MORTGAGE LOAN PURCHASE AGREEMENT
This Mortgage Loan Purchase Agreement, dated as of September 22,
2006
(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 September 1, 2006 (the "Pooling
and Servicing
Agreement"), among the Purchaser as depositor, Capmark Finance Inc.
and Midland
Loan Services, Inc. as master servicers (each, in such capacity, a
"Master
Servicer"), ING Clarion Partners, LLC as special servicer (the
"Special
Servicer") and LaSalle Bank National Association as trustee (the
"Trustee").
Capitalized terms used but not defined herein (including the
schedules attached
hereto) have the respective meanings set forth in the Pooling and
Servicing
Agreement.
The Purchaser has entered into an Underwriting Agreement, dated as
of
September 22, 2006 (the "Underwriting Agreement"), with Merrill
Lynch, Pierce,
Fenner & Smith Incorporated ("Merrill Lynch") for itself and as
representative
of Countrywide Securities Corporation ("Countrywide Securities"),
PNC Capital
Markets LLC ("PNC Capital Markets"), Goldman, Sachs & Co.
("Goldman Sachs") and
Morgan Stanley & Co. Incorporated ("Morgan Stanley"); Merrill
Lynch, Countrywide
Securities, PNC Capital Markets, Goldman Sachs and Morgan Stanley
collectively,
in such capacity, the "Underwriters"), whereby the Purchaser will
sell to the
Underwriters all of the Certificates that are to be registered
under the
Securities Act of 1933, as amended (such Certificates, the
"Publicly-Offered
Certificates"). The Purchaser has also entered into a Certificate
Purchase
Agreement, dated as of September 22, 2006 (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
$1,077,900,362 (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 $2,425,022,033 (subject to a
variance of plus or
minus 5%). The purchase and sale of the Mortgage Loans shall take
place on
September 29, 2006 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)
104.4374% of the
MLML__Mortgage Loan Balance as of the Cut-off Date, plus (ii)
$5,117,427, 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.
The Purchaser hereby directs the Seller to deliver, and the Seller
shall deliver, the Closing Date Deposit (in the amount of
$594,248.33) to the
applicable Master Servicer on the Closing Date. The Closing Date
Deposit shall
be delivered to the account specified by the applicable Master
Servicer by wire
transfer of immediately available funds.
SECTION 2. Conveyance of Mortgage Loans.
(a) Effective as of the Closing Date, subject only to the Seller's
receipt of the Purchase Consideration and the satisfaction or
waiver of the
conditions to closing set forth in Section 5 of this Agreement
(which conditions
shall be deemed to have been satisfied or waived upon the Seller's
receipt of
the Purchase Consideration), the Seller does hereby sell, transfer,
assign, set
over and otherwise convey to the Purchaser, without recourse
(except as set
forth in this Agreement), all the right, title and interest of the
Seller in and
to the Mortgage Loans identified on the Mortgage Loan Schedule as
of such date,
on a servicing released basis (subject to certain agreements
regarding servicing
as provided in the Servicing Rights Purchase Agreement (as defined
in Section
6(a)(iii) hereof)), together with all of the Seller's right, title
and interest
in and to the proceeds of any related title, hazard, primary
mortgage or other
insurance proceeds and all of the Seller's right, title and
interest in and to
the Closing Date Deposit. 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.
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(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
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
ML-CFC Commercial Mortgage Trust 2006-3, Commercial Mortgage
Pass-Through
Certificates, Series 2006-3, 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
ML-CFC
Commercial Mortgage Trust 2006-3, Commercial Mortgage Pass-Through
Certificates, Series 2006-3 (or, in the case of a Loan Combination,
in
favor of LaSalle Bank National Association, as trustee for the
registered
holders of ML-CFC Commercial Mortgage Trust 2006-3, Commercial
Mortgage
Pass-Through Certificates, Series 2006-3, 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
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of LaSalle Bank National Association, as trustee for the registered
holders
of ML-CFC Commercial Mortgage Trust 2006-3, Commercial Mortgage
Pass-Through Certificates, Series 2006-3 (or, in the case of a Loan
Combination, in favor of LaSalle Bank National Association, as
trustee for
the registered holders of ML-CFC Commercial Mortgage Trust 2006-3,
Commercial Mortgage Pass-Through Certificates, Series 2006-3, 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 ML-CFC Commercial Mortgage
Trust
2006-3, Commercial Mortgage Pass-Through Certificates, Series
2006-3, as
assignee (or, in the case of a Loan Combination, in favor of
LaSalle Bank
National Association, as trustee for the registered holders of
ML-CFC
Commercial Mortgage Trust 2006-3, Commercial Mortgage Pass-Through
Certificates, Series 2006-3, and in its capacity as lead lender on
behalf
of the holder of the related Non-Trust Loan(s)), or in blank;
(ix) an original or a copy of any Ground Lease, guaranty or ground
lessor estoppel;
(x) an original or a copy of any intercreditor agreement relating
to
permitted debt of the Mortgagor and any intercreditor agreement
relating to
mezzanine debt related to the Mortgagor;
(xi) an original or a copy of any loan agreement, any escrow or
reserve agreement, any security agreement, any management
agreement, any
agreed upon procedures letter, any lockbox or cash management
agreements,
any environmental reports or any letter of credit (which letter of
credit
shall not be delivered in original from to the Trustee, but rather
to the
applicable Master Servicer), in each case relating to the subject
Mortgage Loan;
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(xii) with respect to a Mortgage Loan secured by a hospitality
property, a signed copy of any franchise agreement and/or
franchisor
comfort letter; and
(xiii) if such Trust Mortgage Loan is part of a Loan Combination,
an
original or a copy of the related Loan Combination Intercreditor
Agreement.
The foregoing Mortgage File delivery requirement shall be subject
to
Section 2.01(c) of the Pooling and Servicing Agreement.
(d) The Seller shall retain an Independent third party (the
"Recording/Filing Agent") that shall, as to each Mortgage Loan,
promptly (and in
any event within 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 applicable Master Servicer in connection with its duties
under the
Pooling and Servicing Agreement, and (c) are in the possession or
under the
control of the Seller, together with all unapplied escrow amounts
and reserve
amounts in the possession or under the control of the Seller that
relate to the
Mortgage Loans, shall be delivered or caused to be delivered by the
Seller to
the applicable Master Servicer (or, at the direction of such Master
Servicer, to
the appropriate sub-servicer); provided that the Seller shall not
be required to
deliver any draft documents, privileged or other communications,
credit
underwriting, legal or other due diligence analyses, credit
committee
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briefs or memoranda or other internal approval documents or data or
internal
worksheets, memoranda, communications or evaluations.
The Seller agrees to use reasonable efforts to deliver to the
Trustee, for
its administrative convenience in reviewing the Mortgage Files, a
mortgage loan
checklist for each Mortgage Loan. The foregoing sentence
notwithstanding, the
failure of the Seller to deliver a mortgage loan checklist or a
complete
mortgage loan checklist shall not give rise to any liability
whatsoever on the
part of the Seller to the Purchaser, the Trustee or any other
person because the
delivery of the mortgage loan checklist is being provided to the
Trustee solely
for its administrative convenience.
(f) The Seller shall take such actions as are reasonably necessary
to
assign or otherwise grant to the Trust Fund the benefit of any
letters of credit
in the name of the Seller, which secure any Mortgage Loan.
(g) On or before the Closing Date, the Seller shall provide to the
applicable Master Servicer, the initial data (as of the Cut-off
Date or the most
recent earlier date for which such data is available) contemplated
by the CMSA
Loan Setup File, the CMSA Loan Periodic Update File, the CMSA
Operating
Statement Analysis Report and the CMSA Property File.
SECTION 3. Representations, Warranties and Covenants of Seller.
(a) The Seller hereby represents and warrants to and covenants with
the Purchaser, as of the date hereof, that:
(i) The Seller is a corporation duly organized, validly existing
and
in good standing under the laws of the State of 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, conservatorship
or
moratorium, (B) other laws relating to or affecting the rights of
creditors
generally, or (C) general equity principles (regardless of whether
such
enforcement is considered in a proceeding in equity or at law).
(iii) The execution and delivery of this Agreement by the Seller
and
the Seller's performance and compliance with the terms of this
Agreement
will not (A) violate the Seller's certificate of incorporation or
bylaws,
(B) violate any law or regulation or any administrative decree or
order to
which it is subject if compliance therewith is necessary (1) to
ensure the
enforceability of this Agreement or (2) for the Seller to perform
its
duties and obligations under this Agreement, or (C) constitute a
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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 (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
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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.
(x) The Prospectus Supplement contains all the information that is
required to be provided in respect of the Seller (that arise from
its role
as "sponsor" (within the meaning of Regulation AB)), the Mortgage
Loans,
the related Mortgagors and the related Mortgaged Properties
pursuant to
Regulation AB. For purpose of this Agreement, "Regulation AB" shall
mean
Subpart 229.1100 - Asset Backed Securities (Regulation AB), 17
C.F.R.
Sections 229.1100-229.1123, as such may be amended from time to
time, and
subject to such clarification and interpretation as have been
provided by
the Commission in the adopting release (Asset-Backed Securities,
Securities
Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005))
or by
the staff of the Commission, or as may be provided by the
Commission or its
staff from time to time.
(b) The Seller hereby makes the representations and warranties
contained in Schedule I hereto for the benefit of the Purchaser and
the Trustee
for the benefit of the Certificateholders as of the Closing Date
(unless a
different date is specified therein), with respect to (and solely
with respect
to) each Mortgage Loan, subject, however, to the exceptions set
forth on Annex A
to Schedule I of this Agreement.
(c) If the Seller discovers or 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 such discovery or receipt of such notice (or, in the case
of a
Document Defect or Breach relating to a Mortgage Loan not being a
"qualified
mortgage" within the meaning of the REMIC Provisions (a "Qualified
Mortgage"),
not later than 90 days from any party to the Pooling and Servicing
Agreement
discovering such Document Defect or Breach, provided the Seller
receives such
notice in a timely manner), if such Document Defect or Breach
materially and
adversely affects the value of the related Mortgage Loan or the
interests of the
Certificateholders therein, cure such Document Defect or Breach, as
the case may
be, in all material respects, which shall include payment of losses
and any
Additional Trust Fund Expenses associated therewith or, if such
Document Defect
or Breach (other than omissions due solely to a document not having
been
returned by the related recording office) cannot be cured within
such 90-day
period, (i) repurchase the affected Mortgage Loan (which, for the
purposes of
this clause (i), shall include an REO Loan) at the applicable
Purchase Price (as
defined in the Pooling and Servicing Agreement) not later than the
end of such
90-day period or (ii) substitute a Qualified Substitute Mortgage
Loan for such
affected Mortgage Loan (which, for purposes of this clause (ii),
shall include
an REO Loan) not later than the end of such 90-day period (and in
no event later
than the second anniversary of the Closing Date) and pay the
applicable Master
Servicer for deposit into its Collection Account any Substitution
Shortfall
Amount in connection therewith; provided, however, that, unless the
Document
Defect or Breach would cause the Mortgage Loan not to be a
Qualified Mortgage,
if such Document Defect or Breach is capable of being cured but not
within such
90-day period and the Seller has commenced and is diligently
proceeding with the
cure of such Document Defect or Breach within such 90-day period,
the Seller
shall have an additional 90 days to complete such cure (or,
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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 Mortgagor 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 Crossed Loan Group for
purposes of
this paragraph and the Seller shall be required to repurchase or
substitute all
such Crossed Loans unless (1) the weighted average debt service
coverage ratio
for all the remaining Crossed Loans for the four calendar quarters
immediately
preceding such repurchase or substitution is not less than the
weighted average
debt service coverage ratio for all such Crossed Loans, including
the affected
Crossed Loan, for the four calendar quarters immediately preceding
such
repurchase or substitution, and (2) the weighted average loan
to-value ratio for
the remaining Crossed Loans, determined at the time of repurchase
or
substitution, based upon an appraisal obtained by the Special
Servicer at the
expense of the Seller shall not be greater than the weighted
average
loan-to-value ratio for all such Crossed Loans, including the
affected Crossed
Loan determined at the time of repurchase or substitution, based
upon an
appraisal obtained by the Special Servicer at the expense of the
Seller;
provided, that if such debt service coverage and loan-to-value
criteria are
satisfied, any other Crossed Loan (that is not the Crossed Loan
directly
affected by the subject Document Defect or Breach), shall be
released from its
cross-collateralization and cross-default provision so long as such
Crossed Loan
(that is not the Crossed Loan directly affected by the subject
Document Defect
or Breach) is held in the Trust Fund; and provided, further, that
the repurchase
or replacement of less than all such Crossed Loans and the release
of any
Crossed Loan from a cross-collateralization and cross-default
provision shall be
further subject to (i) 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
and (ii) the
consent of the Controlling Class Representative (if one is then
acting), which
consent shall not be unreasonably withheld or delayed. In the event
that one or
more of such other Crossed Loans satisfy the aforementioned
criteria, the Seller
may elect either
9
to repurchase or substitute for only the affected Crossed Loan as
to which the
related Document Defect or Breach exists or to repurchase or
substitute for all
of the Crossed Loans in the related Crossed Loan Group. All
documentation
relating to the termination of the cross-collateralization
provisions of a
Crossed Loan being repurchased shall be prepared at the expense of
the Seller
and, where required, with the consent of the related Mortgagor. For
a period of
two years from the Closing Date, so long as there remains any
Mortgage File
relating to a Mortgage Loan as to which there is any uncured
Document Defect or
Breach known to the Seller that existed as of the Closing Date, the
Seller shall
provide, once every 90 days, the officer's certificate to the
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 second and third provisos in the sole sentence of
the preceding
paragraph), the Seller shall in all cases on or prior to the second
anniversary
of the Closing Date either cause such Document Defect or Breach to
be cured or
repurchase or substitute for the affected Mortgage Loan. The
delivery of a
commitment to issue a policy of lender's title insurance as
described in
representation 8 set forth on Schedule I hereto in lieu of the
delivery of the
actual policy of lender's title insurance shall not be considered a
Document
Defect or Breach with respect to any Mortgage File if such actual
policy of
insurance is delivered to the Trustee or a Custodian on its behalf
not later
than the 180th day following the Closing Date.
To the extent that the Seller is required to repurchase or
substitute
for a Crossed Loan hereunder in the manner prescribed above in this
Section 3(c)
while the Trustee continues to hold any other Crossed Loans in such
Crossed Loan
Group, the Seller and the Purchaser shall not enforce any remedies
against the
other's Primary Collateral (as defined below), but each is
permitted to exercise
remedies against the Primary Collateral securing its respective
Crossed Loan(s),
so long as such exercise does not materially impair the ability of
the other
party to exercise its remedies against the Primary Collateral
securing the
Crossed Loan(s) held thereby.
If the exercise by one party would materially impair the ability of
the other party to exercise its remedies with respect to the
Primary Collateral
securing the Crossed Loan(s) held by such party, then the Seller
and the
Purchaser shall forbear from exercising such remedies until the
Mortgage Loan
documents evidencing and securing the relevant Crossed Loans can be
modified in
a manner consistent with this Agreement to remove the threat of
material
impairment as a result of the exercise of remedies or some other
mutually agreed
upon accommodation can be reached. Any reserve or other cash
collateral or
letters of credit securing the Crossed Loans shall be allocated
between such
Crossed Loans in accordance with the Mortgage Loan documents, or,
if the related
Mortgage Loan documents do not so provide, then on a pro rata basis
based upon
their outstanding Stated Principal Balances. Notwithstanding the
foregoing, if a
Crossed Loan is modified to terminate the related
cross-collateralization and/or
cross-default provisions, the Seller shall furnish to the 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.
10
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 applicable 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 applicable Master
Servicer or the
Special Servicer from the related Mortgagor and not a repurchase or
substitution
of the related Mortgage Loan. Following the Seller's remittance of
funds in
payment of such costs and expenses, the Seller shall be deemed to
have cured the
breach of representation 30 in all respects. To the extent any fees
or expenses
that are the subject of a cure by the Seller are subsequently
obtained from the
related Mortgagor, the cure payment made by the Seller shall be
returned to the
Seller. Notwithstanding the prior provisions of this paragraph, the
Seller,
acting in its sole discretion, may effect a repurchase or
substitution (in
accordance with the provisions of this Section 3(c) setting forth
the manner in
which a Mortgage Loan may be repurchased or substituted) of a
Mortgage Loan, as
to which representation 30 set forth on Schedule I has been
breached, in lieu of
paying the costs and expenses that were the subject of the breach
of
representation 30 set forth on Schedule I.
(d) In connection with any permitted repurchase or substitution of
one
or more Mortgage Loans contemplated hereby, upon receipt of a
certificate from a
Servicing Officer certifying as to the receipt of the applicable
Purchase Price
(as defined in the Pooling and Servicing Agreement) or Substitution
Shortfall
Amount(s), as applicable, in the applicable Master Servicer's
Collection
Account, and, if applicable, the delivery of the Mortgage File(s)
and the
Servicing File(s) for the related Qualified Substitute Mortgage
Loan(s) to the
Custodian and the applicable Master Servicer, respectively, (i) the
Trustee
shall be required to execute and deliver such endorsements and
assignments as
are provided to it by the applicable Master Servicer or the Seller,
in each case
without recourse, representation or warranty, as shall be
11
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 applicable Master Servicer and the
Special Servicer
shall each tender to the Seller, upon delivery to each of them of a
receipt
executed by the Seller, all portions of the Mortgage File and other
documents
pertaining to such Mortgage Loan possessed by it, and (iii) the
applicable
Master Servicer and the Special Servicer 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 this Section 3.
SECTION 4. Representations, Warranties and Covenants of the
Purchaser.
In order to induce the Seller to enter into this Agreement, the
Purchaser hereby
represents, warrants and covenants for the benefit of the Seller as
of the date
hereof that:
(a) The Purchaser is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and
the Purchaser
has taken all necessary corporate action to authorize the
execution, delivery
and performance of this Agreement by it, and has the power and
authority to
execute, deliver and perform this Agreement and all transactions
contemplated
hereby.
(b) This Agreement has been duly and validly authorized, executed
and
delivered by the Purchaser, all requisite action by the Purchaser's
directors
and officers has been taken in connection therewith, and (assuming
the due
authorization, execution and delivery hereof by the Seller) this
Agreement
constitutes the valid, legal and binding agreement of the
Purchaser, enforceable
against the Purchaser in accordance with its terms, except as such
enforcement
may be limited by (A) laws relating to bankruptcy, insolvency,
fraudulent
transfer, reorganization, receivership, conservatorship or
moratorium, (B) other
laws relating to or
12
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 if compliance therewith is necessary (1) to ensure the
enforceability of
this Agreement or (2) for the Purchaser to perform its duties and
obligations
under this Agreement or (C) constitute a default (or an event
which, with notice
or lapse of time, or both, would constitute a default) under, or
result in the
breach of, any material contract, agreement or other instrument to
which the
Purchaser is a party or by which the Purchaser is bound, which
default might
have consequences that would, in the Purchaser's reasonable and
good faith
judgment, materially and adversely affect the condition (financial
or other) or
operations of the Purchaser or its properties or have consequences
that would
materially and adversely affect its performance hereunder.
(d) The Purchaser is not a party to or bound by any agreement or
instrument or subject to any certificate of incorporation, bylaws
or any other
corporate restriction or any judgment, order, writ, injunction,
decree, law or
regulation that would, in the Purchaser's reasonable and good faith
judgment,
materially and adversely affect the ability of the Purchaser to
perform its
obligations under this Agreement or that requires the consent of
any third
person to the execution of this Agreement or the performance by the
Purchaser of
its obligations under this Agreement (except to the extent such
consent has been
obtained).
(e) Except as may be required under federal or state securities
laws
(and which will be obtained on a timely basis), no consent,
approval,
authorization or order of, registration or filing with, or notice
to, any
governmental authority or court, is required, under federal or
state law, for
the execution, delivery and performance by the Purchaser of, or
compliance by
the Purchaser with, this Agreement, or the consummation by the
Purchaser of any
transaction described in this Agreement.
(f) Under GAAP and for federal income tax purposes, the Purchaser
will
report the transfer of the Mortgage Loans by the Seller to the
Purchaser as a
sale of the Mortgage Loans to the Purchaser in exchange for
consideration
consisting of a cash amount equal to the aggregate Purchase
Consideration.
(g) There is no action, suit, proceeding or investigation pending
or
to the knowledge of the Purchaser, threatened against the Purchaser
in any court
or by or before any other governmental agency or instrumentality
which would
materially and adversely affect the validity of this Agreement or
any action
taken in connection with the obligations of the Purchaser
contemplated herein,
or which would be likely to impair materially the ability of the
Purchaser to
enter into and/or perform under the terms of this Agreement.
(h) The Purchaser is not in default with respect to any order or
decree of any court or any order, regulation or demand of any
federal, state,
municipal or other governmental agency or body, which default might
have
consequences that would, in the Purchaser's reasonable and good
faith judgment,
materially and adversely affect the condition (financial or
13
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 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 applicable Master Servicer,
respectively, all
documents represented to have been or required to be delivered to
the Trustee
and such Master Servicer pursuant to Section 2 of this Agreement;
(d) All other terms and conditions of this Agreement required to be
complied with on or before the Closing Date shall have been
complied with in all
material respects and the Seller and the Purchaser shall have the
ability to
comply with all terms and conditions and perform all duties and
obligations
required to be complied with or performed after the Closing Date;
(e) The Seller shall have paid all fees and expenses payable by it
to
the Purchaser or otherwise pursuant to this Agreement as of the
Closing Date;
(f) One or more letters from the independent accounting firm of
Ernst
& Young LLP in form satisfactory to the Purchaser and relating
to certain
information regarding the Mortgage Loans and Certificates as set
forth in the
Prospectus (as defined in Section 6(d) of this Agreement) and
Prospectus
Supplement (as defined in Section 6(d) of this Agreement),
respectively; and
(g) The Seller shall have executed and delivered concurrently
herewith
that certain Indemnification Agreement, dated as of September 22,
2006, among
the Seller, Countrywide Commercial Real Estate Finance, Inc., PNC
Bank, National
Association, 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:
14
(a) (i) This Agreement duly executed by the Purchaser and the
Seller,
(ii) the Pooling and Servicing Agreement duly executed by the
parties thereto
and (iii) the agreement(s) pursuant to which the servicing rights
with respect
to the Mortgage Loans are being sold to the applicable Master
Servicer (such
agreement(s), individually or collectively, as the case may be,
"Servicing
Rights Purchase Agreement");
(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 Free Writing Prospectus and nothing has come to
his/her attention
that would lead him/her to believe that the Specified Portions of
the Free
Writing Prospectus, as of the Time of Sale or as of the Closing
Date, included
or include any untrue statement of a material fact relating to the
Mortgage
Loans or omitted or omit to state therein a material fact necessary
in order to
make the statements therein relating to the Mortgage Loans, in
light of the
circumstances under which they were made, not misleading, (ii) such
officer has
carefully examined the Specified Portions (as defined below) of the
Prospectus
Supplement and nothing has come to his/her attention that would
lead him/her to
believe that the Specified Portions of the Prospectus Supplement,
as of the date
of the Prospectus Supplement or as of the Closing Date, included or
include any
untrue statement of a material fact relating to the Mortgage Loans
or omitted or
omit to state therein a material fact necessary in order to make
the statements
therein relating to the Mortgage Loans, in light of the
circumstances under
which they were made, not misleading, and (iii) such officer has
carefully
examined the Specified Portions (as defined below) of the
Memorandum (pursuant
to which certain classes of the Private Certificates are being
privately
offered) and nothing has come to his/her attention that would lead
him/her to
believe that the Specified Portions of the Memorandum, as of the
date thereof or
as of the Closing Date, included or include any untrue statement of
a material
fact relating to the Mortgage Loans or omitted or omit to state
therein a
material fact necessary in order to make the statements therein
related to the
Mortgage Loans, in the light of the circumstances under which they
were made,
not misleading.
15
The "Specified Portions" of the Free Writing Prospectus shall
consist
of Annex A-1 (as contained in each of the September 13, 2006 Free
Writing
Prospectus and the September 15, 2006 Revised Annex A-1 Free
Writing Prospectus)
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 Free Writing Prospectus,
entitled "Certain
Statistical Information Regarding the Mortgage Loans" (insofar as
the
information contained in Annex A-2 relates to the Mortgage Loans
sold by the
Seller hereunder), Annex A-3 to the Free Writing Prospectus,
entitled "Sonic
Automotive I Amortization Schedule", Annex A-4 to the Free Writing
Prospectus,
entitled "Memorial Regional MOB III Amortization Schedule", Annex B
to the Free
Writing Prospectus entitled "Certain Characteristics Regarding
Multifamily
Properties" (insofar as the information contained in Annex B
relates to the
Mortgage Loans sold by the Seller hereunder), Annex C to the Free
Writing
Prospectus, entitled "Preliminary Structural and Collateral Term
Sheet" (as
modified by the September 15, 2006 Term sheet and insofar as the
information
contained in Annex C relates to the Mortgage Loans sold by the
Seller
hereunder), the CD-ROM which accompanies the Free Writing
Prospectus (insofar as
such CD-ROM is consistent with Annex A-1, Annex A-2, Annex A-3,
Annex A-4 and/or
Annex B), and the following sections of the Free Writing Prospectus
(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
Offering
Prospectus--Relevant Parties--Sponsors/Mortgage Loan Sellers",
"Summary of
Offering Prospectus--The Mortgage Loans and the Mortgaged Real
Properties",
"Risk Factors--Risks Related to the Mortgage Loans", "Description
of the
Mortgage Pool", "Transaction Participants--The Sponsors" and
"Affiliations and
Certain Relationships and Related Transactions".
The "Specified Portions" of the Prospectus Supplement shall consist
of
Annex A-1 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 A-3 to the Prospectus Supplement, entitled
"Sonic
Automotive I Amortization Schedule", Annex A-4 to the Prospectus
Supplement,
entitled "Memorial Regional MOB III Amortization Schedule", Annex B
to the
Prospectus Supplement entitled "Certain Characteristics Regarding
Multifamily
Properties" (insofar as the information contained in Annex B
relates to the
Mortgage Loans sold by the Seller hereunder), Annex C to the
Prospectus
Supplement, entitled "Description of the Ten Largest Mortgage Loans
or Groups of
Cross-Collateralized Mortgage Loans" (insofar as the information
contained in
Annex C relates to the Mortgage Loans sold by the Seller
hereunder), the CD-ROM
which accompanies the Prospectus Supplement (insofar as such CD-ROM
is
consistent with Annex A-1, Annex A-2, Annex A-3 Annex A-4 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--Sponsors/Mortgage Loan Sellers", "Summary of
16
Prospectus Supplement--The Mortgage Loans and the Mortgaged Real
Properties",
"Risk Factors--Risks Related to the Mortgage Loans", "Description
of the
Mortgage Pool", "Transaction Participants--The Sponsors" and
"Affiliations and
Certain Relationships and Related Transactions".
The "Specified Portions" of the Memorandum shall consist of the
Specified Portions of the Prospectus Supplement (as attached as an
exhibit to
the Memorandum).
For purposes of this Section 6(d) and this Agreement, the following
terms have the meanings set forth below:
"Free Writing Prospectus" means the Offering Prospectus dated
September 13, 2006 (the "September 13, 2006 Free Writing
Prospectus"), and
relating to the Publicly-Offered Certificates, as supplemented and
amended by
those certain free writing prospectuses (the first pages of which
are attached
hereto as Schedule III) comprised of a revised Annex A-1 to the
Offering
Prospectus that was distributed to potential investors in the
Publicly-Offered
Certificates by e-mail on September 15, 2006 (the "September 15,
2006 Revised
Annex A-1 Free Writing Prospectus") and a revised preliminary and
structural
term sheet that was distributed to potential investors in the
Publicly Offered
Certificates by e-mail on September 15, 2006 (the "September 15,
2006 Term
Sheet");
"Memorandum" means the confidential Private Placement Memorandum
dated
September 22, 2006, and relating to the Private Certificates;
"Prospectus" means the prospectus dated September 13, 2006.
"Prospectus Supplement" means the prospectus supplement dated
September 22, 2006, that supplements the Prospectus and relates to
the
Publicly-Offered Certificates; and
"Time of Sale" means September 22, 2006, at 11:15 a.m.
(e) (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
organizational and enforceability matters (which opinion may be
from in-house
counsel, outside counsel or a combination thereof), reasonably
satisfactory to
the Purchaser, its counsel and the Rating Agencies, dated the
Closing Date and
addressed to the Purchaser, the Trustee, the 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.
17
SECTION 7. Costs. Whether or not this Agreement is terminated, both
the Seller and the Purchaser shall pay their respective share of
the transaction
expenses incurred in connection with the transactions contemplated
herein as set
forth in the closing statement prepared by the Purchaser and
delivered to and
approved by the Seller on or before the Closing Date, and in the
memorandum of
understanding to which the Seller and the Purchaser (or an
affiliate thereof)
are parties with respect to the transactions contemplated by this
Agreement.
SECTION 8. Grant of a Security Interest. It is the express intent
of
the parties hereto that the conveyance of the Mortgage Loans by the
Seller to
the Purchaser as provided in Section 2 of this Agreement be, and be
construed
as, a sale of the Mortgage Loans by the Seller to the Purchaser and
not as a
pledge of the Mortgage Loans by the Seller to the Purchaser to
secure a debt or
other obligation of the Seller. However, if, notwithstanding the
aforementioned
intent of the parties, the Mortgage Loans are held to be property
of the Seller,
then, (a) it is the express intent of the parties that such
conveyance be deemed
a pledge of the Mortgage Loans by the Seller to the Purchaser to
secure a debt
or other obligation of the Seller, and (b) (i) this Agreement shall
also be
deemed to be a security agreement within the meaning of Article 9
of the UCC of
the applicable jurisdiction; (ii) the conveyance provided for in
Section 2 of
this Agreement shall be deemed to be a grant by the Seller to the
Purchaser of a
security interest in all of the Seller's right, title and interest
in and to the
Mortgage Loans, and all amounts payable to the holder of the
Mortgage Loans in
accordance with the terms thereof, and all proceeds of the
conversion, voluntary
or involuntary, of the foregoing into cash, instruments, securities
or other
property, including without limitation, all amounts, other than
investment
earnings (other than investment earnings required by Section
3.19(a) of the
Pooling and Servicing Agreement to offset Prepayment Interest
Shortfalls), from
time to time held or invested in the applicable Master Servicer's
Collection
Account, the Distribution Account or, if established, the REO
Account whether in
the form of cash, instruments, securities or other property; (iii)
the
assignment to the Trustee of the interest of the Purchaser as
contemplated by
Section 1 of this Agreement shall be deemed to be an assignment of
any security
interest created hereunder; (iv) the possession by the Trustee or
any of its
agents, including, without limitation, the Custodian, of the
Mortgage Notes, and
such other items of property as constitute instruments, money,
negotiable
documents or chattel paper shall be deemed to be possession by the
secured party
for purposes of perfecting the security interest pursuant to
Section 9-313 of
the UCC of the applicable jurisdiction; and (v) notifications to
persons (other
than the Trustee) holding such property, and acknowledgments,
receipts or
confirmations from persons (other than the Trustee) holding such
property, shall
be deemed notifications to, or acknowledgments, receipts or
confirmations from,
financial intermediaries, bailees or agents (as applicable) of the
secured party
for the purpose of perfecting such security interest under
applicable law. The
Seller and the Purchaser shall, to the extent consistent with this
Agreement,
take such actions as may be necessary to ensure that, if this
Agreement were
deemed to create a security interest in the Mortgage Loans, such
security
interest would be deemed to be a perfected security interest of
first priority
under applicable law and will be maintained as such throughout the
term of this
Agreement and the Pooling and Servicing Agreement. The Seller does
hereby
consent to the filing by the Purchaser of financing statements
relating to the
transactions contemplated hereby without the signature of the
Seller.
SECTION 9. Notice of Exchange Act Reportable Events. The Seller
hereby
agrees to deliver to the Purchaser any disclosure information
relating to any
event, specifically
18
relating to the Seller, reasonably determined in good faith by the
Purchaser as
required to be reported on Form 8-K, Form 10-D or Form 10-K by the
Trust Fund
(in formatting reasonably appropriate for inclusion in such form)
insofar as
such disclosure is required under Item 1117 or 1119 of Regulation
AB or Item
1.03 to Form 8-K. The Seller shall use reasonable efforts to
deliver proposed
disclosure language relating to any event, specifically relating to
the Seller,
described under Item 1117 or 1119 of Regulation AB or Item 1.03 to
Form 8-K to
the Purchaser as soon as reasonably practicable after the Seller
becomes aware
of such event and in no event more than (2) business days following
the
occurrence of such event if such event is reportable under Item
1.03 to Form
8-K. The obligation of the Seller to provide the above referenced
disclosure
materials in any fiscal year of the Trust will terminate upon the
Trustee's
filing a Form 15 with respect to the Trust as to that fiscal year
in accordance
with Section 8.16 of the Pooling and Servicing Agreement or the
reporting
requirements with respect to the Trust under the Securities
Exchange Act of
1934, as amended (the "1934 Act") have otherwise automatically
suspended. The
Seller hereby acknowledges that the information to be provided by
it pursuant to
this Section 9 will be used in the preparation of reports meeting
the reporting
requirements of the Trust under Section 13(a) and/or Section 15(d)
of the 1934
Act.
SECTION 10. Notices. All notices, copies, requests, consents,
demands
and other communications required hereunder shall be in writing and
sent either
by certified mail (return receipt requested) or by courier service
(proof of
delivery requested) to the intended recipient at the "Address for
Notices"
specified for such party on Exhibit A hereto, or as to either
party, at such
other address as shall be designated by such party in a notice
hereunder to the
other party. Except as otherwise provided in this Agreement, all
such
communications shall be deemed to have been duly given when
received, in each
case given or addressed as aforesaid.
SECTION 11. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained
in this
Agreement, incorporated herein by reference or contained in the
certificates of
officers of the Seller submitted pursuant hereto, shall remain
operative and in
full force and effect and shall survive delivery of the Mortgage
Loans by the
Seller to the Purchaser (and by the Purchaser to the Trustee).
SECTION 12. Severability of Provisions. Any part, provision,
representation, warranty or covenant of this Agreement that is
prohibited or
which is held to be void or unenforceable shall be ineffective to
the extent of
such prohibition or unenforceability without invalidating the
remaining
provisions hereof. Any part, provision, representation, warranty or
covenant of
this Agreement that is prohibited or unenforceable or is held to be
void or
unenforceable in any particular jurisdiction shall, as to such
jurisdiction, be
ineffective to the extent of such prohibition or unenforceability
without
invalidating the remaining provisions hereof, and any such
prohibition or
unenforceability in any particular jurisdiction shall not
invalidate or render
unenforceable such provision in any other jurisdiction. To the
extent permitted
by applicable law, the parties hereto waive any provision of law
that prohibits
or renders void or unenforceable any provision hereof.
SECTION 13. Counterparts. This Agreement may be executed in any
number
of counterparts, each of which shall be an original, but which
together shall
constitute one and the same agreement.
19
SECTION 14. GOVERNING LAW; WAIVER OF TRIAL BY JURY. THIS AGREEMENT
AND
THE RIGHTS, DUTIES, OBLIGATIONS AND RESPONSIBILITIES OF THE PARTIES
HERETO SHALL
BE GOVERNED IN ACCORDANCE WITH THE INTERNAL LAWS AND DECISIONS OF
NEW YORK. THE
PARTIES HERETO INTEND THAT THE PROVISIONS OF SECTION 5-1401 OF THE
NEW YORK
GENERAL OBLIGATIONS LAW SHALL APPLY TO THIS AGREEMENT. THE PARTIES
HERETO HEREBY
WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, THE RIGHT TO TRIAL
BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM, WHETHER IN CONTRACT, TORT OR
OTHERWISE,
RELATING DIRECTLY OR INDIRECTLY TO THIS AGREEMENT OR THE
TRANSACTIONS
CONTEMPLATED HEREBY.
SECTION 15. Attorneys' Fees. If any legal action, suit or
proceeding
is commenced between the Seller and the Purchaser regarding their
respective
rights and obligations under this Agreement, the prevailing party
shall be
entitled to recover, in addition to damages or other relief, costs
and expenses,
attorneys' fees and court costs (including, without limitation,
expert witness
fees). As used herein, the term "prevailing party" shall mean the
party that
obtains the principal relief it has sought, whether by compromise
settlement or
judgment. If the party that commenced or instituted the action,
suit or
proceeding shall dismiss or discontinue it without the concurrence
of the other
party, such other party shall be deemed the prevailing party.
SECTION 16. Further Assurances. The Seller and the Purchaser agree
to
execute and deliver such instruments and take such further actions
as the other
party may, from time to time, reasonably request in order to
effectuate the
purposes and to carry out the terms of this Agreement.
SECTION 17. Successors and Assigns. The rights and obligations of
the
Seller under this Agreement shall not be assigned by the Seller
without the
prior written consent of the Purchaser, except that any person into
which the
Seller may be merged or consolidated, or any corporation resulting
from any
merger, conversion or consolidation to which the Seller is a party,
or any
person succeeding to all or substantially all of the business of
the Seller,
shall be the successor to the Seller hereunder. The Purchaser has
the right to
assign its interest under this Agreement, in whole or in part, as
may be
required to effect the purposes of the Pooling and Servicing
Agreement, and the
assignee shall, to the extent of such assignment, succeed to the
rights and
obligations hereunder of the Purchaser. Subject to the foregoing,
this Agreement
shall bind and inure to the benefit of and be enforceable by the
Seller, the
Purchaser, the Underwriters (as intended third party beneficiaries
hereof), the
Initial Purchasers (also as intended third party beneficiaries
hereof) and their
permitted successors and assigns. This Agreement is enforceable by
the
Underwriters, the Initial Purchasers and the other third party
beneficiaries
hereto in all respects to the same extent as if they had been
signatories
hereof.
SECTION 18. Amendments. No term or provision of this Agreement may
be
waived or modified unless such waiver or modification is in writing
and signed
by a duly authorized officer of the party hereto against whom such
waiver or
modification is sought to be enforced. The Seller's obligations
hereunder shall
in no way be expanded, changed or otherwise affected by any
amendment of or
modification to the Pooling and Servicing Agreement,
20
including, without limitation, any defined terms therein, unless
the Seller has
consented to such amendment or modification in writing.
SECTION 19. Accountants' Letters. The parties hereto shall
cooperate
with Ernst & Young LLP in making available all information and
taking all steps
reasonably necessary to permit such accountants to deliver the
letters required
by the Underwriting Agreement and the Certificate Purchase
Agreement.
SECTION 20. Knowledge. Whenever a representation or warranty or
other
statement in this Agreement (including, without limitation,
Schedule I hereto)
is made with respect to a Person's "knowledge," such statement
refers to such
Person's employees or agents who were or are responsible for or
involved with
the indicated matter and have actual knowledge of the matter in
question.
SECTION 21. Cross-Collateralized Mortgage Loans. Each Crossed Loan
Group is identified on the Mortgage Loan Schedule. For purposes of
reference,
the Mortgaged Property that relates or corresponds to any of the
Mortgage Loans
in a Crossed Loan Group shall be the property identified in the
Mortgage Loan
Schedule as corresponding thereto. The provisions of this
Agreement, including,
without limitation, each of the representations and warranties set
forth in
Schedule I hereto and each of the capitalized terms used herein but
defined in
the Pooling and Servicing Agreement, shall be interpreted in a
manner consistent
with this Section 21. In addition, if there exists with respect to
any Crossed
Loan Group only one original of any document referred to in the
definition of
"Mortgage File" in this Agreement and covering all the Mortgage
Loans in such
Crossed Loan Group, the inclusion of the original of such document
in the
Mortgage File for any of the Mortgage Loans in such Crossed Loan
Group shall be
deemed an inclusion of such original in the Mortgage File for each
such Mortgage
Loan.
[SIGNATURE PAGES TO FOLLOW]
21
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their
names to be signed hereto by their respective duly authorized
officers as of the
date first above written.
SELLER
MERRILL LYNCH MORTGAGE LENDING, INC.
By:
/s/ David M. Rodgers
------------------------------------
Name:
David M. Rodgers
Title: Executive Vice President,
Chief Officer in Charge of
Commercial Mortgage Securitization
PURCHASER
MERRILL LYNCH MORTGAGE INVESTORS, INC.
By:
/s/ David M. Rodgers
------------------------------------
Name:
David M. Rodgers
Title: Executive Vice President,
Chief Officer in Charge of
Commercial Mortgage Securitization
MLML MORTGAGE LOAN PURCHASE AGREEMENT
EXHIBIT A
Seller:
Address for Notices:
Merrill Lynch Mortgage Lending, Inc.
c/o Global Commercial Real Estate
4 World Financial Center, 16th Floor
250 Vesey Street
New York, New York 10080
Attention: David M. Rodgers
with a copy to:
Merrill Lynch Mortgage Lending, Inc.
c/o Global Commercial Real Estate
4 World Financial Center, 16th Floor
250 Vesey Street
New York, New York 10080
Attn: Director of CMBS Securitizations
and with a copy to:
Merrill Lynch Mortgage Lending, Inc.
4 World Financial Center, 12th Floor
250 Vesey Street
New York, New York 10080
Attention: General Counsel for Global
Commercial Real Estate in the Office
of the General Counsel
Purchaser:
Address for Notices:
Merrill Lynch Mortgage Investors, Inc.
c/o Global Commercial Real Estate
4 World Financial Center, 16th Floor
250 Vesey Street
New York, New York 10080
Attention: David M. Rodgers
with a copy to:
Merrill Lynch Mortgage Investors, Inc.
c/o Global Commercial Real Estate
4 World Financial Center, 16th Floor
250 Vesey Street
New York, New York 10080
Attn: Director of CMBS Securitizations
and
Merrill Lynch Mortgage Investors, Inc.
4 World Financial Center, 12th Floor
250 Vesey Street
New York, New York 10080
Attention: General Counsel for Global
Commercial Real Estate in the Office
of the General Counsel
SCHEDULE I
MORTGAGE LOAN REPRESENTATIONS AND WARRANTIES
For purposes of this Schedule I, the "Value" of a Mortgaged
Property
shall mean the value of such Mortgaged Property as determined by
the appraisal
(and subject to the assumptions set forth in the appraisal)
performed in
connection with the origination of the related Mortgage Loan.
1. Mortgage Loan Schedule. The information set forth in the
Mortgage
Loan Schedule with respect to the Mortgage Loans is true and
correct in all
material respects (and contains all the items listed in the
definition of
"Mortgage Loan Schedule") as of the dates of the information set
forth therein
or, if not set forth therein, and in all events no earlier than, as
of the
respective Cut-off Dates for the Mortgage Loans.
2. Ownership of Mortgage Loans. Immediately prior to the transfer
of
the Mortgage Loans to the Purchaser, the Seller had good title to,
and was the
sole owner of, each Mortgage Loan. The Seller has full right, power
and
authority to transfer and assign each Mortgage Loan to or at the
direction of
the Purchaser free and clear of any and all pledges, liens,
charges, security
interests, participation interests and/or other interests and
encumbrances
(except for certain servicing rights as provided in the Pooling and
Servicing
Agreement, any permitted subservicing agreements and servicing
rights purchase
agreements pertaining thereto and the rights of a holder of a
related Non-Trust
Loan pursuant to a Loan Combination Intercreditor Agreement). The
Seller has
validly and effectively conveyed to the Purchaser all legal and
beneficial
interest in and to each Mortgage Loan free and clear of any pledge,
lien,
charge, security interest or other encumbrance (except for certain
servicing
rights as provided in the Pooling and Servicing Agreement, any
permitted
subservicing agreements and servicing rights purchase agreements
pertaining
thereto); provided that recording and/or filing of various transfer
documents
are to be completed after the Closing Date as contemplated hereby
and by the
Pooling and Servicing Agreement. The sale of the Mortgage Loans to
the Purchaser
or its designee does not require the Seller to obtain any
governmental or
regulatory approval or consent that has not been obtained. Each
Mortgage Note
is, or shall be as of the Closing Date, properly endorsed to the
Purchaser or
its designee and each such endorsement is, or shall be as of the
Closing Date,
genuine.
3. Payment Record. No scheduled payment of principal and/or
interest
under any Mortgage Loan was 30 days or more past due as of the Due
Date for such
Mortgage Loan in September 2006, without giving effect to any
applicable grace
period, nor was any such payment 30 days or more delinquent since
the date of
origination of any Mortgage Loan, without giving effect to any
applicable grace
period.
4. Lien; Valid Assignment. Each Mortgage related to and delivered
in
connection with each Mortgage Loan constitutes a valid and, subject
to the
limitations and exceptions set forth in representation 13 below,
enforceable
first priority lien upon the related Mortgaged Property, prior to
all other
liens and encumbrances, and there are no liens and/or
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; (g) if the related Mortgaged Property
consists of one or
more units in a condominium, the related condominium declaration;
and (h) the
rights of the holder of any Non-Trust Loan that is part of a
related Loan
Combination to which any such Mortgage Loan belongs. The Permitted
Encumbrances
do not, individually or in the aggregate, materially interfere with
the security
intended to be provided by the related Mortgage, the current
principal use of
the related Mortgaged Property, the Value of the Mortgaged Property
or the
current ability of the related Mortgaged Property to generate
income sufficient
to service such Mortgage Loan. The related assignment of such
Mortgage executed
and delivered in favor of the Trustee is in recordable form (but
for insertion
of the name and address of the assignee and any related recording
information
which is not yet available to the Seller) and constitutes a legal,
valid,
binding and, subject to the limitations and exceptions set forth in
representation 13 below, enforceable assignment of such Mortgage
from the
relevant assignor to the Trustee.
5. Assignment of Leases and Rents. There exists, as part of the
related Mortgage File, an Assignment of Leases (either as a
separate instrument
or as part of the Mortgage) that relates to and was delivered in
connection with
each Mortgage Loan and that establishes and creates a valid,
subsisting and,
subject to the limitations and exceptions set forth in
representation 13 below,
enforceable first priority lien on and security interest in,
subject to
applicable law, the property, rights and interests of the related
Mortgagor
described therein, except for Permitted Encumbrances and except for
the holder
of any Non-Trust Loan that is part of a related Loan Combination to
which any
such Mortgage Loan belongs, and except that a license may have been
granted to
the related Mortgagor to exercise certain rights and perform
certain obligations
of the lessor under the relevant lease or leases, including,
without limitation,
the right to operate the related leased property so long as no
event of default
has occurred under such Mortgage Loan; and each assignor thereunder
has the full
right to assign the same. The related assignment of any Assignment
of Leases not
included in a Mortgage, executed and delivered in favor of the
Trustee is in
recordable form (but for insertion of the name and address of the
assignee and
any related recording information which is not yet available to the
Seller), and
constitutes a legal, valid, binding and, subject to the limitations
and
exceptions set forth in representation 13 below, enforceable
assignment of such
Assignment of Leases from the relevant assignor to the Trustee. The
related
Mortgage or related Assignment of Leases, subject to applicable
law, provides
for the appointment of a receiver for the collection of rents or
for the related
mortgagee to enter into possession of the related Mortgaged
Property to collect
the rents or provides for rents to be paid directly to the related
mortgagee, if
there is an event of default beyond applicable notice and grace
periods. Except
for the holder of the related Non-Trust Loan
I-2
with respect to any Mortgage Loan that is part of a Loan
Combination, no person
other than the related Mortgagor owns any interest
