EXHIBIT 99.1
EXECUTION VERSION
MORTGAGE LOAN PURCHASE AGREEMENT
This Mortgage Loan Purchase Agreement, dated as of December 1, 2005
(this "Agreement"), is entered into between Merrill Lynch Mortgage
Lending, 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"), 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 December 1, 2005 (the "Pooling and
Servicing
Agreement"), among the Purchaser as depositor, KeyCorp Real Estate
Capital
Markets, Inc. as master servicer (in such capacity, the "Master
Servicer"), J.E.
Robert Company, Inc. as special servicer (in such capacity, the
"Special
Servicer"), LaSalle Bank National Association as trustee (the
"Trustee") and ABN
AMRO Bank N.V. as fiscal agent. Capitalized terms used but not
defined herein
(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
December 1, 2005 (the "Underwriting Agreement"), with Merrill
Lynch, Pierce,
Fenner & Smith Incorporated ("Merrill Lynch"), for itself and
as representative
of Countrywide Securities Corporation ("Countrywide Securities"),
IXIS
Securities North America Inc. ("IXIS Securities"), KeyBanc Capital
Markets, a
Division of McDonald Investments Inc. ("McDonald Investments"),
Morgan Stanley &
Co. Incorporated ("Morgan Stanley") and Goldman, Sachs & Co.
("Goldman Sachs";
Merrill Lynch, Countrywide Securities, IXIS Securities, McDonald
Investments,
Morgan Stanley and Goldman Sachs, 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
December 1,
2005 (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 $1,698,917,299 (the "MLML 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 MLML 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 $3,073,749,461 (subject to a
variance of
plus or minus 5%). The purchase and sale of the Mortgage Loans
shall take place
on December 7, 2005 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)
98.30567% of the
MLML Mortgage Loan Balance as of the Cut-off Date, plus (ii)
$1,486,554, which
amount represents the amount of interest accrued on the MLML
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, 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 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
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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
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
Merrill Lynch Mortgage Trust 2005-CKI1, Commercial Mortgage
Pass-Through
Certificates, Series 2005-CKI1, 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 (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
Merrill
Lynch Mortgage Trust 2005-CKI1, Commercial Mortgage Pass-Through
Certificates, Series 2005-CKI1 (or, in the case of a Loan
Combination, in
favor of LaSalle Bank National Association, as trustee for the
registered
holders of Merrill Lynch Mortgage Trust 2005-CKI1, Commercial
Mortgage
Pass-Through Certificates, Series 2005-CKI1, 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 Merrill Lynch Mortgage Trust 2005-CKI1,
Commercial
Mortgage Pass-Through Certificates, Series 2005-CKI1 (or, in the
case of a
Loan Combination, in favor of LaSalle Bank National Association, as
trustee
for the registered holders of Merrill Lynch Mortgage Trust
2005-CKI1,
Commercial Mortgage Pass-Through Certificates, Series 2005-CKI1,
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and in its capacity as lead lender on behalf of the holder 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 Merrill Lynch Mortgage Trust
2005-CKI1, Commercial Mortgage Pass-Through Certificates, Series
2005-CKI1,
as assignee (or, in the case of a Loan Combination, in favor of
LaSalle
Bank National Association, as trustee for the registered holders of
Merrill
Lynch Mortgage Trust 2005-CKI1, Commercial Mortgage Pass-Through
Certificates, Series 2005-CKI1, 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 copy of any Ground Lease, guaranty or ground
lessor estoppel;
(x) 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, in each case
relating to
the subject Mortgage Loan;
(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, a
copy of the related Loan Combination Intercreditor Agreement.
The foregoing Mortgage File delivery requirement shall be subject
to
Section 2.01(c) of the Pooling and Servicing Agreement.
4
(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 90 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 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
Master
Servicer (or, at the direction of the Master Servicer, to the
appropriate
sub-servicer); provided that the Seller shall not be required to
deliver any
draft documents, privileged or other communications, credit
underwriting or due
diligence analyses, credit committee 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.
5
(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
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 Delaware 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 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
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
6
(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
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 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.
7
(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 Master Servicer for deposit into the
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,
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 Trustee 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; and provided, further, that no
Document
Defect (other than with respect to the Specially Designated
Mortgage Loan
Documents) shall be considered to materially and adversely affect
the interests
of the Certificateholders or the value of the related Mortgage Loan
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 servicing obligations.
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
8
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 greater of (A) 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 (B) the weighted average debt
service coverage
ratio for all such Crossed Loans, including the affected Crossed
Loan, as of the
Cut-off Date, 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 lesser of (A) 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 and (B) the weighted
average
loan-to-value ratio for all such Crossed Loans, including the
affected Crossed
Loan, as of the Cut-off Date; 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 Trustee, 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 borrower. 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, the Seller shall provide, once every ninety days,
the officer's
certificate to the Trustee described above as to the reason(s) such
Document
Defect or Breach remains 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 last
proviso 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.
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
9
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. 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 Trustee 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 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 Master Servicer, the Special Servicer, the Trustee 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 Master Servicer or the
Special
Servicer from the related Mortgagor and not a repurchase or
substitution of the
related Mortgage Loan. Following the
10
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 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 Custodian and the
Master Servicer,
respectively, (i) the Trustee shall be required to execute and
deliver such
endorsements and assignments as are provided to it by the 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 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 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 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.
11
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 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 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 articles of association, 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.
12
(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 Sidley Austin Brown
& Wood LLP 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) 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 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 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;
13
(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 and Prospectus Supplement, respectively; and
(g) The Seller shall have executed and delivered concurrently
herewith
that certain Indemnification Agreement, dated as of December 1,
2005, among the
Seller, Countrywide Commercial Real Estate Finance, Inc., KeyBank
National
Association, IXIS Real Estate Capital Inc., 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 Servicing Rights Purchase Agreement, dated as of
December 7, 2005,
between the Seller and KeyCorp Real Estate Capital Markets, Inc.,
duly executed
by such parties;
(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 Initial Purchasers may rely, to the
effect that
(i) such officer has carefully examined the Specified Portions (as
defined
below) 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 carefully examined the Specified Portions of the
Private Placement
14
Memorandum, dated as of December 1, 2005 (the "Memorandum")
(pursuant to which
certain classes of the Private Certificates are being privately
offered) 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-1 thereto, 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-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
"Structural and
Collateral Term Sheet" (insofar as the information contained in
Annex C relates
to the Mortgage Loans sold by the Seller hereunder), the diskette
which
accompanies the Prospectus Supplement (insofar as such diskette is
consistent
with Annex A-1, Annex A-2 and/or Annex B), and the following
sections of the
Prospectus Supplement (only to the extent that any such information
relates to
the Seller 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--Mortgage Loan
Sellers",
"Summary of Prospectus Supplement--Relevant Parties--Glendale
Galleria Pari
Passu and Subordinate Noteholders", "Summary of Prospectus
Supplement--The
Mortgage Loans And The Mortgaged Real Properties," "Risk Factors"
and
"Description of the Mortgage Pool". The "Specified Portions" of the
Memorandum
shall consist of the Specified Portions of the Prospectus
Supplement (as
attached as an exhibit to the Memorandum);
(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) a certificate of good standing of the
Seller issued by
the State of Delaware not earlier than thirty (30) days prior to
the Closing
Date;
(f) A written opinion of counsel for the Seller relating to
corporate
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 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
15
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 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 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. Notices. All notices, copies, requests, consents,
demands
and other communications required hereunder shall be in writing and
sent by
facsimile or delivered to the intended recipient at the "Address
for Notices"
specified beneath its name on the signature pages hereof 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
16
communications shall be deemed to have been duly given when
transmitted by
facsimile or personally delivered or, in the case of a mailed
notice, upon
receipt, in each case given or addressed as aforesaid.
SECTION 10. 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 11. 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 12. 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 13. 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 EACH
IRREVOCABLY WAIVE, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ALL
RIGHT TO TRIAL
BY JURY IN ANY ACTION, CLAIM, SUIT, PROCEEDING OR COUNTERCLAIM
(WHETHER BASED ON
CONTRACT, TORT OR OTHERWISE) RELATING TO OR ARISING OUT OF THIS
AGREEMENT.
SECTION 14. 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.
17
SECTION 15. 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 16. 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 17. 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 18. 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.
SECTION 19. 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 20. 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 20. In addition, if there exists with respect to
any Crossed
Loan Group only one original of any
18
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.
19
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their
names to be signed hereto by their respective duly authorized
officers as of the
date first above written.
SELLER
MERRILL LYNCH MORTGAGE LENDING, INC.
By: /s/ David M. Rodgers
------------------------------------
Name: David M. Rodgers
Title: Vice President
Address for Notices:
Merrill Lynch Mortgage Lending, Inc.
Four World Financial Center
250 Vesey Street
New York, New York 10080
Telecopier No.: (212) 449-3658
Telephone No.: (212) 449-3611
Attention: David M. Rodgers
with a copy to:
Robert M. Denicola, Esq.
Merrill Lynch Mortgage Investors, Inc.
Four World Financial Center
250 Vesey Street
New York, New York 10080
Telecopier No.: (212) 449-7684
Telephone No.: (212) 449-2916
PURCHASER
MERRILL LYNCH MORTGAGE INVESTORS, INC.
By: /s/ George H. Kok
------------------------------------
Name: George H. Kok
Title: Vice President
Address for Notices:
Merrill Lynch Mortgage Investors, Inc.
Four World Financial Center
250 Vesey Street
New York, New York 10080
Telecopier No.: (212) 449-7684
Telephone No.: (212) 449-3611
Attention: David M. Rodgers or Director,
CMBS Securitization
with a copy to:
Robert M. Denicola, Esq.
Merrill Lynch Mortgage Investors, Inc.
Four World Financial Center
250 Vesey Street
New York, New York 10080
Telecopier No.: (212) 449-0265
Telephone No.: (212) 449-2916
MLML 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). 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 December 2005, without giving effect to any
applicable grace
period, nor was any such payment 30 days or more delinquent in the
twelve-month
period immediately preceding the Due Date for such Mortgage Loan in
December
2005, 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 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 or a "marked-up" commitment
binding upon
the title insurer); (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 or "marked-up" commitment binding upon the
title
insurer); (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; and (g)
if the
related Mortgaged Property consists of one or more units in a
condominium, the
related condominium declaration. The Permitted Encumbrances do not,
individually
or in the aggregate, materially 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
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 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 related mortgagee to enter into possession to
collect the rents
or provides for rents to be paid directly to the related mortgagee,
if there is
an event of default. 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
I-2
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.
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.
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 or a "marked up" commitment
binding on the
title insurer) 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,
each of which
is secured by a separate Mortgage, such 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 without the consent of
or notice to
the insurer. Such Title Policy
I-3
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.
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 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
I-4
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
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 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
I-5
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 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
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
I-6
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 minimum amount required, under the terms of coverage,
to compensate
for any damage or loss on a replacement basis, (2) the outstanding
principal
balance of such Mortgage Loan, and (3) 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 ten (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
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
I-7
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).
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
I-8
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;
(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
I-9
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).
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.
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 amounts paid by the tenant as specifically provided
under a related
lease or by the property manager), 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.
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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. 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 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.
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 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 group of
cross-collateralized
I-11
Mortgage Loans, 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
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 an affiliate thereof inspected, or
caused the inspection of, the related Mortgaged Property within the
preceding
twelve (12) months.
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33. No Material Default. To the Seller's knowledge, 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 worn-out or obsolete furniture,
furnishings
and equipment or transfers of a similar nature to the foregoing
meeting the
requirements of the Mortgage Loan.
35. Single Purpose Entity. The Mortgagor on each Mortgage Loan with
a
Cut-off Date Balance of $5,000,000 or more, was, as of the
origination of the
Mortgage Loan, a Single Purpose Entity. For this purpose, a "Single
Purpose
Entity" shall mean an entity, other than an individual, whose
organizational
documents provide substantially to the effect that it was formed or
organized
solely for the purpose of owning and operating one or more of the
Mortgaged
Properties securing the Mortgage Loans and prohibit it from
engaging in any
business unrelated to such Mortgaged Property or Properties, and
whose
organizational documents further provide, or which entity
represented in the
related Mortgage Loan documents, substantially to the effect that
it does not
have any material assets other than those related to its interest
in and
operation of such Mortgaged Property or Properties, or any
indebtedness other
than as permitted by the related Mortgage(s) or the other related
Mortgage Loan
documents, that it has its own books and records and accounts
separate and apart
from any other person, that it holds itself out as a legal entity
(separate and
apart from any other person), that it will not guarantee or assume
the debts of
any other person, that it will not commingle assets with
affiliates, and that it
will not transact business with affiliates (except to the extent
required by any
cash management provisions of the related Mortgage Loan documents)
except on an
arm's-length basis.
36. Whole Loan. Each Mortgage Loan is a whole loan and not a
participation interest in a mortgage loan.
37. Tax Parcels. Each Mortgaged Property constitutes one or more
complete separate tax lots or is subject to an endorsement under
the related
Title Policy insuring same, or in certain instances an application
has been made
to the applicable governing authority for creation of separate tax
lots, which
shall be effective for the next tax year.
I-13
38. ARD Loans. Each ARD Loan requires scheduled monthly payments of
principal. If any ARD Loan is not paid in full by its Anticipated
Repayment
Date, and assuming it is not otherwise in default, (i) the rate at
which such
ARD Loan accrues interest will increase by at least two (2)
percentage points
and (ii) the related Mortgagor is required to enter into a lockbox
arrangement
on the ARD Loan whereby all revenue from the related Mortgaged
Property shall be
deposited directly into a designated account controlled by the
applicable
servicer.
39. Security Interests. A UCC financing statement has been filed
and/or recorded, or submitted for filing and/or recording (or
submitted to a
title company for filing and/or recording pursuant to escrow
instructions), in
all places necessary to perfect (to the extent that the filing or
recording of
such a UCC financing statement can perfect such a security
interest) a valid
security interest in the personal property of the related Mortgagor
granted
under the related Mortgage. If any Mortgaged Property securing a
Mortgage Loan
is operated as a hospitality property, then (a) the security
agreements,
financing statements or other instruments, if any, related to the
Mortgage Loan
secured by such Mortgaged Property establish and create a valid
security
interest in all items of personal property owned by the related
Mortgagor which
are material to the conduct in the ordinary course of the
Mortgagor's business
on the related Mortgaged Property, subject only to purchase money
security
interests, personal property leases and security interests to
secure revolving
lines of credit and similar financing; and (b) one or more UCC
financing
statements covering such personal property have been filed and/or
recorded (or
have been sent for filing or recording or submitted for filing
and/or recording
to a title company pursuant to escrow instructions) wherever
necessary to
perfect under applicable law such security interests (to the extent
a security
interest in such personal property can be perfected by the filing
or recording
of a UCC financing statement under applicable law). The related
assignment of
such security interest (but for insertion of the name of the
assignee and any
related information which is not yet available to the Seller)
executed and
delivered in favor of the Trustee constitutes a legal, valid and,
subject to the
limitations and exceptions set forth in representation 13 hereof,
binding
assignment thereof from the relevant assignor to the Trustee.
Notwithstanding
any of the foregoing, no representation is made as to the
perfection of any
security interest in rents or other personal property to the extent
that
possession or control of such items or actions other than the
filing or
recording of UCC Financing Statements are required in order to
effect such
perfection.
40. Prepayment Premiums and Yield Maintenance Charges. Prepayment
Premiums and Yield Maintenance Charges payable with respect to each
Mortgage
Loan, if any, constitute "customary prepayment penalties" within
meaning of
Treasury Regulations Section 1.860G-1(b)(2).
41. Commencement of Amortization. Except as disclosed in the
Prospectus Supplement, each Mortgage Loan begins to amortize prior
to its Stated
Maturity Date or, in the case of an ARD Loan, prior to its
Anticipated Repayment
Date.
42. Servicing Rights. Except as provided in the Pooling and
Servicing
Agreement, any permitted subservicing agreements and servicing
rights purchase
agreements pertaining thereto, no Person has been granted or
conveyed the right
to service any Mortgage
I-14
Loan or receive any consideration in connection therewith which
will remain in
effect after the Closing Date.
43. Recourse. The related Mortgage Loan documents contain
provisions
providing for recourse against the related Mortgagor, a principal
of such
Mortgagor or an entity controlled by a principal of such Mortgagor,
for damages,
liabilities, expenses or claims sustained in connection with the
Mortgagor's
fraud, material (or, alternatively, intentional) misrepresentation,
waste or
misappropriation of any tenant security deposits (in some cases,
only after
foreclosure or an action in respect thereof), rent (in some cases,
only after an
event of default), insurance proceeds or condemnation awards. The
related
Mortgage Loan documents contain provisions pursuant to which the
related
Mortgagor, a principal of such Mortgagor or an entity controlled by
a principal
of such Mortgagor, has agreed to indemnify the mortgagee for
damages resulting
from violations of any applicable environmental laws.
44. Assignment of Collateral. There is no material collateral
securing
any Mortgage Loan that is not being assigned to the Purchaser.
45. Fee Simple Interest. Unless such Mortgage Loan is secured in
whole
or in material part by a Ground Lease and is therefore the subject
of
representation 18, the interest of the related Mortgagor in the
Mortgaged
Property securing each Mortgage Loan is a fee simple interest in
real property
and the improvements thereon, except for any portion of such
Mortgaged Property
(identified on Annex D) that consists of a leasehold estate that is
not a
material ground lease, which ground lease is not the subject of
representation
18.
46. Escrows. All escrow deposits (including capital improvements
and
environmental remediation reserves) relating to any Mortgage Loan
that were
required to be delivered to the lender under the terms of the
related Mortgage
Loan documents, have been received and, to the extent of any
remaining balances
of such escrow deposits, are in the possession or under the control
of Seller or
its agents (which shall include the Master Servicer). All such
escrow deposits
are being conveyed hereunder to the Purchaser. Any and all material
requirements
under each Mortgage Loan as to completion of any improvements and
as to
disbursement of any funds escrowed for such purpose, which
requirements were to
have been complied with on or before the date hereof, have been
complied with in
all material respects or, if and to the extent not so complied
with, the
escrowed funds (or an allocable portion thereof) have not been
released except
in accordance with the terms of the related loan documents.
47. Operating Statements. In the case of each Mortgage Loan, the
related Mortgage or another Mortgage Loan document requires the
related
Mortgagor, in some cases at the request of the lender, to provide
the holder of
such Mortgage Loan with at least quarterly operating statements and
rent rolls
(if there is more than one tenant) for the related Mortgaged
Property and annual
financial statements of the related Mortgagor, and with such other
information
as may b
