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MORTGAGE LOAN PURCHASE AGREEMENT
This Mortgage Loan Purchase Agreement, dated as of December 11,
2006
(this "Agreement"), is entered into between Countrywide
Commercial Real Estate
Finance, Inc. (the "Seller") and Merrill Lynch Mortgage
Investors, Inc. (the
"Purchaser").
The Seller intends to sell and the Purchaser intends to
purchase
certain multifamily, commercial and manufactured housing
community mortgage
loans (the "Mortgage Loans") identified on the schedule (the
"Mortgage Loan
Schedule") annexed hereto as Schedule II. The Purchaser intends
to deposit the
Mortgage Loans, along with certain other mortgage loans (the
"Other Mortgage
Loans"), into a trust fund (the "Trust Fund"), the beneficial
ownership of which
will be evidenced by multiple classes of mortgage pass-through
certificates (the
"Certificates"). One or more "real estate mortgage investment
conduit" ("REMIC")
elections will be made with respect to most of the Trust Fund.
The Trust Fund
will be created and the Certificates will be issued pursuant to
a Pooling and
Servicing Agreement, dated as of 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
$1,394,353,351 (the "Countrywide Mortgage Loan Balance")
(subject to a variance
of plus or minus 5.0%) as of the close of business on the
Cut-off Date, after
giving effect to any payments due on or before such date,
whether or not such
payments are received. The Countrywide Mortgage Loan Balance,
together with the
aggregate principal balance of the Other Mortgage Loans as of
the Cut-off Date
(after giving effect to any payments due on or before such date,
whether or not
such payments are received), is expected to equal an aggregate
principal balance
(the "Cut-off Date Pool Balance") of $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)
104.5261% of the
Countrywide Mortgage Loan Balance as of the Cut-off Date, plus
(ii) $2,520,703,
which amount represents the amount of interest accrued on the
Countrywide
Mortgage Loan Balance, as agreed to by the Seller and the
Purchaser.
The Purchase Consideration shall be paid to the Seller or
its
designee by wire transfer in immediately available funds on the
Closing Date.
SECTION 2. Conveyance of Mortgage Loans.
(a) Effective as of the Closing Date, subject only to the
Seller's receipt of the Purchase Consideration and the
satisfaction or waiver of
the conditions to closing set forth in Section 5 of this
Agreement (which
conditions shall be deemed to have been satisfied or waived upon
the Seller's
receipt of the Purchase Consideration), the Seller does hereby
sell, transfer,
assign, set over and otherwise convey to the Purchaser, without
recourse (except
as set forth in this Agreement), all the right, title and
interest of the Seller
in and to the Mortgage Loans identified on the Mortgage Loan
Schedule as of such
date, on a servicing released basis (subject to certain
agreements regarding
servicing as provided in the Servicing Rights Purchase Agreement
(as defined in
Section 6(a)(iii) hereof)), together with all of the Seller's
right, title and
interest in and to the proceeds of any related title, hazard,
primary mortgage
or other insurance proceeds. The Mortgage Loan Schedule, as it
may be amended,
shall conform to the requirements set forth in this Agreement
and the Pooling
and Servicing Agreement.
(b) The Purchaser or its assignee shall be entitled to
receive
all scheduled payments of principal and interest due after the
Cut-off Date, and
all other recoveries of principal and interest collected after
the Cut-off Date
(other than in respect of principal and interest on the Mortgage
Loans due on or
before the Cut-off Date). All scheduled payments of principal
and interest due
on or before the Cut-off Date but collected after the Cut-off
Date, and
recoveries of principal and interest collected on or before the
Cut-off Date
(only in respect of principal and interest on the Mortgage Loans
due on or
before the Cut-off Date and principal prepayments thereon),
shall belong to, and
be promptly remitted to, the Seller.
(c) The Seller hereby represents and warrants that it has or
will have, on behalf of the Purchaser, delivered to the Trustee
(i) on or before
the Closing Date, the documents and instruments specified below
with respect to
each Mortgage Loan that are Specially Designated Mortgage Loan
Documents and
(ii) on or before the date that is 30 days after the Closing
Date, the remaining
documents and instruments specified below that are not Specially
Designated
Mortgage Loan Documents with respect to each Mortgage Loan (the
documents and
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instruments specified below and referred to in clauses (i) and
(ii) preceding,
collectively, a "Mortgage File"). All Mortgage Files so
delivered will be held
by the Trustee in escrow for the benefit of the Seller at all
times prior to the
Closing Date. The Mortgage File with respect to each Mortgage
Loan that is a
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;
(iii) an original or copy of any related Assignment of Leases
(if
such item is a document separate from the Mortgage), together
with
originals or copies of any and all intervening assignments
thereof, in
each case (unless not yet returned by the applicable recording
office)
with evidence of recording indicated thereon or certified by
the
applicable recording office;
(iv) an original executed assignment, in recordable form
(except
for completion of the assignee's name 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;
(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;
(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;
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(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;
(ix) an original or a copy of any Ground Lease, guaranty or
ground lessor estoppel;
(x) an original or a copy of any intercreditor agreement
relating to permitted debt of the Mortgagor and any
intercreditor
agreement relating to mezzanine debt related to the
Mortgagor;
(xi) an original or a copy of any loan agreement, any escrow
or
reserve agreement, any security agreement, any management
agreement, any
agreed upon procedures letter, any lockbox or cash management
agreements,
any environmental reports or any letter of credit (which letter
of credit
shall not be delivered in original from to the Trustee, but
rather to the
applicable Master Servicer), in each case relating to the
subject Mortgage
Loan; and
(xii) with respect to a Mortgage Loan secured by a
hospitality
property, a signed copy of any franchise agreement and/or
franchisor
comfort letter.
The foregoing Mortgage File delivery requirement shall be
subject to
Section 2.01(c) of the Pooling and Servicing Agreement.
(d) The Seller shall retain an Independent third party (the
"Recording/Filing Agent") that shall, as to each Mortgage Loan,
promptly (and in
any event within 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 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
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assignment shall reflect that the recorded original should be
returned by the
public recording office to the Trustee following recording, and
each such
assignment and UCC Financing Statement assignment shall reflect
that the file
copy thereof should be returned to the Trustee following filing;
provided, that
in those instances where the public recording office retains the
original
assignment of Mortgage or assignment of Assignment of Leases,
the
Recording/Filing Agent shall obtain therefrom a certified copy
of the recorded
original. If any such document or instrument is lost or returned
unrecorded or
unfiled, as the case may be, because of a defect therein, then
the Seller shall
prepare a substitute therefor or cure such defect or cause such
to be done, as
the case may be, and the Seller shall deliver such substitute or
corrected
document or instrument to the Trustee (or, if the Mortgage Loan
is then no
longer subject to the Pooling and Servicing Agreement, to the
then holder of
such Mortgage Loan).
The Seller shall bear the out-of-pocket costs and expenses of
all
such recording, filing and delivery contemplated in the
preceding paragraph,
including, without limitation, any costs and expenses that may
be incurred by
the Trustee in connection with any such recording, filing or
delivery performed
by the Trustee at the Seller's request and the fees of the
Recording/Filing
Agent.
(e) All such other relevant documents and records that (a)
relate to the administration or servicing of the Mortgage Loans,
(b) are
reasonably necessary for the ongoing administration and/or
servicing of such
Mortgage Loans by the applicable Master Servicer in connection
with its duties
under the Pooling and Servicing Agreement, and (c) are in the
possession or
under the control of the Seller, together with all unapplied
escrow amounts and
reserve amounts in the possession or under the control of the
Seller that relate
to the Mortgage Loans, shall be delivered or caused to be
delivered by the
Seller to the applicable Master Servicer (or, at the direction
of such Master
Servicer, to the appropriate sub-servicer); provided that the
Seller shall not
be required to deliver any draft documents, privileged or other
communications,
credit underwriting, legal or other due diligence analyses,
credit committee
briefs or memoranda or other internal approval documents or data
or internal
worksheets, memoranda, communications or evaluations.
The Seller agrees to use reasonable efforts to deliver to the
Trustee, for
its administrative convenience in reviewing the Mortgage Files,
a mortgage loan
checklist for each Mortgage Loan. The foregoing sentence
notwithstanding, the
failure of the Seller to deliver a mortgage loan checklist or a
complete
mortgage loan checklist shall not give rise to any liability
whatsoever on the
part of the Seller to the Purchaser, the Trustee or any other
person because the
delivery of the mortgage loan checklist is being provided to the
Trustee solely
for its administrative convenience.
(f) The Seller shall take such actions as are reasonably
necessary to assign or otherwise grant to the Trust Fund the
benefit of any
letters of credit in the name of the Seller, which secure any
Mortgage Loan.
(g) On or before the Closing Date, the Seller shall provide
to
the applicable Master Servicer, the initial data (as of the
Cut-off Date or the
most recent earlier date for which such data is available)
contemplated by the
CMSA Loan Setup File, the CMSA Loan Periodic Update File, the
CMSA Operating
Statement Analysis Report and the CMSA Property File.
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SECTION 3. Representations, Warranties and Covenants of
Seller.
(a) The Seller hereby represents and warrants to and
covenants
with the Purchaser, as of the date hereof, that:
(i) The Seller is a corporation duly organized, validly
existing
and in good standing under the laws of the State of California
and the
Seller has taken all necessary corporate action to authorize
the
execution, delivery and performance of this Agreement by it, and
has the
power and authority to execute, deliver and perform this
Agreement and all
transactions contemplated hereby.
(ii) This Agreement has been duly and validly authorized,
executed and delivered by the Seller, all requisite action by
the Seller's
directors and officers has been taken in connection therewith,
and
(assuming the due authorization, execution and delivery hereof
by the
Purchaser) this Agreement constitutes the valid, legal and
binding
agreement of the Seller, enforceable against the Seller in
accordance with
its terms, except as such enforcement may be limited by (A) laws
relating
to bankruptcy, insolvency, fraudulent transfer,
reorganization,
receivership, conservatorship or moratorium, (B) other laws
relating to or
affecting the rights of creditors generally, or (C) general
equity
principles (regardless of whether such enforcement is considered
in a
proceeding in equity or at law).
(iii) The execution and delivery of this Agreement by the
Seller
and the Seller's performance and compliance with the terms of
this
Agreement will not (A) violate the Seller's certificate of
incorporation
or bylaws, (B) violate any law or regulation or any
administrative decree
or order to which it is subject if compliance therewith is
necessary (1)
to ensure the enforceability of this Agreement or (2) for the
Seller to
perform its duties and obligations under this Agreement, or (C)
constitute
a default (or an event which, with notice or lapse of time, or
both, would
constitute a default) under, or result in the breach of, any
material
contract, agreement or other instrument to which the Seller is a
party or
by which the Seller is bound, which default might have
consequences that
would, in the Seller's reasonable and good faith judgment,
materially and
adversely affect the condition (financial or other) or
operations of the
Seller or its properties or materially and adversely affect
its
performance hereunder.
(iv) The Seller is not in default with respect to any order
or
decree of any court or any order, regulation or demand of any
federal,
state, municipal or other governmental agency or body, which
default might
have consequences that would, in the Seller's reasonable and
good faith
judgment, materially and adversely affect the condition
(financial or
other) or operations of the Seller or its properties or
materially and
adversely affect its performance hereunder.
(v) The Seller is not a party to or bound by any agreement
or
instrument or subject to any certificate of incorporation,
bylaws or any
other corporate restriction or any judgment, order, writ,
injunction,
decree, law or regulation that would, in the Seller's reasonable
and good
faith judgment, materially and adversely affect the ability of
the Seller
to perform its obligations under this Agreement or that requires
the
consent of any
6
third person to the execution of this Agreement or the
performance by the
Seller of its obligations under this Agreement (except to the
extent such
consent has been obtained).
(vi) No consent, approval, authorization or order of any court
or
governmental agency or body is required for the execution,
delivery and
performance by the Seller of or compliance by the Seller with
this
Agreement or the consummation of the transactions contemplated
by this
Agreement except as have previously been obtained, and no bulk
sale law
applies to such transactions.
(vii) None of the sale of the Mortgage Loans by the Seller,
the
transfer of the Mortgage Loans to the Trustee, and the
execution, delivery
or performance of this Agreement by the Seller, results or will
result in
the creation or imposition of any lien on any of the Seller's
assets or
property that would have a material adverse effect upon the
Seller's
ability to perform its duties and obligations under this
Agreement or
materially impair the ability of the Purchaser to realize on the
Mortgage
Loans.
(viii) There is no action, suit, proceeding or investigation
pending or to the knowledge of the Seller, threatened against
the Seller
in any court or by or before any other governmental agency
or
instrumentality which would, in the Seller's good faith and
reasonable
judgment, prohibit its entering into this Agreement or
materially and
adversely affect the validity of this Agreement or the
performance by the
Seller of its obligations under this Agreement.
(ix) Under generally accepted accounting principles ("GAAP")
and
for federal income tax purposes, the Seller will report the
transfer of
the Mortgage Loans to the Purchaser as a sale of the Mortgage
Loans to the
Purchaser in exchange for consideration consisting of a cash
amount equal
to the Purchase Consideration. The consideration received by the
Seller
upon the sale of the Mortgage Loans to the Purchaser will
constitute at
least reasonably equivalent value and fair consideration for the
Mortgage
Loans. The Seller will be solvent at all relevant times prior
to, and will
not be rendered insolvent by, the sale of the Mortgage Loans to
the
Purchaser. The Seller is not selling the Mortgage Loans to the
Purchaser
with any intent to hinder, delay or defraud any of the creditors
of the
Seller.
(x) The Prospectus Supplement contains all the information
that
is required to be provided in respect of the Seller (that arise
from its
role as "sponsor" (within the meaning of Regulation AB)), the
Mortgage
Loans, the related Mortgagors and the related Mortgaged
Properties
pursuant to Regulation AB. For purpose of this Agreement,
"Regulation AB"
shall mean Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17
C.F.R. 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
7
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 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
8
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 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
9
permitted to exercise remedies against the Primary Collateral
securing its
respective Crossed Loan(s), so long as such exercise does not
materially impair
the ability of the other party to exercise its remedies against
the Primary
Collateral securing the Crossed Loan(s) held thereby.
If the exercise by one party would materially impair the ability
of
the other party to exercise its remedies with respect to the
Primary Collateral
securing the Crossed Loan(s) held by such party, then the Seller
and the
Purchaser shall forbear from exercising such remedies until the
Mortgage Loan
documents evidencing and securing the relevant Crossed Loans can
be modified in
a manner consistent with this Agreement to remove the threat of
material
impairment as a result of the exercise of remedies or some other
mutually agreed
upon accommodation can be reached. Any reserve or other cash
collateral or
letters of credit securing the Crossed Loans shall be allocated
between such
Crossed Loans in accordance with the Mortgage Loan documents,
or, if the related
Mortgage Loan documents do not so provide, then on a pro rata
basis based upon
their outstanding Stated Principal Balances. Notwithstanding the
foregoing, if a
Crossed Loan is modified to terminate the related
cross-collateralization and/or
cross-default provisions, the Seller shall furnish to the
Trustee an Opinion of
Counsel that such modification shall not cause an Adverse REMIC
Event.
For purposes hereof, "Primary Collateral" shall mean the
Mortgaged
Property directly securing a Crossed Loan and excluding any
property as to which
the related lien may only be foreclosed upon by exercise of
cross-collateralization provisions of such Mortgage Loans.
Notwithstanding any of the foregoing provisions of this
Section
3(c), if there is a Document Defect or Breach (which Document
Defect or Breach
materially and adversely affects the value of the related
Mortgage Loan or the
interests of the Certificateholders therein) with respect to one
or more
Mortgaged Properties with respect to a Mortgage Loan, the Seller
shall not be
obligated to repurchase or substitute the Mortgage Loan if (i)
the affected
Mortgaged Property(ies) may be released pursuant to the terms of
any partial
release provisions in the related Mortgage Loan documents (and
such Mortgaged
Property(ies) are, in fact, released) and to the extent not
covered by the
applicable release price (if any) required under the related
Mortgage Loan
documents, the Seller pays (or causes to be paid) any additional
amounts
necessary to cover all reasonable out-of-pocket expenses
reasonably incurred by
the applicable Master Servicer, the Special Servicer, the
Trustee or the Trust
Fund in connection with such release, (ii) the remaining
Mortgaged Property(ies)
satisfy the requirements, if any, set forth in the Mortgage Loan
documents and
the Seller provides an opinion of counsel to the effect that
such release would
not cause either of REMIC I or REMIC II to fail to qualify as a
REMIC under the
Code or result in the imposition of any tax on "prohibited
transactions" or
"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
10
such costs and expenses are material or not) specified in such
representation
that have not, at the time of such cure, been received by the
applicable Master
Servicer or the Special Servicer from the related Mortgagor and
not a repurchase
or substitution of the related Mortgage Loan. Following the
Seller's remittance
of funds in payment of such costs and expenses, the Seller shall
be deemed to
have cured the breach of representation 30 in all respects. To
the extent any
fees or expenses that are the subject of a cure by the Seller
are subsequently
obtained from the related Mortgagor, the cure payment made by
the Seller shall
be returned to the Seller. Notwithstanding the prior provisions
of this
paragraph, the Seller, acting in its sole discretion, may effect
a repurchase or
substitution (in accordance with the provisions of this Section
3(c) setting
forth the manner in which a Mortgage Loan may be repurchased or
substituted) of
a Mortgage Loan, as to which representation 30 set forth on
Schedule I has been
breached, in lieu of paying the costs and expenses that were the
subject of the
breach of representation 30 set forth on Schedule I.
(d) In connection with any permitted repurchase or
substitution
of one or more Mortgage Loans contemplated hereby, upon receipt
of a certificate
from a Servicing Officer certifying as to the receipt of the
applicable Purchase
Price (as defined in the Pooling and Servicing Agreement) or
Substitution
Shortfall Amount(s), as applicable, in the applicable Master
Servicer's
Collection Account, and, if applicable, the delivery of the
Mortgage File(s) and
the Servicing File(s) for the related Qualified Substitute
Mortgage Loan(s) to
the Custodian and the applicable Master Servicer, respectively,
(i) the Trustee
shall be required to execute and deliver such endorsements and
assignments as
are provided to it by the applicable Master Servicer or the
Seller, in each case
without recourse, representation or warranty, as shall be
necessary to vest in
the Seller the legal and beneficial ownership of each
repurchased Mortgage Loan
or substituted Mortgage Loan, as applicable, (ii) the Trustee,
the Custodian,
the applicable Master Servicer and the Special Servicer shall
each tender to the
Seller, upon delivery to each of them of a receipt executed by
the Seller, all
portions of the Mortgage File and other documents pertaining to
such Mortgage
Loan possessed by it, and (iii) the applicable Master Servicer
and the Special
Servicer shall release to the Seller any Escrow Payments and
Reserve Funds held
by it in respect of such repurchased or deleted Mortgage
Loan(s).
At the time a substitution is made, the Seller shall deliver
the
related Mortgage File to the Trustee and certify that the
substitute Mortgage
Loan is a Qualified Substitute Mortgage Loan.
No substitution of a Qualified Substitute Mortgage Loan or
Qualified
Substitute Mortgage Loans may be made in any calendar month
after the
Determination Date for such month. Periodic Payments due with
respect to any
Qualified Substitute Mortgage Loan after the 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.
11
(e) This Section 3 provides the sole remedies available to
the
Purchaser, the Certificateholders, or the Trustee on behalf of
the
Certificateholders, respecting any Document Defect in a Mortgage
File or any
Breach of any representation or warranty set forth in or
required to be made
pursuant to this Section 3.
SECTION 4. Representations, Warranties and Covenants of the
Purchaser. In order to induce the Seller to enter into this
Agreement, the
Purchaser hereby represents, warrants and covenants for the
benefit of the
Seller as of the date hereof that:
(a) The Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware and the
Purchaser has taken all necessary corporate action to authorize
the execution,
delivery and performance of this Agreement by it, and has the
power and
authority to execute, deliver and perform this Agreement and all
transactions
contemplated hereby.
(b) This Agreement has been duly and validly authorized,
executed and delivered by the Purchaser, all requisite action by
the Purchaser's
directors and officers has been taken in connection therewith,
and (assuming the
due authorization, execution and delivery hereof by the Seller)
this Agreement
constitutes the valid, legal and binding agreement of the
Purchaser, enforceable
against the Purchaser in accordance with its terms, except as
such enforcement
may be limited by (A) laws relating to bankruptcy, insolvency,
fraudulent
transfer, reorganization, receivership, conservatorship or
moratorium, (B) other
laws relating to or affecting the rights of creditors generally,
or (C) general
equity principles (regardless of whether such enforcement is
considered in a
proceeding in equity or at law).
(c) The execution and delivery of this Agreement by the
Purchaser and the Purchaser's performance and compliance with
the terms of this
Agreement will not (A) violate the Purchaser's articles of
incorporation or
bylaws, (B) violate any law or regulation or any administrative
decree or order
to which it is subject if compliance therewith is necessary (1)
to ensure the
enforceability of this Agreement or (2) for the Purchaser to
perform its duties
and obligations under this Agreement or (C) constitute a default
(or an event
which, with notice or lapse of time, or both, would constitute a
default) under,
or result in the breach of, any material contract, agreement or
other instrument
to which the Purchaser is a party or by which the Purchaser is
bound, which
default might have consequences that would, in the Purchaser's
reasonable and
good faith judgment, materially and adversely affect the
condition (financial or
other) or operations of the Purchaser or its properties or have
consequences
that would materially and adversely affect its performance
hereunder.
(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).
12
(e) Except as may be required under federal or state
securities
laws (and which will be obtained on a timely basis), no consent,
approval,
authorization or order of, registration or filing with, or
notice to, any
governmental authority or court, is required, under federal or
state law, for
the execution, delivery and performance by the Purchaser of, or
compliance by
the Purchaser with, this Agreement, or the consummation by the
Purchaser of any
transaction described in this Agreement.
(f) Under GAAP and for federal income tax purposes, the
Purchaser will report the transfer of the Mortgage Loans by the
Seller to the
Purchaser as a sale of the Mortgage Loans to the Purchaser in
exchange for
consideration consisting of a cash amount equal to the aggregate
Purchase
Consideration.
(g) There is no action, suit, proceeding or investigation
pending or to the knowledge of the Purchaser, threatened against
the Purchaser
in any court or by or before any other governmental agency or
instrumentality
which would materially and adversely affect the validity of this
Agreement or
any action taken in connection with the obligations of the
Purchaser
contemplated herein, or which would be likely to impair
materially the ability
of the Purchaser to enter into and/or perform under the terms of
this Agreement.
(h) The Purchaser is not in default with respect to any order
or
decree of any court or any order, regulation or demand of any
federal, state,
municipal or other governmental agency or body, which default
might have
consequences that would, in the Purchaser's reasonable and good
faith judgment,
materially and adversely affect the condition (financial or
other) or operations
of the Purchaser or its properties or might have consequences
that would
materially and adversely affect its performance hereunder.
SECTION 5. Closing. The closing of the sale of the Mortgage
Loans
(the "Closing") shall be held at the offices of Sidley Austin
LLP on the Closing
Date. The Closing shall be subject to each of the following
conditions:
(a) All of the representations and warranties of the Seller
set
forth in or made pursuant to Sections 3(a) and 3(b) of this
Agreement and all of
the representations and warranties of the Purchaser set forth in
Section 4 of
this Agreement shall be true and correct in all material
respects as of the
Closing Date;
(b) All documents specified in Section 6 of this Agreement
(the
"Closing Documents"), in such forms as are agreed upon and
acceptable to the
Purchaser, the Seller, the Underwriters and their respective
counsel in their
reasonable discretion, shall be duly executed and delivered by
all signatories
as required pursuant to the respective terms thereof;
(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
13
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, Merrill Lynch Mortgage Lending, 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.
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
14
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 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 Free Writing Prospectus
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-4 to the
Free Writing Prospectus, entitled "Sonoma Ridge Apartments
Amortization
Schedule", Annex A-5 to the Free Writing Prospectus, entitled
"Elm Ridge Center
Amortization Schedule", Annex B to such 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"
15
(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-4 to the Prospectus Supplement,
entitled "Sonoma
Ridge Apartments 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 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
16
copy of a certificate of good standing of the Seller issued by
the State of
California not earlier than 30 days prior to the Closing
Date;
(f) A written opinion of counsel for the Seller relating to
organizational and enforceability matters (which opinion may be
from in-house
counsel, outside counsel or a combination thereof), reasonably
satisfactory to
the Purchaser, its counsel and the Rating Agencies, dated the
Closing Date and
addressed to the Purchaser, the Trustee, the Underwriters, the
Initial
Purchasers and each of the Rating Agencies, together with such
other written
opinions, including as to insolvency matters, as may be required
by the Rating
Agencies; and
(g) Such further certificates, opinions and documents as the
Purchaser may reasonably request prior to the Closing Date.
SECTION 7. Costs. Whether or not this Agreement is terminated,
both
the Seller and the Purchaser shall pay their respective share of
the transaction
expenses incurred in connection with the transactions
contemplated herein as set
forth in the closing statement prepared by the Purchaser and
delivered to and
approved by the Seller on or before the Closing Date, and in the
memorandum of
understanding to which the Seller and the Purchaser (or an
affiliate thereof)
are parties with respect to the transactions contemplated by
this Agreement.
SECTION 8. Grant of a Security Interest. It is the express
intent of
the parties hereto that the conveyance of the Mortgage Loans by
the Seller to
the Purchaser as provided in Section 2 of this Agreement be, and
be construed
as, a sale of the Mortgage Loans by the Seller to the Purchaser
and not as a
pledge of the Mortgage Loans by the Seller to the Purchaser to
secure a debt or
other obligation of the Seller. However, if, notwithstanding the
aforementioned
intent of the parties, the Mortgage Loans are held to be
property of the Seller,
then, (a) it is the express intent of the parties that such
conveyance be deemed
a pledge of the Mortgage Loans by 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)
17
holding such property, shall be deemed notifications to, or
acknowledgments,
receipts or confirmations from, financial intermediaries,
bailees or agents (as
applicable) of the secured party for the purpose of perfecting
such security
interest under applicable law. The Seller and the Purchaser
shall, to the extent
consistent with this Agreement, take such actions as may be
necessary to ensure
that, if this Agreement were deemed to create a security
interest in the
Mortgage Loans, such security interest would be deemed to be a
perfected
security interest of first priority under applicable law and
will be maintained
as such throughout the term of this Agreement and the Pooling
and Servicing
Agreement. The Seller does hereby consent to the filing by the
Purchaser of
financing statements relating to the transactions contemplated
hereby without
the signature of the Seller.
SECTION 9. Notice of Exchange Act Reportable Events. The
Seller
hereby agrees to deliver to the Purchaser any disclosure
information relating to
any event, specifically relating to the Seller, reasonably
determined in good
faith by the Purchaser as required to be reported on Form 8-K,
Form 10-D or Form
10-K by the Trust Fund (in formatting reasonably appropriate for
inclusion in
such form) insofar as such disclosure is required under Item
1117 or 1119 of
Regulation AB or Item 1.03 to Form 8-K. The Seller shall use
reasonable efforts
to deliver proposed disclosure language relating to any event,
specifically
relating to the Seller, described under Item 1117 or 1119 of
Regulation AB or
Item 1.03 to Form 8-K to the Purchaser as soon as reasonably
practicable after
the Seller becomes aware of such event and in no event more than
(2) business
days following the occurrence of such event if such event is
reportable under
Item 1.03 to Form 8-K. The obligation of the Seller to provide
the above
referenced disclosure materials in any fiscal year of the Trust
will terminate
upon the Trustee's filing a Form 15 with respect to the Trust as
to that fiscal
year in accordance with Section 8.16 of the Pooling and
Servicing Agreement or
the reporting requirements with respect to the Trust under the
Securities
Exchange Act of 1934, as amended (the "1934 Act") have otherwise
automatically
suspended. The Seller hereby acknowledges that the information
to be provided by
it pursuant to this Section 9 will be used in the preparation of
reports meeting
the reporting requirements of the Trust under Section 13(a)
and/or Section 15(d)
of the 1934 Act.
SECTION 10. Notices. All notices, copies, requests,
consents,
demands and other communications required hereunder shall be in
writing and sent
either by certified mail (return receipt requested) or by
courier service (proof
of delivery requested) to the intended recipient at the "Address
for Notices"
specified for such party on Exhibit A hereto, or as to either
party, at such
other address as shall be designated by such party in a notice
hereunder to the
other party. Except as otherwise provided in this Agreement, all
such
communications shall be deemed to have been duly given when
received, in each
case given or addressed as aforesaid.
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
18
invalidating the remaining provisions hereof. Any part,
provision,
representation, warranty or covenant of this Agreement that is
prohibited or
unenforceable or is held to be void or unenforceable in any
particular
jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of
such prohibition or unenforceability without invalidating the
remaining
provisions hereof, and any such prohibition or unenforceability
in any
particular jurisdiction shall not invalidate or render
unenforceable such
provision in any other jurisdiction. To the extent permitted by
applicable law,
the parties hereto waive any provision of law that prohibits or
renders void or
unenforceable any provision hereof.
SECTION 13. Counterparts. This Agreement may be executed in
any
number of counterparts, each of which shall be an original, but
which together
shall constitute one and the same agreement.
SECTION 14. GOVERNING LAW; WAIVER OF TRIAL BY JURY. THIS
AGREEMENT
AND THE RIGHTS, DUTIES, OBLIGATIONS AND RESPONSIBILITIES OF THE
PARTIES HERETO
SHALL BE GOVERNED IN ACCORDANCE WITH THE INTERNAL LAWS AND
DECISIONS OF NEW
YORK. THE PARTIES HERETO INTEND THAT THE PROVISIONS OF SECTION
5-1401 OF THE NEW
YORK GENERAL OBLIGATIONS LAW SHALL APPLY TO THIS AGREEMENT. THE
PARTIES HERETO
HEREBY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, THE RIGHT
TO TRIAL BY JURY
IN ANY ACTION, PROCEEDING OR COUNTERCLAIM, WHETHER IN CONTRACT,
TORT OR
OTHERWISE, RELATING DIRECTLY OR INDIRECTLY TO THIS AGREEMENT OR
THE TRANSACTIONS
CONTEMPLATED HEREBY.
SECTION 15. Attorneys' Fees. If any legal action, suit or
proceeding
is commenced between the Seller and the Purchaser regarding
their respective
rights and obligations under this Agreement, the prevailing
party shall be
entitled to recover, in addition to damages or other relief,
costs and expenses,
attorneys' fees and court costs (including, without limitation,
expert witness
fees). As used herein, the term "prevailing party" shall mean
the party that
obtains the principal relief it has sought, whether by
compromise settlement or
judgment. If the party that commenced or instituted the action,
suit or
proceeding shall dismiss or discontinue it without the
concurrence of the other
party, such other party shall be deemed the prevailing
party.
SECTION 16. Further Assurances. The Seller and the Purchaser
agree
to execute and deliver such instruments and take such further
actions as the
other party may, from time to 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
19
Servicing Agreement, and the assignee shall, to the extent of
such assignment,
succeed to the rights and obligations hereunder of the
Purchaser. Subject to the
foregoing, this Agreement shall bind and inure to the benefit of
and be
enforceable by the Seller, the Purchaser, the Underwriters (as
intended third
party beneficiaries hereof), the Initial Purchasers (also as
intended third
party beneficiaries hereof) and their permitted successors and
assigns. This
Agreement is enforceable by the Underwriters, the Initial
Purchasers and the
other third party beneficiaries hereto in all respects to the
same extent as if
they had been signatories hereof.
SECTION 18. Amendments. No term or provision of this Agreement
may
be waived or modified unless such waiver or modification is in
writing and
signed by a duly authorized officer of the party hereto against
whom such waiver
or modification is sought to be enforced. The Seller's
obligations hereunder
shall in no way be expanded, changed or otherwise affected by
any amendment of
or modification to the Pooling and Servicing Agreement,
including, without
limitation, any defined terms therein, unless the Seller has
consented to such
amendment or modification in writing.
SECTION 19. Accountants' Letters. The parties hereto shall
cooperate
with Ernst & Young LLP in making available all information
and taking all steps
reasonably necessary to permit such accountants to deliver the
letters required
by the Underwriting Agreement and the Certificate Purchase
Agreement.
SECTION 20. Knowledge. Whenever a representation or warranty
or
other statement in this Agreement (including, without
limitation, Schedule I
hereto) is made with respect to a Person's "knowledge," such
statement refers to
such Person's employees or agents who were or are responsible
for or involved
with the indicated matter and have actual knowledge of the
matter in question.
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]
20
IN WITNESS WHEREOF, the Seller and the Purchaser have caused
their
names to be signed hereto by their respective duly authorized
officers as of the
date first above written.
SELLER
------
COUNTRYWIDE COMMERCIAL REAL ESTATE
FINANCE, INC.
By:
------------------------------------
Name: Jerry Y. Hirschkorn
Title: First 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:
Countrywide Commercial Real Estate Finance, Inc.
4500 Park Granada CH-143
Calabasas, California 91302
Attention: Marlyn Marincas
Purchaser:
Address for Notices:
Merrill Lynch Mortgage Investors, Inc.
c/o Global Commercial Real Estate
4 World Financial Center, 16th Floor
250 Vesey Street
New York, New York 10080
Attention: David M. Rodgers
with a copy to:
Merrill Lynch Mortgage Investors, Inc.
c/o Global Commercial Real Estate
4 World Financial Center, 16th Floor
250 Vesey Street
New York, New York 10080
Attn: Director of CMBS Securitizations
and
Merrill Lynch Mortgage Investors, Inc.
4 World Financial Center, 12th Floor
250 Vesey Street
New York, New York 10080
Attention: General Counsel for Global
Commercial Real Estate in the Office
of the General Counsel
SCHEDULE I
MORTGAGE LOAN REPRESENTATIONS AND WARRANTIES
For purposes of this Schedule I, the "Value" of a Mortgaged
Property
shall mean the value of such Mortgaged Property as determined by
the appraisal
(and subject to the assumptions set forth in the appraisal)
performed in
connection with the origination of the related Mortgage
Loan.
1. Mortgage Loan Schedule. The information set forth in the
Mortgage Loan Schedule with respect to the Mortgage Loans is
true and correct in
all material respects (and contains all the items listed in the
definition of
"Mortgage Loan Schedule") as of the dates of the information set
forth therein
or, if not set forth therein, and in all events no earlier than,
as of the
respective Cut-off Dates for the Mortgage Loans.
2. Ownership of Mortgage Loans. Immediately prior to the
transfer of the Mortgage Loans to the Purchaser, the Seller had
good title to,
and was the sole owner of, each Mortgage Loan. The Seller has
full right, power
and authority to transfer and assign each Mortgage Loan to or at
the direction
of the Purchaser free and clear of any and all pledges, liens,
charges, security
interests, participation interests and/or other interests and
encumbrances
(except for certain servicing rights as provided in the Pooling
and Servicing
Agreement, any permitted subservicing agreements and servicing
rights purchase
agreements pertaining thereto and the rights of a holder of a
related Non-Trust
Loan pursuant to a Loan Combination Intercreditor Agreement).
The Seller has
validly and effectively conveyed to the Purchaser all legal and
beneficial
interest in and to each Mortgage Loan free and clear of any
pledge, lien,
charge, security interest or other encumbrance (except for
certain servicing
rights as provided in the Pooling and Servicing Agreement, any
permitted
subservicing agreements and servicing rights purchase agreements
pertaining
thereto); provided that recording and/or filing of various
transfer documents
are to be completed after the Closing Date as contemplated
hereby and by the
Pooling and Servicing Agreement. The sale of the Mortgage Loans
to the Purchaser
or its designee does not require the Seller to obtain any
governmental or
regulatory approval or consent that has not been obtained. Each
Mortgage Note
is, or shall be as of the Closing Date, properly endorsed to the
Purchaser or
its designee and each such endorsement is, or shall be as of the
Closing Date,
genuine.
3. Payment Record. No scheduled payment of principal and/or
interest under any Mortgage Loan was 30 days or more past due as
of the Due Date
for such Mortgage Loan in 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.
5. Assignment of Leases and Rents. There exists, as part of
the
related Mortgage File, an Assignment of Leases (either as a
separate instrument
or as part of the Mortgage) that relates to and was delivered in
connection with
each Mortgage Loan and that establishes and creates a valid,
subsisting and,
subject to the limitations and exceptions set forth in
representation 13 below,
enforceable first priority lien on and security interest in,
subject to
applicable law, the property, rights and interests of the
related Mortgagor
described therein, except for Permitted Encumbrances and except
for the holder
of any Non-Trust Loan that is part of a related Loan Combination
to which any
such Mortgage Loan belongs, and except that a license may have
been granted to
the related Mortgagor to exercise certain rights and perform
certain obligations
of the lessor under the relevant lease or leases, including,
without limitation,
the right to operate the related leased property so long as no
event of default
has occurred under such Mortgage Loan; and each assignor
thereunder has the full
right to assign the same. The related assignment of any
Assignment of Leases not
included in a Mortgage, executed and delivered in favor of the
Trustee is in
recordable form (but for insertion of the name and address of
the assignee and
any related recording information which is not yet available to
the Seller), and
constitutes a legal, valid, binding and, subject to the
limitations and
exceptions set forth in representation 13 below, enforceable
assignment of such
Assignment of Leases from the relevant assignor to the Trustee.
The related
Mortgage or related Assignment of Leases, subject to applicable
law, provides
for the appointment of a receiver for the collection of rents or
for the related
mortgagee to enter into possession of the related Mortgaged
Property to collect
the rents or provides for rents to be paid directly to the
related mortgagee, if
there is an event of default beyond applicable notice and grace
periods. Except
for the holder of the related Non-Trust Loan
I-2
with respect to any Mortgage Loan that is part of a Loan
Combination, no person
other than the related Mortgagor owns any interest in any
payments due under the
related leases on which the Mortgagor is the landlord, covered
by the related
Assignment of Leases.
6. Mortgage Status; Waivers and Modifications. In the case
of
each Mortgage Loan, except by a written instrument which has
been delivered to
the Purchaser or its designee as a part of the related Mortgage
File, (a) the
related Mortgage (including any amendments or supplements
thereto included in
the related Mortgage File) has not been impaired, waived,
modified, altered,
satisfied, canceled, subordinated or rescinded, (b) neither the
related
Mortgaged Property nor any material portion thereof has been
released from the
lien of such Mortgage and (c) the related Mortgagor has not been
released from
its obligations under such Mortgage, in whole or in material
part. With respect
to each Mortgage Loan, since the later of (a) 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 related
Mortgaged Property. As
of the Closing Date, the Seller has not received notice and has
no knowledge of
any proceeding pending for the condemnation of all or any
material portion of
the Mortgaged Property securing any Mortgage Loan. As of the
date of origination
of each Mortgage Loan and, to the Seller's knowledge, as of the
date hereof, (a)
none of the material improvements on the related Mortgaged
Property encroach
upon the boundaries and, to the extent in effect at the time of
construction, do
not encroach upon the building restriction lines of such
property, and none of
the material improvements on the related Mortgaged Property
encroached over any
easements, except, in each case, for encroachments that are
insured against by
the lender's title insurance policy referred to in
representation 8 below or
that do not materially and adversely affect the Value or current
use of such
Mortgaged Property and (b) no improvements on adjoining
properties encroached
upon such Mortgaged Property so as to materially and adversely
affect the Value
of such Mortgaged Property, except those encroachments that are
insured against
by the lender's title insurance policy referred to in
representation 8 below.
8. Title Insurance. Each Mortgaged Property securing a
Mortgage
Loan is covered by an American Land Title Association (or an
equivalent form of)
lender's title insurance policy (the "Title Policy") (or, if
such policy has yet
to be issued, by a pro forma policy or a "marked up" commitment
binding on the
title insurer) in the original principal
I-3
amount of such Mortgage Loan after all advances of principal,
insuring that the
related Mortgage is a valid first priority lien on such
Mortgaged Property,
subject only to the Permitted Encumbrances, except that in the
case of a
Mortgage Loan as to which the related Mortgaged Property is made
up of more than
one parcel of property, each of which is secured by a separate
Mortgage, such
Mortgage (and therefore the related Title Policy) may be in an
amount less than
the original principal amount of the Mortgage Loan, but is not
less than the
allocated amount of subject parcel constituting a portion of the
related
Mortgaged Property. Such Title Policy (or, if it has yet to be
issued, the
coverage to be provided thereby) is in full force and effect,
all premiums
thereon have been paid, no material claims have been made
thereunder and no
claims have been paid thereunder. No holder of the related
Mortgage has done, by
act or omission, anything that would materially impair the
coverage under such
Title Policy. Immediately following the transfer and assignment
of the related
Mortgage Loan to the Trustee, such Title Policy (or, if it has
yet to be issued,
the coverage to be provided thereby) inures to the benefit of
the Trustee as
sole insured without the consent of or notice to the insurer.
Such Title Policy
contains no exclusion for whether, or it affirmatively insures
(unless the
related Mortgaged Property is located in a jurisdiction where
such affirmative
insurance is not available) that, (a) the related Mortgaged
Property has access
to a public road, and (b) the area shown on the survey, if any,
reviewed or
prepared in connection with the origination of the related
Mortgage Loan is the
same as the property legally described in the related
Mortgage.
9. No Holdback. The proceeds of each Mortgage Loan have been
fully disbursed (except in those cases where the full amount of
the Mortgage
Loan has been disbursed but a portion thereof is being held in
escrow or reserve
accounts documented as part of the Mortgage Loan documents and
the rights to
which are transferred to the Trustee (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.
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.
I-4
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
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
I-5
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 th
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