MORTGAGE LOAN PURCHASE AND SALE AGREEMENT
This Mortgage Loan Purchase and Sale Agreement (this "Agreement"), is
dated and effective as of March 7, 2003, between CIBC Inc. ("CIBC"), as seller
(in such capacity, together with its successors and permitted assigns hereunder,
the "Mortgage Loan Seller"), and Prudential Securities Secured Financing
Corporation ("PSSFC"), as purchaser (in such capacity, together with its
successors and permitted assigns hereunder, the "Purchaser").
RECITALS
CIBC desires to sell, assign, transfer, set over and otherwise convey
to PSSFC, without recourse, representation or warranty, other than as set forth
herein, and PSSFC desires to purchase, subject to the terms and conditions set
forth herein, the multifamily and commercial mortgage loans (collectively, the
"Mortgage Loans") identified on the schedule annexed hereto as Exhibit A (the
"Mortgage Loan Schedule"), as such schedule may be amended from time to time
pursuant to the terms hereof.
PSSFC intends to create a trust (the "Trust"), the primary assets of
which will be a segregated pool of multifamily and commercial mortgage loans
that includes the Mortgage Loans and certain other commercial and multifamily
mortgage loans (collectively, the "Trust Mortgage Loans"). Beneficial ownership
of the assets of the Trust (such assets collectively, the "Trust Fund") will be
evidenced by a series of mortgage pass-through certificates (the
"Certificates"). Certain classes of the Certificates will be rated by Standard &
Poor's Ratings Services, a division of The XxXxxx-Xxxx Companies, Inc. and Fitch
Ratings, Inc. (together, the "Rating Agencies"). Certain classes of the
Certificates (the "Registered Certificates") will be registered under the
Securities Act of 1933, as amended (the "Securities Act"). The Trust will be
created and the Certificates will be issued pursuant to a pooling and servicing
agreement to be dated as of March 1, 2003 (the "Pooling and Servicing
Agreement"), among PSSFC, as depositor (in such capacity, the "Depositor"),
Prudential Asset Resources, Inc. ("PAR"), as a master servicer (a "Master
Servicer"), Xxxxx Fargo Bank, National Association, as a master servicer (in
such capacity, a "Master Servicer"), ARCap Servicing, Inc., as special servicer
(the "Special Servicer"), Xxxxx Fargo Bank Minnesota, National Association, as
certificate administrator (in such capacity, the "Certificate Administrator")
and as tax administrator (in such capacity, the "Tax Administrator"), LaSalle
Bank National Association, as trustee (the "Trustee"), ABN AMRO Bank N.V., as
fiscal agent (the "Fiscal Agent"), and Prudential Mortgage Capital Funding, LLC,
as Ballston Common B-Note Holder and as Renaissance B-Note Holder. Capitalized
terms used but not otherwise defined herein shall have the respective meanings
assigned to them in the Pooling and Servicing Agreement as in full force and
effect on the Closing Date (as defined in Section 1 hereof). It is anticipated
that PSSFC will transfer the Mortgage Loans to the Trust contemporaneously with
its purchase of the Mortgage Loans hereunder.
PSSFC intends to sell the Registered Certificates to Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated ("Xxxxxxx Xxxxx"), Bear, Xxxxxxx & Co. Inc.
("BSC"), Xxxxx Fargo Brokerage Services, LLC ("Xxxxx Fargo Brokerage") and CIBC
World Markets Corp. ("CIBCWM"; and together with Xxxxxxx Xxxxx, BSC and Xxxxx
Fargo Brokerage in such capacity, the "Underwriters"), pursuant to an
underwriting agreement, dated as of March 7, 2003
(the "Underwriting Agreement"), between PSSFC and the Underwriters; and PSSFC
intends to sell the remaining Certificates (the "Non-Registered Certificates")
to Xxxxxxx Xxxxx, BSC, CIBCWM and Xxxxx Fargo Brokerage (together in such
capacity, the "Initial Purchasers") pursuant to a certificate purchase
agreement, dated as of March 7, 2003 (the "Certificate Purchase Agreement"),
between PSSFC and the Initial Purchasers. The Registered Certificates are more
fully described in the prospectus dated February 27, 2003 (the "Base
Prospectus"), and the supplement to the Base Prospectus dated March 7, 2003 (the
"Prospectus Supplement"; and, together with the Base Prospectus, the
"Prospectus"), as each may be amended or supplemented at any time hereafter. The
Non-Registered Certificates are more fully described in the private placement
memorandum dated March 7, 2003 (the "Memorandum"), as it may be amended or
supplemented at any time hereafter.
CIBC will indemnify PSSFC, BSC, Xxxxxxx Xxxxx, Xxxxx Fargo Brokerage
and CIBCWM and certain related parties with respect to the disclosure regarding
the Mortgage Loans that is contained in the Prospectus, the Memorandum and
certain other disclosure documents and offering materials relating to the
Certificates, pursuant to an indemnification agreement, dated as of March 7,
2003 (the "Indemnification Agreement"), among CIBC, PSSFC, BSC, Xxxxxxx Xxxxx,
Xxxxx Fargo Brokerage and CIBCWM.
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 Mortgage Loan Seller agrees to
sell, assign, transfer, set over and otherwise convey to the Purchaser, without
recourse, representation or warranty, other than as set forth herein, and the
Purchaser agrees to purchase from the Mortgage Loan Seller, subject to the terms
and conditions set forth herein, the Mortgage Loans. The purchase and sale of
the Mortgage Loans shall take place on March 20, 2003 or such other date as
shall be mutually acceptable to the parties hereto (the "Closing Date"). As of
the Cut-off Date, the Mortgage Loans will have an aggregate principal balance,
after application of all payments of principal due on the Mortgage Loans on or
before such date, whether or not received, of $107,290,755.59, subject to a
variance of plus or minus 5%. The purchase price for the Mortgage Loans shall be
$115,711,065.38, and the Purchaser shall pay such purchase price to the Mortgage
Loan Seller on the Closing Date by wire transfer in immediately available funds
or by such other method as shall be mutually acceptable to the parties hereto.
SECTION 2. Conveyance of the Mortgage Loans.
(a) Effective as of the Closing Date, subject only to receipt of the
purchase price referred to in Section 1 hereof and the other conditions to the
Mortgage Loan Seller's obligations set forth herein, the Mortgage Loan Seller
does hereby sell, assign, transfer, set over and otherwise convey to the
Purchaser, without recourse, representation or warranty, other than as set forth
herein, all of the right, title and interest of the Mortgage Loan Seller in, to
and under the Mortgage Loans and all documents included in the related Mortgage
Files and Servicing Files. Such assignment includes all scheduled payments of
principal and interest under and proceeds of the Mortgage Loans received after
the Cut-off Date (other than scheduled payments of interest and principal due on
or before the respective Due Dates for the Mortgage Loans in March 2003, which
shall belong and be promptly remitted to the Mortgage Loan Seller) together
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with all documents delivered or caused to be delivered hereunder with respect to
such Mortgage Loans by the Mortgage Loan Seller (including all documents
included in the related Mortgage Files and Servicing Files and any related
Additional Collateral). The Purchaser shall be entitled to receive all scheduled
payments of principal and interest due on the Mortgage Loans after the Cut-off
Date, and all other recoveries of principal and interest collected thereon after
the Cut-off Date (other than scheduled payments of principal and interest due on
the Mortgage Loans on or before the Cut-off Date and collected after the Cut-off
Date, which shall belong to the Mortgage Loan Seller).
After the Mortgage Loan Seller's transfer of the Mortgage Loans to the
Purchaser, as provided herein, the Mortgage Loan Seller shall not take any
action inconsistent with the Purchaser's ownership of the Mortgage Loans. Except
for actions that are the express responsibility of another party hereunder or
under the Pooling and Servicing Agreement, and further except for actions that
the Mortgage Loan Seller is expressly permitted to complete subsequent to the
Closing Date, the Mortgage Loan Seller shall, on or before the Closing Date,
take all actions required under applicable law to effectuate the transfer of the
Mortgage Loans by the Mortgage Loan Seller to the Purchaser.
(b) The conveyance of the Mortgage Loans and the related rights and
property accomplished hereby is intended by the parties hereto to constitute a
sale by the Mortgage Loan Seller of all the Mortgage Loan Seller's right, title
and interest in and to such Mortgage Loans and such other related rights and
property by the Mortgage Loan Seller to the Purchaser. Furthermore, it is not
intended that such conveyance be a pledge of security for a loan. If such
conveyance is determined to be a pledge of security for a loan, however, then:
(i) this Agreement shall constitute a security agreement under applicable law;
(ii) the Mortgage Loan Seller shall be deemed to have granted to the Purchaser a
first priority security interest in all of the Mortgage Loan Seller's right,
title and interest in and to the Mortgage Loans and all amounts payable to the
holder(s) of the Mortgage Loans in accordance with the terms thereof (other than
scheduled payments of interest and principal due and payable on such Mortgage
Loans on or prior to the Cut-Off Date or, in the case of a Replacement Pooled
Mortgage Loan, on or prior to the related date of substitution); (iii) the
assignment by PSSFC to the Trustee of its interests in the Mortgage Loans as
contemplated by Section 15 hereof shall be deemed to be an assignment of any
security interest created hereunder; (iv) the possession by the Purchaser (or
the Trustee or its agent) of the Mortgage Notes with respect to the Mortgage
Loans subject hereto from time to time 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" or possession by a purchaser or
person designated by such secured party for the purpose of perfecting such
security interest under applicable law; and (v) notifications to, and
acknowledgments, receipts or confirmations from, Persons holding such property,
shall be deemed to be notifications to, or acknowledgments, receipts or
confirmations from, securities intermediaries, bailees or agents (as applicable)
of the Purchaser for the purpose of perfecting such security interest under
applicable law. The Mortgage Loan 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 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.
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(c) In connection with the Mortgage Loan Seller's assignment pursuant
to Section 2(a) above, the Mortgage Loan Seller, at its expense, shall deliver
to and deposit with, or cause to be delivered to and deposited with, the Trustee
or a Custodian appointed thereby, on or before the Closing Date, the Mortgage
Note for each Mortgage Loan so assigned, endorsed to the Trustee as specified in
clause (i) of the definition of "Mortgage File", and, on or before the date that
is 45 days following the Closing Date, the remainder of the Mortgage File for
each Mortgage Loan and any Additional Collateral (other than original Letters of
Credit and Reserve Funds, which shall be transferred to the applicable Master
Servicer) for each Mortgage Loan. Notwithstanding the preceding sentence, if the
Mortgage Loan Seller cannot so deliver, or cause to be delivered, as to any
Mortgage Loan, the original or a copy of any of the documents and/or instruments
referred to in clauses (ii), (iii), (vii) and (ix)(A) of the definition of
"Mortgage File", with evidence of recording or filing (if applicable, and as the
case may be) thereon, solely because of a delay caused by the public recording
or filing office where such document or instrument has been delivered for
recordation or filing, as the case may be, then (subject to the obligation of
the Mortgage Loan Seller to nonetheless deliver such document or instrument to
the Trustee or a Custodian appointed thereby promptly upon the Mortgage Loan
Seller's receipt thereof), so long as a copy of such document or instrument,
certified by the Mortgage Loan Seller or title agent as being a copy of the
document deposited for recording or filing, has been delivered to the Trustee on
or before the date that is 45 days following the Closing Date, the delivery
requirements of this subsection shall be deemed to have been satisfied as to
such missing item, and such missing item shall be deemed to have been included
in the related Mortgage File, and if the Mortgage Loan Seller cannot or does not
so deliver, or cause to be delivered, as to any Mortgage Loan, the original of
any of the documents and/or instruments referred to in clauses (iv) and (ix)(B)
of the definition of "Mortgage File", because such document or instrument has
been delivered for recording or filing, as the case may be, then (subject to the
obligation of the Mortgage Loan Seller to nonetheless deliver such document or
instrument to the Trustee or a Custodian appointed thereby promptly upon the
Mortgage Loan Seller's receipt thereof), so long as a copy of such document or
instrument, certified by the Mortgage Loan Seller or title agent as being a copy
of the document deposited for recording or filing, has been delivered to the
Trustee on or before the date that is 45 days following the Closing Date, the
delivery requirements of this subsection shall be deemed to have been satisfied
as to such missing item, and such missing item shall be deemed to have been
included in the related Mortgage File. In addition, with respect to each
Mortgage Loan under which any Additional Collateral is in the form of a Letter
of Credit as of the Closing Date, the Mortgage Loan Seller shall cause to be
prepared, executed and delivered to the issuer of each such Letter of Credit
such notices, assignments and acknowledgments as are required under such Letter
of Credit to assign, without recourse, to the Trustee the Mortgage Loan Seller's
rights as the beneficiary thereof and drawing party thereunder. Furthermore,
with respect to each Mortgage Loan, if any, as to which there exists a secured
creditor impaired property insurance policy covering the related Mortgaged
Property, the Mortgage Loan Seller shall cause such policy, within a reasonable
period following the Closing Date, to run to the benefit of the Trustee for the
benefit of the Certificateholders (if and to the extent that it does not by its
terms automatically run to the holder of such Mortgage Loan). For purposes of
this paragraph, the relevant definition of "Mortgage File" shall be the
definition of such term set forth in the Pooling and Servicing Agreement as in
full force and effect on the Closing Date.
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(d) If the Mortgage Loan Seller receives written notice that any
assignment or other instrument of transfer with respect to the Mortgage Loans is
lost or returned unrecorded or unfiled, as the case may be, because of a defect
therein, the Mortgage Loan Seller shall prepare or cause the preparation of a
substitute therefor or cure such defect, as the case may be. The Mortgage Loan
Seller shall be responsible for all reasonable out-of-pocket costs and expenses
associated with recording and/or filing any and all assignments and other
instruments of transfer with respect to the Mortgage Loans that are required to
be recorded or filed, as the case may be, under the Pooling and Servicing
Agreement; provided that the Mortgage Loan Seller shall not be responsible for
actually recording or filing any such assignments or other instruments of
transfer or for costs and expenses that the related Borrowers have agreed to
pay.
(e) In connection with the Mortgage Loan Seller's assignment pursuant
to Section 2(a) above, the Mortgage Loan Seller, at its expense, shall deliver
to and deposit with, or cause to be delivered to and deposited with, the
applicable Master Servicer, on or before the date that is 45 days after the
Closing Date, in the case of the items in clause (i) below, and 20 days after
the Closing Date, in the case of the items in clause (ii) below, the following
items (except to the extent that any of the following items are to be retained
by a primary servicer that will continue to act on behalf of the applicable
Master Servicer as a Sub-Servicer as contemplated by the Pooling and Servicing
Agreement): (i) originals or copies of all financial statements, appraisals,
environmental/engineering reports, transaction screens, seismic assessment
reports, leases, rent rolls, insurance policies and certificates, major space
leases, legal opinions and tenant estoppels and any other relevant documents
relating to the origination and servicing of any Mortgage Loan that are
reasonably necessary for the ongoing administration and/or servicing of the
applicable Mortgage Loan in the possession or under the control of the Mortgage
Loan Seller that relate to the Mortgage Loans transferred by it to the Purchaser
and, to the extent that any original documents are not required to be a part of
a Mortgage File for any such Mortgage Loan, originals or copies of all
documents, certificates and opinions in the possession or under the control of
the Mortgage Loan Seller that were delivered by or on behalf of the related
Borrowers in connection with the origination of such Mortgage Loans (provided
that the Mortgage Loan Seller shall not be required to deliver any
attorney-client privileged communication, draft documents or any documents or
materials prepared by it or its Affiliates for internal uses, including without
limitation, credit committee briefs or memoranda and other internal approval
documents); and (ii) all unapplied Reserve Funds and Escrow Payments in the
possession or under the control of the Mortgage Loan Seller that relate to the
Mortgage Loans.
(f) Under generally accepted accounting principles ("GAAP") and for
federal income tax purposes, the Mortgage Loan Seller shall report its transfer
of the Mortgage Loans to the Purchaser, as provided herein, as a sale of the
Mortgage Loans to the Purchaser in exchange for the consideration specified in
Section 1 hereof. In connection with the foregoing, the Mortgage Loan Seller
shall cause all of its records to reflect such transfer as a sale (as opposed to
a secured loan) and to reflect that the Mortgage Loans are no longer property of
the Mortgage Loan Seller.
(g) The Mortgage Loan Schedule, as it may be amended from time to time,
shall conform to the requirements set forth in the Pooling and Servicing
Agreement. The Mortgage Loan Seller shall, within 15 days of its discovery or
receipt of notice of any error on the Mortgage Loan Schedule, amend such
Mortgage Loan Schedule and deliver to the Purchaser
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or the Trustee, as the case may be, an amended Mortgage Loan Schedule; provided
that this sentence shall not be construed to relieve the Mortgage Loan Seller of
any liability for any related Breach.
SECTION 3. Examination of Mortgage Loan Files and Due Diligence Review.
The Mortgage Loan Seller shall reasonably cooperate with any examination of the
Mortgage Files for, and any other documents and records relating to, the
Mortgage Loans, that may be undertaken by or on behalf of the Purchaser on or
before the Closing Date. The fact that the Purchaser has conducted or has failed
to conduct any partial or complete examination of any of the Mortgage Files for,
and/or any of such other documents and records relating to, the Mortgage Loans,
shall not affect the Purchaser's right to pursue any remedy available in equity
or at law for a breach of the Mortgage Loan Seller's representations and
warranties made pursuant to Section 4, except as expressly set forth in
Section 5.
SECTION 4. Representations, Warranties and Covenants of the Mortgage
Loan Seller and the Purchaser.
(a) The Mortgage Loan Seller hereby makes, as of the Closing Date (and,
in connection with any replacement of a Defective Mortgage Loan (as defined in
Section 4(d) hereof) with one or more Replacement Mortgage Loans (also as
defined in Section 4(d) hereof), pursuant to Section 5(a) hereof, as of the
related date of substitution), to and for the benefit of the Purchaser, each of
the representations and warranties set forth in Exhibit B-1. The Purchaser
hereby makes, as of the Closing Date, to and for the benefit of the Mortgage
Loan Seller, each of the representations and warranties set forth in Exhibit
B-2.
(b) The Mortgage Loan Seller hereby makes, as of the Closing Date (or
as of such other date specifically provided in the particular representation or
warranty), to and for the benefit of the Purchaser, each of the representations
and warranties set forth in Exhibit C.
(c) The Mortgage Loan Seller hereby represents and warrants, as of the
Closing Date, to and for the benefit of PSSFC only, that the Mortgage Loan
Seller has not dealt with any broker, investment banker, agent or other person
(other than PSSFC, BSC, Xxxxxxx Xxxxx, Xxxxx Fargo Brokerage and CIBCWM) who may
be entitled to any commission or compensation in connection with the sale to the
Purchaser of the Mortgage Loans.
(d) The Mortgage Loan Seller hereby agrees that it shall be deemed to
make to and for the benefit of the Purchaser, as of the date of substitution,
with respect to any replacement mortgage loan (a "Replacement Mortgage Loan")
that is substituted for a Defective Mortgage Loan, by the Mortgage Loan Seller
pursuant to Section 5(a) of this Agreement, each of the representations and
warranties set forth in Exhibit C to this Agreement. From and after the date of
substitution, each Replacement Mortgage Loan, if any, shall be deemed to
constitute a "Mortgage Loan" hereunder for all purposes. A "Defective Mortgage
Loan" is any Mortgage Loan as to which there is an unremedied Material Breach or
Material Document Defect.
(e) It is understood and agreed that the representations and warranties
set forth in or made pursuant to this Section 4 shall survive delivery of the
respective Mortgage Files
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to the Purchaser or its designee and shall inure to the benefit of the
Purchaser, notwithstanding any restrictive or qualified endorsement or
assignment.
SECTION 5. Notice of Breach; Cure, Repurchase and Substitution.
(a) The Mortgage Loan Seller shall, not later than 90 days from
discovery by the Mortgage Loan Seller, or the receipt by the Mortgage Loan
Seller of notice, of any Material Breach or Material Document Defect with
respect to any Mortgage Loan (or, if such Material Breach or Material Document
Defect, as the case may be, related to whether such Mortgage Loan is, or as of
the Closing Date (or, in the case of a Replacement Mortgage Loan, as of the
related date of substitution), was a Qualified Mortgage, and provided that the
Mortgage Loan Seller discovered or received prompt written notice thereof,
within 90 days after any earlier discovery by the Mortgage Loan Seller or any
party to the Pooling and Servicing Agreement of such Material Breach or Material
Document Defect, as the case may be) (such 90-day period, in any case, the
"Initial Resolution Period"), correct or cure such Material Document Defect or
Material Breach, as the case may be, in all material respects, or repurchase the
affected Mortgage Loan at the applicable Purchase Price; provided that if the
Mortgage Loan Seller certifies to the Trustee in writing (i) that such Material
Document Defect or Material Breach, as the case may be, does not relate to
whether the affected Mortgage Loan is or, as of the Closing Date (or, in the
case of a Replacement Mortgage Loan, as of the related date of substitution),
was a Qualified Mortgage, (ii) that such Material Document Defect or Material
Breach, as the case may be, is capable of being cured but not within the
applicable Initial Resolution Period, (iii) that such Mortgage Loan Seller has
commenced and is diligently proceeding with the cure of such Material Document
Defect or Material Breach, as the case may be, during the applicable Initial
Resolution Period, and (iv) that such Mortgage Loan Seller anticipates that such
Material Document Defect or Material Breach, as the case may be, will be cured
within an additional 90-day period (such additional 90-day period, the
"Resolution Extension Period"), then the Mortgage Loan Seller shall have an
additional period equal to any such applicable Resolution Extension Period to
complete such correction or cure (or, upon failure to complete such correction
or cure, to repurchase the affected Mortgage Loan); and provided, further, that,
in lieu of repurchasing the affected Mortgage Loan as contemplated above (but,
in any event, no later than such repurchase would have to have been completed),
such Mortgage Loan Seller shall be permitted, during the three-month period
following the Startup Day for the REMIC Pool that holds the affected Mortgage
Loan (or during the two-year period following such Startup Day if the affected
Mortgage Loan is a "defective obligation" within the meaning of Section
860G(a)(4)(B)(ii) of the Code and Treasury regulation section 1.860G-2(f)), to
replace the affected Mortgage Loan with one or more Qualifying Substitute
Mortgage Loans and to pay a cash amount equal to the applicable Substitution
Shortfall Amount. The parties hereto agree that delivery by the Trustee (or a
Custodian on its behalf) of a certification or schedule of exceptions to the
Mortgage Loan Seller pursuant to the Pooling and Servicing Agreement shall not
in and of itself constitute delivery of notice of any Material Document Defect
or knowledge of the Mortgage Loan Seller of any Material Document Defect
therein. If any Mortgage Loan is to be repurchased or replaced as contemplated
by this subsection, the Purchaser or its designee shall be entitled to designate
the account to which funds in the amount of the applicable Purchase Price or
Substitution Shortfall Amount (as the case may be) are to be wired. Any such
repurchase or replacement of a Mortgage Loan shall be on a whole loan, servicing
released basis. Notwithstanding this subsection, the absence from the Mortgage
File, (i) on the Closing Date of
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the Mortgage Note (or a lost note affidavit and indemnity with a copy of the
Mortgage Note) and (ii) by the first anniversary of the Closing Date of
originals or copies of the following documents (without the presence of any
factor that reasonably mitigates such absence, non-conformity or irregularity)
shall be conclusively presumed to be a Material Document Defect and shall
obligate the Mortgage Loan Seller to cure such Material Document Defect, or,
failing that, repurchase the related Mortgage Loan or REO Mortgage Loan, all in
accordance with the procedures set forth herein: (a) the Mortgage and any
separate Assignment of Leases as described by clauses (ii) and (iii) of the
definition of "Mortgage File"; (b) the title insurance policy as described in
clause (viii) of the definition of "Mortgage File" (or, if the policy has not
yet been issued, an original or copy of a written commitment "marked-up" at the
closing of such Mortgage Loan, interim binder or the pro forma title insurance
policy, in each case evidencing a binding commitment to issue such policy); or
(c) the assignment of Mortgage (and any separate Assignment of Leases) as
described by clause (iv) of the definition of "Mortgage File". For purposes of
this paragraph, the relevant definition of "Mortgage File" shall be the
definition of such term set forth in the Pooling and Servicing Agreement as in
full force and effect on the Closing Date.
The remedies provided for in this subsection with respect to any
Material Document Defect or Material Breach with respect to any Mortgage Loan
shall apply to the related REO Property.
If (x) a Defective Mortgage Loan is to be repurchased or replaced as
described above, (y) such Defective Mortgage Loan is part of a
Cross-Collateralized Group and (z) the applicable document defect or breach does
not constitute a Material Document Defect or Material Breach, as the case may
be, as to the other Mortgage Loan(s) that are a part of such
Cross-Collateralized Group (the "Other Crossed Loans") (without regard to this
paragraph), then the applicable Document Defect or Breach (as the case may be)
shall be deemed to constitute a Material Document Defect or Material Breach (as
the case may be) as to each such Other Crossed Loan for purposes of the above
provisions, and the Mortgage Loan Seller shall be obligated to repurchase or
replace each such Other Crossed Loan in accordance with the provisions above
unless, in the case of such Breach or Document Defect:
(A) the Mortgage Loan Seller (at its expense) delivers or causes to
be delivered to the Trustee an Opinion of Counsel to the effect that its
repurchase of only those Mortgage Loans as to which a Material Breach has
actually occurred without regard to the provisions of this paragraph (the
"Affected Loan(s)") and the operation of the remaining provisions of this
Section 5(a) will not result in an Adverse REMIC Event with respect to any
REMIC Pool, or an Adverse Grantor Event with respect to either Grantor
Trust Pool, under the Pooling and Servicing Agreement; and
(B) both of the following conditions would be satisfied if the
Mortgage Loan Seller were to repurchase or replace only the Affected Loans
and not the Other Crossed Loans:
(i) the debt service coverage ratio for all such Other Crossed
Loan (excluding the Affected Loan(s)) for the four calendar quarters
immediately preceding the repurchase or replacement is not less than
the least of (A) 0.10x below the debt service coverage ratio for the
Cross-Collateralized Group
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(including the Affected Loan(s)) set forth in Appendix B to the
Prospectus Supplement, (B) the debt service coverage ratio for the
Cross-Collateralized Group (including the Affected Loan(s)) for the
four preceding calendar quarters preceding the repurchase or
replacement and (C) 1.25x; and
(ii) the loan-to-value ratio for the Other Crossed Loans is not
greater than the greatest of (A) the loan-to-value ratio, expressed as
a whole number (taken to one decimal place), for the
Cross-Collateralized Group (including the Affected Loan(s)) set forth
in Appendix B to the Prospectus Supplement plus 10%, (B) the
loan-to-value ratio for the Cross-Collateralized Group (including the
Affected Loan(s)) at the time of repurchase or replacement, and (C)
75%.
The determination of the applicable Master Servicer as to whether the conditions
set forth above have been satisfied shall be conclusive and binding in the
absence of manifest error. The applicable Master Servicer will be entitled to
cause to be delivered, or direct the Mortgage Loan Seller to (in which case the
Mortgage Loan Seller shall) cause to be delivered, to the applicable Master
Servicer an Appraisal of any or all of the related Mortgaged Properties for
purposes of determining whether the condition set forth in clause (ii) above has
been satisfied, in each case at the expense of the Mortgage Loan Seller if the
scope and cost of the Appraisal is approved by the Mortgage Loan Seller and the
Controlling Class Representative (such approval not to be unreasonably withheld
in each case).
With respect to any Defective Mortgage Loan that forms a part of a
Cross-Collateralized Group and as to which the conditions described in the
preceding paragraph are satisfied, such that the Trust Fund will continue to
hold the Other Crossed Loans, the Mortgage Loan Seller and the Purchaser agree
to forbear from enforcing any remedies against the other's Primary Collateral
but each is permitted to exercise remedies against the Primary Collateral
securing its respective Mortgage Loans, including with respect to the Trustee,
the Primary Collateral securing the Affected Loan(s) still held by the Trustee,
so long as such exercise does not impair the ability of the Mortgage Loan Seller
to exercise its remedies against its Primary Collateral. If the exercise of
remedies by one such party would impair the ability of the other such party to
exercise its remedies with respect to the Primary Collateral securing the
Affected Loan or the Other Crossed Loans, as the case may be, held by the other
such party, then both parties shall forbear from exercising such remedies unless
and until the loan documents evidencing and securing the relevant Mortgage Loans
can be modified in a manner that complies 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 any of the
Cross-Collateralized Loans shall be allocated between the Mortgage Loans in
accordance with the Mortgage Loan Documents, or otherwise on a pro rata basis
based upon their outstanding Stated Principal Balances. All other terms of the
Mortgage Loans shall remain in full force and effect, without any modification
thereof. The Borrowers set forth on Schedule V to the Pooling and Servicing
Agreement are intended third-party beneficiaries of the provisions set forth in
this paragraph and the preceding paragraph. The provisions of this paragraph and
the preceding paragraph may not be modified with respect to any Mortgage Loan
without the related Borrower's consent.
-9-
All costs and expenses incurred by the Trustee and the applicable
Master Servicer with respect to any Cross-Collateralized Group pursuant to the
preceding paragraph shall be included in the calculation of Purchase Price for
the Affected Loan(s) to be repurchased or replaced.
(b) Whenever one or more Replacement Mortgage Loans are substituted for
a Defective Mortgage Loan by the Mortgage Loan Seller as contemplated by this
Section 5, upon direction by the applicable Master Servicer, the Mortgage Loan
Seller shall deliver to the Trustee the related Mortgage File and a
certification to the effect that such Replacement Mortgage Loan satisfies or
such Replacement Mortgage Loans satisfy, as the case may be, all of the
requirements of the definition of "Qualifying Substitute Mortgage Loan". No
mortgage loan may be substituted for a Defective Mortgage Loan as contemplated
by this Section 5 if the Mortgage Loan to be replaced was itself a Replacement
Mortgage Loan, in which case, absent a cure of the relevant Material Breach or
Material Document Defect, the affected Mortgage Loan will be required to be
repurchased as contemplated hereby. Monthly Payments due with respect to each
Replacement Mortgage Loan (if any) after the related date of substitution, and
Monthly Payments due with respect to each corresponding Deleted Mortgage Loan
(if any) after the related Due Date in March 2003 and on or prior to the related
date of substitution, shall be part of the Trust Fund. Monthly Payments due with
respect to each Replacement Mortgage Loan (if any) on or prior to the related
date of substitution, and Monthly Payments due with respect to each
corresponding Deleted Mortgage Loan (if any) after the related date of
substitution, shall not be part of the Trust Fund and are to be remitted by the
applicable Master Servicer to the Mortgage Loan Seller promptly following
receipt.
If any Mortgage Loan is to be repurchased or replaced by the Mortgage
Loan Seller as contemplated by this Section 5, upon direction by the applicable
Master Servicer, the Mortgage Loan Seller shall amend the Mortgage Loan Schedule
to reflect the removal of any Deleted Mortgage Loan and, if applicable, the
substitution of the related Replacement Mortgage Loan(s) and deliver or cause
the delivery of such amended Mortgage Loan Schedule to the parties to the
Pooling and Servicing Agreement. Upon any substitution of one or more
Replacement Mortgage Loans for a Deleted Mortgage Loan, such Replacement
Mortgage Loan(s) shall become part of the Trust Fund and be subject to the terms
of this Agreement in all respects.
(c) Upon the date when the full amount of the Purchase Price or
Substitution Shortfall Amount (as the case may be) for any Mortgage Loan
repurchased or replaced by the related Mortgage Loan Seller as contemplated by
this Section 5 has been deposited in the account designated therefor by the
Purchaser (or the applicable Master Servicer on its behalf), and further, if
applicable, upon receipt by the Purchaser (or the Trustee or a Custodian
appointed thereby) of the Mortgage File for each Replacement Mortgage Loan (if
any) to be substituted for a Deleted Mortgage Loan, together with any
certifications and/or opinions required pursuant to this Section 5 to be
delivered by the Mortgage Loan Seller, the Purchaser (or the Trustee) shall (i)
release or cause the release of the Mortgage File and any Additional Collateral
held by or on behalf of the Purchaser (or the Trustee) for the Deleted Mortgage
Loan to the Mortgage Loan Seller or its designee and (ii) execute and deliver
such instruments of release, transfer and/or assignment, in each case without
recourse, as shall be provided to it and are reasonably necessary to vest in the
Mortgage Loan Seller or its designee the ownership of the Deleted Mortgage Loan,
-10-
and the Purchaser (or the applicable Master Servicer on its behalf) shall notify
the affected Borrowers of the transfers of the Deleted Mortgage Loan(s) and any
Replacement Mortgage Loan(s). In connection with any such repurchase or
substitution by the Mortgage Loan Seller, each of the applicable Master Servicer
and the Special Servicer (or other servicing agent for the Purchaser) shall
deliver to the Mortgage Loan Seller or its designee any portion of the related
Servicing File, together with any Escrow Payments, Reserve Funds and Additional
Collateral, held by or on behalf of such Master Servicer or the Special Servicer
(or other servicing agent for the Purchaser), as the case may be, with respect
to the Deleted Mortgage Loan, in each case at the expense of the Mortgage Loan
Seller.
(d) It is understood and agreed that the obligations of the Mortgage
Loan Seller set forth in this Section 5 to cure a Material Breach or a Material
Document Defect, or to repurchase or replace the related Defective Mortgage
Loan(s), constitute the sole remedies available to the Purchaser, the
Certificateholders or the Trustee on behalf of the Certificateholders with
respect to a Breach or Document Defect in respect of any Mortgage Loan.
SECTION 6. Closing. The closing of the sale of the Mortgage Loans (the
"Closing") shall be held at the offices of Sidley Xxxxxx Xxxxx & Xxxx LLP, 000
Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 at 10:00 a.m., New York City time, on
the Closing Date.
The Closing shall be subject to each of the following conditions:
(i) All of the representations and warranties of the Mortgage Loan
Seller made pursuant to Section 4 of this Agreement shall be true and
correct in all material respects as of the Closing Date;
(ii) All documents specified in Section 7 of this Agreement (the
"Closing Documents"), in such forms as are agreed upon and reasonably
acceptable to the Purchaser and, in the case of the Pooling and Servicing
Agreement (insofar as such Agreement affects the obligations of the
Mortgage Loan Seller hereunder), to the Mortgage Loan Seller, shall be duly
executed and delivered by all signatories as required pursuant to the
respective terms thereof;
(iii) The Mortgage Loan Seller shall have delivered and released to the
Purchaser or its designee, all documents, funds and other assets required
to be delivered thereto pursuant to Section 2 of this Agreement;
(iv) The result of any examination of the Mortgage Files for, and any
other documents and records relating to, the Mortgage Loans performed by or
on behalf of the Purchaser pursuant to Section 3 hereof shall be
satisfactory to the Purchaser in its reasonable determination;
(v) All other terms and conditions of this Agreement required to be
complied with on or before the Closing Date shall have been complied with
in all material respects, and the Mortgage Loan 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 by it after the
Closing Date;
-11-
(vi) The Mortgage Loan Seller shall have paid all fees and expenses
payable by it to the Purchaser or otherwise pursuant to this Agreement;
(vii) the Mortgage Loan Seller shall have received the purchase price
for the Mortgage Loans, as contemplated by Section 1; and
(viii) Neither the Underwriting Agreement nor the Certificate Purchase
Agreement shall have been terminated in accordance with its terms.
Each of the parties agrees to use their commercially reasonable best
efforts to perform their respective obligations hereunder in a manner that will
enable the Purchaser to purchase the Mortgage Loans on the Closing Date.
SECTION 7. Closing Documents. The Purchaser or its designee shall have
received all of the following Closing Documents, in such forms as are agreed
upon and acceptable to the Purchaser, BSC, Xxxxxxx Xxxxx, Xxxxx Fargo Brokerage,
CIBCWM and the Rating Agencies (collectively, the "Interested Parties"), and
upon which the Interested Parties may rely:
(i) This Agreement, duly executed by the Purchaser and the Mortgage
Loan Seller;
(ii) Each of the Pooling and Servicing Agreement and the
Indemnification Agreement, duly executed by the respective parties thereto;
(iii) An Officer's Certificate substantially in the form of Exhibit D-1
hereto, executed by the Secretary or an assistant secretary of the Mortgage
Loan Seller, in his or her individual capacity, and dated the Closing Date,
and upon which the Interested Parties may rely, attaching thereto as
exhibits (A) the resolutions of the board of directors of the Mortgage Loan
Seller authorizing the Mortgage Loan Seller's entering into the
transactions contemplated by this Agreement and the Indemnification
Agreement, and (B) the organizational documents of the Mortgage Loan
Seller;
(iv) A certificate of good standing with respect to the Mortgage Loan
Seller issued by the Secretary of State of the State of Delaware not
earlier than 60 days prior to the Closing Date, and upon which the
Interested Parties may rely;
(v) A Certificate of the Mortgage Loan Seller substantially in the form
of Exhibit D-2 hereto, executed by an executive officer of the Mortgage
Loan Seller on the Mortgage Loan Seller's behalf and dated the Closing
Date, and upon which the Interested Parties may rely;
(vi) The written opinion of in-house counsel for the Mortgage Loan
Seller, dated the Closing Date and addressed to the Interested Parties and
the Trustee, which opinion shall be substantially in the form of Exhibits
D-3A hereto (with such additions, deletions or modifications as may be
required by either Rating Agency);
-12-
(vii) A letter from Winston & Xxxxxx, special counsel for the Mortgage
Loan Seller, dated the Closing Date and addressed to PSSFC and the
Underwriters, which letter shall be substantially in the form of Exhibit
D-3B hereto;
(viii) copies of all other opinions rendered by counsel for the
Mortgage Loan Seller to the Rating Agencies in connection with the
transactions contemplated by this Agreement, including, but not limited to,
with respect to the characterization of the transfer of the Mortgage Loans
hereunder as a true sale, with each such opinion to be addressed to the
other Interested Parties and the Trustee or accompanied by a letter signed
by such counsel stating that the other Interested Parties and the Trustee
may rely on such opinion as if it were addressed to them as of date
thereof;
(ix) One or more comfort letters from PriceWaterhouse Coopers LLP,
certified public accountants, dated the date of any preliminary Prospectus
Supplement, the Prospectus Supplement and the Memorandum, respectively, and
addressed to, and in form and substance acceptable to, the Interested
Parties (other than the Rating Agencies), stating in effect that, using the
assumptions and methodology used by PSSFC or the Underwriters, as
applicable, all of which shall be described in such letters, they have
recalculated such numbers and percentages relating to the Mortgage Loans
set forth in any preliminary Prospectus Supplement, the Prospectus
Supplement and the Memorandum, compared the results of their calculations
to the corresponding items in any preliminary Prospectus Supplement, the
Prospectus Supplement and the Memorandum, respectively, and found each such
number and percentage set forth in any preliminary Prospectus Supplement,
the Prospectus Supplement and the Memorandum, respectively, to be in
agreement with the results of such calculations; and
(x) Such further certificates, opinions and documents as the Purchaser
may reasonably request or any Rating Agency may require.
SECTION 8. Costs. Whether or not this Agreement is terminated, the
costs and expenses incurred in connection with the transactions herein
contemplated shall be allocated pursuant to the terms of a settlement statement
dated the Closing Date.
SECTION 9. Notices. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if personally
delivered to or mailed, by registered mail, postage prepaid, by overnight mail
or courier service, or transmitted by facsimile and confirmed by similar mailed
writing, if to the Purchaser, addressed to the Purchaser at Xxx Xxx Xxxx Xxxxx,
00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxx Xxxxxxx, Senior Vice
President (with a copy to Prudential Securities Incorporated, Xxx Xxxxxxx Xxxxx,
00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Law Department), or such other
address as may be designated by the Purchaser to the Mortgage Loan Seller in
writing, or, if to the Mortgage Loan Seller, addressed to the Mortgage Loan
Seller at 000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Real Estate Finance Group, or such other address as may be designated by the
Mortgage Loan Seller to the Purchaser in writing.
SECTION 10. Miscellaneous. Neither this Agreement nor any term or
provision hereof may be changed, waived, discharged or terminated except by a
writing signed by a duly
-13-
authorized officer of the party against whom enforcement of such change, waiver,
discharge or termination is sought to be enforced. This Agreement may be
executed in any number of counterparts, each of which shall for all purposes be
deemed to be an original and all of which shall together constitute but one and
the same instrument. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective successors and assigns, and no
other person will have any right or obligation hereunder. Notwithstanding any
contrary provision of this Agreement or the Pooling and Servicing Agreement, the
Purchaser shall not consent to any amendment of the Pooling and Servicing
Agreement which will increase the obligations of, or otherwise adversely affect,
the Mortgage Loan Seller, without the consent of the Mortgage Loan Seller.
SECTION 11. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement, incorporated herein by reference or contained in the certificates of
officers of the Mortgage Loan Seller delivered pursuant hereto, shall remain
operative and in full force and effect and shall survive delivery of the
Mortgage Loans by the Mortgage Loan Seller to PSSFC and by PSSFC to the Trust,
notwithstanding any restrictive or qualified endorsement or assignment in
respect of any Mortgage Loan.
SECTION 12. Severability of Provisions. Any part, provision,
representation, warranty or covenant of this Agreement that is prohibited or is
held to be void or unenforceable shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof. Any part, provision, representation, warranty or covenant of this
Agreement that is prohibited or is held to be void or unenforceable in any
particular jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
particular jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction. To the extent permitted by applicable law,
the parties hereto waive any provision of law which prohibits or renders void or
unenforceable any provision hereof.
SECTION 13. GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF TRIAL BY
JURY. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, APPLICABLE TO AGREEMENTS NEGOTIATED, MADE AND TO
BE PERFORMED ENTIRELY IN SAID STATE. TO THE FULLEST EXTENT PERMITTED UNDER
APPLICABLE LAW, EACH OF THE PURCHASER AND THE MORTGAGE LOAN SELLER HEREBY
IRREVOCABLY (I) SUBMITS TO THE JURISDICTION OF ANY NEW YORK STATE AND FEDERAL
COURTS SITTING IN THE BOROUGH OF MANHATTAN IN NEW YORK CITY WITH RESPECT TO
MATTERS ARISING OUT OF OR RELATING TO THIS AGREEMENT; (II) AGREES THAT ALL
CLAIMS WITH RESPECT TO SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN
SUCH NEW YORK STATE OR FEDERAL COURTS; (III) WAIVES, TO THE FULLEST POSSIBLE
EXTENT, THE DEFENSE OF AN INCONVENIENT FORUM; (IV) AGREES THAT A FINAL JUDGMENT
IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN
OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY
LAW; AND (V) WAIVES TO THE EXTENT PERMITTED BY
-14-
APPLICABLE LAW ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, CLAIM, SUIT, PROCEEDING
OR COUNTERCLAIM (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) RELATING TO OR
ARISING OUT OF THIS AGREEMENT.
SECTION 14. Further Assurances. The Mortgage Loan Seller and the
Purchaser each agrees to execute and deliver such instruments and take such
further actions as any other party hereto may, from time to time, reasonably
request in order to effectuate the purposes and to carry out the terms of this
Agreement.
SECTION 15. Successors and Assigns. The rights and obligations of the
Mortgage Loan Seller under this Agreement shall not be assigned by the Mortgage
Loan Seller without the prior written consent of the Purchaser, except that any
person into which the Mortgage Loan Seller may be merged or consolidated, or any
person resulting from any merger, conversion or consolidation to which the
Mortgage Loan Seller is a party, or any person succeeding to all or
substantially all of the business of the Mortgage Loan Seller, shall be the
successor to the Mortgage Loan Seller hereunder. In connection with its transfer
of the Mortgage Loans to the Trust as contemplated by the recitals hereto, PSSFC
is expressly authorized to assign its rights under this Agreement, in whole or
in part, to the Trustee for the benefit of the registered holders and beneficial
owners of the Certificates. To the extent of any such assignment, the Trustee,
for the benefit of the registered holders and beneficial owners of the
Certificates, shall be the Purchaser hereunder. In addition, PSSFC may assign
this Agreement and/or any of its rights or obligations hereunder, upon written
notice to the Mortgage Loan Seller and without the consent of any Mortgage Loan
Seller, to any affiliate, subsidiary, any entity owned or controlled by
Prudential Securities Group, Inc. ("PSGI"), or any Divested Entities, or in
connection with a reorganization of PSGI or due to a change of control of PSGI,
a business unit, division or line of business, or to entities employed or
retained by PSGI to provide services for the benefit of PSGI. For purposes
hereof, the term "Divested Entities" shall mean former affiliates, subsidiaries
and/or business units of PSGI. Subject to the foregoing, this Agreement shall
bind and inure to the benefit of and be enforceable by the Mortgage Loan Seller
and the Purchaser, and their respective successors and permitted assigns.
SECTION 16. Information. The Mortgage Loan Seller shall provide the
Purchaser with such information about itself, the Mortgage Loans and the
underwriting and servicing procedures applicable to the Mortgage Loans as is (i)
customary in commercial mortgage loan securitization transactions, (ii) required
by a Rating Agency or a governmental agency or body or (iii) reasonably
requested by the Purchaser for use in a public or private disclosure document.
SECTION 17. Cross-Collateralized Mortgage Loans. Notwithstanding
anything herein to the contrary, it is hereby acknowledged that certain groups
of Mortgage Loans are, in the case of each such particular group of Mortgage
Loans (each, a "Cross-Collateralized Group"), by their terms, cross-defaulted
and cross-collateralized. Each Cross-Collateralized 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 referred to in this Section
17 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 Exhibit C
hereto and each of the capitalized terms used herein but defined
-15-
in the Pooling and Servicing Agreement, shall be interpreted in a manner
consistent with this Section 17. In addition, if there exists with respect to
any Cross-Collateralized Group only one original of any document referred to in
the definition of "Mortgage File" in the Pooling and Servicing Agreement and
covering all the Mortgage Loans in such Cross-Collateralized Group, the
inclusion of the original of such document in the Mortgage File for any of the
Mortgage Loans constituting such Cross-Collateralized Group shall be deemed an
inclusion of such original in the Mortgage File for each such Mortgage Loan.
SECTION 18. Entire Agreement. Except as otherwise expressly
contemplated hereby, this Agreement constitutes the entire agreement and
understanding of the parties with respect to the matters addressed herein, and
this Agreement supersedes any prior agreements and/or understandings, written or
oral, with respect to such matters.
[SIGNATURE PAGE FOLLOWS]
-16-
IN WITNESS WHEREOF, the Mortgage Loan Seller and the Purchaser have
caused this Agreement to be duly executed by their respective officers as of the
day and year first above written.
CIBC INC.
By:
-----------------------------
Name:
Title:
PRUDENTIAL SECURITIES SECURED
FINANCING CORPORATION
By:
-----------------------------
Name:
Title:
EXHIBIT A
MORTGAGE LOAN SCHEDULE
----------------------
SELLER
LOAN
ID NUMBER PROPERTY NAME ADDRESS CITY STATE ZIP CODE
-----------------------------------------------------------------------------------------------------------------------------------
13 1.0 Promenade at Xxxxxx Bay 26795-26911 Xxxxx Xxx Xxxxx Xxxxxx Xxxxxxx XX 00000
16 2.0 University Tower 0000 Xxxxx Xxxxxxxxx Xxxxxx XX 00000
22 3.0 Barrington Pointe & Various Various KY Various
Copperstone Pointe Portfolio
22.1 3.1 Barrington Pointe 0000 Xxxxxxxxxx Xxxxx Xxxxxxxx XX 00000
22.2 3.2 Copperstone Pointe 000 Xxxx Xxxxx Xx Xxxxxx XX 00000
26 4.0 WP Xxxxx Industrial Portfolio Various Various Various Various
26.1 4.1 0000 Xxxxxxxxx Xxxx 0000 Xxxxxxxxx Xxxx Xxxxxxx-Xxxxx XX 00000
26.2 4.2 00000 Xxxxxx Xxxx 00000 Xxxxxx Xxxx Xxxxxx XX 00000
26.3 4.3 0000 Xxxxxxx Xxxx 0000 Xxxxxxx Xxxx Xxxxxx XX 00000
35 6.0 Xxxxxxx Manufactured Housing Community Various Various NY Various
35.1 6.1 Latham Manufactured Housing Community 000 XxxXxxxxx Xxxx Xxxxxx XX 00000
35.2 6.2 Saratoga West Manufactured Housing Community 000 Xxxxxxx Xxxxxx Xxxxxxxx Xxx XX 00000
35.3 6.3 Shady Acres Manufactured Housing Community 000 Xxxxxx Xxxxxx Xxxxxxxx Xxx XX 00000
35.4 6.4 Stockade Manufactured Housing Community 000 Xxxx Xxxx Xxxx Xxxxxxxx Xxx XX 00000
37 7.0 0000 Xxxx Xxxxx Xxxx 0000 Xxxx Xxxxx Xxxx Xxxxxx XX 00000
46 8.0 14 & 00 Xxxxx Xxxxxx xxx Xxxxxxx Xxxxxxx XX 00000
0 Xxxx Xxxxxx Portfolio
46.1 8.1 14 & 00 Xxxxx Xxxxxx 14 & 00 Xxxxx Xxxxxx Xxxxxxx XX 00000
46.2 8.2 0 Xxxx Xxxxxx 0 Xxxx Xxxxxx Xxxxxxx XX 00000
49 10.0 000 Xxxxx Xxxxxxx 00 000 Xxxxx Xxxxxxx 00 Xxxxx Xxxxxxxxxx XX 00000
56 11.0 Kash N' Xxxxx Portfolio Various Various FL Various
56.1 11.1 LaMadera Marketplace 0000-0000 Xxxxx Xxxx 00 Xxxxxx XX 00000
56.2 11.2 Shoppes at Avon Park 0000-0000 XX Xxxxxxx 00 Xxxxx Xxxx Xxxx XX 00000
56.3 11.3 Shoppes at Lake Placid 0000-0000 XX Xxxxxxx 00 Xxxxx Xxxx Xxxxxx XX 00000
65 12.0 Colorado Marketplace Xxxx 000xx Xxxxxx & Xxxxxxxx XX 00000
Colorado Boulevard
66 13.0 0000 Xxxx Xxxxxx 1222 -0000 Xxxx Xxxxxx Xxxxxxxxxxxx XX 00000
71 15.0 FedEx Ground Facility 0000 Xxxxxxx Xxxxx Xxxxxxxxxx XX 00000
74 16.0 Mt. Ebo Business Center 00 Xxxxx Xxx Xxxx Xxxxx Xxxxxxxxx XX 00000
86 17.0 Xxx City Centre 0000 Xxxxx 0000 Xxxx Xxx XX 00000
90 18.0 Westwind Plaza 00000 Xxxx Xxxxxx Xxxxxx Xxxx Xxxxxxxx XX 00000
A-1
STATED
ORIGINAL REMAINING ORGINAL
MONTHLY TERM TO TERM TO AMORTI- REMAINING
CUT-OFF MONTHLY DEBT INTEREST ARD MATURITY MATURITY MATURITY ZATION AMORTI-
ORIGINAL DATE DEBT SERVICE MORTGAGE ACCRUAL LOAN DATE OR ARD OR ARD TERM ZATION
ID BALANCE BALANCE SERVICE AFTER IO RATE BASIS (Y/N) OR ARD (MOS.) (MOS.) (MOS.) TERM (MOS.)
------------------------------------------------------------------------------------------------------------------------------------
13 18,000,000 18,000,000 106,649.42 5.8900% Actual/360 Yes 3/1/2013 120 120 360 360
16 16,350,000 16,314,135 97,082.46 5.9100% Actual/360 Yes 1/1/2013 120 118 360 358
22 10,700,000 10,685,680 63,671.15 5.9300% Actual/360 Yes 2/1/2013 120 119 360 359
22.1 8,300,000 8,288,892
22.2 2,400,000 2,396,788
26 9,200,000 9,163,882 55,810.96 6.1100% Actual/360 Yes 11/1/201 120 116 360 356
26.1 4,700,000 4,681,549
26.2 3,800,000 3,785,082
26.3 700,000 697,252
35 7,750,000 7,715,577 49,272.23 5.8600% Actual/360 Yes 12/1/201 120 117 300 297
35.1 1,400,000 1,393,782
35.2 1,650,000 1,642,671
35.3 700,000 696,891
35.4 4,000,000 3,982,233
37 7,600,000 7,590,150 46,794.51 6.2500% Actual/360 Yes 2/1/2013 120 119 360 359
46 6,200,000 6,188,691 38,892.28 5.7200% Actual/360 Yes 2/1/2013 120 119 300 299
46.1 4,636,000 4,627,544
46.2 1,564,000 1,561,147
49 6,000,000 6,000,000 36,592.54 6.1600% Actual/360 Yes 3/1/2013 120 120 360 360
56 5,200,000 5,193,214 31,780.93 6.1800% Actual/360 Yes 2/1/2013 120 119 360 359
56.1 2,050,000 2,047,325
56.2 1,550,000 1,547,977
56.3 1,600,000 1,597,912
65 4,225,000 4,215,793 25,195.35 5.9500% Actual/360 Yes 1/1/2013 120 118 360 358
66 4,150,000 4,140,762 24,403.13 5.8200% Actual/360 No 1/1/2013 120 118 360 358
71 3,750,000 3,750,000 24,161.30 6.0000% Actual/360 Yes 3/1/2013 120 120 300 300
74 3,500,000 3,495,437 21,413.71 6.1900% Actual/360 No 2/1/2013 120 119 360 359
86 2,500,000 2,492,353 16,107.54 6.0000% Actual/360 No 1/1/2013 120 118 300 298
90 2,350,000 2,345,084 14,393.02 6.2000% Actual/360 No 1/1/2013 120 118 360 358
A-2
CIBC CONT.
CROSSED
WITH MORTGAGE
OTHER CROSSED LOAN ADMINISTRATIVE DUE GRACE
ID LOANS LOAN ID PREPAYMENT PROVISIONS (# OF PAYMENTS) INTEREST SELLER FEE RATE DATE PERIOD
------------------------------------------------------------------------------------------------------------------------
13 No NAP Lo(24)/Defeasance(92)/Open(4) Fee CIBC 0.0427% 1 7
16 No NAP Lo(26)/Defeasance(90)/Open(4) Fee CIBC 0.0427% 1 15
22 No NAP Lo(25)/Defeasance(91)/Open(4) Fee CIBC 0.0427% 1 7
22.1 Fee
22.2 Fee
26 No NAP Lo(28)/Defeasance(89)/Open(3) Fee CIBC 0.0427% 1 7
26.1 Fee
26.2 Fee
26.3 Fee
35 No NAP Lo(27)/Defeasance(89)/Open(4) Fee CIBC 0.0427% 1 7
35.1 Fee
35.2 Fee
35.3 Fee
35.4 Fee
37 No NAP Lo(25)/Defeasance(91)/Open(4) Fee CIBC 0.0427% 1 7
46 No NAP Lo(25)/Defeasance(91)/Open(4) Fee CIBC 0.0427% 1 7
46.1 Fee
46.2 Fee
49 No NAP Lo(24)/Defeasance(92)/Open(4) Fee CIBC 0.0427% 1 7
56 No NAP Lo(25)/Defeasance(91)/Open(4) Fee CIBC 0.0427% 1 7
56.1 Fee
56.2 Fee
56.3 Fee
65 No NAP Lo(26)/Defeasance(90)/Open(4) Fee CIBC 0.0827% 1 7
66 No NAP Lo(26)/Defeasance(90)/Open(4) Fee CIBC 0.0427% 1 7
71 No NAP Lo(24)/Defeasance(92)/Open(4) Fee CIBC 0.0427% 1 7
74 No NAP Lo(25)/Defeasance(91)/Open(4) Fee CIBC 0.0427% 1 7
86 No NAP Lo(26)/Defeasance(90)/Open(4) Fee CIBC 0.0427% 1 7
90 No NAP Lo(26)/Defeasance(90)/Open(4) Fee CIBC 0.0927% 1 7
LETTER LETTER OF
OF CREDIT GUARANTOR/ HOSPITALITY
ID CREDIT DESCRIPTION RECOURSE PROPERTY INITIAL MASTER SERVICER
-----------------------------------------------------------------------------------------------
13 No No No Xxxxx Fargo Bank, National Association
16 No No No Xxxxx Fargo Bank, National Association
22 No No No Xxxxx Fargo Bank, National Association
22.1
22.2
26 No No No Xxxxx Fargo Bank, National Association
26.1
26.2
26.3
35 No No No Xxxxx Fargo Bank, National Association
35.1
35.2
35.3
35.4
37 No No No Xxxxx Fargo Bank, National Association
46 No No No Xxxxx Fargo Bank, National Association
46.1 No
46.2 No
49 No No No Xxxxx Fargo Bank, National Association
56 No No No Xxxxx Fargo Bank, National Association
56.1
56.2
56.3
65 No No No Xxxxx Fargo Bank, National Association
66 No No No Xxxxx Fargo Bank, National Association
71 No No No Xxxxx Fargo Bank, National Association
74 No No No Xxxxx Fargo Bank, National Association
86 No No No Xxxxx Fargo Bank, National Association
90 No No No Xxxxx Fargo Bank, National Association
X-0
XXXXXXX X-0
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE MORTGAGE LOAN SELLER
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The Mortgage Loan Seller hereby represents and warrants that, as of the
Closing Date:
(a) The Mortgage Loan Seller is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware.
(b) The Mortgage Loan Seller's execution and delivery of, performance
under, and compliance with this Agreement, will not violate the Mortgage Loan
Seller's organizational documents or 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 agreement or other material instrument to
which it is a party or by which it is bound, which default or breach, in the
good faith and reasonable judgment of the Mortgage Loan Seller, is likely to
affect materially and adversely the ability of the Mortgage Loan Seller to
perform its obligations under this Agreement.
(c) The Mortgage Loan Seller has the full power and authority to
consummate all transactions contemplated by this Agreement, has duly authorized
the execution, delivery and performance of this Agreement and has duly executed
and delivered this Agreement.
(d) This Agreement, assuming due authorization, execution and delivery
by the other party or parties hereto, constitutes a valid, legal and binding
obligation of the Mortgage Loan Seller, enforceable against the Mortgage Loan
Seller in accordance with the terms hereof, subject to (A) applicable
bankruptcy, insolvency, reorganization, receivership, moratorium and other laws
affecting the enforcement of creditors' rights generally, and (B) general
principles of equity, regardless of whether such enforcement is considered in a
proceeding in equity or at law.
(e) The Mortgage Loan Seller is not in violation of, and its execution
and delivery of, performance under and compliance with this Agreement will not
constitute a violation of, any law, any order or decree of any court or arbiter,
or any order, regulation or demand of any federal, state or local governmental
or regulatory authority, which violation, in the Mortgage Loan Seller's good
faith and reasonable judgment, is likely to affect materially and adversely the
ability of the Mortgage Loan Seller to perform its obligations under this
Agreement.
(f) No consent, approval, authorization or order of any state or
federal court or governmental agency or body is required for the consummation by
the Mortgage Loan Seller of the transactions contemplated herein, except for (A)
those consents, approvals, authorizations or orders that previously have been
obtained and (B) those filings and recordings of Mortgage Loan Documents and
assignments thereof that are contemplated by the Pooling and Servicing Agreement
to be completed after the Closing Date.
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(g) No litigation, arbitration, suit, proceeding or governmental
investigation is pending or, to the best of the Mortgage Loan Seller's
knowledge, threatened against the Mortgage Loan Seller that, if determined
adversely to the Mortgage Loan Seller, would prohibit the Mortgage Loan Seller
from entering into this Agreement or that, in the Mortgage Loan Seller's good
faith and reasonable judgment, is likely to materially and adversely affect the
ability of the Mortgage Loan Seller to perform its obligations under this
Agreement.
(h) The transfer of the Mortgage Loans to the Purchaser as contemplated
herein is not subject to any bulk transfer or similar law in effect in any
applicable jurisdiction.
(i) The Mortgage Loan Seller is not transferring the Mortgage Loans to
the Purchaser with any intent to hinder, delay or defraud its present or future
creditors.
(j) The Mortgage Loan Seller will be solvent at all relevant times
prior to, and will not be rendered insolvent by, its transfer of the Mortgage
Loans to the Purchaser, as contemplated herein.
(k) After giving effect to its transfer of the Mortgage Loans to the
Purchaser, as provided herein, the value of the Mortgage Loan Seller's assets,
either taken at their present fair saleable value or at fair valuation, will
exceed the amount of the Mortgage Loan Seller's debts and obligations, including
contingent and unliquidated debts and obligations of the Mortgage Loan Seller,
and the Mortgage Loan Seller will not be left with unreasonably small assets or
capital with which to engage in and conduct its business.
(l) The Mortgage Loan Seller does not intend to, and does not believe
that it will, incur debts or obligations beyond its ability to pay such debts
and obligations as they mature.
(m) No proceedings looking toward liquidation, dissolution or
bankruptcy of the Mortgage Loan Seller are pending or contemplated.
(n) The principal place of business and chief executive office of the
Mortgage Loan Seller is located in the State of New York.
(o) The consideration received by the Mortgage Loan Seller upon the
sale of the Mortgage Loans constitutes at least fair consideration and
reasonably equivalent value for such Mortgage Loans.
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EXHIBIT B-2
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE PURCHASER
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The Purchaser hereby represents and warrants that, as of the Closing
Date:
(a) The Purchaser is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware.
(b) The Purchaser's execution and delivery of, performance under, and
compliance with this Agreement, will not violate the Purchaser's organizational
documents or 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 agreement or other material instrument to which it is a party or by
which it is bound, which default or breach, in the good faith and reasonable
judgment of the Purchaser, is likely to affect materially and adversely the
ability of the Purchaser to perform its obligations under this Agreement.
(c) This Agreement, assuming due authorization, execution and delivery
by the other party or parties hereto, constitutes a valid, legal and binding
obligation of the Purchaser, enforceable against the Purchaser in accordance
with the terms hereof, subject to (A) applicable bankruptcy, insolvency,
reorganization, receivership, moratorium and other laws affecting the
enforcement of creditors' rights generally, and (B) general principles of
equity, regardless of whether such enforcement is considered in a proceeding in
equity or at law.
(d) No litigation, arbitration, suit, proceeding or governmental
investigation is pending or, to the best of the Purchaser's knowledge,
threatened against the Purchaser that, if determined adversely to the Purchaser,
would prohibit the Purchaser from entering into this Agreement or that, in the
Purchaser's good faith and reasonable judgment, is likely to materially and
adversely affect the ability of the Purchaser to perform its obligations under
this Agreement.
B-2-1
EXHIBIT C
MORTGAGE LOAN REPRESENTATIONS AND WARRANTIES
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FOR PURPOSES OF THIS EXHIBIT C, THE PHRASE "THE MORTGAGE LOAN SELLER'S
KNOWLEDGE" AND OTHER WORDS AND PHRASES OF LIKE IMPORT SHALL MEAN, EXCEPT WHERE
OTHERWISE EXPRESSLY SET FORTH BELOW, THE ACTUAL STATE OF KNOWLEDGE OF THE
MORTGAGE LOAN SELLER, ITS OFFICERS AND EMPLOYEES RESPONSIBLE FOR THE
UNDERWRITING, ORIGINATION, SERVICING OR SALE OF THE MORTGAGE LOANS REGARDING THE
MATTERS EXPRESSLY SET FORTH BELOW IN EACH CASE WITHOUT HAVING CONDUCTED ANY
INDEPENDENT INQUIRY INTO SUCH MATTERS AND WITHOUT ANY OBLIGATION TO HAVE DONE SO
(EXCEPT (I) HAVING SENT TO THE SERVICERS SERVICING THE MORTGAGE LOANS ON BEHALF
OF THE MORTGAGE LOAN SELLER, IF ANY, SPECIFIC INQUIRIES REGARDING THE MATTERS
REFERRED TO AND (II) AS EXPRESSLY SET FORTH HEREIN). ALL INFORMATION CONTAINED
IN DOCUMENTS WHICH ARE PART OF OR REQUIRED TO BE PART OF A MORTGAGE FILE, AS
SPECIFIED IN THE POOLING AND SERVICING AGREEMENT (TO THE EXTENT SUCH DOCUMENTS
EXIST) SHALL BE DEEMED WITHIN THE MORTGAGE LOAN SELLER'S KNOWLEDGE.
The Mortgage Loan Seller hereby represents and warrants that, as of the
date herein below specified or, if no such date is specified, as of the Closing
Date, except with respect to the Exceptions described on Schedule C to this
Agreement and subject to Section 17 of this Agreement:
1. Mortgage Loan Schedule. The information set forth in the Mortgage
Loan Schedule with respect to the Mortgage Loans is true, complete (in
accordance with the requirements of this Agreement and the Pooling and Servicing
Agreement) and correct in all material respects as of the date of this
Agreement.
2. Ownership of Mortgage Loans. Immediately prior to the transfer of
the Mortgage Loans to the Purchaser, the Mortgage Loan Seller had good and
marketable title to, and was the sole owner of, each Mortgage Loan. The Mortgage
Loan 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. Upon consummation of transactions contemplated
by this Agreement, the Mortgage Loan Seller will have validly and effectively
conveyed to the Purchaser all legal and beneficial interest in and to each
Mortgage Loan free and clear of any pledge, lien, charge, security interest or
other encumbrance. The sale of the Mortgage Loans to the Purchaser or its
designee does not require the Mortgage Loan Seller to obtain any governmental or
regulatory approval or consent that has not been obtained.
3. Payment Record. As of the Closing Date, the Mortgage Loan is not,
and in the prior 12 months (or since the date of origination if such Mortgage
Loan has been originated within the past 12 months), has not been, 30 days or
more past due in respect of any Monthly Payment without giving effect to any
applicable grace period. If the Mortgage Loan Seller was the originator of the
Mortgage Loan, the Mortgage Loan has not been 60 days or more past due in
respect of any Monthly Payment (without giving effect to any applicable grace
period) at any time since the date of origination. If the Mortgage Loan Seller
was not the
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originator of the Mortgage Loan, the Mortgage Loan has not, to the Mortgage
Loan Seller's knowledge, been 60 days or more past due in respect of any Monthly
Payment (without giving effect to any applicable grace period) at any time since
the date of origination.
4. Lien; Valid Assignment. The Mortgage related to and delivered in
connection with each Mortgage Loan constitutes a valid and, subject to the
exceptions set forth in Paragraph 13 below, enforceable first priority lien upon
the related Mortgaged Property, prior to all other liens and encumbrances, and
there are no liens and/or encumbrances that are pari passu with the lien of such
Mortgage, in any event except for (a) the lien for current real estate taxes,
ground rents, water charges, sewer rents and assessments not yet due and
payable, (b) covenants, conditions and restrictions, rights of way, easements
and other matters that are of public record and are referred to in the related
lender's title insurance policy (or, if not yet issued, referred to in a pro
forma title policy, a preliminary title policy with escrow instructions, or a
"marked-up" commitment, in each case binding upon the title insurer), none of
which materially interferes with the security intended to be provided by such
Mortgage, the current marketability or principal use of the related Mortgaged
Property or the current ability of the related Mortgaged Property to generate
income sufficient to service such Mortgage Loan, (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, a preliminary title policy with
escrow instructions or "marked-up" commitment, in each case binding upon the
title insurer), none of which materially interferes with the security intended
to be provided by such Mortgage, the current marketability or principal use of
the related Mortgaged Property or the current ability of the related Mortgaged
Property to generate income sufficient to service such Mortgage Loan, (d) other
matters to which like properties are commonly subject, none of which materially
interferes with the security intended to be provided by such Mortgage, the
current marketability or principal use of the related Mortgaged Property or the
current ability of the related Mortgaged Property to generate income sufficient
to service the related Mortgage Loan, (e) the rights of tenants (as tenants
only) under leases (including subleases) pertaining to the related Mortgaged
Property which the Mortgage Loan Seller did not require to be subordinated to
the lien of such Mortgage and which do not materially interfere with the
security intended to be provided by such Mortgage, the current marketability or
principal use of the related Mortgaged Property or the current ability of the
related Mortgaged Property to generate income sufficient to service the related
Mortgage Loan, and (f) if such Mortgage Loan constitutes a Cross-Collateralized
Mortgage Loan, the lien of the Mortgage for another Mortgage Loan contained in
the same Cross-Collateralized Group (the foregoing items (a) through (f) being
herein referred to as the "Permitted Encumbrances"). Such Mortgage, together
with any separate security agreements, chattel mortgages or equivalent
instruments and UCC Financing Statements, establishes and creates a valid and,
subject to the exceptions set forth in Paragraph 13 below, enforceable security
interest in favor of the holder thereof 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. The related
assignment of such 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 Mortgage Loan Seller)
and constitutes a legal, valid, binding and, subject to the exceptions set forth
in Paragraph 13 below, enforceable assignment of such Mortgage from the relevant
assignor to the Trustee.
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5. Assignment of Leases and Rents. There exists, to be included in the
related Mortgage File as otherwise contemplated by this Agreement, an Assignment
of Leases, either as a separate instrument or as part of the Mortgage, related
to and delivered in connection with each Mortgage Loan that establishes and
creates a valid, subsisting and, subject to the exceptions set forth in
Paragraph 13 below, enforceable assignment of or first priority lien on and
security interest in, subject to applicable law, the property, rights and
interests of the related Borrower described therein; 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
Mortgage Loan Seller), and constitutes a legal, valid, binding and, subject to
the exceptions set forth in Paragraph 13 below, enforceable assignment of such
Assignment of Leases from the relevant assignor to the Trustee. If an Assignment
of Leases exists with respect to any Mortgage Loan (whether as part of the
related Mortgage or separately), then the related Mortgage or related Assignment
of Leases, subject to applicable law, provides for, upon an event of default
under the Mortgage Loan, the appointment of a receiver for the collection of
rents or for the related mortgagee to enter into possession to collect the rents
or for rents to be paid directly to the mortgagee.
6. Mortgage Status; Waivers and Modifications. In the case of each
Mortgage Loan, except by a written instrument which has been delivered to the
Purchaser or its designee as a part of the related Mortgage File, (a) the
related Mortgage (including any amendments or supplements thereto included in
the related Mortgage File) has not been impaired, waived, modified, altered,
satisfied, canceled, subordinated or rescinded, (b) neither the related
Mortgaged Property nor any material portion thereof has been released from the
lien of such Mortgage and (c) the related Borrower has not been released from
its obligations under such Mortgage, in whole or in material part, in each such
event in a manner which would materially interfere with the benefits of the
security intended to be provided by such Mortgage.
7. Condition of Property; Condemnation. In the case of each Mortgage
Loan, except as set forth in an engineering report prepared by a third party
engineering consultant and included in the Servicing File and which has been the
delivered to the initial Controlling Class Representative, the related Mortgaged
Property is, to the Mortgage Loan Seller's knowledge, 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: (1) an escrow of funds or
insurance coverage or a letter of credit exists in an amount reasonably
estimated to be sufficient to effect the necessary repairs and maintenance; or
(2) such repairs and maintenance have been completed; or (3) such repairs and
maintenance are required to be completed and the amount reasonably estimated to
be sufficient to effect the necessary repairs and maintenance does not exceed 5%
of the original principal balance of the related Mortgage Loan). None of the
engineering reports referred to in the first sentence of this Paragraph 7 was
prepared more than 18 months prior to the Closing Date. As of the date hereof
the Mortgage Loan Seller has no knowledge of any proceeding pending or written
notice of any proceeding threatened for the condemnation of all or any material
portion of the Mortgaged Property securing any Mortgage Loan. To the Mortgage
Loan Seller's knowledge (based solely on surveys (if any) and/or the lender's
title policy (or, if such policy is not yet issued, a pro forma title policy, a
preliminary title policy with escrow instructions or a "marked up" commitment)
obtained in connection with
C-3
the origination of each Mortgage Loan), as of the date of the origination of
each Mortgage Loan, (a) all of the improvements on the related Mortgaged
Property considered material in determining the appraised value of the Mortgaged
Property at origination lay wholly within the boundaries and, to the extent in
effect at the time of construction, building restriction lines of such property,
except for encroachments that are insured against by the lender's title
insurance policy referred to in Paragraph 8 below or that do not materially and
adversely affect the value, marketability or current principal 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
or marketability 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 lender's title insurance policy or
a comparable form of lender's title insurance policy approved for use in the
applicable jurisdiction (the "Title Policy") (or, if such policy is yet to be
issued, by a pro forma policy, a preliminary title policy with escrow
instructions 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 any 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 and, to the
Mortgage Loan Seller's knowledge, no material claims have been made thereunder
and no claims have been paid thereunder. Neither the Mortgage Loan Seller, nor
to the Mortgage Loan Seller's knowledge, any other holder of the Mortgage Loan
has done, by act or omission, anything that would materially impair the coverage
under such Title Policy. Immediately following the transfer and assignment of
the related Mortgage Loan to the Trustee (including endorsement and delivery of
the related Mortgage Note to the Purchaser and recording of the related
Assignment of Mortgage in favor of Purchaser in the applicable real estate
records), such Title Policy (or, if it has yet to be issued, the coverage to be
provided thereby) will inure to the benefit of the Trustee without the consent
of or notice to the insurer. Such Title Policy contains no exclusion for, or it
affirmatively insures (unless the related Mortgaged Property is located in a
jurisdiction where such affirmative insurance is not available), the following:
(a) access to a public road; and (b) that if a survey was reviewed or prepared
in connection with the origination of the related Mortgage Loan, the area shown
on such survey is the same as the property legally described in the related
Mortgage.
9. No Holdback. The proceeds of each Mortgage Loan have been fully
disbursed (except in those cases where the full amount of the Mortgage Loan has
been disbursed but a portion thereof is being held in escrow or reserve accounts
pending the satisfaction of certain conditions relating to leasing, repairs or
other matters with respect to the related Mortgaged Property), and there is no
obligation for future advances with respect thereto.
10. Mortgage Provisions. The Mortgage Loan Documents for each Mortgage
Loan, together with applicable state law, contains customary and, subject to the
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
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limitation, foreclosure or similar proceedings (as applicable for the
jurisdiction where the related Mortgaged Property is located).
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 Mortgage Loan Seller, the
Purchaser or any transferee thereof except in connection with a trustee's sale
after default by the related Borrower or such customary fee, as may be payable,
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 Mortgage Loans
identified on Schedule C to this Agreement as Property Condition or Engineering
Report Loans, where the environmental assessment with respect to lead based
paint, asbestos containing materials, and radon gas was included in the Property
Condition or Engineering Report, with respect to each Mortgaged Property (a) an
environmental site assessment or an environmental site assessment update (each,
an "Environmental Assessment") was performed by an independent third party
environmental consultant with respect to each Mortgaged Property securing a
Mortgage Loan in connection with the origination of such Mortgage Loan, (b) a
report of each such assessment or update or, in the case of Property Condition
or Engineering Report Loan, the applicable Property Condition or Engineering
Report, if any (each, an "Environmental Report"), is dated no earlier than
twelve (12) months prior to the Closing Date and has been delivered to the
Purchaser, and (c) either (i) no such Environmental Report, if any, provides
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 material violation of applicable environmental laws
with respect to any known circumstances or conditions relating to the related
Mortgaged Property and the same has not been subsequently remediated in all
material respects, then one or more of the following are true: (A) a party or
parties not related to the related Borrower was identified as a responsible
party for such condition or circumstance, (B) the related Borrower was required
to provide additional security in an amount reasonably estimated by the Mortgage
Loan Seller 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 provided a "no further
action" letter or other evidence acceptable to the Mortgage Loan Seller in its
reasonable business judgment, that applicable federal, state or local
governmental authorities had no current intention of taking any action, and are
not requiring any action, in respect of such condition or circumstance, (D) such
conditions or circumstances were investigated further and based upon such
additional investigation, 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 by the Mortgage Loan Seller to be
sufficient for purposes of effecting such remediation, (G) the related Borrower
or other responsible party is currently taking such actions, if any, with
respect to such circumstances or conditions as have been required by the
applicable governmental regulatory authority or recommended by the environmental
site assessment, (H) the related Mortgaged Property is
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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 (I) a responsible party provided a guaranty or
indemnity to the related Borrower and/or the mortgagee 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, in the
Mortgage Loan Seller's sole discretion, an appropriate net worth, or the
financial ability to pay or perform all of its obligations under such guaranty
or indemnity, in light of such material violation of applicable environmental
laws with respect to such known circumstances or conditions relating to the
related Mortgaged Property. To the Mortgage Loan Seller's knowledge, 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 Mortgage Loan Seller in
connection with the issuance of any related environmental insurance policy, if
applicable, that render such Mortgaged Property in material violation of any
applicable environmental laws. The Mortgage Loan Seller has required the related
Borrower to provide a secured creditor impaired property insurance policy for
the Mortgaged Properties identified on Schedule C (Representation 12) to this
Agreement (provided that a Mortgaged Property will not be identified on Schedule
C (Representation 12) to this Agreement unless the subject secured creditor
impaired insurance property policy was obtained to specifically address an
environmental concern or in lieu of obtaining a Phase I environmental assessment
or conducting additional environmental testing); such policy has been issued by
an insurer with a claims paying ability rating or a financial strength rating,
as applicable, of no less than "AA" by each of S&P and Fitch; such policy is in
full force and effect and all premiums required to be paid in connection with
the issuance of such policy have been so paid; and either such policy, by its
terms, runs to the benefit of the holder of the related Mortgage Loan or,
subject to the Seller's compliance with this Agreement, such policy will be
assigned to the Trustee within a reasonable period of time following the Closing
Date. All Environmental Reports that were in the possession of the Mortgage Loan
Seller and that relate to a Mortgaged Property identified on Schedule C
(Representation 12) to this Agreement have been delivered to or disclosed to the
environmental insurance carrier issuing the related secured creditor impaired
property insurance policy prior to the issuance of such policy. Each secured
creditor impaired property insurance policy covering a Mortgaged Property
identified on Schedule C (Representation 12) to this Agreement is in an amount
either (1) at least equal to 125% of the outstanding principal balance of the
related Mortgage Loan or (2) equal to the lesser of cleanup costs and the
outstanding principal balance of the related Mortgage Loan and, in either case,
such policy has a term ending no sooner than the date which is five years after
the maturity date (or, in the case of an ARD Loan, the Anticipated Repayment
Date) of the Mortgage Loan to which it relates and either (x) does not provide
for a deductible or (y) provides for a deductible and the amount of that
deductible is held in escrow. The Mortgage for each Mortgage Loan encumbering
the related Mortgaged Property or other related loan documents require the
related Borrower to comply with all applicable federal, state and local
environmental laws and regulations.
13. Loan Document Status. Each Mortgage Note, Mortgage and 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, fraudulent
transfer,
C-6
reorganization 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. Except as set forth in the
immediately preceding sentence, there was no valid offset, defense, counter
claim or right of rescission available to the related Borrower with respect to
any of the related Mortgage Notes, Mortgages or other loan documents, including,
without limitation, any such valid offset, defense, counter claim or right based
on intentional fraud by Mortgage Loan Seller in connection with the origination
of the Mortgage Loan, that would deny the mortgagee the principal benefits
intended to be provided by the Mortgage Note, Mortgage or other loan documents.
14. Insurance. Except in certain cases, where tenants, having a net
worth of at least $50,000,000 or an investment grade credit rating and obligated
to maintain the insurance described in this paragraph, are allowed to
self-insure the related Mortgaged Properties, 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 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 securing a Mortgage Loan is the subject of a business interruption or
rent loss insurance policy providing coverage for at least twelve (12) months
(18 months for Mortgage Loans above $35 million) (or a specified dollar amount
which, in the reasonable judgement of the Mortgage Loan Seller, will cover no
less than twelve (12) months (18 months for Mortgage Loans above $35 million) of
rental income). Set forth on Schedule C (Representation 14) to this Agreement is
a list of those Mortgaged Properties as to which a tenant having a net worth of
at least $50,000,000 or an investment grade rating provided self-insurance, as
contemplated by the second preceding sentence, as of the date of origination of
the subject Mortgage Loan. All such hazard insurance policies described above
contain a standard mortgagee clause for the benefit of the holder of the related
Mortgage, its successors and assigns, as mortgagee as an additional insured in
the case of liability insurance policies or as a loss payee in the case of
property insurance policies, and are not terminable (nor may the amount of
coverage provided thereunder be reduced) without 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. Except under circumstances that
would be reasonably acceptable to a prudent commercial mortgage lender, the
Mortgage for each Mortgage Loan provides 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 the related Mortgaged Property or to the
payment of amounts due under such Mortgage Loan; provided that the related
Mortgage 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 Mortgage requires
that the Borrower or a tenant of the Borrower maintain insurance as
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described above or permits the mortgagee to require insurance or self-insurance
as described above, and permits the mortgagee to purchase such insurance at the
Borrower's expense if Borrower fails to do so or provides that the mortgagee has
the general right to cure defaults of the Borrower. Each Mortgaged Property is
also covered by comprehensive general liability insurance in an amount at least
equal to $1 million. If any material part of the improvements, exclusive of a
parking lot, located on a Mortgaged Property is in an area identified in the
Federal Register by the Federal Emergency Management Agency as having special
flood hazards, the related Borrower is required to maintain flood insurance in
respect thereof to the extent such flood insurance is available.
15. Taxes and Assessments. To the Mortgage Loan Seller's knowledge,
there are no delinquent property taxes or assessments or other outstanding
charges affecting any Mortgaged Property securing a Mortgage Loan that are a
lien of priority equal to or higher than the lien of the related Mortgage, or if
there are such delinquent charges or taxes, or if the appropriate amount of such
taxes or charges is being appealed or is otherwise in dispute, the unpaid taxes
or charges are covered by an escrow of funds or other security sufficient to pay
such tax or charge. For purposes of this representation and warranty, real
property taxes and assessments shall not be considered delinquent until the date
on which interest and/or penalties would be payable thereon.
16. Borrower Bankruptcy. To the Mortgage Loan Seller's knowledge, no
Borrower under a Mortgage Loan is a debtor in any state or federal bankruptcy,
insolvency or similar proceeding. To the Mortgage Loan Seller's knowledge, as of
the origination of the Mortgage Loan, none of (x) the nonrecourse carveout
guarantors or nonrecourse carveout indemnitors under the Mortgage Loan, (y) any
tenant with respect to more than 75% of the net rentable area at the related
Mortgaged Property that is an Affiliate of the Borrower or (z) the sole tenant
at the Mortgaged Property (in the case of this clause (z), if substantially all
of the Mortgaged Property is leased to a single tenant and the tenant was the
owner of the Mortgaged Property immediately prior to the origination of the
Mortgage Loan) was a debtor in any state or federal bankruptcy, insolvency or
similar proceeding.
17. Local Law Compliance. To the Mortgage Loan Seller's knowledge,
based upon any of a letter from governmental authorities, a legal opinion, an
architect's letter, a zoning consultant's report, 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 (i) the value of the related
Mortgaged Property as determined by the appraisal performed in connection with
the origination of such Mortgage Loan; or (ii) the principal use of the
Mortgaged Property as of the date of the origination of such Mortgage Loan). As
of the date of origination, with respect to each legal non-conforming use or
structure, the originator determined (based on either (x) any of a review of the
applicable zoning law, a letter from a governmental authority, a legal opinion,
an
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architect's letter, a zoning consultant's report, an endorsement to the related
title policy or a combination of the foregoing or (y) due diligence considered
reasonable by prudent commercial mortgage lenders in the lending area where the
subject Mortgaged Property is located) that if a casualty occurred at that time,
the Mortgaged Property could have been restored or repaired to such an extent
that the use or structure of the restored or repaired property would be
substantially the same use or structure, or law and ordinance insurance has been
obtained, or a holdback has been established and the Borrower is required to
take steps necessary to cause the Mortgaged Property to become a conforming use
or structure.
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:
(a) Such Ground Lease or a memorandum thereof has been submitted for
recording; 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;
(b) The related lessee's leasehold interest in the portion of the
related Mortgaged Property covered by such Ground Lease is not subject to any
liens or encumbrances superior to, or of equal priority with, the related
Mortgage, other than the related Fee Interest and Permitted Encumbrances;
(c) The Borrower's interest in such Ground Lease is assignable to, and
is thereafter further assignable by, the Purchaser upon notice to, but without
the consent of, the lessor thereunder (or, if such consent is required, it
either has been obtained or cannot be unreasonably withheld; provided that such
Ground Lease has not been terminated and all amounts owed thereunder have been
paid). If required by such Ground Lease, the lessor has received notice of the
lien of the related Mortgage in accordance with the provisions of such Ground
Lease;
(d) The related ground lessor has agreed to provide the holder of the
Mortgage Loan notice and the holder of such Mortgage Loan is permitted a
reasonable time to cure any default or breach by the lessee thereunder,
including such time as is necessary to gain possession of the Mortgaged
Property, by foreclosure or otherwise, if possession is necessary to effect such
cure, before the lessor thereunder may terminate such Ground Lease;
(e) In connection with the origination of such Mortgage Loan, the
related ground lessor provided an estoppel to the originator confirming that the
related Borrower was not then in default under such Ground Lease; such Ground
Lease 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 the mortgagee; the Mortgage Loan Seller has not received any
written notice of default under or termination of such Ground Lease; to the
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Mortgage Loan Seller's knowledge, there is no material default under such Ground
Lease and no condition that, but for the passage of time or giving of notice,
would result in a material default under the terms of such Ground Lease; and, to
the Mortgage Loan Seller's knowledge, such Ground Lease is in full force and
effect as of the Closing Date;
(f) Such Ground Lease has an original term (or an original term plus
one or more optional renewal terms, which, under all circumstances, may be
exercised, and will be enforceable, by the mortgagee if it takes possession of
such leasehold interest) that extends not less than 20 years beyond the stated
maturity of the related Mortgage Loan, or 10 years if such Mortgage Loan fully
or substantially amortizes by the stated maturity;
(g) Such Ground Lease requires the lessor to enter into a new lease
with a mortgagee upon termination of such Ground Lease as a result of a
rejection of such Ground Lease in a bankruptcy proceeding involving the related
Borrower, unless the mortgagee under such Mortgage Loan fails to cure a curable
default of the lessee under such Ground Lease following notice thereof from the
lessor;
(h) Under the terms of such Ground Lease and the related Mortgage,
taken together, any related casualty insurance proceeds 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;
(i) Such Ground Lease does not impose any restrictions on subletting
which would be viewed as commercially unreasonable by a prudent commercial
mortgage lender on a similar mortgaged property in the lending area where the
Mortgaged Property is located at the time of the origination of such Mortgage
Loan; and
(j) Such Ground Lease may not be amended or modified or any such
amendment or modification will not be effective against the mortgagee 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, provided that such mortgagee has provided the ground
lessor with notice of its lien in accordance with the terms of such Ground
Lease.
19. Qualified Mortgage. Such Mortgage Loan is a "qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code and Treasury regulation
section 1.860G-2(a) (but without regard to the rule in Treasury regulation
section 1.860G-2(f)(2)).
20. Advancement of Funds. In the case of each Mortgage Loan, neither
the Mortgage Loan Seller nor, to the Mortgage Loan 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 related lease), for the payment of any amount
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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 (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 Mortgage Loan Seller's knowledge, there
are no pending actions, suits, governmental investigations or proceedings 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, the principal benefit of the
security intended to be provided by the Mortgage Loan documents, the current
ability of the Mortgaged Property to generate net cash flow sufficient to
service such Mortgage Loan, or the current principal use of the Mortgaged
Property.
23. Other Mortgage Liens. 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
other underwriting criteria specified therein. To the Mortgage Loan Seller's
knowledge, except for cases involving Cross-Collateralized 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. Each of the related Mortgage Loan Documents requires the Borrower to
pay all reasonable costs and expenses related to obtaining consent to an
encumbrance.
24. No Mechanics' Liens. As of the date of origination and, to the
Mortgage Loan Seller's knowledge, as of the Closing Date, 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, to the Mortgage Loan Seller's
knowledge, 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.
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26. Licenses and Permits. To the Mortgage Loan 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 Borrower was in possession of all material
licenses, permits and franchises required by applicable law for the ownership
and operation of the related Mortgaged Property as it was then operated or such
material licenses, permits and franchises have otherwise been issued, and, as of
the Cut-Off Date, the Mortgage Loan Seller has no written notice that the
related Borrower was not in possession of such licenses, permits and franchises
or that such licenses, permits and franchises have not otherwise been issued.
27. Cross-Collateralization. No Mortgage Loan is cross-collateralized
with any loan which is outside the Mortgage Pool.
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
U.S. Treasury securities in connection with a defeasance of the related Mortgage
Loan; provided that the Mortgage Loans that are Cross-Collateralized Mortgage
Loans and the other individual Mortgage Loans secured by multiple parcels may
require the respective mortgagee(s) to grant releases of portions of the related
Mortgaged Property or the release of one or more related Mortgaged Properties
upon (i) the satisfaction of certain legal and underwriting requirements, (ii)
the payment of a release price and, if so provided in the related Mortgage Loan
Documents, prepayment consideration in connection therewith or (iii) the
substitution of real property collateral; and provided, further, that any
Mortgage Loan may permit the unconditional release of one or more unimproved
parcels of land to which the Mortgage Loan Seller did not give any material
value in underwriting the Mortgage Loan. With respect to any full or partial
release or substitution of collateral, as contemplated by the provisos to the
immediately preceding sentence, either: (a) such release or substitution of
collateral (i) would not constitute a "significant modification" of the subject
Mortgage Loan within the meaning of Treasury Regulations Section 1.860G-2(b)(2)
and (ii) would not cause the subject Mortgage Loan to fail to be a "qualified
mortgage" within the meaning of Section 860G(a)(3)(A) of the Code; or (b) the
mortgagee or servicer can, in accordance with the related Mortgage Loan
Documents, condition such release or substitution of collateral on the related
Borrower's delivery of an opinion of tax counsel to the effect specified in the
immediately preceding clause (a).
29. Defeasance. If such Mortgage Loan contains a provision for any
defeasance of mortgage collateral, such Mortgage Loan either (A) (1) permits
defeasance no earlier than two years after the Closing Date, (2) permits
defeasance only with substitute collateral constituting "government securities"
within the meaning of Treasury Regulations Section 1.860G-2(a)(8)(i), in an
amount sufficient to make all scheduled payments under the Mortgage Note and (3)
has been transferred by the Mortgage Loan Seller with the intent that the
defeasance provision not be utilized (x) for any reason other than to facilitate
the disposition of
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the Mortgaged Property or any other customary commercial transaction or (y) as a
part of an arrangement to collateralize a REMIC offering with obligations that
are not real estate mortgages or (B) requires that a legal opinion or opinions
be delivered with respect to the defeasance that states subject to customary
assumptions and qualifications that the holder of the such Mortgage Loan has a
first priority perfected security interest in the defeasance collateral and that
the defeasance will not cause the Trust to fail to qualify as a REMIC as defined
in the REMIC Provisions (the "Legal Opinion"). The related mortgage loan
documents enable the lender to charge the Borrower for the expenses associated
with permitting a defeasance and provide for the following items (or otherwise
contain provisions pursuant to which the holder can require such items): (a) an
accountant's certification as to the adequacy of the defeasance collateral to
make payments under the related Mortgage Loan for the remainder of its term, (b)
the Legal Opinion, and (c) a letter or other written evidence from the Rating
Agencies to the effect that the defeasance will not result in the withdrawal,
downgrade or qualification of the ratings assigned to the Certificates.
30. Fixed Rate Loan. Each Mortgage Loan bears interest at a rate that
remains fixed throughout the remaining term of such Mortgage Loan, except in the
case of an ARD Loan after its Anticipated Repayment Date and except for the
imposition of a default rate.
31. Inspection. Each related Mortgaged Property was inspected by or on
behalf of the related originator or an affiliate during the 12 month period
prior to the related origination date.
32. No Material Default. To the Mortgage Loan Seller's knowledge, there
exists no material default, breach, violation or event of acceleration under the
Mortgage Note or Mortgage for any Mortgage Loan and no event has occurred which,
with the passing of time or giving of notice and the expiration of any grace or
cure period, would constitute such a material default or breach; provided,
however, that this representation and warranty does not cover any default,
breach, violation or event of acceleration that specifically pertains to or
arises out of the subject matter otherwise covered by any other representation
and warranty made by the Mortgage Loan Seller in this Exhibit C. Neither the
Mortgage Loan Seller nor any servicer on behalf of the Mortgage Loan Seller has
accelerated the Mortgage Loan or commenced judicial or non-judicial foreclosure
proceedings with respect to the Mortgage Loan.
33. Due-on-Sale. Except for transfers to specific parties that are
identified and pre-approved in the Mortgage Loan documents and except with
respect to certain transfers by reason of family and estate planning and/or a
substitution or release of collateral within the parameters of Paragraph 28
above, each Mortgage contains a "due on sale" clause which expressly or
effectively provides for the acceleration of the payment of the unpaid principal
balance and accrued interest of the related Mortgage Loan if, without the prior
written consent of the holder of such Mortgage and/or the satisfaction of
specified criteria set forth in the related Mortgage Loan documents, the
property subject to the Mortgage or any material portion thereof, or any
controlling interest in the Borrower is directly or indirectly transferred or
sold; provided, however, that certain Mortgage Loans provide a mechanism for the
assumption of the loan by a third party upon the Borrower's satisfaction of
certain conditions precedent, and upon payment of a transfer fee, if any, or
transfer of interests in the Borrower or constituent entities of the
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Borrower to a third party or parties related to the Borrower upon the Borrower's
satisfaction of certain conditions precedent.
34. Single Purpose Entity. The Borrower on each Mortgage Loan with a
Cut-off Date Balance of $10,000,000 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 Mortgaged 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 Mortgaged 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.
35. Whole Loan. Each Mortgage loan is a whole loan and not a
participation interest in a mortgage loan.
36. Security Interests in Hospitality Properties. 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 and enforceable (subject to the exceptions set forth in Paragraph
13 above) first priority 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
Mortgage Loan Seller) executed and delivered in favor of the Trustee constitutes
a legal, valid and binding assignment thereof from the relevant assignor to the
Trustee.
37. Prepayment Premiums. Prepayment Premiums payable with respect to
each Mortgage Loan, if any, constitute "customary prepayment penalties" within
meaning of Treasury Regulation Section 1.860G-1(b)(2).
38. [RESERVED]
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39. [RESERVED]
40. Recourse. 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, or a natural
person, for damages sustained in connection with the Borrower's fraud, material
misrepresentation or misappropriation or misapplication of rents, 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, or a natural person,
has agreed to indemnify the mortgagee for damages resulting from violations of
any applicable environmental covenants.
41. Assignment of Collateral. There is no material collateral securing
any Mortgage Loan that has not been assigned to the Purchaser.
42. Fee Simple or Leasehold Interests. The interest of the related
Borrower in the Mortgaged Property securing each Mortgage Loan includes a fee
simple and/or leasehold estate or interest in real property and the improvements
thereon.
43. Escrows. All escrow deposits (including capital improvements,
environmental remediation reserves and other reserve deposits, if any) 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 Mortgage Loan Seller or its agents (which shall include
the applicable Master Servicer). All such escrow deposits which are required for
the administration and servicing of such Mortgage Loan are conveyed hereunder to
the Purchaser. Any and all material requirements under each Mortgage Loan as to
completion of any material improvements and as to disbursement of any funds
escrowed for such purpose, which requirements were to have been complied with on
or before the Closing Date, 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.
44. Operating Statements. In the case of each Mortgage Loan, the
related Mortgage Loan Documents require the related Borrower, in some cases at
the request of the lender, to provide to the holder of such Mortgage Loan
operating statements and rent rolls not less frequently than quarterly and
annually and financial statements of the Borrower not less frequently than
annually (except if the Mortgage Loan has an outstanding principal balance of
less than or equal to $3,500,000 as of the Cut-off Date or the related Mortgaged
Property has only one tenant, in either of which cases the Mortgage Loan
Documents require the Borrower, in some cases at the request of the lender, to
provide to the holder of such Mortgage Loan operating statements and (if there
is more than one tenant) rent rolls and/or financial statements of the Borrower
annually), and such other information as may be required therein.
45. Appraisals. An appraisal of the related Mortgaged Property was
conducted in connection with the origination of the Mortgage Loan, which
appraisal is signed by an appraiser, who, to the Mortgage Loan Seller's
knowledge, had no interest, direct or indirect,
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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; in connection with the origination of the Mortgage Loan,
each appraiser has represented in such appraisal or in a supplemental letter
that the appraisal satisfies the requirements of the "Uniform Standards of
Professional Appraisal Practice" as adopted by the Appraisal Standards Board of
the Appraisal Foundation.
46. No Capital Contributions. The Mortgage Loan Seller has no
obligation to make any capital contributions to the related Borrower under the
Mortgage Loan.
47. Grace Periods. The related Mortgage or Mortgage Note provides a
grace period for Monthly Payments no longer than ten (10) days from the
applicable Due Date.
48. Access Routes. Based solely on surveys, title insurance reports,
the Title Policy, the engineering report, the appraisal and/or other relevant
documents included in the Mortgage File, at the time of origination of the
Mortgage Loan, the Mortgaged Property had access to a public road.
49. 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, in
which case the Mortgage Loan requires the Borrower to escrow an amount
sufficient to pay taxes for the existing tax parcel of which the Mortgaged
Property is a part.
50. Loan Servicing. The servicing practices used with respect to each
Mortgage Loan have been in all material respects legal, proper, and prudent.
51. Terrorism Insurance. With respect to each Mortgage Loan that has a
Stated Principal Balance as of the Cut-off Date that is greater than or equal to
$20,000,000, the related all risk insurance policy and business interruption
policy do not specifically exclude acts of terrorism from coverage. With respect
to each other Mortgage Loan, the related all risk insurance policy and business
interruption policy did not as of the date of origination of the Mortgage Loan,
and, to the Mortgage Loan Seller's knowledge, does not as of the date hereof,
specifically exclude acts of terrorism from coverage. With respect to each of
the Mortgage Loans, the related Mortgage Loan documents do not expressly waive
or prohibit the mortgagee from requiring coverage for acts of terrorism or
damages related thereto, except to the extent that any right to require such
coverage may be limited by commercially reasonable availability, or as otherwise
indicated on Schedule C to this Agreement.
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CIBC EXCEPTIONS LIST - 2003-PWR1
--------------------------------
SCHEDULE C TO MORTGAGE LOAN PURCHASE AGREEMENT
----------------------------------------------
--------------------------------------------------------------------------------
Representation # Description of Exception
--------------------------------------------------------------------------------
4 LOAN NO. 16 (University Tower) - An unimproved 0.35 acre
portion of the 5.883 acre fee parcel encumbered by the
related Mortgage is subject to a ground lease to an unrelated
third party. Under this ground lease, the lessee has an
option to purchase the 0.35 acre leased premises on September
30, 2099. The 0.35 acre parcel is not under the "footprint"
of the University Tower building. The title policy in
connection with this Mortgage Loan affirmatively insures
that, pursuant to the terms of the ground lease, the lessee
does not have the right to purchase the leased premises prior
to September 30, 2099.
--------------------------------------------------------------------------------
12 A "secured creditor impaired property" insurance policy,
meeting the requirements set forth in Representation 12, is
in effect with respect to each of the following Mortgage
Loans:
Loan No. 26 (WP Xxxxx Industrial Portfolio)
Loan No. 37 (1300 East Joppa)
Loan No. 49 (310 State Highway)
--------------------------------------------------------------------------------
28 LOAN NO. 37 (1300 East Joppa Road) - The Mortgage provides
that the related Mortgagor may obtain a release of a portion
of the related Mortgaged Property, which as of the date of
origination of the Mortgage Loan was improved with a vacant
warehouse building, without partial defeasance and without
payment of a release price, upon satisfaction of various
specified criteria (including, without limitation, evidence
of compliance with zoning and satisfactory plans for
separation of tax parcels). The Seller did not give the
release parcel any value in the underwriting of the Mortgage
Loan. The release parcel was not under lease, and thus not
income-generating, at the time of underwriting and
origination of this Mortgage Loan.
--------------------------------------------------------------------------------
33 LOAN NO. 26 (WP Xxxxx Industrial Portfolio) - The related
Mortgage Loan Documents provide the sale or transfer of stock
in the following affiliates of the Mortgagor shall not
trigger the "due on sale" clause in such Mortgage Loan
Documents so long as the applicable company whose stock is
being sold or transferred is required to file, with respect
to the equity interests of such company, periodic reports
with the Securities and Exchange Commission under Section 13
or Section 15(d) of the Securities Exchange Act of 1934, as
amended: Corporate Property Associates 12 Incorporated,
Corporate Property Associates 14 Incorporated, Corporate
Property Associates 15 Incorporated, Xxxxx Institutional
Properties or W.P. Xxxxx & Co. LLC.
LOAN NO. 65 (Colorado Marketplace) - At the origination of
the Mortgage Loan, the related Mortgagor was one
single-purpose entity (the "Original
--------------------------------------------------------------------------------
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--------------------------------------------------------------------------------
Colorado Marketplace Borrower"). Immediately upon the closing
of the Mortgage Loan, the Original Colorado Marketplace
Borrower conveyed a portion of its interests in the Mortgaged
Property to 9 additional persons (the "Additional Colorado
Marketplace Borrowers"), so that after giving effect to such
transfers the related Mortgaged Property was owned by 10
tenants-in-common. Each of the Additional Colorado
Marketplace Borrowers assumed, jointly and severally with the
Original Colorado Marketplace Borrower, the obligations of
the Original Colorado Marketplace Borrower under the related
Mortgage Loan Documents. The related Mortgage Loan Documents
permit future transfers of interests in the property to
additional tenants-in-common, subject to the following
restrictions: (a) in no event shall the total number of
tenants-in-common, including the Original Colorado
Marketplace Borrower, exceed 12, (b) each additional
tenant-in-common is subject to the holder of the Mortgage
Loan's review and approval as to background and credit, in
accordance with such Mortgage Loan Documents, (c) each
additional tenant-in-common is required to assume, jointly
and severally with the Original Colorado Marketplace Borrower
and the Additional Colorado Marketplace Borrowers, the
obligations of the Mortgagor under the related Mortgage Loan
Documents, and (d) the persons currently controlling the
Original Colorado Marketplace Borrower and responsible for
management of the Mortgaged Property shall remain in control
of the Original Colorado Marketplace Borrower and of the
management of the related Mortgaged Property after each such
transfer.
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34 LOAN XX. 00 (Xxxxxxxxx xx Xxxxxx Xxx) - The related Mortgagor
was not "formed solely for the purpose of owning and
operating one or more of the Mortgage Properties". Prior to
the closing of the related Mortgage Loan, the Mortgagor also
owned the adjacent "sales center" parcel utilized in
connection with the marketing of both this Mortgaged Property
and other adjacent properties owned by affiliates of the
Mortgagor. In connection with the origination of the related
Mortgage Loan, the sales center parcel was conveyed to
another entity, so that at closing the related Mortgagor
owned only the Mortgaged Property.
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40 LOAN NO. 49 (310 State Highway 35) - The indemnity for
damages resulting from violation of any applicable
environmental covenants is provided only by the related
Mortgagor, and not by any principal or other entity or
person. However, a secured creditor impaired property
insurance policy was obtained with respect to the related
Mortgaged Property.
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44 ALL MORTGAGE LOANS BEING SOLD BY CIBC INC. - The Mortgage
Loan Documents generally require rent rolls to be provided
annually, not quarterly. However, operating statements are
generally required on a quarterly basis.
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51 LOAN XX. 00 (Xxxxxxxxxx Xxxxxx & Xxxxxxxxxxx Xxxxxx
Xxxxxxxxx) - The related all risk policy and business
interruption policy excludes from coverage losses resulting
from acts of terrorism.
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X-0
XXXXXXX X-0
FORM OF CERTIFICATE OF THE SECRETARY OR AN ASSISTANT SECRETARY
--------------------------------------------------------------
OF THE MORTGAGE LOAN SELLER
---------------------------
X-0-0
XXXXXXX X-0
FORM OF CERTIFICATE OF THE MORTGAGE LOAN SELLER
-----------------------------------------------
CERTIFICATE OF MORTGAGE LOAN SELLER
In connection with the execution and delivery by CIBC Inc. ("CIBC") of,
and the consummation of the various transactions contemplated by, that certain
Mortgage Loan Purchase Agreement dated as of March 7, 2003 (the "Mortgage Loan
Purchase Agreement") among CIBC as seller and Prudential Securities Secured
Financing Corporation ("PSSFC") as purchaser, the undersigned hereby certifies
that (i) except as previously disclosed to the Purchaser in writing, the
representations and warranties of CIBC in or made pursuant to Section 4(a) of
the Mortgage Loan Purchase Agreement are true and correct in all material
respects at and as of the date hereof with the same effect as if made on the
date hereof, (ii) CIBC has, in all material respects, complied with all the
agreements and satisfied all the conditions on its part required under the
Mortgage Loan Purchase Agreement to be performed or satisfied at or prior to the
date hereof, and (iii) since the date of the Mortgage Loan Purchase Agreement,
there will not have been, immediately prior to the transfer of the Mortgage
Loans pursuant to the Mortgage Loan Purchase Agreement, any material adverse
change in the financial condition of CIBC. Capitalized terms used but not
defined herein shall have the respective meanings assigned to them in the
Mortgage Loan Purchase Agreement.
Certified this 20th day of March, 2003.
CIBC INC.
By:
-------------------------
Name:
Title:
D-2-1
EXHIBIT D-3A
FORM OF OPINION PURSUANT TO SECTION 7(VI)
D-3A-1
EXHIBIT D-3B
FORM OF OPINION PURSUANT TO SECTION 7(VII)
D-3B-1
