MORTGAGE LOAN PURCHASE AGREEMENT
This Mortgage Loan Purchase Agreement, dated as of August 1, 2004 (the
"Agreement"), is entered into between Artesia Mortgage Capital Corporation (the
"Seller") and Wachovia Commercial Mortgage Securities, Inc. (the "Purchaser").
The Seller intends to sell and the Purchaser intends to purchase
certain multifamily and commercial mortgage loans (the "Mortgage Loans")
identified on the schedule (the "Mortgage Loan Schedule") annexed hereto as
Exhibit A. The Purchaser intends to deposit the Mortgage Loans, along with
certain other mortgage loans (the "Other Mortgage Loans"), into a trust fund
(the "Trust Fund"), the beneficial ownership of which will be evidenced by
multiple classes (each, a "Class") of mortgage pass-through certificates (the
"Certificates"). One or more "real estate mortgage investment conduit" ("REMIC")
elections will be made with respect to most of the Trust Fund. The Trust Fund
will be created and the Certificates will be issued pursuant to a Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), dated as of August
1, 2004, among the Purchaser, as depositor, Wachovia Bank, National Association,
as master servicer (in such capacity, the "Master Servicer"), Allied Capital
Corporation, as special servicer (the "Special Servicer"), LaSalle Bank National
Association, as trustee (the "Trustee") and ABN AMRO Bank N.V., as fiscal agent
(in such capacity, the "Fiscal Agent"). Capitalized terms used but not defined
herein (including the Schedules attached hereto) have the respective meanings
set forth in the Pooling and Servicing Agreement.
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, and the Purchaser agrees to purchase, the
Mortgage Loans identified on the Mortgage Loan Schedule. The Mortgage Loan
Schedule may be amended to reflect the actual Mortgage Loans delivered to the
Purchaser pursuant to the terms hereof. The Mortgage Loans are expected to have
an aggregate principal balance of $103,593,924 (the "Artesia Mortgage Loan
Balance") (subject to a variance of plus or minus 5.0%) as of the close of
business on the Cut-Off Date, after giving effect to any payments due on or
before such date, whether or not such payments are received. The Artesia
Mortgage Loan Balance, together with the aggregate principal balance of the
Other Mortgage Loans as of the Cut-Off Date (after giving effect to any payments
due on or before such date whether or not such payments are received), is
expected to equal an aggregate principal balance (the "Cut-Off Date Pool
Balance") of $1,097,030,350 (subject to a variance of plus or minus 5.0%). The
purchase and sale of the Mortgage Loans shall take place August 25, 2004, or
such other date as shall be mutually acceptable to the parties to this Agreement
(the "Closing Date"). The consideration (the "Aggregate Purchase Price") for the
Mortgage Loans shall be equal to (i) 105.81% of the Artesia Mortgage Loan
Balance as of the Cut-Off Date, plus (ii) $434,521, which amount represents the
amount of interest accrued on the Artesia Mortgage Loan Balance at the related
Net Mortgage Rate for the period from and including the Cut-Off Date up to but
not including the Closing Date.
The Aggregate Purchase Price shall be paid to the Seller or its
designee by wire transfer in immediately available funds on the Closing Date.
SECTION 2. Conveyance of Mortgage Loans.
(a) Effective as of the Closing Date, subject only to receipt of the
Aggregate Purchase Price and satisfaction of the other conditions to closing
that are for the benefit of the Seller, the Seller does hereby sell, transfer,
assign, set over and otherwise convey to the Purchaser, without recourse (except
as set forth in this Agreement), all the right, title and interest of the Seller
in and to the Mortgage Loans identified on the Mortgage Loan Schedule as of such
date, on a servicing released basis, together with all of the Seller's right,
title and interest in and to the proceeds of any related title, hazard, primary
mortgage or other insurance proceeds.
(b) The Purchaser or its assignee shall be entitled to receive all
scheduled payments of principal and interest due after the Cut-Off Date, and all
other recoveries of principal and interest collected after the Cut-Off Date
(other than in respect of principal and interest on the Mortgage Loans due on or
before the Cut-Off Date). All scheduled payments of principal and interest due
on or before the Cut-Off Date but collected on or after the Cut-Off Date, and
recoveries of principal and interest collected on or before the Cut-Off Date
(only in respect of principal and interest on the Mortgage Loans due on or
before the Cut-Off Date and principal prepayments thereon), shall belong to, and
shall be promptly remitted to, the Seller.
(c) No later than the Closing Date, the Seller shall, on behalf of the
Purchaser, deliver to the Trustee, the documents and instruments specified below
with respect to each Mortgage Loan (each a "Mortgage File"). All Mortgage Files
so delivered will be held by the Trustee in escrow at all times prior to the
Closing Date. Each Mortgage File shall contain the following documents:
(i) the original executed Mortgage Note including any power of
attorney related to the execution thereof, together with any and all
intervening endorsements thereon, endorsed on its face or by allonge
attached thereto (without recourse, representation or warranty, express or
implied) to the order of "LaSalle Bank National Association, as trustee for
the registered holders of Wachovia Bank Commercial Mortgage Trust,
Commercial Mortgage Pass-Through Certificates, Series 2004-C14" or in blank
(or a lost note affidavit and indemnity with a copy of such Mortgage Note
attached thereto);
(ii) an original or copy of the Mortgage, together with any and all
intervening assignments thereof, in each case (unless not yet returned by
the applicable recording office) with evidence of recording indicated
thereon or certified by the applicable recording office;
(iii) an original or copy of any related Assignment of Leases (if such
item is a document separate from the Mortgage), together with any and all
intervening assignments thereof, in each case (unless not yet returned by
the applicable recording office) with evidence of recording indicated
thereon or certified by the applicable recording office;
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(iv) an original executed assignment, in recordable form (except for
any missing recording information), of (a) the Mortgage, (b) any related
Assignment of Leases (if such item is a document separate from the Mortgage
and to the extent not already assigned pursuant to preceding clause (a))
and (c) any other recorded document relating to the Mortgage Loan otherwise
included in the Mortgage File, in favor of "LaSalle Bank National
Association, as trustee for the registered holders of Wachovia Bank
Commercial Mortgage Trust, Commercial Mortgage Pass-Through Certificates,
Series 2004-C14", or in blank;
(v) an original assignment of all unrecorded documents relating to the
Mortgage Loan (to the extent not already assigned pursuant to clause (iv)
above), in favor of, "LaSalle Bank National Association, as trustee for the
registered holders of Wachovia Bank Commercial Mortgage Trust, Commercial
Mortgage Pass-Through Certificates, Series 2004-C14", or in blank;
(vi) originals or copies of any modification, consolidation,
assumption, and substitution agreements in those instances where the terms
or provisions of the Mortgage or Mortgage Note have been consolidated or
modified or the Mortgage Loan has been assumed or consolidated;
(vii) the original or a copy of the policy or certificate of lender's
title insurance or, if such policy has not been issued or located, an
original or copy of an irrevocable, binding commitment (which may be a
marked version of the policy that has been executed by an authorized
representative of the title company or an agreement to provide the same
pursuant to binding escrow instructions executed by an authorized
representative of the title company) to issue such title insurance policy;
(viii) any filed copies (bearing evidence of filing) or other evidence
of filing satisfactory to the Trustee of any prior UCC Financing Statements
in favor of the originator of such Mortgage Loan or in favor of any
assignee prior to the Trustee (but only to the extent the Seller had
possession of such UCC Financing Statements prior to the Closing Date) and,
if there is an effective UCC Financing Statement and continuation statement
in favor of the Seller on record with the applicable public office for UCC
Financing Statements, an original UCC Amendment, in form suitable for
filing in favor of "LaSalle Bank National Association, as trustee for the
registered holders of Wachovia Bank Commercial Mortgage Trust, Commercial
Mortgage Pass-Through Certificates, Series 2004-C14", as assignee, or in
blank;
(ix) an original or copy of (a) any Ground Lease, Memorandum of Ground
Lease and ground lessor estoppel, (b) any loan guaranty or indemnity and
(c) any environmental insurance policy;
(x) any intercreditor agreement relating to permitted debt (including,
without limitation, mezzanine debt) of the Mortgagor;
(xi) copies of any loan agreement, escrow agreement or security
agreement relating to such Mortgage Loan;
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(xii) a copy of any letter of credit and related transfer documents
relating to such Mortgage Loan;
(xiii) copies of franchise agreements and franchisor comfort letters,
if any, for hospitality properties and any applicable transfer or
assignment documents; and
(xiv) with respect to any Companion Loan, all of the above documents
with respect to such Companion Loan and the related Intercreditor
Agreement; provided that a copy of each Mortgage Note relating to such
Companion Loan, rather than the original, shall be provided, and no
assignments shall be provided.
(d) The Seller shall take all actions reasonably necessary (i) to
permit the Trustee to fulfill its obligations pursuant to Section 2.01(d) of the
Pooling and Servicing Agreement and (ii) to perform its obligations described in
Section 2.01(d) of the Pooling and Servicing Agreement. Without limiting the
generality of the foregoing, if a draw upon a letter of credit is required
before its transfer to the Trust Fund can be completed, the Seller shall draw
upon such letter of credit for the benefit of the Trust pursuant to written
instructions from the Master Servicer. The Seller shall reimburse the Trustee
for all reasonable costs and expenses, if any, incurred by the Trustee for
recording any documents described in Section 2(c)(iv)(c) hereof and filing any
assignments of UCC Financing Statements described in the proviso in the third to
last sentence in Section 2.02(b) of the Pooling and Servicing Agreement.
(e) All documents and records (except draft documents, privileged
communications and internal correspondence and credit, due diligence and other
underwriting analysis, documents, data or internal worksheets, memoranda,
communications and evaluations of the Seller) relating to each Mortgage Loan and
in the Seller's possession (the "Additional Mortgage Loan Documents") that are
not required to be delivered to the Trustee shall promptly be delivered or
caused to be delivered by the Seller to the Master Servicer or at the direction
of the Master Servicer to the appropriate sub-servicer, together with any
related escrow amounts and reserve amounts.
(f) The Seller shall take such actions as are reasonably necessary to
assign or otherwise grant to the Trust Fund the benefit of any letters of credit
in the name of the Seller which secure any Mortgage Loan.
SECTION 3. Representations, Warranties and Covenants of Seller.
(a) The Seller hereby represents and warrants to and covenants with
the Purchaser, as of the date hereof, that:
(i) The Seller is a corporation organized and validly existing and in
good standing under the laws of the Delaware and possesses all requisite
authority, power, licenses, permits and franchises to carry on its business
as currently conducted by it and to execute, deliver and comply with its
obligations under the terms of this Agreement;
(ii) This Agreement has been duly and validly authorized, executed and
delivered by the Seller and, assuming due authorization, execution and
delivery hereof by the Purchaser, constitutes a legal, valid and binding
obligation of the Seller, enforceable
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against the Seller in accordance with its terms, except as such enforcement
may be limited by bankruptcy, insolvency, reorganization, receivership,
moratorium and other laws affecting the enforcement of creditors' rights in
general, and by general equity principles (regardless of whether such
enforcement is considered in a proceeding in equity or at law), and by
public policy considerations underlying the securities laws, to the extent
that such public policy considerations limit the enforceability of the
provisions of this Agreement which purport to provide indemnification from
liabilities under applicable securities laws;
(iii) The execution and delivery of this Agreement by the Seller and
the Seller's performance and compliance with the terms of this Agreement
will not (A) violate the Seller's articles of association or bylaws, (B)
violate any law or regulation or any administrative decree or order to
which it is subject or (C) constitute a material default (or an event
which, with notice or lapse of time, or both, would constitute a material
default) under, or result in the breach of, any material contract,
agreement or other instrument to which the Seller is a party or by which
the Seller is bound;
(iv) The Seller is not in default with respect to any order or decree
of any court or any order, regulation or demand of any federal, state,
municipal or other governmental agency or body, which default might have
consequences that would, in the Seller's reasonable and good faith
judgment, materially and adversely affect the condition (financial or
other) or operations of the Seller or its properties or have consequences
that would materially and adversely affect its performance hereunder;
(v) The Seller is not a party to or bound by any agreement or
instrument or subject to any articles of association, bylaws or any other
corporate restriction or any judgment, order, writ, injunction, decree, law
or regulation that would, in the Seller's reasonable and good faith
judgment, materially and adversely affect the ability of the Seller to
perform its obligations under this Agreement or that requires the consent
of any third person to the execution of this Agreement or the performance
by the Seller of its obligations under this Agreement (except to the extent
such consent has been obtained);
(vi) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Seller of or compliance by the Seller with this
Agreement or the consummation of the transactions contemplated by this
Agreement except as have previously been obtained, and no bulk sale law
applies to such transactions;
(vii) No litigation is pending or, to the Seller's knowledge,
threatened against the Seller that would, in the Seller's good faith and
reasonable judgment, prohibit its entering into this Agreement or
materially and adversely affect the performance by the Seller of its
obligations under this Agreement; and
(viii) Under generally accepted accounting principles ("GAAP") and for
federal income tax purposes, the Seller will report the transfer of the
Mortgage Loans to the Purchaser as a sale of the Mortgage Loans to the
Purchaser in exchange for consideration consisting of a cash amount equal
to the Aggregate Purchase Price. The consideration
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received by the Seller upon the sale of the Mortgage Loans to the Purchaser
will constitute at least reasonably equivalent value and fair consideration
for the Mortgage Loans. The Seller will be solvent at all relevant times
prior to, and will not be rendered insolvent by, the sale of the Mortgage
Loans to the Purchaser. The Seller is not selling the Mortgage Loans to the
Purchaser with any intent to hinder, delay or defraud any of the creditors
of the Seller.
(b) The Seller hereby makes the representations and warranties
contained in Schedule I for the benefit of the Purchaser and the Trustee for the
benefit of the Certificateholders as of the Closing Date, with respect to (and
solely with respect to) each Mortgage Loan, which representations and warranties
are subject to the exceptions set forth on Schedule II.
(c) With respect to the schedule of exceptions delivered by the
Trustee on the Closing Date, within fifteen (15) Business Days (or, in the
reasonable discretion of the Controlling Class Representative, thirty (30)
Business Days) of the Closing Date, with respect to the documents specified in
clauses (i), (ii), (vii), (ix) (solely with respect to Ground Leases) and (xii)
of the definition of Mortgage File, the Seller shall cure any material exception
listed therein (for the avoidance of doubt, any deficiencies with respect to the
documents specified in clause (ii) resulting solely from a delay in the return
of the related documents from the applicable recording office, shall be cured in
the time and manner described in Section 2.01(c) of the Pooling and Servicing
Agreement). If such exception is not so cured, the Seller shall either (1)
repurchase the related Mortgage Loan, (2) with respect to exceptions relating to
clause (xii) of the definition of "Mortgage File", deposit with the Trustee an
amount, to be held in trust in a Special Reserve Account pursuant to the Pooling
and Servicing Agreement, equal to the amount of the undelivered letter of credit
(in the alternative, the Seller may deliver to the Trustee, with a certified
copy to the Master Servicer and Trustee, a letter of credit for the benefit of
the Master Servicer on behalf of the Trustee and upon the same terms and
conditions as the undelivered letter of credit) which the Master Servicer on
behalf of the Trustee may use (or draw upon, as the case may be) under the same
circumstances and conditions as the Master Servicer would have been entitled to
draw on the undelivered letter of credit, or (3) with respect to any exceptions
relating to clauses (i), (ii) and (vii), deposit with the Trustee an amount, to
be held in trust in a Special Reserve Account pursuant to the Pooling and
Servicing Agreement, equal to 25% of the Stated Principal Balance of the related
Mortgage Loan on such date. Any funds or letter of credit deposited pursuant to
clauses (2) and (3) shall be held by the Trustee until the earlier of (x) the
date on which the Master Servicer certifies to the Trustee and the Controlling
Class Representative that such exception has been cured (or the Trustee
certifies the same to the Controlling Class Representative), at which time such
funds or letter of credit, as applicable, shall be returned to the Seller and
(y) thirty (30) Business Days or, if the Controlling Class Representative has
extended the cure period, forty-five (45) Business Days after the Closing Date;
provided, however, that if such exception is not cured within such thirty (30)
Business Days or forty-five (45) Business Days, as the case may be, (A) in the
case of clause (2), the Trustee shall retain the funds or letter of credit, as
applicable, or (B) in the case of clause (3), the Seller shall repurchase the
related Mortgage Loan in accordance with the terms and conditions of this
Agreement, at which time such funds shall be applied to the Purchase Price of
the related Mortgage Loan and any letter of credit will be returned to the
Seller.
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If the Seller receives written notice of a Document Defect or a Breach
pursuant to Section 2.03(a) of the Pooling and Servicing Agreement relating to a
Mortgage Loan, then the Seller shall not later than 90 days from receipt of such
notice (or, in the case of a Document Defect or Breach relating to a Mortgage
Loan not being a "qualified mortgage" within the meaning of the REMIC Provisions
(a "Qualified Mortgage"), not later than 90 days from any party to the Pooling
and Servicing Agreement discovering such Document Defect or Breach provided the
Seller receives such notice in a timely manner), if such Document Defect or
Breach shall materially and adversely affect the value of the applicable
Mortgage Loan, the interest of the Trust therein or the interests of any
Certificateholder, cure such Document Defect or Breach, as the case may be, in
all material respects, which shall include payment of actual or provable losses
and any Additional Trust Fund Expenses directly resulting from any such Document
Defect or Breach or, if such Document Defect or Breach (other than omissions
solely due to a document not having been returned by the related recording
office) cannot be cured within such 90-day period, (i) repurchase the affected
Mortgage Loan at the applicable Purchase Price not later than the end of such
90-day period or (ii) substitute a Qualified Substitute Mortgage Loan for such
affected Mortgage Loan not later than the end of such 90-day period (and in no
event later than the second anniversary of the Closing Date) and pay the Master
Servicer for deposit into the Certificate Account, any Substitution Shortfall
Amount in connection therewith; provided, however, that unless the Breach would
cause the Mortgage Loan not to be a Qualified Mortgage, and if such Document
Defect or Breach is capable of being cured but not within such 90-day period and
the Seller has commenced and is diligently proceeding with the cure of such
Document Defect or Breach within such 90-day period, such Seller shall have an
additional 90 days to complete such cure (or, failing such cure, to repurchase
or substitute the related Mortgage Loan); and provided, further, that with
respect to such additional 90-day period the Seller shall have delivered an
officer's certificate to the Trustee setting forth what actions the Seller is
pursuing in connection with the cure thereof and stating that the Seller
anticipates that such Document Defect or Breach will be cured within the
additional 90-day period; and provided, further, that no Document Defect (other
than with respect to a Mortgage Note, Mortgage, title insurance policy, Ground
Lease, any letter of credit, any franchise agreement, any comfort letter and any
comfort letter transfer documents (collectively, the "Core Material Documents"))
shall be considered to materially and adversely affect the value of the related
Mortgage Loan, the interests of the Trust therein or the interests of any
Certificateholder unless the document with respect to which the Document Defect
exists is required in connection with an imminent enforcement of the mortgagee's
rights or remedies under the related Mortgage Loan, defending any claim asserted
by any borrower or third party with respect to the Mortgage Loan, establishing
the validity or priority of any lien or any collateral securing the Mortgage
Loan or for any immediate significant servicing obligations; provided, further,
with respect to Document Defects which materially and adversely affect the
interests of any Certificateholder, the interests of the Trust therein or the
value of the related Mortgage Loan, other than with respect to Document Defects
relating to the Core Material Documents, any applicable cure period following
the initial 90-day cure period may be extended by the Master Servicer or the
Special Servicer if the document involved is not needed imminently. Such
extension will end upon 30 days notice of such need as reasonably determined by
the Master Servicer or Special Servicer (with a possible 30 day extension if the
Master Servicer or Special Servicer agrees that the Seller is diligently
pursuing a cure). The Seller shall cure all Document Defects, which materially
and adversely affect the interests of any Certificateholder, the interests of
the Trust therein or the
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value of the related Mortgage Loan, regardless of the document involved no later
than 2 years following the Closing Date; provided that the initial 90-day cure
period referenced in this paragraph may not be reduced. For a period of two
years from the Closing Date, so long as there remains any Mortgage File relating
to a Mortgage Loan as to which there is any uncured Document Defect or Breach,
the Seller shall provide the officer's certificate to the Trustee described
above as to the reasons such Document Defect or Breach remains uncured and as to
the actions being taken to pursue cure. Notwithstanding the foregoing, the
delivery of a commitment to issue a policy of lender's title insurance as
described in clause 12 of Schedule I hereof in lieu of the delivery of the
actual policy of lender's title insurance shall not be considered a Document
Defect or Breach with respect to any Mortgage File if such actual policy of
insurance is delivered to the Trustee or a Custodian on its behalf not later
than the 90th day following the Closing Date.
If (i) any Mortgage Loan is required to be repurchased or substituted
for in the manner described above, (ii) such Mortgage Loan is
cross-collateralized and cross-defaulted with one or more other Mortgage Loans
(each, a "Crossed Loan"), and (iii) the applicable Document Defect or Breach
does not constitute a Document Defect or Breach, as the case may be, as to any
other Crossed Loan in such Crossed Group (without regard to this paragraph),
then the applicable Document Defect or Breach, as the case may be, will be
deemed to constitute a Document Defect or Breach, as the case may be, as to any
other Crossed Loan in the Crossed Group for purposes of this paragraph, and the
Seller will be required to repurchase or substitute for all of the remaining
Crossed Loan(s) in the related Crossed Group as provided in the immediately
preceding paragraph unless such other Crossed Loans in such Crossed Group
satisfy the Crossed Loan Repurchase Criteria and satisfy all other criteria for
substitution or repurchase of Mortgage Loans set forth herein. In the event that
the remaining Crossed Loans satisfy the aforementioned criteria, the Seller may
elect either to repurchase or substitute for only the affected Crossed Loan as
to which the related Breach or Document Defect exists or to repurchase or
substitute for all of the Crossed Loans in the related Crossed Group. The Seller
shall be responsible for the cost of any Appraisal required to be obtained by
the Master Servicer to determine if the Crossed Loan Repurchase Criteria have
been satisfied, so long as the scope and cost of such Appraisal has been
approved by the Seller (such approval not to be unreasonably withheld).
To the extent that the Seller is required to repurchase or substitute
for a Crossed Loan hereunder in the manner prescribed above while the Trustee
continues to hold any other Crossed Loans in such Crossed Group, neither the
Seller nor the Purchaser shall enforce any remedies against the other's Primary
Collateral, but each is permitted to exercise remedies against the Primary
Collateral securing its respective Crossed Loans, including with respect to the
Trustee, the Primary Collateral securing Crossed Loans still held by the
Trustee.
If the exercise of remedies by one party would materially impair the
ability of the other party to exercise its remedies with respect to the Primary
Collateral securing the Crossed Loans held by such party, then the Seller and
the Purchaser shall forbear from exercising such remedies until the Mortgage
Loan documents evidencing and securing the relevant Crossed Loans can be
modified in a manner that complies with this Agreement to remove the threat of
material impairment as a result of the exercise of remedies or some other
accommodation can be reached. Any reserve or other cash collateral or letters of
credit securing the Crossed Loans shall
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be allocated between such Crossed Loans in accordance with the Mortgage Loan
documents, or otherwise on a pro rata basis based upon their outstanding Stated
Principal Balances. Notwithstanding the foregoing, if a Crossed Loan included in
the Trust Fund is modified to terminate the related cross-collateralization
and/or cross-default provisions, as a condition to such modification, the Seller
shall furnish to the Trustee an Opinion of Counsel that any modification shall
not cause an Adverse REMIC Event. Any expenses incurred by the Purchaser in
connection with such modification or accommodation (including but not limited to
recoverable attorney fees) shall be paid by the Seller.
(d) In connection with any permitted repurchase or substitution of one
or more Mortgage Loans contemplated hereby, upon receipt of a certificate from a
Servicing Officer certifying as to the receipt of the Purchase Price or
Substitution Shortfall Amount(s), as applicable, in the Certificate Account, and
the delivery of the Mortgage File(s) and the Servicing File(s) for the related
Qualified Substitute Mortgage Loan(s) to the Custodian and the Master Servicer,
respectively, if applicable (i) the Trustee shall execute and deliver such
endorsements and assignments as are provided to it by the Master Servicer, in
each case without recourse, representation or warranty, as shall be necessary to
vest in the Seller, the legal and beneficial ownership of each repurchased
Mortgage Loan or substituted Mortgage Loan, as applicable, (ii) the Trustee, the
Custodian, the Master Servicer and the Special Servicer shall each tender to the
Seller, upon delivery to each of them of a receipt executed by the Seller, all
portions of the Mortgage File and other documents pertaining to such Mortgage
Loan possessed by it, and (iii) the Master Servicer and the Special Servicer
shall release to the Seller any Escrow Payments and Reserve Funds held by it in
respect of such repurchased or deleted Mortgage Loans.
(e) Without limiting the remedies of the Purchaser, the
Certificateholders or the Trustee on behalf of the Certificateholders pursuant
to this Agreement, it is acknowledged that the representations and warranties
are being made for risk allocation purposes. This Section 3 provides the sole
remedy available to the Certificateholders, or the Trustee on behalf of the
Certificateholders, respecting any Document Defect in a Mortgage File or any
Breach of any representation or warranty set forth in or required to be made
pursuant to Section 3 of this Agreement. Nothing in this Agreement shall
prohibit the Purchaser or its assigns (including the Master Servicer and/or the
Special Servicer) from pursuing any course of action authorized by the Pooling
and Servicing Agreement while the Purchaser asserts a claim or brings a cause of
action to enforce any rights set forth herein against the Seller.
(f) With respect to any Mortgage Loan which has become a Defaulted
Mortgage Loan under the Pooling and Servicing Agreement or with respect to which
the related Mortgaged Property has been foreclosed and which is the subject of a
repurchase claim under this Agreement, in accordance with Section 2.03 of the
Pooling and Servicing Agreement, the Special Servicer with the consent of the
Controlling Class Representative shall notify the Seller in writing of its
intention to liquidate such Defaulted Mortgage Loan or REO Property at least 45
days prior to any such action. If (a) the Seller consents to such sale and
voluntarily agrees to repurchase such Defaulted Mortgage Loan or REO Property or
(b) a court of competent jurisdiction determines that the Seller is liable under
this Agreement to repurchase such Defaulted Mortgage Loan or REO Property, then
such Seller shall remit to the Purchaser an amount equal to the difference if
any of the price of such Defaulted Mortgage Loan or REO Property as sold and the
price at which the Seller would have to repurchase such Defaulted
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Mortgage Loan or REO Property under this Agreement. The Seller shall have 10
Business Days after receipt of notice to determine whether or not to consent to
such sale. If the Seller does not consent to such sale, the Special Servicer
shall contract with a Determination Party (as defined in the Pooling and
Servicing Agreement). If the related Determination Party determines that such
proposed sale is in accordance with the Servicing Standards and the provisions
of the Pooling and Servicing Agreement with respect to the sale of Defaulted
Mortgage Loans and REO Properties and, subsequent to such sale, a court of
competent jurisdiction determines that Seller was liable under this Agreement
and required to repurchase such Defaulted Mortgage Loan or REO Property in
accordance with the terms hereof, then the Seller shall remit to Purchaser an
amount equal to the difference (if any) between the proceeds of the related
action and the price at which the Seller would have been obligated to pay had
the Seller repurchased such Defaulted Mortgage Loan or REO Property in
accordance with the terms hereof including the costs related to contracting with
the related Determination Party. If the related Determination Party determines
that the sale of the related Defaulted Mortgage Loan or REO Property is not in
accordance with the Servicing Standards and the provisions of the Pooling and
Servicing Agreement with respect to the sale of Defaulted Mortgage Loans and REO
Properties and the Special Servicer subsequently sells such Mortgage Loan or REO
Property, then the Seller will not be liable for any such difference (nor any
cost of contracting with the Determination Party).
(g) Notwithstanding the foregoing, if there exists a Breach relating
to whether or not the Mortgage Loan documents or any particular Mortgage Loan
document requires the related Mortgagor to bear the costs and expenses
associated with any particular action or matter under such Mortgage Loan
document(s) with respect to matters described in Representations 23 and 43 of
Schedule I, then the Purchaser shall direct the Seller in writing to wire
transfer to the Master Servicer for deposit into the Certificate Account, within
90 days of the Seller's receipt of such direction, the amount of any such costs
and expenses borne by the Purchaser, the Certificateholders, the Master
Servicer, the Special Servicer and the Trustee on their behalf that are the
basis of such Breach. Upon its making such deposit, the Seller shall be deemed
to have cured such Breach in all respects. Provided such payment is made in
full, this paragraph describes the sole remedy available to the Purchaser, the
Certificateholders, the Master Servicer, the Special Servicer and the Trustee on
their behalf regarding any such Breach and the Seller shall not be obligated to
repurchase the affected Mortgage Loan on account of such Breach or otherwise
cure such Breach.
SECTION 4. Representations and Warranties of the Purchaser. In order
to induce the Seller to enter into this Agreement, the Purchaser hereby
represents and warrants for the benefit of the Seller as of the date hereof
that:
(a) The Purchaser is a corporation duly organized, validly existing
and in good standing under the laws of the State of North Carolina. The
Purchaser has the full corporate power and authority and legal right to acquire
the Mortgage Loans from the Seller and to transfer the Mortgage Loans to the
Trustee.
(b) This Agreement has been duly and validly authorized, executed and
delivered by the Purchaser, all requisite action by the Purchaser's directors
and officers has been taken in connection therewith, and (assuming the due
authorization, execution and delivery hereof by the Seller) this Agreement
constitutes the valid, legal and binding agreement of the
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Purchaser, enforceable against the Purchaser in accordance with its terms,
except as such enforcement may be limited by (A) laws relating to bankruptcy,
insolvency, reorganization, receivership or moratorium, (B) other laws relating
to or affecting the rights of creditors generally, or (C) general equity
principles (regardless of whether such enforcement is considered in a proceeding
in equity or at law).
(c) Except as may be required under federal or state securities laws
(and which will be obtained on a timely basis), no consent, approval,
authorization or order of, registration or filing with, or notice to, any
governmental authority or court, is required, under federal or state law, for
the execution, delivery and performance by the Purchaser of or compliance by the
Purchaser with this Agreement, or the consummation by the Purchaser of any
transaction described in this Agreement.
(d) None of the acquisition of the Mortgage Loans by the Purchaser,
the transfer of the Mortgage Loans to the Trustee, and the execution, delivery
or performance of this Agreement by the Purchaser, results or will result in the
creation or imposition of any lien on any of the Purchaser's assets or property,
or conflicts or will conflict with, results or will result in a breach of, or
constitutes or will constitute a default under (A) any term or provision of the
Purchaser's certificate of incorporation or bylaws, (B) any term or provision of
any material agreement, contract, instrument or indenture, to which the
Purchaser is a party or by which the Purchaser is bound, or (C) any law, rule,
regulation, order, judgment, writ, injunction or decree of any court or
governmental authority having jurisdiction over the Purchaser or its assets.
(e) Under GAAP and for federal income tax purposes, the Purchaser will
report the transfer of the Mortgage Loans by the Seller to the Purchaser as a
sale of the Mortgage Loans to the Purchaser in exchange for consideration
consisting of a cash amount equal to the Aggregate Purchase Price.
(f) There is no action, suit, proceeding or investigation pending or
to the knowledge of the Purchaser, threatened against the Purchaser in any court
or by or before any other governmental agency or instrumentality which would
materially and adversely affect the validity of this Agreement or any action
taken in connection with the obligations of the Purchaser contemplated herein,
or which would be likely to impair materially the ability of the Purchaser to
enter into and/or perform under the terms of this Agreement.
(g) The Purchaser is not in default with respect to any order or
decree of any court or any order, regulation or demand of any federal, state,
municipal or governmental agency, which default might have consequences that
would materially and adversely affect the condition (financial or other) or
operations of the Purchaser or its properties or might have consequences that
would materially and adversely affect its performance hereunder.
SECTION 5. Closing. The closing of the sale of the Mortgage Loans (the
"Closing") shall be held at the offices of Dechert LLP, Charlotte, North
Carolina on the Closing Date.
The Closing shall be subject to each of the following conditions:
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(a) All of the representations and warranties of the Seller set forth
in or made pursuant to Sections 3(a) and 3(b) of this Agreement and all of the
representations and warranties of the Purchaser set forth in Section 4 of this
Agreement shall be true and correct in all material respects as of the Closing
Date;
(b) The Pooling and Servicing Agreement (to the extent it affects the
obligations of the Seller hereunder) and all documents specified in Section 6 of
this Agreement (the "Closing Documents"), in such forms as are agreed upon and
acceptable to the Purchaser, the Seller, the Underwriters, the Initial Purchaser
and their respective counsel in their reasonable discretion, shall be duly
executed and delivered by all signatories as required pursuant to the respective
terms thereof;
(c) The Seller shall have delivered and released to the Trustee (or a
Custodian on its behalf) and the Master Servicer, respectively, all documents
represented to have been or required to be delivered to the Trustee and the
Master Servicer pursuant to Section 2 of this Agreement;
(d) 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;
(e) The Seller shall have paid all fees and expenses payable by it to
the Purchaser or otherwise pursuant to this Agreement as of the Closing Date;
and
(f) A letter from the independent accounting firm of KPMG LLP, in form
satisfactory to the Purchaser, relating to certain information regarding the
Mortgage Loans and Certificates as set forth in the Prospectus and Prospectus
Supplement, respectively.
Both parties agree to use their 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.
SECTION 6. Closing Documents. The Closing Documents shall consist of
the following:
(a) This Agreement duly executed by the Purchaser and the Seller;
(b) A certificate of the Seller, executed by a duly authorized officer
of the Seller and dated the Closing Date, and upon which the Purchaser, the
Underwriters and the Initial Purchaser may rely, to the effect that: (i) the
representations and warranties of the Seller in this Agreement are true and
correct in all material respects at and as of the Closing Date with the same
effect as if made on such date; and (ii) the Seller has, in all material
respects, complied with all the agreements and satisfied all the conditions on
its part that are required under this Agreement to be performed or satisfied at
or prior to the Closing Date;
(c) An officer's certificate from an officer of the Seller (signed in
his/her capacity as an officer), dated the Closing Date, and upon which the
Purchaser may rely, to the
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effect that each individual who, as an officer or representative of the Seller,
signed this Agreement or any other document or certificate delivered on or
before the Closing Date in connection with the transactions contemplated herein,
was at the respective times of such signing and delivery, and is as of the
Closing Date, duly elected or appointed, qualified and acting as such officer or
representative, and the signatures of such persons appearing on such documents
and certificates are their genuine signatures;
(d) An officer's certificate from an officer of the Seller (signed in
his/her capacity as an officer), dated the Closing Date, and upon which the
Purchaser, the Underwriters and the Initial Purchaser may rely, to the effect
that with respect to the Seller, the Mortgage Loans, the related Mortgagors and
the related Mortgaged Properties (i) such officer has carefully examined the
Specified Portions of the Prospectus Supplement and nothing has come to his
attention that would lead him to believe that the Specified Portions of the
Prospectus Supplement, as of the date of the Prospectus Supplement, or as of the
Closing Date, included or include any untrue statement of a material fact
relating to the Mortgage Loans or omitted or omit to state therein a material
fact necessary in order to make the statements therein relating to the Mortgage
Loans, in light of the circumstances under which they were made, not misleading,
and (ii) such officer has examined the Specified Portions of the Memorandum and
nothing has come to his attention that would lead him to believe that the
Specified Portions of the Memorandum, as of the date thereof or as of the
Closing Date, included or include any untrue statement of a material fact
relating to the Mortgage Loans or omitted or omit to state therein a material
fact necessary in order to make the statements therein related to the Mortgage
Loans, in the light of the circumstances under which they were made, not
misleading. The "Specified Portions" of the Prospectus Supplement shall consist
of Annex A thereto, the diskette which accompanies the Prospectus Supplement
(insofar as such diskette is consistent with such Annex A) and the following
sections of the Prospectus Supplement (exclusive of any statements in such
sections that purport to summarize the servicing and administration provisions
of the Pooling and Servicing Agreement: "Summary of Prospectus Supplement--The
Parties--The Mortgage Loan Sellers," "Summary of Prospectus Supplement--The
Mortgage Loans," "Risk Factors--The Mortgage Loans," and "Description of the
Mortgage Pool--General," "--Mortgage Loan History," "--Certain Terms and
Conditions of the Mortgage Loans," "--Assessments of Property Condition,"
"--Co-Lender Loans," "--Additional Mortgage Loan Information," "--Twenty Largest
Mortgage Loans," "--The Mortgage Loan Sellers," "--Underwriting Standards," and
"--Representations and Warranties; Repurchases and Substitutions." The
"Specified Portions" of the Memorandum shall consist of the Specified Portions
of the Prospectus Supplement and the first and second full paragraphs on page
"iii" of the Memorandum.
(e) The resolutions of the requisite committee of the Seller's board
of directors authorizing the Seller's entering into the transactions
contemplated by this Agreement, the certificate of incorporation and by-laws of
the Seller, and an original or copy of a certificate of good standing of the
Seller issued by the State of Delaware not earlier than sixty (60) days prior to
the Closing Date;
(f) A written opinion of counsel for the Seller (which opinion may be
from in-house counsel, outside counsel or a combination thereof), reasonably
satisfactory to the Purchaser, its counsel and the Rating Agencies, dated the
Closing Date and addressed to the
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Purchaser, the Trustee, the Underwriters, the Initial Purchaser and each of the
Rating Agencies, together with such other written opinions as may be required by
the Rating Agencies; and
(g) Such further certificates, opinions and documents as the Purchaser
may reasonably request.
SECTION 7. Indemnification.
(a) The Seller shall indemnify and hold harmless the Purchaser, the
Underwriters, the Initial Purchaser, their respective officers and directors,
and each person, if any, who controls the Purchaser, any Underwriter or any
Initial Purchaser within the meaning of either Section 15 of the Securities Act
of 1933, as amended (the "1933 Act") or Section 20 of the Securities Exchange
Act of 1934, as amended (the "1934 Act"), against any and all losses, expenses
(including the reasonable fees and expenses of legal counsel), claims, damages
or liabilities, joint or several, to which they or any of them may become
subject under the 1933 Act, the 1934 Act or other federal or state statutory law
or regulation, at common law or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) (i) arise out of or are
based upon any untrue statement or alleged untrue statement of a material fact
contained in (A) the Prospectus Supplement, the Preliminary Prospectus
Supplement, the Memorandum, the Diskette or, insofar as they are required to be
filed as part of the Registration Statement pursuant to the No-Action Letters,
any Computational Materials or ABS Term Sheets with respect to the Registered
Certificates, or in any revision or amendment of or supplement to any of the
foregoing, (B) any items similar to Computational Materials or ABS Term Sheets
forwarded by the Seller to the Initial Purchaser, or in any revision or
amendment of or supplement to any of the foregoing or (C) the summaries,
reports, documents and other written and computer materials and all other
information regarding the Mortgage Loans or the Seller furnished by the Seller
for review by prospective investors (the items in (A), (B) and (C) above being
defined as the "Disclosure Material"), or (ii) arise out of or are based upon
the omission or alleged omission to state therein (in the case of Computational
Materials and ABS Term Sheets, when read in conjunction with the Prospectus
Supplement, in the case of items similar to Computational Materials and ABS Term
Sheets, when read in conjunction with the Memorandum, and in the case of any
summaries, reports, documents, written or computer materials, or other
information contemplated in clause (C) above, when read in conjunction with the
Memorandum) a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading; but, with respect to the Disclosure Material described in
clauses (A) and (B) of the definition thereof, only if and to the extent that
(I) any such untrue statement or alleged untrue statement or omission or alleged
omission occurring in, or with respect to, such Disclosure Material, arises out
of or is based upon an untrue statement or omission with respect to the Mortgage
Loans, the related Mortgagors and/or the related Mortgaged Properties contained
in the Data File (it being herein acknowledged that the Data File was and will
be used to prepare the Prospectus Supplement and the Preliminary Prospectus
Supplement, including without limitation Annex A thereto, the Memorandum, the
Diskette, any Computational Materials and ABS Term Sheets with respect to the
Registered Certificates and any items similar to Computational Materials and ABS
Term Sheets forwarded to prospective investors in the Non-Registered
Certificates), (II) any such untrue statement or alleged untrue statement or
omission or alleged omission of a material fact occurring in, or with respect
to, such Disclosure Material, is with respect to, or arises out of or is based
upon an untrue
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statement or omission of a material fact with respect to, the information
regarding the Mortgage Loans, the related Mortgagors, the related Mortgaged
Properties and/or the Seller set forth in the Specified Portions of each of the
Prospectus Supplement, the Preliminary Prospectus Supplement and the Memorandum,
(III) any such untrue statement or alleged untrue statement or omission or
alleged omission occurring in, or with respect to, such Disclosure Material,
arises out of or is based upon a breach of the representations and warranties of
the Seller set forth in or made pursuant to Section 3 or (IV) any such untrue
statement or alleged untrue statement or omission or alleged omission occurring
in, or with respect to, such Disclosure Material, arises out of or is based upon
any other written information concerning the characteristics of the Mortgage
Loans, the related Mortgagors or the related Mortgaged Properties furnished to
the Purchaser, the Underwriters or the Initial Purchaser by the Seller; provided
that the indemnification provided by this Section 7 shall not apply to the
extent that such untrue statement or omission of a material fact was made as a
result of an error in the manipulation of, or in any calculations based upon, or
in any aggregation of the information regarding the Mortgage Loans, the related
Mortgagors and/or the related Mortgaged Properties set forth in the Data File or
Annex A to the Prospectus Supplement or the Preliminary Prospectus Supplement to
the extent such information was not materially incorrect in the Data File or
such Annex A, as applicable, including without limitation the aggregation of
such information with comparable information relating to the Other Mortgage
Loans. Notwithstanding the foregoing, the indemnification provided in this
Section 7(a) shall not inure to the benefit of any Underwriter or Initial
Purchaser (or to the benefit of any person controlling such Underwriter or
Initial Purchaser) from whom the person asserting claims giving rise to any such
losses, claims, damages, expenses or liabilities purchased Certificates if (x)
the subject untrue statement or omission or alleged untrue statement or omission
made in any Disclosure Material (exclusive of the Prospectus or any corrected or
amended Prospectus or the Memorandum or any corrected or amended Memorandum) is
eliminated or remedied in the Prospectus or the Memorandum (in either case, as
corrected or amended, if applicable), as applicable, and (y) a copy of the
Prospectus or Memorandum (in either case, as corrected or amended, if
applicable), as applicable, shall not have been sent to such person at or prior
to the written confirmation of the sale of such Certificates to such person, and
(z) in the case of a corrected or amended Prospectus or Memorandum, such
Underwriter or Initial Purchaser received written notice of such correction or
amendment prior to the written confirmation of such sale. The Seller shall,
subject to clause (c) below, reimburse each such indemnified party, as incurred,
for any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action.
This indemnity will be in addition to any liability which the Seller may
otherwise have.
(b) For purposes of this Agreement, "Registration Statement" shall
mean such registration statement No. 333-108944 filed by the Purchaser on Form
S-3, including without limitation exhibits thereto and information incorporated
therein by reference; "Base Prospectus" shall mean the prospectus dated June 17,
2004, as supplemented by the prospectus supplement dated August 12, 2004 (the
"Prospectus Supplement" and, together with the Base Prospectus, the
"Prospectus") relating to the Registered Certificates, including all annexes
thereto; "Preliminary Prospectus Supplement" shall mean the prospectus
supplement dated August 2, 2004 relating to the Registered Certificates,
including all annexes thereto; "Memorandum" shall mean the private placement
memorandum dated August 12, 2004, relating to the Non-Registered Certificates,
including all exhibits thereto; "Registered Certificates" shall mean the Class
A-1, Class A-2, Class A-3, Class A-4, Class B, Class C and Class D Certificates;
"Non-Registered Certificates"
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shall mean the Certificates other than the Registered Certificates;
"Computational Materials" shall have the meaning assigned thereto in the
no-action letter dated May 20, 1994 issued by the Division of Corporation
Finance of the Securities and Exchange Commission (the "Commission") to Xxxxxx,
Xxxxxxx Acceptance Corporation I, Xxxxxx, Peabody & Co. Incorporated, and Xxxxxx
Structured Asset Corporation and the no-action letter dated May 27, 1994 issued
by the Division of Corporation Finance of the Commission to the Public
Securities Association (together, the "Xxxxxx Letters"); "ABS Term Sheets" shall
have the meaning assigned thereto in the no-action letter dated February 17,
1995 issued by the Division of Corporation Finance of the Commission to the
Public Securities Association (the "PSA Letter" and, together with the Xxxxxx
Letters, the "No-Action Letters"); "Diskette" shall mean the diskette or compact
disc attached to each of the Prospectus and the Memorandum; and "Data File"
shall mean the compilation of information and data regarding the Mortgage Loans
covered by the Agreed Upon Procedures Letters dated August 12, 2004 and rendered
by KPMG LLP (a "hard copy" of which Data File was initialed on behalf of the
Seller and the Purchaser).
(c) As promptly as reasonably practicable after receipt by any person
entitled to indemnification under this Section 7 (an "indemnified party") of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the Seller (the "indemnifying
party") under this Section 7, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party will
not relieve it from any liability that it may have to any indemnified party
under Section 7(a) (except to the extent that such omission has prejudiced the
indemnifying party in any material respect) or from any liability which it may
have otherwise than under this Section 7. In case any such action is brought
against any indemnified party and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein, and to the extent that it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof, with counsel selected by the
indemnifying party and reasonably satisfactory to such indemnified party;
provided, however, that if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party or
parties shall have reasonably concluded that there may be legal defenses
available to it or them and/or other indemnified parties that are different from
or additional to those available to the indemnifying party, the indemnified
party shall have the right to select separate counsel to assert such legal
defenses and to otherwise participate in the defense of such action on behalf of
such indemnified party or parties. Upon receipt of notice from the indemnifying
party to such indemnified party of its election so to assume the defense of such
action and approval by the indemnified party of counsel, the indemnifying party
will not be liable for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof, unless (i) the
indemnified party shall have employed separate counsel in connection with the
assertion of legal defenses in accordance with the proviso to the preceding
sentence (it being understood, however, that the indemnifying party shall not be
liable for the expenses of more than one separate counsel, approved by the
Purchaser, the Underwriters and the Initial Purchaser, representing all the
indemnified parties under Section 7(a) who are parties to such action), (ii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after notice of commencement of the action or (iii) the indemnifying party
has authorized the employment of counsel for the indemnified party at the
expense of the indemnifying party; and except that, if clause (i) or (iii) is
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applicable, such liability shall only be in respect of the counsel referred to
in such clause (i) or (iii). Unless it shall assume the defense of any
proceeding, an indemnifying party shall not be liable for any settlement of any
proceeding effected without its written consent but, if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party shall indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel or any other expenses for which the indemnifying party is obligated
under this subsection, the indemnifying party agrees that it shall be liable for
any settlement of any proceeding effected without its written consent if (i)
such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying party
shall not have reimbursed the indemnified party in accordance with such request
prior to the date of such settlement. If an indemnifying party assumes the
defense of any proceeding, it shall be entitled to settle such proceeding with
the consent of the indemnified party or, if such settlement provides for an
unconditional release of the indemnified party in connection with all matters
relating to the proceeding that have been asserted against the indemnified party
in such proceeding by the other parties to such settlement, which release does
not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of any indemnified party without the consent of the
indemnified party.
(d) If the indemnification provided for in this Section 7 is
unavailable to an indemnified party under Section 7(a) hereof or insufficient in
respect of any losses, claims, damages or liabilities referred to therein, then
the indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities, in such proportion as is
appropriate to reflect the relative fault of the indemnified and indemnifying
parties in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations (taking into account the parties' relative knowledge and access
to information concerning the matter with respect to which the claim was
asserted, the opportunity to correct and prevent any statement or omission or
failure to comply, and any other equitable considerations appropriate under the
circumstances). The relative fault of the indemnified and indemnifying parties
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by such parties;
provided that no Underwriter or Initial Purchaser shall be obligated to
contribute more than its share of underwriting discounts and commissions and
other fees pertaining to the Certificates less any damages otherwise paid by
such Underwriter or Initial Purchaser with respect to such loss, liability,
claim, damage or expense. It is hereby acknowledged that the respective
Underwriters' and Initial Purchaser's obligations under this Section 7 shall be
several and not joint. For purposes of this Section, each person, if any, who
controls an Underwriter or an Initial Purchaser within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act, and such Underwriter's or Initial
Purchaser's officers and directors, shall have the same rights to contribution
as such Underwriter or Initial Purchaser, as the case may be, and each director
of the Seller and each person, if any who controls the Seller within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same
rights to contribution as the Seller.
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(e) The Purchaser and the Seller agree that it would not be just and
equitable if contribution pursuant to Section 7(d) were determined by pro rata
allocation or by any other method of allocation that does not take account of
the considerations referred to in Section 7(d) above. The amount paid or payable
by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in this Section 7 shall be deemed to include, subject to
the limitations set forth above, any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim, except where the indemnified party is required to bear such
expenses pursuant to this Section 7, which expenses the indemnifying party shall
pay as and when incurred, at the request of the indemnified party, to the extent
that the indemnifying party will be ultimately obligated to pay such expenses.
If any expenses so paid by the indemnifying party are subsequently determined to
not be required to be borne by the indemnifying party hereunder, the party that
received such payment shall promptly refund the amount so paid to the party
which made such payment. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the 0000 Xxx) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(f) The indemnity and contribution agreements contained in this
Section 7 shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by the Purchaser,
the Underwriters, the Initial Purchaser, any of their respective directors or
officers, or any person controlling the Purchaser, the Underwriters or the
Initial Purchaser, and (iii) acceptance of and payment for any of the
Certificates.
(g) Without limiting the generality or applicability of any other
provision of this Agreement, the Underwriters, the Initial Purchaser and their
directors, officers and controlling parties shall be third-party beneficiaries
of the provisions of this Section 7.
SECTION 8. Costs. The Seller shall pay (or shall reimburse the
Purchaser to the extent that the Purchaser has paid) the Seller's pro rata
portion of the aggregate of the following amounts (the Seller's pro rata portion
to be determined according to the percentage that the Artesia Mortgage Loan
Balance represents as of the Cut-Off Date Pool Balance): (i) the costs and
expenses of printing and delivering the Pooling and Servicing Agreement and the
Certificates; (ii) the costs and expenses of printing (or otherwise reproducing)
and delivering a Preliminary and final Prospectus Supplement, Term Sheet and
Memorandum relating to the Certificates; (iii) the initial fees, costs, and
expenses of the Trustee (including reasonable attorneys' fees); (iv) the filing
fee charged by the Securities and Exchange Commission for registration of the
Certificates so registered; (v) the fees charged by the Rating Agencies to rate
the Certificates so rated; (vi) the fees and disbursements of a firm of
certified public accountants selected by the Purchaser and the Seller with
respect to numerical information in respect of the Mortgage Loans and the
Certificates included in the Prospectus, the Memorandum and any related
Computational Materials or ABS Term Sheets, including in respect of the cost of
obtaining any "comfort letters" with respect to such items; (vii) the reasonable
out-of-pocket costs and expenses in connection with the qualification or
exemption of the Certificates under state securities or "Blue Sky" laws,
including filing fees and reasonable fees and disbursements of counsel in
connection therewith, in connection with the preparation of any "Blue Sky"
survey and in connection with any determination of the eligibility of the
Certificates for investment by institutional investors and the preparation of
any legal investment survey; (viii) the expenses of
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printing any such "Blue Sky" survey and legal investment survey; and (ix) the
reasonable fees and disbursements of counsel to the Underwriters or the Initial
Purchaser; provided, however, Seller shall pay (or shall reimburse the Purchaser
to the extent that the Purchaser has paid) the expense of recording any
assignment of Mortgage or assignment of Assignment of Leases as contemplated by
Section 2 hereof with respect to the Seller's Mortgage Loans. All other costs
and expenses in connection with the transactions contemplated hereunder shall be
borne by the party incurring such expense.
SECTION 9. Grant of a Security Interest. It is the express intent of
the parties hereto that the conveyance of the Mortgage Loans by the Seller to
the Purchaser as provided in Section 2 hereof be, and be construed as, a sale of
the Mortgage Loans by the Seller to the Purchaser and not as a pledge of the
Mortgage Loans by the Seller to the Purchaser to secure a debt or other
obligation of the Seller. However, if, notwithstanding the aforementioned intent
of the parties, the Mortgage Loans are held to be property of the Seller, then,
(a) it is the express intent of the parties that such conveyance be deemed a
pledge of the Mortgage Loans by the Seller to the Purchaser to secure a debt or
other obligation of the Seller, and (b) (i) this Agreement shall also be deemed
to be a security agreement within the meaning of Article 9 of the Uniform
Commercial Code of the applicable jurisdiction; (ii) the conveyance provided for
in Section 2 hereof shall be deemed to be a grant by the Seller to the Purchaser
of a security interest in all of the Seller's right, title and interest in and
to the Mortgage Loans, and all amounts payable to the holder of the Mortgage
Loans in accordance with the terms thereof, and all proceeds of the conversion,
voluntary or involuntary, of the foregoing into cash, instruments, securities or
other property, including, without limitation, all amounts, other than
investment earnings, from time to time held or invested in the Certificate
Account, the Distribution Account or, if established, the REO Account (each as
defined in the Pooling and Servicing Agreement) whether in the form of cash,
instruments, securities or other property; (iii) the assignment to the Trustee
of the interest of the Purchaser as contemplated by Section 1 hereof shall be
deemed to be an assignment of any security interest created hereunder; (iv) the
possession by the Trustee or any of its agents, including, without limitation,
the Custodian, of the Mortgage Notes, and such other items of property as
constitute instruments, money, negotiable documents or chattel paper shall be
deemed to be possession by the secured party for purposes of perfecting the
security interest pursuant to Section 9-313 of the Uniform Commercial Code of
the applicable jurisdiction; and (v) notifications to persons (other than the
Trustee) holding such property, and acknowledgments, receipts or confirmations
from persons (other than the Trustee) holding such property, shall be deemed
notifications to, or acknowledgments, receipts or confirmations from, financial
intermediaries, bailees or agents (as applicable) of the secured party 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 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 deemed to 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 10. Covenants of Purchaser. The Purchaser shall provide the
Seller with all forms of Disclosure Materials (including the final form of the
Memorandum and the preliminary and final forms of the Prospectus Supplement)
promptly upon any such document becoming available.
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SECTION 11. Notices. All notices, copies, requests, consents, demands
and other communications required hereunder shall be in writing and telecopied
or delivered to the intended recipient at the "Address for Notices" specified
beneath its name on the signature pages hereof or, as to either party, at such
other address as shall be designated by such party in a notice hereunder to the
other party. Except as otherwise provided in this Agreement, all such
communications shall be deemed to have been duly given when transmitted by
telecopier or personally delivered or, in the case of a mailed notice, upon
receipt, in each case given or addressed as aforesaid.
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 submitted 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 (and by the Purchaser to the Trustee).
SECTION 13. Severability of Provisions. Any part, provision,
representation, warranty or covenant of this Agreement that is prohibited or
which 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 unenforceable 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. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be an original, but which together shall
constitute one and the same agreement.
SECTION 15. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS, DUTIES,
OBLIGATIONS AND RESPONSIBILITIES OF THE PARTIES HERETO SHALL BE GOVERNED IN
ACCORDANCE WITH THE INTERNAL LAWS AND DECISIONS OF NEW YORK. THE PARTIES HERETO
INTEND THAT THE PROVISIONS OF SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS
LAW SHALL APPLY TO THIS AGREEMENT.
SECTION 16. Attorneys Fees. If any legal action, suit or proceeding is
commenced between the Seller and the Purchaser regarding their respective rights
and obligations under this Agreement, the prevailing party shall be entitled to
recover, in addition to damages or other relief, costs and expenses, attorneys'
fees and court costs (including, without limitation, expert witness fees). As
used herein, the term "prevailing party" shall mean the party which obtains the
principal relief it has sought, whether by compromise settlement or judgment. If
the party which commenced or instituted the action, suit or proceeding shall
dismiss or discontinue it without the concurrence of the other party, such other
party shall be deemed the prevailing party.
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SECTION 17. 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 18. 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. The Purchaser has the right to
assign its interest under this Agreement, in whole or in part, as may be
required to effect the purposes of the Pooling and Servicing Agreement, and the
assignee shall, to the extent of such assignment, succeed to the rights and
obligations hereunder of the Purchaser. Subject to the foregoing, this Agreement
shall bind and inure to the benefit of and be enforceable by the Seller, the
Purchaser, the Underwriters, the Initial Purchaser (as intended third party
beneficiaries hereof) and their permitted successors and assigns, and the
officers, directors and controlling persons referred to in Section 7. This
Agreement is enforceable by the Underwriters and the other third party
beneficiaries hereto in all respects to the same extent as if they had been
signatories hereof.
SECTION 19. Amendments. No term or provision of this Agreement may be
waived or modified unless such waiver or modification is in writing and signed
by a duly authorized officer of the party, or third party beneficiary, against
whom such waiver or modification is sought to be enforced. No amendment to the
Pooling and Servicing Agreement which relates to defined terms contained
therein, Section 2.01(a) thereof or the repurchase obligations or any other
obligations of the Seller shall be effective against the Seller (in such
capacity) unless the Seller shall have agreed to such amendment in writing.
SECTION 20. Accountants' Letters. The parties hereto shall cooperate
with KPMG LLP in making available all information and taking all steps
reasonably necessary to permit such accountants to deliver the letters required
by the Underwriting Agreement.
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IN WITNESS WHEREOF, the Seller and the Purchaser have caused their
names to be signed hereto by their respective duly authorized officers as of the
date first above written.
SELLER
------
ARTESIA MORTGAGE CAPITAL
CORPORATION
By: /s/ Xxxxx Xxxxxx Xxxxx
----------------------------------
Name: Xxxxx Xxxxxx Xxxxx
Title: Vice President
Address for Notices:
0000 XX Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
PURCHASER
---------
WACHOVIA COMMERCIAL MORTGAGE
SECURITIES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Managing Director
Address for Notices:
One Wachovia Center
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
SCHEDULE I
GENERAL MORTGAGE REPRESENTATIONS AND WARRANTIES
For purposes of this Schedule, 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) at the time
of the Seller's origination or acquisition of the particular Mortgage Loan,
after the Seller having conducted such inquiry and due diligence into such
matters as would be customarily performed by a prudent institutional commercial
or multifamily, as applicable, mortgage lender; and (ii) subsequent to such
origination, the Seller having utilized monitoring practices that would be
utilized by a prudent commercial or multifamily, as applicable, mortgage lender
and having made prudent inquiry as to the knowledge of the servicer servicing
such Mortgage Loan on its behalf. 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, such reference shall include the
receipt or possession of such information or documents by, or the taking of such
action or the failure to take such action by, the Seller or any servicer acting
on its behalf.
1. The information pertaining to each Mortgage Loan set forth in the Mortgage
Loan Schedule was true and correct in all material respects as of the
Cut-Off Date and included all of the material information required by the
definition of Mortgage Loan Schedule.
2. As of the date of its origination, such Mortgage Loan complied in all
material respects with, or was exempt from, all requirements of federal,
state or local law relating to the origination of such Mortgage Loan.
3. Immediately prior to the sale, transfer and assignment to the Purchaser,
the Seller had good and marketable title to, and was the sole owner of,
each Mortgage Loan, and the Seller is transferring such Mortgage Loan free
and clear of any and all liens, pledges, charges, security interests or any
other ownership interests of any nature encumbering such Mortgage Loan.
Upon consummation of the transactions contemplated by the Mortgage Loan
Purchase Agreement, the Seller will have validly and effectively conveyed
to the Purchaser all legal and beneficial interest in and to such Mortgage
Loan (other than those rights to servicing and related compensation as
reflected in the Mortgage Loan Schedule) free and clear of any pledge, lien
or security interest.
4. The proceeds of such Mortgage Loan have been fully disbursed and there is
no requirement for future advances thereunder.
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5. Each related Mortgage Note, Mortgage, Assignment of Leases (if a document
separate from the Mortgage) and other agreement executed by the related
Mortgagor in connection with such Mortgage Loan is legal, valid and binding
obligation of the related Mortgagor (subject to any non-recourse provisions
therein and any state anti-deficiency or market value limit deficiency
legislation), enforceable in accordance with its terms, except (i) that
certain provisions contained in such Mortgage Loan documents are or may be
unenforceable in whole or in part under applicable state or federal laws,
but neither the application of any such laws to any such provision nor the
inclusion of any such provisions renders any of the Mortgage Loan documents
invalid as a whole and such Mortgage Loan documents taken as a whole are
enforceable to the extent necessary and customary for the practical
realization of the rights and benefits afforded thereby and (ii) as such
enforcement may be limited by bankruptcy, insolvency, receivership,
reorganization, moratorium, redemption, liquidation or other laws affecting
the enforcement of creditors' rights generally, or by general principles of
equity (regardless of whether such enforcement is considered in a
proceeding in equity or at law). The related Mortgage Note and Mortgage
contain no provision limiting the right or ability of the Seller to assign,
transfer and convey the related Mortgage Loan to any other Person. With
respect to any Mortgaged Property that has tenants, there exists as either
part of the Mortgage or as a separate document, an assignment of leases.
6. As of the date of its origination, there was no valid offset, defense,
counterclaim, abatement or right to rescission with respect to any of the
related Mortgage Notes, Mortgage(s) or other agreements executed in
connection therewith, and, as of the Cut-Off Date, there is no valid
offset, defense, counterclaim or right to rescission with respect to such
Mortgage Note, Mortgage(s) or other agreements, except in each case, with
respect to the enforceability of any provisions requiring the payment of
default interest, late fees, additional interest, prepayment premiums or
yield maintenance charges, and the Seller has no knowledge of such rights,
defenses or counterclaims having been asserted.
7. Each related assignment of Mortgage and assignment of Assignment of Leases
from the Seller to the Trustee constitutes the legal, valid and binding
first priority assignment from the Seller, except as such enforcement may
be limited by bankruptcy, insolvency, redemption, reorganization,
liquidation, receivership, moratorium or other laws relating to or
affecting creditors' rights generally or by general principles of equity
(regardless of whether such enforcement is considered in a proceeding in
equity or at law). Each Mortgage and Assignment of Leases is freely
assignable.
8. Each related Mortgage is a valid and enforceable first lien on the related
Mortgaged Property subject only to the exceptions set forth in paragraph
(5) above and the following title exceptions (each such title exception, a
"Title Exception", and collectively, the "Title Exceptions"): (a) the lien
of current real property taxes, water charges, sewer rents and assessments
not yet due and payable, (b) covenants, conditions and restrictions, rights
of way, easements and other matters of public record, none of which,
individually or in the aggregate, materially and adversely interferes with
the current use of the Mortgaged Property or the security intended to be
provided by such Mortgage or with the Mortgagor's ability to pay its
obligations under the Mortgage Loan when they become due or materially and
adversely affects the value of the Mortgaged Property, (c) the
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exceptions (general and specific) and exclusions set forth in the
applicable policy described in paragraph (12) below or appearing of record,
none of which, individually or in the aggregate, materially and adversely
interferes with the current use of the Mortgaged Property or the security
intended to be provided by such Mortgage or with the Mortgagor's ability to
pay its obligations under the Mortgage Loan when they become due or
materially and adversely affects the value of the Mortgaged Property, (d)
other matters to which like properties are commonly subject, none of which,
individually or in the aggregate, materially and adversely interferes with
the current use of the Mortgaged Property or the security intended to be
provided by such Mortgage or with the Mortgagor's ability to pay its
obligations under the Mortgage Loan when they become due or materially and
adversely affects the value of the Mortgaged Property, (e) the right of
tenants (whether under ground leases, space leases or operating leases) at
the Mortgaged Property to remain following a foreclosure or similar
proceeding (provided that such tenants are performing under such leases)
and (f) if such Mortgage Loan is a Crossed Loan, the lien of the Mortgage
for such other Mortgage Loan, none of which, individually or in the
aggregate, materially and adversely interferes with the current use of the
Mortgaged Property or the security intended to be provided by such Mortgage
or with the Mortgagor's ability to pay its obligations under the Mortgage
Loan when they become due or materially and adversely affects the value of
the Mortgaged Property. Except with respect to Crossed Loans and as
provided below, there are no mortgage loans that are senior or pari passu
with respect to the related Mortgaged Property or such Mortgage Loan.
9. UCC Financing Statements have been filed and/or recorded (or, if not filed
and/or recorded, have been submitted in proper form for filing and
recording), in all public places necessary to perfect a valid security
interest in all items of personal property located on the Mortgaged
Property that are owned by the Mortgagor and either (i) are reasonably
necessary to operate the Mortgaged Property or (ii) are (as indicated in
the appraisal obtained in connection with the origination of the related
Mortgage Loan) material to the value of the Mortgaged Property (other than
any personal property subject to a purchase money security interest or a
sale and leaseback financing arrangement permitted under the terms of such
Mortgage Loan or any other personal property leases applicable to such
personal property), to the extent perfection may be effected pursuant to
applicable law by recording or filing, and the Mortgages, security
agreements, chattel Mortgages or equivalent documents related to and
delivered in connection with the related Mortgage Loan establish and create
a valid and enforceable lien and priority security interest on such items
of personalty except as such enforcement may be limited by bankruptcy,
insolvency, receivership, reorganization, moratorium, redemption,
liquidation or other laws affecting the enforcement of creditor's rights
generally, or by general principles of equity (regardless of whether such
enforcement is considered in a proceeding in equity or at law).
Notwithstanding any of the foregoing, no representation is made as to the
perfection of any security interest in rents or other personal property to
the extent that possession or control of such items or actions other than
the filing of UCC Financing Statements are required in order to effect such
perfection.
10. All real estate taxes and governmental assessments, or installments
thereof, which would be a lien on the Mortgaged Property and that prior to
the Cut-Off Date have become
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delinquent in respect of each related Mortgaged Property have been paid, or
an escrow of funds in an amount sufficient to cover such payments has been
established. For purposes of this representation and warranty, real estate
taxes and governmental assessments and installments thereof shall not be
considered delinquent until the earlier of (a) the date on which interest
and/or penalties would first be payable thereon and (b) the date on which
enforcement action is entitled to be taken by the related taxing authority.
11. In the case of each Mortgage Loan, one or more engineering assessments were
performed and prepared by an independent engineering consultant firm, which
visited the related Mortgaged Property not more than 12 months prior to the
origination date of the related Mortgage Loan, and, except as set forth in
an engineering report prepared in connection with such assessment, a copy
of which has been delivered to the Purchaser or its designee, the related
Mortgaged Property is, to the Seller's knowledge, relying solely on the
review of such engineering assessment(s), in good repair, free and clear of
any damage that would materially and adversely affect its value as security
for such Mortgage Loan. If an engineering report revealed any such damage
or deficiencies, material deferred maintenance or other similar conditions
as described in the preceding sentence either (1) an escrow of funds equal
to at least 125% of the amount estimated to effect the necessary repairs,
or such other amount as a prudent commercial mortgage lender would deem
appropriate under the circumstances was required or a letter of credit in
such amount was obtained or (2) such repairs and maintenance have been
completed. As of the date of origination of such Mortgage Loan there was no
proceeding pending, and subsequent to such date, the Seller has not
received notice of any pending or threatening proceeding for the
condemnation of all or any material portion of the Mortgaged Property
securing any Mortgage Loan.
12. The Seller has received an ALTA lender's title insurance policy or a
comparable form of lender's title insurance policy (or if such policy has
not yet been issued, such insurance may be evidenced by escrow
instructions, a "marked up" pro forma or specimen policy or title
commitment, in either case, marked as binding and countersigned by the
title insurer or its authorized agent at the closing of the related
Mortgage Loan) as adopted in the applicable jurisdiction (the "Title
Insurance Policy"), which to the Seller's knowledge, was issued by a title
insurance company qualified to do business in the jurisdiction where the
applicable Mortgaged Property is located to the extent required, insuring
that the related Mortgage is a valid first lien in the original principal
amount of the related Mortgage Loan on the Mortgagor's fee simple interest
(or, if applicable, leasehold interest) in the portion of the Mortgaged
Property comprised of real estate, subject only to the Title Exceptions.
Such Title Insurance Policy was issued in connection with the origination
of the related Mortgage Loan. No claims have been made under such Title
Insurance Policy. Such Title Insurance Policy is in full force and effect,
provides that the originator of the related Mortgage Loan, its successors
or assigns is the sole named insured, and all premiums thereon have been
paid. The Seller has not done, by act or omission, and the Seller has no
knowledge of, anything that would impair the coverage under such Title
Insurance Policy. Immediately following the transfer and assignment of the
related Mortgage Loan to the Purchaser (including endorsement and delivery
of the related Mortgage Note to the Purchaser and recording of the related
Assignment of Mortgage in favor of Purchaser in the applicable real estate
records), such Title Insurance
I-4
Policy will inure to the benefit of the Purchaser without the consent of or
notice to the title insurer. Such Title Insurance Policy contains no
material exclusions for, or affirmatively insures against any losses
arising from (other than in jurisdictions in which affirmative insurance is
unavailable) (a) access to public roads, (b) that there are no material
encroachments of any part of the building thereon over easements and (c)
that the land shown on the survey is the same as the property legally
described in the Mortgage.
13. Each Mortgaged Property was covered by (1) a fire and extended perils
included within the classification "All Risk of Physical Loss" insurance
policy in an amount (subject to a customary deductible) at least equal to
the lesser of the replacement cost of improvements located on such
Mortgaged Property, with no deduction for depreciation, or the outstanding
principal balance of the Mortgage Loan and in any event, the amount
necessary to avoid the operation of any co-insurance provisions; (2)
business interruption or rental loss insurance in an amount at least equal
to 12 months of operations of the related Mortgaged Property; and (3)
comprehensive general liability insurance against claims for personal and
bodily injury, death or property damage occurring on, in or about the
related Mortgaged Property in an amount customarily required by prudent
commercial mortgage lenders, but not less than $1 million. An architectural
or engineering consultant has performed an analysis of each of the
Mortgaged Properties located in seismic zone 3 or 4 in order to evaluate
the structural and seismic condition of such property, for the sole purpose
of assessing the probable maximum loss ("PML") for the Mortgaged Property
in the event of an earthquake. In such instance, the PML was based on a 475
year lookback with a 10% probability of exceedance in a 50 year period. If
the resulting report concluded that the PML would exceed 20% of the amount
of the replacement costs of the improvements, earthquake insurance on such
Mortgaged Property was obtained by an insurer rated at least "A-:V" (or the
equivalent) by A.M. Best Company or "BBB-" (or the equivalent) from S&P or
"Baa3" (or the equivalent) from Xxxxx'x. If the Mortgaged Property is
located in Florida or within 25 miles of the coast of Texas, Louisiana,
Mississippi, Alabama, Georgia, North Carolina or South Carolina 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 full insurable value, or 100% of the
replacement cost, of the improvements located on the related Mortgaged
Property. Such insurance is required by the Mortgage or related Mortgage
Loan documents and was in full force and effect with respect to each
related Mortgaged Property at origination and to the knowledge of the
Seller, all insurance coverage required under each Mortgage, is in full
force and effect with respect to each related Mortgaged Property; and no
notice of termination or cancellation with respect to any such insurance
policy has been received by the Seller; and except for certain amounts not
greater than amounts which would be considered prudent by a commercial
mortgage lender with respect to a similar mortgage loan and which are set
forth in the related Mortgage, any insurance proceeds in respect of a
casualty loss will be applied either to (1) the repair or restoration of
the related Mortgaged Property with mortgagee or a third party custodian
acceptable to the mortgagee having the right to hold and disburse the
proceeds as the repair or restoration progresses, other than with respect
to amounts that are customarily acceptable to commercial and multifamily
mortgage lending institutions, or (2) the reduction of the
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outstanding principal balance of the Mortgage Loan and accrued interest
thereon. To the Seller's actual knowledge, the insurer with respect to each
policy is qualified to write insurance in the relevant jurisdiction to the
extent required. The insurance policies contain a standard mortgagee clause
naming the originator of the related Mortgage Loan, its successors and
assigns as loss payees in the case of property insurance policies and
additional insureds in the case of liability insurance policies and provide
that they are not terminable and may not be reduced without 30 days prior
written notice to the mortgagee (or, with respect to non-payment of
premiums, 10 days prior written notice to the mortgagee) or such lesser
period as prescribed by applicable law. Each Mortgage requires that the
Mortgagor maintain insurance as described above or permits the mortgagee to
require insurance as described above, and permits the mortgagee to purchase
such insurance at the Mortgagor's expense if the Mortgagor fails to do so.
Additionally, for any Mortgage Loan having an unpaid principal balance
equal to or greater than $15,000,000, the Insurer has a claims paying
ability rating from S&P or Fitch of not less than "A-" (or the equivalent)
or A.M. Best of not less than "A-:V" (or the equivalent).
14. (A) Other than payments due but not yet 30 days or more delinquent, there
is no material default, breach, violation or event of acceleration existing
under the related Mortgage or the related Mortgage Note, and to the
Seller's actual knowledge no event (other than payments due but not yet
delinquent) which, with the passage of time or with notice and the
expiration of any grace or cure period, would constitute a material
default, breach, violation or event of acceleration, provided, however,
that this representation and warranty does not address or otherwise cover
any default, breach, violation or event of acceleration that specifically
pertains to any matter otherwise covered by any other representation and
warranty made by the Seller in any paragraph of this Schedule I or in any
paragraph of Schedule II, and (B) the Seller has not waived any material
default, breach, violation or event of acceleration under such Mortgage or
Mortgage Note, except for a written waiver contained in the related
Mortgage File being delivered to the Purchaser, and no such waiver has been
granted since the date upon which the due diligence file related to the
applicable Mortgage Loan was delivered to Allied Capital Corporation, and
pursuant to the terms of the related Mortgage or the related Mortgage Note
and other documents in the related Mortgage File no Person or party other
than the holder of such Mortgage Note may declare any event of default or
accelerate the related indebtedness under either of such Mortgage or
Mortgage Note.
15. As of the Closing Date, each Mortgage Loan is not, and in the prior 12
months (or since the date of origination if such Mortgage Loan has been
originated within the past 12 months), has not been, 30 days or more past
due in respect of any Scheduled Payment.
16. Except with respect to ARD Loans, which provide that the rate at which
interest accrues thereon increases after the Anticipated Repayment Date,
the Mortgage Rate (exclusive of any default interest, late charges or
prepayment premiums) of such Mortgage Loan is a fixed rate.
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17. Each related Mortgage does not provide for or permit, without the prior
written consent of the holder of the Mortgage Note, each related Mortgaged
Property to secure any other promissory note or obligation except as
expressly described in such Mortgage.
18. Each Mortgage Loan constitutes a "qualified mortgage" within the meaning of
Section 860G(a)(3)of the Code (without regard to Treasury Regulations
Sections 1.860G-2(a)(3) or 1.860G-2(f)(2)), is directly secured by a
Mortgage on a commercial property or a multifamily residential property,
and either (1) substantially all of the proceeds of such Mortgage Loan were
used to acquire, improve or protect the portion of such commercial or
multifamily residential property that consists of an interest in real
property (within the meaning of Treasury Regulations Sections 1.856-3(c)
and 1.856-3(d)) and such interest in real property was the only security
for such Mortgage Loan as of the Testing Date (as defined below), or (2)
the fair market value of the interest in real property which secures such
Mortgage Loan was at least equal to 80% of the principal amount of the
Mortgage Loan (a) as of the Testing Date, or (b) as of the Closing Date.
For purposes of the previous sentence, (1) the fair market value of the
referenced interest in real property shall first be reduced by (a) the
amount of any lien on such interest in real property that is senior to the
Mortgage Loan, and (b) a proportionate amount of any lien on such interest
in real property that is on a parity with the Mortgage Loan, and (2) the
"Testing Date" shall be the date on which the referenced Mortgage Loan was
originated unless (a) such Mortgage Loan was modified after the date of its
origination in a manner that would cause a "significant modification" of
such Mortgage Loan within the meaning of Treasury Regulations Section
1.1001-3(b), and (b) such "significant modification" did not occur at a
time when such Mortgage Loan was in default or when default with respect to
such Mortgage Loan was reasonably foreseeable. However, if the referenced
Mortgage Loan has been subjected to a "significant modification" after the
date of its origination and at a time when such Mortgage Loan was not in
default or when default with respect to such Mortgage Loan was not
reasonably foreseeable, the Testing Date shall be the date upon which the
latest such "significant modification" occurred. As of the Closing Date,
the related Mortgaged Property, if acquired by a REMIC in connection with
the default or imminent default of such Mortgage Loan, would constitute
"foreclosure property" within the meaning of Section 860G(a)(8) of the
Code.
19. One or more environmental site assessments or updates thereof (meeting
American Society for Testing and Materials (ASTM) standards) were performed
by an environmental consulting firm independent of the Seller and the
Seller's affiliates with respect to each related Mortgaged Property during
the 18-months preceding the origination of the related Mortgage Loan, and
the Seller, having made no independent inquiry other than to review the
report(s) prepared in connection with the assessment(s) referenced herein,
has no actual knowledge and has received no notice of any material adverse
environmental condition or circumstance affecting such Mortgaged Property
that was not disclosed in such report(s). If any such environmental report
identified any Recognized Environmental Condition (REC), as that term is
defined in the Standard Practice for Environmental Site Assessments: Phase
I Environmental Site Assessment Process Designation: E 1527-00, as
recommended by the American Society for Testing and Materials (ASTM), with
respect to the related Mortgaged Property and the same have not been
subsequently addressed in all material respects, then either (i) an escrow
of
I-7
100% or more of the amount identified as necessary by the environmental
consulting firm to address the REC is held by the Seller for purposes of
effecting same (and the borrower has covenanted in the Mortgage Loan
documents to perform such work), (ii) the related borrower or other
responsible party having financial resources reasonably estimated to be
adequate to address the REC is required to take such actions or is liable
for the failure to take such actions, if any, with respect to such
circumstances or conditions as have been required by the applicable
governmental regulatory authority or any environmental law or regulation,
(iii) the borrower has provided an environmental insurance policy, (iv) an
operations and maintenance plan has been or will be implemented or (v) such
conditions or circumstances were investigated further and based upon such
additional investigation, a qualified environmental consultant recommended
no further investigation or remediation. All environmental assessments or
updates that were in the possession of the Seller and that relate to a
Mortgaged Property insured by an environmental insurance policy have been
delivered to or disclosed to the environmental insurance carrier or
insurance broker issuing such policy prior to the issuance of such policy.
The Mortgage Loan documents require the borrower to comply with all
applicable environmental laws and each Mortgagor has agreed to indemnify
the mortgagee for any losses resulting from any material, adverse
environmental condition or failure of the Mortgagor to abide by such laws
or has provided environmental insurance.
20. Each related Mortgage and Assignment of Leases, together with applicable
state law, contains customary and enforceable provisions for comparable
mortgaged properties similarly situated such as to render the rights and
remedies of the holder thereof adequate for the practical realization
against the Mortgaged Property of the benefits of the security, including
realization by judicial or, if applicable, non-judicial foreclosure,
subject to the effects of bankruptcy, insolvency, reorganization,
receivership, moratorium, redemption, liquidation or similar law affecting
the right of creditors and the application of principles of equity.
21. No Mortgagor is a debtor in any state or federal bankruptcy or insolvency
proceeding.
22. Each Mortgage Loan is a whole loan (except in respect to each Co-Lender
Loan) and contains no equity participation by the lender or shared
appreciation feature and does not provide for any contingent or additional
interest in the form of participation in the cash flow of the related
Mortgaged Property or, other than the ARD Loans, provide for negative
amortization. The Seller holds no preferred equity interest.
23. The Mortgage contains a "due on sale" clause, which provides for the
acceleration of the payment of the unpaid principal balance of the Mortgage
Loan if, without the prior written consent of the holder of the Mortgage,
either the related Mortgaged Property, or any equity interest in the
related Mortgagor, is directly or indirectly transferred, sold or pledged,
other than by reason of family and estate planning transfers, transfers by
devise, descent or operation of law upon the death of a member, general
partner or shareholder of the related Borrower, transfers of less than a
controlling interest (as such term is defined in the related Mortgage Loan
documents) in the Mortgagor, 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 Mortgagor,
I-8
transfers among affiliated Mortgagors with respect to Crossed Loans or
multi-property Mortgage Loans or transfers of a similar nature to the
foregoing meeting the requirements of the Mortgage Loan (such as pledges of
ownership interests that do not result in a change of control). The
Mortgage requires the Mortgagor to pay all reasonable fees and expenses
associated with securing the consents or approvals described in the
preceding sentence including the cost of any required counsel opinions
relating to REMIC or other securitization and tax issues and any applicable
Rating Agency fees.
24. Except as set forth in the related Mortgage File, the terms of the related
Mortgage Note and Mortgage(s) have not been waived, modified, altered,
satisfied, impaired, canceled, subordinated or rescinded in any manner
which materially interferes with the security intended to be provided by
such Mortgage and no such waiver, modification, alteration, satisfaction,
impairment, cancellation, subordination or rescission has occurred since
the date upon which the due diligence file related to the applicable
Mortgage Loan was delivered to Allied Capital Corporation.
25. Each related Mortgaged Property was inspected by or on behalf of the
related originator or an affiliate during the 12 month period prior to the
related origination date.
26. Since origination, no material portion of the related Mortgaged Property
has been released from the lien of the related Mortgage, in any manner
which materially and adversely affects the value of the Mortgage Loan or
materially interferes with the security intended to be provided by such
Mortgage. The terms of the related Mortgage do not provide for release of
any material portion of the Mortgaged Property from the lien of the
Mortgage except (a) in consideration of payment therefor of not less than
125% of the related allocated loan amount of such Mortgaged Property, (b)
upon payment in full of such Mortgage Loan, (c) upon defeasance permitted
under the terms of such Mortgage Loan by means of substituting for the
Mortgaged Property (or, in the case of a Mortgage Loan secured by multiple
Mortgaged Properties, one or more of such Mortgaged Properties) "government
securities", as defined in the Investment Company Act of 1940, as amended,
sufficient to pay the Mortgage Loan in accordance with its terms, (d) upon
substitution of a replacement property with respect to such Mortgage Loan
as set forth on Schedule 26, (e) where release is conditional upon the
satisfaction of certain underwriting and legal requirements which would be
acceptable to a reasonably prudent commercial mortgage lender and the
payment of a release price that represents at least 125% of the appraised
value of such Mortgaged Property or (f) releases of unimproved out-parcels
or other portions of the Mortgaged Property which will not have a material
adverse effect on the underwritten value of the security for the Mortgage
Loan and which were not afforded any value in the appraisal obtained at the
origination of the Mortgage Loan.
27. To the Seller's knowledge, as of the date of origination of such Mortgage
Loan, based on an opinion of counsel, an endorsement to the related title
policy, a zoning letter or a zoning report, and, to the Seller's knowledge,
as of the Cut-Off Date, there are no violations of any applicable zoning
ordinances, building codes and land laws applicable to the Mortgaged
Property, the improvements thereon or the use and occupancy thereof which
would have a material adverse effect on the value, operation or net
operating income of the Mortgaged Property which are not covered by title
insurance. Any non-
I-9
conformity with zoning laws constitutes a legal non-conforming use or
structure which, in the event of casualty or destruction, may be restored
or repaired to the full extent of the use or structure at the time of such
casualty, or for which law and ordinance insurance coverage has been
obtained in amounts customarily required by prudent commercial mortgage
lenders, or such non-conformity does not materially and adversely affect
the use, operation or value of the Mortgaged Property.
28. To the Seller's actual knowledge based on surveys and/or the title policy
referred to herein obtained in connection with the origination of each
Mortgage Loan, none of the material improvements which were included for
the purposes of determining the appraised value of the related Mortgaged
Property at the time of the origination of the Mortgage Loan lies outside
of the boundaries and building restriction lines of such property (except
Mortgaged Properties which are legal non-conforming uses), to an extent
which would have a material adverse affect on the value of the Mortgaged
Property or related Mortgagor's use and operation of such Mortgaged
Property (unless affirmatively covered by title insurance) and no
improvements on adjoining properties encroached upon such Mortgaged
Property to any material and adverse extent (unless affirmatively covered
by title insurance).
29. Each Mortgage Loan with an original principal balance over $5,000,000
requires the Mortgagor to be for at least for so long as the Mortgage Loan
is outstanding and, to Seller's actual knowledge, each Mortgagor is, a
Single-Purpose Entity. For this purpose, "Single-Purpose Entity" means a
person, other than an individual, whose organizational documents provide,
or which entity represented and covenanted in the related Mortgage Loan
documents, substantially to the effect that such Mortgagor (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. With respect to each Mortgage Loan with an original principal
balance over $15,000,000, the organizational documents of the related
Mortgagor provide substantially to the effect that such Mortgagor (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. Each such Mortgage Loan having an original
principal balance of $20,000,000 or more has a counsel's opinion regarding
non-consolidation of the Mortgagor in any insolvency proceeding involving
any other party. The organizational documents of any Mortgagor on a
Mortgage Loan having an original principal balance of $15,000,000 or more
which is a single member limited liability company provide that the
Mortgagor shall not dissolve or liquidate upon the bankruptcy, dissolution,
liquidation or death of the sole member. With respect to any such single
member limited liability company, which is the Mortgagor on a Mortgage Loan
having an original principal
I-10
balance of $15,000,000 or more, the Mortgage Loan has an opinion of such
Mortgagor's counsel confirming that the law of the jurisdiction in which
such single member limited liability company was organized permits such
continued existence upon such bankruptcy, dissolution, liquidation or death
of the sole member of the Mortgagor.
30. No advance of funds has been made other than pursuant to the loan
documents, directly or indirectly, by the Seller to the Mortgagor and, to
the Seller's actual knowledge, no funds have been received from any Person
other than the Mortgagor, for or on account of payments due on the Mortgage
Note or the Mortgage.
31. As of the date of origination and, to the Seller's actual knowledge, as of
the Cut-Off Date, there was no pending action, suit or proceeding, or
governmental investigation of which it has received notice, against the
Mortgagor or the related Mortgaged Property the adverse outcome of which
could reasonably be expected to materially and adversely affect such
Mortgagor's ability to pay principal, interest or any other amounts due
under such Mortgage Loan or the security intended to be provided by the
Mortgage Loan documents or the current use of the Mortgaged Property.
32. As of the date of origination, and, to the Seller's actual knowledge, as of
the Cut-Off Date, if the related Mortgage is a deed of trust, a trustee,
duly qualified under applicable law to serve as such, has either been
properly designated and serving under such Mortgage or may be substituted
in accordance with the Mortgage and applicable law.
33. The Mortgage Loan and the interest (exclusive of any default interest, late
charges or prepayment premiums) contracted for on such Mortgage Loan (other
than an ARD Loan after the Anticipated Repayment Date) complied as of the
date of origination with, or is exempt from, applicable state or federal
laws, regulations and other requirements pertaining to usury.
34. Except with respect to the Companion Loan of any Co-Lender Loan, the
related Mortgage Note is not secured by any collateral that secures a
Mortgage Loan that is not in the Trust Fund and each Crossed Loan is
cross-collateralized only with other Mortgage Loans sold pursuant to this
Agreement.
35. The improvements located on the Mortgaged Property are either not located
in a federally designated special flood hazard area or, if so located, the
Mortgagor is required to maintain or the mortgagee maintains, flood
insurance with respect to such improvements and such policy is in full
force and effect in an amount no less than the lesser of (i) the original
principal balance of the Mortgage Loan, (ii) the value of such improvements
on the related Mortgaged Property located in such flood hazard area or
(iii) the maximum allowed under the related federal flood insurance
program.
36. All escrow deposits and payments required pursuant to the Mortgage Loan as
of the Closing Date required to be deposited with the Seller in accordance
with the Mortgage Loan documents have been so deposited, are in the
possession, or under the control, of the Seller or its agent and there are
no deficiencies in connection therewith.
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37. To the Seller's actual knowledge, based on the due diligence customarily
performed in the origination of comparable mortgage loans by prudent
commercial and multifamily mortgage lending institutions with respect to
the related geographic area and properties comparable to the related
Mortgaged Property, as of the date of origination of the Mortgage Loan, the
related Mortgagor, the related lessee, franchisor or operator was in
possession of all material licenses, permits and authorizations then
required for use of the related Mortgaged Property by the related
Mortgagor, and, as of the Cut-Off Date, the Seller has no actual knowledge
that the related Mortgagor, the related lessee, franchisor or operator was
not in possession of such licenses, permits and authorizations. The
Mortgage Loan documents require the borrower to maintain all such licenses,
permits, authorizations and franchises.
38. The origination (or acquisition, as the case may be), servicing and
collection practices used by the Seller with respect to the Mortgage Loan
have been in all respects legal and have met customary industry standards
for servicing of commercial mortgage loans for conduit loan programs.
39. Except for Mortgagors under Mortgage Loans the Mortgaged Property with
respect to which includes a Ground Lease, the related Mortgagor (or its
affiliate) has title in the fee simple interest in each related Mortgaged
Property.
40. The Mortgage Loan documents for each Mortgage Loan provide that each
Mortgage Loan is non-recourse to the related Mortgagor except that the
related Mortgagor and an additional guarantor who is a natural person
accepts responsibility for fraud and/or other intentional material
misrepresentation and environmental indemnity. Furthermore, the Mortgage
Loan documents for each Mortgage Loan provide that the related Mortgagor
and an additional guarantor, who is a natural person, shall be liable to
the lender for losses incurred due to the misapplication or
misappropriation of rents collected in advance or received by the related
Mortgagor after the occurrence of an event of default and not paid to the
Mortgagee or applied to the Mortgaged Property in the ordinary course of
business, misapplication or conversion by the Mortgagor of insurance
proceeds or condemnation awards or breach of the environmental covenants in
the related Mortgage Loan documents.
41. Subject to the exceptions set forth in paragraph (5) and upon possession of
the Mortgaged Property as required under applicable state law, the
Assignment of Leases set forth in the Mortgage or separate from the related
Mortgage and related to and delivered in connection with each Mortgage Loan
establishes and creates a valid, subsisting and enforceable lien and
security interest in the related Mortgagor's interest in all leases,
subleases, licenses or other agreements pursuant to which any Person is
entitled to occupy, use or possess all or any portion of the real property.
42. With respect to such Mortgage Loan, any prepayment premium and Yield
Maintenance Charge constitutes a "customary prepayment penalty" within the
meaning of Treasury Regulations Section 1.860G-1(b)(2).
I-12
43. If such Mortgage Loan contains a provision for any defeasance of mortgage
collateral, such Mortgage Loan permits defeasance (1) no earlier than two
years after the Closing Date and (2) only with substitute collateral
constituting "government securities" within the meaning of Treasury
Regulations Section 1.860G-2(a)(8)(i) in an amount sufficient to make all
scheduled payments under the Mortgage Note. Such Mortgage Loan was not
originated with the intent to collateralize a REMIC offering with
obligations that are not real estate mortgages. In addition, if such
Mortgage contains such a defeasance provision, it provides (or otherwise
contains provisions pursuant to which the holder can require) that an
opinion be provided to the effect that such holder has a first priority
perfected security interest in the defeasance collateral. The related
Mortgage Loan documents permit the lender to charge all of its expenses
associated with a defeasance to the Mortgagor (including rating agencies'
fees, accounting fees and attorneys' fees), and provide that the related
Mortgagor must deliver (or otherwise, the Mortgage Loan documents contain
certain provisions pursuant to which the lender can require) (a) an
accountant's certification as to the adequacy of the defeasance collateral
to make payments under the related Mortgage Loan for the remainder of its
term, (b) an Opinion of Counsel that the defeasance complies with all
applicable REMIC Provisions, and (c) assurances from the Rating Agencies
that the defeasance will not result in the withdrawal, downgrade or
qualification of the ratings assigned to the Certificates. Notwithstanding
the foregoing, some of the Mortgage Loan documents may not affirmatively
contain all such requirements, but such requirements are effectively
present in such documents due to the general obligation to comply with the
REMIC Provisions and/or deliver a REMIC Opinion of Counsel.
44. To the extent required under applicable law as of the date of origination,
and necessary for the enforceability or collectability of the Mortgage
Loan, the originator of such Mortgage Loan was authorized to do business in
the jurisdiction in which the related Mortgaged Property is located at all
times when it originated and held the Mortgage Loan.
45. Neither the Seller nor any affiliate thereof has any obligation to make any
capital contributions to the Mortgagor under the Mortgage Loan.
46. Except with respect to the Companion Loan of any Co-Lender Loan, none of
the Mortgaged Properties is encumbered, and none of the Mortgage Loan
documents permits the related Mortgaged Property to be encumbered
subsequent to the Closing Date without the prior written consent of the
holder thereof, by any lien securing the payment of money junior to or of
equal priority with, or superior to, the lien of the related Mortgage
(other than Title Exceptions, taxes, assessments and contested mechanics
and materialmens liens that become payable after the Cut-Off Date of the
related Mortgage Loan).
47. Each related Mortgaged Property constitutes one or more complete separate
tax lots (or the related Mortgagor has covenanted to obtain separate tax
lots and a Person has indemnified the mortgagee for any loss suffered in
connection therewith or an escrow of funds in an amount sufficient to pay
taxes resulting from a breach thereof has been established) or is subject
to an endorsement under the related title insurance policy.
I-13
48. An appraisal of the related Mortgaged Property was conducted in connection
with the origination of such Mortgage Loan; and such appraisal satisfied
either (A) the requirements of the "Uniform Standards of Professional
Appraisal Practice" as adopted by the Appraisal Standards Board of the
Appraisal Foundation, or (B) the guidelines in Title XI of the Financial
Institutions Reform, Recovery and Enforcement Act or 1989, in either case
as in effect on the date such Mortgage Loan was originated.
49. In the origination and servicing of the Mortgage Loan, neither Seller nor
any prior holder of the Mortgage Loan participated in any fraud or
intentional material misrepresentation with respect to the Mortgage Loan.
To Seller's knowledge, no Mortgagor or guarantor originated a Mortgage
Loan.
50. Each Mortgage requires the Mortgagor upon request to provide the owner or
holder of the Mortgage with quarterly (except for some Mortgage Loans with
an original principal balance less than $5,000,000) and annual operating
statements (or a balance sheet and statement of income and expenses, rent
rolls (if there is more than one tenant) and related information, which
annual financial statements for all Mortgage Loans with an outstanding
principal balance greater than $20,000,000 are required to be audited by an
independent certified public accountant.
51. Each Mortgaged Property is served by public utilities, water and sewer (or
septic facilities) and otherwise appropriate for the use in which the
Mortgaged Property is currently being utilized.
52. If the Mortgaged Property securing any Mortgage Loan is covered by a
secured creditor policy, then:
(a) the Seller:
(i) 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 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; or
(ii) has delivered or caused to be delivered to the insurer or its
agent under such policy copies of all environmental reports in
the Seller's possession related to such Mortgaged Property;
in each case, with respect to (i) or (ii), 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
Mortgagor's ability to recover under such policy;
(b) all premiums for such insurance have been paid;
(c) such insurance is in full force and effect;
I-14
(d) such insurance has a term of at least 5 years beyond the maturity date
(or the Anticipated Repayment Date for ARD Loans) of such Mortgage
Loan;
(e) 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 II, (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) such report did not recommend any action
requiring the expenditure of any material funds and 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; and
(f) rights under such policy inure to the benefit of the Purchaser.
53. Each Mortgage Loan is secured by the fee interest in the related Mortgaged
Property, except with respect to loan number 43 listed on the Mortgage Loan
Schedule, which Mortgage Loans are secured by the interest of the related
Mortgagor as a lessee under a ground lease of a Mortgaged Property (a
"Ground Lease") (the term Ground Lease shall mean such ground lease, all
written amendments and modifications, and any related estoppels or
agreements from the ground lessor and, in the event the Mortgagor's
interest is a ground subleasehold, shall also include not only such ground
sublease but also the related ground lease), but not by the related fee
interest in such Mortgaged Property (the "Fee Interest") and:
(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 or, if consent of
the lessor thereunder is required, it has been obtained prior to the
Closing Date, 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 written
instruments which are a part of the related Mortgage File;
(b) Such Ground Lease is not subject to any liens or encumbrances superior
to, or of equal priority with, the related Mortgage, other than the
related Fee Interest and Title Exceptions;
I-15
(c) The Mortgagor's interest in such Ground Lease is assignable to the
mortgagee and its successors and assigns upon notice to, but without
the consent of, the lessor thereunder (or, if such consent is
required, it has been obtained prior to the Cut-Off Date) and, in the
event that it is so assigned, is further assignable by the mortgagee
and its successors and assigns upon notice to, but without the need to
obtain the consent of, such lessor (or, if such consent is required,
it has been obtained prior to the Cut-Off Date);
(d) As of the Closing Date such Ground Lease is in full force and effect,
and the Seller has not received notice (nor is the Seller otherwise
aware) that any default has occurred under such Ground Lease as of the
Cut-Off Date;
(e) Seller or its agent has provided the lessor under the Ground Lease
with notice of its lien, and such Ground Lease requires the lessor to
give notice of any default by the lessee to the mortgagee, and such
Ground Lease, further provides that no notice of termination given
under such Ground Lease is effective against such mortgagee 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 to cure any default under such Ground Lease (including
where necessary, sufficient time to gain possession of the interest of
the lessee under the Ground Lease), which is curable after the receipt
of written notice of any such default, before the lessor thereunder
may terminate such Ground Lease, and all of the rights of the
Mortgagor under such Ground Lease and the related Mortgage (insofar as
it relates to the Ground Lease) may be exercised by or on behalf of
the mortgagee;
(g) Such Ground Lease has a current term (including one or more optional
renewal terms, which, under all circumstances, may be exercised, and
will be enforceable, by the Seller, its successors or assigns) which
extends not less than 10 years beyond the amortization term of the
related Mortgage Loan;
(h) Such Ground Lease requires the lessor to enter into a new lease with
the mortgagee under such Mortgage Loan upon termination of such Ground
Lease for any reason, including rejection of such Ground Lease in a
bankruptcy proceeding;
(i) Under the terms of such Ground Lease and the related Mortgage, taken
together, any related insurance proceeds or condemnation award will be
applied either (i) to the repair or restoration of all or part of the
related Mortgaged Property, with the mortgagee under such Mortgage
Loan 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 such Mortgage Loan
together with any accrued interest thereon;
I-16
(j) Such Ground Lease does not impose any restrictions on subletting which
would be viewed as commercially unreasonable by a prudent commercial
mortgage lender; and the lessor thereunder is not permitted, in the
absence of an uncured default, to disturb the possession, interest or
quiet enjoyment of any 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
(k) Such Ground Lease may not be amended or modified without the prior
consent of the mortgagee under such Mortgage Loan and any such action
without such consent is not binding on such mortgagee, its successors
or assigns.
I-17
SCHEDULE II
EXCEPTIONS TO REPRESENTATIONS AND WARRANTIES
EXCEPTIONS TO REPRESENTATION 8
------------------------------
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LOANS DESCRIPTION OF EXCEPTION
---------------------------------------------------------------------------------------------------------------------
61 Walgreens - Cypress, TX The tenant has a right of first refusal to purchase the
00 Xxxxxxxxx - Xxxxxxx Xxxx, XX Mortgaged Property. The right of first refusal is
74 Walgreens - Beaumont, TX subordinate to the mortgage and is not exercisable in a
foreclosure sale.
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5 FBI Field Office - Baltimore, MD An affiliate of the guarantors has an option to
purchase all of the shares of the borrower's sole
member.
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EXCEPTIONS TO REPRESENTATION 12
-------------------------------
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LOANS DESCRIPTION OF EXCEPTION
---------------------------------------------------------------------------------------------------------------------
81 Kinko's - Albuquerque, NM The Title Insurance Policy does not affirmatively insure
that the land shown on the survey is the same as the
property legally described in the Mortgage. At the time
of loan closing and title policy issuance, this
endorsement was not available in the state of New Mexico.
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II-1
EXCEPTIONS TO REPRESENTATION 13
-------------------------------
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LOANS DESCRIPTION OF EXCEPTION
---------------------------------------------------------------------------------------------------------------------
All Loans All insurance requirements specified under each
Mortgage may not as of the date of origination or
thereafter have been required to be satisfied in every
respect; however, the coverages specifically enumerated
in Representation 13 were in place at origination, and
to Seller's actual knowledge, remain in place except as
otherwise indicated in the exceptions to this
Representation 13.
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61 Walgreen's - Cypress, TX The lender has accepted self insurance from the
Walgreens tenant. Although neither Walgreens nor the
borrower is obligated under the Mortgage Loan documents
to maintain business interruption or rental loss
coverage under the terms of the lease, the tenant's
obligation to pay rent does not xxxxx after a casualty
during the term of the mortgage loan and tenant is also
responsible for effectuating the repair and restoration
of the Mortgaged Property in accordance with the terms
of the lease.
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00 Xxxxxxxx'x - Xxxxxxx Xxxx, XX The lender has accepted self insurance from the
Walgreens tenant. Rental loss coverage is maintained
under a separate insurance policy.
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II-2
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LOANS DESCRIPTION OF EXCEPTION
---------------------------------------------------------------------------------------------------------------------
76 Cape Coral Mini-Storage The fire and extended perils insurance policy,
comprehensive general liability insurance policy, and
business interruption insurance policy are in amounts
less than the amounts required by the representations.
Additionally, the insurance policies maintained have
co-insurance provisions. Finally, the lender is named as
a mortgagee, but not a loss payee in the insurance
policies. However, the value of the Mortgaged Property
exceeds the outstanding principal balance of the
Mortgage Loan, and the borrower and two warm body
guarantors are liable to the lender for losses incurred
due to breach or failure to perform or comply with any
of the insurance provisions of the loan documents.
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78 Embassy House Apartments The borrower is not required to maintain windstorm
insurance on the Mortgaged Property although it is
located in Florida. However, the borrower has chosen
to maintain windstorm insurance and the Mortgaged
Property is located more than 25 miles from the coast.
---------------------------------------------------------------------------------------------------------------------
EXCEPTIONS TO REPRESENTATION 20
-------------------------------
---------------------------------------------------------------------------------------------------------------------
LOANS DESCRIPTION OF EXCEPTION
---------------------------------------------------------------------------------------------------------------------
5 FBI Field Office - Baltimore, MD The single tenant has the right to approve any sale or
transfer of the Mortgaged Property. However, the tenant
and Lender have executed an SNDA providing that the
tenant will recognize Lender as the landlord in the
event of foreclosure. Future transferees of the
Mortgaged Property would be subject to the tenant's
approval.
---------------------------------------------------------------------------------------------------------------------
II-3
EXCEPTIONS TO REPRESENTATION 23
-------------------------------
---------------------------------------------------------------------------------------------------------------------
LOANS DESCRIPTION OF EXCEPTION
---------------------------------------------------------------------------------------------------------------------
5 FBI Field Office - Baltimore, MD With respect to the loan listed to the left, transfers
of the related Mortgaged Property and transfers of
interest in the related Mortgagor and other affiliates
of Mortgagor are permitted to certain specified and
other qualified transferees pursuant to the terms and
subject to the satisfaction of certain conditions as
set forth in the Mortgage loan documents.
---------------------------------------------------------------------------------------------------------------------
40 FDA - Lenexa, KS The borrower is indebted to certain of its equity
owners for unsecured loans having an aggregate balance
of approximately $2,550,952 at the time of origination
of the Mortgage Loan.
---------------------------------------------------------------------------------------------------------------------
00 Xxxxxxxx Xxxxx - Xxxxxx, XX The borrower may enter into a reciprocal perpetual
parking easement with the adjacent property owner for
the use of 10 spaces on the Mortgaged Property and 10
spaces on the adjacent property subject to satisfaction
of certain conditions set forth in the Mortgage Loan
documents.
---------------------------------------------------------------------------------------------------------------------
00 Xxxxxxxxx - Xxxxxxx Xxxx, XX The loan documents require the two tenant in common
borrowers to transfer the Mortgaged Property to a new
single purpose entity borrower which must be 100% owned
and controlled by the two current tenant in common
borrowers by July 24, 2006.
---------------------------------------------------------------------------------------------------------------------
II-4
EXCEPTIONS TO REPRESENTATION 27
-------------------------------
---------------------------------------------------------------------------------------------------------------------
LOANS DESCRIPTION OF EXCEPTION
---------------------------------------------------------------------------------------------------------------------
72 Mission Viejo Retail Building The Mortgaged Property is dependent on a shared wall
located on the adjacent property for shear loads and
seismic support. The shared wall is not part of the
collateral and is not subject to a party wall
agreement. In the event the Mortgaged Property loses
the use of the shared wall, a new wall could be built
on the Mortgaged Property but would require a variance
from setback requirements. A title endorsement was
obtained insuring against any losses that occur due to
the shared wall being located on the adjoining property
subject to the terms and conditions contained in the
related title policy.
---------------------------------------------------------------------------------------------------------------------
78 Embassy House Apartments The Mortgaged Property is currently legal
non-conforming with respect to density. In the event of
casualty resulting in less than 50% of the improvements
being destroyed, the improvements may be rebuilt to the
density at the time of casualty. Due to the low
probability of destruction of more than 50% of the
improvements, the lender waived law and ordinance
coverage, but may require such coverage in the future.
---------------------------------------------------------------------------------------------------------------------
II-5
EXCEPTIONS TO REPRESENTATION 28
-------------------------------
---------------------------------------------------------------------------------------------------------------------
LOANS DESCRIPTION OF EXCEPTION
---------------------------------------------------------------------------------------------------------------------
72 Mission Viejo Retail Building The Mortgaged Property is dependent on a shared wall
located on the adjacent property for shear loads and
seismic support. The shared wall is not part of the
collateral and is not subject to a party wall agreement.
In the event the Mortgaged Property loses the use of the
shared wall, a new wall could be built on the Mortgaged
Property but would require a variance from setback
requirements. A title endorsement was obtained insuring
against any losses that occur due to the shared wall
being located on the adjoining property subject to the
terms and conditions contained in the related title
policy.
---------------------------------------------------------------------------------------------------------------------
EXCEPTIONS TO REPRESENTATION 35
-------------------------------
---------------------------------------------------------------------------------------------------------------------
LOANS DESCRIPTION OF EXCEPTION
---------------------------------------------------------------------------------------------------------------------
61 Walgreens - Cypress, TX For each of the Mortgage Loans to the left, the lender
00 Xxxxxxxxx - Xxxxxxx Xxxx, XX has accepted self insurance from the Walgreens tenant
for the required flood insurance policies.
---------------------------------------------------------------------------------------------------------------------
EXCEPTIONS TO REPRESENTATION 37
-------------------------------
---------------------------------------------------------------------------------------------------------------------
LOANS DESCRIPTION OF EXCEPTION
---------------------------------------------------------------------------------------------------------------------
5 FBI Field Office - Baltimore, MD The Mortgaged Property currently has a partial
certificate of occupancy. A holdback of $100,000 was
taken at closing to be released upon issuance of a final
certificate of occupancy.
---------------------------------------------------------------------------------------------------------------------
II-6
EXCEPTIONS TO REPRESENTATION 40
-------------------------------
---------------------------------------------------------------------------------------------------------------------
LOANS DESCRIPTION OF EXCEPTION
---------------------------------------------------------------------------------------------------------------------
All Mortgage Loans The borrower is liable to the lender for losses incurred
due to the misapplication of rents only with respect to
rents received by the borrower or any guarantor after
the lender makes written demand therefor pursuant to any
loan document.
---------------------------------------------------------------------------------------------------------------------
5 FBI Field Office - Baltimore, MD There is one entity guarantor, and there are two warm
body guarantors. The warm body guarantors will be
permanently released from all liability if a purchase
option to purchase all of the shares of the sole member
of the borrower is exercised by the option holder.
---------------------------------------------------------------------------------------------------------------------
30 Shadelands Self Storage There is not a warm body guarantor initially for this
mortgage loan, however, both an entity guarantor and the
borrower are liable for recourse carveouts.
Additionally, if the net worth of the entity guarantor
drops below $7,500,000, then two warm body guarantors
will become liable for recourse carveouts.
---------------------------------------------------------------------------------------------------------------------
40 FDA - Lenexa, KS There is not a warm body guarantor for this mortgage
loan, however, both an entity guarantor and the borrower
are liable for recourse carveouts.
---------------------------------------------------------------------------------------------------------------------
73 Broad Trace Apartments There is not a warm body guarantor for this mortgage
loan, however, both an entity guarantor and the borrower
are liable for recourse carveouts.
---------------------------------------------------------------------------------------------------------------------
II-7
EXCEPTIONS TO REPRESENTATION 43
-------------------------------
---------------------------------------------------------------------------------------------------------------------
LOANS DESCRIPTION OF EXCEPTION
---------------------------------------------------------------------------------------------------------------------
All Mortgage Loans No Mortgage Loan requires, as a condition to a
defeasance, that the defeasance be permitted only to
facilitate the disposition or refinancing of the
Mortgaged Property and not as a part of an arrangement
to collateralize a REMIC offering with obligations that
are not real estate mortgages.
---------------------------------------------------------------------------------------------------------------------
EXCEPTIONS TO REPRESENTATION 50
-------------------------------
---------------------------------------------------------------------------------------------------------------------
LOANS DESCRIPTION OF EXCEPTION
---------------------------------------------------------------------------------------------------------------------
5 FBI Field Office - Baltimore, MD The borrower is required to provide the owner or holder
of the Mortgage with quarterly and annual financial
statements; however, such annual financial statements
only need to be audited by an independent certified
public accountant upon lender request.
---------------------------------------------------------------------------------------------------------------------
EXCEPTIONS TO REPRESENTATION 53(K)
----------------------------------
---------------------------------------------------------------------------------------------------------------------
LOANS DESCRIPTION OF EXCEPTION
---------------------------------------------------------------------------------------------------------------------
43 Park 80 East The lessor under the Ground Lease does not need the
prior consent of the mortgagee under the Mortgage Loan
to transfer its interest under the Ground Lease.
However, the lessor does need the prior consent of the
mortgagee to amend or modify the Ground Lease.
---------------------------------------------------------------------------------------------------------------------
II-8
EXHIBIT A
MORTGAGE LOAN SCHEDULE
MORTGAGE LOAN
LOAN GROUP
NUMBER NUMBER PROPERTY NAME ADDRESS
------------------------------------------------------------------------------------------------------------------------------------
5 1 FBI Field Office - Baltimore, MD 0000 Xxxx Xxxxxxxxx Xxxxx
30 1 Shadelands Self Storage 0000 Xxx Xxxxx Xxxx
40 1 FDA - Xxxxxx, XX 00000 & 00000 Xxxx 00xx Xxxxxx
43 1 Park 80 East 000 Xxxxx Xxxxxx
48 2 Park Xxxxx Apartments 00000 Xxxxxx Xxxx
00 0 Xxxxxxxxx - Xxxxxxx, XX 00000 Xxxxxx-Xxxxxxx Xxxx
00 1 Suburban Lodge - Stuart, FL 0000 Xxxxx Xxxxxxx Xxxxxxx
65 1 Eckerd - Jupiter, FL 4100 Military Trail
68 1 Good Guys - Xxxxxxxxx Xxxxx, XX 00000 Xxxx Xxxxxx Xxxx
00 0 Renaissance Center 0000-0000 Xxxxx Xxxxxxxx Xxxxx
71 1 Walgreens - Oakland Park, FL 0000 Xxxx Xxxxxxx Xxxx Xxxxxxxxx
72 1 Mission Viejo Retail Building 00000 Xxxxxxxxxx Xxxxxxx
73 2 Broad Trace Apartments 1210, 1215, 1225 & 0000 Xxxxx Xxxxxx
74 1 Walgreens - Beaumont, TX 3990 Xxxx Xxxxx Xxxxx
00 0 Xxxx Xxxxx Mini-Storage 0000 Xxxxxxxxx Xxxx
78 2 Embassy House Apartments 000 Xxxxx Xxxxxxx Xxxxxx
81 1 Kinko's - Xxxxxxxxxxx, XX 00000 Coors Boulevard Northwest
MORTGAGE LOAN
LOAN GROUP
NUMBER NUMBER CITY STATE ZIP CODE COUNTY
----------------------------------------------------------------------------------------------------------------------------------
5 1 Xxxxxxxxx XX 00000 Baltimore
30 1 Xxxxxx Xxxxx XX 00000 Xxxxxx Xxxxx
00 0 Xxxxxx XX 00000 Xxxxxxx
43 1 Xxxxxx Xxxxx XX 00000 Bergen
48 2 Xxxxxx Xxxxxxx XX 00000 Sacramento
61 1 Xxxxxxx XX 00000 Xxxxxx
62 1 Xxxxxx XX 00000 Xxxxxx
65 1 Xxxxxxx XX 00000 Xxxx Xxxxx
00 0 Xxxxxxxxx Xxxxx XX 00000 Xxx Xxxxxxx
00 0 Xxxxx XX 00000 Tulsa
71 1 Xxxxxxx Xxxx XX 00000 Broward
72 1 Xxxxxxx Xxxxx XX 00000 Orange
73 2 Xxxxxx XX 00000 Sumter
74 1 Xxxxxxxx XX 00000 Jefferson
76 1 Xxxx Xxxxx XX 00000 Xxx
78 2 Xxxxxxxxxxx XX 00000 Xxxx
81 1 Xxxxxxxxxxx XX 00000 Bernalillo
MORTGAGE LOAN CUT-OFF DATE MONTHLY
LOAN GROUP LOAN P&I MORTGAGE NUMBER OF
NUMBER NUMBER BALANCE ($) PAYMENTS ($) GRACE DAYS RATE UNITS
-----------------------------------------------------------------------------------------------------------------------------------
5 1 41,900,000.00 Various(2) 0 6.2400% 155,755
30 1 10,300,000.00 59,911.85 0 5.7200% 1,195
40 1 8,000,000.00 47,158.79 0 5.4400% 53,730
43 1 6,993,523.39 46,561.33 0 6.6500% 83,049
48 2 6,133,687.07 34,245.03 0 5.3100% 160
61 1 3,696,769.58 21,709.86 0 5.8000% 14,560
62 1 3,640,000.00 28,264.60 0 7.0200% 126
65 1 3,197,234.75 18,857.69 0 5.8400% 10,908
68 1 3,055,058.47 25,337.42 5 8.3000% 20,970
69 1 2,997,546.10 18,083.07 0 6.0500% 26,120
71 1 2,650,000.00 15,837.01 0 5.9700% 13,905
72 1 2,500,000.00 18,316.56 0 6.1900% 23,340
73 2 2,465,000.00 14,620.81 0 5.9000% 48
74 1 2,025,000.00 11,637.87 0 5.6100% 13,500
76 1 1,700,000.00 12,480.68 0 5.4900% 1,197
78 2 1,400,000.00 8,977.48 0 5.9500% 48
81 1 940,104.57 7,565.06 5 8.7000% 6,580
MORTGAGE LOAN UNIT OF ORIGINAL TERM REMAINING MATURITY ORIGINAL REMAINING
LOAN GROUP MEASURE TO MATURITY TERM TO DATE OR AMORT AMORT
NUMBER NUMBER OR ARD (MOS.) MATURITY OR ARD TERM TERM
ARD (MOS.) (MOS.) (MOS.)
------------------------------------------------------------------------------------------------------------------------------------
5 1 Sq. Ft. 108 108 08/11/13 360 360
30 1 Units 120 120 08/11/14 360 360
40 1 Sq. Ft. 60 60 08/11/09 324 324
43 1 Sq. Ft. 240 239 07/11/24 324 323
48 2 Units 120 116 04/11/14 360 356
61 1 Sq. Ft. 120 119 07/11/14 360 359
62 1 Rooms 84 84 08/11/11 240 240
65 1 Sq. Ft. 120 119 07/11/14 360 359
68 1 Sq. Ft. 132 89 01/01/12 300 257
69 1 Sq. Ft. 120 119 07/11/14 360 359
71 1 Sq. Ft. 120 120 08/11/14 360 360
72 1 Sq. Ft. 240 240 08/11/24 240 240
73 2 Units 120 120 08/11/14 360 360
74 1 Sq. Ft. 120 120 08/11/14 360 360
76 1 Units 216 216 08/11/22 216 216
78 2 Units 120 120 08/11/14 300 300
81 1 Sq. Ft. 120 73 09/01/10 360 313
MORTGAGE LOAN GROUND MASTER ARD LOANS ANTICIPATED
LOAN GROUP LEASE SERVICING REPAYMENT DATE
NUMBER NUMBER FEE RATE
-------------------------------------------------------------------------------------------------------------------
5 1 N 0.04000% Y 08/11/13
30 1 N 0.04000% N
40 1 N 0.04000% Y 08/11/09
43 1 Y 0.04000% N
48 2 N 0.04000% N
61 1 N 0.04000% N
62 1 N 0.04000% Y 08/11/11
65 1 N 0.04000% Y 07/11/14
68 1 N 0.04000% N
69 1 N 0.04000% N
71 1 N 0.04000% Y 08/11/14
72 1 N 0.04000% N
73 2 N 0.11000% N
74 1 N 0.04000% Y 08/11/14
76 1 N 0.04000% N
78 2 N 0.04000% N
81 1 N 0.04000% N
MORTGAGE LOAN
LOAN GROUP
NUMBER NUMBER ADDITIONAL INTEREST RATE LOAN ORIGINATOR
------------------------------------------------------------------------------------------------------------------------------------
5 1 Greater of Initial Rate + 4% or Treasury Index + 3.65% Artesia
30 1 Artesia
40 1 Greater of Initial Rate + 4% or Treasury Index + 3.6% Artesia
43 1 Artesia
48 2 Artesia
61 1 Artesia
62 1 Greater of Initial Rate + 4% or Treasury Index + 6.75% Artesia
65 1 Greater of Initial Rate + 4% or Treasury Index + 5.1% Artesia
68 1 Artesia
69 1 Artesia
71 1 Greater of Initial Rate + 4% or Treasury Index + 5.28% Artesia
72 1 Artesia
73 2 Artesia
74 1 Greater of Initial Rate + 4% or Treasury Index + 5.25% Artesia
76 1 Artesia
78 2 Artesia
81 1 Artesia
MORTGAGE LOAN ENVIRONMENTAL CROSS COLLATERALIZED DEFEASANCE EARLY
LOAN GROUP INSURANCE AND CROSS DEFAULTED LOAN DEFEASANCE
NUMBER NUMBER LOAN FLAG
------------------------------------------------------------------------------------------------------------------------------------
5 1 N Y N
30 1 N N N
40 1 N Y N
43 1 N Y N
48 2 N Y N
61 1 N N N
62 1 N Y N
65 1 N Y N
68 1 N Y N
69 1 N Y N
71 1 N Y N
72 1 N Y N
73 2 N Y N
74 1 N Y N
76 1 N N N
78 2 N Y N
81 1 N Y N
MORTGAGE LOAN SECURE INTEREST INTEREST LOCKBOX
LOAN GROUP BY LC ACCRUAL ACCRUAL
NUMBER NUMBER METHOD METHOD
DURING IO
---------------------------------------------------------------------------------------------------------------------------------
5 1 Actual/360 Actual/360 Day 1
30 1 Actual/360
40 1 Actual/360 Springing
43 1 Y Actual/360
48 2 Actual/360 Day 1
61 1 Actual/360
62 1 Actual/360 Day 1
65 1 Actual/360 Springing
68 1 Actual/360
69 1 Actual/360
71 1 Actual/360 Springing
72 1 Actual/360
73 2 Actual/360
74 1 Actual/360 Springing
76 1 Actual/360
78 2 Actual/360
81 1 Actual/360
MORTGAGE LOAN ANNUAL DEPOSIT INITIAL DEPOSIT INITIAL TI/LC ONGOING
LOAN GROUP TO REPLACEMENT TO CAPITAL ESCROW TI/LC
NUMBER NUMBER RESERVE IMPROVEMENTS FOOTNOTE
RESERVE
----------------------------------------------------------------------------------------------------------------
5 1 31,151
30 1
40 1 10,746
43 1 17,440 350,000 (1)
48 2 48,000 47,375
61 1 2,184
62 1 53,439
65 1
68 1 3,146 150,000 (1)
69 1 3,918 (1)
71 1
72 1 5,858 (1)
73 2 10,800
74 1 2,025
76 1 9,668
78 2 13,200 18,750
81 1 987 (1)
(1) In addition to any such escrows funded at loan closing for potential TI/LC,
these Mortgage Loans require funds to be escrowed during some or all of the
loan term for TI/LC
(2) Fixed monthly payments of principal and interest for the first 12 months on
a 20-year amortization schedule, interest-only payments for months 13
through 36, and thereafter, fixed monthly payments of principal and
interest on a 30-year amortization schedule.
A-1
