MORTGAGE LOAN PURCHASE AGREEMENT
Mortgage Loan Purchase Agreement, dated as of the date of the Pooling and
Servicing Agreement (as defined below) (the "Agreement"), between Xxxxxxx Xxxxx
Mortgage Capital Inc. (the "Seller") and First Union Commercial Mortgage
Securities, Inc. (the "Purchaser").
The Seller intends to sell and the Purchaser intends to purchase certain
multifamily and commercial mortgage loans (the "MLMCI Mortgage Loans") as
provided herein. The Purchaser intends to deposit the MLMCI Mortgage Loans,
together with the Other Mortgage Loans (as defined below), 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 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 the Cut-Off Date,
among the Purchaser as depositor, First Union National Bank as master servicer
(in such capacity, the "Master Servicer"), ORIX Real Estate Capital Markets, LLC
as special servicer (in such capacity, the "Special Servicer"), and Norwest Bank
Minnesota, National Association as trustee (the "Trustee"). Concurrently with
the purchase of the MLMCI Mortgage Loans pursuant to this Agreement, the
Purchaser will also purchase certain multifamily and commercial mortgage loans
(the "Other Mortgage Loans", and collectively with the MLMCI Mortgage Loans, the
"Mortgage Loans") pursuant to a separate mortgage loan purchase agreement, dated
as of the date of the Pooling and Servicing Agreement between the Purchaser and
First Union National Bank. The Other Mortgage Loans will likewise be deposited
into the Trust Fund. Capitalized terms used but not defined herein 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.
(a) The Seller agrees to sell, and the Purchaser agrees to purchase, the
MLMCI Mortgage Loans identified on the schedule (the "Mortgage Loan Schedule")
annexed hereto as Exhibit A. The Mortgage Loan Schedule may be amended to
reflect the actual MLMCI Mortgage Loans delivered to the Purchaser pursuant to
the terms hereof. The MLMCI Mortgage Loans are expected to have an aggregate
principal balance of $178,322,691 (the "MLMCI 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
received. The MLMCI 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 received), is expected to
equal an aggregate principal balance (the "Initial Pool Balance") of
$885,738,326
(subject to a variance of plus or minus 5%). The purchase and sale of the MLMCI
Mortgage Loans shall take place on December 17, 1999 or such other date as shall
be mutually acceptable to the parties hereto (the "Closing Date"). The
consideration (the "Aggregate Purchase Price") for the MLMCI Mortgage Loans
shall consist of a cash amount equal to (i) [____]% of the MLMCI Balance as of
the Cut-Off Date, plus (ii) interest accrued on the MLMCI 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 in the amount of $[_______], less fees and
expenses payable by the Seller. The Aggregate Purchase Price shall be paid to
the Seller or its designee by wire transfer in immediately available funds on
the Closing Date.
The Purchaser will assign to the Trustee, all of its right, title and
interest in and to the MLMCI Mortgage Loans.
SECTION 2. Conveyance of MLMCI Mortgage Loans.
(a) Effective as of the Closing Date, subject only to receipt of the
purchase price referred to in Section 1 hereof, 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 MLMCI 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. The
Mortgage Loan Schedule, as it may be amended, shall conform to the requirements
set forth in this Agreement and the Pooling and Servicing Agreement.
(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 MLMCI 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 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 MLMCI Mortgage Loans due on or
before the Cut-Off Date and principal prepayments thereon), shall belong to, and
be promptly remitted to, the Seller.
(c) The Seller hereby represents and warrants that it has, on behalf of the
Purchaser, delivered to the Trustee, the documents and instruments specified
below with respect to each MLMCI 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 (or a lost note affidavit and
indemnity with a copy of such Mortgage Note attached thereto) together
with any intervening endorsements thereon, endorsed on its face or by
allonge attached thereto (without recourse, representation or
warranty, express or implied) to the order
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of Norwest Bank Minnesota, National Association, as trustee for the
registered holders of First Union National Bank Commercial Mortgage
Pass-Through Certificates, Series 1999-C4 or in blank;
(ii) an original or copy of the Mortgage, together with any and all
intervening assignments thereof, in each case with evidence of
recording indicated thereon;
(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 with evidence of
recording indicated thereon;
(iv) an original executed assignment, in recordable form, of (a) the
Mortgage, (b) any related Assignment of Leases (if such item is a
document separate from the Mortgage) and (c) any other recorded
document relating to the MLMCI Mortgage Loan otherwise included in the
Mortgage File, in favor of Norwest Bank Minnesota, National
Association, as trustee for the registered holders of First Union
National Bank Commercial Mortgage Pass-Through Certificates, Series
1999-C4 or in blank;
(v) an original assignment of all unrecorded documents relating to the
MLMCI Mortgage Loan, in favor of Norwest Bank Minnesota, National
Association, as trustee for the registered holders of First Union
National Bank Commercial Mortgage Pass-Through Certificates, Series
1999-C4 or in blank;
(vi) originals or copies of any consolidation, assumption, substitution and
modification 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;
(vii) the original or a copy of the policy or certificate of lender's title
insurance or, if such policy has not been issued, an original or copy
of an irrevocable, binding commitment to issue such title insurance
policy;
(viii) any filed copies (with evidence of filing) or other evidence of
filing satisfactory to the Purchaser of any prior UCC Financing
Statements in favor of the originator of such MLMCI 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 statements in favor of the Seller on record
with the applicable public office for UCC Financing Statements, an
original UCC-2 or UCC-3 assignment, as appropriate, in form suitable
for filing, as appropriate, in favor of Norwest Bank Minnesota,
National Association, as trustee for the registered holders of First
Union
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National Bank Commercial Mortgage Pass-Through Certificates, Series
1999-C4 or in blank;
(ix) an original or copy of any Credit Lease and any Lease Enhancement
Policy, RVI Policy or Guaranty; and
(x) any subordination, standstill or intercreditor agreement relating to
any permitted debt of the Mortgagor.
(d) Within 75 days following the Closing Date, the Seller shall submit or
cause to be submitted for recordation or filing, as the case may be, in the
appropriate public office for real property records or Uniform Commercial Code
financing statements, as appropriate, each assignment of Mortgage and each
assignment of Assignment of Leases and each other document referred to in clause
(iv) of subsection (c) above and each UCC-2 and UCC-3 in favor of and delivered
to the Trustee constituting part of the Mortgage File. If any such document or
instrument is lost or returned unrecorded or unfiled, as the case may be,
because of a defect therein, then the Seller shall prepare a substitute therefor
or cure such defect or cause such to be done, as the case may be, and the Seller
shall deliver such substitute or corrected document or instrument to the
Purchaser or its designee.
(e) All documents and records (except attorney-client privileged
communication and internal credit analysis of the Seller) relating to each MLMCI
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.
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 duly organized, validly existing and
in good standing under the laws of the State of Delaware and the Seller has
taken all necessary corporate action to authorize the execution, delivery
and performance of this Agreement by it, and has the power and authority to
execute, deliver and perform this Agreement and all the transactions
contemplated hereby.
(ii) This Agreement has been duly and validly authorized, executed and
delivered by the Seller and, assuming the due authorization, execution and
delivery of this Agreement by each other party hereto, this Agreement and
all of the obligations of the Mortgage Loan Seller hereunder are the legal,
valid and binding obligations of the Mortgage Loan Seller, enforceable
against the Mortgage Loan Seller in accordance with the terms of this
Agreement, except as such enforcement may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the enforcement
of creditors' rights generally, and by general principles of equity
(regardless of whether such enforceability is considered
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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 By-Laws, (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.
(viii) Under generally accepted accounting principles ("GAAP") and for
federal income tax purposes, the Seller will report the transfer of the
MLMCI Mortgage Loans to the Purchaser as a sale of the MLMCI Mortgage Loans
to the Purchaser in exchange for consideration consisting of a cash amount
equal to the Aggregate Purchase Price. The consideration received by the
Seller upon the sale of the MLMCI Mortgage Loans to the
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Purchaser will constitute reasonably equivalent value at least equal to the
fair market value of the MLMCI Mortgage Loans. The Seller will be solvent
at all relevant times prior to, and will not be rendered insolvent by, the
sale of the MLMCI Mortgage Loans to the Purchaser. The Seller is not
selling the MLMCI 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, Schedule III and Schedule IV hereto 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 MLMCI Mortgage Loan.
(c) 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
MLMCI 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
MLMCI Mortgage Loan not being a "qualified mortgage" within the meaning of the
REMIC Provisions (a "Qualified Mortgage"), not later than 90 days of 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
related MLMCI Mortgage Loan or the interest of the Certificateholders therein,
cure such Document Defect or Breach, as the case may be, in all material
respects, which shall include payment of losses and any Additional Trust Fund
Expenses associated therewith 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 MLMCI 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 MLMCI 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
if such Document Defect or Breach is capable of being cured but not within such
90-day period, such Document Defect or Breach does not relate to the MLMCI
Mortgage Loan not being treated as a Qualified Mortgage, 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 MLMCI 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 the reason such Document Defect or
Breach is not capable of being cured within the initial 90-day period and 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. For a period of two years from the Closing
Date, so long as there remains any Mortgage File relating to a MLMCI 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; provided, however, that, without limiting the effect
of the forgoing provisions of this Section 3(c),
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if such Document Defect or Breach shall materially and adversely affect the
value of such MLMCI Mortgage Loan or the interests of the holders of the
Certificates therein, the Seller shall in all cases on or prior to the second
anniversary of the Closing Date either cause such Document Defect or Breach to
be cured or repurchase the affected MLMCI Mortgage Loan. Notwithstanding the
foregoing, the delivery of a commitment to issue a policy of lender's title
insurance as described in clause (xii) 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.
(d) In connection with any repurchase or substitution of one or more MLMCI
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 MLMCI
Mortgage Loan or substituted MLMCI Mortgage Loan, as applicable, and (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
MLMCI Mortgage Loan possessed by it.
(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. Subject to Section 7 of this Agreement, 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 2 of this Agreement.
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 MLMCI
Mortgage Loans from the Seller and to transfer the MLMCI 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
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Seller) this Agreement constitutes the valid, legal and binding agreement of the
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 MLMCI Mortgage Loans by the Purchaser,
the transfer of the MLMCI 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 Articles 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 MLMCI Mortgage Loans by the Seller to the Purchaser
as a sale of the MLMCI 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
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 MLMCI Mortgage Loans (the
"Closing") shall be held at the offices of Xxxxx, Xxxxx & Xxxxx, New York, New
York, 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; provided, however, that any material inaccuracy in any representation and
warranty set forth in or made pursuant to Section 3(b) shall not affect the
Purchaser's obligation to purchase the MLMCI Mortgage Loans not affected by such
inaccuracy;
(b) 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 Underwriters 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; and
(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.
(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 as set forth in the Prospectus and a letter from KPMG LLP
regarding certain information regarding the Certificates as set forth in the
Prospectus Supplement.
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
MLMCI 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 and the
Underwriters 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 date hereof;
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(c) An Officer's Certificate from an officer of the Seller, dated the
Closing Date, and upon which the Purchaser may rely, to the 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, dated the
Closing Date, and upon which the Purchaser and the Underwriters may rely, to the
effect that (i) such officer has carefully examined the Prospectus and nothing
has come to his attention that would lead him to believe that the Prospectus, as
of the date of the Prospectus Supplement or as of the Closing Date, included or
includes any untrue statement of a material fact relating to the MLMCI Mortgage
Loans or omitted or omits to state therein a material fact necessary in order to
make the statements therein relating to the MLMCI Mortgage Loans, in light of
the circumstances under which they were made, not misleading, and (ii) such
officer has examined the Memorandum and nothing has come to his attention that
would lead him to believe that the Memorandum, as of the date thereof or as of
the Closing Date, included or includes any untrue statement of a material fact
relating to the MLMCI Mortgage Loans or omitted or omits to state therein a
material fact necessary in order to make the statements therein related to the
MLMCI Mortgage Loans, in the light of the circumstances under which they were
made, not misleading.
(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 articles of association and by-laws of the Seller, and 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, reasonably satisfactory to
the Purchaser, its counsel and the Rating Agencies, dated the Closing Date and
addressed to the Purchaser, the Trustee, the Underwriters 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, their respective officers and directors, and each person, if any,
who controls the Purchaser or any Underwriter 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, 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
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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 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 or (B) any items similar to Computational Materials and
ABS Term Sheets forwarded to prospective investors in the Non-Registered
Certificates (the items in (A) and (B) being defined as the "Disclosure
Material"), or (ii) arise out of or are based upon the omission or alleged
omission to state therein 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 only if and to the extent that
(I) any such untrue statement or alleged untrue statement or omission or alleged
omission arises out of or is based upon an untrue statement or omission with
respect to the MLMCI 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
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 is with respect to, or arises out of or is
based upon an untrue statement or omission of a material fact with respect to,
the information regarding the MLMCI Mortgage Loans, the related Mortgagors, the
related Mortgaged Properties and/or the Seller set forth (X) in the Prospectus
Supplement and the Memorandum under the headings: "SUMMARY OF PROSPECTUS
SUPPLEMENT-THE PARTIES-The Mortgage Loan Sellers", "SUMMARY OF PROSPECTUS
SUPPLEMENT-THE MORTGAGE LOANS", "RISK FACTORS-Certain Risk Factors Associated
With the Mortgage Loans" and "DESCRIPTION OF THE MORTGAGE POOL" and (Y) on Annex
A to the Prospectus Supplement and, to the extent consistent therewith, on a
Diskette, or (III) any such untrue statement or alleged untrue statement or
omission or alleged omission 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; 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
MLMCI Mortgage Loans, the related Mortgagors and/or the related Mortgaged
Properties set forth in the Data File and Annex A to the Prospectus Supplement,
including without limitation the aggregation of such information with comparable
information relating to the Other Mortgage Loans in the Trust Fund. This
indemnity agreement will be in addition to any liability which the Seller may
otherwise have (the information described in clauses (I) through (III) above,
collectively the "Seller Information").
(b) For purposes of this Agreement, "Registration Statement" shall mean
such registration statement No. 333-62671 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 December
8, 1999, as supplemented by the prospectus supplement dated December 14, 1999
(the "Prospectus Supplement") relating to the Registered Certificates, including
11
all annexes thereto; "Memorandum" shall mean the private placement memorandum
dated December 14, 1999, relating to the Non-Registered Certificates, including
all exhibits thereto; "Registered Certificates" shall mean the Class A-1, Class
A-2, Class IO, and Class B Certificates; "Non-Registered Certificates" 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 MLMCI Mortgage Loans
covered by the Agreed Upon Procedures Letter dated December 14, 1999 and
rendered by KPMG (a "hard copy" of which Data File was initialed on behalf of
the Seller and the Purchaser).
(c) The Purchaser shall indemnify and hold harmless the Seller, its
directors, officers, employees and agents, and each person, if any, who controls
the Seller within the meaning of either the 1933 Act or the 1934 Act, against
any and all losses, 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) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Disclosure Material, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances under which they were
made, except to the extent that such untrue statement, alleged untrue statement,
omission or alleged omission is based upon the Seller Information, and the
Purchaser shall reimburse each such indemnified party, as incurred, or 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
agreement will be in addition to any liability which the Purchaser may otherwise
have.
(d) Promptly 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 this Section 7 (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
12
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 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 or parties 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 and the Underwriters, 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 applicable, such liability shall only be in respect of the counsel
referred to in such clause (i) or (iii).
(e) 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. 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.
(f) The Purchaser and the Seller agree that it would not be just and
equitable if contribution pursuant to Section 7(e) 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(e) 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
13
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.
(g) 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, any of their respective directors or officers, or any person
controlling the Purchaser or the Underwriters, and (iii) acceptance of and
payment for any of the Certificates.
(h) Without limiting the generality or applicability of any other provision
of this Agreement, the Underwriters 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 MLMCI Balance represents of the
Initial Pool Balance): (i) the costs and expenses of printing (or otherwise
reproducing) and delivering a preliminary and final Prospectus and Memorandum
relating to the Certificates; (ii) the initial fees, costs, and expenses of the
Trustee (including reasonable attorneys' fees); (iii) the filing fee charged by
the Securities and Exchange Commission for registration of the Certificates so
registered; (iv) the fees charged by the Rating Agencies to rate the
Certificates so rated together with the legal fees of counsel to S&P; (v) the
expense of recording any assignment of Mortgage or assignment of Assignment of
Leases as contemplated by Section 2 hereof; and (vi) the cost of obtaining a
"comfort letter" from a firm of certified public accountants selected by the
Purchaser and the Seller with respect to numerical information in respect of the
MLMCI Mortgage Loans included in the Prospectus and Memorandum. 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 MLMCI Mortgage Loans by the Seller to the
Purchaser as provided in Section 2 hereof be, and be construed as, a sale of the
MLMCI Mortgage Loans by the Seller to the Purchaser and not as a pledge of the
MLMCI 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 MLMCI 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 MLMCI 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 Articles 8 and 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
14
all of the Seller's right, title and interest in and to the MLMCI Mortgage
Loans, and all amounts payable to the holder of the MLMCI 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 9-305 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 MLMCI 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. 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 11. 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 MLMCI Mortgage Loans by the Seller
to the Purchaser (and by the Purchaser to the Trustee).
SECTION 12. 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
15
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 13. 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 14. 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 15. Further Assurances. The Seller and the Purchaser agree to execute
and deliver such instruments and take such further actions as the other party
may, from time to time, reasonably request in order to effectuate the purposes
and to carry out the terms of this Agreement.
SECTION 16. Successors and Assigns. The rights and obligations of the Seller
under this Agreement shall not be assigned by the Seller without the prior
written consent of the Purchaser, except that any person into which the Seller
may be merged or consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Seller is a party, or any person
succeeding to all or substantially all of the business of the Seller, shall be
the successor to the Seller hereunder. 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 (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 17. 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.
SECTION 18. 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.
SECTION 19. Knowledge. Whenever a representation or warranty or other statement
in this Agreement is made with respect to a Person's "knowledge," such statement
refers to such Person's employees or agents who were or are responsible for or
involved with the indicated matter and have actual knowledge of the matter in
question.
16
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
XXXXXXX XXXXX MORTGAGE CAPITAL INC.
By:________________________
Name:
Title:
Address for Notices:
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxx Balkan
Telecopier No.: (000) 000-0000
With a copy to:
Xxxxxxx Xxxxx
000 Xxxxx Xxxxxx
World Financial Center
Xxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx XxXxxxxx
Telecopier No.: (000) 000-0000
PURCHASER
FIRST UNION COMMERCIAL
MORTGAGE SECURITIES, INC.
By:__________________________
Name:
Title:
Address for Notices:
One First Union Center
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxxxxxx
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
17
SCHEDULE I
General Mortgage Representations and Warranties
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.
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 and such Mortgage
Loan has been serviced in accordance with the servicing performed on comparable
Mortgage Loans originated by the Seller.
3 Immediately prior to the sale, transfer and assignment to the Purchaser,
the Seller had good 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 or security interests of any nature encumbering such
Mortgage Loan except as set forth in the related title policy (the "Title
Policy").
4 The proceeds of such Mortgage Loan have been fully disbursed and there is
no requirement for future advances thereunder.
5 Each related Mortgage Note, Mortgage, Assignment of Leases (if any) and
other agreement executed in connection with such Mortgage Loan are legal, valid
and binding obligations of the related Mortgagor (subject to any non-recourse
provisions therein and any state anti-deficiency legislation), enforceable in
accordance with their terms, except with respect to provisions relating to
default interest, yield maintenance charges or prepayment premiums and except as
such enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium 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.
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 Note, Mortgage(s) or other agreements executed in connection
therewith, and, as of the Closing Date, to the knowledge of the Seller, 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.
7 Each related assignment of Mortgage and Assignment of Assignment of
Leases from the Seller to the Trustee constitutes the legal, valid and binding
assignment from the Seller, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization,
1
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).
8 Each related Mortgage is a valid and enforceable first lien on the
related Mortgaged Property subject only to the following title exceptions (each
such exception, a "Title Exception", and collectively, the "Title Exceptions"):
(a) the lien of current real property taxes, ground rents, 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 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 when they
become due or materially and adversely affects the value of the Mortgaged
Property and (c) the exceptions (general and specific) set forth in such policy
or appearing of record, none of which, individually or in the aggregate,
materially 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 when they become due or materially and adversely
affects the value of the Mortgaged Property.
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 necessary to operate the Mortgaged Property
owned by a Mortgagor and located on the related Mortgaged 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, reorganization, moratorium 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).
10 All taxes and governmental assessments which would be a lien on the
Mortgaged Property and that prior to the Closing Date have become 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, taxes and 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 To the Seller's knowledge as of the Closing Date, based solely upon due
diligence customarily performed with the origination of comparable Mortgage
Loans by the Seller, each related Mortgaged Property was free and clear of any
material damage that would affect materially and adversely the value of such
Mortgaged Property as security for the Mortgage Loan
2
and to the Seller's knowledge as of the Closing Date there was no proceeding
pending for the total or partial condemnation of such Mortgaged Property.
12 The lien of each related Mortgage as a first priority lien in the
original principal amount of such Mortgage Loan after all advances of principal
(as set forth on the Mortgage Loan Schedule) is insured by an ALTA lender's
title insurance policy (or a binding commitment therefor), or its equivalent as
adopted in the applicable jurisdiction, insuring the Seller, its successors and
assigns, subject only to the Title Exceptions; the Seller or its successors or
assigns is the named insured of such policy; such policy is assignable and will
inure to the benefit of the Trustee as Mortgagee of record; is in full force and
effect upon the consummation of the transactions contemplated by this Agreement;
all premiums thereon have been paid; to the Seller's knowledge the insurer
issuing such policy is qualified to do business in the jurisdiction in which the
Mortgaged Property is located; no claims have been made under such policy and
the Seller has not done anything, by act or omission, and the Seller has no
knowledge of any matter, which would impair or diminish the coverage of such
policy.
13 As of the date of its origination, all insurance coverage required under
each related Mortgage, which insurance covered such risks as were customarily
acceptable to prudent commercial and multifamily mortgage lending institutions
lending on the security of property comparable to the related Mortgaged Property
in the jurisdiction in which such Mortgaged Property is located (including
comprehensive general liability and business interruption coverage for a period
of twelve months), and with respect to a fire and extended perils insurance
policy, was in an amount (subject to a customary deductible) at least equal to
the replacement cost of improvements located on such Mortgaged Property, or an
amount at least equal to the initial principal balance of the Mortgage Loan in
each case, without deduction for depreciation, was in full force and effect with
respect to each related Mortgaged Property; and, as of the Closing Date, to the
knowledge of the Seller, all insurance coverage required under each Mortgage,
which insurance covers such risks and is in such amounts as are customarily
acceptable to prudent commercial and multifamily mortgage lending institutions
lending on the security of property comparable to the related Mortgaged Property
in the jurisdiction in which such Mortgaged Property is located, is in full
force and effect with respect to each related Mortgaged Property; for any
Mortgage Loan with a Cut-Off Date Balance that is greater than 5% of the
aggregate Cut-Off Date Balances of all Mortgage Loans, the insurer has a claims
paying ability rating from a nationally-recognized rating agency of not less
than 'A'; all premiums due and payable through the Closing Date have been paid;
the insurance policies contain a standard mortgagee clause naming the mortgagee
as an additional insured, and provide that they are not terminable and may not
be reduced without thirty (30) days prior written notice to the mortgagee; 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 an institutional
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 the repair or restoration of all or
part of the related Mortgaged Property or the reduction of the outstanding
principal balance of the Mortgage Loan.
3
14 (A) Other than payments due but not yet 30 days or more delinquent, to
the Seller's knowledge, there is no material default, breach, violation or event
of acceleration existing under the related Mortgage or the related Mortgage
Note, and 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 of clauses (10),
(15) and (19) of this Schedule I or in any clause of Schedule III or IV, 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
pursuant to the terms of the related Mortgage or the related Mortgage Note, 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 Cut-Off Date, the 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
(and for the 30 days prior to the Cut-Off Date, without giving effect to any
applicable grace period) 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.
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 for any
Mortgage Loans that are cross-collateralized with any other Mortgage Loan sold
pursuant to this Agreement.
18 Each Mortgage Loan constitutes a "qualified mortgage" within the meaning
of Section 860G(a)(3) of the Code (but without regard to the rule in Treasury
Regulations 1.860 G-2(f)(2) that treats a defective obligation as a qualified
mortgage, or any substantially similar successor provision). Accordingly, such
Mortgage Loan 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
4
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.
19 One or more environmental site assessments 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
prior to the Closing Date, 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 knowledge and has received no notice of any material
and adverse environmental condition or circumstance affecting such Mortgaged
Property that was not disclosed in such report(s) and either (x) no such report
reveals any known circumstances or conditions with respect to the related
Mortgaged Property that rendered such Mortgaged Property, at the date of such
report, in material violation of any applicable environmental laws or (y) if any
such report does reveal any such circumstances or conditions with respect to the
related Mortgaged Property, then either (1) an environmental insurance policy
was obtained from a third-party insurer; or (2) either (i) an operations and
maintenance program, including, in several cases, with respect to
asbestos-containing materials, lead-based paint and/or radon, or periodic
monitoring of nearby properties, has been or is expected to be implemented in
the manner and within the reasonable time frames specified in the related loan
documents, or (ii) remediation in accordance with applicable law has been
performed; or (3) an escrow or reserve was established to cover the estimated
cost of remediation, with each remediation required to be completed within a
reasonable time frame in accordance with the related loan documents. With
respect to any Mortgage Loans, as to which the Mortgagor was required to
purchase a secured creditor impaired property environmental insurance policy (i)
the policy premium for the term of the policy is fully paid and the deductible
either escrowed or is less than or equal to $25,000, (ii) at issuance, the
insurer had a claims paying ability of not less than "AA" by a nationally
recognized statistical rating agency, and (iii) the policy is in an amount not
less than the full principal amount of the Mortgage Loan. Each Mortgage requires
the related Mortgagor to comply, and to cause the related Mortgaged Property to
be in compliance, in all material respects, with all materially applicable
federal, state and local environmental laws and regulations.
20 Each related Mortgage and Assignment of Leases contains customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security, including realization by judicial or, if applicable,
non-judicial foreclosure, subject to the effects of bankruptcy or similar law
affecting the right of creditors and the application of principles of equity.
5
21 At the time of origination and, to the knowledge of Seller as of the
Closing Date, no Mortgagor is a debtor in, and no Mortgaged Property is the
subject of, any state or federal bankruptcy or insolvency proceeding.
22 Except for the Mortgage Loans indicated on the Mortgage Loan Schedule
attached hereto as eligible to receive low-income housing tax credits pursuant
to Section 42 of the Internal Revenue Code of 1986, each Mortgage Loan 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 provide for
negative amortization.
23 Each related Mortgage or loan agreement contains provisions for the
acceleration of the payment of the unpaid principal balance of such Mortgage
Loan if, without the prior written consent of the Mortgagee or complying with
other requirements of the Mortgage or loan agreement any controlling interest in
the Mortgagor therein is directly transferred or sold, or encumbered in
connection with any financing secured by such controlling interest. Each related
Mortgage or loan agreement contains provisions for the acceleration of payment
of the unpaid principal balance of such Mortgage Loan if, without the prior
consent of the Mortgagee, the related Mortgaged Property is encumbered in
connection with any subordinate financing by a lien or security interest against
the related Mortgaged Property, other than any existing permitted additional
debt.
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.
25 Each related Mortgaged Property was inspected by or on behalf of the
related originator during the 12 month period prior to the Closing 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, and,
except with respect to Mortgage Loans (a) which permit defeasance, (b) where a
release of the portion of the Mortgaged Property was contemplated at origination
and such portion was not considered material for purposes of underwriting the
Mortgage Loan, (c) where release is conditional upon the satisfaction of certain
underwriting and legal requirements and the payment of a release price that
represents adequate consideration for such Mortgaged Property, or (d) with
respect to Mortgage Loans which permit the related Mortgagor to substitute a
replacement property in compliance with REMIC Provisions, the terms of the
related Mortgage do not provide for release of any portion of the Mortgaged
Property from the lien of the Mortgage except in consideration of payment in
full therefor. Each Mortgage Loan containing provisions for defeasance of
Mortgaged Property either (I) requires the prior written consent of, and
6
compliance with the conditions set by, the holder of the Mortgage Loan; or (II)
requires that (A) defeasance must occur within the time permitted by, applicable
REMIC rules and regulations (if applicable), (B) the replacement collateral
consist of U.S. government securities in an amount sufficient to make all
scheduled payments under the Mortgage Note when due, (C) all fees, costs and
expenses incurred by the Mortgagee in connection with the defeasance be paid on
or before the release date, (D) the Mortgage Loan be assumed by a single-purpose
entity that complies with the requirements of the Mortgage and is reasonably
satisfactory to the Mortgagee, and (E) counsel provide an opinion that the
trustee has a perfected security interest in such collateral prior to any other
claim or interest.
27 Based on legal opinion(s) received at the time of origination due
diligence customarily performed by the Seller in the origination of comparable
Mortgage Loans by the Seller, as of the date of origination of such Mortgage
Loan, and, to the Seller's knowledge, as of the Closing Date, there are no
violations of any applicable zoning ordinances, building codes and land laws
applicable to the Mortgaged Property or the and occupancy thereof which would
have a material adverse effect on the value, operation or net operating income
of the Mortgaged Property. As of the date of origination, based upon due
diligence customarily performed by the Seller in the origination of comparable
Mortgage Loans, any non-conformity with zoning laws of which the Seller has
knowledge 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.
28 None of the 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 the related Mortgagor's use and operation
of such Mortgaged Property (unless affirmatively covered by the title insurance)
and no improvements on adjoining properties encroached upon such Mortgaged
Property to any material extent.
29 With respect to at least 95% of the MLMCI Mortgage Loans (by balance)
having a Cut-Off Date Balance in excess of 1% of the Initial Pool Balance, the
related Mortgagor has covenanted in its organizational documents and/or the
Mortgage Loan documents substantially to the effect that (A) it will not own any
significant asset other than the related Mortgaged Property or Mortgaged
Properties, as applicable, and assets incidental to its ownership and operation
of such Mortgaged Property, (B) may not engage in any business unrelated to such
Mortgaged Property or Mortgaged Properties, (C) does not have any material
assets other than those related to its interest in and operation of such
Mortgage Property or Mortgaged Properties, (D) may not incur indebtedness other
than as permitted by the related Mortgage or other Mortgage Loan documents, (E)
has its own books and records separate and apart from any other person, and (F)
holds itself out as a legal entity, separate and apart from any other Person.
7
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 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, provided, however, rental payments or similar payments made by the
Tenant under the related Credit Lease directly to the Seller (or its loan
servicer or agent) shall not be deemed a breach of this representation.
31 As of the date of origination and, to the Seller's knowledge, as of the
Closing Date, there was no pending action, suit or proceeding against the
Mortgagor or the related Mortgaged Property an adverse outcome of which would
materially affect either such Mortgagor's performance under the related Mortgage
Loan documents or the holders of the Certificates.
32 The Mortgage Rate of such Mortgage Loan complied as of the date of
origination with, or is exempt from, applicable state or federal laws,
regulations and other requirements pertaining to usury, except with respect to
any provisions requiring the payment of default interest, late fees, additional
interest, prepayment premiums or yield maintenance charges.
33 To the Seller's knowledge, if the related Mortgage is a deed of trust, a
trustee, duly qualified under applicable law to serve as such, is properly
designated and serving under such Mortgage and, to the Seller's knowledge, no
fees or expenses are, or will become, payable to the trustee under the deed of
trust, except in connection with a trustee sale of the Mortgaged Property after
default by the Mortgagor or in connection with the release of the Mortgaged
Property or related security for the Mortgage Loan.
34 The related Mortgage Note is not secured by any collateral that secures
a Mortgage Loan that is not in the Trust Fund and each Mortgage Loan that is
cross-collateralized 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 the Mortgagor is
required to maintain or the Mortgagee maintains, flood insurance with respect to
such improvements.
36 All escrow deposits and payments required pursuant to the Mortgage Loan
are in the possession, or under the control, of the Seller or its agent and
there are no deficiencies in connection therewith.
37 To the Seller's knowledge, based on due diligence customarily performed
in the origination of comparable Mortgage Loans by the Seller, 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.
8
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. To the
extent required by applicable law, the originator of the related Mortgage Note
and each subsequent holder was authorized to transact and do business in the
jurisdiction where the Mortgaged Property is located while each was the holder.
39 Related Mortgagor (or its affiliate) has title in the fee simple
interest in each related Mortgaged Property.
40 The related Mortgage Loan documents contain provisions providing for
recourse against the related Mortgagor (and its principals or other third party
entities with assets other than its interest in the Mortgagor) for damages
sustained in connection with certain circumstances including fraud,
misappropriation, material misrepresentation and other matters expressly set
forth in the related Mortgage Loan documents.
41 Each Mortgaged Property constitutes one or more complete separate tax
lots, or real estate tax on the portion of the Mortgaged Property not owned by
the Mortgagor is subject to an escrow arrangement sufficient to pay such taxes,
or is subject to an endorsement under the related title insurance policy.
42 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 subject to the related
Mortgage.
43 If such Mortgage Loan is an ARD Loan it provides that:
(A) Except as set forth in Exhibit D, its Mortgage Rate will increase
by no more than two percentage points from and after its Anticipated
Repayment Date;
(B) Its Anticipated Repayment Date is not less than seven years
following the origination of such Mortgage Loan;
(C) Either (a) on the Closing Date, each ARD Loan will have a lockbox
in place, or (b) no later than the related Anticipated Repayment Date, if
it has not previously done so, the related Mortgagor is required to enter
into a "lockbox agreement" whereby all revenue from the related Mortgaged
Property shall be deposited into a designated account controlled by the
Master Servicer;
(D) Any cash flow from the related Mortgaged Property that is applied
to amortize an ARD Loan following its Anticipated Repayment Date shall, to
the extent such net cash flow is in excess of the monthly payment payable
therefrom, be net of budgeted
9
capital expenditures and capital expenditures that may be approved by the
Master Servicer in accordance with the terms of the Pooling and Servicing
Agreement;
(E) Each ARD Loan is being amortized as of the Cut-Off Date and is not
currently subject to any interest-only period;
(F) The holder of each ARD Loan may not exercise any payment default
remedies if the related Mortgagor pays scheduled principal and interest (at
the related Mortgage Rate); and
(G) The property manager cannot be removed for the sole reason that
the ARD Loan continues to be outstanding after its Anticipated Repayment
Date.
10
SCHEDULE II
RESERVED
11
SCHEDULE III
Health Care Facility Representations and Warranties
With respect to any Mortgage Loan that is secured in whole or in part by a
Mortgaged Property which is operated as a residential health care facility (a
"Facility"):
(1) Except with respect to the Mortgage Loans listed in Exhibit III-A
hereto, all governmental licenses, permits, regulatory agreements or
other approvals or agreements necessary for the use and operation of
each Facility as intended are held by the related Mortgagor or the
operator of the Facility, and are in full force and effect, including,
without limitation, a valid certificate of need ("CON") or similar
certificate, license, or approval issued by the applicable department
of health for the requisite number of beds, and approved provider
status in any approved provider payment program (collectively, the
"Licenses").
(2) As of the Closing Date and to Seller's knowledge, based on due
diligence customarily performed in the origination of comparable
mortgage loans by the Seller (1) the Facility has not received a
"Level A" (or equivalent) violation which has not been cured to the
satisfaction of the applicable governmental agency, and (2) no
statement of charges or deficiencies has been made or penalty
enforcement action has been undertaken against the Facility, its
operator or the Mortgagor or against any officer, director or
stockholder of such operator or the Mortgagor by any governmental
agency during the last three calendar years, and there have been no
violations over the past three years which have threatened the
Facility's, the operator's or the Mortgagor's certification for
participation in Medicare or Medicaid or the other third-party payors'
programs.
(3) To Seller's knowledge based on due diligence customarily performed in
the origination of comparable mortgage loans by the Seller, each
operator of a Facility, each Mortgagor and each Facility complies in
all material respects with all federal, state and local laws,
regulations, quality and safety standards, accreditation standards and
requirements of the applicable state department of health and all
other federal, state or local governmental authorities including,
without limitation, those relating to the quality and adequacy of
medical care, distribution of pharmaceuticals, rate setting,
equipment, personnel, operating policies, additions to facilities and
services and fee splitting except where the failure to so comply would
not materially interfere with the current use of the Mortgaged
Property or the Facility or the security intended to be provided by
such Mortgage or with the Mortgagor's ability to
12
pay its obligations when they become due or materially and adversely
affects the value of the Mortgaged Property.
13
SCHEDULE IV
Credit Lease Loan Representations and Warranties
1 The lease payments due under the related Credit Lease, together with any
escrow payments held by the Seller or its designee, are equal to or greater than
the payments due with respect to the related Mortgage Loan.
2 The Mortgagor does not have monetary obligations under the related Credit
Lease, and every monetary obligation associated with managing, owning,
developing and operating the leased property, including, but not limited to, the
costs associated with utilities, taxes, insurance, maintenance and repairs is an
obligation of the related Tenant.
3 The Mortgagor does not have any nonmonetary obligations under the related
Credit Lease, except for the delivery of possession of the leased property.
4 The related Tenant cannot terminate such Credit Lease for any reason
prior to the payment in full of: (a) the principal balance of the related
Mortgage Loan; (b) all accrued and unpaid interest on such Mortgage Loan; and
(c) any other sums due and payable under such Mortgage Loan, as of the
termination date, which date is a rent payment date.
5 In the event the related Tenant assigns or sublets the related leased
property, such Tenant (and if applicable, the related guarantor) remains
obligated under the related Credit Lease.
6 Each property related to a Credit Lease Loan is one or more separate tax
lots.
7 The related Tenant has agreed to indemnify the Mortgagor from any claims
of any nature (a) to which the Mortgagor is subject because of such Mortgagor's
estate in the leased property, or (b) arising from (i) injury to or death of any
person or damage to or loss of property on the leased property or connected with
the use, condition or occupancy of the leased property, (ii) Tenant's violation
of the related Credit Lease, or (iii) any act or omission of the Tenant.
8 The related Tenant has agreed to indemnify the Mortgagor from any claims
of any nature arising as a result of any hazardous material affecting the leased
property and due to such Tenant's use of the leased property.
9 Based on legal opinions and due diligence customarily performed in the
origination of comparable mortgage loans by the Seller, in the event any credit
lease is accompanied by a guaranty from the rated parent or affiliate of the
Tenant, such guaranty is legal, valid and binding against the guarantor; and
such guaranty provides that it is a guaranty of both the performance and payment
of the financial obligations of the Tenant, and may not be amended or released
without the Mortgagee's consent.
14
10 Except for the Credit Lease Loans which have residual value insurance,
each Credit Lease Loan fully amortizes over the term of the loan, and there is
no "balloon" payment due under such Credit Lease Loan at maturity.
11 No Tenant under a Credit Lease Loan may exercise any termination right
or offset or set-off right which shall be binding upon the related Mortgagee
without providing prior written notice of and the opportunity to cure same to
such Mortgagee.
12 Each Tenant under each Credit Lease Loan is required to make all rental
payments due under the applicable Credit Lease directly to a lock-box being
maintained by or on behalf of the Mortgagee.
13 Since the origination date, none of the terms of the Credit Lease have
been waived, impaired, altered or modified in any respect in a manner binding on
the Mortgagee. No material modification or amendment of any Credit Lease Loan
shall be binding upon the related Mortgagee without such Mortgagee's prior
written notice consent to such material modification or amendment.
14 Each Tenant has delivered a Subordination, Non-disturbance and
Attornment Agreement pursuant to which the respective Tenant has agreed in the
event the related Mortgagee succeeds to the interest of the Mortgagor under the
Credit Lease by reason of foreclosure or acceptance of a deed in lieu of
foreclosure, the Tenant will attorn to and recognize the Mortgagee as its
landlord under the Lease for the remainder of the term of the Credit Lease.
15 To the Seller's knowledge, the property related to each Credit Lease
Loan is not subject to any other lease other than the related Credit Lease or
any ground lease pursuant to which the related Mortgagor has acquired its
interest in the respective property, no person has any possessory interest in,
or right to occupy, the subject property except under and pursuant to any such
Credit Lease or ground lease and the related Tenant under each Credit Lease is
in occupancy of the demised premises.
16 To the Seller's knowledge based on due diligence performed in connection
with the origination of such Mortgage Loan, each Credit Lease contains customary
and enforceable provisions which render the rights and remedies of the lessor
thereunder adequate for the enforcement, and satisfaction of the lessor's rights
thereunder.
15
EXCEPTION EXHIBITS
16
Exhibit A
Mortgage Loan Schedule
MLMCI Mortgage Loans transferred pursuant to this Agreement are set forth on
Exhibit B to the Pooling and Servicing Agreement under the column heading
"Seller" and with the designation "MLMCI Seller".
17
