EXHIBIT 10.2
Form of Mortgage Loan
Purchase Agreement
for Commercial Mortgage
Pass-Through Certificates
MORTGAGE LOAN PURCHASE AGREEMENT
Mortgage Loan Purchase Agreement (this "Agreement"), dated as of
________, 20__, between ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc. (the "Seller"), and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital I Inc. (the "Purchaser").
The Seller agrees to sell, and the Purchaser agrees to purchase,
certain mortgage loans listed on Exhibit 1 hereto (the "Mortgage Loans") as
described herein. The Purchaser will convey the Mortgage Loans to a trust (the
"Trust") created pursuant to a Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement"), dated as of ________, 200__, between the Purchaser, as
depositor, [Name of Master Servicer], as Master Servicer, [Name of Special
Servicer], as Special Servicer and [Name of Trustee], as Trustee, Paying Agent
and Certificate Registrar. In exchange for the Mortgage Loans and certain other
mortgage loans (the "Other Mortgage Loans") to be purchased by the Purchaser,
the Trust will issue to the Depositor pass-through certificates to be known as
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital I Inc., Commercial Mortgage Pass-Through Certificates,
Series 20__-_____ (the "Certificates"). The Certificates will be issued pursuant
to the Pooling and Servicing Agreement.
Capitalized terms used herein but not defined herein shall have the
meanings assigned to them in the Pooling and Servicing Agreement.
The Class [A-1], Class [A-1A], Class [A-2], Class [A-3-1FL], Class
[A-3-1], Class [A-3-2], Class [A-AB], Class [A-4A], Class [A-4B], Class [X-2],
Class [A-J], Class [B], Class [C] and Class [D] Certificates (the "Public
Certificates") will be sold by the Purchaser to [▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
Incorporated] [and] [names of other underwriters]. (collectively, the
"Underwriters"), pursuant to an Underwriting Agreement, between the Purchaser
and the Underwriters, dated ________, 20___ (the "Underwriting Agreement"), and
the Class [X-1], Class [X-Y], Class [E], Class [F], Class [G], Class [H], Class
[J], Class [K], Class [L], Class [M], Class [N], Class [O], Class [P], Class
[EI], Class [R-I], Class [R-II] and Class [R-III] Certificates (collectively,
the "Private Certificates") will be sold by the Purchaser to [▇▇▇▇▇▇ ▇▇▇▇▇▇▇ &
Co. Incorporated] (the "Initial Purchaser") pursuant to a Certificate Purchase
Agreement, between the Purchaser and the Initial Purchaser, dated ________,
20___ (the "Certificate Purchase Agreement"). The Underwriters will offer the
Public Certificates for sale publicly pursuant to a Prospectus dated ________,
20___, as supplemented by a Prospectus Supplement dated ________, 20___
(together, the "Prospectus Supplement"), and the Initial Purchaser will offer
the Private Certificates (other than the Class R-I, Class R-II and Class R-III
Certificates) for sale in transactions exempt from the registration requirements
of the Securities Act of 1933 pursuant to a Private Placement Memorandum, dated
as of ________, 20___ (the "Memorandum").
In consideration of the mutual agreements contained herein, the
Seller and the Purchaser hereby agree as follows:
Section 1. Agreement to Purchase. The Seller agrees to sell, and the
Purchaser agrees to purchase, on a servicing released basis, the Mortgage Loans
identified on the
schedule (the "Mortgage Loan Schedule") annexed hereto as Exhibit 1, as such
schedule may be amended to reflect the actual Mortgage Loans accepted by the
Purchaser pursuant to the terms hereof. The Cut-Off Date with respect to each
Mortgage Loan is such Mortgage Loan's Due Date in the month of ________ 20___.
The Mortgage Loans and the Other Mortgage Loans will have an aggregate principal
balance as of the close of business on the Cut-Off Date, after giving effect to
any payments due on or before such date, whether or not received, of
$____________. The sale of the Mortgage Loans shall take place on ________,
20___ or such other date as shall be mutually acceptable to the parties hereto
(the "Closing Date"). The purchase price to be paid by the Purchaser for the
Mortgage Loans shall equal the amount set forth as such purchase price on
Exhibit 3 hereto. The purchase price shall be paid to the Seller by wire
transfer in immediately available funds on the Closing Date.
On the Closing Date, the Purchaser will assign to the Trustee
pursuant to the Pooling and Servicing Agreement all of its right, title and
interest in and to the Mortgage Loans and its rights under this Agreement (to
the extent set forth in Section 15), and the Trustee shall succeed to such
right, title and interest in and to the Mortgage Loans and the Purchaser's
rights under this Agreement (to the extent set forth in Section 15).
Section 2. Conveyance of Mortgage Loans. Effective as of the Closing
Date, subject only to receipt of the consideration referred to in Section 1
hereof and the satisfaction of the conditions specified in Sections 6 and 7
hereof, the Seller does hereby transfer, assign, set over and otherwise convey
to the Purchaser, without recourse, all the right, title and interest of the
Seller, with the understanding that a Servicing Rights Purchase and Sale
Agreement, dated ________, 20___, will be executed by the Seller and the Master
Servicer, in and to the Mortgage Loans identified on the Mortgage Loan Schedule
as of the Closing Date. The Mortgage Loan Schedule, as it may be amended from
time to time on or prior to the Closing Date, shall conform to the requirements
of this Agreement and the Pooling and Servicing Agreement. In connection with
such transfer and assignment, the Seller shall deliver to or on behalf of the
Trustee, on behalf of the Purchaser, on or prior to the Closing Date, the
Mortgage Note (as described in clause (a) below) for each Mortgage Loan and on
or prior to the fifth Business Day after the Closing Date, limited powers of
attorney substantially in the form attached hereto as Exhibit 5 in favor of the
Trustee, the Master Servicer and the Special Servicer to empower the Trustee,
the Master Servicer and, in the event of the failure or incapacity of the
Trustee and the Master Servicer, the Special Servicer, to submit for recording,
at the expense of the Seller, any mortgage loan documents required to be
recorded as described in the Pooling and Servicing Agreement and any intervening
assignments with evidence of recording thereon that are required to be included
in the Mortgage Files (so long as original counterparts have previously been
delivered to the Trustee). The Seller agrees to reasonably cooperate with the
Trustee, the Master Servicer and the Special Servicer in connection with any
additional powers of attorney or revisions thereto that are requested by such
parties for purposes of such recordation. The parties hereto agree that no such
power of attorney shall be used with respect to any Mortgage Loan by or under
authorization by any party hereto except to the extent that the absence of a
document described in the second preceding sentence with respect to such
Mortgage Loan remains unremedied as of the earlier of (i) the date that is 180
days following the delivery of notice of such absence to the Seller, but in no
event earlier than 18 months from the Closing Date, and (ii) the date (if any)
on which such Mortgage Loan becomes a Specially Serviced Mortgage Loan. The
Trustee shall submit such documents for recording, at the Seller's expense,
after the periods
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set forth above; provided, however, the Trustee shall not submit such
assignments for recording if the Seller produces evidence that it has sent any
such assignment for recording and certifies that the Seller is awaiting its
return from the applicable recording office. In addition, not later than the
30th day following the Closing Date, the Seller shall deliver to or on behalf of
the Trustee each of the remaining documents or instruments specified below (with
such exceptions and additional time periods as are permitted by this Section)
with respect to each Mortgage Loan (each, a "Mortgage File"). (The Seller
acknowledges that the term "without recourse" does not modify the duties of the
Seller under Section 5 hereof.)
All Mortgage Files, or portions thereof, delivered prior to the
Closing Date are to be held by or on behalf of the Trustee in escrow on behalf
of the Seller at all times prior to the Closing Date. The Mortgage Files shall
be released from escrow upon closing of the sale of the Mortgage Loans and
payments of the purchase price therefor as contemplated hereby. The Mortgage
File for each Mortgage Loan shall contain the following documents:
(a) The original Mortgage Note bearing all intervening endorsements,
endorsed in blank or endorsed "Pay to the order of _______________, as Trustee
for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital I Inc., Commercial Mortgage Pass-Through
Certificates, Series 20___-_____, without recourse, representation or warranty"
or if the original Mortgage Note is not included therein, then a lost note
affidavit and indemnity, with a copy of the Mortgage Note attached thereto;
(b) The original Mortgage, with evidence of recording thereon, and,
if the Mortgage was executed pursuant to a power of attorney, a certified true
copy of the power of attorney certified by the public recorder's office, with
evidence of recording thereon (if recording is customary in the jurisdiction in
which such power of attorney was executed), or certified by a title insurance
company or escrow company to be a true copy thereof; provided that if such
original Mortgage cannot be delivered with evidence of recording thereon on or
prior to the 90th day following the Closing Date because of a delay caused by
the public recording office where such original Mortgage has been delivered for
recordation or because such original Mortgage has been lost, the Seller shall
deliver or cause to be delivered to the Trustee a true and correct copy of such
Mortgage, together with (i) in the case of a delay caused by the public
recording office, an Officer's Certificate (as defined below) of the Seller
stating that such original Mortgage has been sent to the appropriate public
recording official for recordation or (ii) in the case of an original Mortgage
that has been lost after recordation, a certification by the appropriate county
recording office where such Mortgage is recorded that such copy is a true and
complete copy of the original recorded Mortgage;
(c) The originals of all agreements modifying a Money Term or other
material modification, consolidation and extension agreements, if any, with
evidence of recording thereon (if applicable) or if any such original
modification, consolidation or extension agreement has been delivered to the
appropriate recording office for recordation and either has not yet been
returned on or prior to the 90th day following the Closing Date with evidence of
recordation thereon or has been lost after recordation, a true copy of such
modification, consolidation or extension certified by the Seller together with
(i) in the case of a delay caused by the public recording office, an Officer's
Certificate of the Seller stating that such original modification, consolidation
or extension agreement has been dispatched or sent to the appropriate public
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recording official for recordation or (ii) in the case of an original
modification, consolidation or extension agreement that has been lost after
recordation, a certification by the appropriate county recording office where
such document is recorded that such copy is a true and complete copy of the
original recorded modification, consolidation or extension agreement, and the
originals of all assumption agreements, if any;
(d) An original Assignment of Mortgage for each Mortgage Loan, in
form and substance acceptable for recording (except for recording information
not yet available if the instrument being recorded has not been returned from
the applicable recording office), signed by the holder of record in blank or in
favor of "______________, as Trustee for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital I Inc.,
Commercial Mortgage Pass-Through Certificates, Series 20___-_____";
(e) Originals of all intervening assignments of Mortgage, if any,
with evidence of recording thereon or, if such original assignments of Mortgage
have been delivered to the appropriate recorder's office for recordation,
certified true copies of such assignments of Mortgage certified by the Seller,
or in the case of an original blanket intervening assignment of Mortgage
retained by the Seller, a copy thereof certified by the Seller or, if any
original intervening assignment of Mortgage has not yet been returned on or
prior to the 90th day following the Closing Date from the applicable recording
office or has been lost, a true and correct copy thereof, together with (i) in
the case of a delay caused by the public recording office, an Officer's
Certificate of the Seller stating that such original intervening assignment of
Mortgage has been sent to the appropriate public recording official for
recordation or (ii) in the case of an original intervening assignment of
Mortgage that has been lost after recordation, a certification by the
appropriate county recording office where such assignment is recorded that such
copy is a true and complete copy of the original recorded intervening assignment
of Mortgage;
(f) If the related Assignment of Leases is separate from the
Mortgage, the original of such Assignment of Leases with evidence of recording
thereon or certified by a title insurance company or escrow company to be a true
copy thereof; provided that if such Assignment of Leases has not been returned
on or prior to the 90th day following the Closing Date because of a delay caused
by the applicable public recording office where such Assignment of Leases has
been delivered for recordation or because such original Assignment of Leases has
been lost, the Seller shall deliver or cause to be delivered to the Trustee a
true and correct copy of such Assignment of Leases submitted for recording,
together with, (i) in the case of a delay caused by the public recording office,
an Officer's Certificate (as defined below) of the Seller stating that such
Assignment of Leases has been sent to the appropriate public recording official
for recordation or (ii) in the case of an original Assignment of Leases that has
been lost after recordation, a certification by the appropriate county recording
office where such Assignment of Leases is recorded that such copy is a true and
complete copy of the original recorded Assignment of Leases, in each case
together with an original assignment of such Assignment of Leases, in recordable
form (except for recording information not yet available if the instrument being
recorded has not been returned from the applicable recording office), signed by
the holder of record in favor of "______________, as Trustee for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Capital I Inc., Commercial Mortgage Pass-Through Certificates, Series
20___-_____," which assignment may be effected in the related Assignment of
Mortgage;
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(g) The original or a copy of each guaranty, if any, constituting
additional security for the repayment of such Mortgage Loan;
(h) The original Title Insurance Policy, or in the event such
original Title Insurance Policy has not been issued, a binder, actual
"marked-up" title commitment, pro forma policy, or an agreement to provide any
of the foregoing pursuant to binding escrow instructions executed by the title
company or its authorized agent with the original Title Insurance Policy to
follow within 180 days of the Closing Date, or a copy of any of the foregoing
certified by the title company with the original Title Insurance Policy to
follow within 180 days of the Closing Date, or a preliminary title report with
the original Title Insurance Policy to follow within 180 days of the Closing
Date;
(i) (A) Copies of UCC financing statements (together with all
assignments thereof) filed in connection with a Mortgage Loan and (B) UCC-2 or
UCC-3 financing statements assigning such UCC financing statements to the
Trustee delivered in connection with the Mortgage Loan;
(j) Copies of the related ground lease(s), if any, to any Mortgage
Loan where the Mortgagor is the lessee under such ground lease and there is a
lien in favor of the mortgagee in such lease.
(k) Copies of any loan agreements, lock-box agreements and
intercreditor agreements, if any, related to any Mortgage Loan;
(l) Either (A) the original of each letter of credit, if any,
constituting additional collateral for such Mortgage Loan (other than letters of
credit representing tenant security deposits which have been collaterally
assigned to the lender), which shall be assigned and delivered to the Trustee on
behalf of the Trust with a copy to be held by the Primary Servicer (or the
Master Servicer), and applied, drawn, reduced or released in accordance with
documents evidencing or securing the applicable Mortgage Loan, the Pooling and
Servicing Agreement and the Primary Servicing Agreement or (B) the original of
each letter of credit, if any, constituting additional collateral for such
Mortgage Loan (other than letters of credit representing tenant security
deposits which have been collaterally assigned to the lender), which shall be
held by the applicable Primary Servicer (or the Master Servicer) on behalf of
the Trustee, with a copy to be held by the Trustee, and applied, drawn, reduced
or released in accordance with documents evidencing or securing the applicable
Mortgage Loan, the Pooling and Servicing Agreement and the Primary Servicing
Agreement (it being understood that the Seller has agreed (a) that the proceeds
of such letter of credit belong to the Trust, (b) to notify, on or before the
Closing Date, the bank issuing the letter of credit that the letter of credit
and the proceeds thereof belong to the Trust, and to use reasonable efforts to
obtain within 30 days (but in any event to obtain within 90 days) following the
Closing Date, an acknowledgement thereof by the bank (with a copy of such
acknowledgement to be sent to the Trustee) and (c) to indemnify the Trust for
any liabilities, charges, costs, fees or other expenses accruing from the
failure of the Seller to assign the letter of credit hereunder). In the case of
clause (B) above, any letter of credit held by the applicable Primary Servicer
(or Master Servicer) shall be held in its capacity as agent of the Trust, and if
the applicable Primary Servicer (or Master Servicer) sells its rights to service
the applicable Mortgage Loan, the applicable Primary Servicer (or Master
Servicer) has agreed to assign the
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applicable letter of credit to the Trust or at the direction of the Special
Servicer to such party as the Special Servicer may instruct, in each case, at
the expense of the applicable Primary Servicer (or Master Servicer). The
applicable Primary Servicer (or Master Servicer) has agreed to indemnify the
Trust for any loss caused by the ineffectiveness of such assignment;
(m) The original or a copy of the environmental indemnity agreement,
if any, related to any Mortgage Loan;
(n) Copies of third-party management agreements, if any, for all
hotels and for such other Mortgaged Properties securing Mortgage Loans with a
Cut-Off Date principal balance equal to or greater than $20,000,000;
(o) The original of any Environmental Insurance Policy or, if the
original is held by the related Mortgagor, a copy thereof;
(p) A copy of any affidavit and indemnification agreement in favor
of the lender;
(q) With respect to hospitality properties, a copy of any franchise
agreement, franchise comfort letter and applicable assignment or transfer
documents;
"Officer's Certificate" shall mean a certificate signed by one or
more of the Chairman of the Board, any Vice Chairman, the President, any Senior
Vice President, any Vice President, any Assistant Vice President, any Treasurer
or any Assistant Treasurer.
The Assignment of Mortgage, intervening assignments of Mortgage and
assignment of Assignment of Leases referred to in clauses (d), (e) and (f) may
be in the form of a single instrument assigning the Mortgage and the Assignment
of Leases to the extent permitted by applicable law. To avoid the unnecessary
expense and administrative inconvenience associated with the execution and
recording or filing of multiple assignments of mortgages, assignments of leases
(to the extent separate from the mortgages) and assignments of UCC financing
statements, the Seller shall execute, in accordance with the third succeeding
paragraph, the assignments of mortgages, the assignments of leases (to the
extent separate from the mortgages) and the assignments of UCC financing
statements relating to the Mortgage Loans naming the Trustee on behalf of the
Certificateholders as assignee. Notwithstanding the fact that such assignments
of mortgages, assignments of leases (to the extent separate from the assignments
of mortgages) and assignments of UCC financing statements shall name the Trustee
on behalf of the Certificateholders as the assignee, the parties hereto
acknowledge and agree that the Mortgage Loans shall for all purposes be deemed
to have been transferred from the Seller to the Purchaser and from the Purchaser
to the Trustee on behalf of the Certificateholders.
If the Seller cannot deliver, or cause to be delivered, as to any
Mortgage Loan, any of the documents and/or instruments referred to in clauses
(b), (c), (e) or (f), with evidence of recording thereon, because of a delay
caused by the public recording office where such document or instrument has been
delivered for recordation within such 90 day period, but the Seller delivers a
photocopy thereof (to the extent available, certified by the appropriate county
recorder's office to be a true and complete copy of the original thereof
submitted for recording or, if such certification is not available, together
with an Officer's Certificate of the Seller stating
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that such document has been sent to the appropriate public recording official
for recordation), to the Trustee within such 90 day period, the Seller shall
then deliver within 180 days after the Closing Date the recorded document (or
within such longer period after the Closing Date as the Trustee may consent to,
which consent shall not be withheld so long as the Seller is, as certified in
writing to the Trustee no less often than monthly, in good faith attempting to
obtain from the appropriate county recorder's office such original or
photocopy).
The Trustee, as assignee or transferee of the Purchaser, shall be
entitled to all scheduled payments of principal due thereon after the Cut-Off
Date, all other payments of principal collected after the Cut-Off Date (other
than scheduled payments of principal due on or before the Cut-Off Date), and all
payments of interest on the Mortgage Loans allocable to the period commencing on
the Cut-Off Date. All scheduled payments of principal and interest due on or
before the Cut-Off Date and collected after the Cut-Off Date shall belong to the
Seller.
Within 45 days following the Closing Date, the Seller shall deliver
and the Purchaser, the Trustee or the agents of either may submit or cause to be
submitted for recordation at the expense of the Seller, in the appropriate
public office for real property records, each assignment referred to in clauses
(d) and (f)(ii) above (with recording information in blank if such information
is not yet available). Within 15 days following the Closing Date, the Seller
shall deliver and the Purchaser, the Trustee or the agents of either may submit
or cause to be submitted for filing, at the expense of the Seller, in the
appropriate public office for Uniform Commercial Code financing statements, the
assignment referred to in clause (i) above. If any such document or instrument
is lost or returned unrecorded or unfiled, as the case may be, because of a
defect therein, the Seller shall prepare a substitute therefor or cure such
defect, and the Seller shall, at its own expense (except in the case of a
document or instrument that is lost by the Trustee), record or file, as the case
may be, and deliver such document or instrument in accordance with this Section
2.
As to each Mortgage Loan secured by a Mortgaged Property with
respect to which the related Mortgagor has entered into a franchise agreement
and each Mortgage Loan secured by a Mortgaged Property with respect to which a
letter of credit is in place, the Seller shall provide a notice on or prior to
the date that is thirty (30) days after the Closing Date to the franchisor or
the issuing financial institution, as applicable, of the transfer of such
Mortgage Loan to the Trust pursuant to the Pooling and Servicing Agreement, and
inform such parties that any notices to the Mortgagor's lender pursuant to such
franchise agreement or letter of credit should thereafter be forwarded to the
Master Servicer and, with respect to each franchise agreement, provide a
franchise comfort letter to the franchisor on or prior to the date that is
thirty (30) days after the Closing Date. After the Closing Date, with respect to
any letter of credit that has not yet been assigned to the Trust, upon the
written request of the Master Servicer or the applicable Primary Servicer, the
Seller will draw on such letter of credit as directed by the Master Servicer or
such Primary Servicer in such notice to the extent the Seller has the right to
do so.
Documents that are in the possession of the Seller, its agents or
its subcontractors that relate to the servicing of any Mortgage Loans and that
are not required to be a part of the Mortgage File and are reasonably necessary
for the ongoing administration and/or servicing of the applicable Mortgage Loan
(the "Servicing File") shall be delivered by the Seller to or at the
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direction of the Master Servicer, on behalf of the Purchaser, on or prior to the
75th day after the Closing Date, in accordance with the Primary Servicing
Agreement, if applicable.
The Servicing File shall include, to the extent required to be (and
actually) delivered to the Seller pursuant to the applicable Mortgage Loan
documents, copies of the following items: the Mortgage Note, any Mortgage, the
Assignment of Leases and the Assignment of Mortgage, any guaranty/indemnity
agreement, any loan agreement, the insurance policies or certificates, as
applicable, the property inspection reports, any financial statements on the
property, any escrow analysis, the tax bills, the Appraisal, the environmental
report, the engineering report, the asset summary, financial information on the
Mortgagor/sponsor and any guarantors, any letters of credit, any intercreditor
agreements and any Environmental Insurance Policies; provided, however, the
Seller shall not be required to deliver any draft documents, attorney-client
privileged communications, internal correspondence or credit analysis. Delivery
of any of the foregoing documents to the Primary Servicer shall be deemed a
delivery to the Master Servicer and satisfy Seller's obligations under this
sub-paragraph. Each of the foregoing items shall be delivered by the Seller in
electronic form, to the extent such document is available in such form and such
form is reasonably acceptable to the Master Servicer.
Upon the sale of the Mortgage Loans by the Seller to the Purchaser
pursuant to this Agreement, the ownership of each Mortgage Note, Mortgage and
the other contents of the related Mortgage File shall be vested in the Purchaser
and its assigns, and the ownership of all records and documents with respect to
the related Mortgage Loan prepared by or that come into the possession of the
Seller shall immediately vest in the Purchaser and its assigns, and shall be
delivered promptly by the Seller to or on behalf of either the Trustee or the
Master Servicer as set forth herein, subject to the requirements of the Primary
Servicing Agreement. The Seller's and Purchaser's records shall reflect the
transfer of each Mortgage Loan from the Seller to the Purchaser and its assigns
as a sale.
It is the express intent of the parties hereto that the conveyance
of the Mortgage Loans and related property to the Purchaser by the Seller as
provided in this Section 2 be, and be construed as, an absolute sale of the
Mortgage Loans and related property. It is, further, not the intention of the
parties that such conveyance be deemed a pledge of the Mortgage Loans and
related property by the Seller to the Purchaser to secure a debt or other
obligation of the Seller. However, in the event that, notwithstanding the intent
of the parties, the Mortgage Loans or any related property are held to be the
property of the Seller, or if for any other reason this Agreement is held or
deemed to create a security interest in the Mortgage Loans or any related
property, then:
(i) this Agreement shall be deemed to be a security agreement; and
(ii) the conveyance provided for in this Section 2 shall be deemed
to be a grant by the Seller to the Purchaser of a security interest in all
of the Seller's right, title, and interest, whether now owned or hereafter
acquired, in and to:
(A) All accounts, general intangibles, chattel paper,
instruments, documents, money, deposit accounts, certificates of
deposit, goods, letters of credit, advices of credit and investment
property consisting of, arising from or
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relating to any of the following property: the Mortgage Loans
identified on the Mortgage Loan Schedule, including the related
Mortgage Notes, Mortgages, security agreements, and title, hazard
and other insurance policies, all distributions with respect thereto
payable after the Cut-Off Date, all substitute or replacement
Mortgage Loans and all distributions with respect thereto, and the
Mortgage Files;
(B) All accounts, general intangibles, chattel paper,
instruments, documents, money, deposit accounts, certificates of
deposit, goods, letters of credit, advices of credit, investment
property and other rights arising from or by virtue of the
disposition of, or collections with respect to, or insurance
proceeds payable with respect to, or claims against other Persons
with respect to, all or any part of the collateral described in
clause (A) above (including any accrued discount realized on
liquidation of any investment purchased at a discount); and
(C) All cash and non-cash proceeds of the collateral described
in clauses (A) and (B) above.
The possession by the Purchaser or its designee of the Mortgage
Notes, the Mortgages, and such other goods, letters of credit, advices of
credit, instruments, money, documents, chattel paper or certificated securities
shall be deemed to be possession by the secured party or possession by a
purchaser for purposes of perfecting the security interest pursuant to the
Uniform Commercial Code (including, without limitation, Sections 9-305 and 9-115
thereof) as in force in the relevant jurisdiction. Notwithstanding the
foregoing, the Seller makes no representation or warranty as to the perfection
of any such security interest.
Notifications to Persons holding such property, 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 of, or Persons holding for, the
Purchaser or its designee, as applicable, for the purpose of perfecting such
security interest under applicable law.
The Seller shall, to the extent consistent with this Agreement, take
such reasonable actions as may be necessary to ensure that, if this Agreement
were deemed to create a security interest in the property described above, such
security interest would be deemed to be a perfected security interest of first
priority under applicable law and will be maintained as such throughout the term
of the Agreement. In such case, the Seller shall file all filings necessary to
maintain the effectiveness of any original filings necessary under the Uniform
Commercial Code as in effect in any jurisdiction to perfect such security
interest in such property. In connection herewith, the Purchaser shall have all
of the rights and remedies of a secured party and creditor under the Uniform
Commercial Code as in force in the relevant jurisdiction.
Notwithstanding anything to the contrary contained herein, and
subject to Section 2(a), the Purchaser shall not be required to purchase any
Mortgage Loan as to which any Mortgage Note (endorsed as described in clause (a)
above) or lost note affidavit and indemnity required to be delivered to or on
behalf of the Trustee or the Master Servicer pursuant to this Section 2 on or
before the Closing Date is not so delivered, or is not properly executed or is
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defective on its face, and the Purchaser's acceptance of the related Mortgage
Loan on the Closing Date shall in no way constitute a waiver of such omission or
defect or of the Purchaser's or its successors' and assigns' rights in respect
thereof pursuant to Section 5.
Section 3. Examination of Mortgage Files and Due Diligence Review.
The Seller shall (i) deliver to the Purchaser on or before the Closing Date a
diskette acceptable to the Purchaser that contains such information about the
Mortgage Loans as may be reasonably requested by the Purchaser, (ii) deliver to
the Purchaser investor files (collectively the "Collateral Information") with
respect to the assets proposed to be included in the Mortgage Pool and made
available at the Purchaser's headquarters in New York, and (iii) otherwise
cooperate fully with the Purchaser in its examination of the credit files,
underwriting documentation and Mortgage Files for the Mortgage Loans and its due
diligence review of the Mortgage Loans. The fact that the Purchaser has
conducted or has failed to conduct any partial or complete examination of the
credit files, underwriting documentation or Mortgage Files for the Mortgage
Loans shall not affect the right of the Purchaser or the Trustee to cause the
Seller to cure any Material Document Defect or Material Breach (each as defined
below), or to repurchase or replace the defective Mortgage Loans pursuant to
Section 5 of this Agreement.
On or prior to the Closing Date, the Seller shall allow
representatives of any of the Purchaser, each Underwriter, the Initial
Purchaser, the Trustee, the Special Servicer and each Rating Agency to examine
and audit all books, records and files pertaining to the Mortgage Loans, the
Seller's underwriting procedures and the Seller's ability to perform or observe
all of the terms, covenants and conditions of this Agreement. Such examinations
and audits shall take place at one or more offices of the Seller during normal
business hours and shall not be conducted in a manner that is disruptive to the
Seller's normal business operations upon reasonable prior advance notice. In the
course of such examinations and audits, the Seller will make available to such
representatives of any of the Purchaser, each Underwriter, the Initial
Purchaser, the Trustee, the Special Servicer and each Rating Agency reasonably
adequate facilities, as well as the assistance of a sufficient number of
knowledgeable and responsible individuals who are familiar with the Mortgage
Loans and the terms of this Agreement, and the Seller shall cooperate fully with
any such examination and audit in all material respects. On or prior to the
Closing Date, the Seller shall provide the Purchaser with all material
information regarding the Seller's financial condition and access to
knowledgeable financial or accounting officers for the purpose of answering
questions with respect to the Seller's financial condition, financial statements
as provided to the Purchaser or other developments affecting the Seller's
ability to consummate the transactions contemplated hereby or otherwise
affecting the Seller in any material respect. Within 45 days after the Closing
Date, the Seller shall provide the Master Servicer or Primary Servicer, if
applicable, with any additional information identified by the Master Servicer or
Primary Servicer, if applicable, as necessary to complete the CMSA Property
File, to the extent that such information is available.
The Purchaser may exercise any of its rights hereunder through one
or more designees or agents; provided the Purchaser has provided the Seller with
prior notice of the identity of such designee or agent.
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The Purchaser shall keep confidential any information regarding the
Seller and the Mortgage Loans that has been delivered into the Purchaser's
possession and that is not otherwise publicly available; provided, however, that
such information shall not be kept confidential (and the right to require
confidentiality under any confidentiality agreement is hereby waived) to the
extent such information is required to be included in the Memorandum or the
Prospectus Supplement or the Purchaser is required by law or court order to
disclose such information. If the Purchaser is required to disclose in the
Memorandum or the Prospectus Supplement confidential information regarding the
Seller as described in the preceding sentence, the Purchaser shall provide to
the Seller a copy of the proposed form of such disclosure prior to making such
disclosure and the Seller shall promptly, and in any event within two Business
Days, notify the Purchaser of any inaccuracies therein, in which case the
Purchaser shall modify such form in a manner that corrects such inaccuracies. If
the Purchaser is required by law or court order to disclose confidential
information regarding the Seller as described in the second preceding sentence,
the Purchaser shall notify the Seller and cooperate in the Seller's efforts to
obtain a protective order or other reasonable assurance that confidential
treatment will be accorded such information and, if in the absence of a
protective order or such assurance, the Purchaser is compelled as a matter of
law to disclose such information, the Purchaser shall, prior to making such
disclosure, advise and consult with the Seller and its counsel as to such
disclosure and the nature and wording of such disclosure and the Purchaser shall
use reasonable efforts to obtain confidential treatment therefor.
Notwithstanding the foregoing, if reasonably advised by counsel that the
Purchaser is required by a regulatory agency or court order to make such
disclosure immediately, then the Purchaser shall be permitted to make such
disclosure without prior review by the Seller.
Section 4. Representations and Warranties of the Seller and the
Purchaser.
(a) To induce the Purchaser to enter into this Agreement, the Seller
hereby makes for the benefit of the Purchaser and its assigns with respect to
each Mortgage Loan as of the date hereof (or as of such other date specifically
set forth in the particular representation and warranty) each of the
representations and warranties set forth on Exhibit 2 hereto, except as
otherwise set forth on Schedule A attached hereto, and hereby further represents
and warrants to the Purchaser as of the date hereof that:
(i) The Seller is duly organized and is validly existing as a
corporation in good standing under the laws of New York. The Seller has
the requisite power and authority and legal right to own the Mortgage
Loans and to transfer and convey the Mortgage Loans to the Purchaser and
has the requisite power and authority to execute and deliver, engage in
the transactions contemplated by, and perform and observe the terms and
conditions of, this Agreement.
(ii) This Agreement has been duly and validly authorized, executed
and delivered by the Seller, and assuming the due authorization, execution
and delivery hereof by the Purchaser, this Agreement constitutes the
valid, legal and binding agreement of the Seller, enforceable in
accordance with its terms, except as such enforcement may be limited by
(A) laws relating to bankruptcy, insolvency, reorganization, receivership
or moratorium, (B) other laws relating to or affecting the rights of
creditors generally, (C) general equity principles (regardless of whether
such
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enforcement is considered in a proceeding in equity or at law) or (D)
public policy considerations underlying the securities laws, to the extent
that such public policy considerations limit the enforceability of the
provisions of this Agreement that purport to provide indemnification from
liabilities under applicable securities laws.
(iii) No consent, approval, authorization or order of, registration
or filing with, or notice to, any governmental authority or court is
required, under federal or state law, for the execution, delivery and
performance of or compliance by the Seller with this Agreement, or the
consummation by the Seller of any transaction contemplated hereby, other
than (1) such qualifications as may be required under state securities or
blue sky laws, (2) the filing or recording of financing statements,
instruments of assignment and other similar documents necessary in
connection with the Seller's sale of the Mortgage Loans to the Purchaser,
(3) such consents, approvals, authorizations, qualifications,
registrations, filings or notices as have been obtained and (4) where the
lack of such consent, approval, authorization, qualification,
registration, filing or notice would not have a material adverse effect on
the performance by the Seller under this Agreement.
(iv) Neither the transfer of the Mortgage Loans to the Purchaser,
nor the execution, delivery or performance of this Agreement by the
Seller, conflicts or will conflict with, results or will result in a
breach of, or constitutes or will constitute a default under (A) any term
or provision of the Seller's articles of organization or by-laws, (B) any
term or provision of any material agreement, contract, instrument or
indenture to which the Seller is a party or by which it or any of its
assets is bound or results in the creation or imposition of any lien,
charge or encumbrance upon any of its property pursuant to the terms of
any such indenture, mortgage, contract or other instrument, other than
pursuant to this Agreement, or (C) after giving effect to the consents or
taking of the actions contemplated in subsection (iii), any law, rule,
regulation, order, judgment, writ, injunction or decree of any court or
governmental authority having jurisdiction over the Seller or its assets,
except where in any of the instances contemplated by clauses (B) or (C)
above, any conflict, breach or default, or creation or imposition of any
lien, charge or encumbrance, will not have a material adverse effect on
the consummation of the transactions contemplated hereby by the Seller or
materially and adversely affect its ability to perform its obligations and
duties hereunder or result in any material adverse change in the business,
operations, financial condition, properties or assets of the Seller, or in
any material impairment of the right or ability of the Seller to carry on
its business substantially as now conducted.
(v) There are no actions or proceedings against, or investigations
of, the Seller pending or, to the Seller's knowledge, threatened in
writing against the Seller before any court, administrative agency or
other tribunal, the outcome of which could reasonably be expected to
materially and adversely affect the transfer of the Mortgage Loans to the
Purchaser or the execution or delivery by, or enforceability against, the
Seller of this Agreement or have an effect on the financial condition of
the Seller that would materially and adversely affect the ability of the
Seller to perform its obligations under this Agreement.
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(vi) On the Closing Date, the sale of the Mortgage Loans pursuant to
this Agreement will effect a transfer by the Seller of all of its right,
title and interest in and to the Mortgage Loans to the Purchaser.
(vii) To the Seller's knowledge, the Seller Information (as defined
in that certain indemnification agreement, dated as of ________, 20___,
between the Seller, the Purchaser, the Underwriters and the Initial
Purchaser (the "Indemnification Agreement")) relating to the Mortgage
Loans did not and does not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading (when read together with the Prospectus Supplement, in the case
of Public Certificates, or when read together with the Memorandum, in the
case of the Private Certificates). Notwithstanding anything contained
herein to the contrary, this subparagraph (vii) shall run exclusively to
the benefit of the Purchaser and no other party.
(viii) The Seller has complied with the disclosure requirements of
Regulation AB that arise from its role as "seller" and "sponsor" in
connection with the issuance of the Public Certificates.
(ix) For so long as the Trust is subject to the reporting
requirements of the Exchange Act, the Seller shall provide the Purchaser
and the Paying Agent with any Additional Form 10-D Disclosure and any
Additional Form 10-K Disclosure set forth next to the Seller's name on
Schedule V and Schedule VI of the Pooling and Servicing Agreement within
the time periods set forth in the Pooling and Servicing Agreement.
To induce the Purchaser to enter into this Agreement, the Seller
hereby covenants that the foregoing representations and warranties and those set
forth on Exhibit 2 hereto will be true and correct in all material respects on
and as of the Closing Date with the same effect as if made on the Closing Date,
provided that any representations and warranties made as of a specified date
shall be true and correct in all material respects as of such specified date.
(b) Each of the representations, warranties and covenants made by
the Seller pursuant to this Section 4(a) shall survive the sale of the Mortgage
Loans and shall continue in full force and effect notwithstanding any
restrictive or qualified endorsement on the Mortgage Notes. To induce the Seller
to enter into this Agreement, the Purchaser hereby represents and warrants to
the Seller as of the date hereof:
(i) The Purchaser is a corporation duly organized, validly existing,
and in good standing under the laws of the State of Delaware with full
power and authority to carry on its business as presently conducted by it.
(ii) The Purchaser has full power and authority to acquire the
Mortgage Loans, to execute and deliver this Agreement and to enter into
and consummate all transactions contemplated by this Agreement. The
Purchaser has duly and validly authorized the execution, delivery and
performance of this Agreement and has duly and validly executed and
delivered this Agreement. This Agreement, assuming due authorization,
execution and delivery by the Seller, constitutes the valid and binding
obligation of the Purchaser,
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enforceable against it in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws affecting the enforcement of creditors'
rights generally and by general principles of equity, regardless of
whether such enforcement is considered in a proceeding in equity or at
law.
(iii) No consent, approval, authorization or order of, registration
or filing with, or notice to, any governmental authority or court is
required, under federal or state law, for the execution, delivery and
performance of or compliance by the Purchaser with this Agreement, or the
consummation by the Purchaser of any transaction contemplated hereby that
has not been obtained or made by the Purchaser.
(iv) Neither the purchase of the Mortgage Loans nor the execution,
delivery and performance of this Agreement by the Purchaser will violate
the Purchaser's certificate of incorporation or by-laws or constitute a
default (or an event that, with notice or lapse of time or both, would
constitute a default) under, or result in a breach of, any material
agreement, contract, instrument or indenture to which the Purchaser is a
party or that may be applicable to the Purchaser or its assets.
(v) The Purchaser's execution and delivery of this Agreement and its
performance and compliance with the terms of this Agreement will not
constitute a violation of, any law, rule, writ, injunction, order or
decree of any court, or order or regulation of any federal, state or
municipal government agency having jurisdiction over the Purchaser or its
assets, which violation could materially and adversely affect the
condition (financial or otherwise) or the operation of the Purchaser or
its assets or could materially and adversely affect its ability to perform
its obligations and duties hereunder.
(vi) There are no actions or proceedings against, or investigations
of, the Purchaser pending or, to the Purchaser's knowledge, threatened
against the Purchaser before any court, administrative agency or other
tribunal, the outcome of which could reasonably be expected to adversely
affect the transfer of the Mortgage Loans, the issuance of the
Certificates, the execution, delivery or enforceability of this Agreement
or have an effect on the financial condition of the Purchaser that would
materially and adversely affect the ability of the Purchaser to perform
its obligation under this Agreement.
(vii) The Purchaser has not dealt with any broker, investment
banker, agent or other person, other than the Seller, the Underwriters,
the Initial Purchaser and their respective affiliates, that may be
entitled to any commission or compensation in connection with the sale of
the Mortgage Loans or consummation of any of the transactions contemplated
hereby.
To induce the Seller to enter into this Agreement, the Purchaser
hereby covenants that the foregoing representations and warranties will be true
and correct in all material respects on and as of the Closing Date with the same
effect as if made on the Closing Date.
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Each of the representations and warranties made by the Purchaser
pursuant to this Section 4(b) shall survive the purchase of the Mortgage Loans.
Section 5. Remedies Upon Breach of Representations and Warranties
Made by the Seller.
(a) It is hereby acknowledged that the Seller shall make for the
benefit of the Trustee on behalf of the holders of the Certificates, whether
directly or by way of the Purchaser's assignment of its rights hereunder to the
Trustee, the representations and warranties set forth on Exhibit 2 hereto (each
as of the date hereof unless otherwise specified).
(b) It is hereby further acknowledged that if any document required
to be delivered to the Trustee pursuant to Section 2 is not delivered as and
when required (and including the expiration of any grace or cure period), is not
properly executed or is defective on its face, or if there is a breach of any of
the representations and warranties required to be made by the Seller regarding
the characteristics of the Mortgage Loans and/or the related Mortgaged
Properties as set forth in Exhibit 2 hereto, and in either case such defect or
breach, either (i) materially and adversely affects the interests of the holders
of the Certificates in the related Mortgage Loan, or (ii) both (A) the document
defect or breach materially and adversely affects the value of the Mortgage Loan
and (B) the Mortgage Loan is a Specially Serviced Mortgage Loan or Rehabilitated
Mortgage Loan (such a document defect described in the preceding clause (i) or
(ii), a "Material Document Defect" and such a breach described in the preceding
clause (i) or (ii) a "Material Breach"), the party discovering such Material
Document Defect or Material Breach shall promptly notify, in writing, the other
party; provided that any breach of the representation and warranty contained in
paragraph (38) of such Exhibit 2 shall constitute a Material Breach only if such
prepayment premium or yield maintenance charge is not deemed "customary" for
commercial mortgage loans as evidenced by (i) an opinion of tax counsel to such
effect or (ii) a determination by the Internal Revenue Service that such
provision is not customary. Promptly (but in any event within three Business
Days) upon becoming aware of any such Material Document Defect or Material
Breach, the Master Servicer shall, and the Special Servicer may, request that
the Seller, not later than 90 days from the Seller's receipt of the notice of
such Material Document Defect or Material Breach, cure such Material Document
Defect or Material Breach, as the case may be, in all material respects;
provided, however, that if such Material Document Defect or Material Breach, as
the case may be, cannot be corrected or cured in all material respects within
such 90-day period, and such Material Document Defect or Material Breach would
not cause the Mortgage Loan to be other than a "qualified mortgage" (as defined
in the Code), but the Seller is diligently attempting to effect such correction
or cure, as certified by the Seller in an Officer's Certificate delivered to the
Trustee, then the cure period will be extended for an additional 90 days unless,
solely in the case of a Material Document Defect, (x) the Mortgage Loan is, at
the end of the initial 90 day period, a Specially Serviced Mortgage Loan and a
Servicing Transfer Event has occurred as a result of a monetary default or as
described in clause (ii) or clause (v) of the definition of "Servicing Transfer
Event" in the Pooling and Servicing Agreement and (y) the Material Document
Defect was identified in a certification delivered to the Seller by the Trustee
pursuant to Section 2.2 of the Pooling and Servicing Agreement not less than 90
days prior to the delivery of the notice of such Material Document Defect. The
parties acknowledge that neither delivery of a certification or schedule of
exceptions to the Seller pursuant to Section 2.2 of the Pooling and Servicing
Agreement or
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otherwise nor possession of such certification or schedule by the Seller shall,
in and of itself, constitute delivery of notice of any Material Document Defect
or knowledge or awareness by the Seller of any Material Document Defect listed
therein.
The Seller hereby covenants and agrees that, if any such Material
Document Defect or Material Breach cannot be corrected or cured in all material
aspects within the above cure periods, the Seller shall, on or before the
termination of such cure periods, either (i) repurchase the affected Mortgage
Loan or REO Mortgage Loan from the Purchaser or its assignee at the Purchase
Price as defined in the Pooling and Servicing Agreement, or (ii) if within the
two-year period commencing on the Closing Date, at its option replace, without
recourse, any Mortgage Loan or REO Mortgage Loan to which such defect relates
with a Qualifying Substitute Mortgage Loan. If such Material Document Defect or
Material Breach would cause the Mortgage Loan to be other than a "qualified
mortgage" (as defined in the Code), then notwithstanding the previous sentence,
such repurchase or substitution must occur within 90 days from the earlier of
the date the Seller discovered or was notified of the breach or defect. The
Seller agrees that any substitution shall be completed in accordance with the
terms and conditions of the Pooling and Servicing Agreement.
If (i) a Mortgage Loan is to be repurchased or replaced in
connection with a Material Document Defect or Material Breach as contemplated
above, (ii) such Mortgage Loan is cross-collateralized and cross-defaulted with
one or more other Mortgage Loans in the Trust and (iii) the applicable document
defect or breach does not constitute a Material Document Defect or Material
Breach, as the case may be, as to such other Mortgage 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 Mortgage Loan for purposes of the
above provisions, and the Seller shall be obligated to repurchase or replace
each such other Mortgage Loan in accordance with the provisions above, unless,
in the case of such breach or document defect, both of the following conditions
would be satisfied if the Seller were to repurchase or replace only those
Mortgage Loans as to which a Material Breach had occurred without regard to this
paragraph (the "Affected Loan(s)"): (1) the debt service coverage ratio for all
such other Mortgage Loans (excluding the Affected Loan(s)) for the four calendar
quarters immediately preceding the repurchase or replacement (determined as
provided in the definition of Debt Service Coverage Ratio in the Pooling and
Servicing Agreement, except that net cash flow for such four calendar quarters,
rather than year-end, shall be used) is equal to the greater of (x) the debt
service coverage ratio for all such Mortgage Loans (including the Affected
Loan(s)) set forth under the heading "NCF DSCR" in Appendix II to the Final
Prospectus Supplement and (y) [1.25x], and (2) the Loan-to-Value Ratio for all
such other Mortgage Loans (excluding the Affected Loan(s)) is not greater than
the lesser of (x) the current loan-to-value ratio for all such Mortgage Loans
(including the Affected Loan(s)) set forth under the heading "Cut-Off Date LTV"
in Appendix II to the Final Prospectus Supplement and (y) [75%]. The
determination of the Master Servicer as to whether either of the conditions set
forth above has been satisfied shall be conclusive and binding in the absence of
manifest error. The Master Servicer will be entitled to cause, or direct the
Seller to cause, to be delivered to the Master Servicer at the Seller's expense
(i) an Appraisal of any or all of the related Mortgaged Properties for purposes
of determining whether the condition set forth in clause (2) above has been
satisfied, in each case at the expense of the Seller if the scope and cost of
the Appraisal is approved by the Seller (such approval not to be
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unreasonably withheld) and (ii) an Opinion of Counsel that not requiring the
repurchase of each such Cross-Collateralized Loan will not result in an Adverse
REMIC Event.
With respect to any Mortgage Loan that is cross-defaulted and/or
cross-collateralized with any other Mortgage Loan conveyed hereunder, to the
extent that the Seller is required to repurchase or substitute for such Mortgage
Loan (each, a "Repurchased Loan") in the manner prescribed above while the
Trustee (as assignee of the Purchaser) continues to hold any other Mortgage Loan
that is cross-collateralized and/or cross-defaulted (each, a
"Cross-Collateralized Loan") with such Repurchased Loan, the Seller and the
Purchaser hereby agree to modify, prior to such repurchase or substitution, the
related Mortgage Loan documents in a manner such that such affected Repurchased
Loan, on the one hand, and any related Crossed-Collateralized Loans held by the
Trustee, on the other, would no longer be cross-defaulted or
cross-collateralized with one another; provided that the Seller shall have
furnished the Trustee, at the expense of the Seller, a nondisqualification
opinion that such modification shall not cause an Adverse REMIC Event; provided,
further, that if such nondisqualification opinion cannot be furnished, the
Seller and the Purchaser agree that such repurchase or substitution of only the
Repurchased Loan, notwithstanding anything to the contrary herein, shall not be
permitted and the Seller shall repurchase or substitute for the Repurchased Loan
and all related Crossed-Collateralized Loans. Any reserve or other cash
collateral or letters of credit securing the Cross-Collateralized Loans shall be
allocated between such Mortgage Loans in accordance with the Mortgage Loan
documents. All other terms of the Mortgage Loans shall remain in full force and
effect, without any modification thereof.
Upon occurrence (and after any applicable cure or grace period), any
of the following document defects shall be conclusively presumed materially and
adversely to affect the interests of Certificateholders in a Mortgage Loan and
be a Material Document Defect: (i) the absence from the Mortgage File of the
original signed Mortgage Note, unless the Mortgage File contains a signed lost
note affidavit and indemnity and a copy of the Mortgage Note; (ii) the absence
from the Mortgage File of the item called for by paragraph (b) of the definition
of Mortgage File; or (iii) the absence from the Mortgage File of the item called
for by paragraph (h) of the definition of Mortgage File. If any of the foregoing
Material Document Defects is discovered by the Custodian (or the Trustee if
there is no Custodian), the Trustee (or as set forth in Section 2.3(a) of the
Pooling and Servicing Agreement, the Master Servicer) will take the steps
described elsewhere in this Section, including the giving of notices to the
Rating Agencies and the parties hereto and making demand upon the Seller for the
cure of the Material Document Defect or repurchase or replacement of the related
Mortgage Loan.
If the Seller disputes that a Material Document Defect or Material
Breach exists with respect to a Mortgage Loan or otherwise refuses (i) to effect
a correction or cure of such Material Document Defect or Material Breach, (ii)
to repurchase the Affected Loan from the Trust or (iii) to replace such Mortgage
Loan with a Qualifying Substitute Mortgage Loan, then provided that (x) the
period of time provided for the Seller to correct, repurchase or cure has
expired and (y) the Mortgage Loan is then in default and is then a Specially
Serviced Mortgage Loan, the applicable Special Servicer may, subject to the
Servicing Standard, modify, work-out or foreclose, sell or otherwise liquidate
(or permit the liquidation of) the Mortgage Loan pursuant to Section 9.5,
Section 9.12, Section 9.15 and Section 9.36, as applicable, of the Pooling and
Servicing Agreement, while pursuing the repurchase claim. The Seller
acknowledges and agrees
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that any modification of the Mortgage Loan pursuant to such a work-out shall not
constitute a defense to any repurchase claim nor shall such modification or
work-out change the Purchase Price due from the Seller for any repurchase claim.
Any sale of the Mortgage Loan, or foreclosure upon such Mortgage Loan and sale
of the REO Property, to a Person other than the Seller shall be without (i)
recourse of any kind (either express or implied) by such Person against the
Seller and (ii) representation or warranty of any kind (either express or
implied) by the Seller to or for the benefit of such Person.
The fact that a Material Document Defect or Material Breach is not
discovered until after foreclosure (but in all instances prior to the sale of
the related REO Property or Mortgage Loan) shall not prejudice any claim against
the Seller for repurchase of the REO Mortgage Loan or REO Property. In such an
event, the Master Servicer or Special Servicer, as applicable, shall be required
to notify the Seller of the discovery of the Material Document Defect or
Material Breach and the Seller shall be required to follow the procedures set
forth in this Agreement to correct or cure such Material Document Defect or
Material Breach or purchase the REO Property at the Purchase Price. If the
Seller fails to correct or cure the Material Document Defect or Material Breach
or purchase the REO Property, then the provisions above regarding notice of
offers related to such REO Property and the Seller's right to purchase such REO
Property shall apply. If a court of competent jurisdiction issues a final order
that the Seller is or was obligated to repurchase the related Mortgage Loan or
REO Mortgage Loan or the Seller otherwise accepts liability, then, after the
expiration of any applicable appeal period, but in no event later than the
termination of the Trust pursuant to Section 9.30 of the Pooling and Servicing
Agreement, the Seller will be obligated to pay to the Trust the difference
between any Liquidation Proceeds received upon such liquidation (including those
arising from any sale to the Seller) and the Purchase Price; provided that the
prevailing party in such action shall be entitled to recover all costs, fees and
expenses (including reasonable attorneys' fees) related thereto.
In connection with any liquidation or sale of a Mortgage Loan or REO
Property as described above, the Special Servicer will not receive a Liquidation
Fee in connection with such liquidation or sale or any portion of the Work-Out
Fee that accrues after the Seller receives notice of a Material Document Defect
or Material Breach until a final determination has been made, as set forth in
the prior paragraph, as to whether the Seller is or was obligated to repurchase
such related Mortgage Loan or REO Property. Upon such determination, the Special
Servicer will be entitled: (i) with respect to a determination that the Seller
is or was obligated to repurchase, to collect a Liquidation Fee, if due in
accordance with the definition thereof, based upon the full Purchase Price of
the related Mortgage Loan or REO property, with such Liquidation Fee payable by
the Seller or (ii) with respect to a determination that Seller is not or was not
obligated to repurchase (or the Trust decides that it will no longer pursue a
claim against the Seller for repurchase), (A) to collect a Liquidation Fee based
upon the Liquidation Proceeds as received upon the actual sale or liquidation of
such Mortgage Loan or REO Property, and (B) to collect any accrued and unpaid
Work-Out Fee, based on amounts that were collected for as long as the related
Mortgage Loan was a Rehabilitated Mortgage Loan, in each case with such amount
to be paid from amounts in the Certificate Account.
The obligations of the Seller set forth in this Section 5(b) to cure
a Material Document Defect or a Material Breach or repurchase or replace a
defective Mortgage Loan constitute the sole remedies of the Purchaser or its
assignees with respect to a Material
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Document Defect or Material Breach in respect of an outstanding Mortgage Loan;
provided, that this limitation shall not in any way limit the Purchaser's rights
or remedies upon breach of any other representation or warranty or covenant by
the Seller set forth in this Agreement (other than those set forth in Exhibit
2).
Notwithstanding the foregoing, in the event that there is a breach
of the representation and warranty set forth in paragraph 41 of Exhibit 2
attached hereto because the underlying loan documents do not provide for the
payment by the Mortgagor of reasonable costs and expenses associated with the
defeasance or assumption of a Mortgage Loan by the Mortgagor, the Seller hereby
covenants and agrees to pay such reasonable costs and expenses, to the extent an
amount is due and not paid by the related Mortgagor. The parties hereto
acknowledge that the payment of such reasonable costs and expenses shall be the
Seller's sole obligation with respect to the breaches discussed in the previous
sentence. The Seller shall have no obligation to pay for any of the foregoing
costs if the applicable Mortgagor has an obligation to pay for such costs.
The Seller hereby agrees that it will pay for any expense incurred
by the applicable Master Servicer or the Special Servicer, as applicable, in
connection with modifying a Mortgage Loan pursuant to Section 2.3 of the Pooling
and Servicing Agreement in order for such Mortgage Loan to be a "qualified
substitute mortgage loan" within the meaning of the Treasury Regulations
promulgated under the Code. Upon a breach of the representation and warranty set
forth in paragraph 39 of Exhibit 2 attached hereto, if such Mortgage Loan is
modified so that it becomes a "qualified substitute mortgage loan", such breach
will be cured and the Seller will not be obligated to repurchase or otherwise
remedy such breach.
(c) The Pooling and Servicing Agreement shall provide that the
Trustee (or the Master Servicer or the Special Servicer on its behalf) shall
give written notice within three Business Days to the Seller of its discovery of
any Material Document Defect or Material Breach and prompt written notice to the
Seller in the event that any Mortgage Loan becomes a Specially Serviced Mortgage
Loan (as defined in the Pooling and Servicing Agreement).
(d) If the Seller repurchases any Mortgage Loan pursuant to this
Section 5, the Purchaser or its assignee, following receipt by the Trustee of
the Purchase Price therefor, promptly shall deliver or cause to be delivered to
the Seller all Mortgage Loan documents with respect to such Mortgage Loan, and
each document that constitutes a part of the Mortgage File that was endorsed or
assigned to the Trustee shall be endorsed and assigned to the Seller in the same
manner such that the Seller shall be vested with legal and beneficial title to
such Mortgage Loan, in each case without recourse, including any property
acquired in respect of such Mortgage Loan or proceeds of any insurance policies
with respect thereto.
Section 6. Closing. The closing of the sale of the Mortgage Loans
shall be held at the offices of [Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇] at _____ a.m., New York time, on the
Closing Date.
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The obligation of the Seller and the Purchaser to close shall be
subject to the satisfaction of each of the following conditions on or prior to
the Closing Date:
(a) All of the representations and warranties of the Seller and the
Purchaser specified in Section 4 of this Agreement (including, without
limitation, the representations and warranties set forth on Exhibit 2 to this
Agreement) shall be true and correct as of the Closing Date, provided that any
representations and warranties made as of a specified date shall be true and
correct as of such specified date.
(b) All Closing Documents specified in Section 7 of this Agreement,
in such forms as are agreed upon and reasonably acceptable to the Seller or the
Purchaser, as applicable, shall be duly executed and delivered by all
signatories as required pursuant to the respective terms thereof.
(c) The Seller shall have delivered and released to the Purchaser or
its designee all documents required to be delivered to the Purchaser as of the
Closing Date pursuant to Section 2 of this Agreement.
(d) The result of the examination and audit performed by the
Purchaser and its affiliates pursuant to Section 3 hereof shall be satisfactory
to the Purchaser and its affiliates in their sole determination and the parties
shall have agreed to the form and contents of the Seller Information (as defined
in the Indemnification Agreement) to be disclosed in the Memorandum and the
Prospectus Supplement.
(e) All other terms and conditions of this Agreement required to be
complied with on or before the Closing Date shall have been complied with, and
the Seller and the Purchaser shall have the ability to comply with all terms and
conditions and perform all duties and obligations required to be complied with
or performed after the Closing Date.
(f) The Seller shall have paid all fees and expenses payable by it
to the Purchaser pursuant to Section 8 hereof.
(g) The Certificates to be so rated shall have been assigned ratings
by each Rating Agency no lower than the ratings specified for each such Class in
the Memorandum and the Prospectus Supplement.
(h) No Underwriter shall have terminated the Underwriting Agreement
and the Initial Purchaser shall not have terminated the Certificate Purchase
Agreement, and neither the Underwriters nor the Initial Purchaser shall have
suspended, delayed or otherwise cancelled the Closing Date.
(i) The Seller shall have received the purchase price for the
Mortgage Loans pursuant to Section 1 hereof.
Each party agrees to use its best efforts to perform its respective
obligations hereunder in a manner that will enable the Purchaser to purchase the
Mortgage Loans on the Closing Date.
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Section 7. Closing Documents. The Closing Documents shall consist of
the following:
(a) This Agreement duly executed by the Purchaser and the Seller.
(b) A certificate of the Seller, executed by a duly authorized
officer of the Seller and dated the Closing Date, and upon which the Purchaser
and its successors and assigns may rely, to the effect that: (i) the
representations and warranties of the Seller in this Agreement are true and
correct in all material respects on and as of the Closing Date with the same
force and effect as if made on the Closing Date, provided that any
representations and warranties made as of a specified date shall be true and
correct as of such specified date; and (ii) the Seller has complied with all
agreements and satisfied all conditions on its part to be performed or satisfied
on or prior to the Closing Date.
(c) True, complete and correct copies of the Seller's articles of
organization and by-laws.
(d) A certificate of existence for the Seller from the Secretary of
State of New York dated not earlier than 30 days prior to the Closing Date.
(e) A certificate of the Secretary or Assistant Secretary of the
Seller, dated the Closing Date, and upon which the Purchaser may rely, to the
effect that each individual who, as an officer or representative of the Seller,
signed this Agreement or any other document or certificate delivered on or
before the Closing Date in connection with the transactions contemplated herein,
was at the respective times of such signing and delivery, and is as of the
Closing Date, duly elected or appointed, qualified and acting as such officer or
representative, and the signatures of such persons appearing on such documents
and certificates are their genuine signatures.
(f) An opinion of counsel (which, other than as to the opinion
described in paragraph (vi) below, may be in-house counsel) to the Seller, dated
the Closing Date, substantially to the effect of the following (with such
changes and modifications as the Purchaser may approve and subject to such
counsel's reasonable qualifications):
(i) The Seller is validly existing under New York law and has full
corporate power and authority to enter into and perform its obligations
under this Agreement.
(ii) This Agreement has been duly authorized, executed and delivered
by the Seller.
(iii) No consent, approval, authorization or order of any federal
court or governmental agency or body is required for the consummation by
the Seller of the transactions contemplated by the terms of this Agreement
except any approvals as have been obtained.
(iv) Neither the execution, delivery or performance of this
Agreement by the Seller, nor the consummation by the Seller of any of the
transactions contemplated by the terms of this Agreement (A) conflicts
with or results in a breach or violation of, or
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constitutes a default under, the organizational documents of the Seller,
(B) to the knowledge of such counsel, constitutes a default under any term
or provision of any material agreement, contract, instrument or indenture,
to which the Seller is a party or by which it or any of its assets is
bound or results in the creation or imposition of any lien, charge or
encumbrance upon any of its property pursuant to the terms of any such
indenture, mortgage, contract or other instrument, other than pursuant to
this Agreement, or (C) conflicts with or results in a breach or violation
of any law, rule, regulation, order, judgment, writ, injunction or decree
of any court or governmental authority having jurisdiction over the Seller
or its assets, except where in any of the instances contemplated by
clauses (B) or (C) above, any conflict, breach or default, or creation or
imposition of any lien, charge or encumbrance, will not have a material
adverse effect on the consummation of the transactions contemplated hereby
by the Seller or materially and adversely affect its ability to perform
its obligations and duties hereunder or result in any material adverse
change in the business, operations, financial condition, properties or
assets of the Seller, or in any material impairment of the right or
ability of the Seller to carry on its business substantially as now
conducted.
(v) To his or her knowledge, there are no legal or governmental
actions, investigations or proceedings pending to which the Seller is a
party, or threatened against the Seller, (a) asserting the invalidity of
this Agreement or (b) which materially and adversely affect the
performance by the Seller of its obligations under, or the validity or
enforceability of, this Agreement.
(vi) This Agreement is a valid, legal and binding agreement of the
Seller, enforceable against the Seller in accordance with its terms,
except as such enforcement may be limited by (1) laws relating to
bankruptcy, insolvency, reorganization, receivership or moratorium, (2)
other laws relating to or affecting the rights of creditors generally, (3)
general equity principles (regardless of whether such enforcement is
considered in a proceeding in equity or at law) or (4) public policy
considerations underlying the securities laws, to the extent that such
public policy considerations limit the enforceability of the provisions of
this Agreement that purport to provide indemnification from liabilities
under applicable securities laws.
Such opinion may express its reliance as to factual matters on,
among other things specified in such opinion, the representations and warranties
made by, and on certificates or other documents furnished by officers of, the
parties to this Agreement.
In rendering the opinions expressed above, such counsel may limit
such opinions to matters governed by the federal laws of the United States and
the corporate laws of the State of Delaware and the State of New York, as
applicable.
(g) A "10b-5" opinion of counsel addressed to the Purchaser and the
Underwriters, in form and from counsel reasonably acceptable to the Purchaser
and the Underwriters, as to the disclosure provided by the Seller to the
Purchaser for purposes of compliance with the disclosure requirements of
Regulation AB, and set forth with respect to the Seller's role as sponsor in
connection with the Certificates (the "Regulation AB Seller Disclosure").
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(h) An opinion of counsel addressed to the Purchaser and the
Underwriters, in form and from counsel reasonably acceptable to the Purchaser
and the Underwriters, that such disclosure complies as to form with the
applicable requirements of Regulation AB.Such other opinions of counsel as any
Rating Agency may request in connection with the sale of the Mortgage Loans by
the Seller to the Purchaser or the Seller's execution and delivery of, or
performance under, this Agreement.
(i) A letter from ________________, certified public accountants,
dated the date hereof, to the effect that they have performed certain specified
procedures as a result of which they determined that certain information of an
accounting, financial or statistical nature set forth in the Memorandum and the
Prospectus Supplement agrees with the records of the Seller.
(j) Such further certificates, opinions and documents as the
Purchaser may reasonably request.
(k) An officer's certificate of the Purchaser, dated as of the
Closing Date, with the resolutions of the Purchaser authorizing the transactions
described herein attached thereto, together with certified copies of the
charter, by-laws and certificate of good standing of the Purchaser dated not
earlier than 30 days prior to the Closing Date.
(l) Such other certificates of the Purchaser's officers or others
and such other documents to evidence fulfillment of the conditions set forth in
this Agreement as the Seller or its counsel may reasonably request.
(m) An executed ▇▇▇▇ of Sale in the form attached hereto as Exhibit
4.
Section 8. Costs. The Seller shall pay the Purchaser the costs and
expenses as agreed upon by the Seller and the Purchaser in a separate Letter of
Understanding dated ________, 20___.
Section 9. Notices. All communications provided for or permitted
hereunder shall be in writing and shall be deemed to have been duly given if (a)
personally delivered, (b) mailed by registered or certified mail, postage
prepaid and received by the addressee, (c) sent by express courier delivery
service and received by the addressee, or (d) transmitted by telex or facsimile
transmission (or any other type of electronic transmission agreed upon by the
parties) and confirmed by a writing delivered by any of the means described in
(a), (b) or (c), if (i) to the Purchaser, addressed to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital I
Inc., ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇, with a
copy to ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (or such other address as may hereafter be furnished in
writing by the Purchaser), or (ii) if to the Seller, addressed to the Seller at
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc., ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, with a copy to ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
Section 10. Severability of Provisions. Any part, provision,
representation, warranty or covenant of this Agreement that is prohibited or
that is held to be void or unenforceable shall be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof. Any part, provision, representation, warranty or covenant of
this Agreement that is prohibited or unenforceable or is held to be void or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such
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prohibition or unenforceability without invalidating the remaining provisions
hereof, and any such prohibition or unenforceability in any 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 11. Further Assurances. The Seller and the Purchaser each
agree to execute and deliver such instruments and take such actions as the other
may, from time to time, reasonably request in order to effectuate the purpose
and to carry out the terms of this Agreement and the Pooling and Servicing
Agreement.
Section 12. Survival. Each party hereto agrees that the
representations, warranties and agreements made by it herein and in any
certificate or other instrument delivered pursuant hereto shall be deemed to be
relied upon by the other party, notwithstanding any investigation heretofore or
hereafter made by the other party or on its behalf, and that the
representations, warranties and agreements made by such other party herein or in
any such certificate or other instrument shall survive the delivery of and
payment for the Mortgage Loans and shall continue in full force and effect,
notwithstanding any restrictive or qualified endorsement on the Mortgage Notes
and notwithstanding subsequent termination of this Agreement.
Section 13. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS, DUTIES,
OBLIGATIONS AND RESPONSIBILITIES OF THE PARTIES HERETO SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS AND DECISIONS OF THE STATE OF NEW
YORK. THE PARTIES HERETO INTEND THAT THE PROVISIONS OF SECTION 5-1401 OF THE NEW
YORK GENERAL OBLIGATIONS LAW SHALL APPLY TO THIS AGREEMENT.
Section 14. Benefits of Mortgage Loan Purchase Agreement. This
Agreement shall inure to the benefit of and shall be binding upon the Seller,
the Purchaser and their respective successors, legal representatives, and
permitted assigns, and nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any other person any legal or equitable
right, remedy or claim under or in respect of this Agreement, or any provisions
herein contained, this Agreement and all conditions and provisions hereof being
intended to be and being for the sole and exclusive benefit of such persons and
for the benefit of no other person except that the rights and obligations of the
Purchaser pursuant to Sections 2, 4(a) (other than clause (vii)), 5, 11 and 12
hereof may be assigned to the Trustee as may be required to effect the purposes
of the Pooling and Servicing Agreement and, upon such assignment, the Trustee
shall succeed to the rights and obligations hereunder of the Purchaser. No owner
of a Certificate issued pursuant to the Pooling and Servicing Agreement shall be
deemed a successor or permitted assigns because of such ownership.
Section 15. Miscellaneous. This Agreement may be executed in two or
more counterparts, each of which when so executed and delivered shall be an
original, but all of which together shall constitute one and the same
instrument. Neither this Agreement nor any term hereof may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against whom enforcement of the change, waiver, discharge or
-24-
termination is sought. The headings in this Agreement are for purposes of
reference only and shall not limit or otherwise affect the meaning hereof. The
rights and obligations of the Seller under this Agreement shall not be assigned
by the Seller without the prior written consent of the Purchaser, except that
any person into which the Seller may be merged or consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Seller is a party, or any person succeeding to the entire business of the Seller
shall be the successor to the Seller hereunder.
Section 16. Entire Agreement. This Agreement contains the entire
agreement and understanding between the parties hereto with respect to the
subject matter hereof (other than the Letter of Understanding, the
Indemnification Agreement and the Pooling and Servicing Agreement), and
supersedes all prior and contemporaneous agreements, understandings, inducements
and conditions, express or implied, oral or written, of any nature whatsoever
with respect to the subject matter hereof. The express terms hereof control and
supersede any course of performance or usage of the trade inconsistent with any
of the terms hereof.
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IN WITNESS WHEREOF, the Purchaser and the Seller have caused this
Agreement to be executed by their respective duly authorized officers as of the
date first above written.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ MORTGAGE
CAPITAL INC.
By:
-----------------------------------
Name:
Title:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CAPITAL I INC.
By:
-----------------------------------
Name:
Title:
EXHIBIT 1
MORTGAGE LOAN SCHEDULE
1-1
EXHIBIT 2
REPRESENTATIONS AND WARRANTIES REGARDING
INDIVIDUAL MORTGAGE LOANS
(1) Mortgage Loan Schedule. The information set forth in the
Mortgage Loan Schedule is true and correct in all material respects as of the
date of this Agreement and as of the Cut-Off Date.
(2) Whole Loan; Ownership of Mortgage Loans. Each Mortgage Loan is a
whole loan and not a participation interest in a mortgage loan. Immediately
prior to the transfer to the Purchaser of the Mortgage Loans, the Seller had
good title to, and was the sole owner of, each Mortgage Loan. The Seller has
full right, power and authority to transfer and assign each of the Mortgage
Loans to or at the direction of the Purchaser and has validly and effectively
conveyed (or caused to be conveyed) to the Purchaser or its designee all of the
Seller's legal and beneficial interest in and to the Mortgage Loans free and
clear of any and all pledges, liens, charges, security interests and/or other
encumbrances. The sale of the Mortgage Loans to the Purchaser or its designee
does not require the Seller to obtain any governmental or regulatory approval or
consent that has not been obtained. None of the Mortgage Loan documents
restricts the Seller's right to transfer the Mortgage Loan to the Purchaser or
to the Trustee.
(3) Payment Record. No scheduled payment of principal and interest
under any Mortgage Loan was 30 days or more past due as of the Cut-Off Date, and
no Mortgage Loan was 30 days or more delinquent in the twelve-month period
immediately preceding the Cut-Off Date.
(4) Lien; Valid Assignment. The Mortgage related to and delivered in
connection with each Mortgage Loan constitutes a valid and, subject to the
exceptions set forth in paragraph 13 below, enforceable first priority lien upon
the related Mortgaged Property, prior to all other liens and encumbrances,
except for (a) the lien for current real estate taxes 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/or are referred to in
the related lender's title insurance policy, (c) exceptions and exclusions
specifically referred to in such lender's title insurance policy, (d) other
matters to which like properties are commonly subject, none of which matters
referred to in clauses (b), (c) or (d), individually or in the aggregate,
materially interferes with the security intended to be provided by such
Mortgage, the marketability or current use or operation of the Mortgaged
Property or the current ability of the Mortgaged Property to generate operating
income sufficient to service the Mortgage Loan debt and (e) if such Mortgage
Loan is cross-collateralized with any other Mortgage Loan, the lien of the
Mortgage for such other Mortgage Loan (the foregoing items (a) through (e) being
herein referred to as the "Permitted Encumbrances"). The related assignment of
such Mortgage executed and delivered in favor of the Trustee is in recordable
form and constitutes a legal, valid and binding assignment, sufficient to convey
to the assignee named therein all of the assignor's right, title and interest
in, to and under such Mortgage. Such Mortgage, together with any separate
security agreements, chattel mortgages or equivalent instruments, establishes
and creates a valid and, subject to the exceptions set forth in paragraph 13
below, enforceable security interest in favor of the holder
2-1
thereof in all of the related Mortgagor's personal property used in, and
reasonably necessary to operate, the related Mortgaged Property. In the case of
a Mortgaged Property operated as a hotel or an assisted living facility, the
Mortgagor's personal property includes all personal property that a prudent
mortgage lender making a similar Mortgage Loan would deem reasonably necessary
to operate the related Mortgaged Property as it is currently being operated. A
Uniform Commercial Code financing statement has been filed and/or recorded in
all places necessary to perfect a valid security interest in such personal
property, to the extent a security interest may be so created therein, and such
security interest is a first priority security interest, subject to any prior
purchase money security interest in such personal property and any personal
property leases applicable to such personal property. Notwithstanding the
foregoing, no representation is made as to the perfection of any security
interest in rents or other personal property to the extent that possession or
control of such items or actions other than the filing of Uniform Commercial
Code financing statements are required in order to effect such perfection.
(5) Assignment of Leases and Rents. The Assignment of Leases related
to and delivered in connection with each Mortgage Loan establishes and creates a
valid, subsisting and, subject to the exceptions set forth in paragraph 13
below, enforceable first priority lien and first priority security interest in
the related Mortgagor's interest in all leases, sub-leases, licenses or other
agreements pursuant to which any person is entitled to occupy, use or possess
all or any portion of the real property subject to the related Mortgage, 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 has been
executed and delivered in favor of the Trustee and is in recordable form and
constitutes a legal, valid and binding assignment, sufficient to convey to the
assignee named therein all of the assignor's right, title and interest in, to
and under such Assignment of Leases.
(6) Mortgage Status; Waivers and Modifications. No Mortgage has been
satisfied, cancelled, rescinded or subordinated in whole or in part, and the
related Mortgaged Property has not been released from the lien of such Mortgage,
in whole or in part (except for partial reconveyances of real property that are
set forth on Schedule A to Exhibit 2), nor has any instrument been executed that
would effect any such satisfaction, cancellation, subordination, rescission or
release, in any manner that, in each case, materially adversely affects the
value of the related Mortgaged Property. None of the terms of any Mortgage Note,
Mortgage or Assignment of Leases has been impaired, waived, altered or modified
in any respect, except by written instruments, all of which are included in the
related Mortgage File and none of the Mortgage Loans has been materially
modified since ___________.
(7) Condition of Property; Condemnation. With respect to (i) the
Mortgaged Properties securing the Mortgage Loans that were the subject of an
engineering report issued after the first day of the month that is 18 months
prior to the Closing Date as set forth on Schedule A to this Exhibit 2, each
Mortgaged Property is, to the Seller's knowledge, free and clear of any damage
(or adequate reserves therefor have been established based on the engineering
report) that would materially and adversely affect its value as security for the
related Mortgage Loan and (ii) the Mortgaged Properties securing the Mortgage
Loans that were not the subject of an engineering report 18 months prior to the
Closing Date as set forth on Schedule A to this Exhibit 2, each Mortgaged
Property is in good repair and condition and all building systems contained
therein are in good working order (or adequate reserves therefor have been
established) and each Mortgaged Property is free of structural defects, in each
case, that would
2-2
materially and adversely affect its value as security for the related Mortgage
Loan as of the date hereof. The Seller has received no notice of the
commencement of any proceeding for the condemnation of all or any material
portion of any Mortgaged Property. To the Seller's knowledge (based on surveys
and/or title insurance obtained in connection with the origination of the
Mortgage Loans), as of the date of the origination of each Mortgage Loan, all of
the material improvements on the related Mortgaged Property that were considered
in determining the appraised value of the Mortgaged Property lay wholly within
the boundaries and building restriction lines of such property, except for
encroachments that are insured against by the lender's Title Policy referred to
herein or that do not materially and adversely affect the value or marketability
of such Mortgaged Property, and no improvements on adjoining properties
materially encroached upon such Mortgaged Property so as to materially and
adversely affect the value or marketability of such Mortgaged Property, except
those encroachments that are insured against by the Title Policy referred to
herein.
(8) Title Insurance. Each Mortgaged Property is covered by an
American Land Title Association (or a comparable form as adopted in the
applicable jurisdiction) lender's title insurance policy, a pro forma policy or
a marked-up title insurance commitment (on which the required premium has been
paid) which evidences such title insurance policy (the "Title Policy") in the
original principal amount of the related Mortgage Loan after all advances of
principal. Each Title Policy insures that the related Mortgage is a valid first
priority lien on such Mortgaged Property, subject only to Permitted
Encumbrances. Each 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 no material claims have been made thereunder and no claims have been
paid thereunder. No holder of the related Mortgage has done, by act or omission,
anything that would materially impair the coverage under such Title Policy.
Immediately following the transfer and assignment of the related Mortgage Loan
to the Trustee, such Title Policy (or, if it has yet to be issued, the coverage
to be provided thereby) will inure to the benefit of the Trustee without the
consent of or notice to the insurer. To the Seller's knowledge, the insurer
issuing such Title Policy is qualified to do business in the jurisdiction in
which the related Mortgaged Property is located.
(9) No Holdbacks. The proceeds of each Mortgage Loan have been fully
disbursed and there is no obligation for future advances with respect thereto.
With respect to each Mortgage Loan, any and all requirements as to completion of
any on-site or off-site improvement that must be satisfied as a condition to
disbursements of any funds escrowed for such purpose have been complied with on
or before the Closing Date, or any such funds so escrowed have not been
released.
(10) Mortgage Provisions. The Mortgage Note or Mortgage for each
Mortgage Loan, together with applicable state law, contains customary and
enforceable provisions (subject to the exceptions set forth in paragraph 13)
such as to render the rights and remedies of the holder thereof adequate for the
practical realization against the related Mortgaged Property of the principal
benefits of the security intended to be provided thereby.
(11) Trustee under Deed of Trust. If any Mortgage is a deed of
trust, (1) a trustee, duly qualified under applicable law to serve as such, is
properly designated and serving under such Mortgage, and (2) no fees or expenses
are payable to such trustee by the Seller, the
2-3
Purchaser or any transferee thereof except in connection with a trustee's sale
after default by the related Mortgagor or in connection with any full or partial
release of the related Mortgaged Property or related security for the related
Mortgage Loan.
(12) Environmental Conditions.
(i) With respect to the Mortgaged Properties securing the Mortgage
Loans that were the subject of an environmental site assessment after the first
day of the month that is 18 months prior to the Closing Date, an environmental
site assessment, or an update of a previous such report, was performed with
respect to each Mortgaged Property in connection with the origination or the
acquisition of the related Mortgage Loan, a report of each such assessment (or
the most recent assessment with respect to each Mortgaged Property) (an
"Environmental Report") has been delivered to the Purchaser, and the Seller has
no knowledge of any material and adverse environmental condition or circumstance
affecting any Mortgaged Property that was not disclosed in such report. Each
Mortgage requires the related Mortgagor to comply with all applicable federal,
state and local environmental laws and regulations. Where such assessment
disclosed the existence of a material and adverse environmental condition or
circumstance affecting any Mortgaged Property, (i) a party not related to the
Mortgagor was identified as the responsible party for such condition or
circumstance or (ii) environmental insurance covering such condition was
obtained or must be maintained until the condition is remediated or (iii) the
related Mortgagor was required either to provide additional security that was
deemed to be sufficient by the originator in light of the circumstances and/or
to establish an operations and maintenance plan. In connection with the
origination of each Mortgage Loan, each environmental consultant has represented
in such Environmental Report or in a supplement letter that the environmental
assessment of the applicable Mortgaged Property was conducted utilizing
generally accepted Phase I industry standards using the American Society for
Testing and Materials (ASTM) Standard Practice E 1527-00.
(ii) With respect to the Mortgaged Properties securing the Mortgage
Loans that were not the subject of an environmental site assessment meeting ASTM
Standards after the first day of the month that is 18 months prior to the
Closing Date as set forth on Schedule A to this Exhibit 2, (i) no Hazardous
Material is present on such Mortgaged Property such that (1) the value, use or
operation of such Mortgaged Property is materially and adversely affected or (2)
under applicable federal, state or local law, (a) such Hazardous Material could
be required to be eliminated at a cost materially and adversely affecting the
value of the Mortgaged Property before such Mortgaged Property could be altered,
renovated, demolished or transferred or (b) the presence of such Hazardous
Material could (upon action by the appropriate governmental authorities) subject
the owner of such Mortgaged Property, or the holders of a security interest
therein, to liability for the cost of eliminating such Hazardous Material or the
hazard created thereby at a cost materially and adversely affecting the value of
the Mortgaged Property, and (ii) such Mortgaged Property is in material
compliance with all applicable federal, state and local laws pertaining to
Hazardous Materials or environmental hazards, any noncompliance with such laws
does not have a material adverse effect on the value of such Mortgaged Property
and neither Seller nor, to Seller's knowledge, the related Mortgagor or any
current tenant thereon, has received any notice of violation or potential
violation of any such law.
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"Hazardous Materials" means gasoline, petroleum products,
explosives, radioactive materials, polychlorinated biphenyls or
related or similar materials, and any other substance, material or
waste as may be defined as a hazardous or toxic substance by any
federal, state or local environmental law, ordinance, rule,
regulation or order, including without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as
amended (42 U.S.C. ▇▇.▇▇. 9601 et seq.), the Hazardous Materials
Transportation Act as amended (42 U.S.C. ▇▇.▇▇. 6901 et seq.), the
Resource Conservation and Recovery Act, as amended (42 U.S.C. ▇▇.▇▇.
6901 et seq.), the Federal Water Pollution Control Act as amended
(33 U.S.C. ▇▇.▇▇. 1251 et seq.), the Clean Air Act as amended (42
U.S.C. ▇▇.▇▇. 1251 et seq.) and any regulations promulgated pursuant
thereto.
(13) Loan Document Status. Each Mortgage Note, Mortgage, Assignment
of Leases and other agreement that evidences or secures such Mortgage Loan and
was executed by or on behalf of the related Mortgagor 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
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally, and by general principles of equity
(regardless of whether such enforcement is considered in a proceeding in equity
or at law) and there is no valid defense, counterclaim or right of offset or
rescission available to the related Mortgagor with respect to such Mortgage
Note, Mortgage or other agreement.
(14) Insurance. Each Mortgaged Property is, and is required pursuant
to the related Mortgage to be, insured by (a) a fire and extended perils
insurance policy providing coverage against loss or damage sustained by reason
of fire, lightning, windstorm, hail, explosion, riot, riot attending a strike,
civil commotion, aircraft, vehicles and smoke, and, to the extent required as of
the date of origination by the originator of such Mortgage Loan consistent with
its normal commercial mortgage lending practices, against other risks insured
against with respect to similarly situated properties in the locality of the
Mortgaged Property (so-called "All Risk" coverage) in an amount not less than
the lesser of the principal balance of the related Mortgage Loan and the
replacement cost of the improvements located at the Mortgaged Property, and
contains no provisions for a deduction for depreciation, and not less than the
amount necessary to avoid the operation of any co-insurance provisions with
respect to the Mortgaged Property; (b) a business interruption or rental loss
insurance policy, in an amount at least equal to six months of operations of the
Mortgaged Property; (c) a flood insurance policy (if any portion of buildings or
other structures on the Mortgaged Property are located in an area identified by
the Federal Emergency Management Agency as having special flood hazards and the
Federal Emergency Management Agency requires flood insurance to be maintained);
and (d) a comprehensive general liability insurance policy in amounts as are
generally required by commercial mortgage lenders, for properties of similar
types and in any event not less than $1 million per occurrence. Such insurance
policy contains a standard mortgagee clause that names the mortgagee as an
additional insured in the case of liability insurance policies and as a loss
payee in the case of property insurance policies and requires prior notice to
the holder of the Mortgage of termination or cancellation. No such notice has
been received, including any notice of nonpayment of premiums, that has not been
cured. Each Mortgage obligates the related
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Mortgagor to maintain all such insurance and, upon such Mortgagor's failure to
do so, authorizes the holder of the Mortgage to maintain such insurance at the
Mortgagor's cost and expense and to seek reimbursement therefor from such
Mortgagor. Each Mortgage provides that casualty insurance proceeds will be
applied (a) to the restoration or repair of the related Mortgaged Property, (b)
to the restoration or repair of the related Mortgaged Property, with any excess
insurance proceeds after restoration or repair being paid to the Mortgagor, or
(c) to the reduction of the principal amount of the Mortgage Loan. For each
Mortgaged Property located in a Zone 3 or Zone 4 seismic zone, either: (i) a
seismic report which indicated a PML of less than 20% was prepared, based on a
450 or 475-year lookback with a 10% probability of exceedance in a 50-year
period, in connection with the origination of the Mortgage Loan secured by such
Mortgaged Property or (ii) the improvements for the Mortgaged Property are
insured against earthquake damage.
(15) Taxes and Assessments. As of the Closing Date, there are no
delinquent or unpaid taxes, assessments (including assessments payable in future
installments) or other outstanding charges affecting any Mortgaged Property that
are or may become a lien of priority equal to or higher than the lien of the
related Mortgage. For purposes of this representation and warranty, real
property taxes and assessments shall not be considered delinquent or unpaid
until the date on which interest or penalties would be first payable thereon.
(16) Mortgagor Bankruptcy. No Mortgagor is, to the Seller's
knowledge, a debtor in any state or federal bankruptcy or insolvency proceeding.
(17) Leasehold Estate. Each Mortgaged Property consists of a fee
simple estate in real estate or, if the related Mortgage Loan is secured in
whole or in part by the interest of a Mortgagor as a lessee under a ground lease
of a Mortgaged Property (a "Ground Lease"), by the related Mortgagor's interest
in the Ground Lease but not by the related fee interest in such Mortgaged
Property (the "Fee Interest"), and as to such Ground Leases:
(a) Such Ground Lease or a memorandum thereof has been or will be
duly recorded; such Ground Lease (or the related estoppel letter or lender
protection agreement between the Seller and related lessor) does not
prohibit the current use of the Mortgaged Property and does not prohibit
the interest of the lessee thereunder to be encumbered by the related
Mortgage; and there has been no material change in the payment terms of
such Ground Lease since the origination of the related Mortgage Loan, with
the exception of material changes reflected in written instruments that
are a part of the related Mortgage File;
(b) The lessee's interest in such Ground Lease is not subject to any
liens or encumbrances superior to, or of equal priority with, the related
Mortgage, other than Permitted Encumbrances;
(c) The Mortgagor's interest in such Ground Lease is assignable to
the Purchaser and the Trustee as its assignee upon notice to, but without
the consent of, the lessor thereunder (or, if such consent is required, it
has been obtained prior to the Closing Date) and, in the event that it is
so assigned, is further assignable by the Purchaser and its
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successors and assigns upon notice to, but without the need to obtain the
consent of, such lessor or if such lessor's consent is required it cannot
be unreasonably withheld;
(d) Such Ground Lease is in full force and effect, and the Ground
Lease provides that no material amendment to such Ground Lease is binding
on a mortgagee unless the mortgagee has consented thereto, and the Seller
has received no notice that an event of default has occurred thereunder,
and, to the Seller's knowledge, there exists no condition that, but for
the passage of time or the giving of notice, or both, would result in an
event of default under the terms of such Ground Lease;
(e) Such Ground Lease, or an estoppel letter or other agreement, (A)
requires the lessor under such Ground Lease to give notice of any default
by the lessee to the holder of the Mortgage; and (B) provides that no
notice of termination given under such Ground Lease is effective against
the holder of the Mortgage unless a copy of such notice has been delivered
to such holder and the lessor has offered or is required to enter into a
new lease with such holder on terms that do not materially vary from the
economic terms of the Ground Lease.
(f) A mortgagee is permitted a reasonable opportunity (including,
where necessary, sufficient time to gain possession of the interest of the
lessee under such Ground Lease) to cure any default under such Ground
Lease, which is curable after the receipt of notice of any such default,
before the lessor thereunder may terminate such Ground Lease;
(g) Such Ground Lease has an original term (including any extension
options set forth therein) which extends not less than twenty years beyond
the Stated Maturity Date of the related Mortgage Loan;
(h) Under the terms of such Ground Lease and the related Mortgage,
taken together, any related insurance proceeds or condemnation award
awarded to the holder of the ground lease interest will be applied either
(A) to the repair or restoration of all or part of the related Mortgaged
Property, with the mortgagee or a trustee appointed by the related
Mortgage having the right to hold and disburse such proceeds as the repair
or restoration progresses (except in such cases where a provision
entitling a third party to hold and disburse such proceeds would not be
viewed as commercially unreasonable by a prudent commercial mortgage
lender), or (B) 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 prudent commercial
mortgage lenders lending on a similar Mortgaged Property in the lending
area where the Mortgaged Property is located; and such Ground Lease
contains a covenant that the lessor thereunder is not permitted, in the
absence of an uncured default, to disturb the possession, interest or
quiet enjoyment of the lessee thereunder for any reason, or in any manner,
which would materially adversely affect the security provided by the
related Mortgage; and
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(j) Such Ground Lease requires the Lessor to enter into a new lease
upon termination of such Ground Lease if the Ground Lease is rejected in a
bankruptcy proceeding.
(k) Escrow Deposits. All escrow deposits and payments relating to
each Mortgage Loan that are, as of the Closing Date, required to be
deposited or paid have been so deposited or paid.
(l) LTV Ratio. The gross proceeds of each Mortgage Loan to the
related Mortgagor at origination did not exceed the non-contingent
principal amount of the Mortgage Loan and either: (a) such Mortgage Loan
is secured by an interest in real property having a fair market value (i)
at the date the Mortgage Loan was originated, at least equal to 80 percent
of the original principal balance of the Mortgage Loan or (ii) at the
Closing Date, at least equal to 80 percent of the principal balance of the
Mortgage Loan on such date; provided that for purposes hereof, the fair
market value of the real property interest must first be reduced by (x)
the amount of any lien on the real property interest that is senior to the
Mortgage Loan and (y) a proportionate amount of any lien that is in parity
with the Mortgage Loan (unless such other lien secures a Mortgage Loan
that is cross-collateralized with such Mortgage Loan, in which event the
computation described in clauses (a)(i) and (a)(ii) of this paragraph 19
shall be made on a pro rata basis in accordance with the fair market
values of the Mortgaged Properties securing such cross-collateralized
Mortgage Loans); or (b) substantially all the proceeds of such Mortgage
Loan were used to acquire, improve or protect the real property that
served as the only security for such Mortgage Loan (other than a recourse
feature or other third party credit enhancement within the meaning of
Treasury Regulations Section 1.860G-2(a)(1)(ii)).
(18) Mortgage Loan Modifications. Any Mortgage Loan that was
"significantly modified" prior to the Closing Date so as to result in a taxable
exchange under Section 1001 of the Code either (a) was modified as a result of
the default under such Mortgage Loan or under circumstances that made a default
reasonably foreseeable or (b) satisfies the provisions of either clause (a)(i)
of paragraph 19 (substituting the date of the last such modification for the
date the Mortgage Loan was originated) or clause (a)(ii) of paragraph 19,
including the proviso thereto.
(19) Advancement of Funds by the Seller. No holder of a 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,
directly or indirectly, for the payment of any amount required by such Mortgage
Loan.
(20) No Mechanics' Liens. Each Mortgaged 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, except, in each case, for liens insured against by
the Title Policy referred to herein, and 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 except, in each case, for liens insured against by the
Title Policy referred to herein.
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(21) Compliance with Laws. Except as otherwise specifically
disclosed in an exception on Schedule A attached hereto to another
representation and warranty made by the seller in this Exhibit 2, at
origination, each Mortgage Loan complied with all applicable federal, state and
local statutes and regulations. Each Mortgage Loan complied with (or is exempt
from) all applicable usury laws in effect at its date of origination.
(22) Cross-collateralization. No Mortgage Loan is
cross-collateralized or cross-defaulted with any loan other than one or more
other Mortgage Loans.
(23) Releases of Mortgaged Property. Except as described in the next
sentence, no Mortgage Note or Mortgage requires the mortgagee to release all or
any material portion of the related Mortgaged Property that was included in the
appraisal for such Mortgaged Property, and/or generates income from the lien of
the related Mortgage except upon payment in full of all amounts due under the
related Mortgage Loan or in connection with the defeasance provisions of the
related Note and Mortgage. The Mortgages relating to those Mortgage Loans
identified on Schedule A hereto require the mortgagee to grant releases of
portions of the related Mortgaged Properties upon (a) the satisfaction of
certain legal and underwriting requirements and/or (b) the payment of a release
price and prepayment consideration in connection therewith. Except as described
in the first sentence hereof and for those Mortgage Loans identified on Schedule
A, no Mortgage Loan permits the full or partial release or substitution of
collateral unless the mortgagee or servicer can require the Mortgagor to provide
an opinion of tax counsel to the effect that such release or substitution of
collateral (a) would not constitute a "significant modification" of such
Mortgage Loan within the meaning of Treas. Reg. ss.1.860G-2(b)(2) and (b) would
not cause such Mortgage Loan to fail to be a "qualified mortgage" within the
meaning of Section 860G(a)(3)(A) of the Code. The loan documents require the
related Mortgagor to bear the cost of such opinion.
(24) No Equity Participation or Contingent Interest. No Mortgage
Loan contains any equity participation by the lender or provides for negative
amortization (except that the ARD Loan may provide for the accrual of interest
at an increased rate after the Anticipated Repayment Date) or for any contingent
or additional interest in the form of participation in the cash flow of the
related Mortgaged Property.
(25) No Material Default. To the Seller's knowledge, there exists no
material default, breach, violation or event of acceleration (and no event
which, with the passage of time or the giving of notice, or both, would
constitute any of the foregoing) under the documents evidencing or securing the
Mortgage Loan, in any such case to the extent the same materially and adversely
affects the value of the Mortgage Loan and the related Mortgaged Property;
provided, however, that this representation and warranty does not address or
otherwise cover any default, breach, violation or event of acceleration that
specifically pertains to any matter otherwise covered by any other
representation and warranty made by the Seller elsewhere in this Exhibit 2 or
the exceptions listed in Schedule A attached hereto.
(26) Inspections. The Seller (or if the Seller is not the
originator, the originator of the Mortgage Loan) has inspected or caused to be
inspected each Mortgaged Property in connection with the origination of the
related Mortgage Loan.
2-9
(27) Local Law Compliance. Based on due diligence considered
reasonable by prudent commercial mortgage lenders in the lending area where the
Mortgaged Property is located, the improvements located on or forming part of
each Mortgaged Property comply with applicable zoning laws and ordinances, or
constitute a legal non-conforming use or structure or, if any such improvement
does not so comply, such non-compliance does not materially and adversely affect
the value of the related Mortgaged Property, such value as determined by the
appraisal performed at origination or in connection with the sale of the related
Mortgage Loan by the Seller hereunder.
(28) Junior Liens. None of the Mortgage Loans permits the related
Mortgaged Property to be encumbered by any lien (other than a Permitted
Encumbrance) junior to or of equal priority with the lien of the related
Mortgage without the prior written consent of the holder thereof or the
satisfaction of debt service coverage or similar criteria specified therein. The
Seller has no knowledge that any of the Mortgaged Properties is encumbered by
any lien (other than a Permitted Encumbrance) junior to the lien of the related
Mortgage.
(29) Actions Concerning Mortgage Loans. To the knowledge of the
Seller, there are no actions, suits or proceedings before any court,
administrative agency or arbitrator concerning any Mortgage Loan, Mortgagor or
related Mortgaged Property that might adversely affect title to the Mortgaged
Property or the validity or enforceability of the related Mortgage or that might
materially and adversely affect the value of the Mortgaged Property as security
for the Mortgage Loan or the use for which the premises were intended.
(30) Servicing. The servicing and collection practices used by the
Seller or any prior holder or servicer of each Mortgage Loan have been in all
material respects legal, proper and prudent and have met customary industry
standards.
(31) Licenses and Permits. To the Seller's knowledge, based on due
diligence that it customarily performs in the origination of comparable mortgage
loans, as of the date of origination of each Mortgage Loan or as of the date of
the sale of the related Mortgage Loan by the Seller hereunder, the related
Mortgagor 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.
(32) Collateral in Trust. The Mortgage Note for each Mortgage Loan
is not secured by a pledge of any collateral that has not been assigned to the
Purchaser.
(33) Due on Sale. Each Mortgage Loan contains a "due on sale"
clause, which provides for the acceleration of the payment of the unpaid
principal balance of the Mortgage Loan if, without prior written consent of the
holder of the Mortgage, the property subject to the Mortgage or any material
portion thereof, or a controlling interest in the related Mortgagor, is
transferred, sold or encumbered by a junior mortgage or deed of trust; provided,
however, that certain Mortgage Loans provide a mechanism for the assumption of
the loan by a third party upon the Mortgagor's satisfaction of certain
conditions precedent, and upon payment of a transfer fee, if any, or transfer of
interests in the Mortgagor or constituent entities of the Mortgagor to a third
party or parties related to the Mortgagor upon the Mortgagor's satisfaction of
certain conditions precedent.
2-10
(34) Non-Recourse Exceptions. The Mortgage Loan documents for each
Mortgage Loan provide that such Mortgage Loan constitutes either (a) the
recourse obligations of at least one natural person or (b) the non-recourse
obligations of the related Mortgagor, provided that at least one natural person
(and the Mortgagor if the Mortgagor is not a natural person) is liable to the
holder of the Mortgage Loan for damages arising in the case of fraud or willful
misrepresentation by the Mortgagor, misappropriation of rents, insurance
proceeds or condemnation awards and breaches of the environmental covenants in
the Mortgage Loan documents.
(35) REMIC Eligibility. Each Mortgage Loan is a "qualified mortgage"
as such term is defined in Section 860G(a)(3) of the Code (without regard to
Treasury Regulations Section 1.860G-2(f)(2), which treats certain defective
mortgage loans as qualified mortgages).
(36) Prepayment Premiums. As of the applicable date of origination
of each such Mortgage Loan, any prepayment premiums and yield maintenance
charges payable under the terms of the Mortgage Loans, in respect of voluntary
prepayments, constituted customary prepayment premiums and yield maintenance
charges for commercial mortgage loans of the Seller.
(37) [Reserved].
(38) Single Purpose Entity. The Mortgagor on each Mortgage Loan with
a Cut-Off Date Principal Balance in excess of $10 million, was, as of the
origination of the Mortgage Loan, a Single Purpose Entity. For this purpose, a
"Single Purpose Entity" shall mean an entity, other than an individual, whose
organizational documents provide substantially to the effect that it was formed
or organized solely for the purpose of owning and operating one or more of the
Mortgaged Properties securing the Mortgage Loans and prohibit it from engaging
in any business unrelated to such Mortgaged Property or Properties, and whose
organizational documents further provide, or which entity represented in the
related Mortgage Loan documents, substantially to the effect that it does not
have any assets other than those related to its interest in, and operation of,
such Mortgaged Property or Properties, or any indebtedness other than as
permitted by the related Mortgage(s) or the other related Mortgage Loan
documents, that it has its own books and records and accounts separate and apart
from any other person (other than a Mortgagor for a Mortgage Loan that is
cross-collateralized and cross-defaulted with the related Mortgage Loan), and
that it holds itself out as a legal entity, separate and apart from any other
person.
(39) Defeasance and Assumption Costs. The related Mortgage Loan
Documents provide that the related borrower is responsible for the payment of
all reasonable costs and expenses of the Lender incurred in connection with (i)
the defeasance of such Mortgage Loan and the release of the related Mortgaged
Property, and (ii) the approval of an assumption of such Mortgage Loan.
(40) Defeasance. No Mortgage Loan provides that it can be defeased
until a date that is more than two years after the Closing Date or provides that
it can be defeased with any property other than government securities (as
defined in Section 2(a)(16) of the Investment
2-11
Company Act of 1940, as amended) or any direct non-callable security issued or
guaranteed as to principal or interest by the United States.
2-12
SCHEDULE A
EXCEPTIONS TO REPRESENTATIONS AND WARRANTIES
LISTED IN EXHIBIT 2 REGARDING INDIVIDUAL MORTGAGE LOANS
Sch. A-1
EXHIBIT 3
PURCHASE PRICE
Purchase Price
Accrued Interest
----------------
Total
3-1
EXHIBIT 4
▇▇▇▇ OF SALE
1. Parties. The parties to this ▇▇▇▇ of Sale are the following:
Seller: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc.
Purchaser: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital I Inc.
2. Sale. For value received, the Seller hereby conveys to the
Purchaser, without recourse, all right, title and interest in and to the
Mortgage Loans identified on Exhibit 1 (the "Mortgage Loan Schedule") to the
Mortgage Loan Purchase Agreement, dated as of ________, 20___ (the "Mortgage
Loan Purchase Agreement"), between the Seller and the Purchaser and all of the
following property:
(a) All accounts, general intangibles, chattel paper, instruments,
documents, money, deposit accounts, certificates of deposit, goods,
letters of credit, advices of credit and investment property consisting
of, arising from or relating to any of the following property: the
Mortgage Loans identified on the Mortgage Loan Schedule including the
related Mortgage Notes, Mortgages, security agreements, and title, hazard
and other insurance policies, all distributions with respect thereto
payable after the Cut-Off Date, all substitute or replacement Mortgage
Loans and all distributions with respect thereto, and the Mortgage Files;
(b) All accounts, general intangibles, chattel paper, instruments,
documents, money, deposit accounts, certificates of deposit, goods,
letters of credit, advices of credit, investment property, and other
rights arising from or by virtue of the disposition of, or collections
with respect to, or insurance proceeds payable with respect to, or claims
against other Persons with respect to, all or any part of the collateral
described in clause (a) above (including any accrued discount realized on
liquidation of any investment purchased at a discount); and
(c) All cash and non-cash proceeds of the collateral described in
clauses (a) and (b) above.
3. Purchase Price. The amount and other consideration set forth on
Exhibit 3 to the Mortgage Loan Purchase Agreement.
4. Definitions. Terms used but not defined herein shall have the
meanings assigned to them in the Mortgage Loan Purchase Agreement.
4-1
IN WITNESS WHEREOF, each of the parties hereto has caused this ▇▇▇▇
of Sale to be duly executed and delivered on this ___ day of ________, 20___.
SELLER: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ MORTGAGE
CAPITAL INC.
By:
-----------------------------------
Name:
Title:
PURCHASER: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CAPITAL I INC.
By:
-----------------------------------
Name:
Title:
4-2
EXHIBIT 5
FORM OF LIMITED POWER OF ATTORNEY
THIS DOCUMENT PREPARED BY,
AND AFTER RECORDING RETURN TO:
[Name and address of Master Servicer, Special Servicer and Trustee]
LIMITED POWER OF ATTORNEY
Know all persons by these presents; that the undersigned in its
capacity as Seller, having an address of ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇ (the "Seller"), being duly empowered and
authorized to do so, does hereby make, constitute and appoint [Name and address
of Master Servicer, Special Servicer and Trustee] as the true and lawful
attorneys-in-fact for the undersigned, in its name, place and stead, and for its
use and benefit:
1. To empower the Trustee, the Master Servicer and, in the event of
the failure or incapacity of the Trustee and the Master Servicer, the Special
Servicer, to submit for recording, at the expense of the Seller, any mortgage
loan documents required to be recorded as described in the Pooling and Servicing
Agreement, dated as of ________, 20___ (the "Pooling and Servicing Agreement"),
among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital I Inc., as Depositor, the Master Servicer, the
Special Servicer, the Trustee, and ____________, as Paying Agent and Certificate
Registrar with respect to the Trust and any intervening assignments with
evidence of recording thereon that are required to be included in the Mortgage
File (so long as original counterparts have previously been delivered to the
Trustee).
2. This power of attorney shall be limited to the above-mentioned
exercise of power.
3. This instrument is to be construed and interpreted as a limited
power of attorney. The enumeration of specific items, rights, acts or powers
herein is not intended to, nor does it give rise to, and it is not intended to
be construed as, a general power of attorney.
4. The rights, power of authority of said attorney herein granted
shall commence and be in full force and effect on the date hereof and such
rights, powers and authority shall remain in full force and effect until the
termination of the Pooling and Servicing Agreement.
Capitalized terms used herein but not defined herein shall have the
meanings assigned to them in the Pooling and Servicing Agreement.
5-1
IN WITNESS WHEREOF, I have hereunto set my hand this ____ day of
October 2005.
Witnessed by: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ MORTGAGE
CAPITAL INC.
___________________________ By:________________________
Print Name: Name:
Title:
STATE OF______________________)
COUNTY OF_____________________)
On __________________________, before me, a Notary Public in and for said
county, personally appeared ________________________________, personally known
to me (or proved to me on the basis of satisfactory evidence) to be the person
whose name is subscribed to the within instrument and acknowledged to me that
he/she executed the same in his/her authorized capacity, and that by his/her
signature on the instrument the person acted and executed the instrument.
Witness my hand and official seal.
---------------------------------------
Commission Expires:
5-2
