MORTGAGE LOAN PURCHASE AGREEMENT
This Mortgage Loan Purchase Agreement, dated as of September 22,
2006
(this "Agreement"), is entered into between PNC Bank, National
Association (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
$337,410,257 (the "PNC Bank 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 PNC Bank 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 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)
104.7727% of the
PNC Bank Mortgage Loan Balance as of the Cut-off Date, plus (ii)
$1,613,738,
which amount represents the amount of interest accrued on the PNC
Bank Mortgage
Loan Balance, as agreed to by the Seller and the Purchaser.
The Purchase Consideration shall be paid to the Seller or its
designee
by wire transfer in immediately available funds on the Closing
Date.
SECTION 2. Conveyance of Mortgage Loans.
(a) Effective as of the Closing Date, subject only to the Seller's
receipt of the Purchase Consideration and the satisfaction or
waiver of the
conditions to closing set forth in Section 5 of this Agreement
(which conditions
shall be deemed to have been satisfied or waived upon the Seller's
receipt of
the Purchase Consideration), the Seller does hereby sell, transfer,
assign, set
over and otherwise convey to the Purchaser, without recourse
(except as set
forth in this Agreement), all the right, title and interest of the
Seller in and
to the Mortgage Loans identified on the Mortgage Loan Schedule as
of such date,
on a servicing released basis (subject to certain agreements
regarding servicing
as provided in the Servicing Rights Purchase Agreement (as defined
in Section
6(a)(iii) hereof)), together with all of the Seller's right, title
and interest
in and to the proceeds of any related title, hazard, primary
mortgage or other
insurance proceeds. The Mortgage Loan Schedule, as it may be
amended, shall
conform to the requirements set forth in this Agreement and the
Pooling and
Servicing Agreement.
(b) The Purchaser or its assignee shall be entitled to receive all
scheduled payments of principal and interest due after the Cut-off
Date, and all
other recoveries of principal and interest collected after the
Cut-off Date
(other than in respect of principal and interest on the Mortgage
Loans due on or
before the Cut-off Date). All scheduled payments of principal and
interest due
on or before the Cut-off Date but collected after the Cut-off Date,
and
recoveries of principal and interest collected on or before the
Cut-off Date
(only in respect of principal and interest on the Mortgage Loans
due on or
before the Cut-off Date and principal prepayments thereon), shall
belong to, and
be promptly remitted to, the Seller.
(c) The Seller hereby represents and warrants that it has or will
have, on behalf of the Purchaser, delivered to the Trustee (i) on
or before the
Closing Date, the documents and instruments specified below with
respect to each
Mortgage Loan that are Specially 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
2
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) 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;
(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 blank;
(v) an original assignment of all unrecorded documents relating to
the
Mortgage Loan (to the extent not already assigned pursuant to
clause (iv)
above) in favor of LaSalle Bank National Association, as trustee
for the
registered holders of ML-CFC Commercial Mortgage Trust 2006-3,
Commercial
Mortgage Pass-Through Certificates, Series 2006-3, 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;
3
(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 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; and
(xii) with respect to a Mortgage Loan secured by a hospitality
property, a signed copy of any franchise agreement and/or
franchisor
comfort letter.
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
4
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 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.
5
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) (i) The Seller is a national banking association duly
organized,
validly existing and in good standing under the laws of the United
States
and the Seller has taken all necessary 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
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, articles
of
association, 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
6
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.
(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.
7
(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, 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
8
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 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
9
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.
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
10
"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 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
11
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 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.
12
(d) The Purchaser is not a party to or bound by any agreement or
instrument or subject to any certificate of incorporation, bylaws
or any other
corporate restriction or any judgment, order, writ, injunction,
decree, law or
regulation that would, in the Purchaser's reasonable and good faith
judgment,
materially and adversely affect the ability of the Purchaser to
perform its
obligations under this Agreement or that requires the consent of
any third
person to the execution of this Agreement or the performance by the
Purchaser of
its obligations under this Agreement (except to the extent such
consent has been
obtained).
(e) Except as may be required under federal or state securities
laws
(and which will be obtained on a timely basis), no consent,
approval,
authorization or order of, registration or filing with, or notice
to, any
governmental authority or court, is required, under federal or
state law, for
the execution, delivery and performance by the Purchaser of, or
compliance by
the Purchaser with, this Agreement, or the consummation by the
Purchaser of any
transaction described in this Agreement.
(f) Under GAAP and for federal income tax purposes, the Purchaser
will
report the transfer of the Mortgage Loans by the Seller to the
Purchaser as a
sale of the Mortgage Loans to the Purchaser in exchange for
consideration
consisting of a cash amount equal to the aggregate Purchase
Consideration.
(g) There is no action, suit, proceeding or investigation pending
or
to the knowledge of the Purchaser, threatened against the Purchaser
in any court
or by or before any other governmental agency or instrumentality
which would
materially and adversely affect the validity of this Agreement or
any action
taken in connection with the obligations of the Purchaser
contemplated herein,
or which would be likely to impair materially the ability of the
Purchaser to
enter into and/or perform under the terms of this Agreement.
(h) The Purchaser is not in default with respect to any order or
decree of any court or any order, regulation or demand of any
federal, state,
municipal or other governmental agency or body, which default might
have
consequences that would, in the Purchaser's reasonable and good
faith judgment,
materially and adversely affect the condition (financial or other)
or operations
of the Purchaser or its properties or might have consequences that
would
materially and adversely affect its performance hereunder.
SECTION 5. Closing. The closing of the sale of the Mortgage Loans
(the
"Closing") shall be held at the offices of 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;
13
(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, Merrill Lynch Mortgage Lending, Inc., Countrywide
Commercial Real
Estate Finance, 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 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
14
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.
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 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 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
15
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 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
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
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;
16
"Prospectus" means the prospectus dated September 13, 2006.
"Prospectus Supplement" means the prospectus supplement dated 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 articles of
association
and bylaws of the Seller, and (iii) a certificate of corporate
existence of the
Seller issued by the United States not earlier than 30 days prior
to the Closing
Date;
(f) A written opinion of counsel for the Seller relating to
organizational and enforceability matters (which opinion may be
from in-house
counsel, outside counsel or a combination thereof), reasonably
satisfactory to
the Purchaser, its counsel and the Rating Agencies, dated the
Closing Date and
addressed to the Purchaser, the Trustee, the Underwriters, the
Initial
Purchasers and each of the Rating Agencies, together with such
other written
opinions, including as to insolvency matters, as may be required by
the Rating
Agencies; and
(g) Such further certificates, opinions and documents as the
Purchaser
may reasonably request prior to the Closing Date.
SECTION 7. Costs. Whether or not this Agreement is terminated, both
the Seller and the Purchaser shall pay their respective share of
the transaction
expenses incurred in connection with the transactions contemplated
herein as set
forth in the closing statement prepared by the Purchaser and
delivered to and
approved by the Seller on or before the Closing Date, and in the
memorandum of
understanding to which the Seller and the Purchaser (or an
affiliate thereof)
are parties with respect to the transactions contemplated by this
Agreement.
SECTION 8. Grant of a Security Interest. It is the express intent
of
the parties hereto that the conveyance of the Mortgage Loans by the
Seller to
the Purchaser as provided in 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
17
Master Servicer's Collection Account, the Distribution Account or,
if
established, the REO Account whether in the form of cash,
instruments,
securities or other property; (iii) the assignment to the Trustee
of the
interest of the Purchaser as contemplated by Section 1 of this
Agreement shall
be deemed to be an assignment of any security interest created
hereunder; (iv)
the possession by the Trustee or any of its agents, including,
without
limitation, the Custodian, of the Mortgage Notes, and such other
items of
property as constitute instruments, money, negotiable documents or
chattel paper
shall be deemed to be possession by the secured party for purposes
of perfecting
the security interest pursuant to Section 9-313 of the UCC of the
applicable
jurisdiction; and (v) notifications to persons (other than the
Trustee) holding
such property, and acknowledgments, receipts or confirmations from
persons
(other than the Trustee) holding such property, shall be deemed
notifications
to, or acknowledgments, receipts or confirmations from, financial
intermediaries, bailees or agents (as applicable) of the secured
party for the
purpose of perfecting such security interest under applicable law.
The Seller
and the Purchaser shall, to the extent consistent with this
Agreement, take such
actions as may be necessary to ensure that, if this Agreement were
deemed to
create a security interest in the Mortgage Loans, such security
interest would
be deemed to be a perfected security interest of first priority
under applicable
law and will be maintained as such throughout the term of this
Agreement and the
Pooling and Servicing Agreement. The Seller does hereby consent to
the filing by
the Purchaser of financing statements relating to the transactions
contemplated
hereby without the signature of the Seller.
SECTION 9. Notice of Exchange Act Reportable Events. The Seller
hereby
agrees to deliver to the Purchaser any disclosure information
relating to any
event, specifically relating to the Seller, 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.
18
SECTION 11. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained
in this
Agreement, incorporated herein by reference or contained in the
certificates of
officers of the Seller submitted pursuant hereto, shall remain
operative and in
full force and effect and shall survive delivery of the Mortgage
Loans by the
Seller to the Purchaser (and by the Purchaser to the Trustee).
SECTION 12. Severability of Provisions. Any part, provision,
representation, warranty or covenant of this Agreement that is
prohibited or
which is held to be void or unenforceable shall be ineffective to
the extent of
such prohibition or unenforceability without invalidating the
remaining
provisions hereof. Any part, provision, representation, warranty or
covenant of
this Agreement that is prohibited or unenforceable or is held to be
void or
unenforceable in any particular jurisdiction shall, as to such
jurisdiction, be
ineffective to the extent of such prohibition or unenforceability
without
invalidating the remaining provisions hereof, and any such
prohibition or
unenforceability in any particular jurisdiction shall not
invalidate or render
unenforceable such provision in any other jurisdiction. To the
extent permitted
by applicable law, the parties hereto waive any provision of law
that prohibits
or renders void or unenforceable any provision hereof.
SECTION 13. Counterparts. This Agreement may be executed in any
number
of counterparts, each of which shall be an original, but which
together shall
constitute one and the same agreement.
SECTION 14. GOVERNING LAW; WAIVER OF TRIAL BY JURY. THIS AGREEMENT
AND
THE RIGHTS, DUTIES, OBLIGATIONS AND RESPONSIBILITIES OF THE PARTIES
HERETO SHALL
BE GOVERNED IN ACCORDANCE WITH THE INTERNAL LAWS AND DECISIONS OF
NEW YORK. THE
PARTIES HERETO INTEND THAT THE PROVISIONS OF SECTION 5-1401 OF THE
NEW YORK
GENERAL OBLIGATIONS LAW SHALL APPLY TO THIS AGREEMENT. THE PARTIES
HERETO 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
19
time, reasonably request in order to effectuate the purposes and to
carry out
the terms of this Agreement.
SECTION 17. Successors and Assigns. The rights and obligations of
the
Seller under this Agreement shall not be assigned by the Seller
without the
prior written consent of the Purchaser, except that any person into
which the
Seller may be merged or consolidated, or any corporation resulting
from any
merger, conversion or consolidation to which the Seller is a party,
or any
person succeeding to all or substantially all of the business of
the Seller,
shall be the successor to the Seller hereunder. The Purchaser has
the right to
assign its interest under this Agreement, in whole or in part, as
may be
required to effect the purposes of the Pooling and Servicing
Agreement, and the
assignee shall, to the extent of such assignment, succeed to the
rights and
obligations hereunder of the Purchaser. Subject to the foregoing,
this Agreement
shall bind and inure to the benefit of and be enforceable by the
Seller, the
Purchaser, the Underwriters (as intended third party beneficiaries
hereof), the
Initial Purchasers (also as intended third party beneficiaries
hereof) and their
permitted successors and assigns. This Agreement is enforceable by
the
Underwriters, the Initial Purchasers and the other third party
beneficiaries
hereto in all respects to the same extent as if they had been
signatories
hereof.
SECTION 18. Amendments. No term or provision of this Agreement may
be
waived or modified unless such waiver or modification is in writing
and signed
by a duly authorized officer of the party hereto against whom such
waiver or
modification is sought to be enforced. The Seller's obligations
hereunder shall
in no way be expanded, changed or otherwise affected by any
amendment of or
modification to the Pooling and Servicing Agreement, including,
without
limitation, any defined terms therein, unless the Seller has
consented to such
amendment or modification in writing.
SECTION 19. Accountants' Letters. The parties hereto shall
cooperate
with Ernst & Young LLP in making available all information and
taking all steps
reasonably necessary to permit such accountants to deliver the
letters required
by the Underwriting Agreement and the Certificate Purchase
Agreement.
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.
SECT
