EXECUTION VERSION
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MORTGAGE LOAN PURCHASE AGREEMENT
between
MORGAN STANLEY MORTGAGE CAPITAL INC.
as Seller
and
MORGAN STANLEY CAPITAL I INC.
as Purchaser
Dated as of February 15, 2007
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TABLE OF CONTENTS
1.
AGREEMENT TO
PURCHASE................................................
3
2.
CONVEYANCE OF MORTGAGE
LOANS.........................................
3
3.
EXAMINATION OF MORTGAGE FILES AND DUE DILIGENCE
REVIEW...............
11
4.
REPRESENTATIONS AND WARRANTIES OF SELLER AND
PURCHASER...............
13
5.
REMEDIES UPON BREACH OF REPRESENTATIONS AND WARRANTIES MADE BY
SELLER...............................................................
16
6.
CLOSING..............................................................
21
7.
CLOSING
DOCUMENTS....................................................
22
8.
COSTS................................................................
25
9.
NOTICES..............................................................
25
10.
SEVERABILITY OF
PROVISIONS...........................................
25
11.
FURTHER
ASSURANCES...................................................
25
12.
SURVIVAL.............................................................
25
13.
GOVERNING
LAW........................................................
26
14.
BENEFITS OF MORTGAGE LOAN PURCHASE
AGREEMENT.........................
26
15.
MISCELLANEOUS........................................................
26
16.
ENTIRE
AGREEMENT.....................................................
27
Exhibit 1
Mortgage Loan Schedule
Exhibit 2
Representations and Warranties
Exhibit 3
Pricing Formulation
Exhibit 4
Bill of Sale
Exhibit 5
Power of Attorney
Index of Defined Terms
Affected
Loan(s)...........................................................
18
Agreement..................................................................
2
Certificate Purchase
Agreement.............................................
2
Certificates...............................................................
2
Closing
Date...............................................................
3
Collateral
Information.....................................................
11
Crossed Mortgage
Loans.....................................................
17
Defective Mortgage
Loan....................................................
17
Final Judicial
Determination...............................................
20
Indemnification
Agreement..................................................
14
Initial
Purchaser..........................................................
2
Master
Servicer............................................................
2
Material
Breach............................................................
16
Material Document
Defect...................................................
16
Memorandum.................................................................
3
MERS.......................................................................
5
Mortgage
File..............................................................
4
Mortgage Loan
Schedule.....................................................
3
Mortgage
Loans.............................................................
2
Officer's
Certificate......................................................
8
Other Mortgage
Loans.......................................................
2
Pooling and Servicing
Agreement............................................
2
Private
Certificates.......................................................
2
Prospectus
Supplement......................................................
2
Public
Certificates........................................................
2
Purchaser..................................................................
2
Repurchased
Loan...........................................................
18
Seller.....................................................................
2
Servicing
File.............................................................
9
Special
Servicer...........................................................
2
Trust......................................................................
2
Trustee....................................................................
2
Underwriters...............................................................
2
Underwriting
Agreement.....................................................
2
i
MORTGAGE LOAN PURCHASE AGREEMENT
(MSMC LOANS)
Mortgage Loan Purchase Agreement (this "Agreement"), dated as of
February 15,
2007, between Morgan Stanley Mortgage Capital Inc. (the "Seller"),
and Morgan
Stanley Capital I Inc. (the "Purchaser").
Seller agrees to sell and Purchaser agrees to purchase certain
mortgage loans
listed on Exhibit 1 hereto (the "Mortgage Loans") as described
herein. Purchaser
will convey the Mortgage Loans to a trust (the "Trust") created
pursuant to a
Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement"), to be
dated as of February 1, 2007, between Purchaser, as depositor,
Capmark Finance
Inc., as master servicer, J.E. Robert Company, Inc., as special
servicer
("Special Servicer"), Wells Fargo Bank, National Association, as
trustee and
custodian ("Trustee") and LaSalle Bank National Association, as
paying agent,
certificate registrar and authenticating agent. In exchange for the
Mortgage
Loans and certain other mortgage loans (the "Other Mortgage Loans")
to be
purchased by Purchaser, the Trust will issue to the Depositor
pass-through
certificates to be known as Morgan Stanley Capital I Inc.,
Commercial Mortgage
Pass-Through Certificates, Series 2007-HQ11 (the "Certificates").
The
Certificates will be issued pursuant to the Pooling and Servicing
Agreement.
Capitalized terms used herein but not defined herein shall have the
meanings
assigned to them in the Pooling and Servicing Agreement. The term
"Master
Servicer" as used herein shall mean Capmark Finance Inc. in its
capacity as a
master servicer under the Pooling and Servicing Agreement unless
otherwise
specified.
The Class A-1, Class A-1A, Class A-2, Class A-3-1, Class A-3-2,
Class A-AB,
Class A-4, Class A-4FL, Class A-M, Class A-MFL, Class A-J, Class B,
Class C,
Class D, Class E and Class F Certificates (the "Public
Certificates") will be
sold by Purchaser to Morgan Stanley & Co. Incorporated, LaSalle
Financial
Services, Inc., Deutsche Bank Securities Inc. and Merrill Lynch,
Pierce, Fenner
& Smith Incorporated (except with respect to Class A-4) (the
"Underwriters"),
pursuant to an Underwriting Agreement, between Purchaser and the
Underwriters,
dated February 15, 2007 (the "Underwriting Agreement"), and the
Class X, Class
G, Class H, Class J, Class K, Class L, Class M, Class N, Class O,
Class P, Class
Q, Class S, Class T, Class R-I, Class R-II and Class R-III
Certificates (the
"Private Certificates") will be sold by Purchaser to Morgan Stanley
& Co.
Incorporated (the "Initial Purchaser") pursuant to a Certificate
Purchase
Agreement, between Purchaser and the Initial Purchaser, dated
February 15, 2007
(the "Certificate Purchase Agreement"). The Underwriters will offer
the Public
Certificates for sale publicly pursuant to a Prospectus dated
February 6, 2007,
as supplemented by a Prospectus Supplement dated February 15, 2007
(together
with the Prospectus, the "Prospectus Supplement"), and the Initial
Purchaser
will offer the Private Certificates for sale in transactions exempt
from the
registration requirements of the Securities Act of 1933 pursuant to
a Private
Placement Memorandum dated February 15, 2007 (the "Memorandum").
In consideration of the mutual agreements contained herein, Seller
and Purchaser
hereby agree as follows:
1.
AGREEMENT TO PURCHASE.
1.1 Seller agrees to sell, and Purchaser agrees to purchase, on a
servicing
released basis, the Mortgage Loans identified on the schedule (the
"Mortgage
Loan Schedule") annexed hereto as Exhibit 1, as such schedule may
be amended to
reflect the actual Mortgage Loans accepted by Purchaser pursuant to
the terms
hereof. The Cut-Off Date with respect to the Mortgage Loans is
February 1, 2007.
The Mortgage Loans will have an aggregate principal balance 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 received, of $1,830,126,364. The
sale of the
Mortgage Loans shall take place on February 28, 2007 or such other
date as shall
be mutually acceptable to the parties hereto (the "Closing Date").
The purchase
price to be paid by Purchaser for the Mortgage Loans shall equal
the amount set
forth as such purchase price on Exhibit 3 hereto. The purchase
price shall be
paid to Seller by wire transfer in immediately available funds on
the Closing
Date.
1.2 On the Closing Date, Purchaser will assign to Trustee pursuant
to the
Pooling and Servicing Agreement all of its right, title and
interest in and to
the Mortgage Loans and its rights under this Agreement (to the
extent set forth
in Section 14), and Trustee shall succeed to such right, title and
interest in
and to the Mortgage Loans and Purchaser's rights under this
Agreement (to the
extent set forth in Section 14).
2.
CONVEYANCE OF MORTGAGE LOANS.
2.1 Effective as of the Closing Date, subject only to receipt of
the
consideration referred to in Section 1 hereof and the satisfaction
of the
conditions specified in Sections 6 and 7 hereof, Seller does hereby
transfer,
assign, set over and otherwise convey to Purchaser, without
recourse, except as
specifically provided herein, all the right, title and interest of
Seller, with
the understanding that a Servicing Rights Purchase and Sale
Agreement, dated
February 1, 2007, will be executed by Seller and Master Servicer,
in and to the
Mortgage Loans identified on the Mortgage Loan Schedule as of the
Closing Date.
The Mortgage Loan Schedule, as it may be amended from time to time
on or prior
to the Closing Date, shall conform to the requirements of this
Agreement and the
Pooling and Servicing Agreement. In connection with such transfer
and
assignment, Seller shall deliver to or on behalf of Trustee, on
behalf of
Purchaser, on or prior to the Closing Date, the Mortgage Note (as
described in
clause 2.2.1 hereof) for each Mortgage Loan and on or prior to the
fifth
Business Day after the Closing Date, five limited powers of
attorney
substantially in the form attached hereto as Exhibit 5 in favor of
Trustee,
Master Servicer and Special Servicer to empower Trustee, Master
Servicer and, in
the event of the failure or incapacity of Trustee and Master
Servicer, Special
Servicer, to submit for recording, at the expense of Seller, any
Mortgage Loan
documents required to be recorded as described in the Pooling and
Servicing
Agreement and any intervening assignments with evidence of
recording thereon
that are required to be included in the Mortgage Files (so long as
original
counterparts have previously been delivered to Trustee). Seller
agrees to
reasonably cooperate with Trustee, Master Servicer and Special
Servicer in
connection with any additional powers of attorney or revisions
thereto that are
requested by such parties for purposes of such recordation. The
parties hereto
agree that no such power of attorney shall be used with respect to
any Mortgage
Loan by or under authorization by any party hereto except to the
extent that the
absence of a document described in the second preceding sentence
with respect to
such Mortgage Loan remains
3
unremedied as of the earlier of (i) the date that is 180 days
following the
delivery of notice of such absence to Seller, but in no event
earlier than 18
months from the Closing Date, and (ii) the date (if any) on which
such Mortgage
Loan becomes a Specially Serviced Mortgage Loan. Custodian shall
submit such
documents for recording, at Seller's expense, after the periods set
forth above,
provided, however, Custodian shall not submit such assignments for
recording if
Seller produces evidence that it has sent any such assignment for
recording and
certifies that Seller is awaiting its return from the applicable
recording
office. In addition, not later than the 30th day following the
Closing Date,
Seller shall deliver to or on behalf of Trustee each of the
remaining documents
or instruments specified in Section 2.2 hereof (with such
exceptions and
additional time periods as are permitted by this Section 2) with
respect to each
Mortgage Loan (each, a "Mortgage File"). (Seller acknowledges that
the term
"without recourse" does not modify the duties of Seller under
Section 5 hereof.)
2.2 All Mortgage Files, or portions thereof, delivered prior to the
Closing Date
are to be held by or on behalf of Trustee in escrow on behalf of
Seller at all
times prior to the Closing Date. The Mortgage Files shall be
released from
escrow upon closing of the sale of the Mortgage Loans and payments
of the
purchase price therefor as contemplated hereby. The Mortgage File
for each
Mortgage Loan shall contain the following documents:
2.2.1 The original Mortgage Note bearing all intervening
endorsements,
endorsed, by allonge or on the original Mortgage Note, "Pay to the
order of
Wells Fargo Bank, National Association, as Trustee for Morgan
Stanley Capital I
Inc., Commercial Mortgage Pass-Through Certificates, Series
2007-HQ11, without
recourse, representation or warranty" or if the original Mortgage
Note is not
included therein, then a lost note affidavit, with a copy of the
Mortgage Note
attached thereto;
2.2.2 The original Mortgage, with evidence of recording thereon,
and, if
the Mortgage was executed pursuant to a power of attorney, a
certified true copy
of the power of attorney certified by the public recorder's office,
with
evidence of recording thereon (if recording is customary in the
jurisdiction in
which such power of attorney was executed), or certified by a title
insurance
company or escrow company to be a true copy thereof; provided that
if such
original Mortgage cannot be delivered with evidence of recording
thereon on or
prior to the 90th day following the Closing Date because of a delay
caused by
the public recording office where such original Mortgage has been
delivered for
recordation or because such original Mortgage has been lost, Seller
shall
deliver or cause to be delivered to Trustee a true and correct copy
of such
Mortgage, together with (i) in the case of a delay caused by the
public
recording office, an Officer's Certificate (as defined below) of
Seller stating
that such original Mortgage has been sent to the appropriate public
recording
official for recordation or (ii) in the case of an original
Mortgage that has
been lost after recordation, a certification by the appropriate
county recording
office where such Mortgage is recorded that such copy is a true and
complete
copy of the original recorded Mortgage;
2.2.3 The originals of all agreements modifying a Money Term or
other
material modification, consolidation and extension agreements, if
any, with
evidence of recording thereon, or if any such original
modification,
consolidation or extension agreement has been delivered to the
appropriate
recording office for recordation and either has not yet been
returned on or
prior to the 90th day following the Closing Date with evidence of
recordation
thereon or
4
has been lost after recordation, a true copy of such modification,
consolidation
or extension certified by Seller together with (i) in the case of a
delay caused
by the public recording office, an Officer's Certificate of Seller
stating that
such original modification, consolidation or extension agreement
has been
dispatched or sent to the appropriate public recording official for
recordation
or (ii) in the case of an original modification, consolidation or
extension
agreement that has been lost after recordation, a certification by
the
appropriate county recording office where such document is recorded
that such
copy is a true and complete copy of the original recorded
modification,
consolidation or extension agreement, and the originals of all
assumption
agreements, if any;
2.2.4 An original Assignment of Mortgage for each Mortgage Loan, in
form
and substance acceptable for recording (except for recording
information not yet
available if the instrument being recorded has not been returned
from the
applicable recording office), signed by the holder of record in
blank or in
favor of "Wells Fargo Bank, National Association, as Trustee for
Morgan Stanley
Capital I Inc., Commercial Mortgage Pass-Through Certificates,
Series
2007-HQ11," provided, if the related Mortgage has been recorded in
the name of
Mortgage Electronic Registration Systems, Inc. ("MERS") or its
designee, no such
assignments will be required to be submitted for recording or
filing and
instead, Seller shall take all actions as are necessary to cause
Trustee to be
shown as the owner of the related Mortgage on the record of MERS
for purposes of
the system of recording transfers of beneficial ownership of
mortgages
maintained by MERS and shall deliver to Special Servicer evidence
confirming
that Trustee is shown as the owner on the record of MERS;
2.2.5 Originals of all intervening assignments of Mortgage (except
with
respect to any Mortgage that has been recorded in the name of MERS
or its
designees), if any, with evidence of recording thereon or, if such
original
assignments of Mortgage have been delivered to the appropriate
recorder's office
for recordation, certified true copies of such assignments of
Mortgage certified
by Seller, or in the case of an original blanket intervening
assignment of
Mortgage retained by Seller, a copy thereof certified by Seller or,
if any
original intervening assignment of Mortgage has not yet been
returned on or
prior to the 90th day following the Closing Date from the
applicable recording
office or has been lost, a true and correct copy thereof, together
with (i) in
the case of a delay caused by the public recording office, an
Officer's
Certificate of Seller stating that such original intervening
assignment of
Mortgage has been sent to the appropriate public recording official
for
recordation or (ii) in the case of an original intervening
Assignment of
Mortgage that has been lost after recordation, a certification by
the
appropriate county recording office where such assignment is
recorded that such
copy is a true and complete copy of the original recorded
intervening Assignment
of Mortgage;
2.2.6 If the related Assignment of Leases is separate from the
Mortgage,
the original of such Assignment of Leases with evidence of
recording thereon or,
if such Assignment of Leases has not been returned on or prior to
the 90th day
following the Closing Date from the applicable public recording
office, a copy
of such Assignment of Leases certified by Seller to be a true and
complete copy
of the original Assignment of Leases submitted for recording,
together with (i)
an original of each assignment of such Assignment of Leases with
evidence of
recording thereon and showing a complete recorded chain of
assignment from the
named assignee to the holder of record, and if any such assignment
of such
Assignment of Leases has not been returned from the applicable
public recording
office, a copy of such assignment certified by Seller to be a true
and
5
complete copy of the original assignment submitted for recording,
and (ii) an
original assignment of such Assignment of Leases, in recordable
form, signed by
the holder of record in favor of "Wells Fargo Bank, National
Association, as
Trustee for Morgan Stanley Capital I Inc., Commercial Mortgage
Pass-Through
Certificates, Series 2007-HQ11," which assignment may be effected
in the related
Assignment of Mortgage, provided, if the related Mortgage has been
recorded in
the name of MERS or its designee, no assignment of Assignment of
Leases in favor
of Trustee will be required to be recorded or delivered and
instead, Seller
shall take all actions as are necessary to cause Trustee to be
shown as the
owner of the related Mortgage on the record of MERS for purposes of
the system
of recording transfers of beneficial ownership of mortgages
maintained by MERS
and shall deliver to Special Servicer evidence confirming that
Trustee is shown
as the owner on the record of MERS;
2.2.7 The original or a copy of each guaranty, if any, constituting
additional security for the repayment of such Mortgage Loan;
2.2.8 The original Title Insurance Policy, or in the event such
original
Title Insurance Policy has not been issued, an original binder or
actual title
commitment or a copy thereof certified by the title company with
the original
Title Insurance Policy to follow within 180 days of the Closing
Date or a
preliminary title report with an original Title Insurance Policy to
follow
within 180 days of the Closing Date or an agreement to provide any
of the
foregoing pursuant to binding escrow instructions executed by the
title company
or its authorized agent, with the original title policy to follow
within 180
days of the Closing Date;
2.2.9 (A) Copies of UCC financing statements (together with all
assignments
thereof) and (B) UCC-2 or UCC-3 financing statements assigning such
UCC
financing statements to Trustee executed and delivered in
connection with the
Mortgage Loan, provided, if the related Mortgage has been recorded
in the name
of MERS or its designee, no such financing statements will be
required to be
recorded or delivered and instead, Seller shall take all actions as
are
necessary to cause Trustee to be shown as the owner of the related
Mortgage on
the record of MERS for purposes of the system of recording
transfers of
beneficial ownership of mortgages maintained by MERS and shall
deliver to
Special Servicer evidence confirming that Trustee is shown as the
owner on the
record of MERS;
2.2.10 Copies of the related ground lease(s), if any, to any
Mortgage Loan
where the Mortgagor is the lessee under such ground lease and there
is a lien in
favor of the mortgagee in such lease;
2.2.11 Copies of any loan agreements, lock-box agreements and
intercreditor
agreements (including, without limitation, any Intercreditor
Agreement, any
Non-Serviced Mortgage Loan Intercreditor Agreement and any Loan
Pair
Intercreditor Agreement, and a copy (that is, not the original) of
the mortgage
note evidencing the related B Note), if any, related to any
Mortgage Loan;
2.2.12 Either (A) the original of each letter of credit, if any,
constituting additional collateral for such Mortgage Loan (other
than letters of
credit representing tenant security deposits which have been
collaterally
assigned to the lender), which shall be assigned and delivered to
Trustee on
behalf of the Trust with a copy to be held by Primary Servicer (or
Master
6
Servicer), and applied, drawn, reduced or released in accordance
with documents
evidencing or securing the applicable Mortgage Loan, the Pooling
and Servicing
Agreement and the Primary Servicing Agreement or (B) the original
of each letter
of credit, if any, constituting additional collateral for such
Mortgage Loan
(other than letters of credit representing tenant security deposits
which have
been collaterally assigned to the lender), which shall be held by
Primary
Servicer (or Master Servicer) on behalf of Trustee, with a copy to
be held by
Trustee, and applied, drawn, reduced or released in accordance with
documents
evidencing or securing the applicable Mortgage Loan, the Pooling
and Servicing
Agreement and the Primary Servicing Agreement (it being understood
that Seller
has agreed (a) that the proceeds of such letter of credit belong to
the Trust,
(b) to notify, on or before the Closing Date, the bank issuing the
letter of
credit that the letter of credit and the proceeds thereof belong to
the Trust,
and to use reasonable efforts to obtain within 30 days (but in any
event to
obtain within 90 days) following the Closing Date, an
acknowledgement thereof by
the bank (with a copy of such acknowledgement to be sent to
Trustee) or a
reissued letter of credit and (c) to indemnify the Trust for any
liabilities,
charges, costs, fees or other expenses accruing from the failure of
Seller to
assign the letter of credit hereunder including the right and power
to draw on
the letter of credit). In the case of clause (B) above, the Primary
Servicer (or
Master Servicer) acknowledges that any letter of credit held by it
shall be held
in its capacity as agent of the Trust, and if Primary Servicer (or
Master
Servicer) sells its rights to service the applicable Mortgage Loan,
Primary
Servicer (or Master Servicer) has agreed to assign the applicable
letter of
credit to the Trust or at the direction of Special Servicer to such
party as
Special Servicer may instruct, in each case, at the expense of
Primary Servicer
(or Master Servicer). Primary Servicer (or Master Servicer) has
agreed to
indemnify the Trust for any loss caused by the ineffectiveness of
such
assignment;
2.2.13 The original or a copy of the environmental indemnity
agreement, if
any, related to any Mortgage Loan;
2.2.14 Copies of third-party management agreements, if any, for all
hotels
and for such other Mortgaged Properties securing Mortgage Loans
with a Cut-Off
Date principal balance equal to or greater than $20,000,000;
2.2.15 The original or a copy of any Environmental Insurance
Policy; and
2.2.16 Any affidavit and indemnification agreement.
The original of each letter of credit referred to in clause 2.2.12
above shall
be delivered to Primary Servicer, Master Servicer or Trustee (as
the case may
be) within 45 days of the Closing Date. In addition, a copy of any
ground lease
shall be delivered to Primary Servicer within 30 days of the
Closing Date.
"Officer's Certificate" shall mean a certificate signed by one or
more of the
Chairman of the Board, any Vice Chairman, the President, any Senior
Vice
President, any Vice President, any Assistant Vice President, any
Treasurer or
any Assistant Treasurer.
2.3 The Assignments of Mortgage and assignment of Assignment of
Leases referred
to in Sections 2.2.4 and 2.2.6 may be in the form of a single
instrument
assigning the Mortgage and the Assignment of Leases to the extent
permitted by
applicable law. To avoid the unnecessary
7
expense and administrative inconvenience associated with the
execution and
recording or filing of multiple assignments of mortgages,
assignments of leases
(to the extent separate from the mortgages) and assignments of UCC
financing
statements, Seller shall execute, in accordance with the third
succeeding
paragraph, the assignments of mortgages, assignment of the
assignments of leases
(to the extent separate from the mortgages) and the assignments of
UCC financing
statements relating to the Mortgage Loans naming Trustee on behalf
of the
Certificateholders as assignee. Notwithstanding the fact that such
assignments
of mortgages, assignments of leases (to the extent separate from
the assignments
of mortgages) and assignments of UCC financing statements shall
name Trustee on
behalf of the Certificateholders as the assignee, the parties
hereto acknowledge
and agree that the Mortgage Loans shall for all purposes be deemed
to have been
transferred from Seller to Purchaser and from Purchaser to Trustee
on behalf of
the Certificateholders.
2.4 If Seller cannot deliver, or cause to be delivered, as to any
Mortgage Loan,
any of the documents and/or instruments referred to in Sections
2.2.2, 2.2.3,
2.2.5 or 2.2.6, with evidence of recording thereon, solely because
of a delay
caused by the public recording office where such document or
instrument has been
delivered for recordation within such 90 day period, but Seller
delivers a
photocopy thereof (certified by the appropriate county recorder's
office to be a
true and complete copy of the original thereof submitted for
recording) or an
Officer's Certificate of the Seller stating that such document has
been sent to
the appropriate public recording office for recordation, to Trustee
within such
90 day period, Seller shall then deliver within 180 days after the
Closing Date
the recorded document (or within such longer period after the
Closing Date as
Trustee may consent to, which consent shall not be unreasonably
withheld so long
as Seller is, as certified in writing to Trustee no less often than
monthly, in
good faith attempting to obtain from the appropriate county
recorder's office
such original or photocopy).
2.5 Trustee, as assignee or transferee of Purchaser, shall be
entitled to all
scheduled payments of principal due thereon after the Cut-Off Date,
all other
payments of principal collected after the Cut-Off Date (other than
scheduled
payments of principal due on or before the Cut-Off Date), and all
payments of
interest on the Mortgage Loans allocable to the period commencing
on the Cut-Off
Date. All scheduled payments of principal and interest due on or
before the
Cut-Off Date and collected after the Cut-Off Date shall belong to
Seller.
2.6 Within 45 days following the Closing Date, Seller shall
deliver, and
Purchaser, Trustee or the agents of either may submit or cause to
be submitted
for recordation at the expense of Seller, in the appropriate public
office for
real property records, each assignment referred to in clauses
2.2.4, 2.2.6(ii)
and 2.2.9(B) above (with recording information in blank if such
information is
not yet available). If any such document or instrument is lost or
returned
unrecorded or unfiled, as the case may be, because of a defect
therein, Seller
shall prepare a substitute therefor or cure such defect, and Seller
shall, at
its own expense (except in the case of a document or instrument
that is lost by
Trustee), record or file, as the case may be, and deliver such
document or
instrument in accordance with this Section 2.
2.7 As to each Mortgage Loan secured by a Mortgaged Property with
respect to
which the related Mortgagor has entered into a franchise agreement
and each
Mortgage Loan secured by a Mortgaged Property with respect to which
a letter of
credit is in place, Seller shall provide a notice on or prior to
the date that
is 30 days after the Closing Date to the franchisor or the issuing
8
financial institution, as applicable, of the transfer of such
Mortgage Loan to
the Trust pursuant to the Pooling and Servicing Agreement, and
inform such
parties that any notices to the Mortgagor's lender pursuant to such
franchise
agreement or letter of credit should thereafter be forwarded to
Master Servicer
and, with respect to each franchise agreement, provide a franchise
comfort
letter on or prior to the date that is 30 days after the Closing
Date. After the
Closing Date, with respect to any letter of credit that has not yet
been
assigned to the Trust, upon the written request of Master Servicer
or the
applicable Primary Servicer, Seller will draw on such letter of
credit as
directed by Master Servicer or such Primary Servicer in such notice
to the
extent Seller has the right to do so.
2.8 Documents that are in the possession of Seller, its agents or
its
subcontractors that relate to the servicing of any Mortgage Loans
and that are
not required to be a part of the Mortgage File and are reasonably
necessary for
the ongoing administration and/or servicing of the applicable
Mortgage Loan (the
"Servicing File") shall be delivered to Trustee by Seller to or at
the direction
of Master Servicer, on behalf of Purchaser, on or prior to the 75th
day after
the Closing Date, in accordance with Section 3.1 of the Primary
Servicing
Agreement, if applicable.
2.9 The documents required to be delivered to Master Servicer (or
in the
alternative, Primary Servicer) shall include, to the extent
required to be (and
actually) delivered to Seller pursuant to the applicable Mortgage
Loan
documents, copies of the following items: the Mortgage Note, any
Mortgage, the
Assignment of Leases and the Assignment of Mortgage, any
guaranty/indemnity
agreement, any loan agreement, the insurance policies or
certificates, as
applicable, the property inspection reports, any financial
statements on the
property, any escrow analysis, the tax bills, the Appraisal, the
environmental
report, the engineering report, the asset summary, financial
information on the
Mortgagor/sponsor and any guarantors, any letters of credit, any
intercreditor
agreement and any Environmental Insurance Policies. Notwithstanding
the
foregoing, Seller shall not be required to deliver any draft
documents, or any
attorney-client communications that are privileged communications
or constitute
legal or other due diligence analyses, or internal communications
of Seller or
its affiliates, or credit underwriting or other analyses,
worksheets, memoranda,
communications, evaluations or data. Delivery of any of the
foregoing documents
to Primary Servicer shall be deemed a delivery to Master Servicer
and satisfy
Seller's obligations under this subparagraph. Each of the foregoing
items may be
delivered by Seller in electronic form, to the extent such document
is available
in such form and such form is reasonably acceptable to Master
Servicer.
2.10 Upon the sale of the Mortgage Loans by Seller to Purchaser
pursuant to this
Agreement, the ownership of each Mortgage Note, Mortgage and the
other contents
of the related Mortgage File shall be vested in Purchaser and its
assigns, and
the ownership of all records and documents constituting the
Servicing File with
respect to the related Mortgage Loan prepared by or that come into
the
possession of Seller shall immediately vest in Purchaser and its
assigns, and
shall be delivered promptly by Seller to or on behalf of either
Trustee or
Master Servicer as set forth herein, subject to the requirements of
the Primary
Servicing Agreement. Seller's and Purchaser's records shall reflect
the transfer
of each Mortgage Loan from Seller to Purchaser and its assigns as a
sale.
2.11 It is the express intent of the parties hereto that the
conveyance of the
Mortgage Loans and related property to Purchaser by Seller as
provided in this
Section 2 be, and be construed as,
9
an absolute sale of the Mortgage Loans and related property. It is,
further, not
the intention of the parties that such conveyance be deemed a
pledge of the
Mortgage Loans and related property by Seller to Purchaser to
secure a debt or
other obligation of Seller. However, in the event that,
notwithstanding the
intent of the parties, the Mortgage Loans or any related property
are held to be
the property of Seller, or if for any other reason this Agreement
is held or
deemed to create a security interest in the Mortgage Loans or any
related
property, then:
2.11.1 this Agreement shall be deemed to be a security agreement;
and
2.11.2 the conveyance provided for in this Section 2 shall be
deemed to be
a grant by Seller to Purchaser of a security interest in all of
Seller's right,
title, and interest, whether now owned or hereafter acquired, in
and to:
A. All accounts, general intangibles, chattel paper, instruments,
documents, money, deposit accounts, certificates of deposit, goods,
letters
of credit, advices of credit and investment property consisting of,
arising
from or relating to any of the following property: the Mortgage
Loans
identified on the Mortgage Loan Schedule, including the related
Mortgage
Notes, Mortgages, security agreements, and title, hazard and other
insurance policies, all distributions with respect thereto payable
after
the Cut-Off Date, all substitute or replacement Mortgage Loans and
all
distributions with respect thereto, and the Mortgage Files;
B. All accounts, general intangibles, chattel paper, instruments,
documents, money, deposit accounts, certificates of deposit, goods,
letters
of credit, advices of credit, investment property and other rights
arising
from or by virtue of the disposition of, or collections with
respect to, or
insurance proceeds payable with respect to, or claims against other
Persons
with respect to, all or any part of the collateral described in
clause (A)
above (including any accrued discount realized on liquidation of
any
investment purchased at a discount); and
C. All cash and non-cash proceeds of the collateral described in
clauses (A) and (B) above.
2.12 The possession by Purchaser or its designee of the Mortgage
Notes, the
Mortgages, and such other goods, letters of credit, advices of
credit,
instruments, money, documents, chattel paper or certificated
securities shall be
deemed to be possession by the secured party or possession by a
purchaser for
purposes of perfecting the security interest pursuant to the
Uniform Commercial
Code (including, without limitation, Sections 9-313 thereof) as in
force in the
relevant jurisdiction. Notwithstanding the foregoing, Seller makes
no
representation or warranty as to the perfection of any such
security interest.
2.13 Notifications to Persons holding such property, and
acknowledgments,
receipts, or confirmations from persons holding such property,
shall be deemed
to be notifications to, or acknowledgments, receipts or
confirmations from,
securities intermediaries, bailees or agents of, or Persons holding
for,
Purchaser or its designee, as applicable, for the purpose of
perfecting such
security interest under applicable law.
10
2.14 Seller shall, to the extent consistent with this Agreement and
upon request
by or on behalf of Purchaser, take such reasonable actions as may
be necessary
to ensure that, if this Agreement were deemed to create a security
interest in
the property described above, 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 the Agreement. In such
case, Seller
hereby authorizes Master Servicer to file all filings necessary to
maintain the
effectiveness of any original filings necessary under the Uniform
Commercial
Code as in effect in any jurisdiction to perfect such security
interest in such
property. In connection herewith, Purchaser shall have all of the
rights and
remedies of a secured party and creditor under the Uniform
Commercial Code as in
force in the relevant jurisdiction.
2.15 Notwithstanding anything to the contrary contained herein, and
subject to
Section 2.1, Purchaser shall not be required to purchase any
Mortgage Loan as to
which any Mortgage Note or lost note affidavit and indemnity
(endorsed as
described in clause 2.2.1) required to be delivered to or on behalf
of Trustee
or Master Servicer pursuant to this Section 2 on or before the
Closing Date is
not so delivered, or is not properly executed or is defective on
its face, and
Purchaser's acceptance of the related Mortgage Loan on the Closing
Date shall in
no way constitute a waiver of such omission or defect or of
Purchaser's or its
successors' and assigns' rights in respect thereof pursuant to
Section 5.
3.
EXAMINATION OF MORTGAGE FILES AND DUE DILIGENCE REVIEW.
3.1 Seller shall (i) deliver to Purchaser on or before the Closing
Date a
diskette acceptable to Purchaser that contains such information
about the
Mortgage Loans as may be reasonably requested by Purchaser, (ii)
deliver to
Purchaser investor files (collectively the "Collateral
Information") with
respect to the assets proposed to be included in the Mortgage Pool
and made
available at Purchaser's headquarters in New York, and (iii)
otherwise cooperate
fully with Purchaser in its examination of the credit files,
underwriting
documentation and Mortgage Files for the Mortgage Loans and its due
diligence
review of the Mortgage Loans. The fact that Purchaser has conducted
or has
failed to conduct any partial or complete examination of the credit
files,
underwriting documentation or Mortgage Files for the Mortgage Loans
shall not
affect the right of Purchaser or Trustee to cause Seller to cure
any Material
Document Defect or Material Breach (each as defined below), or to
repurchase or
replace the defective Mortgage Loans pursuant to Section 5 hereof.
3.2 On or prior to the Closing Date, Seller shall allow
representatives of any
of Purchaser, each Underwriter, each Initial Purchaser, Trustee,
Special
Servicer and each Rating Agency to examine and audit all books,
records and
files pertaining to the Mortgage Loans, Seller's underwriting
procedures and
Seller's ability to perform or observe all of the terms, covenants
and
conditions of this Agreement. Such examinations and audits shall
take place at
one or more offices of Seller during normal business hours and
shall not be
conducted in a manner that is disruptive to Seller's normal
business operations
upon reasonable prior advance notice. In the course of such
examinations and
audits, Seller will make available to such representatives of any
of Purchaser,
each Underwriter, each Initial Purchaser, Trustee, Special Servicer
and each
Rating Agency reasonably adequate facilities, as well as the
assistance of a
sufficient number of knowledgeable and responsible individuals who
are familiar
with the Mortgage Loans and the
11
terms of this Agreement, and Seller shall cooperate fully with any
such
examination and audit in all material respects. On or prior to the
Closing Date,
Seller shall provide Purchaser with all material information
regarding Seller's
financial condition and access to knowledgeable financial or
accounting officers
for the purpose of answering questions with respect to Seller's
financial
condition, financial statements as provided to Purchaser or other
developments
affecting Seller's ability to consummate the transactions
contemplated hereby or
otherwise affecting Seller in any material respect. Within 45 days
after the
Closing Date, Seller shall provide Master Servicer or Primary
Servicer, if
applicable, with any additional information identified by Master
Servicer or
Primary Servicer, if applicable, as necessary to complete the CMSA
Property
File, to the extent that such information is available.
3.3 Purchaser may exercise any of its rights hereunder through one
or more
designees or agents, provided Purchaser has provided Seller with
prior notice of
the identity of such designee or agent.
3.4 Purchaser shall keep confidential any information regarding
Seller and the
Mortgage Loans that has been delivered into Purchaser's possession
and that is
not otherwise publicly available; provided, however, that such
information shall
not be kept confidential (and the right to require confidentiality
under any
confidentiality agreement is hereby waived) to the extent such
information is
required to be included in the Memorandum or the Prospectus
Supplement or
Purchaser is required by law or court order to disclose such
information. If
Purchaser is required to disclose in the Memorandum or the
Prospectus Supplement
confidential information regarding Seller as described in the
preceding
sentence, Purchaser shall provide to Seller a copy of the proposed
form of such
disclosure prior to making such disclosure and Seller shall
promptly, and in any
event within two Business Days, notify Purchaser of any
inaccuracies therein, in
which case Purchaser shall modify such form in a manner that
corrects such
inaccuracies. If Purchaser is required by law or court order to
disclose
confidential information regarding Seller as described in the
second preceding
sentence, Purchaser shall notify Seller and cooperate in Seller's
efforts to
obtain a protective order or other reasonable assurance that
confidential
treatment will be accorded such information and, if in the absence
of a
protective order or such assurance, Purchaser is compelled as a
matter of law to
disclose such information, Purchaser shall, prior to making such
disclosure,
advise and consult with Seller and its counsel as to such
disclosure and the
nature and wording of such disclosure and Purchaser shall use
reasonable efforts
to obtain confidential treatment therefor. Notwithstanding the
foregoing, if
reasonably advised by counsel that Purchaser is required by a
regulatory agency
or court order to make such disclosure immediately, then Purchaser
shall be
permitted to make such disclosure without prior review by Seller.
4.
REPRESENTATIONS AND WARRANTIES OF SELLER AND PURCHASER.
4.1 To induce Purchaser to enter into this Agreement, Seller hereby
makes for
the benefit of Purchaser and its assigns with respect to each
Mortgage Loan
(subject to the last paragraph of this Section 4.1) as of the date
hereof (or as
of such other date specifically set forth in the particular
representation and
warranty) each of the representations and warranties set forth on
Exhibit 2
hereto, except as otherwise set forth on Schedule A attached
thereto, and hereby
further represents and warrants to Purchaser as of the date hereof
that:
12
4.1.1 Seller is duly organized and is validly existing as a
corporation in
good standing under the laws of the State of New York. Seller has
the requisite
power and authority and legal right to own the Mortgage Loans and
to transfer
and convey the Mortgage Loans to Purchaser and has the requisite
power and
authority to execute and deliver, engage in the transactions
contemplated by,
and perform and observe the terms and conditions of, this
Agreement.
4.1.2 This Agreement has been duly and validly authorized, executed
and
delivered by Seller, and assuming the due authorization, execution
and delivery
hereof by Purchaser, this Agreement constitutes the valid, legal
and binding
agreement of Seller, enforceable 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, (C) general equity principles (regardless of whether
such enforcement
is considered in a proceeding in equity or at law) or (D) public
policy
considerations underlying the securities laws, to the extent that
such public
policy considerations limit the enforceability of the provisions of
this
Agreement that purport to provide indemnification from liabilities
under
applicable securities laws.
4.1.3 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 of or
compliance by Seller with this Agreement, or the consummation by
Seller of any
transaction contemplated hereby, other than (A) such qualifications
as may be
required under state securities or blue sky laws, (B) the filing or
recording of
financing statements, instruments of assignment and other similar
documents
necessary in connection with Seller's sale of the Mortgage Loans to
Purchaser,
(C) such consents, approvals, authorizations, qualifications,
registrations,
filings or notices as have been obtained and (D) where the lack of
such consent,
approval, authorization, qualification, registration, filing or
notice would not
have a material adverse effect on the performance by Seller under
this
Agreement.
4.1.4 Neither the transfer of the Mortgage Loans to Purchaser, nor
the
execution, delivery or performance of this Agreement by Seller,
conflicts or
will conflict with, results or will result in a breach of, or
constitutes or
will constitute a default under (A) any term or provision of
Seller's articles
of organization or by-laws, (B) any term or provision of any
material agreement,
contract, instrument or indenture to which Seller is a party or by
which it or
any of its assets is bound or results in the creation or imposition
of any lien,
charge or encumbrance upon any of its property pursuant to the
terms of any such
indenture, mortgage, contract or other instrument, other than
pursuant to this
Agreement, or (C) after giving effect to the consents or taking of
the actions
contemplated in subsection 4.1.3, any law, rule, regulation, order,
judgment,
writ, injunction or decree of any court or governmental authority
having
jurisdiction over Seller or its assets, except where in any of the
instances
contemplated by clauses (B) or (C) above, any conflict, breach or
default, or
creation or imposition of any lien, charge or encumbrance, will not
have a
material adverse effect on the consummation of the transactions
contemplated
hereby by Seller or materially and adversely affect its ability to
perform its
obligations and duties hereunder or result in any material adverse
change in the
business, operations, financial condition, properties or assets of
Seller, or in
any material impairment of the right or ability of Seller to carry
on its
business substantially as now conducted.
13
4.1.5 There are no actions or proceedings against, or
investigations of,
Seller pending or, to Seller's knowledge, threatened in writing
against Seller
before any court, administrative agency or other tribunal, the
outcome of which
could reasonably be expected to materially and adversely affect the
transfer of
the Mortgage Loans to Purchaser or the execution or delivery by, or
enforceability against, Seller of this Agreement or have an effect
on the
financial condition of Seller that would materially and adversely
affect the
ability of Seller to perform its obligations under this Agreement.
4.1.6 On the Closing Date, the sale of the Mortgage Loans pursuant
to this
Agreement will effect a transfer by Seller of all of its right,
title and
interest in and to the Mortgage Loans to Purchaser.
4.1.7 To Seller's knowledge, the MSMC Mortgage Loan Information (as
defined
in that certain indemnification agreement, dated February 15, 2007,
between
Seller, Purchaser, the Underwriters and the Initial Purchaser (the
"Indemnification Agreement")) relating to the Mortgage Loans does
not contain
any untrue statement of a material fact or omit to state a material
fact
necessary to make the statements therein, in the light of the
circumstances
under which they were made, not misleading (when read together with
the Final
Prospectus Supplement, in the case of Public Certificates, or when
read together
with the Memorandum, in the case of the Private Certificates).
Notwithstanding
anything contained herein to the contrary, this subparagraph 4.1.7
shall run
exclusively to the benefit of Purchaser and no other party.
To induce Purchaser to enter into this Agreement, Seller hereby
covenants that
the foregoing representations and warranties and those set forth on
Exhibit 2
hereto, subject to the exceptions set forth in Schedule A to
Exhibit 2, will be
true and correct in all material respects on and as of the Closing
Date with the
same effect as if made on the Closing Date, provided that any
representations
and warranties made as of a specified date shall be true and
correct in all
material respects as of such specified date.
4.1.8 Seller has complied with the disclosure requirements of
Regulation AB
that arise from its role as "seller" and "sponsor" in connection
with the
issuance of the Certificates.
4.1.9 For so long as the Trust is subject to the reporting
requirements of
the Exchange Act, Seller shall provide Purchaser (or with respect
to any
Serviced Companion Mortgage Loan that is deposited into an Other
Securitization,
the depositor in such Other Securitization) and the Paying Agent
with any
Additional Form 10-D Disclosure and any Additional Form 10-K
Disclosure set
forth next to Seller's name on Schedule XV and Schedule XVI of the
Pooling and
Servicing Agreement within the time periods set forth in the
Pooling and
Servicing Agreement.
Each of the representations, warranties and covenants made by
Seller pursuant to
this Section 4.1 shall survive the sale of the Mortgage Loans and
shall continue
in full force and effect notwithstanding any restrictive or
qualified
endorsement on the Mortgage Notes.
4.2 To induce Seller to enter into this Agreement, Purchaser hereby
represents
and warrants to Seller as of the date hereof:
14
4.2.1 Purchaser is a corporation duly organized, validly existing,
and in
good standing under the laws of the State of Delaware with full
power and
authority to carry on its business as presently conducted by it.
4.2.2 Purchaser has full power and authority to acquire the
Mortgage Loans,
to execute and deliver this Agreement and to enter into and
consummate all
transactions contemplated by this Agreement. Purchaser has duly and
validly
authorized the execution, delivery and performance of this
Agreement and has
duly and validly executed and delivered this Agreement. This
Agreement, assuming
due authorization, execution and delivery by Seller, constitutes
the valid and
binding obligation of Purchaser, enforceable against it in
accordance with its
terms, except as such enforceability may be limited by bankruptcy,
insolvency,
reorganization, moratorium and other similar laws affecting the
enforcement of
creditors' rights generally and by general principles of equity,
regardless of
whether such enforcement is considered in a proceeding in equity or
at law.
4.2.3 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 of or
compliance by Purchaser with this Agreement, or the consummation by
Purchaser of
any transaction contemplated hereby that has not been obtained or
made by
Purchaser.
4.2.4 Neither the purchase of the Mortgage Loans nor the execution,
delivery and performance of this Agreement by Purchaser will
violate Purchaser's
certificate of incorporation or by-laws or constitute a default (or
an event
that, with notice or lapse of time or both, would constitute a
default) under,
or result in a breach of, any material agreement, contract,
instrument or
indenture to which Purchaser is a party or that may be applicable
to Purchaser
or its assets.
4.2.5 Purchaser's execution and delivery of this Agreement and its
performance and compliance with the terms of this Agreement will
not constitute
a violation of any law, rule, writ, injunction, order or decree of
any court, or
order or regulation of any federal, state or municipal government
agency having
jurisdiction over Purchaser or its assets, which violation could
materially and
adversely affect the condition (financial or otherwise) or the
operation of
Purchaser or its assets or could materially and adversely affect
its ability to
perform its obligations and duties hereunder.
4.2.6 There are no actions or proceedings against, or
investigations of,
Purchaser pending or, to Purchaser's knowledge, threatened against
Purchaser
before any court, administrative agency or other tribunal, the
outcome of which
could reasonably be expected to adversely affect the transfer of
the Mortgage
Loans, the issuance of the Certificates, the execution, delivery or
enforceability of this Agreement or have an effect on the financial
condition of
Purchaser that would materially and adversely affect the ability of
Purchaser to
perform its obligation under this Agreement.
4.2.7 Purchaser has not dealt with any broker, investment banker,
agent or
other person, other than Seller, the Underwriters, the Initial
Purchasers and
their respective affiliates, that may be entitled to any commission
or
compensation in connection with the sale of the Mortgage Loans or
consummation
of any of the transactions contemplated hereby.
15
To induce Seller to enter into this Agreement, Purchaser hereby
covenants that
the foregoing representations and warranties will be true and
correct in all
material respects on and as of the Closing Date with the same
effect as if made
on the Closing Date.
Each of the representations and warranties made by Purchaser
pursuant to this
Section 4.2 shall survive the purchase of the Mortgage Loans.
5.
REMEDIES UPON BREACH OF REPRESENTATIONS AND WARRANTIES MADE BY
SELLER.
5.1 It is hereby acknowledged that Seller shall make for the
benefit of Trustee
on behalf of the holders of the Certificates, whether directly or
by way of
Purchaser's assignment of its rights hereunder to Trustee, the
representations
and warranties set forth on Exhibit 2 hereto (each as of the date
hereof unless
otherwise specified).
5.2 It is hereby further acknowledged that if any document required
to be
delivered to Trustee pursuant to Section 2 is not delivered as and
when required
(and including the expiration of any grace or cure period), is not
properly
executed or is defective on its face, or if there is a breach of
any of the
representations and warranties required to be made by Seller
regarding the
characteristics of the Mortgage Loans and/or the related Mortgaged
Properties as
set forth in Exhibit 2 hereto, and in either case such defect or
breach, either
(i) materially and adversely affects the interests of the holders
of the
Certificates in the related Mortgage Loan, or (ii) both (A) the
document defect
or breach materially and adversely affects the value of the
Mortgage Loan and
(B) the Mortgage Loan is a Specially Serviced Mortgage Loan or
Rehabilitated
Mortgage Loan (such a document defect described in the preceding
clause (i) or
(ii), a "Material Document Defect" and such a breach described in
the preceding
clause (i) or (ii) a "Material Breach"), the party discovering such
Material
Document Defect or Material Breach shall promptly notify, in
writing, the other
parties; provided that any breach of the representation and
warranty contained
in paragraph 42 of such Exhibit 2 shall constitute a Material
Breach only if
such prepayment premium or yield maintenance charge is not deemed
"customary"
for commercial mortgage loans as evidenced by (i) an opinion of tax
counsel to
such effect or (ii) a determination by the Internal Revenue Service
that such
provision is not customary. Promptly (but in any event within three
Business
Days) upon becoming aware of any such Material Document Defect or
Material
Breach, Master Servicer shall, and Special Servicer may, request
that Seller,
not later than 90 days from Seller's receipt of the notice of such
Material
Document Defect or Material Breach, cure such Material Document
Defect or
Material Breach, as the case may be, in all material respects;
provided,
however, that if such Material Document Defect or Material Breach,
as the case
may be, cannot be corrected or cured in all material respects
within such 90 day
period, and such Material Document Defect or Material Breach would
not cause the
Mortgage Loan to be other than a "qualified mortgage"(as defined in
the Code)
but Seller is diligently attempting to effect such correction or
cure, as
certified by Seller in an Officer's Certificate delivered to
Trustee, then the
cure period will be extended for an additional 90 days unless,
solely in the
case of a Material Document Defect, (x) the Mortgage Loan is, at
the end of the
initial 90 day period, then a Specially Serviced Mortgage Loan and
a Servicing
Transfer Event has occurred as a result of a monetary default or as
described in
clause (ii) or clause (v) of the definition of "Servicing Transfer
Event" in the
Pooling and Servicing Agreement and (y) the
16
Material Document Defect was identified in a certification
delivered to Seller
by Trustee pursuant to Section 2.2 of the Pooling and Servicing
Agreement not
less than 90 days prior to the delivery of the notice of such
Material Document
Defect. The parties acknowledge that neither delivery of a
certification or
schedule of exceptions to Seller pursuant to Section 2.2 of the
Pooling and
Servicing Agreement or otherwise nor possession of such
certification or
schedule by Seller shall, in and of itself, constitute delivery of
notice of any
Material Document Defect or knowledge or awareness by Seller of any
Material
Document Defect listed therein.
5.3 Seller hereby covenants and agrees that, if any such Material
Document
Defect or Material Breach cannot be corrected or cured in all
material respects
within the above cure periods, Seller shall, on or before the
termination of
such cure periods, either (i) repurchase the affected Mortgage Loan
or REO
Mortgage Loan from Purchaser or its assignee at the Purchase Price
as defined in
the Pooling and Servicing Agreement, or (ii) if within the
three-month period
commencing on the Closing Date (or within the two-year period
commencing on the
Closing Date if the related Mortgage Loan is a "defective
obligation" within the
meaning of Section 860G(a)(4)(B)(ii) of the Code and Treasury
Regulation Section
1.860G-2(f)), at its option replace, without recourse, any Mortgage
Loan or REO
Mortgage Loan to which such defect relates with a Qualifying
Substitute Mortgage
Loan. If such Material Document Defect or Material Breach would
cause the
Mortgage Loan to be other than a "qualified mortgage" (as defined
in the Code),
then notwithstanding the previous sentence or the previous
paragraph, repurchase
or substitution must occur within 90 days from the date Seller was
notified of
the breach or defect. Seller agrees that any substitution shall be
completed in
accordance with the terms and conditions of the Pooling and
Servicing Agreement.
5.4 If (x) a Mortgage Loan is to be repurchased or replaced as
contemplated
above (a "Defective Mortgage Loan"), (y) such Defective Mortgage
Loan is
cross-collateralized and cross-defaulted with one or more other
Mortgage Loans
("Crossed Mortgage Loans") and (z) the applicable document defect
or breach does
not constitute a Material Document Defect or Material Breach, as
the case may
be, as to such Crossed Mortgage Loans (without regard to this
paragraph), then
the applicable document defect or breach (as the case may be) shall
be deemed to
constitute a Material Document Defect or Material Breach, as the
case may be, as
to each such Crossed Mortgage Loan for purposes of the above
provisions, and
Seller shall be obligated to repurchase or replace each such
Crossed Mortgage
Loan in accordance with the provisions above, unless, in the case
of such breach
or document defect, (A) Seller provides a Nondisqualification
Opinion to Trustee
at the expense of Seller if Trustee acting at the direction of the
Controlling
Class determines that it would be usual and customary in accordance
with
industry practice to obtain a Nondisqualification Opinion and (B)
both of the
following conditions would be satisfied if Seller were to
repurchase or replace
only those Mortgage Loans as to which a Material Breach or Material
Document
Defect had occurred without regard to this paragraph (the "Affected
Loan(s)"):
(i) the debt service coverage ratio for all such other Mortgage
Loans (excluding
the Affected Loan(s)) for the four calendar quarters immediately
preceding the
repurchase or replacement is not less than the greater of (A) the
debt service
coverage ratio for all such Crossed Mortgage Loans (including the
Affected
Loan(s)) set forth under the heading "NCF DSCR" in Appendix II to
the Final
Prospectus Supplement and (B) 1.25x, and (ii) the loan-to-value
ratio for all
such Crossed Mortgage Loans (excluding the Affected Loan(s)) is not
greater than
the lesser of (A) the current loan-to-value ratio for all such
Mortgage Loans
(including the Affected Loan(s)) set forth under the heading
"Cut-Off Date
17
LTV" in Appendix II to the Final Prospectus Supplement and (B) 75%.
The
determination of Master Servicer as to whether the conditions set
forth above
have been satisfied shall be conclusive and binding in the absence
of manifest
error. Master Servicer will be entitled to cause to be delivered,
or direct
Seller to (in which case Seller shall) cause to be delivered to
Master Servicer:
(A) an Appraisal of any or all of the related Mortgaged Properties
for purposes
of determining whether the condition set forth in clause (ii) above
has been
satisfied, in each case at the expense of Seller if the scope and
cost of the
Appraisal is approved by Seller (such approval not to be
unreasonably withheld)
and (B) an opinion of counsel that not requiring the repurchase of
each such
Crossed Mortgage Loan will not result in an Adverse REMIC Event.
5.5 With respect to any Defective Mortgage Loan, to the extent that
Seller is
required to repurchase or substitute for such Defective Mortgage
Loan (each, a
"Repurchased Loan") in the manner prescribed above while Trustee
(as assignee of
Purchaser) continues to hold any Crossed Mortgage Loan that is
cross-collateralized and/or cross-defaulted (each, a
"Cross-Collateralized
Loan") with such Repurchased Loan, Seller and Purchaser hereby
agree to modify,
prior to such repurchase or substitution, the related Mortgage Loan
documents in
a manner such that such affected Repurchased Loan, on the one hand,
and any
related Cross-Collateralized Loans held by Trustee, on the other,
would no
longer be cross-defaulted or cross-collateralized with one another;
provided
that Seller shall have furnished Trustee, at the expense of Seller,
a
nondisqualification opinion that such modification shall not cause
an Adverse
REMIC Event; provided, further, that if such nondisqualification
opinion cannot
be furnished, Seller and Purchaser agree that such repurchase or
substitution of
only the Repurchased Loan, notwithstanding anything to the contrary
herein,
shall not be permitted and Seller shall repurchase or substitute
for the
Repurchased Loan and all related Cross-Collateralized Loans. Any
reserve or
other cash collateral or letters of credit securing the
Cross-Collateralized
Mortgage Loans shall be allocated between such Mortgage Loans in
accordance with
the Mortgage Loan documents, or otherwise on a pro rata basis based
upon their
outstanding Principal Balances. All other terms of the Mortgage
Loans shall
remain in full force and effect, without any modification thereof.
The
Mortgagors set forth on Schedule B to Exhibit 2 hereto are intended
third-party
beneficiaries of the provisions set forth in this paragraph and the
preceding
paragraph. The provisions of this paragraph and the preceding
paragraph may not
be modified with respect to any Mortgage Loan without the related
Mortgagor's
consent.
5.6 Upon occurrence (and after any applicable cure or grace
period), any of the
following document defects shall be conclusively presumed
materially and
adversely to affect the interests of Certificateholders in a
Mortgage Loan and
be a Material Document Defect: (a) the absence from the Mortgage
File of the
original signed Mortgage Note, unless the Mortgage File contains a
signed lost
note affidavit and indemnity that appears to be regular on its
face; (b) the
absence from the Mortgage File of the original signed Mortgage that
appears to
be regular on its face, unless there is included in the Mortgage
File a
certified copy of the Mortgage by the local authority with which
the Mortgage
was recorded; or (c) the absence from the Mortgage File of the item
specified in
paragraph 2.2.8. If any of the foregoing Material Document Defects
is discovered
by the Custodian (or Trustee if there is no Custodian), Trustee (or
as set forth
in Section 2.3(a) of the Pooling and Servicing Agreement, Master
Servicer) will
take the steps described elsewhere in this Section, including the
giving of
notices to the Rating Agencies and the parties hereto and making
demand upon
Seller for the cure of the Material Document Defect or repurchase
or replacement
of the related Mortgage Loan.
18
5.7 If Seller disputes that a Material Document Defect or Material
Breach exists
with respect to a Mortgage Loan or otherwise refuses (i) to effect
a correction
or cure of such Material Document Defect or Material Breach, (ii)
to repurchase
the affected Mortgage Loan from Purchaser or its assignee or (iii)
to replace
such Mortgage Loan with a Qualifying Substitute Mortgage Loan, each
in
accordance with this Agreement, then provided that (i) the period
of time
provided for Seller to correct, repurchase or cure has expired and
(ii) the
Mortgage Loan is then in default and is then a Specially Serviced
Mortgage Loan,
Special Servicer may, subject to the Servicing Standard, modify,
work-out or
foreclose, sell or otherwise liquidate (or permit the liquidation
of) the
Mortgage Loan pursuant to Sections 9.5, 9.12, 9.15 and 9.36, as
applicable, of
the Pooling and Servicing Agreement, while pursuing the repurchase
claim. Seller
acknowledges and agrees that any modification of the Mortgage Loan
pursuant to a
work-out shall not constitute a defense to any repurchase claim nor
shall such
modification and work-out change the Purchase Price due from Seller
for any
repurchase claim. Any sale of the Mortgage Loan, or foreclosure
upon such
Mortgage Loan and sale of the REO Property, to a Person other than
Seller shall
be without (i) recourse of any kind (either express or implied) by
such Person
against Seller and (ii) representation or warranty of any kind
(either express
or implied) by Seller to or for the benefit of such Person.
5.8 Seller shall have the right to purchase certain of the Mortgage
Loans or REO
Properties, as applicable, to the extent set forth in the Pooling
and Servicing
Agreement.
5.9 The fact that a Material Document Defect or Material Breach is
not
discovered until after foreclosure (but in all instances prior to
the sale of
the related REO Property or Mortgage Loan) shall not prejudice any
claim against
Seller for repurchase of the REO Mortgage Loan or REO Property. In
such an
event, Master Servicer shall notify Seller of the discovery of the
Material
Document Defect or Material Breach and Seller shall have 90 days to
correct or
cure such Material Document Defect or Material Breach or purchase
the REO
Property at the Purchase Price. After a final liquidation of the
Mortgage Loan
or REO Mortgage Loan, if a court of competent jurisdiction issues a
final order
that Seller is or was obligated to repurchase the related Mortgage
Loan or REO
Mortgage Loan, after the expiration of any applicable appeal period
(a "Final
Judicial Determination") or Seller otherwise accepts liability,
then, but in no
event later than the Termination of the Trust pursuant to Section
9.30 of the
Pooling and Servicing Agreement, then Seller will be obligated to
pay to the
Trust the difference between any Liquidation Proceeds received upon
such
liquidation in accordance with the Pooling and Servicing Agreement
(including
those arising from any sale to Seller) and the Purchase Price.
5.10 Notwithstanding anything to the contrary contained herein, in
connection
with any sale or other liquidation of a Mortgage Loan or REO
Property as
described in this Section 5, Special Servicer shall not receive a
Liquidation
Fee from Seller (but may collect such Liquidation Fee from the
related
Liquidation Proceeds as otherwise provided herein) unless Seller is
required to
repurchase such Mortgage Loan or REO Property and such Mortgage
Loan or REO
Property is repurchased after the date that is 180 days or more
after the Seller
receives notice of the breach or defect causing the repurchase;
provided,
however, that in the event Seller is obligated to repurchase the
Mortgage Loan
or REO Mortgaged Property after a final liquidation of such
Mortgage Loan or REO
Property pursuant to the immediately preceding paragraph, an amount
equal to any
Liquidation Fee (calculated on the basis of Liquidation Proceeds)
payable to
Special Servicer shall be included in the definition of "Purchase
Price" in
respect of such Mortgage Loan
19
or REO Mortgaged Property. Except as expressly set forth above, no
Liquidation
Fee shall be payable in connection with a repurchase of a Mortgage
Loan by
Seller.
5.11 The obligations of Seller set forth in this Section 5 to cure
a Material
Document Defect or a Material Breach or repurchase or replace a
defective
Mortgage Loan constitute the sole remedies of Purchaser or its
assignees with
respect to a Material Document Defect or Material Breach in respect
of an
outstanding Mortgage Loan; provided, that this limitation shall not
in any way
limit Purchaser's rights or remedies upon breach of any other
representation or
warranty or covenant by Seller set forth in this Agreement (other
than those set
forth in Exhibit 2).
5.12 Notwithstanding the foregoing, in the event that there is a
breach of the
representations and warranties set forth in paragraph 39 of Exhibit
2 hereto
because the underlying loan documents do not provide for the
payment by the
Mortgagor of reasonable costs and expenses associated with the
defeasance or
assumption of a Mortgage Loan, and the related Mortgagor's payments
made for the
reasonable costs and expenses associated with the defeasance or
assumption of a
Mortgage Loan are insufficient and cause the Trust to incur an
Additional Trust
Expense in an amount equal to such reasonable costs and expenses
not paid by
such Mortgagor, Seller hereby covenants and agrees to reimburse the
Trust within
90 days of the receipt of notice of such breach in an amount
sufficient to avoid
such Additional Trust Expense. The parties hereto acknowledge that
such
reimbursement shall be Seller's sole obligation with respect to the
breach
discussed in the previous sentence.
5.13 The Pooling and Servicing Agreement shall provide that Trustee
(or Master
Servicer or Special Servicer on its behalf) shall give written
notice promptly
(but in any event within three Business Days) to Seller of its
discovery of any
Material Document Defect or Material Breach and prompt written
notice to Seller
in the event that any Mortgage Loan becomes a Specially Serviced
Mortgage Loan
(as defined in the Pooling and Servicing Agreement).
5.14 If Seller repurchases any Mortgage Loan pursuant to this
Section 5,
Purchaser or its assignee, following receipt by Trustee of the
Purchase Price
therefor, promptly shall deliver or cause to be delivered to Seller
all Mortgage
Loan documents with respect to such Mortgage Loan, and each
document that
constitutes a part of the Mortgage File that was endorsed or
assigned to Trustee
shall be endorsed and assigned to Seller in the same manner such
that Seller
shall be vested with legal and beneficial title to such Mortgage
Loan, in each
case without recourse, including any property acquired in respect
of such
Mortgage Loan or proceeds of any insurance policies with respect
thereto.
6.
CLOSING.
6.1 The closing of the sale of the Mortgage Loans shall be held at
the offices
of Latham & Watkins LLP, 885 Third Avenue, New York, NY 10022
at 9:00 a.m., New
York time, on the Closing Date. The closing shall be subject to
each of the
following conditions:
6.1.1 All of the representations and warranties of Seller and
Purchaser
specified in Section 4 hereof (including, without limitation, the
representations and warranties set forth on Exhibit 2 hereto) shall
be true and
correct as of the Closing Date, provided that any
20
representations and warranties made as of a specified date shall be
true and
correct as of such specified date (to the extent of the standard,
if any, set
forth in each representation and warranty).
6.1.2 All Closing Documents specified in Section 7 hereof, in such
forms as
are agreed upon and reasonably acceptable to Seller or Purchaser,
as applicable,
shall be duly executed and delivered by all signatories as required
pursuant to
the respective terms thereof.
6.1.3 Seller shall have delivered and released to Purchaser or its
designee
all documents required to be delivered to Purchaser as of the
Closing Date
pursuant to Section 2 hereof.
6.1.4 The result of the examination and audit performed by
Purchaser and
its affiliates pursuant to Section 3 hereof shall be satisfactory
to Purchaser
and its affiliates in their sole determination and the parties
shall have agreed
to the form and contents of the MSMC Mortgage Loan Information to
be disclosed
in the Memorandum and the Prospectus Supplement.
6.1.5 All other terms and conditions of this Agreement required to
be
complied with on or before the Closing Date shall have been
complied with, and
Seller and 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.
6.1.6 Seller shall have paid all fees and expenses payable by it to
Purchaser pursuant to Section 8 hereof.
6.1.7 The Certificates to be so rated shall have been assigned
ratings by
each Rating Agency no lower than the ratings specified for each
such Class in
the Memorandum and the Prospectus Supplement.
6.1.8 No Underwriter shall have terminated the Underwriting
Agreement and
none of the Initial Purchasers shall have terminated the
Certificate Purchase
Agreement, and neither the Underwriters nor the Initial Purchasers
shall have
suspended, delayed or otherwise cancelled the Closing Date.
6.1.9 Seller shall have received the purchase price for the
Mortgage Loans
pursuant to Section 1 hereof.
6.2 Each party agrees to use its best efforts to perform its
respective
obligations hereunder in a manner that will enable Purchaser to
purchase the
Mortgage Loans on the Closing Date.
7.
CLOSING DOCUMENTS. The Closing Documents shall consist of the
following:
7.1 This Agreement duly executed by Purchaser and Seller.
7.2 A certificate of Seller, executed by a duly authorized officer
of Seller and
dated the Closing Date, and upon which Purchaser and its successors
and assigns
may rely, to the effect that: (i) the representations and
warranties of Seller
in this Agreement are true and correct in all material respects on
and as of the
Closing Date with the same force and effect as if made on the
Closing Date,
provided that any representations and warranties made as of a
specified date
shall
21
be true and correct as of such specified date; and (ii) Seller has
complied with
all agreements and satisfied all conditions on its part to be
performed or
satisfied on or prior to the Closing Date.
7.3 True, complete and correct copies of Seller's articles of
organization and
by-laws or other organizational documents.
7.4 A certificate of existence for Seller from the Secretary of
State of New
York dated not earlier than 30 days prior to the Closing Date.
7.5 A certificate of the Secretary or Assistant Secretary of
Seller, dated the
Closing Date, and upon which Purchaser may rely, to the effect that
each
individual who, as an officer or representative of Seller, signed
this Agreement
or any other document or certificate delivered on or before the
Closing Date in
connection with the transactions contemplated herein, 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.
7.6 An opinion of counsel (which, other than as to the opinion
described in
paragraph 7.6.6 below, may be in-house counsel) to Seller, dated
the Closing
Date, substantially to the effect of the following (with such
changes and
modifications as Purchaser may approve and subject to such
counsel's reasonable
qualifications):
7.6.1 Seller is validly existing under New York law and has full
corporate
power and authority to enter into and perform its obligations under
this
Agreement.
7.6.2 This Agreement has been duly
