EXECUTION COPY
MORTGAGE LOAN PURCHASE AGREEMENT
Mortgage Loan Purchase Agreement, dated as of January 31, 2005 (the
"Agreement"), between UBS Real Estate Investments Inc. (together with its
successors and permitted assigns hereunder, the "Seller"), UBS Principal Finance
LLC, as an additional party responsible for the Seller's obligations hereunder
(in such capacity, together with its successors and permitted assigns hereunder,
the "Additional Party"), and Structured Asset Securities Corporation II
(together with its successors and permitted assigns hereunder, the "Purchaser").
The Seller intends to sell and the Purchaser intends to purchase
certain multifamily and commercial mortgage loans (the "Mortgage Loans") as
provided herein. The Purchaser intends to deposit the Mortgage Loans, together
with certain other multifamily and commercial mortgage loans (the "Other Loans";
and, together with the Mortgage Loans, the "Securitized Loans"), into a trust
fund (the "Trust Fund"), the beneficial ownership of which will be evidenced by
multiple classes (each, a "Class") of mortgage pass-through certificates (the
"Certificates") to be identified as the LB-UBS Commercial Mortgage Trust
2005-C1, Commercial Mortgage Pass-Through Certificates, Series 2005-C1. One or
more "real estate mortgage investment conduit" ("REMIC") elections will be made
with respect to the Trust Fund. The Certificates will be issued pursuant to a
Pooling and Servicing Agreement, to be dated as of January 11, 2005 (the
"Pooling and Servicing Agreement"), between the Purchaser, as depositor,
Wachovia Bank, National Association, as master servicer (the "Master Servicer"),
Allied Capital Corporation, as special servicer (the "Special Servicer"),
LaSalle Bank National Association, as trustee (the "Trustee"), and ABN AMRO
Bank, N.V., as fiscal agent. Capitalized terms used but not defined herein have
the respective meanings set forth in the Pooling and Servicing Agreement, as in
effect on the Closing Date.
The Purchaser has entered into an Underwriting Agreement (the
"Underwriting Agreement"), dated as of the date hereof, with Xxxxxx Brothers
Inc. ("Xxxxxx") and UBS Securities LLC ("UBSS" and, together with Xxxxxx in such
capacity, the "Underwriters"), whereby the Purchaser will sell to the
Underwriters all of the Certificates that are to be registered under the
Securities Act of 1933, as amended (the "Securities Act"). The Purchaser has
also entered into a Certificate Purchase Agreement (the "Certificate Purchase
Agreement"), dated as of the date hereof, with Xxxxxx and UBSS (together in such
capacity, the "Placement Agents"), whereby the Purchaser will sell to the
Placement Agents all of the remaining Certificates (other than the Residual
Interest Certificates).
In connection with the transactions contemplated hereby, the Seller,
UBS Americas Inc. (the "Co-Indemnitor"), the Purchaser, the Underwriters and the
Placement Agents have entered into an Indemnification Agreement (the
"Indemnification Agreement"), dated as of the date hereof.
Now, therefore, in consideration of the premises and the mutual
agreements set forth herein, the parties agree as follows:
SECTION 1. Agreement to Purchase.
The Seller agrees to sell, and the Purchaser agrees to purchase, the
Mortgage Loans identified on the schedule (the "Mortgage Loan Schedule") annexed
hereto as Exhibit A. The Mortgage
Loan Schedule may be amended to reflect the actual Mortgage Loans accepted by
the Purchaser pursuant to the terms hereof. The Mortgage Loans will have an
aggregate principal balance of $588,698,889 (the "Initial UBS Pool Balance") as
of the close of business on the Cut-off Date, after giving effect to any and all
payments of principal due thereon on or before such date, whether or not
received. The purchase and sale of the Mortgage Loans shall take place on
February 10, 2005 or such other date as shall be mutually acceptable to the
parties hereto (the "Closing Date"). The consideration for the Mortgage Loans
shall consist of: (A) a cash amount equal to a percentage (mutually agreed upon
by the parties hereto) of the Initial UBS Pool Balance, plus interest accrued on
each Mortgage Loan at the related Mortgage Rate (net of the related
Administrative Cost Rate), for the period from and including January 11, 2005 up
to but not including the Closing Date, which cash amount shall be paid to the
Seller or its designee by wire transfer in immediately available funds (or by
such other method as shall be mutually acceptable to the parties hereto) on the
Closing Date; and (B) a 100% Percentage Interest in the Class R-LR Certificates
and a 42.87812% Percentage Interest in each other Class of Residual Interest
Certificates (all such Residual Interest Certificates, the "Seller's Residual
Interest Certificates").
SECTION 2. Conveyance of Mortgage Loans.
(a) Effective as of the Closing Date, subject only to receipt of the
purchase price referred to in Section 1 hereof and satisfaction or waiver of the
conditions to closing set forth in Section 8 hereof, the Seller does hereby
sell, transfer, assign, set over and otherwise convey to the Purchaser, without
recourse, all the right, title and interest of the Seller (other than the
primary servicing rights) in and to the Mortgage Loans identified on the
Mortgage Loan Schedule as of such date. The Mortgage Loan Schedule, as it may be
amended, shall conform to the requirements set forth in this Agreement and the
Pooling and Servicing Agreement.
(b) The Purchaser or its assignee shall be entitled to receive all
scheduled payments of principal and interest due after the Cut-off Date, and all
other recoveries of principal and interest collected after the Cut-off Date
(other than in respect of principal and interest on the Mortgage Loans due on or
before the Cut-off Date). All scheduled payments of principal and interest due
on or before the Cut-off Date for each Mortgage Loan, but collected after such
date, shall belong to, and be promptly remitted to, the Seller.
(c) On or before the Closing Date, the Seller shall, on behalf of the
initial Purchaser, deliver to and deposit with (i) the Trustee or a Custodian
appointed thereby, a Mortgage File for each Mortgage Loan in accordance with the
terms of, and conforming to the requirements set forth in, the Pooling and
Servicing Agreement, with copies of each Mortgage File to be delivered by the
Trustee to, upon request, the Master Servicer (at the expense of the Trustee),
within 10 Business Days of such request; and (ii) the Master Servicer (or, at
the direction of the Master Servicer, to the appropriate Sub-Servicer), all
unapplied Escrow Payments and Reserve Funds in the possession or under the
control of the Seller that relate to the Mortgage Loans.
(d) The Seller shall, through an Independent third party (the
"Recording Agent") retained by it, as and in the manner provided in the Pooling
and Servicing Agreement (and in any event within 45 days following the later of
the Closing Date and the date on which all necessary recording information is
available to the Recording Agent), cause (i) each assignment of Mortgage and
each assignment of Assignment of Leases, in favor of, and delivered as part of
the related Mortgage File to
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the Trustee, to be submitted for recordation in the appropriate public office
for real property records, and (ii) such assignments to be delivered to the
Trustee following their return by the applicable public recording office, with
copies of any such returned assignments to be delivered by the Trustee to the
Master Servicer, at the expense of the Seller, at least every 90 days after the
Closing Date (or at additional times upon the request of the Master Servicer if
reasonably necessary for the ongoing administration and/or servicing of the
related Mortgage Loan by the Master Servicer); provided that, in those instances
where the public recording office retains the original assignment of Mortgage or
assignment of Assignment of Leases, a certified copy of the recorded original
shall be forwarded to the Trustee. If any such document or instrument is lost or
returned unrecorded because of a defect therein, then the Seller shall prepare a
substitute therefor or cure such defect or cause such to be done, as the case
may be, and the Seller shall deliver such substitute or corrected document or
instrument to the Trustee (or, if the Mortgage Loan is then no longer subject to
the Pooling and Servicing Agreement, to the then holder of such Mortgage Loan).
The Seller shall bear the out-of-pocket costs and expenses of all such
recording and delivery contemplated in the preceding paragraph, including,
without limitation, any out-of-pocket costs and expenses that may be incurred by
the Trustee in connection with any such recording or delivery performed by the
Trustee at the Seller's request and the fees of the Recording Agent.
Pursuant to the Pooling and Servicing Agreement and a letter agreement
dated February 10, 2005 (the "Letter Agreement") between Allied Capital
Corporation ("Allied"), the Depositor, the UBS Mortgage Loan Seller and the
Trustee, the Trustee, through a third party (the "Filing Agent") retained by it,
as and in the manner provided in the Pooling and Servicing Agreement and at the
expense of Allied (and in any event within 45 days following the later of the
Closing Date and the date on which all necessary filing information is available
to the Filing Agent), is required to cause (i) each assignment of Uniform
Commercial Code financing statements prepared by the Seller, in favor of, and
delivered as part of the related Mortgage File to the Trustee, to be submitted
for filing in the appropriate public office, and (ii) such assignments to be
delivered to the Trustee following their return by the applicable public filing
office, with copies of any such returned assignments to be delivered by the
Trustee to the Master Servicer, at the expense of the Seller, at least every 90
days after the Closing Date (or at additional times upon the request of the
Master Servicer if reasonably necessary for the ongoing administration and/or
servicing of the related Mortgage Loan by the Master Servicer). The Seller
hereby agrees to reasonably cooperate with the Trustee and the Filing Agent with
respect to the filing of the assignments of Uniform Commercial Code financing
statements as described in this paragraph and to forward to the Trustee filing
confirmation, if any, received in connection with such Uniform Commercial Code
financing statements filed in accordance with this paragraph. Notwithstanding
the foregoing, to the extent the Trustee provides Allied, pursuant to the Letter
Agreement, with an invoice for the expenses (i) reasonably to be incurred in
connection with the filings referred to in this paragraph and (ii) required to
be paid by Allied pursuant to the Letter Agreement, and such expenses are not
paid by Allied in advance of such filings, the Trustee, pursuant to the Pooling
and Servicing Agreement and the Letter Agreement and at the expense of the
Seller, shall only be required to cause the filing agent to file the assignments
of such Uniform Commercial Code financing statements with respect to Mortgage
Loans secured by hotel or hospitality properties.
(e) With respect to any Mortgage Loan, the following documents (other
than any document that constitutes part of the Mortgage File for such Mortgage
Loan): copies of any final appraisal, final survey, final engineering report,
final environmental report, opinion letters of counsel to
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the related mortgagor delivered in connection with the closing of such Mortgage
Loan, escrow agreements, reserve agreements, organization documentation for the
related mortgagor, organizational documentation for any related guarantor or
indemnitor, if the related guarantor or indemnitor is an entity, insurance
certificates or insurance review reports, leases for tenants representing 10% or
more of the annual income with respect to the related Mortgaged Property, final
seismic report and property management agreements, rent roll, property operating
statement and financial statements for the related guarantor or indemnitor, cash
management or lockbox agreement, zoning letters or zoning reports and the
documents, if any, specifically set forth on Exhibit C hereto (collectively, the
"Mortgage Origination Documents"), but in each case, only if the subject
document (a) was in fact obtained in connection with the origination of such
Mortgage Loan, (b) is reasonably necessary for the ongoing administration and/or
servicing of such Mortgage Loan by the Master Servicer or Special Servicer in
connection with its duties under the Pooling and Servicing Agreement, and (c) is
in the possession or under the control of the Seller shall, within 45 days of
the Closing Date, be delivered or caused to be delivered by the Seller to the
Master Servicer (or, at the direction of the Master Servicer, to the appropriate
Sub-Servicer); provided that the Seller shall not be required to deliver any
draft documents, privileged or other communications or correspondence, credit
underwriting or due diligence analyses or information, credit committee briefs
or memoranda or other internal approval documents or data or internal
worksheets, memoranda, communications or evaluations.
(f) After the Seller's transfer of the Mortgage Loans to the
Purchaser, as provided herein, the Seller shall not take any action inconsistent
with the Purchaser's ownership of the Mortgage Loans. Except for actions that
are the express responsibility of another party hereunder or under the Pooling
and Servicing Agreement, and further except for actions that the Seller is
expressly permitted to complete subsequent to the Closing Date, the Seller
shall, on or before the Closing Date, take all actions required under applicable
law to effectuate the transfer of the Mortgage Loans by the Seller to the
Purchaser.
(g) In connection with the obligations of the Master Servicer under
Sections 3.01(g) and 3.19(c) of the Pooling and Servicing Agreement, with regard
to each Mortgage Loan that is secured by the interests of the related Mortgagor
in a hospitality property (identified on Schedule VI to the Pooling and
Servicing Agreement) and each Mortgage Loan that has a related letter of credit,
the Seller shall deliver to and deposit with the Master Servicer, on or before
the Closing Date, any related franchise agreement, franchise comfort letter and
the original of such letter of credit. Further, in the event, with respect to a
Mortgage Loan with a related letter of credit, the Master Servicer determines
that a draw under such letter of credit has become necessary under the terms
thereof prior to the assignment of such letter of credit having been effected in
accordance with Section 3.01(g) of the Pooling and Servicing Agreement, the
Seller shall, upon the written direction of the Master Servicer, use its best
efforts to make such draw or to cause such draw to be made on behalf of the
Trustee.
(h) Pursuant to the Pooling and Servicing Agreement, the Master
Servicer shall review the documents with respect to each Mortgage Loan delivered
by the Seller pursuant to or as contemplated by Section 2(e) hereof and provide
each Seller and the Controlling Class Representative and the Special Servicer
with a certificate (the "Master Servicer Certification") within 90 days of the
Closing Date acknowledging its (or the appropriate Sub-Servicer's) receipt as of
the date of the Master Servicer Certification of such documents actually
received (provided that such review shall be limited to identifying the document
received, the Serviced Trust Mortgage Loan to which it purports to relate, that
it appears regular on its face and that it appears to have been executed (where
appropriate)).
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Notwithstanding anything to the contrary set forth herein, to the extent the
Seller has not been notified in writing of its failure to deliver any document
with respect to a Mortgage Loan required to be delivered pursuant to or as
contemplated by Section 2(e) hereof prior to the date occurring 18 months
following the date of the Master Servicer Certification, the Seller shall have
no obligation to provide such document.
(i) In addition, on the Closing Date, the Seller shall deliver (i) to
the Master Servicer for deposit in the Pool Custodial Account, the Initial
Deposits relating to the Mortgage Loans, and (ii) to the Trustee for deposit in
the Interest Reserve Account, the Interest Reserve Deposit with respect to each
Mortgage Loan that is an Interest Reserve Mortgage Loan.
SECTION 3. Representations, Warranties and Covenants of Seller and
Additional Party.
(a) Each of the Seller and the Additional Party (each, for purposes of
this Section 3(a), a "Representing Party") hereby represent and warrant to and
covenant with the Purchaser, as of the date hereof, that:
(i) The Representing Party is duly organized or formed, as the
case may be, validly existing and in good standing as a legal entity under
the laws of the State of Delaware and possesses all requisite authority,
power, licenses, permits and franchises to carry on its business as
currently conducted by it and to execute, deliver and comply with its
obligations under the terms of this Agreement.
(ii) This Agreement has been duly and validly authorized,
executed and delivered by the Representing Party and, assuming due
authorization, execution and delivery hereof by the Purchaser, constitutes
a legal, valid and binding obligation of the Representing Party,
enforceable against the Representing Party in accordance with its terms,
except as such enforcement may be limited by (A) bankruptcy, insolvency,
reorganization, receivership, moratorium or other similar laws affecting
the enforcement of creditors' rights in general, and (B) general equity
principles (regardless of whether such enforcement is considered in a
proceeding in equity or at law).
(iii) The execution and delivery of this Agreement by the
Representing Party and the Representing Party's performance and compliance
with the terms of this Agreement will not (A) violate the Representing
Party's organizational documents, (B) violate any law or regulation or any
administrative decree or order to which the Representing Party is subject
or (C) constitute a default (or an event which, with notice or lapse of
time, or both, would constitute a default) under, or result in the breach
of, any material contract, agreement or other instrument to which the
Representing Party is a party or by which the Representing Party is bound.
(iv) The Representing Party is not in default with respect to any
order or decree of any court or any order, regulation or demand of any
federal, state, municipal or other governmental agency or body, which
default might have consequences that would, in the Representing Party's
reasonable and good faith judgment, materially and adversely affect the
condition (financial or other) or operations of the Representing Party or
its properties or have consequences that would materially and adversely
affect its performance hereunder.
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(v) The Representing Party is not a party to or bound by any
agreement or instrument or subject to any organizational document or any
other corporate or limited liability company (as applicable) restriction or
any judgment, order, writ, injunction, decree, law or regulation that
would, in the Representing Party's reasonable and good faith judgment,
materially and adversely affect the ability of the Representing Party to
perform its obligations under this Agreement or that requires the consent
of any third person to the execution and delivery of this Agreement by the
Representing Party or the performance by the Representing Party of its
obligations under this Agreement.
(vi) Except for the recordation and/or filing of assignments and
other transfer documents with respect to the Mortgage Loans, as
contemplated by Section 2(d) hereof, no consent, approval, authorization or
order of, registration or filing with, or notice to, any court or
governmental agency or body, is required for the execution, delivery and
performance by the Representing Party of or compliance by the Representing
Party with this Agreement or the consummation of the transactions
contemplated by this Agreement; and no bulk sale law applies to such
transactions.
(vii) No litigation is pending or, to the best of the
Representing Party's knowledge, threatened against the Representing Party
that would, in the Representing Party's good faith and reasonable judgment,
prohibit its entering into this Agreement or materially and adversely
affect the performance by the Representing Party of its obligations under
this Agreement.
(viii) No proceedings looking toward merger, liquidation,
dissolution or bankruptcy of the Representing Party are pending or
contemplated.
In addition, the Seller hereby further represents and warrants to, and
covenants with, the Purchaser, as of the date hereof, that:
(ix) Under generally accepted accounting principles ("GAAP") and
for federal income tax purposes, the Seller will report the transfer of the
Mortgage Loans to the Purchaser, as provided herein, as a sale of the
Mortgage Loans to the Purchaser in exchange for the consideration specified
in Section 1 hereof. In connection with the foregoing, the Seller shall
cause all of its records to reflect such transfer as a sale (as opposed to
a secured loan). The consideration received by the Seller upon the sale of
the Mortgage Loans to the Purchaser will constitute at least reasonably
equivalent value and fair consideration for the Mortgage Loans. The Seller
will be solvent at all relevant times prior to, and will not be rendered
insolvent by, the sale of the Mortgage Loans to the Purchaser. The Seller
is not selling the Mortgage Loans to the Purchaser with any intent to
hinder, delay or defraud any of the creditors of the Seller. After giving
effect to its transfer of the Mortgage Loans to the Purchaser, as provided
herein, the value of the Seller's assets, either taken at their present
fair saleable value or at fair valuation, will exceed the amount of the
Seller's debts and obligations, including contingent and unliquidated debts
and obligations of the Seller, and the Seller will not be left with
unreasonably small assets or capital with which to engage in and conduct
its business. The Mortgage Loans do not constitute all or substantially all
of the assets of the Seller. The Seller does not intend to, and does not
believe that it will, incur debts or obligations beyond its ability to pay
such debts and obligations as they mature.
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(x) The Seller will acquire the Seller's Residual Interest
Certificates for its own account and not with a view to, or sale or
transfer in connection with, any distribution thereof, in whole or in part,
in any manner that would violate the Securities Act or any applicable state
securities laws.
(xi) The Seller understands that (A) the Seller's Residual
Interest Certificates have not been and will not be registered under the
Securities Act or registered or qualified under any applicable state
securities laws, (B) neither the Purchaser nor any other party is obligated
so to register or qualify the Seller's Residual Interest Certificates and
(C) neither the Seller's Residual Interest Certificates nor any security
issued in exchange therefor or in lieu thereof may be resold or transferred
unless it is (1) registered pursuant to the Securities Act and registered
or qualified pursuant to any applicable state securities laws or (2) sold
or transferred in a transaction which is exempt from such registration and
qualification and the Certificate Registrar has received the certifications
and/or opinions of counsel required by the Pooling and Servicing Agreement.
(xii) The Seller understands that it may not sell or otherwise
transfer the Seller's Residual Interest Certificates, any security issued
in exchange therefor or in lieu thereof or any interest in the foregoing
except in compliance with the provisions of Section 5.02 of the Pooling and
Servicing Agreement, which provisions it has or, as of the Closing Date,
will have carefully reviewed, and that the Seller's Residual Interest
Certificates will bear legends that identify the transfer restrictions to
which such Certificates are subject.
(xiii) Neither the Seller nor anyone acting on its behalf has (A)
offered, transferred, pledged, sold or otherwise disposed of any Seller's
Residual Interest Certificate, any interest in a Seller's Residual Interest
Certificate or any other similar security to any person in any manner, (B)
solicited any offer to buy or accept a transfer, pledge or other
disposition of any Seller's Residual Interest Certificate, any interest in
a Seller's Residual Interest Certificate or any other similar security from
any person in any manner, (C) otherwise approached or negotiated with
respect to any Seller's Residual Interest Certificate, any interest in a
Seller's Residual Interest Certificate or any other similar security with
any person in any manner, (D) made any general solicitation by means of
general advertising or in any other manner, or (E) taken any other action,
that (in the case of any of the acts described in clauses (A) through (E)
above) would constitute a distribution of the Seller's Residual Interest
Certificates under the Securities Act, would render the disposition of the
Seller's Residual Interest Certificates a violation of Section 5 of the
Securities Act or any state securities law or would require registration or
qualification of the Seller's Residual Interest Certificates pursuant
thereto. The Seller will not act, nor has it authorized nor will it
authorize any person to act, in any manner set forth in the foregoing
sentence with respect to the Seller's Residual Interest Certificates, any
interest in the Seller's Residual Interest Certificates or any other
similar security.
(xiv) The Seller has been furnished with all information
regarding (A) the Purchaser, (B) the Seller's Residual Interest
Certificates and distributions thereon, (C) the nature, performance and
servicing of the Other Loans, (D) the Pooling and Servicing Agreement and
the Trust Fund, and (E) all related matters, that it has requested.
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(xv) The Seller is either (a) a "qualified institutional buyer"
within the meaning of Rule 144A under the Securities Act or (b) an
"accredited investor" as defined in any of paragraphs (1), (2), (3) and (7)
of Rule 501(a) under the Securities Act or an entity in which all its
equity owners are "accredited investors" as defined in such paragraphs and
has such knowledge and experience in financial and business matters as to
be capable of evaluating the merits and risks of an investment in the
Seller's Residual Interest Certificates. The Seller has sought such
accounting, legal and tax advice as it has considered necessary to make an
informed investment decision; and the Seller is able to bear the economic
risks of such an investment and can afford a complete loss of such
investment.
(xvi) The Seller is not a Plan and is not directly or indirectly
acquiring the Seller's Residual Interest Certificates on behalf of, as
named fiduciary of, as trustee of or with assets of a Plan.
(xvii) The Seller is a United States Tax Person and is not a
Disqualified Organization.
(b) The Seller hereby makes, for the benefit of the Purchaser, with
respect to each Mortgage Loan, as of the Closing Date or as of such other date
expressly set forth therein, each of the representations and warranties set
forth on Exhibit B hereto.
(c) The Seller intends to transfer the Seller's Residual Interest
Certificates to JPMorgan Chase Bank on or about the Closing Date; and, in
connection therewith, the Seller will comply with all of the requirements of
Section 5.02 of the Pooling and Servicing Agreement, as in effect on the Closing
Date, and applicable law. The Seller hereby directs the Purchaser to cause the
Seller's Residual Interest Certificates to be registered in the name of JPMorgan
Chase Bank upon initial issuance.
SECTION 4. Representations and Warranties of the Purchaser.
In order to induce the Seller to enter into this Agreement, the
Purchaser hereby represents and warrants for the benefit of the Seller and the
Additional Party as of the date hereof that:
(i) The Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. The
Purchaser has the full corporate power and authority and legal right to
acquire the Mortgage Loans from the Seller and to transfer the Mortgage
Loans to the Trustee.
(ii) This Agreement has been duly and validly authorized,
executed and delivered by the Purchaser and, assuming due authorization,
execution and delivery hereof by the Seller and the Additional Party,
constitutes a legal, valid and binding obligation of the Purchaser,
enforceable against the Purchaser in accordance with its terms, except as
such enforcement may be limited by (A) bankruptcy, insolvency,
reorganization, receivership, moratorium or other similar laws affecting
the enforcement of creditors' rights in general, and (B) general equity
principles (regardless of whether such enforcement is considered in a
proceeding in equity or at law).
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(iii) The execution and delivery of this Agreement by the
Purchaser and the Purchaser's performance and compliance with the terms of
this Agreement will not (A) violate the Purchaser's organizational
documents, (B) violate any law or regulation or any administrative decree
or order to which the Purchaser is subject or (C) constitute a default (or
an event which, with notice or lapse of time, or both, would constitute a
default) under, or result in the breach of, any material contract,
agreement or other instrument to which the Purchaser is a party or by which
the Purchaser is bound.
(iv) Except as may be required under federal or state securities
laws (and which will be obtained on a timely basis), no consent, approval,
authorization or order of, registration or filing with, or notice to, any
governmental authority or court, is required for the execution, delivery
and performance by the Purchaser of or compliance by the Purchaser with
this Agreement, or the consummation by the Purchaser of any transaction
described in this Agreement.
(v) Under GAAP and for federal income tax purposes, the Purchaser
will report the transfer of the Mortgage Loans by the Seller to the
Purchaser, as provided herein, as a sale of the Mortgage Loans to the
Purchaser in exchange for the consideration specified in Section 1 hereof.
SECTION 5. Notice of Breach; Cure; Repurchase.
(a) If the Seller receives written notice with respect to any Mortgage
Loan (i) that any document constituting a part of clauses (i) through (xiii) of
the definition of Mortgage File or a document, if any, specifically set forth on
Exhibit D hereto has not been executed (if applicable) or is missing (a
"Document Defect") or (ii) of a breach of any of the Seller's representations
and warranties made pursuant to Section 3(b) hereof (each such breach, a
"Breach") relating to any Mortgage Loan, and such Document Defect or Breach, as
of the date specified in Section 5(b)(i) hereof, materially and adversely
affects the value of the Mortgage Loan, then such Document Defect shall
constitute a "Material Document Defect" or such Breach shall constitute a
"Material Breach", as the case may be. Then, following receipt of a
Seller/Depositor Notification with respect to such Material Document Defect or
Material Breach, as the case may be, the Seller shall (subject to Sections 5(f),
(g) and (h) hereof), (A) not later than (1) 90 days after the Seller and the
Purchaser have agreed upon the existence of such Material Document Defect or
Material Breach or (2) 60 days after an arbitration panel makes a binding
determination, in accordance with the provisions of Section 5(i) hereof, that a
Material Document Defect or Material Breach exists or (B) in the case of a
Material Document Defect or Material Breach that affects whether a Mortgage Loan
was, as of the Closing Date, is or will continue to be a "qualified mortgage"
within the meaning of the REMIC Provisions (a "Qualified Mortgage"), not later
than 90 days following the discovery by any party of such Material Document
Defect or Material Breach (each of such 90-day period referred to in clause
(A)(1) above, or such 60-day period referred to in clause (A)(2) above, or such
90-day period referred to in clause (B) above, as applicable, is referred to as
the "Initial Resolution Period"): (i) cure such Material Document Defect or
Material Breach, as the case may be, in all material respects (which cure shall
include payment of any out-of-pocket expenses that are reasonably incurred and
directly attributable to pursuing such a claim based on such Material Document
Defect or Material Breach associated therewith), or (ii) if such Material
Document Defect or Material Breach, as the case may be, cannot be cured within
the Initial Resolution Period, repurchase the
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affected Mortgage Loan (or the related Mortgaged Property) from, and in
accordance with the directions of, the Purchaser or its designee, at a price
equal to the Purchase Price; provided that if (a) such Material Breach or
Material Document Defect, as the case may be, is capable of being cured but not
within the applicable Initial Resolution Period, (b) any such Material Breach or
Material Document Defect, as the case may be, does not affect whether the
Mortgage Loan was, as of the Closing Date, is or will continue to be a Qualified
Mortgage, (c) the Seller has commenced and is diligently proceeding with the
cure of such Material Breach or Material Document Defect, as the case may be,
within the applicable Initial Resolution Period, and (d) the Seller shall have
delivered to the Purchaser a certification executed on behalf of the Seller by
an officer thereof confirming that such Material Breach or Material Document
Defect, as the case may be, is not capable of being cured within the applicable
Initial Resolution Period, setting forth what actions the Seller is pursuing in
connection with the cure thereof and stating that the Seller anticipates that
such Material Breach or Material Document Defect, as the case may be, will be
cured within an additional period not to exceed, 90 days beyond the end of the
Initial Resolution Period (in the event the Seller and the Purchaser have agreed
upon the existence of such Material Document Defect or Material Breach as
described under Section 5(a)(ii)(A)(1)), or 45 days beyond the end of the
Initial Resolution Period (in the event an arbitration panel has made a binding
determination, as described under Section 5(a)(ii)(A)(2) hereof, that a Material
Document Defect or Material Breach exists), then the Seller shall have such
additional 90-day period or 45-day period, as the case may be (each such period,
the "Resolution Extension Period"), to complete such cure or, failing such, to
repurchase the affected Mortgage Loan (or the related Mortgaged Property); and
provided, further, that, if any such Material Document Defect is still not cured
after the Initial Resolution Period and any such applicable Resolution Extension
Period solely due to the failure of the Seller to have received a recorded
document, then the Seller shall be entitled to continue to defer its cure and
repurchase obligations in respect of such Material Document Defect so long as
the Seller certifies to the Purchaser every six months thereafter that the
Material Document Defect is still in effect solely because of its failure to
have received the recorded document and that the Seller is diligently pursuing
the cure of such defect (specifying the actions being taken). The parties
acknowledge that neither delivery of a certification or schedule of exceptions
to the Seller pursuant to Section 2.02(b) of the Pooling and Servicing Agreement
or 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 Material Breach or knowledge or awareness by the Seller of any
Material Document Defect or Material Breach.
If, during the period of deferral by the Seller of its cure and
repurchase obligations as contemplated by the last proviso of the penultimate
sentence of the preceding paragraph, the Mortgage Loan that is the subject of
the Material Document Defect either becomes a Specially Serviced Mortgage Loan
or becomes the subject of a proposed or actual assumption of the obligations of
the related Mortgagor under such Mortgage Loan, then, following receipt by the
Seller of a Seller/Depositor Notification providing notice of such event, the
Seller shall cure the subject Material Document Defect within the time period
specified in such Seller/Depositor Notification. If, upon the expiration of such
period, the Seller has failed to cure the subject Material Document Defect, the
Master Servicer or the Special Servicer, as applicable, shall be entitled (but
not obligated) to perform the obligations of the Seller with respect to curing
the subject Material Document Defect and, in the event of such an election, the
Seller shall pay all reasonable actual out-of-pocket costs and expenses in
connection with the applicable servicer's effecting such cure.
(b) (i) Provided that any Seller/Depositor Notification with respect
to a Material Document Defect or Material Breach is received by the Seller (in
accordance with the provisions of the
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Pooling and Servicing Agreement) within 24 months of the Closing Date, the
material and adverse effect of the related Document Defect or Breach shall be
determined as of the date hereof. After the expiration of 24 months following
the Closing Date, the material and adverse effect of any Document Defect or
Breach that was not the subject of another Seller/Depositor Notification,
received by the Seller (in accordance with the provisions of the Pooling and
Servicing Agreement) within 24 months of the Closing Date, shall be determined
as of the date of such Seller/Depositor Notification.
(ii) In the event the Seller is obligated to repurchase any
Mortgage Loan pursuant to this Section 5, such obligation shall extend to
any successor REO Mortgage Loan with respect thereto as to which (A) the
subject Material Breach existed as to the subject predecessor Mortgage Loan
prior to the date the related Mortgaged Property became an REO Property or
within 90 days thereafter, and (B) as to which the Seller had received, no
later than 90 days following the date on which the related Mortgaged
Property became an REO Property, a Seller/Depositor Notification from the
Trustee regarding the occurrence of the applicable Material Breach and
directing the Seller to repurchase the subject Mortgage Loan.
(c) If one or more (but not all) of the Mortgage Loans constituting a
Cross-Collateralized Group are to be repurchased by the Seller as contemplated
by Section 5(a) hereof, then, prior to the subject repurchase, the Seller or its
designee shall use reasonable efforts, subject to the terms of the related
Mortgage Loans, to prepare and, to the extent necessary and appropriate, have
executed by the related Mortgagor and record, such documentation as may be
necessary to terminate the cross-collateralization between the Mortgage Loans in
such Cross-Collateralized Group that are to be repurchased, on the one hand, and
the remaining Mortgage Loans therein, on the other hand, such that those two
groups of Mortgage Loans are each secured only by the Mortgaged Properties
identified in the Mortgage Loan Schedule as directly corresponding thereto;
provided that, if such Cross-Collateralized Group is still subject to the
Pooling and Servicing Agreement, then no such termination shall be effected
unless and until (i) the Purchaser or its designee has received from the Seller
(A) an Opinion of Counsel to the effect that such termination will not cause an
Adverse REMIC Event to occur with respect to any REMIC Pool or an Adverse
Grantor Trust Event with respect to the Grantor Trust and (B) written
confirmation from each Rating Agency that such termination will not cause an
Adverse Rating Event to occur with respect to any Class of Certificates and (ii)
the Controlling Class Representative (if one is acting) has consented (which
consent shall not be unreasonably withheld and shall be deemed to have been
given if no written objection is received by the Seller within 10 Business Days
of the Controlling Class Representative's receipt of a written request for such
consent); and provided, further, that the Seller may, at its option, purchase
the entire Cross-Collateralized Group in lieu of terminating the
cross-collateralization. All costs and expenses incurred by the Purchaser or its
designee pursuant to this paragraph shall be included in the calculation of
Purchase Price for the Mortgage Loan(s) to be repurchased. If the
cross-collateralization of any Cross-Collateralized Group is not or cannot be
terminated as contemplated by this paragraph, then, for purposes of (i)
determining whether any Breach or Document Defect, as the case may be,
materially and adversely affects the value of a Mortgage Loan, and (ii) the
application of remedies, such Cross-Collateralized Group shall be treated as a
single Mortgage Loan.
(d) It shall be a condition to any repurchase of a Mortgage Loan by
the Seller pursuant to this Section 5 that the Purchaser shall have executed and
delivered such instruments of transfer or assignment then presented to it by the
Seller (or as otherwise required to be prepared, executed and delivered under
the Pooling and Servicing Agreement), in each case without recourse, as
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shall be necessary to vest in the Seller the legal and beneficial ownership of
such Mortgage Loan (including any property acquired in respect thereof or
proceeds of any insurance policy with respect thereto), to the extent that such
ownership interest was transferred to the Purchaser hereunder. If any Mortgage
Loan is to be repurchased as contemplated by this Section 5, the Seller shall
amend the Mortgage Loan Schedule to reflect the removal of such Mortgage Loan
and shall forward such amended schedule to the Purchaser.
(e) Any repurchase of a Mortgage Loan pursuant to this Section 5 shall
be on a whole loan, servicing released basis. The Seller and the Additional
Party shall have no obligation to monitor the Mortgage Loans regarding the
existence of a Breach or Document Defect. It is understood and agreed that the
obligations of the Seller set forth in this Section 5 constitute the sole
remedies available to the Purchaser with respect to any Breach or Document
Defect.
(f) Notwithstanding the foregoing, if there exists a Breach of that
portion of the representation or warranty on the part of the Seller set forth
in, or made pursuant to, paragraph (xlviii) of Exhibit B to this Agreement,
specifically relating to whether or not the Mortgage Loan documents or any
particular Mortgage Loan document for any Mortgage Loan requires the related
Mortgagor to bear the reasonable costs and expenses associated with the subject
matter of such representation or warranty, as set forth in such representation
or warranty, then the Purchaser or its designee will direct the Seller in
writing to wire transfer to the Custodial Account, within 90 days of receipt of
such direction, the amount of any such reasonable costs and expenses incurred by
the Trust that (i) are due from the Mortgagor, (ii) otherwise would have been
required to be paid by the Mortgagor if such representation or warranty with
respect to such costs and expenses had in fact been true, as set forth in the
related representation or warranty, (iii) have not been paid by the Mortgagor,
(iv) are the basis of such Breach and (v) constitute "Covered Costs". Upon
payment of such costs, the Seller shall be deemed to have cured such Breach in
all respects. Provided that such payment is made, this paragraph describes the
sole remedy available to the Purchaser regarding any such Breach, regardless of
whether it constitutes a Material Breach, and the Seller shall not be obligated
to otherwise cure such Breach or repurchase the affected Mortgage Loan under any
circumstances. Amounts deposited in the Pool Custodial Account pursuant to this
paragraph shall constitute "Liquidation Proceeds" for all purposes of the
Pooling and Servicing Agreement (other than Section 3.11(c) of the Pooling and
Servicing Agreement).
(g) Subject to Section 5(f) hereof and the last three sentences of
this paragraph, if the Seller determines that a Material Breach (other than a
Material Breach of a representation or warranty on the part of the Seller set
forth in and made pursuant to paragraph (xvii) of Exhibit B to this Agreement)
or a Material Document Defect with respect to a Mortgage Loan is not capable of
being cured in accordance with Section 5(a) hereof, then in lieu of repurchasing
such Mortgage Loan the Seller may, at its sole option, pay a cash amount equal
to the loss of value (each such payment, a "Loss of Value Payment") with respect
to such Mortgage Loan, which loss of value is directly attributed to such
Material Breach or Material Document Defect, as the case may be. The amount of
each such Loss of Value Payment shall be determined either (i) by mutual
agreement of the Special Servicer on behalf of the Trust with respect to the
subject Material Breach or Material Document Defect, as the case may be, and the
Seller, or (ii) by an arbitration panel pursuant to a binding arbitration
proceeding in accordance with Section 5(i) hereof; provided that, in the event
there is an arbitration proceeding for determining the existence of a Material
Breach or a Material Document Defect with respect to any Mortgage Loan, such
arbitration proceeding must also include a determination of the amount of the
loss of value to such Mortgage Loan directly attributed to such Material Breach
or such Material Document Defect, as the
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case may be. Provided that such payment is made, this paragraph describes the
sole remedy available to the Purchaser regarding any such Material Breach or
Material Document Defect and the Seller shall not be obligated to otherwise cure
such Material Breach or Material Document Defect or repurchase the affected
Mortgage Loan based on such Material Breach or Material Document Defect under
any circumstances. Notwithstanding the foregoing provisions of this Section
5(g), if 95% or more of the loss of value to a Mortgage Loan was caused by a
Material Breach or Material Document Defect, which Material Breach or Material
Document Defect is not capable of being cured, this Section 5(g) shall not apply
and the Seller shall be obligated to repurchase the affected Mortgage Loan at
the applicable Purchase Price in accordance with Section 5(a) hereof.
Furthermore, the Seller shall not have the option of delivering Loss of Value
Payments in connection with any Material Breach relating to a Mortgage Loan's
failure to be a Qualified Mortgage. In the event there is a Loss of Value
Payment made by the Seller in accordance with this Section 5(g), the amount of
such Loss of Value Payment shall be deposited into the Loss of Value Reserve
Fund to be applied in accordance with Section 3.05(e) of the Pooling and
Servicing Agreement.
In the event the amount of any Loss of Value Payment is determined by
an arbitration panel pursuant to a binding arbitration proceeding in accordance
with Section 5(i) hereof, then such Loss of Value Payment shall also include the
payment of any costs and expenses (including costs incurred in establishing the
amount of any related loss of value to the subject Mortgage Loan, including
reasonable legal fees) that are reasonably incurred in good faith by the Master
Servicer, the Special Servicer and/or the Trustee (on behalf of the Trust) in
enforcing the rights of the Trust against the Seller with respect to the subject
Material Breach or Material Document Defect, as the case may be; provided that,
that in the event the Seller tenders a loss of value payment in a specified
amount in connection with a Material Breach or Material Document Defect, as the
case may be, prior to the institution of arbitration proceedings and that offer
is rejected and an amount equal to or less than the loss of value payment
originally tendered by the Seller is ultimately determined by an arbitration
panel pursuant to a binding arbitration proceeding in accordance with Section
5(i) hereof to be the actual amount of the Loss of Value Payment attributed to
such Material Breach or Material Document Defect, as the case may be, then that
Loss of Value Payment shall not include the payment of any costs or expenses
incurred in enforcing the rights of the Trust against the Seller with respect to
the subject Material Breach or Material Document Defect, as the case may be;
provided, further, that if the Special Servicer request a loss of value payment
from the Seller of a specified amount in connection with a Material Breach or
Material Document Defect, as the case may be, and the Seller refuses to pay that
amount and an amount equal to or greater than the loss of value payment
originally requested by the Special Servicer is ultimately determined by an
arbitration panel pursuant to a binding arbitration proceeding in accordance
with Section 5(i) hereof to be the actual Loss of Value Payment attributable to
such Material Document Defect or Material Breach, then that Loss of Value
Payment shall also include the payment of any costs or expenses reasonably
incurred in good faith in enforcing the rights of the Trust against the Seller
with respect to the subject Material Breach or Material Document Defect, as the
case may be; and provided, further, that, if the Seller tenders a loss of value
payment in connection with a Material Breach or Material Document Defect, as the
case may be, in a specified amount, and the Special Servicer rejects such tender
and requests a greater loss of value payment amount, and an amount in between
the respective amounts tendered and requested is ultimately determined by an
arbitration panel pursuant to a binding arbitration proceeding in accordance
with Section 5(i) hereof to be the actual Loss of Value Payment attributable to
such Material Breach or Material Document Defect, as the case may be, then that
Loss of Value Payment shall also include the payment of an amount equal to the
product of (i) all costs and expenses reasonably incurred in connection with
that arbitration proceeding, multiplied by (ii)
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a fraction, the numerator of which is the excess of the amount determined by
that arbitration proceeding over the amount tendered by the Seller, and the
denominator of which is the excess of the amount requested by the Special
Servicer over the amount tendered by the Seller. Notwithstanding the foregoing,
in the event any Loss of Value Payment is determined by the parties hereto by
mutual agreement (and not by an arbitration proceeding), that Loss of Value
Payment shall not include any costs and expenses incurred by the Master
Servicer, the Special Servicer or the Trustee unless such costs and expenses
were specifically included in such mutual agreement.
(h) Notwithstanding the foregoing, if there exists a Material Breach
of the representation or warranty on the part of the Seller set forth in and
made pursuant to paragraph (xvii) of Exhibit B to this Agreement, and the
subject Mortgage Loan becomes a Qualified Mortgage prior to the expiration of
the Initial Resolution Period applicable to a Material Document Defect or
Material Breach that affects whether a Mortgage Loan is a Qualified Mortgage,
and without otherwise causing an Adverse REMIC Event or an Adverse Grantor Trust
Event, then such breach will be cured and the Seller will not be obligated to
repurchase or otherwise remedy such Breach.
(i) The parties hereto agree that any controversy or claim (a
"Dispute") arising under Section 5(a), Section 5(b) and/or Section 5(g) of this
Agreement shall be resolved in accordance with the following
Mediation/Arbitration procedures in this Section 5(i).
If the Seller receives a Seller/Depositor Notification pursuant to
Section 5(a) of this Agreement regarding the alleged existence of a Material
Document Defect or Material Breach and requesting the Seller to cure or
repurchase the affected Mortgage Loan in connection therewith (a "Notice"), and
the Seller does not agree upon the existence of such Material Document Defect or
Material Breach within 90 days of receiving such Notice, then, unless otherwise
agreed to by the parties involved in the Dispute, that Dispute shall be
submitted to non-binding mediation in accordance with the provisions of this
paragraph; provided, that if the Seller is proceeding to cure the subject
Material Document Defect or Material Breach, then that Dispute shall not be
submitted to mediation until the expiration of the related Resolution Extension
Period and the failure of the Seller to complete such cure (unless otherwise
agreed to by the parties involved in the Dispute). Following the 90-day period
referred to in the preceding sentence and subject to the preceding proviso, any
party to this Agreement that is involved in the Dispute may send a written
letter (a "Mediation Letter") to another party to this Agreement that they wish
the mediation process to begin between the sender and the recipient of such
Mediation Letter. Following receipt of a Mediation Letter, a mediator(s) shall
be selected by agreement of the parties to the mediation. If such parties cannot
agree on a mediator, [a mediator will be designated by the JAMS/Endispute at the
request of any party (provided that any mediator so designated must be
acceptable to both the Seller and the Purchaser or its assignee)] [then the
mediation shall be conducted by three mediators, one of which shall be selected
by the Seller and one of which shall be selected by the Purchaser or its
assignee. Each of the parties to the mediation shall submit the name of the
person it has selected to serve as a mediator to the opposing party within 10
days of the date of the Mediation Letter. If either party fails to submit the
name of its selected mediator within 10 days of the date of the Mediation
Letter, the other party shall have the right to select the second mediator in
addition to its own mediator (provided that such party has submitted the name of
its selected mediator within 10 days of the date of the Mediation Letter). The
two mediators selected by the party(ies) shall appoint a third mediator within
20 days of the date of the Mediation Letter or such longer time period as agreed
to by the parties to the mediation. Any mediator(s) so designated must be
acceptable to both the Seller and
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the Purchaser or its assignee.] Any mediators appointed or selected pursuant to
the provisions of this paragraph must be experienced professionals in the CMBS
industry.
Any mediation related to a particular Dispute and commenced in
accordance with the preceding paragraph must be completed within 90 days of the
date of the Mediation Letter (or a longer period, if the parties to the
mediation agreed to extend the mediation). Any mediation referred to in this
Section 5(i) shall be conducted in the manner specified by the mediator(s) and
agreed upon by the Seller and the Purchaser or its assignee and any such
mediation shall be conducted in New York City to the exclusion of all other
locations (unless otherwise agreed to by the parties to the mediation). During
the mediation process, the parties to the mediation shall discuss their
differences voluntarily and in good faith and attempt, with the assistance of
the mediator(s) as a facilitator of the negotiations, to reach an amicable
resolution of the Dispute. The mediation will be treated as a settlement
discussion and therefore will be confidential. No mediator selected in
accordance with this Section 5(i) may testify for either party in any later
proceeding relating to the Dispute. No recording or transcript shall be made of
the mediation proceedings. The fees and expenses of all mediator(s) shall be
shared equally by the parties to the mediation; provided, that the party to the
mediation that is acting on behalf of the Trust in accordance with the
provisions of this Section 5(i) shall be entitled to reimbursement or
indemnification by the Trust Fund for such fees and expenses if and to the
extent permitted under the Pooling and Servicing Agreement.
Notwithstanding anything to the contrary herein, no party shall be
required to agree to a Dispute resolution pursuant to mediation and no decision
or resolution of a mediator or mediators shall be binding on any party unless
such decision or resolution is expressly agreed to by such party. In the event
the parties involved in the Dispute have not agreed to a Dispute resolution
pursuant to mediation at the termination of the mediation, then that Dispute
will be settled by arbitration in accordance with the succeeding paragraphs of
this Section 5(i).
If a Dispute has not been resolved within 90 days of the date of the
Mediation Letter (or such shorter or longer period as is expressly agreed to by
the parties to the mediation), the mediation shall terminate and the Dispute
will be settled by arbitration. Following the date of termination of mediation,
which shall be the date occurring 90 days after the date of the Mediation Letter
unless otherwise expressly agreed to by the parties to the mediation,
arbitration may be commenced by any party to this Agreement involved in the
Dispute sending a written notice to another party to this Agreement involved in
the Dispute that they wish the arbitration process to begin with respect to the
Dispute between the sender and the recipient of such written notice. The date
any such party receives written notice in accordance with this Section 5(i) from
another party that such party wishes to commence arbitration shall be referred
to as the "Arbitration Commencement Date". Any arbitration hereunder shall be
conducted in accordance with the provisions of this Agreement and the American
Arbitration Association Rules for Large Complex Commercial Disputes ("AAA
Rules"), but shall not be conducted by the American Arbitration Association
("AAA"). Discovery will be permitted in connection with the arbitration in
accordance with the AAA Rules. In the event of a conflict, the provisions of
this Agreement will control. Such arbitration shall be conducted before a panel
of three arbitrators, regardless of the size of the Dispute. The arbitration
panel shall consist of one person selected by the Seller and one person selected
by the Purchaser or its assignee. Each such party shall submit the name of the
person it has selected to serve as an arbitrator to the other party within 30
days of the Arbitration Commencement Date (or such longer period as is expressly
agreed to by the parties to the arbitration). If either such party fails to
submit the name of its selected arbitrator within 30 days of
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the Arbitration Commencement Date, then the other such party shall have the
right to select the second arbitrator in addition to its own arbitrator
(provided that such party has submitted the name of its selected arbitrator
within 30 days of the Arbitration Commencement Date). The two arbitrators
designated in accordance with the two preceding sentences shall appoint a third
arbitrator within 45 days of the Arbitration Commencement Date (or such longer
period as is expressly agreed to by the parties to the arbitration). All
arbitrators appointed or selected pursuant to the provisions of this paragraph
must be experienced professionals in the CMBS industry. The third arbitrator
shall be an Independent person who has not previously been employed by either
party and does not have a direct or indirect interest in either party or the
subject matter of the arbitration. The two (2) arbitrators appointed by the
parties to the arbitration are not required to be neutral and it shall not be
grounds for removal of either of such arbitrators or for vacating an arbitration
award that either of such arbitrators has past or present relationships with the
party that appointed such arbitrator. No potential arbitrator may serve on the
panel unless he or she has agreed in writing to abide and be bound by the terms
and provisions of this Agreement and the AAA Rules and to keep confidential the
terms of any arbitration proceeding related to this Agreement and the terms of
any discussion, negotiation, decision, agreement or resolution in connection
therewith.
Any issue concerning the extent to which any Dispute is subject to
arbitration, or concerning the applicability, interpretation, or enforceability
of these procedures, including any contention that all or part of these
procedures are invalid or unenforceable, shall be resolved by the arbitrators.
In no event, notwithstanding that any provision of this Agreement is held to be
invalid or unenforceable, shall the arbitrators have the power to make an award
or impose a remedy that could not be made or imposed by a court deciding the
matter in the same jurisdiction. In no event shall the arbitrators have the
power to make an award or impose a remedy that is not contemplated by, or
conflicts with the terms and provisions of, this Agreement or the Pooling and
Servicing Agreement (other than any term or provision of this Agreement or the
Pooling and Servicing Agreement that is held to be invalid or unenforceable).
Without limiting the foregoing, the arbitrators shall have no authority to award
treble, consequential or punitive damages of any type under any circumstances,
whether or not such damages may be available under the AAA Rules or any other
act or law. Subject to the provisions of this Agreement, the result of the
arbitration will be binding on the parties involved in the Dispute, and judgment
on the arbitrators' award may be entered, subject to the provisions of Section
16 of this Agreement, in any court of competent jurisdiction.
All mediations and arbitrations shall be conducted in New York City to
the exclusion of all other locations (unless otherwise expressly agreed to by
the parties to the subject mediation or arbitration, as applicable). The party
to an arbitration that is acting on behalf of the Trust in accordance with the
provisions of this Section 5(i) shall be entitled to reimbursement or
indemnification by the Trust Fund for the fees and expenses incurred in
connection therewith if and to the extent permitted under the Pooling and
Servicing Agreement.
The parties to this Agreement hereby agree to waive any right to trial
by jury fully to the extent that any such right shall now or hereafter exist
with regard to the rights and remedies contained in this Section 5; provided,
that if (i) any party to an arbitration governed by this Section 5(i) fails to
abide by the rules or deadlines for that arbitration (as such deadlines may be
extended by express agreement of the parties to that arbitration), or (ii) the
applicable appointed arbitrators determine that the subject Dispute cannot be
resolved through arbitration either because the AAA Rules are inapplicable to
the Dispute and/or the Federal Arbitration Act is inapplicable to the Dispute or
for any other reason, then the
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other party (in the case of clause (i)) or any party (in the case of clause
(ii)) to this Agreement may in its sole option, file a complaint to resolve the
Dispute through a legal proceeding and in accordance with the provision
contained in Section 16 hereof.
If any of the provisions of this Section 5(i) are determined by a
court of law to be invalid or unenforceable, the remaining provisions shall
remain in effect and be binding on the parties involved in the Dispute to the
fullest extent permitted by law.
SECTION 6. Repurchase of Early Defeasance Trust Mortgage Loans.
If the Purchaser or the Master Servicer notifies the Seller or the
Additional Party that the Mortgagor under any of the Mortgage Loans that are
Early Defeasance Trust Mortgage Loans (i) intends to defease such Early
Defeasance Trust Mortgage Loan in whole on or before the second anniversary of
the Closing Date and the amount tendered by such Mortgagor to defease such Early
Defeasance Trust Mortgage Loan (in accordance with the related loan documents)
is less than the Purchase Price that would be applicable in the event of a
repurchase of such Mortgage Loan pursuant to or as otherwise contemplated by
Section 5(a), or (ii) intends to partially defease such Early Defeasance Trust
Mortgage Loan on or prior to the second anniversary of the Closing Date, or
(iii) intends to defease such Early Defeasance Trust Mortgage Loan in whole on
or before the second anniversary of the Closing Date and such Mortgagor is to
tender Defeasance Collateral or such other collateral as is permitted in
connection with a defeasance under the related loan documents that does not
constitute a cash amount equal to or greater than the Purchase Price set forth
in clause (i) above in this paragraph, then the Seller shall promptly repurchase
such Mortgage Loan at the related Purchase Price in accordance with the
directions of the Master Servicer on a whole loan, servicing released basis.
Upon the repurchase of a Mortgage Loan that is an Early Defeasance
Trust Mortgage Loan pursuant to Section 5 hereof and/or this Section 6, the
Purchaser shall effect a "qualified liquidation" of the related Loan REMIC in
accordance with the REMIC Provisions. The Seller hereby agrees to pay all
reasonable costs and expenses, including the costs of any opinions of counsel
under the Pooling and Servicing Agreement, in connection with any such
"qualified liquidation" of the related Loan REMIC in accordance with the REMIC
Provisions.
SECTION 7. Obligations of the Additional Party.
The Additional Party hereby covenants and agrees with the Purchaser
that the Additional Party shall be liable to the Purchaser and any designee
thereof to the same extent as the Seller as set forth herein, for all the
obligations of the Seller under Sections 5 and 6 hereof. The Additional Party
further agrees that the Purchaser shall not be bound or obligated to initially
request the Seller to perform any of its obligations hereunder, but may instead
initially request the Additional Party to perform such obligations.
Additionally, the Additional Party agrees that the Purchaser shall not be bound
or obligated in anyway to exhaust recourse against the Seller before being
entitled to demand the performance by the Additional Party of its obligations
hereunder. Performance by the Additional Party of any of the Seller's
obligations hereunder shall be deemed to be performance thereof by the Seller.
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SECTION 8. Closing.
The closing of the sale of the Mortgage Loans (the "Closing") shall be
held at the offices of Sidley Xxxxxx Xxxxx & Xxxx LLP, 000 Xxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000 at 10:00 a.m., New York City time, on the Closing Date.
The Closing shall be subject to each of the following conditions:
(a) All of the representations and warranties of the Seller and the
Additional Party set forth in or made pursuant to Sections 3(a) and 3(b) of this
Agreement, and all of the representations and warranties of the Purchaser set
forth in Section 4 of this Agreement, shall be true and correct in all material
respects as of the Closing Date;
(b) Insofar as it affects the obligations of the Seller hereunder, the
Pooling and Servicing Agreement shall be in a form mutually acceptable to the
Purchaser and the Seller;
(c) All documents specified in Section 9 of this Agreement (the
"Closing Documents"), in such forms as are reasonably acceptable to the
Purchaser, shall be duly executed and delivered by all signatories as required
pursuant to the respective terms thereof;
(d) The Seller shall have delivered and released to the Trustee (or a
Custodian on its behalf), the Master Servicer and the Special Servicer all
documents and funds required to be delivered to the Trustee, the Master Servicer
and the Special Servicer, respectively, pursuant to Section 2 of this Agreement;
(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 in all
material respects, and the Seller and Additional Party 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 or otherwise pursuant to this Agreement; and
(g) Neither the Underwriting Agreement nor the Certificate Purchase
Agreement shall have been terminated in accordance with its terms.
All parties hereto agree to use their best efforts to perform their
respective obligations hereunder in a manner that will enable the Purchaser to
purchase the Mortgage Loans on the Closing Date.
SECTION 9. Closing Documents.
The Closing Documents shall consist of the following:
(a) This Agreement duly executed by the Purchaser, the Seller and the
Additional Party;
(b) The Pooling and Servicing Agreement duly executed by the parties
thereto;
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(c) The Indemnification Agreement duly executed by the parties
thereto;
(d) Certificates of each of the Seller and the Additional Party,
executed by a duly authorized officer of the Seller or the Additional Party, as
the case may be, and dated the Closing Date, and upon which the initial
Purchaser, the Underwriters and the Placement Agents may rely, to the effect
that: (i) the representations and warranties of the Seller or the Additional
Party, as the case may be, in this Agreement and, in the case of the Seller, in
the Indemnification Agreement are true and correct in all material respects at
and as of the Closing Date with the same effect as if made on such date; and
(ii) the Seller or the Additional Party, as the case may be, has, in all
material respects, complied with all the agreements and satisfied all the
conditions on its part that are required under this Agreement to be performed or
satisfied at or prior to the Closing Date;
(e) An Officer's Certificate from an officer of each of the Seller and
the Additional Party, in his or her individual capacity, dated the Closing Date,
and upon which the initial Purchaser, the Underwriters and the Placement Agents
may rely, to the effect that each individual who, as an officer or
representative of the Seller or the Additional Party, as the case may be, signed
this Agreement, the Indemnification Agreement or any other document or
certificate delivered on or before the Closing Date in connection with the
transactions contemplated herein or, in the case of the Seller, in the
Indemnification Agreement, 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) As certified by an officer of each of the Seller and the
Additional Party, true and correct copies of (i) the resolutions of the board of
directors authorizing the Seller's entering into the transactions contemplated
by this Agreement and, in the case of the Seller, the Indemnification Agreement,
(ii) the organizational documents of each of the Seller and the Additional
Party, and (iii) a certificate of good standing of each of the Seller and the
Additional Party, issued by the Secretary of State of the State of Delaware not
earlier than 10 days prior to the Closing Date;
(g) A Certificate of the Co-Indemnitor, executed by a duly authorized
officer of the Co-Indemnitor and dated the Closing Date, and upon which the
initial Purchaser, the Underwriters and the Placement Agents may rely, to the
effect that the representations and warranties of the Co-Indemnitor in the
Indemnification Agreement are true and correct in all material respects at and
as of the Closing Date with the same effect as if made on such date;
(h) An Officer's Certificate from an officer of the Co-Indemnitor, in
his or her individual capacity, dated the Closing Date, and upon which the
initial Purchaser, the Underwriters and the Placement Agents may rely, to the
effect that each individual who, as an officer or representative of the
Co-Indemnitor, signed the Indemnification Agreement or any other document or
certificate delivered on or before the Closing Date in connection with the
transactions contemplated therein, was at the respective times of such signing
and delivery, and is as of the Closing Date, duly elected or appointed,
qualified and acting as such officer or representative, and the signatures of
such persons appearing on such documents and certificates are their genuine
signatures;
(i) As certified by an officer of the Co-Indemnitor, true and correct
copies of (i) the resolutions of the board of directors authorizing the
Co-Indemnitor's entering into the transactions contemplated by the
Indemnification Agreement, (ii) the organizational documents of the Co-
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Indemnitor, and (iii) a certificate of good standing of the Co-Indemnitor
issued by the Secretary of State of the State of Delaware not earlier than 10
days prior to the Closing Date;
(j) A favorable opinion of Cadwalader, Xxxxxxxxxx & Xxxx ("CWT"),
special counsel to the Seller, the Additional Party and the Co-Indemnitor,
substantially in the form attached hereto as Exhibit C-1, dated the Closing Date
and addressed to the initial Purchaser, the Underwriters, the Placement Agents,
the Rating Agencies and, upon request, the other parties to the Pooling and
Servicing Agreement, together with such other opinions of CWT as may be required
by the Rating Agencies in connection with the transactions contemplated hereby;
(k) An Officer's Certificate from an officer of each of the Seller and
the Co-Indemnitor, in his or her individual capacity, in each case delivered in
connection with the opinion of CWT to be delivered pursuant to Section 9(j)
hereof, in form and substance satisfactory to the addressees of such opinion and
upon which such addressees may rely;
(l) A favorable opinion of in-house counsel to the Additional Party,
substantially in the form attached hereto as Exhibit C-2, dated the Closing Date
and addressed to the initial Purchaser, the Underwriters, the Placement Agents,
the Rating Agencies and, upon request, the other parties to the Pooling and
Servicing Agreement;
(m) In connection with the initial issuance of the Seller's Residual
Interest Certificates, a Transfer Affidavit and Agreement in the form
contemplated by the Pooling and Servicing Agreement from Seller and from the
transferee of the Seller;
(n) In the event any of the Certificates are mortgage related
securities within the meaning of the Secondary Mortgage Market Enhancement Act
of 1984, as amended, a Certificate of the Seller regarding origination of the
Mortgage Loans by specified originators as set forth in Section 3(a)(41) of the
Securities Exchange Act of 1934, as amended; and
(o) Such further certificates, opinions and documents as the Purchaser
may reasonably request.
SECTION 10. Costs.
An amount equal to 42.87812% of all reasonable out-of-pocket costs and
expenses incurred by the Seller, the initial Purchaser, the Underwriters, the
Placement Agents and the seller of the Other Loans to the Purchaser in
connection with the securitization of the Securitized Loans and the other
transactions contemplated by this Agreement, the Underwriting Agreement and the
Certificate Purchase Agreement shall be payable by the Seller.
SECTION 11. Grant of a Security Interest.
The parties hereto agree that it is their express intent that the
conveyance of the Mortgage Loans by the Seller to the Purchaser as provided in
Section 2 hereof be, and be construed as, a sale of the Mortgage Loans by the
Seller to the Purchaser and not as a pledge of the Mortgage Loans by the Seller
to the Purchaser to secure a debt or other obligation of the Seller. However,
if, notwithstanding the aforementioned intent of the parties, the Mortgage Loans
are held to be property of the Seller, then it is the express intent of the
parties that: (i) such conveyance shall be deemed to be a pledge of the
-20-
Mortgage Loans by the Seller to the Purchaser to secure a debt or other
obligation of the Seller; (ii) this Agreement shall be deemed to be a security
agreement within the meaning of Articles 8 and 9 of the applicable Uniform
Commercial Code; (iii) the conveyance provided for in Section 2 hereof shall be
deemed to be a grant by the Seller to the Purchaser of a security interest in
all of the Seller's right, title and interest in and to the Mortgage Loans, and
all amounts payable to the holder of the Mortgage Loans in accordance with the
terms thereof, and all proceeds of the conversion, voluntary or involuntary, of
the foregoing into cash, instruments, securities or other property; (iv) the
assignment to the Trustee of the interest of the Purchaser in and to the
Mortgage Loans shall be deemed to be an assignment of any security interest
created hereunder; (v) the possession by the Trustee or any of its agents,
including, without limitation, the Custodian, of the Mortgage Notes for the
Mortgage Loans, and such other items of property as constitute instruments,
money, negotiable documents or chattel paper shall be deemed to be "possession
by the secured party" for purposes of perfecting the security interest pursuant
to Section 9-313 of the applicable Uniform Commercial Code; and (vi)
notifications to persons (other than the Trustee) holding such property, and
acknowledgments, receipts or confirmations from such persons holding such
property, shall be deemed notifications to, or acknowledgments, receipts or
confirmations from, financial intermediaries, bailees or agents (as applicable)
of the secured party for the purpose of perfecting such security interest under
applicable law. The Seller and the Purchaser shall, to the extent consistent
with this Agreement, take such actions as may be necessary to ensure that, if
this Agreement were deemed to create a security interest in the Mortgage Loans,
such security interest would be deemed to be a perfected security interest of
first priority under applicable law and will be maintained as such throughout
the term of this Agreement and the Pooling and Servicing Agreement; and, in
connection with the foregoing, the Seller authorizes the Purchaser to file any
and all appropriate Uniform Commercial Code financing statements.
SECTION 12. Notices.
All notices, copies, requests, consents, demands and other
communications required hereunder shall be in writing and telecopied or
delivered to the intended recipient at the "Address for Notices" specified
beneath its name on the signature pages hereof or, as to any party, at such
other address as shall be designated by such party in a notice hereunder to the
other parties. Except as otherwise provided in this Agreement, all such
communications shall be deemed to have been duly given when transmitted by
telecopier or personally delivered or, in the case of a mailed notice, upon
receipt, in each case given or addressed as aforesaid.
SECTION 13. Representations, Warranties and Agreements to Survive
Delivery.
All representations, warranties and agreements contained in this
Agreement, incorporated herein by reference or contained in the certificates of
officers of the Seller, the Additional Party and/or the Co-Indemnitor submitted
pursuant hereto, shall remain operative and in full force and effect and shall
survive delivery of the Mortgage Loans by the Seller to the Purchaser (and by
the initial Purchaser to the Trustee).
SECTION 14. Severability of Provisions.
Any part, provision, representation, warranty or covenant of this
Agreement that is prohibited or which is held to be void or unenforceable shall
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any part, provision,
representation, warranty or covenant of this Agreement that is prohibited or
unenforceable or
-21-
is held to be void or unenforceable in any particular jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any particular jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction. To
the extent permitted by applicable law, the parties hereto waive any provision
of law which prohibits or renders void or unenforceable any provision hereof.
SECTION 15. Counterparts.
This Agreement may be executed in any number of counterparts, each of
which shall be an original, but which together shall constitute one and the same
agreement.
SECTION 16. GOVERNING LAW; CONSENT TO JURISDICTION.
THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, APPLICABLE TO AGREEMENTS NEGOTIATED, MADE AND
TO BE PERFORMED ENTIRELY IN SAID STATE. TO THE FULLEST EXTENT PERMITTED UNDER
APPLICABLE LAW AND SUBJECT TO SECTION 5(i) HEREOF, THE SELLER, THE ADDITIONAL
PARTY AND THE PURCHASER EACH HEREBY IRREVOCABLY (I) SUBMITS TO THE JURISDICTION
OF ANY NEW YORK STATE AND FEDERAL COURTS SITTING IN NEW YORK CITY, TO THE
EXCLUSION OF ALL OTHER COURTS, WITH RESPECT TO MATTERS ARISING OUT OF OR
RELATING TO THIS AGREEMENT OTHER THAN MATTERS TO BE SETTLED BY MEDIATION OR
ARBITRATION IN ACCORDANCE WITH SECTION 5(i) HEREOF; (II) AGREES THAT ALL CLAIMS
WITH RESPECT TO SUCH ACTION OR PROCEEDING SHALL BE HEARD AND DETERMINED IN SUCH
NEW YORK STATE OR FEDERAL COURTS, TO THE EXCLUSION OF ALL OTHER COURTS; (III)
WAIVES, TO THE FULLEST POSSIBLE EXTENT, THE DEFENSE OF AN INCONVENIENT FORUM IN
CONNECTION WITH SUCH ACTION OR PROCEEDING COMMENCED IN SUCH NEW YORK STATE OR
FEDERAL COURTS; AND (IV) AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR
PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY
SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW; PROVIDED, THAT IN
THE EVENT SECTION 5(i) HEREOF IS INAPPLICABLE AND BOTH A NEW YORK STATE AND A
FEDERAL COURT SITTING IN NEW YORK IN WHICH AN ACTION OR PROCEEDING HAS BEEN DULY
AND PROPERLY COMMENCED BY ANY PARTY TO THIS AGREEMENT REGARDING A MATTER ARISING
OUT OF OR RELATING TO THIS AGREEMENT HAS REFUSED TO ACCEPT JURISDICTION OVER OR
OTHERWISE HAS NOT ACCEPTED SUCH ACTION OR PROCEEDING WITHIN, IN THE CASE OF EACH
SUCH COURT, 60 DAYS OF THE COMMENCEMENT OR FILING THEREOF, THEN THE WORDS "TO
THE EXCLUSION OF ALL OTHER COURTS" IN CLAUSE (I) AND CLAUSE (II) OF THIS
SENTENCE SHALL NOT APPLY WITH REGARD TO SUCH ACTION OR PROCEEDING AND THE
REFERENCE TO "SHALL" IN CLAUSE (II) OF THIS SECTION SHALL BE DEEMED TO BE "MAY".
SECTION 17. Further Assurances.
The Seller, the Additional Party and the Purchaser each agrees to
execute and deliver such instruments and take such further actions as any other
such party may, from time to time, reasonably request in order to effectuate the
purposes and to carry out the terms of this Agreement.
-22-
SECTION 18. Successors and Assigns.
The rights and obligations of the Seller and the Additional Party
under this Agreement shall not be assigned by the Seller or the Additional
Party, as the case may be, without the prior written consent of the Purchaser,
except that any person into which the Seller or the Additional Party may be
merged or consolidated, or any corporation resulting from any merger, conversion
or consolidation to which the Seller or the Additional Party is a party, or any
person succeeding to all or substantially all of the business of the Seller or
the Additional Party, shall be the successor to the Seller or the Additional
Party, as the case may be, hereunder. The Purchaser has the right to assign its
interest under this Agreement, in whole or in part, as may be required to effect
the purposes of the Pooling and Servicing Agreement, and the assignee shall, to
the extent of such assignment, succeed to the rights and obligations hereunder
of the Purchaser. Subject to the foregoing, this Agreement shall bind and inure
to the benefit of and be enforceable by the Seller, the Additional Party, the
Purchaser, and their respective successors and permitted assigns.
SECTION 19. Amendments.
No term or provision of this Agreement may be waived or modified
unless such waiver or modification is in writing and signed by a duly authorized
officer of the party against whom such waiver or modification is sought to be
enforced. The Seller's and the Additional Party's obligations hereunder shall in
no way be expanded, changed or otherwise affected by any amendment of or
modification to the Pooling and Servicing Agreement, unless the Seller or the
Additional Party, as applicable, has consented to such amendment or modification
in writing.
-23-
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their
names to be signed hereto by their respective duly authorized officers as of the
date first above written.
SELLER
UBS REAL ESTATE INVESTMENTS INC.
By: /s/ Xxxxxx Xxxxxxxxx
-----------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Director
By: /s/ Xxxx Xxxxx
-----------------------------------
Name: Xxxx Xxxxx
Title: Director
Address for Notices:
1285 Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxxxx
Telecopier No.: (000) 000-0000
ADDITIONAL PARTY
UBS PRINCIPAL FINANCE LLC
By: /s/ Xxxxxx Xxxxxxxxx
-----------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Director
By: /s/ Xxxx Xxxxx
-----------------------------------
Name: Xxxx Xxxxx
Title: Director
Address for Notices:
1285 Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxxxx
Telecopier No.: (000) 000-0000
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PURCHASER
STRUCTURED ASSET SECURITIES CORPORATION II
By: /s/ Xxxxx Xxxx
-----------------------------------
Name: Xxxxx Xxxx
Title: Senior Vice President
Address for Notices:
Structured Asset Securities Corporation II
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxx
Telecopier No.: (000) 000-0000
-25-
EXHIBIT A
MORTGAGE LOAN SCHEDULE
MORTGAGE
LOAN
NUMBER PROPERTY NAME ADDRESS CITY STATE ZIP CODE
-------- ----------------------------------------------- ----------------------------------------- -------------- ------- --------
3 Mall Del Norte 0000 Xxx Xxxxx Xxxxxx Xxxxxx XX 00000
5 Macquarie DDR Portfolio Various Various Various Various
7 Lembi Portfolio - LSL Property Holdings II, LLC Various San Francisco CA Various
10 Concord Portfolio Various Houston TX Various
12 Great Neck Roslyn Portfolio Various Various NY Various
14 Crown Center 0000-0000 Xxxx Xxxxxxx Xxxxx Xxxx Xxxx Xxxxxxxxxx XX 00000
16 Atlantic Building 000 Xxxxx Xxxxx Xxxxxx Xxxxxxxxxxxx XX 00000
00 Xxxxxx Xxxxxx Xxxxxxxx Xxxxxxxxxx 0000 Xxxx Xxxxx Xxxxxx Xx Xxxxxx XX 00000
20 Lembi Portfolio - LSL Property Holdings IV, LLC Various San Francisco CA Various
23 Lembi Portfolio - FEL Properties II, Inc. Various Xxx Xxxxxxxxx XX 00000
27 Carson Self Storage 00000 Xxxxx Xxxx Xxxxxx Xxxxxx XX 00000
28 Vista Centre 0000-0000 Xxxx Xxxxxxx Xxxxxxx XX 00000
29 Hayward FedEx 00000 Xxxxxxx Xxxxxx Xxxxxxx XX 00000
00 Xxxxxxxx Xxxxxxx Center 0000-0000 Xxxx Xxxxxxxx Xxxxxxxxx & 00000 Xxxxxxxx XX 00000
East 00xx Xxxxxx
00 Xxxxxxxxxx Xxxxxx 6526 - 0000 Xxxxxxxx Xxxx Xxxx Xxxxx XX 00000
32 Lembi Portfolio - 950 II DE, LLC 000 Xxxxxxxx Xxxxxx Xxx Xxxxxxxxx XX 00000
35 Countryside Professional Center 2 & 0 Xxxxxxx Xxxx Xxxxx Xxxxxxxx XX 00000
40 Best Western Rio Grande Inn 000 Xxxx 0xx Xxxxxx Xxxxxxx XX 00000
41 Rite Aid - Winchester 000 Xxxxxxxx Xxxx Xxxxxxxxxx XX 00000
00 Xxxxxxx Xxxxxxxxx 0000-0000 Xxxxxxx Xxxxxxxxx Xxxx Xxxxxxxxx XX 00000
50 Xxxxxx Xxxxx Apartments 0000 Xxxxxxxxx Xxxx Xxxxxxx XX 00000
51 Northgate Apartments 00000 Xxxxxxx Xxxxx Xxxxxxx XX 00000
00 Xxxxx Xxxx Xxxxxx 0000 & 0000 Xxxxx Xxxx Xxxxxxx XX 00000
62 The Seasons Condiminiums 0-00 Xxxxxxx Xxxxxx Xxxxx Xxxxxx XX 00000
65 CVS - North Carolina Various Various NC Various
66 Jacques Mobile Home Park 00000 Xxxxxxxx Xxxx Xxxxxxx XX 00000
67 La Salle National Bank Branch 00000 Xxxxx XxXxxxxx Xxxx Xxxxxxxxx XX 00000
72 Eckerd - Rochester 000 Xxxxxxxx Xxxxxx Xxxxxxxxx XX 00000
74 000 Xxxxxxxxxx Xxxxxxx 000 Xxxx Xxxxxx Xxxxxxx Xxxxxxxxxx XX 00000
76 000-000 Xxxxxx Xxxxxx 000-000 Xxxxxx Xxxxxx Xxx Xxxx XX 00000
77 Marketplace at Town Center 00000 XXX Xxxxxxx Xxxxxxxx XX 00000
78 Rite Aid - Kettering 0000 Xxxx Xxxxxx Xxxx Xxxxxxxxx XX 00000
83 Lembi Portfolio - FEL-WRL Properties II, LLC - 0000-0000 Xxxxxxxxxx Xxxxxx Xxxxxxxxxx XX 00000
1461 Burlingame
84 Rite Aid - Marmet 00000 XxxXxxxxx Xxxxxx Xxxxxx XX 00000
85 Barbizon Building 0000 Xxxxx Xxxx Xxxxxx XX 00000
86 CVS - Xxxxxxx 000 Xxxx Xxxx Xxxx Xxxxxxxxx Xxxxxxx XX 00000
87 Rite Aid - Monticello 0000 Xxxxx Xxxx Xxxxxx Xxxxxxxxxx XX 00000
MORTGAGE MONTHLY REMAINING REMAINING INTEREST PRIMARY ADMINISTRATIVE
LOAN CUT-OFF DATE P&I MORTGAGE TERM TO MATURITY- AMORTIZATION ACCRUAL SERVICING COST
NUMBER BALANCE PAYMENT RATE MATURITY ARD TERM BASIS FEE RATE
-------- -------------- ---------- -------- -------- ---------- ------------ -------- --------- --------------
3 113,400,000.00 476,280.00 5.04000 119 12/1/2014 0 30/360 0.02122 0.0200
5 85,000,000.00 347,791.67 4.91000 84 1/11/2012 0 30/360 0.02122 0.0200
7 48,950,000.00 251,457.96 6.08000 59 12/11/2009 0 Act/360 0.02122 0.0200
10 41,000,000.00 243,317.16 5.90500 120 1/11/2015 360 Act/360 0.02122 0.0200
12 38,500,000.00 205,360.68 4.94400 61 2/11/2010 360 Act/360 0.02122 0.0200
14 34,000,000.00 196,367.65 5.65500 120 1/11/2015 360 Act/360 0.02122 0.0200
16 28,750,000.00 168,325.51 5.78000 120 1/11/2015 360 Act/360 0.02122 0.0200
18 22,000,000.00 179,846.77 5.28000 176 9/11/2019 176 Act/360 0.02122 0.0200
20 18,700,000.00 96,062.59 6.08000 59 12/11/2009 0 Act/360 0.02122 0.0200
23 16,650,000.00 85,531.67 6.08000 59 12/11/2009 0 Act/360 0.02122 0.0200
27 13,000,000.00 83,441.60 5.96000 119 12/11/2014 300 Act/360 0.02122 0.0200
28 12,600,000.00 70,989.02 5.43000 60 1/11/2010 360 Act/360 0.02122 0.0200
29 11,500,000.00 72,000.17 5.70000 134 3/11/2016 300 Act/360 0.02122 0.0200
30 11,200,000.00 63,803.34 5.53000 84 1/11/2012 360 Act/360 0.02122 0.0200
31 10,414,968.80 59,647.92 5.56000 118 11/11/2014 358 Act/360 0.02122 0.0200
32 8,900,000.00 45,719.63 6.08000 59 12/11/2009 0 Act/360 0.02122 0.0200
35 8,500,000.00 49,118.79 5.66000 120 1/11/2015 360 Act/360 0.02122 0.0200
40 6,700,000.00 45,868.87 6.65000 120 1/11/2015 300 Act/360 0.02122 0.0200
41 6,622,948.20 60,359.60 7.07000 177 10/10/2019 177 30/360 0.02122 0.0200
45 6,000,000.00 34,634.15 5.65000 120 1/11/2015 360 Act/360 0.02122 0.0200
50 4,400,000.00 25,677.21 5.75000 120 1/11/2015 360 Act/360 0.02122 0.0200
51 4,375,464.06 28,080.91 5.90000 116 9/11/2014 296 Act/360 0.02122 0.0200
56 4,100,000.00 23,485.56 5.58000 121 2/11/2015 360 Act/360 0.02122 0.0200
62 3,496,841.22 20,247.53 5.67000 119 12/11/2014 359 Act/360 0.02122 0.0200
65 3,300,000.00 19,616.56 5.56000 120 1/11/2015 327 Act/360 0.02122 0.0200
66 3,250,000.00 19,237.34 5.48000 84 1/11/2012 324 Act/360 0.02122 0.0200
67 3,150,000.00 17,806.38 5.46000 121 2/11/2015 360 Act/360 0.02122 0.0200
72 2,950,000.00 17,290.43 5.79000 120 1/11/2015 360 Act/360 0.02122 0.0200
74 2,694,547.04 15,415.11 5.55000 118 11/11/2014 358 Act/360 0.02122 0.0200
76 2,278,009.36 13,377.97 5.80000 119 12/11/2014 359 Act/360 0.02122 0.0200
77 2,219,000.00 13,389.75 6.06000 61 2/11/2010 360 Act/360 0.02122 0.0200
78 2,089,382.84 19,042.02 7.07000 177 10/10/2019 177 30/360 0.02122 0.0200
83 1,800,000.00 9,246.67 6.08000 59 12/11/2009 0 Act/360 0.02122 0.0200
84 1,789,772.53 16,311.46 7.07000 177 10/10/2019 177 30/360 0.02122 0.0200
85 1,680,000.00 9,676.33 5.63000 121 2/11/2015 360 Act/360 0.02122 0.0200
86 1,450,000.00 8,577.30 5.87500 120 1/11/2015 360 Act/360 0.02122 0.0200
87 1,287,954.61 11,196.36 6.57000 182 3/10/2020 182 30/360 0.02122 0.0200
MORTGAGE MORTGAGE ARD ANTICIPATED
LOAN LOAN MORTGAGE REPAYMENT CROSS MORTGAGE LOAN
NUMBER GROUND LEASE? SELLER DEFEASANCE LOAN DATE ARD SPREAD COLLATERALIZED SELLER LOAN ID
-------- ------------- -------- -------------- -------- ----------- ---------- -------------- --------------
3 Fee Simple UBS Defeasance No N/A No 10615
5 Fee Simple UBS Yield No N/A No 10661
Maintenance
7 Fee Simple UBS Defeasance No N/A Yes (UBS-A) 10637a
10 Fee Simple UBS Defeasance No N/A No 10452
12 Fee Simple/ UBS Defeasance No N/A No 10653
Leasehold
14 Fee Simple/ UBS Defeasance No N/A No 10433
Leasehold
16 Fee Simple UBS Defeasance No N/A No 10543
18 Fee Simple UBS Defeasance No N/A No 10611
20 Fee Simple UBS Defeasance No N/A Yes (UBS-A) 10637b
23 Fee Simple UBS Defeasance No N/A Yes (UBS-A) 10637c
27 Fee Simple UBS Defeasance No N/A No 10617
28 Fee Simple UBS Yield No N/A No 10501
Maintenance -
1% Prepay
Premium
29 Fee Simple UBS Defeasance No N/A No 10584
30 Fee Simple UBS Defeasance No N/A No 10592
31 Fee Simple UBS Defeasance No N/A No 10520
32 Fee Simple UBS Defeasance No N/A Yes (UBS-A) 10637e
35 Fee Simple UBS Defeasance No N/A No 10641
40 Fee Simple UBS Defeasance No N/A No 10582
41 Fee Simple UBS Defeasance No N/A No RA1
45 Fee Simple UBS Defeasance No N/A No 10586
50 Fee Simple UBS Defeasance No N/A No 10530
51 Fee Simple UBS Defeasance No N/A No 10416
56 Fee Simple UBS Defeasance No N/A No 10574
62 Fee Simple UBS Defeasance No N/A No 10546
65 Fee Simple UBS Defeasance No N/A No 10558
66 Fee Simple UBS Defeasance No N/A No 10537
67 Fee Simple UBS Defeasance No N/A No 10667
72 Fee Simple UBS Defeasance No N/A No 10660
74 Fee Simple UBS Defeasance No N/A No 10504
76 Fee Simple UBS Defeasance No N/A No 10538
77 Fee Simple UBS Defeasance No N/A No 10646
78 Fee Simple UBS Defeasance No N/A No RA2
83 Fee Simple UBS Defeasance No N/A Yes (UBS-A) 10637d
84 Fee Simple UBS Defeasance No N/A No RA3
85 Fee Simple UBS Defeasance No N/A No 10647
86 Fee Simple UBS Defeasance No N/A No 10656
87 Leasehold UBS Defeasance No N/A No RA4
EXHIBIT B
REPRESENTATIONS AND WARRANTIES
Except as set forth on the schedule of exceptions attached hereto as
Schedule I, the Seller hereby represents and warrants to the Purchaser, with
respect to each Mortgage Loan, as of the Closing Date or such other date
specified in the particular representation and warranty (the heading set forth
herein with respect to each representation and warranty being for the
convenience of reference only and in no way limiting, expanding or otherwise
affecting the scope or subject matter thereof), that:
(i) Mortgage Loan Schedule. The information pertaining to such
Mortgage Loan set forth in the Mortgage Loan Schedule was true and correct
in all material respects as of the Cut-off Date.
(ii) Legal Compliance. If such Mortgage Loan was originated by
the Seller or an Affiliate of the Seller, then, as of the date of its
origination, such Mortgage Loan complied in all material respects with, or
was exempt from, all requirements of federal, state or local law relating
to the origination of such Mortgage Loan; and, if such Mortgage Loan was
not originated by the Seller or an Affiliate of the Seller, then, to the
Seller's actual knowledge, after having performed the type of due diligence
customarily performed in the origination of comparable mortgage loans by
the Seller, as of the date of its origination, such Mortgage Loan complied
in all material respects with, or was exempt from, all requirements of
federal, state or local law relating to the origination of such Mortgage
Loan.
(iii) Ownership of Mortgage Loan. The Seller owns such Mortgage
Loan, has good title thereto, has full right, power and authority to sell,
assign and transfer such Mortgage Loan and is transferring such Mortgage
Loan free and clear of any and all liens, pledges, charges or security
interests of any nature encumbering such Mortgage Loan, exclusive of the
servicing rights pertaining thereto; no provision of the Mortgage Note,
Mortgage(s) or other loan documents relating to such Mortgage Loan
prohibits or restricts the Seller's right to assign or transfer such
Mortgage Loan to the Trustee; no governmental or regulatory approval or
consent is required for the sale of such Mortgage Loan by the Seller; and
the Seller has validly conveyed to the Trustee a legal and beneficial
interest in and to such Mortgage Loan free and clear of any lien, claim or
encumbrance of any nature.
(iv) No Holdback. The proceeds of such Mortgage Loan have been
fully disbursed (except in those cases where the full amount of such
Mortgage Loan has been disbursed but a portion thereof is being held in
escrow or reserve accounts to be released pending the satisfaction of
certain conditions relating to leasing, repairs or other matters with
respect to the related Mortgaged Property) and there is no requirement for
future advances thereunder.
(v) Loan Document Status. Each of the related Mortgage Note,
Mortgage(s), Assignment(s) of Leases, if separate from the related
Mortgage, and other agreements executed in favor of the lender in
connection therewith is the legal, valid and binding obligation of the
maker thereof (subject to the non-recourse provisions therein and any state
anti-deficiency legislation), enforceable in accordance with its terms,
except that (A) such enforcement may be limited by (1) bankruptcy,
insolvency, receivership, reorganization, liquidation, voidable
1
preference, fraudulent conveyance and transfer, moratorium and/or other
similar laws affecting the enforcement of creditors' rights generally, and
(2) general principles of equity (regardless of whether such enforcement is
considered in a proceeding in equity or at law), and (B) certain provisions
in the subject agreement or instrument may be further limited or rendered
unenforceable by applicable law, but subject to the limitations set forth
in the foregoing clause (A), such limitations will not render that subject
agreement or instrument invalid as a whole or substantially interfere with
the mortgagee's realization of the principal benefits and/or security
provided by the subject agreement or instrument. Such Mortgage Loan is
non-recourse to the Mortgagor or any other Person except to the extent
provided in certain nonrecourse carveouts and/or in any applicable
guarantees. A natural person as individual guarantor has agreed, in effect,
to be liable for all liabilities, costs, losses, damages or expenses
suffered or incurred by the mortgagee under such Mortgage Loan by reason of
or in connection with and to the extent of (A) any material intentional
fraud or material intentional misrepresentation by the related mortgagor;
(B) any breach on the part of the related mortgagor of any environmental
representations warranties and covenants contained in the related Mortgage
Loan documents; (C) misapplication or misappropriation of rents (received
after an event of default), insurance proceeds or condemnation awards; and
(D) the filing of a voluntary bankruptcy or insolvency proceeding by the
related mortgagor; provided that, instead of any breach described in clause
(B) of this paragraph, such entity (or individual) may instead be liable
for liabilities, costs, losses, damages, expenses and claims resulting from
a breach of the obligations and indemnities of the related mortgagor under
the related Mortgage Loan documents relating to hazardous or toxic
substances, radon or compliance with environmental laws.
(vi) No Right of Rescission. Subject to the limitations and
exceptions as to enforceability set forth in paragraph (v) above, there is
no valid offset, defense, counterclaim or right of rescission, abatement of
amounts due under the Mortgage Note or diminution of amounts due under the
Mortgage Note with respect to any of the related Mortgage Note, Mortgage(s)
or other agreements executed in connection with such Mortgage Loan and, as
of the Closing Date, to the actual knowledge of the Seller, no such claim
has been asserted.
(vii) Assignments. The assignment of the related Mortgage(s) and
Assignment(s) of Leases to the Trustee constitutes the legal, valid,
binding and, subject to the limitations and exceptions as to enforceability
set forth in paragraph (v) above, enforceable assignment of such documents
(provided that the unenforceability of any such assignment based on
bankruptcy, insolvency, receivership, reorganization, liquidation,
moratorium and/or other similar laws affecting the enforcement of
creditors' rights generally or based on general principles of equity
(regardless of whether such enforcement is considered in a proceeding in
equity or at law) shall be a breach of this representation and warranty
only upon the declaration by a court with jurisdiction in the matter that
such assignment is to be unenforceable on such basis).
(viii) First Lien. Each related Mortgage is a valid and, subject
to the limitations and exceptions in paragraph (v) above, enforceable first
lien on the related Mortgaged Property including all improvements thereon
(other than any tenant owned improvements), which Mortgaged Property is
free and clear of all encumbrances and liens having priority over or on a
parity with the first lien of such Mortgage, except for the following
(collectively, the "Permitted Encumbrances"): (A) the lien for real estate
taxes, water charges, sewer rents and assessments
2
not yet due and payable; (B) covenants, conditions and restrictions, rights
of way, easements and other matters that are of public record or that are
omitted as exceptions in the related lender's title insurance policy (or,
if not yet issued, omitted as exceptions in a fully binding pro forma title
policy or title policy commitment); (C) exceptions and exclusions
specifically referred to in the related lender's title insurance policy
(or, if not yet issued, referred to in a pro forma title policy or title
policy commitment); (D) other matters to which like properties are commonly
subject, (E) the rights of tenants (as tenants only) under leases
(including subleases) pertaining to the related Mortgaged Property; (F)
condominium declarations of record and identified in the related lender's
title insurance policy (or, if not yet issued, identified in a pro forma
title policy or title policy commitment); and (G) if such Mortgage Loan
constitutes a Cross-Collateralized Mortgage Loan, the lien of the Mortgage
for another Mortgage Loan contained in the same Cross-Collateralized Group.
With respect to such Mortgage Loan, such Permitted Encumbrances do not,
individually or in the aggregate, materially and adversely interfere with
the benefits of the security intended to be provided by the related
Mortgage, the current principal use or operation of the related Mortgaged
Property or the ability of the related Mortgaged Property to generate
sufficient cashflow to enable the related Mortgagor to timely pay in full
the principal and interest on the related Mortgage Note (other than a
Balloon Payment, which would require a refinancing). If the related
Mortgaged Property is operated as a nursing facility or a hospitality
property, the related Mortgage, together with any security agreement,
chattel mortgage or similar agreement and UCC financing statement, if any,
establishes and creates a first priority, perfected security interest
(subject only to any prior purchase money security interest, revolving
credit lines and any personal property leases), to the extent such security
interest can be perfected by the recordation of a Mortgage or the filing of
a UCC financing statement, in all material personal property owned by the
Mortgagor that is used in, and is reasonably necessary to, the operation of
the related Mortgaged Property, and that is located on the related
Mortgaged Property, which personal property includes, in the case of
Mortgaged Properties operated by the related Mortgagor as a nursing
facility or hospitality property, all furniture, fixtures, equipment and
other personal property located at the subject Mortgaged Property that are
owned by the related Mortgagor and reasonably necessary or material to the
operation of the subject Mortgaged Property. In the case of any Mortgage
Loan secured by a hotel, the related loan documents contain such provisions
as are necessary and UCC financing statements have been filed as necessary,
in each case, to perfect a valid first priority security interest, to the
extent such security interest can be perfected by the inclusion of such
provisions and the filing of a UCC financing statement, in the Mortgagor's
right to receive related hotel room revenues with respect to such Mortgaged
Property.
(ix) Taxes and Assessments. All taxes, governmental assessments, water
charges, sewer rents or similar governmental charges which, in all such
cases, were directly related to the related Mortgaged Property and could
constitute liens on the related Mortgaged Property prior to the lien of the
related Mortgage, together with all ground rents, that prior to the Cut-off
Date became due and payable in respect of, and materially affect, any
related Mortgaged Property have been paid or are escrowed for or are not
yet delinquent, and the Seller knows of no unpaid tax, assessment, ground
rent, water charges or sewer rent, which, in all such cases, were directly
related to the subject Mortgaged Property and could constitute liens on the
subject Mortgaged Property prior to the lien of the related Mortgage that
prior to the Closing Date became due and delinquent in respect of any
related Mortgaged Property, or in any such case an escrow of funds in an
amount sufficient to cover such payments has been established.
3
(x) No Material Damage. As of the date of origination of such Mortgage
Loan and, to the actual knowledge of the Seller, as of the Closing Date,
there was no pending proceeding for the total or partial condemnation of
any related Mortgaged Property that materially affects the value thereof
and such Mortgaged Property is free of material damage. Except for certain
amounts not greater than amounts which would be considered prudent by an
institutional commercial mortgage lender with respect to a similar mortgage
loan and which are set forth in the related Mortgage or other loan
documents relating to such Mortgage Loan, (and subject to any rights of the
lessor under any related Ground Lease) the related Mortgage Loan documents
provide that any condemnation awards will be applied (or, at the discretion
of the mortgagee, will be applied) to either the repair or restoration of
all or part of the related Mortgaged Property or the reduction of the
outstanding principal balance of such Mortgage Loan.
(xi) Title Insurance. Each related Mortgaged Property is covered by an
ALTA (or its equivalent) lender's title insurance policy issued by a
nationally recognized title insurance company, insuring that each related
Mortgage is a valid first lien on such Mortgaged Property in the original
principal amount of such Mortgage Loan after all advances of principal,
subject only to Permitted Encumbrances, (or if such policy has not yet been
issued, such insurance may be evidenced by a binding commitment or binding
pro forma marked as binding and signed (either thereon or on a related
escrow letter attached thereto) by the title insurer or its authorized
agent) from a title insurer qualified and/or licensed in the applicable
jurisdiction, as required, to issue such policy; such title insurance is in
full force and effect, all premiums have been paid, is freely assignable
and will inure to the benefit of the Trustee as sole insured as mortgagee
of record, or any such commitment or binding pro forma is a legal, valid
and binding obligation of such insurer; no claims have been made by the
Seller or any prior holder of such Mortgage Loan (other than a prior holder
unaffiliated with the Seller from whom the Seller has taken by assignment)
under such title insurance; and neither the Seller nor any Affiliate of the
Seller has done, by act or omission, anything that would materially impair
the coverage of any such title insurance policy; such policy or commitment
or binding pro forma contains no exclusion for (or alternatively it insures
over such exclusion, unless such coverage is unavailable in the relevant
jurisdiction) (A) access to a public road, (B) that there is no material
encroachment by any improvements on the related Mortgaged Property either
to or from any adjoining property or across any easements on the related
Mortgaged Property, and (C) that the land shown on the survey materially
conforms to the legal description of the related Mortgaged Property.
(xii) Property Insurance. As of the date of its origination and, to
the Seller's actual knowledge, as of the Cut-off Date, all insurance
required under each related Mortgage (except where an investment grade
tenant, or one or more tenants which in the aggregate do not represent more
than 10% of the net operating income with respect to the entire related
Mortgaged Property, is or are permitted to insure or self-insure under a
lease) was in full force and effect with respect to each related Mortgaged
Property; such insurance included (A) fire and extended perils insurance
included within the classification "All Risk of Physical Loss" or the
equivalent thereof in an amount (subject to a customary deductible) at
least equal to the lesser of (1) 100% of the full insurable value of the
improvements located on such Mortgaged Property and (2) the outstanding
principal balance of such Mortgage Loan or the portion thereof allocable to
such Mortgaged Property) and, if applicable, the related hazard insurance
policies or certificates of insurance contain appropriate endorsements to
avoid application of co-insurance,
4
(B) business interruption or rental loss insurance for a period of not less
than 12 months, (C) comprehensive general liability insurance in an amount
not less than $1 million per occurrence, (D) workers' compensation
insurance (if the related Mortgagor has employees and if required by
applicable law), and (E) if (1) such Mortgage Loan is secured by a
Mortgaged Property located in the State of California or in "seismic zone"
3 or 4 and (2) a seismic assessment as described below revealed a maximum
probable or bounded loss in excess of 20% of the amount of the estimated
replacement cost of the improvements on such Mortgaged Property, seismic
insurance; it is an event of default under such Mortgage Loan if the
above-described insurance coverage is not maintained by the related
Mortgagor (except where an investment grade tenant, or one or more tenants
which in the aggregate do not represent more than 10% of the net operating
income with respect to the entire related Mortgaged Property, is or are
permitted to insure or self-insure under a lease) and the related loan
documents provide (in either a general cost and expense recovery provision
or a specific provision with respect to recovery of insurance costs and
expenses) that any reasonable out-of-pocket costs and expenses incurred by
the mortgagee in connection with such default in obtaining such insurance
coverage may be recovered from the related Mortgagor; the related Evidence
of Property Insurance and certificate of liability insurance (which may be
in the form of an Xxxxx 27 or an Xxxxx 25, respectively), or forms
substantially similar thereto, provide that the related insurance policy
may not be terminated or reduced without at least 10 days prior notice to
the mortgagee and (other than those limited to liability protection) name
the mortgagee and its successors as loss payee; no notice of termination or
cancellation with respect to any such insurance policy has been received by
the Seller or, to the actual knowledge of the Seller, by any prior
mortgagee under such Mortgage Loan (other than, with respect to a related
Mortgaged Property located in New York and Florida, a prior mortgagee
unaffiliated with the Seller from whom the Seller has taken the related
Mortgage Note and Mortgage by assignment and has amended and restated such
Mortgage Note and Mortgage); all premiums under any such insurance policy
have been paid through the Cut-off Date; the insurance policies specified
in clauses (A), (B) and (C) above are required to be maintained with
insurance companies having "financial strength" or "claims paying ability"
ratings of at least "A:VII" from A.M. Best Company or at least "BBB+" (or
equivalent) from a nationally recognized statistical rating agency (or,
with respect to certain blanket insurance policies, such other ratings as
are in compliance with S&P's applicable criteria for rating the
Certificates); and, except for certain amounts not greater than amounts
which would be considered prudent by an institutional commercial mortgage
lender with respect to a similar mortgage loan and which are set forth in
the related Mortgage or other loan documents relating to such Mortgage
Loan, and subject to the related exception schedules, the related Mortgage
Loan documents provide that any property insurance proceeds will be applied
(or, at the discretion of the mortgagee, will be applied) either to the
repair or restoration of all or part of the related Mortgaged Property or
the reduction of the outstanding principal balance of such Mortgage Loan;
provided that the related Mortgage Loan documents may entitle the related
Mortgagor to any portion of such proceeds remaining after completion of the
repair or restoration of the related Mortgaged Property or payment of
amounts due under such Mortgage Loan. Notwithstanding anything to the
contrary in this paragraph (xii), with regard to insurance for acts of
terrorism, any such insurance and the amount thereof may be limited by the
commercial availability of such coverage, whether the mortgagee may
reasonably require such insurance, certain limitations with respect to the
cost thereof and/or whether such hazards are at the time commonly insured
against for property similar to the related Mortgaged Property. If the
related Mortgaged Property is located in the State of California or in
"seismic zone" 3 or 4, then: (A)
5
either a seismic assessment was conducted with respect to the related
Mortgaged Property in connection with the origination of such Mortgage Loan
or earthquake insurance was obtained; and (B) the probable maximum loss for
the related Mortgaged Property as reflected in such seismic assessment, if
any, was determined based upon a return period of not less than 475 years,
an exposure period of 50 years and a 10% probability of incidence. Schedule
I-xii attached hereto is true and correct in all material respects.
(xiii) No Material Defaults. Other than payments due but not yet 30
days or more delinquent, there is (A) no material default, breach,
violation or event of acceleration existing under the related Mortgage
Note, the related Mortgage or other loan documents relating to such
Mortgage Loan, and (B), to the knowledge of the Seller as of the Closing
Date, no event which, with the passage of time or with notice and the
expiration of any grace or cure period, would constitute a material
default, breach, violation or event of acceleration under any of such
documents; provided, however, that this representation and warranty does
not cover any default, breach, violation or event of acceleration (A) that
specifically pertains to or arises out of the subject matter otherwise
covered by any other representation and warranty made by the Seller in this
Exhibit B or (B) with respect to which: (1) the Seller has no actual
knowledge as of the Closing Date and (2) written notice of the discovery
thereof is not delivered to the Seller by the Trustee or the Master
Servicer on or prior to the date occurring twelve months after the Closing
Date. Neither the Seller nor any prior holder of such Mortgage Loan (other
than, with respect to a related Mortgaged Property located in New York and
Florida, a prior holder unaffiliated with the Seller from whom the Seller
has taken the related Mortgage Note and Mortgage by assignment and has
amended and restated such Mortgage Note and Mortgage) has waived, in
writing or with knowledge, any material default, breach, violation or event
of acceleration under any of such documents. Under the terms of such
Mortgage Loan, no person or party other than the mortgagee or its servicing
agent may declare an event of default or accelerate the related
indebtedness under such Mortgage Loan.
(xiv) No Payment Delinquency. As of the Closing Date, such Mortgage
Loan is not, and in the prior 12 months (or since the date of origination
if such Mortgage Loan has been originated within the past 12 months), has
not been, 30 days or more past due in respect of any Monthly Payment.
(xv) Interest Accrual Basis. Such Mortgage Loan accrues interest on an
Actual/360 Basis, an Actual/Actual Basis or a 30/360 Basis; and such
Mortgage Loan accrues interest (payable monthly in arrears) at a fixed rate
of interest throughout the remaining term thereof (except if such Mortgage
Loan is an ARD Mortgage Loan, in which case the accrual rate for interest
will increase after its Anticipated Repayment Date, and except in
connection with the occurrence of a default and the accrual of default
interest).
(xvi) Subordinate Debt. Each related Mortgage or other loan document
relating to such Mortgage Loan does not provide for or permit, without the
prior written consent of the holder of the related Mortgage Note, any
related Mortgaged Property or any direct controlling interest in the
Mortgagor to secure any other promissory note or debt (other than another
Mortgage Loan in the Trust Fund.
6
(xvii) Qualified Mortgage. Such Mortgage Loan is a "qualified
mortgage" within the meaning of Section 860G(a)(3) of the Code.
Accordingly, either as of the date of origination or the Closing Date, the
fair market value of the real property securing such Mortgage Loan was not
less than 80% of the "adjusted issue price" (within the meaning of the
REMIC Provisions) of such Mortgage Loan. For purposes of the preceding
sentence, the fair market value of the real property securing such Mortgage
Loan was first reduced by the amount of any lien on such real property that
is senior to the lien that secures such Mortgage Loan, and was further
reduced by a proportionate amount of any lien that is on a parity with the
lien that secures such Mortgage Loan. No action that occurs by operation of
the terms of such Mortgage Loan would cause such Mortgage Loan to cease to
be a "qualified mortgage" and such Mortgage Loan does not permit the
release or substitution of collateral if such release or substitution (A)
would constitute a "significant modification" of such Mortgage Loan within
the meaning of Treasury regulations section 860G-2(b), (B) would cause such
Mortgage Loan not to be a "qualified mortgage" within the meaning of
Section 860G(a)(3) of the Code (without regard to clauses (A)(i) or (A)(ii)
thereof) or (C) would cause a "prohibited transaction" within the meaning
of Section 860F(a)(2) of the Code. The related Mortgaged Property, if
acquired in connection with the default or imminent default of such
Mortgage Loan, would constitute "foreclosure property" within the meaning
of Section 860G(a)(8) of the Code.
(xviii) Prepayment Consideration. Prepayment Premiums and Yield
Maintenance Charges payable with respect to such Mortgage Loan, if any,
constitute "customary prepayment penalties" within the meaning of Treasury
regulations section 1.860G-1(b)(2).
(xix) Environmental Conditions. One or more environmental site
assessments (or updates thereof) in each instance meeting American Society
of Testing and Materials requirements were performed by an environmental
consulting firm independent of the Seller and the Seller's Affiliates with
respect to each related Mortgaged Property during the 12-month period
preceding the Cut-off Date, and the Seller, having made no independent
inquiry other than to review the report(s) prepared in connection with the
assessment(s) and/or update(s) referenced herein, has no knowledge of, and
has not received actual notice of, any material and adverse environmental
condition or circumstance affecting such Mortgaged Property that was not
disclosed in such report(s); none of the environmental reports reveal any
circumstances or conditions that are in violation of any applicable
environmental laws, or if such report does reveal such circumstances, then
(1) the same have been remediated in all material respects, (2) sufficient
funds have been escrowed or a letter of credit, guaranty or other
instrument has been delivered for purposes of covering the estimated costs
of such remediation, (3) the related Mortgagor or other responsible party
set forth on Schedule I (which Mortgagor or other responsible party has
been reasonably determined by the Seller to have the creditworthiness to do
so (such determination by the Seller to be based on review of (i) the
financial statements provided to the Seller by the Mortgagor or other
responsible party, as applicable, and (ii) the reasonable cost of
remediation of the circumstances or conditions that are in violation of the
applicable environmental laws as set forth in the applicable environmental
report)) is currently taking remedial or other appropriate action to
address the environmental issue consistent with the recommendations in such
site assessment, (4) the cost of the environmental issue relative to the
value of such Mortgaged Property was de minimis, or (5) environmental
insurance has been obtained.
7
The Mortgagor with respect to such Mortgage Loan has represented,
warranted and covenanted generally to the effect that, to its knowledge,
except as set forth in the environmental reports described above, it has
not used, caused or permitted to exist, and will not use, cause or permit
to exist, on the related Mortgaged Property, any Hazardous Materials in any
manner which violates applicable federal, state or local laws governing the
use, storage, handling, production or disposal of Hazardous Materials at
the related Mortgaged Property and (A) the related Mortgagor and a natural
person have agreed to indemnify the mortgagee under such Mortgage Loan, and
its successors and assigns, against any losses, liabilities, damages,
penalties, fines, claims and reasonable out of pocket expenses (excluding
lost profits, consequential damages and diminution of value of the related
Mortgaged Property, provided that no Mortgage Loan with an original
principal balance equal to or greater than $15,000,000 contains an
exclusion for "diminution of value" of the related Mortgaged Property)
paid, suffered or incurred by such mortgagee resulting from such
Mortgagor's material violation of any environmental law or a material
breach of the environmental representations and warranties or covenants
given by the related Mortgagor in connection with such Mortgage Loan or (B)
environmental insurance has been obtained. If such Mortgage Loan is a
Mortgage Loan as to which neither a natural person has provided the
indemnity set forth above nor environmental insurance has been obtained,
such Mortgage Loan is set forth on Schedule I.
The Seller has not taken any action with respect to such Mortgage Loan
or the related Mortgaged Property that could subject the Seller or its
successors and assigns in respect of such Mortgage Loan to liability under
CERCLA or any other applicable federal, state or local environmental law.
The related Mortgage or other loan documents require the related Mortgagor
to comply with all applicable federal, state and local environmental laws
and regulations.
(xx) Realization Against Real Estate Collateral. The related Mortgage
Note, Mortgage(s), Assignment(s) of Leases and other loan documents
securing such Mortgage Loan, if any, contain customary and, subject to the
limitations and exceptions as to enforceability in paragraph (v) above,
enforceable provisions such as to render the rights and remedies of the
holder thereof adequate for the practical realization against the related
Mortgaged Property or Properties of the principal benefits of the security
intended to be provided thereby, including realization by judicial or, if
applicable, non-judicial foreclosure.
(xxi) Bankruptcy. The related Mortgagor is not a debtor in any
bankruptcy, reorganization, insolvency or comparable proceeding; provided,
however, that this representation and warranty does not cover any such
bankruptcy, reorganization, insolvency or comparable proceeding with
respect to which: (1) the Seller has no actual knowledge and (2) written
notice of the discovery thereof is not delivered to the Seller by the
Trustee or the Master Servicer on or prior to the date occurring twelve
months after the Closing Date.
(xxii) Loan Security. Such Mortgage Loan is secured by a Mortgage on a
fee simple interest and/or a leasehold estate in a commercial property or
multifamily property, including the related Mortgagor's interest in the
improvements on the related Mortgaged Property.
8
(xxiii) Amortization. Such Mortgage Loan does not provide for negative
amortization unless such Mortgage Loan is an ARD Mortgage Loan, in which
case it may occur only after the Anticipated Repayment Date.
(xxiv) Whole Loan. Such Mortgage Loan is a whole loan, contains no
equity participation by the lender or shared appreciation feature and does
not provide for any contingent interest in the form of participation in the
cash flow of the related Mortgaged Property.
(xxv) Due-on-Encumbrance. Each Mortgage Loan contains provisions for
the acceleration of the payment of the unpaid principal balance of such
Mortgage Loan if, without the prior written consent of the mortgagee or
Rating Agency confirmation that an Adverse Rating Event with respect to any
Class of Certificates would not occur, any related Mortgaged Property or
any direct controlling interest in the Mortgagor is directly encumbered in
connection with subordinate financing; and except for the respective
Mortgage Loans secured by the Mortgaged Properties listed on Schedule I
(for which such consent has been granted with respect to mezzanine debt),
no such consent has been granted by the Seller. To the Seller's knowledge,
no related Mortgaged Property is encumbered in connection with subordinate
financing; however, if the related Mortgaged Property is listed on Schedule
I, certain direct controlling equity holders in the related Mortgagor are
known to the Seller to have incurred debt secured by their ownership
interest in the related Mortgagor.
(xxvi) Due-on-Sale. Except with respect to transfers of certain
non-controlling and/or minority interests in the related Mortgagor as
specified in the related Mortgage or with respect to transfers of interests
in the related Mortgagor between immediate family members and with respect
to transfers by devise, by descent or by operation of law or otherwise upon
the death or incapacity of a person having an interest in the related
Mortgagor, each Mortgage Loan contains either (A) provisions for the
acceleration of the payment of the unpaid principal balance of such
Mortgage Loan if any related Mortgaged Property or interest therein is
directly or indirectly transferred or sold without the prior written
consent of the mortgagee or rating agency confirmation, or (B) provisions
for the acceleration of the payment of the unpaid principal balance of such
Mortgage Loan if any related Mortgaged Property or interest therein is
directly or indirectly transferred or sold without the related Mortgagor
having satisfied certain conditions specified in the related Mortgage with
respect to permitted transfers (which conditions are consistent with the
practices of prudent commercial mortgage lenders (as defined below)). The
Mortgage (under either specific or general expense provisions) requires the
Mortgagor to pay all reasonable fees and expenses associated with securing
the consent or approval of the holder of the Mortgage for all actions
involving the transfer of interest in such Mortgagor requiring such consent
or approval under the Mortgage.
(xxvii) Mortgagor Concentration. Except in the case of the Mortgage
Loans listed on Schedule I (xxvii), such Mortgage Loan, together with any
other Mortgage Loan made to the same Mortgagor or to an Affiliate of such
Mortgagor, does not represent more than 5% of the Initial Pool Balance.
(xxviii) Waivers; Modifications. Except as set forth in a written
instrument included in the related Mortgage File, the (A) material terms of
the related Mortgage Note, the related Mortgage(s) and any related loan
agreement and/or lock-box agreement have not been
9
waived, modified, altered, satisfied, impaired, canceled, subordinated or
rescinded by the mortgagee in any manner, and (B) no portion of a related
Mortgaged Property has been released from the lien of the related Mortgage,
in the case of (A) and/or (B), to an extent or in a manner that in any such
event materially interferes with the security intended to be provided by
such document or instrument. Schedule I identifies each Mortgage Loan (if
any) as to which, since the latest date any related due diligence materials
were delivered to Allied Capital Corporation (or its designee), there has
been (in writing) given, made or consented to a material alteration,
material modification or assumption of the terms of the related Mortgage
Note, Mortgage(s) or any related loan agreement and/or lock-box agreement
and/or as to which, since such date, there has been (in writing) a waiver
other than as related to routine operational matters or minor covenants.
(xxix) Inspection. Each related Mortgaged Property was inspected by or
on behalf of the related originator during the six-month period prior to
the related origination date.
(xxx) Property Release. The terms of the related Mortgage Note,
Mortgage(s) or other loan document securing such Mortgage Loan do not
provide for the release from the lien of such Mortgage of any material
portion of the related Mortgaged Property that is necessary to the
operation of such Mortgaged Property or was given material value in the
underwriting of such Mortgage Loan at origination, without (A) payment in
full of such Mortgage Loan, (B) delivery of Defeasance Collateral in the
form of "government securities" within the meaning of Section 2(a)(16) of
the Investment Company Act of 1940, as amended (the "Investment Company
Act"), (C) payment of a release price equal to at least 125% of the amount
of such Mortgage Loan allocated to the related Mortgaged Property subject
to the release or (D) the satisfaction of certain underwriting and legal
requirements which the Seller required in the origination of comparable
mortgage loans.
(xxxi) Qualifications; Licensing; Zoning. The related Mortgagor has
covenanted in the related Mortgage Loan documents to maintain the related
Mortgaged Property in compliance in all material respects with, to the
extent it is not grandfathered under, all applicable laws, zoning
ordinances, rules, covenants and restrictions affecting the construction,
occupancy, use and operation of such Mortgaged Property, and the related
originator performed the type of due diligence in connection with the
origination of such Mortgage Loan customarily performed by prudent
commercial mortgage lenders (as defined below) with respect to the
foregoing matters; the Seller has received no notice of any material
violation of, to the extent is has not been grandfathered under, any
applicable laws, zoning ordinances, rules, covenants or restrictions
affecting the construction, occupancy, use or operation of the related
Mortgaged Property (unless affirmatively covered by the title insurance
referred to in paragraph (xi) above (or an endorsement thereto)); to the
Seller's knowledge (based on surveys, opinions, letters from municipalities
and/or title insurance obtained in connection with the origination of such
Mortgage Loan), no improvement that was included for the purpose of
determining the appraised value of the related Mortgaged Property at the
time of origination of such Mortgage Loan lay outside the boundaries and
building restriction lines of such property, in effect at the time of
origination of such Mortgage Loan, to an extent which would have a material
adverse affect on the related Mortgagor's use and operation of such
Mortgaged Property (unless grandfathered with respect thereto or
affirmatively covered by the title insurance referred to in paragraph (xi)
above (or an endorsement thereto)), and no improvements on adjoining
properties encroached
10
upon such Mortgaged Property to any material extent. For purposes of this
paragraph, a Mortgaged Property shall be deemed "grandfathered" with
respect to any laws, zoning ordinances, rules, covenants or restrictions
affecting the construction, occupancy, use or operation of the related
Mortgaged Property, if and to the extent that any of the construction,
occupancy, use and operation of such Mortgaged Property: (A) conformed in
all material respects with such laws, zoning ordinances, rules, covenants
and restrictions affecting the improvements on the related Mortgaged
Property at the time the improvements on the related Mortgaged Property
were initially constructed or put into operation; and/or (B) was not
addressed or otherwise prohibited by any such laws, zoning ordinances,
rules, covenants and restrictions affecting the related Mortgaged Property
at the time the improvements on the related Mortgaged Property were
initially constructed or put into operation.
(xxxii) Property Financial Statements. The related Mortgagor has
covenanted in the related Mortgage Loan documents to deliver to the
mortgagee annual operating statements, rent rolls and related information
of each related Mortgaged Property and annual financial statements. If such
Mortgage Loan had an original principal balance greater than $15 million,
the related Mortgagor has covenanted to provide such operating statements,
rent rolls and related information on a quarterly basis. If such Mortgage
Loan has an original principal balance equal to or greater than $20
million, the related Mortgagor, if it obtains an audited financial
statement, is required to provide a copy thereof to the holder of such
Mortgage Loan at the related mortgagee's request.
(xxxiii) Single Purpose Entity. If such Mortgage Loan has a Cut-off
Date Balance in excess of $25 million, then the related Mortgagor is
obligated by its organizational documents and the related Mortgage Loan
documents to be a Single Purpose Entity for so long as such Mortgage Loan
is outstanding; and, if such Mortgage Loan has a Cut-off Date Balance
greater than $5 million and less than $25 million, the related Mortgagor is
obligated by its organizational documents and/or the related Mortgage Loan
documents to own the related Mortgaged Property and no other material
assets, except such as are incidental to the ownership of such Mortgaged
Property for so long as such Mortgage Loan is outstanding. For purposes of
this representation, "Single Purpose Entity" means an entity whose
organizational documents or the related Mortgage Loan documents provide
substantially to the effect that such entity: (A) is formed or organized
solely for the purpose of owning and operating one or more of the Mortgaged
Properties securing such Mortgage Loan, (B) may not engage in any business
unrelated to the related Mortgaged Property or Mortgaged Properties, (C)
does not have any material assets other than those related to its interest
in and operation of such Mortgaged Property or Mortgaged Properties and (D)
may not incur indebtedness other than as permitted by the related Mortgage
or other Mortgage Loan documents. If such Mortgage Loan has an initial
principal balance of $25 million and above and the related Mortgagor is a
single member limited liability company, such Mortgagor's organizational
documents provide that such Mortgagor shall not dissolve or liquidate upon
the bankruptcy, dissolution, liquidation or death of its sole member and is
organized in a jurisdiction that provides for such continued existence and
there was obtained opinion of counsel confirming such continued existence.
If such Mortgage Loan has, or is part of a group of Mortgage Loans with
affiliated Mortgagors having, a Cut-off Date Balance equal to or greater
than 2% of the Initial Pool Balance, or if such Mortgage Loan has an
original principal balance equal to or greater than $25 million, there was
obtained an opinion of counsel regarding non-consolidation of such
Mortgagor.
11
(xxxiv) Advancing of Funds. No advance of funds has been made,
directly or indirectly, by the originator or the Seller to the related
Mortgagor other than pursuant to the related Mortgage Note; and, to the
actual knowledge of the Seller, no funds have been received from any Person
other than such Mortgagor for or on account of payments due on the related
Mortgage Note.
(xxxv) Legal Proceedings. To the Seller's actual knowledge, there are
no pending actions, suits or proceedings by or before any court or
governmental authority against or affecting the related Mortgagor or any
related Mortgaged Property that, if determined adversely to such Mortgagor
or Mortgaged Property, would materially and adversely affect the value of
such Mortgaged Property or the ability of such Mortgagor to pay principal,
interest or any other amounts due under such Mortgage Loan.
(xxxvi) Originator Duly Authorized. To the extent required under
applicable law as of the Closing Date, the originator of such Mortgage Loan
was qualified and authorized to do business in each jurisdiction in which a
related Mortgaged Property is located at all times when it held such
Mortgage Loan to the extent necessary to ensure the enforceability of such
Mortgage Loan.
(xxxvii) Trustee under Deed of Trust. If the related Mortgage is a
deed of trust, a trustee, duly qualified under applicable law to serve as
such, is properly designated and serving under such Mortgage, and no fees
and expenses are payable to such trustee except in connection with a
trustee sale of the related Mortgaged Property following a default or in
connection with the release of liens securing such Mortgage Loan and any
such fees and expenses are the obligation of the Mortgagor under the terms
of the Mortgage.
(xxxviii) Cross-Collateralization. The related Mortgaged Property is
not, to the Seller's knowledge, collateral or security for any mortgage
loan that is not in the Trust Fund and, if such Mortgage Loan is
cross-collateralized, it is cross-collateralized only with other Mortgage
Loans in the Trust Fund. The security interest/lien on each material item
of collateral for such Mortgage Loan has been assigned to the Trustee.
(xxxix) Flood Hazard Insurance. None of the improvements on any
related Mortgaged Property are located in a flood hazard area as defined by
the Federal Insurance Administration or, if any portion of the improvements
on the related Mortgaged Property are in an area identified in the Federal
Register by the Federal Emergency Management Agency as having special flood
hazards falling within zones A or V in the national flood insurance
program, the Mortgagor has obtained and is required to maintain flood
insurance.
(xl) Engineering Assessments. One or more engineering assessments or
updates of a previously conducted engineering assessment were performed by
an Independent engineering consulting firm with respect to each related
Mortgaged Property during the 12-month period preceding the Cut-off Date,
and the Seller, having made no independent inquiry other than to review the
report(s) prepared in connection with such assessment(s) and or update(s),
does not have any knowledge of any material and adverse engineering
condition or circumstance affecting such Mortgaged Property that was not
disclosed in such report(s); and, to the extent such assessments revealed
deficiencies, deferred maintenance or similar conditions, either (A) the
estimated cost has been escrowed or a letter of credit has been provided,
12
(B) repairs have been made or (C) the scope of the deferred maintenance
relative to the value of such Mortgaged Property was de minimis.
(xli) Escrows. All escrow deposits and payments relating to such
Mortgage Loan are under control of the Seller or the servicer of such
Mortgage Loan and all amounts required as of the date hereof under the
related Mortgage Loan documents to be deposited by the related Mortgagor
have been deposited. The Seller is transferring to the Trustee all of its
right, title and interest in and to such amounts.
(xlii) Licenses, Permits and Authorizations. The related Mortgagor has
represented in the related Mortgage Loan documents that, and to the actual
knowledge of the Seller, as of the date of origination of such Mortgage
Loan, all material licenses, permits and authorizations then required for
use of the related Mortgaged Property by such Mortgagor, the related
lessee, franchisor or operator have been issued and were valid and in full
force and effect.
(xliii) Servicing and Collection Practices. The servicing and
collection practices used by the Seller or, to the Seller's knowledge, any
prior holder of the related Mortgage Note with respect to such Mortgage
Loan have been in all respects legal and have met customary industry
standards.
(xliv) Fee Simple. Unless such Mortgage Loan is covered by the
representation and warranty in the immediately following paragraph (xlv),
such Mortgage Loan is secured in whole or material part by a fee simple
interest.
(xlv) Leasehold Interest Only. If such Mortgage Loan is secured in
whole or in material part by the interest of the related Mortgagor as a
lessee under a Ground Lease but not by the related fee interest, then:
(A) such Ground Lease or a memorandum thereof has been or will be
duly recorded and such Ground Lease permits the interest of the
lessee thereunder to be encumbered by the related Mortgage or, if
consent of the lessor thereunder is required, it has been
obtained prior to the Closing Date;
(B) upon the foreclosure of such Mortgage Loan (or acceptance of a
deed in lieu thereof), the Mortgagor's interest in such Ground
Lease is assignable to the Trustee without the consent of the
lessor thereunder (or, if any 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 Trustee and its
successors without a need to obtain the consent of such lessor
(or, if any such consent is required, it has been obtained prior
to the Closing Date or may not be unreasonably withheld);
(C) such Ground Lease may not be amended or modified without the
prior written consent of the mortgagee under such Mortgage Loan
and any such action without such consent is not binding on such
mortgagee, its successors or assigns;
13
(D) unless otherwise set forth in such Ground Lease, such Ground
Lease does not permit any increase in the amount of rent payable
by the ground lessee thereunder during the term of such Mortgage
Loan;
(E) such Ground Lease was in full force and effect as of the date of
origination of the related Mortgage Loan and, at the Closing
Date, such Ground Lease is in full force and effect; to the
actual knowledge of the Seller, except for payments due but not
yet 30 days or more delinquent, (1) there is no material default
under such Ground Lease, and (2) there is no event which, with
the passage of time or with notice and the expiration of any
grace or cure period, would constitute a material default under
such Ground Lease;
(F) such Ground Lease, or an estoppel or consent letter received by
the mortgagee under such Mortgage Loan from the lessor, requires
the lessor thereunder to give notice of any default by the lessee
to such mortgagee; and such Ground Lease, or an estoppel or
consent letter received by the mortgagee under such Mortgage Loan
from the lessor, further provides either (1) that no notice of
termination given under such Ground Lease is effective against
such mortgagee unless a copy has been delivered to the mortgagee
in the manner described in such Ground Lease, estoppel or consent
letter or (2) that upon any termination of such Ground Lease the
lessor will enter into a new lease with such mortgagee upon such
mortgagee's request;
(G) based upon the related policy of title insurance, the ground
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 the related ground lessor's related
fee interest and any Permitted Encumbrances;
(H) the mortgagee under such Mortgage Loan is permitted a reasonable
opportunity to cure any curable default under such Ground Lease
(not less than the time provided to the related lessee under such
Ground Lease to cure such default) before the lessor thereunder
may terminate or cancel such Ground Lease;
(I) such Ground Lease has a currently effective term (including any
options exercisable by the holder of the related Mortgage) that
extends not less than 20 years beyond the Stated Maturity Date of
the related Mortgage Loan;
(J) under the terms of such Ground Lease, any estoppel or consent
letter received by the mortgagee under such Mortgage Loan from
the lessor and the related Mortgage Loan documents, taken
together, any related insurance proceeds, other than de minimis
amounts for minor casualties, with respect to the leasehold
interest, or condemnation proceeds will be applied either to the
repair or restoration of all or part of the related Mortgaged
Property, with the mortgagee or a trustee appointed by it
14
having the right to hold and disburse such proceeds as the repair
or restoration progresses (except in such cases where a provision
entitling another party to hold and disburse such proceeds would
not be viewed as commercially unreasonable by a prudent
commercial mortgage lender), or to the payment of the outstanding
principal balance of the Mortgage Loan, together with any accrued
interest thereon;
(K) such Ground Lease does not impose any restrictions on use or
subletting which would be viewed as commercially unreasonable by
a prudent commercial mortgage lender;
(L) upon the request of the mortgagee under such Mortgage Loan, the
ground lessor under such Ground Lease is required to enter into a
new lease upon termination of the Ground Lease for any reason
prior to the expiration of the term thereof, including as a
result of the rejection of the Ground Lease in a bankruptcy of
the related Mortgagor unless the mortgagee under such Mortgage
Loan fails to cure a default of the lessee under such Ground
Lease following notice thereof from the lessor; and
(M) the terms of the related Ground Lease have not been waived,
modified, altered, satisfied, impaired, canceled, subordinated or
rescinded in any manner which materially interferes with the
security intended to be provided by such Mortgage, except as set
forth in an instrument or document contained in the related
Mortgage File.
(xlvi) Fee Simple and Leasehold Interest. If such Mortgage Loan is
secured by the interest of the related Mortgagor under a Ground Lease and
by the related fee interest, then (A) such fee interest is subject, and
subordinated of record, to the related Mortgage, (B) the related Mortgage
does not by its terms provide that it will be subordinated to the lien of
any other mortgage or other lien upon such fee interest, and (C) upon
occurrence of a default under the terms of the related Mortgage by the
related Mortgagor, the mortgagee under such Mortgage Loan has the right
(subject to the limitations and exceptions set forth in paragraph (v)
above) to foreclose upon or otherwise exercise its rights with respect to
such fee interest.
(xlvii) Tax Lot; Utilities. Each related Mortgaged Property
constitutes one or more complete separate tax lots (or the related
Mortgagor has covenanted to obtain separate tax lots and an escrow of funds
in an amount sufficient to pay taxes resulting from a breach thereof has
been established) or is subject to an endorsement under the related title
insurance policy; and each related Mortgaged Property is served by a public
or other acceptable water system, a public sewer (or, alternatively, a
septic) system, and other customary utility facilities.
(xlviii) Defeasance. If such Mortgage Loan is a Defeasance Mortgage
Loan, the related Mortgage Loan documents require the related Mortgagor to
pay all reasonable costs associated with the defeasance thereof, and
either: (A) require the prior written consent of, and compliance with the
conditions set by, the holder of such Mortgage Loan for defeasance or (B)
require that (1) defeasance may not occur prior to the second anniversary
of the Closing Date, (2) the Defeasance Collateral must be government
securities within the meaning of Treasury regulations section
1.860G-2(a)(8)(i) and must be sufficient to make all scheduled
15
payments under the related Mortgage Note when due (assuming for each ARD
Mortgage Loan that it matures on its Anticipated Repayment Date or on the
date when any open prepayment period set forth in the related Mortgage Loan
documents commences) or, in the case of a partial defeasance that effects
the release of a material portion of the related Mortgaged Property, to
make all scheduled payments under the related Mortgage Note on that part of
such Mortgage Loan equal to at least 110% of the allocated loan amount of
the portion of the Mortgaged Property being released, (3) an independent
accounting firm (which may be the Mortgagor's independent accounting firm)
certify that the Defeasance Collateral is sufficient to make such payments,
(4) such Mortgage Loan be assumed by a successor entity designated by the
holder of such Mortgage Loan (or by the Mortgagor with the approval of such
lender), and (5) counsel provide an opinion letter to the effect that the
Trustee has a perfected security interest in such Defeasance Collateral
prior to any other claim or interest.
(xlix) Primary Servicing Rights. No Person has been granted or
conveyed the right to primary service such Mortgage Loan or receive any
consideration in connection therewith except (A) as contemplated in this
Agreement with respect to primary servicers that are to be sub-servicers of
the Master Servicer, (B) as has been conveyed to the Master Servicer, in
its capacity as a primary servicer, or (C) as has been terminated.
(l) Mechanics' and Materialmen's Liens. As of origination and, to the
Seller's actual knowledge, as of the Closing Date, (A) the related
Mortgaged Property is free and clear of any and all mechanics' and
materialmen's liens that are not bonded, insured against or escrowed for,
and (B) 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
(unless affirmatively covered by the title insurance referred to in
paragraph (xi) above (or an endorsement thereto)). The Seller has not
received actual notice with respect to such Mortgage Loan that any
mechanics' and materialmen's liens have encumbered such Mortgaged Property
since origination that have not been released, bonded, insured against or
escrowed for.
(li) Due Date. Subject to any business day convention imposed by the
related loan documents, the Due Date for such Mortgage Loan is scheduled to
be the first day, the seventh day, the tenth day or the eleventh day of
each month.
(lii) Assignment of Leases. Subject only to Permitted Encumbrances,
the related Assignment of Leases set forth in or separate from the related
Mortgage and delivered in connection with such Mortgage Loan establishes
and creates a valid and, subject only to the exceptions and limitations in
paragraph (v) above, enforceable first priority lien and first priority
security interest in the related Mortgagor's right to receive payments due
under any and all leases, subleases, licenses or other agreements pursuant
to which any Person is entitled to occupy, use or possess all or any
portion of the related Mortgaged Property subject to the related Mortgage,
except that a license may have been granted to the related Mortgagor to
exercise certain rights and perform certain obligations of the lessor under
the relevant lease or leases; and each assignor thereunder has the full
right to assign the same.
(liii) Mortgagor Formation or Incorporation. To the Seller's
knowledge, the related Mortgagor is a Person formed or incorporated in a
jurisdiction within the United States.
16
(liv) No Ownership Interest in Mortgagor. The Seller has no ownership
interest in the related Mortgaged Property or the related Mortgagor other
than as the holder of such Mortgage Loan being sold and assigned, and
neither the Seller nor any affiliate of the Seller has any obligation to
make any capital contributions to the related Mortgagor under the Mortgage
or any other related Mortgage Loan document.
(lv) No Undisclosed Common Ownership. To the Seller's knowledge,
except where multiple properties secure an individual Mortgage Loan and
except for properties securing Mortgage Loans that are cross-defaulted and
cross-collateralized, no two properties securing Mortgage Loans are
directly or indirectly under common ownership.
(lvi) Loan Outstanding. Such Mortgage Loan has not been satisfied in
full, and except as expressly contemplated by the related loan agreement or
other documents contained in the related Mortgage File, no material portion
of the related Mortgaged Property has been released.
(lvii) Usury. Such Mortgage Loan complied with or was exempt from all
applicable usury laws in effect at its date of origination.
(lviii) ARD Mortgage Loan. If such Mortgage Loan is an ARD Mortgage
Loan, then:
(A) the related Anticipated Repayment Date is not less than five
years from the origination date for such Mortgage Loan;
(B) such Mortgage Loan provides that from the related Anticipated
Repayment Date through the maturity date for such Mortgage Loan,
all excess cash flow (net of normal monthly debt service on such
Mortgage Loan, monthly expenses reasonably related to the
operation of the related Mortgaged Property, amounts due for
reserves established under such Mortgage Loan, and payments for
any other expenses, including capital expenses, related to such
Mortgaged Property which are approved by mortgagee) will be
applied to repay principal due under such Mortgage Loan;
(C) no later than the related Anticipated Repayment Date, the related
Mortgagor is required (if it has not previously done so) to enter
into a "lockbox agreement" whereby all revenue from the related
Mortgaged Property will be deposited directly into a designated
account controlled by the mortgagee under such Mortgage Loan; and
(D) the interest rate of such Mortgage Loan will increase by at least
two (2) percentage points in connection with the passage of its
Anticipated Repayment Date.
(lix) Appraisal. An appraisal of the related Mortgaged Property was
conducted in connection with the origination of such Mortgage Loan; and
such appraisal satisfied either (A) the requirements of the "Uniform
Standards of Professional Appraisal Practice" as adopted
17
by the Appraisal Standards Board of the Appraisal Foundation, or (B) the
guidelines in Title XI of the Financial Institutions Reform, Recovery and
Enforcement Act of 1989, in either case as in effect on the date such
Mortgage Loan was originated.
For purposes of the foregoing representations and warranties, the phrases
"to the knowledge of the Seller" or "to the Seller's knowledge" shall mean,
except where otherwise expressly set forth above, the actual state of knowledge
of the Seller at the time of the origination of the particular Mortgage Loan
regarding the matters referred to, in each case after having conducted such
inquiry and due diligence into such matters as is customarily performed by the
Seller in connection with such matters with respect to the origination by Seller
of multifamily or commercial (as applicable) mortgage loans intended for
securitization, and the phrases "to the actual knowledge of the Seller" or "to
the Seller's actual knowledge" shall mean, except where otherwise expressly set
forth above, the actual state of the Seller's knowledge, at the time of the
origination of the particular Mortgage Loan regarding the matters referred to,
in each case without any express or implied obligation to make any inquiry or
conduct any due diligence.
For purposes of the foregoing representations and warranties, the phrases
"would be considered prudent by an institutional commercial mortgage lender" or
"consistent with the practices of prudent commercial mortgage lenders" or
"customarily performed by prudent commercial mortgage lenders" or "would not be
viewed as commercially unreasonable by a prudent commercial mortgage lender"
and/or other references to "prudent commercial mortgage lender(s)" shall, in
each case, mean the subject action, inaction, consideration, determination, or
lending practice would be reasonably consistent with the practices or procedures
commonly followed (at the time the subject action, inaction, consideration,
determination, or lending practice occurred) by commercial mortgage lenders
originating fixed-rate mortgage loans for securitization similar to the Mortgage
Loans, which practices or procedures, in each case, would be commonly applicable
at such time taking into account the facts, circumstances and characteristics of
the subject Mortgage Loan.
18
SCHEDULE I
LB-UBS 2005-C1
EXCEPTIONS TO REPRESENTATIONS AND WARRANTIES
CONTROL
NUMBER PROPERTY ISSUE
-------------------------------------------------------------------------------------------------------------------------------
EXCEPTIONS TO REPRESENTATION (V): LOAN DOCUMENT STATUS.
-------------------------------------------------------------------------------------------------------------------------------
Mall Del Norte There is no non-recourse carve-out guarantor.
-------------------------------------------------------------------------------------------------------------------------------
Macquarie DDR Portfolio The guarantor of the non-recourse carve-outs is
not a natural person.
-------------------------------------------------------------------------------------------------------------------------------
Concord Portfolio The guarantor of the non-recourse carve-outs is not a
natural person.
-------------------------------------------------------------------------------------------------------------------------------
Hayward Fedex In connection with certain transfers of interest, an
entity may become the guarantor.
-------------------------------------------------------------------------------------------------------------------------------
Eckerd Rochester $737,500 of the Mortgage Loan amount is fully
recourse to the guarantor.
-------------------------------------------------------------------------------------------------------------------------------
Barbizon The mortgage loan is fully recourse.
-------------------------------------------------------------------------------------------------------------------------------
Rite Aid--Winchester No warm body recourse carveouts.
-------------------------------------------------------------------------------------------------------------------------------
Rite Aid--Kettering No warm body recourse carveouts.
-------------------------------------------------------------------------------------------------------------------------------
Rite Aid--Marmet No warm body recourse carveouts.
-------------------------------------------------------------------------------------------------------------------------------
Rite Aid--Monticello No warm body recourse carveouts.
-------------------------------------------------------------------------------------------------------------------------------
All Properties With respect to the non-recourse carveout guarantee
concerning fraud, certain of the guarantors have only agreed
to be liable in connection with and to the extent of any
material fraud or material intentional fraud or material
misrepresentations or material intentional misrepresentation
by the related borrower.
-------------------------------------------------------------------------------------------------------------------------------
Sch I-1
CONTROL
NUMBER PROPERTY ISSUE
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
With respect to the non-recourse carve-out covering
misapplication or misappropriation, some guarantors have agreed
to cover "misapplication or conversion" or "misappropriation or
conversion" and some such non-recourse carve-outs apply only
during the continuance of an event of default.
-------------------------------------------------------------------------------------------------------------------------------
EXCEPTIONS TO REPRESENTATION (XII): PROPERTY INSURANCE.
-------------------------------------------------------------------------------------------------------------------------------
Concord Portfolio The related borrower may maintain its existing
property insurance, which does not meet the stated
requirements, until March 31, 2005 provided the current insurer
is not downgraded below "BBB" by S&P.
-------------------------------------------------------------------------------------------------------------------------------
Marketplace at Town Center Outparcel
CVS Conover
CVS North Carolina
Eckerd Rochester
Hayward FedEx The tenant insures the improvements on the Mortgaged Property,
which are single tenant buildings. Insurance proceeds are to be
applied to restoration.
Lasalle National Bank Branch
-------------------------------------------------------------------------------------------------------------------------------
The entire building on the Mortgaged Property is leased to the
El Centro United States of America - General Services Administration,
which lease provides that the tenant may terminate the lease in
the event of a partial destruction of the building that renders
the premises untenable. In connection with such possible
termination, the lender purchased a lease enhancement insurance
policy insuring the lender in the amount of $22,000,000 and
terminating on September 11, 2019.
-------------------------------------------------------------------------------------------------------------------------------
The lender obtained an insurance policy with respect to certain
CVS - North Carolina insurance proceeds shortfalls.
-------------------------------------------------------------------------------------------------------------------------------
Sch I-2
CONTROL
NUMBER PROPERTY ISSUE
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
The tenant insures their portion of the premises. Insurance
Palmdale Gateway Center proceeds are to be applied to restoration.
-------------------------------------------------------------------------------------------------------------------------------
Rite Aid--Winchester
Business interruption insurance is not specifically required,
Rite Aid--Kettering however, the rents for these loans are guaranteed by Rite Aid
Corporation. The liability program is subject to a self-insured
Ride Aid--Marmet retention of $2,000,000. The insurance carriers do not meet the
necessary rating criteria.
Rite Aid--Monticello
-------------------------------------------------------------------------------------------------------------------------------
All Properties With respect to certain mortgage loans, the lender accepted
comprehensive liability insurance in an amount less than that
required by the loan documents, provided, however, that all the
mortgage loans provide a primary general liability policy of at
least $1,000,000 per occurrence with $2,000,000 in the
aggregate. This exception does not apply to the following
mortgage loans: Mall Del Norte, DDR Portfolio, Lembi Portfolio,
Concord Portfolio, Great Neck Xxxxxx Portfolio, Crown Center
and the Atlantic Building.
-------------------------------------------------------------------------------------------------------------------------------
EXCEPTIONS TO REPRESENTATION (XVI): SUBORDINATE DEBT.
-------------------------------------------------------------------------------------------------------------------------------
Lembi Portfolio The equity holders of the related borrowers have pledged 100%
of the equity interests in the related borrowers to secure
mezzanine loans in the aggregate amount of $5,000,000. Each
such mezzanine loan is the subject of an intercreditor
agreement between the mezzanine lender and the lender under the
related mortgage loans.
-------------------------------------------------------------------------------------------------------------------------------
Concord Portfolio The equity holder of the related borrower has pledged 100%
of the equity interests in the related borrower to a secure
mezzanine loan in the amount of $13,425,000. Such mezzanine
loan is the subject of an intercreditor agreement between
the mezzanine lender and the lender under the related
mortgage loan.
-------------------------------------------------------------------------------------------------------------------------------
Sch I-3
CONTROL
NUMBER PROPERTY ISSUE
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
Xxxxxx Self Storage In connection with the transfer of the subject property to
an unrelated entity approved by the lender or the
acquisition by the general partner of the borrower of all of
the limited partnership interest of Rebel Mini Storage, LP,
the equity holders of the borrower or of the transferee, as
applicable, upon the satisfaction of a number of conditions
set forth in the loan documents, have the right to obtain
mezzanine financing in an amount not greater than an amount
which would result in a loan to value ratio immediately
following the transfer of the subject property and closing
of the mezzanine loan, based on the aggregate principal
balance of the loan and the mezzanine loan, equal to or
greater than 75%.
-------------------------------------------------------------------------------------------------------------------------------
Atlantic Building The borrower has a one time right to request mezzanine
financing secured by a pledge of certain ownership interests
in the borrower from an approved mezzanine lender in an
amount not greater than an amount which would result in a
maximum combined loan to value ration equal to 80%, subject
to certain conditions set forth in the related loan
documents, including, but not limited to, a combined debt
service coverage ratio immediately following the closing of
the mezzanine loan of no less than 1.25x.
-------------------------------------------------------------------------------------------------------------------------------
All Properties The loan documents allow the borrower to incur certain trade
payables up to a predetermined amount, which is generally less
than or equal to 5% of the loan amount.
-------------------------------------------------------------------------------------------------------------------------------
Sch I-4
CONTROL
NUMBER PROPERTY ISSUE
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
EXCEPTIONS TO REPRESENTATION (XIX): ENVIRONMENTAL CONDITIONS.
-------------------------------------------------------------------------------------------------------------------------------
Xxxxxx Self Storage The Mortgaged Property is a former organic
refuse landfill site that was closed in 1959. A Phase I
environmental site assessment conducted on the subject
property indicated that the subject property sits on
portions of two former landfills. In addition, based on the
age of the improvements on the mortgaged real property,
there is a potential that non-friable wallboard assemblies,
resilient floor finishes and roofing components contain
asbestos. In May 2003, the lender received notice from the
Xxxxxx Redevelopment Agency notifying the lender under the
Xxxxxxx Act to submit a plan to "remedy or remove" any
release of hazardous substance on the subject mortgaged real
property. The investigation reports were submitted to the
California Department of Toxic Substances as part of a
voluntary cleanup program. The investigations revealed the
presence of fuel constituents, arsenic and methane gas. In
order to mitigate methane accumulation and human exposure to
soil gas constituents, portions the mortgaged real property
was overlain by asphalt, above ground surface structures
were raised to allow landfill gas to dissipate at the
surface, and the improvements on the mortgaged real property
have passive ventilation systems and are underlain by
plastic liners. The California Department of Toxic
Substances has issued a "no further action" letter, subject
to the entire mortgaged real property remaining overlain by
asphalt, the continuation of the existing use of the
mortgaged real property as a personal storage facility and
routine inspections and monitoring for methane gas in
accordance with a written methane gas operating and
maintenance plan. In addition, the related borrower has
obtained a Zurich Pollution Legal Liability Policy in the
amount of $5,000,000, naming the lender as an additional
insured.
-------------------------------------------------------------------------------------------------------------------------------
Sch I-5
CONTROL
NUMBER PROPERTY ISSUE
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
CVS - Xxxxxxx The Mortgaged Property previously operated as a gas station
until 1998, the presence of free-floating petroleum at the
subject property was detected. Five underground storage
tanks used to store petroleum products were removed from the
mortgaged real property in 1998. An independent
environmental firm completed a comprehensive site assessment
of the mortgaged real property in January 2002 and an
additional site investigation in April 2002. The
independent environmental firm submitted a corrective action
plan to remove the identified free floating petroleum
product, which plan was approved by the North Carolina
Department of Environmental Resources in 2002. A petroleum
recovery system was installed and from November 2002 to
January 2004 petroleum recovery was conducted at the
mortgaged real property. Reports of the independent
environmental firm since January 2004 indicate that
free-floating petroleum had declined to levels below the
North Carolina Department of Environmental Resources cleanup
threshold, however a "no further action" letter has not yet
been issued. According to the independent environmental
firm, the borrower is not listed as the responsible party on
the North Carolina Department of Environmental Resources
database. In addition, a $250,000 escrow was taken at
closing to be used in connection with any further necessary
remediation actions.
-------------------------------------------------------------------------------------------------------------------------------
Palmdale Gateway Center a Phase I environmental assessment
conducted on the mortgaged real property revealed a shallow
release of volatile organic compounds due to discharges by a
dry cleaner located on the mortgaged real property. The
County of Los Angeles Fire Department indicated the levels
of volatile organic compounds exceed acceptable guidelines
and remediation is required. A
-------------------------------------------------------------------------------------------------------------------------------
Sch I-6
CONTROL
NUMBER PROPERTY ISSUE
-------------------------------------------------------------------------------------------------------------------------------
remedial action plan was prepared by an independent
environmental firm in June 2004 and such remedial action plan
was approved by the County of Los Angeles Fire Department in
September 2004, subject to approval from the Regional Water
Quality Control Board. The related borrower elected to pursue a
different method of remediation, the removal of the
contaminated soil, which does not require approval from the
Regional Water Quality Control Board. A proposal to remove the
contaminated soil was prepared by the independent environmental
firm in December 2004. The independent environmental firm
estimated that the cost of such removal will be approximately
$35,000. A remedial action plan is currently being prepared by
the independent environmental firm for submission to the County
of Los Angeles Fire Department. A $100,000 escrow was taken at
closing to be used in connection with the excavation of the
contaminated soil, which escrow is required to be released upon
the receipt of a "no further action" letter from the
appropriate regulatory authorities. In addition, if the related
borrower has not received an approved remedial action plan
within 60 days of the origination date of the mortgage loan,
all excess cash flow from the related mortgaged real property
will be swept into a lockbox account until a "no action letter"
is received from the appropriate regulatory authorities.
-------------------------------------------------------------------------------------------------------------------------------
CVS-Charlotte; An Environmental Transaction Screen was performed on the
property.
CVS North Carolina;
CVS--Conover
Marketplace at Town Center Outparcel;
Barbizon Building;
-------------------------------------------------------------------------------------------------------------------------------
Sch I-7
CONTROL
NUMBER PROPERTY ISSUE
-------------------------------------------------------------------------------------------------------------------------------
000-000 Xxxxxx Xxxxxx;
000 Xxxxxxxxxx Xxxxxxx;
La Salle National Bank Branch
Rite Aid--Winchester
Rite Aid--Kettering
Rite Aid--Marmet
Rite Aid--Monticello
Mall Del Norte Macquarie DDR Portfolio
Concord Portfolio
-------------------------------------------------------------------------------------------------------------------------------
Mall Del Norte No warm body environmental indemnity.
Macquarie DDR Portfolio
Concord Portfolio
Rite Aid--Winchester
Rite Aid--Kettering
Rite Aid--Marmet
Rite Aid--Monticello
-------------------------------------------------------------------------------------------------------------------------------
EXCEPTIONS TO REPRESENTATION (XXV): DUE-ON-ENCUMBRANCE.
-------------------------------------------------------------------------------------------------------------------------------
All Properties The loan documents allow the borrower to incur certain trade
payables up to a predetermined amount, which is generally less
than or equal to 5% of the loan amount.
-------------------------------------------------------------------------------------------------------------------------------
Sch I-8
CONTROL
NUMBER PROPERTY ISSUE
-------------------------------------------------------------------------------------------------------------------------------
EXCEPTION TO REPRESENTATION (XXVI): DUE-ON-SALE.
-------------------------------------------------------------------------------------------------------------------------------
Vista The Xxxxxxx Organization, which owns 40% and was the main
organization underwritten by UBS, may buy out Vista Shopping
LLC (an entity owned 100% by the Xxxxxxx Real Estate Fund III),
the 60% owner, without Lender's approval if The Xxxxxxx
Organization remains in control.
-------------------------------------------------------------------------------------------------------------------------------
37.5% of the Borrower is owned by Asset Capital Corporation,
Countryside L.L.C. (ACC), which is the main operating/controlling entity of
the Property. ACC is owned 33.3% each by three principals. Each
of the three individuals listed therefore indirectly only owns
12.5% of the Borrower. Any two of the three named individuals
can buy out the third so long as ACC remains in daily control
of the operation of the Property.
-------------------------------------------------------------------------------------------------------------------------------
Xxxxxx Self Storage The limited partner of the borrower has the right to require
that its shares be purchased at certain points during the term
of the Mortgage Loan. The sponsor guaranteed any losses arising
from such right.
-------------------------------------------------------------------------------------------------------------------------------
The borrower is required to pay all "reasonable-out-of-pocket"
Rite Aid--Winchester expenses incurred by the holder of a mortgage associated with
the review, approval and documentation of a transfer of
Rite Aid--Kettering interest in such borrower or the related mortgaged property.
Rite Aid--Marmet
Rite Aid--Monticello
-------------------------------------------------------------------------------------------------------------------------------
EXCEPTION TO REPRESENTATION (XXVII): MORTGAGOR CONCENTRATION.
-------------------------------------------------------------------------------------------------------------------------------
Mall Del Norte The related mortgage loan exceeds 5% of the Initial Pool
Balance.
-------------------------------------------------------------------------------------------------------------------------------
Macquarie DDR Portfolio The related mortgage loan exceeds 5% of the Initial Pool
Balance.
-------------------------------------------------------------------------------------------------------------------------------
Lembi Portfolio The related mortgage loans are made to affiliate borrowers and
exceed 5% of the Initial Pool Balance.
-------------------------------------------------------------------------------------------------------------------------------
Sch I-9
CONTROL
NUMBER PROPERTY ISSUE
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
Concord Portfolio The related mortgage loan exceeds 5% of the Initial Pool
Balance.
-------------------------------------------------------------------------------------------------------------------------------
EXCEPTION TO REPRESENTATION (XXVIII): WAIVERS; MODIFICATIONS.
-------------------------------------------------------------------------------------------------------------------------------
Mall Del Norte The mortgage loan was modified to change the maturity date.
-------------------------------------------------------------------------------------------------------------------------------
Great Neck Xxxxxx Portfolio The mortgage loan was modified to clarify that additional
amortization payments are only required to be made from excess
cash flow.
-------------------------------------------------------------------------------------------------------------------------------
Lasalle National Bank Branch The mortgage loan was modified to clarify that certain
insurance or self-insurance may be provided by the tenant.
-------------------------------------------------------------------------------------------------------------------------------
Rite Aid--Monticello The lender has previously agreed to a transfer of the mortgaged
property.
-------------------------------------------------------------------------------------------------------------------------------
EXCEPTION TO REPRESENTATION (XXX): PROPERTY RELEASE.
-------------------------------------------------------------------------------------------------------------------------------
Crown Center The borrower may obtain a one time release of a parcel of
the Mortgaged Property, which parcel contains parking
necessary for zoning compliance, upon the satisfaction of
certain conditions set forth in the loan documents,
including the construction of a parking garage on a
different parcel of land, which parking garage provides the
Mortgaged Property with adequate parking spaces to comply
with zoning requirements and the provision of a REMIC
opinion.
-------------------------------------------------------------------------------------------------------------------------------
Mall Del Norte The borrower has a right to obtain the release of a certain
unimproved portion of the mortgaged real property subject to
conditions set forth in the related loan documents.
-------------------------------------------------------------------------------------------------------------------------------
Sch I-10
CONTROL
NUMBER PROPERTY ISSUE
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
Macquarie DDR Portfolio The borrower may obtain the release of a mortgaged real
property (but no more than two mortgaged real properties in the
aggregate over the term of the Macquarie DDR Portfolio Loan) by
substituting a new property subject to the conditions set forth
in the related loan documents.
-------------------------------------------------------------------------------------------------------------------------------
EXCEPTION TO REPRESENTATION (XXXI): QUALIFICATIONS, LICENSING, ZONING.
-------------------------------------------------------------------------------------------------------------------------------
Macquarie DDR Portfolio Certain certificates of occupancy with respect to the
Pioneer and MacArthur Marketplace Properties have not been
delivered. Borrower has a post closing obligation to obtain
and deliver certificates of occupancy and borrower's sponsor
is liable for any losses incurred by lender by reason of the
failure of the borrower to have delivered the required
certificates of occupancy.
-------------------------------------------------------------------------------------------------------------------------------
Countryside Mortgage Loan Seller was unable to confirm that there are no
building code violations at the site and due to record
keeping practices at the local authority, complete
certificates of occupancy for all occupants of the building
were not obtainable. The town has confirmed that the lack
of certificates of occupancy will not result in any action
by the Township. Losses, costs and damages arising from
building code violations and non-issuance of certificates of
occupancy are recourse to the borrower and certain
principals.
-------------------------------------------------------------------------------------------------------------------------------
Xxxxxx Issuance of a final certificate of occupancy for the
condominium was subject to final inspections. As of
closing, there was no evidence of such issuance. The
sponsor is liable for losses, costs or damages resulting
from the failure of the condominium to obtain a final,
unconditional certificate of occupancy for the condominium
building in which the three condominium units for the
Mortgaged Property are located.
-------------------------------------------------------------------------------------------------------------------------------
Sch I-11
CONTROL
NUMBER PROPERTY ISSUE
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxx Apartments Final certificates of occupancy were not available in town
records. The town did not consider it a violation and noted
that final building inspections and approvals for the units
were on record.
-------------------------------------------------------------------------------------------------------------------------------
Barbazon Existing parking is deficient 39 spaces. In addition, the
Director of Building Inspections could not locate any
construction records, building permit records or certificate
of occupancy for the original construction and certain
inspection records are incomplete. However, the building on
the Mortgaged Property was constructed prior to the City of
Xxxxxx'x adoption of a zoning ordinance. Per a letter from
the Director of Building Inspections of the Town of Xxxxxx,
if the Mortgaged Property is not in compliance, it is
considered a legal, non-conforming property.
-------------------------------------------------------------------------------------------------------------------------------
Northgate Apartments The City of Houston Code Enforcement Summary Sheet disclosed
numerous code violations affecting the Northgate Apartments
("Property"), including, without limitation, non-illuminated
light poles and an inactive certificate of occupancy for
Building 11 (there are 12 buildings located at the Property).
The Borrower entered into a letter agreement with Lender in
which the Borrower agreed to use its best efforts, at its sole
cost and expense, to obtain and deliver to Lender, within
twelve (12) months from the closing date of the Loan (the
"Compliance Date"), evidence reasonably satisfactory to Lender
that: (1) (x) there are no open code violations (including,
without limitation, active or inactive violations of zoning
ordinances and/or building and fire codes) affecting the
Property, or (y) the City of Houston has waived the necessity
of curing or satisfying any such violations affecting the
Property, and (2) final current unconditional certificates of
occupancy for the entire Property (including, without
limitation, Building 11) have been issued by the City of
Houston. If Borrower fails to deliver
-------------------------------------------------------------------------------------------------------------------------------
Sch I-12
CONTROL
NUMBER PROPERTY ISSUE
-------------------------------------------------------------------------------------------------------------------------------
such evidence to Lender on or before the Compliance Date, time
being of the essence, Lender may elect, at its option, to
increase the Annual Replacement Amount (which is a reserve
amount based upon Lender's estimate of the annual amount for
replacements and repairs of a capital nature required to be
made to the Property) in an amount as reasonably determined by
Lender based on Lender's good faith estimate of the cost to
cure or satisfy any such open violations or conditions.
In addition, the Borrower and Xxxx Xxxxx, an individual, are
jointly and severally, fully and personally liable and subject
to legal action to the extent of any loss, damage, cost,
expense, liability, claim or other obligation incurred by
Lender as a result of:
(a) the failure by Borrower or any other party or the Property
to comply with all applicable laws, rules, regulations,
covenants and restrictions (including, without limitation,
zoning ordinances and/or building and fire codes) now or
hereafter affecting the Property;
(b) the failure by Borrower to obtain final current
unconditional certificates of occupancy for the entire Property
(including, without limitation, Building 11); and
(c) the failure by Borrower or any other party to maintain,
repair or restore the sewer system servicing the Property as
necessary or desirable in the reasonable discretion of Lender.
-------------------------------------------------------------------------------------------------------------------------------
Rite Aid--Winchester Mortgage Loan Seller has no confirmation of licensing and
zoning compliance. In addition the Mortgage Loan Seller was
Rite Aid--Kettering unable to locate the surveys with respect to Rite
Aid-Winchester and Rite Aid-Monticello.
Rite Aid--Marmet
Rite Aid--Monticello
-------------------------------------------------------------------------------------------------------------------------------
Sch I-13
CONTROL
NUMBER PROPERTY ISSUE
-------------------------------------------------------------------------------------------------------------------------------
EXCEPTION TO REPRESENTATION (XXXII): FINANCIAL STATEMENTS.
-------------------------------------------------------------------------------------------------------------------------------
Lembi Portfolio The loan documents do not provide for the delivery of audited
financial statements to the holder of any Mortgage Loan.
-------------------------------------------------------------------------------------------------------------------------------
EXCEPTION TO REPRESENTATION (XXXIII): SINGLE PURPOSE ENTITY.
-------------------------------------------------------------------------------------------------------------------------------
Lembi Portfolio The borrowers under the related mortgage loans are special
purpose entities, but the lender did not receive an opinion of
non-consolidation with respect to such borrowers.
-------------------------------------------------------------------------------------------------------------------------------
Crown Center Although the borrower currently meets the requirements of a
special purpose entity, the entity did conduct business other
than the ownership of the Mortgaged Property in the past.
-------------------------------------------------------------------------------------------------------------------------------
EXCEPTION TO REPRESENTATION (XXXIX): FLOOD HAZARD INSURANCE.
-------------------------------------------------------------------------------------------------------------------------------
Jacques Mobile Home Park A part of the unimproved portion of the Mortgaged Property is
in a flood hazard area with a rating of AE and A, and no flood
insurance was obtained. No improvements are located on the
portion of the Mortgaged Property in the flood zone.
-------------------------------------------------------------------------------------------------------------------------------
Rite Aid--Winchester Mortgage Loan Seller can not confirm flood hazard risk or
insurance.
Rite Aid--Kettering
Rite Aid--Marmet
Rite Aid--Monticello
-------------------------------------------------------------------------------------------------------------------------------
Sch I-14
CONTROL
NUMBER PROPERTY ISSUE
-------------------------------------------------------------------------------------------------------------------------------
EXCEPTION TO REPRESENTATION (XL): ENGINEERING ASSESSMENTS.
-------------------------------------------------------------------------------------------------------------------------------
Macquarie DDR Portfolio No deferred maintenance escrow was established. Borrower's
obligation to complete the deferred maintenance has been
guaranteed by the sponsor.
-------------------------------------------------------------------------------------------------------------------------------
EXCEPTION TO REPRESENTATION (XLV): LEASEHOLD INTEREST ONLY.
-------------------------------------------------------------------------------------------------------------------------------
Great Neck Xxxxxx Portfolio (I) The ground lease on the related mortgaged real property,
including all renewal options, expires on March 14, 2025, which
is less than 20 years after the maturity date of the related
mortgage loan.
-------------------------------------------------------------------------------------------------------------------------------
EXCEPTION TO REPRESENTATION (XLVIII): DEFEASANCE.
-------------------------------------------------------------------------------------------------------------------------------
Rite Aid--Winchester Defeasance is permitted prior to the second anniversary of the
Closing Date.
Rite Aid--Kettering
Rite Aid--Marmet
Rite Aid--Monticello
-------------------------------------------------------------------------------------------------------------------------------
EXCEPTION TO REPRESENTATION (LI): DUE DATE.
-------------------------------------------------------------------------------------------------------------------------------
Macquarie DDR Portfolio The due date is the fifth day of each month.
-------------------------------------------------------------------------------------------------------------------------------
Sch X-00
XXXXXXX X
XXXX
Xxx C-1
EXHIBIT C-1
OPINION OF CADWALADER, XXXXXXXXXX & XXXX LLP
[CADWALADER, XXXXXXXXXX & XXXX LLP LETTERHEAD]
February 10, 2005
Addressees listed on Schedule A
Re: LB-UBS Commercial Mortgage Trust 2005-C1, Commercial Mortgage Pass-Through
Certificates, Series 2005-C1
--------------------------------------------------------------------------
Ladies and Gentlemen:
We are rendering this opinion pursuant to Section 8(j) of the Mortgage Loan
Purchase Agreement, dated as of January 31, 2005 (the "MLPA"), among UBS Real
Estate Investments Inc., as seller (the "Seller"), UBS Principal Finance LLC, as
an additional party ("UBSPF") and Structured Asset Securities Corporation II, as
purchaser ("SASC").
We have acted as special counsel to the Seller in connection with the
following transactions: (i) the sale by the Seller, and the purchase by SASC, of
multifamily and commercial mortgage loans in the principal amount of
approximately $588,698,889 (the "UBS Mortgage Loans"), pursuant to the MLPA;
(ii) the execution by the Seller of the UBS Indemnification Agreement, dated as
of January 31, 2005 (the "Indemnification Agreement"), by and among the Seller,
UBS Americas Inc. ("UBS Americas" and, together with the Seller, the "UBS
Entities"), SASC and the Underwriters (as defined below); and (iii) the
acknowledgement by the Seller of certain sections of the Underwriting Agreement,
dated as of January 31, 2005 (the "Underwriting Agreement"), by and among SASC,
UBS Securities LLC ("UBS Securities") and Xxxxxx Brothers Inc. ("Xxxxxx", and
together with UBS Securities, the "Underwriters"), and acknowledged with respect
to certain sections by the Seller and Xxxxxx Brothers Holdings Inc. ("LBHI").
We have also acted as special counsel to UBS Americas in connection with
the execution by UBS Americas of the Indemnification Agreement and to UBSPF in
connection with the execution by UBSPF of the MLPA.
The MLPA, the Indemnification Agreement and the Underwriting Agreement are
collectively referred to herein as the "Agreements." Capitalized terms not
defined herein have the respective meanings set forth in the MLPA.
In rendering the opinions set forth below, we have examined and, as to
factual matters relevant to the opinions set forth below, relied upon the
originals, copies or specimens, certified or otherwise identified to our
satisfaction, of the Agreements and such certificates, corporate and public
records, agreements, instruments and other documents, including, among other
things, the documents and agreements delivered at the closing of the purchase
and sale of the Certificates (the "Closing"), as we have deemed appropriate as a
basis for the opinions expressed below. In such examination we have
Exh C-1-1
assumed the genuineness of all signatures, the authenticity of all documents,
agreements and instruments submitted to us as originals, the conformity to
original documents, agreements and instruments of all documents, agreements and
instruments submitted to us as copies or specimens, the authenticity of the
originals of such documents, agreements and instruments submitted to us as
copies or specimens, the conformity of the text of each document filed with the
Securities and Exchange Commission through its Electronic Data Gathering,
Analysis and Retrieval System to the printed document reviewed by us, and the
accuracy of the matters set forth in the documents, agreements and instruments
we reviewed. As to any facts material to the opinions expressed below that were
not known to us, we have relied upon statements, certificates and
representations of officers and other representatives of the UBS Entities,
UBSPF, SASC and the Underwriters, including those contained in the Agreements
and other documents, certificates, agreements and opinions delivered at the
Closing, and of public officials. In addition, with respect to the opinions
referred to in paragraphs 8(c), 8(d) and 9 below, such opinions are based solely
on the Seller Officer's Certificate and the UBS Americas Officer's Certificate
referred to below, a review of the items, if any, identified as exceptions in
the exhibits to such certificates, conversation with internal counsel for each
of the UBS Entities, and the actual knowledge of attorneys who conducted such
review, had such conversations and/or customarily represent the UBS Entities in
real estate lending transactions, financing transactions, and/or transactions
similar to those contemplated by the Agreements. Except as expressly set forth
herein, we have not undertaken any independent investigation (including, without
limitation, conducting any review, search or investigation of any public files,
records or dockets) to determine the existence or absence of the facts that are
material to our opinion, and no inference as to our knowledge concerning such
facts should be drawn from our reliance on the representations of the UBS
Entities, UBSPF and others in connection with the preparation and delivery of
this letter.
In particular, we have examined and relied upon:
(lx) the MLPA;
(lxi) the Underwriting Agreement;
(lxii) the Indemnification Agreement;
(lxiii) the officer's certificate of Seller, dated the date hereof
(the "Seller Officer's Certificate"); and
(lxiv) the officer's certificate of UBS Americas, dated the date
hereof (the "UBS Americas Officer's Certificate").
References in this letter to "Applicable Laws" shall mean those laws, rules
and regulations of the State of New York and of the United States of America
which, in our experience, are normally applicable to transactions of the type
contemplated by the Agreements, as well as the General Corporation Law of the
State of Delaware with respect to the opinions referred to in paragraphs 1
through 4, 8(a), 8(b)(i), 8(c) and 8(d) below. While we are not licensed to
practice law in the State of Delaware, we have reviewed applicable provisions of
the Delaware General Corporation Law as we have deemed appropriate in connection
with the opinions expressed herein. Except as described we have neither examined
nor do we express any opinion with respect to Delaware law. References in this
letter to the term "Governmental Authorities" means executive, legislative,
judicial, administrative or regulatory bodies of the State of New York or the
United States of America. References in this letter to
Exh C-1-2
the term "Governmental Approval" means any consent, approval, license,
authorization or validation of, or filing, recording or registration with, any
Governmental Authority pursuant to Applicable Laws.
We have also assumed, except as to the UBS Entities, that all parties who
executed any documents, agreements and instruments in connection with the
transactions contemplated by the Agreements had the power and legal right to
execute and deliver all such documents, agreements and instruments, and, except
as to the UBS Entities and UBSPF, that such documents, agreements and
instruments are legal, valid and binding obligations of such parties,
enforceable against such parties in accordance with their respective terms. As
used herein, "to our knowledge," "known to us" or words of similar import mean
the actual knowledge, without independent investigation (except as expressly set
forth herein), of any lawyer in our firm actively involved in the transactions
contemplated by the Agreements.
We express no opinion concerning any law other than Applicable Law.
Based upon and subject to the foregoing, we are of the opinion that:
1. Each of the Agreements has been duly authorized, executed and delivered
by the Seller.
2. The Indemnification Agreement has been duly authorized, executed and
delivered by UBS Americas.
3. The Seller is a corporation validly existing and in good standing under
the laws of the State of Delaware, with corporate power and authority to enter
into and perform its obligations under the Agreements.
4. UBS Americas is a corporation validly existing and in good standing
under the laws of the State of Delaware, with corporate power and authority to
enter into and perform its obligations under the Indemnification Agreement.
5. Each of the MLPA and the Underwriting Agreement constitutes the legal,
valid and binding agreement of the Seller, and the MLPA constitutes the legal,
valid and binding agreement of UBSPF, enforceable against the Seller or UBSPF,
as applicable, in accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium, receivership or
other laws relating to or affecting creditors' rights generally, and to
general principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity), and except that (a) the enforcement of rights
with respect to indemnification and contribution obligations and (b)
provisions (i) purporting to waive or limit rights to trial by jury, oral
amendments to written agreements or rights of set off or (ii) relating to
submission to jurisdiction, venue or service of process, may be limited by
applicable law or considerations of public policy.
6. Neither the consummation by UBSPF of any of the transactions
contemplated by the MLPA nor the execution, delivery and performance of the
terms of the MLPA by UBSPF will conflict with, or result in the violation of,
any New York State or federal law that is applicable to UBSPF.
Exh C-1-3
7. The execution, delivery and performance by UBSPF of the MLPA and the
consummation by UBSPF of the transactions contemplated under the MLPA do not
require any consent, approval, license, authorization or validation of, or
filing, recording or registration with, any executive, legislative, judicial,
administrative or regulatory bodies of the United States of America pursuant
to those laws, rules and regulations of the United States of America which, in
our experience are normally applicable to transactions of the type
contemplated by the MLPA, to be obtained by UBSPF except those that may be
required under state securities or blue sky laws, and such other approvals
that have been obtained and, to our knowledge, are in effect.
8. None of the sale of the UBS Mortgage Loans, the consummation by either
UBS Entity of any of the other transactions contemplated by the Agreements to
which it is a party or the execution, delivery and performance by each UBS
Entity of the terms of the Agreements to which it is a party, (a) will require
any Governmental Approval to be obtained or made on the part of either UBS
Entity, the absence of which would have a material adverse effect on such UBS
Entity or the transactions contemplated by the Agreements, except those that
may be required under state securities or blue sky laws, and except for such
other approvals that have been obtained and, to our knowledge, are in full
force and effect, (b) will conflict with, or result in a violation of, any
provision of (i) either UBS Entity's certificate of incorporation or bylaws or
(ii) any Applicable Laws applicable to either UBS Entity, (c) will, to our
knowledge, breach, constitute a default under, require any consent under, or
result in the acceleration or require prepayment of any indebtedness pursuant
to the terms of, any agreement or instrument to which either UBS Entity is a
party or by which it is bound or to which it is subject, or result in the
creation or imposition of any lien upon any property of either UBS Entity
pursuant to the terms of any such agreement or instrument, any of which
occurrences, either in any one instance or in the aggregate, would call into
question the validity of any Agreement to which it is a party or be reasonably
likely to impair materially the ability of such UBS Entity to perform under
the terms of any Agreement to which it is a party and (d) will, to our
knowledge, breach or result in a violation of, or default under, any material
judgment, decree or order that is applicable to either UBS Entity and is
issued by any Governmental Authority having jurisdiction over either UBS
Entity or any of its properties.
9. To our actual knowledge, there is no legal or governmental action,
investigation or proceeding pending or threatened against either UBS Entity
(a) asserting the invalidity of the Agreements to which it is a party, (b)
seeking to prevent the consummation of any of the transactions provided for in
the Agreements, or (c) that would materially and adversely affect (i) the
ability of either UBS Entity to perform its obligations under, or the validity
or enforceability (with respect to either UBS Entity) of, the Agreements to
which it is a party or (ii) any rights with regard the Mortgaged Properties or
the Mortgage Loans. For purposes of the opinion set forth in this paragraph,
we have not regarded any legal or governmental actions, investigations or
proceedings to be "threatened" unless the potential litigant or governmental
authority has communicated in writing to a UBS Entity a present intention to
initiate such actions, investigations or proceedings against such UBS Entity.
Exh C-1-4
We are furnishing this letter to you solely for your benefit in connection
with the transactions referred to herein. This letter is not to be relied upon,
used, circulated, quoted or otherwise referred to by any other person or for any
other purpose without our prior written consent. In addition, we disclaim any
obligation to update this letter for changes in fact or law, or otherwise.
Very truly yours,
Exh C-1-5
SCHEDULE A
----------
Structured Asset Securities Corporation II Standard and Poor's Ratings Services,
000 Xxxxxxx Xxxxxx a division of The XxXxxx-Xxxx Companies, Inc.
Xxx Xxxx, Xxx Xxxx 00000 00 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Brothers Inc. LaSalle Bank National Association
000 Xxxxxxx Xxxxxx 000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 10019 Xxxxxxx, Xxxxxxxx 00000
UBS Securities LLC Xxxxx'x Investors Service, Inc.
1285 Avenue of the Americas 00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000 Xxx Xxxx, Xxx Xxxx 00000
ABN AMRO Bank N.V
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Exh C-1-6
EXHIBIT C-2
OPINION OF IN-HOUSE COUNSEL TO ADDITIONAL PARTY
[UBS LETTERHEAD]
February 10, 2005
TO THE PERSONS ON
THE ATTACHED SCHEDULE A
Re: LB-UBS Commercial Mortgage Trust 2005-C1, Commercial Mortgage
Pass-Through Certificates, Series 2005-C1
-------------------------------------------------------------
Ladies and Gentlemen:
I am Executive Director and Counsel of UBS AG. UBS Principal Finance LLC, a
Delaware limited liability company ("UBSPF"), is a wholly owned subsidiary of
UBS AG. I have been asked to deliver this opinion in connection with (i) the
sale by UBS Real Estate Investments Inc. ("UBSREI") and the purchase by
Structured Asset Securities Corporation II ("SASC") of certain multi-family and
commercial mortgage loans, pursuant to a Mortgage Loan Purchase Agreement, dated
as of January 31, 2005 (the "Agreement"), by and among SASC, as purchaser,
UBSREI, as seller, and UBSPF, as additional party. Capitalized terms used and
not otherwise defined herein have the meanings given to them in the Agreement.
I, or others under my supervision, have examined such documents as I
believe are necessary or appropriate for the purposes of this opinion, including
the certificate of formation, incumbency resolution and limited liability
company agreement adopted by the members of UBSPF and the Agreement and all
exhibits thereto. In reaching such opinions, I have assumed without
investigation, except as expressly set forth below, that there are no facts
inconsistent with the assumptions made in paragraphs A through D below.
A. All signatures of parties, other than UBSPF, on all documents are
genuine. Each person executing any such instrument, document or agreement,
whether individually or on behalf of a firm or other business entity, other than
UBSPF, is duly authorized to do so.
B. All documents submitted as original are authentic, and all photostatic
copies, and all copies certified by a governmental custodian or a party to the
transaction, conform to authentic original documents.
C. All natural persons, including all persons acting on behalf of a
business entity, are legally competent.
Exh C-2-1
D. All other parties to documents, other than UBSPF, have the requisite
power and authority to consummate the transactions contemplated by the Agreement
and to execute and deliver the applicable documents.
Based on my review of the foregoing and such other considerations of law
and fact as I believe to be relevant, and subject to the limitations,
assumptions and qualifications set forth herein, I am of the opinion that:
1. The Agreement has been duly authorized, executed and delivered by UBSPF.
2. UBSPF is a limited liability company duly organized, validly existing
and in good standing under the laws of the State of Delaware, and has the
requisite power and authority to enter into and perform its obligations under
the Agreement.
3. The execution, delivery and performance of the terms of the Agreement
will not result in the breach or violation of or a default under any material
order or decree of any court, regulatory body, administrative agency or
governmental body having jurisdiction over UBSPF and known to me as being
applicable to UBSPF.
4. There is no action, suit or proceeding against, or investigation of,
UBSPF pending or, to my knowledge, threatened against UBSPF before any court,
administrative agency or other tribunal which, either individually or in the
aggregate, (a) asserts the invalidity of the Agreement, (b) seeks to prevent the
consummation of any of the transactions contemplated by the Agreement or (c)
would materially and adversely affect (i) the performance by UBSPF of its
obligations under, or the validity or enforceability of, the Agreement, or (ii)
any rights with regard to the Mortgaged Properties or the Mortgage Loans.
5. No consent, approval, authorization or order of, and no filing or
registration with, any court or governmental agency or regulatory body, of which
I have actual knowledge, the absence of which would have a material adverse
effect on UBSPF or the transactions contemplated by the Agreement, is required
on the part of UBSPF for the execution, delivery or performance by UBSPF of the
Agreement, except those which have been obtained and are in full force and
effect.
6. The execution, delivery and performance by UBSPF of, and the
consummation of the transactions contemplated by, the Agreement do not and will
not result in a breach of any term or provision of the certificate of formation
or limited liability company agreement of UBSPF or in a breach of, constitute a
default under, require any consent under, or result in the acceleration or
require prepayment of any indebtedness pursuant to the terms of, any agreement
or instrument, of which I have actual knowledge, to which UBSPF is a party or by
which it is bound or to which it is subject, or result in the creation or
imposition of any lien upon any property of UBSPF pursuant to the terms of any
such agreement or instrument, any of which occurrences, either in any one
instance or in the aggregate, would call into question the validity of the
Agreement or be reasonably likely to impair materially the ability of UBSPF to
perform under the terms of the Agreement.
Exh C-2-2
In addition to the qualifications set forth above, the opinions herein are
also subject to the following qualifications:
1. I am a member of the Bar of the State of New York, and the opinions
expressed herein concern only the laws of the State of New York, as currently in
effect, the limited liability company law of the State of Delaware, as currently
in effect, and solely with respect to paragraphs 3 and 4 above, the federal laws
of the United States of America, as currently in effect.
2. I assume no obligation to supplement this opinion if, after the date
hereof, any applicable laws change or I become aware of any facts that might
change the opinions set forth herein.
3. The opinions are limited to the matters set forth in this letter. No
other opinions should be inferred beyond the matters expressly stated.
The opinions expressed in this letter may be relied upon solely by the
addressees hereof solely with respect to the transactions described in the
Agreement, and may not be relied upon by any other person or entity, without my
specific prior written consent.
Sincerely,
Xxxx Xxxxxx
Executive Director
Exh C-2-3
SCHEDULE A
UBS Securities LLC Standard and Poor's Ratings Services, a division
1285 Avenue of the Americas of The XxXxxx-Xxxx Companies, Inc.
Xxx Xxxx, Xxx Xxxx 00000 00 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Brothers Inc. Xxxxx'x Investors Service, Inc.
000 Xxxxxxx Xxxxxx 00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000 Xxx Xxxx, Xxx Xxxx 00000
Structured Asset Securities Corporation II ABN AMRO Bank N.V
000 Xxxxxxx Xxxxxx 000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 10019 Xxxxxxx, Xxxxxxxx 00000
LaSalle Bank National Association
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Exh X-0-0
XXXXXXX X
XXXX
Xxx X-0
