EXHIBIT 99.3
MORTGAGE LOAN PURCHASE AGREEMENT
This Mortgage Loan Purchase Agreement, dated as of April 23,
2004 (this "Agreement"), is entered into between KeyBank National Association
(the "Seller") and Xxxxxxx Xxxxx Mortgage Investors, Inc. (the "Purchaser").
The Seller intends to sell and the Purchaser intends to
purchase certain multifamily, manufactured housing and commercial mortgage loans
(the "Mortgage Loans") identified on the schedule (the "Mortgage Loan Schedule")
annexed hereto as Exhibit A. The Purchaser intends to deposit the Mortgage
Loans, along with certain other mortgage loans (the "Other Mortgage Loans"),
into a trust fund (the "Trust Fund"), the beneficial ownership of which will be
evidenced by multiple classes of mortgage pass-through certificates (the
"Certificates"). One or more "real estate mortgage investment conduit" ("REMIC")
elections will be made with respect to most of the Trust Fund. The Trust Fund
will be created and the Certificates will be issued pursuant to a Pooling and
Servicing Agreement, dated as of May 1, 2004 (the "Pooling and Servicing
Agreement"), among the Purchaser as depositor, KeyCorp Real Estate Capital
Markets, Inc., as master servicer (in such capacity, the "Master Servicer"),
Clarion Partners, LLC, as special servicer (in such capacity, the "Special
Servicer"), and Xxxxx Fargo Bank, N.A., as trustee (the "Trustee"). Capitalized
terms used but not defined herein (including the schedules attached hereto) have
the respective meanings set forth in the Pooling and Servicing Agreement.
The Purchaser has entered into an Underwriting Agreement,
dated as of April 23, 2004 (the "Underwriting Agreement"), with Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated ("Xxxxxxx Xxxxx"), for itself and as
representative of Banc of America Securities LLC ("Banc of America"), KeyBanc
Capital Markets, a Division of McDonald Investments Inc. ("KCM"), Deutsche Bank
Securities Inc. ("Deutsche Bank") and Xxxxxx Xxxxxxx & Co. Incorporated ("Xxxxxx
Xxxxxxx" and, together with Xxxxxxx Xxxxx, Banc of America, KCM and Deutsche
Bank in such capacity, the "Underwriters"), whereby the Purchaser will sell to
the Underwriters all of the Certificates that are to be registered under the
Securities Act of 1933, as amended (such Certificates, the "Publicly-Offered
Certificates"). The Purchaser has also entered into a Certificate Purchase
Agreement, dated as of April 23, 2004 (the "Certificate Purchase Agreement"),
with Xxxxxxx Xxxxx, for itself and as representative of Banc of America
(together in such capacity, the "Initial Purchasers"), whereby the Purchaser
will sell to the Initial Purchasers all of the remaining Certificates (such
Certificates, the "Private Certificates").
Now, therefore, in consideration of the premises and the
mutual agreements set forth herein, the parties agree as follows:
SECTION 1. Agreement to Purchase.
The Seller agrees to sell, and the Purchaser agrees to
purchase, the Mortgage Loans identified on the Mortgage Loan Schedule. The
Mortgage Loan Schedule may be amended to reflect the actual Mortgage Loans
delivered to the Purchaser pursuant to the terms hereof. The Mortgage Loans are
expected to have an aggregate principal balance of $116,393,908 (the "KeyBank
Mortgage Loan Balance") (subject to a variance of plus or minus 5.0%) as of the
close of business on the Cut-off Date, after giving effect to any payments due
on or before such date, whether or not such payments are received. The KeyBank
Mortgage Loan Balance, together with the aggregate principal balance of the
Other Mortgage Loans as of the Cut-off Date (after giving effect to any payments
due on
or before such date, whether or not such payments are received), is expected to
equal an aggregate principal balance (the "Cut-off Date Pool Balance") of
$979,850,322 (subject to a variance of plus or minus 5%). The purchase and sale
of the Mortgage Loans shall take place on May 6, 2004 or such other date as
shall be mutually acceptable to the parties to this Agreement (the "Closing
Date"). The consideration (the "Purchase Consideration") for the Mortgage Loans
shall be equal to (i) 100.9775% of the KeyBank Mortgage Loan Balance as of the
Cut-off Date, plus (ii) $88,254, which amount represents the amount of interest
accrued on the KeyBank Mortgage Loan Balance at the related Net Mortgage Rate
for the period from and including the Cut-off Date up to but not including the
Closing Date.
The Purchase Consideration shall be paid to the Seller or its
designee by wire transfer in immediately available funds on the Closing Date.
SECTION 2. Conveyance of Mortgage Loans.
(a) Effective as of the Closing Date, subject only to receipt
of the Purchase Consideration, the Seller does hereby sell, transfer, assign,
set over and otherwise convey to the Purchaser, without recourse (except as set
forth in this Agreement), all the right, title and interest of the Seller in and
to the Mortgage Loans identified on the Mortgage Loan Schedule as of such date,
on a servicing released basis, together with all of the Seller's right, title
and interest in and to the proceeds of any related title, hazard, primary
mortgage or other insurance proceeds. 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 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 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 or will have, on
behalf of the Purchaser, delivered to the Trustee on or before the Closing Date,
the documents and instruments specified below with respect to each Mortgage Loan
(each, a "Mortgage File"). All Mortgage Files so delivered will be held by the
Trustee in escrow at all times prior to the Closing Date. Each Mortgage File
shall contain the following documents:
(i) (A) 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 and all intervening endorsements thereon,
endorsed on its face or by allonge attached thereto (without recourse,
representation or warranty, express or implied) to the order of Xxxxx
Fargo Bank, N.A.,
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as trustee for the registered holders of Xxxxxxx Xxxxx Mortgage Trust
2004-MKB1, Commercial Mortgage Pass-Through Certificates, Series
2004-MKB1, or in blank;
(ii) an original or copy of the Mortgage, together with any
and all intervening assignments thereof, in each case (unless not yet
returned by the applicable recording office) with evidence of recording
indicated thereon or certified by the applicable recording office;
(iii) an original or copy of any related Assignment of Leases
(if such item is a document separate from the Mortgage), together with
any and all intervening assignments thereof, in each case (unless not
yet returned by the applicable recording office) with evidence of
recording indicated thereon or certified by the applicable recording
office;
(iv) an original executed assignment, in recordable form
(except for completion of the assignee's name (if the assignment is
delivered in blank) or a certified copy of that assignment as sent for
recording and any missing recording information), of (a) the Mortgage,
(b) any related Assignment of Leases (if such item is a document
separate from the Mortgage) and (c) any other recorded document
relating to the Mortgage Loan otherwise included in the Mortgage File,
in favor of Xxxxx Fargo Bank, N.A., as trustee for the registered
holders of Xxxxxxx Xxxxx Mortgage Trust 2004-MKB1, Commercial Mortgage
Pass-Through Certificates, Series 2004-MKB1, or in blank;
(v) an original assignment of all unrecorded documents
relating to the Mortgage Loan (to the extent not already assigned
pursuant to clause (iv) above) in favor of Xxxxx Fargo Bank, N.A., as
trustee for the registered holders of Xxxxxxx Xxxxx Mortgage Trust
2004-MKB1, Commercial Mortgage Pass-Through Certificates, Series
2004-MKB1, 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 or
located, an original or copy of an irrevocable, binding commitment
(which may be a pro forma policy or a marked version of the policy that
has been executed by an authorized representative of the title company
or an agreement to provide the same pursuant to binding escrow
instructions executed by an authorized representative of the title
company) to issue such title insurance policy;
(viii) any filed copies or other evidence of filing of any
prior UCC Financing Statements in favor of the originator of such
Mortgage Loan or in favor of any assignee prior to the Trustee (but
only to the extent the Seller had possession of such UCC Financing
Statements prior to the Closing Date) and, if there is an effective UCC
Financing Statement in favor of the Seller on record with the
applicable public office for UCC Financing Statements, a UCC Financing
Statement assignment, in form suitable for filing in favor of Xxxxx
Fargo Bank, N.A., as trustee for the registered holders of Merrill
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Xxxxx Mortgage Trust 2004-MKB1, Commercial Mortgage Pass-Through
Certificates, Series 2004-MKB1, as assignee, or in blank;
(ix) an original or copy of any Ground Lease, guaranty or
ground lessor estoppel;
(x) any intercreditor agreement relating to permitted debt of
the Mortgagor and any intercreditor agreement relating to mezzanine
debt related to the Mortgagor;
(xi) an original or a copy of any loan agreement (if any),
escrow or reserve agreement (if any), security agreement (if any),
management agreement (if any), agreed upon procedures letter (if any),
lockbox or cash management agreements (if any), environmental reports
(if any), or letter of credit (if any), in each case relating to such
Mortgage Loan; and
(xii) with respect to a Mortgage Loan secured by a hospitality
property, a signed copy of the franchise agreement (if any) and/or
franchisor comfort letter (if any).
The foregoing Mortgage File delivery requirement shall be subject to
Section 2.01(c) of the Pooling and Servicing Agreement.
(d) The Seller shall take all actions reasonably necessary to
permit the Trustee to fulfill its obligations pursuant to Section 2.01(d) of the
Pooling and Servicing Agreement with respect to the Mortgage Loans, including
bearing the out-of-pocket costs and expenses of the Trustee in connection with
the performance by the Trustee of its recording, filing and delivery obligations
pursuant to Section 2.01(d).
(e) All such other relevant documents and records that (a)
relate to the administration or servicing of the Mortgage Loans, (b) are
reasonably necessary for the ongoing administration and/or servicing of such
Mortgage Loans by the Master Servicer in connection with its duties under the
Pooling and Servicing Agreement, and (c) are in the possession or under the
control of the Seller, together with all unapplied escrow amounts and reserve
amounts in the possession or under the control of the Seller that relate to the
Mortgage Loans, shall 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); provided that the Seller shall not be required to
deliver any draft documents, privileged or other communications, credit
underwriting or due diligence analyses, credit committee briefs or memoranda or
other internal approval documents or data or internal worksheets, memoranda,
communications or evaluations.
The Seller agrees to use reasonable efforts to deliver to the Trustee,
for its administrative convenience in reviewing the Mortgage Files, a mortgage
loan checklist for each Mortgage Loan. The foregoing sentence notwithstanding,
the failure of the Seller to deliver a mortgage loan checklist or a complete
mortgage loan checklist shall not give rise to any liability whatsoever on the
part of the Seller to the Purchaser, the Trustee or any other person because the
delivery of the mortgage loan checklist is being provided to the Trustee solely
for its administrative convenience.
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(f) The Seller shall take such actions as are reasonably
necessary to assign or otherwise grant to the Trust Fund the benefit of any
letters of credit in the name of the Seller, which secure any Mortgage Loan.
SECTION 3. Representations, Warranties and Covenants of
Seller.
(a) The Seller hereby represents and warrants to and covenants
with the Purchaser, as of the date hereof, that:
(i) The Seller is a national banking association duly
organized, validly existing and in good standing under the laws of the
United States and 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 transactions contemplated hereby.
(ii) This Agreement has been duly and validly authorized,
executed and delivered by the Seller, all requisite action by the
Seller's directors and officers has been taken in connection therewith,
and (assuming the due authorization, execution and delivery hereof by
the Purchaser) this Agreement constitutes the valid, legal and binding
agreement of the Seller, enforceable against the Seller in accordance
with its terms, except as such enforcement may be limited by (A) laws
relating to bankruptcy, insolvency, fraudulent transfer,
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).
(iii) The execution and delivery of this Agreement by the
Seller and the Seller's performance and compliance with the terms of
this Agreement will not (A) violate the Seller's articles of
association or bylaws, (B) violate any law or regulation or any
administrative decree or order to which it is subject or (C) constitute
a default (or an event which, with notice or lapse of time, or both,
would constitute a default) under, or result in the breach of, any
material contract, agreement or other instrument to which the Seller is
a party or by which the Seller is bound, 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 might have
consequences that would materially and adversely affect its performance
hereunder.
(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
might 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 incorporation, regulations or
any other corporate restriction or
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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) None of the sale of the Mortgage Loans by the Seller,
the transfer of the Mortgage Loans to the Trustee, and the execution,
delivery or performance of this Agreement by the Seller, results or
will result in the creation or imposition of any lien on any of the
Seller's assets or property that would have a material adverse effect
upon the Seller's ability to perform its duties and obligations under
this Agreement or materially impair the ability of the Purchaser to
realize on the Mortgage Loans.
(viii) There is no action, suit, proceeding or investigation
pending or to the knowledge of the Seller, threatened against the
Seller in any court or by or before any other governmental agency or
instrumentality which would, in the Seller's good faith and reasonable
judgment, prohibit its entering into this Agreement or materially and
adversely affect the validity of this Agreement or the performance by
the Seller of its obligations under this Agreement.
(ix) Under generally accepted accounting principles ("GAAP")
and for federal income tax purposes, the Seller will report the
transfer of the Mortgage Loans to the Purchaser as a sale of the
Mortgage Loans to the Purchaser in exchange for consideration
consisting of a cash amount equal to the Purchase Consideration. The
consideration received by the Seller upon the sale of the Mortgage
Loans to the Purchaser will constitute at least reasonably equivalent
value and fair consideration for the Mortgage Loans. The Seller will be
solvent at all relevant times prior to, and will not be rendered
insolvent by, the sale of the Mortgage Loans to the Purchaser. The
Seller is not selling the Mortgage Loans to the Purchaser with any
intent to hinder, delay or defraud any of the creditors of the Seller.
(b) The Seller hereby makes the representations and warranties
contained in Schedule I hereto for the benefit of the Purchaser and the Trustee
for the benefit of the Certificateholders as of the Closing Date (unless a
different date is specified therein), with respect to (and solely with respect
to) each Mortgage Loan, subject, however, to the exceptions set forth on Annex A
to Schedule I of this Agreement.
(c) If the Seller discovers or receives written notice of a
Document Defect or a Breach relating to a Mortgage Loan pursuant to Section
2.03(a) of the Pooling and Servicing Agreement, then the Seller shall, not later
than 90 days from such discovery or receipt of such notice (or, in the case of a
Document Defect or Breach relating to a Mortgage Loan not being a
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"qualified mortgage" within the meaning of the REMIC Provisions (a "Qualified
Mortgage"), not later than 90 days from any party to the Pooling and Servicing
Agreement discovering such Document Defect or Breach, provided the Seller
receives such notice in a timely manner), if such Document Defect or Breach
shall materially and adversely affect the value of the related 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 due solely to a
document not having been returned by the related recording office) cannot be
cured within such 90-day period, (i) repurchase the affected Mortgage Loan
(which, for the purposes of this clause (i), shall include an REO Loan) at the
applicable Purchase Price (as defined in the Pooling and Servicing Agreement)
not later than the end of such 90-day period or (ii) substitute a Qualified
Substitute Mortgage Loan for such affected Mortgage Loan (which, for purposes of
this clause (ii), shall include an REO 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 Collection Account, any
Substitution Shortfall Amount in connection therewith; provided, however, that,
unless the breach would cause the Mortgage Loan not to be a Qualified Mortgage,
if such Document Defect or Breach is capable of being cured but not within such
90-day period and the Seller has commenced and is diligently proceeding with the
cure of such Document Defect or Breach within such 90-day period, the Seller
shall have an additional 90 days to complete such cure (or, failing such cure,
to repurchase or substitute the related Mortgage Loan (which, for the purpose of
such repurchase or substitution, shall include an REO 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; and provided,
further, that no Document Defect (other than with respect to a Mortgage Note,
Mortgage, title insurance policy, Ground Lease or any letter of credit) shall be
considered to materially and adversely affect the interests of the
Certificateholders or the value of the related Mortgage Loan unless the document
with respect to which the Document Defect exists is required in connection with
an imminent enforcement of the mortgagee's rights or remedies under the related
Mortgage Loan, defending any claim asserted by any borrower or third party with
respect to the Mortgage Loan, establishing the validity or priority of any lien
or any collateral securing the Mortgage Loan or for any immediate servicing
obligations. A Document Defect or Breach as to a Mortgage Loan that is
cross-collateralized and cross-defaulted with one or more other Mortgage Loans
(each, a "Crossed Loan" and such Crossed Loans, collectively, a "Crossed Loan
Group"), and is not cured as provided for above, shall require the repurchase or
substitution of all such Crossed Loans unless (1) the debt service coverage
ratio for all the remaining Crossed Loans for the four calendar quarters
immediately preceding such repurchase or substitution is not less than the debt
service coverage ratio for all such Crossed Loans, including the affected
Crossed Loan, for the four calendar quarters immediately preceding such
repurchase or substitution, and (2) the weighted average loan to-value ratio for
the remaining Crossed Loans determined at the time of repurchase or substitution
based upon an appraisal obtained by the Special Servicer at the expense of the
related Seller shall not be greater than the weighted average loan-to-value
ratio for all such Crossed Loans, including the affected Crossed Loan; provided,
that if such debt service coverage and loan-to-value criteria are satisfied and
any
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Crossed Loan (that is not the Crossed Loan directly affected by the subject
Breach or Document Defect) is not so materially and adversely affected and
therefore is not so repurchased or substituted, then such Crossed Loan shall be
released from its cross-collateralization and cross-default provision so long as
such Crossed Loan (that is not the Crossed Loan directly affected by the subject
Breach or Document Defect) is held in the Trust Fund; and provided, further,
that the repurchase of less than all such Crossed Loans and the release of any
Crossed Loan from a cross-collateralization and cross-default provision shall be
subject to the delivery by the Seller to the Trustee, at the expense of the
Seller, of an Opinion of Counsel to the effect that such release would not cause
either of REMIC I or REMIC II to fail to qualify as a REMIC under the Code or
result in the imposition of any tax on "prohibited transactions" or
"contributions" after the Startup Day under the REMIC Provisions; and provided,
further, that the Majority Subordinate Certificateholder shall have consented to
the repurchase of the affected Crossed Loan, which consent shall not be
unreasonably withheld. For a period of two years from the Closing Date, so long
as there remains any Mortgage File relating to a Mortgage Loan as to which there
is any uncured Document Defect or Breach known to the Seller, the Seller shall
provide, once every ninety days, 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 foregoing provisions of this Section 3(c), if
such Document Defect or Breach shall materially and adversely affect the value
of such Mortgage Loan or the interests of the holders of the Certificates
therein (subject to the last proviso in the second preceding sentence), 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 or
substitute for the affected Mortgage Loan. Notwithstanding the foregoing, the
delivery of a commitment to issue a policy of lender's title insurance as
described in Paragraph 8 of Schedule I hereto 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.
To the extent that the Seller is required to repurchase or
substitute for a Crossed Loan hereunder in the manner prescribed above in this
Section 3(c) while the Trustee continues to hold any other Crossed Loans in such
Crossed Loan Group, the Seller and the Purchaser shall not enforce any remedies
against the other's Primary Collateral (as defined below), but each is permitted
to exercise remedies against the Primary Collateral securing its respective
Crossed Loan(s), so long as such exercise does not impair the ability of the
other party to exercise its remedies against the Primary Collateral securing the
Crossed Loan(s) held thereby.
If the exercise by one party would impair the ability of the
other party to exercise its remedies with respect to the Primary Collateral
securing the Crossed Loan(s) held by such party, then the Seller and the
Purchaser shall forbear from exercising such remedies until the Mortgage Loan
Documents evidencing and securing the relevant Crossed Loans can be modified in
a manner consistent with this Agreement to remove the threat of impairment as a
result of the exercise of remedies. Any reserve or other cash collateral or
letters of credit securing the Crossed Loans shall be allocated between such
Crossed Loans in accordance with the Mortgage Loan Documents, or otherwise on a
pro rata basis based upon their outstanding Stated Principal Balances.
Notwithstanding the foregoing, if a Crossed Loan is modified to terminate the
related
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cross-collateralization and/or cross-default provisions, the Seller shall
furnish to the Trustee an Opinion of Counsel that such modification shall not
cause an Adverse REMIC Event.
For purposes hereof, "Primary Collateral" shall mean the
Mortgaged Property directly securing a Crossed Loan and excluding any property
as to which the related lien may only be foreclosed upon by exercise of
cross-collateralization provisions of such Mortgage Loans.
The foregoing provisions of this Section 3(c) notwithstanding,
the Purchaser's sole remedy for a breach of the representation in paragraph 30
on Schedule I hereto shall be the cure of such breach by the Seller, which cure
shall be effected through the payment by the Seller of such costs and expenses
(without regard to whether such costs and expenses are material or not)
specified in such paragraph that have not, at the time of such cure, been
received by the Master Servicer or the Special Servicer from the related
Mortgagor and not a repurchase of the related Mortgage Loan. To the extent any
fees or expenses that are the subject of a cure by the Seller are subsequently
obtained from the related Mortgagor, the cure payment made by the Seller shall
be returned to the Seller.
(d) In connection with any permitted repurchase or
substitution of one or more Mortgage Loans contemplated hereby, upon receipt of
a certificate from a Servicing Officer certifying as to the receipt of the
Purchase Price (as defined in the Pooling and Servicing Agreement) or
Substitution Shortfall Amount(s), as applicable, in the Collection Account, and,
if applicable, 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, (i) the Trustee shall execute and deliver such
endorsements and assignments as are provided to it by the Master Servicer or the
Seller, in each case without recourse, representation or warranty, as shall be
necessary to vest in the Seller, the legal and beneficial ownership of each
repurchased Mortgage Loan or substituted Mortgage Loan, as applicable, (ii) the
Trustee, the Custodian, the Master Servicer and the Special Servicer shall each
tender to the Seller, upon delivery to each of them of a receipt executed by the
Seller, all portions of the Mortgage File and other documents pertaining to such
Mortgage Loan possessed by it, and (iii) the Master Servicer and the Special
Servicer shall release to the Seller any Escrow Payments and Reserve Funds held
by it in respect of such repurchased or deleted Mortgage Loan(s).
(e) This Section 3 provides the sole remedy available to the
Purchaser, the Certificateholders, or the Trustee on behalf of the
Certificateholders, respecting any Document Defect in a Mortgage File or any
Breach of any representation or warranty set forth in or required to be made
pursuant to Section 3 of this Agreement.
SECTION 4. Representations, Warranties and Covenants of the
Purchaser. In order to induce the Seller to enter into this Agreement, the
Purchaser hereby represents, warrants and covenants 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 Delaware and the
Purchaser has taken all necessary corporate action to authorize the execution,
delivery and performance of this Agreement by it,
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and has the power and authority to execute, deliver and perform this Agreement
and all transactions contemplated hereby.
(b) This Agreement has been duly and validly authorized,
executed and delivered by the Purchaser, all requisite action by the Purchaser's
directors and officers has been taken in connection therewith, and (assuming the
due authorization, execution and delivery hereof by the Seller) this Agreement
constitutes the valid, legal and binding agreement of the Purchaser, enforceable
against the Purchaser in accordance with its terms, except as such enforcement
may be limited by (A) laws relating to bankruptcy, insolvency, fraudulent
transfer, 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) The execution and delivery of this Agreement by the
Purchaser and the Purchaser's performance and compliance with the terms of this
Agreement will not (A) violate the Purchaser's articles of incorporation or
bylaws, (B) violate any law or regulation or any administrative decree or order
to which it is subject or (C) constitute a default (or an event which, with
notice or lapse of time, or both, would constitute a default) under, or result
in the breach of, any material contract, agreement or other instrument to which
the Purchaser is a party or by which the Purchaser is bound, which default might
have consequences that would, in the Purchaser's reasonable and good faith
judgment, materially and adversely affect the condition (financial or other) or
operations of the Purchaser or its properties or have consequences that would
materially and adversely affect its performance hereunder.
(d) The Purchaser 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 Purchaser's reasonable and good faith judgment,
materially and adversely affect the ability of the Purchaser 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 Purchaser of
its obligations under this Agreement (except to the extent such consent has been
obtained).
(e) 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.
(f) Under GAAP and for federal income tax purposes, the
Purchaser will report the transfer of the Mortgage Loans by the Seller to the
Purchaser as a sale of the Mortgage Loans to the Purchaser in exchange for
consideration consisting of a cash amount equal to the aggregate Purchase
Consideration.
(g) 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
10
validity of this Agreement or any action taken in connection with the
obligations of the Purchaser contemplated herein, or which would be likely to
impair materially the ability of the Purchaser to enter into and/or perform
under the terms of this Agreement.
(h) 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 other governmental agency or body, which default might have
consequences that would, in the Purchaser's reasonable and good faith judgment,
materially and adversely affect the condition (financial or other) or operations
of the Purchaser or its properties or might have consequences that would
materially and adversely affect its performance hereunder.
SECTION 5. Closing. The closing of the sale of the Mortgage
Loans (the "Closing") shall be held at the offices of Sidley Xxxxxx Xxxxx & Xxxx
LLP on the Closing Date. The Closing shall be subject to each of the following
conditions:
(a) All of the representations and warranties of the Seller
set forth in or made pursuant to Sections 3(a) and 3(b) of this Agreement and
all of the representations and warranties of the Purchaser set forth in Section
4 of this Agreement shall be true and correct in all material respects as of the
Closing Date;
(b) All documents specified in Section 6 of this Agreement
(the "Closing Documents"), in such forms as are agreed upon and acceptable to
the Purchaser, the Seller, the Underwriters and their respective counsel in
their reasonable discretion, shall be duly executed and delivered by all
signatories as required pursuant to the respective terms thereof;
(c) The Seller shall have delivered and released to the
Trustee (or a Custodian on its behalf) and the Master Servicer, respectively,
all documents represented to have been or required to be delivered to the
Trustee and the Master Servicer pursuant to Section 2 of this Agreement;
(d) All other terms and conditions of this Agreement required
to be complied with on or before the Closing Date shall have been complied with
in all material respects and the Seller shall have the ability to comply with
all terms and conditions and perform all duties and obligations required to be
complied with or performed after the Closing Date;
(e) The Seller shall have paid all fees and expenses payable
by it to the Purchaser or otherwise pursuant to this Agreement as of the Closing
Date;
(f) A letter from the independent accounting firm of Ernst &
Young LLP in form satisfactory to the Purchaser, relating to certain information
regarding the Mortgage Loans and Certificates as set forth in the Prospectus and
Prospectus Supplement, respectively; and
(g) The Seller shall have executed and delivered concurrently
herewith that certain Indemnification Agreement, dated as of April 23, 2004
among the Seller, Xxxxxxx Xxxxx Mortgage Lending, Inc., Bank of America, N.A.,
the Purchaser, the Underwriters and the Initial Purchasers. Both parties agree
to use their best efforts to perform their respective obligations hereunder in a
manner that will enable the Purchaser to purchase the Mortgage Loans on the
Closing Date.
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SECTION 6. Closing Documents. The Closing Documents shall
consist of the following:
(a) (i) This Agreement duly executed by the Purchaser and the
Seller, (ii) the Pooling and Servicing Agreement duly executed by the parties
thereto and (iii) the Servicing Rights Purchase Agreement, dated as of May 1,
2004, between the Seller and KeyCorp Real Estate Capital Markets, Inc., Inc.,
duly executed by such parties;
(b) An officer's certificate of the Seller, executed by a duly
authorized officer of the Seller and dated the Closing Date, and upon which the
Purchaser, the Underwriters and the Initial Purchasers may rely, to the effect
that: (i) the representations and warranties of the Seller in this Agreement are
true and correct in all material respects at and as of the Closing Date with the
same effect as if made on such date; and (ii) the Seller has, in all material
respects, complied with all the agreements and satisfied all the conditions on
its part that are required under this Agreement to be performed or satisfied at
or prior to the Closing Date;
(c) An officer's certificate from an officer of the Seller
(signed in his/her capacity as an officer), dated the Closing Date, and upon
which the Purchaser may rely, to the effect that each individual who, as an
officer or representative of the Seller, signed this Agreement, the
Indemnification Agreement or any other document or certificate delivered on or
before the Closing Date in connection with the transactions contemplated herein
or therein, was at the respective times of such signing and delivery, and is as
of the Closing Date, duly elected or appointed, qualified and acting as such
officer or representative, and the signatures of such persons appearing on such
documents and certificates are their genuine signatures;
(d) An officer's certificate from an officer of the Seller
(signed in his/her capacity as an officer), dated the Closing Date, and upon
which the Purchaser, the Underwriters and Initial Purchasers may rely, to the
effect that (i) such officer has carefully examined the Specified Portions (as
defined below) of the Prospectus Supplement and nothing has come to his
attention that would lead him to believe that the Specified Portions of the
Prospectus Supplement, as of the date of the Prospectus Supplement or as of the
Closing Date, included or include any untrue statement of a material fact
relating to the Mortgage Loans or omitted or omit to state therein a material
fact necessary in order to make the statements therein relating to the Mortgage
Loans, in light of the circumstances under which they were made, not misleading,
and (ii) such officer has carefully examined the Specified Portions of the
Private Placement Memorandum, dated as of April 23, 2004 (the "Memorandum")
(pursuant to which certain classes of the Private Certificates are being
privately offered) and nothing has come to his attention that would lead him to
believe that the Specified Portions of the Memorandum, as of the date thereof or
as of the Closing Date, included or include any untrue statement of a material
fact relating to the Mortgage Loans or omitted or omit to state therein a
material fact necessary in order to make the statements therein related to the
Mortgage Loans, in the light of the circumstances under which they were made,
not misleading. The "Specified Portions" of the Prospectus Supplement shall
consist of Annex A-1 thereto, entitled "Certain Characteristics of the Mortgage
Loans" (insofar as the information contained in Annex A-1 relates to the
Mortgage Loans sold by the Seller hereunder), Annex A-2 to the Prospectus
Supplement, entitled "Certain Statistical Information Regarding the Mortgage
Loans" (insofar as the information contained in Annex A-2 relates to the
Mortgage Loans sold by the Seller hereunder), Annex B to the
12
Prospectus Supplement entitled "Certain Characteristics Regarding Multifamily
Properties" (insofar as the information contained in Annex B relates to the
Mortgage Loans sold by the Seller hereunder), Annex C to the Prospectus
Supplement, entitled "Structural Term Sheet" (insofar as the information
contained in Annex C relates to the Mortgage Loans sold by the Seller
hereunder), the diskette which accompanies the Prospectus Supplement (insofar as
such diskette is consistent with Annex X-0, Xxxxx X-0 and/or Annex B), and the
following sections of the Prospectus Supplement (only to the extent that any
such information relates to the Seller or the Mortgage Loans sold by the Seller
hereunder and, without limitation, exclusive of any statements in such sections
that purport to describe the servicing and administration provisions of the
Pooling and Servicing Agreement): "Summary of Prospectus Supplement-- Relevant
Parties--Mortgage Loan Sellers," "Summary of Prospectus Supplement-- The
Mortgage Loans And The Mortgaged Real Properties," "Risk Factors" and
"Description of the Mortgage Pool". The "Specified Portions" of the Memorandum
shall consist of the Specified Portions of the Prospectus Supplement;
(e) The resolutions of the Seller's board of directors or a
committee thereof authorizing the Seller's entering into the transactions
contemplated by this Agreement, the articles of incorporation and bylaws of the
Seller, and a certificate of good standing of the Seller issued by the State of
Delaware not earlier than thirty (30) days prior to the Closing Date;
(f) A written opinion of counsel for the Seller (which opinion
may be from in-house counsel, outside counsel or a combination thereof),
reasonably satisfactory to the Purchaser, its counsel and the Rating Agencies,
dated the Closing Date and addressed to the Purchaser, the Trustee, the
Underwriters, the Initial Purchasers 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 prior to the Closing Date.
SECTION 7. Costs. Whether or not this Agreement is terminated,
both the Seller and the Purchaser shall pay their respective share of the
transaction expenses incurred in connection with the transactions contemplated
herein as set forth in the closing statement prepared by the Purchaser and
delivered to and approved by the Seller on or before the Closing Date, and in
the memorandum of understanding between the Seller and Xxxxxxx Xxxxx Mortgage
Investors, Inc. with respect to the transactions contemplated by this Agreement.
SECTION 8. Grant of a Security Interest. It is the express
intent of the parties hereto that the conveyance of the Mortgage Loans by the
Seller to the Purchaser as provided in Section 2 hereof be, and be construed as,
a sale of the Mortgage Loans by the Seller to the Purchaser and not as a pledge
of the Mortgage Loans by the Seller to the Purchaser to secure a debt or other
obligation of the Seller. However, if, notwithstanding the aforementioned intent
of the parties, the Mortgage Loans are held to be property of the Seller, then,
(a) it is the express intent of the parties that such conveyance be deemed a
pledge of the Mortgage Loans by the Seller to the Purchaser to secure a debt or
other obligation of the Seller, and (b) (i) this Agreement shall also be deemed
to be a security agreement within the meaning of Article 9 of the Uniform
Commercial Code of the applicable jurisdiction; (ii) the conveyance provided for
in Section 2 hereof shall be deemed to be a grant by the Seller to the Purchaser
of a security interest
13
in all of the Seller's right, title and interest in and to the Mortgage Loans,
and all amounts payable to the holder of the Mortgage Loans in accordance with
the terms thereof, and all proceeds of the conversion, voluntary or involuntary,
of the foregoing into cash, instruments, securities or other property, including
without limitation, all amounts, other than investment earnings (other than
investment earnings required by Section 3.19(a) of the Pooling and Servicing
Agreement to offset Prepayment Interest Shortfalls), from time to time held or
invested in the Collection Account, the Distribution Account or, if established,
the REO Account whether in the form of cash, instruments, securities or other
property; (iii) the assignment to the Trustee of the interest of the Purchaser
as contemplated by Section 1 hereof shall be deemed to be an assignment of any
security interest created hereunder; (iv) the possession by the Trustee or any
of its agents, including, without limitation, the Custodian, of the Mortgage
Notes, and such other items of property as constitute instruments, money,
negotiable documents or chattel paper shall be deemed to be possession by the
secured party for purposes of perfecting the security interest pursuant to
Section 9-313 of the Uniform Commercial Code of the applicable jurisdiction; and
(v) notifications to persons (other than the Trustee) holding such property, and
acknowledgments, receipts or confirmations from persons (other than the Trustee)
holding such property, shall be deemed notifications to, or acknowledgments,
receipts or confirmations from, financial intermediaries, bailees or agents (as
applicable) of the secured party for the purpose of perfecting such security
interest under applicable law. The Seller and the Purchaser shall, to the extent
consistent with this Agreement, take such actions as may be necessary to ensure
that, if this Agreement were deemed to create a security interest in the
Mortgage Loans, such security interest would be deemed to be a perfected
security interest of first priority under applicable law and will be maintained
as such throughout the term of this Agreement and the Pooling and Servicing
Agreement. The Seller does hereby consent to the filing by the Purchaser of
financing statements relating to the transactions contemplated hereby without
the signature of the Seller.
SECTION 9. Notices. All notices, copies, requests, consents,
demands and other communications required hereunder shall be in writing and sent
by facsimile 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
facsimile or personally delivered or, in the case of a mailed notice, upon
receipt, in each case given or addressed as aforesaid.
SECTION 10. Representations, Warranties and Agreements to
Survive Delivery. All representations, warranties and agreements contained in
this Agreement, incorporated herein by reference or contained in the
certificates of officers of the Seller submitted pursuant hereto, shall remain
operative and in full force and effect and shall survive delivery of the
Mortgage Loans by the Seller to the Purchaser (and by the Purchaser to the
Trustee).
SECTION 11. 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
14
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
particular jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction. To the extent permitted by applicable law,
the parties hereto waive any provision of law that prohibits or renders void or
unenforceable any provision hereof.
SECTION 12. 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 13. 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 14. Attorneys' Fees. If any legal action, suit or
proceeding is commenced between the Seller and the Purchaser regarding their
respective rights and obligations under this Agreement, the prevailing party
shall be entitled to recover, in addition to damages or other relief, costs and
expenses, attorneys' fees and court costs (including, without limitation, expert
witness fees). As used herein, the term "prevailing party" shall mean the party
that obtains the principal relief it has sought, whether by compromise
settlement or judgment. If the party that commenced or instituted the action,
suit or proceeding shall dismiss or discontinue it without the concurrence of
the other party, such other party shall be deemed the prevailing party. 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), the
Initial Purchasers (also as intended third party beneficiaries hereof) and their
permitted successors and assigns. This Agreement is enforceable by the
Underwriters, the Initial Purchasers and the other third party beneficiaries
hereto in all respects to the same extent as if they had been signatories
hereof.
15
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 hereto against whom such waiver
or modification is sought to be enforced. The Seller's obligations hereunder
shall in no way be expanded, changed or otherwise affected by any amendment of
or modification to the Pooling and Servicing Agreement, including, without
limitation, any defined terms therein, unless the Seller has consented to such
amendment or modification in writing.
SECTION 18. Accountants' Letters. The parties hereto shall
cooperate with Ernst & Young 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 and the Certificate Purchase Agreement.
SECTION 19. Knowledge. Whenever a representation or warranty
or other statement in this Agreement (including, without limitation, Schedule I
hereto) 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.
SECTION 20. Cross-Collateralized Mortgage Loans. Each Crossed
Loan Group is identified on the Mortgage Loan Schedule. For purposes of
reference, the Mortgaged Property that relates or corresponds to any of the
Mortgage Loans in a Crossed Loan Group shall be the property identified in the
Mortgage Loan Schedule as corresponding thereto. The provisions of this
Agreement, including, without limitation, each of the representations and
warranties set forth in Schedule I hereto and each of the capitalized terms used
herein but defined in the Pooling and Servicing Agreement, shall be interpreted
in a manner consistent with this Section 20. In addition, if there exists with
respect to any Crossed Loan Group only one original of any document referred to
in the definition of "Mortgage File" in this Agreement and covering all the
Mortgage Loans in such Crossed Loan Group, the inclusion of the original of such
document in the Mortgage File for any of the Mortgage Loans in such Crossed Loan
Group shall be deemed an inclusion of such original in the Mortgage File for
each such Mortgage Loan.
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IN WITNESS WHEREOF, the Seller and the Purchaser have caused
their names to be signed hereto by their respective duly authorized officers as
of the date first above written.
SELLER
------
KEYBANK NATIONAL ASSOCIATION
By:_____________________________________________
Name:
Title:
Address for Notices:
x/x XxxXxxx Xxxx Xxxxxx Xxxxxxx Xxxxxxx, Inc.
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx Xxxx, Xxxxxxxx 00000
Telecopier No.: (000) 000-0000
with a copy (which shall not constitute notice)
to:
Xxxxxx X. Xxxxx
KeyBank National Association
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Telecopier No.: (000) 000-0000
with a copy (which shall not constitute notice)
to:
Xxxxx X. Xxxxxxx
Xxxxxxxxxx Xxxxxxx & Xxxxx, P.C.
000 Xxxx 00xx Xxxxxx, Xxxxx 0000
Xxxxxx Xxxx, Xxxxxxxx 00000
[KEYBANK MORTGAGE LOAN PURCHASE AGREEMENT]
PURCHASER
---------
XXXXXXX XXXXX MORTGAGE INVESTORS,
INC.
By:_____________________________________________
Name:
Title:
Address for Notices:
Four World Financial Center
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.:
Telephone No.:
[KEYBANK MORTGAGE LOAN PURCHASE AGREEMENT]
SCHEDULE I
MORTGAGE LOAN REPRESENTATIONS AND WARRANTIES
For purposes of this Schedule I, the "Value" of a Mortgaged
Property shall mean the value of such Mortgaged Property as determined by the
appraisal (and subject to the assumptions set forth in the appraisal) performed
in connection with the origination of the related Mortgage Loan.
1. Mortgage Loan Schedule. The information set forth in the
Mortgage Loan Schedule with respect to the Mortgage Loans is true and correct in
all material respects (and contains all the items listed in the definition of
"Mortgage Loan Schedule") as of the dates of the information set forth therein
or, if not set forth therein, and in all events no earlier than, as of the
respective Due Dates for the Mortgage Loans in May 2004.
2. Ownership of Mortgage Loans. Immediately prior to the
transfer of the Mortgage Loans to the Purchaser, the Seller had good title to,
and was the sole owner of, each Mortgage Loan. The Seller has full right, power
and authority to transfer and assign each Mortgage Loan to or at the direction
of the Purchaser free and clear of any and all pledges, liens, charges, security
interests, participation interests and/or other interests and encumbrances
(except for certain servicing rights as provided in the Pooling and Servicing
Agreement, any permitted subservicing agreements and servicing rights purchase
agreements pertaining thereto). The Seller has validly and effectively conveyed
to the Purchaser all legal and beneficial interest in and to each Mortgage Loan
free and clear of any pledge, lien, charge, security interest or other
encumbrance (except for certain servicing rights as provided in the Pooling and
Servicing Agreement, any permitted subservicing agreements and servicing rights
purchase agreements pertaining thereto); provided that recording and/or filing
of various transfer documents are to be completed after the Closing Date as
contemplated hereby and by the Pooling and Servicing Agreement. The sale of the
Mortgage Loans to the Purchaser or its designee does not require the Seller to
obtain any governmental or regulatory approval or consent that has not been
obtained. Each Mortgage Note is, or shall be as of the Closing Date, properly
endorsed to the Purchaser or its designee and each such endorsement is, or shall
be as of the Closing Date, genuine.
3. Payment Record. No scheduled payment of principal and
interest under any Mortgage Loan was 30 days or more past due as of the Due Date
for such Mortgage Loan in May 2004 without giving effect to any applicable grace
period, nor was any such payment 30 days or more delinquent in the twelve-month
period immediately preceding the Due Date for such Mortgage Loan in May 2004,
without giving effect to any applicable grace period.
4. Lien; Valid Assignment. Each Mortgage related to and
delivered in connection with each Mortgage Loan constitutes a valid and, subject
to the limitations and exceptions set forth in Paragraph 13 below, enforceable
first priority lien upon the related Mortgaged Property, prior to all other
liens and encumbrances, and there are no liens and/or encumbrances that are pari
passu with the lien of such Mortgage, in any event subject, however, to the
following (collectively, the "Permitted Encumbrances"): (a) the lien for current
real estate taxes, ground rents, water charges, sewer rents and assessments not
yet delinquent or accruing
interest or penalties; (b) covenants, conditions and restrictions, rights of
way, easements and other matters that are of public record and/or are referred
to in the related lender's title insurance policy (or, if not yet issued,
referred to in a pro forma title policy or a "marked-up" commitment binding upon
the title insurer); (c) exceptions and exclusions specifically referred to in
such lender's title insurance policy (or, if not yet issued, referred to in a
pro forma title policy or "marked-up" commitment binding upon the title
insurer); (d) other matters to which like properties are commonly subject; (e)
the rights of tenants (as tenants only) under leases (including subleases)
pertaining to the related Mortgaged Property; (f) if such Mortgage Loan
constitutes a Cross-Collateralized Mortgage Loan, the lien of the Mortgage for
another Mortgage Loan contained in the same Crossed Group; and (g) if the
related Mortgaged Property consists of one or more units in a condominium, the
related condominium declaration. The Permitted Encumbrances do not, individually
or in the aggregate, materially interfere with the security intended to be
provided by the related Mortgage, the current principal use of the related
Mortgaged Property, the Value of the Mortgaged Property or the current ability
of the related Mortgaged Property to generate income sufficient to service such
Mortgage Loan. The related assignment of such Mortgage executed and delivered in
favor of the Trustee is in recordable form (but for insertion of the name and
address of the assignee and any related recording information which is not yet
available to the Seller) and constitutes a legal, valid, binding and, subject to
the limitations and exceptions set forth in Paragraph 13 below, enforceable
assignment of such Mortgage from the relevant assignor to the Trustee.
5. Assignment of Leases and Rents. There exists, as part of
the related Mortgage File, an Assignment of Leases (either as a separate
instrument or as part of the Mortgage) that relates to and was delivered in
connection with each Mortgage Loan and that establishes and creates a valid,
subsisting and, subject to the limitations and exceptions set forth in Paragraph
13 below, enforceable first priority lien on and security interest in, subject
to applicable law, the property, rights and interests of the related Borrower
described therein, except for Permitted Encumbrances and except that a license
may have been granted to the related Borrower to exercise certain rights and
perform certain obligations of the lessor under the relevant lease or leases,
including, without limitation, the right to operate the related leased property
so long as no event of default has occurred under such Mortgage Loan; and each
assignor thereunder has the full right to assign the same. The related
assignment of any Assignment of Leases not included in a Mortgage, executed and
delivered in favor of the Trustee is in recordable form (but for insertion of
the name of the assignee and any related recording information which is not yet
available to the Seller), and constitutes a legal, valid, binding and, subject
to the limitations and exceptions set forth in Paragraph 13 below, enforceable
assignment of such Assignment of Leases from the relevant assignor to the
Trustee. The related Mortgage or related Assignment of Leases, subject to
applicable law, provides for the appointment of a receiver for the collection of
rents or for the related mortgagee to enter into possession to collect the rents
or provides for rents to be paid directly to the related mortgagee, if there is
an event of default. No person other than the related Borrower owns any interest
in any payments due under the related leases on which the Borrower is the
landlord, covered by the related Assignment of Leases.
6. Mortgage Status; Waivers and Modifications. In the case of
each Mortgage Loan, except by a written instrument which has been delivered to
the Purchaser or its designee as a part of the related Mortgage File, (a) the
related Mortgage (including any
I-2
amendments or supplements thereto included in the related Mortgage File) has not
been impaired, waived, modified, altered, satisfied, canceled, subordinated or
rescinded, (b) neither the related Mortgaged Property nor any material portion
thereof has been released from the lien of such Mortgage and (c) the related
Borrower has not been released from its obligations under such Mortgage, in
whole or in material part. With respect to each Mortgage Loan, since the later
of (a) March 31, 2004 and (b) the closing date of such Mortgage Loan, the Seller
has not executed any written instrument that (i) impaired, satisfied, canceled,
subordinated or rescinded such Mortgage Loan, (ii) waived, modified or altered
any material term of such Mortgage Loan, (iii) released the Mortgaged Property
or any material portion thereof from the lien of the related Mortgage, or (iv)
released the related Borrower from its obligations under such Mortgage Loan in
whole or material part. For avoidance of doubt, the preceding sentence does not
relate to any release of escrows by the Seller or a servicer on its behalf.
7. Condition of Property; Condemnation. In the case of each
Mortgage Loan, except as set forth in an engineering report prepared by an
independent engineering consultant in connection with the origination of such
Mortgage Loan, the related Mortgaged Property is, to the Seller's knowledge, in
good repair and free and clear of any damage that would materially and adversely
affect its value as security for such Mortgage Loan (except in any such case
where an escrow of funds, letter of credit or insurance coverage exists
sufficient to effect the necessary repairs and maintenance). As of the date of
origination of the Mortgage Loan, there was no proceeding pending for the
condemnation of all or any material part of the related Mortgaged Property. As
of the Closing Date, the Seller has not received notice and has no knowledge of
any proceeding pending for the condemnation of all or any material portion of
the Mortgaged Property securing any Mortgage Loan. As of the date of origination
of each Mortgage Loan and, to the Seller's knowledge, as of the date hereof, (a)
none of the material improvements on the related Mortgaged Property encroach
upon the boundaries and, to the extent in effect at the time of construction, do
not encroach upon the building restriction lines of such property, and none of
the material improvements on the related Mortgaged Property encroached over any
easements, except, in each case, for encroachments that are insured against by
the lender's title insurance policy referred to in Paragraph 8 below or that do
not materially and adversely affect the Value or current use of such Mortgaged
Property and (b) no improvements on adjoining properties encroached upon such
Mortgaged Property so as to materially and adversely affect the Value of such
Mortgaged Property, except those encroachments that are insured against by the
lender's title insurance policy referred to in Paragraph 8 below.
8. Title Insurance. Each Mortgaged Property securing a
Mortgage Loan is covered by an American Land Title Association (or an equivalent
form of) lender's title insurance policy (the "Title Policy") (or, if such
policy has yet to be issued, by a pro forma policy or a "marked up" commitment
binding on the title insurer) in the original principal amount of such Mortgage
Loan after all advances of principal, insuring that the related Mortgage is a
valid first priority lien on such Mortgaged Property, subject only to the
Permitted Encumbrances. Such Title Policy (or, if it has yet to be issued, the
coverage to be provided thereby) is in full force and effect, all premiums
thereon have been paid, no material claims have been made thereunder and no
claims have been paid thereunder. No holder of the related Mortgage has done, by
act or omission, anything that would materially impair the coverage under such
Title Policy. Immediately following the transfer and assignment of the related
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Mortgage Loan to the Trustee, such Title Policy (or, if it has yet to be issued,
the coverage to be provided thereby) will inure to the benefit of the Trustee as
sole insured without the consent of or notice to the insurer. Such Title Policy
contains no exclusion for whether, or it affirmatively insures (unless the
related Mortgaged Property is located in a jurisdiction where such affirmative
insurance is not available) that, (a) the related Mortgaged Property has access
to a public road, and (b) the area shown on the survey, if any, reviewed or
prepared in connection with the origination of the related Mortgage Loan is the
same as the property legally described in the related Mortgage.
9. No Holdback. The proceeds of each Mortgage Loan have been
fully disbursed (except in those cases where the full amount of the Mortgage
Loan has been disbursed but a portion thereof is being held in escrow or reserve
accounts documented as part of the Mortgage Loan Documents and the rights to
which are transferred to the Trustee, pending the satisfaction of certain
conditions relating to leasing, repairs or other matters with respect to the
related Mortgaged Property), and there is no obligation for future advances with
respect thereto.
10. Mortgage Provisions. The Mortgage Loan Documents for each
Mortgage Loan, together with applicable state law, contain customary and,
subject to the limitations and exceptions set forth in Paragraph 13 below,
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the practical realization against the related Mortgaged
Property of the principal benefits of the security intended to be provided
thereby, including, without limitation, foreclosure or similar proceedings (as
applicable for the jurisdiction where the related Mortgaged Property is
located). None of the Mortgage Loan Documents contains any provision that
expressly excuses the related Borrower from obtaining and maintaining insurance
coverage for acts of terrorism.
11. Trustee under Deed of Trust. If the Mortgage for any
Mortgage Loan is a deed of trust, then (a) a trustee, duly qualified under
applicable law to serve as such, has either been properly designated and
currently so serves or may be substituted in accordance with the Mortgage and
applicable law, and (b) no fees or expenses are payable to such trustee by the
Seller, the Depositor or any transferee thereof except in connection with a
trustee's sale after default by the related Borrower or in connection with any
full or partial release of the related Mortgaged Property or related security
for such Mortgage Loan.
12. Environmental Conditions. Except in the case of the
Mortgaged Properties identified on Annex B hereto (as to which properties the
only environmental investigation conducted in connection with the origination of
the related Mortgage Loan related to asbestos-containing materials and
lead-based paint), (a) an environmental site assessment (which may include a
Phase II environmental assessment) meeting ASTM standards and covering all
environmental hazards typically assessed for similar properties including use,
type and tenants of the related Mortgaged Property, a transaction screen meeting
ASTM standards or an update of a previously conducted environmental site
assessment (which update may have been performed pursuant to a database update),
was performed by an independent third-party environmental consultant (licensed
to the extent required by applicable state law) with respect to each Mortgaged
Property securing a Mortgage Loan in connection with the origination of such
Mortgage Loan, (b) the report of each such assessment, update or screen, if any
(an "Environmental Report"), is dated no earlier than (or, alternatively, has
been updated within)
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twelve (12) months prior to the date hereof, (c) a copy of each such
Environmental Report has been delivered to the Purchaser, and (d) either: (i) no
such Environmental Report, if any, reveals that as of the date of the report
there is a material violation of applicable environmental laws with respect to
any known circumstances or conditions relating to the related Mortgaged
Property; or (ii) if any such Environmental Report does reveal any such
circumstances or conditions with respect to the related Mortgaged Property and
the same have not been subsequently remediated in all material respects, then
one or more of the following are true--(A) one or more parties not related to
the related Borrower and collectively having financial resources reasonably
estimated to be adequate to cure the violation was identified as the responsible
party or parties for such conditions or circumstances, and such conditions or
circumstances do not materially impair the Value of the related Mortgaged
Property, (B) the related Borrower was required to provide additional security
reasonably estimated to be adequate to cure the violations and/or to obtain and,
for the period contemplated by the related Mortgage Loan Documents, maintain an
operations and maintenance plan, (C) the related Borrower, or other responsible
party, provided a "no further action" letter or other evidence that would be
acceptable to a reasonably prudent commercial mortgage lender, that applicable
federal, state or local governmental authorities had no current intention of
taking any action, and are not requiring any action, in respect of such
conditions or circumstances, (D) such conditions or circumstances were
investigated further and based upon such additional investigation, a qualified
environmental consultant recommended no further investigation or remediation,
(E) the expenditure of funds reasonably estimated to be necessary to effect such
remediation is not greater than 2% of the outstanding principal balance of the
related Mortgage Loan, (F) there exists an escrow of funds reasonably estimated
to be sufficient for purposes of effecting such remediation, (G) the related
Mortgaged Property is insured under a policy of insurance, subject to certain
per occurrence and aggregate limits and a deductible, against certain losses
arising from such circumstances and conditions or (H) a responsible party
provided a guaranty or indemnity to the related Borrower to cover the costs of
any required investigation, testing, monitoring or remediation and, as of the
date of origination of the related Mortgage Loan, such responsible party had
financial resources reasonably estimated to be adequate to cure the subject
violation in all material respects. To the Seller's actual knowledge and without
inquiry beyond the related Environmental Report, there are no significant or
material circumstances or conditions with respect to such Mortgaged Property not
revealed in any such Environmental Report, where obtained, or in any Borrower
questionnaire delivered to the Seller in connection with the issue of any
related environmental insurance policy, if applicable, that would require
investigation or remediation by the related Borrower under, or otherwise be a
material violation of, any applicable environmental law. The Mortgage Loan
Documents for each Mortgage Loan require the related Borrower to comply in all
material respects with all applicable federal, state and local environmental
laws and regulations. Each of the Mortgage Loans identified on Annex C hereto
are covered by environmental insurance policies and each such policy is
noncancellable during its term, is in the amount at least equal to 125% of the
principal balance of the Mortgage Loan, has a term ending no sooner than the
date which is five years after the maturity date of the Mortgage Loan to which
it relates and either does not provide for a deductible or the deductible amount
is held in escrow and all premiums have been paid in full. Each Borrower
represents and warrants in the related Mortgage Loan Documents that except as
set forth in certain environmental reports and to its knowledge it has not used,
caused or permitted to exist and will not use, cause or permit to exist on the
related Mortgaged Property any hazardous materials in
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any manner which violates federal, state or local laws, ordinances, regulations,
orders, directives or policies governing the use, storage, treatment,
transportation, manufacture, refinement, handling, production or disposal of
hazardous materials. The related Borrower (or affiliate thereof) has agreed to
indemnify, defend and hold the Seller and its successors and assigns harmless
from and against any and all losses, liabilities, damages, injuries, penalties,
fines, expenses and claims of any kind whatsoever (including attorneys' fees and
costs) paid, incurred or suffered by or asserted against, any such party
resulting from a breach of environmental representations, warranties or
covenants given by the Borrower in connection with such Mortgage Loan.
13. Loan Document Status. Each Mortgage Note, Mortgage, and
each other agreement executed by or on behalf of the related Borrower with
respect to each Mortgage Loan is the legal, valid and binding obligation of the
maker thereof (subject to any non-recourse provisions contained in any of the
foregoing agreements and any applicable state anti-deficiency or market value
limit deficiency legislation), enforceable in accordance with its terms, except
as such enforcement may be limited by (i) bankruptcy, insolvency,
reorganization, receivership, fraudulent transfer and conveyance or other
similar laws affecting the enforcement of creditors' rights generally and (ii)
general principles of equity (regardless of whether such enforcement is
considered in a proceeding in equity or at law), and except that certain
provisions in such loan documents may be further limited or rendered
unenforceable by applicable law, but (subject to the limitations set forth in
the foregoing clauses (i) and (ii)) such limitations or unenforceability will
not render such loan documents invalid as a whole or substantially interfere
with the mortgagee's realization of the principal benefits and/or security
provided thereby. There is no valid defense, counterclaim or right of offset or
rescission available to the related Borrower with respect to such Mortgage Note,
Mortgage or other agreements that would deny the mortgagee the principal
benefits intended to be provided thereby, 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.
14. Insurance. Except in certain cases where tenants, having a
net worth of at least $50,000,000 or an investment grade credit rating (and, if
rated by Fitch, a credit rating of at least "A-" by Fitch) and obligated to
maintain the insurance described in this paragraph, are allowed to self-insure
the related Mortgaged Properties, all improvements upon each Mortgaged Property
securing a Mortgage Loan are insured under a fire and extended perils insurance
(or the equivalent) policy, in an amount at least equal to the lesser of the
outstanding principal balance of such Mortgage Loan and 100% of the full
insurable replacement cost of the improvements located on the related Mortgaged
Property, and if applicable, the related hazard insurance policy contains
appropriate endorsements to avoid the application of co-insurance and does not
permit reduction in insurance proceeds for depreciation. Each Mortgaged Property
is also covered by comprehensive general liability insurance in amounts
customarily required by prudent commercial mortgage lenders for properties of
similar types. Each Mortgaged Property securing a Mortgage Loan is the subject
of a business interruption or rent loss insurance policy providing coverage for
at least twelve (12) months (or a specified dollar amount which is reasonably
estimated to cover no less than twelve (12) months of rental income), unless
such Mortgaged Property constitutes a manufactured housing community. If any
portion of the improvements on a Mortgaged Property securing any Mortgage Loan
was, at the time of the origination of such Mortgage Loan, in an area identified
in the Federal Register by the Flood Emergency
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Management Agency as a special flood hazard area (Zone A or Zone V) (an "SFH
Area"), and flood insurance was available, a flood insurance policy meeting the
requirements of the then current guidelines of the Federal Insurance
Administration is in effect with a generally acceptable insurance carrier, in an
amount representing coverage not less than the least of (1) the minimum amount
required, under the terms of coverage, to compensate for any damage or loss on a
replacement basis, (2) the outstanding principal balance of such Mortgage Loan,
and (3) the maximum amount of insurance available under the applicable National
Flood Insurance Administration Program. Each Mortgaged Property located in
California or in seismic zones 3 and 4 is covered by seismic insurance to the
extent such Mortgaged Property has a probable maximum loss of greater than
twenty percent (20%) of the replacement value of the related improvements,
calculated using methodology acceptable to a reasonably prudent commercial
mortgage lender with respect to similar properties in the same area or
earthquake zone. Each Mortgaged Property located within Florida or within 25
miles of the coast of North Carolina, South Carolina, Georgia, Alabama,
Mississippi, Louisiana or Texas is insured by windstorm insurance in an amount
at least equal to the lesser of (i) the outstanding principal balance of the
related Mortgage Loan and (ii) 100% of the insurable replacement cost of the
improvements located on such Mortgaged Property. All such hazard and flood
insurance policies contain a standard mortgagee clause for the benefit of the
holder of the related Mortgage, its successors and assigns, as mortgagee, and
are not terminable (nor may the amount of coverage provided thereunder be
reduced) without ten (10) days' prior written notice to the mortgagee; and no
such notice has been received, including any notice of nonpayment of premiums,
that has not been cured. Additionally, for any Mortgage Loan having a Cut-off
Date Balance equal to or greater than $20,000,000, the insurer for all of the
required coverages set forth herein has a claims paying ability or financial
strength rating from S&P or Xxxxx'x of not less than A-minus (or the
equivalent), or from A.M. Best Company of not less than "A-minus: V" (or the
equivalent) and, if rated by Fitch, of not less than "A-" from Fitch (or the
equivalent). With respect to each Mortgage Loan, the related Mortgage Loan
Documents require that the related Borrower or a tenant of such Borrower
maintain insurance as described above or permit the related mortgagee to require
insurance as described above. Except under circumstances that would be
reasonably acceptable to a prudent commercial mortgage lender or that would not
otherwise materially and adversely affect the security intended to be provided
by the related Mortgage, the Mortgage Loan Documents for each Mortgage Loan
provide that proceeds paid under any such casualty insurance policy will (or, at
the lender's option, will) be applied either to the repair or restoration of all
or part of the related Mortgaged Property or to the payment of amounts due under
such Mortgage Loan; provided that the related Mortgage Loan Documents may
entitle the related Borrower to any portion of such proceeds remaining after the
repair or restoration of the related Mortgaged Property or payment of amounts
due under the Mortgage Loan; and provided, further, that, if the related
Borrower holds a leasehold interest in the related Mortgaged Property, the
application of such proceeds will be subject to the terms of the related Ground
Lease (as defined in Paragraph 18 below).
Each Mortgaged Property is insured by an "all-risk" casualty
insurance policy that does not contain an express exclusion for (or,
alternatively, is covered by a separate policy that insures against property
damage resulting from) acts of terrorism.
15. Taxes and Assessments. There are no delinquent property
taxes or assessments or other outstanding charges affecting any Mortgaged
Property securing a Mortgage
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Loan that are a lien of priority equal to or higher than the lien of the related
Mortgage and that have not been paid or are not otherwise covered by an escrow
of funds sufficient to pay such charge. For purposes of this representation and
warranty, real property taxes and assessments and other charges shall not be
considered delinquent until the date on which interest and/or penalties would be
payable thereon.
16. Borrower Bankruptcy. No Borrower under a Mortgage Loan is
a debtor in any state or federal bankruptcy, insolvency or similar proceeding.
17. Local Law Compliance. To the Seller's knowledge, based
upon a letter from governmental authorities, a legal opinion, a zoning
consultant's report or an endorsement to the related Title Policy, or based on
such other due diligence considered reasonable by prudent commercial mortgage
lenders in the lending area where the subject Mortgaged Property is located
(including, without limitation, when commercially reasonable, a representation
of the related Borrower at the time of origination of the subject Mortgage
Loan), the improvements located on or forming part of each Mortgaged Property
securing a Mortgage Loan are in material compliance with applicable zoning laws
and ordinances or constitute a legal non-conforming use or structure (or, if any
such improvement does not so comply and does not constitute a legal
non-conforming use or structure, such non-compliance and failure does not
materially and adversely affect the Value of the related Mortgaged Property). In
the case of each legal non-conforming use or structure, the related Mortgaged
Property may be restored or repaired to the full extent of the use or structure
at the time of such casualty or law and ordinance coverage has been obtained in
an amount that would be required by prudent commercial mortgage lenders (or, if
the related Mortgaged Property may not be restored or repaired to the full
extent of the use or structure at the time of such casualty and law and
ordinance coverage has not been obtained in an amount that would be required by
prudent commercial mortgage lenders, such fact does not materially and adversely
affect the Value of the related Mortgaged Property).
18. Leasehold Estate Only. If any Mortgage Loan is secured by
the interest of a Borrower as a lessee under a ground lease of all or a material
portion of a Mortgaged Property (together with any and all written amendments
and modifications thereof and any and all estoppels from or other agreements
with the ground lessor, a "Ground Lease"), but not by the related fee interest
in such Mortgaged Property or such material portion thereof (the "Fee
Interest"), then:
(i) such Ground Lease or a memorandum thereof has been or will
be duly recorded; such Ground Lease permits the interest of the
lessee thereunder to be encumbered by the related Mortgage; and
there has been no material change in the terms of such Ground Lease
since its recordation, with the exception of material changes
reflected in written instruments which are a part of the related
Mortgage File; and if required by such Ground Lease, the lessor
thereunder has received notice of the lien of the related Mortgage
in accordance with the provisions of such Ground Lease;
(ii) the related lessee's leasehold interest in the portion of
the related Mortgaged Property covered by such Ground Lease is not
subject to any liens or encumbrances superior to, or of equal
priority with, the related Mortgage, other than the related Fee
Interest and Permitted Encumbrances;
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(iii) the Borrower's interest in such Ground Lease is
assignable to, and is thereafter further assignable by, the
Purchaser upon notice to, but without the consent of, the lessor
thereunder (or, if such consent is required, it has been obtained);
provided that such Ground Lease has not been terminated and all
amounts owed thereunder have been paid;
(iv) such Ground Lease is in full force and effect, and, to
the Seller's knowledge, no material default has occurred under such
Ground Lease;
(v) such Ground Lease requires the lessor thereunder to give
notice of any default by the lessee to the mortgagee under such
Mortgage Loan; and such Ground Lease further provides that no notice
of termination given under such Ground Lease is effective against
the mortgagee under such Mortgage Loan unless a copy has been
delivered to such mortgagee in the manner described in such Ground
Lease;
(vi) the mortgagee under such Mortgage Loan is permitted a
reasonable opportunity (including, where necessary, sufficient time
to gain possession of the interest of the lessee under such Ground
Lease) to cure any default under such Ground Lease, which is curable
after the receipt of notice of any such default, before the lessor
thereunder may terminate such Ground Lease;
(vii) such Ground Lease either (i) has an original term which
extends not less than twenty (20) years beyond the Stated Maturity
Date of such Mortgage Loan, or (ii) has an original term which does
not end prior to the 5th anniversary of the Stated Maturity Date of
such Mortgage Loan and has extension options that are exercisable by
the lender upon its taking possession of the Borrower's leasehold
interest and that, if exercised, would cause the term of such Ground
Lease to extend not less than twenty (20) years beyond the Stated
Maturity Date of such Mortgage Loan;
(viii) such Ground Lease requires the lessor to enter into a
new lease with a mortgagee upon termination of such Ground Lease for
any reason, including as a result of a rejection of such Ground
Lease in a bankruptcy proceeding involving the related Borrower,
unless the mortgagee under such Mortgage Loan fails to cure a
default of the lessee that is susceptible to cure by the mortgagee
under such Ground Lease following notice thereof from the lessor;
(ix) under the terms of such Ground Lease and the related
Mortgage, taken together, any related casualty insurance proceeds
(other than de minimis amounts for minor casualties) with respect to
the leasehold interest will be applied either (i) to the repair or
restoration of all or part of the related Mortgaged Property, with
the mortgagee or a trustee appointed by it having the right to hold
and disburse such proceeds as the repair or restoration progresses
(except in such cases where a provision entitling another party to
hold and disburse such proceeds would not be viewed as commercially
unreasonable by a prudent commercial mortgage lender), or (ii) to
the payment of the outstanding principal balance of the Mortgage
Loan together with any accrued interest thereon;
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(x) such Ground Lease does not impose any restrictions on
subletting which would be viewed as commercially unreasonable by a
prudent commercial mortgage lender in the lending area where the
related Mortgaged Property is located at the time of the origination
of such Mortgage Loan; and
(xi) such Ground Lease provides that it may not be amended or
modified without the prior written consent of the mortgagee under
such Mortgage Loan, and any such action without such consent is not
binding on such mortgagee, its successors or assigns.
19. Qualified Mortgage. Each Mortgage Loan is a "qualified
mortgage" within the meaning of Section 860G(a)(3) of the Code and Treasury
Regulations Section 1.860G-2(a) (but without regard to the rule in Treasury
Regulations Section 1.860G-2(a)(3) or Section 1.860G-2(f)(2) that treats a
defective obligation as a qualified mortgage under certain circumstances). Each
Mortgage Loan is directly secured by an interest in real property (within the
meaning of Treasury Regulations Section 1.856-3(c) and 1.856-3(d)), and either
(1) 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 such Mortgage
Loan at the time the Mortgage Loan was (a) originated or modified (within the
meaning of Treasury Regulations Section 1.860G-2(b)(1)) or (b) contributed to
the Trust Fund, or (2) substantially all of the proceeds of such Mortgage Loan
were used to acquire, improve or protect an interest in real property and such
interest in real property was the only security for the Mortgage Loan at the
time such Mortgage Loan was originated or modified. For purposes of the previous
sentence, the fair market value of the referenced interest in real property
shall first be reduced by (1) the amount of any lien on such interest in real
property that is senior to the Mortgage Loan, and (2) a proportionate amount of
any lien on such interest in real property that is in parity with the Mortgage
Loan.
20. Advancement of Funds. In the case of each Mortgage Loan,
neither the Seller nor, to the Seller's knowledge, any prior holder of such
Mortgage Loan has advanced funds or induced, solicited or knowingly received any
advance of funds from a party other than the owner of the related Mortgaged
Property (other than amounts paid by the tenant as specifically provided under a
related lease or by the property manager), for the payment of any amount
required by such Mortgage Loan, except for interest accruing from the date of
origination of such Mortgage Loan or the date of disbursement of the Mortgage
Loan proceeds, whichever is later, to the date which preceded by 30 days the
first due date under the related Mortgage Note.
21. No Equity Interest, Equity Participation or Contingent
Interest. No Mortgage Loan contains any equity participation by the mortgagee
thereunder, is convertible by its terms into an equity ownership interest in the
related Mortgaged Property or the related Borrower, provides for any contingent
or additional interest in the form of participation in the cash flow of the
related Mortgaged Property, or provides for the negative amortization of
interest, except that, in the case of an ARD Loan, such Mortgage Loan provides
that, during the period commencing on or about the related Anticipated Repayment
Date and continuing until such Mortgage Loan is paid in full, (a) additional
interest shall accrue and may be compounded monthly and shall be payable only
after the outstanding principal of such Mortgage Loan is paid
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in full, and (b) a portion of the cash flow generated by such Mortgaged Property
will be applied each month to pay down the principal balance thereof in addition
to the principal portion of the related monthly payment.
22. Legal Proceedings. To the Seller's knowledge, there are no
pending actions, suits, proceedings or governmental investigations by or before
any court or governmental authority against or affecting the Borrower under any
Mortgage Loan or the related Mortgaged Property that, if determined adversely to
such Borrower or Mortgaged Property, would materially and adversely affect the
value of the Mortgaged Property as security for such Mortgage Loan or the
current ability of the Borrower to pay principal, interest or any other amounts
due under such Mortgage Loan.
23. Other Mortgage Liens. Except for Mortgage Loans secured by
residential cooperative properties, none of the Mortgage Loans permits the
related Mortgaged Property to be encumbered by any mortgage lien junior to or of
equal priority with the lien of the related Mortgage without the prior written
consent of the holder thereof or the satisfaction of debt service coverage or
similar criteria specified therein. To the Seller's knowledge, except for cases
involving other Mortgage Loans, none of the Mortgaged Properties securing the
Mortgage Loans is encumbered by any mortgage liens junior to or of equal
priority with the liens of the related Mortgage. The related Mortgage Loan
Documents require the Borrower under each Mortgage Loan to pay all reasonable
costs and expenses related to any required consent to an encumbrance, including
any applicable Rating Agency fees, or would permit the related mortgagee to
withhold such consent if such costs and expenses are not paid by a party other
than such mortgagee.
24. No Mechanics' Liens. As of the date of origination, each
Mortgaged Property securing a Mortgage Loan (exclusive of any related personal
property) was free and clear of any and all mechanics' and materialmen's liens
that were prior or equal to the lien of the related Mortgage and that were not
bonded or escrowed for or covered by title insurance. As of the Closing Date, to
the Seller's knowledge: (i) each Mortgaged Property securing a Mortgage Loan
(exclusive of any related personal property) is free and clear of any and all
mechanics' and materialmen's liens that are prior or equal to the lien of the
related Mortgage and that are not bonded or escrowed for or covered by title
insurance, and (ii) no rights are outstanding that under law could give rise to
any such lien that would be prior or equal to the lien of the related Mortgage
and that is not bonded or escrowed for or covered by title insurance.
25. Compliance. Each Mortgage Loan complied with, or was
exempt from, all applicable usury laws in effect at its date of origination.
26. Licenses and Permits. To the Seller's knowledge, as of the
date of origination of each Mortgage Loan and based on any of: (i) a letter from
governmental authorities, (ii) a legal opinion, (iii) an endorsement to the
related Title Policy, (iv) a representation of the related Borrower at the time
of origination of such Mortgage Loan, (v) a zoning report from a zoning
consultant, or (vi) other due diligence that a commercially reasonable
originator of similar mortgage loans in the jurisdiction where the related
Mortgaged Property is located customarily performs in the origination of
comparable mortgage loans, the related Borrower was in possession of all
material licenses, permits and franchises required by
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applicable law for the ownership and operation of the related Mortgaged Property
as it was then operated or such material licenses, permits and franchises have
otherwise been issued.
27. Cross-Collateralization. No Mortgage Loan is
cross-collateralized with any loan which is outside the Mortgage Pool. With
respect to any group of cross-collateralized Mortgage Loans, the sum of the
amounts of the respective Mortgages recorded on the related Mortgaged Properties
with respect to such Mortgage Loans is at least equal to the total amount of
such Mortgage Loans.
28. Releases of Mortgaged Properties. No Mortgage Note or
Mortgage requires the mortgagee to release all or any material portion of the
related Mortgaged Property from the lien of the related Mortgage except upon (i)
payment in full of all amounts due under the related Mortgage Loan or (ii)
delivery of "government securities" within the meaning of Treasury Regulations
Section 1.860G-2(a)(8)(i) in connection with a defeasance of the related
Mortgage Loan; provided that the Mortgage Loans that are Crossed Loans, and the
other individual Mortgage Loans secured by multiple parcels, may require the
respective mortgagee(s) to grant releases of portions of the related Mortgaged
Property or the release of one or more related Mortgaged Properties upon (i) the
satisfaction of certain legal and underwriting requirements or (ii) the payment
of a release price in connection therewith; and provided, further, that certain
Crossed Groups or individual Mortgage Loans secured by multiple parcels may
permit the related Borrower to obtain the release of one or more of the related
Mortgaged Properties by substituting comparable real estate property, subject
to, among other conditions precedent, receipt of confirmation from each Rating
Agency that such release and substitution will not result in a qualification,
downgrade or withdrawal of any of its then-current ratings of the Certificates;
and provided, further, that any Mortgage Loan may permit the unconditional
release of one or more unimproved parcels of land to which the Seller did not
give any material value in underwriting the Mortgage Loan.
29. Defeasance. Each Mortgage Loan that contains a provision
for any defeasance of mortgage collateral permits defeasance (i) no earlier than
two years following the Closing Date and (ii) only with substitute collateral
constituting "government securities" within the meaning of Treasury Regulations
Section 1.860G-2(a)(8)(i). To the Seller's knowledge, defeasance under each such
Mortgage Loan is only for the purpose of facilitating the disposition of a
Mortgaged Property and not as part of an arrangement to collateralize a REMIC
offering with obligations that are not real estate mortgages.
30. Defeasance and Assumption Costs. If any Mortgage Loan
permits defeasance, then the related Mortgage Loan Documents provide that the
related Borrower is responsible for the payment of all reasonable costs and
expenses associated with defeasance incurred by the related mortgagee, including
Rating Agency fees. If any Mortgage Loan permits assumptions, then the related
Mortgage Loan Documents provide that the related Borrower is responsible for all
reasonable costs and expenses associated with an assumption incurred by the
related mortgagee.
31. Fixed Rate Loans. Each Mortgage Loan bears interest at a
rate that remains fixed throughout the remaining term of such Mortgage Loan,
except in the case of an ARD Loan after its Anticipated Repayment Date and
except for the imposition of a default rate.
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32. Inspection. The Seller or an affiliate thereof inspected,
or caused the inspection of, the related Mortgaged Property within the preceding
twelve (12) months.
33. No Material Default. To the Seller's knowledge, there
exists no material default, breach, violation or event of acceleration under the
Mortgage Note or Mortgage for any Mortgage Loan (other than payments due but not
yet 30 days or more delinquent); provided, however, that this representation and
warranty does not cover any default, breach, violation or event of acceleration
that pertains to or arises out of the subject matter otherwise covered by any
other representation and warranty made by the Seller in this Schedule I.
34. Due-on-Sale. The Mortgage for each Mortgage Loan contains
a "due-on-sale" clause, which provides for the acceleration of the payment of
the unpaid principal balance of such Mortgage Loan if, without the prior written
consent of the holder of such Mortgage, either the related Mortgaged Property,
or any direct controlling equity interest in the related Borrower, is
transferred or sold, other than by reason of: (i) if the related Mortgaged
Property is a residential cooperative property, transfers of stock of the
Borrower in connection with the assignment of a proprietary lease for a unit in
the related Mortgaged Property by a tenant-shareholder of the Borrower to other
persons who by virtue of such transfers become tenant-shareholders in the
Borrower; and (ii) in the case of other types of Mortgaged Properties, family
and estate planning transfers, transfers by devise or descent or by operation of
law upon death, transfers of less than a controlling interest in the Borrower,
transfers of shares in public companies, issuance of non-controlling new equity
interests, transfers to an affiliate meeting the requirements of the Mortgage
Loan, transfers among existing members, partners or shareholders in the
Borrower, transfers among affiliated Borrowers with respect to
cross-collateralized Mortgage Loans or multi-property Mortgage Loans, transfers
among co-Borrowers or transfers of a similar nature to the foregoing meeting the
requirements of the Mortgage Loan.
35. Single Purpose Entity. Except in cases where the related
Mortgaged Property is a residential cooperative property, the Borrower on each
Mortgage Loan with a Cut-off Date Balance of $5,000,000 or more, was, as of the
origination of the Mortgage Loan, a Single Purpose Entity. For this purpose, a
"Single Purpose Entity" shall mean an entity, other than an individual, whose
organizational documents provide substantially to the effect that it was formed
or organized solely for the purpose of owning and operating one or more of the
Mortgaged Properties securing the Mortgage Loans and prohibit it from engaging
in any business unrelated to such Mortgaged Property or Properties, and whose
organizational documents further provide, or which entity represented in the
related Mortgage Loan Documents, substantially to the effect that it does not
have any material assets other than those related to its interest in and
operation of such Mortgaged Property or Properties, or any indebtedness other
than as permitted by the related Mortgage(s) or the other related Mortgage Loan
Documents, that it has its own books and records and accounts separate and apart
from any other person, that it holds itself out as a legal entity (separate and
apart from any other person), that it will not guarantee or assume the debts of
any other person, that it will not commingle assets with affiliates, and that it
will not transact business with affiliates except on an arm's-length basis.
36. Whole Loan. Each Mortgage Loan is a whole loan and not a
participation interest in a mortgage loan.
I-13
37. Tax Parcels. Each Mortgaged Property constitutes one or
more complete separate tax lots or is subject to an endorsement under the
related Title Policy insuring same, or in certain instances an application has
been made to the applicable governing authority for creation of separate tax
lots, which shall be effective for the next tax year.
38. ARD Loans. Each ARD Loan requires scheduled monthly
payments of principal. If any ARD Loan is not paid in full by its Anticipated
Repayment Date, and assuming it is not otherwise in default, (i) the rate at
which such ARD Loan accrues interest will increase by at least two (2)
percentage points and (ii) the related Borrower is required to enter into a
lockbox arrangement on the ARD Loan whereby all revenue from the related
Mortgaged Property shall be deposited directly into a designated account
controlled by the applicable Master Servicer.
39. Security Interests. A UCC financing statement has been
filed and/or recorded, or submitted for filing and/or recording, in all places
necessary to perfect (to the extent that the filing of such a UCC financing
statement can perfect such a security interest) a valid security interest in the
personal property of the related Borrower granted under the related Mortgage. If
any Mortgaged Property securing a Mortgage Loan is operated as a hospitality
property, then (a) the security agreements, financing statements or other
instruments, if any, related to the Mortgage Loan secured by such Mortgaged
Property establish and create a valid security interest in all items of personal
property owned by the related Borrower which are material to the conduct in the
ordinary course of the Borrower's business on the related Mortgaged Property,
subject only to purchase money security interests, personal property leases and
security interests to secure revolving lines of credit and similar financing;
and (b) one or more Uniform Commercial Code financing statements covering such
personal property have been filed or recorded (or have been sent for filing or
recording) wherever necessary to perfect under applicable law such security
interests (to the extent a security interest in such personal property can be
perfected by the filing of a Uniform Commercial Code financing statement under
applicable law). The related assignment of such security interest (but for
insertion of the name of the assignee and any related information which is not
yet available to the Seller) executed and delivered in favor of the Trustee
constitutes a legal, valid and, subject to the limitations and exceptions set
forth in Paragraph 13 hereof, binding assignment thereof from the relevant
assignor to the Trustee.
40. Prepayment Premiums and Yield Maintenance Charges.
Prepayment Premiums and Yield Maintenance Charges payable with respect to each
Mortgage Loan, if any, constitute "customary prepayment penalties" within
meaning of Treasury Regulations Section 1.860G-1(b)(2).
41. Commencement of Amortization. Each Mortgage Loan begins to
amortize prior to its Stated Maturity Date or, in the case of an ARD Loan, prior
to its Anticipated Repayment Date.
42. Servicing Rights. Except as provided in the Pooling and
Servicing Agreement, any permitted subservicing agreements and servicing rights
purchase agreements pertaining thereto, no Person has been granted or conveyed
the right to service any Mortgage Loan or receive any consideration in
connection therewith.
I-14
43. Recourse. Unless the related Mortgaged Property is a
residential cooperative property, the related Mortgage Loan Documents contain
provisions providing for recourse against the related Borrower, a principal of
such Borrower, or an entity controlled by a principal of such Borrower for
damages, liabilities, expenses or claims sustained in connection with the
Borrower's fraud, material (or, alternatively, intentional) misrepresentation,
waste or misappropriation of any tenant security deposits (in some cases, only
after foreclosure or an action in respect thereof), rent (in some cases, only
after an event of default), insurance proceeds or condemnation proceeds. The
related Mortgage Loan Documents contain provisions pursuant to which the related
Borrower, a principal of such Borrower or an entity controlled by a principal of
such Borrower, has agreed to indemnify the mortgagee for damages resulting from
violations of any applicable environmental laws.
44. Assignment of Collateral. There is no material collateral
securing any Mortgage Loan that is not being assigned to the Purchaser.
45. Fee Simple or Leasehold Interests. The interest of the
related Borrower in the Mortgaged Property securing each Mortgage Loan is a fee
simple interest in real property and the improvements thereon.
46. Escrows. All escrow deposits (including capital
improvements and environmental remediation reserves) relating to any Mortgage
Loan that were required to be delivered to the lender under the terms of the
related Mortgage Loan Documents, have been received and, to the extent of any
remaining balances of such escrow deposits, are in the possession or under the
control of Seller or its agents (which shall include the Master Servicer). All
such escrow deposits are being conveyed hereunder to the Purchaser. Any and all
material requirements under each Mortgage Loan as to completion of any
improvements and as to disbursement of any funds escrowed for such purpose,
which requirements were to have been complied with on or before the date hereof,
have been complied with in all material respects or, if and to the extent not so
complied with, the escrowed funds (or an allocable portion thereof) have not
been released except in accordance with the terms of the related loan documents.
47. Operating Statements. In the case of each Mortgage Loan,
the related Mortgage requires the related Borrower, in some cases at the request
of the lender, to provide the holder of such Mortgage Loan with at least
quarterly operating statements and rent rolls (if there is more than one tenant)
for the related Mortgaged Property and annual financial statements of the
related Borrower, and with such other information as may be required therein.
48. Grace Period. With respect to each Mortgage Loan, the
related Mortgage or Mortgage Note provides a grace period for delinquent monthly
payments no longer than fifteen (15) days from the applicable Due Date or five
(5) days from notice to the related Borrower of the default.
49. Disclosure to Environmental Insurer. If the Mortgaged
Property securing any Mortgage Loan is covered by a secured creditor impaired
property policy, then the Seller:
(i) has disclosed, or is aware that there has been disclosed,
in the application for such policy or otherwise to the insurer under such policy
the "pollution conditions" (as
I-15
defined in such policy) identified in any environmental reports related to such
Mortgaged Property which are in the Seller's possession or are otherwise known
to the Seller; or
(ii) has delivered or caused to be delivered to the insurer
under such policy copies of all environmental reports in the Seller's possession
related to such Mortgaged Property;
in each case to the extent that the failure to make any such disclosure or
deliver any such report would materially and adversely affect the Purchaser's
ability to recover under such policy.
50. No Fraud. No fraud with respect to a Mortgage Loan has
taken place on the part of the Seller or any affiliated originator in connection
with the origination of any Mortgage Loan.
51. Servicing. The servicing and collection practices used
with respect to each Mortgage Loan in all material respects have met customary
standards utilized by prudent commercial mortgage loan servicers with respect to
whole loans.
52. Appraisal. In connection with its origination or
acquisition of each Mortgage Loan, the Seller obtained an appraisal of the
related Mortgaged Property, which appraisal is signed by an appraiser, who, to
the Seller's knowledge, had no interest, direct or indirect, in the Mortgaged
Property or the Borrower or in any loan made on the security thereof, and whose
compensation is not affected by the approval or disapproval of the Mortgage
Loan; the appraisal, or a letter from the appraiser, states that such appraisal
satisfies the requirements of the "Uniform Standards of Professional Appraisal
Practice" as adopted by the Appraisal Standards Board of the Appraisal
Foundation, all as in effect on the date the Mortgage Loan was originated.
53. Origination of the Mortgage Loans. The Seller originated
all of the Mortgage Loans.
I-16
ANNEX A (TO SCHEDULE I)
XXXX 0000-XXX0
KEYBANK EXCEPTIONS TO REPRESENTATIONS AND WARRANTIES
REPRESENTATION 2/OWNERSHIP OF MORTGAGE LOANS:
----------------------------------------------------------------------------------------------------------------------
Loan No. Exception
----------------------------------------------------------------------------------------------------------------------
11/The Clubs at Xxxxxx Ranch A third party is entitled to a correspondent fee
15/Xxxxxx'x Office Complex
25/Park Place Shopping Center
27/Patriots Plaza Shopping Center
52/Mid-Towne Self Storage
----------------------------------------------------------------------------------------------------------------------
REPRESENTATION 8/TITLE INSURANCE:
----------------------------------------------------------------------------------------------------------------------
Loan No. Exception
----------------------------------------------------------------------------------------------------------------------
33/Federal Express Distribution Building The Title Policy for the related
Mortgage Loan does not affirmatively insure that the area shown
on the survey is the same as the property legally described in
the related Mortgage (no survey).
----------------------------------------------------------------------------------------------------------------------
2
REPRESENTATION 10/MORTGAGE PROVISIONS:
----------------------------------------------------------------------------------------------------------------------
Loan No. Exception
----------------------------------------------------------------------------------------------------------------------
11/The Clubs at Xxxxxx Ranch The related Mortgage Loan Documents provide that the Borrower is
25/Park Place Shopping Center required to maintain insurance coverage for acts of terrorism if
27/Patriots Plaza Shopping Center such coverage is available at "commercially reasonable" rates.
72/Pulaski Shopping Center
----------------------------------------------------------------------------------------------------------------------
00/ Xxxxxxxxx - Xxxx Xxxxx, XX The related Mortgage Loan documents provide that the Borrower is
required to maintain insurance coverage for acts of terrorism if
such coverage is commercially reasonable for properties similar
to the Mortgaged Property, provided, however that the related
borrower will not be required to maintain such terrorism
coverage if (i) borrower confirms in writing that it will
protect and hold the lender harmless from losses associated with
terrorism risks by, among other things, depositing with the
lender sums sufficient to pay all uninsured costs related to a
restoration following any act of terrorism, or prepaying the
related Mortgage Loan in accordance with the provisions of the
related Mortgage Loan documents (including payment of applicable
prepayment consideration), and (ii) the indemnitor for the
related Mortgage Loan executes a guaranty pursuant to which such
indemnitor guarantees payment of all losses associated with
terrorism risks and such indemnitor maintains a specified net
worth and a specified loan to value ratio for all properties in
which such entity has a direct or indirect ownership interest.
----------------------------------------------------------------------------------------------------------------------
3
REPRESENTATION 12/ENVIRONMENTAL CONDITIONS:
----------------------------------------------------------------------------------------------------------------------
Loan No. Exception
----------------------------------------------------------------------------------------------------------------------
39/Dick's at the Crossing at Smithfield Environmental insurance obtained. The initial term extends 5
years beyond the Anticipated Repayment Date. If the Mortgage
Loan is not paid in full on the Anticipated Repayment Date (and
on each succeeding anniversary of the Anticipated Repayment Date
if the Mortgage Loan remains unpaid), the Borrower must obtain
an additional year of coverage.
----------------------------------------------------------------------------------------------------------------------
71/Walgreens - Port Huron, MI A Phase I environmental site assessment conducted on the related
Mortgaged Property reported that a gasoline station was operated
at the Mortgaged Property from approximately 1970 through 1979
and that four underground storage tanks were removed from the
related Mortgage Property in 1979. No additional information
regarding the former underground storage tanks was identified by
the Phase I consultant. In addition, the Phase I environmental
site assessment on the related Mortgaged Property reported that
a dry cleaner was operated at the Mortgaged Property from
approximately 1950 through 1963. Due to the historical presence
of the gasoline station and the dry cleaner, the Phase I
consultant recommended that a subsurface investigation be
performed at the related Mortgaged Property. Rather than incur
the additional cost of a subsurface investigation, the Lender
required an indemnification from the related borrower and a
back-up indemnification from the borrower's parent, Inland
Retail Real Estate Trust, Inc., for any loss resulting from the
presence of hazardous substances relating to the former use of
the Mortgaged Property as a gasoline station or a dry cleaner.
----------------------------------------------------------------------------------------------------------------------
53/Xxxxxx Place Apartments A Phase I environmental site assessment conducted on the related
Mortgaged Property reported that a gasoline station operated on
the northwest adjacent property (approximately 175 feet
northwest of the Mortgaged Property) from approximately 1977
through 1994 when the underground storage tanks were removed
from the L&M Grocery 1 facility. A release from this facility
was reported to the Texas Commission on Environmental Quality
(TCEQ) on
----------------------------------------------------------------------------------------------------------------------
4
----------------------------------------------------------------------------------------------------------------------
January 10, 1994. TCEQ records indicate that the assessment of
the release site is incomplete and a preassessment/release
determination is required. The responsible party identified for
the release is listed as Fast Lane Convenience Store. Neither
the responsible party nor the property owner have fulfilled the
required TCEQ guidelines for proper remediation of the release
site to obtain closure. The Phase I environmental site
assessment report indicates the anticipated depth to shallow
groundwater is 60 to 70 feet below ground surface. Excavation
conducted during tank removal activities extended to a depth of
27 feet below ground surface, groundwater was not encountered.
Based on the potential upgradient location of the release site,
and lack of documentation regarding delineation of impact the
Phase I environmental site assessment report indicates that
there is a potential for the Mortgaged Property to have been
impacted by the L&M Grocery 1 facility, however, due to the
absence of groundwater during removal activities, the
anticipated depth to groundwater, and distance from the
Mortgaged Property, a Phase II investigation was recommended
only if further confidence was needed regarding environmental
conditions at the Mortgaged Property.
----------------------------------------------------------------------------------------------------------------------
27/Patriots Plaza Shopping Center A Phase I environmental site assessment conducted on the related
Mortgaged Property reported that a release from underground
storage tanks situated at the Tread Discount Tire facility
(former EastCooper Tire facility) situated on the northeast
adjacent property was reported to the South Carolina Department
of Health and Environmental Control (SCDHEC) in 1992. This
facility has been accepted into the state trust fund and
environmental activities related to the tanks are governed by
the SCDHEC. December 2003 groundwater sample data identified the
presence of 160 parts per billion (ppb) benzene in the furthest
downgradient monitoring well. This well is located within 75
feet of the Mortgaged Property. Based on this data the SCDHEC is
requiring additional delineation of soil and groundwater impact.
Based on the upgradient location of the release site, and lack
of documentation regarding delineation of impact the
----------------------------------------------------------------------------------------------------------------------
5
----------------------------------------------------------------------------------------------------------------------
Phase I environmental site assessment report indicates that
there is a potential for the Mortgaged Property to have been
impacted by the Tread Discount Tire facility, however, due to
the management of the release by the SCDHEC, a Phase II
investigation was recommended only if further confidence was
needed regarding environmental conditions at the Mortgaged
Property.
----------------------------------------------------------------------------------------------------------------------
6
REPRESENTATION 14/INSURANCE:
----------------------------------------------------------------------------------------------------------------------
Loan No. Exception
----------------------------------------------------------------------------------------------------------------------
11/The Clubs at Xxxxxx Ranch The related Mortgage Loan Documents provide that the Borrower is
25/Park Place Shopping Center required to maintain insurance coverage for acts of terrorism if
27/Patriots Plaza Shopping Center such coverage is available at "commercially reasonable" rates.
72/Pulaski Shopping Center
----------------------------------------------------------------------------------------------------------------------
00/ Xxxxxxxxx - Xxxx Xxxxx, XX The related Mortgage Loan documents provide that the Borrower is
required to maintain insurance coverage for acts of terrorism if
such coverage is commercially reasonable for properties similar
to the Mortgaged Property, provided, however that the related
borrower will not be required to maintain such terrorism
coverage if (i) borrower confirms in writing that it will
protect and hold the lender harmless from losses associated with
terrorism risks by, among other things, depositing with the
lender sums sufficient to pay all uninsured costs related to a
restoration following any act of terrorism, or prepaying the
related Mortgage Loan in accordance with the provisions of the
related Mortgage Loan documents (including payment of applicable
prepayment consideration), and (ii) the indemnitor for the
related Mortgage Loan executes a guaranty pursuant to which such
indemnitor guarantees payment of all losses associated with
terrorism risks and such indemnitor maintains a specified net
worth and a specified loan to value ratio for all properties in
which such entity has a direct or indirect ownership interest.
----------------------------------------------------------------------------------------------------------------------
7
REPRESENTATION 18/LEASEHOLD ESTATE ONLY:
----------------------------------------------------------------------------------------------------------------------
Loan No. Exception
----------------------------------------------------------------------------------------------------------------------
67/AAA Quality Self Storage The Ground Lessee may assign or sublet only with Ground Lessor's
prior written consent. However, upon a foreclosure or deed in
lieu thereof, lender may assign or sublet without Ground
Lessor's prior written consent.
----------------------------------------------------------------------------------------------------------------------
8
REPRESENTATION 23/OTHER MORTGAGE LIENS:
----------------------------------------------------------------------------------------------------------------------
Loan No. Exception
----------------------------------------------------------------------------------------------------------------------
16/Forest Hills Apartments The related Borrower is permitted to encumber the related
41/Xxxxxx Road Shopping Center Mortgaged Property with a subordinate mortgage with lender's
prior written consent and satisfaction of specified conditions,
including specified LTV and DSCR, rating agency confirmation,
execution of a lockbox agreement and intercreditor and
subordination agreement.
----------------------------------------------------------------------------------------------------------------------
9
REPRESENTATION 34/DUE-ON-SALE:
----------------------------------------------------------------------------------------------------------------------
Loan No. Exception
----------------------------------------------------------------------------------------------------------------------
16/Forest Hills Apartments Members of Borrower may obtain financing secured by pledges of
their respective ownership interest in the Borrower upon the
prior written consent of the holder of the related Mortgage and
the satisfaction of certain conditions, including specified debt
service coverage and loan to value ratios, execution of an
intercreditor and subordination agreement by an institutional
mezzanine lender, establishment of a lockbox arrangement and
receipt of rating agency confirmation.
----------------------------------------------------------------------------------------------------------------------
67/AAA Quality Self Storage If Borrower acquires the fee interest in the Mortgaged Property
at any time after the sixth loan year, then in connection with
such acquisition, members of the Borrower may obtain financing
secured by pledges of its ownership interests in the borrowing
entity upon the prior written consent of the holder of the
related Mortgage and the satisfaction of certain conditions,
including specified debt service coverage and loan to value
ratios, execution of an intercreditor and subordination
agreement by an institutional mezzanine lender, establishment of
a lockbox arrangement and receipt of rating agency confirmation.
----------------------------------------------------------------------------------------------------------------------
39/Dick's at the Crossing at Smithfield Following the second anniversary of the promissory note date,
members of the Borrower may obtain mezzanine debt secured by
their cash distribution rights provided certain standard
conditions are satisfied including specified loan-to-value and
debt service coverage ratios, the execution and delivery of an
acceptable subordination agreement, the establishment of a
lockbox and satisfaction of certain lockbox criteria.
----------------------------------------------------------------------------------------------------------------------
10
REPRESENTATION 35/SINGLE PURPOSE ENTITY:
----------------------------------------------------------------------------------------------------------------------
Loan No. Exception
----------------------------------------------------------------------------------------------------------------------
16/Forest Hills Apartments The related Borrower may incur additional debt (i) secured by a
subordinate mortgage on the Mortgaged Property, provided certain
conditions satisfied, including execution of a subordination
agreement or (ii) secured by a pledge of ownership interests in
the Borrower upon the prior written consent of the holder of the
related Mortgage and the satisfaction of certain conditions,
including specified debt service coverage and loan to value
ratios, execution of an intercreditor and subordination
agreement by an institutional mezzanine lender, establishment of
a lockbox arrangement and receipt of rating agency confirmation.
----------------------------------------------------------------------------------------------------------------------
16/Forest Hills Apartments The related Borrower is permitted to encumber the related
00/Xxxxxx Xxxx Mortgaged Property with a subordinate mortgage with lender's
prior written consent and satisfaction of specified conditions,
including specified LTV and DSCR, rating agency confirmation,
execution of a lockbox agreement and intercreditor and
subordination agreement.
----------------------------------------------------------------------------------------------------------------------
11
REPRESENTATION 41/COMMENCEMENT OF AMORTIZATION:
----------------------------------------------------------------------------------------------------------------------
Loan No. Exception
----------------------------------------------------------------------------------------------------------------------
71/Walgreens Port Huron, MI Mortgage Loan provides for "interest only" payments throughout
the term of the Mortgage Loan.
----------------------------------------------------------------------------------------------------------------------
12
REPRESENTATION 45/FEE SIMPLE OR LEASEHOLD INTERESTS:
----------------------------------------------------------------------------------------------------------------------
Loan No. Exception
----------------------------------------------------------------------------------------------------------------------
67/AAA Quality Self Storage The interest of the related Borrower in the Mortgaged Property
72/Pulaski Shopping Center securing each Mortgage Loan is a leasehold interest.
----------------------------------------------------------------------------------------------------------------------
13
REPRESENTATION 47/OPERATING STATEMENTS:
----------------------------------------------------------------------------------------------------------------------
Loan No. Exception
----------------------------------------------------------------------------------------------------------------------
34/Georgetown Medical Plaza Office The Mortgage Loans do not require the delivery of an annual
Building financial statement of the related Borrower, but do require the
39/Dick's at the Crossing at Smithfield delivery of an annual balance sheet of the related Borrower and
72/Pulaski Shopping Center an annual operating statement with respect to the Mortgaged
Property.
----------------------------------------------------------------------------------------------------------------------
16/Forest Hills Apartments The Mortgage Loan does not require the delivery of an annual
financial statement of the related Borrower prior to an Event of
Default.
----------------------------------------------------------------------------------------------------------------------
67/AAA Quality Self Storage The Mortgage Loan does not require the delivery of a quarterly
operating statement of the Mortgaged Property, but a
year-to-date operating statement for the Mortgaged Property is
required on a quarterly basis.
----------------------------------------------------------------------------------------------------------------------
14
ANNEX B (TO SCHEDULE I)
MORTGAGED PROPERTIES AS TO WHICH THE ONLY ENVIRONMENTAL INVESTIGATIONS
CONDUCTED IN CONNECTION WITH THE ORIGINATION OF THE RELATED MORTGAGE LOAN WERE
WITH RESPECT TO ASBESTOS-CONTAINING MATERIALS AND LEAD-BASED PAINT.
(REPRESENTATION 12)
None.
ANNEX C (TO SCHEDULE I)
MORTGAGE LOANS COVERED BY ENVIRONMENTAL INSURANCE POLICIES
(REPRESENTATION 12)
Loan No. 39/Dick's at the Crossing at Smithfield.
EXHIBIT A
MORTGAGE LOAN SCHEDULE
PROPERTY
LOAN # PROPERTY NAME ORIGINATOR TYPE ADDRESS
11 The Clubs at Xxxxxx Ranch KEY Multifamily 0000 Xxxx Xxxx Xxxxxxx Xxxx
15 Xxxxxx'x Office Complex KEY Office 0000 Xxxxxx Xxxx
16 Forest Hills Apartments KEY Multifamily 0000 Xxxxxxxxxxx Xxxxx Xxxx Xxxx
25 Park Place Shopping Center KEY Retail 0000-0000 Xxxxxx Xxxx Xxxx
27 Patriots Plaza Shopping Center KEY Retail 000 Xxxxxxx Xxxxxxxxx Xxxxxxxxx
33 Federal Express Distribution Building KEY Industrial 0000 Xxxxx Xxxxx Xxxxxx
34 Georgetown Medical Plaza Office Building KEY Office 0000 Xxxxxxx Xxxxx Xxxx
00 Dick's at the Crossing at Smithfield KEY Retail 000 Xxxxxx Xxxx (Xxxxx 00)
41 Xxxxxx Road Shopping Center KEY Retail 0000 XX Xxxx 410
52 Mid-Towne Self Storage KEY Self Storage 0000 Xxxxx Xxxxxx
53 Xxxxxx Place Apartments (21) KEY Multifamily 0000 Xxxxx Xxxxxxx Xxxx
64 Highland Self-Storage KEY Self Storage 0000 Xxxx Xxxxxxxx Xxxxxx
67 AAA Quality Self Storage KEY Self Storage 0000 Xxxxxx Xxxxxx
00 Xxxxxxxxx - Xxxx Xxxxx, XX KEY Retail 0000 00xx Xxxxxx
72 Pulaski Shopping Center KEY Retail 0000 Xxxx Xxxxxxx Xxxxxx
XXXX XXXXXX XXXXX ZIP CODE
Las Vegas Xxxxx NV 89148
Memphis Xxxxxx XX 00000
Xxxxxx Xxxx XX 00000
Morrisville Xxxx XX 00000
Xxxxx Xxxxxxxx Xxxxxxxxxx XX 00000
Los Angeles Xxx Xxxxxxx XX 00000
Indianapolis Xxxxxx IN 00000
Xxxxxxxxxx Xxxxxxxxxx XX 00000
San Antonio Bexar TX 78220
Xxxxx Xxxxx Xxx Xxxxx XX 00000
Irving Xxxxxx XX 00000
Xxx Xxxxxxxxxx Xxx Xxxxxxxxxx XX 00000
Tustin Orange CA 92780
Xxxx Xxxxx Xx. Xxxxx XX 00000
Pulaski Giles TN 38478
A-1
MONTHLY DEBT
LOAN # PROPERTY NAME CUTOFF BALANCE ORIGINAL BALANCE SERVICE
11 The Clubs at Xxxxxx Ranch 16,400,000.00 16,400,000.00 75,794.95
15 Xxxxxx'x Office Complex 13,977,423.38 14,000,000.00 84,059.95
16 Forest Hills Apartments 13,160,000.00 13,160,000.00 78,082.98
00 Xxxx Xxxxx Xxxxxxxx Xxxxxx 11,175,324.56 11,200,000.00 61,085.95
00 Xxxxxxxx Xxxxx Xxxxxxxx Xxxxxx 10,795,657.16 10,820,000.00 58,348.90
33 Federal Express Distribution Building 8,173,144.91 8,200,000.00 46,764.70
00 Xxxxxxxxxx Xxxxxxx Xxxxx Xxxxxx Xxxxxxxx 8,084,069.09 8,100,000.00 46,858.56
39 Dick's at the Crossing at Smithfield 7,028,508.07 7,050,000.00 41,906.39
00 Xxxxxx Xxxx Xxxxxxxx Xxxxxx 6,822,007.48 6,850,000.00 39,757.43
52 Mid-Towne Self Storage 5,084,986.57 5,100,000.00 27,346.74
53 Xxxxxx Place Apartments (21) 5,081,501.68 5,100,000.00 31,470.93
64 Highland Self-Storage 3,358,439.41 3,365,000.00 19,551.80
67 AAA Quality Self Storage 2,982,669.82 3,000,000.00 19,073.12
00 Xxxxxxxxx - Xxxx Xxxxx, XX 2,397,000.00 2,397,000.00 9,667.90
72 Pulaski Shopping Center 1,873,175.86 1,875,000.00 11,386.64
ORIGINAL MORTGAGE PRIMARY SERVICING MASTER SERVICING
RATE (%) FEE RATE (%) FEE RATE (%)
5.4700 0.0300 0.0200
5.2700 0.0300 0.0200
5.0500 0.0200 0.0100
5.1400 0.0300 0.0200
5.0400 0.0300 0.0200
5.5400 0.0300 0.0200
5.6700 0.0300 0.0200
5.9200 0.0300 0.0200
5.7000 0.0300 0.0200
5.5500 0.0300 0.0200
4.9900 0.0300 0.0200
5.7100 0.0300 0.0200
5.8600 0.0300 0.0200
4.8400 0.0300 0.0200
6.1200 0.0300 0.0200
A-2
NET
MORTGAGE ACCRUAL
LOAN # PROPERTY NAME RATE (%) TYPE TERM REM. TERM
11 The Clubs at Xxxxxx Ranch 5.3677 Actual/360 120 118
15 Xxxxxx'x Office Complex 5.1677 30/360 60 59
16 Forest Hills Apartments 4.9977 Actual/360 120 81
25 Park Place Shopping Center 5.0377 Actual/360 60 58
27 Patriots Plaza Shopping Center 4.9377 Actual/360 60 58
33 Federal Express Distribution Building 5.4877 Actual/360 120 117
34 Georgetown Medical Plaza Office Building 5.6177 Actual/360 120 118
39 Dick's at the Crossing at Smithfield 5.8677 Actual/360 120 117
41 Xxxxxx Road Shopping Center 5.6477 Actual/360 120 116
52 Mid-Towne Self Storage 5.4477 Actual/360 60 118
53 Xxxxxx Place Apartments (21) 4.9377 Actual/360 120 57
64 Highland Self-Storage 5.6577 Actual/360 120 118
67 AAA Quality Self Storage 5.8077 Actual/360 132 128
00 Xxxxxxxxx - Xxxx Xxxxx, XX 4.7877 30/360 84 79
72 Pulaski Shopping Center 6.0677 Actual/360 120 119
MATURITY GROUND
DATE ARD DATE AMORT TERM REM. AMORT LEASE ARD
3/1/14 3/1/14 360 360 No No
4/1/09 4/1/09 300 299 No No
2/1/11 2/1/11 360 356 No No
3/1/09 3/1/09 360 358 No No
3/1/09 3/1/09 360 358 No No
2/1/14 2/1/34 360 357 No Yes
3/1/14 3/1/34 360 358 No Yes
2/1/14 2/1/34 360 357 No Yes
1/1/14 1/1/14 360 356 No No
3/1/14 3/1/14 360 357 No No
2/1/09 2/1/09 300 298 No No
3/1/14 3/1/14 360 358 No No
1/1/15 1/1/15 300 296 Yes No
12/1/10 12/1/10 0 0 No No
4/1/14 4/1/14 360 359 Yes No
A-3
ENVIRONMENTAL CROSS-
LOAN # PROPERTY NAME ARD STEP UP (%) POLICY DEFAULTED
11 The Clubs at Xxxxxx Ranch No No
15 Xxxxxx'x Office Xxxxxxx Xx Xx
00 Xxxxxx Xxxxx Apartments No No
25 Park Place Shopping Center No No
27 Patriots Plaza Shopping Center No No
33 Federal Express Distribution Building Greater of: (i) Initial Interest No No
Rate plus 2% or (ii) Treasury Rate
plus 2%.
34 Georgetown Medical Plaza Office Building Greater of: (i) Initial Interest No No
Rate plus 2% or (ii) Treasury Rate
plus 2%.
39 Dick's at the Crossing at Smithfield Greater of: (i) Initial Interest Yes No
Rate plus 2% or (ii) Treasury Rate
plus 2%.
00 Xxxxxx Xxxx Shopping Center No No
52 Mid-Towne Self Storage No No
53 Xxxxxx Place Apartments (21) No No
64 Highland Self-Storage No No
67 AAA Quality Self Storage No No
00 Xxxxxxxxx - Xxxx Xxxxx, XX No No
72 Pulaski Shopping Center No No
CROSS- DEFEASANCE LETTER OF LOCKBOX IN
COLLATERALIZED ALLOWED CREDIT PLACE
No Yes 369000
No No No Yes
No Yes No
No Yes No
No Yes No
No Yes No No
No Yes No Yes
No Yes No Yes
No Yes No No
No Yes No
No Yes No
No Yes No
No No No No
No No No
No No No
A-4
UPFRONT UPFRONT
HOLDBACK UPFRONT ENV. TI/LC
LOAN # PROPERTY NAME AMT ENG. RESERVE RESERVE RESERVE
11 The Clubs at Xxxxxx Ranch
00 Xxxxxx'x Xxxxxx Xxxxxxx
00 Xxxxxx Xxxxx Apartments
25 Park Place Shopping Center
27 Patriots Plaza Shopping Center
33 Federal Express Distribution Building 22,981
34 Georgetown Medical Plaza Office Building
39 Dick's at the Crossing at Smithfield 175,000.00
00 Xxxxxx Xxxx Shopping Center 450,000.00
52 Mid-Towne Self Storage 300,000.00
00 Xxxxxx Xxxxx Apartments (21) 40,000.00
64 Highland Self-Storage
67 AAA Quality Self Storage
00 Xxxxxxxxx - Xxxx Xxxxx, XX
72 Pulaski Shopping Center 75,000.00
UPFRONT
UPFRONT RE UPFRONT INS. OTHER UPFRONT OTHER RESERVE
TAX RESERVE RESERVE RESERVE DESCRIPTION
16,193
139,106 Xxxxxx'x Credit Rating
103,976 8,631
40,096
25,776 1,536,410 Whole Foods Escrow held by
Title Company
12,844
9,241 8,413
9,784 18,978
8,072
2,393
9,824 6,425
5,468 5,186
A-5
MONTHLY MONTHLY
CAPEX TI/LC MONTHLY RE MONTHLY INS.
LOAN # PROPERTY NAME RESERVE RESERVE TAX RESERVE RESERVE
11 The Clubs at Xxxxxx Ranch 3,375 16,193 3,163
00 Xxxxxx'x Xxxxxx Xxxxxxx
00 Xxxxxx Xxxxx Apartments 11,117 16,425 8,631
00 Xxxx Xxxxx Xxxxxxxx Xxxxxx 1,632 5,683 13,365
00 Xxxxxxxx Xxxxx Xxxxxxxx Xxxxxx 2,222 8,592
33 Federal Express Distribution Building 848
34 Georgetown Medical Plaza Office Building
39 Dick's at the Crossing at Smithfield 3,509 6,422
00 Xxxxxx Xxxx Shopping Center 800 4,167 9,241 2,103
52 Mid-Towne Self Storage 3,167 4,892 4,001
53 Xxxxxx Place Apartments (21) 1,826 4,036 1,043
64 Highland Self-Storage 942 2,772 598
67 AAA Quality Self Storage 970 2,456 551
71 Walgreens - Port Huron, MI
72 Pulaski Shopping Center 351 1,639 1,823 471
MONTHLY
OTHER GRACE LOAN
RESERVE OTHER MONTH DESCRIPTION PERIOD GROUP
5 2
2,365 Monthly escrow increases 5 1
if Xxxxxx'x rating drops.
5 2
0 1
0 1
5 1
5 1
5 1
7 1
5 2
10 1
5 1
5 1
5 1
10 1
A-6
