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MORTGAGE LOAN PURCHASE AGREEMENT
This Mortgage Loan Purchase Agreement, dated as of December 1,
2006
(this "Agreement"), is entered into between Merrill Lynch
Mortgage Lending, Inc.
(the "Seller") and Merrill Lynch Mortgage Investors, Inc. (the
"Purchaser").
The Seller intends to sell and the Purchaser intends to
purchase
certain multifamily, commercial and manufactured housing
community mortgage
loans (the "Mortgage Loans") identified on the schedule (the
"Mortgage Loan
Schedule") annexed hereto as Schedule II. The Purchaser intends
to deposit the
Mortgage Loans, along with certain other mortgage loans (the
"Other Mortgage
Loans"), into a trust fund (the "Trust Fund"), the beneficial
ownership of which
will be evidenced by multiple classes of mortgage pass-through
certificates (the
"Certificates"). One or more "real estate mortgage investment
conduit" ("REMIC")
elections will be made with respect to most of the Trust Fund.
The Trust Fund
will be created and the Certificates will be issued pursuant to
a Pooling and
Servicing Agreement, dated as of December 1, 2006 (the "Pooling
and Servicing
Agreement"), among the Purchaser as depositor, Midland Loan
Services, Inc. and
Wells Fargo Bank, National Association as master servicers
(each, in such
capacity, a "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
(including the
schedules attached hereto) have the respective meanings set
forth in the Pooling
and Servicing Agreement.
The Purchaser has entered into an Underwriting Agreement, dated
as
of December 1, 2006 (the "Underwriting Agreement"), with Merrill
Lynch, Pierce,
Fenner & Smith Incorporated ("Merrill Lynch") for itself and
as representative
of Countrywide Securities Corporation ("Countrywide
Securities"), IXIS
Securities North America Inc. ("IXIS Securities"), PNC Capital
Markets LLC ("PNC
Capital"), Credit Suisse Securities (USA) LLC ("Credit Suisse")
and Deutsche
Bank Securities Inc. ("DBSI"); Merrill Lynch, Countrywide
Securities, IXIS
Securities, PNC Capital, Credit Suisse and DBSI, collectively,
in such capacity,
the "Underwriters"), whereby the Purchaser will sell to the
Underwriters all of
the Certificates that are to be registered under the Securities
Act of 1933, as
amended (such Certificates, the "Publicly-Offered
Certificates"). The Purchaser
has also entered into a Certificate Purchase Agreement, dated as
of December 1,
2006 (the "Certificate Purchase Agreement"), with Merrill Lynch
for itself and
as representative of Countrywide Securities (together in such
capacity, the
"Initial Purchasers"), whereby the Purchaser will sell to the
Initial Purchasers
all of the remaining Certificates (such Certificates, the
"Private
Certificates").
Now, therefore, in consideration of the premises and the
mutual
agreements set forth herein, the parties agree as follows:
SECTION 1. Agreement to Purchase.
The Seller agrees to sell, and the Purchaser agrees to purchase,
the
Mortgage Loans identified on the Mortgage Loan Schedule. The
Mortgage Loan
Schedule may be amended to reflect the actual Mortgage Loans
delivered to the
Purchaser pursuant to the terms hereof. The Mortgage Loans are
expected to have
an aggregate principal balance of
$2,393,751,335 (the "Merrill Lynch Mortgage Loan Balance")
(subject to a
variance of plus or minus 5.0%) as of the close of business on
the Cut-off Date,
after giving effect to any payments due on or before such date,
whether or not
such payments are received. The Merrill Lynch Mortgage Loan
Balance, together
with the aggregate principal balance of the Other Mortgage Loans
as of the
Cut-off Date (after giving effect to any payments due on or
before such date,
whether or not such payments are received), is expected to equal
an aggregate
principal balance (the "Cut-off Date Pool Balance") of
$4,522,709,155 (subject
to a variance of plus or minus 5%). The purchase and sale of the
Mortgage Loans
shall take place on December 12, 2006 or such other date as
shall be mutually
acceptable to the parties to this Agreement (the "Closing
Date"). The
consideration (the "Purchase Consideration") for the Mortgage
Loans shall be
equal to (i) approximately 103.3834% of the Merrill Lynch
Mortgage Loan Balance
as of the Cut-off Date, plus (ii) $$4,224,924, which amount
represents the
amount of interest accrued on the Merrill Lynch Mortgage Loan
Balance, as agreed
to by the Seller and the Purchaser.
The Purchase Consideration shall be paid to the Seller or
its
designee by wire transfer in immediately available funds on the
Closing Date.
SECTION 2. Conveyance of Mortgage Loans.
(a) Effective as of the Closing Date, subject only to the
Seller's receipt of the Purchase Consideration and the
satisfaction or waiver of
the conditions to closing set forth in Section 5 of this
Agreement (which
conditions shall be deemed to have been satisfied or waived upon
the Seller's
receipt of the Purchase Consideration), the Seller does hereby
sell, transfer,
assign, set over and otherwise convey to the Purchaser, without
recourse (except
as set forth in this Agreement), all the right, title and
interest of the Seller
in and to the Mortgage Loans identified on the Mortgage Loan
Schedule as of such
date, on a servicing released basis (subject to certain
agreements regarding
servicing as provided in the Servicing Rights Purchase Agreement
(as defined in
Section 6(a)(iii) hereof)), together with all of the Seller's
right, title and
interest in and to the proceeds of any related title, hazard,
primary mortgage
or other insurance proceeds. The Mortgage Loan Schedule, as it
may be amended,
shall conform to the requirements set forth in this Agreement
and the Pooling
and Servicing Agreement.
(b) The Purchaser or its assignee shall be entitled to
receive
all scheduled payments of principal and interest due after the
Cut-off Date, and
all other recoveries of principal and interest collected after
the Cut-off Date
(other than in respect of principal and interest on the Mortgage
Loans due on or
before the Cut-off Date). All scheduled payments of principal
and interest due
on or before the Cut-off Date but collected after the Cut-off
Date, and
recoveries of principal and interest collected on or before the
Cut-off Date
(only in respect of principal and interest on the Mortgage Loans
due on or
before the Cut-off Date and principal prepayments thereon),
shall belong to, and
be promptly remitted to, the Seller.
(c) The Seller hereby represents and warrants that it has or
will have, on behalf of the Purchaser, delivered to the Trustee
(i) on or before
the Closing Date, the documents and instruments specified below
with respect to
each Mortgage Loan that are Specially Designated Mortgage Loan
Documents and
(ii) on or before the date that is 30 days after the Closing
Date, the remaining
documents and instruments specified below that are not Specially
Designated
Mortgage Loan Documents with respect to each Mortgage Loan (the
documents and
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instruments specified below and referred to in clauses (i) and
(ii) preceding,
collectively, a "Mortgage File"). All Mortgage Files so
delivered will be held
by the Trustee in escrow for the benefit of the Seller at all
times prior to the
Closing Date. The Mortgage File with respect to each Mortgage
Loan that is a
Serviced Trust Mortgage Loan shall contain the following
documents:
(i) (A) the original executed Mortgage Note for the subject
Mortgage Loan, including any power of attorney related to the
execution
thereof (or a lost note affidavit and indemnity with a copy of
such
Mortgage Note attached thereto), together with any and all
intervening
endorsements thereon, endorsed on its face or by allonge
attached thereto
(without recourse, representation or warranty, express or
implied) to the
order of LaSalle Bank National Association, as trustee for the
registered
holders of ML-CFC Commercial Mortgage Trust 2006-4, Commercial
Mortgage
Pass-Through Certificates, Series 2006-4, or in blank, and (B)
in the case
of a Loan Combination, a copy of the executed Mortgage Note for
each
related Non-Trust Loan;
(ii) an original or copy of the Mortgage, together with
originals
or copies of any and all intervening assignments thereof, in
each case
(unless not yet returned by the applicable recording office)
with evidence
of recording indicated thereon or certified by the applicable
recording
office or, in the case of a MERS Mortgage Loan (as defined
below), an
original or a copy of the Mortgage, together with any and all
intervening
assignments thereof, in each case (unless not yet returned by
the
applicable recording office) with evidence of recording
indicated thereon
or certified by the applicable recording office, with language
noting the
presence of the MIN (as defined below) of such Mortgage Loan and
language
indicating that such Mortgage Loan is a MERS Mortgage Loan;
(iii) an original or copy of any related Assignment of Leases
(if
such item is a document separate from the Mortgage), together
with
originals or copies of any and all intervening assignments
thereof, in
each case (unless not yet returned by the applicable recording
office)
with evidence of recording indicated thereon or certified by
the
applicable recording office or, in the case of a MERS Mortgage
Loan, an
original or copy of any related Assignment of Leases (if such
item is a
document separate from the Mortgage), together with any and
all
intervening assignments thereof, in each case with evidence of
recording
indicated thereon or certified by the applicable recording
office, with
language noting the presence of the MIN of such Mortgage Loan
and language
indicating that such Mortgage Loan is a MERS Mortgage Loan;
(iv) an original executed assignment, in recordable form
(except
for completion of the assignee's name and address (if the
assignment is
delivered in blank) and any missing recording information or a
certified
copy of that assignment as sent for recording), of (a) the
Mortgage, (b)
any related Assignment of Leases (if such item is a document
separate from
the Mortgage) and (c) any other recorded document relating to
the subject
Mortgage Loan otherwise included in the Mortgage File, in favor
of LaSalle
Bank National Association, as trustee for the registered holders
of ML-CFC
Commercial Mortgage Trust 2006-4, Commercial Mortgage
Pass-Through
Certificates, Series 2006-4 (or, in the case of a Loan
Combination, in
favor of LaSalle Bank National Association, as
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trustee for the registered holders of ML-CFC Commercial Mortgage
Trust
2006-4, Commercial Mortgage Pass-Through Certificates, Series
2006-4, and
in its capacity as lead lender on behalf of the holder(s) of the
related
Non-Trust Loan(s)), or in blank or, in the case of a MERS
Mortgage Loan,
evidence from MERS indicating the Trustee's ownership of such
Mortgage
Loan on the MERS(R) System and the Trustee as the beneficiary of
the
assignment(s) of (x) the Mortgage, (y) any related Assignment of
Leases
(if such item is a document separate from the Mortgage) and (z)
any other
recorded document relating to such Mortgage Loan otherwise
included in the
Mortgage File;
(v) an original assignment of all unrecorded documents
relating
to the Mortgage Loan (to the extent not already assigned
pursuant to
clause (iv) above) in favor of LaSalle Bank National
Association, as
trustee for the registered holders of ML-CFC Commercial Mortgage
Trust
2006-4, Commercial Mortgage Pass-Through Certificates, Series
2006-4 (or,
in the case of a Loan Combination, in favor of LaSalle Bank
National
Association, as trustee for the registered holders of ML-CFC
Commercial
Mortgage Trust 2006-4, Commercial Mortgage Pass-Through
Certificates,
Series 2006-4, and in its capacity as lead lender on behalf of
the holder
of the related Non-Trust Loan(s)), or in blank or, in the case
of a MERS
Mortgage Loan (to the extent not already evidenced pursuant to
clause (iv)
above), evidence from MERS indicating the Trustee's ownership of
the
Mortgage Loan on the MERS(R) System and the Trustee as
beneficiary of the
assignment(s) of unrecorded documents related to the Mortgage
Loan;
(vi) originals or copies of any consolidation, assumption,
substitution and modification agreements in those instances
where the
terms or provisions of the Mortgage or Mortgage Note have
been
consolidated or modified or the subject Mortgage Loan has been
assumed;
(vii) the original or a copy of the policy or certificate of
lender's title insurance or, if such policy has not been issued
or
located, an original or copy of an irrevocable, binding
commitment (which
may be a pro forma policy or a marked version of the policy that
has been
executed by an authorized representative of the title company or
an
agreement to provide the same pursuant to binding escrow
instructions
executed by an authorized representative of the title company)
to issue
such title insurance policy;
(viii) any filed copies or other evidence of filing of any
prior
UCC Financing Statements in favor of the originator of the
subject
Mortgage Loan or in favor of any assignee prior to the Trustee
(but only
to the extent the Seller had possession of such UCC Financing
Statements
prior to the Closing Date) and, if there is an effective UCC
Financing
Statement in favor of the Seller on record with the applicable
public
office for UCC Financing Statements, a UCC Financing Statement
assignment,
in form suitable for filing in favor of LaSalle Bank National
Association,
as trustee for the registered holders of ML-CFC Commercial
Mortgage Trust
2006-4, Commercial Mortgage Pass-Through Certificates, Series
2006-4, as
assignee (or, in the case of a Loan Combination, in favor of
LaSalle Bank
National Association, as trustee for the registered holders of
ML-CFC
Commercial Mortgage Trust 2006-4, Commercial Mortgage
Pass-Through
Certificates, Series 2006-4, and in its capacity as lead lender
on behalf
of the holder of the related
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Non-Trust Loan(s)), or in blank or, in the case of a MERS
Mortgage Loan,
evidence from MERS indicating the Trustee's ownership of such
Mortgage
Loan on the MERS(R) System and the Trustee as the beneficiary of
any
effective UCC Financing Statement in favor of the Seller on
record with
the applicable public office for UCC Financing Statements;
(ix) an original or a copy of any Ground Lease, guaranty or
ground lessor estoppel;
(x) an original or a copy of any intercreditor agreement
relating to permitted debt of the Mortgagor and any
intercreditor
agreement relating to mezzanine debt related to the
Mortgagor;
(xi) an original or a copy of any loan agreement, any escrow
or
reserve agreement, any security agreement, any management
agreement, any
agreed upon procedures letter, any lockbox or cash management
agreements,
any environmental reports or any letter of credit (which letter
of credit
shall not be delivered in original from to the Trustee, but
rather to the
applicable Master Servicer), in each case relating to the
subject Mortgage
Loan; and
(xii) with respect to a Mortgage Loan secured by a
hospitality
property, a signed copy of any franchise agreement and/or
franchisor
comfort letter; and
(xiii) if such Trust Mortgage Loan is part of a Loan
Combination,
an original or a copy of the related Loan Combination
Intercreditor
Agreement.
The foregoing Mortgage File delivery requirement shall be
subject to
Section 2.01(c) of the Pooling and Servicing Agreement.
For purposes of this Section 2(c):
"MERS" means Mortgage Electronic Registration Systems, Inc.,
a
corporation organized and existing under the laws of the State
of Delaware, or
any successor thereto.
"MERS Mortgage Loan" means any Mortgage Loan registered with
MERS on
the MERS(R) System, as to which MERS is acting as mortgagee,
solely as nominee
for the Seller and its successors and assigns, which Mortgage
Loans are
identified on Schedule [ ] hereto.
"MERS(R) System" means the system of recording transfers of
mortgages electronically maintained by MERS.
"MIN" means the mortgage identification number on the MERS(R)
System
for any MERS Mortgage Loan.
(d) The Seller shall retain an Independent third party (the
"Recording/Filing Agent") that shall, as to each Mortgage Loan,
promptly (and in
any event within 180 days following the later of the Closing
Date and the
delivery of each Mortgage, Assignment of Leases, recordable
document and UCC
Financing Statement to the Trustee) cause to be
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submitted for recording or filing, as the case may be, in the
appropriate public
office for real property records or UCC Financing Statements,
each assignment of
Mortgage, assignment of Assignment of Leases and any other
recordable documents
relating to each such Mortgage Loan in favor of the Trustee that
is referred to
in clause (iv) of the definition of "Mortgage File" and each UCC
Financing
Statement assignment in favor of the Trustee that is referred to
in clause
(viii) of the definition of "Mortgage File." Each such
assignment and UCC
Financing Statement assignment shall reflect that the recorded
original should
be returned by the public recording office to the Trustee
following recording,
and each such assignment and UCC Financing Statement assignment
shall reflect
that the file copy thereof should be returned to the Trustee
following filing;
provided, that in those instances where the public recording
office retains the
original assignment of Mortgage or assignment of Assignment of
Leases, the
Recording/Filing Agent shall obtain therefrom a certified copy
of the recorded
original. If any such document or instrument is lost or returned
unrecorded or
unfiled, as the case may be, because of a defect therein, then
the Seller shall
prepare a substitute therefor or cure such defect or cause such
to be done, as
the case may be, and the Seller shall deliver such substitute or
corrected
document or instrument to the Trustee (or, if the Mortgage Loan
is then no
longer subject to the Pooling and Servicing Agreement, to the
then holder of
such Mortgage Loan).
The Seller shall bear the out-of-pocket costs and expenses of
all
such recording, filing and delivery contemplated in the
preceding paragraph,
including, without limitation, any costs and expenses that may
be incurred by
the Trustee in connection with any such recording, filing or
delivery performed
by the Trustee at the Seller's request and the fees of the
Recording/Filing
Agent.
If, on the Closing Date as to any MERS Mortgage Loan, the
Seller
does not deliver written evidence of the Trustee's ownership of
such Mortgage
Loan on the MERS(R) System showing the Trustee as a beneficiary
of the
assignment referred to in each of clause (iv) and (v) of the
definition of
"Mortgage File" or the UCC Financing Statements referred to in
clause (viii) of
the definition of "Mortgage File", the Seller may satisfy the
delivery
requirements of this Agreement and Section 2.01(b) of the
Pooling and Servicing
Agreement by delivering such evidence of ownership within 90
days following the
Closing Date; provided that, during such time, the Seller shall
execute any
documents requested by the Master Servicer or the Special
Servicer with respect
to such MERS Mortgage Loan that, in the reasonable discretion of
the Master
Servicer or the Special Servicer (exercised in accordance with
the Servicing
Standard), are necessary to evidence the Trustee's ownership of,
or are
otherwise required for an immediate servicing need with respect
to, such
Mortgage Loan.
(e) All such other relevant documents and records that (a)
relate to the administration or servicing of the Mortgage Loans,
(b) are
reasonably necessary for the ongoing administration and/or
servicing of such
Mortgage Loans by the applicable Master Servicer in connection
with its duties
under the Pooling and Servicing Agreement, and (c) are in the
possession or
under the control of the Seller, together with all unapplied
escrow amounts and
reserve amounts in the possession or under the control of the
Seller that relate
to the Mortgage Loans, shall be delivered or caused to be
delivered by the
Seller to the applicable Master Servicer (or, at the direction
of such Master
Servicer, to the appropriate sub-servicer); provided that the
Seller shall not
be required to deliver any draft documents, privileged or other
communications,
credit underwriting, legal or other due diligence analyses,
credit committee
6
briefs or memoranda or other internal approval documents or data
or internal
worksheets, memoranda, communications or evaluations.
The Seller agrees to use reasonable efforts to deliver to the
Trustee, for
its administrative convenience in reviewing the Mortgage Files,
a mortgage loan
checklist for each Mortgage Loan. The foregoing sentence
notwithstanding, the
failure of the Seller to deliver a mortgage loan checklist or a
complete
mortgage loan checklist shall not give rise to any liability
whatsoever on the
part of the Seller to the Purchaser, the Trustee or any other
person because the
delivery of the mortgage loan checklist is being provided to the
Trustee solely
for its administrative convenience.
(f) The Seller shall take such actions as are reasonably
necessary to assign or otherwise grant to the Trust Fund the
benefit of any
letters of credit in the name of the Seller, which secure any
Mortgage Loan.
(g) On or before the Closing Date, the Seller shall provide
to
the applicable Master Servicer, the initial data (as of the
Cut-off Date or the
most recent earlier date for which such data is available)
contemplated by the
CMSA Loan Setup File, the CMSA Loan Periodic Update File, the
CMSA Operating
Statement Analysis Report and the CMSA Property File.
SECTION 3. Representations, Warranties and Covenants of
Seller.
(a) The Seller hereby represents and warrants to and
covenants
with the Purchaser, as of the date hereof, that:
(i) The Seller is a corporation duly organized, validly
existing
and in good standing under the laws of the State of Delaware and
the
Seller has taken all necessary corporate action to authorize
the
execution, delivery and performance of this Agreement by it, and
has the
power and authority to execute, deliver and perform this
Agreement and all
transactions contemplated hereby.
(ii) This Agreement has been duly and validly authorized,
executed and delivered by the Seller, all requisite action by
the Seller's
directors and officers has been taken in connection therewith,
and
(assuming the due authorization, execution and delivery hereof
by the
Purchaser) this Agreement constitutes the valid, legal and
binding
agreement of the Seller, enforceable against the Seller in
accordance with
its terms, except as such enforcement may be limited by (A) laws
relating
to bankruptcy, insolvency, fraudulent transfer,
reorganization,
receivership, conservatorship or moratorium, (B) other laws
relating to or
affecting the rights of creditors generally, or (C) general
equity
principles (regardless of whether such enforcement is considered
in a
proceeding in equity or at law).
(iii) The execution and delivery of this Agreement by the
Seller
and the Seller's performance and compliance with the terms of
this
Agreement will not (A) violate the Seller's certificate of
incorporation
or bylaws, (B) violate any law or regulation or any
administrative decree
or order to which it is subject if compliance therewith is
necessary (1)
to ensure the enforceability of this Agreement or (2) for the
Seller to
perform its duties and obligations under this Agreement, or (C)
constitute
a
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default (or an event which, with notice or lapse of time, or
both, would
constitute a default) under, or result in the breach of, any
material
contract, agreement or other instrument to which the Seller is a
party or
by which the Seller is bound, which default might have
consequences that
would, in the Seller's reasonable and good faith judgment,
materially and
adversely affect the condition (financial or other) or
operations of the
Seller or its properties or materially and adversely affect
its
performance hereunder.
(iv) The Seller is not in default with respect to any order
or
decree of any court or any order, regulation or demand of any
federal,
state, municipal or other governmental agency or body, which
default might
have consequences that would, in the Seller's reasonable and
good faith
judgment, materially and adversely affect the condition
(financial or
other) or operations of the Seller or its properties or
materially and
adversely affect its performance hereunder.
(v) The Seller is not a party to or bound by any agreement
or
instrument or subject to any articles of association, bylaws or
any other
corporate restriction or any judgment, order, writ, injunction,
decree,
law or regulation that would, in the Seller's reasonable and
good faith
judgment, materially and adversely affect the ability of the
Seller to
perform its obligations under this Agreement or that requires
the consent
of any third person to the execution of this Agreement or the
performance
by the Seller of its obligations under this Agreement (except to
the
extent such consent has been obtained).
(vi) No consent, approval, authorization or order of any court
or
governmental agency or body is required for the execution,
delivery and
performance by the Seller of or compliance by the Seller with
this
Agreement or the consummation of the transactions contemplated
by this
Agreement except as have previously been obtained, and no bulk
sale law
applies to such transactions.
(vii) None of the sale of the Mortgage Loans by the Seller,
the
transfer of the Mortgage Loans to the Trustee, and the
execution, delivery
or performance of this Agreement by the Seller, results or will
result in
the creation or imposition of any lien on any of the Seller's
assets or
property that would have a material adverse effect upon the
Seller's
ability to perform its duties and obligations under this
Agreement or
materially impair the ability of the Purchaser to realize on the
Mortgage
Loans.
(viii) There is no action, suit, proceeding or investigation
pending or to the knowledge of the Seller, threatened against
the Seller
in any court or by or before any other governmental agency
or
instrumentality which would, in the Seller's good faith and
reasonable
judgment, prohibit its entering into this Agreement or
materially and
adversely affect the validity of this Agreement or the
performance by the
Seller of its obligations under this Agreement.
(ix) Under generally accepted accounting principles ("GAAP")
and
for federal income tax purposes, the Seller will report the
transfer of
the Mortgage Loans to the Purchaser as a sale of the Mortgage
Loans to the
Purchaser in exchange for consideration consisting of a cash
amount equal
to the Purchase Consideration. The consideration received by the
Seller
upon the sale of the Mortgage Loans to the Purchaser will
8
constitute at least reasonably equivalent value and fair
consideration for
the Mortgage Loans. The Seller will be solvent at all relevant
times prior
to, and will not be rendered insolvent by, the sale of the
Mortgage Loans
to the Purchaser. The Seller is not selling the Mortgage Loans
to the
Purchaser with any intent to hinder, delay or defraud any of the
creditors
of the Seller.
(x) The Prospectus Supplement contains all the information
that
is required to be provided in respect of the Seller (that arise
from its
role as "sponsor" (within the meaning of Regulation AB)), the
Mortgage
Loans, the related Mortgagors and the related Mortgaged
Properties
pursuant to Regulation AB. For purpose of this Agreement,
"Regulation AB"
shall mean Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17
C.F.R. ss.ss.229.1100-229.1123, as such may be amended from time
to time,
and subject to such clarification and interpretation as have
been provided
by the Commission in the adopting release (Asset-Backed
Securities,
Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531
(Jan. 7,
2005)) or by the staff of the Commission, or as may be provided
by the
Commission or its staff from time to time.
(b) The Seller hereby makes the representations and
warranties
contained in Schedule I hereto for the benefit of the Purchaser
and the Trustee
for the benefit of the Certificateholders as of the Closing Date
(unless a
different date is specified therein), with respect to (and
solely with respect
to) each Mortgage Loan, subject, however, to the exceptions set
forth on Annex A
to Schedule I of this Agreement.
(c) If the Seller receives written notice of a Document
Defect
or a Breach relating to a Mortgage Loan pursuant to Section
2.03(a) of the
Pooling and Servicing Agreement, then the Seller shall, not
later than 90 days
from receipt of such notice (or, in the case of a Document
Defect or Breach
relating to a Mortgage Loan not being a "qualified mortgage"
within the meaning
of the REMIC Provisions (a "Qualified Mortgage"), not later than
90 days from
any party to the Pooling and Servicing Agreement discovering
such Document
Defect or Breach, provided the Seller receives such notice in a
timely manner),
if such Document Defect or Breach materially and adversely
affects the value of
the related Mortgage Loan or the interests of the
Certificateholders therein,
cure such Document Defect or Breach, as the case may be, in all
material
respects, which shall include payment of losses and any
Additional Trust Fund
Expenses associated therewith or, if such Document Defect or
Breach (other than
omissions due solely to a document not having been returned by
the related
recording office) cannot be cured within such 90-day period, (i)
repurchase the
affected Mortgage Loan (which, for the purposes of this clause
(i), shall
include an REO Loan) at the applicable Purchase Price (as
defined in the Pooling
and Servicing Agreement) not later than the end of such 90-day
period or (ii)
substitute a Qualified Substitute Mortgage Loan for such
affected Mortgage Loan
(which, for purposes of this clause (ii), shall include an REO
Loan) not later
than the end of such 90-day period (and in no event later than
the second
anniversary of the Closing Date) and pay the applicable Master
Servicer for
deposit into its Collection Account any Substitution Shortfall
Amount in
connection therewith; provided, however, that, unless the
Document Defect or
Breach would cause the Mortgage Loan not to be a Qualified
Mortgage, if such
Document Defect or Breach is capable of being cured but not
within such 90-day
period and the Seller has commenced and is diligently proceeding
with the cure
of such Document Defect or Breach within such 90-day period, the
Seller shall
have an additional 90 days to complete such cure (or, failing
such cure, to
repurchase
9
or substitute the related Mortgage Loan (which, for purposes of
such repurchase
or substitution, shall include an REO Loan)); and provided,
further, that with
respect to such additional 90-day period, the Seller shall have
delivered an
officer's certificate to the Trustee setting forth the reason(s)
such Document
Defect or Breach is not capable of being cured within the
initial 90-day period
and what actions the Seller is pursuing in connection with the
cure thereof and
stating that the Seller anticipates that such Document Defect or
Breach will be
cured within the additional 90-day period.
A Document Defect or Breach (which Document Defect or Breach
materially and adversely affects the value of the related
Mortgage Loan or the
interests of the Certificateholders therein) as to a Mortgage
Loan that is
cross-collateralized and cross-defaulted with one or more other
Mortgage Loans
(each, a "Crossed Loan" and such Crossed Loans, collectively, a
"Crossed Loan
Group"), which Document Defect or Breach does not constitute a
Document Defect
or Breach, as the case may be, as to any other Crossed Loan in
such Crossed Loan
Group (without regard to this paragraph) and is not cured as
provided for above,
shall be deemed to constitute a Document Defect or Breach, as
the case may be,
as to each other Crossed Loan in the subject Crossed Loan Group
for purposes of
this paragraph and the Seller shall be required to repurchase or
substitute all
such Crossed Loans unless (1) the weighted average debt service
coverage ratio
for all the remaining Crossed Loans for the four calendar
quarters immediately
preceding such repurchase or substitution is not less than the
weighted average
debt service coverage ratio for all such Crossed Loans,
including the affected
Crossed Loan, for the four calendar quarters immediately
preceding such
repurchase or substitution, and (2) the weighted average loan
to-value ratio for
the remaining Crossed Loans, determined at the time of
repurchase or
substitution, based upon an appraisal obtained by the Special
Servicer at the
expense of the Seller shall not be greater than the weighted
average
loan-to-value ratio for all such Crossed Loans, including the
affected Crossed
Loan determined at the time of repurchase or substitution, based
upon an
appraisal obtained by the Special Servicer at the expense of the
Seller;
provided, that if such debt service coverage and loan-to-value
criteria are
satisfied, any other Crossed Loan (that is not the Crossed Loan
directly
affected by the subject Document Defect or Breach), shall be
released from its
cross-collateralization and cross-default provision so long as
such Crossed Loan
(that is not the Crossed Loan directly affected by the subject
Document Defect
or Breach) is held in the Trust Fund; and provided, further,
that the repurchase
or replacement of less than all such Crossed Loans and the
release of any
Crossed Loan from a cross-collateralization and cross-default
provision shall be
further subject to the delivery by the Seller to the Trustee, at
the expense of
the Seller, of an Opinion of Counsel to the effect that such
release would not
cause either of REMIC I or REMIC II to fail to qualify as a
REMIC under the Code
or result in the imposition of any tax on "prohibited
transactions" or
"contributions" after the Startup Day under the REMIC
Provisions. In the event
that one or more of such other Crossed Loans satisfy the
aforementioned
criteria, the Seller may elect either to repurchase or
substitute for only the
affected Crossed Loan as to which the related Document Defect or
Breach exists
or to repurchase or substitute for all of the Crossed Loans in
the related
Crossed Loan Group. All documentation relating to the
termination of the
cross-collateralization provisions of a Crossed Loan being
repurchased shall be
prepared at the expense of the Seller and, where required, with
the consent of
the related Mortgagor. For a period of two years from the
Closing Date, so long
as there remains any Mortgage File relating to a Mortgage Loan
as to which there
is any uncured Document Defect or Breach known to the Seller
that existed as of
the Closing Date, the Seller shall provide, once every 90 days,
the officer's
certificate to the Trustee described above as to
10
the reason(s) such Document Defect or Breach remains uncured and
as to the
actions being taken to pursue cure; provided, however, that,
without limiting
the effect of the foregoing provisions of this Section 3(c), if
such Document
Defect or Breach shall materially and adversely affect the value
of such
Mortgage Loan or the interests of the holders of the
Certificates therein
(subject to the second and third provisos in the sole sentence
of the preceding
paragraph), the Seller shall in all cases on or prior to the
second anniversary
of the Closing Date either cause such Document Defect or Breach
to be cured or
repurchase or substitute for the affected Mortgage Loan (for the
avoidance of
doubt, the foregoing two-year period shall not be deemed to be a
time limitation
on the Seller's right to cure a Document Defect as set forth in
this Section 3).
The delivery of a commitment to issue a policy of lender's title
insurance as
described in representation 8 set forth on Schedule I hereto in
lieu of the
delivery of the actual policy of lender's title insurance shall
not be
considered a Document Defect or Breach with respect to any
Mortgage File if such
actual policy of insurance is delivered to the Trustee or a
Custodian on its
behalf not later than the 180th day following the Closing
Date.
To the extent that the Seller is required to repurchase or
substitute for a Crossed Loan hereunder in the manner prescribed
above in this
Section 3(c) while the Trustee continues to hold any other
Crossed Loans in such
Crossed Loan Group, the Seller and the Purchaser shall not
enforce any remedies
against the other's Primary Collateral (as defined below), but
each is permitted
to exercise remedies against the Primary Collateral securing its
respective
Crossed Loan(s), so long as such exercise does not materially
impair the ability
of the other party to exercise its remedies against the Primary
Collateral
securing the Crossed Loan(s) held thereby.
If the exercise by one party would materially impair the ability
of
the other party to exercise its remedies with respect to the
Primary Collateral
securing the Crossed Loan(s) held by such party, then the Seller
and the
Purchaser shall forbear from exercising such remedies until the
Mortgage Loan
documents evidencing and securing the relevant Crossed Loans can
be modified in
a manner consistent with this Agreement to remove the threat of
material
impairment as a result of the exercise of remedies or some other
mutually agreed
upon accommodation can be reached. Any reserve or other cash
collateral or
letters of credit securing the Crossed Loans shall be allocated
between such
Crossed Loans in accordance with the Mortgage Loan documents,
or, if the related
Mortgage Loan documents do not so provide, then on a pro rata
basis based upon
their outstanding Stated Principal Balances. Notwithstanding the
foregoing, if a
Crossed Loan is modified to terminate the related
cross-collateralization and/or
cross-default provisions, the Seller shall furnish to the
Trustee an Opinion of
Counsel that such modification shall not cause an Adverse REMIC
Event.
For purposes hereof, "Primary Collateral" shall mean the
Mortgaged
Property directly securing a Crossed Loan and excluding any
property as to which
the related lien may only be foreclosed upon by exercise of
cross-collateralization provisions of such Mortgage Loans.
Notwithstanding any of the foregoing provisions of this
Section
3(c), if there is a Document Defect or Breach (which Document
Defect or Breach
materially and adversely affects the value of the related
Mortgage Loan or the
interests of the Certificateholders therein) with respect to one
or more
Mortgaged Properties with respect to a Mortgage Loan, the Seller
shall not be
obligated to repurchase or substitute the Mortgage Loan if (i)
the affected
Mortgaged
11
Property(ies) may be released pursuant to the terms of any
partial release
provisions in the related Mortgage Loan documents (and such
Mortgaged
Property(ies) are, in fact, released) and to the extent not
covered by the
applicable release price (if any) required under the related
Mortgage Loan
documents, the Seller pays (or causes to be paid) any additional
amounts
necessary to cover all reasonable out-of-pocket expenses
reasonably incurred by
the applicable Master Servicer, the Special Servicer, the
Trustee or the Trust
Fund in connection with such release, (ii) the remaining
Mortgaged Property(ies)
satisfy the requirements, if any, set forth in the Mortgage Loan
documents and
the Seller provides an opinion of counsel to the effect that
such release would
not cause either of REMIC I or REMIC II to fail to qualify as a
REMIC under the
Code or result in the imposition of any tax on "prohibited
transactions" or
"contributions" after the Startup Day under the REMIC Provisions
and (iii) each
Rating Agency then rating the Certificates shall have provided
written
confirmation that such release would not cause the then-current
ratings of the
Certificates rated by it to be qualified, downgraded or
withdrawn.
The foregoing provisions of this Section 3(c) notwithstanding,
the
Purchaser's sole remedy (subject to the last sentence of this
paragraph) for a
breach of representation 30 set forth on Schedule I hereto shall
be the cure of
such breach by the Seller, which cure shall be effected through
the payment by
the Seller of such costs and expenses (without regard to whether
such costs and
expenses are material or not) specified in such representation
that have not, at
the time of such cure, been received by the applicable Master
Servicer or the
Special Servicer from the related Mortgagor and not a repurchase
or substitution
of the related Mortgage Loan. Following the Seller's remittance
of funds in
payment of such costs and expenses, the Seller shall be deemed
to have cured the
breach of representation 30 in all respects. To the extent any
fees or expenses
that are the subject of a cure by the Seller are subsequently
obtained from the
related Mortgagor, the cure payment made by the Seller shall be
returned to the
Seller. Notwithstanding the prior provisions of this paragraph,
the Seller,
acting in its sole discretion, may effect a repurchase or
substitution (in
accordance with the provisions of this Section 3(c) setting
forth the manner in
which a Mortgage Loan may be repurchased or substituted) of a
Mortgage Loan, as
to which representation 30 set forth on Schedule I has been
breached, in lieu of
paying the costs and expenses that were the subject of the
breach of
representation 30 set forth on Schedule I.
(d) In connection with any permitted repurchase or
substitution
of one or more Mortgage Loans contemplated hereby, upon receipt
of a certificate
from a Servicing Officer certifying as to the receipt of the
applicable Purchase
Price (as defined in the Pooling and Servicing Agreement) or
Substitution
Shortfall Amount(s), as applicable, in the applicable Master
Servicer's
Collection Account, and, if applicable, the delivery of the
Mortgage File(s) and
the Servicing File(s) for the related Qualified Substitute
Mortgage Loan(s) to
the Custodian and the applicable Master Servicer, respectively,
(i) the Trustee
shall be required to execute and deliver such endorsements and
assignments as
are provided to it by the applicable Master Servicer or the
Seller, in each case
without recourse, representation or warranty, as shall be
necessary to vest in
the Seller the legal and beneficial ownership of each
repurchased Mortgage Loan
or substituted Mortgage Loan, as applicable, (ii) the Trustee,
the Custodian,
the applicable Master Servicer and the Special Servicer shall
each tender to the
Seller, upon delivery to each of them of a receipt executed by
the Seller, all
portions of the Mortgage File and other documents pertaining to
such Mortgage
Loan possessed by it, and (iii) the applicable Master Servicer
and
12
the Special Servicer shall release to the Seller any Escrow
Payments and Reserve
Funds held by it in respect of such repurchased or deleted
Mortgage Loan(s).
At the time a substitution is made, the Seller shall deliver
the
related Mortgage File to the Trustee and certify that the
substitute Mortgage
Loan is a Qualified Substitute Mortgage Loan.
No substitution of a Qualified Substitute Mortgage Loan or
Qualified
Substitute Mortgage Loans may be made in any calendar month
after the
Determination Date for such month. Periodic Payments due with
respect to any
Qualified Substitute Mortgage Loan after the related date of
substitution shall
be part of REMIC I, as applicable. No substitution of a
Qualified Substitute
Mortgage Loan for a deleted Mortgage Loan shall be permitted
under this
Agreement if, after such substitution, the aggregate of the
Stated Principal
Balances of all Qualified Substitute Mortgage Loans which have
been substituted
for deleted Mortgage Loans exceeds 10% of the aggregate Cut-off
Date Balance of
all the Mortgage Loans and the Other Mortgage Loans. Periodic
Payments due with
respect to any Qualified Substitute Mortgage Loan on or prior to
the related
date of substitution shall not be part of the Trust Fund or
REMIC I.
(e) This Section 3 provides the sole remedies available to
the
Purchaser, the Certificateholders, or the Trustee on behalf of
the
Certificateholders, respecting any Document Defect in a Mortgage
File or any
Breach of any representation or warranty set forth in or
required to be made
pursuant to this Section 3.
(f) If, upon any payment in full with respect to any MERS
Mortgage Loan, none of the Trustee, the Master Servicer or any
Sub-Servicer of
such Mortgage Loan is registered with MERS and is unable to
reflect the release
of the related Mortgage on the MERS(R) System, the Seller shall
take all
necessary action to reflect the release of such Mortgage on the
MERS(R) System
and shall take such other actions as are necessary to enable the
Master Servicer
and the Trustee to comply with the provisions of Section 3.10 of
the Pooling and
Servicing Agreement and any other provisions relating to the
release of the
Mortgage Loan or the related Mortgage File.
SECTION 4. Representations, Warranties and Covenants of the
Purchaser. In order to induce the Seller to enter into this
Agreement, the
Purchaser hereby represents, warrants and covenants for the
benefit of the
Seller as of the date hereof that:
(a) The Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware and the
Purchaser has taken all necessary corporate action to authorize
the execution,
delivery and performance of this Agreement by it, and has the
power and
authority to execute, deliver and perform this Agreement and all
transactions
contemplated hereby.
(b) This Agreement has been duly and validly authorized,
executed and delivered by the Purchaser, all requisite action by
the Purchaser's
directors and officers has been taken in connection therewith,
and (assuming the
due authorization, execution and delivery hereof by the Seller)
this Agreement
constitutes the valid, legal and binding agreement of the
13
Purchaser, enforceable against the Purchaser in accordance with
its terms,
except as such enforcement may be limited by (A) laws relating
to bankruptcy,
insolvency, fraudulent transfer, reorganization, receivership,
conservatorship
or moratorium, (B) other laws relating to or affecting the
rights of creditors
generally, or (C) general equity principles (regardless of
whether such
enforcement is considered in a proceeding in equity or at
law).
(c) The execution and delivery of this Agreement by the
Purchaser and the Purchaser's performance and compliance with
the terms of this
Agreement will not (A) violate the Purchaser's articles of
incorporation or
bylaws, (B) violate any law or regulation or any administrative
decree or order
to which it is subject if compliance therewith is necessary (1)
to ensure the
enforceability of this Agreement or (2) for the Purchaser to
perform its duties
and obligations under this Agreement or (C) constitute a default
(or an event
which, with notice or lapse of time, or both, would constitute a
default) under,
or result in the breach of, any material contract, agreement or
other instrument
to which the Purchaser is a party or by which the Purchaser is
bound, which
default might have consequences that would, in the Purchaser's
reasonable and
good faith judgment, materially and adversely affect the
condition (financial or
other) or operations of the Purchaser or its properties or have
consequences
that would materially and adversely affect its performance
hereunder.
(d) The Purchaser is not a party to or bound by any agreement
or
instrument or subject to any certificate of incorporation,
bylaws or any other
corporate restriction or any judgment, order, writ, injunction,
decree, law or
regulation that would, in the Purchaser's reasonable and good
faith judgment,
materially and adversely affect the ability of the Purchaser to
perform its
obligations under this Agreement or that requires the consent of
any third
person to the execution of this Agreement or the performance by
the Purchaser of
its obligations under this Agreement (except to the extent such
consent has been
obtained).
(e) Except as may be required under federal or state
securities
laws (and which will be obtained on a timely basis), no consent,
approval,
authorization or order of, registration or filing with, or
notice to, any
governmental authority or court, is required, under federal or
state law, for
the execution, delivery and performance by the Purchaser of, or
compliance by
the Purchaser with, this Agreement, or the consummation by the
Purchaser of any
transaction described in this Agreement.
(f) Under GAAP and for federal income tax purposes, the
Purchaser will report the transfer of the Mortgage Loans by the
Seller to the
Purchaser as a sale of the Mortgage Loans to the Purchaser in
exchange for
consideration consisting of a cash amount equal to the aggregate
Purchase
Consideration.
(g) There is no action, suit, proceeding or investigation
pending or to the knowledge of the Purchaser, threatened against
the Purchaser
in any court or by or before any other governmental agency or
instrumentality
which would materially and adversely affect the validity of this
Agreement or
any action taken in connection with the obligations of the
Purchaser
contemplated herein, or which would be likely to impair
materially the ability
of the Purchaser to enter into and/or perform under the terms of
this Agreement.
14
(h) The Purchaser is not in default with respect to any order
or
decree of any court or any order, regulation or demand of any
federal, state,
municipal or other governmental agency or body, which default
might have
consequences that would, in the Purchaser's reasonable and good
faith judgment,
materially and adversely affect the condition (financial or
other) or operations
of the Purchaser or its properties or might have consequences
that would
materially and adversely affect its performance hereunder.
SECTION 5. Closing. The closing of the sale of the Mortgage
Loans (the "Closing") shall be held at the offices of Sidley
Austin LLP on the
Closing Date. The Closing shall be subject to each of the
following conditions:
(a) All of the representations and warranties of the Seller
set
forth in or made pursuant to Sections 3(a) and 3(b) of this
Agreement and all of
the representations and warranties of the Purchaser set forth in
Section 4 of
this Agreement shall be true and correct in all material
respects as of the
Closing Date;
(b) All documents specified in Section 6 of this Agreement
(the
"Closing Documents"), in such forms as are agreed upon and
acceptable to the
Purchaser, the Seller, the Underwriters and their respective
counsel in their
reasonable discretion, shall be duly executed and delivered by
all signatories
as required pursuant to the respective terms thereof;
(c) The Seller shall have delivered and released to the
Trustee
(or a Custodian on its behalf) and the applicable Master
Servicer, respectively,
all documents represented to have been or required to be
delivered to the
Trustee and such Master Servicer pursuant to Section 2 of this
Agreement;
(d) All other terms and conditions of this Agreement required
to
be complied with on or before the Closing Date shall have been
complied with in
all material respects and the Seller and the Purchaser shall
have the ability to
comply with all terms and conditions and perform all duties and
obligations
required to be complied with or performed after the Closing
Date;
(e) The Seller shall have paid all fees and expenses payable
by
it to the Purchaser or otherwise pursuant to this Agreement as
of the Closing
Date;
(f) One or more letters from the independent accounting firm
of
Ernst & Young LLP, in form satisfactory to the Purchaser and
relating to certain
information regarding the Mortgage Loans and Certificates as set
forth in the
Prospectus (as defined in Section 6(d) of this Agreement) and
Prospectus
Supplement (as defined in Section 6(d) of this Agreement),
respectively, shall
have been delivered; and
(g) The Seller shall have executed and delivered
concurrently
herewith that certain Indemnification Agreement, dated as of
December 1, 2006,
among the Seller, Countrywide Commercial Real Estate Finance,
Inc., IXIS Real
Estate Capital, Inc. and PNC Bank, National Association, the
Purchaser, the
Underwriters and the Initial Purchasers. Both parties agree to
use their best
reasonable efforts to perform their respective obligations
hereunder in a manner
that will enable the Purchaser to purchase the Mortgage Loans on
the Closing
Date.
15
SECTION 6. Closing Documents. The Closing Documents shall
consist
of the following:
(a) (i) This Agreement duly executed by the Purchaser and
the
Seller, (ii) the Pooling and Servicing Agreement duly executed
by the parties
thereto and (iii) the agreement(s) pursuant to which the
servicing rights with
respect to the Mortgage Loans are being sold to the applicable
Master Servicer
(such agreement(s), individually or collectively, as the case
may be, "Servicing
Rights Purchase Agreement");
(b) An officer's certificate of the Seller, executed by a
duly
authorized officer of the Seller and dated the Closing Date, and
upon which the
Purchaser, the Underwriters and the Initial Purchasers may rely,
to the effect
that: (i) the representations and warranties of the Seller in
this Agreement are
true and correct in all material respects at and as of the
Closing Date with the
same effect as if made on such date; and (ii) the Seller has, in
all material
respects, complied with all the agreements and satisfied all the
conditions on
its part that are required under this Agreement to be performed
or satisfied at
or prior to the Closing Date;
(c) An officer's certificate from an officer of the Seller
(signed in his/her capacity as an officer), dated the Closing
Date, and upon
which the Purchaser may rely, to the effect that each individual
who, as an
officer or representative of the Seller, signed this Agreement,
the
Indemnification Agreement or any other document or certificate
delivered on or
before the Closing Date in connection with the transactions
contemplated herein
or therein, was at the respective times of such signing and
delivery, and is as
of the Closing Date, duly elected or appointed, qualified and
acting as such
officer or representative, and the signatures of such persons
appearing on such
documents and certificates are their genuine signatures;
(d) An officer's certificate from an officer of the Seller
(signed in his/her capacity as an officer), dated the Closing
Date, and upon
which the Purchaser, the Underwriters and Initial Purchasers may
rely, to the
effect that (i) such officer has carefully examined the
Specified Portions (as
defined below) of the Free Writing Prospectus and nothing has
come to his/her
attention that leads him/her to believe that the Specified
Portions of the Free
Writing Prospectus, as of the Time of Sale or as of the Closing
Date, included
or include any untrue statement of a material fact relating to
the Mortgage
Loans or omitted or omit to state therein a material fact
necessary in order to
make the statements therein relating to the Mortgage Loans, in
light of the
circumstances under which they were made, not misleading, (ii)
such officer has
carefully examined the Specified Portions (as defined below) of
the Prospectus
Supplement and nothing has come to his/her attention that leads
him/her to
believe that the Specified Portions of the Prospectus
Supplement, as of the date
of the Prospectus Supplement or as of the Closing Date, included
or include any
untrue statement of a material fact relating to the Mortgage
Loans or omitted or
omit to state therein a material fact necessary in order to make
the statements
therein relating to the Mortgage Loans, in light of the
circumstances under
which they were made, not misleading, and (iii) such officer has
carefully
examined the Specified Portions (as defined below) of the
Memorandum (pursuant
to which certain classes of the Private Certificates are being
privately
offered) and nothing has come to his/her attention that leads
him/her to believe
that the Specified Portions of the Memorandum, as of the date
thereof or as of
the Closing Date, included or include any untrue statement of a
material fact
relating to the Mortgage Loans or omitted or omit to state
therein a material
fact necessary in order to make the
16
statements therein related to the Mortgage Loans, in the light
of the
circumstances under which they were made, not misleading.
The "Specified Portions" of each of the Free Writing
Prospectuses
shall consist of Annex A-1 to such Free Writing Prospectus,
entitled "Certain
Characteristics of the Mortgage Loans" (insofar as the
information contained in
Annex A-1 relates to the Mortgage Loans sold by the Seller
hereunder), Annex A-2
to such Free Writing Prospectus, entitled "Certain Statistical
Information
Regarding the Mortgage Loans" (insofar as the information
contained in Annex A-2
relates to the Mortgage Loans sold by the Seller hereunder),
Annex A-3 to such
Free Writing Prospectus, entitled "Sonic Automotive II
Amortization Schedule",
Annex B to the Free Writing Prospectus entitled "Certain
Characteristics
Regarding Multifamily Properties" (insofar as the information
contained in Annex
B relates to the Mortgage Loans sold by the Seller hereunder),
Annex C to such
Free Writing Prospectus, entitled "Structural and Collateral
Term Sheet"
(insofar as the information contained in Annex C relates to the
Mortgage Loans
sold by the Seller hereunder), the CD-ROM which accompanies such
Free Writing
Prospectus (insofar as such CD-ROM is consistent with Annex A-1,
Annex A-2
and/or Annex B), and the following sections of such Free Writing
Prospectus
(only to the extent that any such information relates to the
Seller or the
Mortgage Loans sold by the Seller hereunder and exclusive of any
statements in
such sections that purport to describe the servicing and
administration
provisions of the Pooling and Servicing Agreement and exclusive
of aggregated
numerical information that includes the Other Mortgage Loans):
"Summary of
Offering Prospectus--Relevant Parties--Sponsors/Mortgage Loan
Sellers", "Summary
of Offering Prospectus--The Mortgage Loans and the Mortgaged
Real Properties",
"Risk Factors--Risks Related to the Mortgage Loans",
"Description of the
Mortgage Pool" and "Transaction Participants--The Sponsors" and
"Affiliations
and Certain Relationships and Related Transactions".
The "Specified Portions" of the Prospectus Supplement shall
consist
of Annex A-1 to the Prospectus Supplement, entitled "Certain
Characteristics of
the Mortgage Loans" (insofar as the information contained in
Annex A-1 relates
to the Mortgage Loans sold by the Seller hereunder), Annex A-2
to the Prospectus
Supplement, entitled "Certain Statistical Information Regarding
the Mortgage
Loans" (insofar as the information contained in Annex A-2
relates to the
Mortgage Loans sold by the Seller hereunder), Annex A-3 to the
Prospectus
Supplement, entitled "Sonic Automative II Amortization
Schedule", Annex A-5 to
the Prospectus Supplement, entitled "Elm Ridge Center
Amortization Schedule",]
Annex B to the Prospectus Supplement entitled "Certain
Characteristics Regarding
Multifamily Properties" (insofar as the information contained in
Annex B relates
to the Mortgage Loans sold by the Seller hereunder), Annex C to
the Prospectus
Supplement, entitled "Description of the Ten Largest Mortgage
Loans and/or
Groups of Cross-Collateralized Mortgage Loans" (insofar as the
information
contained in Annex C relates to the Mortgage Loans sold by the
Seller
hereunder), the CD-ROM which accompanies the Prospectus
Supplement (insofar as
such CD-ROM is consistent with Annex A-1, Annex A-2 and/or Annex
B), and the
following sections of the Prospectus Supplement (only to the
extent that any
such information relates to the Seller or the Mortgage Loans
sold by the Seller
hereunder and exclusive of any statements in such sections that
purport to
describe the servicing and administration provisions of the
Pooling and
Servicing Agreement and exclusive of aggregated numerical
information that
includes the Other Mortgage Loans): "Summary of Prospectus
Supplement--Relevant
Parties--Sponsors/Mortgage Loan Sellers", "Summary of Prospectus
Supplement--The
Mortgage Loans and the Mortgaged Real
17
Properties", "Risk Factors--Risks Related to the Mortgage
Loans", "Description
of the Mortgage Pool" and "Transaction Participants--The
Sponsors" and
"Affiliations and Certain Relationships and Related
Transactions".
The "Specified Portions" of the Memorandum shall consist of
the
Specified Portions of the Prospectus Supplement (as attached as
an exhibit to
the Memorandum).
For purposes of this Section 6(d) and this Agreement, the
following
terms have the meanings set forth below:
"Free Writing Prospectus" means each of the Offering
Prospectus
dated November 20, 2006 and relating to the Publicly-Offered
Certificates, as
supplemented and amended by the Offering Prospectus dated
November 28, 2006, and
relating to the Publicly-Offered Certificates;
"Memorandum" means the confidential Private Placement
Memorandum
dated December 1, 2006, and relating to the Private
Certificates;
"Prospectus" means the prospectus dated September 13, 2006.
"Prospectus Supplement" means the prospectus supplement
dated
December 1, 2006, that supplements the Prospectus and relates to
the
Publicly-Offered Certificates; and
"Time of Sale" means December 1, 2006, at 12:30 p.m.
(e) Each of: (i) the resolutions of the Seller's board of
directors or a committee thereof authorizing the Seller's
entering into the
transactions contemplated by this Agreement, (ii) the
certificate of
incorporation and bylaws of the Seller, and (iii) an original or
a copy of a
certificate of good standing of the Seller issued by the State
of Delaware not
earlier than 30 days prior to the Closing Date;
(f) A written opinion of counsel for the Seller relating to
organizational and enforceability matters (which opinion may be
from in-house
counsel, outside counsel or a combination thereof), reasonably
satisfactory to
the Purchaser, its counsel and the Rating Agencies, dated the
Closing Date and
addressed to the Purchaser, the Trustee, the Underwriters, the
Initial
Purchasers and each of the Rating Agencies, together with such
other written
opinions, including as to insolvency matters, as may be required
by the Rating
Agencies; and
(g) Such further certificates, opinions and documents as the
Purchaser may reasonably request prior to the Closing Date.
SECTION 7. Costs. Whether or not this Agreement is
terminated,
both the Seller and the Purchaser shall pay their respective
share of the
transaction expenses incurred in connection with the
transactions contemplated
herein as set forth in the closing statement prepared by the
Purchaser and
delivered to and approved by the Seller on or before the Closing
Date, and in
the memorandum of understanding to which the Seller and the
Purchaser (or an
affiliate thereof) are parties with respect to the transactions
contemplated by
this Agreement.
18
SECTION 8. Grant of a Security Interest. It is the express
intent
of the parties hereto that the conveyance of the Mortgage Loans
by the Seller to
the Purchaser as provided in Section 2 of this Agreement be, and
be construed
as, a sale of the Mortgage Loans by the Seller to the Purchaser
and not as a
pledge of the Mortgage Loans by the Seller to the Purchaser to
secure a debt or
other obligation of the Seller. However, if, notwithstanding the
aforementioned
intent of the parties, the Mortgage Loans are held to be
property of the Seller,
then, (a) it is the express intent of the parties that such
conveyance be deemed
a pledge of the Mortgage Loans by the Seller to the Purchaser to
secure a debt
or other obligation of the Seller, and (b) (i) this Agreement
shall also be
deemed to be a security agreement within the meaning of Article
9 of the UCC of
the applicable jurisdiction; (ii) the conveyance provided for in
Section 2 of
this Agreement shall be deemed to be a grant by the Seller to
the Purchaser of a
security interest in all of the Seller's right, title and
interest in and to the
Mortgage Loans, and all amounts payable to the holder of the
Mortgage Loans in
accordance with the terms thereof, and all proceeds of the
conversion, voluntary
or involuntary, of the foregoing into cash, instruments,
securities or other
property, including without limitation, all amounts, other than
investment
earnings (other than investment earnings required by Section
3.19(a) of the
Pooling and Servicing Agreement to offset Prepayment Interest
Shortfalls), from
time to time held or invested in the applicable Master
Servicer's Collection
Account, the Distribution Account or, if established, the REO
Account whether in
the form of cash, instruments, securities or other property;
(iii) the
assignment to the Trustee of the interest of the Purchaser as
contemplated by
Section 1 of this Agreement shall be deemed to be an assignment
of any security
interest created hereunder; (iv) the possession by the Trustee
or any of its
agents, including, without limitation, the Custodian, of the
Mortgage Notes, and
such other items of property as constitute instruments, money,
negotiable
documents or chattel paper shall be deemed to be possession by
the secured party
for purposes of perfecting the security interest pursuant to
Section 9-313 of
the UCC of the applicable jurisdiction; and (v) notifications to
persons (other
than the Trustee) holding such property, and acknowledgments,
receipts or
confirmations from persons (other than the Trustee) holding such
property, shall
be deemed notifications to, or acknowledgments, receipts or
confirmations from,
financial intermediaries, bailees or agents (as applicable) of
the secured party
for the purpose of perfecting such security interest under
applicable law. The
Seller and the Purchaser shall, to the extent consistent with
this Agreement,
take such actions as may be necessary to ensure that, if this
Agreement were
deemed to create a security interest in the Mortgage Loans, such
security
interest would be deemed to be a perfected security interest of
first priority
under applicable law and will be maintained as such throughout
the term of this
Agreement and the Pooling and Servicing Agreement. The Seller
does hereby
consent to the filing by the Purchaser of financing statements
relating to the
transactions contemplated hereby without the signature of the
Seller.
SECTION 9. Notice of Exchange Act Reportable Events. The
Seller
hereby agrees to deliver to the Purchaser any disclosure
information relating to
any event, specifically relating to the Seller, reasonably
determined in good
faith by the Purchaser as required to be reported on Form 8-K,
Form 10-D or Form
10-K by the Trust Fund (in formatting reasonably appropriate for
inclusion in
such form) insofar as such disclosure is required under Item
1117 or 1119 of
Regulation AB or Item 1.03 to Form 8-K. The Seller shall use
reasonable efforts
to deliver proposed disclosure language relating to any event,
specifically
relating to the Seller, described under Item 1117 or 1119 of
Regulation AB or
Item 1.03 to Form 8-K to the Purchaser as soon as reasonably
practicable after
the Seller becomes aware of such event and in no event
19
more than (2) business days following the occurrence of such
event if such event
is reportable under Item 1.03 to Form 8-K. The obligation of the
Seller to
provide the above referenced disclosure materials in any fiscal
year of the
Trust will terminate upon the Trustee's filing a Form 15 with
respect to the
Trust as to that fiscal year in accordance with Section 8.16 of
the Pooling and
Servicing Agreement or the reporting requirements with respect
to the Trust
under the Securities Exchange Act of 1934, as amended (the "1934
Act") have
otherwise automatically suspended. The Seller hereby
acknowledges that the
information to be provided by it pursuant to this Section 9 will
be used in the
preparation of reports meeting the reporting requirements of the
Trust under
Section 13(a) and/or Section 15(d) of the 1934 Act.
SECTION 10. Notices. All notices, copies, requests,
consents,
demands and other communications required hereunder shall be in
writing and sent
either by certified mail (return receipt requested) or by
courier service (proof
of delivery requested) to the intended recipient at the "Address
for Notices"
specified for such party on Exhibit A hereto, or as to either
party, at such
other address as shall be designated by such party in a notice
hereunder to the
other party. Except as otherwise provided in this Agreement, all
such
communications shall be deemed to have been duly given when
received, in each
case given or addressed as aforesaid.
SECTION 11. Representations, Warranties and Agreements to
Survive
Delivery. All representations, warranties and agreements
contained in this
Agreement, incorporated herein by reference or contained in the
certificates of
officers of the Seller submitted pursuant hereto, shall remain
operative and in
full force and effect and shall survive delivery of the Mortgage
Loans by the
Seller to the Purchaser (and by the Purchaser to the
Trustee).
SECTION 12. Severability of Provisions. Any part, provision,
representation, warranty or covenant of this Agreement that is
prohibited or
which is held to be void or unenforceable shall be ineffective
to the extent of
such prohibition or unenforceability without invalidating the
remaining
provisions hereof. Any part, provision, representation, warranty
or covenant of
this Agreement that is prohibited or unenforceable or is held to
be void or
unenforceable in any particular jurisdiction shall, as to such
jurisdiction, be
ineffective to the extent of such prohibition or
unenforceability without
invalidating the remaining provisions hereof, and any such
prohibition or
unenforceability in any particular jurisdiction shall not
invalidate or render
unenforceable such provision in any other jurisdiction. To the
extent permitted
by applicable law, the parties hereto waive any provision of law
that prohibits
or renders void or unenforceable any provision hereof.
SECTION 13. Counterparts. This Agreement may be executed in
any
number of counterparts, each of which shall be an original, but
which together
shall constitute one and the same agreement.
SECTION 14. GOVERNING LAW; WAIVER OF TRIAL BY JURY. THIS
AGREEMENT
AND THE RIGHTS, DUTIES, OBLIGATIONS AND RESPONSIBILITIES OF THE
PARTIES HERETO
SHALL BE GOVERNED IN ACCORDANCE WITH THE INTERNAL LAWS AND
DECISIONS OF NEW
YORK. THE PARTIES HERETO INTEND THAT THE PROVISIONS OF SECTION
5-1401 OF THE NEW
YORK GENERAL OBLIGATIONS LAW SHALL APPLY TO THIS AGREEMENT. THE
PARTIES HERETO
HEREBY WAIVE, TO THE FULLEST
20
EXTENT PERMITTED BY LAW, THE RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR
COUNTERCLAIM, WHETHER IN CONTRACT, TORT OR OTHERWISE, RELATING
DIRECTLY OR
INDIRECTLY TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
SECTION 15. Attorneys' Fees. If any legal action, suit or
proceeding
is commenced between the Seller and the Purchaser regarding
their respective
rights and obligations under this Agreement, the prevailing
party shall be
entitled to recover, in addition to damages or other relief,
costs and expenses,
attorneys' fees and court costs (including, without limitation,
expert witness
fees). As used herein, the term "prevailing party" shall mean
the party that
obtains the principal relief it has sought, whether by
compromise settlement or
judgment. If the party that commenced or instituted the action,
suit or
proceeding shall dismiss or discontinue it without the
concurrence of the other
party, such other party shall be deemed the prevailing
party.
SECTION 16. Further Assurances. The Seller and the Purchaser
agree
to execute and deliver such instruments and take such further
actions as the
other party may, from time to time, reasonably request in order
to effectuate
the purposes and to carry out the terms of this Agreement.
SECTION 17. Successors and Assigns. The rights and obligations
of
the Seller under this Agreement shall not be assigned by the
Seller without the
prior written consent of the Purchaser, except that any person
into which the
Seller may be merged or consolidated, or any corporation
resulting from any
merger, conversion or consolidation to which the Seller is a
party, or any
person succeeding to all or substantially all of the business of
the Seller,
shall be the successor to the Seller hereunder. The Purchaser
has the right to
assign its interest under this Agreement, in whole or in part,
as may be
required to effect the purposes of the Pooling and Servicing
Agreement, and the
assignee shall, to the extent of such assignment, succeed to the
rights and
obligations hereunder of the Purchaser. Subject to the
foregoing, this Agreement
shall bind and inure to the benefit of and be enforceable by the
Seller, the
Purchaser, the Underwriters (as intended third party
beneficiaries hereof), the
Initial Purchasers (also as intended third party beneficiaries
hereof) and their
permitted successors and assigns. This Agreement is enforceable
by the
Underwriters, the Initial Purchasers and the other third party
beneficiaries
hereto in all respects to the same extent as if they had been
signatories
hereof.
SECTION 18. Amendments. No term or provision of this Agreement
may
be waived or modified unless such waiver or modification is in
writing and
signed by a duly authorized officer of the party hereto against
whom such waiver
or modification is sought to be enforced. The Seller's
obligations hereunder
shall in no way be expanded, changed or otherwise affected by
any amendment of
or modification to the Pooling and Servicing Agreement,
including, without
limitation, any defined terms therein, unless the Seller has
consented to such
amendment or modification in writing.
SECTION 19. Accountants' Letters. The parties hereto shall
cooperate
with Ernst & Young LLP in making available all information
and taking all steps
reasonably necessary to permit such accountants to deliver the
letters required
by the Underwriting Agreement and the Certificate Purchase
Agreement.
21
SECTION 20. Knowledge. Whenever a representation or warranty
or
other statement in this Agreement (including, without
limitation, Schedule I
hereto) is made with respect to a Person's "knowledge," such
statement refers to
such Person's employees or agents who were or are responsible
for or involved
with the indicated matter and have actual knowledge of the
matter in question.
SECTION 21. Cross-Collateralized Mortgage Loans. Each Crossed
Loan
Group is identified on the Mortgage Loan Schedule. For purposes
of reference,
the Mortgaged Property that relates or corresponds to any of the
Mortgage Loans
in a Crossed Loan Group shall be the property identified in the
Mortgage Loan
Schedule as corresponding thereto. The provisions of this
Agreement, including,
without limitation, each of the representations and warranties
set forth in
Schedule I hereto and each of the capitalized terms used herein
but defined in
the Pooling and Servicing Agreement, shall be interpreted in a
manner consistent
with this Section 21. In addition, if there exists with respect
to any Crossed
Loan Group only one original of any document referred to in the
definition of
"Mortgage File" in this Agreement and covering all the Mortgage
Loans in such
Crossed Loan Group, the inclusion of the original of such
document in the
Mortgage File for any of the Mortgage Loans in such Crossed Loan
Group shall be
deemed an inclusion of such original in the Mortgage File for
each such Mortgage
Loan.
[SIGNATURE PAGES TO FOLLOW]
22
IN WITNESS WHEREOF, the Seller and the Purchaser have caused
their
names to be signed hereto by their respective duly authorized
officers as of the
date first above written.
SELLER
------
MERRILL LYNCH MORTGAGE INVESTORS, INC.
By:
--------------------
Name: David M. Rodgers
Title: Executive Vice President
PURCHASER
---------
MERRILL LYNCH MORTGAGE INVESTORS,
INC.
By:
--------------------
Name: David M. Rodgers
Title: Executive Vice President
MLML MORTGAGE LOAN PURCHASE AGREEMENT
EXHIBIT A
Seller:
Address for Notices:
Merrill Lynch Mortgage Lending, Inc.,
c/o Global Commercial Real Estate
4 World Financial Center, 16th Floor
250 Vesey Street
New York, New York 10080
Attention: David Rodgers
with a copy to:
Merrill Lynch Mortgage Lending, Inc.
c/o Global Commercial Real Estate
4 World Financial Center, 16th Floor
250 Vesey Street
New York, New York 10080
Attention: Director of CMBS Securitizations
with a copy to:
Merrill Lynch Mortgage Lending, Inc.
4 World Financial Center, 12th Floor
250 Vesey Street
New York, New York 10080
Attention: General Counsel for Global Commercial Real Estate in
the Office
of the General Counsel
Purchaser:
Address for Notices:
Merrill Lynch Mortgage Investors, Inc.
c/o Global Commercial Real Estate
4 World Financial Center, 16th Floor
250 Vesey Street
New York, New York 10080
Attention: David M. Rodgers
with a copy to:
Merrill Lynch Mortgage Investors, Inc.
c/o Global Commercial Real Estate
4 World Financial Center, 16th Floor
250 Vesey Street
New York, New York 10080
Attn: Director of CMBS Securitizations
and
Merrill Lynch Mortgage Investors, Inc.
4 World Financial Center, 12th Floor
250 Vesey Street
New York, New York 10080
Attention: General Counsel for Global
Commercial Real Estate in the Office
of the General Counsel
SCHEDULE I
MORTGAGE LOAN REPRESENTATIONS AND WARRANTIES
For purposes of this Schedule I, the "Value" of a Mortgaged
Property
shall mean the value of such Mortgaged Property as determined by
the appraisal
(and subject to the assumptions set forth in the appraisal)
performed in
connection with the origination of the related Mortgage
Loan.
1. Mortgage Loan Schedule. The information set forth in the
Mortgage Loan Schedule with respect to the Mortgage Loans is
true and correct in
all material respects (and contains all the items listed in the
definition of
"Mortgage Loan Schedule") as of the dates of the information set
forth therein
or, if not set forth therein, and in all events no earlier than,
as of the
respective Cut-off Dates for the Mortgage Loans.
2. Ownership of Mortgage Loans. Immediately prior to the
transfer of the Mortgage Loans to the Purchaser, the Seller had
good title to,
and was the sole owner of, each Mortgage Loan. The Seller has
full right, power
and authority to transfer and assign each Mortgage Loan to or at
the direction
of the Purchaser free and clear of any and all pledges, liens,
charges, security
interests, participation interests and/or other interests and
encumbrances
(except for certain servicing rights as provided in the Pooling
and Servicing
Agreement, any permitted subservicing agreements and servicing
rights purchase
agreements pertaining thereto and the rights of a holder of a
related Non-Trust
Loan pursuant to a Loan Combination Intercreditor Agreement).
The Seller has
validly and effectively conveyed to the Purchaser all legal and
beneficial
interest in and to each Mortgage Loan free and clear of any
pledge, lien,
charge, security interest or other encumbrance (except for
certain servicing
rights as provided in the Pooling and Servicing Agreement, any
permitted
subservicing agreements and servicing rights purchase agreements
pertaining
thereto); provided that recording and/or filing of various
transfer documents
are to be completed after the Closing Date as contemplated
hereby and by the
Pooling and Servicing Agreement; and provided further that, if
the related
Mortgage and/or Assignment of Leases has been recorded in the
name of MERS or
its designee, no assignment of Mortgage and/or Assignment of
Leases in favor of
the Trustee is required to be prepared or delivered and instead,
the Seller
shall take all actions as are necessary to cause the Trust to be
shown as the
owner of the Mortgage Loan on the records of MERS for purposes
of the system of
recording transfers of beneficial ownership of mortgages
maintained by MERS. The
sale of the Mortgage Loans to the Purchaser or its designee does
not require the
Seller to obtain any governmental or regulatory approval or
consent that has not
been obtained. Each Mortgage Note is, or shall be as of the
Closing Date,
properly endorsed to the Purchaser or its designee and each such
endorsement is,
or shall be as of the Closing Date, genuine.
3. Payment Record. No scheduled payment of principal and/or
interest under any Mortgage Loan was 30 days or more past due as
of the Due Date
for such Mortgage Loan in December 2006, without giving effect
to any applicable
grace period, nor was any such payment
30 days or more delinquent since the date of origination of any
Mortgage Loan,
without giving effect to any applicable grace period.
4. Lien; Valid Assignment. Each Mortgage related to and
delivered in connection with each Mortgage Loan constitutes a
valid and, subject
to the limitations and exceptions set forth in representation 13
below,
enforceable first priority lien upon the related Mortgaged
Property, prior to
all other liens and encumbrances, and there are no liens and/or
encumbrances
that are pari passu with the lien of such Mortgage, in any event
subject,
however, to the following (collectively, the "Permitted
Encumbrances"): (a) the
lien for current real estate taxes, ground rents, water charges,
sewer rents and
assessments not yet delinquent or accruing interest or
penalties; (b) covenants,
conditions and restrictions, rights of way, easements and other
matters that are
of public record and/or are referred to in the related lender's
title insurance
policy (or, if not yet issued, referred to in a pro forma title
policy or a
"marked-up" commitment binding upon the title insurer); (c)
exceptions and
exclusions specifically referred to in such lender's title
insurance policy (or,
if not yet issued, referred to in a pro forma title policy or
"marked-up"
commitment binding upon the title insurer); (d) other matters to
which like
properties are commonly subject; (e) the rights of tenants (as
tenants only)
under leases (including subleases) pertaining to the related
Mortgaged Property;
(f) if such Mortgage Loan constitutes a Cross-Collateralized
Mortgage Loan, the
lien of the Mortgage for another Mortgage Loan contained in the
same Crossed
Group; (g) if the related Mortgaged Property consists of one or
more units in a
condominium, the related condominium declaration; and (h) the
rights of the
holder of any Non-Trust Loan that is part of a related Loan
Combination to which
any such Mortgage Loan belongs. The Permitted Encumbrances do
not, individually
or in the aggregate, materially interfere with the security
intended to be
provided by the related Mortgage, the current principal use of
the related
Mortgaged Property, the Value of the Mortgaged Property or the
current ability
of the related Mortgaged Property to generate income sufficient
to service such
Mortgage Loan. The related assignment of such Mortgage executed
and delivered in
favor of the Trustee is in recordable form (but for insertion of
the name and
address of the assignee and any related recording information
which is not yet
available to the Seller) and constitutes a legal, valid, binding
and, subject to
the limitations and exceptions set forth in representation 13
below, enforceable
assignment of such Mortgage from the relevant assignor to the
Trustee provided
that, if the related Mortgage and/or Assignment of Leases has
been recorded in
the name of MERS or its designee, no assignment of Mortgage
and/or Assignment of
Leases in favor of the Trustee is required to be prepared or
delivered and
instead, the Seller shall take all actions as are necessary to
cause the Trust
to be shown as the owner of the Mortgage Loan on the records of
MERS for
purposes of the system of recording transfers of beneficial
ownership of
mortgages maintained by MERS.
5. Assignment of Leases and Rents. There exists, as part of
the related Mortgage File, an Assignment of Leases (either as a
separate
instrument or as part of the Mortgage) that relates to and was
delivered in
connection with each Mortgage Loan and that establishes and
creates a valid,
subsisting and, subject to the limitations and exceptions set
forth in
representation 13 below, enforceable first priority lien on and
security
interest in, subject to applicable law, the property, rights and
interests of
the related Mortgagor described therein, except for Permitted
Encumbrances and
except for the holder of any Non-Trust Loan that is part of a
related Loan
Combination to which any such Mortgage Loan belongs, and except
that a license
may have been granted to the related Mortgagor to exercise
certain rights and
perform
I-2
certain obligations of the lessor under the relevant lease or
leases, including,
without limitation, the right to operate the related leased
property so long as
no event of default has occurred under such Mortgage Loan; and
each assignor
thereunder has the full right to assign the same. The related
assignment of any
Assignment of Leases not included in a Mortgage, executed and
delivered in favor
of the Trustee is in recordable form (but for insertion of the
name and address
of the assignee and any related recording information which is
not yet available
to the Seller), and constitutes a legal, valid, binding and,
subject to the
limitations and exceptions set forth in representation 13 below,
enforceable
assignment of such Assignment of Leases from the relevant
assignor to the
Trustee; provided that, if the related Mortgage and/or
Assignment of Leases has
been recorded in the name of MERS or its designee, no assignment
of Mortgage
and/or Assignment of Leases in favor of the Trustee is required
to be prepared
or delivered and instead, the Seller shall take all actions as
are necessary to
cause the Trust to be shown as the owner of the Mortgage Loan on
the records of
MERS for purposes of the system of recording transfers of
beneficial ownership
of mortgages maintained by MERS. The related Mortgage or related
Assignment of
Leases, subject to applicable law, provides for the appointment
of a receiver
for the collection of rents or for the related mortgagee to
enter into
possession of the related Mortgaged Property to collect the
rents or provides
for rents to be paid directly to the related mortgagee, if there
is an event of
default beyond applicable notice and grace periods. Except for
the holder of the
related Non-Trust Loan with respect to any Mortgage Loan that is
part of a Loan
Combination, no person other than the related Mortgagor owns any
interest in any
payments due under the related leases on which the Mortgagor is
the landlord,
covered by the related Assignment of Leases.
6. Mortgage Status; Waivers and Modifications. In the case
of
each Mortgage Loan, except by a written instrument which has
been delivered to
the Purchaser or its designee as a part of the related Mortgage
File, (a) the
related Mortgage (including any amendments or supplements
thereto included in
the related Mortgage File) has not been impaired, waived,
modified, altered,
satisfied, canceled, subordinated or rescinded, (b) neither the
related
Mortgaged Property nor any material portion thereof has been
released from the
lien of such Mortgage and (c) the related Mortgagor has not been
released from
its obligations under such Mortgage, in whole or in material
part. With respect
to each Mortgage Loan, since the later of (a) November 20, 2006
and (b) the
closing date of such Mortgage Loan, the Seller has not executed
any written
instrument that (i) impaired, satisfied, canceled, subordinated
or rescinded
such Mortgage Loan, (ii) waived, modified or altered any
material term of such
Mortgage Loan, (iii) released the Mortgaged Property or any
material portion
thereof from the lien of the related Mortgage, or (iv) released
the related
Mortgagor from its obligations under such Mortgage Loan in whole
or material
part. For avoidance of doubt, the preceding sentence does not
relate to any
release of escrows by the Seller or a servicer on its
behalf.
7. Condition of Property; Condemnation. In the case of each
Mortgage Loan, except as set forth in an engineering report
prepared by an
independent engineering consultant in connection with the
origination of such
Mortgage Loan, the related Mortgaged Property is, to the
Seller's knowledge, in
good repair and free and clear of any damage that would
materially and adversely
affect its value as security for such Mortgage Loan (except in
any such case
where an escrow of funds, letter of credit or insurance coverage
exists
sufficient to effect the necessary repairs and maintenance). As
of the date of
origination of the Mortgage Loan, there was no proceeding
pending for the
condemnation of all or any material part of the
I-3
related Mortgaged Property. As of the Closing Date, the Seller
has not received
notice and has no knowledge of any proceeding pending for the
condemnation of
all or any material portion of the Mortgaged Property securing
any Mortgage
Loan. As of the date of origination of each Mortgage Loan and,
to the Seller's
knowledge, as of the date hereof, (a) none of the material
improvements on the
related Mortgaged Property encroach upon the boundaries and, to
the extent in
effect at the time of construction, do not encroach upon the
building
restriction lines of such property, and none of the material
improvements on the
related Mortgaged Property encroached over any easements,
except, in each case,
for encroachments that are insured against by the lender's title
insurance
policy referred to in representation 8 below or that do not
materially and
adversely affect the Value or current use of such Mortgaged
Property and (b) no
improvements on adjoining properties encroached upon such
Mortgaged Property so
as to materially and adversely affect the Value of such
Mortgaged Property,
except those encroachments that are insured against by the
lender's title
insurance policy referred to in representation 8 below.
8. Title Insurance. Each Mortgaged Property securing a
Mortgage Loan is covered by an American Land Title Association
(or an equivalent
form of) lender's title insurance policy (the "Title Policy")
(or, if such
policy has yet to be issued, by a pro forma policy or a "marked
up" commitment
binding on the title insurer) in the original principal amount
of such Mortgage
Loan after all advances of principal, insuring that the related
Mortgage is a
valid first priority lien on such Mortgaged Property, subject
only to the
Permitted Encumbrances, except that in the case of a Mortgage
Loan as to which
the related Mortgaged Property is made up of more than one
parcel of property,
each of which is secured by a separate Mortgage, such Mortgage
(and therefore
the related Title Policy) may be in an amount less than the
original principal
amount of the Mortgage Loan, but is not less than the allocated
amount of
subject parcel constituting a portion of the related Mortgaged
Property. Such
Title Policy (or, if it has yet to be issued, the coverage to be
provided
thereby) is in full force and effect, all premiums thereon have
been paid, no
material claims have been made thereunder and no claims have
been paid
thereunder. No holder of the related Mortgage has done, by act
or omission,
anything that would materially impair the coverage under such
Title Policy.
Immediately following the transfer and assignment of the related
Mortgage Loan
to the Trustee, such Title Policy (or, if it has yet to be
issued, the coverage
to be provided thereby) inures to the benefit of the Trustee as
sole insured
without the consent of or notice to the insurer. Such Title
Policy contains no
exclusion for whether, or it affirmatively insures (unless the
related Mortgaged
Property is located in a jurisdiction where such affirmative
insurance is not
available) that, (a) the related Mortgaged Property has access
to a public road,
and (b) the area shown on the survey, if any, reviewed or
prepared in connection
with the origination of the related Mortgage Loan is the same as
the property
legally described in the related Mortgage.
9. No Holdback. The proceeds of each Mortgage Loan have been
fully disbursed (except in those cases where the full amount of
the Mortgage
Loan has been disbursed but a portion thereof is being held in
escrow or reserve
accounts documented as part of the Mortgage Loan documents and
the rights to
which are transferred to the Trustee (in the case of the Park La
Brea Apartments
Trust Mortgage Loan, subject to the rights of the JP Series
2006-LDP8 Trustee),
pending the satisfaction of certain conditions relating to
leasing, repairs or
other matters with respect to the related Mortgaged Property),
and there is no
obligation for future advances with respect thereto.
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10. Mortgage Provisions. The Mortgage Loan documents for
each
Mortgage Loan, together with applicable state law, contain
customary and,
subject to the limitations and exceptions set forth in
representation 13 below,
enforceable provisions such as to render the rights and remedies
of the holder
thereof adequate for the practical realization against the
related Mortgaged
Property of the principal benefits of the security intended to
be provided
thereby, including, without limitation, judicial or non-judicial
foreclosure or
similar proceedings (as applicable for the jurisdiction where
the related
Mortgaged Property is located). None of the Mortgage Loan
documents contains any
provision that expressly excuses the related Mortgagor from
obtaining and
maintaining insurance coverage for acts of terrorism.
11. Trustee under Deed of Trust. If the Mortgage for any
Mortgage Loan is a deed of trust, then (a) a trustee, duly
qualified under
applicable law to serve as such, has either been properly
designated and
currently so serves or may be substituted in accordance with the
Mortgage and
applicable law, and (b) no fees or expenses are or will become
payable to such
trustee by the Seller, the Purchaser or any transferee thereof
except in
connection with a trustee's sale after default by the related
Mortgagor or in
connection with any full or partial release of the related
Mortgaged Property or
related security for such Mortgage Loan.
12. Environmental Conditions. Except in the case of the
Mortgaged Properties identified on Annex B hereto (as to which
properties the
only environmental investigation conducted in connection with
the origination of
the related Mortgage Loan related to asbestos-containing
materials and
lead-based paint), (a) an environmental site assessment meeting
ASTM standards
and covering all environmental hazards typically assessed for
similar properties
including use, type and tenants of the related Mortgaged
Property, a transaction
screen meeting ASTM standards or an update of a previously
conducted
environmental site assessment (which update may have been
performed pursuant to
a database update), was performed by an independent third-party
environmental
consultant (licensed to the extent required by applicable state
law) with
respect to each Mortgaged Property securing a Mortgage Loan in
connection with
the origination of such Mortgage Loan, (b) the report of each
such assessment,
update or screen, if any (an "Environmental Report"), is dated
no earlier than
(or, alternatively, has been updated within) twelve (12) months
prior to the
date hereof, (c) a copy of each such Environmental Report has
been delivered to
the Purchaser, and (d) either: (i) no such Environmental Report,
if any, reveals
that as of the date of the report there is a material violation
of applicable
environmental laws with respect to any known circumstances or
conditions
relating to the related Mortgaged Property; or (ii) if any such
Environmental
Report does reveal any such circumstances or conditions with
respect to the
related Mortgaged Property and the same have not been
subsequently remediated in
all material respects, then one or more of the following are
true--(A) one or
more parties not related to the related Mortgagor and
collectively having
financial resources reasonably estimated to be adequate to cure
the violation
was identified as the responsible party or parties for such
conditions or
circumstances, and such conditions or circumstances do not
materially impair the
Value of the related Mortgaged Property, (B) the related
Mortgagor was required
to provide additional security reasonably estimated to be
adequate to cure the
violations and/or to obtain and, for the period contemplated by
the related
Mortgage Loan documents, maintain an operations and maintenance
plan, (C) the
related Mortgagor, or other responsible party, provided a "no
further action"
letter or other evidence that would be acceptable to a
reasonably prudent
commercial mortgage lender, that applicable federal, state or
local governmental
authorities had no current intention of taking any action,
and
I-5
are not requiring any action, in respect of such conditions or
circumstances,
(D) such conditions or circumstances were investigated further
and based upon
such additional investigation, a qualified environmental
consultant recommended
no further investigation or remediation, (E) the expenditure of
funds reasonably
estimated to be necessary to effect such remediation is not
greater than 2% of
the outstanding principal balance of the related Mortgage Loan,
(F) there exists
an escrow of funds reasonably estimated to be sufficient for
purposes of
effecting such remediation, (G) the related Mortgaged Property
is insured under
a policy of insurance, subject to certain per occurrence and
aggregate limits
and a deductible, against certain losses arising from such
circumstances and
conditions or (H) a responsible party provided a guaranty or
indemnity to the
related Mortgagor to cover the costs of any required
investigation, testing,
monitoring or remediation and, as of the date of origination of
the related
Mortgage Loan, such responsible party had financial resources
reasonably
estimated to be adequate to cure the subject violation in all
material respects.
To the Seller's actual knowledge and without inquiry beyond the
related
Environmental Report, there are no significant or material
circumstances or
conditions with respect to such Mortgaged Property not revealed
in any such
Environmental Report, where obtained, or in any Mortgagor
questionnaire
delivered to the Seller in connection with the issue of any
related
environmental insurance policy, if applicable, that would
require investigation
or remediation by the related Mortgagor under, or otherwise be a
material
violation of, any applicable environmental law. The Mortgage
Loan documents for
each Mortgage Loan require the related Mortgagor to comply in
all material
respects with all applicable federal, state and local
environmental laws and
regulations. Each of the Mortgage Loans identified on Annex C
hereto is covered
by a secured creditor environmental insurance policy and each
such policy is
noncancellable during its term, is in the amount at least equal
to 125% of the
principal balance of the Mortgage Loan, has a term ending no
sooner than the
date which is five years after the maturity date of the Mortgage
Loan to which
it relates and either does not provide for a deductible or the
deductible amount
is held in escrow and all premiums have been paid in full. Each
Mortgagor
represents and warrants in the related Mortgage Loan documents
that except as
set forth in certain environmental reports and to its knowledge
it has not used,
caused or permitted to exist and will not use, cause or permit
to exist on the
related Mortgaged Property any hazardous materials in any manner
which violates
federal, state or local laws, ordinances, regulations, orders,
directives or
policies governing the use, storage, treatment, transportation,
manufacture,
refinement, handling, production or disposal of hazardous
materials. The related
Mortgagor (or affiliate thereof) has agreed to indemnify, defend
and hold the
Seller and its successors and assigns harmless from and against
any and all
losses, liabilities, damages, injuries, penalties, fines,
out-of-pocket expenses
and claims of any kind whatsoever (including attorneys' fees and
costs) paid,
incurred or suffered by or asserted against, any such party
resulting from a
breach of environmental representations, warranties or covenants
given by the
Mortgagor in connection with such Mortgage Loan.
13. Loan Document Status. Each Mortgage Note, Mortgage, and
each
other agreement executed by or on behalf of the related
Mortgagor with respect
to each Mortgage Loan is the legal, valid and binding obligation
of the maker
thereof (subject to any non-recourse provisions contained in any
of the
foregoing agreements and any applicable state anti-deficiency or
one form of
action law or market value limit deficiency legislation),
enforceable in
accordance with its terms, except as such enforcement may be
limited by (i)
bankruptcy, insolvency, reorganization, receivership, fraudulent
transfer and
conveyance or other similar laws affecting the enforcement of
creditors' rights
generally, (ii) general principles of equity (regardless of
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whether such enforcement is considered in a proceeding in equity
or at law) and
(iii) public policy considerations underlying applicable
securities laws, to the
extent that such public policy considerations limit the
enforceability of
provisions that purport to provide indemnification from
liabilities under
applicable securities laws, and except that certain provisions
in such loan
documents may be further limited or rendered unenforceable by
applicable law,
but (subject to the limitations set forth in the foregoing
clauses (i) and (ii))
such limitations or unenforceability will not render such loan
documents invalid
as a whole or substantially interfere with the mortgagee's
realization of the
principal benefits and/or security provided thereby. There is no
valid defense,
counterclaim or right of offset or rescission available to the
related Mortgagor
with respect to such Mortgage Note, Mortgage or other agreements
that would deny
the mortgagee the principal benefits intended to be provided
thereby, except in
each case, with respect to the enforceability of any provisions
requiring the
payment of default interest, late fees, additional interest,
prepayment premiums
or yield maintenance charges.
14. Insurance. Except in certain cases where tenants, having
a
net worth of at least $50,000,000 or an investment grade credit
rating (and, if
rated by Fitch, a credit rating of at least "A-" by Fitch) and
obligated to
maintain the insurance described in this paragraph, are allowed
to self-in
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