EXECUTION COPY
MORTGAGE LOAN PURCHASE AGREEMENT
This Mortgage Loan Purchase Agreement, dated as of March 1, 2001
(the "Agreement"), is entered into between First Union National Bank (the
"Seller") and First Union Commercial Mortgage Securities, Inc. (the
"Purchaser").
The Seller intends to sell and the Purchaser intends to purchase
certain multifamily and commercial mortgage loans (the "Mortgage Loans")
identified on the schedule (the "Mortgage Loan Schedule") annexed hereto as
Exhibit A. 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 (each, a "Class") 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 (the "Pooling and Servicing Agreement"), dated as of the
Cut-Off Date, among the Purchaser as depositor, First Union National Bank as
master servicer (in such capacity, the "Master Servicer") and as special
servicer (in such capacity, the "Special Servicer"), and ▇▇▇▇▇ Fargo Bank
Minnesota, N.A. as trustee (the "Trustee"). Capitalized terms used but not
defined herein have the respective meanings set forth in the Pooling and
Servicing Agreement.
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 $687,840,697 (the "First Union 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 First Union
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 $1,308,278,729 (subject to a variance of plus or minus 5%). The
purchase and sale of the Mortgage Loans shall take place on March 30, 2001 or
such other date as shall be mutually acceptable to the parties to this Agreement
(the "Closing Date"). The consideration (the "Purchase Price") for the Mortgage
Loans shall be equal to (i) 108.2% of the First Union Mortgage Loan Balance as
of the Cut-Off Date, plus (ii) $4,515,756, which amount represents the amount of
interest accrued on the First Union Mortgage Loan Balance at the related Net
Mortgage Rate for the period from and including the Cut-Off Date up to but not
including the Closing Date (net of the amount of accrued interest on the Class
A-2F Regular Interest applicable to the Seller for the period from and including
the Cut-Off Date up to but not including the Closing Date).
The Purchase Price 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 receipt of the
Purchase Price, 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, 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, on behalf
of the Purchaser, delivered to the Trustee, the documents and instruments
specified below with respect to each Mortgage Loan (each a "Mortgage File"). All
Mortgage Files so delivered will be held by the Trustee in escrow at all times
prior to the Closing Date. Each Mortgage File shall contain the following
documents:
(i) the original executed Mortgage Note 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 intervening endorsements thereon, endorsed on its face or by
allonge attached thereto (without recourse, representation or warranty,
express or implied) to the order of ▇▇▇▇▇ Fargo Bank Minnesota, N.A., as
trustee for the registered holders of First Union National Bank-Bank of
America, N.A. Commercial Mortgage Pass-Through Certificates, Series
2001-C1 or in blank;
(ii) an original or copy of the Mortgage, together with any and
all intervening assignments thereof, in each case with evidence of
recording indicated thereon or certified as to recording 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 any and
all intervening assignments thereof, in each case with evidence of
recording indicated thereon or certified by the applicable recording
office;
(iv) an original executed assignment, in recordable form, 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 Mortgage Loan otherwise included in the Mortgage File, in
favor of ▇▇▇▇▇ Fargo Bank Minnesota, N.A., as trustee for the registered
holders of First Union National Bank-Bank of America, N.A. Commercial
Mortgage Pass-Through Certificates, Series 2001-C1 or in blank;
(v) an original assignment of all unrecorded documents relating
to the Mortgage Loan, in favor of ▇▇▇▇▇ Fargo Bank Minnesota, N.A, as
trustee for the registered holders of First Union National Bank-Bank of
America, N.A. Commercial Mortgage Pass-Through Certificates, Series
2001-C1 or in blank;
(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 Mortgage Loan has been assumed;
(vii) the original or a copy of the policy or certificate of
lender's title insurance or, if such policy has not been issued or
located, an original or copy of an irrevocable, binding commitment (which
may be a marked version of the policy that has been executed by an
authorized representative of the title company) to issue such title
insurance policy;
(viii) any filed copies (with evidence of filing) or other
evidence of filing satisfactory to the Purchaser of any prior UCC
Financing Statements in favor of the originator of such 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 and
continuation statements in favor of the Seller on record with the
applicable public office for UCC Financing Statements, an original UCC-2
or UCC-3 assignment, as appropriate, in form suitable for filing, as
appropriate, in favor of ▇▇▇▇▇ Fargo Bank Minnesota, N.A., as trustee for
the registered holders of First Union National Bank Commercial Mortgage
Pass-Through Certificates, Series 2001-C1 or in blank;
(ix) an original or copy of any Ground Lease, guaranty or Ground
Lessor estoppel;
(x) any intercreditor agreement relating to permitted debt of the
Mortgagor; and
(xi) copies of any loan agreement, escrow agreement, security
agreement or letter of credit relating to a Mortgage Loan.
(d) The Seller shall take all actions necessary or desirable to
permit the Trustee to fulfill its obligations pursuant to Section 2.01(d) of the
Pooling and Servicing Agreement.
(e) All documents and records (except attorney-client privileged
communication and internal credit analysis of the Seller) relating to each
Mortgage Loan and in the Seller's possession (the "Additional Mortgage Loan
Documents") that are not required to be delivered to the Trustee shall promptly
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,
together with any related escrow amounts and reserve amounts.
(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.
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 national banking association organized and
validly existing and in good standing under the banking laws of the United
States and possesses all requisite authority, power, licenses, permits and
franchises to carry on its business as currently conducted by it and to
execute, deliver and comply with its obligations under the terms of this
Agreement;
(ii) This Agreement has been duly and validly authorized,
executed and delivered by the Seller and, assuming due authorization,
execution and delivery hereof by the Purchaser, constitutes a legal, valid
and binding obligation of the Seller, enforceable against the Seller in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium and other laws
affecting the enforcement of creditors' rights in general, as they may be
applied in the context of the insolvency of a national banking
association, and by general equity principles (regardless of whether such
enforcement is considered in a proceeding in equity or at law), and by
public policy considerations underlying the securities laws, to the extent
that such public policy considerations limit the enforceability of the
provisions of this Agreement which purport to provide indemnification from
liabilities under applicable securities laws;
(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 articles of association or
bylaws, (B) violate any law or regulation or any administrative decree or
order to which it is subject or (C) constitute a material default (or an
event which, with notice or lapse of time, or both, would constitute a
material 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;
(iv) The Seller is not in default with respect to any order or
decree of any court or any order, regulation or demand of any federal,
state, municipal or other governmental agency or body, which default might
have consequences that would, in the Seller's reasonable and good faith
judgment, materially and adversely affect the condition (financial or
other) or operations of the Seller or its properties or have consequences
that would materially and adversely affect its performance hereunder;
(v) The Seller is not a party to or bound by any agreement or
instrument or subject to any articles of association, bylaws or any other
corporate restriction or any judgment, order, writ, injunction, decree,
law or regulation that would, in the Seller's reasonable and good faith
judgment, materially and adversely affect the ability of the Seller to
perform its obligations under this Agreement or that requires the consent
of any third person to the execution of this Agreement or the performance
by the Seller of its obligations under this Agreement (except to the
extent such consent has been obtained);
(vi) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Seller of or compliance by the Seller with this
Agreement or the consummation of the transactions contemplated by this
Agreement except as have previously been obtained, and no bulk sale law
applies to such transactions;
(vii) No litigation is pending or, to the Seller's knowledge,
threatened against the Seller that would, in the Seller's good faith and
reasonable judgment, prohibit its entering into this Agreement or
materially and adversely affect the performance by the Seller of its
obligations under this Agreement; and
(viii) 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 Price. The consideration received by the Seller upon
the sale of the Mortgage Loans to the Purchaser will constitute reasonably
equivalent value at least equal to the fair market value of 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.
(b) The Seller hereby makes the representations and warranties
contained in Schedule I and Schedule II hereto for the benefit of the Purchaser
and the Trustee for the benefit of the Certificateholders as of the Closing
Date, with respect to (and solely with respect to) each Mortgage Loan.
(c) If the Seller receives written notice of a Document Defect or a
Breach pursuant to Section 2.03(a) of the Pooling and Servicing Agreement
relating to a Mortgage Loan, 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 of 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 shall materially and adversely affect the value of the
related Mortgage Loan or the interest 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
solely due 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 at the applicable Purchase Price not later than the end of such
90-day period or (ii) substitute a Qualified Substitute Mortgage Loan for such
affected Mortgage 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 Master
Servicer for deposit into the Certificate Account, any Substitution Shortfall
Amount in connection therewith; provided, however, that unless the breach would
cause the Mortgage Loan not to be a Qualified Mortgage, and 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, such Seller shall have an
additional 90 days to complete such cure (or, failing such cure, to repurchase
or substitute the related Mortgage 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 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; and provided; further, that no
Document Defect (other than with respect to a Mortgage Note, Mortgage, title
insurance policy, Ground Lease or any letter of credit) shall be considered to
materially and adversely affect the interests of the Certificateholders or the
value of the related Mortgage Loan unless the document with respect to which the
Document Defect exists is required in connection with an imminent enforcement of
the Mortgagee's rights or remedies under the related Mortgage Loan, defending
any claim asserted by any borrower or third party with respect to the Mortgage
Loan, establishing the validity or priority of any lien or any collateral
securing the Mortgage Loan or for any immediate servicing obligations. A
Document Defect or Breach as to a Mortgage Loan that is cross-collateralized and
cross-defaulted with one or more other Mortgage Loans (each a "Crossed Loan")
that materially and adversely affects the value of such other Mortgage Loans,
and is not cured as provided for above, shall require the repurchase or
substitution of all such cross-collateralized and cross-defaulted Mortgage Loans
which are materially and adversely affected by such Document Defect or Breach;
provided, that if any Crossed Loan is not so repurchased or substituted, then
such Crossed Loan and the repurchased or substituted Mortgage Loan shall be
released from its cross-collateralization and cross-default provision so long as
such Crossed Loan is held in the Trust Fund; provided, further, that the
borrower under such Mortgage Loans is an intended third party beneficiary of
this provision, which shall not be modified without such borrower's consent. 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, the Seller shall provide the Officer's Certificate to
the Trustee described above as to the reasons 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 last proviso in the immediately preceding
sentence), 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. Notwithstanding the
foregoing, the delivery of a commitment to issue a policy of lender's title
insurance as described in clause 12 of Schedule I hereof 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 90th day following the Closing Date. 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.
(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 Purchase Price or
Substitution Shortfall Amount(s), as applicable, in the Certificate Account, and
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 Master Servicer,
respectively, if applicable (i) the Trustee shall execute and deliver such
endorsements and assignments as are provided to it by the Master Servicer, 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, and (ii) the Trustee,
the Custodian, the 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.
(e) Without limiting the remedies of the Purchaser, the
Certificateholders or the Trustee on behalf of the Certificateholders pursuant
to this Agreement, it is acknowledged that the representations and warranties
are being made for risk allocation purposes. Subject to Section 7 of this
Agreement, this Section 3 provides the sole remedy available to 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
Section 3 of this Agreement.
SECTION 4. Representations and Warranties of the Purchaser. In order
to induce the Seller to enter into this Agreement, the Purchaser hereby
represents and warrants for the benefit of the Seller as of the date hereof
that:
(a) The Purchaser is a corporation duly organized, validly existing
and in good standing under the laws of the State of North Carolina. 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.
(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, reorganization,
receivorship 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) 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.
(d) None of the acquisition of the Mortgage Loans by the Purchaser,
the transfer of the Mortgage Loans to the Trustee, and the execution, delivery
or performance of this Agreement by the Purchaser, results or will result in the
creation or imposition of any lien on any of the Purchaser's assets or property,
or conflicts or will conflict with, results or will result in a breach of, or
constitutes or will constitute a default under (A) any term or provision of the
Purchaser's Articles of Incorporation or Bylaws, (B) any term or provision of
any material agreement, contract, instrument or indenture, to which the
Purchaser is a party or by which the Purchaser is bound, or (C) any law, rule,
regulation, order, judgment, writ, injunction or decree of any court or
governmental authority having jurisdiction over the Purchaser or its assets.
(e) 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 Price.
(f) 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
perform under the terms of this Agreement.
(g) 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 governmental agency, which default might have consequences that
would 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 Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇,
Charlotte, North Carolina 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 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 Master Servicer, respectively, all documents
represented to have been or required to be delivered to the Trustee and the
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 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; and
(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) A letter from the independent accounting firm of KPMG LLP in
form satisfactory to the Purchaser, relating to certain information regarding
the Mortgage Loans and Certificates as set forth in the Prospectus and
Prospectus Supplement, respectively.
Both parties 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 6. Closing Documents. The Closing Documents shall consist of
the following:
(a) This Agreement duly executed by the Purchaser and the Seller;
(b) A Certificate of the Seller, executed by a duly authorized
officer of the Seller and dated the Closing Date, and upon which the Purchaser
and the Underwriters 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 date hereof;
(c) An Officer's Certificate from an officer of the Seller, 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 or any other document or certificate delivered on or before the
Closing Date in connection with the transactions contemplated herein, was at the
respective times of such signing and delivery, and is as of the Closing Date,
duly elected or appointed, qualified and acting as such officer or
representative, and the signatures of such persons appearing on such documents
and certificates are their genuine signatures;
(d) An Officer's Certificate from an officer of the Seller, dated
the Closing Date, and upon which the Purchaser and the Underwriters may rely, to
the effect that (i) such officer has carefully examined the Prospectus and
nothing has come to his attention that would lead him to believe that the
Prospectus, as of the date of the Prospectus Supplement or as of the Closing
Date, included or includes any untrue statement of a material fact relating to
the Mortgage Loans or omitted or omits 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 (ii) such officer has examined the Memorandum and nothing has come to his
attention that would lead him to believe that the Memorandum, as of the date
thereof or as of the Closing Date, included or includes any untrue statement of
a material fact relating to the Mortgage Loans or omitted or omits 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;
(e) The resolutions of the requisite committee of the Seller's board
of directors authorizing the Seller's entering into the transactions
contemplated by this Agreement, the articles of association and by-laws of the
Seller, and a certificate of good standing of the Seller issued by the State of
Delaware not earlier than sixty (60) days prior to the Closing Date;
(f) A written opinion of counsel for the Seller, reasonably
satisfactory to the Purchaser, its counsel and the Rating Agencies, dated the
Closing Date and addressed to the Purchaser, the Trustee, the Underwriters and
each of the Rating Agencies, together with such other written opinions as may be
required by the Rating Agencies; and
(g) Such further certificates, opinions and documents as the
Purchaser may reasonably request.
SECTION 7. Indemnification.
(a) The Seller shall indemnify and hold harmless the Purchaser, the
Underwriters, their respective officers and directors, and each person, if any,
who controls the Purchaser or any Underwriter within the meaning of either
Section 15 of the Securities Act of 1933, as amended (the "1933 Act") or Section
20 of the Securities Exchange Act of 1934, as amended (the "1934 Act"), against
any and all losses, expenses (including the reasonable fees and expenses of
legal counsel), claims, damages or liabilities, joint or several, to which they
or any of them may become subject under the 1933 Act, the 1934 Act or other
federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) (i) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in (A) the Prospectus Supplement,
the Memorandum, the Diskette or, insofar as they are required to be filed as
part of the Registration Statement pursuant to the No-Action Letters, any
Computational Materials or ABS Term Sheets with respect to the Registered
Certificates, or in any revision or amendment of or supplement to any of the
foregoing or (B) any items similar to Computational Materials and ABS Term
Sheets forwarded to prospective investors in the Non-Registered Certificates
(the items in (A) and (B) being defined as the "Disclosure Material"), or (ii)
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; but only if and to the extent that (I) any such untrue
statement or alleged untrue statement or omission or alleged omission arises out
of or is based upon an untrue statement or omission with respect to the Mortgage
Loans, the related Mortgagors and/or the related Mortgaged Properties contained
in the Data File (it being herein acknowledged that the Data File was and will
be used to prepare the Prospectus Supplement including without limitation Annex
A thereto, the Memorandum, the Diskette, any Computational Materials and ABS
Term Sheets with respect to the Registered Certificates and any items similar to
Computational Materials and ABS Term Sheets forwarded to prospective investors
in the Non-Registered Certificates), (II) any such untrue statement or alleged
untrue statement or omission or alleged omission of a material fact is with
respect to, or arises out of or is based upon an untrue statement or omission of
a material fact with respect to, the information regarding the Mortgage Loans,
the related Mortgagors, the related Mortgaged Properties and/or the Seller set
forth (Y) in the Prospectus Supplement and the Memorandum under the headings:
"SUMMARY OF PROSPECTUS SUPPLEMENT-THE PARTIES-The Mortgage Loan Sellers" and
"-The Mortgage Loan Originators", "SUMMARY OF PROSPECTUS SUPPLEMENT-THE MORTGAGE
LOANS", "RISK FACTORS-Certain Risk Factors Associated With the Mortgage Loans"
and "DESCRIPTION OF THE MORTGAGE POOL" and (Z) on Annex A to the Prospectus
Supplement and, to the extent consistent therewith, on a Diskette, or (III) any
such untrue statement or alleged untrue statement or omission or alleged
omission arises out of or is based upon a breach of the representations and
warranties of the Seller set forth in or made pursuant to Section 3; provided
that the indemnification provided by this Section 7 shall not apply to the
extent that such untrue statement or omission of a material fact was made as a
result of an error in the manipulation of, or in any calculations based upon, or
in any aggregation of the information regarding the Mortgage Loans, the related
Mortgagors and/or the related Mortgaged Properties set forth in the Data File
and Annex A to the Prospectus Supplement, including without limitation the
aggregation of such information with comparable information relating to the
Other Mortgage Loans in the Trust Fund. The information described in clauses (I)
through (III) above is collectively referred to as the "Seller Information". The
Seller shall reimburse each such indemnified party, as incurred, for any legal
or other expenses reasonably incurred by them in connection with investigating
or defending any such loss, claim, damage, liability or action. This indemnity
agreement will be in addition to any liability which the Purchaser may otherwise
have.
(b) For purposes of this Agreement, "Registration Statement" shall
mean such registration statement No. 333-53266 filed by the Purchaser on Form
S-3, including without limitation exhibits thereto and information incorporated
therein by reference; "Base Prospectus" shall mean the prospectus dated March
12, 2001, as supplemented by the prospectus supplement dated March 22, 2001 (the
"Prospectus Supplement" and, together with the Base Prospectus, the
"Prospectus") relating to the Registered Certificates, including all annexes
thereto; "Memorandum" shall mean the private placement memorandum dated March
22, 2001 relating to the Non-Registered Certificates, including all exhibits
thereto; "Registered Certificates" shall mean the Class A-1, Class A-2, Class
A-2F, Class B, Class C, Class D, Class E and Class F Certificates;
"Non-Registered Certificates" shall mean the Certificates other than the
Registered Certificates; "Computational Materials" shall have the meaning
assigned thereto in the no-action letter dated May 20, 1994 issued by the
Division of Corporation Finance of the Securities and Exchange Commission (the
"Commission") to ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ Acceptance Corporation I, ▇▇▇▇▇▇, Peabody & Co.
Incorporated, and ▇▇▇▇▇▇ Structured Asset Corporation and the no-action letter
dated May 27, 1994 issued by the Division of Corporation Finance of the
Commission to the Public Securities Association (together, the "▇▇▇▇▇▇
Letters"); "ABS Term Sheets" shall have the meaning assigned thereto in the
no-action letter dated February 17, 1995 issued by the Division of Corporation
Finance of the Commission to the Public Securities Association (the "PSA Letter"
and, together with the ▇▇▇▇▇▇ letters, the "No-Action Letters"); "Diskette"
shall mean the diskette or compact disc attached to each of the Prospectus and
the Memorandum; and "Data File" shall mean the compilation of information and
data regarding the Mortgage Loans covered by the Agreed Upon Procedures Letter
dated March 12, 2001 and rendered by KPMG LLP (a "hard copy" of which Data File
was initialed on behalf of the Seller and the Purchaser).
(c) The Purchaser shall indemnify and hold harmless the Seller, its
directors, officers, employees and agents, and each person, if any, who controls
the Seller within the meaning of either the 1933 Act or the 1934 Act, against
any and all losses, expenses (including the reasonable fees and expenses of
legal counsel), claims, damages or liabilities, joint or several, to which they
or any of them may become subject under the 1933 Act, the 1934 Act, or other
federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Prospectus (in preliminary or
final form), or in an amendment thereof or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances under which they were made,
except to the extent that such untrue statement, alleged untrue statement,
omission or alleged omission is based upon (i) the Seller Information or (ii)
information set forth in the Prospectus Supplement under the headings "SUMMARY
OF PROSPECTUS SUPPLEMENT--THE PARTIES--SwaP Contract," "RISK FACTORS--The
Offered Certificates--The Swap Contract," anD "DESCRIPTION OF THE SWAP
CONTRACT," and the Purchaser shall reimburse each such indemnified party, as
incurred, for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action. This indemnity agreement will be in addition to any
liability which the Purchaser may otherwise have.
(d) Promptly after receipt by any person entitled to indemnification
under this Section 7 (an "indemnified party") of notice of the commencement of
any action, such indemnified party will, if a claim in respect thereof is to be
made against the Seller (the "indemnifying party") under this Section 7, notify
the indemnifying party in writing of the commencement thereof; but the omission
so to notify the indemnifying party will not relieve it from any liability that
it may have to any indemnified party under this Section 7 (except to the extent
that such omission has prejudiced the indemnifying party in any material
respect) or from any liability which it may have otherwise than under this
Section 7. In case any such action is brought against any indemnified party and
it notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein, and to the extent that it may
elect by written notice delivered to the indemnified party promptly after
receiving the aforesaid notice from such indemnified party, to assume the
defense thereof, with counsel selected by the indemnifying party and
satisfactory to such indemnified party; provided, however, that if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party or parties shall have reasonably
concluded that there may be legal defenses available to it or them and/or other
indemnified parties that are different from or additional to those available to
the indemnifying party, the indemnified party shall have the right to select
separate counsel to assert such legal defenses and to otherwise participate in
the defense of such action on behalf of such indemnified party or parties. Upon
receipt of notice from the indemnifying party to such indemnified party of its
election so to assume the defense of such action and approval by the indemnified
party of counsel, the indemnifying party will not be liable for any legal or
other expenses subsequently incurred by such indemnified party in connection
with the defense thereof, unless (i) the indemnified party shall have employed
separate counsel in connection with the assertion of legal defenses in
accordance with the proviso to the preceding sentence (it being understood,
however, that the indemnifying party shall not be liable for the expenses of
more than one separate counsel, approved by the Purchaser and the Underwriters,
representing all the indemnified parties under Section 7(a) who are parties to
such action), (ii) the indemnifying party shall not have employed counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after notice of commencement of the action or
(iii) the indemnifying party has authorized the employment of counsel for the
indemnified party at the expense of the indemnifying party; and except that, if
clause (i) or (iii) is applicable, such liability shall only be in respect of
the counsel referred to in such clause (i) or (iii).
(e) If the indemnification provided for in this Section 7 is
unavailable to an indemnified party under Section 7(a) hereof or insufficient in
respect of any losses, claims, damages or liabilities referred to therein, then
the indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities, in such proportion as is
appropriate to reflect the relative fault of the indemnified and indemnifying
parties in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative fault of the indemnified and indemnifying parties
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by such parties.
(f) The Purchaser and the Seller agree that it would not be just and
equitable if contribution pursuant to Section 7(e) were determined by pro rata
allocation or by any other method of allocation that does not take account of
the considerations referred to in Section 7(e) above. The amount paid or payable
by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in this Section 7 shall be deemed to include, subject to
the limitations set forth above, any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim, except where the indemnified party is required to bear such
expenses pursuant to this Section 7, which expenses the indemnifying party shall
pay as and when incurred, at the request of the indemnified party, to the extent
that the indemnifying party will be ultimately obligated to pay such expenses.
If any expenses so paid by the indemnifying party are subsequently determined to
not be required to be borne by the indemnifying party hereunder, the party that
received such payment shall promptly refund the amount so paid to the party
which made such payment. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(g) The indemnity and contribution agreements contained in this
Section 7 shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by the Purchaser,
the Underwriters, any of their respective directors or officers, or any person
controlling the Purchaser or the Underwriters, and (iii) acceptance of and
payment for any of the Certificates.
(h) Without limiting the generality or applicability of any other
provision of this Agreement, the Underwriters shall be third-party beneficiaries
of the provisions of this Section 7.
SECTION 8. Costs. The Seller shall pay (or shall reimburse the
Purchaser to the extent that the Purchaser has paid) the Seller's pro rata
portion of the aggregate of the following amounts (the Seller's pro rata portion
to be determined according to the percentage that the First Union Mortgage Loan
Balance represents of the Cut-Off Date Pool Balance): (i) the costs and expenses
of printing and delivering the Pooling and Servicing Agreement and the
Certificates; (ii) the costs and expenses of printing (or otherwise reproducing)
and delivering a preliminary and final Prospectus and Memorandum relating to the
Certificates; (iii) the initial fees, costs, and expenses of the Trustee
(including reasonable attorneys' fees); (iv) the filing fee charged by the
Securities and Exchange Commission for registration of the Certificates so
registered; (v) the fees charged by the Rating Agencies to rate the Certificates
so rated; (vi) the expense of recording any assignment of Mortgage or assignment
of Assignment of Leases as contemplated by Section 2 hereof; (vii) the fees and
disbursements of a firm of certified public accountants selected by the
Purchaser and the Seller with respect to numerical information in respect of the
Mortgage Loans and the Certificates included in the Prospectus, the Memorandum
and any related Computational Materials or ABS Term Sheets, including in respect
of the cost of obtaining any "comfort letters" with respect to such items;
(viii) the reasonable out-of-pocket costs and expenses in connection with the
qualification or exemption of the Certificates under state securities or "Blue
Sky" laws, including filing fees and reasonable fees and disbursements of
counsel in connection therewith, in connection with the preparation of any "Blue
Sky" survey and in connection with any determination of the eligibility of the
Certificates for investment by institutional investors and the preparation of
any legal investment survey; (ix) the expenses of printing any such "Blue Sky"
survey and legal investment survey; and (x) the reasonable fees and
disbursements of counsel to the Underwriters. All other costs and expenses in
connection with the transactions contemplated hereunder shall be borne by the
party incurring such expense.
SECTION 9. 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 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,
(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 Articles 8 and 9 of the Uniform
Commercial Code of the applicable jurisdiction; (ii) 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, including without limitation all amounts, other than investment
earnings, from time to time held or invested in the Certificate Account, the
Distribution Account or, if established, the REO Account (each as defined in the
Pooling and Servicing Agreement) 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 hereof 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 9-305 of the Uniform Commercial Code of the
applicable jurisdiction; and (v) notifications to persons (other than the
Trustee) holding such property, and acknowledgments, receipts or confirmations
from persons (other than the Trustee) holding such property, shall be deemed
notifications to, or acknowledgments, receipts or confirmations from, financial
intermediaries, bailees or agents (as applicable) of the secured party for the
purpose of perfecting such security interest under applicable law. The Seller
and the Purchaser shall, to the extent consistent with this Agreement, take such
actions as may be necessary to ensure that, if this Agreement were deemed to
create a security interest in the Mortgage Loans, such security interest would
be deemed to be a perfected security interest of first priority under applicable
law and will be maintained as such throughout the term of this Agreement and the
Pooling and Servicing Agreement.
SECTION 10. 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 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 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 11. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement, incorporated herein by reference or contained in the certificates of
officers of the Seller submitted pursuant hereto, shall remain operative and in
full force and effect and shall survive delivery of the Mortgage Loans by the
Seller to the Purchaser (and by the Purchaser to the Trustee).
SECTION 12. Severability of Provisions. Any part, provision,
representation, warranty or covenant of this Agreement that is prohibited or
which is held to be void or unenforceable shall be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof. Any part, provision, representation, warranty or covenant of
this Agreement that is prohibited or unenforceable or is held to be void or
unenforceable in any particular jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any particular jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which 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. 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.
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 which
obtains the principal relief it has sought, whether by compromise settlement or
judgment. If the party which commenced or instituted the action, suit or
proceeding shall dismiss or discontinue it without the concurrence of the other
party, such other party shall be deemed the prevailing party.
SECTION 16. Further Assurances. The Seller and the Purchaser agree
to execute and deliver such instruments and take such further actions as the
other party may, from time to time, reasonably request in order to effectuate
the purposes and to carry out the terms of this Agreement.
SECTION 17. Successors and Assigns. The rights and obligations of
the Seller under this Agreement shall not be assigned by the Seller without the
prior written consent of the Purchaser, except that any person into which the
Seller may be merged or consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Seller is a party, or any
person succeeding to all or substantially all of the business of the Seller,
shall be the successor to the Seller hereunder. The Purchaser has the right to
assign its interest under this Agreement, in whole or in part, as may be
required to effect the purposes of the Pooling and Servicing Agreement, and the
assignee shall, to the extent of such assignment, succeed to the rights and
obligations hereunder of the Purchaser. Subject to the foregoing, this Agreement
shall bind and inure to the benefit of and be enforceable by the Seller, the
Purchaser, the Underwriters (as intended third party beneficiaries hereof) and
their permitted successors and assigns, and the officers, directors and
controlling persons referred to in Section 7. This Agreement is enforceable by
the Underwriters 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, or third party beneficiary,
against whom such waiver or modification is sought to be enforced.
SECTION 19. Accountants' Letters. The parties hereto shall cooperate
with KPMG 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.
SECTION 20. Knowledge. Whenever a representation or warranty or
other statement in this Agreement 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.
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
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FIRST UNION NATIONAL BANK
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
Address for Notices:
One First Union Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
PURCHASER
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FIRST UNION COMMERCIAL MORTGAGE
SECURITIES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
Address for Notices:
One First Union Center
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▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
EXECUTION COPY
SCHEDULE I
GENERAL MORTGAGE REPRESENTATIONS AND WARRANTIES
1. The information pertaining to each Mortgage Loan set forth in the Mortgage
Loan Schedule was true and correct in all material respects as of the
Cut-Off Date, and is consistent with the definition of Mortgage Loan
Schedule in the Pooling and Servicing Agreement.
2. As of the date of its origination, such Mortgage Loan complied in all
material respects with, or was exempt from, all requirements of federal,
state or local law relating to the origination of such Mortgage Loan.
3. Immediately prior to the sale, transfer and assignment to the Purchaser,
the Seller had good and marketable title to, and was the sole owner of,
each Mortgage Loan, and the Seller is transferring such Mortgage Loan free
and clear of any and all liens, pledges, charges or security interests or
any other ownership interest of any nature encumbering such Mortgage Loan.
Upon consummation of the transactions contemplated by the Mortgage Loan
Purchase Agreement, the Seller will have validly and effectively conveyed
to the Purchaser all legal and beneficial interest in and to such Mortgage
Loan free and clear of any pledge, lien or security interest.
4. The proceeds of such Mortgage Loan have been fully disbursed and there is
no requirement for future advances thereunder.
5. Each related Mortgage Note, Mortgage, Assignment of Leases (if any) and
other agreement executed in connection with such Mortgage Loan are legal,
valid and binding obligations of the related Mortgagor (subject to any
non-recourse provisions therein and any state anti-deficiency or market
value limit deficiency legislation), enforceable in accordance with their
terms, except (i) that certain provisions contained in such Mortgage Loan
documents are or may be unenforceable in whole or in part under applicable
state or federal laws, but neither the application of any such laws to any
such provision nor the inclusion of any such provisions renders any of the
Mortgage Loan documents invalid as a whole and such Mortgage Loan
documents taken as a whole are enforceable to the extent necessary and
customary for the practical realization of the rights and benefits
afforded thereby and (ii) as such enforcement may be limited by
bankruptcy, insolvency, receivership, reorganization, moratorium,
redemption or other laws affecting the enforcement of creditors' rights
generally, or by general principles of equity (regardless of whether such
enforcement is considered in a proceeding in equity or at law). The
related Mortgage Note and Mortgage contain no provision limiting the right
or ability of the Seller to assign, transfer and convey the related
Mortgage Loan to any other Person.
6. As of the date of its origination, there was no valid offset, defense,
counterclaim, abatement or right to rescission with respect to any of the
related Mortgage Notes, Mortgage(s) or other agreements executed in
connection therewith, and, as of the Cut-Off Date, to the actual knowledge
of the Seller, there is no valid offset, defense, counterclaim or right to
rescission with respect to such Mortgage Note, Mortgage(s) or other
agreements, except in each case, with respect to the enforceability of any
provisions requiring the payment of default interest, late fees,
additional interest, prepayment premiums or yield maintenance charges.
7. Each related assignment of Mortgage and assignment of Assignment of Leases
from the Seller to the Trustee constitutes the legal, valid and binding
assignment from the Seller, except as such enforcement may be limited by
bankruptcy, insolvency, redemption, reorganization, liquidation,
receivership, moratorium or other laws relating to or affecting creditors'
rights generally or by general principles of equity (regardless of whether
such enforcement is considered in a proceeding in equity or at law). Each
Mortgage and Assignment of Leases is freely assignable.
8. Each related Mortgage is a valid and enforceable first lien on the related
Mortgaged Property subject only to the exceptions set forth in paragraph
(5) above and the following title exceptions (each such exception, a
"Title Exception", and collectively, the "Title Exceptions"): (a) the lien
of current real property taxes, ground rents, water charges, sewer rents
and assessments not yet due and payable, (b) covenants, conditions and
restrictions, rights of way, easements and other matters of public record,
none of which, individually or in the aggregate, materially interferes
with the current use of the Mortgaged Property or the security intended to
be provided by such Mortgage or with the Mortgagor's ability to pay its
obligations under the Mortgage Loan when they become due or materially and
adversely affects the value of the Mortgaged Property, (c) the exceptions
(general and specific) set forth in such policy or appearing of record,
(d) other matters to which like properties are commonly subject, (e) the
right of tenants (whether under ground leases, space leases or operating
leases) at the Mortgaged Property to remain following a foreclosure or
similar proceeding (provided that such tenants are performing under such
leases) and (f) if such Mortgage Loan is cross-collateralized with any
other Mortgage Loan, the lien of the Mortgage for such other Mortgage
Loan, none of which, individually or in the aggregate, materially and
adversely interferes with the current use of the Mortgaged Property or the
security intended to be provided by such Mortgage or with the Mortgagor's
ability to pay its obligations when they become due or materially and
adversely affects the value of the Mortgaged Property. Except with respect
to cross-collateralized and cross-defaulted Mortgage Loans, there are no
mortgage loans that are senior or pari passu with respect to the related
Mortgaged Property or such Mortgage Loan.
9. UCC Financing Statements have been filed and/or recorded (or, if not filed
and/or recorded, have been submitted in proper form for filing and
recording), in all public places necessary to perfect a valid security
interest in all items of personal property reasonably necessary to operate
the Mortgaged Property owned by a Mortgagor and located on the related
Mortgaged Property or which is material to the value (as determined in the
related Appraisal) of the related real estate constituting part of the
Mortgaged Property, (in either case, other than any personal property
subject to a purchase money security interest or a sale and leaseback
financing arrangement permitted under the terms of such Mortgage Loan or
any other personal property leases applicable to such personal property)
to the extent perfection may be effected pursuant to applicable law by
recording or filing, and the Mortgages, security agreements, chattel
Mortgages or equivalent documents related to and delivered in connection
with the related Mortgage Loan establish and create a valid and
enforceable lien and priority security interest on such items of
personalty except as such enforcement may be limited by bankruptcy,
insolvency, receivorship, reorganization, moratorium, redemption,
liquidation or other laws affecting the enforcement of creditor's rights
generally, or by general principles of equity (regardless of whether such
enforcement is considered in a proceeding in equity or at law).
Notwithstanding any of the foregoing, no representation is made as to the
perfection of any security interest in rents or other personal property to
the extent that possession or control of such items or actions other than
the filing of UCC Financing Statements are required in order to effect
such perfection.
10. All real estate taxes and governmental assessments which would be a lien
on the Mortgaged Property and that prior to the Cut-Off Date have become
delinquent in respect of each related Mortgaged Property have been paid,
or an escrow of funds in an amount sufficient to cover such payments has
been established. For purposes of this representation and warranty, real
estate taxes and governmental assessments and installments thereof shall
not be considered delinquent until the date on which interest and/or
penalties would first be payable thereon.
11. To the Seller's actual knowledge as of the Cut-Off Date, and to the
Seller's actual knowledge based solely upon due diligence customarily
performed with the origination of comparable Mortgage Loans by the Seller,
each related Mortgaged Property was free and clear of any material damage
(other than deferred maintenance for which escrows were established at
origination) that would affect materially and adversely the value of such
Mortgaged Property as security for the Mortgage Loan and to the Seller's
actual knowledge as of the Cut-Off Date there was no proceeding pending or
threatened for the total or partial condemnation of such Mortgaged
Property.
12. The lien of each related Mortgage as a first priority lien in the original
principal amount of such Mortgage Loan after all advances of principal (as
set forth on the Mortgage Loan Schedule) is insured by an ALTA lender's
title insurance policy (or a binding commitment therefor), or its
equivalent as adopted in the applicable jurisdiction, insuring the Seller,
its successors and assigns, subject only to the Title Exceptions; the
Seller or its successors or assigns is the named insured of such policy;
such policy is assignable without consent of the insurer and will inure to
the benefit of the Trustee as Mortgagee of record; is in full force and
effect upon the consummation of the transactions contemplated by this
Agreement; all premiums thereon have been paid; no claims have been made
under such policy and the Seller has not done anything, by act or
omission, and the Seller has no actual knowledge of any matter, which
would impair or diminish the coverage of such policy. The insurer issuing
such policy is either (x) a nationally-recognized title insurance company
or (y) qualified to do business in the jurisdiction in which the related
Mortgaged Property is located to the extent required; such policy contains
no material exclusions for, or affirmatively insures (except for any
Mortgaged Property located in a jurisdiction where such insurance is not
available) (a) access to a public road or (b) that there are no
encroachments of any material portion of the improvements thereon.
13. As of the date of its origination, all insurance coverage required under
each related Mortgage, which insurance covered such risks as were
customarily acceptable to prudent commercial and multifamily mortgage
lending institutions lending on the security of property comparable to the
related Mortgaged Property in the jurisdiction in which such Mortgaged
Property is located, and with respect to a fire and extended perils
insurance policy, is in an amount (subject to a customary deductible)
equal to the lesser of (i) the replacement cost of improvements located on
such Mortgaged Property, or (ii) the initial principal balance of the
Mortgage Loan, and in any event, the amount necessary to prevent operation
of any co-insurance provisions; and, except if such Mortgaged Property is
operated as a mobile home park, is also covered by business interruption
or rental loss insurance, in an amount at least equal to 12 months of
operations of the related Mortgaged Property (or in the case of a
Mortgaged Property without any elevator, 6 months), all of which is was in
full force and effect with respect to each related Mortgaged Property;
and, as of the Cut-Off Date, to the actual knowledge of the Seller, all
insurance coverage required under each Mortgage, which insurance covers
such risks and is in such amounts as are customarily acceptable to prudent
commercial and multifamily mortgage lending institutions lending on the
security of property comparable to the related Mortgaged Property in the
jurisdiction in which such Mortgaged Property is located, is in full force
and effect with respect to each related Mortgaged Property; all premiums
due and payable through the Closing Date have been paid; and no notice of
termination or cancellation with respect to any such insurance policy has
been received by the Seller; and except for certain amounts not greater
than amounts which would be considered prudent by an institutional
commercial mortgage lender with respect to a similar Mortgage Loan and
which are set forth in the related Mortgage, any insurance proceeds in
respect of a casualty loss, will be applied either (i) to the repair or
restoration of all or part of the related Mortgaged Property with the
mortgagee having the right to hold and disburse the proceeds or (ii) the
reduction of the outstanding principal balance of the Mortgage Loan at the
holder's sole option, subject in either case to requirements with respect
to leases at the related Mortgaged Property and to other exceptions
customarily provided for by prudent institutional lenders for similar
loans. The Mortgaged Property is also covered by comprehensive general
liability insurance against claims for personal and bodily injury, death
or property damage occurring on, in or about the related Mortgaged
Property, in an amount customarily required by prudent institutional
lenders.
The insurance policies contain a standard mortgage clause naming the
Seller, its successors and assigns as loss payee, in the case of a
property insurance policy, and additional insured in the case of a
liability insurance policy and provide that they are not terminable
without 30 days prior written notice to the Mortgagee or such lesser
period as prescribed by applicable law. Each Mortgage requires that the
Mortgagor maintain insurance as described above or permits the Mortgagee
to require insurance as described above, and permits the Mortgagee to
purchase such insurance at the Mortgagor's expense if Mortgagor fails to
do so.
14. (A) Other than payments due but not yet 30 days or more delinquent, to the
Seller's actual knowledge, based upon due diligence customarily performed
with the servicing of comparable mortgage loans by prudent institutional
lenders, there is no material default, breach, violation or event of
acceleration existing under the related Mortgage or the related Mortgage
Note, and to the Seller's actual knowledge no event (other than payments
due but not yet delinquent) which, with the passage of time or with notice
and the expiration of any grace or cure period, would constitute a
material default, breach, violation or event of acceleration, provided,
however, that this representation and warranty does not address or
otherwise cover any default, breach, violation or event of acceleration
that specifically pertains to any matter otherwise covered by any other
representation and warranty made by the Seller in any of clauses (10),
(15) and (19) of this Schedule I or in any clause of Schedule II or III,
and (B) the Seller has not waived any material default, breach, violation
or event of acceleration under such Mortgage or Mortgage Note, except for
a written waiver contained in the related Mortgage File being delivered to
the Purchaser, and pursuant to the terms of the related Mortgage or the
related Mortgage Note, and other documents in the related Mortgage File no
person or party other than the holder of such Mortgage Note may declare
any event of default or accelerate the related indebtedness under either
of such Mortgage or Mortgage Note.
15. As of the Closing Date, the Mortgage Loan is not, and in the prior 12
months (or since the date of origination if such Mortgage Loan has been
originated within the past 12 months), has not been, 30 days or more past
due in respect of any Scheduled Payment.
16. Except with respect to ARD Loans, which provide that the rate at which
interest accrues thereon increases after the Anticipated Repayment Date,
the Mortgage Rate (exclusive of any default interest, late charges or
prepayment premiums) of such Mortgage Loan is a fixed rate.
17. Each related Mortgage does not provide for or permit, without the prior
written consent of the holder of the Mortgage Note, each related Mortgaged
Property to secure any other promissory note or obligation except as
expressly described in such Mortgage.
18. Each Mortgage Loan constitutes a "qualified mortgage" within the meaning
of Section 860G(a)(3) of the Code (but without regard to the rule in
Treasury Regulations 1.860G-2(f)(2) that treats a defective obligation as
a qualified mortgage, or any substantially similar successor provision).
Accordingly, such Mortgage Loan is directly secured by a Mortgage on a
commercial property or a multifamily residential property, and either (1)
substantially all of the proceeds of such Mortgage Loan were used to
acquire, improve or protect the portion of such commercial or multifamily
residential property that consists of an interest in real property (within
the meaning of Treasury Regulations Sections 1.856-3(c) and 1.856-3(d))
and such interest in real property was the only security for such Mortgage
Loan as of the Testing Date (as defined below), or (2) the fair market
value of the interest in real property which secures such Mortgage Loan
was at least equal to 80% of the principal amount of the Mortgage Loan (a)
as of the Testing Date, or (b) as of the Closing Date. For purposes of the
previous sentence, (1) the fair market value of the referenced interest in
real property shall first be reduced by (a) the amount of any lien on such
interest in real property that is senior to the Mortgage Loan, and (b) a
proportionate amount of any lien on such interest in real property that is
on a parity with the Mortgage Loan, and (2) the "Testing Date" shall be
the date on which the referenced Mortgage Loan was originated unless (a)
such Mortgage Loan was modified after the date of its origination in a
manner that would cause a "significant modification" of such Mortgage Loan
within the meaning of Treasury Regulations Section 1.1001-3(b), and (b)
such "significant modification" did not occur at a time when such Mortgage
Loan was in default or when default with respect to such Mortgage Loan was
reasonably foreseeable. However, if the referenced Mortgage Loan has been
subjected to a "significant modification" after the date of its
origination and at a time when such Mortgage Loan was not in default or
when default with respect to such Mortgage Loan was not reasonably
foreseeable, the Testing Date shall be the date upon which the latest such
"significant modification" occurred. The Mortgage Loan documents with
respect to each Defeasance Loan do not allow such Defeasance Loan to be
defeased prior to two years after the Startup Date.
19. One or more environmental site assessments or updates thereof were
performed by an environmental consulting firm independent of the Seller
and the Seller's affiliates with respect to each related Mortgaged
Property during the 18-months preceding the origination of the related
Mortgage Loan, and the Seller, having made no independent inquiry other
than to review the report(s) prepared in connection with the assessment(s)
referenced herein, has no actual knowledge and has received no notice of
any material and adverse environmental condition or circumstance affecting
such Mortgaged Property that was not disclosed in such report(s). All
environmental assessments or updates that were in the possession of the
Seller and that relate to a Mortgaged Property insured by an environmental
insurance policy have been delivered to or disclosed to the environmental
insurance carrier issuing such policy prior to the issuance of such
policy.
20. Each related Mortgage and Assignment of Leases, together with applicable
state law, contains customary and enforceable provisions such as to render
the rights and remedies of the holder thereof adequate for the realization
against the Mortgaged Property of the benefits of the security, including
realization by judicial or, if applicable, non-judicial foreclosure,
subject to the effects of bankruptcy or similar law affecting the right of
creditors and the application of principles of equity.
21. At the time of origination and, to the actual knowledge of Seller as of
the Cut-Off Date, no Mortgagor is a debtor in, and no Mortgaged Property
is the subject of, any state or federal bankruptcy or insolvency
proceeding.
22. Each Mortgage Loan is a whole loan, contains no equity participation by
the lender or shared appreciation feature and does not provide for any
contingent or additional interest in the form of participation in the cash
flow of the related Mortgaged Property or, other than the ARD Loans,
provide for negative amortization. The Seller holds no preferred equity
interest.
23. Subject to certain exceptions, which are customarily acceptable to prudent
commercial and multifamily mortgage lending institutions lending on the
security of property comparable to the related Mortgaged Property, each
related Mortgage or loan agreement contains provisions for the
acceleration of the payment of the unpaid principal balance of such
Mortgage Loan if, without complying with the requirements of the Mortgage
or loan agreement, the related Mortgaged Property, or any controlling
interest in the related Mortgagor, is directly transferred or sold (other
than by reason of family and estate planning transfers and transfers of
less than a controlling interest in a mortgagor, or a substitution or
release of collateral within the parameters of paragraph (26) below), or
encumbered in connection with subordinate financing by a lien or security
interest against the related Mortgaged Property, other than any existing
permitted additional debt.
24. Except as set forth in the related Mortgage File, the terms of the related
Mortgage Note and Mortgage(s) have not been waived, modified, altered,
satisfied, impaired, canceled, subordinated or rescinded in any manner
which materially interferes with the security intended to be provided by
such Mortgage.
25. Each related Mortgaged Property was inspected by or on behalf of the
related originator or an affiliate during the 12 month period prior to the
related origination date.
26. Since origination, no material portion of the related Mortgaged Property
has been released from the lien of the related Mortgage in any manner
which materially and adversely affects the value of the Mortgage Loan or
materially interferes with the security intended to be provided by such
Mortgage, and, except with respect to Mortgage Loans (a) which permit
defeasance by means of substituting for the Mortgaged Property (or, in the
case of a Mortgage Loan secured by multiple Mortgaged Properties, one or
more of such Mortgaged Properties) U.S. Treasury Obligations sufficient to
pay the Mortgage Loans in accordance with their terms, (b) where a release
of the portion of the Mortgaged Property was contemplated at origination
and such portion was not considered material for purposes of underwriting
the Mortgage Loan, or (c) where release is conditional upon the
satisfaction of certain underwriting and legal requirements and the
payment of a release price that represents adequate consideration for such
Mortgaged Property, but in no event less than the related allocated loan
amount, the terms of the related Mortgage do not provide for release of
any portion of the Mortgaged Property from the lien of the Mortgage except
in consideration of payment in full therefor.
27. To the Seller's actual knowledge, based on due diligence customary in the
industry, as of the date of origination of such Mortgage Loan and as of
the Cut-Off Date, there are no violations of any applicable zoning
ordinances, building codes and land laws applicable to the Mortgaged
Property or the use and occupancy thereof which would have a material
adverse effect on the value, operation or net operating income of the
Mortgaged Property.
28. To the Seller's actual knowledge, after review of surveys and/or any
related title policy obtained in connection with the origination of each
Mortgage Loan only, and to the Seller's actual knowledge, as of the
Cut-off Date, none of the material improvements which were included for
the purposes of determining the appraised value of the related Mortgaged
Property at the time of the origination of the Mortgage Loan lies outside
of the boundaries and building restriction lines of such property (except
Mortgaged Properties which are legal non-conforming uses), to an extent
which would have a material adverse affect on the related Mortgagor's use
and operation of such Mortgaged Property (unless affirmatively covered by
the title insurance) and no improvements on adjoining properties
encroached upon such Mortgaged Property to any material and adverse extent
(unless affirmatively covered by title insurance).
29. With respect to at least 95% of the Mortgage Loans (by balance) having a
Cut-Off Date Balance in excess of 1% of the Initial Pool Balance, the
related Mortgagor is an entity which has represented in connection with
the origination of the Mortgage Loan, and/or whose organizational
documents provide, that so long as the Mortgage Loan is outstanding it
will be a single-purpose entity. (For this purpose, "single-purpose
entity" shall mean a person, other than an individual, which does not
engage in any business unrelated to the related Mortgaged Property and its
financing, does not have any significant assets other than those related
to its interest in such Mortgaged Property or its financing, or any
indebtedness other than as permitted by the related Mortgage or the other
documents in the Mortgage Loan File, and holds itself out as being a legal
entity, separate and apart from any other person).
30. No advance of funds has been made other than pursuant to the loan
documents, directly or indirectly, by the Seller to the Mortgagor and, to
the Seller's actual knowledge, no funds have been received from any person
other than the Mortgagor, for or on account of payments due on the
Mortgage Note or the Mortgage.
31. As of the date of origination and, to the Seller's actual knowledge, as of
the Cut-Off Date, there was no pending action, suit or proceeding, or
governmental investigation of which it has received notice, against the
Mortgagor or the related Mortgaged Property an adverse outcome of which
could reasonably be expected to materially and adversely affect such
Mortgagor's performance under the related Mortgage Loan documents or the
security intended to be provided by the Mortgage Loan documents or the
current use of the Mortgaged Property.
32. As of the date of origination, and, to the Seller's actual knowledge, as
of the Cut-Off Date, if the related Mortgage is a deed of trust, a
trustee, duly qualified under applicable law to serve as such, has either
been properly designated and serving under such Mortgage or may be
substituted in accordance with the Mortgage and applicable law.
33. The Mortgage Loan and the interest contracted for complied as of the date
of origination with, or is exempt from, applicable state or federal laws,
regulations and other requirements pertaining to usury.
34. The related Mortgage Note is not secured by any collateral that secures a
Mortgage Loan that is not in the Trust Fund and each Mortgage Loan that is
cross-collateralized is cross-collateralized only with other Mortgage
Loans sold pursuant to this Agreement.
35. The improvements located on the Mortgaged Property are either not located
in a federally designated special flood hazard area or the Mortgagor is
required to maintain or the Mortgagee maintains, flood insurance with
respect to such improvements and disclosed on the Mortgage Loan Schedule.
36. All escrow deposits and payments required pursuant to the Mortgage Loan
are in the possession, or under the control, of the Seller or its agent
and there are no deficiencies in connection therewith.
37. To the Seller's actual knowledge, based on the due diligence customarily
performed in the origination of comparable mortgage loans by prudent
commercial and multifamily mortgage lending institutions with respect to
the related geographic area and properties comparable to the related
Mortgaged Property, as of the date of origination of the Mortgage Loan,
the related Mortgagor, the related lessee, franchisor or operator was in
possession of all material licenses, permits and authorizations then
required for use of the related Mortgaged Property as operated on the
origination date, and, as of the Cut-Off Date, the Seller has no actual
knowledge that the related Mortgagor, the related lessee, franchisor or
operator was not in possession of such licenses, permits and
authorizations.
38. The origination (or acquisition, as the case may be), servicing and
collection practices used by the Seller or the Seller's predecessor or
agent with respect to the Mortgage Loan have been in all respects legal
and have met customary industry standards.
39. Except for Mortgagors under Ground Lease Loans, the related Mortgagor (or
its affiliate) has title in the fee simple interest in each related
Mortgaged Property.
40. The Mortgage Loan documents for each Mortgage Loan provide that each
Mortgage Loan is non-recourse to the related Mortgagor except that the
related Mortgagor accepts responsibility for fraud and/or other
intentional misrepresentation. Furthermore, the Mortgage Loan documents
for each Mortgage Loan provide that the related Mortgagor shall be liable
to the lender for losses incurred due to the misapplication or
misappropriation of rents collected in advance or received by the related
Mortgagor after the occurrence of an event of default, insurance proceeds
or condemnation awards or breach of the environmental covenants in the
related Mortgage Loan documents.
41. The Assignment of Leases set forth in the Mortgage or separate from the
related Mortgage and related to and delivered in connection with each
Mortgage Loan establishes and creates a valid, subsisting and enforceable
lien and security interest in the related Mortgagor's interest in all
leases, subleases, licenses or other agreements pursuant to which any
person is entitled to occupy, use or possess all or any portion of the
real property subject to the related Mortgage and the exceptions set forth
in paragraph (5).
42. With respect to such Mortgage Loan, any prepayment premium constitutes a
"customary prepayment penalty" within the meaning of Treasury Regulations
Section 1.860G-1(b)(2).
43. If such Mortgage Loan contains a provision for any defeasance of mortgage
collateral, such Mortgage Loan permits defeasance (1) no earlier than two
years after the Closing Date, (2) only with substitute collateral
constituting "government securities" within the meaning of Treasury
Regulations Section 1.860G-2(a)(8)(i) in an amount sufficient to make all
scheduled payments under the Mortgage Note and (3) only to facilitate the
disposition of the Mortgaged Property and not as a part of an arrangement
to collateralize a REMIC offering with obligations that are not real
estate mortgages. In addition, if such Mortgage contains such a defeasance
provision, it provides (or otherwise contains provisions pursuant to which
the holder can require) that the loan be assumed by a single-purpose
entity designated by the holder of the Mortgage Loan and that an opinion
be provided to the effect that such holder has a first priority perfected
security interest in the defeasance collateral. The related Mortgage Loan
documents enable the lender to charge the expenses associated with
permitting a defeasance to the Mortgagor (including rating agencies' fees,
accounting fees and attorneys' fees), and must provide for (a) an
accountant's certification as to the adequacy of the defeasance collateral
to make payments under the related Mortgage Loan for the remainder of its
term, (b) an Opinion of Counsel that the defeasance complies with all
applicable REMIC Provisions, and (c) a letter from the Rating Agencies
that the defeasance will not result in the withdrawal, downgrade or
qualification of the ratings assigned to the Certificates. Notwithstanding
the foregoing, some of the Mortgage Loan documents may not affirmatively
contain all such requirements, but such requirements are effectively
present in such documents due to the general obligation to comply with the
REMIC Provisions and/or deliver a REMIC Opinion of Counsel.
44. To the extent required under applicable law as of the date of origination,
and necessary for the enforceability or collectability of the Mortgage
Loan, the originator of such Mortgage Loan was authorized to do business
in the jurisdiction in which the related Mortgaged Property is located at
all times when it originated and held the Mortgage Loan.
45. No Mortgage Loan, other than a Mortgage Loan with an Anticipated Repayment
Date, provides for the negative amortization of interest. Neither the
Seller nor any affiliate thereof has any obligation to make any capital
contributions to the Mortgagor under the Mortgage Loan.
46. No fraud with respect to such Mortgage Loan has taken place on the part of
the Seller or, to Seller's actual knowledge, on the part of any
originator, in connection with the origination of such Mortgage Loan.
47. An appraisal of the related Mortgaged Property was conducted in connection
with the origination of the Mortgage Loan, which appraisal is signed by an
appraiser, who, to the Seller's actual knowledge, had no interest, direct
or indirect, in the Mortgaged Property or the Mortgagor or in any loan
made on the security thereof, and whose compensation is not affected by
the approval or disapproval of the Mortgage Loan; the appraisal satisfies
the requirements of the "Uniform Standards of Professional Appraisal
Practice" as adopted by the Appraisal Standards Board of the Appraisal
Foundation, all as in effect on the date the Mortgage Loan was originated.
48. To the Seller's knowledge based on due diligence customary for prudent
commercial lenders: (i) the Mortgaged Property is located on or adjacent
to a dedicated road or has access to an irrevocable easement permitting
ingress and egress, (ii) the Mortgaged Property is served by public
utilities, water and sewer (or septic facilities), and (iii) the Mortgaged
Property constitutes one or more separate tax parcels (or will constitute
separate tax parcels when the next tax maps are issued) or is subject to
an endorsement under the related title insurance policy insuring for
losses arising from any claim that the Mortgaged Property is not one or
more separate tax parcels.
49. Each Mortgage requires the Mortgagor to provide the holder with certain
financial information at the times required under the related Mortgage
Loan documents.
EXCEPTIONS TO REPRESENTATIONS AND WARRANTIES
--------------------------------------------
REPRESENTATION AND WARRANTY NO. 19
(ENVIRONMENTAL)
Loan No. Exception
---------
35 (Mayflower Seaside) AST present at Mortgaged Property.
Reserve for removal in existence.
REPRESENTATION AND WARRANTY NO. 19
(NO RELEASE)
Loan No. Exception
-------- ---------
27 (▇▇▇▇▇ Industrial) Two parcels of adjoining vacant land to
Mortgaged Property permitted to be
released. Parcels were not included in
the appraised value and are not
relevant to the production of income at
the Mortgaged Property.
REPRESENTATION & WARRANTY NO. 27
(ZONING, ETC.)
Loan No. Exception
-------- ---------
26 (Foxfire Apartments) Portion of parking area non-conforming
with respect to zoning. It is
anticipated that portion will be
"restriped" to conform to applicable
zoning code.
REPRESENTATION AND WARRANTY NO. 31
(PENDING LITIGATION)
Loan No. Exception
-------- ---------
73 (Raley's Center) Pending litigation relating to the
validity of an assignment of the
related ground lessee's interest in an
outparcel and the ability of the
alleged assignee to sublease such
outparcel.
SCHEDULE II
GROUND LEASE REPRESENTATIONS AND WARRANTIES
1. Such Ground Lease or a memorandum thereof has been or will be duly
recorded and such Ground Lease permits the interest of the lessee
thereunder to be encumbered by the related Mortgage or, if consent of the
lessor thereunder is required, it has been obtained prior to the Closing
Date. To the Seller's actual knowledge, there has been no material change
in the terms of the Ground Lease since its recordation except by written
instrument delivered as part of the Mortgage File.
2. Upon the foreclosure of the Mortgage Loan (or acceptance of a deed in lieu
thereof), the Mortgagor's interest in such ground lease is assignable to
the Mortgagee under the leasehold estate and its assigns without the
consent of the lessor thereunder (or, if any such consent is required, it
has been obtained prior to the Closing Date).
3. Such Ground Lease may not be amended, modified, canceled or terminated
without the prior written consent of the Mortgagee and that any such
action without such consent is not binding on the Mortgagee, its
successors or assigns, except termination or cancellation if an event of
default occurs under the Ground Lease and notice is provided to the
Mortgagee and such default is curable by the Mortgagee as provided in the
Ground Lease, but remains uncured beyond the applicable cure period.
4. To the actual knowledge of the Seller, at the Closing Date, such Ground
Lease is in full force and effect and other than payments due but not yet
30 days or more delinquent, (1) there is no material default, and (2)
there is no event which, with the passage of time or with notice and the
expiration of any grace or cure period, would constitute a material
default under such Ground Lease.
5. The ground lease or ancillary agreement between the lessor and the lessee
requires the lessor to give notice of any default by the lessee to the
Mortgagee. The ground lease or ancillary agreement further provides that
no notice given is effective against the Mortgagee unless a copy has been
given to the Mortgagee in a manner described in the ground lease or
ancillary agreement.
6. The ground lease (a) is not subject to any liens or encumbrances superior
to, or of equal priority with, the Mortgage, subject, however, to only the
Title Exceptions or (b) is subject to a subordination, non-disturbance and
attornment agreement to which the mortgagee on the lessor's fee interest
in the Mortgaged Property is subject.
7. A Mortgagee is permitted a reasonable opportunity to cure any curable
default under such Ground Lease before the lessor thereunder may terminate
such Ground Lease, including such time as is necessary to gain possession
of the Mortgaged Property, by foreclosure or otherwise, if possession is
necessary in order to effect such cure.
8. Such Ground Lease has an original term (together with any extension
options, whether or not currently exercised, set forth therein all of
which can be exercised by the Mortgagee if the mortgagee acquires the
lessee's rights under the Ground Lease) that extends not less than 20
years beyond the Stated Maturity Date, or, if not 20 years, at least 10
years beyond such Stated Maturity Date.
9. Under the terms of such Ground Lease, any estoppel or consent letter
received by the Mortgagee from the lessor, and the related Mortgage, taken
together, any related insurance proceeds or condemnation award (other than
in respect of a total or substantially total loss or taking) will be
applied either to the repair or restoration of all or part of the related
Mortgaged Property, with the Mortgagee or a trustee appointed by it having
the right to hold and disburse such proceeds as repair or restoration
progresses, or to the payment or defeasance of the outstanding principal
balance of the Mortgage Loan, together with any accrued interest (except
in cases where a different allocation would not be viewed as commercially
unreasonable by any institutional investor, taking into account the
relative duration of the ground lease and the related Mortgage and the
ratio of the market value of the related Mortgaged Property to the
outstanding principal balance of such Mortgage Loan).
10. The ground lease does not impose any restrictions on subletting that would
be viewed as commercially unreasonable by a prudent commercial lender.
11. The ground lessor under such Ground Lease is required to enter into a new
lease with the holder of the Mortgage Loan upon termination of the Ground
Lease for any reason, including the rejection of the Ground Lease in
bankruptcy.
EXHIBIT A
MORTGAGE LOAN SCHEDULE
LOAN LOAN
NUMBER PROPERTY NAME STATE CUT-OFF DATE LOAN BALANCE ($) SELLER
2 ▇▇▇▇ ▇▇▇▇▇ Building CA $ 45,905,482.87 FUNB
3 ▇▇▇▇▇ Tech CA $ 40,413,873.75 FUNB
▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ $ 25,932,760.32 FUNB
▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ $ 25,133,038.92 FUNB
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ $ 20,183,996.35 FUNB
▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ $ 19,239,355.22 FUNB
15 Registry at Windsor Parke FL $ 18,760,000.00 FUNB
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ $ 16,250,000.00 FUNB
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ $ 15,225,763.99 FUNB
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ $ 15,000,000.00 FUNB
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ $ 13,913,153.77 FUNB
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇ $ 13,000,000.00 FUNB
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ $ 12,650,000.00 FUNB
26 Foxfire Apartments NC $ 12,630,000.00 FUNB
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ $ 12,629,382.87 FUNB
▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ $ 12,081,128.42 FUNB
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ $ 12,000,000.00 FUNB
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇ $ 12,000,000.00 FUNB
▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ $ 11,681,752.28 FUNB
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇ $ 11,416,644.88 FUNB
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ $ 10,500,000.00 FUNB
▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ $ 10,466,521.13 FUNB
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ MD $ 10,101,201.71 FUNB
▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ $ 9,500,000.00 FUNB
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ $ 9,500,000.00 FUNB
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ - ▇▇▇▇▇▇▇ ▇▇ $ 9,485,344.56 FUNB
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ $ 9,119,520.30 FUNB
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇ ▇▇ $ 8,961,628.40 FUNB
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ $ 8,676,409.02 FUNB
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ $ 8,362,989.78 FUNB
▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ $ 8,228,299.74 FUNB
▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ $ 8,000,000.00 FUNB
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇ $ 7,722,410.00 FUNB
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ $ 7,591,221.16 FUNB
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇ $ 7,437,857.90 FUNB
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇ $ 7,238,971.18 FUNB
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇ $ 6,929,355.00 FUNB
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ $ 6,494,437.00 FUNB
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ $ 6,300,000.00 FUNB
73 Raley's Center CA $ 6,134,469.81 FUNB
▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ $ 6,000,000.00 FUNB
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ $ 5,983,498.40 FUNB
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ ▇▇ $ 5,974,418.93 FUNB
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ $ 5,784,462.73 FUNB
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ $ 5,511,117.00 FUNB
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ ▇▇ $ 5,476,550.68 FUNB
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ $ 5,423,772.00 FUNB
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ $ 5,165,179.41 FUNB
▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ $ 5,000,000.00 FUNB
▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇ $ 4,987,139.65 FUNB
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ $ 4,869,932.26 FUNB
91 Orange Town & Country II CA $ 4,713,116.96 FUNB
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ $ 4,160,000.00 FUNB
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ $ 3,920,000.00 FUNB
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ $ 3,710,431.89 FUNB
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇ $ 3,640,000.00 FUNB
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ $ 3,524,219.42 FUNB
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ $ 3,500,000.00 FUNB
108 Builder's First Source MD $ 3,394,458.63 FUNB
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ - ▇▇▇▇▇▇▇ ▇▇ $ 3,105,172.24 FUNB
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ $ 2,994,306.89 FUNB
▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ $ 2,920,140.43 FUNB
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ $ 2,917,243.49 FUNB
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ ▇▇ $ 2,788,062.16 FUNB
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ $ 2,700,000.00 FUNB
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇ $ 2,695,755.90 FUNB
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇, ▇▇ ▇▇▇ ▇▇▇ ▇▇ $ 2,493,811.04 FUNB
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇▇ ▇▇ $ 2,489,341.22 FUNB
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ - ▇▇▇▇▇▇▇ ▇▇ $ 2,431,148.38 FUNB
▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ $ 2,400,000.00 FUNB
▇▇▇ ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ $ 2,371,139.48 FUNB
▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇ $ 2,296,215.70 FUNB
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇ $ 2,234,147.48 FUNB
▇▇▇ ▇▇▇▇▇▇▇▇▇ - ▇▇▇▇▇ ▇▇▇▇▇ ▇▇ $ 2,196,414.41 FUNB
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ $ 2,143,749.73 FUNB
▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ $ 1,986,977.48 FUNB
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ $ 1,869,114.00 FUNB
▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ $ 1,684,673.22 FUNB
▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ $ 1,666,958.51 FUNB
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ $ 1,595,129.46 FUNB
163 ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇ $ 1,497,739.32 FUNB
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ $ 1,485,631.49 FUNB
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ $ 1,397,539.00 FUNB
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ $ 1,377,840.97 FUNB
▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ $ 1,294,728.86 FUNB
▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇ ▇▇ $ 1,238,952.31 FUNB
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ $ 1,231,903.59 FUNB
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇ $ 1,097,267.36 FUNB
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ $ 924,443.75 FUNB
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇ $ 877,904.06 FUNB
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ $ 712,965.00 FUNB
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ $ 598,495.68 FUNB
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ $ 590,515.73 FUNB