ARTESIA MORTGAGE LOAN PURCHASE AGREEMENT

 

                                                                    EXHIBIT 99.3

 

                    Artesia Mortgage Loan Purchase Agreement

 

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                        MORTGAGE LOAN PURCHASE AGREEMENT

 

            This Mortgage Loan Purchase Agreement, dated as of January 1, 2005

(the "Agreement"), is entered into between ARTESIA MORTGAGE CAPITAL CORPORATION

(the "Seller") and Wachovia Commercial Mortgage Securities, Inc. (the

"Purchaser").

 

            The Seller intends to sell and the Purchaser intends to purchase

certain multifamily and commercial mortgage loans (the "Mortgage Loans")

identified on the schedule (the "Mortgage Loan Schedule") annexed hereto as

Exhibit A. The Purchaser intends to deposit the Mortgage Loans, along with

certain other mortgage loans (the "Other Mortgage Loans"), into a trust fund

(the "Trust Fund"), the beneficial ownership of which will be evidenced by

multiple classes (each, a "Class") of mortgage pass-through certificates (the

"Certificates"). 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 (the "Pooling and Servicing Agreement"), dated as of January

1, 2005, among the Purchaser, as depositor, Wachovia Bank, National Association,

as Master Servicer and a Special Servicer, GMAC Commercial Mortgage Corporation,

as a Special Servicer and Wells Fargo Bank, N.A., as Trustee. Capitalized terms

used but not defined herein (including the Schedules attached hereto) have the

respective meanings set forth in the Pooling and Servicing Agreement.

 

            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 $170,856,104 (the "Artesia 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 Artesia

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 $2,063,442,241 (subject to a variance of plus or minus 5.0%). The

purchase and sale of the Mortgage Loans shall take place January 27, 2005, or

such other date as shall be mutually acceptable to the parties to this Agreement

(the "Closing Date"). The consideration (the "Aggregate Purchase Price") for the

Mortgage Loans shall be equal to (i)        % of the Artesia Mortgage Loan

Balance as of the Cut-Off Date, plus (ii) $661,567, which amount represents the

amount of interest accrued on the Artesia Mortgage Loan Balance at the related

Net Mortgage Rate for the period from and including the Cut-Off Date up to but

not including the Closing Date.

 

            The Aggregate Purchase Price 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 receipt of the

Aggregate Purchase Price and satisfaction of the other conditions to closing

that are for the benefit of the Seller, 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, 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.

 

             (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 on or 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

shall be promptly remitted to, the Seller.

 

            (c) No later than the Closing Date, the Seller shall, on behalf of

the Purchaser, deliver to the Trustee, the documents and instruments specified

below with respect to each Mortgage Loan (each a "Mortgage File"). All Mortgage

Files so delivered will be held by the Trustee in escrow at all times prior to

the Closing Date. Each Mortgage File shall contain the following documents:

 

            (i) the original executed Mortgage Note including any power of

      attorney related to the execution thereof, 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 "Wells Fargo Bank, N.A., as trustee for the

      registered holders of Wachovia Bank Commercial Mortgage Trust, Commercial

      Mortgage Pass-Through Certificates, Series 2005-C16" or in blank (or a

      lost note affidavit and indemnity with a copy of such Mortgage Note

      attached thereto);

 

            (ii) an original or copy of the Mortgage, together with 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 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

      any missing recording information), of (a) the Mortgage, (b) any related

      Assignment of Leases (if such item is a document separate from the

      Mortgage and to the extent not already assigned pursuant to preceding

      clause (a)) and (c) any other recorded document relating to the Mortgage

      Loan otherwise included in the Mortgage File, in favor of "Wells Fargo

      Bank, N.A., as trustee for the registered holders of Wachovia Bank

      Commercial Mortgage Trust, Commercial Mortgage Pass-Through Certificates,

      Series 2005-C16", 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 "Wells Fargo Bank, N.A., as trustee for the

      registered holders of Wachovia Bank Commercial Mortgage Trust, Commercial

      Mortgage Pass-Through Certificates, Series 2005-C16", or in blank;

 

            (vi) originals or copies of any modification, consolidation,

      assumption and substitution agreements in those instances where the terms

      or provisions of the Mortgage or Mortgage Note have been consolidated or

      modified or the Mortgage Loan has been assumed or consolidated;

 

            (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 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 (bearing evidence of filing) or other

      evidence of filing satisfactory to the Purchaser of any prior UCC

      Financing Statements in favor of the originator of such 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 and

      continuation statement in favor of the Seller on record with the

      applicable public office for UCC Financing Statements, an original UCC

      Amendment, in form suitable for filing in favor of Wells Fargo Bank, N.A.,

      as trustee for the registered holders of Wachovia Bank Commercial Mortgage

       Trust, Commercial Mortgage Pass-Through Certificates, Series 2005-C16, as

      assignee", or in blank;

 

            (ix) an original or copy of (a) any Ground Lease and (b) any loan

      guaranty, indemnity, ground lessor estoppel or environmental insurance

      policy;

 

            (x) any intercreditor agreement relating to permitted debt

      (including, without limitation, mezzanine debt) of the Mortgagor;

 

            (xi) copies of any loan agreement, escrow agreement or security

      agreement relating to such Mortgage Loan;

 

            (xii) a copy of any letter of credit and related transfer documents

      relating to such Mortgage Loan; and

 

            (xiii) with respect to any Companion Loan, all of the above

      documents with respect to such Companion Loan and the related

      Intercreditor Agreement; provided that a copy of each Mortgage Note

      relating to such Companion Loan, rather than the original, shall be

      provided, and no assignments shall be provided.

 

            (d) The Seller shall take all actions reasonably necessary (i) to

permit the Trustee to fulfill its obligations pursuant to Section 2.01(d) of the

Pooling and Servicing Agreement and (ii) to perform its obligations described in

Section 2.01(d) of the Pooling and Servicing Agreement. Without limiting the

generality of the foregoing, if a draw upon a letter of credit is required

before its transfer to the Trust Fund can be completed, the Seller shall draw

upon such letter of credit for the benefit of the Trust pursuant to written

instructions from the Master Servicer. The Seller shall reimburse the Trustee

for all reasonable costs and expenses, if any, incurred by the Trustee for

recording any documents described in Section 2(c)(iv)(c) hereof and filing any

assignments of UCC Financing Statements described in the proviso in the third to

last sentence in Section 2.01(d) of the Pooling and Servicing Agreement.

 

            (e) All documents and records (except draft documents, privileged

communications and internal correspondence and credit, due diligence and other

underwriting analysis, documents, data or internal worksheets, memoranda,

communications and evaluations of the Seller) relating to each Mortgage Loan and

in the Seller's possession (the "Additional Mortgage Loan Documents") that are

not required to be delivered to the Trustee shall promptly be delivered or

caused to be delivered by the Seller to the Master Servicer or at the direction

of the Master Servicer to the appropriate sub-servicer, together with any

related escrow amounts and reserve amounts.

 

            (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 the Closing Date, the Seller shall pay to the Master Servicer

for deposit into the Interest Reserve Account an amount equal to $26,011, which

represents the Initial Interest Reserve Account Deposit for its Interest Reserve

Loans.

 

            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 organized and validly existing and

      in good standing under the laws of the State of Delaware and possesses all

      requisite authority, power, licenses, permits and franchises to carry on

      its business as currently conducted by it and to execute, deliver and

      comply with its obligations under the terms of this Agreement;

 

            (ii) This Agreement has been duly and validly authorized, executed

      and delivered by the Seller and, assuming due authorization, execution and

      delivery hereof by the Purchaser, constitutes a legal, valid and binding

      obligation of the Seller, enforceable against the Seller in accordance

      with its terms, except as such enforcement may be limited by bankruptcy,

      insolvency, reorganization, receivership, moratorium and other laws

      affecting the enforcement of creditors' rights in general and by general

      equity principles (regardless of whether such enforcement is considered in

      a proceeding in equity or at law), and by public policy considerations

      underlying the securities laws, to the extent that such public policy

      considerations limit the enforceability of the provisions of this

      Agreement which purport to provide indemnification from liabilities under

      applicable securities laws;

 

            (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 material default (or an event

      which, with notice or lapse of time, or both, would constitute a material

      default) under, or result in the breach of, any material contract,

      agreement or other instrument to which the Seller is a party or by which

      the Seller is bound;

 

            (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 have consequences

      that would 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) No litigation is pending or, to the Seller's knowledge,

      threatened against the Seller that would, in the Seller's good faith and

      reasonable judgment, prohibit its entering into this Agreement or

      materially and adversely affect the performance by the Seller of its

      obligations under this Agreement; and

 

            (viii) 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 Aggregate Purchase Price. The consideration received by the Seller

       upon the sale of the Mortgage Loans to the Purchaser will constitute at

      least reasonably equivalent value and fair consideration for the Mortgage

      Loans. The Seller will be solvent at all relevant times prior to, and will

      not be rendered insolvent by, the sale of the Mortgage Loans to the

      Purchaser. The Seller is not selling the Mortgage Loans to the Purchaser

      with any intent to hinder, delay or defraud any of the creditors of the

      Seller.

 

            (b) The Seller hereby makes the representations and warranties

contained in Schedule I for the benefit of the Purchaser and the Trustee for the

benefit of the Certificateholders as of the Closing Date, with respect to (and

solely with respect to) each Mortgage Loan, which representations and warranties

are subject to the exceptions set forth on Schedule II.

 

            (c) With respect to the schedule of exceptions delivered by the

Trustee on the Closing Date, within fifteen (15) Business Days (or, in the

reasonable discretion of the Controlling Class Representative, thirty (30)

Business Days) of the Closing Date, with respect to the documents specified in

clauses (i), (ii), (vii), (ix) (solely with respect to Ground Leases) and (xii)

of the definition of Mortgage File, the Seller shall cure any material exception

listed therein (for the avoidance of doubt, any deficiencies with respect to the

documents specified in clause (ii) resulting solely from a delay in the return

of the related documents from the applicable recording office, shall be cured in

the time and manner described in Section 2.01(c) of the Pooling and Servicing

Agreement). If such exception is not so cured, the Seller shall either (1)

repurchase the related Mortgage Loan, (2) with respect to exceptions relating to

clause (xii) of the definition of "Mortgage File", deposit with the Trustee an

amount, to be held in trust in a Special Reserve Account pursuant to the Pooling

and Servicing Agreement, equal to the amount of the undelivered letter of credit

(in the alternative, the Seller may deliver to the Trustee, with a certified

copy to the Master Servicer and Trustee, a letter of credit for the benefit of

the Master Servicer on behalf of the Trustee and upon the same terms and

conditions as the undelivered letter of credit) which the Master Servicer on

behalf of the Trustee may use (or draw upon, as the case may be) under the same

circumstances and conditions as the Master Servicer would have been entitled to

draw on the undelivered letter of credit, or (3) with respect to any exceptions

relating to clauses (i), (ii) and (vii), deposit with the Trustee an amount, to

be held in trust in a Special Reserve Account pursuant to the Pooling and

Servicing Agreement, equal to 25% of the Stated Principal Balance of the related

Mortgage Loan on such date. Any funds or letter of credit deposited pursuant to

clauses (2) and (3) shall be held by the Trustee until the earlier of (x) the

date on which the Master Servicer certifies to the Trustee and the Controlling

Class Representative that such exception has been cured (or the Trustee

certifies the same to the Controlling Class Representative), at which time such

funds or letter of credit, as applicable, shall be returned to the Seller and

(y) thirty (30) Business Days or, if the Controlling Class Representative has

extended the cure period, forty-five (45) Business Days after the Closing Date;

provided, however, that if such exception is not cured within such thirty (30)

Business Days or forty-five (45) Business Days, as the case may be, (A) in the

case of clause (2), the Trustee shall retain the funds or letter of credit, as

applicable, or (B) in the case of clause (3), the Seller shall repurchase the

related Mortgage Loan in accordance with the terms and conditions of this

Agreement, at which time such funds shall be applied to the Purchase Price of

the related Mortgage Loan and any letter of credit will be returned to the

Seller.

 

            If the Seller receives written notice of a Document Defect or a

Breach pursuant to Section 2.03(a) of the Pooling and Servicing Agreement

relating to a Mortgage Loan, 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 the date

that any party to the Pooling and Servicing Agreement discovers such Document

Defect or Breach provided the Seller receives such notice in a timely manner),

if such Document Defect or Breach shall materially and adversely affect the

value of the applicable Mortgage Loan, the interest of the Trust therein or the

interests of any Certificateholder, cure such Document Defect or Breach, as the

case may be, in all material respects, which shall include payment` of actual or

provable losses and any Additional Trust Fund Expenses directly resulting from

any such Document Defect or Breach or, if such Document Defect or Breach (other

than omissions solely due 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 at the applicable Purchase Price not later than the end

of such 90-day period or substitute a Qualified Substitute Mortgage Loan for

such affected Mortgage 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

Master Servicer for deposit into the Certificate Account, any Substitution

Shortfall Amount in connection therewith; provided, however, that unless the

Breach would cause the Mortgage Loan not to be a Qualified Mortgage, and 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, such Seller shall

have an additional 90 days to complete such cure (or, failing such cure, to

repurchase or substitute the related Mortgage Loan); and provided, further, that

with respect to such additional 90-day period the Seller shall have delivered an

officer's certificate to the Trustee setting forth 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; and provided, further, that no Document Defect (other

than with respect to a Mortgage Note, Mortgage, title insurance policy, Ground

Lease, any letter of credit, any franchise agreement, any comfort letter and (if

required) any comfort letter transfer documents (collectively, the "Core

Material Documents")) shall be considered to materially and adversely affect the

value of the related Mortgage Loan, the interests of the Trust therein or the

interests of any Certificateholder unless the document with respect to which the

Document Defect exists is required in connection with an imminent enforcement of

the mortgagee's rights or remedies under the related Mortgage Loan, defending

any claim asserted by any borrower or third party with respect to the Mortgage

Loan, establishing the validity or priority of any lien or any collateral

securing the Mortgage Loan or for any immediate significant servicing

obligations; provided, further, with respect to Document Defects which

materially and adversely affect the interests of any Certificateholder, the

interests of the Trust therein or the value of the related Mortgage Loan, other

than with respect to Document Defects relating to the Core Material Documents,

any applicable cure period following the initial 90 day cure period may be

extended by the Master Servicer or the Special Servicer if the document involved

is not needed imminently. Such extension will end upon 30 days notice of such

need as reasonably determined by the Master Servicer or Special Servicer (with a

possible 30 day extension if the Master Servicer or Special Servicer agrees that

the Seller is diligently pursuing a cure). The Seller shall cure all Document

Defects which materially and adversely affect the interests of any

Certificateholder, the interests of the Trust therein or the value of the

related Mortgage Loan, regardless of the document involved, no later than 2

years following the Closing Date; provided that the initial 90 day cure period

referenced in this paragraph may not be reduced. 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, the

Seller shall provide the officer's certificate to the Trustee described above as

to the reasons such Document Defect or Breach remains uncured and as to the

actions being taken to pursue cure. Notwithstanding the foregoing, the delivery

of a commitment to issue a policy of lender's title insurance as described in

clause 12 of Schedule I hereof 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 90th

day following the Closing Date.

 

            If (i) any Mortgage Loan is required to be repurchased or

substituted for in the manner described above, (ii) such Mortgage Loan is

cross-collateralized and cross-defaulted with one or more other Mortgage Loans

(each, a "Crossed Loan"), and (iii) the applicable 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 Group (without regard to this paragraph),

then the applicable Document Defect or Breach, as the case may be, will be

deemed to constitute a Document Defect or Breach, as the case may be, as to any

other Crossed Loan in the Crossed Group for purposes of this paragraph, and the

Seller will be required to repurchase or substitute for all of the remaining

Crossed Loan(s) in the related Crossed Group as provided in the immediately

preceding paragraph unless such other Crossed Loans in such Crossed Group

satisfy the Crossed Loan Repurchase Criteria and satisfy all other criteria for

substitution or repurchase of Mortgage Loans set forth herein. In the event that

the remaining 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 Breach or Document Defect exists or to repurchase or

substitute for all of the Crossed Loans in the related Crossed Group. The Seller

shall be responsible for the cost of any Appraisal required to be obtained by

the Master Servicer to determine if the Crossed Loan Repurchase Criteria have

been satisfied, so long as the scope and cost of such Appraisal has been

approved by the Seller (such approval not to be unreasonably withheld).

 

            To the extent that the Seller is required to repurchase or

substitute for a Crossed Loan hereunder in the manner prescribed above while the

Trustee continues to hold any other Crossed Loans in such Crossed Group, neither

the Seller nor the Purchaser shall enforce any remedies against the other's

Primary Collateral, but each is permitted to exercise remedies against the

Primary Collateral securing its respective Crossed Loans, including with respect

to the Trustee, the Primary Collateral securing Crossed Loans still held by the

Trustee.

 

            If the exercise of remedies 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 Loans 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 that complies with this Agreement to remove the threat of

material impairment as a result of the exercise of remedies or some other

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 otherwise on a pro rata basis

based upon their outstanding Stated Principal Balances. Notwithstanding the

foregoing, if a Crossed Loan included in the Trust Fund is modified to terminate

the related cross-collateralization and/or cross-default provisions, as a

condition to such modification, the Seller shall furnish to the Trustee an

Opinion of Counsel that any modification shall not cause an Adverse REMIC Event.

Any expenses incurred by the Purchaser in connection with such modification or

accommodation (including but not limited to recoverable attorney fees) shall be

paid by the Seller.

 

            (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 Purchase Price or

Substitution Shortfall Amount(s), as applicable, in the Certificate Account, and

the delivery of the Mortgage File(s) and the Servicing File(s) for the related

Qualified Substitute Mortgage Loan(s) to the Custodian and the Master Servicer,

respectively, if applicable (i) the Trustee shall execute and deliver such

endorsements and assignments as are provided to it by the Master Servicer, 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

Custodian, the 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 Master Servicer and the Special Servicer

shall release to the Seller any Escrow Payments and Reserve Funds held by it in

respect of such repurchased or deleted Mortgage Loans.

 

            (e) Without limiting the remedies of the Purchaser, the

Certificateholders or the Trustee on behalf of the Certificateholders pursuant

to this Agreement, it is acknowledged that the representations and warranties

are being made for risk allocation purposes. This Section 3 provides the sole

remedy available to the Certificateholders, or the Trustee 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 Section 3 of this Agreement. Nothing in this Agreement shall

prohibit the Purchaser or its assigns (including the Master Servicer and/or the

Special Servicer) from pursuing any course of action authorized by the Pooling

and Servicing Agreement while the Purchaser asserts a claim or brings a cause of

action to enforce any rights set forth herein against the Seller.

 

            (f) With respect to any Mortgage Loan which has become a Defaulted

Mortgage Loan under the Pooling and Servicing Agreement or with respect to which

the related Mortgaged Property has been foreclosed and which is the subject of a

repurchase claim under this Agreement, in accordance with Section 2.03 of the

Pooling and Servicing Agreement, the Special Servicer with the consent of the

Controlling Class Representative shall notify the Seller in writing of its

intention to liquidate such Defaulted Mortgage Loan or REO Property at least 45

days prior to any such action. If (a) the Seller consents to such sale and

voluntarily agrees to repurchase such Defaulted Mortgage Loan or REO Property or

(b) a court of competent jurisdiction determines that the Seller is liable under

this Agreement to repurchase such Defaulted Mortgage Loan or REO Property, then

such Seller shall remit to the Purchaser an amount equal to the difference if

any of the price of such Defaulted Mortgage Loan or REO Property as sold and the

price at which the Seller would have had to repurchase such Defaulted Mortgage

Loan or REO Property under this Agreement. The Seller shall have 10 Business

Days after receipt of notice to determine whether or not to consent to such

sale. If the Seller does not consent to such sale, the Special Servicer shall

contract with a Determination Party (as defined in the Pooling and Servicing

Agreement) as to the merits of such proposed sale. If the related Determination

Party determines that such proposed sale is in accordance with the Servicing

Standard and the provisions of the Pooling and Servicing Agreement with respect

to the sale of Defaulted Mortgage Loans and REO Properties and, subsequent to

such sale, a court of competent jurisdiction determines that Seller was liable

under this Agreement and required to repurchase such Defaulted Mortgage Loan or

REO Property in accordance with the terms hereof, then the Seller shall remit to

Purchaser an amount equal to the difference (if any) between the proceeds of the

related action and the price at which the Seller would have been obligated to

pay had the Seller repurchased such Defaulted Mortgage Loan or REO Property in

accordance with the terms hereof including the costs related to contracting with

the related Determination Party provided that the foregoing procedure in this

Section 3(f) shall not preclude the Seller from repurchasing the Defaulted

Mortgage Loan or REO Property prior to the execution of a binding contract of

sale with a third party in accordance with the other provisions of this Section

3 (excluding this subsection (f)). If the related Determination Party determines

that the sale of the related Defaulted Mortgage Loan or REO Property is not in

accordance with the Servicing Standards and the provisions of the Pooling and

Servicing Agreement with respect to the sale of Defaulted Mortgage Loans and REO

Properties and the Special Servicer subsequently sells such Mortgage Loan or REO

Property, then the Seller will not be liable for any such difference (nor any

cost of contracting with the Determination Party).

 

            (g) Notwithstanding the foregoing, if there exists a Breach relating

to whether or not the Mortgage Loan documents or any particular Mortgage Loan

document requires the related Mortgagor to bear the costs and expenses

associated with any particular action or matter under such Mortgage Loan

document(s) with respect to matters described in Representations 23 and 43 of

Schedule I, then the Purchaser shall direct the Seller in writing to wire

transfer to the Master Servicer for deposit into the Certificate Account, within

90 days of the Seller's receipt of such direction, the amount of any such costs

and expenses borne by the Purchaser, the Certificateholders, the Master

Servicer, the Special Servicer and the Trustee on their behalf that are the

basis of such Breach. Upon its making such deposit, the Seller shall be deemed

to have cured such Breach in all respects. Provided such payment is made in

full, this paragraph describes the sole remedy available to the Purchaser, the

Certificateholders, the Master Servicer, the Special Servicer and the Trustee on

their behalf regarding any such Breach and the Seller shall not be obligated to

repurchase the affected Mortgage Loan on account of such Breach or otherwise

cure such Breach.

 

            SECTION 4. Representations and Warranties of the Purchaser. In order

to induce the Seller to enter into this Agreement, the Purchaser hereby

represents and warrants for the benefit of the Seller 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 North Carolina. The

Purchaser has the full corporate power and authority and legal right to acquire

the Mortgage Loans from the Seller and to transfer the Mortgage Loans to the

Trustee.

 

            (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, reorganization,

receivership 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) 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.

 

            (d) None of the acquisition of the Mortgage Loans by the Purchaser,

the transfer of the Mortgage Loans to the Trustee, and the execution, delivery

or performance of this Agreement by the Purchaser, results or will result in the

creation or imposition of any lien on any of the Purchaser's assets or property,

or conflicts or will conflict with, results or will result in a breach of, or

constitutes or will constitute a default under (A) any term or provision of the

Purchaser's articles of association or bylaws, (B) any term or provision of any

material agreement, contract, instrument or indenture, to which the Purchaser is

a party or by which the Purchaser is bound, or (C) any law, rule, regulation,

order, judgment, writ, injunction or decree of any court or governmental

authority having jurisdiction over the Purchaser or its assets.

 

            (e) 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 Price.

 

            (f) 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.

 

            (g) 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 governmental agency, which default might have consequences that

would 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 Cadwalader, Wickersham & Taft

LLP, Charlotte, North Carolina on the Closing Date.

 

             The Closing shall be subject to each of the following conditions:

 

            (a) All of the representations and warranties of the Seller 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) The Pooling and Servicing Agreement (to the extent it affects

the obligations of the Seller hereunder) and 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, the Initial

Purchasers 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 Master Servicer, respectively, all documents

represented to have been or required to be delivered to the Trustee and the

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 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;

and

 

            (f) A letter shall have been received from the independent

accounting firm of KPMG LLP in form satisfactory to the Purchaser, relating to

certain information regarding the Mortgage Loans and Certificates as set forth

in the Prospectus and Prospectus Supplement, respectively.

 

            Both parties agree to use their best efforts to perform their

respective obligations hereunder in a manner that will enable the Purchaser to

purchase the Mortgage Loans on the Closing Date.

 

            SECTION 6. Closing Documents. The Closing Documents shall consist of

the following:

 

            (a) This Agreement duly executed by the Purchaser and the Seller;

 

            (b) A certificate of the Seller, executed by a duly authorized

officer of the Seller and dated the Closing Date, and upon which the Purchaser,

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 or any other document or

certificate delivered on or before the Closing Date in connection with the

transactions contemplated herein, was at the respective times of such signing

and delivery, and is as of the Closing Date, duly elected or appointed,

qualified and acting as such officer or representative, and the signatures of

such persons appearing on such documents and certificates are their genuine

signatures;

 

            (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 with respect to the Seller, the Mortgage Loans, the related Mortgagors and

the related Mortgaged Properties (i) such officer has carefully examined the

Specified Portions of the Prospectus Supplement and nothing has come to his

attention that would lead him 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 (ii) such officer has examined the Specified Portions of the Memorandum and

nothing has come to his attention that would lead him 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 Prospectus Supplement shall consist

of Annex A thereto, the diskette which accompanies the Prospectus Supplement

(insofar as such diskette is consistent with such Annex A) and the following

sections of the Prospectus Supplement (exclusive of any statements in such

sections that purport to summarize the servicing and administration provisions

of the Pooling and Servicing Agreement): "Summary of Prospectus Supplement--The

Parties--The Mortgage Loan Sellers," "Summary of Prospectus Supplement--The

Mortgage Loans," "Risk Factors--The Mortgage Loans," and "Description of the

Mortgage Pool--General," "--Mortgage Loan History," "--Certain Terms and

Conditions of the Mortgage Loans," "--Assessments of Property Condition,"

"--Additional Mortgage Loan Information," "--Twenty Largest Mortgage Loans,"

"--The Mortgage Loan Sellers," "--Underwriting Standards," and

"--Representations and Warranties; Repurchases and Substitutions." The

"Specified Portions" of the Memorandum shall consist of the Specified Portions

of the Prospectus Supplement and the first and second full paragraphs on page

"iv" of the Memorandum.

 

            (e) The certificate of incorporation of the Seller, and an original

or copy of a certificate of good standing of the Seller issued by the State of

Delaware not earlier than sixty (60) days prior to the Closing Date;

 

            (f) A written opinion of counsel for the Seller (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 Underwriters, the

Initial Purchasers and each of the Rating Agencies, together with such other

written opinions as may be required by the Rating Agencies; and

 

            (g) Such further certificates, opinions and documents as the

Purchaser may reasonably request.

 

            SECTION 7. Indemnification.

 

            (a) The Seller shall indemnify and hold harmless the Purchaser, the

Underwriters, the Initial Purchasers, their respective officers and directors,

and each person, if any, who controls the Purchaser, any Underwriter or any

Initial Purchaser within the meaning of either Section 15 of the Securities Act

of 1933, as amended (the "1933 Act") or Section 20 of the Securities Exchange

Act of 1934, as amended (the "1934 Act"), against any and all losses, expenses

(including the reasonable fees and expenses of legal counsel), claims, damages

or liabilities, joint or several, to which they or any of them may become

subject under the 1933 Act, the 1934 Act or other federal or state statutory law

or regulation, at common law or otherwise, insofar as such losses, claims,

damages or liabilities (or actions in respect thereof) (i) arise out of or are

based upon any untrue statement or alleged untrue statement of a material fact

contained in (A) the Prospectus Supplement, the Preliminary Prospectus

Supplement, the Memorandum, the Diskette or, insofar as they are required to be

filed as part of the Registration Statement pursuant to the No-Action Letters,

any Computational Materials or ABS Term Sheets with respect to the Registered

Certificates, or in any revision or amendment of or supplement to any of the

foregoing, (B) any items similar to Computational Materials or ABS Term Sheets

forwarded by the Seller to the Initial Purchasers, or in any revision or

amendment of or supplement to any of the foregoing or (C) the summaries,

reports, documents and other written and computer materials and all other

information regarding the Mortgage Loans or the Seller furnished by the Seller

for review by prospective investors (the items in (A), (B) and (C) above being

defined as the "Disclosure Material"), or (ii) arise out of or are based upon

the omission or alleged omission to state therein (in the case of Computational

Materials and ABS Term Sheets, when read in conjunction with the Prospectus

Supplement, in the case of items similar to Computational Materials and ABS Term

Sheets, when read in conjunction with the Memorandum, and in the case of any

summaries, reports, documents, written or computer materials, or other

information contemplated in clause (C) above, when read in conjunction with the

Memorandum) a material fact required to be stated therein or necessary to make

the statements therein, in the light of the circumstances under which they were

made, not misleading; but, with respect to the Disclosure Material described in

clauses (A) and (B) of the definition thereof, only if and to the extent that

(I) any such untrue statement or alleged untrue statement or omission or alleged

omission occurring in, or with respect to, such Disclosure Material, arises out

of or is based upon an untrue statement or omission with respect to the Mortgage

Loans, the related Mortgagors and/or the related Mortgaged Properties contained

in the Data File (it being herein acknowledged that the Data File was and will

be used to prepare the Prospectus Supplement and the Preliminary Prospectus

Supplement, including without limitation Annex A thereto, the Memorandum, the

Diskette, any Computational Materials and ABS Term Sheets with respect to the

Registered Certificates and any items similar to Computational Materials and ABS

Term Sheets forwarded to prospective investors in the Non-Registered

Certificates), (II) any such untrue statement or alleged untrue statement or

omission or alleged omission of a material fact occurring in, or with respect

to, such Disclosure Material, is with respect to, or arises out of or is based

upon an untrue statement or omission of a material fact with respect to, the

information regarding the Mortgage Loans, the related Mortgagors, the related

Mortgaged Properties and/or the Seller set forth in the Specified Portions of

each of the Prospectus Supplement, the Preliminary Prospectus Supplement and the

Memorandum, (III) any such untrue statement or alleged untrue statement or

omission or alleged omission occurring in, or with respect to, such Disclosure

Material, arises out of or is based upon a breach of the representations and

warranties of the Seller set forth in or made pursuant to Section 3 or (IV) any

such untrue statement or alleged untrue statement or omission or alleged

omission occurring in, or with respect to, such Disclosure Material, arises out

of or is based upon any other written information concerning the characteristics

of the Mortgage Loans, the related Mortgagors or the related Mortgaged

Properties furnished to the Purchaser, the Underwriters or the Initial

Purchasers by the Seller; provided that the indemnification provided by this

Section 7 shall not apply to the extent that such untrue statement or omission

of a material fact was made as a result of an error in the manipulation of, or

in any calculations based upon, or in any aggregation of the information

regarding the Mortgage Loans, the related Mortgagors and/or the related

Mortgaged Properties set forth in the Data File or Annex A to the Prospectus

Supplement or the Preliminary Prospectus Supplement to the extent such

information was not materially incorrect in the Data File or such Annex A, as

applicable, including without limitation the aggregation of such information

with comparable information relating to the Other Mortgage Loans.

Notwithstanding the foregoing, the indemnification provided in this Section 7(a)

shall not inure to the benefit of any Underwriter or Initial Purchaser (or to

the benefit of any person controlling such Underwriter or Initial Purchaser)

from whom the person asserting claims giving rise to any such losses, claims,

damages, expenses or liabilities purchased Certificates if (x) the subject

untrue statement or omission or alleged untrue statement or omission made in any

Disclosure Material (exclusive of the Prospectus or any corrected or amended

Prospectus or the Memorandum or any corrected or amended Memorandum) is

eliminated or remedied in the Prospectus or the Memorandum (in either case, as

corrected or amended, if applicable), as applicable, and (y) a copy of the

Prospectus or Memorandum (in either case, as corrected or amended, if

applicable), as applicable, shall not have been sent to such person at or prior

to the written confirmation of the sale of such Certificates to such person, and

(z) such Underwriter or Initial Purchaser received electronically or in writing

notice of such untrue statement or omission and updated information concerning

the untrue statement or omission at least one Business Day prior to the written

confirmation of such sale. The Seller shall, subject to clause (c) below,

reimburse each such indemnified party, as incurred, for any legal or other

expenses reasonably incurred by them in connection with investigating or

defending any such loss, claim, damage, liability or action. This indemnity will

be in addition to any liability which the Seller may otherwise have.

 

            (b) For purposes of this Agreement, "Registration Statement" shall

mean such registration statement No. 333-120922 filed by the Purchaser on Form

S-3, including without limitation exhibits thereto and information incorporated

therein by reference; "Base Prospectus" shall mean the prospectus dated January

19, 2005, as supplemented by the prospectus supplement dated January 19, 2005

(the "Prospectus Supplement" and, together with the Base Prospectus, the

"Prospectus") relating to the Registered Certificates, including all annexes

thereto; "Preliminary Prospectus Supplement" shall mean the prospectus

supplement dated January 1, 2005, relating to the Registered Certificates,

including all annexes thereto; "Memorandum" shall mean the private placement

memorandum dated January 19, 2005, relating to the Non-Registered Certificates,

including all exhibits thereto; "Registered Certificates" shall mean the Class

A-1, Class A-2, Class A-3, Class A-PB, Class A-4, Class A-J, Class B, Class C

and Class D Certificates; "Non-Registered Certificates" shall mean the

Certificates other than the Registered Certificates; "Computational Materials"

shall have the meaning assigned thereto in the no-action letter dated May 20,

1994 issued by the Division of Corporation Finance of the Securities and

Exchange Commission (the "Commission") to Kidder, Peabody Acceptance Corporation

I, Kidder, Peabody & Co. Incorporated, and Kidder Structured Asset Corporation

and the no-action letter dated May 27, 1994 issued by the Division of

Corporation Finance of the Commission to the Public Securities Association

(together, the "Kidder Letters"); "ABS Term Sheets" shall have the meaning

assigned thereto in the no-action letter dated February 17, 1995 issued by the

Division of Corporation Finance of the Commission to the Public Securities

Association (the "PSA Letter" and, together with the Kidder Letters, the

"No-Action Letters"); "Diskette" shall mean the diskette or compact disc

attached to each of the Prospectus and the Memorandum; and "Data File" shall

mean the compilation of information and data regarding the Mortgage Loans

covered by the Agreed Upon Procedures Letters dated January 1, 2005 and rendered

by KPMG LLP (a "hard copy" of which Data File was initialed on behalf of the

Seller and the Purchaser).

 

            (c) As promptly as reasonably practicable after receipt by any

person entitled to indemnification under this Section 7 (an "indemnified party")

of notice of the commencement of any action, such indemnified party will, if a

claim in respect thereof is to be made against the Seller (the "indemnifying

party") under this Section 7, notify the indemnifying party in writing of the

commencement thereof; but the omission so to notify the indemnifying party will

not relieve it from any liability that it may have to any indemnified party

under Section 7(a) (except to the extent that such omission has prejudiced the

indemnifying party in any material respect) or from any liability which it may

have otherwise than under this Section 7. In case any such action is brought

against any indemnified party and it notifies the indemnifying party of the

commencement thereof, the indemnifying party will be entitled to participate

therein, and to the extent that it may elect by written notice delivered to the

indemnified party promptly after receiving the aforesaid notice from such

indemnified party, to assume the defense thereof, with counsel selected by the

indemnifying party and reasonably satisfactory to such indemnified party;

provided, however, that if the defendants in any such action include both the

indemnified party and the indemnifying party and the indemnified party or

parties shall have reasonably concluded that there may be legal defenses

available to it or them and/or other indemnified parties that are different from

or additional to those available to the indemnifying party, the indemnified

party shall have the right to select separate counsel to assert such legal

defenses and to otherwise participate in the defense of such action on behalf of

such indemnified party or parties. Upon receipt of notice from the indemnifying

party to such indemnified party of its election so to assume the defense of such

action and approval by the indemnified party of counsel, the indemnifying party

will not be liable for any legal or other expenses subsequently incurred by such

indemnified party in connection with the defense thereof, unless (i) the

indemnified party shall have employed separate counsel in connection with the

assertion of legal defenses in accordance with the proviso to the preceding

sentence (it being understood, however, that the indemnifying party shall not be

liable for the expenses of more than one separate counsel, approved by the

Purchaser, the Underwriters and the Initial Purchasers, representing all the

indemnified parties under Section 7(a) who are parties to such action), (ii) the

indemnifying party shall not have employed counsel reasonably satisfactory to

the indemnified party to represent the indemnified party within a reasonable

time after notice of commencement of the action or (iii) the indemnifying party

has authorized the employment of counsel for the indemnified party at the

expense of the indemnifying party; and except that, if clause (i) or (iii) is

applicable, such liability shall only be in respect of the counsel referred to

in such clause (i) or (iii). Unless it shall assume the defense of any

proceeding, an indemnifying party shall not be liable for any settlement of any

proceeding effected without its written consent but, if settled with such

consent or if there be a final judgment for the plaintiff, the indemnifying

party shall indemnify the indemnified party from and against any loss or

liability by reason of such settlement or judgment. Notwithstanding the

foregoing sentence, if at any time an indemnified party shall have requested an

indemnifying party to reimburse the indemnified party for fees and expenses of

counsel or any other expenses for which the indemnifying party is obligated

under this subsection, the indemnifying party agrees that it shall be liable for

any settlement of any proceeding effected without its written consent if (i)

such settlement is entered into more than 45 days after receipt by such

indemnifying party of the aforesaid request and (ii) such indemnifying party

shall not have reimbursed the indemnified party in accordance with such request

prior to the date of such settlement. If an indemnifying party assumes the

defense of any proceeding, it shall be entitled to settle such proceeding with

the consent of the indemnified party or, if such settlement provides for an

unconditional release of the indemnified party in connection with all matters

relating to the proceeding that have been asserted against the indemnified party

in such proceeding by the other parties to such settlement, which release does

not include a statement as to or an admission of fault, culpability or a failure

to act by or on behalf of any indemnified party without the consent of the

indemnified party.

 

            (d) If the indemnification provided for in this Section 7 is

unavailable to an indemnified party under Section 7(a) hereof or insufficient in

respect of any losses, claims, damages or liabilities referred to therein, then

the indemnifying party, in lieu of indemnifying such indemnified party, shall

contribute to the amount paid or payable by such indemnified party as a result

of such losses, claims, damages or liabilities, in such proportion as is

appropriate to reflect the relative fault of the indemnified and indemnifying

parties in connection with the statements or omissions which resulted in such

losses, claims, damages or liabilities, as well as any other relevant equitable

considerations (taking into account the parties' relative knowledge and access

to information concerning the matter with respect to which the claim was

asserted, the opportunity to correct and prevent any statement or omission or

failure to comply, and any other equitable considerations appropriate under the

circumstances). The relative fault of the indemnified and indemnifying parties

shall be determined by reference to, among other things, whether the untrue or

alleged untrue statement of a material fact or the omission or alleged omission

to state a material fact relates to information supplied by such parties;

provided that no Underwriter or Initial Purchaser shall be obligated to

contribute more than its share of underwriting discounts and commissions and

other fees pertaining to the Certificates less any damages otherwise paid by

such Underwriter or Initial Purchaser with respect to such loss, liability,

claim, damage or expense. It is hereby acknowledged that the respective

Underwr