EXECUTION COPY
UBS MORTGAGE LOAN PURCHASE AGREEMENT
Mortgage Loan Purchase Agreement, dated as of May 25, 2004 (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
2004-C4, Commercial Mortgage Pass-Through Certificates, Series 2004-C4. 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 (the "Pooling and Servicing Agreement"), to be
dated as of May 11, 2004, between the Purchaser, as depositor, Wachovia Bank,
National Association, as master servicer (the "Master Servicer"), Lennar
Partners, Inc., as special servicer (the "Special Servicer") and Xxxxx Fargo
Bank, N.A., as trustee (the "Trustee"). 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 (USA) 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 $557,716,129 (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 June
7, 2004 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 Fee Rate),
for the period from and including May 11, 2004 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 39.50585%
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 in and to the Mortgage
Loans identified on the Mortgage Loan Schedule as of such date (other than the
primary servicing rights). 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 (or portions thereof) to
be delivered by the Trustee to (x) upon request, the Master Servicer (at the
expense of the Trustee), within 10 Business Days of such request, and (y) with
respect to the Mortgage File for the Garden State Plaza Loan Group, the Garden
State Plaza Non-Trust Noteholders, at the expense of the initial Garden State
Plaza Noteholders; 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/Filing 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 or
filing, as applicable, information is available to the Recording/Filing Agent),
cause (i) each assignment of Mortgage, each assignment of Assignment of Leases
and, solely with respect to nursing facilities and hospitality properties
(identified on Schedule VI to the Pooling and Servicing Agreement),
-2-
each assignment of Uniform Commercial Code financing statement, in favor of, and
delivered as part of the related Mortgage File to, the Trustee, to be submitted
for recordation or filing, as the case may be, in the appropriate public office
for real property records or, solely with respect to nursing facilities and
hospitality properties (identified on Schedule VI to the Pooling and Servicing
Agreement), Uniform Commercial Code financing statements, as appropriate, and
(ii) such assignments to be delivered to the Trustee following their return by
the applicable public recording or filing office, as the case may be, 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 or unfiled, as the case may be, 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, filing 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, filing or
delivery performed by the Trustee at the Seller's request and the fees of the
Recording/Filing Agent.
(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 the related mortgagor
delivered in connection with the closing of such Mortgage Loan, escrow
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, leases for tenants
representing 25% or more of the annual income with respect to the related
Mortgaged Property, final seismic report and property management agreements, but
in each case, only if the subject document (a) was in fact obtained in
connection with the origination of such Mortgage Loan, (b) relates to the
administration or servicing of such Mortgage Loan, (c) 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 (d) 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, 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
-3-
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(h) 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(h) 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) and provide the
Seller with a certificate (the "Master Servicer Certification") within 90 days
of the Closing Date acknowledging its receipt of such documents actually
received; provided that such review shall be limited to identifying the document
received, the 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). 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 first anniversary of 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 to the
Master Servicer for deposit in the Pool Custodial Account the Initial Deposits
relating to the Mortgage Loans.
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
-4-
(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.
(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.
-5-
In addition, the Seller hereby further represents and warrants to, and
covenants with, the Purchaser, as of the date hereof, that:
(i) 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.
(ii) 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.
(iii) 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.
(iv) 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.
(v) 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
-6-
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.
(vi) 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.
(vii) 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.
(viii) 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.
(ix) 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.
-7-
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).
(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 (x) of the
definition of Mortgage File has not been executed 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 materially and
adversely affects the value of the Mortgage Loan at the time of such notice,
then such Document Defect shall constitute a "Material Document Defect" or such
Breach shall constitute a "Material Breach", as the case may be. Then,
-8-
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)), (A) not later than 90 days after
(1) the Seller and the Purchaser have agreed upon the existence of such Material
Document Defect or Material Breach or (2) a court of competent jurisdiction
makes a final non-appealable determination 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
(either such 90-day period, in the case of (A) or (B), as applicable, 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 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, then the Seller shall have such
additional 90-day 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
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
-9-
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) [Reserved.]
(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), 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 interests of the Purchaser or the
Certificateholders in any 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 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.
-10-
(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) and the last sentence 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 judicial decision; provided that, in the event there is a legal action for
determining the existence of a Material Breach or a Material Document Defect
with respect to any Mortgage Loan, such legal action 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 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
substantially all 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
-11-
Section 5(a). 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
judicial decision, 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) that are: (i)
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
with respect to the subject Material Breach or Material Document Defect, as the
case may be; and (ii) directly attributable to the enforcement of the rights of
the Trust 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 legal 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 judicial decision 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 by the Master Servicer, the Special Servicer
and/or the Trustee in connection with the subject litigation; 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 judicial decision 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 all costs and expenses reasonably incurred in connection with that judicial
determination; 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 judicial decision 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 judicial determination, multiplied by (ii) a fraction, the numerator of
which is the excess of the amount determined by judicial decision 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 a judicial
decision), 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
-12-
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.
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.
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:
-13-
(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;
(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
-14-
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-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
-15-
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)
above, 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 39.50585% 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 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
-16-
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 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.
-17-
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, 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 WITH RESPECT TO MATTERS ARISING OUT OF OR
RELATING TO THIS AGREEMENT; (II) AGREES THAT ALL CLAIMS WITH RESPECT TO SUCH
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE OR
FEDERAL COURTS; (III) WAIVES, TO THE FULLEST POSSIBLE EXTENT, THE DEFENSE OF AN
INCONVENIENT FORUM; 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.
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.
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
-18-
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.
-19-
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: Executive 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: Executive Director
Address for Notices:
1285 Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxxxx
Telecopier No.: (000) 000-0000
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
EXHIBIT A
MORTGAGE LOAN SCHEDULE
[See Attached]
A-1
UBS MORTGAGE LOAN SCHEDULE
MORTGAGE
LOAN
NUMBER PROPERTY NAME ADDRESS CITY STATE ZIP CODE
-------- ---------------------------------- ---------------------------------- -------------- ----- --------
1 Westfield Shoppingtown Garden 0 Xxxxxx Xxxxx Xxxxx Xxxxxxx XX 00000
Xxxxx Xxxxx
0 Xxxx Xxxx Xxxx 0000 Xxxx Xxxx Xxxx Xxxxxxxx XX 00000
7 Enterprise Technology Center 000 Xxxxxxxxxx Xxx Xxxxxx Xxxxxx XX 00000
9 Sirata Beach Resort & Conference 0000-0000 Xxxx Xxxxxxxxx Xx. Xxxx Xxxxx XX 00000
Center
11 Lembi Portfolio - Civic Properties Various San Francisco CA Various
DE
12 000-000 Xxxxx Xxxxx Xxxxx 000-000 Xxxxx Xxxxx Xxxxx Xxxxxxx Xxxxx XX 00000
00 Xxxxx Xxxx Apartments 14,16,18 and 00 Xxxx 000xx Xxxxxx Xxx Xxxx XX 00000
14 000 Xxxxxxx Xxxxx Xxxxx 000 Xxxxxxx Xxxxx Xxxxx Xxxxxxxxxxxx XX 00000
00 Xxxxxxxx Xxxxx 0000, 2455, 2461, 2465, 2471, Xxxxxxxxxx XX 00000
2475, 2481, 2491 and 2495 XxXxxxxx
Xxxxx Xxxx, 0000 and 0000
Xxxxxxxxxx Xxxx
17 Regal Cinema 0000 Xxxxxxx Xxxx Xxxxxxx XX 00000
21 0000 Xxxxxxx Xxxx 0000 Xxxxxxx Xxxx Xxxxxxx XX 00000
22 North Xxxxx Retail 000-000 Xxxxxx Xxxxxx Xxx Xxxx XX 00000
00 Xxxxxxxx Xxxx Apartments 000-000 Xxxxx Xxxx Xxxxxxx XX 00000
24 Lembi Portfolio - Bay Citi Various San Francisco CA Various
Properties II DE
26 Pico Xxxxxx Commerce Center I 0000 Xxxxxxx Xxxx Xxxx Xxxxxx XX 00000
27 Artesia Apartments 0000 Xxxx Xxxxxxx Xxxxxxxxx Xxxx Xxxxx XX 00000
28 Plantation Xxxxxxx Apartments 7201, 7221, 7261, 7301 and 7321 Plantation FL 00000
Xxxxxxxxx 00xx Xxxxxx
30 Lembi Portfolio - LRL Citigroup Various Xxx Xxxxxxxxx XX 00000
Properties II DE
32 Xxxxxxxx Building 000-000 Xxxxxxx Xxxx Xxxxx Xxxxx XX 00000
34 Cancun Apartments 0000 Xxxx Xxxx Xxxxxxx XX 00000
36 0 Xxxxxxxxxx Xxxxx 0 Xxxxxxxxxx Xxxxx Xxxxxxx XX 00000
39 Winbranch Apartments 0000 Xxxxxxxxxx Xxxx Xxxxxxx XX 00000
40 Holiday Inn Express - Sorrento 0000 Xxxx Xxxxxxxxx Xxx Xxxxx XX 00000
Valley
51 FedEx Building 0 Xxxxx Xxxx Xxxxxxx Xxxxxxxxxxx XX 00000
00 Xx Xxxxxx Xxx - Xxx Xxxx 0000 Xxxxx Xxxxxx Xxx Xxxxx XX 00000
00 Xxxxx Xxxxxxxxx - 000 Xxxxxxxx 000 Xxxxxxxx Xxxxxx Xxx Xxxxxxxxx XX 00000
56 Walgreens - Humble 0000 XX 0000 Xxxx Xxxxxx XX 00000
58 Rite Aid - Westlake 00000 Xxxxxx Xxxxx Xxxx Xxxxxxxx XX 00000
61 Rite Aid - Hermiston 000 Xxxxx Xxxxxxx 000 Xxxxxxxxx XX 00000
64 Cayuga Professional 0000 Xxxxxxxxxxx Xxxx Xxxxxx XX 00000
66 SaveRite - Douglasville 0000 Xxxxx-Xxxxxxxxxxxx Xxxxxxx Xxxxxxxxxxxx XX 00000
68 Walgreens - Huffmeister 00000 XX 000 Xxxxxxx XX 00000
71 Rite Aid - Monroe 0000 Xxxxxxxxxx Xxxxxx Xxxxxx XX 00000
74 Shadowwood MHP 0000 Xxxxx Xxxxxx Xxxxxx Xxxxxxxxx XX 00000
76 Walgreens - Saginaw 000 Xxxxxxx Xxxxxxxxx Xxxxxxx XX 00000
00 Xxxxx Xxxx Self Storage 0000 Xxxxx Xxxx Xxxxxxxxxx XX 00000
91 Lembi Portfolio - 0000 00xx Xxxxxx 0000 00xx Xxxxxx Xxx Xxxxxxxxx XX 00000
94 Eckerd - Lafayette 0000 Xxxx Xxxxxx Xxxxxxxxx XX 00000
96 Walgreens - Indianapolis 0000 Xxxxx Xxxxxxxx Xxxx Xxxxxxxxxxxx XX 00000
A-2
MORTGAGE
LOAN CUT-OFF DATE MONTHLY P&I REMAINING TERM TO
NUMBER BALANCE PAYMENT MORTGAGE RATE MATURITY
-------- -------------- ----------- ------------- -----------------
1 130,000,000.00 546,949.12 4.97960 121
4 116,814,657.55 522,936.20 3.46250 59
7 36,500,000.00 245,083.91 6.44000 84
9 24,500,000.00 173,473.61 7.02000 96
11 18,777,000.00 88,049.79 5.55000 60
12 16,682,062.14 95,871.19 5.60000 119
13 16,000,000.00 98,036.57 6.20400 120
14 15,500,000.00 93,529.09 6.06000 120
16 13,900,000.00 88,315.02 6.55000 120
17 11,403,000.00 87,860.59 6.92000 181
21 10,600,000.00 69,033.48 6.79000 120
22 10,000,000.00 58,230.30 5.73000 120
23 10,000,000.00 58,739.00 5.81000 120
24 9,938,000.00 46,601.63 5.55000 60
26 9,120,000.00 60,491.95 6.97000 120
27 8,786,314.40 54,092.27 5.51000 119
28 8,650,000.00 53,964.75 6.37500 61
30 8,275,000.00 38,803.43 5.55000 60
32 7,800,000.00 49,660.93 6.57000 121
34 7,579,463.21 49,199.46 6.05000 118
36 7,200,000.00 44,004.37 6.18000 120
39 6,800,000.00 39,769.39 5.77000 120
40 6,440,000.00 45,969.48 7.11000 120
51 4,495,672.27 27,502.73 6.18000 119
53 4,400,000.00 31,126.36 7.01000 120
55 3,900,000.00 18,288.02 5.55000 60
56 3,800,000.00 16,984.33 5.29000 59
58 3,504,378.26 32,523.25 8.59500 207
61 3,216,470.46 29,851.25 8.59500 207
64 3,100,000.00 19,390.68 6.40000 120
66 3,050,000.00 26,854.64 6.67000 180
68 3,000,000.00 19,159.76 6.60000 120
71 2,789,107.25 25,885.00 8.59500 207
74 2,400,000.00 15,419.25 5.97000 120
76 2,397,610.79 14,389.21 6.00000 119
81 2,076,857.36 13,022.64 5.70000 119
91 1,610,000.00 7,549.67 5.55000 60
94 1,467,359.94 8,889.14 6.08000 118
96 1,243,175.63 7,945.62 5.90000 119
MORTGAGE
LOAN REMAINING AMORTIZATION
NUMBER MATURITY DATE TERM INTEREST ACCRUAL BASIS
-------- ------------- ---------------------- ----------------------
1 6/6/2014 0 Act/360
4 4/11/2009 359 Act/360
7 5/11/2011 300 Act/360
9 5/11/2012 300 Act/360
11 5/11/2009 0 Act/360
12 4/11/2014 359 Act/360
13 5/11/2014 360 Act/360
14 5/11/2014 360 Act/360
16 5/11/2014 360 Act/360
17 6/11/2019 240 Act/360
21 5/11/2014 360 Act/360
22 5/11/2014 360 Act/360
23 5/11/2014 360 Act/360
24 5/11/2009 0 Act/360
26 5/11/2014 360 Act/360
27 4/11/2014 299 Act/360
28 6/11/2009 360 Act/360
30 5/11/2009 0 Act/360
32 6/11/2014 360 Act/360
34 3/11/2014 298 Act/360
36 5/11/2014 360 Act/360
39 5/11/2014 360 Act/360
40 5/11/2014 300 Act/360
51 4/11/2014 359 Act/360
53 5/11/2014 300 Act/360
55 5/11/2009 0 Act/360
56 4/11/2009 0 Act/360
58 8/10/2021 207 30/360
61 8/10/2021 207 30/360
64 5/11/2014 360 Act/360
66 5/11/2019 180 Act/360
68 5/11/2014 360 Act/360
71 8/10/2021 207 30/360
74 5/11/2014 300 Act/360
76 4/11/2014 359 Act/360
81 4/11/2014 299 Act/360
91 5/11/2009 0 Act/360
94 3/11/2014 358 Act/360
96 4/11/2014 299 Act/360
A-3
MORTGAGE
LOAN ADMINISTRATIVE PRIMARY MORTGAGE LOAN
NUMBER COST RATE SERVICING FEE GROUND LEASE SELLER
-------- -------------- ------------- ------------ -------------
1 0.0366 0.0350 Fee Simple UBS
4 0.0316 0.0300 Fee Simple UBS
7 0.0316 0.0300 Fee Simple UBS
9 0.0316 0.0300 Fee Simple UBS
11 0.0316 0.0300 Fee Simple UBS
12 0.0316 0.0300 Fee Simple UBS
13 0.0316 0.0300 Fee Simple UBS
14 0.0316 0.0300 Fee Simple UBS
16 0.0316 0.0300 Leasehold UBS
17 0.0316 0.0300 Fee Simple UBS
21 0.0316 0.0300 Fee Simple UBS
22 0.0316 0.0300 Fee Simple UBS
23 0.0316 0.0300 Fee Simple UBS
24 0.0316 0.0300 Fee Simple UBS
26 0.0316 0.0300 Fee Simple UBS
27 0.0316 0.0300 Fee Simple UBS
28 0.0316 0.0300 Fee Simple UBS
30 0.0316 0.0300 Fee Simple UBS
32 0.0316 0.0300 Fee Simple UBS
34 0.0316 0.0300 Fee Simple UBS
36 0.0316 0.0300 Fee Simple UBS
39 0.0316 0.0300 Fee Simple UBS
40 0.0316 0.0300 Fee Simple UBS
51 0.0316 0.0300 Fee Simple UBS
53 0.0316 0.0300 Fee Simple UBS
55 0.0316 0.0300 Fee Simple UBS
56 0.0316 0.0300 Fee Simple UBS
58 0.0316 0.0300 Fee Simple UBS
61 0.0316 0.0300 Fee Simple UBS
64 0.0316 0.0300 Fee Simple UBS
66 0.0316 0.0300 Fee Simple UBS
68 0.0316 0.0300 Fee Simple UBS
71 0.0316 0.0300 Fee Simple UBS
74 0.0316 0.0300 Fee Simple UBS
76 0.0316 0.0300 Fee Simple UBS
81 0.0316 0.0300 Fee Simple UBS
91 0.0316 0.0300 Fee Simple UBS
94 0.0316 0.0300 Leasehold UBS
96 0.0316 0.0300 Fee Simple UBS
MORTGAGE
LOAN
NUMBER DEFEASANCE ARD MORTGAGE LOAN ANTICIPATED REPAYMENT DATE
-------- ----------------- ----------------- --------------------------
1 Defeasance No N/A
4 Defeasance No N/A
7 Defeasance No N/A
9 Defeasance No N/A
11 Defeasance No N/A
12 Defeasance No N/A
13 Defeasance No N/A
14 Defeasance No N/A
16 Defeasance No N/A
17 Defeasance No N/A
21 Yield Maintenance No N/A
22 Defeasance No N/A
23 Defeasance No N/A
24 Defeasance No N/A
26 Defeasance No N/A
27 Defeasance No N/A
28 Defeasance No N/A
30 Defeasance No N/A
32 Defeasance No N/A
34 Defeasance No N/A
36 Defeasance No N/A
39 Defeasance No N/A
40 Defeasance No N/A
51 Defeasance No N/A
53 Defeasance No N/A
55 Defeasance No N/A
56 Defeasance No N/A
58 Defeasance No N/A
61 Defeasance No N/A
64 Defeasance No N/A
66 Defeasance No N/A
68 Defeasance No N/A
71 Defeasance No N/A
74 Defeasance No N/A
76 Defeasance No N/A
81 Yield Maintenance No N/A
91 Defeasance No N/A
94 Defeasance No N/A
96 Defeasance No N/A
A-4
MORTGAGE
LOAN
NUMBER ARD SPREAD CROSS COLLATERALIZED MORTGAGE LOAN SELLER LOAN ID
-------- ---------- -------------------- ----------------------------
1 N/A No LBUBS1
4 N/A No 10291
7 N/A No 10250
9 N/A No 10214
11 N/A Yes (UBS-A) 10242a
12 N/A No 10248
13 N/A No 9876
14 N/A No 10295
16 N/A No 10179
17 N/A No 10213
21 N/A No 10154
22 N/A No 10174
23 N/A No 10266
24 N/A Yes (UBS-A) 10242b
26 N/A No 9511
27 N/A No 10229
28 N/A No 10121
30 N/A Yes (UBS-A) 10242c
32 N/A No 10015
34 N/A No 10157
36 N/A No 10215
39 N/A No 10245
40 N/A No 10307
51 N/A No 10071
53 N/A No 10306
55 N/A Yes (UBS-A) 10242d
56 N/A No 10191a
58 N/A No RA-1
61 N/A No XX-0
00 X/X Xx 00000
66 N/A No 10254
68 N/A No 10191b
71 N/A No XX-0
00 X/X Xx 00000
76 N/A No 10160
81 N/A No 10180
91 N/A Yes (UBS-A) 10242e
94 N/A No 10036
96 N/A No 10142
A-5
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 its Due Date in May 2004.
(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,
B-1
liquidation, voidable 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. If such Mortgage
Loan has a Cut-off Date Balance of $15 million or more, the related
Mortgagor or another Person 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; and (C) 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, the related Mortgagor or such other Person 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. As of the date of origination,
subject to the limitations and exceptions as to enforceability set forth in
paragraph (v) above, there was no valid offset, defense, counterclaim or
right to 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, subject to
the limitations and exceptions as to enforceability set forth in paragraph
(v) above, their 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..
(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
B-2
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 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 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
related Due Date in May 2004 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
B-3
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.
(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 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 a tenant under a lease
is 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
B-4
Property and (2) the outstanding principal balance of such Mortgage Loan or
the portion thereof allocable to such Mortgaged Property), (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 a tenant
under a lease is 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; 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 located in the State of California or in
"seismic zone" 3 or 4, then: (A) 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
B-5
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, 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 the Seller has no actual knowledge. The Seller has
not 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 directo secure any other
promissory note or debt (other than another Mortgage Loan in the Trust
Fund).
(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
B-6
Treasury regulations section 1.1001-3, (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 transaction screens, or one or more updates of a previously
conducted environmental assessment or transaction screen, 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), transaction screen(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);
all of such environmental site assessments and transaction screens met ASTM
requirements to the extent set forth in such report; and none of the above
referenced 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 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.
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
B-7
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.
(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.
B-8
(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.
(xxvii) Mortgagor Concentration. 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 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.
(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) delivery of substitute real property collateral, or (D) 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
(E) 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
B-9
performed by such originator in the origination of comparable mortgage
loans 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 upon such Mortgaged Property to any
material extent.
(xxxii) Property Financial Statements. The related Mortgagor has
covenanted in the related Mortgage Loan documents to deliver to the
mortgagee annual operating statements and rent rolls of each related
Mortgaged Property. If such Mortgage Loan had an original principal balance
greater than $15 million, the related Mortgagor has covenanted to provide
such operating statements and rent rolls on a quarterly basis.
(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.
B-10
(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.
(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,
B-11
(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;
B-12
(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
B-13
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
B-14
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 Wachovia, in its capacity
as a primary servicer, or (C) as has been terminated.
(l) Mechanics' and Materialmen's Liens. As of origination, (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 sixth 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.
(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
B-15
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 and has a Cut-off Date Balance of $15,000,000 or more, 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 by the Appraisal
Standards Board of the Appraisal Foundation, or (B) the
B-16
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.
B-17
SCHEDULE I
LB-UBS 2004-C4
EXCEPTIONS TO REPRESENTATIONS AND WARRANTIES
CONTROL
NUMBER PROPERTY ISSUE
--------------------------------------------------------------------------------------------------------------
EXCEPTIONS TO REPRESENTATION (V): LOAN DOCUMENT STATUS.
--------------------------------------------------------------------------------------------------------------
12 000-000 Xxxxx Xxxxx Xxxxx There is a springing full recourse to the
borrower and Xxxxxx X. Xxxxxx if the borrower
does not deliver possession under the Coach or
Swatch Lease and Coach and/or Swatch terminates
its lease as a result thereof. Recourse will
"burn off" if the borrower re-lets the space to
tenants acceptable to the lender with credit
similar to Coach and/or Swatch and underwritten
net cash flow is equal to or greater than Coach
and/or Swatch; provided, however, if the
re-underwritten net cash flow is less than the
underwritten net cash flow then lender agrees to
reduce the recourse liability to an amount
calculated in accordance with the loan documents.
--------------------------------------------------------------------------------------------------------------
58 Rite Aid - Westlake No warm body recourse carveouts.
61 Rite Aid - Hermiston
71 Rite Aid - Monroe
--------------------------------------------------------------------------------------------------------------
11 Lembi Portfolio - Civic Properties DE The loans are full recourse to the principals of
the related borrower and such principals have
executed guarantees of payment.
24 Lembi Portfolio - Bay Citi Properties II DE
30 Lembi Portfolio - LRL Citigroup Porperties XX XX
00 Xxxxx Xxxxxxxxx - 000 Xxxxxxxx
00 Lembi Portfolio - 0000 00xx Xxxxxx
--------------------------------------------------------------------------------------------------------------
27 Artesia Apartments The loan is fully recourse to a principal of the
borrower.
--------------------------------------------------------------------------------------------------------------
B-18
CONTROL
NUMBER PROPERTY ISSUE
--------------------------------------------------------------------------------------------------------------
All Properties With respect to the non-recourse carveout
guarantee concerning fraud, certain of the
guarantors have only agreed to be, 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.
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.
--------------------------------------------------------------------------------------------------------------
4 Town East Mall The amount of "all risk" insurance is equal to
the actual replacement value (exclusive of costs
of excavations, foundations, underground
utilities and footings) with a waiver of
depreciation (excluding the land value) without
reference to the loan amount.
Borrower will maintain workers' compensation,
motor vehicle and earthquake insurance coverage,
pursuant to policies issued by either (A) one or
more financially sound and responsible insurance
companies authorized to do business in the state
in which the property is located and having a
claims paying ability rating of "A" or better by
S&P or (B) a syndicate of insurers through which
(1) at least 50% of claims coverage shall be with
one or more carriers having a
claims-paying-ability rating by A.M. Best of
"A-X" or better, (2) subject to the requirement
set forth in (B)(1) above, at least 90% of claims
coverage (inclusive of the coverage provided by
carriers described in (1) above) shall be with
one or more carriers having a claims paying
ability rating by A.M. Best of "A-VIII" or
better, (3) the balance of the coverage not to
exceed 10% of claims coverage is with one or
--------------------------------------------------------------------------------------------------------------
B-19
CONTROL
NUMBER PROPERTY ISSUE
--------------------------------------------------------------------------------------------------------------
more carriers having a claims paying ability
rating by A.M. Best of "A-VII" or better and (4)
provided, further, with regard to any insurance
carrier which has a claims-paying-ability rating
by A.M. Best of less than "A-X" such carrier may
not represent more than 5% of the total insurance
described in the loan agreement. Borrower will
maintain the commercial general liability
insurance coverage described in the loan
agreement with either (A) one or more other
domestic primary insurers having or a syndicate
of insurers through which at least 25% of the
coverage is with carriers having a
claims-paying-ability rating by S&P not lower
than "AA", at least 75% of the coverage
(including, for the purposes of such calculation,
the carriers which are rated not lower than "AA")
is with carriers having a claims-paying-ability
rating by S&P not lower than "A" and the balance
of the coverage is with carriers having a
claims-paying-ability rating by S&P not lower
than "A-" or (B) one or more carriers having a
claims paying ability rating by A.M. Best of
"A/X" or better. With respect to all other
insurance, except as set forth above, Borrower
will maintain (1) the insurance coverage
described in the loan agreement with either (A)
one or more financially sound and responsible
insurance companies authorized to do business in
the state in which the Property is located and
having a claims-paying-ability rating by S&P not
lower than "A" or (B) a syndicate of insurers
through which at least 75% of the coverage (if
there are 4 or fewer members of the syndicate) or
at least 60% of the coverage (if there are 5 or
more members of the syndicate) is with carriers
having a claims-paying-ability rating by S&P not
lower than "A" and the balance of the coverage
is, in each case, with insurers having a
claims-paying-ability rating by S&P of not lower
than "BBB", provided that in each case, the first
loss risk is borne by the carriers having a
claims-paying-rating by S&P of not lower than
"A", and (2) the flood hazard insurance coverage
described in the loan agreement with any
insurance company authorized by the United
--------------------------------------------------------------------------------------------------------------
B-20
CONTROL
NUMBER PROPERTY ISSUE
--------------------------------------------------------------------------------------------------------------
States government to issue such insurance
provided such flood hazard insurance is reinsured
by the United States government.
--------------------------------------------------------------------------------------------------------------
66 SaveRite - Douglasville The borrower is permitted to obtain insurance
from an insurer with a claims paying ability
rating of at least "BBB" by S&P or "A:XI" from
A.M. Best Company.
--------------------------------------------------------------------------------------------------------------
34 Cancun Apartments Borrower's existing umbrella liability policy,
set to expire on September 14, 2004, is provided
by a carrier which is currently rated "BBB-" by
S&P. Upon the earlier to occur of (x) September
14, 2004 and (y) the date, if any, on which the
insurance carrier on the existing policy is
downgraded below "BBB-", the borrower shall
immediately obtain and maintain such insurance
from a carrier with financial strength and claims
paying ability ratings of at least "A:X" from
A.M. Best Company and "A" from S&P.
--------------------------------------------------------------------------------------------------------------
58 Rite Aid - Westlake Business interruption insurance is not
specifically required. The liability program is
61 Rite Aid - Hermiston subject to a self insured retention of $2,000,000
by Rite Aid Corporation. The property insurance
71 Rite Aid - Monroe carriers are: Royal: BBB+/A-XIV (80%) and
Discover Re: A+/AXV (20%) on the first $5,000,000
and United States Fire: BBB/A-X on losses from
$5,000,000 to $10,000,000.
--------------------------------------------------------------------------------------------------------------
56 Walgreens - Humble Business interruption insurance was not required
because rent does not xxxxx within 12 months
68 Walgreens - Huffmeister following the event of a casualty.
76 Walgreens - Saginaw
96 Walgreens - Indianapolis
--------------------------------------------------------------------------------------------------------------
39 Winbranch Apartments The insurer in connection with the general
liability policy has a rating of "A:-XII" from
A.M. Best Company. The borrower has agreed to
replace
--------------------------------------------------------------------------------------------------------------
B-21
CONTROL
NUMBER PROPERTY ISSUE
--------------------------------------------------------------------------------------------------------------
such policy with an insurer that meets the
requirements under the mortgage loan documents at
the expiration of the policy or in the event the
rating of the insurer is downgraded.
--------------------------------------------------------------------------------------------------------------
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.
--------------------------------------------------------------------------------------------------------------
EXCEPTIONS TO REPRESENTATION (XVI): SUBORDINATE DEBT.
--------------------------------------------------------------------------------------------------------------
4 Town East Mall The borrower is allowed to incur unsecured
capital expenditures and trade debt in an
aggregate amount of up to $8,775,000.
--------------------------------------------------------------------------------------------------------------
21 0000 Xxxxxxx Xxxx The mortgage allows for a one time right to have
a mezzanine loan provided the borrower satisfies
certain conditions.
--------------------------------------------------------------------------------------------------------------
11 Lembi Portfolio - Civic Properties DE Full recourse subordinate debt secured by a
pledge of equity (mezzanine debt) was incurred in
24 Lembi Portfolio - Bay Citi Properties II DE the aggregate amount of $8,500,000. The
subordinate lender entered into an intercreditor
30 Lembi Portfolio - LRL Citigroup Porperties II DE agreement with the lender.
55 Lembi Portfolio - 621 Stockton
91 Lembi Portfolio - 0000 00xx Xxxxxx
--------------------------------------------------------------------------------------------------------------
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.
--------------------------------------------------------------------------------------------------------------
EXCEPTIONS TO REPRESENTATION (XIX): ENVIRONMENTAL CONDITIONS.
--------------------------------------------------------------------------------------------------------------
7 Enterprise Technology Center The initial tenant in common owner, who is
--------------------------------------------------------------------------------------------------------------
B-22
CONTROL
NUMBER PROPERTY ISSUE
--------------------------------------------------------------------------------------------------------------
initially controlled by the sponsor, together
with the sponsor, who is a natural person, and
the operating company of the sponsor have agreed
to indemnify the mortgagee under the mortgage
loan.
--------------------------------------------------------------------------------------------------------------
4 Town East Mall No natural person has agreed to indemnify lender
for hazardous substance losses.
--------------------------------------------------------------------------------------------------------------
58 Rite Aid - Westlake No warm body environmental indemnity.
61 Rite Aid - Hermiston
71 Rite Aid - Monroe
--------------------------------------------------------------------------------------------------------------
EXCEPTIONS TO REPRESENTATION (XXV): DUE ON ENCUMBRANCE.
--------------------------------------------------------------------------------------------------------------
4 Town East Mall The loan permits certain pledges of
non-controlling interests in the borrower without
rating agency confirmation.
The borrower is allowed to incur unsecured
capital expenditures and trade debt in an
aggregate amount of up to $8,775,000.
--------------------------------------------------------------------------------------------------------------
11 Lembi Portfolio - Civic Properties DE Full recourse subordinate debt secured by a
pledge of equity (mezzanine debt) was incurred in
24 Lembi Portfolio - Bay Citi Properties II DE the aggregate amount of $8,500,000. The
subordinate lender entered into an intercreditor
30 Lembi Portfolio - LRL Citigroup Porperties II DE agreement with the lender.
55 Lembi Portfolio - 621 Stockton
91 Lembi Portfolio - 0000 00xx Xxxxxx
--------------------------------------------------------------------------------------------------------------
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.
--------------------------------------------------------------------------------------------------------------
B-23
CONTROL
NUMBER PROPERTY ISSUE
--------------------------------------------------------------------------------------------------------------
EXCEPTIONS TO REPRESENTATION (XXVI): DUE-ON-SALE.
--------------------------------------------------------------------------------------------------------------
12 000-000 Xxxxx Xxxxx Xxxxx Loan documents permit (i) the existing members to
transfer ownership interests among each other so
long as either Xxxxxx X. Xxxxxx or Xxxxxx X.
Xxxxxx retains management or replacement
management is approved by the lender (Xxxxx Xxxxx
Xxxxxx is an approved manager), (ii) existing
members may transfer to family members so long as
there is no change in management or such
replacement management is approved by the lender
and (iii) Xxxxxx X. Xxxxxx may transfer his
non-managing membership interest to a real estate
company of which he maintains a 10% direct or
indirect ownership interest and controls the
company.
--------------------------------------------------------------------------------------------------------------
EXCEPTIONS TO REPRESENTATION (XXVII): MORTGAGOR CONCENTRATION.
--------------------------------------------------------------------------------------------------------------
0 Xxxxxxxxx Xxxxxxxxxxxx Xxxxxx Xxxxx Plaza Mortgage loan represents 18.4% of initial pool
balance.
--------------------------------------------------------------------------------------------------------------
4 Town East Mall Mortgage loan represents 8.3% of initial pool
balance.
--------------------------------------------------------------------------------------------------------------
11 Lembi Portfolio - Civic Properties DE Mortgage loans have affiliated borrowers and
represent, in the aggregate 3.0% of initial pool
24 Lembi Portfolio - Bay Citi Properties II DE balance.
30 Lembi Portfolio - LRL Citigroup Porperties XX XX
00 Xxxxx Xxxxxxxxx - 000 Xxxxxxxx
00 Lembi Portfolio - 0000 00xx Xxxxxx
--------------------------------------------------------------------------------------------------------------
EXCEPTIONS TO REPRESENTATION (XXVIII): WAIVERS; MODIFICATIONS.
--------------------------------------------------------------------------------------------------------------
58 Rite Aid - Westlake The lender has previously agreed to a transfer of
--------------------------------------------------------------------------------------------------------------
B-24
CONTROL
NUMBER PROPERTY ISSUE
--------------------------------------------------------------------------------------------------------------
61 Rite Aid - Hermiston the mortgaged property.
71 Rite Aid - Monroe
--------------------------------------------------------------------------------------------------------------
EXCEPTION TO REPRESENTATION (XXXI): QUALIFICATIONS; LICENSING; ZONING.
-------------------------------------------------------------------------------------------------------------
51 FedEx Building Mortgage only has a temporary certificate of
occupancy for the property. There is full
recourse to the principal of the mortgagor for
the loan until such time that a permanent
certificate of occupancy is obtained. In
addition, the principal of the mortgagor has
executed a completion guaranty for the
performance of all items necessary to obtain the
permanent certificate of occupancy.
--------------------------------------------------------------------------------------------------------------
34 Cancun Apartments Prior to the closing of the loan, the City of
Houston issued a Code Enforcement Summary Sheet
(the "Summary Sheet") which described certain
unresolved City of Houston code violations (the
"Code Violations") affecting the property. At
closing, the borrower delivered a certificate to
lender stating the following: (i) all of the Code
Violations were cured in accordance with the City
of Houston code requirements and (ii) many of the
Code Violations set forth on the Summary Sheet
occurred prior to March, 1998 and inspectors from
the City of Houston completed a physical
inspection of the Property in March, 1998 and
following the inspection, the City of Houston
issued certificates of occupancy for the property
indicating that no Code Violations existed at the
property at such time.
$250,000 was escrowed at closing to be held
by the lender unless, within three (3) years from
the date of closing, the borrower delivers
evidence, satisfactory to the lender, in its sole
but good faith discretion, that there are no code
violations (including, without limitation, zoning
ordinances and building and fire codes) affecting
the property. In the event, within three (3)
years from the date of
--------------------------------------------------------------------------------------------------------------
B-25
CONTROL
NUMBER PROPERTY ISSUE
--------------------------------------------------------------------------------------------------------------
the closing, the borrower is unable to satisfy
the conditions described in the preceding
sentence, such $250,000 will be held as
additional security for the remainder of the term
of the loan.
In addition, Arum Verma, an individual (the
non-recourse guarantor) executed a guaranty in
which he is liable to the extent lender suffers
any losses as a result of the failure by borrower
or any other party to comply with all applicable
laws, rules, regulations, covenants and
restrictions (including, without limitation,
zoning ordinances and building and for codes) now
or hereafter affecting the property. The guaranty
remains in effect for the term of the loan.
--------------------------------------------------------------------------------------------------------------
EXCEPTION TO REPRESENTATION (XXXIII): SINGLE PURPOSE ENTITY.
--------------------------------------------------------------------------------------------------------------
32 Xxxxxxxx Building The related borrower has the right to provide
unsecured financing to affiliates in an amount
not to exceed $3,000,000, in the aggregate, out
of excess cash flow with respect to the mortgaged
property.
--------------------------------------------------------------------------------------------------------------
EXCEPTION TO REPRESENTATION (XXXIX): FLOOD HAZARD INSURANCE.
--------------------------------------------------------------------------------------------------------------
0 Xxxxxxxxx Xxxxxxxxxxxx Xxxxxx Xxxxx Plaza Part of the property is located in flood zone X
in the national flood insurance program. The
borrower is required to obtain flood zone
insurance covering such portion.
--------------------------------------------------------------------------------------------------------------
EXCEPTION TO REPRESENTATION (XLII):LICENSES, PERMITS AND AUTHORIZATIONS.
--------------------------------------------------------------------------------------------------------------
51 FedEx Building Mortgage only has a temporary certificate of
occupancy for the property. There is full
recourse to the principal of the mortgagor for
the loan until such time that a permanent
certificate of occupancy is obtained. In
addition, the principal of the mortgagor has
executed a completion
--------------------------------------------------------------------------------------------------------------
B-26
CONTROL
NUMBER PROPERTY ISSUE
--------------------------------------------------------------------------------------------------------------
guaranty for the performance of all items
necessary to obtain the permanent certificate of
occupancy.
--------------------------------------------------------------------------------------------------------------
34 Cancun Apartments Prior to the closing of the loan, the City of
Houston issued a Code Enforcement Summary Sheet
(the "Summary Sheet") which described certain
unresolved City of Houston code violations (the
"Code Violations") affecting the property. At
closing, the borrower delivered a certificate to
lender stating the following: (i) all of the Code
Violations were cured in accordance with the City
of Houston code requirements and (ii) many of the
Code Violations set forth on the Summary Sheet
occurred prior to March, 1998 and inspectors from
the City of Houston completed a physical
inspection of the Property in March, 1998 and
following the inspection, the City of Houston
issued certificates of occupancy for the property
indicating that no Code Violations existed at the
property at such time.
$250,000 was escrowed at closing to be held
by the lender unless, within three (3) years from
the date of closing, the borrower delivers
evidence, satisfactory to the lender, in its sole
but good faith discretion, that there are no code
violations (including, without limitation, zoning
ordinances and building and fire codes) affecting
the property. In the event, within three (3)
years from the date of the closing, the borrower
is unable to satisfy the conditions described in
the preceding sentence, such $250,000 will be
held as additional security for the remainder of
the term of the loan.
In addition, Arum Verma, an individual (the
non-recourse guarantor) executed a guaranty in
which he is liable to the extent lender suffers
any losses as a result of the failure by borrower
or any other party to comply with all applicable
laws, rules, regulations, covenants and
restrictions (including, without limitation,
zoning ordinances
--------------------------------------------------------------------------------------------------------------
B-27
CONTROL
NUMBER PROPERTY ISSUE
--------------------------------------------------------------------------------------------------------------
and building and fire codes) now or hereafter
affecting the property. The guaranty remains in
effect for the term of the loan.
--------------------------------------------------------------------------------------------------------------
EXCEPTION TO REPRESENTATION (XLV): LEASEHOLD INTEREST ONLY.
--------------------------------------------------------------------------------------------------------------
94 Eckerd Lafayette Lender is entitled to a portion of the proceeds,
if any, remaining after payment to landlord of
the total fair market value of the land taken
with the ground lease in place and all severance
damage to the remainder of the land.
Leasehold mortgagee is entitled to a new lease
upon termination of the Lease. The lease is
silent with respect to bankruptcy.
--------------------------------------------------------------------------------------------------------------
EXCEPTION TO REPRESENTATION (XLVIII): DEFEASANCE.
--------------------------------------------------------------------------------------------------------------
58 Rite Aid - Westlake Defeasance is permitted prior to the second
anniversary of the Closing Date.
61 Rite Aid - Hermiston
71 Rite Aid - Monroe
--------------------------------------------------------------------------------------------------------------
EXCEPTIONS TO REPRESENTATION (L): MECHANICS' AND MATERIALMEN'S LIENS.
--------------------------------------------------------------------------------------------------------------
32 Xxxxxxxx Building During the build out of its space at the
mortgaged property, Cafeteria, a large tenant at
the property, encountered difficulties with its
general contractor and subsequently replaced such
general contractor and the architect who designed
the space. Liens were filed against the property
by various sub-contractors as well as the general
contractor in connection therewith. As of the
closing date, such liens have either been paid
and release, bonded or escrowed with the title
company.
--------------------------------------------------------------------------------------------------------------
51 FedEx Building There is a dispute between a contractor and the
seller from which the borrower purchased the
property. No mechanics' lien has been filed. The
title company currently holds money in escrow
pursuant to an escrow agreement between the
seller of the property and the borrower from
which the
--------------------------------------------------------------------------------------------------------------
B-28
CONTROL
NUMBER PROPERTY ISSUE
--------------------------------------------------------------------------------------------------------------
contractor will be paid when the dispute is
settled.
--------------------------------------------------------------------------------------------------------------
EXCEPTION TO REPRESENTATION (LI): DUE DATE.
--------------------------------------------------------------------------------------------------------------
0 Xxxxxxxxx Xxxxxxxxxxxx Xxxxxx Xxxxx Plaza The due date is the sixth day of each month.
--------------------------------------------------------------------------------------------------------------
58 Rite Aid - Westlake The due date is the tenth day of each month.
61 Rite Aid - Hermiston
71 Rite Aid - Monroe
--------------------------------------------------------------------------------------------------------------
EXCEPTION TO REPRESENTATION (LV): NO UNDISCLOSED COMMON OWNERSHIP.
--------------------------------------------------------------------------------------------------------------
11 Lembi Portfolio - Civic Properties DE The properties are directly or indirectly under
common ownership.
24 Lembi Portfolio - Bay Citi Properties II DE
30 Lembi Portfolio - LRL Citigroup Porperties XX XX
00 Xxxxx Xxxxxxxxx - 000 Xxxxxxxx
00 Lembi Portfolio - 0000 00xx Xxxxxx
--------------------------------------------------------------------------------------------------------------
56 Walgreens - Humble The properties have a common principal.
68 Walgreens - Huffmeister
--------------------------------------------------------------------------------------------------------------
58,61 and Rite Aid - Westlake The properties are directly or indirectly under
71 common ownership.
Rite Aid - Hermiston
Rite Aid - Monroe
--------------------------------------------------------------------------------------------------------------
X-00
XXXXXXX X-0
XXXXXXX XX XXXXXXXXXX, XXXXXXXXXX & XXXX
[Letterhead of Cadwalader, Xxxxxxxxxx & Xxxx]
June 7, 2004
Addressees listed on Schedule A
Re: LB-UBS Commercial Mortgage Trust 2004-C4, Commercial Mortgage Pass-Through
Certificates, Series 2004-C4
Ladies and Gentlemen:
We are rendering this opinion pursuant to Section 8(j) of the Mortgage Loan
Purchase Agreement, dated as of May 25, 2004 (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 $557,716,129 (the "UBS Mortgage Loans"), pursuant to the MLPA;
(ii) the execution by the Seller of the UBS Indemnification Agreement, dated as
of May 25, 2004 (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 May 25, 2004 (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 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:
(i) the MLPA;
(ii) the Underwriting Agreement;
(iii) the Indemnification Agreement;
(iv) the officer's certificate of Seller, dated the date hereof (the
"Seller Officer's Certificate"); and
(v) 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
-2-
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
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
-3-
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.
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,
-4-
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.
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,
-5-
SCHEDULE A
Structured Asset Securities Corporation II Standard and Poor's Ratings Services, a division of The
000 Xxxxxxx Xxxxxx XxXxxx-Xxxx Companies, Inc.
Xxx Xxxx, Xxx Xxxx 00000 00 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Brothers Inc. Xxxxx Fargo Bank, N.A.
000 Xxxxxxx Xxxxxx 0000 Xxx Xxxxxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000 Xxxxxxxx, Xxxxxxxx 00000-0000
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
C-1-1
EXHIBIT C-2
OPINION OF IN-HOUSE COUNSEL TO ADDITIONAL PARTY
[Letterhead of UBS]
June 7, 2004
TO THE PERSONS ON
THE ATTACHED SCHEDULE A
LB-UBS Commercial Mortgage Trust 2004-C4, Commercial Mortgage Pass-Through
Certificates, Series 2004-C4
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 May 25, 2004 (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.
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.
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
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
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
C-2-4
