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MORTGAGE LOAN PURCHASE AGREEMENT
between
PRINCIPAL COMMERCIAL FUNDING II, LLC
as Seller
and
XXXXXX XXXXXXX CAPITAL I INC.
as Purchaser
Dated as of July 19, 2006
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TABLE OF CONTENTS
1. AGREEMENT TO PURCHASE................................................ 3
2. CONVEYANCE OF MORTGAGE LOANS......................................... 3
3. EXAMINATION OF MORTGAGE FILES AND DUE DILIGENCE REVIEW............... 10
4. REPRESENTATIONS AND WARRANTIES OF SELLER AND PURCHASER............... 12
5. REMEDIES UPON BREACH OF REPRESENTATIONS AND WARRANTIES MADE BY
SELLER............................................................... 15
6. CLOSING.............................................................. 20
7. CLOSING DOCUMENTS.................................................... 20
8. COSTS................................................................ 23
9. NOTICES.............................................................. 23
10. SEVERABILITY OF PROVISIONS........................................... 23
11. FURTHER ASSURANCES................................................... 24
12. SURVIVAL............................................................. 24
13. GOVERNING LAW........................................................ 24
14. BENEFITS OF MORTGAGE LOAN PURCHASE AGREEMENT......................... 24
15. MISCELLANEOUS........................................................ 24
16. ENTIRE AGREEMENT..................................................... 25
Exhibit 1 Mortgage Loan Schedule
Exhibit 2 Representations and Warranties
Exhibit 3 Pricing Formulation
Exhibit 4 Xxxx of Sale
Exhibit 5 Power of Attorney
Index of Defined Terms
Affected Loan(s)........................................................... 17
Agreement.................................................................. 2
Certificate Purchase Agreement............................................. 2
Certificates............................................................... 2
Closing Date............................................................... 3
Collateral Information..................................................... 10
Crossed Mortgage Loans..................................................... 17
Defective Mortgage Loan.................................................... 17
Final Judicial Determination............................................... 19
Indemnification Agreement.................................................. 13
Initial Purchasers......................................................... 2
Master Servicer............................................................ 2
Material Breach............................................................ 15
Material Document Defect................................................... 15
Memorandum................................................................. 2
MERS....................................................................... 5
Mortgage File.............................................................. 4
Mortgage Loan Schedule..................................................... 3
Mortgage Loans............................................................. 2
Officer's Certificate...................................................... 7
Other Mortgage Loans....................................................... 2
Pooling and Servicing Agreement............................................ 2
Private Certificates....................................................... 2
Prospectus Supplement...................................................... 2
Public Certificates........................................................ 2
Purchaser.................................................................. 2
Repurchased Loan........................................................... 17
Seller..................................................................... 2
Special Servicer........................................................... 2
Trust...................................................................... 2
Trustee.................................................................... 2
Underwriters............................................................... 2
Underwriting Agreement..................................................... 2
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MORTGAGE LOAN PURCHASE AGREEMENT
(PRINCIPAL LOANS)
Mortgage Loan Purchase Agreement ("Agreement"), dated as of July 19, 2006,
between Principal Commercial Funding II, LLC ("Seller") and Xxxxxx Xxxxxxx
Capital I Inc. ("Purchaser").
Seller agrees to sell and Purchaser agrees to purchase certain mortgage loans
listed on Exhibit 1 hereto (the "Mortgage Loans") as described herein. Purchaser
will convey the Mortgage Loans to a trust (the "Trust") created pursuant to a
Pooling and Servicing Agreement (the "Pooling and Servicing Agreement"), to be
dated as of August 1, 2006 between Purchaser, as depositor, Xxxxx Fargo Bank,
National Association, as master servicer (the "Master Servicer"), ARCap
Servicing, Inc., as special servicer (the "Special Servicer"), LaSalle Bank
National Association, as trustee and custodian (the "Trustee") and Xxxxx Fargo
Bank, National Association, as paying agent, certificate registrar and
authenticating agent. In exchange for the Mortgage Loans and certain other
mortgage loans to be purchased by Purchaser (collectively the "Other Mortgage
Loans"), the Trust will issue to the Depositor pass-through certificates to be
known as Xxxxxx Xxxxxxx Capital I Inc., Commercial Mortgage Pass-Through
Certificates, Series 2006-TOP23 (the "Certificates"). The Certificates will be
issued pursuant to the Pooling and Servicing Agreement.
Capitalized terms used herein but not defined herein shall have the meanings
assigned to them in the Pooling and Servicing Agreement.
The Class A-1, Class A-2, Class A-3, Class A-AB, Class A-4, Class A-M and Class
A-J Certificates (the "Public Certificates") will be sold by Purchaser to Xxxxxx
Xxxxxxx & Co. Incorporated and Bear, Xxxxxxx & Co. Inc. (the "Underwriters"),
pursuant to an Underwriting Agreement, between Purchaser and the Underwriters,
dated July 19, 2006 (the "Underwriting Agreement"), and the Class X, Class B,
Class C, Class D, Class E, Class F, Class G, Class H, Class J, Class K, Class L,
Class M, Class N, Class O, Class P, Class R-I, Class R-II and Class R-III
Certificates (the "Private Certificates") will be sold by Purchaser to Xxxxxx
Xxxxxxx & Co. Incorporated and Bear, Xxxxxxx & Co. Inc. (the "Initial
Purchasers") pursuant to a Certificate Purchase Agreement, between Purchaser and
the Initial Purchasers, dated July 19, 2006 (the "Certificate Purchase
Agreement"). The Underwriters will offer the Public Certificates for sale
publicly pursuant to a Prospectus dated March 14, 2006, as supplemented by a
Prospectus Supplement dated July 19, 2006 (together, the "Prospectus
Supplement") and the Initial Purchasers will offer the Private Certificates for
sale in transactions exempt from the registration requirements of the Securities
Act of 1933 pursuant to a Private Placement Memorandum dated July 19, 2006 (the
"Memorandum").
In consideration of the mutual agreements contained herein, Seller and Purchaser
hereby agree as follows:
AGREEMENT TO PURCHASE.
Seller agrees to sell, and Purchaser agrees to purchase, on a servicing released
basis, the Mortgage Loans identified on the schedule (the "Mortgage Loan
Schedule") annexed hereto as Exhibit 1, as such schedule may be amended to
reflect the actual Mortgage Loans accepted by Purchaser pursuant to the terms
hereof. The Cut-Off Date with respect to the Mortgage Loans is August 1, 2006.
The Mortgage Loans will have an aggregate principal balance as of the close of
business on the Cut-Off Date, after giving effect to any payments due on or
before such date, whether or not received, of $393,404,396. The sale of the
Mortgage Loans shall take place on August 3, 2006 or such other date as shall be
mutually acceptable to the parties hereto (the "Closing Date"). The purchase
price to be paid by Purchaser for the Mortgage Loans shall equal the amount set
forth as such purchase price on Exhibit 3 hereto. The purchase price shall be
paid to Seller by wire transfer in immediately available funds on the Closing
Date.
On the Closing Date, Purchaser will assign to the Trustee pursuant to the
Pooling and Servicing Agreement all of its right, title and interest in and to
the Mortgage Loans and its rights under this Agreement (to the extent set forth
in Section 14 hereof), and the Trustee shall succeed to such right, title and
interest in and to the Mortgage Loans and Purchaser's rights under this
Agreement (to the extent set forth in Section 14 hereof).
CONVEYANCE OF MORTGAGE LOANS.
Effective as of the Closing Date, subject only to receipt of the consideration
referred to in Section 1 hereof and the satisfaction of the conditions specified
in Sections 6 and 7 hereof, Seller does hereby transfer, assign, set over and
otherwise convey to Purchaser, without recourse, except as specifically provided
herein all the right, title and interest of Seller, with the understanding that
a Servicing Rights Purchase and Sale Agreement, dated August 1, 2006, will be
executed by Seller and the Master Servicer, in and to the Mortgage Loans
identified on the Mortgage Loan Schedule as of the Closing Date. The Mortgage
Loan Schedule, as it may be amended from time to time on or prior to the Closing
Date, shall conform to the requirements of this Agreement and the Pooling and
Servicing Agreement. In connection with such transfer and assignment, Seller
shall deliver to or on behalf of the Trustee, on behalf of Purchaser, on or
prior to the Closing Date, the Mortgage Note (as described in clause 2.2.1
hereof) for each Mortgage Loan and on or prior to the fifth Business Day after
the Closing Date, five limited powers of attorney substantially in the form
attached hereto as Exhibit 5 in favor of the Trustee and the Special Servicer to
empower the Trustee and, in the event of the failure or incapacity of the
Trustee, the Special Servicer, to submit for recording, at the expense of
Seller, any mortgage loan documents required to be recorded as described in the
Pooling and Servicing Agreement and any intervening assignments with evidence of
recording thereon that are required to be included in the Mortgage Files (so
long as original counterparts have previously been delivered to the Trustee).
Seller agrees to reasonably cooperate with the Trustee and the Special Servicer
in connection with any additional powers of attorney or revisions thereto that
are requested by such parties for purposes of such recordation. The parties
hereto agree that no such power of attorney shall be used with respect to any
Mortgage Loan by or under authorization by any party hereto except to the extent
that the absence of a document described in the second preceding sentence with
respect to such Mortgage Loan remains unremedied as of the earlier of (i) the
date
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that is 180 days following the delivery of notice of such absence to Seller, but
in no event earlier than 18 months from the Closing Date, and (ii) the date (if
any) on which such Mortgage Loan becomes a Specially Serviced Mortgage Loan. The
Trustee shall submit such documents, at Seller's expense, after the periods set
forth above, provided, however, the Trustee shall not submit such assignments
for recording if Seller produces evidence that it has sent any such assignment
for recording and certifies that Seller is awaiting its return from the
applicable recording office. In addition, not later than the 30th day following
the Closing Date, Seller shall deliver to or on behalf of the Trustee each of
the remaining documents or instruments specified in Section 2.2 hereof (with
such exceptions as are permitted by this Section 2) with respect to each
Mortgage Loan (each, a "Mortgage File"). (Seller acknowledges that the term
"without recourse" does not modify the duties of Seller under Section 5 hereof.)
All Mortgage Files, or portions thereof, delivered prior to the Closing Date are
to be held by or on behalf of the Trustee in escrow on behalf of Seller at all
times prior to the Closing Date. The Mortgage Files shall be released from
escrow upon closing of the sale of the Mortgage Loans and payments of the
purchase price therefor as contemplated hereby. The Mortgage File for each
Mortgage Loan shall contain the following documents:
The original Mortgage Note bearing all intervening endorsements, endorsed "Pay
to the order of LaSalle Bank National Association, as Trustee for Xxxxxx Xxxxxxx
Capital I Inc., Commercial Mortgage Pass-Through Certificates, Series
2006-TOP23, without recourse, representation or warranty" or if the original
Mortgage Note is not included therein, then a lost note affidavit, with a copy
of the Mortgage Note attached thereto;
The original Mortgage, with evidence of recording thereon, and, if the Mortgage
was executed pursuant to a power of attorney, a certified true copy of the power
of attorney certified by the public recorder's office, with evidence of
recording thereon (if recording is customary in the jurisdiction in which such
power of attorney was executed), or certified by a title insurance company or
escrow company to be a true copy thereof; provided that if such original
Mortgage cannot be delivered with evidence of recording thereon on or prior to
the 45th day following the Closing Date because of a delay caused by the public
recording office where such original Mortgage has been delivered for recordation
or because such original Mortgage has been lost, Seller shall deliver or cause
to be delivered to the Trustee a true and correct copy of such Mortgage,
together with (i) in the case of a delay caused by the public recording office,
an Officer's Certificate (as defined below) of Seller stating that such original
Mortgage has been sent to the appropriate public recording official for
recordation or (ii) in the case of an original Mortgage that has been lost after
recordation, a certification by the appropriate county recording office where
such Mortgage is recorded that such copy is a true and complete copy of the
original recorded Mortgage;
The originals of all agreements modifying a Money Term or other material
modification, consolidation and extension agreements, if any, with evidence of
recording thereon, or if any such original modification, consolidation or
extension agreement has been delivered to the appropriate recording office for
recordation and either has not yet been returned on or prior to the 45th day
following the Closing Date with evidence of recordation thereon or has been lost
after recordation, a true copy of such modification, consolidation or extension
certified by Seller together with (i) in the case of a delay caused by the
public recording office, an Officer's
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Certificate of Seller stating that such original modification, consolidation or
extension agreement has been dispatched or sent to the appropriate public
recording official for recordation or (ii) in the case of an original
modification, consolidation or extension agreement that has been lost after
recordation, a certification by the appropriate county recording office where
such document is recorded that such copy is a true and complete copy of the
original recorded modification, consolidation or extension agreement, and the
originals of all assumption agreements, if any;
An original Assignment of Mortgage for each Mortgage Loan, in form and substance
acceptable for recording, signed by the holder of record in favor of "LaSalle
Bank National Association, as Trustee for Xxxxxx Xxxxxxx Capital I Inc.,
Commercial Mortgage Pass-Through Certificates, Series 2006-TOP23," provided, if
the related Mortgage has been recorded in the name of Mortgage Electronic
Registration Systems, Inc. ("MERS") or its designee, no such assignments will be
required to be submitted for recording or filing and instead, Seller shall take
all actions as are necessary to cause the Trustee to be shown as the owner of
the related Mortgage on the record of MERS for purposes of the system of
recording transfers of beneficial ownership of mortgages maintained by MERS and
shall deliver to the Master Servicer and the Special Servicer evidence
confirming that the Trustee is shown as the owner on the record of MERS;
Originals of all intervening assignments of Mortgage (except with respect to any
Mortgage that has been recorded in the name of MERS or its designees), if any,
with evidence of recording thereon or, if such original assignments of Mortgage
have been delivered to the appropriate recorder's office for recordation,
certified true copies of such assignments of Mortgage certified by Seller, or in
the case of an original blanket intervening assignment of Mortgage retained by
Seller, a copy thereof certified by Seller or, if any original intervening
assignment of Mortgage has not yet been returned on or prior to the 45th day
following the Closing Date from the applicable recording office or has been
lost, a true and correct copy thereof, together with (i) in the case of a delay
caused by the public recording office, an Officer's Certificate of Seller
stating that such original intervening assignment of Mortgage has been sent to
the appropriate public recording official for recordation or (ii) in the case of
an original intervening Assignment of Mortgage that has been lost after
recordation, a certification by the appropriate county recording office where
such assignment is recorded that such copy is a true and complete copy of the
original recorded intervening Assignment of Mortgage;
If the related Assignment of Leases is separate from the Mortgage, the original
of such Assignment of Leases with evidence of recording thereon or, if such
Assignment of Leases has not been returned on or prior to the 45th day following
the Closing Date from the applicable public recording office, a copy of such
Assignment of Leases certified by Seller to be a true and complete copy of the
original Assignment of Leases submitted for recording, together with (i) an
original of each assignment of such Assignment of Leases with evidence of
recording thereon and showing a complete recorded chain of assignment from the
named assignee to the holder of record, and if any such assignment of such
Assignment of Leases has not been returned from the applicable public recording
office, a copy of such assignment certified by Seller to be a true and complete
copy of the original assignment submitted for recording, and (ii) an original
assignment of such Assignment of Leases, in recordable form, signed by the
holder of record in favor of "LaSalle Bank National Association, as Trustee for
Xxxxxx Xxxxxxx Capital I Inc., Commercial Mortgage Pass-Through Certificates,
Series 2006-TOP23," which assignment may be effected in the related Assignment
of Mortgage, provided, if the related Mortgage has been recorded in the
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name of MERS or its designee, no assignment of Assignment of Leases in favor of
the Trustee will be required to be recorded or delivered and instead, Seller
shall take all actions as are necessary to cause the Trustee to be shown as the
owner of the related Mortgage on the record of MERS for purposes of the system
of recording transfers of beneficial ownership of mortgages maintained by MERS
and shall deliver to the Master Servicer and the Special Servicer evidence
confirming that the Trustee is shown as the owner on the record of MERS;
The original of each guaranty, if any, constituting additional security for the
repayment of such Mortgage Loan;
The original Title Insurance Policy, or in the event such original Title
Insurance Policy has not been issued, an original binder or actual title
commitment or a copy thereof certified by the title company with the original
Title Insurance Policy to follow within 180 days of the Closing Date or a
preliminary title report binding on the title company with an original Title
Insurance Policy to follow within 180 days of the Closing Date;
(A) UCC financing statements (together with all assignments thereof) and (B)
UCC-2 or UCC-3 financing statements to the Trustee executed and delivered in
connection with the Mortgage Loan, provided, if the related Mortgage has been
recorded in the name of MERS or its designee, no such financing statements will
be required to be recorded or delivered and instead, Seller shall take all
actions as are necessary to cause the Trustee to be shown as the owner of the
related Mortgage on the record of MERS for purposes of the system of recording
transfers of beneficial ownership of mortgages maintained by MERS and shall
deliver to the Master Servicer and the Special Servicer evidence confirming that
the Trustee is shown as the owner on the record of MERS;
Copies of the related ground lease(s), if any, to any Mortgage Loan where the
Mortgagor is the lessee under such ground lease and there is a lien in favor of
the mortgagee in such lease;
Copies of any loan agreements, lock-box agreements and intercreditor agreements
(including, without limitation, any Intercreditor Agreement, and a copy (that
is, not the original) of the mortgage note evidencing the related B Note), if
any, related to any Mortgage Loan;
Either (A) the original of each letter of credit, if any, constituting
additional collateral for such Mortgage Loan, which shall be assigned and
delivered to the Trustee on behalf of the Trust with a copy to be held by the
Primary Servicer (or the Master Servicer), and applied, drawn, reduced or
released in accordance with documents evidencing or securing the applicable
Mortgage Loan, the Pooling and Servicing Agreement and the Primary Servicing
Agreement or (B) the original of each letter of credit, if any, constituting
additional collateral for such Mortgage Loan, which shall be held by the Primary
Servicer (or the Master Servicer) on behalf of the Trustee, with a copy to be
held by the Trustee, and applied, drawn, reduced or released in accordance with
documents evidencing or securing the applicable Mortgage Loan, the Pooling and
Servicing Agreement and the Primary Servicing Agreement (it being understood
that Seller has agreed (a) that the proceeds of such letter of credit belong to
the Trust, (b) to notify, on or before the Closing Date, the bank issuing the
letter of credit that the letter of credit and the proceeds thereof belong to
the Trust, and to use reasonable efforts to obtain within 30 days (but in any
event to obtain within 90 days) following the Closing Date, an acknowledgement
thereof by the bank
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(with a copy of such acknowledgement to be sent to the Trustee) or a reissued
letter of credit and (c) to indemnify the Trust for any liabilities, charges,
costs, fees or other expenses accruing from the failure of Seller to assign all
rights to the letter of credit hereunder including the right and power to draw
on the letter of credit). In the case of clause (B) above, any letter of credit
held by the Primary Servicer (or Master Servicer) shall be held in its capacity
as agent of the Trust, and if the Primary Servicer (or Master Servicer) sells
its rights to service the applicable Mortgage Loan, the Primary Servicer (or
Master Servicer) has agreed to assign the applicable letter of credit to the
Trust or at the direction of the Special Servicer to such party as the Special
Servicer may instruct, in each case, at the expense of the Primary Servicer (or
Master Servicer). The Primary Servicer (or Master Servicer) has agreed to
indemnify the Trust for any loss caused by the ineffectiveness of such
assignment;
The original environmental indemnity agreement, if any, related to any Mortgage
Loan;
Third-party management agreements for all hotels and for such other Mortgaged
Properties securing Mortgage Loans with a Cut-Off Date principal balance equal
to or greater than $20,000,000;
Any Environmental Insurance Policy; and
Any affidavit and indemnification agreement.
The original of each letter of credit referred to in clause 2.2.12 above shall
be delivered to the Primary Servicer, the Master Servicer or the Trustee (as the
case may be) within 45 days of the Closing Date. In addition, a copy of any
ground lease shall be delivered to the Primary Servicer within 30 days of the
Closing Date. Any failure to deliver any ground lease shall constitute a
document defect.
"Officer's Certificate" shall mean a certificate signed by one or more of the
Chairman of the Board, any Vice Chairman, the President, any Senior Vice
President, any Vice President, any Assistant Vice President, any Treasurer or
any Assistant Treasurer.
The Assignments of Mortgage and assignment of Assignment of Leases referred to
in Sections 2.2.4 and 2.2.6 hereof may be in the form of a single instrument
assigning the Mortgage and the Assignment of Leases to the extent permitted by
applicable law. To avoid the unnecessary expense and administrative
inconvenience associated with the execution and recording or filing of multiple
assignments of mortgages, assignments of leases (to the extent separate from the
mortgages) and assignments of UCC financing statements, Seller shall execute, in
accordance with Section 2.6 hereof, the assignments of mortgages, the
assignments of leases (to the extent separate from the mortgages) and the
assignments of UCC financing statements relating to the Mortgage Loans naming
the Trustee on behalf of the Certificateholders as assignee. Notwithstanding the
fact that such assignments of mortgages, assignments of leases (to the extent
separate from the assignments of mortgages) and assignments of UCC financing
statements shall name the Trustee on behalf of the Certificateholders as the
assignee, the parties hereto acknowledge and agree that the Mortgage Loans shall
for all purposes be deemed to have been transferred from Seller to Purchaser and
from Purchaser to the Trustee on behalf of the Certificateholders.
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If Seller cannot deliver, or cause to be delivered, as to any Mortgage Loan, any
of the documents and/or instruments referred to in Sections 2.2.2, 2.2.3, 2.2.5
or 2.2.6 hereof, with evidence of recording thereon, solely because of a delay
caused by the public recording office where such document or instrument has been
delivered for recordation within such 45 day period, but Seller delivers a
photocopy thereof (certified by the appropriate county recorder's office to be a
true and complete copy of the original thereof submitted for recording), to the
Trustee within such 45 day period, Seller shall then deliver within 90 days
after the Closing Date the recorded document (or within such longer period after
the Closing Date as the Trustee may consent to, which consent shall not be
unreasonably withheld so long as Seller is, as certified in writing to the
Trustee no less often than monthly, in good faith attempting to obtain from the
appropriate county recorder's office such original or photocopy).
The Trustee, as assignee or transferee of Purchaser, shall be entitled to all
scheduled payments of principal due on the Mortgage Loans after the Cut-Off
Date, all other payments of principal collected after the Cut-Off Date (other
than scheduled payments of principal due on or before the Cut-Off Date), and all
payments of interest on the Mortgage Loans allocable to the period commencing on
the Cut-Off Date. All scheduled payments of principal and interest due on or
before the Cut-Off Date and collected after the Cut-Off Date shall belong to
Seller.
Within 45 days following the Closing Date, Seller shall deliver and Purchaser,
the Trustee or the agents of either may submit or cause to be submitted for
recordation at the expense of Seller, in the appropriate public office for real
property records, each assignment referred to in clauses 2.2.4 and 2.2.6(ii)
above. Within 90 days following the Closing Date, Seller shall deliver and
Purchaser, the Trustee or the agents of either may submit or cause to be
submitted for filing, at the expense of Seller, in the appropriate public office
for Uniform Commercial Code financing statements, the assignment referred to in
clause 2.2.1. If any such document or instrument is lost or returned unrecorded
or unfiled, as the case may be, because of a defect therein, Seller shall
prepare a substitute therefor or cure such defect, and Seller shall, at its own
expense (except in the case of a document or instrument that is lost by the
Trustee), record or file, as the case may be, and deliver such document or
instrument in accordance with this Section 2.
Documents that are in the possession of Seller, its agents or its subcontractors
that relate to the Mortgage Loans and that are not required to be delivered to
the Trustee shall be shipped by Seller to or at the direction of the Master
Servicer, on behalf of Purchaser, on or prior to the 75th day after the Closing
Date, in accordance with Section 3.1 of the Primary Servicing Agreement, if
applicable.
The documents required to be delivered to the Master Servicer (or in the
alternative, the Primary Servicer) shall include, to the extent required to be
(and actually) delivered to Seller pursuant to the applicable Mortgage Loan
documents, copies of the following items: the Mortgage Note, any Mortgage, the
Assignment of Leases and the Assignment of Mortgage, any guaranty/indemnity
agreement, any loan agreement, the insurance policies or certificates, as
applicable, the property inspection reports, any financial statements on the
property, any escrow analysis, the tax bills, the Appraisal, the environmental
report, the engineering report, the asset summary, financial information on the
Borrower/sponsor and any guarantors, any letters of credit, any intercreditor
agreement and any Environmental Insurance Policies. Delivery of any of the
foregoing
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documents to the Primary Servicer shall be deemed a delivery to the Master
Servicer and satisfy Seller's obligations under this subparagraph.
Upon the sale of the Mortgage Loans by Seller to Purchaser pursuant to this
Agreement, the ownership of each Mortgage Note, Mortgage and the other contents
of the related Mortgage File shall be vested in Purchaser and its assigns, and
the ownership of all records and documents with respect to the related Mortgage
Loan prepared by or that come into the possession of Seller shall immediately
vest in Purchaser and its assigns, and shall be delivered promptly by Seller to
or on behalf of either the Trustee or the Master Servicer as set forth herein,
subject to the requirements of the Primary Servicing Agreement. Seller's and
Purchaser's records shall reflect the transfer of each Mortgage Loan from Seller
to Purchaser and its assigns as a sale.
It is the express intent of the parties hereto that the conveyance of the
Mortgage Loans and related property to Purchaser by Seller as provided in this
Section 2 be, and be construed as, an absolute sale of the Mortgage Loans and
related property. It is, further, not the intention of the parties that such
conveyance be deemed a pledge of the Mortgage Loans and related property by
Seller to Purchaser to secure a debt or other obligation of Seller. However, in
the event that, notwithstanding the intent of the parties, the Mortgage Loans or
any related property are held to be the property of Seller, or if for any other
reason this Agreement is held or deemed to create a security interest in the
Mortgage Loans or any related property, then:
this Agreement shall be deemed to be a security agreement; and
the conveyance provided for in this Section 2 shall be deemed to be a grant by
Seller to Purchaser of a security interest in all of Seller's right, title, and
interest, whether now owned or hereafter acquired, in and to:
All accounts, general intangibles, chattel paper, instruments, documents, money,
deposit accounts, certificates of deposit, goods, letters of credit, advices of
credit and investment property consisting of, arising from or relating to any of
the following property: the Mortgage Loans identified on the Mortgage Loan
Schedule, including the related Mortgage Notes, Mortgages, security agreements,
and title, hazard and other insurance policies, all distributions with respect
thereto payable after the Cut-Off Date, all substitute or replacement Mortgage
Loans and all distributions with respect thereto, and the Mortgage Files;
All accounts, general intangibles, chattel paper, instruments, documents, money,
deposit accounts, certificates of deposit, goods, letters of credit, advices of
credit, investment property and other rights arising from or by virtue of the
disposition of, or collections with respect to, or insurance proceeds payable
with respect to, or claims against other Persons with respect to, all or any
part of the collateral described in clause (A) above (including any accrued
discount realized on liquidation of any investment purchased at a discount); and
All cash and non-cash proceeds of the collateral described in clauses (A) and
(B) above.
The possession by Purchaser or its designee of the Mortgage Notes, the
Mortgages, and such other goods, letters of credit, advices of credit,
instruments, money, documents, chattel paper or certificated securities shall be
deemed to be possession by the secured party or possession by a purchaser for
purposes of perfecting the security interest pursuant to the Uniform Commercial
9
Code (including, without limitation, Section 9-313 thereof) as in force in the
relevant jurisdiction. Notwithstanding the foregoing, Seller makes no
representation or warranty as to the perfection of any such security interest.
Notifications to Persons holding such property, and acknowledgments, receipts,
or confirmations from persons holding such property, shall be deemed to be
notifications to, or acknowledgments, receipts or confirmations from, securities
intermediaries, bailees or agents of, or Persons holding for, Purchaser or its
designee, as applicable, for the purpose of perfecting such security interest
under applicable law.
Seller shall, to the extent consistent with this Agreement, take such reasonable
actions as may be necessary to ensure that, if this Agreement were deemed to
create a security interest in the property described above, 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. In such case, Seller shall file all filings necessary to maintain the
effectiveness of any original filings necessary under the Uniform Commercial
Code as in effect in any jurisdiction to perfect such security interest in such
property. In connection herewith, Purchaser shall have all of the rights and
remedies of a secured party and creditor under the Uniform Commercial Code as in
force in the relevant jurisdiction.
Notwithstanding anything to the contrary contained herein, and subject to
Section 2.1 hereof, Purchaser shall not be required to purchase any Mortgage
Loan as to which any Mortgage Note (endorsed as described in clause 2.2.1)
required to be delivered to or on behalf of the Trustee or the Master Servicer
pursuant to this Section 2 on or before the Closing Date is not so delivered, or
is not properly executed or is defective on its face, and Purchaser's acceptance
of the related Mortgage Loan on the Closing Date shall in no way constitute a
waiver of such omission or defect or of Purchaser's or its successors' and
assigns' rights in respect thereof pursuant to Section 5 hereof.
EXAMINATION OF MORTGAGE FILES AND DUE DILIGENCE REVIEW.
Seller shall (i) deliver to Purchaser on or before the Closing Date a diskette
acceptable to Purchaser that contains such information about the Mortgage Loans
as may be reasonably requested by Purchaser, (ii) deliver to Purchaser investor
files (collectively the "Collateral Information") with respect to the assets
proposed to be included in the Mortgage Pool and made available at Purchaser's
headquarters in New York, and (iii) otherwise cooperate fully with Purchaser in
its examination of the credit files, underwriting documentation and Mortgage
Files for the Mortgage Loans and its due diligence review of the Mortgage Loans.
The fact that Purchaser has conducted or has failed to conduct any partial or
complete examination of the credit files, underwriting documentation or Mortgage
Files for the Mortgage Loans shall not affect the right of Purchaser or the
Trustee to cause Seller to cure any Material Document Defect or Material Breach
(each as defined below), or to repurchase or replace the defective Mortgage
Loans pursuant to Section 5 hereof.
On or prior to the Closing Date, Seller shall allow representatives of any of
Purchaser, each Underwriter, each Initial Purchaser, the Trustee, the Special
Servicer and each Rating Agency to
10
examine and audit all books, records and files pertaining to the Mortgage Loans,
Seller's underwriting procedures and Seller's ability to perform or observe all
of the terms, covenants and conditions of this Agreement. Such examinations and
audits shall take place at one or more offices of Seller during normal business
hours and shall not be conducted in a manner that is disruptive to Seller's
normal business operations upon reasonable prior advance notice. In the course
of such examinations and audits, Seller will make available to such
representatives of any of Purchaser, each Underwriter, each Initial Purchaser,
the Trustee, the Special Servicer and each Rating Agency reasonably adequate
facilities, as well as the assistance of a sufficient number of knowledgeable
and responsible individuals who are familiar with the Mortgage Loans and the
terms of this Agreement, and Seller shall cooperate fully with any such
examination and audit in all material respects. On or prior to the Closing Date,
Seller shall provide Purchaser with all material information regarding Seller's
financial condition and access to knowledgeable financial or accounting officers
for the purpose of answering questions with respect to Seller's financial
condition, financial statements as provided to Purchaser or other developments
affecting Seller's ability to consummate the transactions contemplated hereby or
otherwise affecting Seller in any material respect. Within 45 days after the
Closing Date, Seller shall provide the Master Servicer or Primary Servicer, if
applicable, with any additional information identified by the Master Servicer or
Primary Servicer, if applicable, as necessary to complete the CMSA Property
File, to the extent that such information is available.
Purchaser may exercise any of its rights hereunder through one or more designees
or agents, provided Purchaser has provided Seller with prior notice of the
identity of such designee or agent.
Purchaser shall keep confidential any information regarding Seller and the
Mortgage Loans that has been delivered into Purchaser's possession and that is
not otherwise publicly available; provided, however, that such information shall
not be kept confidential (and the right to require confidentiality under any
confidentiality agreement is hereby waived) to the extent such information is
required to be included in the Memorandum or the Prospectus Supplement or
Purchaser is required by law or court order to disclose such information. If
Purchaser is required to disclose in the Memorandum or the Prospectus Supplement
confidential information regarding Seller as described in the preceding
sentence, Purchaser shall provide to Seller a copy of the proposed form of such
disclosure prior to making such disclosure and Seller shall promptly, and in any
event within two Business Days, notify Purchaser of any inaccuracies therein, in
which case Purchaser shall modify such form in a manner that corrects such
inaccuracies. If Purchaser is required by law or court order to disclose
confidential information regarding Seller as described in the second preceding
sentence, Purchaser shall notify Seller and cooperate in Seller's efforts to
obtain a protective order or other reasonable assurance that confidential
treatment will be accorded such information and, if in the absence of a
protective order or such assurance, Purchaser is compelled as a matter of law to
disclose such information, Purchaser shall, prior to making such disclosure,
advise and consult with Seller and its counsel as to such disclosure and the
nature and wording of such disclosure and Purchaser shall use reasonable efforts
to obtain confidential treatment therefor. Notwithstanding the foregoing, if
reasonably advised by counsel that Purchaser is required by a regulatory agency
or court order to make such disclosure immediately, then Purchaser shall be
permitted to make such disclosure without prior review by Seller.
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REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER AND PURCHASER.
To induce Purchaser to enter into this Agreement, Seller hereby makes for the
benefit of Purchaser and its assigns with respect to each Mortgage Loan as of
the date hereof (or as of such other date specifically set forth in the
particular representation and warranty) each of the representations and
warranties set forth on Exhibit 2 hereto, except as otherwise set forth on
Schedule A attached hereto, and hereby further represents, warrants and
covenants to Purchaser as of the date hereof that:
Seller is duly organized and is validly existing as a limited liability company
in good standing under the laws of the State of Delaware. Seller has the
requisite power and authority and legal right to own the Mortgage Loans and to
transfer and convey the Mortgage Loans to Purchaser and has the requisite power
and authority to execute and deliver, engage in the transactions contemplated
by, and perform and observe the terms and conditions of, this Agreement.
This Agreement has been duly and validly authorized, executed and delivered by
Seller, and assuming the due authorization, execution and delivery hereof by
Purchaser, this Agreement constitutes the valid, legal and binding agreement of
Seller, enforceable in accordance with its terms, except as such enforcement may
be limited by (A) laws relating to bankruptcy, insolvency, reorganization,
receivership or moratorium, (B) other laws relating to or affecting the rights
of creditors generally, (C) general equity principles (regardless of whether
such enforcement is considered in a proceeding in equity or at law) or (D)
public policy considerations underlying the securities laws, to the extent that
such public policy considerations limit the enforceability of the provisions of
this Agreement that purport to provide indemnification from liabilities under
applicable securities laws.
No consent, approval, authorization or order of, registration or filing with, or
notice to, any governmental authority or court is required, under federal or
state law, for the execution, delivery and performance of or compliance by
Seller with this Agreement, or the consummation by Seller of any transaction
contemplated hereby, other than (A) such qualifications as may be required under
state securities or blue sky laws, (B) the filing or recording of financing
statements, instruments of assignment and other similar documents necessary in
connection with Seller's sale of the Mortgage Loans to Purchaser, (C) such
consents, approvals, authorizations, qualifications, registrations, filings or
notices as have been obtained and (D) where the lack of such consent, approval,
authorization, qualification, registration, filing or notice would not have a
material adverse effect on the performance by Seller under this Agreement.
Neither the transfer of the Mortgage Loans to Purchaser, nor the execution,
delivery or performance of this Agreement by Seller, conflicts or will conflict
with, results or will result in a breach of, or constitutes or will constitute a
default under (A) any term or provision of Seller's articles of organization or
by-laws, (B) any term or provision of any material agreement, contract,
instrument or indenture to which Seller is a party or by which it or any of its
assets is bound or results in the creation or imposition of any lien, charge or
encumbrance upon any of its property pursuant to the terms of any such
indenture, mortgage, contract or other instrument, other than pursuant to this
Agreement, or (C) after giving effect to the consents or taking of the actions
contemplated in Section 4.1.3 hereof, any law, rule, regulation, order,
judgment, writ,
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injunction or decree of any court or governmental authority having jurisdiction
over Seller or its assets, except where in any of the instances contemplated by
clauses (B) or (C) above, any conflict, breach or default, or creation or
imposition of any lien, charge or encumbrance, will not have a material adverse
effect on the consummation of the transactions contemplated hereby by Seller or
its ability to perform its obligations and duties hereunder or result in any
material adverse change in the business, operations, financial condition,
properties or assets of Seller, or in any material impairment of the right or
ability of Seller to carry on its business substantially as now conducted.
There are no actions or proceedings against, or investigations of, Seller
pending or, to Seller's knowledge, threatened in writing against Seller before
any court, administrative agency or other tribunal, the outcome of which could
reasonably be expected to materially and adversely affect the transfer of the
Mortgage Loans to Purchaser or the execution or delivery by, or enforceability
against, Seller of this Agreement or have an effect on the financial condition
of Seller that would materially and adversely affect the ability of Seller to
perform its obligations under this Agreement.
On the Closing Date, the sale of the Mortgage Loans pursuant to this Agreement
will effect a transfer by Seller of all of its right, title and interest in and
to the Mortgage Loans to Purchaser.
To Seller's knowledge, Seller's Information (as defined in that certain
indemnification agreement, dated July 19, 2006, between Seller, Purchaser, the
Underwriters and the Initial Purchasers (the "Indemnification Agreement")) does
not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading. Notwithstanding anything contained
herein to the contrary, this subparagraph 4.1.7 shall run exclusively to the
benefit of Purchaser and no other party.
The Seller has complied with the disclosure requirements of Regulation AB that
arise from its role as "originator" and "sponsor" in connection with the
issuance of the Public Certificates.
For so long as the Trust is subject to the reporting requirements of the
Exchange Act, the Seller shall provide the Purchaser (or with respect to any
Serviced Companion Mortgage Loan that is deposited into an Other Securitization,
the depositor in such Other Securitization) and the Paying Agent with any
Additional Form 10-D Disclosure and any Additional Form 10-K Disclosure set
forth next to the Seller's name on Schedule XV and Schedule XVI of the Pooling
and Servicing Agreement within the time periods and in accordance with the
provisions set forth in the Pooling and Servicing Agreement.
To induce Purchaser to enter into this Agreement, Seller hereby covenants that
the foregoing representations and warranties and those set forth on Exhibit 2
hereto, subject to the exceptions set forth in Schedule A to Exhibit 2, will be
true and correct in all material respects on and as of the Closing Date with the
same effect as if made on the Closing Date.
Each of the representations, warranties and covenants made by Seller pursuant to
this Section 4.1 shall survive the sale of the Mortgage Loans and shall continue
in full force and effect notwithstanding any restrictive or qualified
endorsement on the Mortgage Notes.
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To induce Seller to enter into this Agreement, Purchaser hereby represents and
warrants to Seller as of the date hereof:
Purchaser is a corporation duly organized, validly existing, and in good
standing under the laws of the State of Delaware with full power and authority
to carry on its business as presently conducted by it.
Purchaser has full power and authority to acquire the Mortgage Loans, to execute
and deliver this Agreement and to enter into and consummate all transactions
contemplated by this Agreement. Purchaser has duly and validly authorized the
execution, delivery and performance of this Agreement and has duly and validly
executed and delivered this Agreement. This Agreement, assuming due
authorization, execution and delivery by Seller, constitutes the valid and
binding obligation of Purchaser, enforceable against it in accordance with its
terms, except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity, regardless of
whether such enforcement is considered in a proceeding in equity or at law.
No consent, approval, authorization or order of, registration or filing with, or
notice to, any governmental authority or court is required, under federal or
state law, for the execution, delivery and performance of or compliance by
Purchaser with this Agreement, or the consummation by Purchaser of any
transaction contemplated hereby that has not been obtained or made by Purchaser.
Neither the purchase of the Mortgage Loans nor the execution, delivery and
performance of this Agreement by Purchaser will violate Purchaser's certificate
of incorporation or by-laws or constitute a default (or an event that, with
notice or lapse of time or both, would constitute a default) under, or result in
a breach of, any material agreement, contract, instrument or indenture to which
Purchaser is a party or that may be applicable to Purchaser or its assets.
Purchaser's execution and delivery of this Agreement and its performance and
compliance with the terms of this Agreement will not constitute a violation of
any law, rule, writ, injunction, order or decree of any court, or order or
regulation of any federal, state or municipal government agency having
jurisdiction over Purchaser or its assets, which violation could materially and
adversely affect the condition (financial or otherwise) or the operation of
Purchaser or its assets or could materially and adversely affect its ability to
perform its obligations and duties hereunder.
There are no actions or proceedings against, or investigations of, Purchaser
pending or, to Purchaser's knowledge, threatened against Purchaser before any
court, administrative agency or other tribunal, the outcome of which could
reasonably be expected to adversely affect the transfer of the Mortgage Loans,
the issuance of the Certificates, the execution, delivery or enforceability of
this Agreement or have an effect on the financial condition of Purchaser that
would materially and adversely affect the ability of Purchaser to perform its
obligation under this Agreement.
Purchaser has not dealt with any broker, investment banker, agent or other
person, other than Seller, the Underwriters, the Initial Purchasers and their
respective affiliates, that may be entitled
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to any commission or compensation in connection with the sale of the Mortgage
Loans or consummation of any of the transactions contemplated hereby.
To induce Seller to enter into this Agreement, Purchaser hereby covenants that
the foregoing representations and warranties will be true and correct in all
material respects on and as of the Closing Date with the same effect as if made
on the Closing Date.
Each of the representations and warranties made by Purchaser pursuant to this
Section 4.2 shall survive the purchase of the Mortgage Loans.
REMEDIES UPON BREACH OF REPRESENTATIONS AND WARRANTIES MADE BY SELLER.
It is hereby acknowledged that Seller shall make for the benefit of the Trustee
on behalf of the holders of the Certificates, whether directly or by way of
Purchaser's assignment of its rights hereunder to the Trustee, the
representations and warranties set forth on Exhibit 2 hereto (each as of the
date hereof unless otherwise specified).
It is hereby further acknowledged that if any document required to be delivered
to the Trustee pursuant to Section 2 hereof is not delivered as and when
required, not properly executed or is defective on its face, or if there is a
breach of any of the representations and warranties required to be made by
Seller regarding the characteristics of the Mortgage Loans and/or the related
Mortgaged Properties as set forth in Exhibit 2 hereto, and in either case the
party discovering such breach or defect determines that either (i) the defect or
breach materially and adversely affects the interests of the holders of the
Certificates in the related Mortgage Loan or (ii) both (A) the defect or breach
materially and adversely affects the value of the Mortgage Loan and (B) the
Mortgage Loan is a Specially Serviced Mortgage Loan or Rehabilitated Mortgage
Loan (any such defect described in the preceding clause (i) or (ii), a "Material
Document Defect" and any such breach described in the preceding clause (i) or
(ii), a "Material Breach"), the party determining that such Material Document
Defect or Material Breach exists shall promptly notify, in writing, the other
parties; provided that any breach of the representation and warranty contained
in paragraph (41) of such Exhibit 2 shall constitute a Material Breach only if
such prepayment premium or yield maintenance charge is not deemed "customary"
for commercial mortgage loans as evidenced by (i) an opinion of tax counsel to
such effect or (ii) a determination by the Internal Revenue Service that such
provision is not customary. Promptly (but in any event within three Business
Days) upon determining (or becoming aware of another party's determination) that
any such Material Document Defect or Material Breach exists (which determination
shall, absent evidence to the contrary, be presumed to be no earlier than three
Business Days prior to delivery of the notice to Seller referred to below), the
Master Servicer shall, and the Special Servicer may, request that Seller, not
later than 90 days from Seller's receipt of the notice of such Material Document
Defect or Material Breach, cure such Material Document Defect or Material
Breach, as the case may be, in all material respects; provided, however, that if
such Material Document Defect or Material Breach, as the case may be, cannot be
corrected or cured in all material respects within such 90 day period, and such
Material Document Defect or Material Breach would not cause the Mortgage Loan to
be other than a "qualified mortgage"(as defined in the Code) but Seller is
diligently attempting to effect such
15
correction or cure, as certified by Seller in an Officer's Certificate delivered
to the Trustee, then the cure period will be extended for an additional 90 days
unless, solely in the case of a Material Document Defect, (x) the Mortgage Loan
is then a Specially Serviced Mortgage Loan and a Servicing Transfer Event has
occurred as a result of a monetary default or as described in clause (ii) or
clause (v) of the definition of "Servicing Transfer Event" in the Pooling and
Servicing Agreement and (y) the Material Document Defect was identified in a
certification delivered to Seller by the Trustee pursuant to Section 2.2 of the
Pooling and Servicing Agreement not less than 90 days prior to the delivery of
the notice of such Material Document Defect. The parties acknowledge that
neither delivery of a certification or schedule of exceptions to Seller pursuant
to Section 2.2 of the Pooling and Servicing Agreement or otherwise nor
possession of such certification or schedule by Seller shall, in and of itself,
constitute delivery of notice of any Material Document Defect or knowledge or
awareness by Seller, the Master Servicer or the Special Servicer of any Material
Document Defect listed therein.
Seller hereby covenants and agrees that, if any such Material Document Defect or
Material Breach cannot be corrected or cured or Seller otherwise fails to
correct or cure within the above cure periods, Seller shall, on or before the
termination of such cure periods, either (i) repurchase the affected Mortgage
Loan or REO Mortgage Loan (or interest therein) from Purchaser or its assignee
at the Purchase Price as defined in the Pooling and Servicing Agreement, or (ii)
if within the three-month period commencing on the Closing Date (or within the
two-year period commencing on the Closing Date if the related Mortgage Loan is a
"defective obligation" within the meaning of Section 860G(a)(4)(B)(ii) of the
Code and Treasury Regulation Section 1.860G-2(f)), at its option replace,
without recourse, any Mortgage Loan or REO Mortgage Loan to which such defect
relates with a Qualifying Substitute Mortgage Loan. If such Material Document
Defect or Material Breach would cause the Mortgage Loan to be other than a
"qualified mortgage" (as defined in the Code), then notwithstanding the previous
sentence or the previous paragraph, repurchase must occur within 85 days from
the date Seller was notified of the defect. Seller agrees that any substitution
shall be completed in accordance with the terms and conditions of the Pooling
and Servicing Agreement.
If (x) a Mortgage Loan is to be repurchased or replaced as contemplated above (a
"Defective Mortgage Loan"), (y) such Defective Mortgage Loan is
cross-collateralized and cross-defaulted with one or more other Mortgage Loans
("Crossed Mortgage Loans") and (z) the applicable document defect or breach does
not constitute a Material Document Defect or Material Breach, as the case may
be, as to such Crossed Mortgage Loans (without regard to this paragraph), then
the applicable document defect or breach (as the case may be) shall be deemed to
constitute a Material Document Defect or Material Breach, as the case may be, as
to each such Crossed Mortgage Loan for purposes of the above provisions, and
Seller shall be obligated to repurchase or replace each such Crossed Mortgage
Loan in accordance with the provisions above, unless, in the case of such breach
or document defect, (A) Seller provides a Nondisqualification Opinion to the
Trustee at the expense of Seller if, in the reasonable business judgment of the
Trustee, it would be usual and customary in accordance with industry practice to
obtain a Nondisqualification Opinion and (B) both of the following conditions
would be satisfied if Seller were to repurchase or replace only those Mortgage
Loans as to which a Material Breach or Material Document Defect had occurred
without regard to this paragraph (the "Affected Loan(s)"): (i) the debt service
coverage ratio for all such Crossed Mortgage Loans (excluding the Affected
Loan(s)) for the four calendar quarters immediately preceding the repurchase or
16
replacement is not less than the lesser of (A) 0.10x below the debt service
coverage ratio for all such Crossed Mortgage Loans (including the Affected
Loans(s)) set forth in Appendix II to the Final Prospectus Supplement and (B)
the debt service coverage ratio for all such Crossed Mortgage Loans (including
the Affected Loan(s)) for the four preceding calendar quarters preceding the
repurchase or replacement, and (ii) the loan-to-value ratio for all such Crossed
Mortgage Loans (excluding the Affected Loan(s)) is not greater than the greater
of (A) the loan-to-value ratio, expressed as a whole number (taken to one
decimal place), for all such Crossed Mortgage Loans (including the Affected
Loan(s)) set forth in Appendix II to the Final Prospectus Supplement plus 10%
and (B) the loan-to-value ratio for all such Crossed Mortgage Loans (including
the Affected Loans(s)), at the time of repurchase or replacement. The
determination of the Master Servicer as to whether the conditions set forth
above have been satisfied shall be conclusive and binding in the absence of
manifest error. The Master Servicer will be entitled to cause to be delivered,
or direct Seller to (in which case Seller shall) cause to be delivered to the
Master Servicer, an Appraisal of any or all of the related Mortgaged Properties
for purposes of determining whether the condition set forth in clause (ii) above
has been satisfied, in each case at the expense of Seller if the scope and cost
of the Appraisal is approved by Seller (such approval not to be unreasonably
withheld).
With respect to any Defective Mortgage Loan, to the extent that Seller is
required to repurchase or substitute for such Defective Mortgage Loan (each, a
"Repurchased Loan") in the manner prescribed above while the Trustee (as
assignee of Purchaser) continues to hold any Crossed Mortgage Loan, Seller and
Purchaser hereby agree to forebear from enforcing any remedies against the
other's Primary Collateral but may exercise remedies against the Primary
Collateral securing their respective Mortgage Loans, including with respect to
the Trustee, the Primary Collateral securing the Mortgage Loans still held by
the Trustee, so long as such exercise does not impair the ability of the other
party to exercise its remedies against its Primary Collateral. If the exercise
of remedies by one party would impair the ability of the other party to exercise
its remedies with respect to the Primary Collateral securing the Mortgage Loan
or Mortgage Loans held by such party, then both parties shall forbear from
exercising such remedies until the loan documents evidencing and securing the
relevant Mortgage Loans can be modified in a manner that complies with the
Pooling and Servicing Agreement to remove the threat of impairment as a result
of the exercise of remedies. Any reserve or other cash collateral or letters of
credit securing the Crossed Mortgage Loans shall be allocated between such
Mortgage Loans in accordance with the Mortgage Loan documents, or otherwise on a
pro rata basis based upon their outstanding Principal Balances. All other terms
of the Mortgage Loans shall remain in full force and effect, without any
modification thereof. The Mortgagors set forth on Schedule B hereto are intended
third-party beneficiaries of the provisions set forth in this paragraph and the
preceding paragraph. The provisions of this paragraph and the preceding
paragraph may not be modified with respect to any Mortgage Loan without the
related Mortgagor's consent.
Any of the following document defects shall be conclusively presumed materially
and adversely to affect the interests of Certificateholders in a Mortgage Loan
and be a Material Document Defect: (a) the absence from the Mortgage File of the
original signed Mortgage Note, unless the Mortgage File contains a signed lost
note affidavit and indemnity that appears to be regular on its face; (b) the
absence from the Mortgage File of the original signed Mortgage that appears to
be regular on its face, unless there is included in the Mortgage File a
certified copy of the Mortgage by the local authority with which the Mortgage
was recorded; or (c) the absence from the
17
Mortgage File of the item specified in paragraph 2.2.8. If any of the foregoing
Material Document Defects is discovered by the Custodian (or the Trustee if
there is no Custodian), the Trustee (or as set forth in Section 2.3(a) of the
Pooling and Servicing Agreement, the Master Servicer) will take the steps
described elsewhere in this Section, including the giving of notices to the
Rating Agencies and the parties hereto and making demand upon Seller for the
cure of the Material Document Defect or repurchase or replacement of the related
Mortgage Loan.
If Seller disputes that a Material Document Defect or Material Breach exists
with respect to a Mortgage Loan or otherwise refuses (i) to effect a correction
or cure of such Material Document Defect or Material Breach, (ii) to repurchase
the affected Mortgage Loan from Purchaser or its assignee or (iii) to replace
such Mortgage Loan with a Qualifying Substitute Mortgage Loan, each in
accordance with this Agreement, then provided that (x) the period of time
provided for Seller to correct, repurchase or cure has expired and (y) the
Mortgage Loan is then in default and is then a Specially Serviced Mortgage Loan,
the Special Servicer may, subject to the Servicing Standard, modify, work-out or
foreclose, sell or otherwise liquidate (or permit the liquidation of) the
Mortgage Loan pursuant to Sections 9.5, 9.12, 9.15 and 9.36, as applicable, of
the Pooling and Servicing Agreement, while pursuing the repurchase claim. Seller
acknowledges and agrees that any modification of the Mortgage Loan pursuant to a
work-out shall not constitute a defense to any repurchase claim nor shall such
modification and work-out change the Purchase Price due from Seller for any
repurchase claim. In the event of any such modification and work-out, Seller
shall be obligated to repurchase the Mortgage Loan as modified and the Purchase
Price shall include any Work-Out Fee paid to the Special Servicer up to the date
of repurchase plus the present value (calculated at a discount rate equal to the
applicable Mortgage Rate) of the Work-Out Fee that would have been payable to
the Special Servicer in respect of such Mortgage Loan if the Mortgage Loan
performed in accordance with its terms to its Maturity Date, provided that no
amount shall be paid by Seller in respect of any Work-Out Fee if a Liquidation
Fee already comprises a portion of the Purchase Price.
Seller shall have the right to purchase certain of the Mortgage Loans or REO
Properties, as applicable, in accordance with Section 9.36 of the Pooling and
Servicing Agreement.
The fact that a Material Document Defect or Material Breach is not discovered
until after foreclosure (but in all instances prior to the sale of the related
REO Property or Mortgage Loan) shall not prejudice any claim against Seller for
repurchase of the REO Mortgage Loan or REO Property. In such an event, the
Master Servicer shall notify Seller of the discovery of the Material Document
Defect or Material Breach and Seller shall have 90 days to correct or cure such
Material Document Defect or Material Breach or purchase the REO Property (or
interest therein) at the Purchase Price. After a final liquidation of the
Mortgage Loan or REO Mortgage Loan, if a court of competent jurisdiction issues
a final order after the expiration of any applicable appeal period that Seller
is or was obligated to repurchase the related Mortgage Loan or REO Mortgage Loan
(or interest therein) (a "Final Judicial Determination") or Seller otherwise
accepts liability, then, but in no event later than the Termination of the Trust
pursuant to Section 9.30 of the Pooling and Servicing Agreement, Seller will be
obligated to pay to the Trust the difference between any Liquidation Proceeds
received upon such liquidation in accordance with the Pooling and Servicing
Agreement (including those arising from any sale to Seller) and the Purchase
Price.
18
Notwithstanding anything to the contrary contained herein, in connection with
any sale or other liquidation of a Mortgage Loan or REO Property as described in
this Section 5, the Special Servicer shall not receive a Liquidation Fee from
Seller (but may collect such Liquidation Fee from the related Liquidation
Proceeds as otherwise provided herein); provided, however, that in the event
Seller is obligated to repurchase the Mortgage Loan or REO Mortgaged Property
(or interest therein) after a final liquidation of such Mortgage Loan or REO
Property pursuant to the immediately preceding paragraph, an amount equal to any
Liquidation Fee (calculated on the basis of Liquidation Proceeds) payable to the
Special Servicer shall be included in the definition of "Purchase Price" in
respect of such Mortgage Loan or REO Mortgaged Property. Except as expressly set
forth above, no Liquidation Fee shall be payable in connection with a repurchase
of a Mortgage Loan by Seller.
The obligations of Seller set forth in this Section 5 to cure a Material
Document Defect or a Material Breach or repurchase or replace a defective
Mortgage Loan constitute the sole remedies of Purchaser or its assignees with
respect to a Material Document Defect or Material Breach in respect of an
outstanding Mortgage Loan; provided, that this limitation shall not in any way
limit Purchaser's rights or remedies upon breach of any other representation or
warranty or covenant by Seller set forth in this Agreement (other than those set
forth in Exhibit 2).
Notwithstanding the foregoing, in the event that there is a breach of the
representations and warranties set forth in paragraph 39 in Exhibit 2 hereto,
and as a result the payments, by a Mortgagor, of reasonable costs and expenses
associated with the defeasance or assumption of a Mortgage Loan are insufficient
causing the Trust to incur an Additional Trust Expense in an amount equal to
such reasonable costs and expenses not paid by such Mortgagor, Seller hereby
covenants and agrees to reimburse the Trust within 90 days of the receipt of
notice of such breach in an amount sufficient to avoid such Additional Trust
Expense. The parties hereto acknowledge that such reimbursement shall be
Seller's sole obligation with respect to the breach discussed in the previous
sentence.
The Pooling and Servicing Agreement shall provide that the Trustee (or the
Master Servicer or the Special Servicer on its behalf) shall give written notice
promptly (but in any event within three Business Days) to Seller of its
determination that any Material Document Defect or Material Breach exists (which
determination shall, absent evidence to the contrary, be presumed to be no
earlier than three Business Days prior to delivery of the notice) and prompt
written notice to Seller in the event that any Mortgage Loan becomes a Specially
Serviced Mortgage Loan (as defined in the Pooling and Servicing Agreement).
If Seller repurchases any Mortgage Loan pursuant to this Section 5, Purchaser or
its assignee, following receipt by the Trustee of the Purchase Price therefor,
promptly shall deliver or cause to be delivered to Seller all Mortgage Loan
documents with respect to such Mortgage Loan, and each document that constitutes
a part of the Mortgage File that was endorsed or assigned to the Trustee shall
be endorsed and assigned to Seller in the same manner such that Seller shall be
vested with legal and beneficial title to such Mortgage Loan, in each case
without recourse, including any property acquired in respect of such Mortgage
Loan or proceeds of any insurance policies with respect thereto.
19
CLOSING.
The closing of the sale of the Mortgage Loans shall be held at the offices of
Xxxxxx & Xxxxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000 at 9:00 a.m., New
York time, on the Closing Date. The closing shall be subject to each of the
following conditions:
All of the representations and warranties of Seller and Purchaser specified in
Section 4 hereof (including, without limitation, the representations and
warranties set forth on Exhibit 2 hereto) shall be true and correct as of the
Closing Date (to the extent of the standard, if any, set forth in each
representation and warranty).
All Closing Documents specified in Section 7 hereof, in such forms as are agreed
upon and reasonably acceptable to Seller or Purchaser, as applicable, shall be
duly executed and delivered by all signatories as required pursuant to the
respective terms thereof.
Seller shall have delivered and released to Purchaser or its designee all
documents required to be delivered to Purchaser as of the Closing Date pursuant
to Section 2 hereof.
The result of the examination and audit performed by Purchaser and its
affiliates pursuant to Section 3 hereof shall be satisfactory to Purchaser and
its affiliates in their sole determination and the parties shall have agreed to
the form and contents of Seller's Information to be disclosed in the Memorandum
and the Prospectus Supplement.
All other terms and conditions of this Agreement required to be complied with on
or before the Closing Date shall have been complied with, and Seller and
Purchaser 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.
Seller shall have paid all fees and expenses payable by it to Purchaser pursuant
to Section 8 hereof.
The Certificates to be so rated shall have been assigned ratings by each Rating
Agency no lower than the ratings specified for each such Class in the Memorandum
and the Prospectus Supplement.
No Underwriter shall have terminated the Underwriting Agreement and none of the
Initial Purchasers shall have terminated the Certificate Purchase Agreement, and
neither the Underwriters nor the Initial Purchasers shall have suspended,
delayed or otherwise cancelled the Closing Date.
Seller shall have received the purchase price for the Mortgage Loans pursuant to
Section 1 hereof.
Each party agrees to use its best efforts to perform its respective obligations
hereunder in a manner that will enable Purchaser to purchase the Mortgage Loans
on the Closing Date.
CLOSING DOCUMENTS. The Closing Documents shall consist of the following:
20
This Agreement duly executed by Purchaser and Seller.
A certificate of Seller, executed by a duly authorized officer of Seller and
dated the Closing Date, and upon which Purchaser and its successors and assigns
may rely, to the effect that: (i) the representations and warranties of Seller
in this Agreement are true and correct in all material respects on and as of the
Closing Date with the same force and effect as if made on the Closing Date,
provided that any representations and warranties made as of a specified date
shall be true and correct as of such specified date; and (ii) Seller has
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied on or prior to the Closing Date.
True, complete and correct copies of Seller's articles of organization and
by-laws.
A certificate of existence for Seller from the Secretary of State of Delaware
dated not earlier than 30 days prior to the Closing Date.
A certificate of the Secretary or Assistant Secretary of Seller, dated the
Closing Date, and upon which Purchaser may rely, to the effect that each
individual who, as an officer or representative of Seller, signed this Agreement
or any other document or certificate delivered on or before the Closing Date in
connection with the transactions contemplated herein, was at the respective
times of such signing and delivery, and is as of the Closing Date, duly elected
or appointed, qualified and acting as such officer or representative, and the
signatures of such persons appearing on such documents and certificates are
their genuine signatures.
An opinion of counsel (which, other than as to the opinion described in
paragraph 7.6.6 below, may be in-house counsel) to Seller, dated the Closing
Date, substantially to the effect of the following (with such changes and
modifications as Purchaser may approve and subject to such counsel's reasonable
qualifications):
Seller is validly existing under Delaware law and has full corporate or
organizational power and authority to enter into and perform its obligations
under this Agreement.
This Agreement has been duly authorized, executed and delivered by Seller.
No consent, approval, authorization or order of any federal court or
governmental agency or body is required for the consummation by Seller of the
transactions contemplated by the terms of this Agreement except any approvals as
have been obtained.
Neither the execution, delivery or performance of this Agreement by Seller, nor
the consummation by Seller of any of the transactions contemplated by the terms
of this Agreement (A) conflicts with or results in a breach or violation of, or
constitutes a default under, the organizational documents of Seller, (B) to the
knowledge of such counsel, constitutes a default under any term or provision of
any material agreement, contract, instrument or indenture, to which Seller is a
party or by which it or any of its assets is bound or results in the creation or
imposition of any lien, charge or encumbrance upon any of its property pursuant
to the terms of any such indenture, mortgage, contract or other instrument,
other than pursuant to this Agreement, or (C) conflicts with or results in a
breach or violation of any law, rule, regulation, order, judgment, writ,
injunction or decree of any court or governmental authority having jurisdiction
over Seller or its assets, except where in any of the instances contemplated by
21
clauses (B) or (C) above, any conflict, breach or default, or creation or
imposition of any lien, charge or encumbrance, will not have a material adverse
effect on the consummation of the transactions contemplated hereby by Seller or
materially and adversely affect its ability to perform its obligations and
duties hereunder or result in any material adverse change in the business,
operations, financial condition, properties or assets of Seller, or in any
material impairment of the right or ability of Seller to carry on its business
substantially as now conducted.
To his or her knowledge, there are no legal or governmental actions,
investigations or proceedings pending to which Seller is a party, or threatened
against Seller, (a) asserting the invalidity of this Agreement or (b) which
materially and adversely affect the performance by Seller of its obligations
under, or the validity or enforceability of, this Agreement.
This Agreement is a valid, legal and binding agreement of Seller, enforceable
against Seller in accordance with its terms, except as such enforcement may be
limited by (1) laws relating to bankruptcy, insolvency, reorganization,
receivership or moratorium, (2) other laws relating to or affecting the rights
of creditors generally, (3) general equity principles (regardless of whether
such enforcement is considered in a proceeding in equity or at law) or (4)
public policy considerations underlying the securities laws, to the extent that
such public policy considerations limit the enforceability of the provisions of
this Agreement that purport to provide indemnification from liabilities under
applicable securities laws.
Such opinion may express its reliance as to factual matters on, among other
things specified in such opinion, the representations and warranties made by,
and on certificates or other documents furnished by officers of, the parties to
this Agreement.
In rendering the opinions expressed above, such counsel may limit such opinions
to matters governed by the federal laws of the United States and the corporate
laws of the State of Delaware and the State of New York, as applicable.
Such other opinions of counsel as any Rating Agency may request in connection
with the sale of the Mortgage Loans by Seller to Purchaser or Seller's execution
and delivery of, or performance under, this Agreement.
A "10b-5" opinion of counsel addressed to the Purchaser and the Underwriters, in
form reasonably acceptable to Purchaser and the Underwriters, as to the
disclosure provided by Seller to Purchaser in connection with the Certificates.
An opinion of counsel addressed to Purchaser and the Underwriters, in form
reasonably acceptable to Purchaser and the Underwriters, that such disclosure
complies as to form with the applicable requirements of Regulation AB with
respect to Seller's role as Sponsor (as defined in Regulation AB) in connection
with the Certificates.
A letter from Deloitte & Touche, certified public accountants, dated the date
hereof, to the effect that they have performed certain specified procedures as a
result of which they determined that certain information of an accounting,
financial or statistical nature set forth in the Memorandum and the Prospectus
Supplement agrees with the records of Seller.
22
Such further certificates, opinions and documents as Purchaser may reasonably
request.
An officer's certificate of Purchaser, dated as of the Closing Date, with the
resolutions of Purchaser authorizing the transactions described herein attached
thereto, together with certified copies of the charter, by-laws and certificate
of good standing of Purchaser dated not earlier than 30 days prior to the
Closing Date.
Such other certificates of Purchaser's officers or others and such other
documents to evidence fulfillment of the conditions set forth in this Agreement
as Seller or its counsel may reasonably request.
An executed Xxxx of Sale in the form attached hereto as Exhibit 4.
COSTS. Seller shall pay Purchaser the costs and expenses as agreed upon by
Seller and Purchaser in a separate Letter of Understanding entered into in
connection with this Agreement and the issuance of the Certificates.
NOTICES. All communications provided for or permitted hereunder shall be in
writing and shall be deemed to have been duly given if (a) personally delivered,
(b) mailed by registered or certified mail, postage prepaid and received by the
addressee, (c) sent by express courier delivery service and received by the
addressee, or (d) transmitted by telex or facsimile transmission (or any other
type of electronic transmission agreed upon by the parties) and confirmed by a
writing delivered by any of the means described in (a), (b) or (c), if (i) to
Purchaser, addressed to Xxxxxx Xxxxxxx Capital I Inc., 0000 Xxxxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Xxxxxx Friend, with a copy to Xxxxxx Xxxxxxx Capital
I Inc., 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Legal Department, Attention:
Xxxxx X. Xxx, Esq. (or such other address as may hereafter be furnished in
writing by Purchaser), or if (ii) to Seller, addressed to Seller at Principal
Commercial Funding II, LLC, 000 Xxxxx Xxxxxx, Xxx Xxxxxx, Xxxx 00000, Attention:
Xxxxxx X. Xxxxxx (with a copy to the attention of Xxxxxx X. Xxxxxxxxx, Esq., 000
Xxxxx Xxxxxx, Xxx Xxxxxx, Xxxx 50392) (or such other address as may hereafter be
furnished in writing by such entity).
SEVERABILITY OF PROVISIONS. Any part, provision, representation, warranty or
covenant of this Agreement that is prohibited or that 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
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
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. To the extent permitted by applicable law, the parties
hereto waive any provision of law that prohibits or renders void or
unenforceable any provision hereof.
23
FURTHER ASSURANCES. Seller and Purchaser each agree to execute and deliver such
instruments and take such actions as the other may, from time to time,
reasonably request in order to effectuate the purpose and to carry out the terms
of this Agreement and the Pooling and Servicing Agreement.
SURVIVAL. Each party hereto agrees that the representations, warranties and
agreements made by it herein and in any certificate or other instrument
delivered pursuant hereto shall be deemed to be relied upon by the other party,
notwithstanding any investigation heretofore or hereafter made by the other
party or on its behalf, and that the representations, warranties and agreements
made by such other party herein or in any such certificate or other instrument
shall survive the delivery of and payment for the Mortgage Loans and shall
continue in full force and effect, notwithstanding any restrictive or qualified
endorsement on the Mortgage Notes and notwithstanding subsequent termination of
this Agreement.
GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS, DUTIES, OBLIGATIONS AND
RESPONSIBILITIES OF THE PARTIES HERETO SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS AND DECISIONS OF THE STATE OF NEW YORK. THE
PARTIES HERETO INTEND THAT THE PROVISIONS OF SECTION 5-1401 OF THE NEW YORK
GENERAL OBLIGATIONS LAW SHALL APPLY TO THIS AGREEMENT.
BENEFITS OF MORTGAGE LOAN PURCHASE AGREEMENT. This Agreement shall inure to the
benefit of and shall be binding upon Seller, Purchaser and their respective
successors, legal representatives, and permitted assigns, and nothing expressed
or mentioned in this Agreement is intended or shall be construed to give any
other person any legal or equitable right, remedy or claim under or in respect
of this Agreement, or any provisions herein contained, this Agreement and all
conditions and provisions hereof being intended to be and being for the sole and
exclusive benefit of such persons and for the benefit of no other person except
that the rights and obligations of Purchaser pursuant to Sections 2, 4.1 (other
than clause 4.1.7), 5, 9, 10, 11, 12 and 13 hereof may be assigned to the
Trustee as may be required to effect the purposes of the Pooling and Servicing
Agreement and, upon such assignment, the Trustee shall succeed to the rights and
obligations hereunder of Purchaser. No owner of a Certificate issued pursuant to
the Pooling and Servicing Agreement shall be deemed a successor or permitted
assigns because of such ownership.
MISCELLANEOUS. This Agreement may be executed in two or more counterparts, each
of which when so executed and delivered shall be an original, but all of which
together shall constitute one and the same instrument. Neither this Agreement
nor any term hereof may be changed, waived, discharged or terminated orally, but
only by an instrument in writing signed by the party against whom enforcement of
the change, waiver, discharge or termination is sought. The headings in this
Agreement are for purposes of reference only and shall not limit or otherwise
affect the meaning hereof. The rights and obligations of Seller under this
Agreement shall not be assigned by Seller without the prior written consent of
Purchaser, except that any person into which Seller may be merged or
consolidated, or any corporation resulting from any
24
merger, conversion or consolidation to which Seller is a party, or any person
succeeding to the entire business of Seller shall be the successor to Seller
hereunder.
ENTIRE AGREEMENT. This Agreement contains the entire agreement and understanding
between the parties hereto with respect to the subject matter hereof (other than
the Letter of Understanding (solely with respect to those portions of this
Agreement that are not assigned to the Trustee), the Indemnification Agreement
and the Pooling and Servicing Agreement), and supersedes all prior and
contemporaneous agreements, understandings, inducements and conditions, express
or implied, oral or written, of any nature whatsoever with respect to the
subject matter hereof. The express terms hereof control and supersede any course
of performance or usage of the trade inconsistent with any of the terms hereof.
25
IN WITNESS WHEREOF, Purchaser and Seller have caused this Agreement to be
executed by their respective duly authorized officers as of the date first above
written.
PRINCIPAL COMMERCIAL FUNDING II, LLC
By: /s/ Xxxxxx X. Xxxxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Vice President and Senior
Investment Counsel
XXXXXX XXXXXXX CAPITAL I INC.
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
EXHIBIT 1
MORTGAGE LOAN SCHEDULE
LOAN
POOL CUT-OFF DATE
NO. MORTGAGE LOAN SELLER LOAN NUMBER PROPERTY NAME BALANCE NOTE DATE
---- -------------------- ----------- ----------------------------- ------------ ----------
3 PCF II 0-000 Xxxxxxxx Xxxxx Mall $117,000,000 07/06/2006
8 PCF II 0-000 Xxxxxxxxxx Financial Center $ 34,500,000 05/02/2006
9 PCF II 0-000 Xxxxx Building $ 32,000,000 06/23/2006
10 PCF II 9-001 The Reserve $ 25,000,000 05/09/2006
13 PCF II 12-001 Valley Corporate Center $ 22,700,000 05/30/2006
15 PCF II 14-001 0000 Xx Xxxxx Xxxxxx $ 21,350,000 05/18/2006
18 PCF II 00-000 Xxxxxxx Xxxxx Xxxxxxx Xxxxxx $ 20,480,000 06/06/2006
21 PCF II 20-001 14401 County Road 212 $ 17,000,000 04/03/2006
25 PCF II 00-000 Xxxxx Xxxxx Center $ 15,600,000 05/10/2006
34 PCF II 33-001 The Legacy Units $ 10,500,000 05/11/2006
South Suburban Industrial
Portfolio - 480 X. Xxxxxxx
35 PCF II 00-000 Xxxxxxx (XX) $ 4,286,517 04/04/2006
South Suburban Industrial
Portfolio - 8711 S. 77th
36 PCF II 00-000 Xxxxxx (XX) $ 3,067,416 04/04/2006
Xxxxx Xxxxxxxx Xxxxxxxxxx
Xxxxxxxxx - 0000-0000 West
37 PCF II 00-000 000xx Xxxxxx (XX) $ 1,966,292 04/04/2006
Xxxxx Xxxxxxxx Xxxxxxxxxx
Xxxxxxxxx - 00000 X. Xxxxxx
00 XXX XX 00-000 Xxxxxx (XX) $ 1,179,775 04/04/2006
41 PCF II 37-001 Marketplace At Collegeville $ 9,966,538 06/02/2006
Suncrest Commerce Xxxxxx
00 XXX XX 00-000 Xxxxxxxxxx Xxxxxxxxx $ 7,625,000 05/16/2006
XXXXX Xxxxxxxxx - 0000 Xxxx
Xxx Xxxxxx & 0000 Xxxxxxxx
64 PCF II 58-001 Place (IV) $ 3,457,865 05/05/2006
RMRTN Portfolio - 1863 Union
65 PCF II 00-000 Xxxxxx (XX) $ 3,324,300 05/05/2006
00 XXX XX 00-000 Xxxxxxxxx Xxxxx I $ 6,150,000 05/31/2006
76 PCF II 69-001 00 Xxxxxxxxx Xxxxxx $ 5,000,000 05/12/2006
78 PCF II 00-000 Xxxxxxxxxx Xxxx $ 4,979,263 03/31/2006
110 PCF II 000-000 Xxxxxx Xxxxxx Office Building $ 3,194,441 05/10/2006
1-1
116 PCF II 000-000 Xxxx Xxxxxxxx Apartments $ 3,035,885 02/03/2006
000 XXX XX 000-000 Xxxxxxx xx Xxxxxxx Xxxx $ 2,797,691 06/19/2006
129 PCF II 000-000 Xxxxxxxxxx Xxxxxxxx Xxxxxx $ 2,563,518 03/17/2006
134 PCF II 127-001 000 X. 0xx Xxxxxx $ 2,395,619 05/25/2006
136 PCF II 129-001 0000 Xxxxxxx Xxxxxx $ 2,295,904 05/19/2006
139 PCF II 132-001 Fry's Center Shops $ 2,200,000 05/22/2006
6010 & 6020 South Rainbow
153 PCF II 144-001 Boulevard $ 1,557,197 05/02/2006
155 PCF II 146-001 000 Xxxxx Xxxxxx $ 1,498,123 06/01/2006
156 PCF II 147-001 000 Xxxxxxxx Xxxx $ 1,493,901 05/16/2006
161 PCF II 152-001 0000 XxXxxxxxx Xxxxx $ 1,346,598 05/03/2006
170 PCF II 161-001 00000 Xxxxxxxx Xxxxxx $ 946,277 05/12/2006
171 PCF II 000-000 000 Xxxxxxx Crossing $ 946,277 05/22/2006
Notes:
1. Master Servicing fees in excess of 0.02% (or 0.01% for MSMC loans) include
a subservicing fee
LOAN ORIGINAL TERM
POOL MORTGAGE LOAN TO MATURITY OR MONTHLY DEBT
NO. SELLER ARD REMAINING TERM ORIG. AMORT. REM. AMORT. RATE SERVICE (P&I)
---- ------------- -------------- -------------- ------------ ----------- ----- -------------
3 PCF II 120 120 360 360 5.860% $690,978
8 PCF II 120 117 360 360 5.955% $205,848
9 PCF II 120 119 IO IO 6.080% NAP
10 PCF II 84 82 IO IO 6.270% NAP
13 PCF II 120 118 360 360 5.950% $135,369
15 PCF II 120 119 360 360 5.900% $126,635
18 PCF II 120 119 360 360 6.140% $124,637
21 PCF II 120 117 IO IO 5.470% NAP
25 PCF II 120 118 IO IO 5.980% NAP
34 PCF II 120 118 IO IO 5.940% NAP
35 PCF II 120 116 360 360 5.780% $ 25,097
36 PCF II 120 116 360 360 5.780% $ 17,959
37 PCF II 120 116 360 360 5.780% $ 11,512
38 PCF II 120 116 360 360 5.780% $ 6,907
41 PCF II 180 179 180 179 5.770% $ 83,148
55 PCF II 120 118 360 360 5.880% $ 45,129
64 PCF II 240 238 240 238 6.160% $ 25,196
65 PCF II 240 238 240 238 6.160% $ 24,223
70 PCF II 120 118 IO IO 6.050% NAP
76 PCF II 120 118 240 240 5.920% $ 35,591
78 PCF II 152 149 300 297 5.820% $ 31,667
110 PCF II 120 118 360 358 6.230% $ 19,661
1-2
116 PCF II 120 115 360 355 5.900% $ 18,091
127 PCF II 120 119 360 359 6.020% $ 16,823
129 PCF II 180 176 180 176 5.590% $ 21,369
134 PCF II 84 82 360 358 6.010% $ 14,405
136 PCF II 120 118 360 358 6.120% $ 13,968
139 PCF II 120 118 360 360 6.210% $ 13,489
153 PCF II 120 118 360 358 6.080% $ 9,433
155 PCF II 120 119 300 299 6.100% $ 9,756
156 PCF II 120 118 240 238 6.200% $ 10,920
161 PCF II 180 178 300 298 6.450% $ 9,073
170 PCF II 120 118 240 238 6.480% $ 7,072
171 PCF II 120 118 240 238 6.480% $ 7,072
MASTER PRIMARY
LOAN SERVICE SERVICE
POOL MORTGAGE LOAN YM LO END ADMIN COST FEE FEE
NO. SELLER SEASONING CODE LO DATE DEF DEF/YM1 YM1 OPEN RATE RATE(1) RATE
---- ------------- --------- ---- -- --------- --- ------- --- ---- ---------- ------- -------
3 PCF II 0 24 4/30/2016 92 4 3.145 2.000 1.000
8 PCF II 3 27 3/31/2016 91 2 3.145 2.000 1.000
9 PCF II 1 A 0 NAP 118 2 3.145 2.000 1.000
10 PCF II 2 26 4/30/2013 56 2 3.145 2.000 1.000
13 PCF II 2 A 0 NAP 118 2 3.145 2.000 1.000
15 PCF II 1 A 0 NAP 117 3 3.145 2.000 1.000
18 PCF II 1 A 12 7/31/2007 93 13 2 3.145 2.000 1.000
21 PCF II 3 E 0 NAP 118 2 3.145 2.000 1.000
25 PCF II 2 A 0 NAP 117 3 3.145 2.000 1.000
34 PCF II 2 A 0 NAP 116 4 3.145 2.000 1.000
35 PCF II 4 E 28 8/31/2008 90 2 3.145 2.000 1.000
1-3
36 PCF II 4 E 28 8/31/2008 90 2 3.145 2.000 1.000
37 PCF II 4 E 28 8/31/2008 90 2 3.145 2.000 1.000
38 PCF II 4 E 28 8/31/2008 90 2 3.145 2.000 1.000
41 PCF II 1 25 5/31/2021 153 2 3.145 2.000 1.000
55 PCF II 2 26 4/30/2016 92 2 3.145 2.000 1.000
64 PCF II 2 E 48 6/30/2010 190 2 3.145 2.000 1.000
65 PCF II 2 E 48 6/30/2010 190 2 3.145 2.000 1.000
70 PCF II 2 26 3/31/2016 91 3 3.145 2.000 1.000
76 PCF II 2 E 26 8/31/2008 92 2 3.145 2.000 1.000
78 PCF II 3 E 27 9/2/2008 123 2 3.145 2.000 1.000
110 PCF II 2 E 26 8/31/2008 92 2 3.145 2.000 1.000
116 PCF II 5 E 26 5/31/2008 92 2 3.145 2.000 1.000
127 PCF II 1 E 25 8/31/2008 93 2 3.145 2.000 1.000
129 PCF II 4 E 28 8/31/2008 150 2 3.145 2.000 1.000
134 PCF II 2 26 4/30/2013 56 2 3.145 2.000 1.000
136 PCF II 2 E 26 8/31/2008 92 2 3.145 2.000 1.000
139 PCF II 2 E 26 8/31/2008 92 2 3.145 2.000 1.000
153 PCF II 2 26 4/30/2016 92 2 3.145 2.000 1.000
155 PCF II 1 E 25 8/31/2008 91 4 3.145 2.000 1.000
1-4
156 PCF II 2 E 26 8/31/2008 92 2 3.145 2.000 1.000
161 PCF II 2 E 26 8/31/2008 144 10 3.145 2.000 1.000
170 PCF II 2 E 26 8/31/2008 92 2 3.145 2.000 1.000
171 PCF II 2 E 26 8/31/2008 92 2 3.145 2.000 1.000
PRIMARY
MASTER EXCESS
EXCESS SERVICING
LOAN POOL MORTGAGE LOAN SERV. FEE FEE RATE TRUSTEE FEE EXCESS SERVICE
NO. SELLER RATE (BPS) (BPS) DEAL FEES RATE FEE RATE
--------- ------------- ---------- --------- --------- ----------- --------------
3 PCF II 0.000 0.000 3.000 0.145 0.000
8 PCF II 0.000 0.000 3.000 0.145 0.000
9 PCF II 0.000 0.000 3.000 0.145 0.000
10 PCF II 0.000 0.000 3.000 0.145 0.000
13 PCF II 0.000 0.000 3.000 0.145 0.000
15 PCF II 0.000 0.000 3.000 0.145 0.000
18 PCF II 0.000 0.000 3.000 0.145 0.000
21 PCF II 0.000 0.000 3.000 0.145 0.000
25 PCF II 0.000 0.000 3.000 0.145 0.000
34 PCF II 0.000 0.000 3.000 0.145 0.000
35 PCF II 0.000 0.000 3.000 0.145 0.000
36 PCF II 0.000 0.000 3.000 0.145 0.000
37 PCF II 0.000 0.000 3.000 0.145 0.000
38 PCF II 0.000 0.000 3.000 0.145 0.000
41 PCF II 0.000 0.000 3.000 0.145 0.000
55 PCF II 0.000 0.000 3.000 0.145 0.000
64 PCF II 0.000 0.000 3.000 0.145 0.000
65 PCF II 0.000 0.000 3.000 0.145 0.000
70 PCF II 0.000 0.000 3.000 0.145 0.000
76 PCF II 0.000 0.000 3.000 0.145 0.000
78 PCF II 0.000 0.000 3.000 0.145 0.000
110 PCF II 0.000 0.000 3.000 0.145 0.000
116 PCF II 0.000 0.000 3.000 0.145 0.000
127 PCF II 0.000 0.000 3.000 0.145 0.000
129 PCF II 0.000 0.000 3.000 0.145 0.000
134 PCF II 0.000 0.000 3.000 0.145 0.000
136 PCF II 0.000 0.000 3.000 0.145 0.000
139 PCF II 0.000 0.000 3.000 0.145 0.000
153 PCF II 0.000 0.000 3.000 0.145 0.000
155 PCF II 0.000 0.000 3.000 0.145 0.000
156 PCF II 0.000 0.000 3.000 0.145 0.000
161 PCF II 0.000 0.000 3.000 0.145 0.000
1-5
170 PCF II 0.000 0.000 3.000 0.145 0.000
171 PCF II 0.000 0.000 3.000 0.145 0.000
1-6
EXHIBIT 2
REPRESENTATIONS AND WARRANTIES REGARDING
INDIVIDUAL MORTGAGE LOANS
1. Mortgage Loan Schedule. The information set forth in the Mortgage Loan
Schedule is complete, true and correct in all material respects as of the date
of this Agreement and as of the Cut-Off Date.
2. Whole Loan; Ownership of Mortgage Loans. Each Mortgage Loan is a whole loan
and not a participation interest in a mortgage loan. Immediately prior to the
transfer to Purchaser of the Mortgage Loans, Seller had good title to, and was
the sole owner of, each Mortgage Loan. Seller has full right, power and
authority to transfer and assign each of the Mortgage Loans to or at the
direction of Purchaser and has validly and effectively conveyed (or caused to be
conveyed) to Purchaser or its designee all of Seller's legal and beneficial
interest in and to the Mortgage Loans free and clear of any and all pledges,
liens, charges, security interests and/or other encumbrances. The sale of the
Mortgage Loans to Purchaser or its designee does not require Seller to obtain
any governmental or regulatory approval or consent that has not been obtained.
3. Payment Record. No scheduled payment of principal and interest under any
Mortgage Loan was 30 days or more past due as of the Cut-Off Date, and no
Mortgage Loan was 30 days or more delinquent in the twelve-month period
immediately preceding the Cut-Off Date.
4. Lien; Valid Assignment. The Mortgage related to and delivered in connection
with each Mortgage Loan constitutes a valid and, subject to the exceptions set
forth in paragraph 13 below, enforceable first priority lien upon the related
Mortgaged Property, prior to all other liens and encumbrances, except for (a)
the lien for current real estate taxes and assessments not yet due and payable,
(b) covenants, conditions and restrictions, rights of way, easements and other
matters that are of public record and/or are referred to in the related lender's
title insurance policy, (c) exceptions and exclusions specifically referred to
in such lender's title insurance policy, (d) other matters to which like
properties are commonly subject, none of which matters referred to in clauses
(b), (c) or (d), individually or in the aggregate, materially interferes with
the security intended to be provided by such Mortgage, the marketability or
current use of the Mortgaged Property or the current ability of the Mortgaged
Property to generate operating income sufficient to service the Mortgage Loan
debt and (e) if such Mortgage Loan is cross-collateralized with any other
Mortgage Loan, the lien of the Mortgage for such other Mortgage Loan (the
foregoing items (a) through (e), the "Permitted Encumbrances"). The related
assignment of such Mortgage executed and delivered in favor of the Trustee is in
recordable form and constitutes a legal, valid and binding assignment,
sufficient to convey to the assignee named therein all of the assignor's right,
title and interest in, to and under such Mortgage. Such Mortgage, together with
any separate security agreements, chattel mortgages or equivalent instruments,
establishes and creates a valid and, subject to the exceptions set forth in
paragraph 13 below, enforceable security interest in favor of the holder thereof
in all of the related Mortgagor's personal property used in, and reasonably
necessary to operate, the related Mortgaged Property. In the case of a Mortgaged
Property operated as a hotel or an assisted living facility, the Mortgagor's
personal property includes all personal property that a prudent mortgage lender
making a similar Mortgage Loan would deem reasonably necessary to operate the
related Mortgaged Property as it is currently being operated. A Uniform
Commercial Code
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financing statement has been filed and/or recorded in all places necessary to
perfect a valid security interest in such personal property, to the extent a
security interest may be so created therein, and such security interest is a
first priority security interest, subject to any prior purchase money security
interest in such personal property and any personal property leases applicable
to such personal property. Notwithstanding the foregoing, no representation is
made as to the perfection of any security interest in rents or other personal
property to the extent that possession or control of such items or actions other
than the filing of Uniform Commercial Code financing statements are required in
order to effect such perfection.
5. Assignment of Leases and Rents. The Assignment of Leases related to and
delivered in connection with each Mortgage Loan establishes and creates a valid,
subsisting and, subject to the exceptions set forth in paragraph 13 below,
enforceable first priority lien and first priority security interest in the
related Mortgagor's interest in all leases, sub-leases, licenses or other
agreements pursuant to which any person is entitled to occupy, use or possess
all or any portion of the real property subject to the related Mortgage, and
each assignor thereunder has the full right to assign the same. The related
assignment of any Assignment of Leases not included in a Mortgage has been
executed and delivered in favor of the Trustee and is in recordable form and
constitutes a legal, valid and binding assignment, sufficient to convey to the
assignee named therein all of the assignor's right, title and interest in, to
and under such Assignment of Leases.
6. Mortgage Status; Waivers and Modifications. No Mortgage has been satisfied,
cancelled, rescinded or subordinated in whole or in part, and the related
Mortgaged Property has not been released from the lien of such Mortgage, in
whole or in part (except for partial reconveyances of real property that are set
forth on Schedule A to Exhibit 2), nor has any instrument been executed that
would effect any such satisfaction, cancellation, subordination, rescission or
release, in any manner that, in each case, materially adversely affects the
value of the related Mortgaged Property. None of the terms of any Mortgage Note,
Mortgage or Assignment of Leases has been impaired, waived, altered or modified
in any respect, except by written instruments, all of which are included in the
related Mortgage File.
7. Condition of Property; Condemnation. Except with respect to Mortgage Loans
secured primarily by unimproved land: (i) with respect to the Mortgaged
Properties securing the Mortgage Loans that were the subject of an engineering
report within 18 months prior to the Cut-Off Date as set forth on Schedule A to
this Exhibit 2, each Mortgaged Property is, to Seller's knowledge, free and
clear of any damage (or adequate reserves therefor have been established) that
would materially and adversely affect its value as security for the related
Mortgage Loan, and (ii) with respect to the Mortgaged Properties securing the
Mortgage Loans that were not the subject of an engineering report within 18
months prior to the Cut-Off Date as set forth on Schedule A to this Exhibit 2,
each Mortgaged Property is in good repair and condition and all building systems
contained therein are in good working order (or adequate reserves therefor have
been established) and each Mortgaged Property is free of structural defects, in
each case, that would materially and adversely affect its value as security for
the related Mortgage Loan as of the date hereof. Seller has received no notice
of the commencement of any proceeding for the condemnation of all or any
material portion of any Mortgaged Property. To Seller's knowledge (based on
surveys and/or title insurance obtained in connection with the origination of
the Mortgage Loans), as of the date of the origination of each Mortgage Loan,
all of the material improvements on the related Mortgaged Property that were
considered in determining the
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appraised value of the Mortgaged Property lay wholly within the boundaries and
building restriction lines of such property, except for encroachments that are
insured against by the lender's title insurance policy referred to herein or
that do not materially and adversely affect the value or marketability of such
Mortgaged Property, and no improvements on adjoining properties materially
encroached upon such Mortgaged Property so as to materially and adversely affect
the value or marketability of such Mortgaged Property, except those
encroachments that are insured against by the Title Policy referred to herein.
8. Title Insurance. Each Mortgaged Property is covered by an American Land Title
Association (or an equivalent form of) lender's title insurance policy or a
marked-up title insurance commitment (on which the required premium has been
paid) which evidences such title insurance policy (the "Title Policy") in the
original principal amount of the related Mortgage Loan after all advances of
principal. Each Title Policy insures that the related Mortgage is a valid first
priority lien on such Mortgaged Property, subject only to Permitted
Encumbrances. Each Title Policy (or, if it has yet to be issued, the coverage to
be provided thereby) is in full force and effect, all premiums thereon have been
paid and no material claims have been made thereunder and no claims have been
paid thereunder. No holder of the related Mortgage has done, by act or omission,
anything that would materially impair the coverage under such Title Policy.
Immediately following the transfer and assignment of the related Mortgage Loan
to the Trustee, such Title Policy (or, if it has yet to be issued, the coverage
to be provided thereby) will inure to the benefit of the Trustee without the
consent of or notice to the insurer. To Seller's knowledge, the insurer issuing
such Title Policy is qualified to do business in the jurisdiction in which the
related Mortgaged Property is located.
9. No Holdbacks. The proceeds of each Mortgage Loan have been fully disbursed
and there is no obligation for future advances with respect thereto. With
respect to each Mortgage Loan, any and all requirements as to completion of any
on-site or off-site improvement and as to disbursements of any funds escrowed
for such purpose that were to have been complied with on or before the Closing
Date have been complied with, or any such funds so escrowed have not been
released.
10. Mortgage Provisions. The Mortgage Note or Mortgage for each Mortgage Loan,
together with applicable state law, contains customary and enforceable
provisions (subject to the exceptions set forth in paragraph 13) such as to
render the rights and remedies of the holder thereof adequate for the practical
realization against the related Mortgaged Property of the principal benefits of
the security intended to be provided thereby.
11. Trustee under Deed of Trust. If any Mortgage is a deed of trust, (1) a
trustee, duly qualified under applicable law to serve as such, is properly
designated and serving under such Mortgage, and (2) no fees or expenses are
payable to such trustee by Seller, Purchaser or any transferee thereof except in
connection with a trustee's sale after default by the related Mortgagor or in
connection with any full or partial release of the related Mortgaged Property or
related security for the related Mortgage Loan.
12. Environmental Conditions.
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(i) Except as set forth on Schedule A to this Exhibit 2, with respect
to the Mortgaged Properties securing the Mortgage Loans that were
the subject of an environmental site assessment within 18 months
prior to the Cut-Off Date, an environmental site assessment
prepared to ASTM standards, or an update of a previous such
report, was performed with respect to each Mortgaged Property in
connection with the origination or the sale of the related
Mortgage Loan, a report of each such assessment (or the most
recent assessment with respect to each Mortgaged Property) (an
"Environmental Report") has been delivered to, or on behalf of,
Purchaser or its designee, and Seller has no knowledge of any
material and adverse environmental condition or circumstance
affecting any Mortgaged Property that was not disclosed in such
report. Each Mortgage requires the related Mortgagor to comply
with all applicable federal, state and local environmental laws
and regulations. Where such assessment disclosed the existence of
a material and adverse environmental condition or circumstance
affecting any Mortgaged Property, (i) a party not related to the
Mortgagor was identified as the responsible party for such
condition or circumstance or (ii) environmental insurance
covering such condition was obtained or must be maintained until
the condition is remediated or (iii) the related Mortgagor was
required either to provide additional security that was deemed to
be sufficient by the originator in light of the circumstances
and/or to establish an operations and maintenance plan. Each
Mortgage Loan set forth on Schedule C to this Exhibit 2 (each, a
"Schedule C Loan") is the subject of a Secured Creditor Impaired
Property Policy, issued by the issuer set forth on Schedule C
(the "Policy Issuer") and effective as of the date thereof (the
"Environmental Insurance Policy"). Except as set forth on
Schedule A to this Exhibit 2, with respect to each Schedule C
Loan, (i) the Environmental Insurance Policy is in full force and
effect, (ii)(a) a property condition or engineering report was
prepared with respect to lead based paint ("LBP") and radon gas
("RG") at each Mortgaged Property that is used as a multifamily
dwelling, and with respect to asbestos containing materials
("ACM") at each related Mortgaged Property and (b) if such report
disclosed the existence of a material and adverse LBP, ACM or RG
environmental condition or circumstance affecting the related
Mortgaged Property, the related Mortgagor (A) was required to
remediate the identified condition prior to closing the Mortgage
Loan or provide additional security, or establish with the lender
a reserve from loan proceeds, in an amount deemed to be
sufficient by Seller for the remediation of the problem and/or
(B) agreed in the Mortgage Loan documents to establish an
operations and maintenance plan after the closing of the Mortgage
Loan, (iii) on the effective date of the Environmental Insurance
Policy, Seller as originator had no knowledge of any material and
adverse environmental condition or circumstance affecting the
Mortgaged Property (other than the existence of LBP, ACM or RG)
that was not disclosed to the Policy Issuer in one or more of the
following: (a) the application for insurance, (b) a borrower
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questionnaire that was provided to the Policy Issuer or (c) an
engineering or other report provided to the Policy Issuer and
(iv) the premium of any Environmental Insurance Policy has been
paid through the maturity of the policy's term and the term of
such policy extends at least five years beyond the maturity of
the Mortgage Loan.
(ii) With respect to the Mortgaged Properties securing the Mortgage
Loans that were not the subject of an environmental site
assessment prepared to ASTM standards within 18 months prior to
the Cut-Off Date as set forth on Schedule A to this Exhibit 2,
(i) no Hazardous Material is present on such Mortgaged Property
such that (1) the value of such Mortgaged Property is materially
and adversely affected or (2) under applicable federal, state or
local law, (a) such Hazardous Material could be required to be
eliminated at a cost materially and adversely affecting the value
of the Mortgaged Property before such Mortgaged Property could be
altered, renovated, demolished or transferred or (b) the presence
of such Hazardous Material could (upon action by the appropriate
governmental authorities) subject the owner of such Mortgaged
Property, or the holders of a security interest therein, to
liability for the cost of eliminating such Hazardous Material or
the hazard created thereby at a cost materially and adversely
affecting the value of the Mortgaged Property, and (ii) such
Mortgaged Property is in material compliance with all applicable
federal, state and local laws pertaining to Hazardous Materials
or environmental hazards, any noncompliance with such laws does
not have a material adverse effect on the value of such Mortgaged
Property and neither Seller nor, to Seller's knowledge, the
related Mortgagor or any current tenant thereon, has received any
notice of violation or potential violation of any such law.
"Hazardous Materials" means gasoline, petroleum products, explosives,
radioactive materials, polychlorinated biphenyls or related or similar
materials, and any other substance or material as may be defined as a
hazardous or toxic substance by any federal, state or local
environmental law, ordinance, rule, regulation or order, including
without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended (42 U.S.C. Sections
9601 et seq.), the Hazardous Materials Transportation Act as amended
(42 U.S.C. Sections 6901 et seq.), the Federal Water Pollution Control
Act as amended (33 U.S.C. Sections 1251 et seq.), the Clean Air Act
(42 U.S.C. Sections 1251 et seq.) and any regulations promulgated
pursuant thereto.
13. Loan Document Status. Each Mortgage Note, Mortgage and other agreement that
evidences or secures such Mortgage Loan and was executed by or on behalf of the
related Mortgagor is the legal, valid and binding obligation of the maker
thereof (subject to any non-recourse provisions contained in any of the
foregoing agreements and any applicable state anti-deficiency or market value
limit deficiency legislation), enforceable in accordance with its terms,
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except as such enforcement may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of creditors'
rights generally, and by general principles of equity (regardless of whether
such enforcement is considered in a proceeding in equity or at law) and there is
no valid defense, counterclaim or right of offset or rescission available to the
related Mortgagor with respect to such Mortgage Note, Mortgage or other
agreement.
14. Insurance. Each Mortgaged Property is, and is required pursuant to the
related Mortgage to be, insured by (a) a fire and extended perils insurance
policy providing coverage against loss or damage sustained by reason of fire,
lightning, windstorm, hail, explosion, riot, riot attending a strike, civil
commotion, aircraft, vehicles and smoke, and, to the extent required as of the
date of origination by the originator of such Mortgage Loan consistent with its
normal commercial mortgage lending practices, against other risks insured
against by persons operating like properties in the locality of the Mortgaged
Property in an amount not less than the lesser of the principal balance of the
related Mortgage Loan and the replacement cost of the Mortgaged Property, and
not less than the amount necessary to avoid the operation of any co-insurance
provisions with respect to the Mortgaged Property, and the policy contains no
provisions for a deduction for depreciation; (b) a business interruption or
rental loss insurance policy, in an amount at least equal to six months of
operations of the Mortgaged Property estimated as of the date of origination by
the originator of such Mortgage Loan consistent with its normal commercial
lending practices; (c) a flood insurance policy (if any portion of buildings or
other structures on the Mortgaged Property are located in an area identified by
the Federal Emergency Management Agency as having special flood hazards and the
Federal Emergency Management Agency requires flood insurance to be maintained);
and (d) a comprehensive general liability insurance policy in amounts as are
generally required by commercial mortgage lenders, and in any event not less
than $1 million per occurrence. Such insurance policy contains a standard
mortgagee clause that names the mortgagee as an additional insured in the case
of liability insurance policies and as a loss payee in the case of property
insurance policies and requires prior notice to the holder of the Mortgage of
termination or cancellation. No such notice has been received, including any
notice of nonpayment of premiums, that has not been cured. Each Mortgage
obligates the related Mortgagor to maintain all such insurance and, upon such
Mortgagor's failure to do so, authorizes the holder of the Mortgage to maintain
such insurance at the Mortgagor's cost and expense and to seek reimbursement
therefor from such Mortgagor. Each Mortgage provides that casualty insurance
proceeds will be applied (a) to the restoration or repair of the related
Mortgaged Property, (b) to the restoration or repair of the related Mortgaged
Property, with any excess insurance proceeds after restoration or repair being
paid to the Mortgagor, or (c) to the reduction of the principal amount of the
Mortgage Loan.
15. Taxes and Assessments. As of the Closing Date, there are no delinquent or
unpaid taxes, assessments (including assessments payable in future installments)
or other outstanding charges affecting any Mortgaged Property that are or may
become a lien of priority equal to or higher than the lien of the related
Mortgage. For purposes of this representation and warranty, real property taxes
and assessments shall not be considered unpaid until the date on which interest
or penalties would be first payable thereon.
16. Mortgagor Bankruptcy. No Mortgagor is, to Seller's knowledge, a debtor in
any state or federal bankruptcy or insolvency proceeding. As of the date of
origination, (i) with respect to Mortgage Loans with a principal balance greater
than $3,500,000, no tenant physically
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occupying 25% or more (by square feet) of the net rentable area of the related
Mortgaged Property was, to Seller's knowledge, a debtor in any state or federal
bankruptcy or insolvency proceeding and (ii) with respect to Mortgage Loans with
a principal balance equal to or less than $3,500,000 no tenant physically
occupying 50% or more (by square feet) of the net rentable area of the related
Mortgaged Property was, to Seller's knowledge, a debtor in any state or federal
bankruptcy or insolvency proceeding.
17. Leasehold Estate. Each Mortgaged Property consists of a fee simple estate in
real estate or, if the related Mortgage Loan is secured in whole or in part by
the interest of a Mortgagor as a lessee under a ground lease of a Mortgaged
Property (a "Ground Lease"), by the related Mortgagor's interest in the Ground
Lease but not by the related fee interest in such Mortgaged Property (the "Fee
Interest"), and as to such Ground Leases:
(i) Such Ground Lease or a memorandum thereof has been or will be duly
recorded; such Ground Lease (or the related estoppel letter or
lender protection agreement between Seller and related lessor) does
not prohibit the current use of the Mortgaged Property and does not
prohibit the interest of the lessee thereunder to be encumbered by
the related Mortgage; and there has been no material change in the
payment terms of such Ground Lease since the origination of the
related Mortgage Loan, with the exception of material changes
reflected in written instruments that are a part of the related
Mortgage File;
(ii) The 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 Permitted Encumbrances;
(iii) The Mortgagor's interest in such Ground Lease is assignable to
Purchaser and its successors and assigns upon notice to, but without
the consent of, the lessor thereunder (or, if such consent is
required, it has been obtained prior to the Closing Date) and, in
the event that it is so assigned, is further assignable by Purchaser
and its successors and assigns upon notice to, but without the need
to obtain the consent of, such lessor or if such lessor's consent is
required it cannot be unreasonably withheld;
(iv) Such Ground Lease is in full force and effect, and the Ground Lease
provides that no material amendment to such Ground Lease is binding
on a mortgagee unless the mortgagee has consented thereto, and
Seller has received no notice that an event of default has occurred
thereunder, and, to Seller's knowledge, there exists no condition
that, but for the passage of time or the giving of notice, or both,
would result in an event of default under the terms of such Ground
Lease;
(v) Such Ground Lease, or an estoppel letter or other agreement, (A)
requires the lessor under such Ground Lease to give notice of any
default by the lessee to the holder of the Mortgage; and (B)
provides that no notice of termination given under such Ground Lease
is effective against the holder of the Mortgage unless a copy of
such notice has been delivered to such holder and the lessor has
offered or
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is required to enter into a new lease with such holder on terms that
do not materially vary from the economic terms of the Ground Lease.
(vi) A mortgagee is permitted a reasonable opportunity (including, where
necessary, sufficient time to gain possession of the interest of the
lessee under such Ground Lease) to cure any default under such
Ground Lease, which is curable after the receipt of notice of any
such default, before the lessor thereunder may terminate such Ground
Lease;
(vii) Such Ground Lease has an original term (including any extension
options set forth therein) which extends not less than twenty years
beyond the Stated Maturity Date of the related Mortgage Loan;
(viii) Under the terms of such Ground Lease and the related Mortgage, taken
together, any related insurance proceeds or condemnation award
awarded to the holder of the ground lease interest will be applied
either (A) to the repair or restoration of all or part of the
related Mortgaged Property, with the mortgagee or a trustee
appointed by the related Mortgage having the right to hold and
disburse such proceeds as the repair or restoration progresses
(except in such cases where a provision entitling a third party to
hold and disburse such proceeds would not be viewed as commercially
unreasonable by a prudent commercial mortgage lender), or (B) to the
payment of the outstanding principal balance of the Mortgage Loan
together with any accrued interest thereon; and
(ix) Such Ground Lease does not impose any restrictions on subletting
which would be viewed as commercially unreasonable by prudent
commercial mortgage lenders lending on a similar Mortgaged Property
in the lending area where the Mortgaged Property is located; and
such Ground Lease contains a covenant that the lessor thereunder is
not permitted, in the absence of an uncured default, to disturb the
possession, interest or quiet enjoyment of the lessee thereunder for
any reason, or in any manner, which would materially adversely
affect the security provided by the related Mortgage.
(x) Such Ground Lease requires the Lessor to enter into a new lease upon
termination of such Ground Lease if the Ground Lease is rejected in
a bankruptcy proceeding.
18. Escrow Deposits. All escrow deposits and payments relating to each Mortgage
Loan that are, as of the Closing Date, required to be deposited or paid have
been so deposited or paid.
19. LTV Ratio. The gross proceeds of each Mortgage Loan to the related Mortgagor
at origination did not exceed the non-contingent principal amount of the
Mortgage Loan and either: (a) such Mortgage Loan is secured by an interest in
real property having a fair market value (i) at the date the Mortgage Loan was
originated, at least equal to 80 percent of the original principal balance of
the Mortgage Loan or (ii) at the Closing Date, at least equal to 80 percent of
the principal balance of the Mortgage Loan on such date; provided that for
purposes hereof, the fair market value of the real property interest must first
be reduced by (x) the amount of any lien on the real property interest that is
senior to the Mortgage Loan and (y) a proportionate amount of
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any lien that is in parity with the Mortgage Loan (unless such other lien
secures a Mortgage Loan that is cross-collateralized with such Mortgage Loan, in
which event the computation described in clauses (a)(i) and (a)(ii) of this
paragraph 19 shall be made on a pro rata basis in accordance with the fair
market values of the Mortgaged Properties securing such cross-collateralized
Mortgage Loans); or (b) substantially all the proceeds of such Mortgage Loan
were used to acquire, improve or protect the real property that served as the
only security for such Mortgage Loan (other than a recourse feature or other
third party credit enhancement within the meaning of Treasury Regulations
Section 1.860G-2(a)(1)(ii)).
20. Mortgage Loan Modifications. Any Mortgage Loan that was "significantly
modified" prior to the Closing Date so as to result in a taxable exchange under
Section 1001 of the Code either (a) was modified as a result of the default
under such Mortgage Loan or under circumstances that made a default reasonably
foreseeable or (b) satisfies the provisions of either clause (a)(i) of paragraph
19 (substituting the date of the last such modification for the date the
Mortgage Loan was originated) or clause (a)(ii) of paragraph 19, including the
proviso thereto.
21. Advancement of Funds by Seller. No holder of a Mortgage Loan has advanced
funds or induced, solicited or knowingly received any advance of funds from a
party other than the owner of the related Mortgaged Property, directly or
indirectly, for the payment of any amount required by such Mortgage Loan.
22. No Mechanics' Liens. Each Mortgaged Property is free and clear of any and
all mechanics' and materialmen's liens that are prior or equal to the lien of
the related Mortgage, and 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 except, in each case, for liens insured against by the Title Policy
referred to herein.
23. Compliance with Usury Laws. Each Mortgage Loan complied with all applicable
usury laws in effect at its date of origination.
24. Cross-collateralization. No Mortgage Loan is cross-collateralized or
cross-defaulted with any loan other than one or more other Mortgage Loans.
25. Releases of Mortgaged Property. Except as described in the next sentence, no
Mortgage Note or Mortgage requires the mortgagee to release all or any material
portion of the related Mortgaged Property that was included in the appraisal for
such Mortgaged Property, and/or generates income from the lien of the related
Mortgage except upon payment in full of all amounts due under the related
Mortgage Loan or in connection with the defeasance provisions of the related
Note and Mortgage. The Mortgages relating to those Mortgage Loans identified on
Schedule A hereto require the mortgagee to grant releases of portions of the
related Mortgaged Properties upon (a) the satisfaction of certain legal and
underwriting requirements and/or (b) the payment of a predetermined or
objectively determinable release price and prepayment consideration in
connection therewith. Except as described in the first sentence hereof and for
those Mortgage Loans identified on Schedule A, no Mortgage Loan permits the full
or partial release or substitution of collateral unless the mortgagee or
servicer can require the Borrower to provide an opinion of tax counsel to the
effect that such release or substitution of collateral (a) would not constitute
a "significant modification" of such Mortgage Loan within the meaning of
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Treas. Reg. Section 1.1001-3 and (b) would not cause such Mortgage Loan to fail
to be a "qualified mortgage" within the meaning of Section 860G(a)(3)(A) of the
Code.
26. No Equity Participation or Contingent Interest. No Mortgage Loan contains
any equity participation by the lender or provides for negative amortization
(except that the ARD Loan may provide for the accrual of interest at an
increased rate after the Anticipated Repayment Date) or for any contingent or
additional interest in the form of participation in the cash flow of the related
Mortgaged Property.
27. No Material Default. To Seller's knowledge, there exists no material
default, breach, violation or event of acceleration (and no event which, with
the passage of time or the giving of notice, or both, would constitute any of
the foregoing) under the documents evidencing or securing the Mortgage Loan, in
any such case to the extent the same materially and adversely affects the value
of the Mortgage Loan and the related Mortgaged Property; provided, however, that
this representation and warranty does not address or otherwise cover any
default, breach, violation or event of acceleration that specifically pertains
to any matter otherwise covered by any other representation and warranty made by
Seller in any of paragraphs 3, 7, 8, 12, 14, 15, 16 and 17 of this Exhibit 2.
28. Inspections. Seller (or if Seller is not the originator, the originator of
the Mortgage Loan) has inspected or caused to be inspected each Mortgaged
Property in connection with the origination of the related Mortgage Loan.
29. Local Law Compliance. Based on due diligence considered reasonable by
prudent commercial mortgage lenders in the lending area where the Mortgaged
Property is located, the improvements located on or forming part of each
Mortgaged Property comply with applicable zoning laws and ordinances, or
constitute a legal non-conforming use or structure or, if any such improvement
does not so comply, such non-compliance does not materially and adversely affect
the value of the related Mortgaged Property, such value as determined by the
appraisal performed at origination or in connection with the sale of the related
Mortgage Loan by Seller hereunder.
30. Junior Liens. None of the Mortgage Loans permits the related Mortgaged
Property to be encumbered by any lien (other than a Permitted Encumbrance)
junior to or of equal priority with the lien of the related Mortgage without the
prior written consent of the holder thereof or the satisfaction of debt service
coverage or similar criteria specified therein. Seller has no knowledge that any
of the Mortgaged Properties is encumbered by any lien junior to the lien of the
related Mortgage.
31. Actions Concerning Mortgage Loans. To the knowledge of Seller, there are no
actions, suits or proceedings before any court, administrative agency or
arbitrator concerning any Mortgage Loan, Mortgagor or related Mortgaged Property
that might adversely affect title to the Mortgaged Property or the validity or
enforceability of the related Mortgage or that might materially and adversely
affect the value of the Mortgaged Property as security for the Mortgage Loan or
the use for which the premises were intended.
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32. Servicing. The servicing and collection practices used by Seller or any
prior holder or servicer of each Mortgage Loan have been in all material
respects legal, proper and prudent and have met customary industry standards.
33. Licenses and Permits. To Seller's knowledge, based on due diligence that it
customarily performs in the origination of comparable mortgage loans, as of the
date of origination of each Mortgage Loan or as of the date of the sale of the
related Mortgage Loan by Seller hereunder, the related Mortgagor was in
possession of all material licenses, permits and franchises required by
applicable law for the ownership and operation of the related Mortgaged Property
as it was then operated.
34. Assisted Living Facility Regulation. If the Mortgaged Property is operated
as an assisted living facility, to Seller's knowledge (a) the related Mortgagor
is in compliance in all material respects with all federal and state laws
applicable to the use and operation of the related Mortgaged Property and (b) if
the operator of the Mortgaged Property participates in Medicare or Medicaid
programs, the facility is in compliance in all material respects with the
requirements for participation in such programs.
35. Collateral in Trust. The Mortgage Note for each Mortgage Loan is not secured
by a pledge of any collateral that has not been assigned to Purchaser.
36. Due on Sale. Each Mortgage Loan contains a "due on sale" clause, which
provides for the acceleration of the payment of the unpaid principal balance of
the Mortgage Loan if, without prior written consent of the holder of the
Mortgage, the property subject to the Mortgage or any material portion thereof,
or a controlling interest in the related Mortgagor, is transferred, sold or
encumbered by a junior mortgage or deed of trust; provided, however, that
certain Mortgage Loans provide a mechanism for the assumption of the loan by a
third party upon the Mortgagor's satisfaction of certain conditions precedent,
and upon payment of a transfer fee, if any, or transfer of interests in the
Mortgagor or constituent entities of the Mortgagor to a third party or parties
related to the Mortgagor upon the Mortgagor's satisfaction of certain conditions
precedent.
37. Single Purpose Entity. The Mortgagor on each Mortgage Loan with a Cut-Off
Date Principal Balance in excess of $10 million, was, as of the origination of
the Mortgage Loan, a Single Purpose Entity. For this purpose, a "Single Purpose
Entity" shall mean an entity, other than an individual, whose organizational
documents provide substantially to the effect that it was formed or organized
solely for the purpose of owning and operating one or more of the Mortgaged
Properties securing the Mortgage Loans and prohibit it from engaging in any
business unrelated to such Mortgaged Property or Properties, and whose
organizational documents further provide, or which entity represented in the
related Mortgage Loan documents, substantially to the effect that it does not
have any assets other than those related to its interest in and operation of
such Mortgaged Property or Properties, or any indebtedness other than as
permitted by the related Mortgage(s) or the other related Mortgage Loan
documents, that it has its own books and records and accounts separate and apart
from any other person (other than a Mortgagor for a Mortgage Loan that is
cross-collateralized and cross-defaulted with the related Mortgage Loan), and
that it holds itself out as a legal entity, separate and apart from any other
person.
2-11
38. Non-Recourse Exceptions. The Mortgage Loan documents for each Mortgage Loan
provide that such Mortgage Loan constitutes either (a) the recourse obligations
of at least one natural person or (b) the non-recourse obligations of the
related Mortgagor, provided that at least one natural person (and the Mortgagor
if the Mortgagor is not a natural person) is liable to the holder of the
Mortgage Loan for damages arising in the case of fraud or willful
misrepresentation by the Mortgagor, misappropriation of rents, insurance
proceeds or condemnation awards and breaches of the environmental covenants in
the Mortgage Loan documents.
39. Defeasance and Assumption Costs. The related Mortgage Loan documents provide
that the related borrower is responsible for the payment of all reasonable costs
and expenses of the lender incurred in connection with the defeasance of such
Mortgage Loan and the release of the related Mortgaged Property, and the
borrower is required to pay all reasonable costs and expenses of the lender
associated with the approval of an assumption of such Mortgage Loan.
40. Defeasance. No Mortgage Loan provides that (i) it can be defeased until the
date that is more than two years after the Closing Date, (ii) that it can be
defeased with any property other than government securities (as defined in
Section 2(a)(16) of the Investment Company Act of 1940, as amended) or any
direct non-callable security issued or guaranteed as to principal or interest by
the United States that will provide interest and principal payments sufficient
to satisfy scheduled payments of interest and principal as required under the
related Mortgage Loan, or (iii) defeasance requires the payment of any
consideration other than (a) reimbursement of incidental costs and expenses
and/or (b) a specified dollar amount or an amount that is based on a formula
that uses objective financial information (as defined in Treasury Regulation
Section 1.446-3(c)(4)(ii)).
41. Prepayment Premiums. As of the applicable date of origination of each such
Mortgage Loan, any prepayment premiums and yield maintenance charges payable
under the terms of the Mortgage Loans, in respect of voluntary prepayments,
constituted customary prepayment premiums and yield maintenance charges for
commercial mortgage loans.
42. Terrorism Insurance. With respect to each Mortgage Loan that has a principal
balance as of the Cut-off Date that is greater than or equal to $20,000,000, the
related all risk insurance policy and business interruption policy do not
specifically exclude Acts of Terrorism, as defined in the Terrorism Risk
Insurance Act of 2002, from coverage, or if such coverage is excluded, is
covered by a separate terrorism insurance policy. With respect to each other
Mortgage Loan, the related all risk insurance policy and business interruption
policy did not as of the date of origination of the Mortgage Loan, and, to
Seller's knowledge, do not, as of the date hereof, specifically exclude Acts of
Terrorism from coverage, or if such coverage is excluded, it is covered by a
separate terrorism insurance policy. With respect to each of the Mortgage Loans,
the related Mortgage Loan documents do not expressly waive or prohibit the
mortgagee from requiring coverage for acts of terrorism or damages related
thereto, except to the extent that any right to require such coverage may be
limited by commercially reasonable availability, or as otherwise indicated on
Schedule A.
43. Foreclosure Property. Seller is not selling any Mortgage Loan as part of a
plan to transfer the underlying Mortgaged Property to Purchaser, and Seller does
not know or, to Seller's knowledge, have reason to know that any Mortgage Loan
will default. The representations in
2-12
this paragraph 43 are being made solely for the purpose of determining whether
the Mortgaged Property, if acquired by the Trust, would qualify as "foreclosure
property" within the meaning of Section 860G(a)(8) of the Code, and may not be
relied upon or used for any other purpose. Such representations shall not be
construed as a guarantee to any degree that defaults or losses will not occur.
2-13
Schedule A
Exceptions to Representations and Warranties
LOAN NO. - 754999 [1863 UNION AVENUE]
EXPLANATION:
Until 1977, a portion of the Property was a filling station. No documentation
was provided to the Phase I engineer and only one ground water monitoring well
had data, which was 12 years old, available. The Phase I report recommended that
a Phase II report be done to determine if any of the tanks are still present and
whether or not there has been any adverse environmental impact on the Mortgaged
Property. No Phase II was done but the Mortgage Loan is fully recourse to the
guarantor until a "case closed" letter is provided.
REP. NO. 14- INSURANCE
LOAN NO. 754912 [MONTICELLO MALL]
EXPLANATION:
The Mortgage Loan Documents permit the tenant to self-insure if SuperValu's net
worth is at least $100,000,000 and there is no tenant default. Currently, the
tenant has not exercised its right to self-insure.
LOAN NO. 754999 [1863 UNION AVENUE]
EXPLANATION:
The Mortgage Loan does not provide for business interruption or rental loss
insurance. The collateral for the Mortgage Loan is a land only. The three
tenants, Walgreen Co, Chili's Inc and Xxxxx'x Roadhouse, Inc, own their
buildings. Walgreen may not terminate its lease unless the casualty is greater
than 50%. Chilis may not terminate it lease, which expires 9/12/2008, unless the
casualty occurs during the last 2 years of the term or the last two years of any
renewal. And, Xxxxx'x Roadhouse may not terminate its lease, which expires
7/31/2017, unless the casualty occurs during the last 5 years of the lease. The
Mortgage Loan has a twenty-year amortizing schedule. The LTV for the Mortgage
Loan is 59.4%.
LOAN NO. 755036 [10454 RICHMOND AVENUE]
EXPLANATION:
The Mortgage Loan does not provide for business interruption or rental loss
insurance. The collateral for the Mortgage Loan is a land only. The tenant, Xxxx
in the Box Eastern Division, LP, can not terminate its lease unless the casualty
(i) occurs in the last 3 years of the term of the lease and has a material
impact on the tenant or (ii) is uninsured which is defined to not include any
risk required to be insured under the lease's all risk provisions or relating to
flood and rising water damage. The LTV for the Mortgage Loan is 45.3%.
REP. NO. 25- RELEASES
LOAN NO. 755140 [XXXXXXXX MALL]
EXPLANATION:
The Mortgage Loan Documents provide for the release of identified income
producing out-parcels, provided that if the DSCR is less than 1.63 times on a
trailing twelve month period, Borrower must post cash or a letter of credit with
the Lender in an amount specified in the Loan Documents for the out-parcel
released. Those amounts can be released when the DSCR is at least 1.63 times
debt service on a trailing twelve-month period. If the debt service coverage
again falls below 1.63 times, the cash or letter of credit will be required to
be provided to the Lender. The release(s) will require that the Borrower satisfy
certain legal and underwriting requirements, and will require the issuance of a
REMIC opinion. There is no pay-down required in conjunction with the out-parcel
release(s).
REP. XX. 00 - XXXXX XXX XXXXXXXXXX
XXXX XX. 000000 [309 XXXXX STREET]
EXPLANATION:
The Mortgage Loan has no on-site parking and is approximately 88 spaces short of
current parking requirements. The building violates set back lines along the
rear of the building by 15 ft. The current use is legal non-conforming. The
building can be rebuilt to the same use, regardless of percentage of
destruction/damage, provided the destruction of the building was accidental and
rebuilding or restoration is started within 12 months and is completed within a
reasonable time as determined by the Inspector of Buildings.
LOAN NO. 755051 [650 WASHINGTON ROAD]
EXPLANATION:
The building on the Property encroaches 14 ft onto the 25 ft rear setback
requirement. The Property is also 162 parking spaces short of compliance with
the required 282 parking spaces. Both are considered legal nonconforming uses.
In the event of any casualty, the Property may be rebuilt if the re-construction
is started within 1 year and diligently completed. In addition, the title
company has insured against forced removal of the property relating to the
setback violation.
REP. NO. 37 - SINGLE PURPOSE ENTITY
LOAN NO. 755034 [THE LEGACY UNITS]
EXPLANATION:
The Borrower is not a single purpose entity. The LTV for the Mortgage Loan is
52%. The Mortgage Loan is fully recourse to Xxxxxxx and Xxxxxxx Xxxxx.
LOAN NO. 755062 [NORTH POINT CENTER]
EXPLANATION -
The Borrower is not a single purpose entity structure. The Borrower is required,
per the loan documents, to transfer the interest of each tenant in common to a
single purpose entity known as North Pointe Fresno, LLC ("SPE Transfer") by
April 15, 2008. If the Borrower does not comply, Lender has the right to further
extend the date at its sole option or require a monthly escrow of $65,000
beginning May 1, 2009 and continuing until such time as the transfer has
occurred. The LTV for the Mortgage Loan is 61%.
REP. NO. 38 - NON-RECOURSE EXCEPTIONS
LOAN NO. 755038 [MILLENNIUM FINANCIAL CENTER]
EXPLANATION:
The Mortgage Loan does not have at least one natural person liable to Lender for
damages arising from breaches of the environmental covenants in the Loan
Documents occurring from the date of closing. There is an environmental policy
that addresses past environmental contamination.
LOAN NO. 754842 [4633 LA PALMA AVENUE]
EXPLANATION:
The Mortgage Loan does not have at least one natural person liable to Lender for
damages arising from fraud or willful misrepresentation by the Mortgagor,
misappropriation of rents, insurance proceeds or condemnation awards and
breaches of the environmental covenants in the Loan Documents. Sares-Regis
Group, the guarantor, must maintain a minimum net worth of $3,500,000.
Sares-Regis Group, audited financial statements show a net worth of $12.0
million with approximately $9.7 million in liquid assets as of 12/31/2005.
LOAN NO. 754913 [14401 COUNTY ROAD 212]
EXPLANATION:
The Mortgage Loan does not have at least one natural person liable to Lender for
damages arising from fraud or willful misrepresentation by the Mortgagor,
misappropriation of rents, insurance proceeds or condemnation awards and
breaches of the environmental covenants in the Loan Documents. The LTV for the
Mortgage Loan is 43%. The Property is 100% leased, through 06/25/2016, to Best
Buy Co. Inc., an investment grade rated entity.
LOAN NO. 755044 [2213 XXXXXXXXX]
EXPLANATION:
The Mortgage Loan does not have at least one natural person liable to Lender for
damages arising from fraud or willful misrepresentation by the Mortgagor,
misappropriation of rents, insurance proceeds or condemnation awards and
breaches of the environmental covenants in the Loan Documents. The LTV for the
Mortgage Loan is 60% with a 25-year amortization schedule. The loan guarantor
must maintain a minimum tangible net worth of $1,000,000.
LOAN NO. 755067 [BAPTIST NORTH MEDICAL CENTER]
EXPLANATION -
The Mortgage Loan does not have at least one natural person liable to Lender for
damages arising from fraud or willful misrepresentation by the Mortgagor,
misappropriation of rents, insurance proceeds or condemnation awards and
breaches of the environmental covenants in the Loan Documents. The subject
property is 100% master leased through 12/31/2020 to Baptist Hospital, whose
parent company, Ascension Health, is an investment grade company. The Mortgage
Loan matures on 07/01/2016.
LOAN NO. 755138 [NOKIA BUILDING]
EXPLANATION:
The Mortgage Loan does not have at least one natural person liable to Lender for
damages arising from fraud or willful misrepresentation by the Mortgagor,
misappropriation of rents, insurance proceeds or condemnation awards and
breaches of the environmental covenants in the Loan Documents. The LTV for the
Mortgage Loan is 49.7%.
LOAN XX. 000000 [XXXXXXXX XXXX]
EXPLANATION:
The Mortgage Loan does not have at least one natural person liable to Lender for
damages arising from fraud or willful misrepresentation by the Mortgagor,
misappropriation of rents, insurance proceeds or condemnation awards and
breaches of the environmental covenants in the Loan Documents. The LTV for the
Mortgage Loan is 58.5%.
Schedule B
List of Mortgagors that are Third-Party Beneficiaries Under Section 5.5
None
Schedule C
List of Mortgage Loans Subject to Secured Creditor Impaired Property Policies
EXHIBIT 3
PRICING FORMULATION
Total Bond Proceeds $1,602,911,567
Less Expenses ($5,079,831)
--------------
Net Proceeds $1,597,831,736 1,597,831,736
Less Purchase Price of BS Loans
Discounted Value of BS Loans $ 435,187,621
Allocable Expense Amount for BS Loans ($1,084,974)
--------------
Purchase Price of BS Loans $ 434,102,646 ($434,102,646)
Less Purchase Price of WF Loans
Discounted Value of WF Loans $ 390,730,403
Allocable Expense Amount for WF Loans ($1,349,108)
--------------
Purchase Price of WF Loans $ 389,381,295 ($389,381,295)
Less Purchase Price of PCF Loans
Discounted Value of PCF Loans $ 393,012,739
Allocable Expense Amount for PCF Loans ($1,423,948)
--------------
Purchase Price of PCF Loans $ 391,588,791 ($391,588,791)
Less Purchase Price of MS Loans
Discounted Value of MS Loans $ 385,068,054
Allocable Expense Amount for MS Loans ($1,221,800)
--------------
Purchase Price of MS Loans $ 383,846,254 ($383,846,254)
Remaining Proceeds ($1,087,249)
BS Share of Remaining Proceeds ($294,986)
WF Share of Remaining Proceeds ($264,851)
PCF Share of Remaining Proceeds ($266,398)
MS Share of Remaining Proceeds ($261,013)
Total Proceeds Allocated to BS $ 433,807,660
Total Proceeds Allocated to WF $ 389,116,443
Total Proceeds Allocated to PCF $ 391,322,392
Total Proceeds Allocated to MS $ 383,585,240
3-1
EXHIBIT 4
XXXX OF SALE
1. Parties. The parties to this Xxxx of Sale are the following:
Seller: Principal Commercial Funding II, LLC
Purchaser: Xxxxxx Xxxxxxx Capital I Inc.
2. Sale. For value received, Seller hereby conveys to Purchaser, without
recourse, all right, title and interest in and to the Mortgage Loans identified
on Exhibit 1 (the "Mortgage Loan Schedule") to the Mortgage Loan Purchase
Agreement, dated as of July 19, 2006 (the "Mortgage Loan Purchase Agreement"),
between Seller and Purchaser and all of the following property:
(a) All accounts, general intangibles, chattel paper, instruments,
documents, money, deposit accounts, certificates of deposit, goods, letters
of credit, advices of credit and investment property consisting of, arising
from or relating to any of the following property: the Mortgage Loans
identified on the Mortgage Loan Schedule including the related Mortgage
Notes, Mortgages, security agreements, and title, hazard and other
insurance policies, all distributions with respect thereto payable after
the Cut-Off Date, all substitute or replacement Mortgage Loans and all
distributions with respect thereto, and the Mortgage Files;
(b) All accounts, general intangibles, chattel paper, instruments,
documents, money, deposit accounts, certificates of deposit, goods, letters
of credit, advices of credit, investment property, and other rights arising
from or by virtue of the disposition of, or collections with respect to, or
insurance proceeds payable with respect to, or claims against other Persons
with respect to, all or any part of the collateral described in clause (a)
above (including any accrued discount realized on liquidation of any
investment purchased at a discount); and
(c) All cash and non-cash proceeds of the collateral described in
clauses (a) and (b) above.
3. Purchase Price. The amount and other consideration set forth on Exhibit 3 to
the Mortgage Loan Purchase Agreement.
4. Definitions. Terms used but not defined herein shall have the meanings
assigned to them in the Mortgage Loan Purchase Agreement.
4-1
IN WITNESS WHEREOF, each of the parties hereto has caused this Xxxx of Sale to
be duly executed and delivered on this 19th day of July, 2006.
SELLER: PRINCIPAL COMMERCIAL FUNDING II, LLC
By:
------------------------------------
Name:
------------------------------
Title:
-----------------------------
PURCHASER: XXXXXX XXXXXXX CAPITAL I INC.
By:
------------------------------------
Name:
------------------------------
Title:
-----------------------------
EXHIBIT 5
FORM OF LIMITED POWER OF ATTORNEY
TO LASALLE BANK NATIONAL ASSOCIATION
AND ARCAP SERVICING, INC.
WITH RESPECT TO
XXXXXX XXXXXXX CAPITAL I INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 2006-TOP23
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, pursuant to the terms of the Mortgage Loan Purchase Agreement
dated as of July 19, 2006 (the "Mortgage Loan Purchase Agreement"), between
Principal Commercial Funding II, LLC ("Principal II") and Xxxxxx Xxxxxxx Capital
I Inc. ("Depositor"), Principal II is selling certain multifamily and commercial
mortgage loans (the "Mortgage Loans") to Depositor;
WHEREAS, pursuant to the terms of the Pooling and Servicing Agreement dated
as of August 1, 2006 (the "Pooling and Servicing Agreement"), between the
Depositor, Xxxxx Fargo Bank, National Association, as Master Servicer, ARCap
Servicing, Inc. ("ARCAP") as Special Servicer, LaSalle Bank National Association
("LaSalle") as Trustee and Xxxxx Fargo Bank, National Association, as Paying
Agent, the Trustee and the Special Servicer are granted certain powers,
responsibilities and authority in connection with the completion and the filing
and recording of assignments of mortgage, deeds of trust or similar documents,
Form UCC-2 and UCC-3 assignments of financing statements, reassignments of
assignments of leases, rents and profits and other Mortgage Loan documents
required to be filed or recorded in appropriate public filing and recording
offices;
WHEREAS, Principal II has agreed to provide this Limited Power of Attorney
pursuant to the Mortgage Loan Purchase Agreement;
NOW, THEREFORE, Principal II does hereby make, constitute and appoint
LaSalle, acting solely in its capacity as Trustee under, and in accordance with
the terms of, the Pooling and Servicing Agreement, Principal II's true and
lawful agent and attorney-in-fact with respect to each Mortgage Loan in
Principal II's name, place and stead: (i) to complete (to the extent necessary)
and to cause to be submitted for filing or recording in the appropriate public
filing or recording offices, all assignments of mortgage, deeds of trust or
similar documents, assignments or reassignments of rents, leases and profits, in
each case in favor of the Trustee, as set forth in the definition of "Mortgage
File" in Section 1.1 of the Pooling and Servicing Agreement, that have been
received by the Trustee or a Custodian on its behalf, and all Form UCC-2 or
UCC-3 assignments of financing statements and all other comparable instruments
or documents with respect to the Mortgage Loans which are customarily and
reasonably necessary or appropriate to assign agreements, documents and
instruments pertaining to the Mortgage Loans, in each case in favor of the
Trustee as set forth in the definition of "Mortgage File" in, and in accordance
with Section 1.1 of, the Pooling and Servicing Agreement, and to evidence,
provide notice of and perfect such assignments and conveyances in favor of the
Trustee in the public records of the
5-1
appropriate filing and recording offices; and (ii) to file or record in the
appropriate public filing or recording offices, all other Mortgage Loan
documents to be recorded under the terms of the Pooling and Servicing Agreement
or any such Mortgage Loan documents which have not been submitted for filing or
recordation by Principal II on or before the date hereof or which have been so
submitted but are subsequently lost or returned unrecorded or unfiled as a
result of actual or purported defects therein, in order to evidence, provide
notice of and perfect such documents in the public records of the appropriate
filing and recording offices. Notwithstanding the foregoing, this Limited Power
of Attorney shall grant to LaSalle and ARCAP only such powers, responsibilities
and authority as are set forth in Section 2.1 of the Mortgage Loan Purchase
Agreement.
Principal II does also hereby make, constitute and appoint ARCAP, acting
solely in its capacity as Special Servicer under the Pooling and Servicing
Agreement, Principal II's true and lawful agent and attorney-in-fact with
respect to the Mortgage Loans in Principal II's name, place and stead solely to
exercise and perform all of the rights, authority and powers of LaSalle as set
forth in the preceding paragraph in the event of the failure or the incapacity
of LaSalle to do so for any reason. As between ARCAP and any third party, no
evidence of the failure or incapacity of LaSalle shall be required and such
third party may rely upon ARCAP's written statement that it is acting pursuant
to the terms of this Limited Power of Attorney.
ARTICLE I.
The enumeration of particular powers herein is not intended in any way to
limit the grant to either the Trustee or the Special Servicer as Principal II's
attorney-in-fact of full power and authority with respect to the Mortgage Loans
to complete (to the extent necessary), file and record any documents,
instruments or other writings referred to above as fully, to all intents and
purposes, as Principal II might or could do if personally present, hereby
ratifying and confirming whatsoever such attorney-in-fact shall and may do by
virtue hereof; and Principal II agrees and represents to those dealing with such
attorney-in-fact that they may rely upon this Limited Power of Attorney until
termination thereof under the provisions of Article III below. As between
Principal II, the Depositor, the Master Servicer, the Special Servicer, the
Trustee, the Trust Fund and the Certificateholders, neither the Trustee nor the
Special Servicer may exercise any right, authority or power granted by this
Limited Power of Attorney in a manner which would violate the terms of the
Pooling and Servicing Agreement, but any and all third parties dealing with
either the Trustee or the Special Servicer as Principal II's attorney-in-fact
may rely completely, unconditionally and conclusively on the authority of the
Trustee or the Special Servicer, as applicable, and need not make any inquiry
about whether the Trustee or the Special Servicer is acting pursuant to the
Pooling and Servicing Agreement. Any purchaser, title insurance company or other
third party may rely upon a written statement by either the Trustee or the
Special Servicer that any particular Mortgage Loan or related mortgaged real
property in question is subject to and included under this Limited Power of
Attorney and the Pooling and Servicing Agreement.
Any act or thing lawfully done hereunder by either the Trustee or the
Special Servicer shall be binding on Principal II and Principal II's successors
and assigns.
This Limited Power of Attorney shall continue in full force and effect with
respect to the Trustee and the Special Servicer, as applicable, until the
earliest occurrence of any of the following events:
with respect to the Trustee, the termination of the Trustee and its
replacement with a successor Trustee under the terms of the Pooling and
Servicing Agreement;
with respect to the Special Servicer, the termination of the Special
Servicer and its replacement with a successor Special Servicer under the
terms of the Pooling and Servicing Agreement;
with respect to the Trustee, the appointment of a receiver or conservator
with respect to the business of the Trustee, or the filing of a voluntary
or involuntary petition in bankruptcy by or against the Trustee;
with respect to the Special Servicer, the appointment of a receiver or
conservator with respect to the business of the Special Servicer, or the
filing of a voluntary or involuntary petition in bankruptcy by or against
the Special Servicer;
with respect to each of the Trustee and the Special Servicer and any
Mortgage Loan, such Mortgage Loan is no longer a part of the Trust Fund;
with respect to each of the Trustee and the Special Servicer, the
termination of the Pooling and Servicing Agreement in accordance with its
terms; and
with respect to the Special Servicer, the occurrence of an Event of Default
under the Pooling and Servicing Agreement with respect to the Special
Servicer.
Nothing herein shall be deemed to amend or modify the Pooling and Servicing
Agreement, the Mortgage Loan Purchase Agreement or the respective rights, duties
or obligations of Principal II under the Mortgage Loan Purchase Agreement, and
nothing herein shall constitute a waiver of any rights or remedies under the
Pooling and Servicing Agreement.
Capitalized terms used but not defined herein have the respective meanings
assigned thereto in the Mortgage Loan Purchase Agreement.
THIS LIMITED POWER OF ATTORNEY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES APPLIED IN NEW YORK.
[Signature on next page]
IN WITNESS WHEREOF, Principal II has caused this instrument to be executed
and its corporate seal to be affixed hereto by its officer duly authorized as of
August 3, 2006.
PRINCIPAL COMMERCIAL FUNDING II, LLC.
By: PRINCIPAL REAL ESTATE INVESTORS, LLC, a
Delaware limited liability company, as its
manager
By:
----------------------------------------
Name:
--------------------------------------
Title:
--------------------------------------
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
ACKNOWLEDGEMENT
STATE OF _____________ )
) ss:
COUNTY OF ____________ )
On this ____ day of August, 2006, before me appeared _____________________,
and _____________________________________ to me personally known, who, being by
me duly sworn did say that he/she and he/she are the _____________________ and
____________________________ of Principal Commercial Funding II, LLC, and that
the seal affixed to the foregoing instrument is the corporate seal of said
corporation, and that said instrument was signed and sealed in behalf of said
corporation by authority of its board of directors, and said __________________
acknowledged said instrument to be the free act and deed of said corporation.
----------------------------------------------
Name:
----------------------------------------
Notary Public in and for said County and
State
My Commission Expires:
----------------------------------