EXECUTION COPY
UBS MORTGAGE LOAN PURCHASE AGREEMENT
Mortgage Loan Purchase Agreement, dated as of November 20, 2007 (the
"Agreement"), between UBS Real Estate Securities Inc. (together with its
successors and permitted assigns hereunder, the "Seller") and Structured Asset
Securities Corporation II (together with its successors and permitted assigns
hereunder, the "Purchaser").
The Seller intends to sell and the Purchaser intends to purchase
certain multifamily and commercial mortgage loans (the "Mortgage Loans") as
provided herein. The Purchaser intends to deposit the Mortgage Loans, together
with certain other multifamily and commercial mortgage loans (the "Other Loans";
and, together with the Mortgage Loans, the "Securitized Loans"), into a trust
fund (the "Trust Fund"), the beneficial ownership of which will be evidenced by
multiple classes (each, a "Class") of mortgage pass-through certificates (the
"Certificates") to be identified as the LB-UBS Commercial Mortgage Trust
2007-C7, Commercial Mortgage Pass-Through Certificates, Series 2007-C7. One or
more "real estate mortgage investment conduit" ("REMIC") elections will be made
with respect to the Trust Fund. The Certificates will be issued pursuant to a
Pooling and Servicing Agreement, to be dated as of November 12, 2007 (the
"Pooling and Servicing Agreement"), between the Purchaser, as depositor,
Wachovia Bank, National Association, as master servicer (the "Master Servicer"),
LNR Partners, Inc., as special servicer (the "Special Servicer"), and LaSalle
Bank National Association, as trustee (the "Trustee"). Capitalized terms used
but not defined herein have the respective meanings set forth in the Pooling and
Servicing Agreement, as in effect on the Closing Date.
The Purchaser has entered into an Underwriting Agreement (the
"Underwriting Agreement"), dated as of the date hereof, with ▇▇▇▇▇▇ Brothers
Inc. ("▇▇▇▇▇▇"), Wachovia Capital Markets, LLC ("Wachovia Capital") and UBS
Securities LLC ("UBS-SEC" and, together with ▇▇▇▇▇▇ and Wachovia Capital in such
capacity, the "Underwriters"), whereby the Purchaser will sell to the
Underwriters all of the Certificates that are to be registered under the
Securities Act of 1933, as amended (the "Securities Act"). The Purchaser has
also entered into a Certificate Purchase Agreement (the "Certificate Purchase
Agreement"), dated as of the date hereof, with ▇▇▇▇▇▇ and UBS-SEC (together in
such capacity, the "Placement Agents"), whereby the Purchaser will sell to the
Placement Agents all of the remaining Certificates (other than the Residual
Interest Certificates).
In connection with the transactions contemplated hereby, the Seller,
the Purchaser, the Underwriters and the Placement Agents have entered into an
Indemnification Agreement (the "Indemnification Agreement"), dated as of the
date hereof.
Now, therefore, in consideration of the premises and the mutual
agreements set forth herein, the parties agree as follows:
SECTION 1. Agreement to Purchase.
The Seller agrees to sell, and the Purchaser agrees to purchase, the
Mortgage Loans identified on the schedule (the "Mortgage Loan Schedule") annexed
hereto as Exhibit A. The Mortgage Loan Schedule may be amended to reflect the
actual Mortgage Loans accepted by
the Purchaser pursuant to the terms hereof. The Mortgage Loans will have an
aggregate principal balance of $1,120,456,369.60 (the "Initial UBS Pool
Balance") as of the close of business on the Cut-off Date, after giving effect
to any and all payments of principal due thereon on or before such date, whether
or not received. The purchase and sale of the Mortgage Loans shall take place on
November 30, 2007 or such other date as shall be mutually acceptable to the
parties hereto (the "Closing Date"). The consideration for the Mortgage Loans
shall consist of: (A) a cash amount equal to a percentage (mutually agreed upon
by the parties hereto) of the Initial UBS Pool Balance, plus interest accrued on
each Mortgage Loan at the related Mortgage Rate (net of the related
Administrative Cost Rate), for the period from and including November 11, 2007
up to but not including the Closing Date, which cash amount shall be paid to the
Seller or its designee by wire transfer in immediately available funds (or by
such other method as shall be mutually acceptable to the parties hereto) on the
Closing Date; and (B) a 34.98330% Percentage Interest in each of the Class R-I,
Class R-II and Class R-III Certificates (all such Residual Interest
Certificates, the "Seller's Residual Interest Certificates").
SECTION 2. Conveyance of Mortgage Loans.
(a) Effective as of the Closing Date, subject only to receipt of the
purchase price referred to in Section 1 hereof and satisfaction or waiver of the
conditions to closing set forth in Section 8 hereof, the Seller does hereby
sell, transfer, assign, set over and otherwise convey to the Purchaser, without
recourse, all the right, title and interest of the Seller (other than the
primary servicing rights) in and to the Mortgage Loans identified on the
Mortgage Loan Schedule as of such date. The Mortgage Loan Schedule, as it may be
amended, shall conform to the requirements set forth in this Agreement and the
Pooling and Servicing Agreement.
(b) The Purchaser or its assignee shall be entitled to receive all
scheduled payments of principal and interest due after the Cut-off Date, and all
other recoveries of principal and interest collected after the Cut-off Date
(other than in respect of principal and interest on the Mortgage Loans due on or
before the Cut-off Date). All scheduled payments of principal and interest due
on or before the Cut-off Date for each Mortgage Loan, but collected after such
date, shall belong to, and be promptly remitted to, the Seller.
(c) On or before the Closing Date, the Seller shall, on behalf of the
initial Purchaser, deliver to and deposit with (i) the Trustee or a Custodian
appointed thereby, a Mortgage File for each Mortgage Loan in accordance with the
terms of, and conforming to the requirements set forth in, the Pooling and
Servicing Agreement, with copies of each Mortgage File to be delivered by the
Trustee to, upon request, the Master Servicer (at the expense of the Trustee),
within 10 Business Days of such request; and (ii) the Master Servicer (or, at
the direction of the Master Servicer, to the appropriate Sub-Servicer) or, in
the case of an Outside Serviced Trust Mortgage Loan, the applicable Outside
Servicer, all unapplied Escrow Payments and Reserve Funds in the possession or
under the control of the Seller that relate to the Mortgage Loans. In addition,
the Seller shall, in the case of each Mortgage Loan that is an Outside Serviced
Trust Mortgage Loan, deliver to and deposit with the Master Servicer, within 45
days of the Closing Date, a copy of the mortgage file that was delivered to the
related Outside Trustee under the related Non Trust Mortgage Loan Securitization
Agreement or to a custodian under a
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custodial agreement that relates solely to such Outside Serviced Trust Mortgage
Loan, as applicable.
(d) The Seller shall, through an Independent third party (the
"Recording Agent") retained by it, as and in the manner provided in the Pooling
and Servicing Agreement (and in any event within 45 days following the later of
the Closing Date and the date on which all necessary recording information is
available to the Recording Agent), cause (i) each assignment of Mortgage and
each assignment of Assignment of Leases, in favor of, and delivered as part of
the related Mortgage File to the Trustee, to be submitted for recordation in the
appropriate public office for real property records, and (ii) such assignments
to be delivered to the Trustee following their return by the applicable public
recording office, with copies of any such returned assignments to be delivered
by the Trustee to the Master Servicer, at the expense of the Seller, at least
every 90 days after the Closing Date (or at additional times upon the request of
the Master Servicer if reasonably necessary for the ongoing administration
and/or servicing of the related Mortgage Loan by the Master Servicer); provided
that, in those instances where the public recording office retains the original
assignment of Mortgage or assignment of Assignment of Leases, a certified copy
of the recorded original shall be forwarded to the Trustee. If any such document
or instrument is lost or returned unrecorded because of a defect therein, then
the Seller shall prepare a substitute therefor or cure such defect or cause such
to be done, as the case may be, and the Seller shall deliver such substitute or
corrected document or instrument to the Trustee (or, if the Mortgage Loan is
then no longer subject to the Pooling and Servicing Agreement, to the then
holder of such Mortgage Loan).
The Seller shall bear the out-of-pocket costs and expenses of all such
recording and delivery contemplated in the preceding paragraph, including,
without limitation, any out-of-pocket costs and expenses that may be incurred by
the Trustee in connection with any such recording or delivery performed by the
Trustee at the Seller's request and the fees of the Recording Agent.
Pursuant to the Pooling and Servicing Agreement and a letter agreement
dated November 30, 2007 (the "Filing Letter Agreement") between ▇▇ ▇▇▇▇▇▇
Capital Corporation (the "Payee"), the Depositor, the Seller, the Key Mortgage
Loan Seller, and the Trustee, the Trustee, through a third party (the "Filing
Agent") retained by it, as and in the manner provided in the Pooling and
Servicing Agreement and at the expense of the Payee (and in any event within 45
days following the later of the Closing Date and the date on which all necessary
filing information is available to the Filing Agent), is required to cause, (i)
an assignment of each Uniform Commercial Code financing statements delivered by
the Seller as part of the related Mortgage File to the Trustee, to be prepared
and submitted for filing in the appropriate public office, and (ii) such
assignments to be delivered to the Trustee following their return by the
applicable public filing office, with copies of any such returned assignments to
be delivered by the Trustee to the Master Servicer, at the expense of the
Seller, at least every 90 days after the Closing Date (or at additional times
upon the request of the Master Servicer if reasonably necessary for the ongoing
administration and/or servicing of the related Mortgage Loan by the Master
Servicer). The Seller hereby agrees to reasonably cooperate with the Trustee and
the Filing Agent with respect to the filing of the assignments of Uniform
Commercial Code financing statements as described in this paragraph and to
forward to the Trustee filing confirmation, if any, received in connection with
such Uniform Commercial Code financing statements filed in accordance with this
paragraph. Notwithstanding the foregoing, to the extent the Trustee provides the
Payee, pursuant to the Filing Letter Agreement, with an invoice for the expenses
(i) reasonably to be incurred in connection with the filings referred to in this
paragraph and (ii) required to be paid by the Payee pursuant to the Filing
Letter Agreement, and such expenses are not paid by the Payee in advance of such
filings, the Trustee, pursuant to the Pooling and Servicing Agreement and the
Filing Letter Agreement and at the expense of the Seller, shall only be required
to cause the filing agent to file the assignments of such Uniform Commercial
Code financing statements with respect to Mortgage Loans secured by hotel or
hospitality properties.
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(e) With respect to any Mortgage Loan (other than an Outside Serviced
Trust Mortgage Loan), the Seller shall, within 45 days of the Closing Date,
deliver or caused to be delivered to the Master Servicer (or, at the direction
of the Master Servicer, to the appropriate Sub-Servicer) the following documents
(other than any document that constitutes part of the Mortgage File for such
Mortgage Loan): copies of any final appraisal, final survey, final engineering
report, final environmental report, opinion letters of counsel to the related
mortgagor delivered in connection with the closing of such Mortgage Loan, escrow
agreements, reserve agreements, organization documentation for the related
mortgagor, organizational documentation for any related guarantor or indemnitor,
if the related guarantor or indemnitor is an entity, insurance certificates or
insurance review reports, leases for tenants representing 10% or more of the
annual income with respect to the related Mortgaged Property, final seismic
report and property management agreements, rent roll, property operating
statement and financial statements for the related guarantor or indemnitor, cash
management or lockbox agreement, zoning letters or zoning reports and the
documents, if any, specifically set forth on Exhibit C hereto (collectively, the
"Mortgage Origination Documents"), but in each case, only if the subject
document (a) was in fact obtained in connection with the origination of such
Mortgage Loan, (b) is reasonably necessary for the ongoing administration and/or
servicing of such Mortgage Loan by the Master Servicer or Special Servicer in
connection with its duties under the Pooling and Servicing Agreement, and (c) is
in the possession or under the control of the Seller; provided that the Seller
shall not be required to deliver any draft documents, privileged or other
communications or correspondence, credit underwriting or due diligence analyses
or information, credit committee briefs or memoranda or other internal approval
documents or data or internal worksheets, memoranda, communications or
evaluations.
(f) After the Seller's transfer of the Mortgage Loans to the
Purchaser, as provided herein, the Seller shall not take any action inconsistent
with the Purchaser's ownership of the Mortgage Loans. Except for actions that
are the express responsibility of another party hereunder or under the Pooling
and Servicing Agreement, and further except for actions that the Seller is
expressly permitted to complete subsequent to the Closing Date, the Seller
shall, on or before the Closing Date, take all actions required under applicable
law to effectuate the transfer of the Mortgage Loans by the Seller to the
Purchaser.
(g) In connection with the obligations of the Master Servicer under
the Pooling and Servicing Agreement, with regard to each Mortgage Loan (other
than an Outside Serviced Trust Mortgage Loan) that is secured by the interests
of the related Mortgagor in a hospitality property (identified on Schedule VI to
the Pooling and Servicing Agreement) and each Mortgage Loan (other than an
Outside Serviced Trust Mortgage Loan) that has a related letter of credit, the
Seller shall deliver to and deposit with the Master Servicer, on or before the
Closing Date, any related franchise agreement, franchise comfort letter and the
original of such letter of credit. Further, in the event, with respect to a
Mortgage Loan (other than an Outside Serviced Trust Mortgage Loan) with a
related letter of credit, the Master Servicer determines that a draw under such
letter of credit has become necessary under the terms thereof prior to the
assignment of such letter of credit having been effected in accordance with
Section 3.01(e) of the Pooling and Servicing Agreement, the Seller shall, upon
the written direction of the Master Servicer, use its best efforts to make such
draw or to cause such draw to be made on behalf of the Trustee.
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(h) Pursuant to the Pooling and Servicing Agreement, the Master
Servicer shall review the documents with respect to each Mortgage Loan delivered
by the Seller pursuant to or as contemplated by Section 2(e) hereof and provide
the Seller and the Controlling Class Representative and the Special Servicer
with a certificate (the "Master Servicer Certification") within 90 days of the
Closing Date acknowledging its (or the appropriate Sub-Servicer's) receipt as of
the date of the Master Servicer Certification of such documents actually
received (provided that such review shall be limited to identifying the document
received, the Serviced Trust Mortgage Loan to which it purports to relate, that
it appears regular on its face and that it appears to have been executed (where
appropriate)). Notwithstanding anything to the contrary set forth herein, to the
extent the Seller has not been notified in writing of its failure to deliver any
document with respect to a Mortgage Loan required to be delivered pursuant to or
as contemplated by Section 2(e) hereof prior to the date occurring 18 months
following the date of the Master Servicer Certification, the Seller shall have
no obligation to provide such document.
(i) In addition, on the Closing Date, the Seller shall deliver to the
Master Servicer for deposit in the Pool Custodial Account, the Initial Deposits
relating to the Mortgage Loans.
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 duly organized or formed, as the case may be,
validly existing and in good standing as a legal entity under the laws of
the State of Delaware and possesses all requisite authority, power,
licenses, permits and franchises to carry on its business as currently
conducted by it and to execute, deliver and comply with its obligations
under the terms of this Agreement.
(ii) This Agreement has been duly and validly authorized,
executed and delivered by the 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 (A)
bankruptcy, insolvency, reorganization, receivership, moratorium or other
similar laws affecting the enforcement of creditors' rights in general, and
(B) general equity principles (regardless of whether such enforcement is
considered in a proceeding in equity or at law).
(iii) The execution and delivery of this Agreement by the Seller
and the Seller's performance and compliance with the terms of this
Agreement will not (A) violate the Seller's organizational documents, (B)
violate any law or regulation or any administrative decree or order to
which the Seller is subject or (C) constitute a default (or an event which,
with notice or lapse of time, or both, would constitute a default) under,
or result in the breach of, any material contract, agreement or other
instrument to which the Seller is a party or by which the Seller is bound.
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(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 organizational document or any other corporate
or limited liability company (as applicable) restriction or any judgment,
order, writ, injunction, decree, law or regulation that would, in the
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
and delivery of this Agreement by the Seller or the performance by the
Seller of its obligations under this Agreement.
(vi) Except for the recordation and/or filing of assignments and
other transfer documents with respect to the Mortgage Loans, as
contemplated by Section 2(d) hereof, no consent, approval, authorization or
order of, registration or filing with, or notice to, any court or
governmental agency or body, is required for the execution, delivery and
performance by the Seller of or compliance by the Seller with this
Agreement or the consummation of the transactions contemplated by this
Agreement; and no bulk sale law applies to such transactions.
(vii) No litigation is pending or, to the best of the 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.
(viii) No proceedings looking toward merger, liquidation,
dissolution or bankruptcy of the Seller are pending or contemplated.
In addition, the Seller hereby further represents and warrants to, and
covenants with, the Purchaser, as of the date hereof, that:
(i) Under generally accepted accounting principles ("GAAP") and
for federal income tax purposes, the Seller will report the transfer of the
Mortgage Loans to the Purchaser, as provided herein, as a sale of the
Mortgage Loans to the Purchaser in exchange for the consideration specified
in Section 1 hereof. In connection with the foregoing, the Seller shall
cause all of its records to reflect such transfer as a sale (as opposed to
a secured loan). The consideration received by the Seller upon the sale of
the Mortgage Loans to the Purchaser will constitute at least reasonably
equivalent value and fair consideration for the Mortgage Loans. The Seller
will be solvent at all relevant times prior to, and will not be rendered
insolvent by, the sale of the Mortgage Loans to the Purchaser. The Seller
is not selling the Mortgage Loans to the Purchaser with any intent to
hinder, delay or defraud any of the creditors of the Seller. After giving
effect to its
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transfer of the Mortgage Loans to the Purchaser, as provided herein, the
value of the Seller's assets, either taken at their present fair saleable
value or at fair valuation, will exceed the amount of the Seller's debts
and obligations, including contingent and unliquidated debts and
obligations of the Seller, and the Seller will not be left with
unreasonably small assets or capital with which to engage in and conduct
its business. The Mortgage Loans do not constitute all or substantially all
of the assets of the Seller. The Seller does not intend to, and does not
believe that it will, incur debts or obligations beyond its ability to pay
such debts and obligations as they mature.
(ii) The Seller will acquire the Seller's Residual Interest
Certificates for its own account and not with a view to, or sale or
transfer in connection with, any distribution thereof, in whole or in part,
in any manner that would violate the Securities Act or any applicable state
securities laws.
(iii) The Seller understands that (A) the Seller's Residual
Interest Certificates have not been and will not be registered under the
Securities Act or registered or qualified under any applicable state
securities laws, (B) neither the Purchaser nor any other party is obligated
so to register or qualify the Seller's Residual Interest Certificates and
(C) neither the Seller's Residual Interest Certificates nor any security
issued in exchange therefor or in lieu thereof may be resold or transferred
unless it is (1) registered pursuant to the Securities Act and registered
or qualified pursuant to any applicable state securities laws or (2) sold
or transferred in a transaction which is exempt from such registration and
qualification and the Certificate Registrar has received the certifications
and/or opinions of counsel required by the Pooling and Servicing Agreement.
(iv) The Seller understands that it may not sell or otherwise
transfer the Seller's Residual Interest Certificates, any security issued
in exchange therefor or in lieu thereof or any interest in the foregoing
except in compliance with the provisions of Section 5.02 of the Pooling and
Servicing Agreement, which provisions it has or, as of the Closing Date,
will have carefully reviewed, and that the Seller's Residual Interest
Certificates will bear legends that identify the transfer restrictions to
which such Certificates are subject.
(v) Neither the Seller nor anyone acting on its behalf has (A)
offered, transferred, pledged, sold or otherwise disposed of any Seller's
Residual Interest Certificate, any interest in a Seller's Residual Interest
Certificate or any other similar security to any person in any manner, (B)
solicited any offer to buy or accept a transfer, pledge or other
disposition of any Seller's Residual Interest Certificate, any interest in
a Seller's Residual Interest Certificate or any other similar security from
any person in any manner, (C) otherwise approached or negotiated with
respect to any Seller's Residual Interest Certificate, any interest in a
Seller's Residual Interest Certificate or any other similar security with
any person in any manner, (D) made any general solicitation by means of
general advertising or in any other manner, or (E) taken any other action,
that (in the case of any of the acts described in clauses (A) through (E)
above) would constitute a distribution of the Seller's Residual Interest
Certificates under the Securities Act, would render the disposition of the
Seller's Residual Interest Certificates a violation
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of Section 5 of the Securities Act or any state securities law or would
require registration or qualification of the Seller's Residual Interest
Certificates pursuant thereto. The Seller will not act, nor has it
authorized nor will it authorize any person to act, in any manner set forth
in the foregoing sentence with respect to the Seller's Residual Interest
Certificates, any interest in the Seller's Residual Interest Certificates
or any other similar security.
(vi) The Seller has been furnished with all information regarding
(A) the Purchaser, (B) the Seller's Residual Interest Certificates and
distributions thereon, (C) the nature, performance and servicing of the
Other Loans, (D) the Pooling and Servicing Agreement and the Trust Fund,
and (E) all related matters, that it has requested.
(vii) The Seller is either (a) a "qualified institutional buyer"
within the meaning of Rule 144A under the Securities Act or (b) an
"accredited investor" as defined in any of paragraphs (1), (2), (3) and (7)
of Rule 501(a) under the Securities Act or an entity in which all its
equity owners are "accredited investors" as defined in such paragraphs and
has such knowledge and experience in financial and business matters as to
be capable of evaluating the merits and risks of an investment in the
Seller's Residual Interest Certificates. The Seller has sought such
accounting, legal and tax advice as it has considered necessary to make an
informed investment decision; and the Seller is able to bear the economic
risks of such an investment and can afford a complete loss of such
investment.
(viii) The Seller is not a Plan and is not directly or indirectly
acquiring the Seller's Residual Interest Certificates on behalf of, as
named fiduciary of, as trustee of or with assets of a Plan.
(ix) The Seller is a United States Tax Person and is not a
Disqualified Organization.
(b) The Seller hereby makes, for the benefit of the Purchaser, with
respect to each Mortgage Loan, as of the Closing Date or as of such other date
expressly set forth therein, each of the representations and warranties set
forth on Exhibit B hereto.
(c) The Seller intends to transfer the Seller's Residual Interest
Certificates to ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ ▇▇▇▇▇ Inc. on or about the Closing
Date; and, in connection therewith, the Seller will comply with all of the
requirements of Section 5.02 of the Pooling and Servicing Agreement, as in
effect on the Closing Date, and applicable law. The Seller hereby directs the
Purchaser to cause the Seller's Residual Interest Certificates to be registered
in the name of ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ ▇▇▇▇▇ Inc. upon initial issuance.
SECTION 4. Representations and Warranties of the Purchaser.
In order to induce the Seller to enter into this Agreement, the
Purchaser hereby represents and warrants for the benefit of the Seller as of the
date hereof that:
(i) The Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. The
Purchaser has the full
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corporate power and authority and legal right to acquire the Mortgage Loans
from the Seller and to transfer the Mortgage Loans to the Trustee.
(ii) This Agreement has been duly and validly authorized,
executed and delivered by the Purchaser and, assuming due authorization,
execution and delivery hereof by the Seller, constitutes a legal, valid and
binding obligation of the Purchaser, enforceable against the Purchaser in
accordance with its terms, except as such enforcement may be limited by (A)
bankruptcy, insolvency, reorganization, receivership, moratorium or other
similar laws affecting the enforcement of creditors' rights in general, and
(B) general equity principles (regardless of whether such enforcement is
considered in a proceeding in equity or at law).
(iii) The execution and delivery of this Agreement by the
Purchaser and the Purchaser's performance and compliance with the terms of
this Agreement will not (A) violate the Purchaser's organizational
documents, (B) violate any law or regulation or any administrative decree
or order to which the Purchaser is subject or (C) constitute a default (or
an event which, with notice or lapse of time, or both, would constitute a
default) under, or result in the breach of, any material contract,
agreement or other instrument to which the Purchaser is a party or by which
the Purchaser is bound.
(iv) Except as may be required under federal or state securities
laws (and which will be obtained on a timely basis), no consent, approval,
authorization or order of, registration or filing with, or notice to, any
governmental authority or court, is required for the execution, delivery
and performance by the Purchaser of or compliance by the Purchaser with
this Agreement, or the consummation by the Purchaser of any transaction
described in this Agreement.
(v) Under GAAP and for federal income tax purposes, the Purchaser
will report the transfer of the Mortgage Loans by the Seller to the
Purchaser, as provided herein, as a sale of the Mortgage Loans to the
Purchaser in exchange for the consideration specified in Section 1 hereof.
SECTION 5. Notice of Breach; Cure; Repurchase.
(a) If the Seller receives written notice or obtains actual knowledge
with respect to any Mortgage Loan (i) that any document constituting a part of
clauses (a)(i) through (a)(xiii) (or, in the case of an Outside Serviced Trust
Mortgage Loan, clause(b)(i)) of the definition of Mortgage File or a document,
if any, specifically set forth on Exhibit D hereto, has not been executed (if
applicable) or is missing (a "Document Defect") or (ii) of a breach of any of
the Seller's representations and warranties made pursuant to Section 3(b) hereof
(each such breach, a "Breach") relating to any Mortgage Loan, and such Document
Defect or Breach, as of the date specified in Section 5(b)(i) hereof, materially
and adversely affects the value of the Mortgage Loan, then such Document Defect
shall constitute a "Material Document Defect" or such Breach shall constitute a
"Material Breach", as the case may be. In the event the Seller obtains actual
knowledge of a Material Document Defect or Material Breach, then the Seller
shall deliver written notification to the Trustee with respect thereto. Then,
following receipt by
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the Seller of a Seller/Depositor Notification with respect to such Material
Document Defect or Material Breach, as the case may be, the Seller shall
(subject to Sections 5(f), (g) and (h) hereof), (A) not later than (1) 30 days
after the Seller and the Purchaser have agreed upon the existence of such
Material Document Defect or Material Breach or (2) 30 days after an arbitration
panel makes a binding determination, in accordance with the provisions of
Section 5(i) hereof, that a Material Document Defect or Material Breach exists
or (B) in the case of a Material Document Defect or Material Breach that affects
whether a Mortgage Loan was, as of the Closing Date, is or will continue to be a
"qualified mortgage" within the meaning of the REMIC Provisions (a "Qualified
Mortgage"), not later than 90 days following the discovery by any party of such
Material Document Defect or Material Breach (each such 30-day period referred to
in clause (A)(1) above, or such 30-day period referred to in clause (A)(2)
above, or such 90-day period referred to in clause (B) above, as applicable, is
referred to as the "Initial Resolution Period"): (i) cure such Material Document
Defect or Material Breach, as the case may be, in all material respects (which
cure shall include payment of any out-of-pocket expenses that are reasonably
incurred and directly attributable to pursuing such a claim based on such
Material Document Defect or Material Breach associated therewith), or (ii) if
such Material Document Defect or Material Breach, as the case may be, cannot be
cured within the Initial Resolution Period, repurchase the affected Mortgage
Loan (or the related Mortgaged Property) from, and in accordance with the
directions of, the Purchaser or its designee, at a price equal to the Purchase
Price; provided that if (a) such Material Breach or Material Document Defect, as
the case may be, is capable of being cured but not within the applicable Initial
Resolution Period, (b) any such Material Breach or Material Document Defect, as
the case may be, does not affect whether the Mortgage Loan was, as of the
Closing Date, is or will continue to be a Qualified Mortgage, (c) the Seller has
commenced and is diligently proceeding with the cure of such Material Breach or
Material Document Defect, as the case may be, within the applicable Initial
Resolution Period, and (d) the Seller shall have delivered to the Purchaser a
certification executed on behalf of the Seller by an officer thereof confirming
that such Material Breach or Material Document Defect, as the case may be, is
not capable of being cured within the applicable Initial Resolution Period,
setting forth what actions the Seller is pursuing in connection with the cure
thereof and stating that the Seller anticipates that such Material Breach or
Material Document Defect, as the case may be, will be cured within an additional
period not to exceed 90 days beyond the end of the Initial Resolution Period (in
the event the Seller and the Purchaser have agreed upon the existence of such
Material Document Defect or Material Breach as described under clause (A)(1), or
45 days beyond the end of the Initial Resolution Period (in the event an
arbitration panel has made a binding determination, as described under clause
(A)(2) hereof, that a Material Document Defect or Material Breach exists), then
the Seller shall have such additional 90-day period or 45-day period, as the
case may be (each such period, the "Resolution Extension Period"), to complete
such cure or, failing such, to repurchase the affected Mortgage Loan (or the
related Mortgaged Property); and provided, further, that, if any such Material
Document Defect is still not cured after the Initial Resolution Period and any
such applicable Resolution Extension Period solely due to the failure of the
Seller to have received a recorded document, then the Seller shall be entitled
to continue to defer its cure and repurchase obligations in respect of such
Material Document Defect so long as the Seller certifies to the Purchaser every
six months thereafter that the Material Document Defect is still in effect
solely because of its failure to have received the recorded document and that
the Seller is diligently pursuing the cure of such
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defect (specifying the actions being taken). The parties acknowledge that
neither delivery of a certification or schedule of exceptions to the Seller
pursuant to Section 2.02(b) of the Pooling and Servicing Agreement or otherwise
nor possession of such certification or schedule by the Seller shall, in and of
itself, constitute delivery of notice of any Material Document Defect or
Material Breach or knowledge or awareness by the Seller of any Material Document
Defect or Material Breach.
If, during the period of deferral by the Seller of its cure and
repurchase obligations as contemplated by the last proviso of the penultimate
sentence of the preceding paragraph, the Mortgage Loan that is the subject of
the Material Document Defect either becomes a Specially Serviced Mortgage Loan
or becomes the subject of a proposed or actual assumption of the obligations of
the related Mortgagor under such Mortgage Loan, then, following receipt by the
Seller of a Seller/Depositor Notification providing notice of such event, the
Seller shall cure the subject Material Document Defect within the time period
specified in such Seller/Depositor Notification. If, upon the expiration of such
period, the Seller has failed to cure the subject Material Document Defect, the
Master Servicer or the Special Servicer, as applicable, shall be entitled (but
not obligated) to perform the obligations of the Seller with respect to curing
the subject Material Document Defect and, in the event of such an election, the
Seller shall pay all reasonable actual out-of-pocket costs and expenses in
connection with the applicable servicer's effecting such cure.
(b) (i) Provided that any Seller/Depositor Notification with respect
to a Material Document Defect or Material Breach is received by the Seller in
accordance with the provisions of the Pooling and Servicing Agreement, within 24
months of the Closing Date, the material and adverse effect of the related
Document Defect or Breach shall be determined as of the date hereof. After the
expiration of 24 months following the Closing Date, the material and adverse
effect of any Document Defect or Breach that was not the subject of another
Seller/Depositor Notification received by the Seller (in accordance with the
provisions of the Pooling and Servicing Agreement) within 24 months of the
Closing Date, shall be determined as of the date of such Seller/Depositor
Notification.
(ii) In the event the Seller is obligated to repurchase any
Mortgage Loan pursuant to this Section 5, such obligation shall extend to
any successor REO Mortgage Loan with respect thereto as to which (A) the
subject Material Breach existed as to the subject predecessor Mortgage Loan
prior to the date the related Mortgaged Property became an REO Property or
within 90 days thereafter, and (B) as to which the Seller had received, no
later than 90 days following the date on which the related Mortgaged
Property became an REO Property, a Seller/Depositor Notification from the
Trustee regarding the occurrence of the applicable Material Breach and
directing the Seller to repurchase the subject Mortgage Loan.
(c) If one or more (but not all) of the Mortgage Loans constituting a
Cross-Collateralized Group are to be repurchased by the Seller as contemplated
by Section 5(a) hereof, then, prior to the subject repurchase, the Seller or its
designee shall use reasonable efforts, subject to the terms of the related
Mortgage Loans, to prepare and, to the extent necessary and appropriate, have
executed by the related Mortgagor and record, such documentation as may be
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necessary to terminate the cross-collateralization between the Mortgage Loans in
such Cross-Collateralized Group that are to be repurchased, on the one hand, and
the remaining Mortgage Loans therein, on the other hand, such that those two
groups of Mortgage Loans are each secured only by the Mortgaged Properties
identified in the Mortgage Loan Schedule as directly corresponding thereto;
provided that, if such Cross-Collateralized Group is still subject to the
Pooling and Servicing Agreement, then no such termination shall be effected
unless and until (i) the Purchaser or its designee has received from the Seller
(A) an Opinion of Counsel to the effect that such termination will not cause an
Adverse REMIC Event to occur with respect to any REMIC Pool or an Adverse
Grantor Trust Event with respect to the Grantor Trust and (B) written
confirmation from each Rating Agency that such termination will not cause an
Adverse Rating Event to occur with respect to any Class of Certificates and (ii)
the Controlling Class Representative (if one is acting) has consented (which
consent shall not be unreasonably withheld and shall be deemed to have been
given if no written objection is received by the Seller within 10 Business Days
of the Controlling Class Representative's receipt of a written request for such
consent); and provided, further, that the Seller may, at its option, purchase
the entire Cross-Collateralized Group in lieu of terminating the
cross-collateralization. All costs and expenses incurred by the Purchaser or its
designee pursuant to this paragraph shall be included in the calculation of
Purchase Price for the Mortgage Loan(s) to be repurchased. If the
cross-collateralization of any Cross-Collateralized Group is not or cannot be
terminated as contemplated by this paragraph, then, for purposes of (i)
determining whether the subject Breach or Document Defect, as the case may be,
materially and adversely affects the value of such Cross-Collateralized Group,
and (ii) the application of remedies, such Cross-Collateralized Group shall be
treated as a single Mortgage Loan.
(d) It shall be a condition to any repurchase of a Mortgage Loan by
the Seller pursuant to this Section 5 that the Purchaser shall have executed and
delivered such instruments of transfer or assignment then presented to it by the
Seller (or as otherwise required to be prepared, executed and delivered under
the Pooling and Servicing Agreement), in each case without recourse, as shall be
necessary to vest in the Seller the legal and beneficial ownership of such
Mortgage Loan (including any property acquired in respect thereof or proceeds of
any insurance policy with respect thereto), to the extent that such ownership
interest was transferred to the Purchaser hereunder. If any Mortgage Loan is to
be repurchased as contemplated by this Section 5, the Seller shall amend the
Mortgage Loan Schedule to reflect the removal of such Mortgage Loan and shall
forward such amended schedule to the Purchaser.
(e) Any repurchase of a Mortgage Loan pursuant to this Section 5 shall
be on a whole loan, servicing released basis. The Seller shall have no
obligation to monitor the Mortgage Loans regarding the existence of a Breach or
Document Defect. It is understood and agreed that the obligations of the Seller
set forth in this Section 5 constitute the sole remedies available to the
Purchaser with respect to any Breach or Document Defect.
(f) Notwithstanding the foregoing, if there exists a Breach of that
portion of the representation or warranty on the part of the Seller set forth
in, or made pursuant to, paragraph (xlviii) of Exhibit B to this Agreement,
specifically relating to whether or not the Mortgage Loan documents or any
particular Mortgage Loan document for any Mortgage Loan requires the related
Mortgagor to bear the reasonable costs and expenses associated with the
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subject matter of such representation or warranty, as set forth in such
representation or warranty, then the Purchaser or its designee will direct the
Seller in writing to wire transfer to the Custodial Account, within 90 days of
receipt of such direction, the amount of any such reasonable costs and expenses
incurred by the Trust that (i) are due from the Mortgagor, (ii) otherwise would
have been required to be paid by the Mortgagor if such representation or
warranty with respect to such costs and expenses had in fact been true, as set
forth in the related representation or warranty, (iii) have not been paid by the
Mortgagor, (iv) are the basis of such Breach and (v) constitute "Covered Costs".
Upon payment of such costs, the Seller shall be deemed to have cured such Breach
in all respects. Provided that such payment is made, this paragraph describes
the sole remedy available to the Purchaser regarding any such Breach, regardless
of whether it constitutes a Material Breach, and the Seller shall not be
obligated to otherwise cure such Breach or repurchase the affected Mortgage Loan
under any circumstances. Amounts deposited in the Pool Custodial Account
pursuant to this paragraph shall constitute "Liquidation Proceeds" for all
purposes of the Pooling and Servicing Agreement (other than Section 3.11(c) of
the Pooling and Servicing Agreement).
(g) Subject to Section 5(f) hereof and the last three sentences of
this paragraph, if the Seller determines that a Material Breach (other than a
Material Breach of a representation or warranty on the part of the Seller set
forth in and made pursuant to paragraph (xvii) of Exhibit B to this Agreement)
or a Material Document Defect with respect to a Mortgage Loan is not capable of
being cured in accordance with Section 5(a) hereof, then in lieu of repurchasing
such Mortgage Loan the Seller may, at its sole option, pay a cash amount equal
to the loss of value (each such payment, a "Loss of Value Payment") with respect
to such Mortgage Loan, which loss of value is directly attributed to such
Material Breach or Material Document Defect, as the case may be. The amount of
each such Loss of Value Payment shall be determined either (i) by mutual
agreement of the Special Servicer on behalf of the Trust with respect to the
subject Material Breach or Material Document Defect, as the case may be, and the
Seller, or (ii) by an arbitration panel pursuant to a binding arbitration
proceeding in accordance with Section 5(i) hereof; provided that, in the event
there is an arbitration proceeding for determining the existence of a Material
Breach or a Material Document Defect with respect to any Mortgage Loan, such
arbitration proceeding must also include a determination of the amount of the
loss of value to such Mortgage Loan directly attributed to such Material Breach
or such Material Document Defect, as the case may be. Provided that such payment
is made, this paragraph describes the sole remedy available to the Purchaser
regarding any such Material Breach or Material Document Defect and the Seller
shall not be obligated to otherwise cure such Material Breach or Material
Document Defect or repurchase the affected Mortgage Loan based on such Material
Breach or Material Document Defect under any circumstances. Notwithstanding the
foregoing provisions of this Section 5(g), if 95% or more of the loss of value
to a Mortgage Loan was caused by a Material Breach or Material Document Defect,
which Material Breach or Material Document Defect is not capable of being cured,
this Section 5(g) shall not apply and the Seller shall be obligated to
repurchase the affected Mortgage Loan at the applicable Purchase Price in
accordance with Section 5(a) hereof. Furthermore, the Seller shall not have the
option of delivering Loss of Value Payments in connection with any Material
Breach relating to a Mortgage Loan's failure to be a Qualified Mortgage. In the
event there is a Loss of Value Payment made by the Seller in accordance with
this Section 5(g), the amount of
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such Loss of Value Payment shall be deposited into the Loss of Value Reserve
Fund to be applied in accordance with Section 3.05(e) of the Pooling and
Servicing Agreement.
In the event the amount of any Loss of Value Payment is determined by
an arbitration panel pursuant to a binding arbitration proceeding in accordance
with Section 5(i) hereof, then such Loss of Value Payment shall also include the
payment of any costs and expenses (including costs incurred in establishing the
amount of any related loss of value to the subject Mortgage Loan, including
reasonable legal fees) that are reasonably incurred in good faith by the Master
Servicer, the Special Servicer and/or the Trustee (on behalf of the Trust) in
enforcing the rights of the Trust against the Seller with respect to the subject
Material Breach or Material Document Defect, as the case may be; provided that,
in the event the Seller tenders a loss of value payment in a specified amount in
connection with a Material Breach or Material Document Defect, as the case may
be, prior to the institution of arbitration proceedings and that offer is
rejected and an amount equal to or less than the loss of value payment
originally tendered by the Seller is ultimately determined by an arbitration
panel pursuant to a binding arbitration proceeding in accordance with Section
5(i) hereof to be the actual amount of the Loss of Value Payment attributed to
such Material Breach or Material Document Defect, as the case may be, then that
Loss of Value Payment shall not include the payment of any costs or expenses
incurred in enforcing the rights of the Trust against the Seller with respect to
the subject Material Breach or Material Document Defect, as the case may be;
provided, further, that if the Special Servicer request a loss of value payment
from the Seller of a specified amount in connection with a Material Breach or
Material Document Defect, as the case may be, and the Seller refuses to pay that
amount and an amount equal to or greater than the loss of value payment
originally requested by the Special Servicer is ultimately determined by an
arbitration panel pursuant to a binding arbitration proceeding in accordance
with Section 5(i) hereof to be the actual Loss of Value Payment attributable to
such Material Document Defect or Material Breach, then that Loss of Value
Payment shall also include the payment of any costs or expenses reasonably
incurred in good faith in enforcing the rights of the Trust against the Seller
with respect to the subject Material Breach or Material Document Defect, as the
case may be; and provided, further, that, if the Seller tenders a loss of value
payment in connection with a Material Breach or Material Document Defect, as the
case may be, in a specified amount, and the Special Servicer rejects such tender
and requests a greater loss of value payment amount, and an amount in between
the respective amounts tendered and requested is ultimately determined by an
arbitration panel pursuant to a binding arbitration proceeding in accordance
with Section 5(i) hereof to be the actual Loss of Value Payment attributable to
such Material Breach or Material Document Defect, as the case may be, then that
Loss of Value Payment shall also include the payment of an amount equal to the
product of (i) all costs and expenses reasonably incurred in connection with
that arbitration proceeding, multiplied by (ii) a fraction, the numerator of
which is the excess of the amount determined by that arbitration proceeding over
the amount tendered by the Seller, and the denominator of which is the excess of
the amount requested by the Special Servicer over the amount tendered by the
Seller. Notwithstanding the foregoing, in the event any Loss of Value Payment is
determined by the parties hereto by mutual agreement (and not by an arbitration
proceeding), that Loss of Value Payment shall not include any costs and expenses
incurred by the Master Servicer, the Special Servicer or the Trustee unless such
costs and expenses were specifically included in such mutual agreement.
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(h) Notwithstanding the foregoing, if there exists a Material Breach
of the representation or warranty on the part of the Seller set forth in and
made pursuant to paragraph (xvii) of Exhibit B to this Agreement, and the
subject Mortgage Loan becomes a Qualified Mortgage prior to the expiration of
the Initial Resolution Period applicable to a Material Document Defect or
Material Breach that affects whether a Mortgage Loan is a Qualified Mortgage,
and without otherwise causing an Adverse REMIC Event or an Adverse Grantor Trust
Event, then such breach will be cured and the Seller will not be obligated to
repurchase or otherwise remedy such Breach.
(i) The parties hereto agree that any controversy or claim (a
"Dispute") arising under Section 5(a), Section 5(b) and/or Section 5(g) of this
Agreement shall be resolved in accordance with the following
Mediation/Arbitration procedures in this Section 5(i).
If the Seller receives a Seller/Depositor Notification pursuant to
Section 5(a) of this Agreement regarding the alleged existence of a Material
Document Defect or Material Breach and requesting the Seller to cure or
repurchase the affected Mortgage Loan in connection therewith (a "Notice"), and
the Seller does not agree upon the existence of such Material Document Defect or
Material Breach within 90 days of receiving such Notice, then, unless otherwise
agreed to by the parties involved in the Dispute, that Dispute shall be
submitted to non-binding mediation in accordance with the provisions of this
paragraph; provided, that if the Seller is proceeding to cure the subject
Material Document Defect or Material Breach, then that Dispute shall not be
submitted to mediation until the expiration of the related Resolution Extension
Period and the failure of the Seller to complete such cure (unless otherwise
agreed to by the parties involved in the Dispute). Following the 90-day period
referred to in the preceding sentence and subject to the preceding proviso, any
party to this Agreement that is involved in the Dispute may send a written
letter (a "Mediation Letter") another party to this Agreement that they wish the
mediation process to begin between the sender and the recipient of such
Mediation Letter. Following receipt of a Mediation Letter, a mediator(s) shall
be selected by agreement of the parties to the mediation. If such parties cannot
agree on a mediator, then the mediation shall be conducted by three mediators,
one of which shall be selected by the Seller and one of which shall be selected
by the Purchaser or its assignee. Each of the parties to the mediation shall
submit the name of the person it has selected to serve as a mediator to the
opposing party within 10 days of the date of the Mediation Letter. If either
party fails to submit the name of its selected mediator within 10 days of the
date of the Mediation Letter, the other party shall have the right to select the
second mediator in addition to its own mediator (provided that such party has
submitted the name of its selected mediator within 10 days of the date of the
Mediation Letter). The two mediators selected by the party(ies) shall appoint a
third mediator within 20 days of the date of the Mediation Letter or such longer
time period as agreed to by the parties to the mediation. Any mediator(s) so
designated must be acceptable to both the Seller and the Purchaser or its
assignee. Any mediators appointed or selected pursuant to the provisions of this
paragraph must be experienced professionals in the CMBS industry.
Any mediation related to a particular Dispute and commenced in
accordance with the preceding paragraph must be completed within 90 days of the
date of the Mediation Letter (or a longer period, if the parties to the
mediation agreed to extend the mediation). Any mediation referred to in this
Section 5(i) shall be conducted in the manner specified by the
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mediator(s) and agreed upon by the Seller and the Purchaser or its assignee and
any such mediation shall be conducted in New York City to the exclusion of all
other locations (unless otherwise agreed to by the parties to the mediation).
During the mediation process, the parties to the mediation shall discuss their
differences voluntarily and in good faith and attempt, with the assistance of
the mediator(s) as a facilitator of the negotiations, to reach an amicable
resolution of the Dispute. The mediation will be treated as a settlement
discussion and therefore will be confidential. No mediator selected in
accordance with this Section 5(i) may testify for either party in any later
proceeding relating to the Dispute. No recording or transcript shall be made of
the mediation proceedings. The fees and expenses of all mediator(s) shall be
shared equally by the parties to the mediation; provided, that the party to the
mediation that is acting on behalf of the Trust in accordance with the
provisions of this Section 5(i) shall be entitled to reimbursement or
indemnification by the Trust Fund for such fees and expenses if and to the
extent permitted under the Pooling and Servicing Agreement.
Notwithstanding anything to the contrary herein, no party shall be
required to agree to a Dispute resolution pursuant to mediation and no decision
or resolution of a mediator or mediators shall be binding on any party unless
such decision or resolution is expressly agreed to by such party. In the event
the parties involved in the Dispute have not agreed to a Dispute resolution
pursuant to mediation at the termination of the mediation, then that Dispute
will be settled by arbitration in accordance with the succeeding paragraphs of
this Section 5(i).
If a Dispute has not been resolved within 90 days of the date of the
Mediation Letter (or such shorter or longer period as is expressly agreed to by
the parties to the mediation), the mediation shall terminate and the Dispute
will be settled by arbitration. Following the date of termination of mediation,
which shall be the date occurring 90 days after the date of the Mediation Letter
unless otherwise expressly agreed to by the parties to the mediation,
arbitration may be commenced by any party to this Agreement involved in the
Dispute sending a written notice to another party to this Agreement involved in
the Dispute that they wish the arbitration process to begin with respect to the
Dispute between the sender and the recipient of such written notice. The date
any such party receives written notice in accordance with this Section 5(i) from
another party that such party wishes to commence arbitration shall be referred
to as the "Arbitration Commencement Date". Any arbitration hereunder shall be
conducted in accordance with the provisions of this Agreement and the American
Arbitration Association Rules for Large Complex Commercial Disputes ("AAA
Rules"), but shall not be conducted by the American Arbitration Association
("AAA"). Discovery will be permitted in connection with the arbitration in
accordance with the AAA Rules. In the event of a conflict, the provisions of
this Agreement will control. Such arbitration shall be conducted before a panel
of three arbitrators, regardless of the size of the Dispute. The arbitration
panel shall consist of one person selected by the Seller and one person selected
by the Purchaser or its assignee. Each such party shall submit the name of the
person it has selected to serve as an arbitrator to the other party within 30
days of the Arbitration Commencement Date (or such longer period as is expressly
agreed to by the parties to the arbitration). If either such party fails to
submit the name of its selected arbitrator within 30 days of the Arbitration
Commencement Date, then the other such party shall have the right to select the
second arbitrator in addition to its own arbitrator (provided that such party
has submitted the name of its selected arbitrator within 30 days of the
Arbitration Commencement Date). The two arbitrators designated in accordance
with the two preceding sentences shall
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appoint a third arbitrator within 45 days of the Arbitration Commencement Date
(or such longer period as is expressly agreed to by the parties to the
arbitration). All arbitrators appointed or selected pursuant to the provisions
of this paragraph must be experienced professionals in the CMBS industry. The
third arbitrator shall be an Independent person who has not previously been
employed by either party and does not have a direct or indirect interest in
either party or the subject matter of the arbitration. The two (2) arbitrators
appointed by the parties to the arbitration are not required to be neutral and
it shall not be grounds for removal of either of such arbitrators or for
vacating an arbitration award that either of such arbitrators has past or
present relationships with the party that appointed such arbitrator. No
potential arbitrator may serve on the panel unless he or she has agreed in
writing to abide and be bound by the terms and provisions of this Agreement and
the AAA Rules and to keep confidential the terms of any arbitration proceeding
related to this Agreement and the terms of any discussion, negotiation,
decision, agreement or resolution in connection therewith.
Any issue concerning the extent to which any Dispute is subject to
arbitration, or concerning the applicability, interpretation, or enforceability
of these procedures, including any contention that all or part of these
procedures are invalid or unenforceable, shall be resolved by the arbitrators.
In no event, notwithstanding that any provision of this Agreement is held to be
invalid or unenforceable, shall the arbitrators have the power to make an award
or impose a remedy that could not be made or imposed by a court deciding the
matter in the same jurisdiction. In no event shall the arbitrators have the
power to make an award or impose a remedy that is not contemplated by, or
conflicts with the terms and provisions of, this Agreement or the Pooling and
Servicing Agreement (other than any term or provision of this Agreement or the
Pooling and Servicing Agreement that is held to be invalid or unenforceable).
Without limiting the foregoing, the arbitrators shall have no authority to award
treble, consequential or punitive damages of any type under any circumstances,
whether or not such damages may be available under the AAA Rules or any other
act or law. Subject to the provisions of this Agreement, the result of the
arbitration will be binding on the parties involved in the Dispute, and judgment
on the arbitrators' award may be entered, subject to the provisions of Section
15 of this Agreement, in any court of competent jurisdiction.
All mediations and arbitrations shall be conducted in New York City to
the exclusion of all other locations (unless otherwise expressly agreed to by
the parties to the subject mediation or arbitration, as applicable). The party
to an arbitration that is acting on behalf of the Trust in accordance with the
provisions of this Section 5(i) shall be entitled to reimbursement or
indemnification by the Trust Fund for the fees and expenses incurred in
connection therewith if and to the extent permitted under the Pooling and
Servicing Agreement.
The parties to this Agreement hereby agree to waive any right to trial
by jury fully to the extent that any such right shall now or hereafter exist
with regard to the rights and remedies contained in this Section 5; provided,
that if (i) any party to an arbitration governed by this Section 5(i) fails to
abide by the rules or deadlines for that arbitration (as such deadlines may be
extended by express agreement of the parties to that arbitration), or (ii) the
applicable appointed arbitrators determine that the subject Dispute cannot be
resolved through arbitration either because the AAA Rules are inapplicable to
the Dispute and/or the Federal Arbitration Act is inapplicable to the Dispute or
for any other reason, then the other party (in the case of clause
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(i)) or any party (in the case of clause (ii)) to this Agreement may in its sole
option, file a complaint to resolve the Dispute through a legal proceeding and
in accordance with the provision contained in Section 15 hereof.
If any of the provisions of this Section 5(i) are determined by a
court of law to be invalid or unenforceable, the remaining provisions shall
remain in effect and be binding on the parties involved in the Dispute to the
fullest extent permitted by law.
SECTION 6. Defeasance Serviced Trust Mortgage Loans; Early Defeasance
Trust Mortgage Loans.
(a) With respect to any Mortgage Loan that is a Defeasance Serviced
Trust Mortgage Loan, to the extent the related Mortgage Loan documents expressly
grant the lender or its designee the right to appoint a successor borrower (or
words of similar import) thereunder in connection with a defeasance, the
Purchaser hereby designates the Seller as its designee with respect to the
exercise of, and hereby grants to the Seller the right, in its capacity as
designee of the Purchaser as holder of the subject Serviced Trust Mortgage Loan,
to exercise, the right and/or obligation of the lender under the related
Mortgage Loan documents to appoint a "successor borrower" (as defined under the
related Mortgage Loan documents) or words of similar import, to hold and pledge
the related Defeasance Collateral in the event a related Mortgagor exercises its
right pursuant to the related Mortgage Loan documents to defease the subject
Serviced Trust Mortgage Loan and obtain the release of all or a portion of the
related Mortgaged Property from the lien of the related Mortgage (provided that
such rights and/or obligations as successor borrower shall be exercised in
accordance with customary terms and costs). In connection with the foregoing, if
the Purchaser or its assignee, as holder of the subject Defeasance Serviced
Trust Mortgage Loan, receives written notice from the related Mortgagor that it
intends to defease the subject Serviced Trust Mortgage Loan in accordance with
the related Mortgage Loan documents, then the Purchaser or its assignee, as the
case may be, shall send a copy of such written notice to the Seller or (if the
Seller has notified the Purchaser or such assignee, as the case may be, in
writing that it has appointed a designee and has provided such party with such
designee's contact information for any notice required in connection therewith)
the Seller's designee, promptly after receipt of such written notice. If,
however, the Master Servicer, in accordance with the Servicing Standard,
determines that neither the Seller nor its designee is performing the duties
related to the appointment of a successor borrower in a timely manner and/or in
accordance with the provisions of the related Mortgage Loan documents (after the
Seller and such designee having been provided with written notice in accordance
with this paragraph and a reasonable period of time (which shall not be less
than five (5) Business Days) to perform such duties), then the Master Servicer
(or a designee of the Master Servicer) shall, in accordance with Section 3.20(k)
of the Pooling and Servicing Agreement, itself perform those obligations under
the related Mortgage Loan documents in accordance with the Servicing Standard,
applicable law and the related Mortgage Loan documents, and thereupon the
appointment of the Seller or its designee in connection therewith shall be null
and void. In the event, with respect to a Mortgage Loan that is a Defeasance
Serviced Trust Mortgage Loan, the Seller, the Master Servicer or a designee of
the Seller or the Master Servicer actually appoints a successor borrower in
accordance with the related Mortgage Loan documents and the foregoing provisions
of this paragraph and the relevant portion or all, as applicable, of the subject
Mortgaged Property is released from the lien
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of the related Mortgage, then, to the extent provided under the related Mortgage
Loan documents, such successor borrower shall succeed to all of the rights and
obligations of the original Mortgagor under such Serviced Trust Mortgage Loan.
In the event the Seller, by written notice to Purchaser or its assignee,
designates a third party to exercise its rights under this paragraph and
provides contact information therefor, the Purchaser or its designee, the
Trustee and the Master Servicer shall be entitled to rely on such notice and, in
such event, all notices required to be delivered to the Seller pursuant to this
paragraph shall be delivered to the Seller's designee.
(b) If the Purchaser or the Master Servicer notifies the Seller that
the Mortgagor under any of the Mortgage Loans that are Early Defeasance Trust
Mortgage Loans (i) intends to defease such Early Defeasance Trust Mortgage Loan
in whole on or before the second anniversary of the Closing Date and the amount
tendered by such Mortgagor to defease such Early Defeasance Trust Mortgage Loan
(in accordance with the related loan documents) is less than the Purchase Price
that would be applicable in the event of a repurchase of such Mortgage Loan
pursuant to or as otherwise contemplated by Section 5(a), or (ii) intends to
partially defease such Early Defeasance Trust Mortgage Loan on or prior to the
second anniversary of the Closing Date, or (iii) intends to defease such Early
Defeasance Trust Mortgage Loan in whole on or before the second anniversary of
the Closing Date and such Mortgagor is to tender Defeasance Collateral or such
other collateral as is permitted in connection with a defeasance under the
related loan documents that does not constitute a cash amount equal to or
greater than the Purchase Price set forth in clause (i) above in this paragraph,
then the Seller shall promptly repurchase such Mortgage Loan at a price equal to
(A) the related Purchase Price and (B) the amount, if any, by which the proceeds
from any cash defeasance deposit exceeds the related Purchase Price, in
accordance with the directions of the Master Servicer on a whole loan, servicing
released basis.
Upon the repurchase of a Mortgage Loan that is an Early Defeasance
Trust Mortgage Loan pursuant to Section 5 hereof and/or this Section 6, the
Purchaser shall effect a "qualified liquidation" of the related Loan REMIC in
accordance with the REMIC Provisions. The Seller hereby agrees to pay all
reasonable costs and expenses, including the costs of any opinions of counsel
under the Pooling and Servicing Agreement, in connection with any such
"qualified liquidation" of the related Loan REMIC in accordance with the REMIC
Provisions.
SECTION 7. Closing.
The closing of the sale of the Mortgage Loans (the "Closing") shall be
held at the offices of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇, LLP, 2 World Financial Center,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ at 10:00 a.m., New York City time, on the Closing Date.
The Closing shall be subject to each of the following conditions:
(a) All of the representations and warranties of the Seller 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;
-19-
(b) Insofar as it affects the obligations of the Seller hereunder, the
Pooling and Servicing Agreement shall be in a form mutually acceptable to the
Purchaser and the Seller;
(c) All documents specified in Section 8 of this Agreement (the
"Closing Documents"), in such forms as are reasonably acceptable to the
Purchaser, shall be duly executed and delivered by all signatories as required
pursuant to the respective terms thereof;
(d) The Seller shall have delivered and released to the Trustee (or a
Custodian on its behalf), the Master Servicer and the Special Servicer all
documents and funds required to be delivered to the Trustee, the Master Servicer
and the Special Servicer, respectively, pursuant to Section 2 of this Agreement;
(e) All other terms and conditions of this Agreement required to be
complied with on or before the Closing Date shall have been complied with in all
material respects, and the Seller shall have the ability to comply with all
terms and conditions and perform all duties and obligations required to be
complied with or performed after the Closing Date;
(f) The Seller shall have paid all fees and expenses payable by it to
the Purchaser or otherwise pursuant to this Agreement; and
(g) Neither the Underwriting Agreement nor the Certificate Purchase
Agreement shall have been terminated in accordance with its terms.
All parties hereto agree to use their best efforts to perform their
respective obligations hereunder in a manner that will enable the Purchaser to
purchase the Mortgage Loans on the Closing Date.
SECTION 8. Closing Documents.
The Closing Documents shall consist of the following:
(a) This Agreement duly executed by the Purchaser and the Seller;
(b) The Pooling and Servicing Agreement duly executed by the parties
thereto;
(c) The Indemnification Agreement duly executed by the parties
thereto;
(d) Certificate of the Seller, executed by a duly authorized officer
of the Seller and dated the Closing Date, and upon which the initial Purchaser,
the Underwriters and the Placement Agents may rely, to the effect that: (i) the
representations and warranties of the Seller in this Agreement and in the
Indemnification Agreement are true and correct in all material respects at and
as of the Closing Date with the same effect as if made on such date; and (ii)
the Seller 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;
-20-
(e) An Officer's Certificate from an officer of the Seller, in his or
her individual capacity, dated the Closing Date, and upon which the initial
Purchaser, the Underwriters and the Placement Agents may rely, to the effect
that each individual who, as an officer or representative of the Seller signed
this Agreement, the Indemnification Agreement or any other document or
certificate delivered on or before the Closing Date in connection with the
transactions contemplated herein or in the Indemnification Agreement, was at the
respective times of such signing and delivery, and is as of the Closing Date,
duly elected or appointed, qualified and acting as such officer or
representative, and the signatures of such persons appearing on such documents
and certificates are their genuine signatures;
(f) As certified by an officer of the Seller, true and correct copies
of (i) the resolutions of the board of directors authorizing the Seller's
entering into the transactions contemplated by this Agreement and the
Indemnification Agreement, (ii) the organizational documents of the Seller, and
(iii) a certificate of good standing of the Seller, issued by the Secretary of
State of the State of Delaware not earlier than 10 days prior to the Closing
Date;
(g) A favorable opinion of Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇ ("CWT"),
special counsel to the Seller, substantially in the form attached hereto as
Exhibit C-1, dated the Closing Date and addressed to the initial Purchaser, the
Underwriters, the Placement Agents, the Rating Agencies and, upon request, the
other parties to the Pooling and Servicing Agreement, together with such other
opinions of CWT as may be required by the Rating Agencies in connection with the
transactions contemplated hereby;
(h) An Officer's Certificate from an officer of the Seller, in his or
her individual capacity, delivered in connection with the opinion of CWT to be
delivered pursuant to Section 8(g) hereof, in form and substance satisfactory to
the addressees of such opinion and upon which such addressees may rely;
(i) In connection with the initial issuance of the Seller's Residual
Interest Certificates, a Transfer Affidavit and Agreement in the form
contemplated by the Pooling and Servicing Agreement from Seller and from the
transferee of the Seller;
(j) In the event any of the Certificates are mortgage related
securities within the meaning of the Secondary Mortgage Market Enhancement Act
of 1984, as amended, a Certificate of the Seller regarding origination of the
Mortgage Loans by specified originators as set forth in Section 3(a)(41) of the
Securities Exchange Act of 1934, as amended; and
(k) Such further certificates, opinions and documents as the Purchaser
may reasonably request.
SECTION 9. Costs.
An amount equal to 35.34290% of all reasonable out-of-pocket costs and
expenses incurred by the Seller, the initial Purchaser, the Underwriters, the
Placement Agents and the seller of the Other Loans to the Purchaser in
connection with the securitization of the Securitized Loans and the other
transactions contemplated by this Agreement, the Underwriting
-21-
Agreement and the Certificate Purchase Agreement shall be payable by the Seller.
In addition to the foregoing, the Seller shall pay, upon request of the subject
Outside Master and/or Outside Special Servicer, all reasonable costs and
expenses related to the provision by the Outside Master Servicer and the Outside
Special Servicer for the Sears Tower Trust Mortgage Loan to the depositor and
any underwriters of such opinion(s) of counsel, certifications and/or
indemnification agreement(s) related to the updated description referred in
Section 3.30(a) of the related Outside Servicing Agreement with respect to such
party and in connection with the information concerning such party in the
Prospectus Supplement and/or any other disclosure materials relating to the
securitization of the Sears Tower Trust Mortgage Loan.
SECTION 10. Grant of a Security Interest.
The parties hereto agree that it is their express intent that the
conveyance of the Mortgage Loans by the Seller to the Purchaser as provided in
Section 2 hereof be, and be construed as, a sale of the Mortgage Loans by the
Seller to the Purchaser and not as a pledge of the Mortgage Loans by the Seller
to the Purchaser to secure a debt or other obligation of the Seller. However,
if, notwithstanding the aforementioned intent of the parties, the Mortgage Loans
are held to be property of the Seller, then it is the express intent of the
parties that: (i) such conveyance shall be deemed to be a pledge of the Mortgage
Loans by the Seller to the Purchaser to secure a debt or other obligation of the
Seller; (ii) this Agreement shall be deemed to be a security agreement within
the meaning of Articles 8 and 9 of the applicable Uniform Commercial Code; (iii)
the conveyance provided for in Section 2 hereof shall be deemed to be a grant by
the Seller to the Purchaser of a security interest in all of the Seller's right,
title and interest in and to the Mortgage Loans, and all amounts payable to the
holder of the Mortgage Loans in accordance with the terms thereof, and all
proceeds of the conversion, voluntary or involuntary, of the foregoing into
cash, instruments, securities or other property; (iv) the assignment to the
Trustee of the interest of the Purchaser in and to the Mortgage Loans shall be
deemed to be an assignment of any security interest created hereunder; (v) the
possession by the Trustee or any of its agents, including, without limitation,
the Custodian, of the Mortgage Notes for the Mortgage Loans, and such other
items of property as constitute instruments, money, negotiable documents or
chattel paper shall be deemed to be "possession by the secured party" for
purposes of perfecting the security interest pursuant to Section 9-313 of the
applicable Uniform Commercial Code; and (vi) notifications to persons (other
than the Trustee) holding such property, and acknowledgments, receipts or
confirmations from such persons holding such property, shall be deemed
notifications to, or acknowledgments, receipts or confirmations from, financial
intermediaries, bailees or agents (as applicable) of the secured party for the
purpose of perfecting such security interest under applicable law. The Seller
and the Purchaser shall, to the extent consistent with this Agreement, take such
actions as may be necessary to ensure that, if this Agreement were deemed to
create a security interest in the Mortgage Loans, such security interest would
be deemed to be a perfected security interest of first priority under applicable
law and will be maintained as such throughout the term of this Agreement and the
Pooling and Servicing Agreement; and, in connection with the foregoing, the
Seller authorizes the Purchaser to file any and all appropriate Uniform
Commercial Code financing statements.
-22-
SECTION 11. Notices.
All notices, copies, requests, consents, demands and other
communications required hereunder shall be in writing and telecopied or
delivered to the intended recipient at the "Address for Notices" specified
beneath its name on the signature pages hereof or, as to any party, at such
other address as shall be designated by such party in a notice hereunder to the
other parties. Except as otherwise provided in this Agreement, all such
communications shall be deemed to have been duly given when transmitted by
telecopier or personally delivered or, in the case of a mailed notice, upon
receipt, in each case given or addressed as aforesaid.
SECTION 12. 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 initial Purchaser to the Trustee).
SECTION 13. 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 14. 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 15. GOVERNING LAW; CONSENT TO JURISDICTION.
THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, APPLICABLE TO AGREEMENTS NEGOTIATED, MADE AND
TO BE PERFORMED ENTIRELY IN SAID STATE. TO THE FULLEST EXTENT PERMITTED UNDER
APPLICABLE LAW AND SUBJECT TO SECTION 5(i) HEREOF, THE SELLER AND THE PURCHASER
EACH HEREBY IRREVOCABLY (I) SUBMITS TO THE JURISDICTION OF ANY NEW YORK STATE
AND FEDERAL COURTS SITTING IN NEW YORK CITY, TO THE EXCLUSION OF ALL OTHER
COURTS, WITH RESPECT TO MATTERS ARISING OUT OF OR
-23-
RELATING TO THIS AGREEMENT OTHER THAN MATTERS TO BE SETTLED BY MEDIATION OR
ARBITRATION IN ACCORDANCE WITH SECTION 5(i) HEREOF; (II) AGREES THAT ALL CLAIMS
WITH RESPECT TO SUCH ACTION OR PROCEEDING SHALL BE HEARD AND DETERMINED IN SUCH
NEW YORK STATE OR FEDERAL COURTS, TO THE EXCLUSION OF ALL OTHER COURTS; (III)
WAIVES, TO THE FULLEST POSSIBLE EXTENT, THE DEFENSE OF AN INCONVENIENT FORUM IN
CONNECTION WITH SUCH ACTION OR PROCEEDING COMMENCED IN SUCH NEW YORK STATE OR
FEDERAL COURTS; AND (IV) AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR
PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY
SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW; PROVIDED, THAT IN
THE EVENT SECTION 5(i) HEREOF IS INAPPLICABLE AND BOTH A NEW YORK STATE AND A
FEDERAL COURT SITTING IN NEW YORK IN WHICH AN ACTION OR PROCEEDING HAS BEEN DULY
AND PROPERLY COMMENCED BY ANY PARTY TO THIS AGREEMENT REGARDING A MATTER ARISING
OUT OF OR RELATING TO THIS AGREEMENT HAS REFUSED TO ACCEPT JURISDICTION OVER OR
OTHERWISE HAS NOT ACCEPTED SUCH ACTION OR PROCEEDING WITHIN, IN THE CASE OF EACH
SUCH COURT, 60 DAYS OF THE COMMENCEMENT OR FILING THEREOF, THEN THE WORDS "TO
THE EXCLUSION OF ALL OTHER COURTS" IN CLAUSE (I) AND CLAUSE (II) OF THIS
SENTENCE SHALL NOT APPLY WITH REGARD TO SUCH ACTION OR PROCEEDING AND THE
REFERENCE TO "SHALL" IN CLAUSE (II) OF THIS SECTION SHALL BE DEEMED TO BE "MAY".
SECTION 16. Further Assurances.
The Seller and the Purchaser each agrees to execute and deliver such
instruments and take such further actions as any other such party may, from time
to time, reasonably request in order to effectuate the purposes and to carry out
the terms of this Agreement.
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, and their respective successors
and permitted assigns.
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 against
-24-
whom such waiver or modification is sought to be enforced. The Seller's
obligations hereunder shall in no way be expanded, changed or otherwise affected
by any amendment of or modification to the Pooling and Servicing Agreement,
unless the Seller has consented to such amendment or modification in writing.
-25-
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their
names to be signed hereto by their respective duly authorized officers as of the
date first above written.
SELLER
UBS REAL ESTATE SECURITIES INC.
By: /s/ ▇▇▇▇▇ ▇. ▇'▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇. ▇'▇▇▇▇
Title: Director
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Managing Director
Address for Notices:
1285 Avenue of the ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇'▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
1285 Avenue of the ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
LB-UBS 2007-C7 UBS MORTGAGE LOAN PURCHASE AGREEMENT
PURCHASER
STRUCTURED ASSET SECURITIES
CORPORATION II
By: /s/ ▇▇▇▇▇ ▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇
Title: Senior Vice President
Address for Notices:
Structured Asset Securities Corporation II
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
LB-UBS 2007-C7 UBS MORTGAGE LOAN PURCHASE AGREEMENT
EXHIBIT A
MORTGAGE LOAN SCHEDULE
(SEE ATTACHED)
Exh. A-1
MORTGAGE LOAN NUMBER PROPERTY NAME ADDRESS
-------------------- ----------------------------------- --------------------------------------
3 ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
5 Carnegie Hall Tower ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
13 Ballston Tower ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
14 Chateau Marmont ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
15 Sears Tower ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇ Multifamily Portfolio Various
20 Soundview Marketplace ▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇ Business Center Various
22 ▇▇-▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇-▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇ Corp Center ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, et al
26 Banco Popular Portfolio Various
27 ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
28 ▇▇▇-▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ 519-525 ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
33 Riverstone Apartments 25740 ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇ Discovery Office 920, 1002 and ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
54 Comfort Inn & Country Inn Portfolio Various
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ Street
60 ▇▇▇▇▇▇ Career Institute ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
61 Liberty ▇▇▇▇ Plaza 6225 - 6255 Lake ▇▇▇▇ Boulevard
63 The Villas ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇▇ Shopping Center ▇▇▇▇-▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
68 Quality Inn - Laurel One 2nd ▇▇▇▇▇▇
▇▇ ▇▇▇▇'▇ ▇▇▇ Storage ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
78 Binghamton Retail Portfolio Various
79 Tractor Supply Shreveport SWC ▇▇▇▇▇▇▇ ▇▇▇ & ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇ Supply Odessa ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ 191
86 Tractor Supply DeRidder ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
87 Walgreens ▇▇▇▇▇ ▇▇▇▇ ▇ ▇▇▇▇▇ ▇▇▇▇▇▇
88 Walgreens Pueblo ▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
93 Walgreens Amity ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ Road
96 ▇▇▇▇▇▇▇▇▇ Storage ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
98 Crossroads Shopping Center 754 San Souci Parkway
99 Arvada Office Max ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
MORTGAGE LOAN NUMBER CITY STATE ZIP CODE CUT-OFF DATE BALANCE MONTHLY P&I PAYMENT MORTGAGE RATE
-------------------- ----------------- ----- -------- -------------------- ------------------- -------------
3 ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇ 295,000,000.00 1,615,125.00 6.4800
5 ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇ 190,000,000.00 956,291.55 5.9570
6 ▇▇▇▇▇ ▇▇ ▇▇▇▇▇ 170,000,000.00 897,714.12 6.2500
13 ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ 60,000,000.00 377,270.02 6.4500
14 ▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ 55,000,000.00 266,179.63 5.7280
15 ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ 50,000,000.00 264,857.35 6.2695
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ 45,875,000.00 296,416.97 6.7130
19 ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ 23,500,000.00 141,347.95 6.0300
20 ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ 21,524,949.08 132,377.37 5.7300
21 ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ 20,500,000.00 127,023.08 6.3100
22 ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇ 18,500,000.00 115,319.15 6.3670
24 ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ 17,135,000.00 106,989.78 6.3830
26 Various NY Various 15,840,000.00 99,573.30 6.4475
27 ▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ 14,960,000.00 78,872.44 6.2400
28 ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇ 14,800,000.00 76,703.40 6.1340
▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇ 13,500,000.00 77,163.28 6.7650
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ 12,000,000.00 60,225.00 5.9400
39 ▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ 10,600,000.00 56,512.48 6.3100
54 Various ME Various 7,000,000.00 49,051.13 6.9050
59 ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ 6,150,000.00 38,831.75 6.4900
60 ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ 6,095,630.24 38,696.66 6.5350
61 ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ 5,970,000.00 37,276.28 6.3830
63 ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ 5,750,000.00 33,555.44 5.7500
66 ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ 5,490,768.44 34,330.83 6.3800
68 ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ 5,055,734.48 32,882.63 6.7400
72 ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ 4,250,000.00 27,249.76 6.6380
78 Various NY Various 3,109,280.87 19,313.71 6.3100
79 ▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ 3,078,000.00 15,083.63 5.8000
81 ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ 2,871,000.00 14,287.54 5.8900
▇▇ ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ 2,580,000.00 12,664.99 5.8100
87 ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ 2,575,000.00 16,223.29 6.4690
88 ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ 2,575,000.00 16,223.29 6.4690
93 ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ 2,200,000.00 13,860.68 6.4690
▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ 2,171,457.48 13,761.79 6.5100
96 ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇ 1,970,000.00 12,568.57 6.5900
98 ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ 1,456,809.94 9,566.08 6.8560
99 ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ 1,372,739.07 8,662.92 6.4690
MORTGAGE LOAN NUMBER REMAINING TERM TO MATURITY MATURITY DATE REMAINING AMORTIZATION TERM INTEREST ACCRUAL BASIS
-------------------- -------------------------- ------------- --------------------------- ----------------------
3 120 11/11/2017 0 Actual/360
5 119 10/10/2017 0 Actual/360
6 58 9/11/2012 0 Actual/360
13 119 10/9/2017 360 Actual/360
14 116 7/9/2017 0 Actual/360
15 111 2/11/2017 0 Actual/360
16 120 11/9/2017 360 Actual/360
19 120 11/9/2017 360 Actual/360
20 110 1/11/2017 314 Actual/360
21 118 9/9/2017 360 Actual/360
22 118 9/9/2017 360 Actual/360
24 119 10/9/2017 360 Actual/360
26 120 11/9/2017 360 Actual/360
27 114 5/11/2017 0 Actual/360
28 117 8/9/2017 0 Actual/360
31 57 8/9/2012 0 Actual/360
33 115 6/11/2017 0 Actual/360
39 113 4/11/2017 0 Actual/360
54 120 11/9/2017 300 Actual/360
59 119 10/9/2017 360 Actual/360
60 119 10/9/2017 359 Actual/360
61 119 10/9/2017 360 Actual/360
63 114 5/11/2017 360 Actual/360
66 118 9/9/2017 358 Actual/360
68 115 6/11/2017 355 Actual/360
72 118 9/9/2017 360 Actual/360
78 117 8/9/2017 357 Actual/360
79 117 8/9/2017 0 Actual/360
81 117 8/9/2017 0 Actual/360
86 118 9/9/2017 0 Actual/360
87 118 9/10/2017 360 Actual/360
88 118 9/10/2017 360 Actual/360
93 118 9/10/2017 360 Actual/360
94 118 9/10/2017 358 Actual/360
96 116 7/9/2017 360 Actual/360
98 118 9/9/2017 358 Actual/360
99 118 9/10/2017 358 Actual/360
MORTGAGE LOAN NUMBER ADMINISTRATIVE COST RATE (%) OUTSIDE SERVICING FEE RATE (%) GROUND LEASE? MORTGAGE LOAN SELLER
-------------------- ---------------------------- ------------------------------ -------------------- --------------------
3 0.04049 0 Fee Simple UBS
5 0.04049 0 Leasehold UBS
6 0.04049 0 Fee Simple UBS
13 0.04049 0 Fee Simple UBS
14 0.04049 0 Fee Simple UBS
15 0.03049 0 Fee Simple UBS
16 0.04049 0 Fee Simple UBS
19 0.04049 0 Fee Simple UBS
20 0.04049 0 Fee Simple/Leasehold UBS
21 0.04049 0 Fee Simple UBS
22 0.04049 0 Fee Simple UBS
24 0.04049 0 Fee Simple UBS
26 0.04049 0 Fee Simple UBS
27 0.04049 0 Fee Simple UBS
28 0.04049 0 Fee Simple UBS
31 0.04049 0 Fee Simple UBS
33 0.04049 0 Fee Simple UBS
39 0.04049 0 Fee Simple UBS
54 0.04049 0 Fee Simple UBS
59 0.04049 0 Fee Simple UBS
60 0.04049 0 Fee Simple UBS
61 0.04049 0 Fee Simple UBS
63 0.04049 0 Fee Simple UBS
66 0.04049 0 Fee Simple UBS
68 0.04049 0 Fee Simple UBS
72 0.04049 0 Fee Simple UBS
78 0.04049 0 Fee Simple UBS
79 0.04049 0 Fee Simple UBS
81 0.04049 0 Fee Simple UBS
86 0.04049 0 Fee Simple UBS
87 0.04049 0 Fee Simple UBS
88 0.04049 0 Fee Simple UBS
93 0.04049 0 Fee Simple UBS
94 0.04049 0 Fee Simple UBS
96 0.04049 0 Fee Simple UBS
98 0.04049 0 Fee Simple UBS
99 0.04049 0 Fee Simple UBS
MORTGAGE LOAN NUMBER DEFEASANCE ARD MORTGAGE LOAN ANTICIPATED REPAYMENT DATE
-------------------- ---------------------------- ----------------- --------------------------
3 Defeasance ▇/▇ ▇/▇
▇ ▇▇▇▇▇▇▇▇▇▇ ▇/▇ ▇/▇
6 Defeasance/Yield Maintenance N/A N/A
13 Defeasance N/A N/A
14 Defeasance N/A N/A
15 Defeasance N/A N/A
16 Defeasance N/A N/A
19 Yield Maintenance N/A N/A
20 Defeasance N/A N/A
21 Defeasance N/A N/A
22 Defeasance N/A N/A
24 Defeasance N/A N/A
26 Defeasance N/A N/A
27 Defeasance N/A N/A
28 Defeasance N/A N/A
31 Yield Maintenance N/A N/A
33 Defeasance N/A N/A
39 Defeasance N/A N/A
54 Defeasance N/A N/A
59 Defeasance N/A N/A
60 Defeasance N/A N/A
61 Defeasance N/A N/A
63 Defeasance N/A N/A
66 Defeasance/Yield Maintenance N/A N/A
68 Defeasance N/A N/A
72 Yield Maintenance N/A N/A
78 Yield Maintenance N/A N/A
79 Defeasance/Yield Maintenance N/A N/A
81 Defeasance/Yield Maintenance N/A N/A
86 Defeasance/Yield Maintenance N/A N/A
87 Yield Maintenance N/A N/A
88 Yield Maintenance N/A N/A
93 Yield Maintenance N/A N/A
94 Yield Maintenance N/A N/A
96 Yield Maintenance N/A N/A
98 Defeasance N/A N/A
99 Yield Maintenance N/A N/A
MORTGAGE LOAN NUMBER ADDITIONAL INTEREST RATE CROSS COLLATERALIZED MORTGAGE LOAN GROUP
-------------------- ------------------------ ---------------------- -------------------
3 N/A ▇▇ ▇
▇ ▇/▇ ▇▇ ▇
▇ ▇/▇ ▇▇ 1
13 N/A No 1
14 N/A No 1
15 N/A No 1
16 N/A No 1
19 N/A No 1
20 N/A No 1
21 N/A No 1
22 N/A No 1
24 N/A No 1
26 N/A No 1
27 N/A No 1
28 N/A No 2
31 N/A No 1
33 N/A No 2
39 N/A No 1
54 N/A No 1
59 N/A No 1
60 N/A No 1
61 N/A No 1
63 N/A No 2
66 N/A No 1
68 N/A No 1
72 N/A ▇▇ ▇
▇▇ ▇/▇ ▇▇ ▇
▇▇ ▇/▇ Yes (UBS-F) 1
81 N/A Yes (UBS-F) 1
86 N/A Yes (UBS-F) 1
87 N/A ▇▇ ▇
▇▇ ▇/▇ ▇▇ ▇
▇▇ ▇/▇ No 1
94 N/A No 1
96 N/A No 1
98 N/A ▇▇ ▇
▇▇ ▇/▇ ▇▇ ▇
▇▇▇▇▇▇▇ ▇
REPRESENTATIONS AND WARRANTIES
Except as set forth on the schedule of exceptions attached hereto as
Schedule I, the Seller hereby represents and warrants to the Purchaser, with
respect to each Mortgage Loan, as of the Closing Date or such other date
specified in the particular representation and warranty (the heading set forth
herein with respect to each representation and warranty being for the
convenience of reference only and in no way limiting, expanding or otherwise
affecting the scope or subject matter thereof), that:
(i) Mortgage Loan Schedule. The information pertaining to such
Mortgage Loan set forth in the Mortgage Loan Schedule was true and correct in
all material respects as of the Cut-off Date.
(ii) Legal Compliance. If such Mortgage Loan was originated by the
Seller or an Affiliate of the Seller, then, 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; and, if such Mortgage Loan was not originated by the Seller
or an Affiliate of the Seller, then such mortgage loan is listed on Schedule
I-ii hereto and, to the Seller's actual knowledge, after having performed the
type of due diligence customarily performed in the origination of comparable
mortgage loans by the Seller, 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.
(iii) Ownership of Mortgage Loan. The Seller owns such Mortgage Loan,
has good title thereto, has full right, power and authority to sell, assign and
transfer such Mortgage Loan and is transferring such Mortgage Loan free and
clear of any and all liens, pledges, charges or security interests of any nature
encumbering such Mortgage Loan, exclusive of the servicing rights pertaining
thereto; no provision of the Mortgage Note, Mortgage(s) or other loan documents
relating to such Mortgage Loan prohibits or restricts the Seller's right to
assign or transfer such Mortgage Loan to the Trustee (except in the case of a
Loan Combination, which may, pursuant to the related Co-Lender Agreement,
require notice to one or more rating agencies or another lender which, if
required, has already been provided); no governmental or regulatory approval or
consent is required for the sale of such Mortgage Loan by the Seller; and the
Seller has validly conveyed to the Trustee a legal and beneficial interest in
and to such Mortgage Loan free and clear of any lien, claim or encumbrance of
any nature.
(iv) No Holdback. The proceeds of such Mortgage Loan have been fully
disbursed (except in those cases where the full amount of such Mortgage Loan has
been disbursed but a portion thereof is being held in escrow or reserve accounts
to be released pending the satisfaction of certain conditions relating to
leasing, repairs or other matters with respect to the related Mortgaged
Property) and there is no requirement for future advances thereunder.
B-1
(v) Loan Document Status. Each of the related Mortgage Note,
Mortgage(s), Assignment(s) of Leases, if separate from the related Mortgage, and
other agreements executed in favor of the lender in connection therewith is the
legal, valid and binding obligation of the maker thereof (subject to the
non-recourse provisions therein and any state anti-deficiency legislation),
enforceable in accordance with its terms, except that (A) such enforcement may
be limited by (1) bankruptcy, insolvency, receivership, reorganization,
liquidation, voidable preference, fraudulent conveyance and transfer, moratorium
and/or other similar laws affecting the enforcement of creditors' rights
generally, and (2) general principles of equity (regardless of whether such
enforcement is considered in a proceeding in equity or at law), and (B) certain
provisions in the subject agreement or instrument may be further limited or
rendered unenforceable by applicable law, but subject to the limitations set
forth in the foregoing clause (A), such limitations will not render that subject
agreement or instrument invalid as a whole or substantially interfere with the
mortgagee's realization of the principal benefits and/or security provided by
the subject agreement or instrument. Such Mortgage Loan is non-recourse to the
Mortgagor or any other Person except to the extent provided in certain
nonrecourse carveouts and/or in any applicable guarantees. A natural person as
individual guarantor has agreed, in effect, to be liable for all liabilities,
costs, losses, damages or expenses suffered or incurred by the mortgagee under
such Mortgage Loan by reason of or in connection with and to the extent of (A)
any material intentional fraud or material intentional misrepresentation by the
related mortgagor; (B) any breach on the part of the related mortgagor of any
environmental representations warranties and covenants contained in the related
Mortgage Loan documents; (C) misapplication or misappropriation of rents
(received after an event of default), insurance proceeds or condemnation awards;
and (D) the filing of a voluntary bankruptcy or insolvency proceeding by the
related mortgagor; provided that, instead of any breach described in clause (B)
of this paragraph, such entity (or individual) may instead be liable for
liabilities, costs, losses, damages, expenses and claims resulting from a breach
of the obligations and indemnities of the related mortgagor under the related
Mortgage Loan documents relating to hazardous or toxic substances, radon or
compliance with environmental laws.
(vi) No Right of Rescission. Subject to the limitations and exceptions
as to enforceability set forth in paragraph (v) above, there is no valid offset,
defense, counterclaim or right of rescission, abatement of amounts due under the
Mortgage Note or diminution of amounts due under the Mortgage Note with respect
to any of the related Mortgage Note, Mortgage(s) or other agreements executed in
connection with such Mortgage Loan and, as of the Closing Date, to the actual
knowledge of the Seller, no such claim has been asserted.
(vii) Assignments. The assignment of the related Mortgage(s) and
Assignment(s) of Leases to the Trustee (or, in the case of an Outside Serviced
Trust Mortgage Loan, to the related Outside Trustee) constitutes the legal,
valid, binding and, subject to the limitations and exceptions as to
enforceability set forth in paragraph (v) above, enforceable assignment of such
documents (provided that the unenforceability of any such assignment based on
bankruptcy, insolvency, receivership, reorganization, liquidation, moratorium
and/or other similar laws affecting the enforcement of creditors' rights
generally or based on general principles of equity (regardless of whether such
enforcement is considered in a proceeding in equity or at law) shall be a breach
of this representation and warranty only upon the declaration
B-2
by a court with jurisdiction in the matter that such assignment is to be
unenforceable on such basis).
(viii) First Lien. Each related Mortgage is a valid and, subject to
the limitations and exceptions in paragraph (v) above, enforceable first lien on
the related Mortgaged Property including all improvements thereon (other than
any tenant owned improvements) and appurtenances and rights related thereto,
which Mortgaged Property is free and clear of all encumbrances and liens having
priority over or on a parity with the first lien of such Mortgage, except for
the following (collectively, the "Permitted Encumbrances"): (A) the lien for
real estate taxes, water charges, sewer rents and assessments not yet due and
payable; (B) covenants, conditions and restrictions, rights of way, easements
and other matters that are of public record or that are omitted as exceptions in
the related lender's title insurance policy (or, if not yet issued, omitted as
exceptions in a fully binding pro forma title policy or title policy
commitment); (C) the rights of tenants (as tenants only) under leases (including
subleases) pertaining to the related Mortgaged Property; (D) condominium
declarations of record and identified in the related lender's title insurance
policy (or, if not yet issued, identified in a pro forma title policy or title
policy commitment); and (E) if such Mortgage Loan constitutes a
Cross-Collateralized Mortgage Loan, the lien of the Mortgage for another
Mortgage Loan contained in the same Cross-Collateralized Group; provided that,
in the case of a Trust Mortgage Loan that is part of a Loan Combination, such
Mortgage also secures the other mortgage loan(s) in such Loan Combination. With
respect to such Mortgage Loan, such Permitted Encumbrances do not, individually
or in the aggregate, materially and adversely interfere with the benefits of the
security intended to be provided by the related Mortgage, the current principal
use or operation of the related Mortgaged Property or the ability of the related
Mortgaged Property to generate sufficient cashflow to enable the related
Mortgagor to timely pay in full the principal and interest on the related
Mortgage Note (other than a Balloon Payment, which would require a refinancing).
If the related Mortgaged Property is operated as a nursing facility or a
hospitality property, the related Mortgage, together with any security
agreement, chattel mortgage or similar agreement and UCC financing statement, if
any, establishes and creates a first priority, perfected security interest
(subject only to any prior purchase money security interest, revolving credit
lines and any personal property leases), to the extent such security interest
can be perfected by the recordation of a Mortgage or the filing of a UCC
financing statement, in all material personal property owned by the Mortgagor
that is used in, and is reasonably necessary to, the operation of the related
Mortgaged Property as presently operated by the Mortgagor, and that is located
on the related Mortgaged Property, which personal property includes, in the case
of Mortgaged Properties operated by the related Mortgagor as a nursing facility
or hospitality property, all furniture, fixtures, equipment and other personal
property located at the subject Mortgaged Property that are owned by the related
Mortgagor and reasonably necessary or material to the operation of the subject
Mortgaged Property. In the case of any 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 priority security interest, to the extent such security interest can
be perfected by the inclusion of such provisions and the filing of a UCC
financing statement, in the Mortgagor's right to receive related hotel room
revenues with respect to such Mortgaged Property.
B-3
(ix) Taxes and Assessments. All taxes, governmental assessments, water
charges, sewer rents or similar governmental charges which, in all such cases,
were directly related to the related Mortgaged Property and could constitute
liens on the related Mortgaged Property prior to the lien of the related
Mortgage, together with all ground rents, that prior to the Cut-off Date became
due and payable in respect of, and materially affect, any related Mortgaged
Property have been paid or are escrowed for or are not yet delinquent, and the
Seller knows of no unpaid tax, assessment, ground rent, water charges or sewer
rent, which, in all such cases, were directly related to the subject Mortgaged
Property and could constitute liens on the subject Mortgaged Property prior to
the lien of the related Mortgage that prior to the Closing Date became due and
delinquent in respect of any related Mortgaged Property, or in any such case an
escrow of funds in an amount sufficient to cover such payments has been
established.
(x) No Material Damage. As of the date of origination of such Mortgage
Loan and, to the actual knowledge of the Seller, as of the Closing Date, there
was no pending proceeding for the total or partial condemnation of any related
Mortgaged Property that materially affects the value thereof and such Mortgaged
Property is free of material damage. Except for certain amounts not greater than
amounts which would be considered prudent by an institutional commercial
mortgage lender with respect to a similar mortgage loan and which are set forth
in the related Mortgage or other loan documents relating to such Mortgage Loan,
(and subject to any rights of the lessor under any related Ground Lease) the
related Mortgage Loan documents provide that any condemnation awards will be
applied (or, at the discretion of the mortgagee, will be applied) to either the
repair or restoration of all or part of the related Mortgaged Property or the
reduction of the outstanding principal balance of such Mortgage Loan.
(xi) Title Insurance. Each related Mortgaged Property is covered by an
ALTA (or its equivalent) lender's title insurance policy issued by a nationally
recognized title insurance company, insuring that each related Mortgage is a
valid first lien on such Mortgaged Property in the original principal amount of
such Mortgage Loan (or, if such Mortgage Loan is part of a Loan Combination, in
the original principal amount of such Loan Combination) after all advances of
principal, subject only to Permitted Encumbrances and, in the case of a Trust
Mortgage Loan that is part of a Loan Combination, further subject to the fact
that the related Mortgage also secures the related Non-Trust Mortgage Loan(s),
(or if such policy has not yet been issued, such insurance may be evidenced by a
binding commitment or binding pro forma marked as binding and signed (either
thereon or on a related escrow letter attached thereto) by the title insurer or
its authorized agent) from a title insurer qualified and/or licensed in the
applicable jurisdiction, as required, to issue such policy; such title insurance
is in full force and effect, all premiums have been paid, is freely assignable
and will inure to the benefit of the Trustee (or, in the case of an Outside
Serviced Trust Mortgage Loan, the benefit of the related Outside Trustee) as
sole insured as mortgagee of record, or any such commitment or binding pro forma
is a legal, valid and binding obligation of such insurer; no claims have been
made by the Seller or any prior holder of such Mortgage Loan (other than a prior
holder unaffiliated with the Seller from whom the Seller has taken by
assignment) under such title insurance; and neither the Seller nor any Affiliate
of the Seller has done, by act or omission, anything that would materially
impair the coverage of any such title insurance policy; such policy or
commitment or binding pro forma contains no exclusion for (or alternatively it
insures over such exclusion, unless such
B-4
coverage is unavailable in the relevant jurisdiction) (A) access to a public
road, (B) that there is no material encroachment by any improvements on the
related Mortgaged Property either to or from any adjoining property or across
any easements on the related Mortgaged Property, and (C) that the land shown on
the survey materially conforms to the legal description of the related Mortgaged
Property.
(xii) Property Insurance. As of the date of its origination and, to
the Seller's actual knowledge, as of the Cut-off Date, all insurance required
under each related Mortgage (except where an investment grade tenant, or one or
more tenants which in the aggregate do not represent more than 10% of the net
operating income with respect to the entire related Mortgaged Property, is or
are permitted to insure or self-insure under a lease) was in full force and
effect with respect to each related Mortgaged Property; such insurance included
(A) fire and extended perils insurance included within the classification "All
Risk of Physical Loss" or the equivalent thereof in an amount (subject to a
customary deductible) at least equal to the lesser of (1) 100% of the full
insurable value of the improvements located on such Mortgaged Property and (2)
the outstanding principal balance of such Mortgage Loan or the portion thereof
allocable to such Mortgaged Property) and, if applicable, the related hazard
insurance policies or certificates of insurance contain appropriate endorsements
to avoid application of co-insurance, (B) business interruption or rental loss
insurance for a period of not less than 12 months, (C) comprehensive general
liability insurance in an amount not less than $1 million per occurrence, (D)
workers' compensation insurance (if the related Mortgagor has employees and if
required by applicable law), and (E) if (1) such Mortgage Loan is secured by a
Mortgaged Property located in the State of California or in "seismic zone" 3 or
4 and (2) a seismic assessment as described below revealed a maximum probable or
bounded loss in excess of 20% of the amount of the estimated replacement cost of
the improvements on such Mortgaged Property, seismic insurance; it is an event
of default under such Mortgage Loan if the above-described insurance coverage is
not maintained by the related Mortgagor (except where an investment grade
tenant, or one or more tenants which in the aggregate do not represent more than
10% of the net operating income with respect to the entire related Mortgaged
Property, is or are permitted to insure or self-insure under a lease) and the
related loan documents provide (in either a general cost and expense recovery
provision or a specific provision with respect to recovery of insurance costs
and expenses) that any reasonable out-of-pocket costs and expenses incurred by
the mortgagee in connection with such default in obtaining such insurance
coverage may be recovered from the related Mortgagor; the related Evidence of
Property Insurance and certificate of liability insurance (which may be in the
form of an ▇▇▇▇▇ 27 or an ▇▇▇▇▇ 25, respectively), or forms substantially
similar thereto, provide that the related insurance policy may not be terminated
or reduced without at least 10 days prior notice to the mortgagee and (other
than those limited to liability protection) name the mortgagee and its
successors as loss payee; no notice of termination or cancellation with respect
to any such insurance policy has been received by the Seller or, to the actual
knowledge of the Seller, by any prior mortgagee under such Mortgage Loan (other
than, with respect to a related Mortgaged Property located in New York and
Florida, a prior mortgagee unaffiliated with the Seller from whom the Seller has
taken the related Mortgage Note and Mortgage by assignment and has amended and
restated such Mortgage Note and Mortgage); all premiums under any such insurance
policy have been paid through the Cut-off Date; the insurance policies specified
in clauses (A), (B) and (C) above are required to be maintained with insurance
companies having "financial strength" or "claims
B-5
paying ability" ratings of at least "A:VII" from A.M. Best Company or at least
"BBB+" (or equivalent) from a nationally recognized statistical rating agency
(or, with respect to certain blanket insurance policies, such other ratings as
are in compliance with S&P's applicable criteria for rating the Certificates);
and, except for certain amounts not greater than amounts which would be
considered prudent by an institutional commercial mortgage lender with respect
to a similar mortgage loan and which are set forth in the related Mortgage or
other loan documents relating to such Mortgage Loan, and subject to the related
exception schedules, the related Mortgage Loan documents provide that any
property insurance proceeds will be applied (or, at the discretion of the
mortgagee, will be applied) either to the repair or restoration of all or part
of the related Mortgaged Property or the reduction of the outstanding principal
balance of such Mortgage Loan; provided, that the related Mortgage Loan
documents may entitle the related Mortgagor to any portion of such proceeds
remaining after completion of the repair or restoration of the related Mortgaged
Property or payment of amounts due under such Mortgage Loan. With respect to the
subject Mortgage Loan, the related loan documents generally require the
Mortgagor to maintain insurance against windstorm damage and certain acts of
terrorism (except where an investment grade tenant is permitted to insure or
self-insure under a lease or is required to restore the premises, and except
where a related sponsor has agreed to be responsible for losses due to windstorm
or certain acts of terrorism, as the case may be, which would have otherwise
been covered by insurance); provided, that any such insurance and the amount
thereof may be limited by the commercial availability of such coverage, whether
the mortgagee may reasonably require such insurance, certain limitations with
respect to the cost thereof and/or whether such hazards are at the time commonly
insured against for property similar to the related Mortgaged Property; and
provided, further, that with respect to windstorm damage, such insurance is only
required if the related Mortgaged Property is located within 25 miles of the
coast of Florida, North Carolina, South Carolina, Georgia, Alabama, Mississippi,
Louisiana or Texas. If the related Mortgaged Property is located in the State of
California or in "seismic zone" 3 or 4, then: (A) either a seismic assessment
was conducted with respect to the related Mortgaged Property in connection with
the origination of such Mortgage Loan or earthquake insurance was obtained; and
(B) the probable maximum loss for the related Mortgaged Property as reflected in
such seismic assessment, if any, was determined based upon a return period of
not less than 475 years, an exposure period of 50 years and a 10% probability of
incidence. Schedule I-xii attached hereto is true and correct in all material
respects.
(xiii) No Material Defaults. Other than payments due but not yet 30
days or more delinquent, there is (A) no material default, breach, violation or
event of acceleration existing under the related Mortgage Note, the related
Mortgage or other loan documents relating to such Mortgage Loan, and (B), to the
knowledge of the Seller as of the Closing Date, no event which, with the passage
of time or with notice and the expiration of any grace or cure period, would
constitute a material default, breach, violation or event of acceleration under
any of such documents; provided, however, that this representation and warranty
does not cover any default, breach, violation or event of acceleration (A) that
specifically pertains to or arises out of the subject matter otherwise covered
by any other representation and warranty made by the Seller in this Exhibit B or
(B) with respect to which: (1) the Seller has no actual knowledge as of the
Closing Date and (2) written notice of the discovery thereof is not delivered to
the Seller by the Trustee or the Master Servicer on or prior to the date
occurring twelve months after the Closing Date. Neither the Seller nor any prior
holder of such Mortgage Loan (other than, with respect to
B-6
a related Mortgaged Property located in New York and Florida, a prior holder
unaffiliated with the Seller from whom the Seller has taken the related Mortgage
Note and Mortgage by assignment and has amended and restated such Mortgage Note
and Mortgage) has waived, in writing or with knowledge, any material default,
breach, violation or event of acceleration under any of such documents. Under
the terms of such Mortgage Loan, no person or party other than the mortgagee or
its servicing agent may declare an event of default or accelerate the related
indebtedness under such Mortgage Loan.
(xiv) No Payment Delinquency. As of the Closing Date, such 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 Monthly Payment.
(xv) Interest Accrual Basis. Such Mortgage Loan accrues interest on an
Actual/360 Basis, an Actual/Actual Basis or a 30/360 Basis; and such Mortgage
Loan accrues interest (payable monthly in arrears) at a fixed rate of interest
throughout the remaining term thereof (except if such Mortgage Loan is an ARD
Mortgage Loan, in which case the accrual rate for interest will increase after
its Anticipated Repayment Date, and except in connection with the occurrence of
a default and the accrual of default interest).
(xvi) Subordinate Debt. Each related Mortgage or other loan document
relating to such Mortgage Loan does not provide for or permit, without the prior
written consent of the holder of the related Mortgage Note, any related
Mortgaged Property or any direct controlling interest in the Mortgagor to secure
any other promissory note or debt (other than another Mortgage Loan in the Trust
Fund and, if such Mortgage Loan is part of a Loan Combination, the other
mortgage loan(s) that are part of such Loan Combination, as applicable).
(xvii) Qualified Mortgage. Such Mortgage Loan is a "qualified
mortgage" within the meaning of Section 860G(a)(3) of the Code. Accordingly,
either as of the date of origination or the Closing Date, the fair market value
of the real property securing such Mortgage Loan was not less than 80% of the
"adjusted issue price" (within the meaning of the REMIC Provisions) of such
Mortgage Loan. For purposes of the preceding sentence, the fair market value of
the real property securing such Mortgage Loan was first reduced by the amount of
any lien on such real property that is senior to the lien that secures such
Mortgage Loan, and was further reduced by a proportionate amount of any lien
that is on a parity with the lien that secures such Mortgage Loan. No action
that occurs by operation of the terms of such Mortgage Loan would cause such
Mortgage Loan to cease to be a "qualified mortgage" and such Mortgage Loan does
not permit the release or substitution of collateral if such release or
substitution (A) would constitute a "significant modification" of such Mortgage
Loan within the meaning of Treasury regulations section 860G-2(b), (B) would
cause such Mortgage Loan not to be a "qualified mortgage" within the meaning of
Section 860G(a)(3) of the Code (without regard to clauses (A)(i) or (A)(ii)
thereof) or (C) would cause a "prohibited transaction" within the meaning of
Section 860F(a)(2) of the Code. The related Mortgaged Property, if acquired in
connection with the default or imminent default of such Mortgage Loan, would
constitute "foreclosure property" within the meaning of Section 860G(a)(8) of
the Code.
B-7
(xviii) Prepayment Consideration. Prepayment Premiums and Yield
Maintenance Charges payable with respect to such Mortgage Loan, if any,
constitute "customary prepayment penalties" within the meaning of Treasury
regulations section 1.860G-1(b)(2).
(xix) Environmental Conditions. One or more environmental site
assessments (or updates thereof) in each instance meeting American Society of
Testing and Materials requirements were performed by an environmental consulting
firm independent of the Seller and the Seller's Affiliates with respect to each
related Mortgaged Property during the 12-month period preceding the Cut-off
Date, and the Seller, having made no independent inquiry other than to review
the report(s) prepared in connection with the assessment(s) and/or update(s)
referenced herein, has no knowledge of, and has not received actual notice of,
any material and adverse environmental condition or circumstance affecting such
Mortgaged Property that was not disclosed in such report(s); none of the
environmental reports reveal any circumstances or conditions that are in
violation of any applicable environmental laws, or if such report does reveal
such circumstances, then (1) the same have been remediated in all material
respects, (2) sufficient funds have been escrowed or a letter of credit,
guaranty or other instrument has been delivered for purposes of covering the
estimated costs of such remediation, (3) the related Mortgagor or other
responsible party set forth on Schedule I (which Mortgagor or other responsible
party has been reasonably determined by the Seller to have the creditworthiness
to do so (such determination by the Seller to be based on review of (i) the
financial statements provided to the Seller by the Mortgagor or other
responsible party, as applicable, and (ii) the reasonable cost of remediation of
the circumstances or conditions that are in violation of the applicable
environmental laws as set forth in the applicable environmental report)) is
currently taking remedial or other appropriate action to address the
environmental issue consistent with the recommendations in such site assessment,
(4) the cost of the environmental issue relative to the value of such Mortgaged
Property was de minimis, or (5) environmental insurance has been obtained.
The Mortgagor with respect to such Mortgage Loan has represented,
warranted and covenanted generally to the effect that, to its knowledge, except
as set forth in the environmental reports described above, it has not used,
caused or permitted to exist, and will not use, cause or permit to exist, on the
related Mortgaged Property, any Hazardous Materials in any manner which violates
applicable federal, state or local laws governing the use, storage, handling,
production or disposal of Hazardous Materials at the related Mortgaged Property
and (A) the related Mortgagor and a natural person have agreed to indemnify the
mortgagee under such Mortgage Loan, and its successors and assigns, against any
losses, liabilities, damages, penalties, fines, claims and reasonable out of
pocket expenses (excluding lost profits, consequential damages and diminution of
value of the related Mortgaged Property, provided that no Mortgage Loan with an
original principal balance equal to or greater than $15,000,000 contains an
exclusion for "diminution of value" of the related Mortgaged Property) paid,
suffered or incurred by such mortgagee resulting from such Mortgagor's material
violation of any environmental law or a material breach of the environmental
representations and warranties or covenants given by the related Mortgagor in
connection with such Mortgage Loan or (B) environmental insurance has been
obtained. If such Mortgage Loan is a Mortgage Loan as to which neither a natural
person has provided the indemnity set forth above nor environmental insurance
has been obtained, such Mortgage Loan is set forth on Schedule I.
B-8
The Seller has not taken any action with respect to such Mortgage Loan
or the related Mortgaged Property that could subject the Seller or its
successors and assigns in respect of such Mortgage Loan to liability under
CERCLA or any other applicable federal, state or local environmental law. The
related Mortgage or other loan documents require the related Mortgagor to comply
with all applicable federal, state and local environmental laws and regulations.
(xx) Realization Against Real Estate Collateral. The related Mortgage
Note, Mortgage(s), Assignment(s) of Leases and other loan documents securing
such Mortgage Loan, if any, contain customary and, subject to the limitations
and exceptions as to enforceability in paragraph (v) above, enforceable
provisions such as to render the rights and remedies of the holder thereof
adequate for the practical realization against the related Mortgaged Property or
Properties of the principal benefits of the security intended to be provided
thereby, including realization by judicial or, if applicable, non-judicial
foreclosure.
(xxi) Bankruptcy. The related Mortgagor is not a debtor in any
bankruptcy, reorganization, insolvency or comparable proceeding; provided,
however, that this representation and warranty does not cover any such
bankruptcy, reorganization, insolvency or comparable proceeding with respect to
which: (1) the Seller has no actual knowledge and (2) written notice of the
discovery thereof is not delivered to the Seller by the Trustee or the Master
Servicer on or prior to the date occurring twelve months after the Closing Date.
(xxii) Loan Security. Such Mortgage Loan is secured by a Mortgage on a
fee simple interest and/or a leasehold estate in a commercial property or
multifamily property, including the related Mortgagor's interest in the
improvements on the related Mortgaged Property.
(xxiii) Amortization. Such Mortgage Loan does not provide for negative
amortization unless such Mortgage Loan is an ARD Mortgage Loan, in which case it
may occur only after the Anticipated Repayment Date.
(xxiv) Whole Loan. Such Mortgage Loan is a whole loan, contains no
equity participation by the lender or shared appreciation feature and does not
provide for any contingent interest in the form of participation in the cash
flow of the related Mortgaged Property.
(xxv) Due-on-Encumbrance. Each Mortgage Loan contains provisions for
the acceleration of the payment of the unpaid principal balance of such Mortgage
Loan if, without the prior written consent of the mortgagee or Rating Agency
confirmation that an Adverse Rating Event with respect to any Class of
Certificates would not occur, any related Mortgaged Property or any direct
controlling interest in the Mortgagor is directly encumbered in connection with
subordinate financing; and except in the case of a Trust Mortgage Loan that is
part of a Loan Combination (for which such consent has been granted with respect
to the other mortgage loan(s) in such Loan Combination), and except for the
respective Mortgage Loans secured by the Mortgaged Properties listed on Schedule
I (for which such consent has been granted with respect to mezzanine debt), no
such consent has been granted by the Seller. To the Seller's knowledge, no
related Mortgaged Property is encumbered in connection with subordinate
financing (except that each Mortgaged Property securing a Trust Mortgage Loan
that is part of a Loan
B-9
Combination also secures the other mortgage loan(s) in such Loan Combination);
however, if the related Mortgaged Property is listed on Schedule I, certain
direct controlling equity holders in the related Mortgagor are known to the
Seller to have incurred debt secured by their ownership interest in the related
Mortgagor.
(xxvi) Due-on-Sale. Except with respect to transfers of certain
non-controlling and/or minority interests in the related Mortgagor as specified
in the related Mortgage or with respect to transfers of interests in the related
Mortgagor between immediate family members and with respect to transfers by
devise, by descent or by operation of law or otherwise upon the death or
incapacity of a person having an interest in the related Mortgagor, each
Mortgage Loan contains either (A) provisions for the acceleration of the payment
of the unpaid principal balance of such Mortgage Loan if any related Mortgaged
Property or interest therein is directly or indirectly transferred or sold
without the prior written consent of the mortgagee or rating agency
confirmation, or (B) provisions for the acceleration of the payment of the
unpaid principal balance of such Mortgage Loan if any related Mortgaged Property
or interest therein is directly or indirectly transferred or sold without the
related Mortgagor having satisfied certain conditions specified in the related
Mortgage with respect to permitted transfers (which conditions are consistent
with the practices of prudent commercial mortgage lenders (as defined below)).
The Mortgage (under either specific or general expense provisions) requires the
Mortgagor to pay all reasonable fees and expenses associated with securing the
consent or approval of the holder of the Mortgage for all actions involving the
transfer of interest in such Mortgagor requiring such consent or approval under
the Mortgage.
(xxvii) Mortgagor Concentration. Except in the case of the Mortgage
Loans listed on Schedule I (xxvii), such Mortgage Loan, together with any other
Mortgage Loan made to the same Mortgagor or to an Affiliate of such Mortgagor,
does not represent more than 5% of the Initial Pool Balance.
(xxviii) Waivers; Modifications. Except as set forth in a written
instrument included in the related Mortgage File, the (A) material terms of the
related Mortgage Note, the related Mortgage(s) and any related loan agreement
and/or lock-box agreement have not been waived, modified, altered, satisfied,
impaired, canceled, subordinated or rescinded by the mortgagee in any manner,
and (B) no portion of a related Mortgaged Property has been released from the
lien of the related Mortgage, in the case of (A) and/or (B), to an extent or in
a manner that in any such event materially interferes with the security intended
to be provided by such document or instrument. Schedule I identifies each
Mortgage Loan (if any) as to which, since the latest date any related due
diligence materials were delivered to ▇▇ ▇▇▇▇▇▇ Capital Corporation (or its
designee), there has been (in writing) given, made or consented to a material
alteration, material modification or assumption of the terms of the related
Mortgage Note, Mortgage(s) or any related loan agreement and/or lock-box
agreement and/or as to which, since such date, there has been (in writing) a
waiver other than as related to routine operational matters or minor covenants.
(xxix) Inspection. Each related Mortgaged Property was inspected by or
on behalf of the related originator during the six-month period prior to the
related origination date.
B-10
(xxx) Property Release. The terms of the related Mortgage Note,
Mortgage(s) or other loan document securing such Mortgage Loan do not provide
for the release from the lien of such Mortgage of any material portion of the
related Mortgaged Property that is necessary to the operation of such Mortgaged
Property or was given material value in the underwriting of such Mortgage Loan
at origination, without (A) payment in full of such Mortgage Loan, (B) delivery
of Defeasance Collateral in the form of "government securities" within the
meaning of Section 2(a)(16) of the Investment Company Act of 1940, as amended
(the "Investment Company Act"), (C) payment of a release price equal to at least
125% of the amount of such Mortgage Loan allocated to the related Mortgaged
Property subject to the release or (D) with respect to mortgage loans listed on
Schedule I-xxx, the satisfaction of certain underwriting and legal requirements
which the Seller required in the origination of comparable mortgage loans.
(xxxi) Qualifications; Licensing; Zoning. The related Mortgagor has
covenanted in the related Mortgage Loan documents to maintain the related
Mortgaged Property in compliance in all material respects with, to the extent it
is not grandfathered under, all applicable laws, zoning ordinances, rules,
covenants and restrictions affecting the construction, occupancy, use and
operation of such Mortgaged Property, and the related originator performed the
type of due diligence in connection with the origination of such Mortgage Loan
customarily performed by prudent commercial mortgage lenders (as defined below)
with respect to the foregoing matters; the Seller has received no notice of any
material violation of, to the extent is has not been grandfathered under, any
applicable laws, zoning ordinances, rules, covenants or restrictions affecting
the construction, occupancy, use or operation of the related Mortgaged Property
(unless affirmatively covered by the title insurance referred to in paragraph
(xi) above (or an endorsement thereto)); to the Seller's knowledge (based on
surveys, opinions, letters from municipalities and/or title insurance obtained
in connection with the origination of such Mortgage Loan), no improvement that
was included for the purpose of determining the appraised value of the related
Mortgaged Property at the time of origination of such Mortgage Loan lay outside
the boundaries and building restriction lines of such property, in effect at the
time of origination of such Mortgage Loan, to an extent which would have a
material adverse affect on the related Mortgagor's use and operation of such
Mortgaged Property (unless grandfathered with respect thereto or affirmatively
covered by the title insurance referred to in paragraph (xi) above (or an
endorsement thereto)), and no improvements on adjoining properties encroached
upon such Mortgaged Property to any material extent. For purposes of this
paragraph, a Mortgaged Property shall be deemed "grandfathered" with respect to
any laws, zoning ordinances, rules, covenants or restrictions affecting the
construction, occupancy, use or operation of the related Mortgaged Property, if
and to the extent that any of the construction, occupancy, use and operation of
such Mortgaged Property: (A) conformed in all material respects with such laws,
zoning ordinances, rules, covenants and restrictions affecting the improvements
on the related Mortgaged Property at the time the improvements on the related
Mortgaged Property were initially constructed or put into operation; and/or (B)
was not addressed or otherwise prohibited by any such laws, zoning ordinances,
rules, covenants and restrictions affecting the related Mortgaged Property at
the time the improvements on the related Mortgaged Property were initially
constructed or put into operation.
B-11
(xxxii) Property Financial Statements. The related Mortgagor has
covenanted in the related Mortgage Loan documents to deliver to the mortgagee
annual operating statements, rent rolls and related information of each related
Mortgaged Property and annual financial statements. If such Mortgage Loan had an
original principal balance greater than $15 million, the related Mortgagor has
covenanted to provide such operating statements, rent rolls and related
information on a quarterly basis. If such Mortgage Loan has an original
principal balance equal to or greater than $20 million, the related Mortgagor,
if it obtains an audited financial statement, is required to provide a copy
thereof to the holder of such Mortgage Loan at the related mortgagee's request.
(xxxiii) Single Purpose Entity. If such Mortgage Loan has a Cut-off
Date Balance in excess of $25 million, then the related Mortgagor is obligated
by its organizational documents and the related Mortgage Loan documents to be a
Single Purpose Entity for so long as such Mortgage Loan is outstanding; and, if
such Mortgage Loan has a Cut-off Date Balance greater than $5 million and less
than $25 million, the related Mortgagor is obligated by its organizational
documents and/or the related Mortgage Loan documents to own the related
Mortgaged Property and no other material assets, except such as are incidental
to the ownership of such Mortgaged Property for so long as such Mortgage Loan is
outstanding. For purposes of this representation, "Single Purpose Entity" means
an entity whose organizational documents or the related Mortgage Loan documents
provide substantially to the effect that such entity: (A) is formed or organized
solely for the purpose of owning and operating one or more of the Mortgaged
Properties securing such Mortgage Loan, (B) may not engage in any business
unrelated to the related Mortgaged Property or Mortgaged Properties, (C) does
not have any material assets other than those related to its interest in and
operation of such Mortgaged Property or Mortgaged Properties and (D) may not
incur indebtedness other than as permitted by the related Mortgage or other
Mortgage Loan documents. If such Mortgage Loan has an initial principal balance
of $25 million and above and the related Mortgagor is a single member limited
liability company, such Mortgagor's organizational documents provide that such
Mortgagor shall not dissolve or liquidate upon the bankruptcy, dissolution,
liquidation or death of its sole member and is organized in a jurisdiction that
provides for such continued existence and there was obtained opinion of counsel
confirming such continued existence. If such Mortgage Loan has, or is part of a
group of Mortgage Loans with affiliated Mortgagors having, a Cut-off Date
Balance equal to or greater than 2% of the Initial Pool Balance, or if such
Mortgage Loan has an original principal balance equal to or greater than $25
million, there was obtained an opinion of counsel regarding non-consolidation of
such Mortgagor.
(xxxiv) Advancing of Funds. No advance of funds has been made,
directly or indirectly, by the originator or the Seller to the related Mortgagor
other than pursuant to the related Mortgage Note; and, to the actual knowledge
of the Seller, no funds have been received from any Person other than such
Mortgagor for or on account of payments due on the related Mortgage Note.
(xxxv) Legal Proceedings. To the Seller's actual knowledge, there are
no pending actions, suits or proceedings by or before any court or governmental
authority against or affecting the related Mortgagor or any related Mortgaged
Property that, if determined adversely to such Mortgagor or Mortgaged Property,
would materially and adversely affect the value of
B-12
such Mortgaged Property or the ability of such Mortgagor to pay principal,
interest or any other amounts due under such Mortgage Loan.
(xxxvi) Originator Duly Authorized. To the extent required under
applicable law as of the Closing Date, the originator of such Mortgage Loan was
qualified and authorized to do business in each jurisdiction in which a related
Mortgaged Property is located at all times when it held such Mortgage Loan to
the extent necessary to ensure the enforceability of such Mortgage Loan.
(xxxvii) Trustee under Deed of Trust. 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, and no fees and expenses
are payable to such trustee except in connection with a trustee sale of the
related Mortgaged Property following a default or in connection with the release
of liens securing such Mortgage Loan and any such fees and expenses are the
obligation of the Mortgagor under the terms of the Mortgage.
(xxxviii) Cross-Collateralization. The related Mortgaged Property is
not, to the Seller's knowledge, collateral or security for any mortgage loan
that is not in the Trust Fund and, if such Mortgage Loan is
cross-collateralized, it is cross-collateralized only with other Mortgage Loans
in the Trust Fund, except that a Trust Mortgage Loan that is part of a Loan
Combination is secured by one or more Mortgaged Properties that also secure the
related Non-Trust Mortgage Loan(s). The security interest/lien on each material
item of collateral for such Mortgage Loan has been assigned to the Trustee.
(xxxix) Flood Hazard Insurance. None of the improvements on any
related Mortgaged Property are located in a flood hazard area as defined by the
Federal Insurance Administration or, if any portion of the improvements on the
related Mortgaged Property are in an area identified in the Federal Register by
the Federal Emergency Management Agency as having special flood hazards falling
within zones A or V in the national flood insurance program, the Mortgagor has
obtained and is required to maintain flood insurance.
(xl) Engineering Assessments. One or more engineering assessments or
updates of a previously conducted engineering assessment were performed by an
Independent engineering consulting firm with respect to each related Mortgaged
Property during the 12-month period preceding the Cut-off Date, and the Seller,
having made no independent inquiry other than to review the report(s) prepared
in connection with such assessment(s) and or update(s), does not have any
knowledge of any material and adverse engineering condition or circumstance
affecting such Mortgaged Property that was not disclosed in such report(s); and,
to the extent such assessments revealed deficiencies, deferred maintenance or
similar conditions, either (A) the estimated cost has been escrowed or a letter
of credit has been provided, (B) repairs have been made or (C) the scope of the
deferred maintenance relative to the value of such Mortgaged Property was de
minimis.
(xli) Escrows. All escrow deposits and payments relating to such
Mortgage Loan are under control of the Seller or the servicer of such Mortgage
Loan and all amounts required as of the date hereof under the related Mortgage
Loan documents to be deposited by the
B-13
related Mortgagor have been deposited. The Seller is transferring to the Trustee
all of its right, title and interest in and to such amounts.
(xlii) Licenses, Permits and Authorizations. The related Mortgagor has
represented in the related Mortgage Loan documents that, and to the actual
knowledge of the Seller, as of the date of origination of such Mortgage Loan,
all material licenses, permits and authorizations then required for use of the
related Mortgaged Property by such Mortgagor, the related lessee, franchisor or
operator have been issued and were valid and in full force and effect.
(xliii) Servicing and Collection Practices. The servicing and
collection practices used by the Seller or, to the Seller's knowledge, any prior
holder of the related Mortgage Note with respect to such Mortgage Loan have been
in all respects legal and have met customary industry standards.
(xliv) Fee Simple. Unless such Mortgage Loan is covered by the
representation and warranty in the immediately following paragraph (xlv), such
Mortgage Loan is secured in whole or material part by a fee simple interest.
(xlv) Leasehold Interest Only. If such Mortgage Loan is secured in
whole or in material part by the interest of the related Mortgagor as a lessee
under a Ground Lease but not by the related fee interest, then:
(A) such Ground Lease or a memorandum thereof has been or will
be duly recorded and such Ground Lease permits the interest
of the lessee thereunder to be encumbered by the related
Mortgage or, if consent of the lessor thereunder is
required, it has been obtained prior to the Closing Date;
(B) upon the foreclosure of such Mortgage Loan (or acceptance of
a deed in lieu thereof), the Mortgagor's interest in such
Ground Lease is assignable to the Trustee (or, in the case
of an Outside Serviced Trust Mortgage Loan, to the related
Outside Trustee) without the consent of the lessor
thereunder (or, if any such consent is required, it has been
obtained prior to the Closing Date) and, in the event that
it is so assigned, is further assignable by the Trustee (or,
in the case of an Outside Serviced Trust Mortgage Loan, by
the related Outside Trustee) and its successors without a
need to obtain the consent of such lessor (or, if any such
consent is required, it has been obtained prior to the
Closing Date or may not be unreasonably withheld);
(C) such Ground Lease may not be amended or modified without the
prior written 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;
B-14
(D) unless otherwise set forth in such Ground Lease, such Ground
Lease does not permit any increase in the amount of rent
payable by the ground lessee thereunder during the term of
such Mortgage Loan;
(E) such Ground Lease was in full force and effect as of the
date of origination of the related Mortgage Loan and, at the
Closing Date, such Ground Lease is in full force and effect;
to the actual knowledge of the Seller, except for payments
due but not yet 30 days or more delinquent, (1) there is no
material default under such Ground Lease, and (2) there is
no event which, with the passage of time or with notice and
the expiration of any grace or cure period, would constitute
a material default under such Ground Lease;
(F) such Ground Lease, or an estoppel or consent letter received
by the mortgagee under such Mortgage Loan from the lessor,
requires the lessor thereunder to give notice of any default
by the lessee to such mortgagee; and such Ground Lease, or
an estoppel or consent letter received by the mortgagee
under such Mortgage Loan from the lessor, further provides
either (1) that no notice of termination given under such
Ground Lease is effective against such mortgagee unless a
copy has been delivered to the mortgagee in the manner
described in such Ground Lease, estoppel or consent letter
or (2) that upon any termination of such Ground Lease the
lessor will enter into a new lease with such mortgagee upon
such mortgagee's request;
(G) based upon the related policy of title insurance, the ground
lessee's interest in 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 ground
lessor's related fee interest and any Permitted
Encumbrances;
(H) the mortgagee under such Mortgage Loan is permitted a
reasonable opportunity to cure any curable default under
such Ground Lease (not less than the time provided to the
related lessee under such Ground Lease to cure such default)
before the lessor thereunder may terminate or cancel such
Ground Lease;
(I) such Ground Lease has a currently effective term (including
any options exercisable by the holder of the related
Mortgage) that extends not less than 20 years beyond the
Stated Maturity Date of the related Mortgage Loan;
(J) under the terms of such Ground Lease, any estoppel or
consent letter received by the mortgagee under such Mortgage
Loan from
B-15
the lessor and the related Mortgage Loan documents, taken
together, any related insurance proceeds, other than de
minimis amounts for minor casualties, with respect to the
leasehold interest, or condemnation proceeds will be applied
either to the repair or restoration of all or part of the
related Mortgaged Property, with the mortgagee or a trustee
appointed by it having the right to hold and disburse such
proceeds as 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 to the payment of the outstanding principal
balance of the Mortgage Loan, together with any accrued
interest thereon;
(K) such Ground Lease does not impose any restrictions on use or
subletting which would be viewed as commercially
unreasonable by a prudent commercial mortgage lender;
(L) upon the request of the mortgagee under such Mortgage Loan,
the ground lessor under such Ground Lease is required to
enter into a new lease upon termination of the Ground Lease
for any reason prior to the expiration of the term thereof,
including as a result of the rejection of the Ground Lease
in a bankruptcy of the related Mortgagor unless the
mortgagee under such Mortgage Loan fails to cure a default
of the lessee under such Ground Lease following notice
thereof from the lessor; and
(M) the terms of the related Ground Lease 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, except as set forth in an instrument or document
contained in the related Mortgage File.
(xlvi) Fee Simple and Leasehold Interest. If such Mortgage Loan is
secured by the interest of the related Mortgagor under a Ground Lease and by the
related fee interest, then (A) such fee interest is subject, and subordinated of
record, to the related Mortgage, (B) the related Mortgage does not by its terms
provide that it will be subordinated to the lien of any other mortgage or other
lien upon such fee interest, and (C) upon occurrence of a default under the
terms of the related Mortgage by the related Mortgagor, the mortgagee under such
Mortgage Loan has the right (subject to the limitations and exceptions set forth
in paragraph (v) above) to foreclose upon or otherwise exercise its rights with
respect to such fee interest.
(xlvii) Tax Lot; Utilities. Each related Mortgaged Property
constitutes one or more complete separate tax lots (or the related Mortgagor has
covenanted to obtain separate tax lots and an escrow of funds in an amount
sufficient to pay taxes resulting from a breach thereof has been established) or
is subject to an endorsement under the related title insurance policy; and
B-16
each related Mortgaged Property is served by a public or other acceptable water
system, a public sewer (or, alternatively, a septic) system, and other customary
utility facilities.
(xlviii) Defeasance. If such Mortgage Loan is a Defeasance Mortgage
Loan, the related Mortgage Loan documents require the related Mortgagor to pay
all reasonable costs associated with the defeasance thereof, and either: (A)
require the prior written consent of, and compliance with the conditions set by,
the holder of such Mortgage Loan for defeasance or (B) require that (1)
defeasance may not occur prior to the second anniversary of the Closing Date,
(2) the Defeasance Collateral must be government securities within the meaning
of Treasury regulations section 1.860G-2(a)(8)(i) and must be sufficient to make
all scheduled payments under the related Mortgage Note when due (assuming for
each ARD Mortgage Loan that it matures on its Anticipated Repayment Date or on
the date when any open prepayment period set forth in the related Mortgage Loan
documents commences) or, in the case of a partial defeasance that effects the
release of a material portion of the related Mortgaged Property, to make all
scheduled payments under the related Mortgage Note on that part of such Mortgage
Loan equal to at least 110% of the allocated loan amount of the portion of the
Mortgaged Property being released, (3) an independent accounting firm (which may
be the Mortgagor's independent accounting firm) certify that the Defeasance
Collateral is sufficient to make such payments, (4) such Mortgage Loan be
assumed by a successor entity designated by the holder of such Mortgage Loan (or
by the Mortgagor with the approval of such lender), and (5) counsel provide an
opinion letter to the effect that the Trustee (or, in the case of an Outside
Serviced Trust Mortgage Loan, the related Outside Trustee) has a perfected
security interest in such Defeasance Collateral prior to any other claim or
interest.
(xlix) Primary Servicing Rights. Except with respect to the Outside
Servicers, no Person has been granted or conveyed the right to primary service
such Mortgage Loan or receive any consideration in connection therewith except
(A) as contemplated in this Agreement with respect to primary servicers that are
to be sub-servicers of the Master Servicer, (B) as has been conveyed to the
Master Servicer, in its capacity as a primary servicer, or (C) as has been
terminated.
(l) Mechanics' and Materialmen's Liens. As of origination and, to the
Seller's actual knowledge, as of the Closing Date, (A) the related Mortgaged
Property is free and clear of any and all mechanics' and materialmen's liens
that are not bonded, insured against or escrowed for, and (B) no rights are
outstanding that under law could give rise to any such lien that would be prior
or equal to the lien of the related Mortgage (unless affirmatively covered by
the title insurance referred to in paragraph (xi) above (or an endorsement
thereto)). The Seller has not received actual notice with respect to such
Mortgage Loan that any mechanics' and materialmen's liens have encumbered such
Mortgaged Property since origination that have not been released, bonded,
insured against or escrowed for.
(li) Due Date. Subject to any business day convention imposed by the
related loan documents, the Due Date for such Mortgage Loan is scheduled to be
the first day, the seventh day, the tenth day or the eleventh day of each month.
B-17
(lii) Assignment of Leases. Subject only to Permitted Encumbrances,
the related Assignment of Leases set forth in or separate from the related
Mortgage and delivered in connection with such Mortgage Loan establishes and
creates a valid and, subject only to the exceptions and limitations in paragraph
(v) above, enforceable first priority lien and first priority security interest
in the related Mortgagor's right to receive payments due under any and all
leases, subleases, licenses or other agreements pursuant to which any Person is
entitled to occupy, use or possess all or any portion of the related Mortgaged
Property subject to the related Mortgage, except that a license may have been
granted to the related Mortgagor to exercise certain rights and perform certain
obligations of the lessor under the relevant lease or leases; and each assignor
thereunder has the full right to assign the same.
(liii) Mortgagor Formation or Incorporation. To the Seller's
knowledge, the related Mortgagor is a Person formed or incorporated in a
jurisdiction within the United States.
(liv) No Ownership Interest in Mortgagor. The Seller has no ownership
interest in the related Mortgaged Property or the related Mortgagor other than
as the holder of such Mortgage Loan being sold and assigned, and neither the
Seller nor any affiliate of the Seller has any obligation to make any capital
contributions to the related Mortgagor under the Mortgage or any other related
Mortgage Loan document.
(lv) No Undisclosed Common Ownership. To the Seller's knowledge,
except where multiple properties secure an individual Mortgage Loan and except
for properties securing Mortgage Loans that are cross-defaulted and
cross-collateralized, no two properties securing Mortgage Loans are directly or
indirectly under common ownership.
(lvi) Loan Outstanding. Such Mortgage Loan has not been satisfied in
full, and except as expressly contemplated by the related loan agreement or
other documents contained in the related Mortgage File, no material portion of
the related Mortgaged Property has been released.
(lvii) Usury. Such Mortgage Loan complied with or was exempt from all
applicable usury laws in effect at its date of origination.
(lviii) ARD Mortgage Loan. If such Mortgage Loan is an ARD Mortgage
Loan, then:
(A) the related Anticipated Repayment Date is not less than five
years from the origination date for such Mortgage Loan;
(B) such Mortgage Loan provides that from the related
Anticipated Repayment Date through the maturity date for
such Mortgage Loan, all excess cash flow (net of normal
monthly debt service on such Mortgage Loan, monthly expenses
reasonably related to the operation of the related Mortgaged
Property, amounts due for reserves established under such
Mortgage Loan, and payments for any other expenses,
including capital expenses, related to such
B-18
Mortgaged Property which are approved by mortgagee) will be
applied to repay principal due under such Mortgage Loan;
(C) no later than the related Anticipated Repayment Date, 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 will be deposited
directly into a designated account controlled by the
mortgagee under such Mortgage Loan; and
(D) the interest rate of such Mortgage Loan will increase by at
least two (2) percentage points in connection with the
passage of its Anticipated Repayment Date.
(lix) Appraisal. An appraisal of the related Mortgaged Property was
conducted in connection with the origination of such Mortgage Loan; and such
appraisal satisfied either (A) the requirements of the "Uniform Standards of
Professional Appraisal Practice" as adopted by the Appraisal Standards Board of
the Appraisal Foundation, or (B) the guidelines in Title XI of the Financial
Institutions Reform, Recovery and Enforcement Act of 1989, in either case as in
effect on the date such Mortgage Loan was originated.
For purposes of the foregoing representations and warranties, the
phrases "to the knowledge of the Seller" or "to the Seller's knowledge" shall
mean, except where otherwise expressly set forth above, the actual state of
knowledge of the Seller at the time of the origination of the particular
Mortgage Loan regarding the matters referred to, in each case after having
conducted such inquiry and due diligence into such matters as is customarily
performed (at the time the subject Mortgage Loan was originated) by prudent
institutional commercial or multifamily (as applicable) mortgage lenders
originating fixed-rate mortgage loans for securitization similar to the subject
Mortgage Loan, which inquiry and due diligence, in each case, would be commonly
applicable at such time taking into account the facts, circumstances and
characteristics of the subject Mortgage Loan and Mortgaged Property, and the
phrases "to the actual knowledge of the Seller" or "to the Seller's actual
knowledge" shall mean, except where otherwise expressly set forth above, the
actual state of the Seller's knowledge, at the time of the origination of the
particular Mortgage Loan regarding the matters referred to, in each case without
any express or implied obligation to make any inquiry or conduct any due
diligence. For purposes of the foregoing representations and warranties, with
respect to matters referred to that occurred subsequent to the origination of
the subject Mortgage Loan and with respect to the phrases "to the knowledge of
the Seller," "to the Seller's knowledge," "to the actual knowledge of the
Seller" or "to the Seller's actual knowledge," the term "Seller" shall be deemed
to include Wachovia, solely in its capacity as interim servicer (if applicable)
of the subject Mortgage Loan subsequent to origination of and prior to the
Closing Date for the subject Mortgage Loan.
For purposes of the foregoing representations and warranties, the
phrases "would be considered prudent by an institutional commercial mortgage
lender" or "consistent with the practices of prudent commercial mortgage
lenders" or "customarily performed by prudent commercial mortgage lenders" or
"would not be viewed as commercially unreasonable by a
B-19
prudent commercial mortgage lender" and/or other references to "prudent
commercial mortgage lender(s)" shall, in each case, mean the subject action,
inaction, consideration, determination, or lending practice would be reasonably
consistent with the practices or procedures commonly followed (at the time the
subject action, inaction, consideration, determination, or lending practice
occurred) by commercial mortgage lenders originating fixed-rate mortgage loans
for securitization similar to the Mortgage Loans, which practices or procedures,
in each case, would be commonly applicable at such time taking into account the
facts, circumstances and characteristics of the subject Mortgage Loan.
B-20
SCHEDULE I
LB-UBS 2007-C7
Exceptions to Representations and Warranties
Control
No. Representation Property Issue
-------- -------------------- --------------------------- ----------------------------------------------
6 (v) Miami Center No guaranty of the recourse obligations of the
borrower has been provided by any entity or
Loan Document Status natural person.
13 (v) Ballston Tower The guarantor of the recourse obligations in
not a natural person. The recourse carveout
Loan Document Status guaranty is from Consortium Atlantic Properties
LLC.
98 (v) Crossroads Shopping Center The loan is full recourse to the Mortgagor and
the guarantor.
Loan Document Status
14 (v) Chateau Marmont The non-recourse carveout guaranty covers (i)
misappropriation of rents, but not
Loan Document Status misapplication of rents and (ii) the breach on
the part of the Mortgagor of environmental
representations, but only to the extent
material.
66 (v) Northstar Shopping Center The liability of the guarantor with respect to
the non-recourse carveout guaranty is capped at
Loan Document Status $1,800,000.
N/A (v) All Properties With respect to the nonrecourse carveout
guaranty concerning fraud, certain of the
Loan Document Status guarantors have only agreed to be liable in
connection with and to the extent of any
material fraud or material intentional fraud or
material misrepresentations or material
intentional misrepresentation by the related
mortgagor.
Sch I-1
Control
No. Representation Property Issue
-------- -------------------- --------------------------- ----------------------------------------------
With respect to the nonrecourse carveout
covering misapplication or misappropriation,
some guarantors have agreed to cover
"misapplication or conversion" or
"misappropriation or conversion" and some such
non-recourse carve-outs apply only during the
continuance of an event of default or with
respect to material misapplication or
misappropriation.
Certain of the loans are recourse in limited
circumstances.
(viii) Gateway Plaza The fee interest of the Mortgaged Property is
owned by the ▇▇▇▇▇▇▇▇ County Industrial
First Lien Development Agency (the "County"), which has
entered into an Installment Sale Agreement (the
"ISA") and Payment in Lieu of Tax Agreement
(the "PILOT Agreement") with the Mortgagor. The
County has joined the mortgage for the purpose
of mortgaging its fee interest in the property.
59 (xi) Gateway Plaza The fee interest of the Mortgaged Property is
owned by the ▇▇▇▇▇▇▇▇ County Industrial
Title Insurance Development Agency (the "County"), which has
entered into an Installment Sale Agreement (the
"ISA") and Payment in Lieu of Tax Agreement
(the "PILOT Agreement") with the Mortgagor. The
County has joined the mortgage for the purpose
of mortgaging its fee interest in the property.
14 (xii) Chateau Marmont The Mortgagor is permitted to continue its
current coverage with Ironshore Insurance Ltd.
Property Insurance (as of closing of the Mortgage Loan, rated A-XI
by A.M.
Sch I-2
Control
No. Representation Property Issue
-------- -------------------- --------------------------- ----------------------------------------------
Best Company) and United States Fire Insurance
Company (as of closing of the Mortgage Loan,
rated BBB by S&P and A- XIII by A.M. Best
Company). Following the expiration of these
policies on March 3, 2008, the Mortgagor is
obligated to obtain insurance from an insurance
carrier with a rating of "A-" or better. The
Mortgagor shall have the ability to have the
insurance provided by an insurance syndicate",
provided that the insurance is provided by five
(5) or more insurance companies, the primary
insurer and at least 60% of the overall
insurance coverage is provided by companies
with a rating of "A-" or better and the balance
is provided by insurance companies with a
rating of BBB+ or better.
15 (xii) Sears Tower The related borrower has the right, subject to
the satisfaction of certain conditions, to
Property Insurance provide all or a portion of the insurance it is
required to maintain under the related loan
documents through an insurance company that is
wholly owned by an affiliate of such related
borrower. The related borrower currently
maintains such insurance for casualties in
excess of $1,000,000,000. Such insurance
company has been established in the District of
Columbia and therefore is subject to the
supervision of and the insurance laws and
regulations of the District of Columbia, the
District of Columbia Commissioner of Insurance
("the Commissioner") and such laws and
regulations are designed to assure the solvency
of such captive insurance company. In
particular, such captive insurance company is
subject to
Sch I-3
Control
No. Representation Property Issue
-------- -------------------- --------------------------- ----------------------------------------------
restrictions upon its licensors, delinquency
proceedings instituted by the Commissioner and
resulting delays or failures to pay under its
policy covering the related mortgaged property
and the related borrower will not have access
to state guaranty funds in such an event. To
the extent that such captive insurance company
buys third party reinsurance coverage and the
third party reinsurers fail to pay, the captive
insurance company may not have sufficient funds
to pay claims under the policy issued to the
related borrower. Pursuant to the loan
documents, such captive insurance company is
required to secure reinsurance for all required
coverage except terrorism acts covered by TRIEA
and the deductible permitted under the loan
documents. Because such captive insurance
company is a wholly owned subsidiary of an
affiliate of the related borrower, to the
extent that such affiliate becomes subject to a
bankruptcy proceeding and the independent
corporate existence of such captive insurance
company is not respected, the assets of such
captive insurance company could be applied to
satisfy the claims of the creditors of such
affiliate rather than the related borrower.
In addition, in the case of a non-certified
terrorism event, 12 months of business
interruption is not required.
63 (xii) The Villas The general liability insurance policy was
issued by ▇▇▇▇▇ River, which is a private
Property Insurance insurance company that does not have a
financial strength or a claims-paying-ability
rating from S&P
Sch I-4
Control
No. Representation Property Issue
-------- -------------------- --------------------------- ----------------------------------------------
or A.M. Best Company. Such insurer is required
to be accepted until the renewal of such policy
or policies, at which time the Mortgagor will
be required to obtain an insurance policy from
an insurer satisfying the financial strength or
claims-paying-ability rating of at least
"A:VIII" from A.M. Best Company or "A" or
better from S&P.
98 (xii) Crossroads Shopping Center Although the loan documents require a
$3,000,000 umbrella policy, the lender accepted
Property Insurance a $2,000,000 umbrella policy.
5, 22 (xvi) Carnegie Hall Tower Mezzanine debt is in place.
Subordinate Debt ▇▇-▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
3, 5, 6, (xvi) ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ The borrowers are permitted to procure
19, 20, mezzanine debt subject to the terms of the loan
63, 31, Subordinate Debt Carnegie Hall Tower documents.
39, 60, Miami Center
61, 78 Ithaca Multifamily
Portfolio
Soundview Marketplace
The Villas
▇▇▇▇▇ Street
Discovery Office
▇▇▇▇▇▇ Career Institute
Liberty ▇▇▇▇ Plaza
Sch I-5
Control
No. Representation Property Issue
-------- -------------------- --------------------------- ----------------------------------------------
Binghamton Retail
Portfolio
N/A (xvi) All Properties The loan documents allow the borrower to incur
certain trade payables and equipment financing
Subordinate Debt up to a predetermined amount, which is
generally less than or equal to 5% of the loan
amount.
6 (xix) Miami Center No natural person or entity has provided an
environmental indemnity. The environmental
Environmental indemnity was provided solely by the related
Conditions borrower.
13 (xix) Ballston Tower No natural person has provided an environmental
indemnity. The environmental indemnity is from
Environmental Consortium Atlantic Properties LLC.
Conditions
88, 87, (xix) Walgreens Pueblo The indemnitors are only liable to the extent
93, 94, Walgreens ▇▇▇▇▇ the indemnitors' own acts or omissions caused
99 Environmental Walgreens Amity or contributed to the loss.
Conditions Walgreens ▇▇▇▇▇▇
Arvada Office Max
Sch I-6
Control
No. Representation Property Issue
-------- -------------------- --------------------------- ----------------------------------------------
3, 5, 6, (xxv) One State Street Plaza The borrowers are permitted to procure
19, 20, mezzanine debt subject to the terms of the loan
63, 31, Due-on-Encumbrance Carnegie Hall Tower documents.
39, 60, Miami Center
61, 78 Ithaca Multifamily
Portfolio
Soundview Marketplace
The Villas
▇▇▇▇▇ Street
Discovery Office
▇▇▇▇▇▇ Career Institute
Liberty ▇▇▇▇ Plaza
Binghamton Retail
Portfolio
N/A (xxv) All Properties The loan documents allow the borrower to incur
certain trade payables and equipment financing
Due-on-Encumbrance up to a predetermined amount, which is
generally less than or equal to 5% of the loan
amount.
20 (xxvi) Soundview Marketplace (i) Legal fees in connection with the Lender's
consent to a transfer are capped at $15,000.
Due-on-Sale
(ii) A controlling interest in Mortgagor may be
transferred to ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ("▇▇▇▇▇▇"), or
an entity controlled by ▇▇▇▇▇▇, who is the
non-recourse carve-
Sch I-7
Control
No. Representation Property Issue
-------- -------------------- --------------------------- ----------------------------------------------
out guarantor. Lender's consent is not
required, however, ▇▇▇▇▇▇ has to maintain
control of the Mortgagor, no Event of Default
shall have occurred, the SPE structure of
Mortgagor must be maintained, and Lender has
the right to require updated due diligence with
respect to ▇▇▇▇▇▇.
(iii) Interests in borrower may be transferred
to any entity in which UBS Real Estate
Investments Inc. ("UBSREI") or UBS AG (or any
of their respective affiliates) holds any
interests or investment in and to any entity in
which UBSREI or UBS AG is merged into or
consolidated with.
Additionally, UBSREI may, without the consent
of lender, transfer or assign, or cause the
transfer or assignment of, all or any portion
of the direct or indirect interests in borrower
or may permit a transfer, directly or
indirectly, of any direct or indirect interest
in UBSREI or borrower, to (x) any fund advised
by UBSREI or an "affiliate" of UBSREI, or (y)
any other entity as long as, in the case of
this clause (y) only, UBSREI, an affiliate of
UBSREI, or a fund advised by UBSREI or an
affiliate of UBSREI either directly or
indirectly (1) "controls" such entity or (2) is
empowered to conduct, (or directly or
indirectly controls an entity that is empowered
to conduct), all day-to-day management of the
Mortgaged Property and, subject to obtaining
the consent of other persons or entities that
may have an interest therein, has the right to
participate in (or directly or indirectly
controls an entity that has the
Sch I-8
Control
No. Representation Property Issue
-------- -------------------- --------------------------- ----------------------------------------------
right to participate in), all day-to-day
management of the Mortgaged Property.
Additionally, nothing in the loan documents
restricts the right of UBSREI to engage in
repurchase transactions or any pledge,
hypothecation, or re-hypothecation transaction
with respect to its indirect ownership of the
partnership interests in borrower.
31 (xxvi) ▇▇▇▇▇ Street Lender consent is not required for transfers of
interests in borrower to ▇▇ ▇▇/▇▇▇▇▇ Street
Due-on-Sale Retail Center LLC, provided that (i) such
entity is controlled by Fidelity Real Estate
Growth Fund II, L.P. or such other entity that
is controlled by Fidelity Management Trust
Company ('Trust") or an affiliate of the Trust
and (ii) such entity provides a replacement
guarantor/indemnitor ("Indemnitor") acceptable
to lender and such Indemnitor shall be approved
by the rating agencies.
Lender consent is not required for transfers
of interests in Fidelity Real Estate Growth
Fund II, L.P., provided that the Trust or an
affiliate of the Trust controls Fidelity Real
Estate Growth Fund II, L.P.
Lender consent is also not required for any
transfer of direct or indirect ownership
interests in ▇▇ ▇▇/▇▇▇▇▇ Street Retail Center
LLC to a "qualified transferee", which
"qualified transferee" must (i) be an entity
with a net worth of $50,000,000 or more, (ii)
be experienced in the ownership and
Sch I-9
Control
No. Representation Property Issue
-------- -------------------- --------------------------- ----------------------------------------------
management of properties similar to the subject
(as determined by lender in its reasonable
discretion), (iii) own or manage retail
properties containing at least 500,000 square
feet, and (iv) provide credit and judgment lien
searches satisfactory to the lender.
79, 81, (xxvi) Tractor Supply Shreveport Direct and indirect owners of membership
86 interests of the Mortgagors may, without the
Due-on-Sale Tractor Supply Odessa consent of the lender, transfer those interests
to either or both of the non-recourse carveout
Tractor Supply DeRidder guarantors or to any entity directly or
indirectly controlled by either or both of the
non-recourse carveout guarantors. In addition,
any transfer or sale of American Realty
Capital, LLC, an indirect member of the
Mortgagors, or any merger or consolidation of
American Realty Capital, LLC, shall be
permitted without the lender's consent,
provided there is no change of control and
either one or both of the non-recourse carveout
guarantors continue to own at least 51% of the
interests in the Mortgagors.
78 (xxvi) Binghamton Retail Portfolio The Mortgagor is entitled after the lockout
date and provided there is no event of default,
Due-on-Sale to release one or more of the three properties
from the lien of the mortgage subject to the
terms of the loan documents, which include,
without limitation, the Mortgagor (i) providing
the lender sixty (60) days prior notice and
making full payments through the partial
prepayment date, (ii) paying all of the
lender's expenses, and (iii) paying 120% of the
allocated loan amount for the property being
released and pays yield maintenance on
Sch I-10
Control
No. Representation Property Issue
-------- -------------------- --------------------------- ----------------------------------------------
the amount being prepaid.
N/A (xxvi) All Properties Most of the loan documents provide that
transfers of direct and/or indirect interest in
Due-on-Sale the related mortgagor and/or the related
mortgaged property upon the death of any
natural person which holds such interest(s)
will not constitute a transfer of direct and/or
indirect interest in mortgagor and/or mortgaged
property so long as, among other things as set
forth in loan documents: (i) all of the direct
and/or indirect interests of such decedent in
the mortgagor and/or the mortgaged property are
held and remain the property of the legal
representative of such decedent's estate; (ii)
the mortgaged property continues to be managed
in a manner acceptable to the mortgagee and
(iii) within thirty (30) days of such death,
mortgagor delivers notice thereof to the
mortgagee and thereafter provides the mortgagee
with such information as may be reasonably
requested by the mortgagee as to the continued
management of the mortgaged property.
Sch I-11
Control
No. Representation Property Issue
-------- -------------------- --------------------------- ----------------------------------------------
19 (xxxi) Ithaca Multifamily Valid certificates of compliance with respect
Portfolio to the Center Ithaca Property, the Cayuga
Qualifications; Property and the Eddygate Property were not
Licensing; Zoning obtained by origination. The related mortgage
loan documents require the borrower to obtain
such certificates of compliance by January 4,
2008. The loan is fully recourse in the event
an order to vacate any property is issued due
to the failure of the borrower to obtain a
certificate of compliance and a $10,000 escrow
was taken at origination to be held pending the
issuance of the certificates of compliance.
16 (xxxii) Leeds Park Audited financial statements are not required
to be provided. The related borrower is
Property Financial required to provide financial statements
Statements certified by the borrower and the borrower's
accountant only.
N/A (xxxii) All Properties Annual rent rolls are not required, but the
borrower is required to provide monthly and/or
Property Financial quarterly rent rolls.
Statements
15 (xl) Sears Tower The engineering assessment was conducted more
than 12-months prior to the Cut-off Date.
Engineering
Assessments
19 (xlii) Ithaca Multifamily Valid certificates of compliance with respect
Portfolio to the Center Ithaca Property, the Cayuga
Licenses, Permits Property and the Eddygate Property were not
and Authorizations obtained by origination. The related mortgage
loan documents require the borrower to obtain
such certificates of compliance by January 4,
2008. The loan is fully
Sch I-12
Control
No. Representation Property Issue
-------- -------------------- --------------------------- ----------------------------------------------
recourse in the event an order to vacate any
property is issued due to the failure of the
borrower to obtain a certificate of compliance
and a $10,000 escrow was taken at origination
to be held pending the issuance of the
certificates of compliance.
5 (xlv) Carnegie Hall Tower The rights of the leasehold mortgagee under
the ground lease are subject to the leasehold
Leasehold Interest mortgagee meeting the definition of a
Only "Recognized Mortgagee" under the ground lease,
which includes an entity or a subsidiary of an
entity that is a commercial bank or trust
company (acting individually or in a fiduciary
capacity) that has a net worth of not less
than $300,000,000 (subject to indexing from
1986).
(B) Upon the foreclosure of the Mortgage Loan,
the Trustee may assign the ground lease for so
long as the assignee meets certain requirements
under the ground lease, including, among other
things (a) assignee (i) is not a felon, (ii) is
not in default or breach of any agreement with
the City or State of New York and (iii) has not
been involved in litigation during the past ten
years that would impair a favorable reputation
in the New York City business community, and
(b) assignee (including any affiliates) has a
net worth of no less than $12,500,000 (subject
to indexing from 1986 to date of proposed
transfer).
(F) The ground lease provides that no notice of
"default" given under the ground lease is
effective against the lender unless a copy is
delivered to the lender, but does not provide
that no
Sch I-13
Control
No. Representation Property Issue
-------- -------------------- --------------------------- ----------------------------------------------
notice of "termination" given under the ground
lease will be effective against the lender
unless a copy is delivered to the lender.
(L) The ground lessor is not required to enter
into a new lease upon termination of the ground
lease prior to the expiration of the term
thereof "for any reason", but is required, upon
the request of the lender, to enter into a new
lease upon termination of the ground lease
prior to the expiration of the term thereof due
to an "event of default under the ground
lease", including as a result of the rejection
of the ground lease in bankruptcy.
20 (xlv) Soundview Marketplace (C) The ground lease provides that it may not
be modified without the prior consent in
Leasehold Interest writing of any leasehold mortgagee, but it does
Only not expressly provide that "any such action
without such consent is not binding on such
mortgagee".
(F) If there is a default which entitles the
fee owner to terminate the ground lease, and if
within 20 days after the leasehold mortgagee's
receipt of a copy of a notice of termination
from the fee owner, the leasehold mortgagee
advises the fee owner of its desire to pay all
rent then in default, and the leasehold
mortgagee otherwise complies or commences to
comply with any non-monetary default, except
for non-monetary defaults over which the
leasehold mortgagee has no reasonable control,
and prosecutes the same to completion with due
diligence, and provided the leasehold mortgagee
keeps rent payments current, then the
Sch I-14
Control
No. Representation Property Issue
-------- -------------------- --------------------------- ----------------------------------------------
fee owner is not entitled to terminate the
ground lease pursuant to the notice of
termination, which is void and of no effect.
In addition to the right in the preceding
paragraph, the leasehold mortgagee has a right
to postpone and extend the date of termination
specified in the fee owner's termination notice
for a period of not more than 6 months, if the
leasehold mortgagee shall cure or cause to be
cured then existing monetary defaults, keeps
payment of rent current and complies with the
other terms of the ground lease, other than
past non-monetary defaults over which the
leasehold mortgagee has no reasonable control,
and provided the leasehold mortgagee promptly
takes steps to acquire and sell the ground
leasehold interest pursuant to the terms of a
mortgage foreclosure or otherwise. If at the
end of the 6-month extension the leasehold
mortgagee is diligently proceeding with its
foreclosure, then the termination date is
further extended to such period as is
reasonable to complete the foreclosure assuming
the leasehold mortgage is proceeding diligently
and continually. In such event all monetary
defaults have to be cured and monetary payments
continued.
The leasehold mortgagee is entitled to request
a new lease on termination of the existing
ground lease by reason of a default by tenant,
except where the default is a default in the
payment of rent, additional rent or other
monetary sums.
Sch I-15
Control
No. Representation Property Issue
-------- -------------------- --------------------------- ----------------------------------------------
(I) The maturity date of the Mortgage Loan is
January 11, 2017 and the ground lease term
extends to December 31, 2036 (11 days short of
the 20 years).
(M) While the ground lease is not currently
subordinate to any fee mortgage, as there is
currently no fee mortgage effecting the
property, the leasehold mortgage is subject and
subordinate to any fee mortgages now or
hereafter made, provided that the Mortgagor and
the leasehold mortgagee shall receive a
non-disturbance agreement from any fee
mortgagee in recordable form and reasonably
satisfactory to the leasehold mortgagee.
N/A (xlviii) Certain Properties The defeasance collateral can consist of, in
addition to what is listed in representation
Defeasance (xlviii), (A) non-callable instruments, which
(a) will not cause the REMIC trust to fail to
maintain its status as a "real estate mortgage
investment conduit," (b) will not result in a
ratings reduction, downgrade or withdrawal, (c)
are then outstanding and (d) are then being
generally accepted by the rating agencies
without any reduction, downgrade or withdrawal
of the applicable ratings, or (B)
non-redeemable securities evidencing an
obligation to timely pay principal and/or
interest in a timely manner that are (a) direct
obligations of the united states for payment of
which its full faith and credit is pledged or
(b) "government securities" within the meaning
of Section 2(a)(16) of the Investment Company
Act of 1940.
Sch I-16
Control
No. Representation Property Issue
-------- -------------------- --------------------------- ----------------------------------------------
N/A (li) Certain Properties The due date is the 9th of the month.
Due Date
20 (liv) Soundview Marketplace 75% of the Mortgagor is owned by CRE Soundview
JV LLC, which entity is wholly owned by UBS
No Ownership Real Estate Investments, Inc., an affiliate of
Interest in the seller.
Mortgagor
Sch-I-17
EXHIBIT C
NONE
C-1
EXHIBIT C-1
OPINION OF CADWALADER, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇
______________, 2007
Addressees listed on Schedule A
Re: LB-UBS Commercial Mortgage Trust 2007-C7, Commercial Mortgage Pass-Through
Certificates, Series 2007-C7
Ladies and Gentlemen:
We are rendering this opinion pursuant to the Mortgage Loan Purchase
Agreement, dated as of November 20, 2007 (the "MLPA"), between UBS Real Estate
Securities Inc., as seller (the "Seller"), and Structured Asset Securities
Corporation II, as purchaser ("SASC").
We have acted as special counsel to the Seller in connection with the
following transactions: (i) the sale by the Seller, and the purchase by SASC, of
multifamily and commercial mortgage loans in the principal amount of
approximately $1,120,456,369.60 (the "UBS Mortgage Loans"), pursuant to the
MLPA; (ii) the execution by the Seller of the UBS Indemnification Agreement,
dated as of November 20, 2007 (the "Indemnification Agreement"), by and among
the Seller, SASC and the Underwriters (as defined below); and (iii) the
acknowledgement by the Seller of certain sections of the Underwriting Agreement,
dated as of November 20, 2007 (the "Underwriting Agreement"), by and among SASC,
▇▇▇▇▇▇ Brothers Inc. ("▇▇▇▇▇▇"), Wachovia Capital Markets, LLC ("Wachovia
Capital") and UBS Securities LLC ("UBS SEC" and, together with ▇▇▇▇▇▇ and
Wachovia Capital, the "Underwriters") and acknowledged with respect to certain
sections by the Seller and ▇▇▇▇▇▇ Brothers Holdings Inc.
The MLPA, the Indemnification Agreement and the Underwriting Agreement
are collectively referred to herein as the "Agreements." Capitalized terms not
defined herein have the respective meanings set forth in the MLPA.
In rendering the opinions set forth below, we have examined and, as to
factual matters relevant to the opinions set forth below, relied upon the
originals, copies or specimens, certified or otherwise identified to our
satisfaction, of the Agreements and such certificates, corporate and public
records, agreements, instruments and other documents, including, among other
things, the documents and agreements delivered at the closing of the purchase
and sale of the Certificates (the "Closing"), as we have deemed appropriate as a
basis for the opinions expressed below. In such examination we have assumed the
genuineness of all signatures, the authenticity of all documents, agreements and
instruments submitted to us as originals, the conformity to original documents,
agreements and instruments of all documents, agreements and
C-2
instruments submitted to us as copies or specimens, the authenticity of the
originals of such documents, agreements and instruments submitted to us as
copies or specimens and the accuracy of the matters set forth in the documents,
agreements and instruments we reviewed. As to any facts material to the opinions
expressed below that were not known to us, we have relied upon statements,
certificates and representations of officers and other representatives of the
Seller, SASC and the Underwriters, including those contained in the Agreements
and other documents, certificates, agreements and opinions delivered at the
Closing, and of public officials. In addition, with respect to the opinions
referred to in paragraphs 4(c), 4(d) and 5 below, such opinions are based solely
on the Seller Officer's Certificate referred to below, a review of the items, if
any, identified as exceptions in the exhibits to such certificate, conversations
with internal counsel for the Seller, and the actual knowledge of attorneys who
conducted such review, had such conversations and/or customarily represent the
Seller in real estate lending transactions, financing transactions, and/or
transactions similar to those contemplated by the Agreements. Except as
expressly set forth herein, we have not undertaken any independent investigation
(including, without limitation, conducting any review, search or investigation
of any public files, records or dockets) to determine the existence or absence
of the facts that are material to our opinion, and no inference as to our
knowledge concerning such facts should be drawn from our reliance on the
representations of the Seller and others in connection with the preparation and
delivery of this letter.
In particular, we have examined and relied upon:
1. the MLPA;
2. the Underwriting Agreement;
3. the Indemnification Agreement; and
4. the officer's certificate of Seller, dated the date hereof (the
"Seller Officer's Certificate").
References in this letter to "Applicable Laws" shall mean those laws,
rules and regulations of the State of New York and of the United States of
America which, in our experience, are normally applicable to transactions of the
type contemplated by the Agreements, as well as the General Corporation Law of
the State of Delaware with respect to the opinions referred to in paragraphs 1,
2, 4(a), 4(b)(i), 4(c) and 4(d) below. While we are not licensed to practice law
in the State of Delaware, we have reviewed applicable provisions of the Delaware
General Corporation Law as we have deemed appropriate in connection with the
opinions expressed herein. Except as described we have neither examined nor do
we express any opinion with respect to Delaware law. References in this letter
to the term "Governmental Authorities" means executive, legislative, judicial,
administrative or regulatory bodies of the State of New York or the United
States of America. References in this letter to the term "Governmental Approval"
means any consent, approval, license, authorization or validation of, or filing,
recording or registration with, any Governmental Authority pursuant to
Applicable Laws.
C-3
We have also assumed, except as to the Seller, that all documents,
agreements and instruments have been duly authorized, executed and delivered by
all parties thereto, that all such parties are validly existing and in good
standing under the laws of their respective jurisdictions of organization, that
all such parties had the power and legal right to execute and deliver all such
documents, agreements and instruments, and, except as to the Seller, that such
documents, agreements and instruments are legal, valid and binding obligations
of such parties, enforceable against such parties in accordance with their
respective terms. As used herein, "to our knowledge," "known to us" or words of
similar import mean the actual knowledge, without independent investigation
(except as expressly set forth herein), of any lawyer in our firm actively
involved in the transactions contemplated by the Agreements.
We express no opinion concerning any law other than Applicable Law.
Based upon and subject to the foregoing, we are of the opinion that:
1. Each of the Agreements has been duly authorized, executed and
delivered by the Seller.
2. The Seller is a corporation validly existing and in good standing
under the laws of the State of Delaware, with corporate power and authority
to enter into and perform its obligations under the Agreements.
3. Each of the MLPA and the Underwriting Agreement constitutes the
legal, valid and binding agreement of the Seller, enforceable against the
Seller in accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium, receivership
or other laws relating to or affecting creditors' rights generally, and to
general principles of equity (regardless of whether enforcement is sought
in a proceeding at law or in equity), and except that (a) the enforcement
of rights with respect to indemnification and contribution obligations and
(b) provisions (i) purporting to waive or limit rights to trial by jury,
oral amendments to written agreements or rights of set off or (ii) relating
to submission to jurisdiction, venue or service of process, may be limited
by applicable law or considerations of public policy.
4. None of the sale of the UBS Mortgage Loans, the consummation by the
Seller of any of the other transactions contemplated by the Agreements to
which it is a party or the execution, delivery and performance by the
Seller of the terms of the Agreements to which it is a party, (a) will
require any Governmental Approval to be obtained or made on the part of the
Seller, the absence of which would have a material adverse effect on the
Seller or the transactions contemplated by the Agreements, except those
that may be required under state securities or blue sky laws, and except
for such other approvals that have been obtained and, to our knowledge, are
in full force and effect, (b) will conflict with, or result in a violation
of, any provision of (i) either the Seller's certificate of incorporation
or bylaws or (ii) any Applicable Laws applicable to the Seller, (c) will,
to our knowledge, breach, constitute a default under, require any consent
under, or result in the acceleration or require prepayment of any
indebtedness pursuant to the terms of, any agreement or instrument to which
the Seller is a party or by
C-4
which it is bound or to which it is subject, or result in the creation or
imposition of any lien upon any property of the Seller pursuant to the
terms of any such agreement or instrument, any of which occurrences, either
in any one instance or in the aggregate, would call into question the
validity of any Agreement to which it is a party or be reasonably likely to
impair materially the ability of the Seller to perform under the terms of
any Agreement to which it is a party or (d) will, to our knowledge, breach
or result in a violation of, or default under, any material judgment,
decree or order that is applicable to the Seller and is issued by any
Governmental Authority having jurisdiction over the Seller or any of its
properties.
5. To our actual knowledge, there is no legal or governmental action,
investigation or proceeding pending or threatened against the Seller (a)
asserting the invalidity of the Agreements to which it is a party, (b)
seeking to prevent the consummation of any of the transactions provided for
in the Agreements, or (c) that would materially and adversely affect (i)
the ability of the Seller to perform its obligations under, or the validity
or enforceability (with respect to the Seller) of, the Agreements to which
it is a party or (ii) any rights with regard the Mortgaged Properties or
the Mortgage Loans. For purposes of the opinion set forth in this
paragraph, we have not regarded any legal or governmental actions,
investigations or proceedings to be "threatened" unless the potential
litigant or governmental authority has communicated in writing to the
Seller a present intention to initiate such actions, investigations or
proceedings against the Seller.
We are furnishing this letter to you solely for your benefit in
connection with the transactions referred to herein. Without our prior written
consent, this letter is not to be relied upon, used, circulated, quoted or
otherwise referred to by, or assigned to, any other person (including any person
that acquires any Certificates from you or that seeks to assert your rights in
respect of this letter (other than your successor in interest by means of
merger, consolidation, transfer of a business or other similar transaction)) or
for any other purpose. In addition, we disclaim any obligation to update this
letter for changes in fact or law, or otherwise.
Very truly yours,
C-5
SCHEDULE A
Structured Asset Securities Corporation II Standard & Poor's Rating Services
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ Brothers Inc. LaSalle Bank National Association
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ 10019 ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
UBS Securities LLC Fitch Inc.
1285 Avenue of the Americas ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Wachovia Capital Markets, LLC
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇-▇
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