Execution Copy
MORTGAGE LOAN CONTRIBUTION, PURCHASE AND SALE AGREEMENT
This Mortgage Loan Contribution, Purchase and Sale Agreement (the
"Agreement") dated as of March 27, 1997, is between Asset Securitization
Corporation, a Delaware corporation (the "Company"), and Nomura Asset Capital
Corporation, a Delaware corporation (the "Seller"). The Seller agrees to sell,
and the Company agrees to purchase a portion of, and the Seller agrees to
contribute, and the Company accepts the contribution of a portion of, the
mortgage loans (the "Mortgage Loans") described in, and set forth in, the
Mortgage Loan Schedule attached as Exhibit B to the Pooling and Servicing
Agreement dated as of March 27, 1997 (the "Pooling and Servicing Agreement"),
among the Company, AMRESCO Management, Inc., as servicer (in such capacity, the
"Servicer") and as special servicer, LaSalle National Bank, as trustee (the
"Trustee"), and ABN AMRO Bank N.V., as fiscal agent, relating to the issuance of
the Asset Securitization Corporation, Commercial Mortgage Pass-Through
Certificates, Series 1997-D4 (the "Certificates"). The portion of the Mortgage
Loans sold by NACC to ASC pursuant to this Agreement is referred to herein as
the "Sold Mortgage Loans" and the portion thereof contributed by NACC to ASC is
referred to herein as the "Contributed Mortgage Loans." The Certificates will
consist of twenty-six classes: the "Class A-1A Certificates," the "Class A-1B
Certificates," the "Class A-1C Certificates," the "Class A-1D Certificates," the
"Class A-1E Certificates," the "Class A-CS1 Certificates," the Class PS-1
Certificates," the "Class A-2 Certificates," the "Class A-3 Certificates," the
"Class A-4 Certificates," the "Class A-5 Certificates," the "Class A-6
Certificates," the "Class A-7 Certificates" and the "Class A-8 Certificates,"
(collectively, the "Senior Offered Certificates"), the "Class B-1 Certificates,"
the "Class B-2 Certificates," the "Class B-3 Certificates," the "Class B-4
Certificates," the "Class B-5 Certificates" and the "Class B-6 Certificates,"
(collectively, the "Subordinated Offered Certificates"), the "Class B-7
Certificates," the "Class B-7H Certificates," the "Class V-1 Certificates," the
"Class V-2 Certificates," the "Class R Certificates" and the "Class LR
Certificates" (collectively, the "Purchased Certificates"). Capitalized terms
used without definition herein shall have the respective meanings assigned to
them in the Pooling and Servicing Agreement or, if not defined therein, in the
Underwriting Agreement, dated March 26, 1997 (the "Underwriting Agreement"), by
and between the Company and Nomura Securities International, Inc. (in such
capacity, the "Underwriter") or in the Purchase Agreement, dated March 27, 1997
(the "Purchase Agreement"), by and between the Company and Nomura Securities
International, Inc. (in such capacity, the "Placement Agent").
1. Purchase Price; Contribution, Purchase and Sale. The purchase price
("Purchase Price") for the Sold Mortgage Loans shall be an amount agreed upon by
the parties in a separate writing, which amount shall be payable by the Company
to the Seller on the Closing Date in immediately available funds. It is
contemplated that the Purchase Price will be remitted to the Seller from amounts
to be paid to the Company by the Underwriter pursuant to the Underwriting
Agreement and the Placement Agent pursuant to the Purchase Agreement. The Seller
hereby contributes to the Company, and the Company hereby accepts, as of the
Closing Date, the Contributed Mortgage Loans. The closing for the contribution,
purchase and sale of the Mortgage Loans shall take place at the offices of
Cadwalader, Xxxxxxxxxx & Xxxx, New York, New York, at 10:00 a.m. New York time,
on the Closing Date.
On the Closing Date, the Company shall pay the Purchase Price to the
Seller. As of the Closing Date, the Seller hereby sells, transfers, assigns,
sets over and otherwise conveys to the Company all the right, title and interest
of the Seller in and to the Mortgage Loans, including all interest and principal
due on or with respect to the Mortgage Loans after the Cut-off Date, together
with all of the Seller's right, title and interest in and to the proceeds of any
related title, hazard, primary mortgage or other insurance policies. In
addition, as of the Closing Date, the Seller hereby transfers, assigns, sets
over and otherwise conveys to the Company all the right, title and interest of
the Seller in and to the Originator's Mortgage Loan Purchase Agreement (as
defined below) and which is attached hereto, insofar as such rights relate to
the Mortgage Loans including, but not limited to, the obligations of the
Originator (as defined below) pursuant to the Originator's Mortgage Loan
Purchase Agreement to repurchase Mortgage Loans with respect to which there
exists a breach of one or more of the Originator's representations and
warranties made in the Originator's Mortgage Loan Purchase Agreement. The
Company hereby directs the Seller, and the Seller hereby agrees, to deliver to
the Trustee all documents, instruments and agreements required to be delivered
by the Company to the Custodian on behalf of the Trustee under the Pooling and
Servicing Agreement and such other documents, instruments and agreements as the
Company or the Trustee shall reasonably request. "Originator's Mortgage Loan
Purchase Agreement" means the Mortgage Loan Purchase Agreement, dated as of May
16, 1994, by and between the Seller and Bloomfield Acceptance Company, LLC
("Bloomfield").
2. Representations and Warranties. (a) The Seller hereby represents and
warrants to the Company as of the Closing Date that:
(i) The Seller is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware with
full power and authority to carry on its business as presently
conducted by it;
(ii) The Seller has taken all necessary action to authorize the
execution, delivery and performance of this Agreement by it, and
has the power and authority to execute, deliver and perform this
Agreement and all the transactions contemplated hereby,
including, but not limited to, the power and authority to sell,
assign and transfer the Mortgage Loans in accordance with this
Agreement;
(iii) Assuming the due authorization, execution and delivery of this
Agreement by the Company, this Agreement and all of the
obligations of the Seller hereunder are the legal, valid and
binding obligations of the Seller, enforceable in accordance with
the terms of this Agreement, except as such enforcement may be
limited by bankruptcy, insolvency, reorganization, liquidation,
receivership, moratorium or other laws relating to or affecting
creditors' rights generally, or by general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law);
(iv) The execution and delivery of this Agreement and the performance
of its obligations hereunder by the Seller does not conflict with
any provision of any law or regulation to which the Seller is
subject, or conflict with, result in a breach of or constitute a
default under any of the terms, conditions or provisions of any
agreement or instrument to which the Seller is a party or by
which it is bound, or any order or decree applicable to the
Seller, or result in the creation or imposition of any lien on
any of the Seller's assets or property, which would materially
and adversely affect the ability of the Seller to carry out the
transactions contemplated by this Agreement. The Seller has
obtained any consent, approval, authorization or order of any
court or governmental agency or body required for the execution,
delivery and performance by the Seller of this Agreement; and
(v) There is no action, suit or proceeding pending against the Seller
in any court or by or before any other governmental agency or
instrumentality which would materially and adversely affect the
ability of the Seller to carry out its obligations under this
Agreement or have a material adverse effect on the financial
condition of the Seller or the ability of the Seller to perform
its obligations under this Agreement.
(b) The Seller hereby represents and warrants with respect to each
Mortgage Loan that as of the date specified below or, if no such date is
specified, as of the Closing Date:
(i) Immediately prior to the sale, transfer and assignment to the
Company, each related Note and Mortgage was not subject to an
assignment (other than to the Seller) or pledge, and the Seller
had good and marketable title to, and was the sole owner of, the
Mortgage Loan;
(ii) The Seller has full right and authority to sell, assign and
transfer such Mortgage Loan and the assignment to the Company
constitutes a legal, valid and binding assignment of such
Mortgage;
(iii) The Seller is transferring such Mortgage Loan free and clear of
any and all liens, pledges, charges or security interests of any
nature encumbering such Mortgage Loan subject to the matters
described in clause (xi) below;
(iv) Each related Note, Mortgage, Assignment of Leases and Rents (if
any) and other agreement executed in connection with such
Mortgage Loan are legal, valid and binding obligations of the
related Borrower, enforceable in accordance with their terms,
except as such enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or other laws affecting
the enforcement of creditors' rights generally, or by general
principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law) and to the
best of the Seller's knowledge, there is no valid defense,
counterclaim, or right of rescission or right of set-off or
abatement available to the related Borrower with respect to such
Note, Mortgage and other agreements;
(v) Each related Assignment of Leases and Rents creates a valid,
collateral or first priority assignment of, or a valid first
priority security interest in, certain rights under the related
lease, subject only to a license granted to the related Borrower
to exercise certain rights and to perform certain obligations of
the lessor under such lease, including the right to operate the
related Mortgaged Property; no person other than the related
Borrower owns any interest in any payments due under such lease
that is superior to or of equal priority with the mortgagee's
interest therein;
(vi) Each related assignment of Mortgage from the Seller to the
Company and any related Reassignment of Assignment of Leases and
Rents, if any, or assignment of any other agreement executed in
connection with such Mortgage Loan, from the Seller to the
Company constitutes the legal, valid and binding assignment from
the Seller to the Company, except as such enforcement may be
limited by bankruptcy, insolvency, reorganization, liquidation,
receivership, moratorium or other laws relating to or affecting
creditors' rights generally, or by general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law);
(vii) Since origination, and except as set forth in the related
Mortgage File, such Mortgage Loan has not been waived, modified,
altered, satisfied, canceled, subordinated or rescinded and, each
related Mortgaged Property has not been released from the lien of
the related Mortgage in any manner which materially interferes
with the security intended to be provided by such Mortgage;
(viii) Each related Mortgage is a valid and enforceable first lien on
the related Mortgaged Property (subject to the matters described
in clause (xi) below), and such Mortgaged Property is free and
clear of any mechanics' and materialmen's liens which are prior
to or equal with the lien of the related Mortgage, except those
which are insured against by a lender's title insurance policy
(as described below);
(ix) The Seller has not taken any action that would cause the
representations and warranties made by each related Borrower in
the Mortgage Loan not to be true;
(x) The Seller has no knowledge that the representations and
warranties made by each related Borrower in such Mortgage Loan
are not true in any material respect;
(xi) The lien of each related Mortgage is insured by an ALTA lender's
title insurance policy (or a binding commitment therefor), or its
equivalent as adopted in the applicable jurisdiction, insuring
the Seller, its successors and assigns, or the holder of the
related Note as to a valid and first priority lien of the
Mortgage in at least the original principal amount of such
Mortgage Loan or Allocated Loan Amount of the related Mortgaged
Property (as set forth on the Mortgage Loan Schedule which is an
exhibit to the Pooling and Servicing Agreement), subject only to
(a) the lien of current real property taxes, ground rents, water
charges, sewer rents and assessments not yet due and payable, (b)
covenants, conditions and restrictions, rights of way, easements
and other matters of public record, none of which, individually
or in the aggregate, materially interferes with the current use
or operation of the Mortgaged Property or the security intended
to be provided by such Mortgage or with the borrower's ability to
pay its obligations when they become due or the value of the
Mortgaged Property and (c) the exceptions (general and specific)
set forth in such policy, none of which, individually or in the
aggregate, materially interferes with the security intended to be
provided by such Mortgage or with the related Borrower's ability
to pay its obligations when they become due or the value, use or
operation of the Mortgaged Property; the Seller or its successors
or assigns is the sole named insured of such policy; such policy
is assignable to the Company without the consent of or any
notification to the insurer, and is in full force and effect upon
the consummation of the transactions contemplated by this
Agreement; no claims have been made under such policy and the
Seller has not done anything, by act or omission, and the Seller
has no knowledge of any matter, which would impair or diminish
the coverage of such policy; to the extent required by applicable
law, the insurer issuing such policy is qualified to do business
in the jurisdiction in which the related Mortgaged Properties are
located;
(xii) The proceeds of such Mortgage Loan have been fully disbursed and
there is no requirement for future advances thereunder and the
Seller covenants that it will not make any future advances under
the Mortgage Loan to the related Borrower;
(xiii) Each related Mortgaged Property is free of any material damage
that would affect materially and adversely the value of such
Mortgaged Property as security for the Mortgage Loan and there is
no proceeding pending for the total or, except as disclosed in
Exhibit A hereto, the partial condemnation of such Mortgaged
Property;
(xiv) Each of the related Borrowers (and, in the case of certain
loans, each of the operators of the senior housing/healthcare
facilities) is in possession of all material licenses, permits
and other authorizations necessary and required by all applicable
laws for the conduct of its business and all such licenses,
permits and authorizations are valid and in full force and
effect, and if a related Mortgaged Property is improved by a
senior housing or healthcare facility, the most recent inspection
or survey by governmental authorities having jurisdiction in
connection with such licenses, permits and authorizations did not
cite such Mortgaged Property for material violations (which shall
include only "Level A" violations or the equivalent, in the case
of skilled nursing facilities, that have not been cured); and if
a related Mortgaged Property is improved by a hotel, the most
recent inspection or review by the franchiser, if any, did not
cite such Mortgaged Property for material violations of the
related franchise agreement which have not been cured;
(xv) The Seller or, to the best of Seller's knowledge, Bloomfield has
inspected or caused to be inspected each related Mortgaged
Property within the past 12 months or within 1 month of
origination of the Mortgage Loan;
(xvi) Such Mortgage Loan does not have a shared appreciation feature,
other contingent interest feature or negative amortization;
(xvii) Such Mortgage Loan is a whole loan and no other party holds a
participation interest in the Mortgage Loan;
(xviii) The Mortgage Rate (exclusive of any default interest, late
charges, or prepayment premiums) of such Mortgage Loan complied
as of the date of origination with, or is exempt from, applicable
state or federal laws, regulations and other requirements
pertaining to usury; any and all other requirements of any
federal, state or local laws, including, without limitation,
truth-in-lending, real estate settlement procedures, equal credit
opportunity or disclosure laws, applicable to such Mortgage Loan
have been complied with as of the date of origination of such
Mortgage Loan. All Prepayment premiums and yield maintenance
premiums constitute "customary prepayment penalties" within the
meanings of ss.1860(b)(2) of the Code;
(xix) (A) With respect to each Mortgage Loan originated by the Seller,
no fraudulent acts were committed by the Seller during the
origination process of such Mortgage Loan and the origination,
servicing and collection of each Mortgage Loan is in all respects
legal, proper and prudent in accordance with customary industry
standards and (B) with respect to each Mortgage Loan originated
by Bloomfield, to the best of the Seller's knowledge, no
fraudulent acts were committed by Bloomfield during the
origination process of such Mortgage Loan and the origination,
servicing and collection of each Mortgage Loan is in all respects
legal, proper and prudent in accordance with customary industry
standards;
(xx) All taxes and governmental assessments that prior to the Closing
Date became due and owing in respect of, each related Mortgaged
Property have been paid or an escrow of funds in an amount
sufficient to cover such payments has been established;
(xxi) All escrow deposits and payments required pursuant to the
Mortgage Loans are in the possession, or under the control, of
the Seller or its agent and there are no deficiencies in
connection therewith and all such escrows and deposits have been
conveyed by the Seller to the Company and identified as such with
appropriate detail;
(xxii) To the extent required under applicable law, as of the Cut-off
Date, the Seller was authorized to transact and do business in
the jurisdiction in which each related Mortgaged Property is
located at all times when it held the Mortgage Loan;
(xxiii) Each related Mortgaged Property is insured by a fire and extended
perils insurance policy, issued by an insurer meeting the
requirements of the Pooling and Servicing Agreement, in an amount
not less than the replacement cost and the amount necessary to
avoid the operation of any co-insurance provisions with respect
to the Mortgaged Property; each related Mortgaged Property is
also covered by business interruption insurance (for at least 12
months of rent interruptions) and comprehensive general liability
insurance in amounts generally required by institutional lenders
for similar properties; all premiums on such insurance policies
required to be paid as of the date hereof have been paid; such
insurance policies require prior notice to the insured of
termination or cancellation, and no such notice has been
received; each related Mortgage or Loan Agreement obligates the
related Borrower to maintain all such insurance and, at such
Borrower's failure to do so, authorizes the mortgagee to maintain
such insurance at the Borrower's cost and expense and to seek
reimbursement therefor from such Borrower;
(xxiv) There is no default, breach, violation or event of acceleration
existing under the related Mortgage or the related Note and, to
the Seller's knowledge, no event which, with the passage of time
or with notice and the expiration of any grace or cure period,
would and does constitute a default, breach, violation or event
of acceleration;
(xxv) Such Mortgage Loan has not been 30 days or more delinquent since
origination and as of the Cut-off Date was not delinquent;
(xxvi) Each related Mortgage contains customary and enforceable
provisions such as to render the rights and remedies of the
holder thereof adequate for the realization against the Mortgaged
Property of the benefits of the security, including realization
by judicial or, if applicable, non-judicial foreclosure, and
there is no exemption available to the Borrower which would
interfere with such right to foreclose. To the best of the
Seller's knowledge, no Borrower is a debtor in a state or federal
bankruptcy or insolvency preceding;
(xxvii) In each related Mortgage or Loan Agreement, the related Borrower
represents and warrants that except as set forth in certain
environmental reports or other documents previously provided to
the Rating Agencies and to the best of its knowledge it has not
used, caused or permitted to exist and will not use, cause or
permit to exist on the related Mortgaged Property any Hazardous
Materials in any manner which violates federal, state or local
laws, ordinances, regulations, orders, directives or policies
governing the use, storage, treatment, transportation,
manufacture, refinement, handling, production or disposal of
Hazardous Materials; the related Borrower agrees to indemnify,
defend and hold the mortgagee and its successors and assigns
harmless from and against any and all losses, liabilities,
damages, injuries, penalties, fines, expenses, and claims of any
kind whatsoever (including attorneys' fees and costs) paid,
incurred or suffered by, or asserted against, any such party
resulting from a breach of certain representations, warranties or
covenants given by the Borrower in such Mortgage or Loan
Agreement. A Phase I environmental report was conducted by a
reputable environmental engineer in connection with such Mortgage
Loan, which report, except as disclosed in the Prospectus
Supplement and the preliminary prospectus, subject to completion,
dated March 20, 1997, as may be amended, relating to the Class
B-1, Class B-2, Class B-3, Class B-4, Class B-5 and Class B-6
Certificates (the "Subordinated Certificates Prospectus") does
not indicate any material non-compliance or material existence of
Hazardous Materials. To the best of the Seller's knowledge, each
related Mortgaged Property, except as disclosed in the Prospectus
Supplement and the Subordinated Certificates Prospectus, is in
material compliance with all applicable federal, state and local
laws pertaining to environmental hazards, and to the best of
Seller's knowledge, no notice of violation of such laws has been
issued by any governmental agency or authority; the Seller has
not taken any action which would cause the related Mortgaged
Property not to be in compliance with all federal, state and
local laws pertaining to environmental hazards;
(xxviii) Each related Mortgage or Loan Agreement contains provisions for
the acceleration of the payment of the unpaid principal balance
of such Mortgage Loan if, without complying with the requirements
of the Mortgage or Loan Agreement or obtaining the prior written
consent of the Mortgagee, the related Mortgaged Property, or any
interest therein, is directly or indirectly transferred or sold,
or encumbered in connection with subordinate financing and each
related Mortgage prohibits the pledge or encumbrance of the
Mortgaged Property without the consent of the holder of the
Mortgage Loan;
(xxix) (1) The Mortgage Loan is directly secured by a Mortgage on a
commercial property or multifamily residential property, and (2)
the fair market value of such real property as evidenced by an
MAI appraisal conducted within 12 months of the origination of
the Mortgage Loan (except with respect to the Mortgaged
Properties included in the Sunwest Pool, in which case, market
value was determined by using a capitalization rate), was at
least equal to 80% of the principal amount of the Mortgage Loan
(a) at origination (or if the Mortgage Loan has been modified in
a manner that constituted a deemed exchange under Section 1001 of
the Code at a time when the Mortgage Loan was not in default or
default with respect thereto was not reasonably foreseeable, the
date of the last such modification) or (b) at the Closing Date;
provided that the fair market value of the real property interest
must first be reduced by (A) the amount of any lien on the real
property interest that is senior to the Mortgage Loan (unless
such senior lien also secures a Mortgage Loan, in which event the
computation described in (a) and (b) shall be made on an
aggregated basis) and (B) a proportionate amount of any lien that
is in parity with the Mortgage Loan (unless such other lien
secures a Mortgage Loan that is cross-collateralized with such
Mortgage Loan, in which event the computation described in (a)
and (b) shall be made on an aggregate basis). All improvements
included for MAI appraisals are within the boundaries of the
related Mortgaged Property;
(xxx) The Mortgage Loan Schedule is complete and accurate in all
respects;
(xxxi) Each Mortgage Loan constitutes a "qualified mortgage" within the
meaning of Section 860G(a)(3) of the Code (but without regard to
the rule in Treasury Regulations 1.860 G-2(f)(2) that treats a
defective obligation as a qualified mortgage, or any
substantially similar successor provision);
(xxxii) Each Mortgaged Property is in compliance with all applicable
laws, zoning ordinances, rules, covenants and restrictions
affecting the construction, occupancy, use and operation of such
Mortgaged Property. All inspections, licenses and certificates
required, including certificates of occupancy, whether by law,
ordinance, regulation or insurance standards to be made or issued
with regard to the Mortgaged Property, have been obtained and are
in full force and effect;
(xxxiii) (A) Each Borrower of a Mortgage Loan is an entity whose
organizational documents provide that it is, and at least so long
as the Mortgage Loan is outstanding will continue to be, a
single-purpose entity. (For this purpose, "single-purpose entity"
shall mean a person, other than an individual, which is formed or
organized solely for the purpose of owning and operating a single
property, does not engage in any business unrelated to such
property and its financing, does not have any assets other than
those related to its interest in the property or its financing,
or any indebtedness other than as permitted by the related
Mortgage or the other Mortgage Loan Documents, has its own books
and records and accounts separate and apart from any other
person, and holds itself out as being a legal entity, separate
and apart from any other person);
(B) A non-consolidation opinion was obtained for each Borrower or
affiliated group of Borrowers of Mortgage Loans or groups of
Mortgage Loans with an original principal balance in excess of
$20,000,000;
(C) The general partners or managing members of Borrowers or
affiliated Borrowers of Mortgage Loans or groups of Mortgage
Loans having an original principal balance in excess of
$20,000,000 have an independent director;
(xxxiv) With respect to any Mortgage Loan where the entire estate of the
related Borrower therein is a leasehold estate, except with
respect to the Mortgaged Properties in the Sunwest Pool, where a
material portion of the estate of the related borrower therein is
a leasehold estate and the fee interest of the ground lessor is
not subject and subordinate to the related Mortgagee, the Seller
represents and warrants that:
(A) The ground lease or a memorandum regarding it has been duly
recorded. The ground lease permits the interest of the
lessee to be encumbered by the related Mortgage and does not
restrict the use of the related Mortgaged Property by such
lessee, its successors or assigns in a manner that would
adversely affect the security provided by the related
Mortgage. There has been no material change in the terms of
such ground lease since its recordation, except by written
instruments, all of which are included in the related
Mortgage File;
(B) Except with respect to the Mortgage Loan known as Marina
Harbor, the lessor under such ground lease has agreed in
writing and included in the related Mortgage File that the
ground lease may not be amended, modified, canceled or
terminated without the prior written consent of the
mortgagee and that any such action without such consent is
not binding on the mortgagee, its successors or assigns;
(C) The ground lease has an original term (or an original term
plus one or more optional renewal terms, which, under all
circumstances, may be exercised, and will be enforceable, by
the mortgagee) that extends not less than 10 years beyond
the stated maturity of the related Mortgage Loan;
(D) The ground lease is not subject to any liens or encumbrances
superior to, or of equal priority with, the Mortgage
(subject to exceptions comparable in clause (xi) above). The
ground lease is, and provides that it shall remain, prior to
any Mortgage or other lien upon the related fee interest;
(E) Except with respect to the Mortgage Loan known as Marina
Harbor and as disclosed on Exhibit A hereto, the ground
lease is assignable to the mortgagee under the leasehold
estate and its assigns without the consent of the lessor
thereunder;
(F) As of the date of execution and delivery, the ground lease
is in full force and effect and no default has occurred, nor
is there any existing condition which, but for the passage
of time or giving of notice, would result in a default under
the terms of the ground lease;
(G) The ground lease or ancillary agreement between the lessor
and the lessee requires the lessor to give notice of any
default by the lessee to the mortgagee;
(H) A mortgagee is permitted a reasonable opportunity
(including, where necessary, sufficient time to gain
possession of the interest of the lessee under the ground
lease through legal proceedings, or to take other action so
long as the mortgagee is proceeding diligently) to cure any
default under the ground lease which is curable after the
receipt of notice of any default before the lessor may
terminate the ground lease. All rights of the mortgagee
under the ground lease and the related Mortgage (insofar as
it relates to the ground lease) may be exercised by or on
behalf of the mortgagee;
(I) Except as disclosed on Exhibit A hereto, the ground lease
does not impose any restrictions on subletting that would be
viewed as commercially unreasonable by an institutional
investor. The lessor is not permitted to disturb the
possession, interest or quiet enjoyment of any subtenant of
the lessee in the relevant portion of the Mortgaged Property
subject to the ground lease for any reason, or in any
manner, which would adversely affect the security provided
by the related Mortgage;
(J) Any related insurance proceeds or condemnation award (other
than in respect of a total or substantially total loss or
taking) 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 (or in the case of
the Marina Harbor Loan, the ground lessor acting in trust
for the named insureds) having the right to hold and
disburse such proceeds as repair or restoration progresses,
or, if permitted by the related ground lease, to the payment
of the outstanding principal balance of the Mortgage Loan,
together with any accrued interest, except that in the case
of condemnation awards, the ground lessor is entitled to an
amount of such award generally based on the value of the
unimproved land taken; and
(K) Under the terms of the ground lease and the related
Mortgage, except with respect to the Mortgage Loans known as
Marina Harbor, International Plaza and 00 Xxxxx Xxxxxx, any
related insurance proceeds, or condemnation award in respect
of a total or substantially total loss or taking of the
related Mortgaged Property will be applied first to the
payment of the outstanding principal balance of the Mortgage
Loan, together with any accrued interest (except as provided
by applicable law or in cases where a different allocation
would not be viewed as commercially unreasonable by any
institutional investor, taking into account the relative
duration of the ground lease and the related Mortgage and
the ratio of the market value of the related Mortgage
property to the outstanding principal balance of such
Mortgage Loan). Until the principal balance and accrued
interest rate are paid in full, neither the lessee nor the
lessor under the ground lease will have the option to
terminate or modify the ground lease without prior written
consent of the mortgagee as a result of any casualty or
partial condemnation, except to provide for an abatement of
the rent;
(xxxv) With respect to the Mortgaged Properties that have earthquake,
windstorm or flood insurance as of the Cut-off Date, such
insurance is required to be maintained until the principal
balances of the related Mortgage Loans are paid in full;
(xxxvi) With respect to Mortgage Loans that are cross-collateralized, all
other loans that are cross-collateralized by such Mortgage Loans
are included in the Mortgage Pool;
(xxxvii) Except with respect to the Mortgage Loan known as South DeKalb
Mall, neither the Seller nor any affiliate thereof has any
obligation or right to make any capital contribution to any
Borrower under a Mortgage Loan, other than contributions made on
or prior to the Closing Date;
(xxxviii) Except as disclosed in the Prospectus Supplement and the
Subordinated Certificates Prospectus, no borrower under a
Mortgage Loan is an affiliate of a borrower under any other
Mortgage Loan;
(xxxix) After receipt of the Purchase Price, the Seller has no right of
set-off with respect to the transfer of the Mortgage Loans to the
Purchaser; and
(xl) With respect to each Mortgage Loan originated by Bloomfield:
(A) Such Mortgage Loan was underwritten in accordance with
standards established by the Seller, using application forms
and related credit documents approved by the Seller;
(B) The Seller approved each application and related credit
documents before a commitment by Bloomfield was issued, and
no such commitment was issued until the Seller agreed to
fund such loan;
(C) The closing documents for such Mortgage Loan were prepared
on forms approved by the Seller, and reflect the Seller as
the successor and assign to Bloomfield; and
(D) Such loan was actually funded by the Seller, and was
assigned to the Seller at the closing;
(xli) The leases to the Kmart Corporation with respect to the Mortgaged
Properties securing the Kmart Distribution Properties (A) are
triple net leases, (B) require the tenant to pay all rent without
deduction, setoff, abatement or other reduction, notwithstanding
casualty, condemnation and prohibition of use and (C) may not be
terminated for any reason other than a material taking or
casualty, provided, however, that Kmart Corporation agrees to
purchase the related Kmart Distribution Property for an amount at
least equal to the outstanding principal balance of the loan
allocable to such property;
(xlii) With respect to each Mortgaged Property improved by a hotel, the
Seller has filed and/or recorded (or sent for filing and/or
recording on the closing date of the related Mortgage Loan)
Uniform Commercial Code financing statements on all furniture,
fixtures, equipment and all other personal property used in the
operation of the hotel;
(xliii) Each of the related Borrowers is organized under the laws of a
state or commonwealth of the United States;
(xliv) The Mortgage File that is being conveyed to the Trustee is
complete;
(xlv) Each Mortgaged Property (i) is located on or adjacent to a
dedicated road, or has access to an irrevocable easement
permitting ingress and egress, (ii) is served by public
utilities, water and sewer (or septic facilities), (iii) is a
separate tax parcel and (iv) has parking as required under
applicable law; and
(xlvi) The Seller has not advanced additional funds for principal and
interest or taxes and insurance (other than holdbacks at the
closing for the related Mortgage Loan from the proceeds of such
loan).
(c) The Seller has not dealt with any broker, investment banker, agent or
other person (other than the Company, the Underwriter and the Placement Agent)
who may be entitled to any commission or compensation in connection with the
sale to the Company of the Mortgages Loans.
3. Notice of Breach; Cure and Repurchase. (a) Pursuant to the Pooling and
Servicing Agreement, the Seller and the Company shall be given notice of (A) any
breach of any representation or warranty contained in Section 2(b) (i), (ii),
(iii), (iv), (v), (vi), (vii), (viii), (ix), (xi), (xii), (xv), (xvi), (xvii),
(xviii), (xix), (xx), (xxiv), (xxv), (xxvii), (xxix), (xxxi) or (xxxv) and (B)
any breach of any representation or warranty contained in Section 2(b), (x),
(xiii), (xiv), (xxi), (xxii), (xxiii), (xxvi), (xxviii), (xxx), (xxxii),
(xxxiii), (xxxiv), (xxxvi), (xxxvii), (xxxviii), (xxxix), (xl), (xli), (xlii),
(xliii), (xliv), (xlv) and (xlvi) that materially and adversely affects the
value of such Mortgage Loan or the interests of the holders of the Certificates
therein.
(b) Within 90 days of the receipt of the notice (or with respect to the
representation and warranty contained in Section 2(b)(xxx) or (xxxii),
discovery) of a breach provided for in clause (a), the Seller shall either (i)
repurchase the related Mortgage Loan at the Repurchase Price or (ii) promptly
cure such breach in all material respects; provided, however, that in the event
that such breach (other than a breach of Section 2(b)(xxx) or (xxxii)) is
capable of being cured but not within such 90 day period and the Seller has
commenced and is diligently proceeding with the cure of such breach within such
90 day period, the Seller shall have an additional 90 days to complete such
cure, provided, further, that with respect to such additional 90 day period the
Seller shall have delivered an officer's certificate to the Trustee setting
forth the reason such breach is not capable of being cured within the initial 90
day period and what actions the Seller is pursuing in connection with the cure
thereof and stating that the Seller anticipates that such breach will be cured
within the additional 90 day period; and provided, further, that in the event
that the Seller fails to complete the cure of such breach within such additional
90 day period, the Repurchase Price shall also include interest at the Advance
Rate on any Advance made by the Servicer in respect of the related Mortgage
Loan. Upon any such repurchase of a Mortgage Loan by Seller, the Company shall
execute and deliver such instruments of transfer or assignment presented to it
by Seller, in each case without recourse, as shall be necessary to vest in
Seller the legal and beneficial ownership of such Mortgage Loan or (including
any property acquired in respect thereof or proceeds of any insurance policy
with respect thereto) and the rights with respect thereto under the applicable
Originator's Mortgage Loan Purchase Agreement (including, without limitation,
the rights and remedies with respect to representations and warranties made by
the Originator thereunder relating to such Mortgage Loan), and shall deliver the
related Mortgage File to Seller or its designee after receipt of the related
repurchase price.
(c) The Seller hereby acknowledges the assignment by the Company to the
Trustee, as trustee under the Pooling and Servicing Agreement, for the benefit
of the Holders of the Certificates, of the representations and warranties
contained herein and of the obligation of the Seller to repurchase a Mortgage
Loan pursuant to this Section. The Trustee or its designee may enforce such
obligation as provided in Section 8(b) hereof.
4. Opinions of Counsel. The Seller hereby covenants to the Company to,
simultaneously with the execution hereof, deliver or cause to be delivered to
the Company opinions of counsel as to various corporate matters in form
satisfactory to the Company.
5. Underwriting. The Seller hereby agrees to furnish any and all
information, documents, certificates, letters or opinions with respect to the
Mortgage Loans, reasonably requested by the Company in order to perform any of
its obligations or satisfy any of the conditions on its part to be performed or
satisfied pursuant to the Underwriting Agreement or the Purchase Agreement at or
prior to the Closing Date.
6. Costs. The Company shall pay all expenses incidental to the performance
of its obligations under the Underwriting Agreement and the Purchase Agreement,
including without limitation (i) any recording fees or fees for title policy
endorsements and continuations, (ii) the expenses of preparing, printing and
reproducing the Prospectus Supplement, Private Placement Memorandum dated March
27, 1997 relating to the Purchased Certificates, the Underwriting Agreement, the
Purchase Agreement, the Pooling and Servicing Agreement, the Senior Offered
Certificates and the Purchased Certificates and (iii) the cost of delivering the
Senior Offered Certificates and the Purchased Certificates to the office of the
Underwriter or the purchaser of the such certificates, as applicable, insured to
the satisfaction of the Underwriter or such purchaser, as applicable.
7. Notices. All communications hereunder shall be in writing and effective
only upon receipt and, if sent to the Company, will be mailed, delivered or
telegraphed and confirmed to it at 2 World Financial Xxxxxx Xxxxxxxx X, Xxx
Xxxx, Xxx Xxxx 00000-0000 attention of Manager - Mortgage Finance Department,
or, if sent to the Seller, will be mailed, delivered or telegraphed and
confirmed to it at 2 World Xxxxxxxxx Xxxxxx - Xxxxxxxx X, Xxx Xxxx, Xxx Xxxx
00000-0000 attention of Manager - Mortgage Finance Department.
8. Trustee Beneficiary. The representations, warranties and agreements made
by the Seller in this Agreement are made for the benefit of, and may be enforced
by or on behalf of, the Trustee and the Holders of Certificates to the same
extent that the Company has rights against the Seller under this Agreement in
respect of representations, warranties and agreements made by the Seller herein
and such representations and warranties shall survive delivery of the respective
Mortgage Files to the Trustee until the termination of the Pooling and Servicing
Agreement.
9. Miscellaneous. This Agreement will be governed by and construed in
accordance with the substantive laws of the State of New York. Neither this
Agreement nor any term hereof may be changed, waived, discharged or terminated
except by a writing signed by the party against whom enforcement of such change,
waiver, discharge or termination is sought. This Agreement may not be changed in
any manner which would have a material adverse effect on Holders of Certificates
without the prior written consent of the Trustee. The Trustee shall be protected
in consenting to any such change to the same extent provided in Section 10.07 of
the Pooling and Servicing Agreement. This Agreement may be executed in any
number of counterparts, each of which shall for all purposes be deemed to be an
original and all of which shall together constitute but one and the same
instrument. This Agreement will inure to the benefit of and be binding upon the
parties hereto and their respective successors and assigns, and no other person
will have any right or obligation hereunder, other than as provided in Section 8
hereof.
10. Third Party Beneficiary. Nomura Securities International, Inc. is an
intended third party beneficiary of the representations and warranties of the
Seller set forth in Article 2 hereof.
IN WITNESS WHEREOF, the Company and the Seller have caused this Agreement to
be duly executed by their respective officers as of the day and year first above
written.
ASSET SECURITIZATION CORPORATION
By:-------------------------------
Name:
Title:
NOMURA ASSET CAPITAL CORPORATION
By:--------------------------------
Name:
Title:
EXHIBIT A
EXCEPTIONS TO THE MORTGAGE LOAN REPRESENTATIONS
(xiii) A portion of the property in the Sunwest Pool known
as Facility number 5833, located in Richland Hills,
Texas, is involved in a condemnation proceeding;
however, such proceeding will not have a material
adverse effect on the cash flow of such property;
(xxxiv)(E) With respect to the ground lease covering the
Mortgaged Property known as Marina Harbor, consent
may not be unreasonably withheld and any subsequent
transfer following foreclosure or transfer by deed in
lieu of foreclosure is not subject to the prior
consent of the lessor, provided that the subsequent
transferee expressly agrees in writing to assume the
obligations of the Lease;
(I) With respect to the ground lease covering the
Mortgaged Property known as Marina Harbor, the ground
lessor has retained the right to approve subleases in
excess of one year.
