EXECUTION COPY
MORTGAGE LOAN PURCHASE AGREEMENT
Mortgage Loan Purchase Agreement, dated as of January 31, 2005 (the
"Agreement"), between UBS Real Estate Investments Inc. (together
with its
successors and permitted assigns hereunder, the "Seller"), UBS
Principal Finance
LLC, as an additional party responsible for the Seller's
obligations hereunder
(in such capacity, together with its successors and permitted
assigns hereunder,
the "Additional Party"), and Structured Asset Securities
Corporation II
(together with its successors and permitted assigns hereunder, the
"Purchaser").
The Seller intends to sell and the Purchaser intends to purchase
certain multifamily and commercial mortgage loans (the "Mortgage
Loans") as
provided herein. The Purchaser intends to deposit the Mortgage
Loans, together
with certain other multifamily and commercial mortgage loans (the
"Other Loans";
and, together with the Mortgage Loans, the "Securitized Loans"),
into a trust
fund (the "Trust Fund"), the beneficial ownership of which will be
evidenced by
multiple classes (each, a "Class") of mortgage pass-through
certificates (the
"Certificates") to be identified as the LB-UBS Commercial Mortgage
Trust
2005-C1, Commercial Mortgage Pass-Through Certificates, Series
2005-C1. One or
more "real estate mortgage investment conduit" ("REMIC") elections
will be made
with respect to the Trust Fund. The Certificates will be issued
pursuant to a
Pooling and Servicing Agreement, to be dated as of January 11, 2005
(the
"Pooling and Servicing Agreement"), between the Purchaser, as
depositor,
Wachovia Bank, National Association, as master servicer (the
"Master Servicer"),
Allied Capital Corporation, as special servicer (the "Special
Servicer"),
LaSalle Bank National Association, as trustee (the "Trustee"), and
ABN AMRO
Bank, N.V., as fiscal agent. Capitalized terms used but not defined
herein have
the respective meanings set forth in the Pooling and Servicing
Agreement, as in
effect on the Closing Date.
The Purchaser has entered into an Underwriting Agreement (the
"Underwriting Agreement"), dated as of the date hereof, with Lehman
Brothers
Inc. ("Lehman") and UBS Securities LLC ("UBSS" and, together with
Lehman in such
capacity, the "Underwriters"), whereby the Purchaser will sell to
the
Underwriters all of the Certificates that are to be registered
under the
Securities Act of 1933, as amended (the "Securities Act"). The
Purchaser has
also entered into a Certificate Purchase Agreement (the
"Certificate Purchase
Agreement"), dated as of the date hereof, with Lehman and UBSS
(together in such
capacity, the "Placement Agents"), whereby the Purchaser will sell
to the
Placement Agents all of the remaining Certificates (other than the
Residual
Interest Certificates).
In connection with the transactions contemplated hereby, the
Seller,
UBS Americas Inc. (the "Co-Indemnitor"), the Purchaser, the
Underwriters and the
Placement Agents have entered into an Indemnification Agreement
(the
"Indemnification Agreement"), dated as of the date hereof.
Now, therefore, in consideration of the premises and the mutual
agreements set forth herein, the parties agree as follows:
SECTION 1. Agreement to Purchase.
The Seller agrees to sell, and the Purchaser agrees to purchase,
the
Mortgage Loans identified on the schedule (the "Mortgage Loan
Schedule") annexed
hereto as Exhibit A. The Mortgage
Loan Schedule may be amended to reflect the actual Mortgage Loans
accepted by
the Purchaser pursuant to the terms hereof. The Mortgage Loans will
have an
aggregate principal balance of $588,698,889 (the "Initial UBS Pool
Balance") as
of the close of business on the Cut-off Date, after giving effect
to any and all
payments of principal due thereon on or before such date, whether
or not
received. The purchase and sale of the Mortgage Loans shall take
place on
February 10, 2005 or such other date as shall be mutually
acceptable to the
parties hereto (the "Closing Date"). The consideration for the
Mortgage Loans
shall consist of: (A) a cash amount equal to a percentage (mutually
agreed upon
by the parties hereto) of the Initial UBS Pool Balance, plus
interest accrued on
each Mortgage Loan at the related Mortgage Rate (net of the related
Administrative Cost Rate), for the period from and including
January 11, 2005 up
to but not including the Closing Date, which cash amount shall be
paid to the
Seller or its designee by wire transfer in immediately available
funds (or by
such other method as shall be mutually acceptable to the parties
hereto) on the
Closing Date; and (B) a 100% Percentage Interest in the Class R-LR
Certificates
and a 42.87812% Percentage Interest in each other Class of Residual
Interest
Certificates (all such Residual Interest Certificates, the
"Seller's Residual
Interest Certificates").
SECTION 2. Conveyance of Mortgage Loans.
(a) Effective as of the Closing Date, subject only to receipt of
the
purchase price referred to in Section 1 hereof and satisfaction or
waiver of the
conditions to closing set forth in Section 8 hereof, the Seller
does hereby
sell, transfer, assign, set over and otherwise convey to the
Purchaser, without
recourse, all the right, title and interest of the Seller (other
than the
primary servicing rights) in and to the Mortgage Loans identified
on the
Mortgage Loan Schedule as of such date. The Mortgage Loan Schedule,
as it may be
amended, shall conform to the requirements set forth in this
Agreement and the
Pooling and Servicing Agreement.
(b) The Purchaser or its assignee shall be entitled to receive all
scheduled payments of principal and interest due after the Cut-off
Date, and all
other recoveries of principal and interest collected after the
Cut-off Date
(other than in respect of principal and interest on the Mortgage
Loans due on or
before the Cut-off Date). All scheduled payments of principal and
interest due
on or before the Cut-off Date for each Mortgage Loan, but collected
after such
date, shall belong to, and be promptly remitted to, the Seller.
(c) On or before the Closing Date, the Seller shall, on behalf of
the
initial Purchaser, deliver to and deposit with (i) the Trustee or a
Custodian
appointed thereby, a Mortgage File for each Mortgage Loan in
accordance with the
terms of, and conforming to the requirements set forth in, the
Pooling and
Servicing Agreement, with copies of each Mortgage File to be
delivered by the
Trustee to, upon request, the Master Servicer (at the expense of
the Trustee),
within 10 Business Days of such request; and (ii) the Master
Servicer (or, at
the direction of the Master Servicer, to the appropriate
Sub-Servicer), all
unapplied Escrow Payments and Reserve Funds in the possession or
under the
control of the Seller that relate to the Mortgage Loans.
(d) The Seller shall, through an Independent third party (the
"Recording Agent") retained by it, as and in the manner provided in
the Pooling
and Servicing Agreement (and in any event within 45 days following
the later of
the Closing Date and the date on which all necessary recording
information is
available to the Recording Agent), cause (i) each assignment of
Mortgage and
each assignment of Assignment of Leases, in favor of, and delivered
as part of
the related Mortgage File to
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the Trustee, to be submitted for recordation in the appropriate
public office
for real property records, and (ii) such assignments to be
delivered to the
Trustee following their return by the applicable public recording
office, with
copies of any such returned assignments to be delivered by the
Trustee to the
Master Servicer, at the expense of the Seller, at least every 90
days after the
Closing Date (or at additional times upon the request of the Master
Servicer if
reasonably necessary for the ongoing administration and/or
servicing of the
related Mortgage Loan by the Master Servicer); provided that, in
those instances
where the public recording office retains the original assignment
of Mortgage or
assignment of Assignment of Leases, a certified copy of the
recorded original
shall be forwarded to the Trustee. If any such document or
instrument is lost or
returned unrecorded because of a defect therein, then the Seller
shall prepare a
substitute therefor or cure such defect or cause such to be done,
as the case
may be, and the Seller shall deliver such substitute or corrected
document or
instrument to the Trustee (or, if the Mortgage Loan is then no
longer subject to
the Pooling and Servicing Agreement, to the then holder of such
Mortgage Loan).
The Seller shall bear the out-of-pocket costs and expenses of all
such
recording and delivery contemplated in the preceding paragraph,
including,
without limitation, any out-of-pocket costs and expenses that may
be incurred by
the Trustee in connection with any such recording or delivery
performed by the
Trustee at the Seller's request and the fees of the Recording
Agent.
Pursuant to the Pooling and Servicing Agreement and a letter
agreement
dated February 10, 2005 (the "Letter Agreement") between Allied
Capital
Corporation ("Allied"), the Depositor, the UBS Mortgage Loan Seller
and the
Trustee, the Trustee, through a third party (the "Filing Agent")
retained by it,
as and in the manner provided in the Pooling and Servicing
Agreement and at the
expense of Allied (and in any event within 45 days following the
later of the
Closing Date and the date on which all necessary filing information
is available
to the Filing Agent), is required to cause (i) each assignment of
Uniform
Commercial Code financing statements prepared by the Seller, in
favor of, and
delivered as part of the related Mortgage File to the Trustee, to
be submitted
for filing in the appropriate public office, and (ii) such
assignments to be
delivered to the Trustee following their return by the applicable
public filing
office, with copies of any such returned assignments to be
delivered by the
Trustee to the Master Servicer, at the expense of the Seller, at
least every 90
days after the Closing Date (or at additional times upon the
request of the
Master Servicer if reasonably necessary for the ongoing
administration and/or
servicing of the related Mortgage Loan by the Master Servicer). The
Seller
hereby agrees to reasonably cooperate with the Trustee and the
Filing Agent with
respect to the filing of the assignments of Uniform Commercial Code
financing
statements as described in this paragraph and to forward to the
Trustee filing
confirmation, if any, received in connection with such Uniform
Commercial Code
financing statements filed in accordance with this paragraph.
Notwithstanding
the foregoing, to the extent the Trustee provides Allied, pursuant
to the Letter
Agreement, with an invoice for the expenses (i) reasonably to be
incurred in
connection with the filings referred to in this paragraph and (ii)
required to
be paid by Allied pursuant to the Letter Agreement, and such
expenses are not
paid by Allied in advance of such filings, the Trustee, pursuant to
the Pooling
and Servicing Agreement and the Letter Agreement and at the expense
of the
Seller, shall only be required to cause the filing agent to file
the assignments
of such Uniform Commercial Code financing statements with respect
to Mortgage
Loans secured by hotel or hospitality properties.
(e) With respect to any Mortgage Loan, the following documents
(other
than any document that constitutes part of the Mortgage File for
such Mortgage
Loan): copies of any final appraisal, final survey, final
engineering report,
final environmental report, opinion letters of counsel to
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the related mortgagor delivered in connection with the closing of
such Mortgage
Loan, escrow agreements, reserve agreements, organization
documentation for the
related mortgagor, organizational documentation for any related
guarantor or
indemnitor, if the related guarantor or indemnitor is an entity,
insurance
certificates or insurance review reports, leases for tenants
representing 10% or
more of the annual income with respect to the related Mortgaged
Property, final
seismic report and property management agreements, rent roll,
property operating
statement and financial statements for the related guarantor or
indemnitor, cash
management or lockbox agreement, zoning letters or zoning reports
and the
documents, if any, specifically set forth on Exhibit C hereto
(collectively, the
"Mortgage Origination Documents"), but in each case, only if the
subject
document (a) was in fact obtained in connection with the
origination of such
Mortgage Loan, (b) is reasonably necessary for the ongoing
administration and/or
servicing of such Mortgage Loan by the Master Servicer or Special
Servicer in
connection with its duties under the Pooling and Servicing
Agreement, and (c) is
in the possession or under the control of the Seller shall, within
45 days of
the Closing Date, be delivered or caused to be delivered by the
Seller to the
Master Servicer (or, at the direction of the Master Servicer, to
the appropriate
Sub-Servicer); provided that the Seller shall not be required to
deliver any
draft documents, privileged or other communications or
correspondence, credit
underwriting or due diligence analyses or information, credit
committee briefs
or memoranda or other internal approval documents or data or
internal
worksheets, memoranda, communications or evaluations.
(f) After the Seller's transfer of the Mortgage Loans to the
Purchaser, as provided herein, the Seller shall not take any action
inconsistent
with the Purchaser's ownership of the Mortgage Loans. Except for
actions that
are the express responsibility of another party hereunder or under
the Pooling
and Servicing Agreement, and further except for actions that the
Seller is
expressly permitted to complete subsequent to the Closing Date, the
Seller
shall, on or before the Closing Date, take all actions required
under applicable
law to effectuate the transfer of the Mortgage Loans by the Seller
to the
Purchaser.
(g) In connection with the obligations of the Master Servicer under
Sections 3.01(g) and 3.19(c) of the Pooling and Servicing
Agreement, with regard
to each Mortgage Loan that is secured by the interests of the
related Mortgagor
in a hospitality property (identified on Schedule VI to the Pooling
and
Servicing Agreement) and each Mortgage Loan that has a related
letter of credit,
the Seller shall deliver to and deposit with the Master Servicer,
on or before
the Closing Date, any related franchise agreement, franchise
comfort letter and
the original of such letter of credit. Further, in the event, with
respect to a
Mortgage Loan with a related letter of credit, the Master Servicer
determines
that a draw under such letter of credit has become necessary under
the terms
thereof prior to the assignment of such letter of credit having
been effected in
accordance with Section 3.01(g) of the Pooling and Servicing
Agreement, the
Seller shall, upon the written direction of the Master Servicer,
use its best
efforts to make such draw or to cause such draw to be made on
behalf of the
Trustee.
(h) Pursuant to the Pooling and Servicing Agreement, the Master
Servicer shall review the documents with respect to each Mortgage
Loan delivered
by the Seller pursuant to or as contemplated by Section 2(e) hereof
and provide
each Seller and the Controlling Class Representative and the
Special Servicer
with a certificate (the "Master Servicer Certification") within 90
days of the
Closing Date acknowledging its (or the appropriate Sub-Servicer's)
receipt as of
the date of the Master Servicer Certification of such documents
actually
received (provided that such review shall be limited to identifying
the document
received, the Serviced Trust Mortgage Loan to which it purports to
relate, that
it appears regular on its face and that it appears to have been
executed (where
appropriate)).
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Notwithstanding anything to the contrary set forth herein, to the
extent the
Seller has not been notified in writing of its failure to deliver
any document
with respect to a Mortgage Loan required to be delivered pursuant
to or as
contemplated by Section 2(e) hereof prior to the date occurring 18
months
following the date of the Master Servicer Certification, the Seller
shall have
no obligation to provide such document.
(i) In addition, on the Closing Date, the Seller shall deliver (i)
to
the Master Servicer for deposit in the Pool Custodial Account, the
Initial
Deposits relating to the Mortgage Loans, and (ii) to the Trustee
for deposit in
the Interest Reserve Account, the Interest Reserve Deposit with
respect to each
Mortgage Loan that is an Interest Reserve Mortgage Loan.
SECTION 3. Representations, Warranties and Covenants of Seller and
Additional Party.
(a) Each of the Seller and the Additional Party (each, for purposes
of
this Section 3(a), a "Representing Party") hereby represent and
warrant to and
covenant with the Purchaser, as of the date hereof, that:
(i) The Representing Party is duly organized or formed, as the
case may be, validly existing and in good standing as a legal
entity under
the laws of the State of Delaware and possesses all requisite
authority,
power, licenses, permits and franchises to carry on its business as
currently conducted by it and to execute, deliver and comply with
its
obligations under the terms of this Agreement.
(ii) This Agreement has been duly and validly authorized,
executed and delivered by the Representing Party and, assuming due
authorization, execution and delivery hereof by the Purchaser,
constitutes
a legal, valid and binding obligation of the Representing Party,
enforceable against the Representing Party in accordance with its
terms,
except as such enforcement may be limited by (A) bankruptcy,
insolvency,
reorganization, receivership, moratorium or other similar laws
affecting
the enforcement of creditors' rights in general, and (B) general
equity
principles (regardless of whether such enforcement is considered in
a
proceeding in equity or at law).
(iii) The execution and delivery of this Agreement by the
Representing Party and the Representing Party's performance and
compliance
with the terms of this Agreement will not (A) violate the
Representing
Party's organizational documents, (B) violate any law or regulation
or any
administrative decree or order to which the Representing Party is
subject
or (C) constitute a default (or an event which, with notice or
lapse of
time, or both, would constitute a default) under, or result in the
breach
of, any material contract, agreement or other instrument to which
the
Representing Party is a party or by which the Representing Party is
bound.
(iv) The Representing Party 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 Representing
Party's
reasonable and good faith judgment, materially and adversely affect
the
condition (financial or other) or operations of the Representing
Party or
its properties or have consequences that would materially and
adversely
affect its performance hereunder.
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(v) The Representing Party is not a party to or bound by any
agreement or instrument or subject to any organizational document
or any
other corporate or limited liability company (as applicable)
restriction or
any judgment, order, writ, injunction, decree, law or regulation
that
would, in the Representing Party's reasonable and good faith
judgment,
materially and adversely affect the ability of the Representing
Party to
perform its obligations under this Agreement or that requires the
consent
of any third person to the execution and delivery of this Agreement
by the
Representing Party or the performance by the Representing Party of
its
obligations under this Agreement.
(vi) Except for the recordation and/or filing of assignments and
other transfer documents with respect to the Mortgage Loans, as
contemplated by Section 2(d) hereof, no consent, approval,
authorization or
order of, registration or filing with, or notice to, any court or
governmental agency or body, is required for the execution,
delivery and
performance by the Representing Party of or compliance by the
Representing
Party with this Agreement or the consummation of the transactions
contemplated by this Agreement; and no bulk sale law applies to
such
transactions.
(vii) No litigation is pending or, to the best of the
Representing Party's knowledge, threatened against the Representing
Party
that would, in the Representing Party's good faith and reasonable
judgment,
prohibit its entering into this Agreement or materially and
adversely
affect the performance by the Representing Party of its obligations
under
this Agreement.
(viii) No proceedings looking toward merger, liquidation,
dissolution or bankruptcy of the Representing Party are pending or
contemplated.
In addition, the Seller hereby further represents and warrants to,
and
covenants with, the Purchaser, as of the date hereof, that:
(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 provided herein, as a sale of
the
Mortgage Loans to the Purchaser in exchange for the consideration
specified
in Section 1 hereof. In connection with the foregoing, the Seller
shall
cause all of its records to reflect such transfer as a sale (as
opposed to
a secured loan). The consideration received by the Seller upon the
sale of
the Mortgage Loans to the Purchaser will constitute at least
reasonably
equivalent value and fair consideration for the Mortgage Loans. The
Seller
will be solvent at all relevant times prior to, and will not be
rendered
insolvent by, the sale of the Mortgage Loans to the Purchaser. The
Seller
is not selling the Mortgage Loans to the Purchaser with any intent
to
hinder, delay or defraud any of the creditors of the Seller. After
giving
effect to its transfer of the Mortgage Loans to the Purchaser, as
provided
herein, the value of the Seller's assets, either taken at their
present
fair saleable value or at fair valuation, will exceed the amount of
the
Seller's debts and obligations, including contingent and
unliquidated debts
and obligations of the Seller, and the Seller will not be left with
unreasonably small assets or capital with which to engage in and
conduct
its business. The Mortgage Loans do not constitute all or
substantially all
of the assets of the Seller. The Seller does not intend to, and
does not
believe that it will, incur debts or obligations beyond its ability
to pay
such debts and obligations as they mature.
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(x) The Seller will acquire the Seller's Residual Interest
Certificates for its own account and not with a view to, or sale or
transfer in connection with, any distribution thereof, in whole or
in part,
in any manner that would violate the Securities Act or any
applicable state
securities laws.
(xi) The Seller understands that (A) the Seller's Residual
Interest Certificates have not been and will not be registered
under the
Securities Act or registered or qualified under any applicable
state
securities laws, (B) neither the Purchaser nor any other party is
obligated
so to register or qualify the Seller's Residual Interest
Certificates and
(C) neither the Seller's Residual Interest Certificates nor any
security
issued in exchange therefor or in lieu thereof may be resold or
transferred
unless it is (1) registered pursuant to the Securities Act and
registered
or qualified pursuant to any applicable state securities laws or
(2) sold
or transferred in a transaction which is exempt from such
registration and
qualification and the Certificate Registrar has received the
certifications
and/or opinions of counsel required by the Pooling and Servicing
Agreement.
(xii) The Seller understands that it may not sell or otherwise
transfer the Seller's Residual Interest Certificates, any security
issued
in exchange therefor or in lieu thereof or any interest in the
foregoing
except in compliance with the provisions of Section 5.02 of the
Pooling and
Servicing Agreement, which provisions it has or, as of the Closing
Date,
will have carefully reviewed, and that the Seller's Residual
Interest
Certificates will bear legends that identify the transfer
restrictions to
which such Certificates are subject.
(xiii) Neither the Seller nor anyone acting on its behalf has (A)
offered, transferred, pledged, sold or otherwise disposed of any
Seller's
Residual Interest Certificate, any interest in a Seller's Residual
Interest
Certificate or any other similar security to any person in any
manner, (B)
solicited any offer to buy or accept a transfer, pledge or other
disposition of any Seller's Residual Interest Certificate, any
interest in
a Seller's Residual Interest Certificate or any other similar
security from
any person in any manner, (C) otherwise approached or negotiated
with
respect to any Seller's Residual Interest Certificate, any interest
in a
Seller's Residual Interest Certificate or any other similar
security with
any person in any manner, (D) made any general solicitation by
means of
general advertising or in any other manner, or (E) taken any other
action,
that (in the case of any of the acts described in clauses (A)
through (E)
above) would constitute a distribution of the Seller's Residual
Interest
Certificates under the Securities Act, would render the disposition
of the
Seller's Residual Interest Certificates a violation of Section 5 of
the
Securities Act or any state securities law or would require
registration or
qualification of the Seller's Residual Interest Certificates
pursuant
thereto. The Seller will not act, nor has it authorized nor will it
authorize any person to act, in any manner set forth in the
foregoing
sentence with respect to the Seller's Residual Interest
Certificates, any
interest in the Seller's Residual Interest Certificates or any
other
similar security.
(xiv) The Seller has been furnished with all information
regarding (A) the Purchaser, (B) the Seller's Residual Interest
Certificates and distributions thereon, (C) the nature, performance
and
servicing of the Other Loans, (D) the Pooling and Servicing
Agreement and
the Trust Fund, and (E) all related matters, that it has requested.
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(xv) The Seller is either (a) a "qualified institutional buyer"
within the meaning of Rule 144A under the Securities Act or (b) an
"accredited investor" as defined in any of paragraphs (1), (2), (3)
and (7)
of Rule 501(a) under the Securities Act or an entity in which all
its
equity owners are "accredited investors" as defined in such
paragraphs and
has such knowledge and experience in financial and business matters
as to
be capable of evaluating the merits and risks of an investment in
the
Seller's Residual Interest Certificates. The Seller has sought such
accounting, legal and tax advice as it has considered necessary to
make an
informed investment decision; and the Seller is able to bear the
economic
risks of such an investment and can afford a complete loss of such
investment.
(xvi) The Seller is not a Plan and is not directly or indirectly
acquiring the Seller's Residual Interest Certificates on behalf of,
as
named fiduciary of, as trustee of or with assets of a Plan.
(xvii) The Seller is a United States Tax Person and is not a
Disqualified Organization.
(b) The Seller hereby makes, for the benefit of the Purchaser, with
respect to each Mortgage Loan, as of the Closing Date or as of such
other date
expressly set forth therein, each of the representations and
warranties set
forth on Exhibit B hereto.
(c) The Seller intends to transfer the Seller's Residual Interest
Certificates to JPMorgan Chase Bank on or about the Closing Date;
and, in
connection therewith, the Seller will comply with all of the
requirements of
Section 5.02 of the Pooling and Servicing Agreement, as in effect
on the Closing
Date, and applicable law. The Seller hereby directs the Purchaser
to cause the
Seller's Residual Interest Certificates to be registered in the
name of JPMorgan
Chase Bank upon initial issuance.
SECTION 4. Representations and Warranties of the Purchaser.
In order to induce the Seller to enter into this Agreement, the
Purchaser hereby represents and warrants for the benefit of the
Seller and the
Additional Party as of the date hereof that:
(i) The Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware. The
Purchaser has the full corporate power and authority and legal
right to
acquire the Mortgage Loans from the Seller and to transfer the
Mortgage
Loans to the Trustee.
(ii) This Agreement has been duly and validly authorized,
executed and delivered by the Purchaser and, assuming due
authorization,
execution and delivery hereof by the Seller and the Additional
Party,
constitutes a legal, valid and binding obligation of the Purchaser,
enforceable against the Purchaser in accordance with its terms,
except as
such enforcement may be limited by (A) bankruptcy, insolvency,
reorganization, receivership, moratorium or other similar laws
affecting
the enforcement of creditors' rights in general, and (B) general
equity
principles (regardless of whether such enforcement is considered in
a
proceeding in equity or at law).
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(iii) The execution and delivery of this Agreement by the
Purchaser and the Purchaser's performance and compliance with the
terms of
this Agreement will not (A) violate the Purchaser's organizational
documents, (B) violate any law or regulation or any administrative
decree
or order to which the Purchaser is subject or (C) constitute a
default (or
an event which, with notice or lapse of time, or both, would
constitute a
default) under, or result in the breach of, any material contract,
agreement or other instrument to which the Purchaser is a party or
by which
the Purchaser is bound.
(iv) Except as may be required under federal or state securities
laws (and which will be obtained on a timely basis), no consent,
approval,
authorization or order of, registration or filing with, or notice
to, any
governmental authority or court, is required for the execution,
delivery
and performance by the Purchaser of or compliance by the Purchaser
with
this Agreement, or the consummation by the Purchaser of any
transaction
described in this Agreement.
(v) Under GAAP and for federal income tax purposes, the Purchaser
will report the transfer of the Mortgage Loans by the Seller to the
Purchaser, as provided herein, as a sale of the Mortgage Loans to
the
Purchaser in exchange for the consideration specified in Section 1
hereof.
SECTION 5. Notice of Breach; Cure; Repurchase.
(a) If the Seller receives written notice with respect to any
Mortgage
Loan (i) that any document constituting a part of clauses (i)
through (xiii) of
the definition of Mortgage File or a document, if any, specifically
set forth on
Exhibit D hereto has not been executed (if applicable) or is
missing (a
"Document Defect") or (ii) of a breach of any of the Seller's
representations
and warranties made pursuant to Section 3(b) hereof (each such
breach, a
"Breach") relating to any Mortgage Loan, and such Document Defect
or Breach, as
of the date specified in Section 5(b)(i) hereof, materially and
adversely
affects the value of the Mortgage Loan, then such Document Defect
shall
constitute a "Material Document Defect" or such Breach shall
constitute a
"Material Breach", as the case may be. Then, following receipt of a
Seller/Depositor Notification with respect to such Material
Document Defect or
Material Breach, as the case may be, the Seller shall (subject to
Sections 5(f),
(g) and (h) hereof), (A) not later than (1) 90 days after the
Seller and the
Purchaser have agreed upon the existence of such Material Document
Defect or
Material Breach or (2) 60 days after an arbitration panel makes a
binding
determination, in accordance with the provisions of Section 5(i)
hereof, that a
Material Document Defect or Material Breach exists or (B) in the
case of a
Material Document Defect or Material Breach that affects whether a
Mortgage Loan
was, as of the Closing Date, is or will continue to be a "qualified
mortgage"
within the meaning of the REMIC Provisions (a "Qualified
Mortgage"), not later
than 90 days following the discovery by any party of such Material
Document
Defect or Material Breach (each of such 90-day period referred to
in clause
(A)(1) above, or such 60-day period referred to in clause (A)(2)
above, or such
90-day period referred to in clause (B) above, as applicable, is
referred to as
the "Initial Resolution Period"): (i) cure such Material Document
Defect or
Material Breach, as the case may be, in all material respects
(which cure shall
include payment of any out-of-pocket expenses that are reasonably
incurred and
directly attributable to pursuing such a claim based on such
Material Document
Defect or Material Breach associated therewith), or (ii) if such
Material
Document Defect or Material Breach, as the case may be, cannot be
cured within
the Initial Resolution Period, repurchase the
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affected Mortgage Loan (or the related Mortgaged Property) from,
and in
accordance with the directions of, the Purchaser or its designee,
at a price
equal to the Purchase Price; provided that if (a) such Material
Breach or
Material Document Defect, as the case may be, is capable of being
cured but not
within the applicable Initial Resolution Period, (b) any such
Material Breach or
Material Document Defect, as the case may be, does not affect
whether the
Mortgage Loan was, as of the Closing Date, is or will continue to
be a Qualified
Mortgage, (c) the Seller has commenced and is diligently proceeding
with the
cure of such Material Breach or Material Document Defect, as the
case may be,
within the applicable Initial Resolution Period, and (d) the Seller
shall have
delivered to the Purchaser a certification executed on behalf of
the Seller by
an officer thereof confirming that such Material Breach or Material
Document
Defect, as the case may be, is not capable of being cured within
the applicable
Initial Resolution Period, setting forth what actions the Seller is
pursuing in
connection with the cure thereof and stating that the Seller
anticipates that
such Material Breach or Material Document Defect, as the case may
be, will be
cured within an additional period not to exceed, 90 days beyond the
end of the
Initial Resolution Period (in the event the Seller and the
Purchaser have agreed
upon the existence of such Material Document Defect or Material
Breach as
described under Section 5(a)(ii)(A)(1)), or 45 days beyond the end
of the
Initial Resolution Period (in the event an arbitration panel has
made a binding
determination, as described under Section 5(a)(ii)(A)(2) hereof,
that a Material
Document Defect or Material Breach exists), then the Seller shall
have such
additional 90-day period or 45-day period, as the case may be (each
such period,
the "Resolution Extension Period"), to complete such cure or,
failing such, to
repurchase the affected Mortgage Loan (or the related Mortgaged
Property); and
provided, further, that, if any such Material Document Defect is
still not cured
after the Initial Resolution Period and any such applicable
Resolution Extension
Period solely due to the failure of the Seller to have received a
recorded
document, then the Seller shall be entitled to continue to defer
its cure and
repurchase obligations in respect of such Material Document Defect
so long as
the Seller certifies to the Purchaser every six months thereafter
that the
Material Document Defect is still in effect solely because of its
failure to
have received the recorded document and that the Seller is
diligently pursuing
the cure of such defect (specifying the actions being taken). The
parties
acknowledge that neither delivery of a certification or schedule of
exceptions
to the Seller pursuant to Section 2.02(b) of the Pooling and
Servicing Agreement
or otherwise nor possession of such certification or schedule by
the Seller
shall, in and of itself, constitute delivery of notice of any
Material Document
Defect or Material Breach or knowledge or awareness by the Seller
of any
Material Document Defect or Material Breach.
If, during the period of deferral by the Seller of its cure and
repurchase obligations as contemplated by the last proviso of the
penultimate
sentence of the preceding paragraph, the Mortgage Loan that is the
subject of
the Material Document Defect either becomes a Specially Serviced
Mortgage Loan
or becomes the subject of a proposed or actual assumption of the
obligations of
the related Mortgagor under such Mortgage Loan, then, following
receipt by the
Seller of a Seller/Depositor Notification providing notice of such
event, the
Seller shall cure the subject Material Document Defect within the
time period
specified in such Seller/Depositor Notification. If, upon the
expiration of such
period, the Seller has failed to cure the subject Material Document
Defect, the
Master Servicer or the Special Servicer, as applicable, shall be
entitled (but
not obligated) to perform the obligations of the Seller with
respect to curing
the subject Material Document Defect and, in the event of such an
election, the
Seller shall pay all reasonable actual out-of-pocket costs and
expenses in
connection with the applicable servicer's effecting such cure.
(b) (i) Provided that any Seller/Depositor Notification with
respect
to a Material Document Defect or Material Breach is received by the
Seller (in
accordance with the provisions of the
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Pooling and Servicing Agreement) within 24 months of the Closing
Date, the
material and adverse effect of the related Document Defect or
Breach shall be
determined as of the date hereof. After the expiration of 24 months
following
the Closing Date, the material and adverse effect of any Document
Defect or
Breach that was not the subject of another Seller/Depositor
Notification,
received by the Seller (in accordance with the provisions of the
Pooling and
Servicing Agreement) within 24 months of the Closing Date, shall be
determined
as of the date of such Seller/Depositor Notification.
(ii) In the event the Seller is obligated to repurchase any
Mortgage Loan pursuant to this Section 5, such obligation shall
extend to
any successor REO Mortgage Loan with respect thereto as to which
(A) the
subject Material Breach existed as to the subject predecessor
Mortgage Loan
prior to the date the related Mortgaged Property became an REO
Property or
within 90 days thereafter, and (B) as to which the Seller had
received, no
later than 90 days following the date on which the related
Mortgaged
Property became an REO Property, a Seller/Depositor Notification
from the
Trustee regarding the occurrence of the applicable Material Breach
and
directing the Seller to repurchase the subject Mortgage Loan.
(c) If one or more (but not all) of the Mortgage Loans constituting
a
Cross-Collateralized Group are to be repurchased by the Seller as
contemplated
by Section 5(a) hereof, then, prior to the subject repurchase, the
Seller or its
designee shall use reasonable efforts, subject to the terms of the
related
Mortgage Loans, to prepare and, to the extent necessary and
appropriate, have
executed by the related Mortgagor and record, such documentation as
may be
necessary to terminate the cross-collateralization between the
Mortgage Loans in
such Cross-Collateralized Group that are to be repurchased, on the
one hand, and
the remaining Mortgage Loans therein, on the other hand, such that
those two
groups of Mortgage Loans are each secured only by the Mortgaged
Properties
identified in the Mortgage Loan Schedule as directly corresponding
thereto;
provided that, if such Cross-Collateralized Group is still subject
to the
Pooling and Servicing Agreement, then no such termination shall be
effected
unless and until (i) the Purchaser or its designee has received
from the Seller
(A) an Opinion of Counsel to the effect that such termination will
not cause an
Adverse REMIC Event to occur with respect to any REMIC Pool or an
Adverse
Grantor Trust Event with respect to the Grantor Trust and (B)
written
confirmation from each Rating Agency that such termination will not
cause an
Adverse Rating Event to occur with respect to any Class of
Certificates and (ii)
the Controlling Class Representative (if one is acting) has
consented (which
consent shall not be unreasonably withheld and shall be deemed to
have been
given if no written objection is received by the Seller within 10
Business Days
of the Controlling Class Representative's receipt of a written
request for such
consent); and provided, further, that the Seller may, at its
option, purchase
the entire Cross-Collateralized Group in lieu of terminating the
cross-collateralization. All costs and expenses incurred by the
Purchaser or its
designee pursuant to this paragraph shall be included in the
calculation of
Purchase Price for the Mortgage Loan(s) to be repurchased. If the
cross-collateralization of any Cross-Collateralized Group is not or
cannot be
terminated as contemplated by this paragraph, then, for purposes of
(i)
determining whether any Breach or Document Defect, as the case may
be,
materially and adversely affects the value of a Mortgage Loan, and
(ii) the
application of remedies, such Cross-Collateralized Group shall be
treated as a
single Mortgage Loan.
(d) It shall be a condition to any repurchase of a Mortgage Loan by
the Seller pursuant to this Section 5 that the Purchaser shall have
executed and
delivered such instruments of transfer or assignment then presented
to it by the
Seller (or as otherwise required to be prepared, executed and
delivered under
the Pooling and Servicing Agreement), in each case without
recourse, as
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shall be necessary to vest in the Seller the legal and beneficial
ownership of
such Mortgage Loan (including any property acquired in respect
thereof or
proceeds of any insurance policy with respect thereto), to the
extent that such
ownership interest was transferred to the Purchaser hereunder. If
any Mortgage
Loan is to be repurchased as contemplated by this Section 5, the
Seller shall
amend the Mortgage Loan Schedule to reflect the removal of such
Mortgage Loan
and shall forward such amended schedule to the Purchaser.
(e) Any repurchase of a Mortgage Loan pursuant to this Section 5
shall
be on a whole loan, servicing released basis. The Seller and the
Additional
Party shall have no obligation to monitor the Mortgage Loans
regarding the
existence of a Breach or Document Defect. It is understood and
agreed that the
obligations of the Seller set forth in this Section 5 constitute
the sole
remedies available to the Purchaser with respect to any Breach or
Document
Defect.
(f) Notwithstanding the foregoing, if there exists a Breach of that
portion of the representation or warranty on the part of the Seller
set forth
in, or made pursuant to, paragraph (xlviii) of Exhibit B to this
Agreement,
specifically relating to whether or not the Mortgage Loan documents
or any
particular Mortgage Loan document for any Mortgage Loan requires
the related
Mortgagor to bear the reasonable costs and expenses associated with
the subject
matter of such representation or warranty, as set forth in such
representation
or warranty, then the Purchaser or its designee will direct the
Seller in
writing to wire transfer to the Custodial Account, within 90 days
of receipt of
such direction, the amount of any such reasonable costs and
expenses incurred by
the Trust that (i) are due from the Mortgagor, (ii) otherwise would
have been
required to be paid by the Mortgagor if such representation or
warranty with
respect to such costs and expenses had in fact been true, as set
forth in the
related representation or warranty, (iii) have not been paid by the
Mortgagor,
(iv) are the basis of such Breach and (v) constitute "Covered
Costs". Upon
payment of such costs, the Seller shall be deemed to have cured
such Breach in
all respects. Provided that such payment is made, this paragraph
describes the
sole remedy available to the Purchaser regarding any such Breach,
regardless of
whether it constitutes a Material Breach, and the Seller shall not
be obligated
to otherwise cure such Breach or repurchase the affected Mortgage
Loan under any
circumstances. Amounts deposited in the Pool Custodial Account
pursuant to this
paragraph shall constitute "Liquidation Proceeds" for all purposes
of the
Pooling and Servicing Agreement (other than Section 3.11(c) of the
Pooling and
Servicing Agreement).
(g) Subject to Section 5(f) hereof and the last three sentences of
this paragraph, if the Seller determines that a Material Breach
(other than a
Material Breach of a representation or warranty on the part of the
Seller set
forth in and made pursuant to paragraph (xvii) of Exhibit B to this
Agreement)
or a Material Document Defect with respect to a Mortgage Loan is
not capable of
being cured in accordance with Section 5(a) hereof, then in lieu of
repurchasing
such Mortgage Loan the Seller may, at its sole option, pay a cash
amount equal
to the loss of value (each such payment, a "Loss of Value Payment")
with respect
to such Mortgage Loan, which loss of value is directly attributed
to such
Material Breach or Material Document Defect, as the case may be.
The amount of
each such Loss of Value Payment shall be determined either (i) by
mutual
agreement of the Special Servicer on behalf of the Trust with
respect to the
subject Material Breach or Material Document Defect, as the case
may be, and the
Seller, or (ii) by an arbitration panel pursuant to a binding
arbitration
proceeding in accordance with Section 5(i) hereof; provided that,
in the event
there is an arbitration proceeding for determining the existence of
a Material
Breach or a Material Document Defect with respect to any Mortgage
Loan, such
arbitration proceeding must also include a determination of the
amount of the
loss of value to such Mortgage Loan directly attributed to such
Material Breach
or such Material Document Defect, as the
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case may be. Provided that such payment is made, this paragraph
describes the
sole remedy available to the Purchaser regarding any such Material
Breach or
Material Document Defect and the Seller shall not be obligated to
otherwise cure
such Material Breach or Material Document Defect or repurchase the
affected
Mortgage Loan based on such Material Breach or Material Document
Defect under
any circumstances. Notwithstanding the foregoing provisions of this
Section
5(g), if 95% or more of the loss of value to a Mortgage Loan was
caused by a
Material Breach or Material Document Defect, which Material Breach
or Material
Document Defect is not capable of being cured, this Section 5(g)
shall not apply
and the Seller shall be obligated to repurchase the affected
Mortgage Loan at
the applicable Purchase Price in accordance with Section 5(a)
hereof.
Furthermore, the Seller shall not have the option of delivering
Loss of Value
Payments in connection with any Material Breach relating to a
Mortgage Loan's
failure to be a Qualified Mortgage. In the event there is a Loss of
Value
Payment made by the Seller in accordance with this Section 5(g),
the amount of
such Loss of Value Payment shall be deposited into the Loss of
Value Reserve
Fund to be applied in accordance with Section 3.05(e) of the
Pooling and
Servicing Agreement.
In the event the amount of any Loss of Value Payment is determined
by
an arbitration panel pursuant to a binding arbitration proceeding
in accordance
with Section 5(i) hereof, then such Loss of Value Payment shall
also include the
payment of any costs and expenses (including costs incurred in
establishing the
amount of any related loss of value to the subject Mortgage Loan,
including
reasonable legal fees) that are reasonably incurred in good faith
by the Master
Servicer, the Special Servicer and/or the Trustee (on behalf of the
Trust) in
enforcing the rights of the Trust against the Seller with respect
to the subject
Material Breach or Material Document Defect, as the case may be;
provided that,
that in the event the Seller tenders a loss of value payment in a
specified
amount in connection with a Material Breach or Material Document
Defect, as the
case may be, prior to the institution of arbitration proceedings
and that offer
is rejected and an amount equal to or less than the loss of value
payment
originally tendered by the Seller is ultimately determined by an
arbitration
panel pursuant to a binding arbitration proceeding in accordance
with Section
5(i) hereof to be the actual amount of the Loss of Value Payment
attributed to
such Material Breach or Material Document Defect, as the case may
be, then that
Loss of Value Payment shall not include the payment of any costs or
expenses
incurred in enforcing the rights of the Trust against the Seller
with respect to
the subject Material Breach or Material Document Defect, as the
case may be;
provided, further, that if the Special Servicer request a loss of
value payment
from the Seller of a specified amount in connection with a Material
Breach or
Material Document Defect, as the case may be, and the Seller
refuses to pay that
amount and an amount equal to or greater than the loss of value
payment
originally requested by the Special Servicer is ultimately
determined by an
arbitration panel pursuant to a binding arbitration proceeding in
accordance
with Section 5(i) hereof to be the actual Loss of Value Payment
attributable to
such Material Document Defect or Material Breach, then that Loss of
Value
Payment shall also include the payment of any costs or expenses
reasonably
incurred in good faith in enforcing the rights of the Trust against
the Seller
with respect to the subject Material Breach or Material Document
Defect, as the
case may be; and provided, further, that, if the Seller tenders a
loss of value
payment in connection with a Material Breach or Material Document
Defect, as the
case may be, in a specified amount, and the Special Servicer
rejects such tender
and requests a greater loss of value payment amount, and an amount
in between
the respective amounts tendered and requested is ultimately
determined by an
arbitration panel pursuant to a binding arbitration proceeding in
accordance
with Section 5(i) hereof to be the actual Loss of Value Payment
attributable to
such Material Breach or Material Document Defect, as the case may
be, then that
Loss of Value Payment shall also include the payment of an amount
equal to the
product of (i) all costs and expenses reasonably incurred in
connection with
that arbitration proceeding, multiplied by (ii)
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a fraction, the numerator of which is the excess of the amount
determined by
that arbitration proceeding over the amount tendered by the Seller,
and the
denominator of which is the excess of the amount requested by the
Special
Servicer over the amount tendered by the Seller. Notwithstanding
the foregoing,
in the event any Loss of Value Payment is determined by the parties
hereto by
mutual agreement (and not by an arbitration proceeding), that Loss
of Value
Payment shall not include any costs and expenses incurred by the
Master
Servicer, the Special Servicer or the Trustee unless such costs and
expenses
were specifically included in such mutual agreement.
(h) Notwithstanding the foregoing, if there exists a Material
Breach
of the representation or warranty on the part of the Seller set
forth in and
made pursuant to paragraph (xvii) of Exhibit B to this Agreement,
and the
subject Mortgage Loan becomes a Qualified Mortgage prior to the
expiration of
the Initial Resolution Period applicable to a Material Document
Defect or
Material Breach that affects whether a Mortgage Loan is a Qualified
Mortgage,
and without otherwise causing an Adverse REMIC Event or an Adverse
Grantor Trust
Event, then such breach will be cured and the Seller will not be
obligated to
repurchase or otherwise remedy such Breach.
(i) The parties hereto agree that any controversy or claim (a
"Dispute") arising under Section 5(a), Section 5(b) and/or Section
5(g) of this
Agreement shall be resolved in accordance with the following
Mediation/Arbitration procedures in this Section 5(i).
If the Seller receives a Seller/Depositor Notification pursuant to
Section 5(a) of this Agreement regarding the alleged existence of a
Material
Document Defect or Material Breach and requesting the Seller to
cure or
repurchase the affected Mortgage Loan in connection therewith (a
"Notice"), and
the Seller does not agree upon the existence of such Material
Document Defect or
Material Breach within 90 days of receiving such Notice, then,
unless otherwise
agreed to by the parties involved in the Dispute, that Dispute
shall be
submitted to non-binding mediation in accordance with the
provisions of this
paragraph; provided, that if the Seller is proceeding to cure the
subject
Material Document Defect or Material Breach, then that Dispute
shall not be
submitted to mediation until the expiration of the related
Resolution Extension
Period and the failure of the Seller to complete such cure (unless
otherwise
agreed to by the parties involved in the Dispute). Following the
90-day period
referred to in the preceding sentence and subject to the preceding
proviso, any
party to this Agreement that is involved in the Dispute may send a
written
letter (a "Mediation Letter") to another party to this Agreement
that they wish
the mediation process to begin between the sender and the recipient
of such
Mediation Letter. Following receipt of a Mediation Letter, a
mediator(s) shall
be selected by agreement of the parties to the mediation. If such
parties cannot
agree on a mediator, [a mediator will be designated by the
JAMS/Endispute at the
request of any party (provided that any mediator so designated must
be
acceptable to both the Seller and the Purchaser or its assignee)]
[then the
mediation shall be conducted by three mediators, one of which shall
be selected
by the Seller and one of which shall be selected by the Purchaser
or its
assignee. Each of the parties to the mediation shall submit the
name of the
person it has selected to serve as a mediator to the opposing party
within 10
days of the date of the Mediation Letter. If either party fails to
submit the
name of its selected mediator within 10 days of the date of the
Mediation
Letter, the other party shall have the right to select the second
mediator in
addition to its own mediator (provided that such party has
submitted the name of
its selected mediator within 10 days of the date of the Mediation
Letter). The
two mediators selected by the party(ies) shall appoint a third
mediator within
20 days of the date of the Mediation Letter or such longer time
period as agreed
to by the parties to the mediation. Any mediator(s) so designated
must be
acceptable to both the Seller and
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the Purchaser or its assignee.] Any mediators appointed or selected
pursuant to
the provisions of this paragraph must be experienced professionals
in the CMBS
industry.
Any mediation related to a particular Dispute and commenced in
accordance with the preceding paragraph must be completed within 90
days of the
date of the Mediation Letter (or a longer period, if the parties to
the
mediation agreed to extend the mediation). Any mediation referred
to in this
Section 5(i) shall be conducted in the manner specified by the
mediator(s) and
agreed upon by the Seller and the Purchaser or its assignee and any
such
mediation shall be conducted in New York City to the exclusion of
all other
locations (unless otherwise agreed to by the parties to the
mediation). During
the mediation process, the parties to the mediation shall discuss
their
differences voluntarily and in good faith and attempt, with the
assistance of
the mediator(s) as a facilitator of the negotiations, to reach an
amicable
resolution of the Dispute. The mediation will be treated as a
settlement
discussion and therefore will be confidential. No mediator selected
in
accordance with this Section 5(i) may testify for either party in
any later
proceeding relating to the Dispute. No recording or transcript
shall be made of
the mediation proceedings. The fees and expenses of all mediator(s)
shall be
shared equally by the parties to the mediation; provided, that the
party to the
mediation that is acting on behalf of the Trust in accordance with
the
provisions of this Section 5(i) shall be entitled to reimbursement
or
indemnification by the Trust Fund for such fees and expenses if and
to the
extent permitted under the Pooling and Servicing Agreement.
Notwithstanding anything to the contrary herein, no party shall be
required to agree to a Dispute resolution pursuant to mediation and
no decision
or resolution of a mediator or mediators shall be binding on any
party unless
such decision or resolution is expressly agreed to by such party.
In the event
the parties involved in the Dispute have not agreed to a Dispute
resolution
pursuant to mediation at the termination of the mediation, then
that Dispute
will be settled by arbitration in accordance with the succeeding
paragraphs of
this Section 5(i).
If a Dispute has not been resolved within 90 days of the date of
the
Mediation Letter (or such shorter or longer period as is expressly
agreed to by
the parties to the mediation), the mediation shall terminate and
the Dispute
will be settled by arbitration. Following the date of termination
of mediation,
which shall be the date occurring 90 days after the date of the
Mediation Letter
unless otherwise expressly agreed to by the parties to the
mediation,
arbitration may be commenced by any party to this Agreement
involved in the
Dispute sending a written notice to another party to this Agreement
involved in
the Dispute that they wish the arbitration process to begin with
respect to the
Dispute between the sender and the recipient of such written
notice. The date
any such party receives written notice in accordance with this
Section 5(i) from
another party that such party wishes to commence arbitration shall
be referred
to as the "Arbitration Commencement Date". Any arbitration
hereunder shall be
conducted in accordance with the provisions of this Agreement and
the American
Arbitration Association Rules for Large Complex Commercial Disputes
("AAA
Rules"), but shall not be conducted by the American Arbitration
Association
("AAA"). Discovery will be permitted in connection with the
arbitration in
accordance with the AAA Rules. In the event of a conflict, the
provisions of
this Agreement will control. Such arbitration shall be conducted
before a panel
of three arbitrators, regardless of the size of the Dispute. The
arbitration
panel shall consist of one person selected by the Seller and one
person selected
by the Purchaser or its assignee. Each such party shall submit the
name of the
person it has selected to serve as an arbitrator to the other party
within 30
days of the Arbitration Commencement Date (or such longer period as
is expressly
agreed to by the parties to the arbitration). If either such party
fails to
submit the name of its selected arbitrator within 30 days of
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the Arbitration Commencement Date, then the other such party shall
have the
right to select the second arbitrator in addition to its own
arbitrator
(provided that such party has submitted the name of its selected
arbitrator
within 30 days of the Arbitration Commencement Date). The two
arbitrators
designated in accordance with the two preceding sentences shall
appoint a third
arbitrator within 45 days of the Arbitration Commencement Date (or
such longer
period as is expressly agreed to by the parties to the
arbitration). All
arbitrators appointed or selected pursuant to the provisions of
this paragraph
must be experienced professionals in the CMBS industry. The third
arbitrator
shall be an Independent person who has not previously been employed
by either
party and does not have a direct or indirect interest in either
party or the
subject matter of the arbitration. The two (2) arbitrators
appointed by the
parties to the arbitration are not required to be neutral and it
shall not be
grounds for removal of either of such arbitrators or for vacating
an arbitration
award that either of such arbitrators has past or present
relationships with the
party that appointed such arbitrator. No potential arbitrator may
serve on the
panel unless he or she has agreed in writing to abide and be bound
by the terms
and provisions of this Agreement and the AAA Rules and to keep
confidential the
terms of any arbitration proceeding related to this Agreement and
the terms of
any discussion, negotiation, decision, agreement or resolution in
connection
therewith.
Any issue concerning the extent to which any Dispute is subject to
arbitration, or concerning the applicability, interpretation, or
enforceability
of these procedures, including any contention that all or part of
these
procedures are invalid or unenforceable, shall be resolved by the
arbitrators.
In no event, notwithstanding that any provision of this Agreement
is held to be
invalid or unenforceable, shall the arbitrators have the power to
make an award
or impose a remedy that could not be made or imposed by a court
deciding the
matter in the same jurisdiction. In no event shall the arbitrators
have the
power to make an award or impose a remedy that is not contemplated
by, or
conflicts with the terms and provisions of, this Agreement or the
Pooling and
Servicing Agreement (other than any term or provision of this
Agreement or the
Pooling and Servicing Agreement that is held to be invalid or
unenforceable).
Without limiting the foregoing, the arbitrators shall have no
authority to award
treble, consequential or punitive damages of any type under any
circumstances,
whether or not such damages may be available under the AAA Rules or
any other
act or law. Subject to the provisions of this Agreement, the result
of the
arbitration will be binding on the parties involved in the Dispute,
and judgment
on the arbitrators' award may be entered, subject to the provisions
of Section
16 of this Agreement, in any court of competent jurisdiction.
All mediations and arbitrations shall be conducted in New York City
to
the exclusion of all other locations (unless otherwise expressly
agreed to by
the parties to the subject mediation or arbitration, as
applicable). The party
to an arbitration that is acting on behalf of the Trust in
accordance with the
provisions of this Section 5(i) shall be entitled to reimbursement
or
indemnification by the Trust Fund for the fees and expenses
incurred in
connection therewith if and to the extent permitted under the
Pooling and
Servicing Agreement.
The parties to this Agreement hereby agree to waive any right to
trial
by jury fully to the extent that any such right shall now or
hereafter exist
with regard to the rights and remedies contained in this Section 5;
provided,
that if (i) any party to an arbitration governed by this Section
5(i) fails to
abide by the rules or deadlines for that arbitration (as such
deadlines may be
extended by express agreement of the parties to that arbitration),
or (ii) the
applicable appointed arbitrators determine that the subject Dispute
cannot be
resolved through arbitration either because the AAA Rules are
inapplicable to
the Dispute and/or the Federal Arbitration Act is inapplicable to
the Dispute or
for any other reason, then the
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other party (in the case of clause (i)) or any party (in the case
of clause
(ii)) to this Agreement may in its sole option, file a complaint to
resolve the
Dispute through a legal proceeding and in accordance with the
provision
contained in Section 16 hereof.
If any of the provisions of this Section 5(i) are determined by a
court of law to be invalid or unenforceable, the remaining
provisions shall
remain in effect and be binding on the parties involved in the
Dispute to the
fullest extent permitted by law.
SECTION 6. Repurchase of Early Defeasance Trust Mortgage Loans.
If the Purchaser or the Master Servicer notifies the Seller or the
Additional Party that the Mortgagor under any of the Mortgage Loans
that are
Early Defeasance Trust Mortgage Loans (i) intends to defease such
Early
Defeasance Trust Mortgage Loan in whole on or before the second
anniversary of
the Closing Date and the amount tendered by such Mortgagor to
defease such Early
Defeasance Trust Mortgage Loan (in accordance with the related loan
documents)
is less than the Purchase Price that would be applicable in the
event of a
repurchase of such Mortgage Loan pursuant to or as otherwise
contemplated by
Section 5(a), or (ii) intends to partially defease such Early
Defeasance Trust
Mortgage Loan on or prior to the second anniversary of the Closing
Date, or
(iii) intends to defease such Early Defeasance Trust Mortgage Loan
in whole on
or before the second anniversary of the Closing Date and such
Mortgagor is to
tender Defeasance Collateral or such other collateral as is
permitted in
connection with a defeasance under the related loan documents that
does not
constitute a cash amount equal to or greater than the Purchase
Price set forth
in clause (i) above in this paragraph, then the Seller shall
promptly repurchase
such Mortgage Loan at the related Purchase Price in accordance with
the
directions of the Master Servicer on a whole loan, servicing
released basis.
Upon the repurchase of a Mortgage Loan that is an Early Defeasance
Trust Mortgage Loan pursuant to Section 5 hereof and/or this
Section 6, the
Purchaser shall effect a "qualified liquidation" of the related
Loan REMIC in
accordance with the REMIC Provisions. The Seller hereby agrees to
pay all
reasonable costs and expenses, including the costs of any opinions
of counsel
under the Pooling and Servicing Agreement, in connection with any
such
"qualified liquidation" of the related Loan REMIC in accordance
with the REMIC
Provisions.
SECTION 7. Obligations of the Additional Party.
The Additional Party hereby covenants and agrees with the Purchaser
that the Additional Party shall be liable to the Purchaser and any
designee
thereof to the same extent as the Seller as set forth herein, for
all the
obligations of the Seller under Sections 5 and 6 hereof. The
Additional Party
further agrees that the Purchaser shall not be bound or obligated
to initially
request the Seller to perform any of its obligations hereunder, but
may instead
initially request the Additional Party to perform such obligations.
Additionally, the Additional Party agrees that the Purchaser shall
not be bound
or obligated in anyway to exhaust recourse against the Seller
before being
entitled to demand the performance by the Additional Party of its
obligations
hereunder. Performance by the Additional Party of any of the
Seller's
obligations hereunder shall be deemed to be performance thereof by
the Seller.
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SECTION 8. Closing.
The closing of the sale of the Mortgage Loans (the "Closing") shall
be
held at the offices of Sidley Austin Brown & Wood LLP, 787
Seventh Avenue, New
York, New York 10019 at 10:00 a.m., New York City time, on the
Closing Date.
The Closing shall be subject to each of the following conditions:
(a) All of the representations and warranties of the Seller and the
Additional Party set forth in or made pursuant to Sections 3(a) and
3(b) of this
Agreement, and all of the representations and warranties of the
Purchaser set
forth in Section 4 of this Agreement, shall be true and correct in
all material
respects as of the Closing Date;
(b) Insofar as it affects the obligations of the Seller hereunder,
the
Pooling and Servicing Agreement shall be in a form mutually
acceptable to the
Purchaser and the Seller;
(c) All documents specified in Section 9 of this Agreement (the
"Closing Documents"), in such forms as are reasonably acceptable to
the
Purchaser, shall be duly executed and delivered by all signatories
as required
pursuant to the respective terms thereof;
(d) The Seller shall have delivered and released to the Trustee (or
a
Custodian on its behalf), the Master Servicer and the Special
Servicer all
documents and funds required to be delivered to the Trustee, the
Master Servicer
and the Special Servicer, respectively, pursuant to Section 2 of
this Agreement;
(e) All other terms and conditions of this Agreement required to be
complied with on or before the Closing Date shall have been
complied with in all
material respects, and the Seller and Additional Party shall have
the ability to
comply with all terms and conditions and perform all duties and
obligations
required to be complied with or performed after the Closing Date;
(f) The Seller shall have paid all fees and expenses payable by it
to
the Purchaser or otherwise pursuant to this Agreement; and
(g) Neither the Underwriting Agreement nor the Certificate Purchase
Agreement shall have been terminated in accordance with its terms.
All parties hereto agree to use their best efforts to perform their
respective obligations hereunder in a manner that will enable the
Purchaser to
purchase the Mortgage Loans on the Closing Date.
SECTION 9. Closing Documents.
The Closing Documents shall consist of the following:
(a) This Agreement duly executed by the Purchaser, the Seller and
the
Additional Party;
(b) The Pooling and Servicing Agreement duly executed by the
parties
thereto;
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(c) The Indemnification Agreement duly executed by the parties
thereto;
(d) Certificates of each of the Seller and the Additional Party,
executed by a duly authorized officer of the Seller or the
Additional Party, as
the case may be, and dated the Closing Date, and upon which the
initial
Purchaser, the Underwriters and the Placement Agents may rely, to
the effect
that: (i) the representations and warranties of the Seller or the
Additional
Party, as the case may be, in this Agreement and, in the case of
the Seller, in
the Indemnification Agreement are true and correct in all material
respects at
and as of the Closing Date with the same effect as if made on such
date; and
(ii) the Seller or the Additional Party, as the case may be, has,
in all
material respects, complied with all the agreements and satisfied
all the
conditions on its part that are required under this Agreement to be
performed or
satisfied at or prior to the Closing Date;
(e) An Officer's Certificate from an officer of each of the Seller
and
the Additional Party, in his or her individual capacity, dated the
Closing Date,
and upon which the initial Purchaser, the Underwriters and the
Placement Agents
may rely, to the effect that each individual who, as an officer or
representative of the Seller or the Additional Party, as the case
may be, signed
this Agreement, the Indemnification Agreement or any other document
or
certificate delivered on or before the Closing Date in connection
with the
transactions contemplated herein or, in the case of the Seller, in
the
Indemnification Agreement, was at the respective times of such
signing and
delivery, and is as of the Closing Date, duly elected or appointed,
qualified
and acting as such officer or representative, and the signatures of
such persons
appearing on such documents and certificates are their genuine
signatures;
(f) As certified by an officer of each of the Seller and the
Additional Party, true and correct copies of (i) the resolutions of
the board of
directors authorizing the Seller's entering into the transactions
contemplated
by this Agreement and, in the case of the Seller, the
Indemnification Agreement,
(ii) the organizational documents of each of the Seller and the
Additional
Party, and (iii) a certificate of good standing of each of the
Seller and the
Additional Party, issued by the Secretary of State of the State of
Delaware not
earlier than 10 days prior to the Closing Date;
(g) A Certificate of the Co-Indemnitor, executed by a duly
authorized
officer of the Co-Indemnitor and dated the Closing Date, and upon
which the
initial Purchaser, the Underwriters and the Placement Agents may
rely, to the
effect that the representations and warranties of the Co-Indemnitor
in the
Indemnification Agreement are true and correct in all material
respects at and
as of the Closing Date with the same effect as if made on such
date;
(h) An Officer's Certificate from an officer of the Co-Indemnitor,
in
his or her individual capacity, dated the Closing Date, and upon
which the
initial Purchaser, the Underwriters and the Placement Agents may
rely, to the
effect that each individual who, as an officer or representative of
the
Co-Indemnitor, signed the Indemnification Agreement or any other
document or
certificate delivered on or before the Closing Date in connection
with the
transactions contemplated 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;
(i) As certified by an officer of the Co-Indemnitor, true and
correct
copies of (i) the resolutions of the board of directors authorizing
the
Co-Indemnitor's entering into the transactions contemplated by the
Indemnification Agreement, (ii) the organizational documents of the
Co-
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Indemnitor, and (iii) a certificate of good standing of the
Co-Indemnitor
issued by the Secretary of State of the State of Delaware not
earlier than 10
days prior to the Closing Date;
(j) A favorable opinion of Cadwalader, Wickersham & Taft
("CWT"),
special counsel to the Seller, the Additional Party and the
Co-Indemnitor,
substantially in the form attached hereto as Exhibit C-1, dated the
Closing Date
and addressed to the initial Purchaser, the Underwriters, the
Placement Agents,
the Rating Agencies and, upon request, the other parties to the
Pooling and
Servicing Agreement, together with such other opinions of CWT as
may be required
by the Rating Agencies in connection with the transactions
contemplated hereby;
(k) An Officer's Certificate from an officer of each of the Seller
and
the Co-Indemnitor, in his or her individual capacity, in each case
delivered in
connection with the opinion of CWT to be delivered pursuant to
Section 9(j)
hereof, in form and substance satisfactory to the addressees of
such opinion and
upon which such addressees may rely;
(l) A favorable opinion of in-house counsel to the Additional
Party,
substantially in the form attached hereto as Exhibit C-2, dated the
Closing Date
and addressed to the initial Purchaser, the Underwriters, the
Placement Agents,
the Rating Agencies and, upon request, the other parties to the
Pooling and
Servicing Agreement;
(m) In connection with the initial issuance of the Seller's
Residual
Interest Certificates, a Transfer Affidavit and Agreement in the
form
contemplated by the Pooling and Servicing Agreement from Seller and
from the
transferee of the Seller;
(n) In the event any of the Certificates are mortgage related
securities within the meaning of the Secondary Mortgage Market
Enhancement Act
of 1984, as amended, a Certificate of the Seller regarding
origination of the
Mortgage Loans by specified originators as set forth in Section
3(a)(41) of the
Securities Exchange Act of 1934, as amended; and
(o) Such further certificates, opinions and documents as the
Purchaser
may reasonably request.
SECTION 10. Costs.
An amount equal to 42.87812% of all reasonable out-of-pocket costs
and
expenses incurred by the Seller, the initial Purchaser, the
Underwriters, the
Placement Agents and the seller of the Other Loans to the Purchaser
in
connection with the securitization of the Securitized Loans and the
other
transactions contemplated by this Agreement, the Underwriting
Agreement and the
Certificate Purchase Agreement shall be payable by the Seller.
SECTION 11. Grant of a Security Interest.
The parties hereto agree that it is their express intent that the
conveyance of the Mortgage Loans by the Seller to the Purchaser as
provided in
Section 2 hereof be, and be construed as, a sale of the Mortgage
Loans by the
Seller to the Purchaser and not as a pledge of the Mortgage Loans
by the Seller
to the Purchaser to secure a debt or other obligation of the
Seller. However,
if, notwithstanding the aforementioned intent of the parties, the
Mortgage Loans
are held to be property of the Seller, then it is the express
intent of the
parties that: (i) such conveyance shall be deemed to be a pledge of
the
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Mortgage Loans by the Seller to the Purchaser to secure a debt or
other
obligation of the Seller; (ii) this Agreement shall be deemed to be
a security
agreement within the meaning of Articles 8 and 9 of the applicable
Uniform
Commercial Code; (iii) the conveyance provided for in Section 2
hereof 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;
(iv) the
assignment to the Trustee of the interest of the Purchaser in and
to the
Mortgage Loans shall be deemed to be an assignment of any security
interest
created hereunder; (v) the possession by the Trustee or any of its
agents,
including, without limitation, the Custodian, of the Mortgage Notes
for the
Mortgage Loans, 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 applicable Uniform Commercial Code; and
(vi)
notifications to persons (other than the Trustee) holding such
property, and
acknowledgments, receipts or confirmations from such persons
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;
and, in
connection with the foregoing, the Seller authorizes the Purchaser
to file any
and all appropriate Uniform Commercial Code financing statements.
SECTION 12. Notices.
All notices, copies, requests, consents, demands and other
communications required hereunder shall be in writing and
telecopied or
delivered to the intended recipient at the "Address for Notices"
specified
beneath its name on the signature pages hereof or, as to any party,
at such
other address as shall be designated by such party in a notice
hereunder to the
other parties. Except as otherwise provided in this Agreement, all
such
communications shall be deemed to have been duly given when
transmitted by
telecopier or personally delivered or, in the case of a mailed
notice, upon
receipt, in each case given or addressed as aforesaid.
SECTION 13. 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, the Additional Party and/or the
Co-Indemnitor 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 initial Purchaser to the Trustee).
SECTION 14. Severability of Provisions.
Any part, provision, representation, warranty or covenant of this
Agreement that is prohibited or which is held to be void or
unenforceable shall
be ineffective to the extent of such prohibition or
unenforceability without
invalidating the remaining provisions hereof. Any part, provision,
representation, warranty or covenant of this Agreement that is
prohibited or
unenforceable or
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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 which prohibits or renders void or unenforceable any
provision hereof.
SECTION 15. 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 16. GOVERNING LAW; CONSENT TO JURISDICTION.
THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, APPLICABLE TO AGREEMENTS
NEGOTIATED, MADE AND
TO BE PERFORMED ENTIRELY IN SAID STATE. TO THE FULLEST EXTENT
PERMITTED UNDER
APPLICABLE LAW AND SUBJECT TO SECTION 5(i) HEREOF, THE SELLER, THE
ADDITIONAL
PARTY AND THE PURCHASER EACH HEREBY IRREVOCABLY (I) SUBMITS TO THE
JURISDICTION
OF ANY NEW YORK STATE AND FEDERAL COURTS SITTING IN NEW YORK CITY,
TO THE
EXCLUSION OF ALL OTHER COURTS, WITH RESPECT TO MATTERS ARISING OUT
OF OR
RELATING TO THIS AGREEMENT OTHER THAN MATTERS TO BE SETTLED BY
MEDIATION OR
ARBITRATION IN ACCORDANCE WITH SECTION 5(i) HEREOF; (II) AGREES
THAT ALL CLAIMS
WITH RESPECT TO SUCH ACTION OR PROCEEDING SHALL BE HEARD AND
DETERMINED IN SUCH
NEW YORK STATE OR FEDERAL COURTS, TO THE EXCLUSION OF ALL OTHER
COURTS; (III)
WAIVES, TO THE FULLEST POSSIBLE EXTENT, THE DEFENSE OF AN
INCONVENIENT FORUM IN
CONNECTION WITH SUCH ACTION OR PROCEEDING COMMENCED IN SUCH NEW
YORK STATE OR
FEDERAL COURTS; AND (IV) AGREES THAT A FINAL JUDGMENT IN ANY SUCH
ACTION OR
PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY
SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW;
PROVIDED, THAT IN
THE EVENT SECTION 5(i) HEREOF IS INAPPLICABLE AND BOTH A NEW YORK
STATE AND A
FEDERAL COURT SITTING IN NEW YORK IN WHICH AN ACTION OR PROCEEDING
HAS BEEN DULY
AND PROPERLY COMMENCED BY ANY PARTY TO THIS AGREEMENT REGARDING A
MATTER ARISING
OUT OF OR RELATING TO THIS AGREEMENT HAS REFUSED TO ACCEPT
JURISDICTION OVER OR
OTHERWISE HAS NOT ACCEPTED SUCH ACTION OR PROCEEDING WITHIN, IN THE
CASE OF EACH
SUCH COURT, 60 DAYS OF THE COMMENCEMENT OR FILING THEREOF, THEN THE
WORDS "TO
THE EXCLUSION OF ALL OTHER COURTS" IN CLAUSE (I) AND CLAUSE (II) OF
THIS
SENTENCE SHALL NOT APPLY WITH REGARD TO SUCH ACTION OR PROCEEDING
AND THE
REFERENCE TO "SHALL" IN CLAUSE (II) OF THIS SECTION SHALL BE DEEMED
TO BE "MAY".
SECTION 17. Further Assurances.
The Seller, the Additional Party and the Purchaser each agrees to
execute and deliver such instruments and take such further actions
as any other
such party may, from time to time, reasonably request in order to
effectuate the
purposes and to carry out the terms of this Agreement.
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SECTION 18. Successors and Assigns.
The rights and obligations of the Seller and the Additional Party
under this Agreement shall not be assigned by the Seller or the
Additional
Party, as the case may be, without the prior written consent of the
Purchaser,
except that any person into which the Seller or the Additional
Party may be
merged or consolidated, or any corporation resulting from any
merger, conversion
or consolidation to which the Seller or the Additional Party is a
party, or any
person succeeding to all or substantially all of the business of
the Seller or
the Additional Party, shall be the successor to the Seller or the
Additional
Party, as the case may be, hereunder. The Purchaser has the right
to assign its
interest under this Agreement, in whole or in part, as may be
required to effect
the purposes of the Pooling and Servicing Agreement, and the
assignee shall, to
the extent of such assignment, succeed to the rights and
obligations hereunder
of the Purchaser. Subject to the foregoing, this Agreement shall
bind and inure
to the benefit of and be enforceable by the Seller, the Additional
Party, the
Purchaser, and their respective successors and permitted assigns.
SECTION 19. 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 against whom such waiver or modification is
sought to be
enforced. The Seller's and the Additional Party'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, unless the
Seller or the
Additional Party, as applicable, has consented to such amendment or
modification
in writing.
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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
UBS REAL ESTATE INVESTMENTS INC.
By: /s/ Robert Pettinato
-----------------------------------
Name:
Robert Pettinato
Title: Director
By: /s/ Brad Cohen
-
