MORTGAGE LOAN PURCHASE AGREEMENT
Mortgage Loan Purchase Agreement, dated as of November 21, 2006
(the
"Agreement"), between KeyBank National Association (together with
its successors
and permitted assigns hereunder, the "Seller") and Structured Asset
Securities
Corporation II (together with its successors and permitted assigns
hereunder,
the "Purchaser").
The Seller intends to sell and the Purchaser intends to purchase
certain multifamily and commercial mortgage loans (the "Mortgage
Loans") as
provided herein. The Purchaser intends to deposit the Mortgage
Loans, together
with certain other multifamily and commercial mortgage loans (the
"Other Loans";
and, together with the Mortgage Loans, the "Securitized Loans"),
into a trust
fund (the "Trust Fund"), the beneficial ownership of which will be
evidenced by
multiple classes (each, a "Class") of mortgage pass-through
certificates (the
"Certificates") to be identified as the LB-UBS Commercial Mortgage
Trust
2006-C7, Commercial Mortgage Pass-Through Certificates, Series
2006-C7. One or
more "real estate mortgage investment conduit" elections will be
made with
respect to the Trust Fund. The Certificates will be issued pursuant
to a Pooling
and Servicing Agreement, to be dated as of November 13, 2006 (the
"Pooling and
Servicing Agreement"), between the Purchaser, as depositor,
Wachovia Bank,
National Association, as master servicer (the "Master Servicer"),
LNR Partners,
Inc., as special servicer (the "Special Servicer") and LaSalle Bank
National
Association, as trustee (the "Trustee"). Capitalized terms used but
not defined
herein have the respective meanings set forth in the Pooling and
Servicing
Agreement, as in effect on the Closing Date.
The Purchaser has entered into an Underwriting Agreement (the
"Underwriting Agreement"), dated as of the date hereof, with Lehman
Brothers
Inc. ("Lehman"), UBS Global Asset Management (US) Inc. ("UBS-AM"),
KeyBanc
Capital Markets, a division of McDonald Investments Inc. ("KBCM")
and Citigroup
Global Markets Inc. ("CGMI" and, together with Lehman, UBS-AM and
KBCM 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 (the "Securities Act"). The
Purchaser has
also entered into a Certificate Purchase Agreement (the
"Certificate Purchase
Agreement"), dated as of the date hereof, with Lehman and UBS-AM
(together in
such capacity, the "Placement Agents"), whereby the Purchaser will
sell to the
Placement Agents all of the remaining Certificates (other than the
Residual
Interest Certificates).
In connection with the transactions contemplated hereby, the
Seller,
the Purchaser, the Underwriters and the Placement Agents have
entered into an
Indemnification Agreement (the "Indemnification Agreement"), dated
as of the
date hereof.
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 schedule (the "Mortgage Loan
Schedule") annexed
hereto as Exhibit A. The Mortgage Loan Schedule may be amended to
reflect the
actual Mortgage Loans accepted by the Purchaser pursuant to the
terms hereof.
The Mortgage Loans will have an aggregate principal balance of
$385,237,134 (the
"Initial KeyBank Pool Balance") as of the close of business on the
Cut-off Date,
after giving effect to any and all payments of principal due
thereon on or
before such date, whether or not
received. The purchase and sale of the Mortgage Loans shall take
place on
December 5, 2006 or such other date as shall be mutually acceptable
to the
parties hereto (the "Closing Date"). The consideration for the
Mortgage Loans
shall consist of a cash amount equal to a percentage (mutually
agreed upon by
the parties hereto) of the Initial KeyBank Pool Balance, plus
interest accrued
on each Mortgage Loan at the related Mortgage Rate (net of the
related
Administrative Cost Rate), for the period from and including
November 13, 2006
up to but not including the Closing Date, which cash amount shall
be paid to the
Seller or its designee by wire transfer in immediately available
funds (or by
such other method as shall be mutually acceptable to the parties
hereto) on the
Closing Date; and (B) a 12.75764% Percentage Interest in each of
the Class R-I,
Class R-II and Class R-III Certificates (all such Residual Interest
Certificates, the "Seller's Residual Interest Certificates").
SECTION 2. Conveyance of Mortgage Loans.
(a) Effective as of the Closing Date, subject only to receipt of
the
purchase price referred to in Section 1 hereof and satisfaction or
waiver of the
conditions to closing set forth in Section 8 hereof, the Seller
does hereby
sell, transfer, assign, set over and otherwise convey to the
Purchaser, without
recourse, all the right, title and interest of the Seller (other
than the
primary servicing rights) in and to the Mortgage Loans identified
on the
Mortgage Loan Schedule as of such date. 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 for each Mortgage Loan, but collected
after such
date, shall belong to, and be promptly remitted to, the Seller.
(c) On or before the Closing Date, the Seller shall, on behalf of
the
initial Purchaser, deliver to and deposit with (i) the Trustee or a
Custodian
appointed thereby, a Mortgage File for each Mortgage Loan in
accordance with the
terms of, and conforming to the requirements set forth in, the
Pooling and
Servicing Agreement, with copies of each Mortgage File to be
delivered by the
Trustee to, upon request, the Master Servicer (at the expense of
the Trustee),
within 10 Business Days of such request; and (ii) the Master
Servicer (or, at
the direction of the Master Servicer, to the appropriate
Sub-Servicer) all
unapplied Escrow Payments and Reserve Funds in the possession or
under the
control of the Seller that relate to the Mortgage Loans.
(d) The Seller shall, through an Independent third party (the
"Recording Agent") retained by it, as and in the manner provided in
the Pooling
and Servicing Agreement (and in any event within 45 days following
the later of
the Closing Date and the date on which all necessary recording
information is
available to the Recording Agent), cause (i) each assignment of
Mortgage and
each assignment of Assignment of Leases, in favor of, and delivered
as part of
the related Mortgage File to the Trustee, to be submitted for
recordation in the
appropriate public office for real property records, and (ii) such
assignments
to be delivered to the Trustee following their return by the
applicable public
recording office, with copies of any such returned assignments to
be delivered
by the Trustee to the Master Servicer, at the expense of the
Seller, at least
every 90 days after the Closing Date (or at additional times upon
the request of
the Master Servicer if reasonably necessary for the ongoing
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administration and/or servicing of the related Mortgage Loan by the
Master
Servicer); provided that, in those instances where the public
recording office
retains the original assignment of Mortgage or assignment of
Assignment of
Leases, a certified copy of the recorded original shall be
forwarded to the
Trustee. If any such document or instrument is lost or returned
unrecorded
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 and delivery contemplated in the preceding paragraph,
including,
without limitation, any out-of-pocket costs and expenses that may
be incurred by
the Trustee in connection with any such recording or delivery
performed by the
Trustee at the Seller's request and the fees of the Recording
Agent.
Pursuant to the Pooling and Servicing Agreement and a letter
agreement
dated December 5, 2006 (the "Filing Letter Agreement") between
American Capital
Strategies Ltd. (the "Payee"), the Depositor, the UBS Mortgage Loan
Seller, the
KeyBank Mortgage Loan Seller and the Trustee, the Trustee, through
a third party
(the "Filing Agent") retained by it, as and in the manner provided
in the
Pooling and Servicing Agreement and at the expense of the Payee
(and in any
event within 45 days following the later of the Closing Date and
the date on
which all necessary filing information is available to the Filing
Agent), is
required to cause (i) each assignment of Uniform Commercial Code
financing
statements prepared by the Seller, in favor of, and delivered as
part of the
related Mortgage File to the Trustee, to be submitted for filing in
the
appropriate public office, and (ii) such assignments to be
delivered to the
Trustee following their return by the applicable public filing
office, with
copies of any such returned assignments to be delivered by the
Trustee to the
Master Servicer, at the expense of the Seller, at least every 90
days after the
Closing Date (or at additional times upon the request of the Master
Servicer if
reasonably necessary for the ongoing administration and/or
servicing of the
related Mortgage Loan by the Master Servicer). The Seller hereby
agrees to
reasonably cooperate with the Trustee and the Filing Agent with
respect to the
filing of the assignments of Uniform Commercial Code financing
statements as
described in this paragraph and to forward to the Trustee filing
confirmation,
if any, received in connection with such Uniform Commercial Code
financing
statements filed in accordance with this paragraph. Notwithstanding
the
foregoing, to the extent the Trustee provides the Payee, pursuant
to the Filing
Letter Agreement, with an invoice for the expenses (i) reasonably
to be incurred
in connection with the filings referred to in this paragraph and
(ii) required
to be paid by the Payee pursuant to the Filing Letter Agreement,
and such
expenses are not paid by the Payee in advance of such filings, the
Trustee,
pursuant to the Pooling and Servicing Agreement and the Filing
Letter Agreement
and at the expense of the Seller, shall only be required to cause
the filing
agent to file the assignments of such Uniform Commercial Code
financing
statements with respect to Mortgage Loans secured by hotel or
hospitality
properties.
(e) With respect to any Mortgage Loan, the following Mortgage Loan
Origination Documents (other than any document that constitutes
part of the
Mortgage File for such Mortgage Loan): copies of any final
appraisal, final
survey, final engineering report, final environmental report,
opinion letters of
counsel to the related mortgagor delivered in connection with the
closing of
such Mortgage Loan, escrow agreements, reserve agreements,
organization
documentation for the related mortgagor, organizational
documentation for any
related guarantor or indemnitor, if the related guarantor or
indemnitor is an
entity, insurance certificates or insurance review reports, leases
for tenants
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representing 10% or more of the annual income with respect to the
related
Mortgaged Property, final seismic report and property management
agreements,
rent roll, property operating statement and financial statements
for the related
guarantor or indemnitor, cash management or lockbox agreement,
zoning letters or
zoning reports and the documents, if any, specifically set forth on
Exhibit C
hereto, but in each case, only if the subject document (a) was in
fact obtained
in connection with the origination of such Mortgage Loan, (b) is
reasonably
necessary for the ongoing administration and/or servicing of such
Mortgage Loan
by the Master Servicer or Special Servicer in connection with its
duties under
the Pooling and Servicing Agreement, and (c) is in the possession
or under the
control of the Seller shall, within 45 days of the Closing Date, be
delivered or
caused to be delivered by the Seller to the Master Servicer (or, at
the
direction of the Master Servicer, to the appropriate Sub-Servicer);
provided
that the Seller shall not be required to deliver any draft
documents, privileged
or other communications or correspondence, credit underwriting or
due diligence
analyses or information, credit committee briefs or memoranda or
other internal
approval documents or data or internal worksheets, memoranda,
communications or
evaluations.
(f) After the Seller's transfer of the Mortgage Loans to the
Purchaser, as provided herein, the Seller shall not take any action
inconsistent
with the Purchaser's ownership of the Mortgage Loans. Except for
actions that
are the express responsibility of another party hereunder or under
the Pooling
and Servicing Agreement, and further except for actions that the
Seller is
expressly permitted to complete subsequent to the Closing Date, the
Seller
shall, on or before the Closing Date, take all actions required
under applicable
law to effectuate the transfer of the Mortgage Loans by the Seller
to the
Purchaser.
(g) In connection with the obligations of the Master Servicer under
Sections 3.01(e) and 3.19(c) of the Pooling and Servicing
Agreement, with regard
to each Mortgage Loan that is secured by the interests of the
related Mortgagor
in a hospitality property (identified on Schedule VI to the Pooling
and
Servicing Agreement) and each Mortgage Loan that has a related
letter of credit,
the Seller shall deliver to and deposit with the Master Servicer,
on or before
the Closing Date, any related franchise agreement, franchise
comfort letter and
the original of such letter of credit. Further, in the event, with
respect to a
Mortgage Loan with a related letter of credit, the Master Servicer
determines
that a draw under such letter of credit has become necessary under
the terms
thereof prior to the assignment of such letter of credit having
been effected in
accordance with Section 3.01(e) of the Pooling and Servicing
Agreement, the
Seller shall, upon the written direction of the Master Servicer,
use its best
efforts to make such draw or to cause such draw to be made on
behalf of the
Trustee.
(h) Pursuant to the Pooling and Servicing Agreement, the Master
Servicer shall review the documents with respect to each Mortgage
Loan delivered
by the Seller pursuant to or as contemplated by Section 2(e) hereof
and provide
each Seller and the Controlling Class Representative and the
Special Servicer
with a certificate (the "Master Servicer Certification") within 90
days of the
Closing Date acknowledging its (or the appropriate Sub-Servicer's)
receipt as of
the date of the Master Servicer Certification of such documents
actually
received (provided that such review shall be limited to identifying
the document
received, the Serviced Trust Mortgage Loan to which it purports to
relate, that
it appears regular on its face and that it appears to have been
executed (where
appropriate)). Notwithstanding anything to the contrary set forth
herein, to the
extent the Seller has not been notified in writing of its failure
to deliver any
document with respect to a Mortgage Loan required to be delivered
pursuant to or
as contemplated by Section 2(e) hereof prior to the date occurring
18 months
following
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the date of the Master Servicer Certification, the Seller shall
have no
obligation to provide such document.
(i) In addition, on the Closing Date, the Seller shall deliver to
the
Master Servicer for deposit in the Pool Custodial Account, the
Initial Deposits
relating to the Mortgage Loans.
SECTION 3. Representations, Warranties and Covenants of Seller.
(a) The Seller hereby represents and warrants to and covenants with
the Purchaser, as of the date hereof, that:
(i) The Seller is duly organized or formed, as the case may be,
validly existing and in good standing as a legal entity under the
laws of
the United States and possesses all requisite authority, power,
licenses,
permits and franchises to carry on its business as currently
conducted by
it and to execute, deliver and comply with its obligations under
the terms
of this Agreement.
(ii) This Agreement has been duly and validly authorized,
executed and delivered by the Seller and, assuming due
authorization,
execution and delivery hereof by the Purchaser, constitutes a
legal, valid
and binding obligation of the Seller, enforceable against the
Seller in
accordance with its terms, except as such enforcement may be
limited by (A)
bankruptcy, insolvency, reorganization, receivership, moratorium or
other
similar laws affecting the enforcement of creditors' rights in
general, and
(B) 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 organizational
documents, (B)
violate any law or regulation or any administrative decree or order
to
which the Seller is subject if compliance therewith is material to
(i) the
enforceability of this Agreement or any other agreements
contemplated
hereby or (ii) the Seller's ability to perform its duties and
obligations
under, or contemplated by, 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, the effect of which default or breach would be
material to the Seller or which violation or default would have a
material
adverse effect on the performance of its obligations under, or
contemplated
by, this Agreement.
(iv) The Seller is not in default with respect to any order or
decree of any court or any order, regulation or demand of any
federal,
state, municipal or other governmental agency or body, which
default might
have consequences that would, in the Seller's reasonable and good
faith
judgment, materially and adversely affect the condition (financial
or
other) or operations of the Seller or its properties or have
consequences
that would materially and adversely affect its performance
hereunder.
(v) The Seller is not a party to or bound by any agreement or
instrument or subject to any organizational document or any other
corporate
or limited liability company (as applicable) 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
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ability of the Seller to perform its obligations under this
Agreement or
that requires the consent of any third person to the execution and
delivery
of this Agreement by the Seller or the performance by the Seller of
its
obligations under this Agreement.
(vi) Except for the recordation and/or filing of assignments and
other transfer documents with respect to the Mortgage Loans, as
contemplated by Section 2(d) hereof, no consent, approval,
authorization or
order of, registration or filing with, or notice to, 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; and no bulk sale law applies to such transactions.
(vii) No litigation is pending or, to the best of the Seller's
knowledge, threatened against the Seller that would, in the
Seller's good
faith and reasonable judgment, prohibit its entering into this
Agreement or
materially and adversely affect the performance by the Seller of
its
obligations under this Agreement.
(viii) No proceedings looking toward liquidation, dissolution or
bankruptcy of the Seller are pending or contemplated.
In addition, the Seller hereby further represents and warrants to,
and
covenants with, the Purchaser, as of the date hereof, that:
(i) 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 provided herein, as a sale of
the
Mortgage Loans to the Purchaser in exchange for the consideration
specified
in Section 1 hereof. In connection with the foregoing, the Seller
shall
cause all of its records to reflect such transfer as a sale (as
opposed to
a secured loan). 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. After
giving
effect to its transfer of the Mortgage Loans to the Purchaser, as
provided
herein, the value of the Seller's assets, either taken at their
present
fair saleable value or at fair valuation, will exceed the amount of
the
Seller's debts and obligations, including contingent and
unliquidated debts
and obligations of the Seller, and the Seller will not be left with
unreasonably small assets or capital with which to engage in and
conduct
its business. The Mortgage Loans do not constitute all or
substantially all
of the assets of the Seller. The Seller does not intend to, and
does not
believe that it will, incur debts or obligations beyond its ability
to pay
such debts and obligations as they mature.
(ii) The Seller will acquire the Seller's Residual Interest
Certificates for its own account and not with a view or intention
to
distribute such Residual Interest Certificates, in whole or in
part, in any
manner that would violate the Securities Act or any applicable
state
securities laws.
(iii) The Seller understands that (A) the Seller's Residual
Interest Certificates have not been and will not be registered
under the
Securities Act or registered or qualified under
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any applicable state securities laws, (B) neither the Purchaser nor
any
other party is obligated so to register or qualify the Seller's
Residual
Interest Certificates and (C) neither the Seller's Residual
Interest
Certificates nor any security issued in exchange therefor or in
lieu
thereof may be (1) sold or transferred in connection with a
distribution
unless it is registered pursuant to the Securities Act and
registered or
qualified pursuant to any applicable state securities laws or (2)
sold,
transferred or distributed in a transaction which is exempt from
such
registration and qualification and the Certificate Registrar has
received
the certifications and/or opinions of counsel required by the
Pooling and
Servicing Agreement.
(iv) The Seller understands that it may not sell or otherwise
transfer the Seller's Residual Interest Certificates, any security
issued
in exchange therefor or in lieu thereof or any interest in the
foregoing
except in compliance with the provisions of Section 5.02 of the
Pooling and
Servicing Agreement, which provisions it has or, as of the Closing
Date,
will have carefully reviewed, and that the Seller's Residual
Interest
Certificates will bear legends that identify the transfer
restrictions to
which such Certificates are subject.
(v) Neither the Seller nor anyone acting on its behalf has (A)
offered, transferred, pledged, sold or otherwise disposed of any
Seller's
Residual Interest Certificate, any interest in a Seller's Residual
Interest
Certificate or any other similar security to any person in any
manner, (B)
solicited any offer to buy or accept a transfer, pledge or other
disposition of any Seller's Residual Interest Certificate, any
interest in
a Seller's Residual Interest Certificate or any other similar
security from
any person in any manner, (C) otherwise approached or negotiated
with
respect to any Seller's Residual Interest Certificate, any interest
in a
Seller's Residual Interest Certificate or any other similar
security with
any person in any manner, (D) made any general solicitation by
means of
general advertising or in any other manner, or (E) taken any other
action,
that (in the case of any of the acts described in clauses (A)
through (E)
above) would constitute a distribution of the Seller's Residual
Interest
Certificates under the Securities Act, would render the disposition
of the
Seller's Residual Interest Certificates a violation of Section 5 of
the
Securities Act or any state securities law or would require
registration or
qualification of the Seller's Residual Interest Certificates
pursuant
thereto. The Seller will not act, nor has it authorized nor will it
authorize any person to act, in any manner set forth in the
foregoing
sentence with respect to the Seller's Residual Interest
Certificates, any
interest in the Seller's Residual Interest Certificates or any
other
similar security.
(vi) The Seller has been furnished with all information regarding
(A) the Purchaser, (B) the Seller's Residual Interest Certificates
and
distributions thereon, (C) the nature, performance and servicing of
the
Other Loans, (D) the Pooling and Servicing Agreement and the Trust
Fund,
and (E) all related matters, that it has requested.
(vii) The Seller is either (a) a "qualified institutional buyer"
within the meaning of Rule 144A under the Securities Act or (b) an
"accredited investor" as defined in any of paragraphs (1), (2), (3)
and (7)
of Rule 501(a) under the Securities Act or an entity in which all
its
equity owners are "accredited investors" as defined in such
paragraphs and
has such knowledge and experience in financial and business matters
as to
be capable of evaluating the merits and risks of an investment in
the
Seller's Residual Interest Certificates. The Seller has sought such
accounting, legal and tax advice as it has considered necessary to
make an
informed
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investment decision; and the Seller is able to bear the economic
risks of
such an investment and can afford a complete loss of such
investment.
(viii) The Seller is not a Plan and is not directly or indirectly
acquiring the Seller's Residual Interest Certificates on behalf of,
as
named fiduciary of, as trustee of or with assets of a Plan.
(ix) The Seller is a United States Tax Person and is not a
Disqualified Organization.
(b) The Seller hereby makes, for the benefit of the Purchaser, with
respect to each Mortgage Loan, as of the Closing Date or as of such
other date
expressly set forth therein, each of the representations and
warranties set
forth on Exhibit B hereto.
(c) The Seller intends to transfer the Seller's Residual Interest
Certificates to Merrill Lynch, Pierce, Fenner & Smith
Incorporated on or about
the Closing Date; and, in connection therewith, the Seller will
comply with all
of the requirements of Section 5.02 of the Pooling and Servicing
Agreement, as
in effect on the Closing Date, and applicable law. The Seller
hereby directs the
Purchaser to cause the Seller's Residual Interest Certificates to
be registered
in the name of Merrill Lynch, Pierce, Fenner & Smith
Incorporated upon initial
issuance.
SECTION 4. Representations and Warranties of the Purchaser.
In order to induce the Seller to enter into this Agreement, the
Purchaser hereby represents and warrants for the benefit of the
Seller as of the
date hereof that:
(i) The Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware. The
Purchaser has the full corporate power and authority and legal
right to
acquire the Mortgage Loans from the Seller and to transfer the
Mortgage
Loans to the Trustee.
(ii) This Agreement has been duly and validly authorized,
executed and delivered by the Purchaser and, assuming due
authorization,
execution and delivery hereof by the Seller, constitutes a legal,
valid and
binding obligation of the Purchaser, enforceable against the
Purchaser in
accordance with its terms, except as such enforcement may be
limited by (A)
bankruptcy, insolvency, reorganization, receivership, moratorium or
other
similar laws affecting the enforcement of creditors' rights in
general, and
(B) 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
Purchaser and the Purchaser's performance and compliance with the
terms of
this Agreement will not (A) violate the Purchaser's organizational
documents, (B) violate any law or regulation or any administrative
decree
or order to which the Purchaser is subject or (C) constitute a
default (or
an event which, with notice or lapse of time, or both, would
constitute a
default) under, or result in the breach of, any material contract,
agreement or other instrument to which the Purchaser is a party or
by which
the Purchaser is bound.
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(iv) 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 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.
(v) 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 provided herein, as a sale of the Mortgage Loans to
the
Purchaser in exchange for the consideration specified in Section 1
hereof.
(vi) No litigation is pending or, to the best of the Purchaser's
knowledge, threatened against the Purchaser that would, in the
Purchaser's
good faith and reasonable judgment, prohibit its entering into this
Agreement or materially and adversely affect the performance by the
Purchaser of its obligations under this Agreement
SECTION 5. Notice of Breach; Cure; Repurchase.
(a) If the Seller receives written notice or obtains actual
knowledge
with respect to any Mortgage Loan (i) that any document
constituting a part of
clauses (a)(i) through (a)(xiii) of the definition of Mortgage File
or a
document, if any, specifically set forth on Exhibit D hereto, has
not been
executed (if applicable) or is missing (a "Document Defect") or
(ii) of a breach
of any of the Seller's representations and warranties made pursuant
to Section
3(b) hereof (each such breach, a "Breach") relating to any Mortgage
Loan, and
such Document Defect or Breach, as of the date specified in Section
5(b)(i)
hereof, materially and adversely affects the value of the Mortgage
Loan, then
such Document Defect shall constitute a "Material Document Defect"
or such
Breach shall constitute a "Material Breach", as the case may be. In
the event
the Seller obtains actual knowledge of a Material Document Defect
or Material
Breach, then the Seller shall deliver written notification to the
Trustee with
respect thereto. Then, following receipt by the Seller of a
Seller/Depositor
Notification with respect to such Material Document Defect or
Material Breach,
as the case may be, the Seller shall (subject to Sections 5(f), (g)
and (h)
hereof), (A) not later than (1) 30 days after the Seller and the
Purchaser have
agreed upon the existence of such Material Document Defect or
Material Breach or
(2) 30 days after an arbitration panel makes a binding
determination, in
accordance with the provisions of Section 5(i) hereof, that a
Material Document
Defect or Material Breach exists or (B) in the case of a Material
Document
Defect or Material Breach that affects whether a Mortgage Loan was,
as of the
Closing Date, is or will continue to be a "qualified mortgage"
within the
meaning of the REMIC Provisions (a "Qualified Mortgage"), not later
than 90 days
following the discovery by any party of such Material Document
Defect or
Material Breach (each of such 30-day period referred to in clause
(A)(1) above,
or such 30-day period referred to in clause (A)(2) above, or such
90-day period
referred to in clause (B) above, as applicable, is referred to as
the "Initial
Resolution Period"): (i) cure such Material Document Defect or
Material Breach,
as the case may be, in all material respects (which cure shall
include payment
of any out-of-pocket expenses that are reasonably incurred and
directly
attributable to pursuing such a claim based on such Material
Document Defect or
Material Breach associated therewith), or (ii) if such Material
Document Defect
or Material Breach, as the case may be, cannot be cured within the
Initial
Resolution Period, repurchase the affected Mortgage Loan (or the
related
Mortgaged Property) from, and in accordance with the directions of,
the
Purchaser or its
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designee, at a price equal to the Purchase Price; provided that if
(a) such
Material Breach or Material Document Defect, as the case may be, is
capable of
being cured but not within the applicable Initial Resolution
Period, (b) any
such Material Breach or Material Document Defect, as the case may
be, does not
affect whether the Mortgage Loan was, as of the Closing Date, is or
will
continue to be a Qualified Mortgage, (c) the Seller has commenced
and is
diligently proceeding with the cure of such Material Breach or
Material Document
Defect, as the case may be, within the applicable Initial
Resolution Period, and
(d) the Seller shall have delivered to the Purchaser a
certification executed on
behalf of the Seller by an officer thereof confirming that such
Material Breach
or Material Document Defect, as the case may be, is not capable of
being cured
within the applicable Initial Resolution Period, setting forth what
actions the
Seller is pursuing in connection with the cure thereof and stating
that the
Seller anticipates that such Material Breach or Material Document
Defect, as the
case may be, will be cured within an additional period not to
exceed, 90 days
beyond the end of the Initial Resolution Period (in the event the
Seller and the
Purchaser have agreed upon the existence of such Material Document
Defect or
Material Breach as described under Section 5(a)(ii)(A)(1)), or 45
days beyond
the end of the Initial Resolution Period (in the event an
arbitration panel has
made a binding determination, as described under Section
5(a)(ii)(A)(2) hereof,
that a Material Document Defect or Material Breach exists), then
the Seller
shall have such additional 90-day period or 45-day period, as the
case may be
(each such period, the "Resolution Extension Period"), to complete
such cure or,
failing such, to repurchase the affected Mortgage Loan (or the
related Mortgaged
Property); and provided, further, that, if any such Material
Document Defect is
still not cured after the Initial Resolution Period and any such
applicable
Resolution Extension Period solely due to the failure of the Seller
to have
received a recorded document, then the Seller shall be entitled to
continue to
defer its cure and repurchase obligations in respect of such
Material Document
Defect so long as the Seller certifies to the Purchaser every six
months
thereafter that the Material Document Defect is still in effect
solely because
of its failure to have received the recorded document and that the
Seller is
diligently pursuing the cure of such defect (specifying the actions
being
taken). The parties acknowledge that neither delivery of a
certification or
schedule of exceptions to the Seller pursuant to Section 2.02(b) of
the Pooling
and Servicing Agreement or otherwise nor possession of such
certification or
schedule by the Seller shall, in and of itself, constitute delivery
of notice of
any Material Document Defect or Material Breach or knowledge or
awareness by the
Seller of any Material Document Defect or Material Breach.
If, during the period of deferral by the Seller of its cure and
repurchase obligations as contemplated by the last proviso of the
penultimate
sentence of the preceding paragraph, the Mortgage Loan that is the
subject of
the Material Document Defect either becomes a Specially Serviced
Mortgage Loan
or becomes the subject of a proposed or actual assumption of the
obligations of
the related Mortgagor under such Mortgage Loan, then, following
receipt by the
Seller of a Seller/Depositor Notification providing notice of such
event, the
Seller shall cure the subject Material Document Defect within the
time period
specified in such Seller/Depositor Notification. If, upon the
expiration of such
period, the Seller has failed to cure the subject Material Document
Defect, the
Master Servicer or the Special Servicer, as applicable, shall be
entitled (but
not obligated) to perform the obligations of the Seller with
respect to curing
the subject Material Document Defect and, in the event of such an
election, the
Seller shall pay all reasonable actual out-of-pocket costs and
expenses in
connection with the applicable servicer's effecting such cure.
(b) (i) Provided that any Seller/Depositor Notification with
respect
to a Material Document Defect or Material Breach is received by the
Seller in
accordance with the provisions of the Pooling and Servicing
Agreement), within
24 months of the Closing Date, the material and adverse
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effect of the related Document Defect or Breach shall be determined
as of the
date hereof. After the expiration of 24 months following the
Closing Date, the
material and adverse effect of any Document Defect or Breach that
was not the
subject of another Seller/Depositor Notification, received by the
Seller (in
accordance with the provisions of the Pooling and Servicing
Agreement), within
24 months of the Closing Date, shall be determined as of the date
of such
Seller/Depositor Notification.
(ii) In the event the Seller is obligated to repurchase any
Mortgage Loan pursuant to this Section 5, such obligation shall
extend to
any successor REO Mortgage Loan with respect thereto as to which
(A) the
subject Material Breach existed as to the subject predecessor
Mortgage Loan
prior to the date the related Mortgaged Property became an REO
Property or
within 90 days thereafter, and (B) as to which the Seller had
received, no
later than 90 days following the date on which the related
Mortgaged
Property became an REO Property, a Seller/Depositor Notification
from the
Trustee regarding the occurrence of the applicable Material Breach
and
directing the Seller to repurchase the subject Mortgage Loan.
(c) If one or more (but not all) of the Mortgage Loans constituting
a
Cross-Collateralized Group are to be repurchased by the Seller as
contemplated
by Section 5(a) hereof, then, prior to the subject repurchase, the
Seller or its
designee shall use reasonable efforts, subject to the terms of the
related
Mortgage Loans, to prepare and, to the extent necessary and
appropriate, have
executed by the related Mortgagor and record, such documentation as
may be
necessary to terminate the cross-collateralization between the
Mortgage Loans in
such Cross-Collateralized Group that are to be repurchased, on the
one hand, and
the remaining Mortgage Loans therein, on the other hand, such that
those two
groups of Mortgage Loans are each secured only by the Mortgaged
Properties
identified in the Mortgage Loan Schedule as directly corresponding
thereto;
provided that, if such Cross-Collateralized Group is still subject
to the
Pooling and Servicing Agreement, then no such termination shall be
effected
unless and until (i) the Purchaser or its designee has received
from the Seller
(A) an Opinion of Counsel to the effect that such termination will
not cause an
Adverse REMIC Event to occur with respect to any REMIC Pool or an
Adverse
Grantor Trust Event with respect to the Grantor Trust and (B)
written
confirmation from each Rating Agency that such termination will not
cause an
Adverse Rating Event to occur with respect to any Class of
Certificates and (ii)
the Controlling Class Representative (if one is acting) has
consented (which
consent shall not be unreasonably withheld and shall be deemed to
have been
given if no written objection is received by the Seller within 10
Business Days
of the Controlling Class Representative's receipt of a written
request for such
consent); and provided, further, that the Seller may, at its
option, purchase
the entire Cross-Collateralized Group in lieu of terminating the
cross-collateralization. All costs and expenses incurred by the
Purchaser or its
designee pursuant to this paragraph shall be included in the
calculation of
Purchase Price for the Mortgage Loan(s) to be repurchased. If the
cross-collateralization of any Cross-Collateralized Group is not or
cannot be
terminated as contemplated by this paragraph, then, for purposes of
(i)
determining whether the subject Breach or Document Defect, as the
case may be,
materially and adversely affects the value of such
Cross-Collateralized Group,
and (ii) the application of remedies, such Cross-Collateralized
Group shall be
treated as a single Mortgage Loan.
(d) It shall be a condition to any repurchase of a Mortgage Loan by
the Seller pursuant to this Section 5 that the Purchaser shall have
executed and
delivered such instruments of transfer or assignment then presented
to it by the
Seller (or as otherwise required to be prepared, executed and
delivered under
the Pooling and Servicing Agreement), in each case without
recourse, as shall be
necessary to vest in the Seller the legal and beneficial ownership
of such
Mortgage Loan
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(including any property acquired in respect thereof or proceeds of
any insurance
policy with respect thereto), to the extent that such ownership
interest was
transferred to the Purchaser hereunder. If any Mortgage Loan is to
be
repurchased as contemplated by this Section 5, the Seller shall
amend the
Mortgage Loan Schedule to reflect the removal of such Mortgage Loan
and shall
forward such amended schedule to the Purchaser.
(e) Any repurchase of a Mortgage Loan pursuant to this Section 5
shall
be on a whole loan, servicing released basis. The Seller shall have
no
obligation to monitor the Mortgage Loans regarding the existence of
a Breach or
Document Defect. It is understood and agreed that the obligations
of the Seller
set forth in this Section 5 constitute the sole remedies available
to the
Purchaser with respect to any Breach or Document Defect.
(f) Notwithstanding the foregoing, if there exists a Breach of that
portion of the representation or warranty on the part of the Seller
set forth
in, or made pursuant to, paragraph (xlviii) of Exhibit B to this
Agreement,
specifically relating to whether or not the Mortgage Loan documents
or any
particular Mortgage Loan document for any Mortgage Loan requires
the related
Mortgagor to bear the reasonable costs and expenses associated with
the subject
matter of such representation or warranty, as set forth in such
representation
or warranty, then the Purchaser or its designee will direct the
Seller in
writing to wire transfer to the Custodial Account, within 90 days
of receipt of
such direction, the amount of any such reasonable costs and
expenses incurred by
the Trust that (i) are due from the Mortgagor, (ii) otherwise would
have been
required to be paid by the Mortgagor if such representation or
warranty with
respect to such costs and expenses had in fact been true, as set
forth in the
related representation or warranty, (iii) have not been paid by the
Mortgagor,
(iv) are the basis of such Breach and (v) constitute "Covered
Costs". Upon
payment of such costs, the Seller shall be deemed to have cured
such Breach in
all respects. Provided that such payment is made, this paragraph
describes the
sole remedy available to the Purchaser regarding any such Breach,
regardless of
whether it constitutes a Material Breach, and the Seller shall not
be obligated
to otherwise cure such Breach or repurchase the affected Mortgage
Loan under any
circumstances. Amounts deposited in the Pool Custodial Account
pursuant to this
paragraph shall constitute "Liquidation Proceeds" for all purposes
of the
Pooling and Servicing Agreement (other than Section 3.11(c) of the
Pooling and
Servicing Agreement).
(g) Subject to Section 5(f) hereof and the last three sentences of
this paragraph, if the Seller determines that a Material Breach
(other than a
Material Breach of a representation or warranty on the part of the
Seller set
forth in and made pursuant to paragraph (xvii) of Exhibit B to this
Agreement)
or a Material Document Defect with respect to a Mortgage Loan is
not capable of
being cured in accordance with Section 5(a) hereof, then in lieu of
repurchasing
such Mortgage Loan the Seller may, at its sole option, pay a cash
amount equal
to the loss of value (each such payment, a "Loss of Value Payment")
with respect
to such Mortgage Loan, which loss of value is directly attributed
to such
Material Breach or Material Document Defect, as the case may be.
The amount of
each such Loss of Value Payment shall be determined either (i) by
mutual
agreement of the Special Servicer on behalf of the Trust with
respect to the
subject Material Breach or Material Document Defect, as the case
may be, and the
Seller, or (ii) by an arbitration panel pursuant to a binding
arbitration
proceeding in accordance with Section 5(i) hereof; provided that,
in the event
there is an arbitration proceeding for determining the existence of
a Material
Breach or a Material Document Defect with respect to any Mortgage
Loan, such
arbitration proceeding must also include a determination of the
amount of the
loss of value to such Mortgage Loan directly attributed to such
Material Breach
or such Material Document Defect, as the case may be. Provided that
such payment
is made, this paragraph describes the sole remedy available to
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the Purchaser regarding any such Material Breach or Material
Document Defect and
the Seller shall not be obligated to otherwise cure such Material
Breach or
Material Document Defect or repurchase the affected Mortgage Loan
based on such
Material Breach or Material Document Defect under any
circumstances.
Notwithstanding the foregoing provisions of this Section 5(g), if
95% or more of
the loss of value to a Mortgage Loan was caused by a Material
Breach or Material
Document Defect, which Material Breach or Material Document Defect
is not
capable of being cured, this Section 5(g) shall not apply and the
Seller shall
be obligated to repurchase the affected Mortgage Loan at the
applicable Purchase
Price in accordance with Section 5(a) hereof. Furthermore, the
Seller shall not
have the option of delivering Loss of Value Payments in connection
with any
Material Breach relating to a Mortgage Loan's failure to be a
Qualified
Mortgage. In the event there is a Loss of Value Payment made by the
Seller in
accordance with this Section 5(g), the amount of such Loss of Value
Payment
shall be deposited into the Loss of Value Reserve Fund to be
applied in
accordance with Section 3.05(e) of the Pooling and Servicing
Agreement.
In the event the amount of any Loss of Value Payment is determined
by
an arbitration panel pursuant to a binding arbitration proceeding
in accordance
with Section 5(i) hereof, then such Loss of Value Payment shall
also include the
payment of any costs and expenses (including costs incurred in
establishing the
amount of any related loss of value to the subject Mortgage Loan,
including
reasonable legal fees) that are reasonably incurred in good faith
by the Master
Servicer, the Special Servicer and/or the Trustee (on behalf of the
Trust) in
enforcing the rights of the Trust against the Seller with respect
to the subject
Material Breach or Material Document Defect, as the case may be;
provided that,
that in the event the Seller tenders a loss of value payment in a
specified
amount in connection with a Material Breach or Material Document
Defect, as the
case may be, prior to the institution of arbitration proceedings
and that offer
is rejected and an amount equal to or less than the loss of value
payment
originally tendered by the Seller is ultimately determined by an
arbitration
panel pursuant to a binding arbitration proceeding in accordance
with Section
5(i) hereof to be the actual amount of the Loss of Value Payment
attributed to
such Material Breach or Material Document Defect, as the case may
be, then that
Loss of Value Payment shall not include the payment of any costs or
expenses
incurred in enforcing the rights of the Trust against the Seller
with respect to
the subject Material Breach or Material Document Defect, as the
case may be;
provided, further, that if the Special Servicer request a loss of
value payment
from the Seller of a specified amount in connection with a Material
Breach or
Material Document Defect, as the case may be, and the Seller
refuses to pay that
amount and an amount equal to or greater than the loss of value
payment
originally requested by the Special Servicer is ultimately
determined by an
arbitration panel pursuant to a binding arbitration proceeding in
accordance
with Section 5(i) hereof to be the actual Loss of Value Payment
attributable to
such Material Document Defect or Material Breach, then that Loss of
Value
Payment shall also include the payment of any costs or expenses
reasonably
incurred in good faith in enforcing the rights of the Trust against
the Seller
with respect to the subject Material Breach or Material Document
Defect, as the
case may be; and provided, further, that, if the Seller tenders a
loss of value
payment in connection with a Material Breach or Material Document
Defect, as the
case may be, in a specified amount, and the Special Servicer
rejects such tender
and requests a greater loss of value payment amount, and an amount
in between
the respective amounts tendered and requested is ultimately
determined by an
arbitration panel pursuant to a binding arbitration proceeding in
accordance
with Section 5(i) hereof to be the actual Loss of Value Payment
attributable to
such Material Breach or Material Document Defect, as the case may
be, then that
Loss of Value Payment shall also include the payment of an amount
equal to the
product of (i) all costs and expenses reasonably incurred in
connection with
that arbitration proceeding, multiplied by (ii) a fraction, the
numerator of
which is the excess of the amount determined by that arbitration
proceeding
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over the amount tendered by the Seller, and the denominator of
which is the
excess of the amount requested by the Special Servicer over the
amount tendered
by the Seller. Notwithstanding the foregoing, in the event any Loss
of Value
Payment is determined by the parties hereto by mutual agreement
(and not by an
arbitration proceeding), that Loss of Value Payment shall not
include any costs
and expenses incurred by the Master Servicer, the Special Servicer
or the
Trustee unless such costs and expenses were specifically included
in such mutual
agreement.
(h) Notwithstanding the foregoing, if there exists a Material
Breach
of the representation or warranty on the part of the Seller set
forth in and
made pursuant to paragraph (xvii) of Exhibit B to this Agreement,
and the
subject Mortgage Loan becomes a Qualified Mortgage prior to the
expiration of
the Initial Resolution Period applicable to a Material Document
Defect or
Material Breach that affects whether a Mortgage Loan is a Qualified
Mortgage,
and without otherwise causing an Adverse REMIC Event or an Adverse
Grantor Trust
Event, then such breach will be cured and the Seller will not be
obligated to
repurchase or otherwise remedy such Breach.
(i) The parties hereto agree that any controversy or claim (a
"Dispute") arising under Section 5(a), Section 5(b) and/or Section
5(g) of this
Agreement shall be resolved in accordance with the following
Mediation/Arbitration procedures in this Section 5(i).
If the Seller receives a Seller/Depositor Notification pursuant to
Section 5(a) of this Agreement regarding the alleged existence of a
Material
Document Defect or Material Breach and requesting the Seller to
cure or
repurchase the affected Mortgage Loan in connection therewith (a
"Notice"), and
the Seller does not agree upon the existence of such Material
Document Defect or
Material Breach within 90 days of receiving such Notice, then,
unless otherwise
agreed to by the parties involved in the Dispute, that Dispute
shall be
submitted to non-binding mediation in accordance with the
provisions of this
paragraph; provided, that if the Seller is proceeding to cure the
subject
Material Document Defect or Material Breach, then that Dispute
shall not be
submitted to mediation until the expiration of the related
Resolution Extension
Period and the failure of the Seller to complete such cure (unless
otherwise
agreed to by the parties involved in the Dispute). Following the
90-day period
referred to in the preceding sentence and subject to the preceding
proviso, any
party to this Agreement that is involved in the Dispute may send a
written
letter (a "Mediation Letter") to another party to this Agreement
that they wish
the mediation process to begin between the sender and the recipient
of such
Mediation Letter. Following receipt of a Mediation Letter, a
mediator(s) shall
be selected by agreement of the parties to the mediation. If such
parties cannot
agree on a mediator, then the mediation shall be conducted by three
mediators,
one of which shall be selected by the Seller and one of which shall
be selected
by the Purchaser or its assignee. Each of the parties to the
mediation shall
submit the name of the person it has selected to serve as a
mediator to the
opposing party within 10 days of the date of the Mediation Letter.
If either
party fails to submit the name of its selected mediator within 10
days of the
date of the Mediation Letter, the other party shall have the right
to select the
second mediator in addition to its own mediator (provided that such
party has
submitted the name of its selected mediator within 10 days of the
date of the
Mediation Letter). The two mediators selected by the party(ies)
shall appoint a
third mediator within 20 days of the date of the Mediation Letter
or such longer
time period as agreed to by the parties to the mediation. Any
mediator(s) so
designated must be acceptable to both the Seller and the Purchaser
or its
assignee. Any mediators appointed or selected pursuant to the
provisions of this
paragraph must be experienced professionals in the CMBS industry.
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Any mediation related to a particular Dispute and commenced in
accordance with the preceding paragraph must be completed within 90
days of the
date of the Mediation Letter (or a longer period, if the parties to
the
mediation agreed to extend the mediation). Any mediation referred
to in this
Section 5(i) shall be conducted in the manner specified by the
mediator(s) and
agreed upon by the Seller and the Purchaser or its assignee and any
such
mediation shall be conducted in New York City to the exclusion of
all other
locations (unless otherwise agreed to by the parties to the
mediation). During
the mediation process, the parties to the mediation shall discuss
their
differences voluntarily and in good faith and attempt, with the
assistance of
the mediator(s) as a facilitator of the negotiations, to reach an
amicable
resolution of the Dispute. The mediation will be treated as a
settlement
discussion and therefore will be confidential. No mediator selected
in
accordance with this Section 5(i) may testify for either party in
any later
proceeding relating to the Dispute. No recording or transcript
shall be made of
the mediation proceedings. The fees and expenses of all mediator(s)
shall be
shared equally by the parties to the mediation; provided, that the
party to the
mediation that is acting on behalf of the Trust in accordance with
the
provisions of this Section 5(i) shall be entitled to reimbursement
or
indemnification by the Trust Fund for such fees and expenses if and
to the
extent permitted under the Pooling and Servicing Agreement.
Notwithstanding anything to the contrary herein, no party shall be
required to agree to a Dispute resolution pursuant to mediation and
no decision
or resolution of a mediator or mediators shall be binding on any
party unless
such decision or resolution is expressly agreed to by such party.
In the event
the parties involved in the Dispute have not agreed to a Dispute
resolution
pursuant to mediation at the termination of the mediation, then
that Dispute
will be settled by arbitration in accordance with the succeeding
paragraphs of
this Section 5(i).
If a Dispute has not been resolved within 90 days of the date of
the
Mediation Letter (or such shorter or longer period as is expressly
agreed to by
the parties to the mediation), the mediation shall terminate and
the Dispute
will be settled by arbitration. Following the date of termination
of mediation,
which shall be the date occurring 90 days after the date of the
Mediation Letter
unless otherwise expressly agreed to by the parties to the
mediation,
arbitration may be commenced by any party to this Agreement
involved in the
Dispute sending a written notice to another party to this Agreement
involved in
the Dispute that they wish the arbitration process to begin with
respect to the
Dispute between the sender and the recipient of such written
notice. The date
any such party receives written notice in accordance with this
Section 5(i) from
another party that such party wishes to commence arbitration shall
be referred
to as the "Arbitration Commencement Date". Any arbitration
hereunder shall be
conducted in accordance with the provisions of this Agreement and
the American
Arbitration Association Rules for Large Complex Commercial Disputes
("AAA
Rules"), but shall not be conducted by the American Arbitration
Association
("AAA"). Discovery will be permitted in connection with the
arbitration in
accordance with the AAA Rules. In the event of a conflict, the
provisions of
this Agreement will control. Such arbitration shall be conducted
before a panel
of three arbitrators, regardless of the size of the Dispute. The
arbitration
panel shall consist of one person selected by the Seller and one
person selected
by the Purchaser or its assignee. Each such party shall submit the
name of the
person it has selected to serve as an arbitrator to the other party
within 30
days of the Arbitration Commencement Date (or such longer period as
is expressly
agreed to by the parties to the arbitration). If either such party
fails to
submit the name of its selected arbitrator within 30 days of the
Arbitration
Commencement Date, then the other such party shall have the right
to select the
second arbitrator in addition to its own arbitrator (provided that
such party
has submitted the name of its selected arbitrator within 30 days of
the
Arbitration Commencement Date). The two arbitrators
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designated in accordance with the two preceding sentences shall
appoint a third
arbitrator within 45 days of the Arbitration Commencement Date (or
such longer
period as is expressly agreed to by the parties to the
arbitration). All
arbitrators appointed or selected pursuant to the provisions of
this paragraph
must be experienced professionals in the CMBS industry. The third
arbitrator
shall be an Independent person who has not previously been employed
by either
party and does not have a direct or indirect interest in either
party or the
subject matter of the arbitration. The two (2) arbitrators
appointed by the
parties to the arbitration are not required to be neutral and it
shall not be
grounds for removal of either of such arbitrators or for vacating
an arbitration
award that either of such arbitrators has past or present
relationships with the
party that appointed such arbitrator. No potential arbitrator may
serve on the
panel unless he or she has agreed in writing to abide and be bound
by the terms
and provisions of this Agreement and the AAA Rules and to keep
confidential the
terms of any arbitration proceeding related to this Agreement and
the terms of
any discussion, negotiation, decision, agreement or resolution in
connection
therewith.
Any issue concerning the extent to which any Dispute is subject to
arbitration, or concerning the applicability, interpretation, or
enforceability
of these procedures, including any contention that all or part of
these
procedures are invalid or unenforceable, shall be resolved by the
arbitrators.
In no event, notwithstanding that any provision of this Agreement
is held to be
invalid or unenforceable, shall the arbitrators have the power to
make an award
or impose a remedy that could not be made or imposed by a court
deciding the
matter in the same jurisdiction. In no event shall the arbitrators
have the
power to make an award or impose a remedy that is not contemplated
by, or
conflicts with the terms and provisions of, this Agreement or the
Pooling and
Servicing Agreement (other than any term or provision of this
Agreement or the
Pooling and Servicing Agreement that is held to be invalid or
unenforceable).
Without limiting the foregoing, the arbitrators shall have no
authority to award
treble, consequential or punitive damages of any type under any
circumstances,
whether or not such damages may be available under the AAA Rules or
any other
act or law. Subject to the provisions of this Agreement, the result
of the
arbitration will be binding on the parties involved in the Dispute,
and judgment
on the arbitrators' award may be entered, subject to the provisions
of Section
15 of this Agreement, in any court of competent jurisdiction.
All mediations and arbitrations shall be conducted in New York City
to
the exclusion of all other locations (unless otherwise expressly
agreed to by
the parties to the subject mediation or arbitration, as
applicable). The party
to an arbitration that is acting on behalf of the Trust in
accordance with the
provisions of this Section 5(i) shall be entitled to reimbursement
or
indemnification by the Trust Fund for the fees and expenses
incurred in
connection therewith if and to the extent permitted under the
Pooling and
Servicing Agreement.
The parties to this Agreement hereby agree to waive any right to
trial
by jury fully to the extent that any such right shall now or
hereafter exist
with regard to the rights and remedies contained in this Section 5;
provided,
that if (i) any party to an arbitration governed by this Section
5(i) fails to
abide by the rules or deadlines for that arbitration (as such
deadlines may be
extended by express agreement of the parties to that arbitration),
or (ii) the
applicable appointed arbitrators determine that the subject Dispute
cannot be
resolved through arbitration either because the AAA Rules are
inapplicable to
the Dispute and/or the Federal Arbitration Act is inapplicable to
the Dispute or
for any other reason, then the other party (in the case of clause
(i)) or any
party (in the case of clause (ii)) to this Agreement may in its
sole option,
file a complaint to resolve the Dispute through a legal proceeding
and in
accordance with the provision contained in Section 15 hereof.
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If any of the provisions of this Section 5(i) are determined by a
court of law to be invalid or unenforceable, the remaining
provisions shall
remain in effect and be binding on the parties involved in the
Dispute to the
fullest extent permitted by law.
SECTION 6. Defeasance Serviced Trust Mortgage Loans; Early
Defeasance
Trust Mortgage Loans.
(a) [RESERVED]
(b) If the Purchaser or the Master Servicer notifies the Seller
that
the Mortgagor under any of the Mortgage Loans that are Early
Defeasance Trust
Mortgage Loans (i) intends to defease such Early Defeasance Trust
Mortgage Loan
in whole on or before the second anniversary of the Closing Date
and the amount
tendered by such Mortgagor to defease such Early Defeasance Trust
Mortgage Loan
(in accordance with the related loan documents) is less than the
Purchase Price
that would be applicable in the event of a repurchase of such
Mortgage Loan
pursuant to or as otherwise contemplated by Section 5(a), or (ii)
intends to
partially defease such Early Defeasance Trust Mortgage Loan on or
prior to the
second anniversary of the Closing Date, or (iii) intends to defease
such Early
Defeasance Trust Mortgage Loan in whole on or before the second
anniversary of
the Closing Date and such Mortgagor is to tender Defeasance
Collateral or such
other collateral as is permitted in connection with a defeasance
under the
related loan documents that does not constitute a cash amount equal
to or
greater than the Purchase Price set forth in clause (i) above in
this paragraph,
then the Seller shall promptly repurchase such Mortgage Loan at a
price equal to
(A) the related Purchase Price and (B) the amount, if any, by which
the proceeds
from any cash defeasance deposit exceeds the related Purchase
Price, in
accordance with the directions of the Master Servicer on a whole
loan, servicing
released basis.
Upon the repurchase of a Mortgage Loan that is an Early Defeasance
Trust Mortgage Loan pursuant to Section 5 hereof and/or this
Section 6, the
Purchaser shall effect a "qualified liquidation" of the related
Loan REMIC in
accordance with the REMIC Provisions. The Seller hereby agrees to
pay all
reasonable costs and expenses, including the costs of any opinions
of counsel
under the Pooling and Servicing Agreement, in connection with any
such
"qualified liquidation" of the related Loan REMIC in accordance
with the REMIC
Provisions.
SECTION 7. Closing.
The closing of the sale of the Mortgage Loans (the "Closing") shall
be
held at the offices of Sidley Austin LLP, 787 Seventh Avenue, New
York, New York
10019 at 10:00 a.m., New York City time, on the Closing Date.
The Closing shall be subject to each of the following conditions:
(a) All of the representations and warranties of the Seller set
forth
in or made pursuant to Sections 3(a) and 3(b) of this Agreement,
and all of the
representations and warranties of the Purchaser set forth in
Section 4 of this
Agreement, shall be true and correct in all material respects as of
the Closing
Date;
(b) Insofar as it affects the obligations of the Seller hereunder,
the
Pooling and Servicing Agreement shall be in a form mutually
acceptable to the
Purchaser and the Seller;
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(c) All documents specified in Section 8 of this Agreement (the
"Closing Documents"), in such forms as are reasonably acceptable to
the
Purchaser, shall be duly executed and delivered by all signatories
as required
pursuant to the respective terms thereof;
(d) The Purchaser shall have paid to the Seller the consideration
for
the Mortgage Loans pursuant to Section 1 hereof; and the Seller
shall have
delivered and released to the Trustee (or a Custodian on its
behalf), the Master
Servicer and the Special Servicer all documents and funds required
to be
delivered to the Trustee, the Master Servicer and the Special
Servicer,
respectively, pursuant to Section 2 of this Agreement;
(e) All other terms and conditions of this Agreement required to be
complied with on or before the Closing Date shall have been
complied with in all
material respects, and the Seller shall have the ability to comply
with all
terms and conditions and perform all duties and obligations
required to be
complied with or performed after the Closing Date;
(f) The Seller shall have paid all fees and expenses payable by it
to
the Purchaser or otherwise pursuant to this Agreement; and
(g) Neither the Underwriting Agreement nor the Certificate Purchase
Agreement shall have been terminated in accordance with its terms.
All parties hereto agree to use their best efforts to perform their
respective obligations hereunder in a manner that will enable the
Purchaser to
purchase the Mortgage Loans on the Closing Date.
SECTION 8. Closing Documents.
The Closing Documents shall consist of the following:
(a) This Agreement duly executed by the Purchaser and the Seller;
(b) The Pooling and Servicing Agreement duly executed by the
parties
thereto;
(c) The Indemnification Agreement duly executed by the parties
thereto;
(d) Certificate of the Seller, executed by a duly authorized
officer
of the Seller and dated the Closing Date, and upon which the
initial Purchaser,
the Underwriters and the Placement Agents may rely, to the effect
that: (i) the
representations and warranties of the Seller in this Agreement and
in the
Indemnification 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;
(e) An Officer's Certificate from an officer of the Seller, in his
or
her capacity as an officer, dated the Closing Date, and upon which
the initial
Purchaser, the Underwriters and the Placement Agents 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 in the
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Indemnification Agreement, 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;
(f) As certified by an officer of the Seller, true and correct
copies
of (i) the resolutions of the board of directors authorizing the
Seller's
entering into the transactions contemplated by this Agreement and
the
Indemnification Agreement, (ii) the organizational documents of the
Seller, and
(iii) a certificate of good standing of the Seller, issued by the
Office of the
Comptroller of the Currency not earlier than 30 days prior to the
Closing Date;
(g) A favorable opinion of Polsinelli Shalton Welte Suelthaus PC
("PSWS"), special counsel to the Seller, substantially in the form
attached
hereto as Exhibit C-1, dated the Closing Date and addressed to the
initial
Purchaser, the Underwriters, the Placement Agents, the Rating
Agencies and, upon
request, the other parties to the Pooling and Servicing Agreement,
together with
such other opinions of PSWS as may be required by the Rating
Agencies in
connection with the transactions contemplated hereby;
(h) In connection with the initial issuance of the Seller's
Residual
Interest Certificates, a Transfer Affidavit and Agreement in the
form
contemplated by the Pooling and Servicing Agreement from Seller and
from the
transferee of the Seller;
(i) An Officer's Certificate from an officer of the Seller, in his
or
her capacity as an officer, delivered in connection with the
opinion of PSWS to
be delivered pursuant to Section 8(g) hereof, in form and substance
satisfactory
to the addressees of such opinion and upon which such addressees
may rely; and
(j) Such further certificates, opinions and documents as the
Purchaser
may reasonably request.
SECTION 9. Costs.
An amount equal to 12.8% of all reasonable out-of-pocket costs and
expenses incurred by the Seller, the initial Purchaser, the
Underwriters, the
Placement Agents and the seller of the Other Loans to the Purchaser
in
connection with the securitization of the Securitized Loans and the
other
transactions contemplated by this Agreement, the Underwriting
Agreement and the
Certificate Purchase Agreement shall be payable by the Seller.
SECTION 10. Grant of a Security Interest.
The parties hereto agree that it is their express intent that the
conveyance of the Mortgage Loans by the Seller to the Purchaser as
provided in
Section 2 hereof 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 it is the express
intent of the
parties that: (i) such conveyance shall be deemed to be a pledge of
the Mortgage
Loans by the Seller to the Purchaser to secure a debt or other
obligation of the
Seller; (ii) this Agreement shall be deemed to be
