MORTGAGE LOAN PURCHASE AGREEMENT
This Mortgage Loan Purchase Agreement, dated as of September 22,
2006 (this "Agreement"), is entered into between Countrywide
Commercial Real
Estate Finance, Inc. (the "Seller") and Merrill Lynch Mortgage
Investors, Inc.
(the "Purchaser").
The Seller intends to sell and the Purchaser intends to purchase
certain multifamily, commercial and manufactured housing community
mortgage
loans (the "Mortgage Loans") identified on the schedule (the
"Mortgage Loan
Schedule") annexed hereto as Schedule II. The Purchaser intends to
deposit the
Mortgage Loans, along with certain other mortgage loans (the "Other
Mortgage
Loans"), 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
$1,009,711,413 (the "Countrywide Mortgage Loan Balance") (subject
to a variance
of plus or minus 5.0%) as of the close of business on the Cut-off
Date, after
giving effect to any payments due on or before such date, whether
or not such
payments are received. The Countrywide Mortgage Loan Balance,
together with the
aggregate principal balance of the Other Mortgage Loans as of the
Cut-off Date
(after giving effect to any payments due on or before such date,
whether or not
such payments are received), is expected to equal an aggregate
principal balance
(the "Cut-off Date Pool Balance") of $2,425,022,033 (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)
104.6507% of the
Countrywide Mortgage Loan Balance as of the Cut-off Date, plus (ii)
$4,833,445,
which amount represents the amount of interest accrued on the
Countrywide
Mortgage Loan Balance, as agreed to by the Seller and the
Purchaser.
The Purchase Consideration shall be paid to the Seller or its
designee by wire transfer in immediately available funds on the
Closing Date.
SECTION 2.
Conveyance of Mortgage Loans.
(a)
Effective as of the Closing Date, subject only to the
Seller's receipt of the Purchase Consideration and the satisfaction
or waiver of
the conditions to closing set forth in Section 5 of this Agreement
(which
conditions shall be deemed to have been satisfied or waived upon
the Seller's
receipt of the Purchase Consideration), the Seller does hereby
sell, transfer,
assign, set over and otherwise convey to the Purchaser, without
recourse (except
as set forth in this Agreement), all the right, title and interest
of the Seller
in and to the Mortgage Loans identified on the Mortgage Loan
Schedule as of such
date, on a servicing released basis (subject to certain agreements
regarding
servicing as provided in the 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
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instruments specified below and referred to in clauses (i) and (ii)
preceding,
collectively, a "Mortgage File"). All Mortgage Files so delivered
will be held
by the Trustee in escrow for the benefit of the Seller at all times
prior to the
Closing Date. The Mortgage File with respect to each Mortgage Loan
that is a
Trust Mortgage Loan shall contain the following documents:
(i)
(A) the original executed Mortgage Note for the subject
Mortgage Loan, including any power of attorney related to the
execution
thereof (or a lost note affidavit and indemnity with a copy of such
Mortgage Note attached thereto), together with any and all
intervening
endorsements thereon, endorsed on its face or by allonge attached
thereto (without recourse, representation or warranty, express or
implied) to the order of LaSalle Bank National Association, as
trustee
for the registered holders of 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 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
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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;
(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.
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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
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
5
loan checklist or a complete mortgage loan checklist shall not give
rise to any
liability whatsoever on the part of the Seller to the Purchaser,
the Trustee or
any other person because the delivery of the mortgage loan
checklist is being
provided to the Trustee solely for its administrative convenience.
(f)
The Seller shall take such actions as are reasonably
necessary to assign or otherwise grant to the Trust Fund the
benefit of any
letters of credit in the name of the Seller, which secure any
Mortgage Loan.
(g)
On or before the Closing Date, the Seller shall provide to
the applicable Master Servicer, the initial data (as of the Cut-off
Date or the
most recent earlier date for which such data is available)
contemplated by the
CMSA Loan Setup File, the CMSA Loan Periodic Update File, the CMSA
Operating
Statement Analysis Report and the CMSA Property File.
SECTION 3.
Representations, Warranties and Covenants of Seller.
(a)
The Seller hereby represents and warrants to and covenants
with the Purchaser, as of the date hereof, that:
(i)
The Seller is a corporation duly organized, validly existing
and in good standing under the laws of the State of California and
the
Seller has taken all necessary corporate action to authorize the
execution, delivery and performance of this Agreement by it, and
has the
power and authority to execute, deliver and perform this Agreement
and all
transactions contemplated hereby.
(ii)
This Agreement has been duly and validly authorized,
executed and delivered by the Seller, all requisite action by the
Seller's
directors and officers has been taken in connection therewith, and
(assuming the due authorization, execution and delivery hereof by
the
Purchaser) this Agreement constitutes the valid, legal and binding
agreement of the Seller, enforceable against the Seller in
accordance with
its terms, except as such enforcement may be limited by (A) laws
relating
to bankruptcy, insolvency, fraudulent transfer, reorganization,
receivership, conservatorship or moratorium, (B) other laws
relating to or
affecting the rights of creditors generally, or (C) general equity
principles (regardless of whether such enforcement is considered in
a
proceeding in equity or at law).
(iii)
The execution and delivery of this Agreement by the Seller
and the Seller's performance and compliance with the terms of this
Agreement will not (A) violate the Seller's certificate of
incorporation
or bylaws, (B) violate any law or regulation or any administrative
decree
or order to which it is subject 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.
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(iv)
The Seller is not in default with respect to any order or
decree of any court or any order, regulation or demand of any
federal,
state, municipal or other governmental agency or body, which
default might
have consequences that would, in the Seller's reasonable and good
faith
judgment, materially and adversely affect the condition (financial
or
other) or operations of the Seller or its properties or materially
and
adversely affect its performance hereunder.
(v)
The Seller is not a party to or bound by any agreement or
instrument or subject to any certificate of incorporation, bylaws
or any
other corporate restriction or any judgment, order, writ,
injunction,
decree, law or regulation that would, in the Seller's reasonable
and good
faith judgment, materially and adversely affect the ability of the
Seller
to perform its obligations under this Agreement or that requires
the
consent of any third person to the execution of this Agreement or
the
performance by the Seller of its obligations under this Agreement
(except
to the extent such consent has been obtained).
(vi)
No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery
and
performance by the Seller of or compliance by the Seller with this
Agreement or the consummation of the transactions contemplated by
this
Agreement except as have previously been obtained, and no bulk sale
law
applies to such transactions.
(vii)
None of the sale of the Mortgage Loans by the Seller, the
transfer of the Mortgage Loans to the Trustee, and the execution,
delivery
or performance of this Agreement by the Seller, results or will
result in
the creation or imposition of any lien on any of the Seller's
assets or
property that would have a material adverse effect upon the
Seller's
ability to perform its duties and obligations under this Agreement
or
materially impair the ability of the Purchaser to realize on the
Mortgage
Loans.
(viii)
There is no action, suit, proceeding or investigation
pending or to the knowledge of the Seller, threatened against the
Seller
in any court or by or before any other governmental agency or
instrumentality which would, in the Seller's good faith and
reasonable
judgment, prohibit its entering into this Agreement or materially
and
adversely affect the validity of this Agreement or the performance
by the
Seller of its obligations under this Agreement.
(ix)
Under generally accepted accounting principles ("GAAP") and
for federal income tax purposes, the Seller will report the
transfer of
the Mortgage Loans to the Purchaser as a sale of the Mortgage Loans
to the
Purchaser in exchange for consideration consisting of a cash amount
equal
to the Purchase Consideration. The consideration received by the
Seller
upon the sale of the Mortgage Loans to the Purchaser will
constitute at
least reasonably equivalent value and fair consideration for the
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.
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(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. ss.ss.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, 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
8
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 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
9
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.
Notwithstanding any of the foregoing provisions of this Section
3(c), if there is a Document Defect or Breach (which Document
Defect or Breach
materially and adversely affects the value of the related Mortgage
Loan or the
interests of the Certificateholders therein) with respect to one or
more
Mortgaged Properties with respect to a Mortgage Loan, the Seller
shall not be
obligated to repurchase or substitute the Mortgage Loan if (i) the
affected
Mortgaged
10
Property(ies) may be released pursuant to the terms of any partial
release
provisions in the related Mortgage Loan documents (and such
Mortgaged
Property(ies) are, in fact, released) and to the extent not covered
by the
applicable release price (if any) required under the related
Mortgage Loan
documents, the Seller pays (or causes to be paid) any additional
amounts
necessary to cover all reasonable out-of-pocket expenses reasonably
incurred by
the applicable Master Servicer, the Special Servicer, the Trustee
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 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
11
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 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
12
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 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:
13
(a)
All of the representations and warranties of the Seller set
forth in or made pursuant to Sections 3(a) and 3(b) of this
Agreement and all of
the representations and warranties of the Purchaser set forth in
Section 4 of
this Agreement shall be true and correct in all material respects
as of the
Closing Date;
(b)
All documents specified in Section 6 of this Agreement (the
"Closing Documents"), in such forms as are agreed upon and
acceptable to the
Purchaser, the Seller, the Underwriters and their respective
counsel in their
reasonable discretion, shall be duly executed and delivered by all
signatories
as required pursuant to the respective terms thereof;
(c)
The Seller shall have delivered and released to the Trustee
(or a Custodian on its behalf) and the applicable Master Servicer,
respectively,
all documents represented to have been or required to be delivered
to the
Trustee and such Master Servicer pursuant to Section 2 of this
Agreement;
(d)
All other terms and conditions of this Agreement required to
be complied with on or before the Closing Date shall have been
complied with in
all material respects and the Seller and the Purchaser shall have
the ability to
comply with all terms and conditions and perform all duties and
obligations
required to be complied with or performed after the Closing Date;
(e)
The Seller shall have paid all fees and expenses payable by
it to the Purchaser or otherwise pursuant to this Agreement as of
the Closing
Date;
(f)
One or more letters from the independent accounting firm of
Ernst & Young LLP in form satisfactory to the Purchaser and
relating to certain
information regarding the Mortgage Loans and Certificates as set
forth in the
Prospectus (as defined in Section 6(d) of this Agreement) and
Prospectus
Supplement (as defined in Section 6(d) of this Agreement),
respectively; 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., 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:
(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
14
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.
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
15
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 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
16
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 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)
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 California not earlier than 30
days prior
to the Closing Date;
(f)
A written opinion of counsel for the Seller relating to
organizational and enforceability matters (which opinion may be
from in-house
counsel, outside counsel or a combination thereof), reasonably
satisfactory to
the Purchaser, its counsel and the Rating Agencies, dated the
Closing Date and
addressed to the Purchaser, the Trustee, the 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
17
the Seller to the Purchaser to secure a debt or other obligation of
the Seller,
and (b) (i) this Agreement shall also be deemed to be a security
agreement
within the meaning of Article 9 of the UCC of the applicable
jurisdiction; (ii)
the conveyance provided for in Section 2 of this Agreement shall be
deemed to be
a grant by the Seller to the Purchaser of a security interest in
all of the
Seller's right, title and interest in and to the Mortgage Loans,
and all amounts
payable to the holder of the Mortgage Loans in accordance with the
terms
thereof, and all proceeds of the conversion, voluntary or
involuntary, of the
foregoing into cash, instruments, securities or other property,
including
without limitation, all amounts, other than investment earnings
(other than
investment earnings required by Section 3.19(a) of the Pooling and
Servicing
Agreement to offset Prepayment Interest Shortfalls), from time to
time held or
invested in the applicable Master Servicer's Collection Account,
the
Distribution Account or, if established, the REO Account whether in
the form of
cash, instruments, securities or other property; (iii) the
assignment to the
Trustee of the interest of the Purchaser as contemplated by Section
1 of this
Agreement shall be deemed to be an assignment of any security
interest created
hereunder; (iv) the possession by the Trustee or any of its agents,
including,
without limitation, the Custodian, of the Mortgage Notes, and such
other items
of property as constitute instruments, money, negotiable documents
or chattel
paper shall be deemed to be possession by the secured party for
purposes of
perfecting the security interest pursuant to Section 9-313 of the
UCC of the
applicable jurisdiction; and (v) notifications to persons (other
than the
Trustee) holding such property, and acknowledgments, receipts or
confirmations
from persons (other than the Trustee) holding such property, shall
be deemed
notifications to, or acknowledgments, receipts or confirmations
from, financial
intermediaries, bailees or agents (as applicable) of the secured
party for the
purpose of perfecting such security interest under applicable law.
The Seller
and the Purchaser shall, to the extent consistent with this
Agreement, take such
actions as may be necessary to ensure that, if this Agreement were
deemed to
create a security interest in the Mortgage Loans, such security
interest would
be deemed to be a perfected security interest of first priority
under applicable
law and will be maintained as such throughout the term of this
Agreement and the
Pooling and Servicing Agreement. The Seller does hereby consent to
the filing by
the Purchaser of financing statements relating to the transactions
contemplated
hereby without the signature of the Seller.
SECTION 9.
Notice of Exchange Act Reportable Events. The Seller
hereby agrees to deliver to the Purchaser any disclosure
information relating to
any event, specifically relating to the Seller, 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
18
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.
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
19
obligations under this Agreement, the prevailing party shall be
entitled to
recover, in addition to damages or other relief, costs and
expenses, attorneys'
fees and court costs (including, without limitation, expert witness
fees). As
used herein, the term "prevailing party" shall mean the party that
obtains the
principal relief it has sought, whether by compromise settlement or
judgment. If
the party that commenced or instituted the action, suit or
proceeding shall
dismiss or discontinue it without the concurrence of the other
party, such other
party shall be deemed the prevailing party.
SECTION 16. Further Assurances. The Seller and the Purchaser agree
to execute and deliver such instruments and take such further
actions as the
other party may, from time to time, reasonably request in order to
effectuate
the purposes and to carry out the terms of this Agreement.
SECTION 17. Successors and Assigns. The rights and obligations of
the Seller under this Agreement shall not be assigned by the Seller
without the
prior written consent of the Purchaser, except that any person into
which the
Seller may be merged or consolidated, or any corporation resulting
from any
merger, conversion or consolidation to which the Seller is a party,
or any
person succeeding to all or substantially all of the business of
the Seller,
shall be the successor to the Seller hereunder. The Purchaser has
the right to
assign its interest under this Agreement, in whole or in part, as
may be
required to effect the purposes of the Pooling and Servicing
Agreement, and the
assignee shall, to the extent of such assignment, succeed to the
rights and
obligations hereunder of the Purchaser. Subject to the foregoing,
this Agreement
shall bind and inure to the benefit of and be enforceable by the
Seller, the
Purchaser, the Underwriters (as intended third party beneficiaries
hereof), the
Initial Purchasers (also as intended third party beneficiaries
hereof) and their
permitted successors and assigns. This Agreement is enforceable by
the
Underwriters, the Initial Purchasers and the other third party
beneficiaries
hereto in all respects to the same extent as if they had been
signatories
hereof.
SECTION 18. Amendments. No term or provision of this Agreement may
be waived or modified unless such waiver or modification is in
writing and
signed by a duly authorized officer of the party hereto against
whom such waiver
or modification is sought to be enforced. The Seller's obligations
hereunder
shall in no way be expanded, changed or otherwise affected by any
amendment of
or modification to the Pooling and Servicing Agreement, including,
without
limitation, any defined terms therein, unless the Seller has
consented to such
amendment or modification in writing.
SECTION 19. Accountants' Letters. The parties hereto shall
cooperate with Ernst & Young LLP in making available all
information and taking
all steps reasonably necessary to permit such accountants to
deliver the letters
required by the Underwriting Agreement and the Certificate Purchase
Agreement.
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.
20
SECTION 21. Cross-Collateralized Mortgage Loans. Each Crossed Loan
Group is identified on the Mortgage Loan Schedule. For purposes of
reference,
the Mortgaged Property that relates or corresponds to any of the
Mortgage Loans
in a Crossed Loan Group shall be the property identified in the
Mortgage Loan
Schedule as corresponding thereto. The provisions of this
Agreement, including,
without limitation, each of the representations and warranties set
forth in
Schedule I hereto and each of the capitalized terms used herein but
defined in
the Pooling and Servicing Agreement, shall be interpreted in a
manner consistent
with this Section 21. In addition, if there exists with respect to
any Crossed
Loan Group only one original of any document referred to in the
definition of
"Mortgage File" in this Agreement and covering all the Mortgage
Loans in such
Crossed Loan Group, the inclusion of the original of such document
in the
Mortgage File for any of the Mortgage Loans in such Crossed Loan
Group shall be
deemed an inclusion of such original in the Mortgage File for each
such Mortgage
Loan.
[SIGNATURE PAGES TO FOLLOW]
21
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their
names to be signed hereto by their respective duly authorized
officers as of the
date first above written.
SELLER
COUNTRYWIDE COMMERCIAL REAL ESTATE
FINANCE, INC.
By:
/s/ Jerry Y. Hirshkorn
-----------------------------------------
Name:
Jerry Y. Hirshkorn
Title: First Vice President
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
COUNTRYWIDE MORTGAGE LOAN PURCHASE AGREEMENT
EXHIBIT A
Seller:
Address for Notices:
Countrywide Commercial Real Estate Finance, Inc.
4500 Park Granada CH-143
Calabasas, California 91302
Telephone No.: (818) 225-4032
Attention:
Marlyn Marincas
Purchaser:
Address for Notices:
Merrill Lynch Mortgage Investors, Inc.
c/o Global Commercial Real Estate
4 World Financial Center, 16th Floor
250 Vesey Street
New York, New York 10080
Attention: David M. Rodgers
with a copy to:
Merrill Lynch Mortgage Investors, Inc.
c/o Global Commercial Real Estate
4 World Financial Center, 16th Floor
250 Vesey Street
New York, New York 10080
Attn: Director of CMBS Securitizations
and
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 in any payments
due under the
related leases on which the Mortgagor is the landlord, covered by
the related
Assignment of Leases.
6.
Mortgage Status; Waivers and Modifications. In the case of
each Mortgage Loan, except by a written instrument which has been
delivered to
the Purchaser or its designee as a part of the related Mortgage
File, (a) the
related Mortgage (including any amendments or supplements thereto
included in
the related Mortgage File) has not been impaired, waived, modified,
altered,
satisfied, canceled, subordinated or rescinded, (b) neither the
related
Mortgaged Property nor any material portion thereof has been
released from the
lien of such Mortgage and (c) the related Mortgagor has not been
released from
its obligations under such Mortgage, in whole or in material part.
With respect
to each Mortgage Loan, since the later of (a) September 8, 2006 and
(b) the
closing date of such Mortgage Loan, the Seller has not executed any
written
instrument that (i) impaired, satisfied, canceled, subordinated or
rescinded
such Mortgage Loan, (ii) waived, modified or altered any material
term of such
Mortgage Loan, (iii) released the Mortgaged Property or any
material portion
thereof from the lien of the related Mortgage, or (iv) released the
related
Mortgagor from its obligations under such Mortgage Loan in whole or
material
part. For avoidance of doubt, the preceding sentence does not
relate to any
release of escrows by the Seller or a servicer on its behalf.
7.
Condition of Property; Condemnation. In the case of each
Mortgage Loan, except as set forth in an engineering report
prepared by an
independent engineering consultant in connection with the
origination of such
Mortgage Loan, the related Mortgaged Property is, to the Seller's
knowledge, in
good repair and free and clear of any damage that would materially
and adversely
affect its value as security for such Mortgage Loan (except in any
such case
where an escrow of funds, letter of credit or insurance coverage
exists
sufficient to effect the necessary repairs and maintenance). As of
the date of
origination of the Mortgage Loan, there was no proceeding pending
for the
condemnation of all or any material part of the related Mortgaged
Property. As
of the Closing Date, the Seller has not received notice and has no
knowledge of
any proceeding pending for the condemnation of all or any material
portion of
the Mortgaged Property securing any Mortgage Loan. As of the date
of origination
of each Mortgage Loan and, to the Seller's knowledge, as of the
date hereof, (a)
none of the material improvements on the related Mortgaged Property
encroach
upon the boundaries and, to the extent in effect at the time of
construction, do
not encroach upon the building restriction lines of such property,
and none of
the material improvements on the related Mortgaged Property
encroached over any
easements, except, in each case, for encroachments that are insured
against by
the lender's title insurance policy referred to in representation 8
below or
that do not materially and adversely affect the Value or current
use of such
Mortgaged Property and (b) no improvements on adjoining properties
encroached
upon such Mortgaged Property so as to materially and adversely
affect the Value
of such Mortgaged Property, except those encroachments that are
insured against
by the lender's title insurance policy referred to in
representation 8 below.
8.
Title Insurance. Each Mortgaged Property securing a Mortgage
Loan is covered by an American Land Title Association (or an
equivalent form of)
lender's title insurance policy (the "Title Policy") (or, if such
policy has yet
to be issued, by a pro forma policy or a "marked up" commitment
binding on the
title insurer) in the original principal
I-3
amount of such Mortgage Loan after all advances of principal,
insuring that the
related Mortgage is a valid first priority lien on such Mortgaged
Property,
subject only to the Permitted Encumbrances, except that in the case
of a
Mortgage Loan as to which the related Mortgaged Property is made up
of more than
one parcel of property, each of which is secured by a separate
Mortgage, such
Mortgage (and therefore the related Title Policy) may be in an
amount less than
the original principal amount of the Mortgage Loan, but is not less
than the
allocated amount of subject parcel constituting a portion of the
related
Mortgaged Property. Such Title Policy (or, if it has yet to be
issued, the
coverage to be provided thereby) is in full force and effect, all
premiums
thereon have been paid, no material claims have been made
thereunder and no
claims have been paid thereunder. No holder of the related Mortgage
has done, by
act or omission, anything that would materially impair the coverage
under such
Title Policy. Immediately following the transfer and assignment of
the related
Mortgage Loan to the Trustee, such Title Policy (or, if it has yet
to be issued,
the coverage to be provided thereby) inures to the benefit of the
Trustee as
sole insured without the consent of or notice to the insurer. Such
Title Policy
contains no exclusion for whether, or it affirmatively insures
(unless the
related Mortgaged Property is located in a jurisdiction where such
affirmative
insurance is not available) that, (a) the related Mortgaged
Property has access
to a public road, and (b) the area shown on the survey, if any,
reviewed or
prepared in connection with the origination of the related Mortgage
Loan is the
same as the property legally described in the related Mortgage.
9.
No Holdback. The proceeds of each Mortgage Loan have been
fully disbursed (except in those cases where the full amount of the
Mortgage
Loan has been disbursed but a portion thereof is being held in
escrow or reserve
accounts documented as part of the Mortgage Loan documents and the
rights to
which are transferred to the Trustee, pending the satisfaction of
certain
conditions relating to leasing, repairs or other matters with
respect to the
related Mortgaged Property), and there is no obligation for future
advances with
respect thereto.
10.
Mortgage Provisions. The Mortgage Loan documents for each
Mortgage Loan, together with applicable state law, contain
customary and,
subject to the limitations and exceptions set forth in
representation 13 below,
enforceable provisions such as to render the rights and remedies of
the holder
thereof adequate for the practical realization against the related
Mortgaged
Property of the principal benefits of the security intended to be
provided
thereby, including, without limitation, judicial or non-judicial
foreclosure or
similar proceedings (as applicable for the jurisdiction where the
related
Mortgaged Property is located). None of the Mortgage Loan documents
contains any
provision that expressly excuses the related Mortgagor from
obtaining and
maintaining insurance coverage for acts of terrorism.
11.
Trustee under Deed of Trust. If the Mortgage for any
Mortgage Loan is a deed of trust, then (a) a trustee, duly
qualified under
applicable law to serve as such, has either been properly
designated and
currently so serves or may be substituted in accordance with the
Mortgage and
applicable law, and (b) no fees or expenses are or will become
payable to such
trustee by the Seller, the Purchaser or any transferee thereof
except in
connection with a trustee's sale after default by the related
Mortgagor or in
connection with any full or partial release of the related
Mortgaged Property or
related security for such Mortgage Loan.
12.
Environmental Conditions. Except in the case of the
Mortgaged Properties identified on Annex B hereto (as to which
properties the
only environmental
I-4
investigation conducted in connection with the origination of the
related
Mortgage Loan related to asbestos-containing materials and
lead-based paint),
(a) an environmental site assessment meeting ASTM standards and
covering all
environmental hazards typically assessed for similar properties
including use,
type and tenants of the related Mortgaged Property, a transaction
screen meeting
ASTM standards or an update of a previously conducted environmental
site
assessment (which update may have been performed pursuant to a
database update),
was performed by an independent third-party environmental
consultant (licensed
to the extent required by applicable state law) with respect to
each Mortgaged
Property securing a Mortgage Loan in connection with the
origination of such
Mortgage Loan, (b) the report of each such assessment, update or
screen, if any
(an "Environmental Report"), is dated no earlier than (or,
alternatively, has
been updated within) twelve (12) months prior to the date hereof,
(c) a copy of
each such Environmental Report has been delivered to the Purchaser,
and (d)
either: (i) no such Environmental Report, if any, reveals that as
of the date of
the report there is a material violation of applicable
environmental laws with
respect to any known circumstances or conditions relating to the
related
Mortgaged Property; or (ii) if any such Environmental Report does
reveal any
such circumstances or conditions with respect to the related
Mortgaged Property
and the same have not been subsequently remediated in all material
respects,
then one or more of the following are true--(A) one or more parties
not related
to the related Mortgagor and collectively having financial
resources reasonably
estimated to be adequate to cure the violation was identified as
the responsible
party or parties for such conditions or circumstances, and such
conditions or
circumstances do not materially impair the Value of the related
Mortgaged
Property, (B) the related Mortgagor was required to provide
additional security
reasonably estimated to be adequate to cure the violations and/or
to obtain and,
for the period contemplated by the related Mortgage Loan documents,
maintain an
operations and maintenance plan, (C) the related Mortgagor, or
other responsible
party, provided a "no further action" letter or other evidence that
would be
acceptable to a reasonably prudent commercial mortgage lender, that
applicable
federal, state or local governmental authorities had no current
intention of
taking any action, and are not requiring any action, in respect of
such
conditions or circumstances, (D) such conditions or circumstances
were
investigated further and based upon such additional investigation,
a qualified
environmental consultant recommended no further investigation or
remediation,
(E) the expenditure of funds reasonably estimated to be necessary
to effect such
remediation is not greater than 2% of the outstanding principal
balance of the
related Mortgage Loan, (F) there exists an escrow of funds
reasonably estimated
to be sufficient for purposes of effecting such remediation, (G)
the related
Mortgaged Property is insured under a policy of insurance, subject
to certain
per occurrence and aggregate limits and a deductible, against
certain losses
arising from such circumstances and conditions or (H) a responsible
party
provided a guaranty or indemnity to the related Mortgagor to cover
the costs of
any required investigation, testing, monitoring or remediation and,
as of the
date of origination of the related Mortgage Loan, such responsible
party had
financial resources reasonably estimated to be adequate to cure the
subject
violation in all material respects. To the Seller's actual
knowledge and without
inquiry beyond the related Environmental Report, there are no
significant or
material circumstances or conditions with respect to such Mortgaged
Property not
revealed in any such Environmental Report, where obtained, or in
any Mortgagor
questionnaire delivered to the Seller in connection with the issue
of any
related environmental insurance policy, if applicable, that would
require
investigation or remediation by the related Mortgagor under, or
otherwise be a
material violation of, any applicable environmental law. The
Mortgage Loan
documents for each Mortgage Loan
I-5
require the related Mortgagor to comply in all material respects
with all
applicable federal, state and local environmental laws and
regulations. Each of
the Mortgage Loans identified on Annex C hereto is covered by a
secured creditor
environmental insurance policy and each such policy is
noncancellable during its
term, is in the amount at least equal to 125% of the principal
balance of the
Mortgage Loan, has a term ending no sooner than the date which is
five years
after the maturity date of the Mortgage Loan to which it relates
and either does
not provide for a deductible or the deductible amount is held in
escrow and all
premiums have been paid in full. Each Mortgagor represents and
warrants in the
related Mortgage Loan documents that except as set forth in certain
environmental reports and to its knowledge it has not used, caused
or permitted
to exist and will not use, cause or permit to exist on the related
Mortgaged
Property any hazardous materials in any manner which violates
federal, state or
local laws, ordinances, regulations, orders, directives or policies
governing
the use, storage, treatment, transportation, manufacture,
refinement, handling,
production or disposal of hazardous materials. The related
Mortgagor (or
affiliate thereof) has agreed to indemnify, defend and hold the
Seller and its
successors and assigns harmless from and against any and all
losses,
liabilities, damages, injuries, penalties, fines, out-of-pocket
expenses and
claims of any kind whatsoever (including attorneys' fees and costs)
paid,
incurred or suffered by or asserted against, any such party
resulting from a
breach of environmental representations, warranties or covenants
given by the
Mortgagor in connection with such Mortgage Loan.
13.
Loan Document Status. E
