MORTGAGE LOAN PURCHASE AGREEMENT
This Mortgage Loan Purchase Agreement, dated as of
November 1, 2007
(this "Agreement"), is entered into between Countrywide Commercial
Real Estate
Finance, Inc. (the "Seller") and Merrill Lynch Mortgage Investors,
Inc. (the
"Purchaser").
The Seller intends to sell, and the Purchaser intends to
purchase,
certain multifamily, commercial and manufactured housing community
mortgage
loans (the "Mortgage Loans") identified on the schedule (the
"Mortgage Loan
Schedule") annexed hereto as Schedule II. The Purchaser intends to
deposit the
Mortgage Loans, along with certain other mortgage loans (the "Other
Mortgage
Loans") acquired from other entities (the "Other Sellers"), into a
trust fund
(the "Trust Fund"), the beneficial ownership of which will be
evidenced by
multiple classes of mortgage pass-through certificates (the
"Certificates"). One
or more "real estate mortgage investment conduit" ("REMIC")
elections will be
made with respect to most of the Trust Fund. The Trust Fund will be
created and
the Certificates will be issued pursuant to a Pooling and Servicing
Agreement,
dated as of November 1, 2007 (the "Pooling and Servicing
Agreement"), among the
Purchaser as depositor, Wells Fargo Bank, National Association
("Wells Fargo")
and Midland Loan Services, Inc. as master servicers (each, in such
capacity, a
"Master Servicer"), LNR Partners, Inc. as special servicer (the
"Special
Servicer"), LaSalle Bank National Association as trustee (the
"Trustee") and
Wells Fargo as certificate administrator (the "Certificate
Administrator").
Capitalized terms used but not defined herein (including the
schedules attached
hereto) have the respective meanings set forth in the Pooling and
Servicing
Agreement.
The Purchaser has entered into an Underwriting Agreement,
dated as of
November 1, 2007 (the "Underwriting Agreement"), with Merrill
Lynch, Pierce,
Fenner & Smith Incorporated ("Merrill Lynch") for itself and as
representative
of Countrywide Securities Corporation ("Countrywide Securities"),
Natixis
Securities North America Inc. ("Natixis Securities"), Goldman,
Sachs & Co.
("Goldman Sachs") and Morgan Stanley & Co. Incorporated
("Morgan Stanley";
Merrill Lynch, Countrywide Securities, Natixis Securities, Goldman
Sachs and
Morgan Stanley, collectively, 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 (such
Certificates, the
"Publicly-Offered Certificates"). The Purchaser has also entered
into a
Certificate Purchase Agreement, dated as of November 1, 2007 (the
"Certificate
Purchase Agreement"), with Merrill Lynch for itself and as
representative of
Countrywide Securities (together in such capacity, the "Initial
Purchasers"),
whereby the Purchaser will sell to the Initial Purchasers all of
the remaining
Certificates (such Certificates, the "Private Certificates").
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 Mortgage Loan Schedule. The
Mortgage Loan
Schedule may be
amended to reflect the actual Mortgage Loans delivered to the
Purchaser pursuant
to the terms hereof. The Mortgage Loans are expected to have an
aggregate
principal balance of $1,190,758,018 (the "Countrywide Mortgage Loan
Balance")
(subject to a variance of plus or minus 5.0%) as of the close of
business on the
Cut-off Date, after giving effect to any payments due on or before
such date,
whether or not such payments are received. The Countrywide Mortgage
Loan
Balance, together with the aggregate principal balance of the Other
Mortgage
Loans as of the Cut-off Date (after giving effect to any payments
due on or
before such date, whether or not such payments are received), is
expected to
equal an aggregate principal balance (the "Cut-off Date Pool
Balance") of
$2,809,835,146 (subject to a variance of plus or minus 5%). The
purchase and
sale of the Mortgage Loans shall take place on November 14, 2007 or
such other
date as shall be mutually acceptable to the parties to this
Agreement (the
"Closing Date"). The consideration (the "Purchase Consideration")
for the
Mortgage Loans shall be equal to (i) approximately 100.49452% of
the Countrywide
Mortgage Loan Balance as of the Cut-off Date, plus (ii)
$2,653,881.35, which
amount represents the amount of interest accrued on the Countrywide
Mortgage
Loan Balance, as agreed to by the Seller and the Purchaser.
The Purchase Consideration shall be paid to the Seller or
its designee
by wire transfer in immediately available funds on the Closing
Date.
SECTION 2. Conveyance of Mortgage Loans.
(a) Effective as of the Closing Date, subject only to the
Seller's
receipt of the Purchase Consideration and the satisfaction or
waiver of the
conditions to closing set forth in Section 5 of this Agreement
(which conditions
shall be deemed to have been satisfied or waived upon the Seller's
receipt of
the Purchase Consideration), the Seller does hereby sell, transfer,
assign, set
over and otherwise convey to the Purchaser, without recourse
(except as set
forth in this Agreement), 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,
on a servicing released basis (subject to certain agreements
regarding servicing
as provided in the Pooling and Servicing Agreement, the
sub-servicing agreements
permitted thereunder and the Servicing Rights Purchase Agreement
(as defined in
Section 6(a)(iii) hereof)), together with all of the Seller's
right, title and
interest in and to the proceeds of any related title, hazard,
primary mortgage
or other insurance proceeds. 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 but collected after the Cut-off Date,
and
recoveries of principal and interest collected on or before the
Cut-off Date
(only in respect of principal and interest on the Mortgage Loans
due on or
before the Cut-off Date and principal prepayments thereon), shall
belong to, and
be promptly remitted to, the Seller.
(c) The Seller hereby represents and warrants that it has
or will
have, on behalf of the Purchaser, delivered to the Trustee (i) on
or before the
Closing Date, the documents and instruments specified below with
respect to each
Mortgage Loan that are Specially
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Designated Mortgage Loan Documents and (ii) on or before the date
that is 30
days after the Closing Date, the remaining documents and
instruments specified
below that are not Specially Designated Mortgage Loan Documents
with respect to
each Mortgage Loan (the documents and instruments specified below
and referred
to in clauses (i) and (ii) preceding, collectively, a "Mortgage
File"). All
Mortgage Files so delivered will be held by the Trustee in escrow
for the
benefit of the Seller at all times prior to the Closing Date. The
Mortgage File
with respect to each Mortgage Loan that is a Serviced Trust
Mortgage Loan shall
contain the following documents:
(i) (A) the original executed Mortgage Note for the
subject
Mortgage Loan, including any power of attorney related to the
execution
thereof (or a lost note affidavit and indemnity with a copy of
such
Mortgage Note attached thereto), together with any and all
intervening
endorsements thereon, endorsed on its face or by allonge
attached thereto
(without recourse, representation or warranty, express or
implied) to the
order of LaSalle Bank National Association, as trustee for the
registered
holders of ML-CFC Commercial Mortgage Trust 2007-9, Commercial
Mortgage
Pass-Through Certificates, Series 2007-9, or in blank, and (B)
in the case
of a Loan Combination, a copy of the executed Mortgage Note
for each
related Non-Trust Loan;
(ii) an original or copy of the Mortgage, together
with originals
or copies of any and all intervening assignments thereof, in
each case
(unless not yet returned by the applicable recording office)
with evidence
of recording indicated thereon or certified by the applicable
recording
office;
(iii) an original or copy of any related Assignment
of Leases (if
such item is a document separate from the Mortgage), together
with
originals or copies of any and all intervening assignments
thereof, in each
case (unless not yet returned by the applicable recording
office) with
evidence of recording indicated thereon or certified by the
applicable
recording office;
(iv) an original executed assignment, in recordable
form (except
for completion of the assignee's name and address (if the
assignment is
delivered in blank) and any missing recording information or a
certified
copy of that assignment as sent for recording), of (a) the
Mortgage, (b)
any related Assignment of Leases (if such item is a document
separate from
the Mortgage) and (c) any other recorded document relating to
the subject
Mortgage Loan otherwise included in the Mortgage File, in
favor of LaSalle
Bank National Association, as trustee for the registered
holders of ML-CFC
Commercial Mortgage Trust 2007-9, Commercial Mortgage
Pass-Through
Certificates, Series 2007-9 (or, in the case of a Loan
Combination, in
favor of LaSalle Bank National Association, as trustee for the
registered
holders of ML-CFC Commercial Mortgage Trust 2007-9, Commercial
Mortgage
Pass-Through Certificates, Series 2007-9, and in its capacity
as lead
lender on behalf of the holder(s) of the related Non-Trust
Loan(s)), or in
blank;
(v) an original assignment of all unrecorded
documents relating
to the Mortgage Loan (to the extent not already assigned
pursuant to clause
(iv) above) in favor of LaSalle Bank National Association, as
trustee for
the registered holders of ML-CFC Commercial Mortgage Trust
2007-9,
Commercial Mortgage Pass-Through Certificates,
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Series 2007-9 (or, in the case of a Loan Combination, in favor
of LaSalle
Bank National Association, as trustee for the registered
holders of ML-CFC
Commercial Mortgage Trust 2007-9, Commercial Mortgage
Pass-Through
Certificates, Series 2007-9, and in its capacity as lead
lender on behalf
of the holder(s) of the related Non-Trust Loan(s)), or in
blank;
(vi) originals or copies of any consolidation,
assumption,
substitution and modification agreements in those instances
where the terms
or provisions of the Mortgage or Mortgage Note have been
consolidated or
modified or the subject Mortgage Loan has been assumed;
(vii) the original or a copy of the policy or
certificate of
lender's title insurance or, if such policy has not been
issued or located,
an original or copy of an irrevocable, binding commitment
(which may be a
pro forma policy or a marked version of the policy that has
been executed
by an authorized representative of the title company or an
agreement to
provide the same pursuant to binding escrow instructions
executed by an
authorized representative of the title company) to issue such
title
insurance policy;
(viii) any filed copies or other evidence of filing
of any prior
UCC Financing Statements in favor of the originator of the
subject Mortgage
Loan or in favor of any assignee prior to the Trustee (but
only to the
extent the Seller had possession of such UCC Financing
Statements prior to
the Closing Date) and, if there is an effective UCC Financing
Statement in
favor of the Seller on record with the applicable public
office for UCC
Financing Statements, a UCC Financing Statement assignment, in
form
suitable for filing in favor of LaSalle Bank National
Association, as
trustee for the registered holders of ML-CFC Commercial
Mortgage Trust
2007-9, Commercial Mortgage Pass-Through Certificates, Series
2007-9, as
assignee (or, in the case of a Loan Combination, in favor of
LaSalle Bank
National Association, as trustee for the registered holders of
ML-CFC
Commercial Mortgage Trust 2007-9, Commercial Mortgage
Pass-Through
Certificates, Series 2007-9, and in its capacity as lead
lender on behalf
of the holder of the related Non-Trust Loan(s)), or in blank;
(ix) an original or a copy of any Ground Lease,
guaranty or
ground lessor estoppel;
(x) an original or a copy of any intercreditor
agreement relating
to permitted debt of the Mortgagor and any intercreditor
agreement relating
to mezzanine debt related to the Mortgagor;
(xi) an original or a copy of any loan agreement,
any escrow or
reserve agreement, any security agreement, any management
agreement, any
agreed upon procedures letter, any lockbox or cash management
agreements,
any environmental reports or any letter of credit (which
letter of credit
shall not be delivered in original form to the Trustee, but
rather to the
applicable Master Servicer), in each case relating to the
subject Mortgage
Loan;
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(xii) with respect to a Mortgage Loan secured by a
hospitality
property, a signed copy of any franchise agreement and/or
franchisor
comfort letter; and
(xiii) if such Trust Mortgage Loan is part of a Loan
Combination,
an original or a copy of the related Loan Combination
Co-Lender Agreement.
The foregoing Mortgage File delivery requirement shall be
subject to
Section 2.01(c) of the Pooling and Servicing Agreement.
(d) The Seller shall retain an Independent third party
(the
"Recording/Filing Agent") that shall, as to each Mortgage Loan,
promptly (and in
any event within 180 days following the later of the Closing Date
and the
delivery of each Mortgage, Assignment of Leases, recordable
document and UCC
Financing Statement to the Trustee) cause to be submitted for
recording or
filing, as the case may be, in the appropriate public office for
real property
records or UCC Financing Statements, each assignment of Mortgage,
assignment of
Assignment of Leases and any other recordable documents relating to
each such
Mortgage Loan in favor of the Trustee that is referred to in clause
(iv) of the
definition of "Mortgage File" and each UCC Financing Statement
assignment in
favor of the Trustee that is referred to in clause (viii) of the
definition of
"Mortgage File." Each such assignment and UCC Financing Statement
assignment
shall reflect that the recorded original should be returned by the
public
recording office to the Trustee following recording, and each such
assignment
and UCC Financing Statement assignment shall reflect that the file
copy thereof
should be returned to the Trustee following filing; provided that,
in those
instances where the public recording office retains the original
assignment of
Mortgage or assignment of Assignment of Leases, the
Recording/Filing Agent shall
obtain therefrom a certified copy of the recorded original. 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 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) All such other relevant documents and records that
(a) relate to
the administration or servicing of the Mortgage Loans, (b) are
reasonably
necessary for the ongoing administration and/or servicing of such
Mortgage Loans
by the applicable Master Servicer in connection with its duties
under the
Pooling and Servicing Agreement, and (c) are in the possession or
under the
control of the Seller, together with all unapplied escrow amounts
and reserve
amounts in the possession or under the control of the Seller that
relate to the
Mortgage Loans, shall be delivered or caused to be delivered by the
Seller to
the applicable Master Servicer (or, at the direction of such 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, legal or other due diligence analyses, credit
committee
5
briefs or memoranda or other internal approval documents or data or
internal
worksheets, memoranda, communications or evaluations.
The Seller agrees to use reasonable efforts to deliver to
the Trustee,
for its administrative convenience in reviewing the Mortgage Files,
a mortgage
loan checklist for each Mortgage Loan. The foregoing sentence
notwithstanding,
the failure of the Seller to deliver a mortgage loan checklist or a
complete
mortgage loan checklist shall not give rise to any liability
whatsoever on the
part of the Seller to the Purchaser, the Trustee or any other
person because the
delivery of the mortgage loan checklist is being provided to the
Trustee solely
for its administrative convenience.
(f) The Seller shall take such actions as are reasonably
necessary to
assign or otherwise grant to the Trust Fund the benefit of any
letters of credit
in the name of the Seller, which secure any Mortgage Loan.
(g) On or before the Closing Date, the Seller shall
provide to the
applicable Master Servicer, the initial data (as of the Cut-off
Date or the most
recent earlier date for which such data is available) contemplated
by the CMSA
Loan Setup File, the CMSA Loan Periodic Update File, the CMSA
Operating
Statement Analysis Report and the CMSA Property File.
SECTION 3. Representations, Warranties and Covenants of
Seller.
(a) The Seller hereby represents and warrants to and
covenants with
the Purchaser, as of the date hereof, that:
(i) The Seller is a corporation duly organized,
validly existing
and in good standing under the laws of the State of California
and the
Seller has taken all necessary corporate action to authorize
the execution,
delivery and performance of this Agreement by it, and has the
power and
authority to execute, deliver and perform this Agreement and
all
transactions contemplated hereby.
(ii) This Agreement has been duly and validly
authorized,
executed and delivered by the Seller, all requisite action by
the Seller's
directors and officers has been taken in connection therewith,
and
(assuming the due authorization, execution and delivery hereof
by the
Purchaser) this Agreement constitutes the valid, legal and
binding
agreement of the Seller, enforceable against the Seller in
accordance with
its terms, except as such enforcement may be limited by (A)
laws relating
to bankruptcy, insolvency, fraudulent transfer,
reorganization,
receivership, conservatorship or moratorium, (B) other laws
relating to or
affecting the rights of creditors generally, or (C) 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 Seller
and the Seller's performance and compliance with the terms of
this
Agreement will not (A) violate the Seller's certificate of
incorporation or
bylaws, (B) violate any law or regulation or any
administrative decree or
order to which it 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
6
instrument to which the Seller is a party or by which the
Seller is bound,
which default might have consequences that would, in the
Seller's
reasonable and good faith judgment, materially and adversely
affect the
condition (financial or other) or operations of the Seller or
its
properties or materially and adversely affect its performance
hereunder.
(iv) The Seller 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 Seller's reasonable and
good faith
judgment, materially and adversely affect the condition
(financial or
other) or operations of the Seller or its properties or
materially and
adversely affect its performance hereunder.
(v) The Seller is not a party to or bound by any
agreement or
instrument or subject to any certificate of incorporation,
bylaws or any
other corporate restriction or any judgment, order, writ,
injunction,
decree, law or regulation that would, in the Seller's
reasonable and good
faith judgment, materially and adversely affect the ability of
the Seller
to perform its obligations under this Agreement or that
requires the
consent of any third person to the execution of this Agreement
or the
performance by the Seller of its obligations under this
Agreement (except
to the extent such consent has been obtained).
(vi) No consent, approval, authorization or order of
any court or
governmental agency or body is required for the execution,
delivery and
performance by the Seller of or compliance by the Seller with
this
Agreement or the consummation of the transactions contemplated
by this
Agreement except as have previously been obtained, and no bulk
sale law
applies to such transactions.
(vii) None of the sale of the Mortgage Loans by the
Seller, the
transfer of the Mortgage Loans to the Trustee, and the
execution, delivery
or performance of this Agreement by the Seller, results or
will result in
the creation or imposition of any lien on any of the Seller's
assets or
property that would have a material adverse effect upon the
Seller's
ability to perform its duties and obligations under this
Agreement or
materially impair the ability of the Purchaser to realize on
the Mortgage
Loans.
(viii) There is no action, suit, proceeding or
investigation
pending or to the knowledge of the Seller, threatened against
the Seller in
any court or by or before any other governmental agency or
instrumentality
which would, in the Seller's good faith and reasonable
judgment, prohibit
its entering into this Agreement or materially and adversely
affect the
validity of this Agreement or the performance by the Seller of
its
obligations under this Agreement.
(ix) Under generally accepted accounting principles
("GAAP") and
for federal income tax purposes, the Seller will report the
transfer of the
Mortgage Loans to the Purchaser as a sale of the Mortgage
Loans to the
Purchaser in exchange for consideration consisting of a cash
amount equal
to the Purchase Consideration. 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
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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.
(x) The Prospectus Supplement contains all the
information that
is required to be provided in respect of the Seller (that
arise from its
role as "sponsor" (within the meaning of Regulation AB)), the
Mortgage
Loans, the related Mortgagors and the related Mortgaged
Properties pursuant
to Regulation AB. For purpose of this Agreement, "Regulation
AB" shall mean
Subpart 229.1100 - Asset Backed Securities (Regulation AB), 17
C.F.R.
Sections 229.1100-229.1123, as such may be amended from time
to time, and
subject to such clarification and interpretation as have been
provided by
the Commission in the adopting release (Asset-Backed
Securities, Securities
Act Release No. 33-8518, 70 Fed. Reg. 1,506-1,631 (Jan. 7,
2005)) or by the
staff of the Commission, or as may be provided by the
Commission or its
staff from time to time.
(b) The Seller hereby makes the representations and
warranties
contained in Schedule I hereto for the benefit of the Purchaser and
the Trustee
for the benefit of the Certificateholders as of the Closing Date
(unless a
different date is specified therein), with respect to (and solely
with respect
to) each Mortgage Loan, subject, however, to the exceptions set
forth on Annex A
to Schedule I of this Agreement.
(c) If the Seller receives written notice of a Document
Defect or a
Breach relating to a Mortgage Loan pursuant to Section 2.03(a) of
the Pooling
and Servicing Agreement, then the Seller shall, not later than 90
days from
receipt of such notice (or, in the case of a Document Defect or
Breach relating
to a Mortgage Loan not being a "qualified mortgage" within the
meaning of the
REMIC Provisions (a "Qualified Mortgage"), not later than 90 days
from any party
to the Pooling and Servicing Agreement discovering such Document
Defect or
Breach, provided the Seller receives such notice in a timely
manner), if such
Document Defect or Breach materially and adversely affects the
value of the
related Mortgage Loan or the interests of the Certificateholders
therein, cure
such Document Defect or Breach, as the case may be, in all material
respects,
which shall include payment of losses and any Additional Trust Fund
Expenses
associated therewith or, if such Document Defect or Breach (other
than omissions
due solely to a document not having been returned by the related
recording
office) cannot be cured within such 90-day period, (i) repurchase
the affected
Mortgage Loan (which, for the purposes of this clause (i), shall
include an REO
Loan) at the applicable Purchase Price (as defined in the Pooling
and Servicing
Agreement) not later than the end of such 90-day period or (ii)
substitute a
Qualified Substitute Mortgage Loan for such affected Mortgage Loan
(which, for
purposes of this clause (ii), shall include an REO Loan) not later
than the end
of such 90-day period (and in no event later than the second
anniversary of the
Closing Date) and pay the applicable Master Servicer for deposit
into its
Collection Account any Substitution Shortfall Amount in connection
therewith;
provided, however, that, unless the Document Defect or Breach would
cause the
Mortgage Loan not to be a Qualified Mortgage, if such Document
Defect or Breach
is capable of being cured but not within such 90-day period and the
Seller has
commenced and is diligently proceeding with the cure of such
Document Defect or
Breach within such 90-day period, the Seller shall have an
additional 90 days to
complete such cure (or, failing such cure, to repurchase or
substitute the
related Mortgage Loan (which, for purposes of such repurchase or
substitution,
8
shall include an REO Loan)); and provided, further, that with
respect to such
additional 90-day period, the Seller shall have delivered an
officer's
certificate to the Certificate Administrator setting forth the
reason(s) such
Document Defect or Breach is not capable of being cured within the
initial
90-day period and what actions the Seller is pursuing in connection
with the
cure thereof and stating that the Seller anticipates that such
Document Defect
or Breach will be cured within the additional 90-day period.
A Document Defect or Breach (which Document Defect or
Breach
materially and adversely affects the value of the related Mortgage
Loan or the
interests of the Certificateholders therein) as to a Mortgage Loan
that is
cross-collateralized and cross-defaulted with one or more other
Mortgage Loans
(each, a "Crossed Loan" and such Crossed Loans, collectively, a
"Crossed Loan
Group"), which Document Defect or Breach does not constitute a
Document Defect
or Breach, as the case may be, as to any other Crossed Loan in such
Crossed Loan
Group (without regard to this paragraph) and is not cured as
provided for above,
shall be deemed to constitute a Document Defect or Breach, as the
case may be,
as to each other Crossed Loan in the subject Crossed Loan Group for
purposes of
this paragraph and the Seller shall be required to repurchase or
substitute all
such Crossed Loans unless (1) the weighted average debt service
coverage ratio
for all the remaining Crossed Loans for the four calendar quarters
immediately
preceding such repurchase or substitution is not less than the
weighted average
debt service coverage ratio for all such Crossed Loans, including
the affected
Crossed Loan, for the four calendar quarters immediately preceding
such
repurchase or substitution, and (2) the weighted average loan
to-value ratio for
the remaining Crossed Loans, determined at the time of repurchase
or
substitution, based upon an appraisal obtained by the Special
Servicer at the
expense of the Seller shall not be greater than the weighted
average
loan-to-value ratio for all such Crossed Loans, including the
affected Crossed
Loan determined at the time of repurchase or substitution, based
upon an
appraisal obtained by the Special Servicer at the expense of the
Seller;
provided, that if such debt service coverage and loan-to-value
criteria are
satisfied, any other Crossed Loan (that is not the Crossed Loan
directly
affected by the subject Document Defect or Breach), shall be
released from its
cross-collateralization and cross-default provision so long as such
Crossed Loan
(that is not the Crossed Loan directly affected by the subject
Document Defect
or Breach) is held in the Trust Fund; and provided, further, that
the repurchase
or replacement of less than all such Crossed Loans and the release
of any
Crossed Loan from a cross-collateralization and cross-default
provision shall be
further subject to the delivery by the Seller to the Certificate
Administrator,
at the expense of the Seller, of an Opinion of Counsel to the
effect that such
release would not cause either of REMIC I or REMIC II to fail to
qualify as a
REMIC under the Code or result in the imposition of any tax on
"prohibited
transactions" or "contributions" after the Startup Day under the
REMIC
Provisions. In the event that one or more of such other Crossed
Loans satisfy
the aforementioned criteria, the Seller may elect either to
repurchase or
substitute for only the affected Crossed Loan as to which the
related Document
Defect or Breach exists or to repurchase or substitute for all of
the Crossed
Loans in the related Crossed Loan Group. All documentation relating
to the
termination of the cross-collateralization provisions of a Crossed
Loan being
repurchased shall be prepared at the expense of the Seller and,
where required,
with the consent of the related Mortgagor. For a period of two
years from the
Closing Date, so long as there remains any Mortgage File relating
to a Mortgage
Loan as to which there is any uncured Document Defect or Breach
known to the
Seller that existed as of the Closing Date, the Seller shall
provide, once every
90 days, the officer's certificate to the Certificate Administrator
described
above as to the reason(s) such Document Defect or Breach remains
9
uncured and as to the actions being taken to pursue cure; provided,
however,
that, without limiting the effect of the foregoing provisions of
this Section
3(c), if such Document Defect or Breach shall materially and
adversely affect
the value of such Mortgage Loan or the interests of the holders of
the
Certificates therein (subject to the second and third provisos in
the sole
sentence of the preceding paragraph), the Seller shall in all cases
on or prior
to the second anniversary of the Closing Date either cause such
Document Defect
or Breach to be cured or repurchase or substitute for the affected
Mortgage Loan
(for the avoidance of doubt, the foregoing two-year period shall
not be deemed
to be a time limitation on the Seller's right to cure a Document
Defect or
Breach as set forth in this Section 3). The delivery of a
commitment to issue a
policy of lender's title insurance as described in representation 8
set forth on
Schedule I hereto in lieu of the delivery of the actual policy of
lender's title
insurance shall not be considered a Document Defect or Breach with
respect to
any Mortgage File if such actual policy of insurance is delivered
to the Trustee
or a Custodian on its behalf not later than the 180th day following
the Closing
Date.
To the extent that the Seller is required to repurchase
or substitute
for a Crossed Loan hereunder in the manner prescribed above in this
Section 3(c)
while the Trustee continues to hold any other Crossed Loans in such
Crossed Loan
Group, the Seller and the Purchaser shall not enforce any remedies
against the
other's Primary Collateral (as defined below), but each is
permitted to exercise
remedies against the Primary Collateral securing its respective
Crossed Loan(s),
so long as such exercise does not materially impair the ability of
the other
party to exercise its remedies against the Primary Collateral
securing the
Crossed Loan(s) held thereby.
If the exercise by one party would materially impair the
ability of
the other party to exercise its remedies with respect to the
Primary Collateral
securing the Crossed Loan(s) held by such party, then the Seller
and the
Purchaser shall forbear from exercising such remedies until the
Mortgage Loan
documents evidencing and securing the relevant Crossed Loans can be
modified in
a manner consistent with this Agreement to remove the threat of
material
impairment as a result of the exercise of remedies or some other
mutually agreed
upon accommodation can be reached. Any reserve or other cash
collateral or
letters of credit securing the Crossed Loans shall be allocated
between such
Crossed Loans in accordance with the Mortgage Loan documents, or,
if the related
Mortgage Loan documents do not so provide, then on a pro rata basis
based upon
their outstanding Stated Principal Balances. Notwithstanding the
foregoing, if a
Crossed Loan is modified to terminate the related
cross-collateralization and/or
cross-default provisions, the Seller shall furnish to the
Certificate
Administrator an Opinion of Counsel that such modification shall
not cause an
Adverse REMIC Event.
For purposes hereof, "Primary Collateral" shall mean the
Mortgaged
Property directly securing a Crossed Loan and excluding any
property as to which
the related lien may only be foreclosed upon by exercise of
cross-collateralization provisions of such Mortgage Loans.
Notwithstanding any of the foregoing provisions of this
Section 3(c),
if there is a Document Defect or Breach (which Document Defect or
Breach
materially and adversely affects the value of the related Mortgage
Loan or the
interests of the Certificateholders therein) with respect to one or
more
Mortgaged Properties with respect to a Mortgage Loan, the Seller
shall not be
obligated to repurchase or substitute the Mortgage Loan if (i) the
affected
Mortgaged
10
Property(ies) may be released pursuant to the terms of any partial
release
provisions in the related Mortgage Loan documents (and such
Mortgaged
Property(ies) are, in fact, released) and, to the extent not
covered by the
applicable release price (if any) required under the related
Mortgage Loan
documents, the Seller pays (or causes to be paid) any additional
amounts
necessary to cover all reasonable out-of-pocket expenses reasonably
incurred by
the applicable Master Servicer, the Special Servicer, the Trustee,
the
Certificate Administrator or the Trust Fund in connection with such
release,
(ii) the remaining Mortgaged Property(ies) satisfy the
requirements, if any, set
forth in the Mortgage Loan documents and the Seller provides an
opinion of
counsel to the effect that such release would not cause either of
REMIC I or
REMIC II to fail to qualify as a REMIC under the Code or result in
the
imposition of any tax on "prohibited transactions" or
"contributions" after the
Startup Day under the REMIC Provisions and (iii) each Rating Agency
then rating
the Certificates shall have provided written confirmation that such
release
would not cause the then-current ratings of the Certificates rated
by it to be
qualified, downgraded or withdrawn.
The foregoing provisions of this Section 3(c)
notwithstanding, the
Purchaser's sole remedy (subject to the last sentence of this
paragraph) for a
breach of representation 30 set forth on Schedule I hereto shall be
the cure of
such breach by the Seller, which cure shall be effected through the
payment by
the Seller of such costs and expenses (without regard to whether
such costs and
expenses are material or not) specified in such representation that
have not, at
the time of such cure, been received by the applicable Master
Servicer or the
Special Servicer from the related Mortgagor and not a repurchase or
substitution
of the related Mortgage Loan. Following the Seller's remittance of
funds in
payment of such costs and expenses, the Seller shall be deemed to
have cured the
breach of representation 30 in all respects. To the extent any fees
or expenses
that are the subject of a cure by the Seller are subsequently
obtained from the
related Mortgagor, the cure payment made by the Seller shall be
returned to the
Seller. Notwithstanding the prior provisions of this paragraph, the
Seller,
acting in its sole discretion, may effect a repurchase or
substitution (in
accordance with the provisions of this Section 3(c) setting forth
the manner in
which a Mortgage Loan may be repurchased or substituted) of a
Mortgage Loan, as
to which representation 30 set forth on Schedule I has been
breached, in lieu of
paying the costs and expenses that were the subject of the breach
of
representation 30 set forth on Schedule I.
(d) In connection with any permitted repurchase or
substitution of one
or more Mortgage Loans contemplated hereby, upon receipt of a
certificate from a
Servicing Officer certifying as to the receipt of the applicable
Purchase Price
(as defined in the Pooling and Servicing Agreement) or Substitution
Shortfall
Amount(s), as applicable, in the applicable Master Servicer's
Collection
Account, and, if applicable, the delivery of the Mortgage File(s)
and the
Servicing File(s) for the related Qualified Substitute Mortgage
Loan(s) to the
Trustee and the applicable Master Servicer, respectively, (i) the
Trustee shall
be required to execute and deliver such endorsements and
assignments as are
provided to it by the applicable Master Servicer or the Seller, in
each case
without recourse, representation or warranty, as shall be necessary
to vest in
the Seller the legal and beneficial ownership of each repurchased
Mortgage Loan
or substituted Mortgage Loan, as applicable, (ii) the Trustee, the
applicable
Master Servicer and the Special Servicer shall each tender to the
Seller, upon
delivery to each of them of a receipt executed by the Seller, all
portions of
the Mortgage File and other documents pertaining to such Mortgage
Loan possessed
by it, and (iii) the applicable Master Servicer and the Special
Servicer
11
shall release to the Seller any Escrow Payments and Reserve Funds
held by it in
respect of such repurchased or deleted Mortgage Loan(s).
At the time a substitution is made, the Seller shall
deliver the
related Mortgage File to the Trustee and certify that the
substitute Mortgage
Loan is a Qualified Substitute Mortgage Loan.
No substitution of a Qualified Substitute Mortgage Loan
or Qualified
Substitute Mortgage Loans may be made in any calendar month after
the
Determination Date for such month. Periodic Payments due with
respect to any
Qualified Substitute Mortgage Loan after the related date of
substitution shall
be part of REMIC I, as applicable. No substitution of a Qualified
Substitute
Mortgage Loan for a deleted Mortgage Loan shall be permitted under
this
Agreement if, after such substitution, the aggregate of the Stated
Principal
Balances of all Qualified Substitute Mortgage Loans which have been
substituted
for deleted Mortgage Loans exceeds 10% of the aggregate Cut-off
Date Balance of
all the Mortgage Loans and the Other Mortgage Loans. Periodic
Payments due with
respect to any Qualified Substitute Mortgage Loan on or prior to
the related
date of substitution shall not be part of the Trust Fund or REMIC
I.
(e) This Section 3 provides the sole remedies available
to the
Purchaser, the Certificateholders, or the Trustee (on whose behalf
the
Certificate Administrator may act) on behalf of the
Certificateholders,
respecting any Document Defect in a Mortgage File or any Breach of
any
representation or warranty set forth in or required to be made
pursuant to this
Section 3.
SECTION 4. Representations, Warranties and Covenants of
the Purchaser.
In order to induce the Seller to enter into this Agreement, the
Purchaser hereby
represents, warrants and covenants for the benefit of the Seller as
of the date
hereof that:
(a) The Purchaser is a corporation duly organized,
validly existing
and in good standing under the laws of the State of Delaware and
the Purchaser
has taken all necessary corporate action to authorize the
execution, delivery
and performance of this Agreement by it, and has the power and
authority to
execute, deliver and perform this Agreement and all transactions
contemplated
hereby.
(b) This Agreement has been duly and validly authorized,
executed and
delivered by the Purchaser, all requisite action by the Purchaser's
directors
and officers has been taken in connection therewith, and (assuming
the due
authorization, execution and delivery hereof by the Seller) this
Agreement
constitutes the valid, legal and binding agreement of the
Purchaser, enforceable
against the Purchaser in accordance with its terms, except as such
enforcement
may be limited by (A) laws relating to bankruptcy, insolvency,
fraudulent
transfer, reorganization, receivership, conservatorship or
moratorium, (B) other
laws relating to or affecting the rights of creditors generally, or
(C) general
equity principles (regardless of whether such enforcement is
considered in a
proceeding in equity or at law).
(c) 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
12
the Purchaser's articles of incorporation or bylaws, (B) violate
any law or
regulation or any administrative decree or order to which it 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, which default might have consequences
that would,
in the Purchaser's reasonable and good faith judgment, materially
and adversely
affect the condition (financial or other) or operations of the
Purchaser or its
properties or have consequences that would materially and adversely
affect its
performance hereunder.
(d) The Purchaser is not a party to or bound by any
agreement or
instrument or subject to any certificate of incorporation, bylaws
or any other
corporate restriction or any judgment, order, writ, injunction,
decree, law or
regulation that would, in the Purchaser's reasonable and good faith
judgment,
materially and adversely affect the ability of the Purchaser to
perform its
obligations under this Agreement or that requires the consent of
any third
person to the execution of this Agreement or the performance by the
Purchaser of
its obligations under this Agreement (except to the extent such
consent has been
obtained).
(e) 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, under federal or
state law, 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.
(f) 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 a
sale of the Mortgage Loans to the Purchaser in exchange for
consideration
consisting of a cash amount equal to the aggregate Purchase
Consideration.
(g) There is no action, suit, proceeding or investigation
pending or
to the knowledge of the Purchaser, threatened against the Purchaser
in any court
or by or before any other governmental agency or instrumentality
which would
materially and adversely affect the validity of this Agreement or
any action
taken in connection with the obligations of the Purchaser
contemplated herein,
or which would be likely to impair materially the ability of the
Purchaser to
enter into and/or perform under the terms of this Agreement.
(h) The Purchaser 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 Purchaser's reasonable and good
faith judgment,
materially and adversely affect the condition (financial or other)
or operations
of the Purchaser or its properties or might have consequences that
would
materially and adversely affect its performance hereunder.
SECTION 5. Closing. The closing of the sale of the
Mortgage Loans (the
"Closing") shall be held at the offices of Thacher Proffitt &
Wood LLP 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 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) All documents specified in Section 6 of this
Agreement (the
"Closing Documents"), in such forms as are agreed upon and
acceptable to the
Purchaser, the Seller, the Underwriters and their respective
counsel in their
reasonable discretion, shall be duly executed and delivered by all
signatories
as required pursuant to the respective terms thereof;
(c) The Seller shall have delivered and released to the
Trustee (or a
Custodian on its behalf) and the applicable Master Servicer,
respectively, all
documents represented to have been or required to be delivered to
the Trustee
and such Master Servicer pursuant to Section 2 of this Agreement;
(d) 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 the Purchaser shall have the
ability to
comply with all terms and conditions and perform all duties and
obligations
required to be complied with or performed after the Closing Date;
(e) The Seller shall have paid all fees and expenses
payable by it to
the Purchaser or otherwise pursuant to this Agreement as of the
Closing Date;
(f) One or more letters from the independent accounting
firm of Ernst
& Young LLP, in form satisfactory to the Purchaser and relating
to certain
information regarding the Mortgage Loans and Certificates as set
forth in the
Prospectus (as defined in Section 6(d) of this Agreement) and
Prospectus
Supplement (as defined in Section 6(d) of this Agreement),
respectively, shall
have been delivered; and
(g) The Seller shall have executed and delivered
concurrently herewith
that certain Indemnification Agreement, dated as of November 1,
2007, among the
Seller, the Other Sellers, the Purchaser, the Underwriters and the
Initial
Purchasers.
Both parties agree to use their best reasonable 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 6. Closing Documents. The Closing Documents shall
consist of
the following:
(a) (i) This Agreement duly executed by the Purchaser and
the Seller,
(ii) the Pooling and Servicing Agreement duly executed by the
parties thereto
and (iii) the agreement(s) pursuant to which the servicing rights
with respect
to the Mortgage Loans are being sold to the applicable Master
Servicer (such
agreement(s), individually or collectively, as the case may be, the
"Servicing
Rights Purchase Agreement");
14
(b) An officer's certificate of the Seller, executed by a
duly
authorized officer of the Seller and dated the Closing Date, and
upon which the
Purchaser, the Underwriters and the Initial Purchasers may rely, to
the effect
that: (i) the representations and warranties of the Seller in this
Agreement are
true and correct in all material respects at and as of the Closing
Date with the
same effect as if made on such date; and (ii) the Seller 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;
(c) An officer's certificate from an officer of the
Seller (signed in
his/her capacity as an officer), dated the Closing Date, and upon
which the
Purchaser may rely, to the effect that each individual who, as an
officer or
representative of the Seller, signed this Agreement, the
Indemnification
Agreement or any other document or certificate delivered on or
before the
Closing Date in connection with the transactions contemplated
herein or 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;
(d) An officer's certificate from an officer of the
Seller (signed in
his/her capacity as an officer), dated the Closing Date, and upon
which the
Purchaser, the Underwriters and the Initial Purchasers may rely, to
the effect
that (i) such officer has carefully examined the Specified Portions
(as defined
below) of the Free Writing Prospectus and nothing has come to
his/her attention
that leads him/her to believe that the Specified Portions of the
Free Writing
Prospectus (when read together with the free writing prospectus
which was
distributed to prospective investors in the Certificates by e-mail
on November
1, 2007), as of the Time of Sale or as of the Closing Date,
included or include
any untrue statement of a material fact relating to the Mortgage
Loans or
omitted or omit to state therein a material fact necessary in order
to make the
statements therein relating to the Mortgage Loans, in light of the
circumstances
under which they were made, not misleading, (ii) such officer has
carefully
examined the Specified Portions (as defined below) of the
Prospectus Supplement
and nothing has come to his/her attention that leads him/her to
believe that the
Specified Portions of the Prospectus Supplement, as of the date of
the
Prospectus Supplement or as of the Closing Date, included or
include any untrue
statement of a material fact relating to the Mortgage Loans or
omitted or omit
to state therein a material fact necessary in order to make the
statements
therein relating to the Mortgage Loans, in light of the
circumstances under
which they were made, not misleading, and (iii) such officer has
carefully
examined the Specified Portions (as defined below) of the
Memorandum (pursuant
to which certain classes of the Private Certificates are being
privately
offered) and nothing has come to his/her attention that leads
him/her to believe
that the Specified Portions of the Memorandum, as of the date
thereof or as of
the Closing Date, included or include any untrue statement of a
material fact
relating to the Mortgage Loans or omitted or omit to state therein
a material
fact necessary in order to make the statements therein related to
the Mortgage
Loans, in the light of the circumstances under which they were
made, not
misleading.
The "Specified Portions" of the Free Writing Prospectus
shall consist
of Annex A-1 to the Free Writing Prospectus, entitled "Certain
Characteristics
of the Mortgage Loans" (insofar as the information contained in
Annex A-1
relates to the Mortgage Loans sold by the Seller hereunder), Annex
A-1(YM) to
the Free Writing Prospectus entitled "Yield Maintenance Formulas"
(insofar as
the information contained in Annex A-1(YM) relates to the Mortgage
15
Loans sold by the Seller hereunder), Annex A-2 to the Free Writing
Prospectus,
entitled "Certain Statistical Information Regarding the Mortgage
Loans" (insofar
as the information contained in Annex A-2 relates to the Mortgage
Loans sold by
the Seller hereunder), Annex B to the Free Writing Prospectus
entitled "Certain
Characteristics Regarding Multifamily Properties" (insofar as the
information
contained in Annex B relates to the Mortgage Loans sold by the
Seller
hereunder), Annex C to the Free Writing Prospectus, entitled
"Structural and
Collateral Term Sheet" (insofar as the information contained in
Annex C relates
to the Mortgage Loans sold by the Seller hereunder), the CD-ROM
which
accompanies the Free Writing Prospectus (insofar as such CD-ROM is
consistent
with Annex A-1, Annex A-1(YM), Annex A-2 and/or Annex B and only
insofar as the
information contained therein relates to the Mortgage Loans sold by
the Seller
hereunder), and the following sections of the Free Writing
Prospectus (only to
the extent that any such information relates to the Seller (solely
in its
capacity as a seller, sponsor or originator of the Mortgage Loans
sold by the
Seller hereunder), or the Mortgage Loans sold by the Seller
hereunder and
exclusive of any statements in such sections that purport to
describe the
servicing and administration provisions of the Pooling and
Servicing Agreement
and exclusive of aggregated numerical information that includes the
Other
Mortgage Loans): "Summary of Offering Prospectus--Relevant
Parties--Sponsors/Mortgage Loan Sellers", "Summary of Offering
Prospectus--The
Mortgage Loans and the Mortgaged Real Properties", "Risk
Factors--Risks Related
to the Mortgage Loans", "Description of the Mortgage Pool",
"Transaction
Participants--The Sponsors" and "Affiliations and Certain
Relationships and
Related Transactions".
The "Specified Portions" of the Prospectus Supplement shall
consist of
Annex A-1 to the Prospectus Supplement, entitled "Certain
Characteristics of the
Mortgage Loans" (insofar as the information contained in Annex A-1
relates to
the Mortgage Loans sold by the Seller hereunder), Annex A-1(YM) to
the
Prospectus Supplement entitled "Yield Maintenance Formulas"
(insofar as the
information contained in Annex A-1(YM) relates to the Mortgage
Loans sold by the
Seller hereunder), Annex A-2 to the Prospectus Supplement, entitled
"Certain
Statistical Information Regarding the Mortgage Loans" (insofar as
the
information contained in Annex A-2 relates to the Mortgage Loans
sold by the
Seller hereunder), Annex B to the Prospectus Supplement entitled
"Certain
Characteristics Regarding Multifamily Properties" (insofar as the
information
contained in Annex B relates to the Mortgage Loans sold by the
Seller
hereunder), Annex C to the Prospectus Supplement, entitled
"Description of the
Ten Largest Mortgage Loans" (insofar as the information contained
in Annex C
relates to the Mortgage Loans sold by the Seller hereunder), the
CD-ROM which
accompanies the Prospectus Supplement (insofar as such CD-ROM is
consistent with
Annex A-1, Annex A-1(YM), Annex A-2 and/or Annex B and only insofar
as the
information contained therein related to the Mortgage Loans sold by
the Seller
hereunder), and the following sections of the Prospectus Supplement
(only to the
extent that any such information relates to the Seller (solely in
its capacity
as a seller, sponsor or originator of the Mortgage Loans sold by
the Seller
hereunder), or the Mortgage Loans sold by the Seller hereunder and
exclusive of
any statements in such sections that purport to describe the
servicing and
administration provisions of the Pooling and Servicing Agreement
and exclusive
of aggregated numerical information that includes the Other
Mortgage Loans):
"Summary of Prospectus Supplement--Relevant
Parties--Sponsors/Mortgage Loan
Sellers", "Summary of Prospectus Supplement--The Mortgage Loans and
the
Mortgaged Real Properties", "Risk Factors--Risks Related to the
Mortgage Loans",
"Description of the
16
Mortgage Pool", "Transaction Participants--The Sponsors" and
"Affiliations and
Certain Relationships and Related Transactions".
The "Specified Portions" of the Memorandum shall consist
of the
Specified Portions of the Prospectus Supplement (as attached as an
exhibit to
the Memorandum).
For purposes of this Section 6(d) and this Agreement, the
following
terms have the meanings set forth below:
"Free Writing Prospectus" means the Offering Prospectus
dated October
25, 2007, and relating to the Publicly Offered Certificates.
"Memorandum" means the confidential Private Placement
Memorandum dated
November 1, 2007, and relating to the Private Certificates;
"Prospectus" means the prospectus dated May 10, 2007.
"Prospectus Supplement" means the prospectus supplement
dated November
1, 2007, that supplements the Prospectus and relates to the
Publicly-Offered
Certificates; and
"Time of Sale" means November 1, 2007, at 11:10 a.m.
(e) Each of: (i) the resolutions of the Seller's board of
directors or
a committee thereof authorizing the Seller's entering into the
transactions
contemplated by this Agreement, (ii) the certificate of
incorporation and bylaws
of the Seller, and (iii) an original or a copy of a certificate of
good standing
of the Seller issued by the State of California not earlier than 30
days prior
to the Closing Date;
(f) A written opinion of counsel for the Seller relating
to
organizational and enforceability matters (which opinion may be
from in-house
counsel, outside counsel or a combination thereof), reasonably
satisfactory to
the Purchaser, its counsel and the Rating Agencies, dated the
Closing Date and
addressed to the Purchaser, the Trustee, the Certificate
Administrator, the
Underwriters, the Initial Purchasers and each of the Rating
Agencies, together
with such other written opinions, including as to insolvency
matters, as may be
required by the Rating Agencies; and
(g) Such further certificates, opinions and documents as
the Purchaser
may reasonably request prior to the Closing Date.
SECTION 7. Costs. Whether or not this Agreement is
terminated, both
the Seller and the Purchaser shall pay their respective share of
the transaction
expenses incurred in connection with the transactions contemplated
herein as set
forth in the closing statement prepared by the Purchaser and
delivered to and
approved by the Seller on or before the Closing Date, and in the
memorandum of
understanding to which the Seller and the Purchaser (or an
affiliate thereof)
are parties with respect to the transactions contemplated by this
Agreement.
SECTION 8. Grant of a Security Interest. It is the
express intent of
the parties hereto that the conveyance of the Mortgage Loans by the
Seller to
the Purchaser as provided in
17
Section 2 of this Agreement 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, (a)
it is the
express intent of the parties that such conveyance be deemed a
pledge of the
Mortgage Loans by the Seller to the Purchaser to secure a debt or
other
obligation of the Seller, and (b) (i) this Agreement shall also be
deemed to be
a security agreement within the meaning of Article 9 of the UCC of
the
applicable jurisdiction; (ii) the conveyance provided for in
Section 2 of this
Agreement 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, including without limitation, all amounts, other than
investment
earnings (other than investment earnings required by Section
3.19(a) of the
Pooling and Servicing Agreement to offset Prepayment Interest
Shortfalls), from
time to time held or invested in the applicable Master Servicer's
Collection
Account, the Distribution Account or, if established, the REO
Account whether in
the form of cash, instruments, securities or other property; (iii)
the
assignment to the Trustee of the interest of the Purchaser as
contemplated by
Section 1 of this Agreement shall be deemed to be an assignment of
any security
interest created hereunder; (iv) the possession by the Trustee or
any of its
agents, including, without limitation, the Custodian, of the
Mortgage Notes, 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 UCC of the applicable jurisdiction; and (v) notifications to
persons (other
than the Trustee) holding such property, and acknowledgments,
receipts or
confirmations from persons (other than the Trustee) 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. The Seller does
hereby
consent to the filing by the Purchaser of financing statements
relating to the
transactions contemplated hereby without the signature of the
Seller.
SECTION 9. Notice of Exchange Act Reportable Events. The
Seller hereby
agrees to deliver to the Purchaser any disclosure information
relating to any
event, specifically relating to the Seller (that arise from its
role as sponsor
with respect to the Mortgage Loans), reasonably determined in good
faith by the
Purchaser as required to be reported on Form 8-K, Form 10-D or Form
10-K by the
Trust Fund (in formatting reasonably appropriate for inclusion in
such form)
insofar as such disclosure is required under Item 1117 or 1119 of
Regulation AB
or Item 1.03 to Form 8-K. The Seller shall use reasonable efforts
to deliver
proposed disclosure language relating to any event, specifically
relating to the
Seller (that arise from its role as sponsor with respect to the
Mortgage Loans),
described under Item 1117 or 1119 of Regulation AB or Item 1.03 to
Form 8-K to
the Purchaser as soon as reasonably practicable after the Seller
becomes aware
of such event and in no event more than two (2) business days
following the
18
occurrence of such event if such event is reportable under Item
1.03 to Form
8-K. The obligation of the Seller to provide the above referenced
disclosure
materials in any fiscal year of the Trust Fund will terminate upon
the Trustee
filing a Form 15 with respect to the Trust Fund as to that fiscal
year in
accordance with Section 8.16 of the Pooling and Servicing Agreement
or the
reporting requirements with respect to the Trust Fund under the
Securities
Exchange Act of 1934, as amended (the "1934 Act"), have otherwise
automatically
suspended. The Seller hereby acknowledges that the information to
be provided by
it pursuant to this Section 9 will be used in the preparation of
reports on Form
8-K, Form 10-D or Form 10-K with respect to the Trust Fund as
required under the
1934 Act and any applicable rules promulgated thereunder and as
required under
Regulation AB.
SECTION 10. Notices. All notices, copies, requests,
consents, demands
and other communications required hereunder shall be in writing and
sent either
by certified mail (return receipt requested) or by courier service
(proof of
delivery requested) to the intended recipient at the "Address for
Notices"
specified for such party on Exhibit A hereto, or as to either
party, at such
other address as shall be designated by such party in a notice
hereunder to the
other party. Except as otherwise provided in this Agreement, all
such
communications shall be deemed to have been duly given when
received, in each
case given or addressed as aforesaid.
SECTION 11. Representations, Warranties and Agreements to
Survive
Delivery. All representations, warranties and agreements contained
in this
Agreement, incorporated herein by reference or contained in the
certificates of
officers of the Seller 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 Purchaser to the Trustee).
SECTION 12. 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
that prohibits
or renders void or unenforceable any provision hereof.
SECTION 13. 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 14. GOVERNING LAW; WAIVER OF TRIAL BY JURY. THIS
AGREEMENT AND
THE RIGHTS, DUTIES, OBLIGATIONS AND RESPONSIBILITIES OF THE PARTIES
HERETO SHALL
BE GOVERNED IN ACCORDANCE WITH THE INTERNAL LAWS AND DECISIONS OF
NEW YORK. THE
PARTIES HERETO INTEND THAT THE PROVISIONS OF SECTION 5-1401 OF THE
NEW YORK
GENERAL OBLIGATIONS LAW SHALL APPLY TO THIS AGREEMENT. THE PARTIES
HERETO
19
HEREBY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, THE RIGHT TO
TRIAL BY JURY
IN ANY ACTION, PROCEEDING OR COUNTERCLAIM, WHETHER IN CONTRACT,
TORT OR
OTHERWISE, RELATING DIRECTLY OR INDIRECTLY TO THIS AGREEMENT OR THE
TRANSACTIONS
CONTEMPLATED HEREBY.
SECTION 15. Attorneys' Fees. If any legal action, suit or
proceeding
is commenced between the Seller and the Purchaser regarding their
respective
rights and obligations under this Agreement, the prevailing party
shall be
entitled to recover, in addition to damages or other relief, costs
and expenses,
attorneys' fees and court costs (including, without limitation,
expert witness
fees). As used herein, the term "prevailing party" shall mean the
party that
obtains the principal relief it has sought, whether by compromise
settlement or
judgment. If the party that commenced or instituted the action,
suit or
proceeding shall dismiss or discontinue it without the concurrence
of the other
party, such other party shall be deemed the prevailing party.
SECTION 16. Further Assurances. The Seller and the
Purchaser agree to
execute and deliver such instruments and take such further actions
as the other
party may, from time to time, reasonably request in order to
effectuate the
purposes and to carry out the terms of this Agreement.
SECTION 17. Successors and Assigns. The rights and
obligations of the
Seller under this Agreement shall not be assigned by the Seller
without the
prior written consent of the Purchaser, except that any person into
which the
Seller may be merged or consolidated, or any corporation resulting
from any
merger, conversion or consolidation to which the Seller is a party,
or any
person succeeding to all or substantially all of the business of
the Seller,
shall be the successor to the Seller 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
Purchaser, the Underwriters (as intended third party beneficiaries
hereof), the
Initial Purchasers (also as intended third party beneficiaries
hereof) and their
permitted successors and assigns. This Agreement is enforceable by
the
Underwriters, the Initial Purchasers and the other third party
beneficiaries
hereto in all respects to the same extent as if they had been
signatories
hereof.
SECTION 18. 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 hereto against whom such
waiver or
modification is sought to be enforced. The Seller's obligations
hereunder shall
in no way be expanded, changed or otherwise affected by any
amendment of or
modification to the Pooling and Servicing Agreement, including,
without
limitation, any defined terms therein, unless the Seller has
consented to such
amendment or modification in writing.
SECTION 19. Accountants' Letters. The parties hereto
shall cooperate
with Ernst & Young LLP in making available all information and
taking all steps
reasonably necessary to permit such accountants to deliver the
letters required
by the Underwriting Agreement and the Certificate Purchase
Agreement.
20
SECTION 20. Knowledge. Whenever a representation or
warranty or other
statement in this Agreement (including, without limitation,
Schedule I hereto)
is made with respect to a Person's "knowledge," such statement
refers to such
Person's employees or agents who were or are responsible for or
involved with
the indicated matter and have actual knowledge of the matter in
question.
SECTION 21. Cross-Collateralized Mortgage Loans. Each
Crossed Loan
Group is identified on the Mortgage Loan Schedule. For purposes of
reference,
the Mortgaged Property that relates or corresponds to any of the
Mortgage Loans
in a Crossed Loan Group shall be the property identified in the
Mortgage Loan
Schedule as corresponding thereto. The provisions of this
Agreement, including,
without limitation, each of the representations and warranties set
forth in
Schedule I hereto and each of the capitalized terms used herein but
defined in
the Pooling and Servicing Agreement, shall be interpreted in a
manner consistent
with this Section 21. In addition, if there exists with respect to
any Crossed
Loan Group only one original of any document referred to in the
definition of
"Mortgage File" in this Agreement and covering all the Mortgage
Loans in such
Crossed Loan Group, the inclusion of the original of such document
in the
Mortgage File for any of the Mortgage Loans in such Crossed Loan
Group shall be
deemed an inclusion of such original in the Mortgage File for each
such Mortgage
Loan.
[SIGNATURE PAGES TO FOLLOW]
21
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
COUNTRYWIDE COMMERCIAL REAL
ESTATE
FINANCE, INC.
By: /s/ Marlyn A. Marincas
------------------------------------
Name: Marlyn A.
Marincas
Title: Senior Vice
President
PURCHASER
MERRILL LYNCH MORTGAGE
INVESTORS, INC.
By: /s/ David M. Rodgers
------------------------------------
Name: David M. Rodgers
Title: Executive Vice
President
COUNTRYWIDE MORTGAGE LOAN PURCHASE AGREEMENT
EXHIBIT A
Seller:
Address for Notices:
Countrywide Commercial Real Estate Finance, Inc.
4500 Park Granada CH-143
Calabasas, CA 91302
Attention: Marlyn Marincas
Purchaser:
Address for Notices:
Merrill Lynch Mortgage Investors, Inc.
c/o Global Commercial Real Estate
4 World Financial Center, 16th Floor
250 Vesey Street
New York, New York 10080
Attention: David M. Rodgers
with a copy to:
Merrill Lynch Mortgage Investors, Inc.
c/o Global Commercial Real Estate
4 World Financial Center, 16th Floor
250 Vesey Street
New York, New York 10080
Attn: Director of CMBS Securitizations
and to:
Merrill Lynch Mortgage Investors, Inc.
4 World Financial Center, 12th Floor
250 Vesey Street
New York, New York 10080
Attention: General Counsel for Global
Commercial Real Estate in the Office
of the General Counsel
COUNTRYWIDE MORTGAGE LOAN PURCHASE AGREEMENT
SCHEDULE I
MORTGAGE LOAN REPRESENTATIONS AND WARRANTIES
For purposes of this Schedule I, the "Value" of a
Mortgaged Property
shall mean the value of such Mortgaged Property as determined by
the appraisal
(and subject to the assumptions set forth in the appraisal)
performed in
connection with the origination of the related Mortgage Loan.
1. Mortgage Loan Schedule. The information set forth in
the Mortgage
Loan Schedule with respect to the Mortgage Loans is true and
correct in all
material respects (and contains all the items listed in the
definition of
"Mortgage Loan Schedule") as of the dates of the information set
forth therein
or, if not set forth therein, and in all events no earlier than, as
of the
respective Cut-off Dates for the Mortgage Loans.
2. Ownership of Mortgage Loans. Immediately prior to the
transfer of
the Mortgage Loans to the Purchaser, the Seller had good title to,
and was the
sole owner of, each Mortgage Loan. The Seller has full right, power
and
authority to transfer and assign each Mortgage Loan to or at the
direction of
the Purchaser free and clear of any and all pledges, liens,
charges, security
interests, participation interests and/or other interests and
encumbrances
(except for certain servicing rights as provided in the Pooling and
Servicing
Agreement, any permitted subservicing agreements and servicing
rights purchase
agreements pertaining thereto and the rights of a holder of a
related Non-Trust
Loan pursuant to a Loan Combination Co-Lender Agreement). The
Seller has validly
and effectively conveyed to the Purchaser all legal and beneficial
interest in
and to each Mortgage Loan free and clear of any pledge, lien,
charge, security
interest or other encumbrance (except for certain servicing rights
as provided
in the Pooling and Servicing Agreement, any permitted subservicing
agreements
and servicing rights purchase agreements pertaining thereto);
provided that
recording and/or filing of various transfer documents are to be
completed after
the Closing Date as contemplated hereby and by the Pooling and
Servicing
Agreement. The sale of the Mortgage Loans to the Purchaser or its
designee does
not require the Seller to obtain any governmental or regulatory
approval or
consent that has not been obtained. Each Mortgage Note is, or shall
be as of the
Closing Date, properly endorsed to the Purchaser or its designee
and each such
endorsement is, or shall be as of the Closing Date, genuine.
3. Payment Record. No scheduled payment of principal
and/or interest
under any Mortgage Loan was 30 days or more past due as of the Due
Date for such
Mortgage Loan in November 2007, without giving effect to any
applicable grace
period, nor was any such payment 30 days or more delinquent since
the date of
origination of any Mortgage Loan, without giving effect to any
applicable grace
period.
4. Lien; Valid Assignment. Each Mortgage related to and
delivered in
connection with each Mortgage Loan constitutes a valid and, subject
to the
limitations and exceptions set forth in representation 13 below,
enforceable
first priority lien upon the related Mortgaged Property, prior to
all other
liens and encumbrances, and there are no liens and/or
I-1
encumbrances that are pari passu with the lien of such Mortgage, in
any event
subject, however, to the following (collectively, the "Permitted
Encumbrances"):
(a) the lien for current real estate taxes, ground rents, water
charges, sewer
rents and assessments not yet delinquent or accruing interest or
penalties; (b)
covenants, conditions and restrictions, rights of way, easements
and other
matters that are of public record and/or are referred to in the
related lender's
title insurance policy (or, if not yet issued, referred to in a pro
forma title
policy, a "marked-up" commitment binding upon the title insurer or
escrow
instructions binding on the title insurer and irrevocably
obligating the title
insurer to issue such title insurance policy); (c) exceptions and
exclusions
specifically referred to in such lender's title insurance policy
(or, if not yet
issued, referred to in a pro forma title policy, a "marked-up"
commitment
binding upon the title insurer or escrow instructions binding on
the title
insurer and irrevocably obligating the title insurer to issue such
title
insurance policy); (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) if
such Mortgage
Loan constitutes a Cross-Collateralized Mortgage Loan, the lien of
the Mortgage
for another Mortgage Loan contained in the same Crossed Group; (g)
if the
related Mortgaged Property consists of one or more units in a
condominium, the
related condominium declaration; and (h) the rights of the holder
of any
Non-Trust Loan that is part of a related Loan Combination to which
any such
Mortgage Loan belongs. The Permitted Encumbrances do not,
individually or in the
aggregate, materially and adversely interfere with the security
intended to be
provided by the related Mortgage, the current principal use of the
related
Mortgaged Property, the Value of the Mortgaged Property or the
current ability
of the related Mortgaged Property to generate income sufficient to
service such
Mortgage Loan. The related assignment of such Mortgage executed and
delivered in
favor of the Trustee is in recordable form (but for insertion of
the name and
address of the assignee and any related recording information which
is not yet
available to the Seller) and constitutes a legal, valid, binding
and, subject to
the limitations and exceptions set forth in representation 13
below, enforceable
assignment of such Mortgage from the relevant assignor to the
Trustee.
5. Assignment of Leases and Rents. There exists, as part
of the
related Mortgage File, an Assignment of Leases (either as a
separate instrument
or as part of the Mortgage) that relates to and was delivered in
connection with
each Mortgage Loan and that establishes and creates a valid,
subsisting and,
subject to the limitations and exceptions set forth in
representation 13 below,
enforceable first priority lien on and security interest in,
subject to
applicable law, the property, rights and interests of the related
Mortgagor
described therein, except for Permitted Encumbrances and except for
the holder
of any Non-Trust Loan that is part of a related Loan Combination to
which any
such Mortgage Loan belongs, and 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, including,
without limitation,
the right to operate the related leased property so long as no
event of default
has occurred under such Mortgage Loan; and each assignor thereunder
has the full
right to assign the same. The related assignment of any Assignment
of Leases not
included in a Mortgage, executed and delivered in favor of the
Trustee is in
recordable form (but for insertion of the name and address of the
assignee and
any related recording information which is not yet available to the
Seller), and
constitutes a legal, valid, binding and, subject to the limitations
and
exceptions set forth in representation 13 below, enforceable
assignment of such
Assignment of Leases from the relevant assignor to the Trustee. The
related
Mortgage or related Assignment of Leases, subject to applicable
law, provides
for the appointment of a receiver for the collection of rents or
for the
I-2
related mortgagee to enter into possession of the related Mortgaged
Property to
collect the rents or provides for rents to be paid directly to the
related
mortgagee, if there is an event of default beyond applicable notice
and grace
periods. Except for the holder of the related Non-Trust Loan with
respect to any
Mortgage Loan that is part of a Loan Combination, no person other
than the
related Mortgagor owns any interest in any payments due under the
related leases
on which the Mortgagor is the landlord, covered by the related
Assignment of
Leases.
6. Mortgage Status; Waivers and Modifications. In the
case of each
Mortgage Loan, except by a written instrument which has been
delivered to the
Purchaser or its designee as a part of the related Mortgage File,
(a) the
related Mortgage (including any amendments or supplements thereto
included in
the related Mortgage File) has not been impaired, waived, modified,
altered,
satisfied, canceled, subordinated or rescinded, (b) neither the
related
Mortgaged Property nor any material portion thereof has been
released from the
lien of such Mortgage and (c) the related Mortgagor has not been
released from
its obligations under such Mortgage, in whole or in material part.
With respect
to each Mortgage Loan, since the later of (a) October 12, 2007 and
(b) the
closing date of such Mortgage Loan, the Seller has not executed any
written
instrument that (i) impaired, satisfied, canceled, subordinated or
rescinded
such Mortgage Loan, (ii) waived, modified or altered any material
term of such
Mortgage Loan, (iii) released the Mortgaged Property or any
material portion
thereof from the lien of the related Mortgage, or (iv) released the
related
Mortgagor from its obligations under such Mortgage Loan in whole or
material
part. For avoidance of doubt, the preceding sentence does not
relate to any
release of escrows by the Seller or a servicer on its behalf.
7. Condition of Property; Condemnation. In the case of
each Mortgage
Loan, except as set forth in an engineering report prepared by an
independent
engineering consultant in connection with the origination of such
Mortgage Loan,
the related Mortgaged Property is, to the Seller's knowledge, in
good repair and
free and clear of any damage that would materially and adversely
affect its
Value as security for such Mortgage Loan (except in any such case
where an
escrow of funds, letter of credit or insurance coverage exists
sufficient to
effect the necessary repairs and maintenance). As of the date of
origination of
the Mortgage Loan, there was no proceeding pending for the
condemnation of all
or any material part of the related Mortgaged Property. As of the
Closing Date,
the Seller has not received notice and has no knowledge of any
proceeding
pending for the condemnation of all or any material portion of the
Mortgaged
Property securing any Mortgage Loan. As of the date of origination
of each
Mortgage Loan and, to the Seller's knowledge, as of the date
hereof, (a) none of
the material improvements on the related Mortgaged Property
encroach upon the
boundaries and, to the extent in effect at the time of
construction, do not
encroach upon the building restriction lines of such property, and
none of the
material improvements on the related Mortgaged Property encroached
over any
easements, except, in each case, for encroachments that are insured
against by
the lender's title insurance policy referred to in representation 8
below or
that do not materially and adversely affect the Value or current
use of such
Mortgaged Property and (b) no improvements on adjoining properties
encroached
upon such Mortgaged Property so as to materially and adversely
affect the Value
of such Mortgaged Property, except those encroachments that are
insured against
by the lender's title insurance policy referred to in
representation 8 below.
I-3
8. Title Insurance. Each Mortgaged Property securing a
Mortgage Loan
is covered by an American Land Title Association (or an equivalent
form of)
lender's title insurance policy (the "Title Policy") (or, if such
policy has yet
to be issued, by a pro forma policy, a"marked up" commitment
binding on the
title insurer or escrow instructions binding on the title insurer
irrevocably
obligating the title insurer to issue the title insurance policy)
in the
original principal amount of such Mortgage Loan after all advances
of principal,
insuring that the related Mortgage is a valid first priority lien
on such
Mortgaged Property, subject only to the Permitted Encumbrances,
except that in
the case of a Mortgage Loan as to which the related Mortgaged
Property is made
up of more than one parcel of property and is not secured by a
single Mortgage,
each related Mortgage (and therefore the related Title Policy) may
be in an
amount less than the original principal amount of the Mortgage
Loan, but is not
less than the allocated amount of subject parcel constituting a
portion of the
related Mortgaged Property. Such Title Policy (or, if it has yet to
be issued,
the coverage to be provided thereby) is in full force and effect,
all premiums
thereon have been paid, no material claims have been made
thereunder and no
claims have been paid thereunder. No holder of the related Mortgage
has done, by
act or omission, anything that would materially impair the coverage
under such
Title Policy. Immediately following the transfer and assignment of
the related
Mortgage Loan to the Trustee, such Title Policy (or, if it has yet
to be issued,
the coverage to be provided thereby) inures to the benefit of the
Trustee as
sole insured (except with respect to the rights of the holder of
any Non-Trust
Loan that is part of a related Loan Combination to which any such
Mortgage Loan
belongs) without the consent of or notice to the insurer. Such
Title Policy
contains no exclusion for whether, or it affirmatively insures
(unless the
related Mortgaged Property is located in a jurisdiction where such
affirmative
insurance is not available) that, (a) the related Mortgaged
Property has access
to a public road, and (b) the area shown on the survey, if any,
reviewed or
prepared in connection with the origination of the related Mortgage
Loan is the
same as the property legally described in the related Mortgage.
9. No Holdback. The proceeds of each Mortgage Loan have
been fully
disbursed (except in those cases where the full amount of the
Mortgage Loan has
been disbursed but a portion thereof is being held in escrow or
reserve accounts
documented as part of the Mortgage Loan documents and the rights to
which are
transferred to the Trustee, pending the satisfaction of certain
conditions
relating to leasing, repairs or other matters with respect to the
related
Mortgaged Property), and there is no obligation for future advances
with respect
thereto.
10. Mortgage Provisions. The Mortgage Loan documents for
each Mortgage
Loan, together with applicable state law, contain customary and,
subject to the
limitations and exceptions set forth in representation 13 below,
enforceable
provisions such as to render the rights and remedies of the holder
thereof
adequate for the practical realization against the related
Mortgaged Property of
the principal benefits of the security intended to be provided
thereby,
including, without limitation, judicial or non-judicial foreclosure
or similar
proceedings (as applicable for the jurisdiction where the related
Mortgaged
Property is located). None of the Mortgage Loan documents contains
any provision
that expressly excuses the related Mortgagor from obtaining and
maintaining
insurance coverage for acts of terrorism provided that such
insurance is
generally available at commercially reasonable rates.
11. Trustee under Deed of Trust. If the Mortgage for any
Mortgage Loan
is a deed of trust, then (a) a trustee, duly qualified under
applicable law to
serve as such, has either
I-4
been properly designated and currently so serves or may be
substituted in
accordance with the Mortgage and applicable law, and (b) no fees or
expenses are
or will become payable to such trustee by the Seller, the Purchaser
or any
transferee thereof except in connection with a trustee's sale after
default by
the related Mortgagor or in connection with any full or partial
release of the
related Mortgaged Property or related security for such Mortgage
Loan.
12. Environmental Conditions. Except in the case of the
Mortgaged
Properties identified on Annex B hereto (as to which properties the
only
environmental investigation conducted in connection with the
origination of the
related Mortgage Loan related to asbestos-containing materials and
lead-based
paint), (a) an environmental site assessment meeting ASTM standards
and covering
all environmental hazards typically assessed for similar properties
including
use, type and tenants of the related Mortgaged Property, a
transaction screen
meeting ASTM standards or an update of a previously conducted
environmental site
assessment (which update may have been performed pursuant to a
database update),
was performed by an independent third-party environmental
consultant (licensed
to the extent required by applicable state law) with respect to
each Mortgaged
Property securing a Mortgage Loan in connection with the
origination of such
Mortgage Loan, (b) the report of each such assessment, update or
screen, if any
(an "Environmental Report"), is dated no earlier than (or,
alternatively, has
been updated within) twelve (12) months prior to the date hereof,
(c) a copy of
each such Environmental Report has been delivered to the Purchaser,
and (d)
either: (i) no such Environmental Report, if any, reveals that as
of the date of
the report there is a material violation of applicable
environmental laws with
respect to any known circumstances or conditions relating to the
related
Mortgaged Property; or (ii) if any such Environmental Report does
reveal any
such circumstances or conditions with respect to the related
Mortgaged Property
and the same have not been subsequently remediated in all material
respects,
then one or more of the following are true--(A) one or more parties
not related
to the related Mortgagor and collectively having financial
resources reasonably
estimated to be adequate to cure the violation was identified as
the responsible
party or parties for such conditions or circumstances, and such
conditions or
circumstances do not materially impair the Value of the related
Mortgaged
Property, (B) the related Mortgagor was required to provide
additional security
reasonably estimated to be adequate to cure the violations and/or
to obtain and,
for the period contemplated by the related Mortgage Loan documents,
maintain an
operations and maintenance plan, (C) the related Mortgagor, or
other responsible
party, provided a "no further action" letter or other evidence that
would be
acceptable to a reasonably prudent commercial mortgage lender, that
applicable
federal, state or local governmental authorities had no current
intention of
taking any action, and are not requiring any action, in respect of
such
conditions or circumstances, (D) such conditions or circumstances
were
investigated further and based upon such additional investigation,
a qualified
environmental consultant recommended no further investigation or
remediation,
(E) the expenditure of funds reasonably estimated to be necessary
to effect such
remediation is not greater than 2% of the outstanding principal
balance of the
related Mortgage Loan, (F) there exists an escrow of funds
reasonably estimated
to be sufficient for purposes of effecting such remediation, (G)
the related
Mortgaged Property is insured under a policy of insurance, subject
to certain
per occurrence and aggregate limits and a deductible, against
certain losses
arising from such circumstances and conditions or (H) a responsible
party
provided a guaranty or indemnity to the related Mortgagor to cover
the costs of
any required investigation, testing, monitoring or remediation and,
as of the
date of origination of the related Mortgage Loan, such responsible
party had
financial resources reasonably estimated to be adequate to cure the
subject
I-5
violation in all material respects. To the Seller's actual
knowledge and without
inquiry beyond the related Environmental Report, there are no
significant or
material circumstances or conditions with respect to such Mortgaged
Property not
revealed in any such Environmental Report, where obtained, or in
any Mortgagor
questionnaire delivered to the Seller in connection with the issue
of any
related environmental insurance policy, if applicable, that would
require
investigation or remediation by the related Mortgagor under, or
otherwise be a
material violation of, any applicable environmental law. The
Mortgage Loan
documents for each Mortgage Loan require the related Mortgagor to
comply in all
material respects with all applicable federal, state and local
environmental
laws and regulations. Each of the Mortgage Loans identified on
Annex C hereto is
covered by a secured creditor environmental insurance policy and
each such
policy is noncancellable during its term, is in the amount at least
equal to
125% of the lesser of (a) the amount estimated in such
Environmental Report as
sufficient to pay the costs of such remediation or (b) the
principal balance of
the Mortgage Loan, has a term ending no sooner than the date which
is five years
after the maturity date of the Mortgage Loan to which it relates
and either does
not provide for a deductible or the deductible amount is held in
escrow and all
premiums have been paid in full. Each Mortgagor represents and
warrants in the
related Mortgage Loan documents that except as set forth in certain
environmental reports and to its knowledge it has not used, caused
or permitted
to exist and will not use, cause or permit to exist on the related
Mortgaged
Property any hazardous materials in any manner which violates
federal, state or
local laws, ordinances, regulations, orders, directives or policies
governing
the use, storage, treatment, transportation, manufacture,
refinement, handling,
production or disposal of hazardous materials. The related
Mortgagor (or
affiliate thereof) has agreed to indemnify, defend and hold the
Seller and its
successors and assigns harmless from and against any and all
losses,
liabilities, damages, injuries, penalties, fines, out-of-pocket
expenses and
claims of any kind whatsoever (including attorneys' fees and costs)
paid,
incurred or suffered by or asserted against, any such party
resulting from a
breach of environmental representations, warranties or covenants
given by the
Mortgagor in connection with such Mortgage Loan.
13. Loan Document Status. Each Mortgage Note, Mortgage
and each other
agreement executed by or on behalf of the related Mortgagor with
respect to each
Mortgage Loan is the legal, valid and binding obligation of the
maker thereof
(subject to any non-recourse provisions contained in any of the
foregoing
agreements and any applicable state anti-deficiency or one form of
action law or
market value limit deficiency legislation), enforceable in
accordance with its
terms, except as such enforcement may be limited by (i) bankruptcy,
insolvency,
reorganization, receivership, fraudulent transfer and conveyance or
other
similar laws affecting the enforcement of creditors' rights
generally, (ii)
general principles of equity (regardless of whether such
enforcement is
considered in a proceeding in equity or at law) and (iii) public
policy
considerations underlying applicable securities laws, to the extent
that such
public policy considerations limit the enforceability of provisions
that purport
to provide indemnification from liabilities under applicable
securities laws,
and except that certain provisions in such loan documents may be
further limited
or rendered unenforceable by applicable law, but (subject to the
limitations set
forth in the foregoing clauses (i) and (ii)) such limitations or
unenforceability will not render such loan documents invalid as a
whole or
substantially interfere with the mortgagee's realization of the
principal
benefits and/or security provided thereby. There is no valid
defense,
counterclaim or right of offset or rescission available to the
related Mortgagor
with respect to such Mortgage Note, Mortgage or other agreements
that would deny
the mortgagee the principal benefits intended to be provided
thereby, except in
each case, with
I-6
respect to the enforceability of any provisions requiring the
payment of default
interest, late fees, additional interest, prepayment premiums or
yield
maintenance charges.
14. Insurance. Except in certain cases where tenants,
having a net
worth of at least $50,000,000 or an investment grade credit rating
(and, if
rated by Fitch, a credit rating of at least "A-" by Fitch) and
obligated to
maintain the insurance described in this paragraph, are allowed to
self-insure
the related Mortgaged Properties, all improvements upon each
Mortgaged Property
securing a Mortgage Loan are insured under a fire and extended
perils insurance
(or the equivalent) policy, in an amount at least equal to the
lesser of the
outstanding principal balance of such Mortgage Loan and 100% of the
full
insurable replacement cost of the improvements located on the
related Mortgaged
Property, and if applicable, the related hazard insurance policy
contains
appropriate endorsements to avoid the application of co-insurance
and does not
permit reduction in insurance proceeds for depreciation. Each
Mortgaged Property
is also covered by comprehensive general liability insurance in
amounts
customarily required by prudent commercial mortgage lenders for
properties of
similar types. Each Mortgaged Property securing a Mortgage Loan is
the subject
of a business interruption or rent loss insurance policy providing
coverage for
at least twelve (12) months (or a specified dollar amount which is
reasonably
estimated to cover no less than twelve (12) months of rental
income), unless
such Mortgaged Property constitutes a manufactured housing
community. If any
portion of the improvements on a Mortgaged Property securing any
Mortgage Loan
was, at the time of the origination of such Mortgage Loan, in an
area identified
in the Federal Register by the Flood Emergency Management Agency as
a special
flood hazard area (Zone A or Zone V), and flood insurance was
available, a flood
insurance policy is in effect with a generally acceptable insurance
carrier, in
an amount representing coverage not less than the least of: (1) the
full
insurable value of the related Mortgaged Property or (2) the
maximum amount of
insurance available under the applicable federal flood insurance
program. Each
Mortgaged Property located in California or in seismic zones 3 and
4 is covered
by seismic insurance to the extent such Mortgaged Property has a
probable
maximum loss of greater than twenty percent (20%) of the
replacement value of
the related improvements, calculated using methodology acceptable
to a
reasonably prudent commercial mortgage lender with respect to
similar properties
in the same area or earthquake zone. Each Mortgaged Property
located within
Florida or within 25 miles of the coast of North Carolina, South
Carolina,
Georgia, Alabama, Mississippi, Louisiana or Texas is insured by
windstorm
insurance in an amount at least equal to the lesser of (i) the
outstanding
principal balance of the related Mortgage Loan and (ii) 100% of the
insurable
replacement cost of the improvements located on such Mortgaged
Property (less
physical depreciation). All such hazard and flood insurance
policies contain a
standard mortgagee clause for the benefit of the holder of the
related Mortgage,
its successors and assigns, as mortgagee, and are not terminable
(nor may the
amount of coverage provided thereunder be reduced) without at least
10 days'
prior written notice to the mortgagee; and no such notice has been
received,
including any notice of nonpayment of premiums, that has not been
cured.
Additionally, for any Mortgage Loan having a Cut-off Date Balance
equal to or
greater than $20,000,000, the insurer for all of the required
coverages set
forth herein has a claims paying ability or financial strength
rating from S&P
or Moody's of not less than A-minus (or the equivalent), or from
A.M. Best
Company of not less than "A-minus: V" (or the equivalent) and, if
rated by
Fitch, of not less than "A-" from Fitch (or the equivalent). With
respect to
each Mortgage Loan, the related Mortgage Loan documents require
that the related
Mortgagor or a tenant of such Mortgagor maintain insurance as
described above or
permit the related mortgagee to require insurance as described
above. Except
under
I-7
circumstances that would be reasonably acceptable to a prudent
commercial
mortgage lender or that would not otherwise materially and
adversely affect the
security intended to be provided by the related Mortgage, the
Mortgage Loan
documents for each Mortgage Loan provide that proceeds paid under
any such
casualty insurance policy will (or, at the lender's option, will)
be applied
either to the repair or restoration of all or part of the related
Mortgaged
Property or to the payment of amounts due under such Mortgage Loan;
provided
that the related Mortgage Loan documents may entitle the related
Mortgagor to
any portion of such proceeds remaining after the repair or
restoration of the
related Mortgaged Property or payment of amounts due under the
Mortgage Loan;
and provided, further, that, if the related Mortgagor holds a
leasehold interest
in the related Mortgaged Property, the application of such proceeds
will be
subject to the terms of the related Ground Lease (as defined in
representation
18 below).
Each Mortgaged Property is insured by an "all-risk"
casualty insurance
policy that does not contain an express exclusion for (or,
alternatively, is
covered by a separate policy that insures against property damage
resulting
from) acts of terrorism.
15. Taxes and Assessments. There are no delinquent
property taxes or
assessments or other outstanding charges affecting any Mortgaged
Property
securing a Mortgage Loan that are a lien of priority equal to or
higher than the
lien of the related Mortgage and that have not been paid or are not
otherwise
covered by an escrow of funds sufficient to pay such charge. For
purposes of
this representation and warranty, real property taxes and
assessments and other
charges shall not be considered delinquent until the date on which
interest
and/or penalties would be payable thereon.
16. Mortgagor Bankruptcy. No Mortgagor under a Mortgage
Loan is a
debtor in any state or federal bankruptcy, insolvency or similar
proceeding.
17. Local Law Compliance. To the Seller's knowledge,
based upon a
letter from governmental authorities, a legal opinion, a zoning
consultant's
report or an endorsement to the related Title Policy, or based on
such other due
diligence considered reasonable by prudent commercial mortgage
lenders in the
lending area where the subject Mortgaged Property is located
(including, without
limitation, when commercially reasonable, a representation of the
related
Mortgagor at the time of origination of the subject Mortgage Loan),
the
improvements located on or forming part of each Mortgaged Property
securing a
Mortgage Loan are in material compliance with applicable zoning
laws and
ordinances or constitute a legal non-conforming use or structure
(or, if any
such improvement does not so comply and does not constitute a legal
non-conforming use or structure, such non-compliance and failure
does not
materially and adversely affect the Value of the related Mortgaged
Property). In
the case of each legal non-conforming use or structure, the related
Mortgaged
Property may be restored or repaired to the full extent of the use
or structure
at the time of such casualty or law and ordinance coverage has been
obtained in
an amount that would be required by prudent commercial mortgage
lenders (or, if
the related Mortgaged Property may not be restored or repaired to
the full
extent of the use or structure at the time of such casualty and law
and
ordinance coverage has not been obtained in an amount that would be
required by
prudent commercial mortgage lenders, such fact does not materially
and adversely
affect the Value of the related Mortgaged Property).
I-8
18. Leasehold Estate. If any Mortgage Loan is secured by
the interest
of a Mortgagor as a lessee under a ground lease of all or a
material portion of
a Mortgaged Property (together with any and all written amendments
and
modifications thereof and any and all estoppels from or other
agreements with
the ground lessor, a "Ground Lease"), but not by the related fee
interest in
such Mortgaged Property or such material portion thereof (the "Fee
Interest"),
then:
(i) such Ground Lease or a memorandum thereof has been or
will be duly
recorded; such Ground Lease permits the interest of the lessee
thereunder
to be encumbered by the related Mortgage; and there has been
no material
change in the terms of such Ground Lease since its
recordation, with the
exception of material changes reflected in written instruments
which are a
part of the related Mortgage File; and if required by such
Ground Lease,
the lessor thereunder has received notice of the lien of the
related
Mortgage in accordance with the provisions of such Ground
Lease;
(ii) the related lessee's leasehold interest in the
portion of the
related Mortgaged Property covered by such Ground Lease is not
subject to
any liens or encumbrances superior to, or of equal priority
with, the
related Mortgage, other than the related Fee Interest and
Permitted
Encumbrances;
(iii) upon foreclosure of such Mortgage Loan (or
acceptance of a deed
in lieu thereof), the Mortgagor's interest in such Ground
Lease is
assignable to, and is thereafter further assignable by, the
Purchaser upon
notice to, but without the consent of, the lessor thereunder
(or, if such
consent is required, it has been obtained); provided that such
Ground Lease
has not been terminated and all amounts owed thereunder have
been paid;
(iv) such Ground Lease is in full force and effect, and,
to the
Seller's knowledge, no material default has occurred under
such Ground
Lease;
(v) such Ground Lease requires the lessor thereunder to
give notice of
any default by the lessee to the mortgagee under such Mortgage
Loan; and
such Ground Lease further provides that no notice of
termination given
under such Ground Lease is effective against the mortgagee
under such
Mortgage Loan unless a copy has been delivered to such
mortgagee in the
manner described in such Ground Lease;
(vi) the mortgagee under such Mortgage Loan is permitted
a reasonable
opportunity (including, where necessary, sufficient time to
gain possession
of the interest of the lessee under such Ground Lease) to cure
any default
under such Ground Lease, which is curable after the receipt of
notice of
any such default, before the lessor thereunder may terminate
such Ground
Lease;
(vii) such Ground Lease either (i) has an original term
which extends
not less than twenty (20) years beyond the Stated Maturity
Date of such
Mortgage Loan, or (ii) has an original term which does not end
prior to the
5th anniversary of the Stated Maturity Date of such Mortgage
Loan and has
extension options that are exercisable by the lender upon its
taking
possession of the Mortgagor's leasehold interest and that, if
exercised,
would cause the term of such Ground Lease to extend not less
than twenty
(20) years beyond the Stated Maturity Date of such Mortgage
Loan;
I-9
(viii) such Ground Lease requires the lessor to enter
into a new lease
with a mortgagee upon termination of such Ground Lease for any
reason,
including as a result of a rejection of such Ground Lease in a
bankruptcy
proceeding involving the related Mortgagor, unless the
mortgagee under such
Mortgage Loan fails to cure a default of the lessee that is
susceptible to
cure by the mortgagee under such Ground Lease following notice
thereof from
the lessor;
(ix) under the terms of such Ground Lease and the related
Mortgage or
related Mortgage Loan documents, taken together, any related
casualty
insurance proceeds (other than de minimis amounts for minor
casualties)
with respect to the leasehold interest will be applied either
(i) to the
repair or restoration of all or part of the related Mortgaged
Property,
with the mortgagee or a trustee appointed by it having the
right to hold
and disburse such proceeds as the repair or restoration
progresses (except
in such cases where a provision entitling another party to
hold and
disburse such proceeds would not be viewed as commercially
unreasonable by
a prudent commercial mortgage lender), or (ii) to the payment
of the
outstanding principal balance of the Mortgage Loan together
with any
accrued interest thereon;
(x) such Ground Lease does not impose any restrictions on
subletting
which would be viewed as commercially unreasonable by a
prudent commercial
mortgage lender in the lending area where the related
Mortgaged Property is
located at the time of the origination of such Mortgage Loan;
and
(xi) such Ground Lease provides that (i) it may not be
amended,
modified, cancelled or terminated without the prior written
consent of the
mortgagee under such Mortgage Loan, and (ii) any such action
without such
consent is not binding on such mortgagee, its successors or
assigns.
19. Qualified Mortgage. Each Mortgage Loan is a
"qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code and Treasury
Regulations
Section 1.860G-2(a) (but without regard to the rule in Treasury
Regulations
Section 1.860G-2(a)(3) or Section 1.860G-2(f)(2) that treats a
defective
obligation as a qualified mortgage under certain circumstances).
Accordingly,
each Mortgage Loan is directly secured by an interest in real
property (within
the meaning of Treasury Regulations Section 1.856-3(c) and
1.856-3(d)), and
either (1) the fair market value of the interest in real property
which secures
such Mortgage Loan was at least equal to 80% of the principal
amount of such
Mortgage Loan at the time the Mortgage Loan was (a) originated or
modified
(within the meaning of Treasury Regulations Section 1.860G-2(b)(1))
or (b)
contributed to the Trust Fund, or (2) substantially all of the
proceeds of such
Mortgage Loan were used to acquire, improve or protect an interest
in real
property and such interest in real property was the only security
for the
Mortgage Loan at the time such Mortgage Loan was originated or
modified. For
purposes of the previous sentence, the fair market value of the
referenced
interest in real property shall first be reduced by (1) the amount
of any lien
on such interest in real property that is senior to the Mortgage
Loan, and (2) a
proportionate amount of any lien on such interest in real property
that is in
parity with the Mortgage Loan.
I-10
20. Advancement of Funds. In the case of each Mortgage
Loan, neither
the Seller nor, to the Seller's knowledge, any prior holder of such
Mortgage
Loan has advanced funds or induced, solicited or knowingly received
any advance
of funds from a party other than the owner of the related Mortgaged
Property
(other than (a) amounts paid by the tenant as specifically provided
under a
related lease or by the property manager or (b) application and
commitment fees,
escrow funds, points and reimbursements for fees and expenses
incurred in
connection with the origination and funding of the Mortgage Loan),
for the
payment of any amount required by such Mortgage Loan, except for
interest
accruing from the date of origination of such Mortgage Loan or the
date of
disbursement of the Mortgage Loan proceeds, whichever is later, to
the date
which preceded by 30 days the first due date under the related
Mortgage Note.
21. No Equity Interest, Equity Participation or
Contingent Interest.
No Mortgage Loan contains any equity participation by the mortgagee
thereunder,
is convertible by its terms into an equity ownership interest in
the related
Mortgaged Property or the related Mortgagor, provides for any
contingent or
additional interest in the form of participation in the cash flow
of the related
Mortgaged Property, or provides for the negative amortization of
interest,
except that, in the case of an ARD Loan, such Mortgage Loan
provides that,
during the period commencing on or about the related Anticipated
Repayment Date
and continuing until such Mortgage Loan is paid in full, (a)
additional interest
shall accrue and may be compounded monthly and shall be payable
only after the
outstanding principal of such Mortgage Loan is paid in full, and
(b) a portion
of the cash flow generated by such Mortgaged Property will be
applied each month
to pay down the principal balance thereof in addition to the
principal portion
of the related monthly payment.
22. Legal Proceedings. To the Seller's knowledge, there
are no pending
actions, suits, proceedings or governmental investigations by or
before any
court or governmental authority against or affecting the Mortgagor
under any
Mortgage Loan or the related Mortgaged Property that, if determined
adversely to
such Mortgagor or Mortgaged Property, would materially and
adversely affect the
Value of the Mortgaged Property as security for such Mortgage Loan
or the
current ability of the Mortgagor to pay principal, interest or any
other amounts
due under such Mortgage Loan.
23. Other Mortgage Liens. Except with respect to another
Mortgage Loan
(which will also be an asset of the Trust Fund) cross
collateralized with a
Mortgage Loan, none of the Mortgage Loans permits the related
Mortgaged Property
to be encumbered by any mortgage lien junior to or of equal
priority with the
lien of the related Mortgage without the prior written consent of
the holder
thereof or the satisfaction of debt service coverage or similar
criteria
specified therein. To the Seller's knowledge, except as indicated
in the
preceding sentence and except for cases involving other Mortgage
Loans, none of
the Mortgaged Properties securing the Mortgage Loans is encumbered
by any
mortgage liens junior to or of equal priority with the liens of the
related
Mortgage. The related Mortgage Loan documents require the Mortgagor
under each
Mortgage Loan to pay all reasonable costs and expenses related to
any required
consent to an encumbrance, including any applicable Rating Agency
fees, or would
permit the related mortgagee to withhold such consent if such costs
and expenses
are not paid by a party other than such mortgagee.
I-11
24. No Mechanics' Liens. As of the date of origination,
each Mortgaged
Property securing a Mortgage Loan (exclusive of any related
personal property)
was free and clear of any and all mechanics' and materialmen's
liens that were
prior or equal to the lien of the related Mortgage and that were
not bonded or
escrowed for or covered by title insurance. As of the Closing Date,
to the
Seller's knowledge: (i) each Mortgaged Property securing a Mortgage
Loan
(exclusive of any related personal property) is free and clear of
any and all
mechanics' and materialmen's liens that are prior or equal to the
lien of the
related Mortgage and that are not bonded or escrowed for or covered
by title
insurance, and (ii) no rights are outstanding that under law could
give rise to
any such lien that would be prior or equal to the lien of the
related Mortgage
and that is not bonded or escrowed for or covered by title
insurance.
25. Compliance. Each Mortgage Loan complied with, or was
exempt from,
all applicable usury laws in effect at its date of origination.
26. Licenses and Permits. To the Seller's knowledge, as
of the date of
origination of each Mortgage Loan and based on any of: (i) a letter
from
governmental authorities, (ii) a legal opinion, (iii) an
endorsement to the
related Title Policy, (iv) a representation of the related
Mortgagor at the time
of origination of such Mortgage Loan, (v) a zoning report from a
zoning
consultant, or (vi) other due diligence that a commercially
reasonable
originator of similar mortgage loans in the jurisdiction where the
related
Mortgaged Property is located customarily performs in the
origination of
comparable mortgage loans, the related Mortgagor, the related
lessee, franchisee
or operator was in possession of all material licenses, permits and
franchises
required by applicable law for the ownership and operation of the
related
Mortgaged Property as it was then operated or such material
licenses, permits
and franchises have otherwise been issued.
27. Cross-Collateralization. No Mortgage Loan is
cross-collateralized
with any loan which is outside the Mortgage Pool. With respect to
any Crossed
Loan Group, the sum of the amounts of the respective Mortgages
recorded on the
related Mortgaged Properties with respect to such Mortgage Loans is
at least
equal to the total amount of such Mortgage Loans.
28. Releases of Mortgaged Properties. No Mortgage Note or
Mortgage
requires the mortgagee to release all or any material portion of
the related
Mortgaged Property from the lien of the related Mortgage except
upon (i) payment
in full of all amounts due under the related Mortgage Loan or (ii)
delivery of
"government securities" within the meaning of Section 2(a)(16) of
the Investment
Company Act of 1940, as amended (the "Investment Company Act"), in
connection
with a defeasance of the related Mortgage Loan; provided that the
Mortgage Loans
that are Crossed Loans, and the other individual Mortgage Loans
secured by
multiple parcels, may require the respective mortgagee(s) to grant
releases of
portions of the related Mortgaged Property or the release of one or
more related
Mortgaged Properties upon (i) the satisfaction of certain legal and
underwriting
requirements or (ii) the payment of a release price in connection
therewith; and
provided, further, that certain Crossed Groups or individual
Mortgage Loans
secured by multiple parcels may permit the related Mortgagor to
obtain the
release of one or more of the related Mortgaged Properties by
substituting
comparable real estate property, subject to, among other conditions
precedent,
receipt of confirmation from each Rating Agency that such release
and
substitution will not result in a qualification, downgrade or
withdrawal of any
of its then-current ratings of the Certificates; and provided,
further, that any
I-12
Mortgage Loan may permit the unconditional release of one or more
unimproved
parcels of land to which the Seller did not give any material value
in
underwriting the Mortgage Loan.
29. Defeasance. Each Mortgage Loan that contains a
provision for any
defeasance of mortgage collateral permits defeasance (i) no earlier
than two
years following the Closing Date and (ii) only with substitute
collateral
constituting "government securities" within the meaning of Section
2(a)(16) of
the Investment Company Act. To the Seller's knowledge, the
provisions of each
such Mortgage Loan, if any, permitting defeasance are only for the
purpose of
facilitating the disposition of a Mortgaged Property and are not
part of an
arrangement to collateralize a REMIC offering with obligations that
are not real
estate mortgages.
30. Defeasance and Assumption Costs. If any Mortgage Loan
permits
defeasance, then the related Mortgage Loan documents provide that
the related
Mortgagor is responsible for the payment of all reasonable costs
and expenses
associated with defeasance incurred by the related mortgagee,
including Rating
Agency fees. If any Mortgage Loan permits assumptions, then the
related Mortgage
Loan documents provide that the related Mortgagor is responsible
for all
reasonable costs and expenses associated with an assumption
incurred by the
related mortgagee.
31. Fixed Rate Loans. Each Mortgage Loan bears interest
at a rate that
remains fixed throughout the remaining term of such Mortgage Loan,
except in the
case of an ARD Loan after its Anticipated Repayment Date and except
for the
imposition of a default rate.
32. Inspection. The Seller (or if the Seller is not the
originator,
the originator of the Mortgage Loan) or an affiliate thereof
inspected, or
caused the inspection of, the related Mortgaged Property within the
preceding
twelve (12) months.
33. No Material Default. To the Seller's knowledge, after
due inquiry
consistent with the inquiry a reasonably prudent commercial
mortgage lender
would conduct under similar circumstances, there exists no material
default,
breach, violation or event of acceleration under the Mortgage Note
or Mortgage
for any Mortgage Loan (other than payments due but not yet 30 days
or more
delinquent); provided, however, that this representation and
warranty does not
cover any default, breach, violation or event of acceleration that
pertains to
or arises out of the subject matter otherwise covered by any other
representation and warranty made by the Seller in this Schedule I.
34. Due-on-Sale. The Mortgage, Mortgage Note or loan
agreement for
each Mortgage Loan contains a "due-on-sale" clause, which provides
for the
acceleration of the payment of the unpaid principal balance of such
Mortgage
Loan if, without the prior written consent of the holder of such
Mortgage,
either the related Mortgaged Property, or any direct controlling
equity interest
in the related Mortgagor, is transferred or sold, other than by
reason of family
and estate planning transfers, transfers by devise or descent or by
operation of
law upon death, transfers of less than a controlling interest in
the Mortgagor,
transfers of shares in public companies, issuance of
non-controlling new equity
interests, transfers to an affiliate meeting the requirements of
the Mortgage
Loan, transfers among existing members, partners or shareholders in
the
Mortgagor, transfers among affiliated Mortgagors with respect to
cross-collateralized Mortgage Loans or multi-property Mortgage
Loans, transfers
among co-Mortgagors, transfers of
I-13
worn-out or obsolete fur
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