MORTGAGE LOAN PURCHASE AGREEMENT
This Mortgage Loan Purchase Agreement, dated as of February 10, 2002
(the "Agreement"), is entered into between German American Capital Corporation
(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
February 10, 2002, among the Purchaser as depositor, First Union National Bank,
as master servicer (in such capacity, the "Master Servicer"), GMAC Commercial
Mortgage Corporation, as special servicer (in such capacity, the "Special
Servicer"), LaSalle Bank National Association, as paying agent (in such
capacity, the "Paying Agent"), 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 $151,693,666 (the "GACC 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 GACC 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
$728,324,739 (subject to a variance of plus or minus 5%). The purchase and sale
of the Mortgage Loans shall take place on February 25, 2002 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) 104.06% of the GACC Mortgage Loan Balance as of the Cut-Off Date,
plus (ii) $733,196, which amount represents the amount of interest accrued on
the GACC 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.
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 and all intervening endorsements thereon, endorsed on its face or
by allonge attached thereto (without recourse, representation or warranty,
express or implied) to the order of ▇▇▇▇▇ Fargo Bank Minnesota, N.A., as
trustee for the registered holders of First Union National Bank Commercial
Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Series
2002-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 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, (except
for completion of the assignee's name (if the assignment is delivered in
blank) and any missing recording information), 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 Commercial Mortgage Trust, Commercial Mortgage Pass-Through
Certificates, Series 2002-C1, or in blank;
(v) an original assignment of all unrecorded documents relating to
the Mortgage Loan (to the extent not already assigned pursuant to clause
(iv) above), in favor of ▇▇▇▇▇ Fargo Bank Minnesota, N.A., as trustee for
the registered holders of First Union National Bank Commercial Mortgage
Trust, Commercial Mortgage Pass-Through Certificates, Series 2002-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 or an agreement to provide
the same pursuant to binding escrow instructions executed by an authorized
representative of the title company) to issue such title insurance policy;
(viii) any filed copies (bearing 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 statement in favor of the Seller on record with the
applicable public office for UCC Financing Statements, a copy of the UCC
Amendment, in form suitable for filing in favor of ▇▇▇▇▇ Fargo Bank
Minnesota, N.A., as trustee for the registered holders of First Union
National Bank Commercial Mortgage Trust, Commercial Mortgage Pass-Through
Certificates, Series 2002-C1, as assignee, or in blank;
(ix) an original or copy of any Ground Lease, any Lease Enhancement
Policy, guaranty or ground lessor estoppel;
(x) any intercreditor agreement relating to permitted debt of the
Mortgagor and any intercreditor agreement related to mezzanine debt
related to the Mortgagor;
(xi) a copy of any letter of credit and related transfer documents,
loan agreement, escrow agreement or security agreement relating to a
Mortgage Loan; and
(xii) for each hospitality property, the franchise agreement and
comfort letter, if any.
(d) The Seller, at Seller's reasonable cost and expense, shall take
all actions necessary or desirable (i) to permit the Trustee to fulfill its
obligations pursuant to Section 2.01(d) of the Pooling and Servicing Agreement
and (ii) to perform its obligations described in 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; provided, however,
that the Seller shall deliver each original letter of credit and the related
transfer documents to the Trustee on the Closing Date, and the Trustee shall
forward such letters of credit and related transfer documents to the Master
Servicer pursuant to the Pooling and Servicing Agreement.
(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 corporation organized and validly existing
and in good standing under the laws of the State of Maryland 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, receivership, 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 corporation, 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 incorporation 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 incorporation, bylaws or any
other corporate restriction or any judgment, order, writ, injunction,
decree, law or regulation that would, in the Seller's reasonable and good
faith judgment, materially and adversely affect the ability of the Seller
to perform its obligations under this Agreement or that requires the
consent of any 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 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) With respect to the schedule of exceptions delivered by the
Trustee on the Closing Date, within fifteen (15) Business Days of the Closing
Date, with respect to the documents specified in clauses (ii), (vii), (ix)
(solely with respect to Ground Leases) and (xi) (solely with respect to letters
of credit and the related transfer documents) of the definition of Mortgage
File, the Mortgage Loan Seller shall cure any exception listed therein (for the
avoidance of doubt, any deficiencies with respect to the documents specified in
clause (ii) resulting solely from a delay in the return of the related documents
from the applicable recording office, shall be cured in the time and manner
described in Section 2.01(c) of the Pooling and Servicing Agreement). If such
exception is not so cured, the Mortgage Loan Seller shall either (1) repurchase
the related Mortgage Loan, (2) with respect to exceptions relating to clause
(xi) (solely with respect to letters of credit) of the definition of "Mortgage
File", deposit with the Master Servicer an amount, to be held in trust in a
Special Reserve Account pursuant to the Pooling and Servicing Agreement, equal
to the amount of the undelivered letter of credit (in the alternative, the
Mortgage Loan Seller may deliver to the Master Servicer with a certified copy to
the Trustee a letter of credit for the benefit of the Master Servicer on behalf
of the Trustee and upon the same terms and conditions as the undelivered letter
of credit) which the Master Servicer on behalf of the Trustee may use (or draw
upon, as the case may be) under the same circumstances and conditions as the
Master Servicer would have been entitled to draw on the undelivered letter of
credit, or (3) with respect to any exceptions relating to clauses (ii) and
(vii), deposit with the Trustee an amount, to be held in trust in a Special
Reserve Account pursuant to the Pooling and Servicing Agreement, equal to 25% of
the Stated Principal Balance of the related Mortgage Loan on such date. Any
funds or letter of credit deposited pursuant to clauses (2) and (3) shall be
held by the Trustee or the Master Servicer, as applicable, until the earlier of
(x) the date on which the Master Servicer certifies to the Trustee and the
Controlling Class Representative that such exception has been cured (or the
Trustee certifies the same to the Controlling Class Representative), at which
time such funds or letter of credit, as applicable, shall be returned to the
Mortgage Loan Seller and (y) thirty (30) Business Days after the Closing Date;
provided, however, that if such exception is not cured within such thirty (30)
Business Days, (A) in the case of clause (2), the Master Servicer shall retain
the funds or letter of credit, as applicable, or (B) in the case of clause (3),
the Mortgage Loan Seller shall repurchase the related Mortgage Loan in
accordance with the terms and conditions of this Agreement, at which time such
funds shall be applied to the Purchase Price of the related Mortgage Loan and
any letter of credit will be returned to the Mortgage Loan Seller.
If the Seller receives written notice of a Material Document Defect or a
Material 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 Material Document Defect
or Material Breach relating to a Mortgage Loan not being a "qualified mortgage"
within the meaning of the REMIC Provisions (a "Qualified Mortgage"), not later
than 90 days from any party to the Pooling and Servicing Agreement discovering
such Material Document Defect or Material Breach provided the Seller receives
such notice in a timely manner), cure such Material Document Defect or Material
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 Material Document Defect or Material 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, (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, or (iii) at the sole discretion of the
Controlling Class Representative (so long as the Controlling Class
Representative is not the related Mortgage Loan Seller or an Affiliate thereof),
provide to the Master Servicer a letter of credit or deposit in a Special
Reserve Account with the Trustee an amount equal to 25% of the Stated Principal
Balance of any Mortgage Loan as of such date for which certain types of Material
Document Defects relating to a delay in the return of documents from the local
filing or recording offices remain uncorrected for 18 months following the
Closing Date; provided, however, that unless the Material Breach would cause the
Mortgage Loan not to be a Qualified Mortgage, and if such Material Document
Defect or Material 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 Material Document Defect or Material Breach within such 90-day period,
such Seller shall have (x) with respect to any such Material Breach, an
additional ninety (90) days to complete such cure (or, failing such cure, to
repurchase the related Mortgage Loan (or related REO Loan) or substitute a
Qualified Substitute Mortgage Loan) and (y) with respect to any such Material
Document Defect, the applicable Resolution Extension Period to complete such
cure (or, failing such cure, to repurchase the related Mortgage Loan (or related
REO Loan) or substitute a Qualified Substitute Mortgage Loan); and provided,
further, that with respect to such additional 90-day period or Resolution
Extension Period, as case may be, the Seller shall have delivered an officer's
certificate to the Trustee setting forth the reason such Material Document
Defect or Material 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 or Resolution
Extension Period. A Material Document Defect or Material Breach as to a Mortgage
Loan that is cross-collateralized and cross-defaulted with one or more other
Mortgage Loans (each a "Crossed Loan"), and is not cured as provided for above,
shall require the repurchase or substitution of all such cross-collateralized
and cross-defaulted Mortgage Loans; provided, that with respect to any Mortgage
Loan the Seller shall not be required to repurchase or substitute for the
affected Mortgage Loan for which the repurchase obligation has arisen, or all of
the related Crossed Loans, if the affected Mortgaged Property may be released
pursuant to the specific terms of any partial release provisions in the related
Mortgage Loan documents and the remaining Mortgaged Property(ies) satisfies the
requirements, if any, set forth in the Mortgage(s) for the Mortgaged
Property(ies) remaining after application of such partial release provisions or,
in the alternative, at the sole discretion of the Controlling Class
Representative (so long as the Controlling Class Representative is not the
related Mortgage Loan Seller or an Affiliate thereof), if the credit of the
remaining Mortgage Loans comprising the pool of Crossed Loans shall be
reasonably acceptable; provided, however, that in connection with a partial
release, the Seller shall obtain an Opinion of Counsel (at the Seller's expense)
to the effect that the contemplated action will not, with respect to REMIC I or
REMIC II, endanger such status or, unless such party determines in its sole
discretion to indemnify the Trust Fund against any resultant tax, result in the
imposition of any tax; provided, further, that the borrower under such Mortgage
Loan is an intended third party beneficiary of this provision, which shall not
be modified without such borrower's consent. For a period of four 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 Material Document Defect or Material
Breach, the Seller shall provide the officer's certificate to the Trustee
described above as to the reasons such Material Document Defect or Material
Breach remains uncured and as to the actions being taken to pursue cure.
Notwithstanding the foregoing, the delivery of a binding commitment to issue a
policy of lender's title insurance as described in clause (vii) of Section 2(c)
hereof in lieu of the delivery of the actual policy of lender's title insurance
shall not be considered a Material Document Defect or Material 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.
(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. 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. Nothing in this Agreement shall
prohibit the Purchaser or its assigns from pursuing any course of action
authorized by the Pooling and Servicing Agreement while the Purchaser asserts a
claim or brings a cause of action to enforce the rights set forth herein against
the Seller. In the event that a Mortgage Loan or REO Property is liquidated
during the period of time in which any action with respect to a claim is ongoing
pursuant to this Section 3, if a court of competent jurisdiction issues a final
order that the Seller is or was obligated to repurchase such Mortgage Loan or
REO Loan or REO Property or the Seller otherwise accepts liability in connection
therewith, then, after the expiration of any applicable appeal period, the
Seller will be obligated to pay to the Purchaser the amount, if any, by which
the applicable Purchase Price exceeds any Liquidation Proceeds received upon a
liquidation of such Mortgage Loan; provided that the prevailing party in such
action shall be entitled to recover all costs, fees and expenses (including
reasonable attorneys' fee) related thereto.
(f) Notwithstanding the foregoing, if there exists a Breach relating
to whether or not the Mortgage Loan documents or any particular Mortgage Loan
document requires the related Mortgagor to bear the costs and expenses
associated with any particular action or matter under such Mortgage Loan
document(s) with respect to matters described in Representations 23 and 27 of
Schedule I, then the Purchaser shall direct the Seller in writing to wire
transfer to the Certificate Account, within 90 days of the Seller's receipt of
such direction, the amount of any such costs and expenses borne by the
Purchaser, the Certificateholders and the Trustee on their behalf that are the
basis of such Breach. Upon its making such deposit, the Seller shall be deemed
to have cured such Breach in all respects. Provided such payment is made in
full, this paragraph describes the sole remedy available to the Purchaser, the
Certificateholders and the Trustee on their behalf regarding any such Breach and
the Seller shall not be obligated to repurchase the affected Mortgage Loan on
account of such Breach or otherwise cure such Breach.
Notwithstanding anything herein to the contrary, the parties hereto
understand and agree that if a Material Document Defect or a Material Breach
existed with respect to any Mortgage Loan at the time it became an REO Loan and
either (i) the Seller had discovered or been notified of such Material Document
Defect or Material Breach at least 90 days prior to such Mortgage Loan's
becoming an REO Loan or (ii) such Material Document Defect or Material Breach,
regardless of whether it was yet discovered as of the date that such Mortgage
Loan became an REO Mortgage Loan, materially and adversely affects the value of
the related REO Property or material additional collateral or the interests of
the Purchaser, the Trust Fund or any Certificateholder therein, then the Seller
shall have the same cure/repurchase rights and obligations with respect to such
Material Document Defect or Material Breach and such related REO Property or
material additional collateral as it would have had with respect to the affected
Mortgage Loan, if it were still outstanding.
If there exists with respect to any REO Property an alleged Material
Breach or Material Document Defect, then in the event of a potential sale of
such REO Property, the Seller shall have the right to purchase such REO Property
from the Purchaser or its assigns at a purchase price equal to the amount of
such offer. The Seller shall have three (3) Business Days from the date that it
was notified of such offer to purchase such REO Property. The Special Servicer
shall provide the Seller with any appraisal or other third-party reports
relating to such REO Property within its possession to enable the Seller to
evaluate such REO Property. Any sale of a Mortgage Loan, or foreclosure upon
such Mortgage Loan and sale of any related REO Property, to a Person other than
the Seller shall be (i) without recourse of any kind (either expressed or
implied) by such Person against the Seller and (ii) without representation or
warranty of any kind (either expressed or implied) by the Seller to or for the
benefit of such Person.
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,
receivership 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
enter into and/or 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;
(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;
and
(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, shall have been delivered to the Seller,
the Purchaser and the Underwriters.
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) An officer's certificate of the Seller, executed by a duly
authorized officer of the Seller and dated the Closing Date, and upon which the
Purchaser 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 Closing Date;
(c) An officer's certificate from an officer of the Seller (signed
in his/her capacity as an officer), dated the Closing Date, and upon which the
Purchaser may rely, to the effect that each individual who, as an officer or
representative of the Seller, signed this Agreement 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 (signed
in his/her capacity as an officer), 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 articles of association and by-laws of the Seller, and a
certificate of good standing of the Seller issued by the State of Maryland not
earlier than sixty (60) days prior to the Closing Date.
(f) A written opinion of counsel for the Seller (which opinion may
be from in-house counsel, outside counsel or a combination thereof), reasonably
satisfactory to the Purchaser, its counsel and the Rating Agencies, dated the
Closing Date and addressed to the Purchaser, the Trustee, the Underwriters 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 the Diskette, (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 or (IV) any
such untrue statement or alleged untrue statement or omission or alleged
omission arises out of or is based upon any other information concerning the
characteristics of the Mortgage Loans, the related obligors on the Mortgage
Loans or the related Mortgaged Properties furnished to the Purchaser or the
Underwriters by the Seller; 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 or Annex A to the Prospectus
Supplement to the extent such information was not materially incorrect in the
Data File or such Annex A, as applicable, including without limitation the
aggregation of such information with comparable information relating to the
Other Mortgage Loans. The information described in clauses (I) through (IV)
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 Seller may otherwise
have.
(b) For purposes of this Agreement, "Registration Statement" shall
mean such registration statement No. 333-68246 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 February
6, 2002, as supplemented by the prospectus supplement dated February 14, 2002
(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 February
20, 2002, relating to the Non-Registered Certificates, including all exhibits
thereto; "Registered Certificates" shall mean the Class A-1, Class A-2, Class B,
Class C and Class D 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 ▇▇▇▇▇▇, Peabody Acceptance Corporation
I, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & 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 February 6, 2002 and rendered
by KPMG LLP (a "hard copy" of which Data File was initialed on behalf of the
Seller and the Purchaser).
(c) 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 the
indemnifying party's election 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).
(d) 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.
(e) The Purchaser and the Seller agree that it would not be just and
equitable if contribution pursuant to Section 7(d) 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(d) 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.
(f) 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.
(g) 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 GACC Mortgage Loan Balance
represents as 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 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; (vii) 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;
(viii) the expenses of printing any such "Blue Sky" survey and legal investment
survey; and (ix) the reasonable fees and disbursements of counsel to the
Underwriters; provided, however, Seller shall pay (or shall reimburse the
Purchaser to the extent that the Purchaser has paid) the expense of recording
any assignment of Mortgage or assignment of Assignment of Leases as contemplated
by Section 2 hereof with respect to such Seller's Mortgage Loans. 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 Article 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 9-313 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. No amendment
to the Pooling and Servicing Agreement which relates to defined terms contained
therein, Section 2.01(d) thereof or the repurchase obligations of the Seller
shall be effective against the Seller (in such capacity) unless the Seller shall
have agreed to such amendment in writing.
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.
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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GERMAN AMERICAN CAPITAL CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Authorized Signatory
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
Address for Notices:
Deutsche Banc Alex. ▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
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
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
SCHEDULE I
MORTGAGE LOAN REPRESENTATIONS AND WARRANTIES
For purposes of this Schedule, the phrases "to the knowledge of the
Seller" or "to the Seller's knowledge" shall mean, except where otherwise
expressly set forth below, the actual state of knowledge of the Seller or any
servicer acting on its behalf regarding the matters referred to, in each case:
(i) at the time of the Seller's origination or acquisition of the particular
Mortgage Loan, after the Seller having conducted such inquiry and due diligence
into such matters as would be customarily performed by a prudent institutional
commercial or multifamily, as applicable, mortgage lenders; and (ii) subsequent
to such origination, the Seller having utilized monitoring practices that would
be utilized by a prudent commercial or multifamily, as applicable, mortgage
lender and having made prudent inquiry as to the knowledge of the servicer
servicing such Mortgage Loan on its behalf. Also for purposes of these
representations and warranties, the phrases "to the actual knowledge of the
Seller" or "to the Seller's actual knowledge" shall mean, except where otherwise
expressly set forth below, the actual state of knowledge of the Seller or any
servicer acting on its behalf without any express or implied obligation to make
inquiry. All information contained in documents which are part of or required to
be part of a Mortgage File shall be deemed to be within the knowledge and the
actual knowledge of the Seller. Wherever there is a reference to receipt by, or
possession of, the Seller of any information or documents, or to any action
taken by the Seller or not taken by the Seller, such reference shall include the
receipt or possession of such information or documents by, or the taking of such
action or the failure to take such action by the Seller or any servicer acting
on its behalf.
The Seller represents and warrants with respect to each Mortgage
Loan that, as of the date specified below or, if no such date is specified, as
of the Cut-Off Date, except as set forth on the Schedules attached hereto:
1. The information pertaining to each Mortgage Loan set forth in the
Mortgage Loan Schedule to the Pooling and Servicing Agreement was true and
accurate in all material respects as of the Cut-Off Date.
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 the full right, power and authority to sell,
transfer and assign each Mortgage Loan and had good 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,
participation interests, security interests or any other ownership
interests or encumbrances of any nature (other than the rights to
servicing and related compensation as reflected in the Mortgage Loan
Schedule). The Seller is validly and effectively conveying to the
Purchaser all legal and beneficial interest in and to such Mortgage Loan
free and clear of any pledge, lien, claim, security interest or any other
ownership interest or encumbrance of any kind. No person other than the
Master Servicer and, with respect to Loan No. 57 Green River Center, GMAC
Commercial Mortgage Corporation, has been granted or conveyed the right to
service the Mortgage Loan or receive any consideration in connection
therewith. The sale of the Mortgage Loans to the Purchaser or its designee
does not require the Seller to obtain any governmental or regulatory
approval or consent that has not been obtained.
4. The proceeds of such Mortgage Loan have been fully disbursed and
there is no requirement for future advances thereunder. Any requirements
under the related Mortgage Loan documents regarding the completion of any
on-site or off-site improvements and disbursements of any escrow funds
therefor have been or are being complied with or escrow funds are still
being held pending completion. The value of the Mortgaged Property
relative to the value reflected in the most recent appraisal thereof is
not impaired by any improvements which have not been completed.
5. Each related Mortgage Note, Mortgage, Assignment of Leases (if
any) and other material agreements and documents executed by the related
Mortgagor or guarantor in connection with such Mortgage Loan is a legal,
valid and binding obligation of the related Mortgagor or guarantor, as
applicable (subject to any non-recourse provisions therein and any state
anti-deficiency or market value limit deficiency legislation), enforceable
in accordance with its terms, except with respect to provisions relating
to default interest, late charges, additional interest, yield maintenance
charges or prepayment premiums and except as such enforcement may be
limited by bankruptcy, insolvency, reorganization, redemption,
liquidation, receivership, moratorium or other laws relating to or
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).
6. There exists as part of the related Mortgage File an Assignment
of Leases either as a separate document or as part of the Mortgage. Each
related Assignment of Leases creates a valid, first priority collateral
assignment of, or a valid perfected first priority lien on or security
interest in, certain rights under the related lease or leases, including
the right to receive all payment due under the related Lease, subject only
to a license granted to the related Mortgagor to exercise certain rights
and to perform certain obligations of the lessor under such lease or
leases, including the right to operate the related leased property.
7. Subject to the exceptions and limitations set forth in paragraph
5 above, there is no right of rescission, offset, abatement or diminution,
or valid defense or counterclaim with respect to any of the related
Mortgage Note(s), Mortgage(s) or other agreements executed in connection
therewith, except in each case, with respect to the enforceability of any
provisions requiring the payment of default interest, late charges,
additional interest, prepayment premiums or yield maintenance charges. The
Seller has no actual knowledge of any such rights, defenses or
counterclaims having been asserted.
8. Each related assignment of Mortgage and assignment of Assignment
of Leases from the Seller to the Trustee has been or will be duly
authorized, executed and delivered in recordable form (but for the
insertion of the name and address of the assignee and any related
recording information which is not yet available to the Seller) by the
Seller and constitutes the legal, valid, binding and enforceable
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
related Mortgage and Assignment of Leases is freely assignable by Seller.
9. Each related Mortgage is properly recorded (or, if not recorded,
has been submitted in proper form for recording), in the applicable
jurisdiction and constitutes a legal, valid and enforceable first lien on
the related Mortgaged Property, except as set forth in paragraph 5,
subject only to the following title exceptions (each such exception, a
"Title Exception", and collectively, the "Title Exceptions"): (a) the lien
of current real property taxes, water charges, sewer rents and assessments
not yet delinquent or accruing interest or penalties, (b) covenants,
conditions and restrictions, rights of way, easements and other matters of
public record and rights of tenants (as tenants only) and (c) the
exceptions (general and specific) and exclusions set forth in the mortgage
policy of title insurance issued with respect to the Mortgage Loan and
none of which is a mortgage lien that is pari passu or senior to the
Mortgage Loan (with the exception of a Mortgage Loan which is
cross-collateralized with one or more other Mortgage Loans); and such
Mortgaged Property was, as of the origination of the Mortgage Loan, and,
to the Seller's knowledge, is free and clear of any mechanics' and
materialmen's liens (or rights that could give rise to a mechanic's or
materialmen's lien) which are prior to or equal with the lien of the
related Mortgage, except those which are insured against or for which
there is neither an exclusion nor an exception, in a lender's title
insurance policy as described above. None of the Title Exceptions,
individually or in the aggregate, materially and adversely interferes with
the current use or operation 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 Mortgage Loan.
10. 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 described therein owned by a
Mortgagor and located on the related Mortgaged Property (other than any
personal property subject to a leasing arrangement permitted under the
terms of such Mortgage Loan or any other applicable personal property
leases (provided, the related Mortgage Loan documents contain a provision
providing for the assignment of such leases and related contracts to the
mortgagee in the event of a foreclosure of the Mortgage Loan) and in all
cases, subject to a purchase money security interest), to the extent
perfection may be effected pursuant to applicable law by recording or
filing UCC Financing Statements, 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 security interest on such items of personalty except
as enforceability may be limited as set forth in paragraph 5 and to the
extent such documents may create a valid and enforceable lien on such
items of personalty. In the case of each Mortgage Loan secured by a hotel,
the related loan documents contain such provisions as are necessary and
UCC Financing Statements have been filed as necessary, in each case, to
perfect a valid first security interest in Mortgagor's related operating
revenues with respect to such Mortgaged Property. An assignment of each
UCC Financing Statement relating to the Mortgage Loan has been completed
or will be prepared in blank which the Purchaser or Trustee, as
applicable, or its designee is authorized to complete and to file in the
filing office in which such Financing Statement was filed. 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.
11. No real estate taxes and governmental assessments that prior to
the Cut-Off Date became due and owing in respect of each related Mortgaged
Property are delinquent and unpaid, or, an escrow of funds in an amount
sufficient to cover such payments has been established. Such taxes and
assessments shall not be considered delinquent or unpaid until the date on
which interest or penalties may first be payable thereon.
12. In the case of each Mortgage Loan, one or more engineering
assessments were performed and prepared by an independent engineering
consultant firm, which visited the related Mortgaged Property, not more
than 12 months prior to the origination date of the related Mortgage Loan,
and except as set forth in an engineering report prepared in connection
with such assessment, a copy of which has been delivered to the Purchaser
or its designee as part of the related Servicing File, the related
Mortgaged Property is, to the Seller's knowledge, relying solely on the
review of such engineering assessment(s), in good repair, free and clear
of any damage that would materially and adversely affect its value as
security for such Mortgage Loan. If an engineering report revealed any
such damage or deficiencies, material deferred maintenance or other
similar conditions as described in the preceding sentence either (1) an
escrow of funds equal to at least 125% of the amount estimated to effect
the necessary repairs, or such other amount as a prudent commercial
mortgage lender would deem appropriate under the circumstances was
required or a letter of credit in such amount was obtained or (2) such
repairs and maintenance have been completed. As of the date of origination
of such Mortgage Loan there was no proceeding pending, and subsequent to
such date, the Seller has not received notice of, any pending or
threatened proceeding for the condemnation of all or any material portion
of the Mortgaged Property securing any Mortgage Loan.
13. The Seller has received an ALTA lender's title insurance policy
or a comparable form of lender's title insurance policy (or if such policy
has not yet been issued, such insurance may be evidenced by escrow
instructions, a "marked up" pro forma or specimen policy or title
commitment, in either case, marked as binding and countersigned by the
title insurer or its authorized agent at the closing of the related
Mortgage Loan) as adopted in the applicable jurisdiction (the "Title
Insurance Policy"), which to the Mortgage Seller's knowledge, was issued
by a title insurance company qualified to do business in the jurisdiction
where the applicable Mortgaged Property is located to the extent required,
insuring that the related Mortgage is a valid first lien in the original
principal amount of the related Mortgage Loan on the Mortgagor's fee
simple interest (or, if applicable, leasehold interest) in the portion of
the Mortgaged Property comprised of real estate, subject only to the Title
Exceptions. Such Title Insurance Policy was issued in connection with the
origination of the related Mortgage Loan. No claims have been made under
such Title Insurance Policy. Such Title Insurance Policy is in full force
and effect, provides that the originator of the related Mortgage Loan, its
successors or assigns is the sole named insured, and all premiums thereon
have been paid. The Seller has not done, by act or omission, and the
Seller has no knowledge of, anything that would impair the coverage under
such Title Insurance Policy. Immediately following the transfer and
assignment of the related Mortgage Loan to the Trustee (including
endorsement and delivery of the related Mortgage Note to the Trustee and
recording of the related Assignment of Mortgage in favor of Trustee in the
applicable real estate records), such Title Insurance Policy will inure to
the benefit of the Trustee without the consent of or notice to the title
insurer. Such Title Insurance Policy contains no material exclusions for,
or affirmatively insures against any losses arising from (other than in
jurisdictions in which affirmative insurance is unavailable) (a) access to
public roads, (b) that there are no material encroachments of any part of
the building thereon over easements and (c) that the land shown on the
survey is the same as the property legally described in the Mortgage.
14. Each Mortgaged Property was covered by (1) a fire and extended
perils included within the classification "All Risk of Physical Loss"
insurance policy in an amount (subject to a customary deductible) at least
equal to the lesser of the replacement cost of improvements located on
such Mortgaged Property, with no deduction for depreciation, or the
outstanding principal balance of the Mortgage Loan and in any event, the
amount necessary to avoid the operation of any co-insurance provisions;
(2) business interruption or rental loss insurance in an amount at least
equal to 12 months of operations of the related Mortgaged Property; and
(3) 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
commercial mortgage lenders, but not less than $1 million. An
architectural or engineering consultant has performed an analysis of each
of the Mortgaged Properties located in seismic zones 3 or 4 in order to
evaluate the structural and seismic condition of such property, for the
sole purpose of assessing the probable maximum loss ("PML") for the
Mortgaged Property in the event of an earthquake. In such instance, the
PML was based on a 475 year lookback with a 10% probability of exceedance
in a 50 year period. If the resulting report concluded that the PML would
exceed 20% of the amount of the replacement costs of the improvements,
earthquake insurance on such Mortgaged Property was obtained by an insurer
rated at least A:VIII by A.M. Best Company or "BBB-" (or the equivalent)
from S&P or "Baa3" (or the equivalent) from ▇▇▇▇▇'▇. If the Mortgaged
Property is located in Florida or within 25 miles of the coast of Texas,
Louisiana, Mississippi, Alabama, Georgia, North Carolina or South Carolina
such Mortgaged Property is insured by windstorm insurance in an amount at
least equal to the lesser of (i) the outstanding principal balance of such
Mortgage Loan and (ii) 100% of the full insurable value, or 100% of the
replacement cost, of the improvements located on the related Mortgaged
Property. Such insurance is required by the Mortgage or related Mortgage
Loan documents and was in full force and effect with respect to each
related Mortgaged Property at origination and to the knowledge of the
Seller, all insurance coverage required under each Mortgage, is in full
force and effect with respect to each related Mortgaged Property; 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 a 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 to (1) the repair or restoration of
the related Mortgaged Property with mortgagee or a third party custodian
acceptable to the mortgagee having the right to hold and disburse the
proceeds as the repair or restoration progresses, other than with respect
to amounts that are customarily acceptable to commercial and multifamily
mortgage lending institutions, or (2) the reduction of the outstanding
principal balance of the Mortgage Loan and accrued interest thereon. To
the Seller's actual knowledge, the insurer with respect to each policy is
qualified to write insurance in the relevant jurisdiction to the extent
required. The insurance policies contain a standard mortgagee clause
naming the originator of the related Mortgage Loan, its successors and
assigns as loss payees in the case of property insurance policies and
additional insureds in the case of liability insurance policies and
provide that they are not terminable and may not be reduced without 30
days prior written notice to the mortgagee (or, with respect to
non-payment of premiums, 10 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 the
Mortgagor fails to do so. Additionally, for any Mortgage Loan having an
unpaid principal balance equal to or greater than $15,000,000, the Insurer
has a claims paying ability rating from S&P of not less than "A-" (or the
equivalent) or ▇▇▇▇▇'▇ of not less than "A3" (or the equivalent) or A.M.
Best of not less than A:VIII.
15. Other than payments due but not yet 30 days or more past due,
(A) as of the Closing Date there is no material default, breach, violation
or event of acceleration existing under the related Mortgage Note or each
related Mortgage that materially and adversely affects the value of the
Mortgage Loan or the related Mortgaged Property, and (B) since the date of
origination of such Mortgage Loan, there has been no declaration by the
Seller of an event of acceleration under the related Mortgage or Mortgage
Note, and (C) the Seller has no knowledge of any event 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 under any of such documents that materially and adversely
affects the value of the Mortgage Loan or the related Mortgaged Property;
provided, however, that the representation and warranty set forth in
either (A) or (C) does not address or otherwise cover any material
default, breach, violation or event of acceleration that specifically
pertains to any matter otherwise covered by any other representation or
warranty made by the Seller in any of paragraphs 11, 12, 16, 19, 28, 29
and 44 of this Schedule I; the Seller has not waived any other material
default, breach, violation or event of acceleration under any of such
documents, except for a written waiver contained in the related Mortgage
File being delivered to the Purchaser; provided, however, no such waiver
with respect to a Mortgage Loan has been granted since the date upon which
the due diligence file related to the applicable Mortgage Loan was
delivered to Allied Capital Corporation; and under the terms of each
Mortgage Loan, each related Mortgage Note, each related Mortgage and the
other loan documents in the related Mortgage File, no person or party
other than the holder of such Mortgage Note may declare an event of
default or accelerate the related indebtedness under such Mortgage Loan,
Mortgage Note or Mortgage.
16. Each 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, without giving effect to any applicable grace
period.
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 described on Schedule 17.
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, each 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, unless such
other lien secures a Mortgage Loan that is cross-collateralized with such
Mortgage Loan, in which event the computation of the fair market value of
the referenced interest in real property will be made on a pro rata basis
in accordance with the fair market values of the Mortgaged Properties
securing such cross-collateralized Mortgage Loans, 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. 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. Yield Maintenance Charges
or Prepayment Premiums payable with respect to each Mortgage Loan, if any,
constitute "customary prepayment penalties" within meaning of Treasury
Regulation Section 1.860G-1(b)(2).
19. One or more Phase I environmental site assessments covering
environmental hazards typically assessed for properties similar to the
Mortgaged Property, including use, type, condition, age and tenants of the
Mortgaged Property (or updates thereof) (each a "Phase I") meeting the
requirements of the American Society for Testing and Materials and, with
respect to certain Mortgage Loans, a Phase II environmental assessment and
report (together with the related Phase I report or reports, collectively,
the "Environmental Reports") were performed by a reputable environmental
consulting firm which was independent of the Seller and the Seller's
affiliates with respect to each related Mortgaged Property within the 18
months prior to the origination of the related Mortgage Loan.
Notwithstanding the preceding sentence, with respect to the Mortgage Loans
set forth on Schedule 19 with an original principal balance of less than
$3 million, no Phase I may have been obtained, but a lender's secured
creditor impairment environmental insurance policy was obtained with
respect to each such Mortgage Loan and is part of the related Mortgage or
Servicing File. The Seller, having made no independent inquiry other than
to review the Environmental Report(s), if any, prepared in connection with
the assessment(s) referenced herein, has no 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
Environmental Report(s). A copy of each Environmental Report is a part of
the related Mortgage or Servicing File. With respect to any material and
adverse environmental condition or circumstance disclosed in any such
Environmental Report, one of the following statements is true: (i) such
material and adverse condition or circumstance has been remediated in all
material respects, or (ii) sufficient funds reasonably estimated to effect
such remediation have been escrowed with the Seller for purposes of
effecting such remediation, or (iii) the cost of remediation is less than
2% of the original principal balance of the related Mortgage Loan and the
related Mortgagor or one of its affiliates is currently taking or required
to take such actions, if any, with respect to such conditions or
circumstances as have been recommended by the Environmental Report or
required by the applicable governmental authority, or (iv) another
responsible party not related to the Mortgagor with assets reasonably
estimated by the Seller at the time of origination to be sufficient to
effect all necessary or required remediation identified in a notice or
other action approved by the applicable governmental authority is
currently taking or required to take such actions, if any, with respect to
such regulatory authority's order or directive, or (v) environmental
insurance has been obtained with respect to such matters, subject to
customary limitations, or (vii) such conditions or circumstances
identified in the Environmental Report were investigated further and based
upon such additional investigation, an environmental consultant
recommended no further investigation or remediation, or (viii) a party
with financial resources reasonably estimated to be adequate to cure the
condition or circumstance provided a guaranty or indemnity to the related
Mortgagor or to the mortgagee to cover the costs of any required
investigation, testing, monitoring or remediation, or (ix) the related
Mortgagor or other responsible party obtained a "No Further Action" letter
or other evidence reasonably acceptable to a prudent commercial mortgage
lender that applicable federal, state, or local governmental authorities
had no current intention of taking any action, and are not requiring any
action, in respect of such condition or circumstance, or (x) the
expenditure of funds reasonably estimated to be necessary to effect such
remediation is not greater than two percent (2%) of the outstanding
principal balance of the related Mortgage Loan. All such Environmental
Reports that were in the possession of the originator of the Mortgage Loan
and that relate to a Mortgaged Property which is insured by an
environmental insurance policy have been delivered to or disclosed to the
environmental insurance carrier issuing such policy or its agent prior to
the issuance of such policy. Each Mortgage Loan requires the related
Mortgagor to comply, and cause the related Mortgaged Property to be in
compliance, with all applicable federal, state and local environmental
laws and regulations. The Seller has not taken any action which would
cause the Mortgaged Property not to be in compliance with all federal,
state and local laws pertaining to environmental hazards or which could
subject the Seller or its successors and assigns to liability under such
laws. Each Mortgagor represents and warrants in the related Mortgage Loan
documents generally to the effect that except as set forth in certain
specified environmental reports and to its knowledge that as of the date
of origination of such Mortgage Loan, there were no hazardous materials on
the related Mortgaged Property other than as otherwise permitted by
applicable law, code or regulation and that the Mortgagor has covenanted
not to use, cause or permit to exist on the related Mortgaged Property any
hazardous materials in any manner which violates federal, state or local
laws, ordinances or regulations governing the use, storage, treatment,
transportation, manufacture, refinement, handling, production or disposal
of hazardous materials. The related Mortgagor (or an affiliate thereof)
has agreed to indemnify the mortgagee against, or otherwise be liable for,
any and all losses resulting from a breach of environmental
representations, warranties or covenants given by the Mortgagor in
connection with such Mortgage Loan.
20. Each related Mortgage contains customary and enforceable
provisions such as to render the rights and remedies of the holder thereof
adequate for the practical realization against the Mortgaged Property of
the principal benefits of the security, including realization by judicial
or, if applicable, non-judicial foreclosure, except as the enforcement of
the Mortgage may be limited by bankruptcy, insolvency, reorganization,
redemption, liquidation, receivership, moratorium or other laws relating
to or 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).
21. As of the Closing Date no Mortgaged Property, nor any portion
thereof, is the subject of, and no Mortgagor under a Mortgage Loan is a
debtor in any state or federal bankruptcy, insolvency or similar
proceeding.
22. Each Mortgage Loan is a whole loan, and not a participation
interest in a mortgage 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 provide for negative
amortization (other than the ARD Loans). Neither the Seller nor any
Affiliate thereof has any obligation to make any capital contribution to
the Mortgagor under the Mortgage Loan or otherwise.
23. The Mortgage contains a "due on sale" clause, which provides for
the acceleration of the payment of the unpaid principal balance of the
Mortgage Loan if, without the prior written consent of the holder of the
Mortgage, either the related Mortgaged Property, or any equity interest in
the related Mortgagor, is directly or indirectly transferred, sold or
pledged, other than by reason of family and estate planning transfers,
transfers of less than a controlling interest (as such term is defined in
the related Mortgage Loan documents) in the Mortgagor, issuance of
non-controlling new equity interests, transfers to an affiliate meeting
the requirements of the Mortgage Loan, transfers among existing members,
partners or shareholders in the Mortgagor, transfers among affiliated
Mortgagors with respect to cross-collateralized Mortgaged Loans or
multi-property Mortgage Loans or transfers of a similar nature to the
foregoing meeting the requirements of the Mortgage Loan (such as pledges
of ownership interests that do not result in a change of control). The
Mortgage requires the Mortgagor to pay all reasonable fees and expenses
associated with securing the consents or approvals described in the
preceding sentence including the cost of any required counsel opinions
relating to REMIC or other securitization and tax issues and any
applicable Rating Agency fees.
24. 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 other than any
material amendment or modification which has been effected pursuant to a
written instrument and has been duly submitted for recordation to the
extent necessary to protect the interests of the mortgagee, and is a part
of the related Mortgage File. Except as set forth on Schedule 24, no
consents, waivers, modifications, alterations or assumptions of any kind
with respect to a Mortgage Loan have occurred since the date upon which
the due diligence file related to the applicable Mortgage Loan was
delivered to Allied Capital Corporation.
25. Each related Mortgaged Property was inspected by or on behalf of
the originator of the related Mortgage Loan within the 12 months 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. The terms of the related Mortgage do not provide for
release of any material portion of the Mortgaged Property from the lien of
the Mortgage except (a) in consideration of payment therefor of not less
than 125% of the related allocated loan amount of such Mortgaged Property,
(b) upon payment in full of such Mortgage Loan, (c) upon defeasance
permitted under the terms of such Mortgage Loan 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. government securities sufficient to pay the Mortgage Loan in
accordance with its terms, (d) upon substitution of a replacement property
with respect to such Mortgage Loan as set forth on Schedule 26, (e) where
release is conditional upon the satisfaction of certain underwriting and
legal requirements which would be acceptable to a reasonably prudent
commercial mortgage lender and the payment of a release price that
represents at least 125% of the appraised value of such Mortgaged Property
or (f) releases of unimproved out-parcels or other portions of the
Mortgaged Property which will not have a material adverse effect on the
underwritten value of the security for the Mortgage Loan and which were
not afforded any value in the appraisal obtained at the origination of the
Mortgage Loan.
27. Each Mortgage Loan containing provisions for defeasance of all
or a portion of the Mortgaged Property either (i) requires the prior
written consent of, and compliance with all conditions set by, the holder
of the Mortgage Loan, (ii) requires confirmation from the rating agencies
rating the certificates of any securitization transaction in which such
Mortgage Loan is included that such defeasance will not cause the
downgrade, withdrawal or qualification of the then current ratings of such
certificates, or (iii) requires that (A) defeasance must occur in
accordance with the requirements of, and within the time permitted by,
applicable REMIC rules and regulations, (B) the replacement collateral
consists of non-callable U.S. government securities in an amount
sufficient to make all scheduled payments under such Mortgage Loan when
due, (C) at the mortgagee's election, the Mortgage Loan may only be
assumed by a single-purpose entity designated or approved by the holder of
the Mortgage Loan and (D) counsel provide an opinion that the Trustee has
a perfected security interest in such U.S. government securities prior to
any other claim or interest. The Mortgagor is required by the Mortgage
Loan documents to pay all reasonable costs and expenses, including Rating
Agency fees, associated with defeasance.
28. To the Seller's knowledge, as of the date of origination of such
Mortgage Loan, based on an opinion of counsel, an endorsement to the
related title policy, a zoning letter or a zoning report, and, to the
Seller's knowledge, 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, the improvements thereon 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 which are not covered by
title insurance. Any non-conformity with zoning laws constitutes a legal
non-conforming use or structure which, in the event of casualty or
destruction, may be restored or repaired to the full extent of the use or
structure at the time of such casualty, or for which law and ordinance
insurance coverage has been obtained in amounts customarily required by
prudent commercial mortgage lenders, or such non-conformity does not
materially and adversely affect the use, operation or value of the
Mortgaged Property.
29. To the Seller's knowledge, based on surveys or the Title
Insurance Policy, 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 for which the use or improvements
are legally non-conforming) to an extent which would have a material
adverse effect on the value or 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 an extent which would have a material adverse
effect on the value or the related Mortgagor's use and operation of such
Mortgaged Property unless covered by the Title Insurance Policy.
30. Each Mortgage Loan with an original principal balance over
$5,000,000 requires the Mortgagor to be for at least for so long as the
Mortgage Loan is outstanding, and to Seller's actual knowledge each
Mortgagor is, a Single-Purpose Entity. For this purpose, "Single-Purpose
Entity" means a person, other than an individual, whose organizational
documents provide, or which entity represented and covenanted in the
related Mortgage Loan documents, substantially to the effect that such
Mortgagor (i) does not and will not have any material assets other than
those related to its interest in such Mortgaged Property or Properties or
the financing thereof; (ii) does not and will not have any indebtedness
other than as permitted by the related Mortgage or other related Mortgage
Loan documents; (iii) maintains its own books, records and accounts, in
each case which are separate and apart from the books, records and
accounts of any other person; and (iv) holds itself out as being a legal
entity, separate and apart from any other person. With respect to each
Mortgage Loan with an original principal balance over $15,000,000, the
organizational documents of the related Mortgagor provide substantially to
the effect that such Mortgagor (i) does not and will not have any material
assets other than those related to its interest in such Mortgaged Property
or Properties or the financing thereof; (ii) does not and will not have
any indebtedness other than as permitted by the related Mortgage or other
related Mortgage Loan documents; (iii) maintains its own books, records
and accounts, in each case which are separate and apart from the books,
records and accounts of any other person; and (iv) holds itself out as
being a legal entity, separate and apart from any other person. The
Servicing File for each such Mortgage Loan having an original principal
balance of $20,000,000 or more contains a counsel's opinion regarding
non-consolidation of the Mortgagor in any insolvency proceeding involving
any other party. The organizational documents of any Mortgagor on a
Mortgage Loan having an original principal balance of $15,000,000 or more
which is a single member limited liability company provide that the
Mortgagor shall not dissolve or liquidate upon the bankruptcy,
dissolution, liquidation or death of the sole member. With respect to any
such single member limited liability company, which is the Mortgagor on a
Mortgage Loan having an original principal balance of $15,000,000 or more,
there was obtained and the Servicing File contains an opinion of such
Mortgagor's counsel confirming that the law of the jurisdiction in which
such single member limited liability company was organized permits such
continued existence upon such bankruptcy, dissolution, liquidation or
death of the sole member of the Mortgagor.
31. No advance of funds has been made after origination, directly or
indirectly, by the Seller to the Mortgagor and, to the Seller's 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.
32. To the Seller's actual knowledge, as of the Cut-Off Date, there
was no pending action, suit or proceeding against the Mortgagor or the
related Mortgaged Property, which could reasonably be expected to
materially and adversely affect either such Mortgagor's performance under
the related Mortgage Loan documents, the security intended to be provided
by the Mortgage Loan documents or the value or current use of the
Mortgaged Property. The Seller has received no notice of any governmental
investigation against the Mortgagor or the related Mortgaged Property that
could reasonably be expected to materially and adversely affect either
such Mortgagor's performance under the related Mortgage Loan documents,
the security intended to be provided by the Mortgage Loan documents or the
current use of the Mortgaged Property.
33. The Mortgage Rate (exclusive of any default interest, late
charges or prepayment premiums) of such Mortgage Loan (other than an ARD
Loan after the Anticipated Repayment Date) is a fixed rate, and 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. If the related Mortgage is a deed of trust, a trustee, duly
qualified under applicable law to serve as such, is properly designated
and serving under such Mortgage or may be substituted in accordance with
applicable law by the related mortgagee, and no fees or expenses are, or
will become, payable to the trustee under the deed of trust, except in
connection with a trustee's sale after default by the related Mortgagor or
in connection with the release of the related Mortgaged Property or
related security for such Mortgage Loan following payment of such Mortgage
Loan in full and such fees, to the extent payable to such trustee, are
obligations of the related Mortgagor.
35. 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 and disclosed on the
Mortgage Loan Schedule. There is no material collateral securing any
Mortgage Loan that has not been or will not be assigned to the Trustee.
36. The improvements located on the Mortgaged Property are either
(i) not located in a federally designated special flood hazard area or if
so located flood insurance is not required by the Federal Emergency
Management Agency or (ii) if so located and required, the Mortgagor is
required to maintain, or the mortgagee maintains, a flood insurance policy
with respect to such improvements meeting the requirements of the then
current guidelines of the Federal Insurance Administration is in effect in
an amount representing coverage not less than the lesser of (1) the
outstanding principal balance of such Mortgage Loan, and (2) the maximum
amount of insurance available under the applicable National Flood
Insurance Administration Program. Such insurance is required by the
Mortgage or related Mortgage Loan documents and was in full force and
effect with respect to each related Mortgaged Property at origination and
to the knowledge of the Seller, such insurance coverage required under
each Mortgage, is in full force and effect with respect to each related
Mortgaged Property; and no notice of termination or cancellation with
respect to any such insurance policy has been received by the Seller.
37. All escrow deposits and payments required pursuant to the
Mortgage Loan as of the Closing Date required to be deposited with the
Seller in accordance with the Mortgage Loan Documents have been deposited
with and are in the possession, or under the control, of the Seller or its
agent and there are no deficiencies (subject to any applicable grace or
cure periods) in connection therewith and all such escrows, deposits and
payments have been applied in accordance with their intended purposes or
are being conveyed by the applicable Seller to the Purchaser and
identified as such with appropriate detail.
38. The related Mortgagor has represented to the Seller that, and
the Mortgage or other related Mortgage Loan documents require, and to the
knowledge of the Seller, as of the date of origination of the Mortgage
Loan, such Mortgagor or 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, which the related
Mortgagor represented were valid and in full force and effect, and, as of
the Cut-Off Date, the Seller has no knowledge of termination, breach,
default or invalidity.
39. The origination (or acquisition, as the case may be), servicing
and collection practices used by the Seller or, to the actual knowledge of
the Seller, any predecessor or prior servicer with respect to the Mortgage
Loan, have been in all respects legal and have met customary industry
standards.
40. In respect of each Mortgage Loan, in reliance on certified
copies of the incorporation or partnership or other entity documents, as
applicable, delivered in connection with the origination of such Mortgage
Loan, the related Mortgagor is an entity organized under the laws of a
state of the United States of America, the District of Columbia or the
Commonwealth of Puerto Rico.
41. Except as described on Schedule 41, each Mortgage Loan is
non-recourse, except that the Mortgagor and a guarantor who is ether a
principal of the Mortgagor or other entity or natural person with assets
other than any interest in the Mortgagor has agreed to be liable for all
liabilities, losses, damages, expenses or claims suffered or incurred by
the holder of the Mortgage Loan by reason of or in connection with: (i)
any fraud and/or other intentional material misrepresentation by the
Mortgagor, (ii) misapplication or misappropriation of rents or insurance
proceeds (to the extent received by the related Mortgagor after the
occurrence of an event of default and not paid to the Mortgagee or applied
to the Mortgaged Property in the ordinary course of business), insurance
payments or condemnation awards or (iii) violation of applicable
environmental laws or breaches of environmental covenants in the Mortgage
or related environmental indemnity or guaranty.
42. Each Mortgaged Property constitutes one or more separate tax
lots (or will constitute separate tax lots 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 lots.
43. Each Mortgage requires the Mortgagor upon request to provide the
owner or holder of the Mortgage with quarterly (except for some Mortgage
Loans with an original principal balance less than $5,000,000) and annual
operating statements (or a balance sheet and statement of income and
expenses, rent rolls (if there is more than one tenant) and related
information which annual financial statements for all Mortgage Loans with
an outstanding principal balance greater than $20,000,000 are required to
be audited by an independent certified public accountant.
44. Each Mortgage Loan is secured by the fee interest in the related
Mortgaged Property, except with respect to the Mortgage Loans listed on
Schedule 44 attached hereto, which Mortgage Loans are secured by the
interest of the related Mortgagor as a lessee under a ground lease of a
Mortgaged Property (a "Ground Lease") (the term Ground Lease shall mean
such ground lease, all written amendments and modifications, and any
related estoppels or agreements from the ground lessor and, in the event
the Mortgagor's interest is a ground subleasehold, shall also include not
only such ground sublease but also the related ground lease), but not by
the related fee interest in such Mortgaged Property (the "Fee Interest")
and:
(A) Such Ground Lease or a memorandum thereof has been or will
be duly recorded; 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, and does not restrict the use of the
related Mortgaged Property by such lessee, its successors or
assigns, in a manner that would materially adversely affect the
security provided by the related Mortgage; and there has been no
material change in the terms of such Ground Lease since its
recordation, with the exception of written instruments which are a
part of the related Mortgage File;
(B) Such Ground Lease is not subject to any liens or
encumbrances superior to, or of equal priority with, the related
Mortgage, other than the related Fee Interest and Title Exceptions;
(C) The Mortgagor's interest in such Ground Lease is
assignable to the mortgagee and its successors and assigns upon
notice to, but without the consent of, the lessor thereunder (or, if
such consent is required, it has been obtained prior to the Cut-Off
Date) and, in the event that it is so assigned, is further
assignable by the mortgagee and its successors and assigns upon
notice to, but without the need to obtain the consent of, such
lessor;
(D) As of the Closing Date such Ground Lease is in full force
and effect, and the Seller has not received notice (nor is the
Seller otherwise aware) that any default has occurred under such
Ground Lease as of the Cut-Off Date;
(E) Seller or its agent has provided the lessor under the
Ground Lease with notice of its lien, and such Ground Lease requires
the lessor to give notice of any default by the lessee to the
mortgagee, and such Ground Lease, further provides that no notice of
termination given under such Ground Lease is effective against such
mortgagee unless a copy has been delivered to such mortgagee in the
manner described in such Ground Lease;
(F) The mortgagee under such Mortgage Loan is permitted a
reasonable opportunity to cure any default under such Ground Lease
(including where necessary, sufficient time to gain possession of
the interest of the lessee under the Ground Lease), which is curable
after the receipt of written notice of any such default, before the
lessor thereunder may terminate such Ground Lease, and all of the
rights of the Mortgagor under such Ground Lease and the related
Mortgage (insofar as it relates to the Ground Lease) may be
exercised by or on behalf of the mortgagee;
(G) Such Ground Lease has a current term (including one or
more optional renewal terms, which, under all circumstances, may be
exercised, and will be enforceable, by the Seller, its successors or
assigns) which extends not less than 10 years beyond the
amortization term of the related Mortgage Loan;
(H) Such Ground Lease requires the lessor to enter into a new
lease with the mortgagee under such Mortgage Loan upon termination
of such Ground Lease for any reason, including rejection of such
Ground Lease in a bankruptcy proceeding;
(I) Under the terms of such Ground Lease and the related
Mortgage, taken together, any related insurance proceeds will be
applied either (i) to the repair or restoration of all or part of
the related Mortgaged Property, with the mortgagee under such
Mortgage Loan or a trustee appointed by it having the right to hold
and disburse such proceeds as the repair or restoration progresses
(except in such cases where a provision entitling another party to
hold and disburse such proceeds would not be viewed as commercially
unreasonable by a prudent commercial mortgage lender), or (ii) to
the payment of the outstanding principal balance of such Mortgage
Loan together with any accrued interest thereon;
(J) Such Ground Lease does not impose any restrictions on
subletting which would be viewed as commercially unreasonable by a
prudent commercial mortgage lender; and the lessor thereunder is not
permitted, in the absence of an uncured default, to disturb the
possession, interest or quiet enjoyment of any lessee in the
relevant portion of the Mortgaged Property subject to such Ground
Lease for any reason, or in any manner, which would materially
adversely affect the security provided by the related Mortgage; and
(K) Such Ground Lease may not be amended or modified without
the prior consent of the mortgagee under such Mortgage Loan and any
such action without such consent is not binding on such mortgagee,
its successors or assigns.
45. Except with respect to the Mortgage Loans secured by Ground
Leases, each of the Mortgagors (or its affiliates) has title in the fee
simple interest in each related Mortgaged Property.
46. If Loan No. 1, 2, 15 or 45 is not paid in full by its
Anticipated Repayment Date, and assuming that it is not otherwise in
default, the rate at which such Mortgage Loan accrues interest will
increase to the greater of the sum of the original Mortgage Rate and 200
basis points or a specified treasury index plus the original spread plus
200 basis points. The Anticipated Repayment Date is not less than 5 years
from the date of origination of Loan No. 1, 2, 15 or 45, as the case may
be. After the Anticipated Repayment Date, the respective loan documents
provide that excess cash flow after payment of expenses, including
scheduled interest and capital expenditures approved by the lender, will
be used to repay principal and the related Mortgagor is required (if it
has not previously done so) to enter into a "lockbox agreement" whereby
all revenue from the related Mortgaged Property shall be deposited
directly into a designated account controlled by the holder of the
Mortgage Loan.
47. 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.
48. The Mortgage Loan was not originated for the purpose of
financing the construction of incomplete improvements on the related
Mortgaged Property other than tenant improvements.
49. In the origination and servicing of the Mortgage Loan, neither
Seller nor the originator nor any employee or agent of Seller or such
originator participated in any fraud or intentional material
misrepresentation with respect to the Mortgage Loan. To Seller's
knowledge, no Mortgagor or guarantor originated a Mortgage Loan.
50. The Mortgage or Servicing File contains an appraisal of the
related Mortgaged Property, 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.
51. Except as disclosed in Schedule 51 or the Prospectus Supplement,
(1) no Mortgagor is the mortgagor with respect to more than one Mortgage
Loan and (2) to the Seller's knowledge, no group of Mortgage Loans with
affiliated Mortgagors have an aggregate principal balance equaling more
than $0.
52. If the Mortgaged Property securing any Mortgage Loan is covered
by a secured creditor policy, then:
(a) the Seller:
(i) has disclosed, or is aware that there has been disclosed, in the
application for such policy or otherwise to the insurer under such policy
the "pollution conditions" (as defined in such policy) identified in any
environmental reports related to such Mortgaged Property which are in the
Seller's possession or are otherwise known to the Seller; or
(ii) has delivered or caused to be delivered to the insurer or its
agent under such policy copies of all environmental reports in the
Seller's possession related to such Mortgaged Property,
in each case with respect to (i) or (ii) to the extent required by such policy
or to the extent the failure to make any such disclosure or deliver any such
report would materially and adversely affect the Mortgagor's ability to recover
under such policy;
(b) all premiums for such insurance have been paid;
(c) such insurance is in full force and effect;
(d) such insurance has a term of at least 5 years beyond the
Maturity Date (or the Anticipated Repayment Date for ARD Loans) of such Mortgage
Loan;
(e) an environmental report, a property condition report or an
engineering report was prepared that included an assessment for lead based paint
("LBP") (in the case of a multifamily property built prior to 1978), asbestos
containing materials ("ACM") (in the case of any property built prior to 1985)
and radon gas ("RG") (in the case of a multifamily property) at such Mortgaged
Property and (ii) if such report disclosed the existence of a material and
adverse LBP, ACM or RG environmental condition or circumstance affecting such
Mortgaged Property, then, except as otherwise described on Schedule 52, (A) the
related Borrower was required to remediate such condition or circumstance prior
to the closing of the subject Mortgage Loan, or (B) the related Borrower was
required to provide additional security reasonably estimated to be adequate to
cure such condition or circumstance, or (C) such report did not recommend any
action requiring the expenditure of any material funds and the related Mortgage
Loan documents require the related Borrower to establish an operations and
maintenance plan with respect to such condition or circumstance after the
closing of such Mortgage Loan; and
(f) rights under such policy inure to the benefit of the Trustee.
If the Mortgage Loan is listed on Schedule 52 and the environmental insurance
for such Mortgage Loan is not a secured creditor policy but was required to be
obtained by the Mortgagor, then the holder of the Mortgage Loan is entitled to
be an additional insured under such policy, all premiums have been paid, such
insurance is in full force and effect and, to the Seller's knowledge, the
Mortgagor has made the disclosures and complied with the requirements of clauses
(a) and (b) of this paragraph 52.
53. If the Mortgaged Property is subject to any leases, the
Mortgagor is the owner and holder of the landlord's interest under any
leases (with the exception of any ground lease under which the Mortgagor
is a lessee) and the related Mortgage and/or Assignment of Leases provides
for the appointment of a receiver for rents or allows the mortgagee to
enter into possession to collect rents or provides for rents to be paid
directly to mortgagee in the event of a default.
EXCEPTIONS TO REPRESENTATIONS AND WARRANTIES
SCHEDULE 27
-----------
Loan No. Exception
-------- ---------
15 Doubletree Guest Suites Fort Although the Mortgage Loan documents do not
Lauderdale, Florida explicitly state that the Mortgagor is
responsible for the costs and expenses
incurred in connection with defeasance,
under the terms of such documents, it is
Mortgagor's obligation to satisfy the
defeasance requirements set forth therein,
and the Mortgagor would do so presumably at
its own expense. Alternatively, to the
extent such defeasance is deemed a consent,
the Mortgage Loan documents obligate the
Mortgagor to pay the expenses of Mortgagee
incurred in granting any such consent.
SCHEDULE 36
-----------
Loan No. Exception
-------- ---------
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ of Commerce The amount of required flood insurance is
equal to at least the lesser of (1) the
replacement cost of the Mortgaged Property
(or if the replacement cost coverage is not
available, the amount of the debt) or (2)
the maximum amount of insurance available
under the applicable National Flood
Insurance Administration Program. However,
the underwriting for this Mortgage Loan
indicates that the replacement cost of the
improvements is 119% of the debt.
SCHEDULE 38
-----------
Loan No. Exception
-------- ---------
1 Wilshire Union Center At the time of origination, the Mortgagor
had not obtained certificates of occupancy
for the Autozone Premises, which is
currently vacant, and the McDonald's
Premises. The Mortgage Loan documents
required the Mortgagor to deposit at
origination with Seller $1,500,000 in the
case of the Autozone Premises and
$1,250,000 in the case of the McDonald's
Premises, as holdbacks, each to be released
upon satisfaction of certain conditions,
including that the Mortgagor obtain a
permanent, unconditional certificate of
occupancy for the applicable premises.
SCHEDULE 41
-----------
Loan No. Exception
-------- ---------
2 The Promenade An entity or natural person with assets
other than an interest in the Mortgagor has
not agreed to be liable for losses suffered
in connection with the violation of
applicable environmental laws or breaches
of environmental covenants in the Mortgage
or related environmental indemnity or
guaranty. However, the Mortgagor has
agreed to be liable for such losses, and
the Mortgagor has obtained a secured
creditor insurance policy.
58 Herndon Center V An entity or natural person with assets
other than an interest in Mortgagor has not
agreed to be liable for losses suffered in
connection with the violation of applicable
environmental laws or breaches of
environmental covenants in the Mortgage or
related environmental indemnity or
guaranty. However, the Mortgagor and the
general partner of the Mortgagor have
agreed to be liable for such losses.
15 Doubletree Guest Suites Fort An entity or natural person with assets
Lauderdale, Florida other than an interest in the Mortgagor has
not agreed to be liable for losses suffered
in connection with the fraud and/or other
material misrepresentation by the Mortgagor
or the misapplication or misappropriation of
rents or insurance proceeds, insurance
payments or condemnation awards.
SCHEDULE 42
-----------
Loan No. Exception
-------- ---------
57 Green River Center Parcel 2 of the Mortgaged Property does not
constitute a tax parcel separate from the
property adjacent to it. However, the
owner of the adjacent property is an
affiliate of the Mortgagor, and taxes will
be impounded for the adjoining property
until such time as Parcel 2 is its own tax
parcel.
SCHEDULE 46
-----------
Loan No. Exception
-------- ---------
1 Wilshire Union Center If the Mortgage Loan is not paid in full by
its Anticipated Repayment Date, and
assuming that it is not otherwise in
default, the rate at which such Mortgage
Loan accrues interest will increase to (1)
the greater of the sum of (i) the original
Mortgage Rate and 500 basis points or (ii)
a specified treasury index plus 500 basis
points or (2) for so long as the Note is an
asset of a trust, partnership, corporation
or other entity formed in connection with a
secondary market transaction pursuant to
which securities rated by a rating agency
have been issued, the sum of the original
Mortgage Rate and 200 basis points.
2 The Promenade If the Mortgage Loan is not paid in full by
its Anticipated Repayment Date, and
assuming that it is not otherwise in
default, the rate at which such Mortgage
Loan accrues interest will increase to the
sum of the original Mortgage Rate and 300
basis points.
15 Doubletree Guest Suites Fort If the Mortgage Loan is not paid in full by
Lauderdale, Florida its Anticipated Repayment Date, and
assuming that it is not otherwise in
default, the rate at which such Mortgage
Loan accrues interest will increase to the
greater of the sum of the original Mortgage
Rate and 350 basis points or a specified
treasury index plus 550 basis points.
45 Whiteville Shopping Center If the Mortgage Loan is not paid in full by
its Anticipated Repayment Date, and
assuming that it is not otherwise in
default, the rate at which such Mortgage
Loan accrues interest will increase to the
sum of the original Mortgage Rate and 200
basis points.
EXHIBIT A
MORTGAGE LOAN SCHEDULE
MORTGAGE LOAN
NUMBER MORTGAGE LOAN SELLER PROPERTY NAME
------------------------------------------------------------------------------------------------------------------------------------
1 Deutsche Bank Wilshire Union Center
2 Deutsche Bank The ▇▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇ Bank Doubletree Guest Suites Fort Lauderdale, Florida
17 Deutsche Bank Shoppes at ▇▇▇▇▇▇ / Pier I Shopping Center
17.01 Deutsche Bank Shoppes at ▇▇▇▇▇▇
17.02 Deutsche Bank Pier One Shopping Center
22 Deutsche Bank St. ▇▇▇▇▇ Apartments
25 Deutsche Bank Northwood Apartments
30 Deutsche Bank Flamingo Park of Commerce
43 Deutsche Bank Peninsula Portfolio
43.01 Deutsche Bank Peninsula Business Center I & II
43.02 Deutsche Bank Peninsula Oyster Point
45 Deutsche Bank Whiteville Shopping Center
50 Deutsche Bank Cheyenne Plaza
51 Deutsche Bank Pavilion Centre
57 Deutsche Bank Green River Center
58 Deutsche Bank Herndon Center V
70 Deutsche Bank Business Village West Condominiums
77 Deutsche Bank Court Square Office Building Phase I & III
93 Deutsche Bank ▇▇▇▇▇▇▇▇▇ Apartments
TABLE CONTINUED
MORTGAGE LOAN
NUMBER STREET ADDRESS PROPERTY CITY PROPERTY STATE
------------------------------------------------------------------------------------------------------------------------------------
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇
2 ▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇
15 ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇
17 Various Vestal NY
17.01 ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇
17.02 ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇
22 ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇
25 ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇
30 12000-13000 Miramar Parkway Miramar FL
43 Various Newport News VA
43.01 11751 & ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇
43.02 ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇
45 ▇▇-▇▇▇ ▇.▇. ▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇
50 ▇▇▇▇-▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇
51 ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇
57 4225,4325, and ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇
58 ▇▇▇-▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇
70 ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ (▇▇▇▇ ▇) ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇
77 ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇
93 ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇
TABLE CONTINUED
MORTGAGE LOAN
NUMBER PROPERTY ZIP CODE PROPERTY TYPE NUMBER OF UNITS UNIT TYPE ORIGINAL PRINCIPAL BALANCE
------------------------------------------------------------------------------------------------------------------------------------
1 90017 Retail 216,458 Sq. Ft. 35,000,000.00
2 92641 Retail 351,537 Sq. Ft. 27,600,000.00
15 33304 Hospitality 229 Rooms 13,916,184.99
17 13850 Retail 105,815 Sq. Ft. 10,975,000.00
17.01 13850 Retail 92,328 Sq. Ft.
17.02 13850 Retail 13,487 Sq. Ft.
22 89123 Multifamily 180 Units 9,800,000.00
25 21218 Multifamily 389 Units 9,700,000.00
30 33025 Mixed Use 109,664 Sq. Ft. 8,270,000.00
43 23606 Office 101,361 Sq. Ft. 5,500,000.00
43.01 23606 Office 62,292 Sq. Ft.
43.02 23606 Office 39,069 Sq. Ft.
45 28472 Retail 62,935 Sq. Ft. 5,450,000.00
50 89115 Retail 94,764 Sq. Ft. 5,000,000.00
51 72227 Office 50,403 Sq. Ft. 4,875,000.00
57 92880 Industrial 177,115 Sq. Ft. 4,375,000.00
58 20171 Retail 18,999 Sq. Ft. 4,000,000.00
70 84119 Industrial 65,794 Sq. Ft. 3,075,000.00
77 23832 Office 31,374 Sq. Ft. 2,475,000.00
93 23223 Multifamily 31 Units 1,800,000.00
TABLE CONTINUED
CURRRENT MONTHLY ORIG TERM REM TERM TO
MORTGAGE LOAN PRINCIPAL DEBT ACCRUAL TO STATED STATED
NUMBER BALANCE SERVICE RATE BASIS MATURITY MATURITY
------------------------------------------------------------------------------------------------------------------------------------
1 34,977,448.28 230,510.05 6.900% Actual/360 120 119
2 27,600,000.00 194,497.38 7.580% Actual/360 120 120
15 13,846,138.98 103,837.15 7.610% Actual/360 114 107
17 10,975,000.00 77,491.70 7.600% Actual/360 120 120
17.01
17.02
22 9,800,000.00 65,925.23 7.110% Actual/360 120 120
25 9,700,000.00 66,565.17 7.040% Actual/360 84 84
30 8,265,438.47 57,259.81 7.400% Actual/360 120 119
43 5,500,000.00 36,850.57 7.070% Actual/360 120 120
43.01
43.02
45 5,446,954.79 37,586.10 7.360% Actual/360 120 119
50 4,995,342.11 36,949.56 7.500% Actual/360 120 119
51 4,872,258.51 33,554.20 7.340% Actual/360 120 119
57 4,372,725.95 30,830.65 7.580% Actual/360 120 119
58 4,000,000.00 28,490.82 7.690% Actual/360 120 120
70 3,073,287.37 21,227.78 7.370% Actual/360 120 119
77 2,470,080.63 16,766.51 7.180% Actual/360 120 117
93 1,798,991.00 12,401.50 7.350% Actual/360 120 119
TABLE CONTINUED
STATED
MATURITY ORIG ▇▇▇ ▇▇▇ ANTICIPATED
MORTGAGE LOAN (OR ARD) AMORT AMORT LEASEHOLD SERVICING LOAN REPAYMENT
NUMBER DATE TERM TERM FLAG FEE FLAG DATE
------------------------------------------------------------------------------------------------------------------------------------
1 1/1/12 360 359 0.0500% ARD 1/1/12
2 2/1/12 360 360 0.0500% ARD 2/1/12
15 1/1/11 300 295 0.0500% ARD 1/1/11
17 2/1/12 360 360 0.0500%
17.01 0.0500%
17.02 0.0500%
22 2/1/12 360 360 0.0500%
25 2/1/09 330 330 0.0500%
30 1/1/12 360 359 0.0500%
43 2/1/12 360 360 0.0500%
43.01 0.0500%
43.02 0.0500%
45 1/1/12 360 359 0.0500% ARD 1/1/12
50 1/1/12 300 299 0.0500%
51 1/1/12 360 359 0.0500%
57 1/1/12 360 359 0.1250%
58 2/1/12 360 360 0.0500%
70 1/1/12 360 359 0.0500%
77 11/1/11 360 357 0.0500%
93 1/1/12 360 359 0.0500%
TABLE CONTINUED
LETTER
LEASE CROSS OF INTEREST
MORTGAGE LOAN ENHANCEMENT ENVIRONMENTAL COLLATERALIZED/ DEFEASANCE CREDIT RESERVE LOAN LOCKBOX
NUMBER POLICY FLAG POLICY FLAG DEFAULTED FLAG FLAG FLAG TYPE
------------------------------------------------------------------------------------------------------------------------------------
1 Defeasance Actual/360 Day 1
2 Yes Defeasance Actual/360 Day 1
15 Defeasance Actual/360 Day 1
17 Defeasance Actual/360
17.01
17.02
22 Defeasance Actual/360
25 Defeasance Actual/360
30 Defeasance Actual/360
43 Defeasance Actual/360
43.01
43.02
45 Defeasance Actual/360 Springing
50 Yes Defeasance Actual/360
51 Defeasance Actual/360
57 Defeasance Actual/360
58 Defeasance Actual/360
70 Defeasance Actual/360
77 Defeasance Actual/360
93 Defeasance Actual/360 Day 1
TABLE CONTINUED
INITIAL INITIAL TOTAL
MORTGAGE LOAN ENVIRONMENTAL REPAIR INITIAL TI/ RESERVE GRACE
NUMBER RESERVES RESERVES LC RESERVES FUNDS PERIOD NOTES
------------------------------------------------------------------------------------------------------------------------------------
1 2,750,000 2,750,000 5 Monthly Debt Service increases to
$244,010.05 at payment 61.
2 5
15 5
17 5
17.01
17.02
22 5
25 43,750 413,750 457,500 5
30 100,000 100,000 5
43 13,750 400,000 413,750 5
43.01
43.02
45 5
50 12,500 225,000 237,500 5
51 100,000 100,000 5
57 65,000 65,000 5
58 5
70 10,000 10,000 5
77 150,000 150,000 5
93 5