EXHIBIT 99.2
MORTGAGE LOAN PURCHASE AGREEMENT
This Mortgage Loan Purchase Agreement, dated as of August 1, 2006
(this "Agreement"), is entered into between NOMURA CREDIT & CAPITAL, INC. (the
"Seller") and WACHOVIA COMMERCIAL MORTGAGE SECURITIES, INC. (the "Purchaser").
The Seller intends to sell and the Purchaser intends to purchase
certain multifamily and commercial mortgage loans (the "Mortgage Loans")
identified on the schedule (the "Mortgage Loan Schedule") annexed hereto as
Exhibit A. The Purchaser intends to deposit the Mortgage Loans, along with
certain other mortgage loans (the "Other Mortgage Loans"), into a trust fund
(the "Trust Fund"), the beneficial ownership of which will be evidenced by
multiple classes (each, a "Class") of mortgage pass-through certificates (the
"Certificates"). One or more "real estate mortgage investment conduit" ("REMIC")
elections will be made with respect to most of the Trust Fund. The Trust Fund
will be created and the Certificates will be issued pursuant to a pooling and
servicing agreement (the "Pooling and Servicing Agreement"), dated as of August
1, 2006, among the Purchaser, as depositor, Wachovia Bank, National Association,
as master servicer (in such capacity, the "Master Servicer"), LNR Partners,
Inc., as special servicer (the "Special Servicer") and Xxxxx Fargo Bank, N.A.,
as trustee (the "Trustee"). Capitalized terms used but not defined herein
(including the Schedules attached hereto) have the respective meanings set forth
in the Pooling and Servicing Agreement.
Now, therefore, in consideration of the premises and the mutual
agreements set forth herein, the parties agree as follows:
SECTION 1. Agreement to Purchase.
The Seller agrees to sell, and the Purchaser agrees to purchase, the
Mortgage Loans identified on the Mortgage Loan Schedule. The Mortgage Loan
Schedule may be amended to reflect the actual Mortgage Loans delivered to the
Purchaser pursuant to the terms hereof. The Mortgage Loans are expected to have
an aggregate principal balance of $639,859,272 (the "Nomura Mortgage Loan
Balance") (subject to a variance of plus or minus 5.0%) as of the close of
business on the Cut-Off Date, after giving effect to any payments due on or
before such date, whether or not such payments are received.
The Nomura Mortgage Loan Balance, together with the aggregate
principal balance of the Other Mortgage Loans as of the Cut-Off Date (after
giving effect to any payments due on or before such date whether or not such
payments are received), is expected to equal an aggregate principal balance (the
"Cut-Off Date Pool Balance") of $3,079,909,568 (subject to a variance of plus or
minus 5.0%). The purchase and sale of the Mortgage Loans shall take place August
23, 2006, or such other date as shall be mutually acceptable to the parties to
this Agreement (the "Closing Date"). The consideration (the "Aggregate Purchase
Price") for the Mortgage Loans shall be equal to (i) % of the Nomura
Mortgage Loan Balance as of the Cut-Off Date, plus (ii) $2,462,554, which amount
represents the amount of interest accrued on the Nomura Mortgage Loan Balance at
the related Net Mortgage Rate for the period from and including the Cut-Off Date
up to but not including the Closing Date but does not reflect any deduction for
any fees and/or expenses incurred in connection with this transaction.
The Aggregate Purchase Price shall be paid to the Seller or its
designee by wire transfer in immediately available funds on the Closing Date.
SECTION 2. Conveyance of Mortgage Loans.
(a) Effective as of the Closing Date, subject only to receipt by the
Seller of the Aggregate Purchase Price and satisfaction of the other conditions
to closing that are for the benefit of the Seller, the Seller does hereby sell,
transfer, assign, set over and otherwise convey to the Purchaser, without
recourse (except as set forth in this Agreement), all the right, title and
interest of the Seller in and to the Mortgage Loans identified on the Mortgage
Loan Schedule as of such date, on a servicing released basis, together with all
of the Seller's right, title and interest in and to the proceeds of any related
title, hazard, primary mortgage or other insurance proceeds.
(b) The Purchaser or its assignee shall be entitled to receive all
scheduled payments of principal and interest due after the Cut-Off Date, and all
other recoveries of principal and interest collected after the Cut-Off Date
(other than in respect of principal and interest on the Mortgage Loans due on or
before the Cut-Off Date). All scheduled payments of principal and interest due
on or before the Cut-Off Date but collected on or after the Cut-Off Date, and
recoveries of principal and interest collected on or before the Cut-Off Date
(only in respect of principal and interest on the Mortgage Loans due on or
before the Cut-Off Date and principal prepayments thereon), shall belong to, and
shall be promptly remitted to, the Seller.
(c) No later than the Closing Date, the Seller shall, on behalf of
the Purchaser, deliver to the Trustee, the documents and instruments specified
below with respect to each Mortgage Loan (each a "Mortgage File"). All Mortgage
Files so delivered will be held by the Trustee in escrow at all times prior to
the Closing Date. Each Mortgage File shall contain the following documents:
(i) the original executed Mortgage Note including any power of
attorney related to the execution thereof, together with any and all
intervening endorsements thereon, endorsed on its face or by allonge
attached thereto (without recourse, representation or warranty, express or
implied) to the order of "Xxxxx Fargo Bank, N.A., as trustee for the
registered holders of Wachovia Bank Commercial Mortgage Trust, Commercial
Mortgage Pass-Through Certificates, Series 2006-C27" or in blank (or a
lost note affidavit and indemnity with a copy of such Mortgage Note
attached thereto);
(ii) an original or copy of the Mortgage, together with any and all
intervening assignments thereof, in each case (unless not yet returned by
the applicable recording office) with evidence of recording indicated
thereon or certified by the applicable recording office;
(iii) an original or copy of any related Assignment of Leases (if
such item is a document separate from the Mortgage), together with any and
all intervening assignments thereof, in each case (unless not yet returned
by the applicable recording office) with evidence of recording indicated
thereon or certified by the applicable recording office;
(iv) an original executed assignment, in recordable form (except for
any missing recording information), of (a) the Mortgage, (b) any related
Assignment of Leases (if such item is a document separate from the
Mortgage and to the extent not already assigned pursuant to preceding
clause (a) and (c) any other recorded document relating to the Mortgage
Loan otherwise included in the Mortgage File, in favor of "Xxxxx Fargo
Bank, N.A., as trustee for the registered holders of Wachovia Bank
Commercial Mortgage Trust, Commercial Mortgage Pass-Through Certificates,
Series 2006-C27", or in blank;
(v) an original assignment of all unrecorded documents relating to
the Mortgage Loan (to the extent not already assigned pursuant to clause
(iv) above), in favor of "Xxxxx Fargo Bank, N.A., as trustee for the
registered holders of Wachovia Bank Commercial Mortgage Trust, Commercial
Mortgage Pass-Through Certificates, Series 2006-C27", or in blank;
(vi) originals or copies of any modification, consolidation,
assumption and substitution agreements in those instances where the terms
or provisions of the Mortgage or Mortgage Note have been consolidated or
modified or the Mortgage Loan has been assumed or consolidated;
(vii) the original or a copy of the policy or certificate of
lender's title insurance or, if such policy has not been issued or
located, an original or copy of an irrevocable, binding commitment (which
may be a marked version of the policy that has been executed by an
authorized representative of the title company or an agreement to provide
the same pursuant to binding escrow instructions executed by an authorized
representative of the title company) to issue such title insurance policy;
(viii) any filed copies (bearing evidence of filing) or other
evidence of filing satisfactory to the Purchaser of any prior UCC
Financing Statements in favor of the originator of such Mortgage Loan or
in favor of any assignee prior to the Trustee (but only to the extent the
Seller had possession of such UCC Financing Statements prior to the
Closing Date) and, if there is an effective UCC Financing Statement and
continuation statement in favor of the Seller on record with the
applicable public office for UCC Financing Statements, an original UCC
Amendment, in form suitable for filing in favor of "Xxxxx Fargo Bank,
N.A., as trustee for the registered holders of Wachovia Bank Commercial
Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Series
2006-C27, as assignee", or in blank;
(ix) an original or copy of (a) any Ground Lease, Memorandum of
Ground Lease and ground lessor estoppel, (b) any loan guaranty or
indemnity and (c) any environmental insurance policy;
(x) any intercreditor agreement relating to permitted debt
(including, without limitation, mezzanine debt) of the Mortgagor;
(xi) copies of any loan agreement, escrow agreement or security
agreement relating to such Mortgage Loan;
(xii) a copy of any letter of credit and related transfer documents
relating to such Mortgage Loan;
(xiii) copies of any management agreements and applicable transfer
or assignment documents;
(xiv) copies of any cash management agreements and applicable
transfer or assignment documents;
(xv) copies of franchise agreements and franchisor comfort letters,
if any, for hospitality properties and applicable transfer or assignment
documents; and
(xvi) with respect to any Companion Loan, all of the above documents
with respect to such Companion Loan and the related Intercreditor
Agreement; provided that a copy of each Mortgage Note relating to such
Companion Loan, rather than the original, shall be provided, and no
assignments shall be provided.
(d) The Seller shall take all actions reasonably necessary (i) to
permit the Trustee to fulfill its obligations pursuant to Section 2.01(d) of the
Pooling and Servicing Agreement and (ii) to perform its obligations described in
Section 2.01(d) of the Pooling and Servicing Agreement. Without limiting the
generality of the foregoing, if a draw upon a letter of credit is required
before its transfer to the Trust Fund can be completed, the Seller shall draw
upon such letter of credit for the benefit of the Trust Fund pursuant to written
instructions from the Master Servicer. The Seller shall reimburse the Trustee
for all reasonable costs and expenses, if any, incurred by the Trustee for
recording any documents described in Section 2(c)(iv)(c) hereof and filing any
assignments of UCC Financing Statements described in the proviso in the third to
last sentence in Section 2.01(d) of the Pooling and Servicing Agreement.
(e) All documents and records (except draft documents, privileged
communications and internal correspondence and credit, due diligence and other
underwriting analysis, documents, data or internal worksheets, memoranda,
communications and evaluations of the Seller) relating to each Mortgage Loan and
in the Seller's possession (the "Additional Mortgage Loan Documents") that are
not required to be delivered to the Trustee shall promptly be delivered or
caused to be delivered by the Seller to the Master Servicer or at the direction
of the Master Servicer to the appropriate sub-servicer, together with any
related escrow amounts and reserve amounts.
(f) The Seller shall take such actions as are reasonably necessary
to assign or otherwise grant to the Trust Fund the benefit of any letters of
credit in the name of the Seller which secure any Mortgage Loan.
SECTION 3. Representations, Warranties and Covenants of Seller.
(a) The Seller hereby represents and warrants to and covenants with
the Purchaser, as of the date hereof, that:
(i) The Seller is a corporation organized and validly existing and
in good standing under the laws of the State of Delaware and possesses all
requisite authority, power, licenses, permits and franchises to carry on
its business as currently conducted by it and to execute, deliver and
comply with its obligations under the terms of this Agreement;
(ii) This Agreement has been duly and validly authorized, executed
and delivered by the Seller and, assuming due authorization, execution and
delivery hereof by the Purchaser, constitutes a legal, valid and binding
obligation of the Seller, enforceable against the Seller in accordance
with its terms, except as such enforcement may be limited by bankruptcy,
insolvency, reorganization, receivership, moratorium and other laws
relating to or affecting the enforcement of creditors' rights in general,
and by general equity principles (regardless of whether such enforcement
is considered in a proceeding in equity or at law) and by public policy
considerations underlying the securities laws, to the extent that such
public policy considerations limit the enforceability of the provisions of
this Agreement which purport to provide indemnification from liabilities
under applicable securities laws;
(iii) The execution and delivery of this Agreement by the Seller and
the Seller's performance and compliance with the terms of this Agreement
will not (A) violate the Seller's certificate of incorporation or bylaws,
(B) violate any law or regulation or any administrative decree or order to
which it is subject or (C) constitute a material default (or an event
which, with notice or lapse of time, or both, would constitute a material
default) under, or result in the breach of, any material contract,
agreement or other instrument to which the Seller is a party or by which
the Seller is bound;
(iv) The Seller is not in default with respect to any order or
decree of any court or any order, regulation or demand of any federal,
state, municipal or other governmental agency or body, which default might
have consequences that would, in the Seller's reasonable and good faith
judgment, materially and adversely affect the condition (financial or
other) or operations of the Seller or its properties or have consequences
that would materially and adversely affect its performance hereunder;
(v) The Seller is not a party to or bound by any agreement or
instrument or subject to any certificate of incorporation, bylaws or any
other corporate restriction or any judgment, order, writ, injunction,
decree, law or regulation that would, in the Seller's reasonable and good
faith judgment, materially and adversely affect the ability of the Seller
to perform its obligations under this Agreement or that requires the
consent of any third person to the execution of this Agreement or the
performance by the Seller of its obligations under this Agreement (except
to the extent such consent has been obtained);
(vi) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Seller of or compliance by the Seller with this
Agreement or the consummation of the transactions contemplated by this
Agreement except as have previously been obtained and no bulk sale law
applies to such transactions;
(vii) No litigation is pending or, to the Seller's knowledge,
threatened against the Seller that would, in the Seller's good faith and
reasonable judgment, prohibit its entering into this Agreement or
materially and adversely affect the performance by the Seller of its
obligations under this Agreement;
(viii) Under generally accepted accounting principles ("GAAP") and
for federal income tax purposes, the Seller will report the transfer of
the Mortgage Loans to the Purchaser as a sale of the Mortgage Loans to the
Purchaser in exchange for consideration consisting of a cash amount equal
to the Aggregate Purchase Price. The consideration received by the Seller
upon the sale of the Mortgage Loans to the Purchaser will constitute at
least reasonably equivalent value and fair consideration for the Mortgage
Loans. The Seller will be solvent at all relevant times prior to, and will
not be rendered insolvent by, the sale of the Mortgage Loans to the
Purchaser. The Seller is not selling the Mortgage Loans to the Purchaser
with any intent to hinder, delay or defraud any of the creditors of the
Seller; and
(ix) The Seller has examined the Disclosure Material (as defined
below) set forth in the Preliminary Prospectus Supplement (as defined
below), the Prospectus Supplement (as defined below) to the accompanying
Prospectus (as defined below), the Preliminary Memorandum (as defined
below) and the Memorandum (as defined below), relating to the
Certificates. The Seller hereby represents and warrants that the
Disclosure Material is appropriately responsive in all material respects
to the applicable requirements of Items 1104, 1110, 1111, 1117 and 1119 of
Regulation AB with respect to the Seller and the Nomura Mortgage Loans.
(x) For so long as the Trust Fund is subject to the reporting
requirements of the Exchange Act, the Seller shall provide the Purchaser
(or, with respect to any Companion Loan that is deposited into another
securitization, the depositor in such other securitization) and the
Trustee with any Additional Form 10-K Disclosure and any Additional Form
10-D Disclosure set forth next to the Purchaser's name on Exhibit U and
Exhibit W, respectively, of the Pooling and Servicing Agreement within the
time periods set forth in the Pooling and Servicing Agreement.
(b) The Seller hereby makes the representations and warranties
contained in Schedule I for the benefit of the Purchaser and the Trustee for the
benefit of the Certificateholders as of the Closing Date, with respect to (and
solely with respect to) each Mortgage Loan, which representations and warranties
are subject to the exceptions set forth on Schedule II.
(c) [Reserved].
(d) With respect to the schedule of exceptions delivered by the
Trustee on the Closing Date, within fifteen (15) Business Days (or, in the
reasonable discretion of the Controlling Class Representative, thirty (30)
Business Days) of the Closing Date, with respect to the documents specified in
clauses (i), (ii), (vii), (ix) (solely with respect to Ground Leases) and (xii)
of the definition of Mortgage File, the Seller shall cure any material exception
listed therein (for the avoidance of doubt, any deficiencies with respect to the
documents specified in clause (ii) resulting solely from a delay in the return
of the related documents from the applicable recording office, shall be cured in
the time and manner described in Section 2.01(c) of the Pooling and Servicing
Agreement). If such exception is not so cured, the Seller shall either (1)
repurchase the related Mortgage Loan, (2) with respect to exceptions relating to
clause (xii) of the definition of "Mortgage File", deposit with the Trustee an
amount, to be held in trust in a Special Reserve Account pursuant to the Pooling
and Servicing Agreement, equal to the amount of the undelivered letter of credit
(in the alternative, the Seller may deliver to the Trustee, with a certified
copy to the Master Servicer and Trustee, a letter of credit for the benefit of
the Master Servicer on behalf of the Trustee and upon the same terms and
conditions as the undelivered letter of credit) which the Master Servicer on
behalf of the Trustee may use (or draw upon, as the case may be) under the same
circumstances and conditions as the Master Servicer would have been entitled to
draw on the undelivered letter of credit, or (3) with respect to any exceptions
relating to clauses (i), (ii) and (vii), deposit with the Trustee an amount, to
be held in trust in a Special Reserve Account pursuant to the Pooling and
Servicing Agreement, equal to 25% of the Stated Principal Balance of the related
Mortgage Loan on such date. Any funds or letter of credit deposited pursuant to
clauses (2) and (3) shall be held by the Trustee until the earlier of (x) the
date on which the Master Servicer certifies to the Trustee and the Controlling
Class Representative that such exception has been cured (or the Trustee
certifies the same to the Controlling Class Representative), at which time such
funds or letter of credit, as applicable, shall be returned to the Seller and
(y) thirty (30) Business Days or, if the Controlling Class Representative has
extended the cure period, forty-five (45) Business Days after the Closing Date;
provided, however, that if such exception is not cured within such thirty (30)
Business Days or forty-five (45) Business Days, as the case may be, (A) in the
case of clause (2), the Trustee shall retain the funds or letter of credit, as
applicable, or (B) in the case of clause (3), the Seller shall repurchase the
related Mortgage Loan in accordance with the terms and conditions of this
Agreement, at which time such funds shall be applied to the Purchase Price of
the related Mortgage Loan and any letter of credit will be returned to the
Seller.
If the Seller receives written notice of a Document Defect or a
Breach pursuant to Section 2.03(a) of the Pooling and Servicing Agreement
relating to a Mortgage Loan, then the Seller shall not later than ninety (90)
days from receipt of such notice (or, in the case of a Document Defect or Breach
relating to a Mortgage Loan not being a "qualified mortgage" within the meaning
of the REMIC Provisions (a "Qualified Mortgage"), not later than ninety (90)
days from the date that any party to the Pooling and Servicing Agreement
discovers such Document Defect or Breach; provided the Seller receives such
notice in a timely manner), if such Document Defect or Breach shall materially
and adversely affect the value of the applicable Mortgage Loan, the interest of
the Trust Fund therein or the interests of any Certificateholder, cure such
Document Defect or Breach, as the case may be, in all material respects, which
shall include payment of actual or provable losses and any Additional Trust Fund
Expenses directly resulting from any such Document Defect or Breach or, if such
Document Defect or Breach (other than omissions solely due to a document not
having been returned by the related recording office) cannot be cured within
such 90-day period, (i) repurchase the affected Mortgage Loan at the applicable
Purchase Price not later than the end of such 90-day period or (ii) substitute a
Qualified Substitute Mortgage Loan for such affected Mortgage Loan not later
than the end of such 90-day period (and in no event later than the second
anniversary of the Closing Date) and pay the Master Servicer for deposit into
the Certificate Account, any Substitution Shortfall Amount in connection
therewith; provided, however, that unless the Breach would cause the Mortgage
Loan not to be a Qualified Mortgage, and if such Document Defect or Breach is
capable of being cured but not within such 90-day period and the Seller has
commenced and is diligently proceeding with the cure of such Document Defect or
Breach within such 90-day period, such Seller shall have an additional ninety
(90) days to complete such cure (or, failing such cure, to repurchase or
substitute the related Mortgage Loan); provided, further, that with respect to
such additional 90-day period the Seller shall have delivered an officer's
certificate to the Trustee setting forth what actions the Seller is pursuing in
connection with the cure thereof and stating that the Seller anticipates that
such Document Defect or Breach will be cured within the additional 90-day
period; provided, further, that no Document Defect (other than with respect to a
Mortgage Note, Mortgage, title insurance policy, Ground Lease, any letter of
credit, any franchise agreement, any comfort letter and (if required) any
comfort letter transfer documents (collectively, the "Core Material Documents"))
shall be considered to materially and adversely affect the value of the related
Mortgage Loan, the interests of the Trust Fund therein or the interests of any
Certificateholder unless the document with respect to which the Document Defect
exists is required in connection with an imminent enforcement of the mortgagee's
rights or remedies under the related Mortgage Loan, defending any claim asserted
by any Mortgagor or third party with respect to the Mortgage Loan, establishing
the validity or priority of any lien or any collateral securing the Mortgage
Loan or for any immediate significant servicing obligations; provided, further,
with respect to Document Defects which materially and adversely affect the
interests of any Certificateholder, the interests of the Trust Fund therein or
the value of the related Mortgage Loan, other than with respect to Document
Defects relating to the Core Material Documents, any applicable cure period
following the initial 90-day cure period may be extended by the Master Servicer
or the Special Servicer if the document involved is not needed imminently. Such
extension will end upon thirty (30) days notice of such need as reasonably
determined by the Master Servicer or Special Servicer (with a possible thirty
(30) day extension if the Master Servicer or Special Servicer agrees that the
Seller is diligently pursuing a cure). The Seller shall cure all Document
Defects which materially and adversely affect the interests of any
Certificateholder, the interests of the Trust Fund therein or the value of the
related Mortgage Loan, regardless of the document involved, no later than two
years following the Closing Date; provided that the initial 90-day cure period
referenced in this paragraph may not be reduced. For a period of two years from
the Closing Date, so long as there remains any Mortgage File relating to a
Mortgage Loan as to which there is any uncured Document Defect or Breach, the
Seller shall provide the officer's certificate to the Trustee described above as
to the reasons such Document Defect or Breach remains uncured and as to the
actions being taken to pursue cure. Notwithstanding the foregoing, the delivery
of a commitment to issue a policy of lender's title insurance as described in
Representation 12 of Schedule I hereof in lieu of the delivery of the actual
policy of lender's title insurance shall not be considered a Document Defect or
Breach with respect to any Mortgage File if such actual policy of insurance is
delivered to the Trustee or a Custodian on its behalf not later than the 90th
day following the Closing Date.
If (i) any Mortgage Loan is required to be repurchased or
substituted for in the manner described above, (ii) such Mortgage Loan is
cross-collateralized and cross-defaulted with one or more other Mortgage Loans
(each, a "Crossed Loan"), and (iii) the applicable Document Defect or Breach
does not constitute a Document Defect or Breach, as the case may be, as to any
other Crossed Loan in such Crossed Group (without regard to this paragraph),
then the applicable Document Defect or Breach, as the case may be, will be
deemed to constitute a Document Defect or Breach, as the case may be, as to any
other Crossed Loan in the Crossed Group for purposes of this paragraph, and the
Seller will be required to repurchase or substitute for all of the remaining
Crossed Loan(s) in the related Crossed Group as provided in the immediately
preceding paragraph unless such other Crossed Loans in such Crossed Group
satisfy the Crossed Loan Repurchase Criteria and satisfy all other criteria for
substitution or repurchase of Mortgage Loans set forth herein. In the event that
the remaining Crossed Loans satisfy the aforementioned criteria, the Seller may
elect either to repurchase or substitute for only the affected Crossed Loan as
to which the related Breach or Document Defect exists or to repurchase or
substitute for all of the Crossed Loans in the related Crossed Group. The Seller
shall be responsible for the cost of any Appraisal required to be obtained by
the Master Servicer to determine if the Crossed Loan Repurchase Criteria have
been satisfied, so long as the scope and cost of such Appraisal has been
approved by the Seller (such approval not to be unreasonably withheld).
To the extent that the Seller is required to repurchase or
substitute for a Crossed Loan hereunder in the manner prescribed above while the
Trustee continues to hold any other Crossed Loans in such Crossed Group, neither
the Seller nor the Purchaser shall enforce any remedies against the other's
Primary Collateral, but each is permitted to exercise remedies against the
Primary Collateral securing its respective Crossed Loans, including with respect
to the Trustee, the Primary Collateral securing Crossed Loans still held by the
Trustee.
If the exercise of remedies by one party would materially impair the
ability of the other party to exercise its remedies with respect to the Primary
Collateral securing the Crossed Loans held by such party, then the Seller and
the Purchaser shall forbear from exercising such remedies until the Mortgage
Loan documents evidencing and securing the relevant Crossed Loans can be
modified in a manner that complies with this Agreement to remove the threat of
material impairment as a result of the exercise of remedies or some other
accommodation can be reached. Any reserve or other cash collateral or letters of
credit securing the Crossed Loans shall be allocated between such Crossed Loans
in accordance with the Mortgage Loan documents, or otherwise on a pro rata basis
based upon their outstanding Stated Principal Balances. Notwithstanding the
foregoing, if a Crossed Loan included in the Trust Fund is modified to terminate
the related cross-collateralization and/or cross-default provisions, as a
condition to such modification, the Seller shall furnish to the Trustee an
Opinion of Counsel that any modification shall not cause an Adverse REMIC Event.
Any expenses incurred in good faith by the Purchaser in connection with such
modification or accommodation (including, but not limited to, recoverable
attorney fees) shall be paid by the Seller.
(e) In connection with any permitted repurchase or substitution of
one or more Mortgage Loans contemplated hereby, upon receipt of a certificate
from a Servicing Officer certifying as to the receipt of the Purchase Price or
Substitution Shortfall Amount(s), as applicable, in the Certificate Account, and
the delivery of the Mortgage File(s) and the Servicing File(s) for the related
Qualified Substitute Mortgage Loan(s) to the Custodian and the Master Servicer,
respectively, if applicable (i) the Trustee shall execute and deliver such
endorsements and assignments as are provided to it by the Master Servicer, in
each case without recourse, representation or warranty, as shall be necessary to
vest in the Seller, the legal and beneficial ownership of each repurchased
Mortgage Loan or substituted Mortgage Loan, as applicable, (ii) the Trustee, the
Custodian, the Master Servicer and the Special Servicer shall each tender to the
Seller, upon delivery to each of them of a receipt executed by the Seller, all
portions of the Mortgage File and other documents pertaining to such Mortgage
Loan possessed by it, and (iii) the Master Servicer and the Special Servicer
shall release to the Seller any Escrow Payments and Reserve Funds held by it in
respect of such repurchased or substituted Mortgage Loans.
(f) Without limiting the remedies of the Purchaser, the
Certificateholders or the Trustee on behalf of the Certificateholders pursuant
to this Agreement, it is acknowledged that the representations and warranties
are being made for risk allocation purposes. This Section 3 provides the sole
remedy available to the Certificateholders, or the Trustee on behalf of the
Certificateholders, respecting any Document Defect in a Mortgage File or any
Breach of any representation or warranty set forth in or required to be made
pursuant to this Section 3. Nothing in this Agreement shall prohibit the
Purchaser or its assigns (including the Master Servicer and/or the Special
Servicer) from pursuing any course of action authorized by the Pooling and
Servicing Agreement while the Purchaser asserts a claim or brings a cause of
action to enforce any rights set forth herein against the Seller.
(g) With respect to any Mortgage Loan which has become a Defaulted
Mortgage Loan under the Pooling and Servicing Agreement or with respect to which
the related Mortgaged Property has been foreclosed and which is the subject of a
repurchase claim under this Agreement, in accordance with Section 2.03 of the
Pooling and Servicing Agreement, the Special Servicer with the consent of the
Controlling Class Representative shall notify the Seller in writing of its
intention to liquidate such Defaulted Mortgage Loan or REO Property at least 45
days prior to any such action. If (a) the Seller consents to such sale and
voluntarily agrees to repurchase such Defaulted Mortgage Loan or REO Property or
(b) a court of competent jurisdiction determines that the Seller is liable under
this Agreement to repurchase such Defaulted Mortgage Loan or REO Property, then
such Seller shall remit to the Purchaser an amount equal to the difference if
any of the price of such Defaulted Mortgage Loan or REO Property as sold and the
price at which the Seller would have had to repurchase such Defaulted Mortgage
Loan or REO Property under this Agreement. The Seller shall have ten (10)
Business Days after receipt of notice to determine whether or not to consent to
such sale. If the Seller does not consent to such sale, the Special Servicer
shall contract with a Determination Party (as defined in the Pooling and
Servicing Agreement) as to the merits of such proposed sale. If the related
Determination Party determines that such proposed sale is in accordance with the
Servicing Standard and the provisions of the Pooling and Servicing Agreement
with respect to the sale of Defaulted Mortgage Loans and REO Properties and,
subsequent to such sale, a court of competent jurisdiction determines that the
Seller was liable under this Agreement and required to repurchase such Defaulted
Mortgage Loan or REO Property in accordance with the terms hereof, then the
Seller shall remit to the Purchaser an amount equal to the difference (if any)
between the proceeds of the related action and the price at which the Seller
would have been obligated to pay had the Seller repurchased such Defaulted
Mortgage Loan or REO Property prior to the execution of a binding contract of
sale with a third party in accordance with the terms hereof including the costs
related to contracting with the related Determination Party; provided that the
foregoing procedure in this Section 3(g) shall not preclude such Seller from
repurchasing the Defaulted Mortgage Loan or REO Property prior to the execution
of a binding contract of sale with a third party in accordance with the other
provisions of this Section 3 (excluding this Section 3(g)). If the related
Determination Party determines that the sale of the related Defaulted Mortgage
Loan or REO Property is not in accordance with the Servicing Standard and the
provisions of the Pooling and Servicing Agreement with respect to the sale of
Defaulted Mortgage Loans and REO Properties and the Special Servicer
subsequently sells such Mortgage Loan or REO Property, then the Seller will not
be liable for any such difference (nor any cost of contracting with the
Determination Party).
(h) Notwithstanding the foregoing, if there exists a Breach relating
to whether or not the Mortgage Loan documents or any particular Mortgage Loan
document requires the related Mortgagor to bear the costs and expenses
associated with any particular action or matter under such Mortgage Loan
document(s) with respect to matters described in Representations 23 and 43 of
Schedule I hereof, then the Purchaser shall direct the Seller in writing to wire
transfer to the Master Servicer for deposit into the Certificate Account, within
ninety (90) days of the Seller's receipt of such direction, the amount of any
such costs and expenses borne by the Purchaser, the Certificateholders, the
Master Servicer, the Special Servicer and the Trustee on their behalf that are
the basis of such Breach. Upon its making such deposit, the Seller shall be
deemed to have cured such Breach in all respects. Provided such payment is made
in full, this paragraph describes the sole remedy available to the Purchaser,
the Certificateholders, the Master Servicer, the Special Servicer and the
Trustee on their behalf regarding any such Breach and the Seller shall not be
obligated to repurchase the affected Mortgage Loan on account of such Breach or
otherwise cure such Breach.
SECTION 4. Representations and Warranties of the Purchaser. In order
to induce the Seller to enter into this Agreement, the Purchaser hereby
represents and warrants for the benefit of the Seller as of the date hereof
that:
(a) The Purchaser is a corporation duly organized, validly existing
and in good standing under the laws of the State of North Carolina. The
Purchaser has the full corporate power and authority and legal right to acquire
the Mortgage Loans from the Seller and to transfer the Mortgage Loans to the
Trustee.
(b) This Agreement has been duly and validly authorized, executed
and delivered by the Purchaser, all requisite action by the Purchaser's
directors and officers has been taken in connection therewith, and (assuming the
due authorization, execution and delivery hereof by the Seller) this Agreement
constitutes the valid, legal and binding obligation of the Purchaser,
enforceable against the Purchaser in accordance with its terms, except as such
enforcement may be limited by (A) laws relating to bankruptcy, insolvency,
reorganization, receivership or moratorium, (B) other laws relating to or
affecting the rights of creditors generally, or (C) general equity principles
(regardless of whether such enforcement is considered in a proceeding in equity
or at law).
(c) Except as may be required under federal or state securities laws
(and which will be obtained on a timely basis), no consent, approval,
authorization or order of, registration or filing with, or notice to, any
governmental authority or court, is required, under federal or state law, for
the execution, delivery and performance by the Purchaser of or compliance by the
Purchaser with this Agreement, or the consummation by the Purchaser of any
transaction described in this Agreement.
(d) None of the acquisition of the Mortgage Loans by the Purchaser,
the transfer of the Mortgage Loans to the Trustee, or the execution, delivery or
performance of this Agreement by the Purchaser, results or will result in the
creation or imposition of any lien on any of the Purchaser's assets or property,
or conflicts or will conflict with, results or will result in a breach of, or
require or will require the consent of any third person or constitutes or will
constitute a default under (A) any term or provision of the Purchaser's
certificate of incorporation or bylaws, (B) any term or provision of any
material agreement, contract, instrument or indenture, to which the Purchaser is
a party or by which the Purchaser is bound, or (C) any law, rule, regulation,
order, judgment, writ, injunction or decree of any court or governmental
authority having jurisdiction over the Purchaser or its assets.
(e) Under GAAP and for federal income tax purposes, the Purchaser
will report the transfer of the Mortgage Loans by the Seller to the Purchaser as
a sale of the Mortgage Loans to the Purchaser in exchange for consideration
consisting of a cash amount equal to the Aggregate Purchase Price.
(f) There is no action, suit, proceeding or investigation pending or
to the knowledge of the Purchaser, threatened against the Purchaser in any court
or by or before any other governmental agency or instrumentality which would
materially and adversely affect the validity of this Agreement or any action
taken in connection with the obligations of the Purchaser contemplated herein,
or which would be likely to impair materially the ability of the Purchaser to
enter into and/or perform its obligations under the terms of this Agreement.
(g) The Purchaser is not in default with respect to any order or
decree of any court or any order, regulation or demand of any federal, state,
municipal or governmental agency or body, which default might have consequences
that would materially and adversely affect the condition (financial or other) or
operations of the Purchaser or its properties or might have consequences that
would materially and adversely affect its performance hereunder.
SECTION 5. Closing. The closing of the sale of the Mortgage Loans
(the "Closing") shall be held at the offices of Cadwalader, Xxxxxxxxxx & Xxxx
LLP, Charlotte, North Carolina on the Closing Date.
The Closing shall be subject to each of the following conditions:
(a) All of the representations and warranties of the Seller set
forth in or made pursuant to Sections 3(a) and 3(b) of this Agreement and all of
the representations and warranties of the Purchaser set forth in Section 4 of
this Agreement shall be true and correct in all material respects as of the
Closing Date;
(b) The Pooling and Servicing Agreement (to the extent it affects
the obligations of the Seller hereunder) and all documents specified in Section
6 of this Agreement (the "Closing Documents"), in such forms as are agreed upon
and acceptable to the Purchaser, the Seller, the Underwriters, the Initial
Purchasers and their respective counsel in their reasonable discretion, shall be
duly executed and delivered by all signatories as required pursuant to the
respective terms thereof;
(c) The Seller shall have delivered and released to the Trustee (or
a Custodian on its behalf) and the Master Servicer, respectively, all documents
represented to have been or required to be delivered to the Trustee and the
Master Servicer pursuant to Section 2 of this Agreement;
(d) All other terms and conditions of this Agreement required to be
complied with on or before the Closing Date shall have been complied with in all
material respects and the Seller shall have the ability to comply with all terms
and conditions and perform all duties and obligations required to be complied
with or performed after the Closing Date;
(e) The Seller shall have paid all fees and expenses payable by it
to the Purchaser or otherwise pursuant to this Agreement as of the Closing Date;
and
(f) The letters shall have been received from the independent
accounting firm KPMG LLP, in form satisfactory to the Purchaser, relating to
certain information regarding the Mortgage Loans and Certificates as set forth
in the Prospectus, the Preliminary Prospectus Supplement, the Prospectus
Supplement, the Preliminary Memorandum and the Memorandum.
Both parties agree to use their best efforts to perform their
respective obligations hereunder in a manner that will enable the Purchaser to
purchase the Mortgage Loans on the Closing Date.
SECTION 6. Closing Documents. The Closing Documents shall consist of
the following:
(a) This Agreement duly executed by the Purchaser and the Seller;
(b) A certificate of the Seller, executed by a duly authorized
officer of the Seller and dated the Closing Date, and upon which the Purchaser,
the Underwriters and the Initial Purchasers may rely, to the effect that: (i)
the representations and warranties of the Seller in this Agreement are true and
correct in all material respects at and as of the Closing Date with the same
effect as if made on such date; and (ii) the Seller has, in all material
respects, complied with all the agreements and satisfied all the conditions on
its part that are required under this Agreement to be performed or satisfied at
or prior to the Closing Date;
(c) An officer's certificate from an officer of the Seller (signed
in his/her capacity as an officer), dated the Closing Date, and upon which the
Purchaser may rely, to the effect that each individual who, as an officer or
representative of the Seller, signed this Agreement or any other document or
certificate delivered on or before the Closing Date in connection with the
transactions contemplated herein, was at the respective times of such signing
and delivery, and is as of the Closing Date, duly elected or appointed,
qualified and acting as such officer or representative, and the signatures of
such persons appearing on such documents and certificates are their genuine
signatures;
(d) An officer's certificate from an officer of the Seller (signed
in his/her capacity as an officer), dated the Closing Date, and upon which the
Purchaser, the Underwriters and the Initial Purchasers may rely, to the effect
that with respect to the Seller, the Mortgage Loans, the related Mortgagors and
the related Mortgaged Properties (i) such officer has carefully examined the
Specified Portions of the Preliminary Prospectus Supplement together with all
other Time of Sale Information delivered prior to the Time of Sale and nothing
has come to his attention that would lead him to believe that the Specified
Portions of the Preliminary Prospectus Supplement together with all other Time
of Sale Information delivered prior to the Time of Sale, as of the Time of Sale,
or as of the Closing Date, included or include any untrue statement of a
material fact relating to the Mortgage Loans or omitted or omit to state therein
a material fact necessary in order to make the statements therein relating to
the Mortgage Loans, in light of the circumstances under which they were made,
not misleading, (ii) such officer has carefully examined the Specified Portions
of the Prospectus Supplement and nothing has come to his attention that would
lead him to believe that the Specified Portions of the Prospectus Supplement, as
of the date of the Prospectus Supplement, or as of the Closing Date, included or
include any untrue statement of a material fact relating to the Mortgage Loans
or omitted or omit to state therein a material fact necessary in order to make
the statements therein relating to the Mortgage Loans, in light of the
circumstances under which they were made, not misleading, (iii) such officer has
examined the Specified Portions of the Memorandum and nothing has come to his
attention that would lead him to believe that the Specified Portions of the
Memorandum, as of the date thereof or as of the Closing Date, included or
include any untrue statement of a material fact relating to the Mortgage Loans
or omitted or omit to state therein a material fact necessary in order to make
the statements therein related to the Mortgage Loans, in the light of the
circumstances under which they were made, not misleading. The "Specified
Portions" of the Preliminary Prospectus Supplement or the Prospectus Supplement,
as applicable, shall consist of Annex A and Annex D thereto, the diskette which
accompanies the Prospectus Supplement (insofar as such diskette is consistent
with such Annex A) and the following sections of the Preliminary Prospectus
Supplement or the Prospectus Supplement, as applicable (exclusive of any
statements in such sections that purport to summarize the servicing and
administration provisions of the Pooling and Servicing Agreement): "SUMMARY OF
PROSPECTUS SUPPLEMENT--The Parties--The Mortgage Loan Sellers", "SUMMARY OF
PROSPECTUS SUPPLEMENT--The Mortgage Loans", "RISK FACTORS--The Mortgage Loans",
"DESCRIPTION OF THE MORTGAGE POOL--General", "--Mortgage Loan History",
"--Certain Terms and Conditions of the Mortgage Loans", "--Assessments of
Property Condition", "--Co-Lender Loans", "--Additional Mortgage Loan
Information", "--Twenty Largest Mortgage Loans", "--The Sponsors", "--The
Mortgage Loan Sellers" and "--Representations and Warranties; Repurchases and
Substitutions." The "Specified Portions" of the Memorandum shall consist of the
Specified Portions of the Prospectus Supplement, the first and second full
paragraphs on page "v" of the Memorandum.
(e) The resolutions of the requisite committee of the Seller's board
of directors authorizing the Seller's entering into the transactions
contemplated by this Agreement, the certificate of incorporation and by-laws of
the Seller, and an original or copy of a certificate of good standing of the
Seller issued by the State of Delaware not earlier than sixty (60) days prior to
the Closing Date;
(f) A written opinion of counsel for the Seller (which opinion may
be from in-house counsel, outside counsel or a combination thereof), reasonably
satisfactory to the Purchaser, its counsel and the Rating Agencies, dated the
Closing Date and addressed to the Purchaser, the Trustee, the Underwriters, the
Initial Purchasers and each of the Rating Agencies, together with such other
written opinions as may be required by the Rating Agencies; and
(g) Such further certificates, opinions and documents as the
Purchaser may reasonably request.
SECTION 7. Indemnification.
(a) The Seller shall indemnify and hold harmless the Purchaser, the
Underwriters, the Initial Purchasers, their respective officers and directors,
and each person, if any, who controls the Purchasers, any Underwriter or any
Initial Purchaser within the meaning of either Section 15 of the Securities Act
of 1933, as amended (the "1933 Act") or Section 20 of the Securities Exchange
Act of 1934, as amended (the "1934 Act"), against any and all losses, expenses
(including the reasonable fees and expenses of legal counsel), claims, damages
or liabilities, joint or several, to which they or any of them may become
subject under the 1933 Act, the 1934 Act or other federal or state statutory law
or regulation, at common law or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) (i) arise out of or are
based upon a breach or violation of the representations made by the Seller in
Section 3(a)(ix) hereof, (ii) arise out of or are based upon a breach of the
representations made by the Seller in Section 3(a)(x) hereof, (iii) arise out of
or are based upon any untrue statement or alleged untrue statement of a material
fact contained in (A) the Prospectus Supplement, the Preliminary Memorandum, the
Memorandum, the Diskette or in any revision or amendment of or supplement to any
of the foregoing, (B) any Time of Sale Information or any Issuer Information
contained in any Free Writing Prospectus prepared by or on behalf of the
Underwriters (an "Underwriter Free Writing Prospectus") or contained in any Free
Writing Prospectus which is required to be filed in accordance with the terms of
the Underwriting Agreement, (C) any items similar to Free Writing Prospectuses
forwarded by the Seller to the Initial Purchasers, or in any revision or
amendment of or supplement to any of the foregoing or (D) the summaries,
reports, documents and other written and computer materials and all other
information regarding the Mortgage Loans or the Seller furnished by the Seller
for review by prospective investors (the items in (A), (B), (C) and (D) above
being defined as the "Disclosure Material"), or (iv) arise out of or are based
upon the omission or alleged omission to state therein (in the case of Free
Writing Prospectuses, when read in conjunction with the other Time of Sale
Information, in the case of any items similar to Free Writing Prospectuses, when
read in conjunction with the Memorandum) and in the case of any summaries,
reports, documents, written or computer materials, or other information
contemplated in clause (D) above, when read in conjunction with the Memorandum
and in the case of any Free Writing Prospectus, when read in conjunction with
the other Time of Sale Information, a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; but, with respect to
any Disclosure Material described in clauses (A), (B) and (C) of the definition
thereof, only if and to the extent that (I) any such untrue statement or alleged
untrue statement or omission or alleged omission occurring in, or with respect
to, such Disclosure Material, arises out of or is based upon an untrue statement
or omission with respect to the Mortgage Loans, the related Mortgagors and/or
the related Mortgaged Properties contained in the Data File (it being herein
acknowledged that the Data File was and will be used to prepare the Preliminary
Prospectus Supplement and the Prospectus Supplement, including without
limitation Annex A thereto, any other Time of Sale Information, the Preliminary
Memorandum, the Memorandum and the Diskette with respect to the Registered
Certificates and any items similar to Free Writing Prospectuses forwarded to
prospective investors in the Non-Registered Certificates and any Free Writing
Prospectus), (II) any such untrue statement or alleged untrue statement or
omission or alleged omission of a material fact occurring in, or with respect
to, such Disclosure Material, is with respect to, or arises out of or is based
upon an untrue statement or omission of a material fact with respect to, the
information regarding the Mortgage Loans, the related Mortgagors, the related
Mortgaged Properties and/or the Seller set forth in the Specified Portions of
the Preliminary Prospectus Supplement, the Prospectus Supplement, the
Preliminary Memorandum or the Memorandum, (III) any such untrue statement or
alleged untrue statement or omission or alleged omission occurring in, or with
respect to, such Disclosure Material, arises out of or is based upon a breach of
the representations and warranties of the Seller set forth in or made pursuant
to Section 3 hereof or (IV) any such untrue statement or alleged untrue
statement or omission or alleged omission occurring in, or with respect to, such
Disclosure Material, arises out of or is based upon any other written
information concerning the characteristics of the Mortgage Loans, the related
Mortgagors or the related Mortgaged Properties furnished to the Purchaser, the
Underwriters or the Initial Purchasers by the Seller; provided that the
indemnification provided by this Section 7 shall not apply to the extent that
such untrue statement or omission of a material fact was made as a result of an
error in the manipulation of, or in any calculations based upon, or in any
aggregation of the information regarding the Mortgage Loans, the related
Mortgagors and/or the related Mortgaged Properties set forth in the Data File or
Annex A to the Preliminary Prospectus Supplement or the Prospectus Supplement to
the extent such information was not materially incorrect in the Data File or
such Annex A, as applicable, including without limitation the aggregation of
such information with comparable information relating to the Other Mortgage
Loans. Notwithstanding the foregoing, the indemnification provided in this
Section 7(a) shall not inure to the benefit of any Underwriter or Initial
Purchasers (or to the benefit of any person controlling such Underwriter or
Initial Purchasers) from whom the person asserting claims giving rise to any
such losses, claims, damages, expenses or liabilities purchased Certificates if
(x) the subject untrue statement or omission or alleged untrue statement or
omission made in any Disclosure Material (exclusive of the Prospectus or any
corrected or amended Prospectus or the Memorandum or any corrected or amended
Memorandum) is eliminated or remedied in the Prospectus or the Memorandum or,
with respect to any Time of Sale Information only, by the delivery of a
Corrected Free Writing Prospectus prior to the Time of Sale (in each case, as
corrected or amended, if applicable), as applicable, and (y) a copy of the
Prospectus, Memorandum or Corrected Free Writing Prospectus (in each case, as
corrected or amended, if applicable), as applicable, shall not have been sent to
such person at or prior to the Time of Sale of such Certificates, and (z) in the
case of a corrected or amended Prospectus, Memorandum or Corrected Free Writing
Prospectus, such Underwriter or Initial Purchasers received electronically or in
writing notice of such untrue statement or omission and updated information
concerning the untrue statement or omission at least one Business Day prior to
the Time of Sale. The Seller shall, subject to clause (c) below, reimburse each
such indemnified party, as incurred, for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action.
(b) For purposes of this Agreement, "Registration Statement" shall
mean such registration statement No. 333-131262 filed by the Purchaser on Form
S-3, including without limitation exhibits thereto and information incorporated
therein by reference; "Base Prospectus" shall mean the prospectus, dated August
10, 2006, as supplemented by the prospectus supplement, dated August 10, 2006
(the "Prospectus Supplement" and, together with the Base Prospectus, the
"Prospectus") relating to the Registered Certificates, including all annexes
thereto; "Preliminary Prospectus Supplement" shall mean the free writing
prospectus, dated July 29, 2006, consisting of the preliminary free writing
prospectus, including the base prospectus attached thereto, as supplemented and
corrected by that certain free writing prospectus, dated August 4, 2006;
"Preliminary Memorandum" shall mean the preliminary private placement
memorandum, dated August 4, 2006, relating to the Non-Registered Certificates,
including all annexes thereto; "Memorandum" shall mean the private placement
memorandum, dated August 10, 2006, relating to the Non-Registered Certificates,
including all exhibits thereto; "Registered Certificates" shall mean the Class
A-1, Class A-2, Class A-PB, Class A-3, Class A-1A, Class A-M, Class A-J, Class
B, Class C, Class D and Class E Certificates; "Non-Registered Certificates"
shall mean the Certificates other than the Registered Certificates; "Diskette"
shall mean the diskette or compact disc attached to each of the Preliminary
Prospectus Supplement, the Prospectus and the Memorandum; and "Data File" shall
mean the compilation of information and data regarding the Mortgage Loans
covered by the Agreed Upon Procedures Letters dated August 4, 2006, and rendered
by KPMG LLP (a "hard copy" of which Data File was initialed on behalf of the
Seller and the Purchaser). "Free Writing Prospectus" shall mean a "free writing
prospectus" as such term is defined pursuant to Rule 405 under the 1933 Act.
"Corrected Free Writing Prospectus" shall mean a Free Writing Prospectus that
corrects any previous Free Writing Prospectus prepared by or on behalf of any
Underwriter and delivered to any purchaser that contained any untrue statement
of a material fact or omitted to state a material fact necessary in order to
make the statements contained therein, in light of the circumstances in which
they were made, not misleading. "Time of Sale" shall mean the time at which
sales to investors of the Certificates were first made as determined in
accordance with Rule 159 of the 1933 Act. "Time of Sale Information" shall mean
each free writing prospectus listed on Exhibit B hereto (the first page of each
such free writing prospectus is attached hereto). "Issuer Information" shall
have the meaning given to such term in Rule 433(h) under the 1933 Act (as
discussed by the Securities and Exchange Commission (the "Commission") in
footnote 271 of the Commission's Securities Offering Reform Release No.
33--8591). "Regulation AB" shall have the meaning as defined in Subpart 229.1100
- Asset Backed Securities (Regulation AB), 17 C.F.R. ss.ss.229.1100-229.1123 of
the 1933 Act, as such may be amended from time to time, and subject to such
clarification and interpretation as have been provided by the Commission in the
adopting release (Asset-Backed Securities, Securities Act Release No. 33-8518,
70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the staff of the Commission, or
as may be provided by the Commission or its staff from time to time.
(c) As promptly as reasonably practicable after receipt by any
person entitled to indemnification under this Section 7 (an "indemnified party")
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the Seller (the "indemnifying
party") under this Section 7, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party will
not relieve it from any liability that it may have to any indemnified party
under Section 7(a) (except to the extent that such omission has prejudiced the
indemnifying party in any material respect) or from any liability which it may
have otherwise than under this Section 7. In case any such action is brought
against any indemnified party and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein, and to the extent that it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof, with counsel selected by the
indemnifying party and reasonably satisfactory to such indemnified party;
provided, however, that if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party or
parties shall have reasonably concluded that there may be legal defenses
available to it or them and/or other indemnified parties that are different from
or additional to those available to the indemnifying party, the indemnified
party shall have the right to select separate counsel to assert such legal
defenses and to otherwise participate in the defense of such action on behalf of
such indemnified party or parties. Upon receipt of notice from the indemnifying
party to such indemnified party of its election so to assume the defense of such
action and approval by the indemnified party of counsel, the indemnifying party
will not be liable for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof, unless (i) the
indemnified party shall have employed separate counsel in connection with the
assertion of legal defenses in accordance with the proviso to the preceding
sentence (it being understood, however, that the indemnifying party shall not be
liable for the expenses of more than one separate counsel, approved by the
Purchaser, the Underwriters and the Initial Purchasers, representing all the
indemnified parties under Section 7(a) who are parties to such action), (ii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after notice of commencement of the action or (iii) the indemnifying party
has authorized the employment of counsel for the indemnified party at the
expense of the indemnifying party; and except that, if clause (i) or (iii) is
applicable, such liability shall only be in respect of the counsel referred to
in such clause (i) or (iii). Unless it shall assume the defense of any
proceeding, an indemnifying party shall not be liable for any settlement of any
proceeding effected without its written consent but, if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party shall indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel or any other expenses for which the indemnifying party is obligated
under this subsection, the indemnifying party agrees that it shall be liable for
any settlement of any proceeding effected without its written consent if (i)
such settlement is entered into more than forty-five (45) days after receipt by
such indemnifying party of the aforesaid request and (ii) such indemnifying
party shall not have reimbursed the indemnified party in accordance with such
request prior to the date of such settlement. If an indemnifying party assumes
the defense of any proceeding, it shall be entitled to settle such proceeding
with the consent of the indemnified party or, if such settlement provides for an
unconditional release of the indemnified party in connection with all matters
relating to the proceeding that have been asserted against the indemnified party
in such proceeding by the other parties to such settlement, which release does
not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of any indemnified party without the consent of the
indemnified party.
(d) If the indemnification provided for in this Section 7 is
unavailable to an indemnified party under Section 7(a) hereof or insufficient in
respect of any losses, claims, damages or liabilities referred to therein, then
the indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities, in such proportion as is
appropriate to reflect the relative fault of the indemnified and indemnifying
parties in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations (taking into account the parties' relative knowledge and access
to information concerning the matter with respect to which the claim was
asserted, the opportunity to correct and prevent any statement or omission or
failure to comply, and any other equitable considerations appropriate under the
circumstances). The relative fault of the indemnified and indemnifying parties
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by such parties;
provided that no Underwriter or Initial Purchasers shall be obligated to
contribute more than its share of underwriting discounts and commissions and
other fees pertaining to the Certificates less any damages otherwise paid by
such Underwriter or Initial Purchasers with respect to such loss, liability,
claim, damage or expense. It is hereby acknowledged that the respective
Underwriters' and Initial Purchasers' obligations under this Section 7 shall be
several and not joint. For purposes of this Section, each person, if any, who
controls an Underwriter or an Initial Purchasers within the meaning of Section
15 of the 1933 Act or Section 20 of the 1934 Act, and such Underwriter's or
Initial Purchasers' officers and directors, shall have the same rights to
contribution as such Underwriter or Initial Purchasers, as the case may be, and
each director of the Seller and each person, if any who controls the Seller
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
shall have the same rights to contribution as the Seller.
(e) The Purchaser and the Seller agree that it would not be just and
equitable if contribution pursuant to Section 7(d) were determined by pro rata
allocation or by any other method of allocation that does not take account of
the considerations referred to in Section 7(d) above. The amount paid or payable
by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in this Section 7 shall be deemed to include, subject to
the limitations set forth above, any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim, except where the indemnified party is required to bear such
expenses pursuant to this Section 7, which expenses the indemnifying party shall
pay as and when incurred, at the request of the indemnified party, to the extent
that the indemnifying party will be ultimately obligated to pay such expenses.
If any expenses so paid by the indemnifying party are subsequently determined to
not be required to be borne by the indemnifying party hereunder, the party that
received such payment shall promptly refund the amount so paid to the party
which made such payment. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the 0000 Xxx) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(f) The indemnity and contribution agreements contained in this
Section 7 shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by the Purchaser,
the Underwriters, the Initial Purchasers, any of their respective directors or
officers, or any person controlling the Purchaser, the Underwriters or the
Initial Purchasers, and (iii) acceptance of and payment for any of the
Certificates.
(g) Without limiting the generality or applicability of any other
provision of this Agreement, the Underwriters, the Initial Purchasers and their
directors, officers and controlling parties shall be third-party beneficiaries
of the provisions of this Section 7.
SECTION 8. Costs. The Seller shall pay (or shall reimburse the
Purchaser to the extent that the Purchaser has paid) the Seller's pro rata
portion of the aggregate of the following amounts (the Seller's pro rata portion
to be determined according to the percentage that the Nomura Mortgage Loan
Balance represents as of the Cut-Off Date Pool Balance): (i) the costs and
expenses of printing and delivering the Pooling and Servicing Agreement and the
Certificates; (ii) the costs and expenses of printing (or otherwise reproducing)
and delivering a final Prospectus, Term Sheet, Preliminary Prospectus
Supplement, each other Free Writing Prospectus, Preliminary Memorandum and
Memorandum relating to the Certificates; (iii) the initial fees, costs, and
expenses of the Trustee (including reasonable attorneys' fees); (iv) the filing
fee charged by the Commission for registration of the Certificates so
registered; (v) the fees charged by the Rating Agencies to rate the Certificates
so rated; (vi) the fees and disbursements of a firm of certified public
accountants selected by the Purchaser and the Seller with respect to numerical
information in respect of the Mortgage Loans and the Certificates included in
any Free Writing Prospectus, the Prospectus Supplement, the Preliminary
Memorandum and the Memorandum, including in respect of the cost of obtaining any
"comfort letters" with respect to such items; (vii) the reasonable out-of-pocket
costs and expenses in connection with the qualification or exemption of the
Certificates under state securities or "Blue Sky" laws, including filing fees
and reasonable fees and disbursements of counsel in connection therewith, in
connection with the preparation of any "Blue Sky" survey and in connection with
any determination of the eligibility of the Certificates for investment by
institutional investors and the preparation of any legal investment survey;
(viii) the expenses of printing any such "Blue Sky" survey and legal investment
survey; and (ix) the reasonable fees and disbursements of counsel to the
Underwriters or Initial Purchasers; provided, however, Seller shall pay (or
shall reimburse the Purchaser to the extent that the Purchaser has paid) the
expense of recording any assignment of Mortgage or assignment of Assignment of
Leases as contemplated by Section 2 hereof with respect to the Seller's Mortgage
Loans. All other costs and expenses in connection with the transactions
contemplated hereunder shall be borne by the party incurring such expense.
SECTION 9. Grant of a Security Interest. It is the express intent of
the parties hereto that the conveyance of the Mortgage Loans by the Seller to
the Purchaser as provided in Section 2 hereof be, and be construed as, a sale of
the Mortgage Loans by the Seller to the Purchaser and not as a pledge of the
Mortgage Loans by the Seller to the Purchaser to secure a debt or other
obligation of the Seller. However, if, notwithstanding the aforementioned intent
of the parties, the Mortgage Loans are held to be property of the Seller, then,
(a) it is the express intent of the parties that such conveyance be deemed a
pledge of the Mortgage Loans by the Seller to the Purchaser to secure a debt or
other obligation of the Seller, and (b) (i) this Agreement shall also be deemed
to be a security agreement within the meaning of Article 9 of the Uniform
Commercial Code of the applicable jurisdiction; (ii) the conveyance provided for
in Section 2 hereof shall be deemed to be a grant by the Seller to the Purchaser
of a security interest in all of the Seller's right, title and interest in and
to the Mortgage Loans, and all amounts payable to the holder of the Mortgage
Loans in accordance with the terms thereof, and all proceeds of the conversion,
voluntary or involuntary, of the foregoing into cash, instruments, securities or
other property, including, without limitation, all amounts, other than
investment earnings, from time to time held or invested in the Certificate
Account, the Distribution Account or, if established, the REO Account (each as
defined in the Pooling and Servicing Agreement) whether in the form of cash,
instruments, securities or other property; (iii) the assignment to the Trustee
of the interest of the Purchaser as contemplated by Section 1 hereof shall be
deemed to be an assignment of any security interest created hereunder; (iv) the
possession by the Trustee or any of its agents, including, without limitation,
the Custodian, of the Mortgage Notes, and such other items of property as
constitute instruments, money, negotiable documents or chattel paper shall be
deemed to be possession by the secured party for purposes of perfecting the
security interest pursuant to Section 9-313 of the Uniform Commercial Code of
the applicable jurisdiction; and (v) notifications to persons (other than the
Trustee) holding such property, and acknowledgments, receipts or confirmations
from persons (other than the Trustee) holding such property, shall be deemed
notifications to, or acknowledgments, receipts or confirmations from, financial
intermediaries, bailees or agents (as applicable) of the secured party for the
purpose of perfecting such security interest under applicable law. The Seller
and the Purchaser shall, to the extent consistent with this Agreement, take such
actions as may be necessary to ensure that, if this Agreement were deemed to
create a security interest in the Mortgage Loans, such security interest would
be deemed to be a perfected security interest of first priority under applicable
law and will be maintained as such throughout the term of this Agreement and the
Pooling and Servicing Agreement.
SECTION 10. Covenants of Purchaser. The Purchaser shall provide the
Seller with all forms of Disclosure Materials (including the Preliminary
Prospectus Supplement, the final form of the Memorandum and the final form of
the Prospectus Supplement) promptly upon any such document becoming available.
SECTION 11. Notices. All notices, copies, requests, consents,
demands and other communications required hereunder shall be in writing and
telecopied or delivered to the intended recipient at the "Address for Notices"
specified beneath its name on the signature pages hereof or, as to either party,
at such other address as shall be designated by such party in a notice hereunder
to the other party. Except as otherwise provided in this Agreement, all such
communications shall be deemed to have been duly given when transmitted by
telecopier or personally delivered or, in the case of a mailed notice, upon
receipt, in each case given or addressed as aforesaid.
SECTION 12. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement, incorporated herein by reference or contained in the certificates of
officers of the Seller submitted pursuant hereto, shall remain operative and in
full force and effect and shall survive delivery of the Mortgage Loans by the
Seller to the Purchaser (and by the Purchaser to the Trustee).
SECTION 13. Severability of Provisions. Any part, provision,
representation, warranty or covenant of this Agreement that is prohibited or
which is held to be void or unenforceable shall be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof. Any part, provision, representation, warranty or covenant of
this Agreement that is prohibited or unenforceable or is held to be void or
unenforceable in any particular jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any particular jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof.
SECTION 14. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be an original, but which together
shall constitute one and the same agreement.
SECTION 15. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS, DUTIES,
OBLIGATIONS AND RESPONSIBILITIES OF THE PARTIES HERETO SHALL BE GOVERNED IN
ACCORDANCE WITH THE INTERNAL LAWS AND DECISIONS OF NEW YORK, WITHOUT REGARD TO
CONFLICTS OF LAWS PRINCIPLES. THE PARTIES HERETO INTEND THAT THE PROVISIONS OF
SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW SHALL APPLY TO THIS
AGREEMENT.
SECTION 16. Attorneys Fees. If any legal action, suit or proceeding
is commenced between the Seller and the Purchaser regarding their respective
rights and obligations under this Agreement, the prevailing party shall be
entitled to recover, in addition to damages or other relief, costs and expenses,
attorneys' fees and court costs (including, without limitation, expert witness
fees). As used herein, the term "prevailing party" shall mean the party which
obtains the principal relief it has sought, whether by compromise settlement or
judgment. If the party which commenced or instituted the action, suit or
proceeding shall dismiss or discontinue it without the concurrence of the other
party, such other party shall be deemed the prevailing party.
SECTION 17. Further Assurances. The Seller and the Purchaser agree
to execute and deliver such instruments and take such further actions as the
other party may, from time to time, reasonably request in order to effectuate
the purposes and to carry out the terms of this Agreement.
SECTION 18. Successors and Assigns. The rights and obligations of
the Seller under this Agreement shall not be assigned by the Seller without the
prior written consent of the Purchaser, except that any person into which the
Seller may be merged or consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Seller is a party, or any
person succeeding to all or substantially all of the business of the Seller,
shall be the successor to the Seller hereunder. The Purchaser has the right to
assign its interest under this Agreement, in whole or in part, as may be
required to effect the purposes of the Pooling and Servicing Agreement, and the
assignee shall, to the extent of such assignment, succeed to the rights and
obligations hereunder of the Purchaser. Subject to the foregoing, this Agreement
shall bind and inure to the benefit of and be enforceable by the Seller, the
Purchaser, the Underwriters and the Initial Purchasers (each as intended third
party beneficiaries hereof) and their permitted successors and assigns, and the
officers, directors and controlling persons referred to in Section 7. This
Agreement is enforceable by the Underwriters, the Initial Purchasers and the
other third party beneficiaries hereto in all respects to the same extent as if
they had been signatories hereof.
SECTION 19. Amendments. No term or provision of this Agreement may
be waived or modified unless such waiver or modification is in writing and
signed by a duly authorized officer of the party, or third party beneficiary,
against whom such waiver or modification is sought to be enforced. No amendment
to the Pooling and Servicing Agreement which relates to defined terms contained
therein, Section 2.01(d) thereof or the repurchase obligations or any other
obligations of the Seller shall be effective against the Seller (in such
capacity) unless the Seller shall have agreed to such amendment in writing.
SECTION 20. Accountants' Letters. The parties hereto shall cooperate
with KPMG LLP in making available all information and taking all steps
reasonably necessary to permit such accountants to deliver the letters required
by the Underwriting Agreement.
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their
names to be signed hereto by their respective duly authorized officers as of the
date first above written.
SELLER
NOMURA CREDIT & CAPITAL, INC.
By: /s/ N. Xxxxx XxXxxxx
----------------------------------
Name: N. Xxxxx XxXxxxx
Title: Managing Director
Address for Notices:
2 World Financial Xxxxxx
Xxxxxxxx X
Xxx Xxxx, Xxx Xxxx 00000-0000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
PURCHASER
WACHOVIA COMMERCIAL MORTGAGE
SECURITIES, INC.
By: /s/ X. Xxxxx Xxxx, Jr.
----------------------------------
Name: X. Xxxxx Xxxx, Jr.
Title: Vice President
Address for Notices:
One Wachovia Center
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
SCHEDULE I
General Mortgage Representations and Warranties
For purposes of this Schedule I, the phrases "to the knowledge of
the Seller" or "to the Seller's knowledge" shall mean, except where otherwise
expressly set forth below, the actual state of knowledge of the Seller or any
servicer acting on its behalf regarding the matters referred to, in each case:
(i) at the time of the Seller's origination or acquisition of the particular
Mortgage Loan, after the Seller having conducted such inquiry and due diligence
into such matters as would be customarily performed by a prudent institutional
commercial or multifamily, as applicable, mortgage lender; and (ii) subsequent
to such origination, the Seller having utilized monitoring practices that would
be utilized by a prudent commercial or multifamily, as applicable, mortgage
lender and having made prudent inquiry as to the knowledge of the servicer
servicing such Mortgage Loan on its behalf. Also, for purposes of these
representations and warranties, the phrases "to the actual knowledge of the
Seller" or "to the Seller's actual knowledge" shall mean, except where otherwise
expressly set forth below, the actual state of knowledge of the Seller or any
servicer acting on its behalf without any express or implied obligation to make
inquiry. All information contained in documents which are part of or required to
be part of a Mortgage File shall be deemed to be within the knowledge and the
actual knowledge of the Seller. Wherever there is a reference to receipt by, or
possession of, the Seller of any information or documents, or to any action
taken by the Seller or not taken by the Seller, such reference shall include the
receipt or possession of such information or documents by, or the taking of such
action or the failure to take such action by, the Seller or any servicer acting
on its behalf.
1. The information pertaining to each Mortgage Loan set forth in the Mortgage
Loan Schedule was true and correct in all material respects as of the
Cut-Off Date and included all of the material information required by the
definition of Mortgage Loan Schedule.
2. As of the date of its origination, such Mortgage Loan complied in all
material respects with, or was exempt from, all requirements of federal,
state or local law relating to the origination of such Mortgage Loan.
3. Immediately prior to the sale, transfer and assignment to the Purchaser,
the Seller had good and marketable title to, and was the sole owner of,
each Mortgage Loan, and the Seller is transferring such Mortgage Loan free
and clear of any and all liens, pledges, charges, security interests or
any other ownership interests of any nature encumbering such Mortgage
Loan. Upon consummation of the transactions contemplated by this
Agreement, the Seller will have validly and effectively conveyed to the
Purchaser all legal and beneficial interest in and to such Mortgage Loan
(other than those rights to servicing and related compensation as
reflected in the Mortgage Loan Schedule) free and clear of any pledge,
lien or security interest.
4. The proceeds of such Mortgage Loan have been fully disbursed and there is
no requirement for future advances thereunder.
5. Each related Mortgage Note, Mortgage, Assignment of Leases (if a document
separate from the Mortgage) and other agreement executed by the related
Mortgagor in connection with such Mortgage Loan is a legal, valid and
binding obligation of the related Mortgagor (subject to any non-recourse
provisions therein and any state anti-deficiency or market value limit
deficiency legislation), enforceable in accordance with its terms, except
(i) that certain provisions contained in such Mortgage Loan documents are
or may be unenforceable in whole or in part under applicable state or
federal laws, but neither the application of any such laws to any such
provision nor the inclusion of any such provisions renders any of the
Mortgage Loan documents invalid as a whole and such Mortgage Loan
documents taken as a whole are enforceable to the extent necessary and
customary for the practical realization of the rights and benefits
afforded thereby and (ii) as such enforcement may be limited by
bankruptcy, insolvency, receivership, reorganization, moratorium,
redemption, liquidation or other laws affecting the enforcement of
creditors' rights generally, or by general principles of equity
(regardless of whether such enforcement is considered in a proceeding in
equity or at law). The related Mortgage Note and Mortgage contain no
provision limiting the right or ability of the Seller to assign, transfer
and convey the related Mortgage Loan to any other Person. With respect to
any Mortgaged Property that has tenants, there exists as either part of
the Mortgage or as a separate document, an Assignment of Leases.
6. As of the date of its origination, there was no valid offset, defense,
counterclaim, abatement or right to rescission with respect to any of the
related Mortgage Notes, Mortgage(s) or other agreements executed in
connection therewith, and, as of the Cut-Off Date, there is no valid
offset, defense, counterclaim or right to rescission with respect to such
Mortgage Note, Mortgage(s) or other agreements, except in each case, with
respect to the enforceability of any provisions requiring the payment of
default interest, late fees, additional interest, Prepayment Premiums or
Yield Maintenance Charges, and the Seller has no knowledge of such rights,
defenses or counterclaims having been asserted.
7. Each related assignment of Mortgage and assignment of Assignment of Leases
from the Seller to the Trustee constitutes the legal, valid and binding
first priority assignment from the Seller, except as such enforcement may
be limited by bankruptcy, insolvency, redemption, reorganization,
liquidation, receivership, moratorium or other laws relating to or
affecting creditors' rights generally or by general principles of equity
(regardless of whether such enforcement is considered in a proceeding in
equity or at law). Each Mortgage and Assignment of Leases is freely
assignable.
8. Each related Mortgage is a valid and enforceable first lien on the related
Mortgaged Property subject only to the exceptions set forth in paragraph
(5) above and the following title exceptions (each such title exception, a
"Title Exception", and collectively, the "Title Exceptions"): (a) the lien
of current real property taxes, water charges, sewer rents and assessments
not yet due and payable, (b) covenants, conditions and restrictions,
rights of way, easements and other matters of public record, none of
which, individually or in the aggregate, materially and adversely
interferes with the current use of the Mortgaged Property or the security
intended to be provided by such Mortgage or with the Mortgagor's ability
to pay its obligations under the Mortgage Loan when they become due or
materially and adversely affects the value of the Mortgaged Property, (c)
the exceptions (general and specific) and exclusions set forth in the
applicable policy described in paragraph (12) below or appearing of
record, none of which, individually or in the aggregate, materially and
adversely interferes with the current use of the Mortgaged Property or the
security intended to be provided by such Mortgage or with the Mortgagor's
ability to pay its obligations under the Mortgage Loan when they become
due or materially and adversely affects the value of the Mortgaged
Property, (d) other matters to which like properties are commonly subject,
none of which, individually or in the aggregate, materially and adversely
interferes with the current use of the Mortgaged Property or the security
intended to be provided by such Mortgage or with the Mortgagor's ability
to pay its obligations under the Mortgage Loan when they become due or
materially and adversely affects the value of the Mortgaged Property, (e)
the right of tenants (whether under ground leases, space leases or
operating leases) at the Mortgaged Property to remain following a
foreclosure or similar proceeding (provided that such tenants are
performing under such leases) and (f) if such Mortgage Loan is a Crossed
Loan, the lien of the Mortgage for such other Mortgage Loan, none of
which, individually or in the aggregate, materially and adversely
interferes with the current use of the Mortgaged Property or the security
intended to be provided by such Mortgage or with the Mortgagor's ability
to pay its obligations under the Mortgage Loan when they become due or
materially and adversely affects the value of the Mortgaged Property.
Except with respect to Crossed Loans and as provided below, there are no
mortgage loans that are senior or pari passu with respect to the related
Mortgaged Property or such Mortgage Loan.
9. UCC Financing Statements have been filed and/or recorded (or, if not filed
and/or recorded, have been submitted in proper form for filing and
recording), in all public places necessary to perfect a valid security
interest in all items of personal property located on the Mortgaged
Property that are owned by the Mortgagor and either (i) are reasonably
necessary to operate the Mortgaged Property or (ii) are (as indicated in
the appraisal obtained in connection with the origination of the related
Mortgage Loan) material to the value of the Mortgaged Property (other than
any personal property subject to a purchase money security interest or a
sale and leaseback financing arrangement permitted under the terms of such
Mortgage Loan or any other personal property leases applicable to such
personal property), to the extent perfection may be effected pursuant to
applicable law by recording or filing, and the Mortgages, security
agreements, chattel Mortgages or equivalent documents related to and
delivered in connection with the related Mortgage Loan establish and
create a valid and enforceable lien and priority security interest on such
items of personalty except as such enforcement may be limited by
bankruptcy, insolvency, receivership, reorganization, moratorium,
redemption, liquidation or other laws affecting the enforcement of
creditor's rights generally, or by general principles of equity
(regardless of whether such enforcement is considered in a proceeding in
equity or at law). Notwithstanding any of the foregoing, no representation
is made as to the perfection of any security interest in rents or other
personal property to the extent that possession or control of such items
or actions other than the filing of UCC Financing Statements are required
in order to effect such perfection.
10. All real estate taxes and governmental assessments, or installments
thereof, which would be a lien on the Mortgaged Property and that prior to
the Cut-Off Date have become delinquent in respect of each related
Mortgaged Property have been paid, or an escrow of funds in an amount
sufficient to cover such payments has been established. For purposes of
this representation and warranty, real estate taxes and governmental
assessments and installments thereof shall not be considered delinquent
until the earlier of (a) the date on which interest and/or penalties would
first be payable thereon and (b) the date on which enforcement action is
entitled to be taken by the related taxing authority.
11. In the case of each Mortgage Loan, one or more engineering assessments
were performed and prepared by an independent engineering consultant firm,
which visited the related Mortgaged Property not more than 12 months prior
to the origination date of the related Mortgage Loan, and, except as set
forth in an engineering report prepared in connection with such
assessment, a copy of which has been delivered to the Purchaser or its
designee, the related Mortgaged Property is, to the Seller's knowledge,
relying solely on the review of such engineering assessment(s), in good
repair, free and clear of any damage that would materially and adversely
affect its value as security for such Mortgage Loan. If an engineering
report revealed any such damage or deficiencies, material deferred
maintenance or other similar conditions as described in the preceding
sentence either (1) an escrow of funds equal to at least 125% of the
amount estimated to effect the necessary repairs, or such other amount as
a prudent commercial mortgage lender would deem appropriate under the
circumstances was required or a letter of credit in such amount was
obtained or (2) such repairs and maintenance have been completed. As of
the date of origination of such Mortgage Loan, there was no proceeding
pending, and subsequent to such date, the Seller has not received notice
of any pending or threatening proceeding for the condemnation of all or
any material portion of the Mortgaged Property securing any Mortgage Loan.
12. The Seller has received an ALTA lender's title insurance policy or a
comparable form of lender's title insurance policy (or if such policy has
not yet been issued, such insurance may be evidenced by escrow
instructions, a "marked up" pro forma or specimen policy or title
commitment, in either case, marked as binding and countersigned by the
title insurer or its authorized agent at the closing of the related
Mortgage Loan) as adopted in the applicable jurisdiction (the "Title
Insurance Policy"), which to the Seller's knowledge, was issued by a title
insurance company qualified to do business in the jurisdiction where the
applicable Mortgaged Property is located to the extent required, insuring
that the related Mortgage is a valid first lien in the original principal
amount of the related Mortgage Loan on the Mortgagor's fee simple interest
(or, if applicable, leasehold interest) in the portion of the Mortgaged
Property comprised of real estate, subject only to the Title Exceptions.
Such Title Insurance Policy was issued in connection with the origination
of the related Mortgage Loan. No claims have been made under such Title
Insurance Policy. Such Title Insurance Policy is in full force and effect,
provides that the originator of the related Mortgage Loan, its successors
or assigns is the sole named insured, and all premiums thereon have been
paid. The Seller has not done, by act or omission, and the Seller has no
knowledge of, anything that would impair the coverage under such Title
Insurance Policy. Immediately following the transfer and assignment of the
related Mortgage Loan to the Purchaser (including endorsement and delivery
of the related Mortgage Note to the Purchaser and recording of the related
Assignment of Mortgage in favor of Purchaser in the applicable real estate
records), such Title Insurance Policy will inure to the benefit of the
Purchaser without the consent of or notice to the title insurer. Such
Title Insurance Policy contains no material exclusions for, or
affirmatively insures against any losses arising from (other than in
jurisdictions in which affirmative insurance is unavailable) (a) access to
public roads, (b) that there are no material encroachments of any part of
the building thereon over easements and (c) that the land shown on the
survey is the same as the property legally described in the Mortgage.
13. Each Mortgaged Property was covered by (1) a fire and extended perils
included within the classification "All Risk of Physical Loss" insurance
policy in an amount (subject to a customary deductible) at least equal to
the lesser of the replacement cost of improvements located on such
Mortgaged Property, with no deduction for depreciation, or the outstanding
principal balance of the Mortgage Loan and in any event, the amount
necessary to avoid the operation of any co-insurance provisions; (2)
business interruption or rental loss insurance in an amount at least equal
to 12 months of operations of the related Mortgaged Property; and (3)
comprehensive general liability insurance against claims for personal and
bodily injury, death or property damage occurring on, in or about the
related Mortgaged Property in an amount customarily required by prudent
commercial mortgage lenders, but not less than $1 million. An
architectural or engineering consultant has performed an analysis of each
of the Mortgaged Properties located in seismic zone 3 or 4 in order to
evaluate the structural and seismic condition of such property, for the
sole purpose of assessing the probable maximum loss ("PML") for the
Mortgaged Property in the event of an earthquake. In such instance, the
PML was based on a 475-year lookback with a 10% probability of exceedance
in a 50-year period. If the resulting report concluded that the PML would
exceed 20% of the amount of the replacement costs of the improvements,
earthquake insurance on such Mortgaged Property was obtained by an insurer
rated at least "A-:V" (or the equivalent) by A.M. Best Company or "BBB-"
(or the equivalent) from S&P or Fitch. If the Mortgaged Property is
located in Florida or within 25 miles of the coast of Texas, Louisiana,
Mississippi, Alabama, Georgia, North Carolina or South Carolina, such
Mortgaged Property is insured by windstorm insurance in an amount at least
equal to the lesser of (i) the outstanding principal balance of such
Mortgage Loan and (ii) 100% of the full insurable value, or 100% of the
replacement cost, of the improvements located on the related Mortgaged
Property. Such insurance is required by the Mortgage or related Mortgage
Loan documents and was in full force and effect with respect to each
related Mortgaged Property at origination and to the knowledge of the
Seller, all insurance coverage required under each Mortgage or related
Mortgage Loan documents is in full force and effect with respect to each
related Mortgaged Property; and no notice of termination or cancellation
with respect to any such insurance policy has been received by the Seller;
and except for certain amounts not greater than amounts which would be
considered prudent by a commercial mortgage lender with respect to a
similar mortgage loan and which are set forth in the related Mortgage or
related Mortgage Loan documents, any insurance proceeds in respect of a
casualty loss will be applied either to (1) the repair or restoration of
the related Mortgaged Property with mortgagee or a third party custodian
acceptable to the mortgagee having the right to hold and disburse the
proceeds as the repair or restoration progresses, other than with respect
to amounts that are customarily acceptable to commercial and multifamily
mortgage lending institutions, or (2) the reduction of the outstanding
principal balance of the Mortgage Loan and accrued interest thereon. To
the Seller's actual knowledge, the insurer with respect to each policy is
qualified to write insurance in the relevant jurisdiction to the extent
required. The insurance policies contain a standard mortgagee clause
naming the originator of the related Mortgage Loan, its successors and
assigns as loss payees in the case of property insurance policies and
additional insureds in the case of liability insurance policies and
provide that they are not terminable and may not be reduced without 30
days prior written notice to the mortgagee (or, with respect to
non-payment of premiums, 10 days prior written notice to the mortgagee) or
such lesser period as prescribed by applicable law. Each Mortgage or
related Mortgage Loan documents require that the Mortgagor maintain
insurance as described above or permits the mortgagee to require insurance
as described above, and permits the mortgagee to purchase such insurance
at the Mortgagor's expense if the Mortgagor fails to do so. Additionally,
for any Mortgage Loan having an unpaid principal balance equal to or
greater than $15,000,000, the insurer has a claims paying ability rating
from S&P or Fitch of not less than "A-" (or the equivalent) or A.M. Best
of not less than "A-:V" (or the equivalent).
14. (A) Other than payments due but not yet 30 days or more delinquent, there
is no material default, breach, violation or event of acceleration
existing under the related Mortgage or the related Mortgage Note, and to
the Seller's actual knowledge no event (other than payments due but not
yet delinquent) which, with the passage of time or with notice and the
expiration of any grace or cure period, would constitute a material
default, breach, violation or event of acceleration, provided, however,
that this representation and warranty does not address or otherwise cover
any default, breach, violation or event of acceleration that specifically
pertains to any matter otherwise covered by any other representation and
warranty made by the Seller in any paragraph of this Schedule I or in any
paragraph of Schedule II, and (B) the Seller has not waived any material
default, breach, violation or event of acceleration under such Mortgage or
Mortgage Note, except for a written waiver contained in the related
Mortgage File being delivered to the Purchaser, and no such waiver has
been granted since the later of: (a) the date upon which the due diligence
file related to the applicable Mortgage Loan was delivered to Redwood
Trust, Inc., or an affiliate, or (b) the date of the origination of such
Mortgage Loan, and pursuant to the terms of the related Mortgage or the
related Mortgage Note and other documents in the related Mortgage File no
Person or party other than the holder of such Mortgage Note may declare
any event of default or accelerate the related indebtedness under either
of such Mortgage or Mortgage Note.
15. As of the Closing Date, each Mortgage Loan is not, and in the prior 12
months (or since the date of origination if such Mortgage Loan has been
originated within the past 12 months), has not been, 30 days or more past
due in respect of any Scheduled Payment.
16. Except with respect to ARD Loans, which provide that the rate at which
interest accrues thereon increases after the Anticipated Repayment Date,
the Mortgage Rate (exclusive of any default interest, late charges or
Prepayment Premiums) of such Mortgage Loan is a fixed rate.
17. Each related Mortgage or related Mortgage Loan documents do not provide
for or permit, without the prior written consent of the holder of the
Mortgage Note, each related Mortgaged Property to secure any other
promissory note or obligation except as expressly described in such
Mortgage or related Mortgage Loan documents.
18. Each Mortgage Loan constitutes a "qualified mortgage" within the meaning
of Section 860G(a)(3) of the Code, is directly secured by a Mortgage on a
commercial property or a multifamily residential property, and either (1)
substantially all of the proceeds of such Mortgage Loan were used to
acquire, improve or protect the portion of such commercial or multifamily
residential property that consists of an interest in real property (within
the meaning of Treasury Regulations Sections 1.856-3(c) and 1.856-3(d))
and such interest in real property was the only security for such Mortgage
Loan as of the Testing Date (as defined below), or (2) the fair market
value of the interest in real property which secures such Mortgage Loan
was at least equal to 80% of the principal amount of the Mortgage Loan (a)
as of the Testing Date, or (b) as of the Closing Date. For purposes of the
previous sentence, (1) the fair market value of the referenced interest in
real property shall first be reduced by (a) the amount of any lien on such
interest in real property that is senior to the Mortgage Loan, and (b) a
proportionate amount of any lien on such interest in real property that is
on a parity with the Mortgage Loan, and (2) the "Testing Date" shall be
the date on which the referenced Mortgage Loan was originated unless (a)
such Mortgage Loan was modified after the date of its origination in a
manner that would cause a "significant modification" of such Mortgage Loan
within the meaning of Treasury Regulations Section 1.1001-3(b), and (b)
such "significant modification" did not occur at a time when such Mortgage
Loan was in default or when default with respect to such Mortgage Loan was
reasonably foreseeable. However, if the referenced Mortgage Loan has been
subjected to a "significant modification" after the date of its
origination and at a time when such Mortgage Loan was not in default or
when default with respect to such Mortgage Loan was not reasonably
foreseeable, the Testing Date shall be the date upon which the latest such
"significant modification" occurred. The related Mortgaged Property, if
acquired by a REMIC in connection with the default or imminent default of
such Mortgage Loan and if operated in accordance with Treasury Regulations
Section 1.856-6, would constitute "foreclosure property" within the
meaning of Section 860G(a)(8) of the Code.
19. One or more environmental site assessments or updates thereof (meeting
American Society for Testing and Materials ("ASTM") standards) were
performed by an environmental consulting firm independent of the Seller
and the Seller's affiliates with respect to each related Mortgaged
Property during the 18-months preceding the origination of the related
Mortgage Loan, and the Seller, having made no independent inquiry other
than to review the report(s) prepared in connection with the assessment(s)
referenced herein, has no actual knowledge and has received no notice of
any material adverse environmental condition or circumstance affecting
such Mortgaged Property that was not disclosed in such report(s). If any
such environmental report identified any Recognized Environmental
Condition ("REC"), as that term is defined in the Standard Practice for
Environmental Site Assessments: Phase I Environmental Site Assessment
Process Designation: E 1527-00, as recommended by the ASTM, with respect
to the related Mortgaged Property and the same have not been subsequently
addressed in all material respects, then either (i) an escrow of 100% or
more of the amount identified as necessary by the environmental consulting
firm to address the REC is held by the Seller for purposes of effecting
same (and the Mortgagor has covenanted in the Mortgage Loan documents to
perform such work), (ii) the related Mortgagor or other responsible party
having financial resources reasonably estimated to be adequate to address
the REC is required to take such actions or is liable for the failure to
take such actions, if any, with respect to such circumstances or
conditions as have been required by the applicable governmental regulatory
authority or any environmental law or regulation, (iii) the Mortgagor has
provided an environmental insurance policy, (iv) an operations and
maintenance plan has been or will be implemented or (v) such conditions or
circumstances were investigated further and based upon such additional
investigation, a qualified environmental consultant recommended no further
investigation or remediation. All environmental assessments or updates
that were in the possession of the Seller and that relate to a Mortgaged
Property insured by an environmental insurance policy have been delivered
to or disclosed to the environmental insurance carrier or insurance broker
issuing such policy prior to the issuance of such policy. The Mortgage
Loan documents require the Mortgagor to comply with all applicable
environmental laws and each Mortgagor has agreed to indemnify the
mortgagee for any losses resulting from any material, adverse
environmental condition or failure of the Mortgagor to abide by such laws
or has provided environmental insurance.
20. Each related Mortgage and Assignment of Leases, together with applicable
state law, contains customary and enforceable provisions for comparable
mortgaged properties similarly situated such as to render the rights and
remedies of the holder thereof adequate for the practical realization
against the Mortgaged Property of the benefits of the security, including
realization by judicial or, if applicable, non-judicial foreclosure,
subject to the effects of bankruptcy, insolvency, reorganization,
receivership, moratorium, redemption, liquidation or similar law affecting
the right of creditors and the application of principles of equity.
21. No Mortgagor is a debtor in any state or federal bankruptcy or insolvency
proceeding.
22. Each Mortgage Loan is a whole loan (except in respect to each Co-Lender
Loan) and contains no equity participation by the lender or shared
appreciation feature and does not provide for any contingent or additional
interest in the form of participation in the cash flow of the related
Mortgaged Property or, other than the ARD Loans, provide for negative
amortization. The Seller holds no preferred equity interest in the related
Mortgagor.
23. The Mortgage or related Mortgage Loan documents contain a "due on sale"
clause, which provides for the acceleration of the payment of the unpaid
principal balance of the Mortgage Loan if, without the prior written
consent of the holder of the Mortgage, either the related Mortgaged
Property, or any equity interest in the related Mortgagor, is directly or
indirectly transferred, sold or pledged, other than by reason of family
and estate planning transfers, transfers of less than a controlling
interest (as such term is defined in the related Mortgage Loan documents)
in the Mortgagor, issuance of non-controlling new equity interests,
transfers to an affiliate meeting the requirements of the Mortgage Loan,
transfers among existing members, partners or shareholders in the
Mortgagor, transfers among affiliated Mortgagors with respect to Crossed
Loans or multi-property Mortgage Loans or transfers of a similar nature to
the foregoing meeting the requirements of the Mortgage Loan (such as
pledges of ownership interests that do not result in a change of control).
The Mortgage or related Mortgage Loan documents require the Mortgagor to
pay all reasonable fees and expenses associated with securing the consents
or approvals described in the preceding sentence including the cost of any
required counsel opinions relating to REMIC or other securitization and
tax issues and any applicable Rating Agency fees.
24. Except as set forth in the related Mortgage File, the terms of the related
Mortgage Note and Mortgage(s) have not been waived, modified, altered,
satisfied, impaired, canceled, subordinated or rescinded in any manner
which materially interferes with the security intended to be provided by
such Mortgage and no such waiver, modification, alteration, satisfaction,
impairment, cancellation, subordination or rescission has occurred since
the date upon which the due diligence file related to the applicable
Mortgage Loan was delivered to Redwood Trust, Inc., or an affiliate.
25. Each related Mortgaged Property was inspected by or on behalf of the
related originator or an affiliate during the 12 month period prior to the
related origination date.
26. Since origination, no material portion of the related Mortgaged Property
has been released from the lien of the related Mortgage, in any manner
which materially and adversely affects the value of the Mortgage Loan or
materially interferes with the security intended to be provided by such
Mortgage. The terms of the related Mortgage or related Mortgage Loan
documents do not provide for release of any material portion of the
Mortgaged Property from the lien of the Mortgage except (a) in
consideration of payment therefor of not less than 125% of the related
allocated loan amount of such Mortgaged Property, (b) upon payment in full
of such Mortgage Loan, (c) upon defeasance permitted under the terms of
such Mortgage Loan by means of substituting for the Mortgaged Property
(or, in the case of a Mortgage Loan secured by multiple Mortgaged
Properties, one or more of such Mortgaged Properties) "government
securities", as defined in the Investment Company Act of 1940, as amended,
sufficient to pay the Mortgage Loan in accordance with its terms, (d) upon
substitution of a replacement property with respect to such Mortgage Loan
as set forth on Schedule 26, (e) where release is conditional upon the
satisfaction of certain objective underwriting and legal requirements, the
satisfaction of which would be acceptable to a reasonably prudent
commercial mortgage lender and the payment of a release price that
represents at least 125% of the appraised value of such Mortgaged Property
or (f) releases of unimproved out-parcels or other portions of the
Mortgaged Property which will not have a material adverse effect on the
underwritten value of the security for the Mortgage Loan and which were
not afforded any value in the appraisal obtained at the origination of the
Mortgage Loan.
27. To the Seller's knowledge, as of the date of origination of such Mortgage
Loan, based on an opinion of counsel, an endorsement to the related title
policy, a zoning letter or a zoning report, and, to the Seller's
knowledge, as of the Cut-Off Date, there are no violations of any
applicable zoning ordinances, building codes and land laws applicable to
the Mortgaged Property, the improvements thereon or the use and occupancy
thereof which would have a material adverse effect on the value, operation
or net operating income of the Mortgaged Property which are not covered by
title insurance. Any non-conformity with zoning laws constitutes a legal
non-conforming use or structure (i) which, in the event of casualty or
destruction, may be restored or repaired to the full extent of the use or
structure at the time of such casualty, (ii) for which law and ordinance
insurance coverage has been obtained in amounts customarily required by
prudent commercial mortgage lenders, or (iii) which does not materially
and adversely affect the use, operation or value of the Mortgaged
Property.
28. To the Seller's actual knowledge based on surveys and/or the title policy
referred to herein obtained in connection with the origination of each
Mortgage Loan, none of the material improvements which were included for
the purposes of determining the appraised value of the related Mortgaged
Property at the time of the origination of the Mortgage Loan lies outside
of the boundaries and building restriction lines of such property (except
Mortgaged Properties which are legal non-conforming uses), to an extent
which would have a material adverse affect on the value of the Mortgaged
Property or related Mortgagor's use and operation of such Mortgaged
Property (unless affirmatively covered by title insurance) and no
improvements on adjoining properties encroached upon such Mortgaged
Property to any material and adverse extent (unless affirmatively covered
by title insurance).
29. Each Mortgage Loan with an original principal balance over $5,000,000
requires the Mortgagor to be for at least for so long as the Mortgage Loan
is outstanding and, to Seller's actual knowledge, each Mortgagor is, a
Single-Purpose Entity. For this purpose, "Single-Purpose Entity" means a
person, other than an individual, whose organizational documents provide,
or which entity represented and covenanted in the related Mortgage Loan
documents, substantially to the effect that such Mortgagor (i) does not
and will not have any material assets other than those related to its
interest in such Mortgaged Property or Properties or the financing
thereof; (ii) does not and will not have any indebtedness other than as
permitted by the related Mortgage or other related Mortgage Loan
documents; (iii) maintains its own books, records and accounts, in each
case which are separate and apart from the books, records and accounts of
any other person; and (iv) holds itself out as being a legal entity,
separate and apart from any other person. With respect to each Mortgage
Loan with an original principal balance over $15,000,000, the
organizational documents of the related Mortgagor provide substantially to
the effect that such Mortgagor (i) does not and will not have any material
assets other than those related to its interest in such Mortgaged Property
or Properties or the financing thereof; (ii) does not and will not have
any indebtedness other than as permitted by the related Mortgage or other
related Mortgage Loan documents; (iii) maintains its own books, records
and accounts, in each case which are separate and apart from the books,
records and accounts of any other person; and (iv) holds itself out as
being a legal entity, separate and apart from any other person. Each such
Mortgage Loan having an original principal balance of $20,000,000 or more
has a counsel's opinion regarding non-consolidation of the Mortgagor in
any insolvency proceeding involving any other party. The organizational
documents of any Mortgagor on a Mortgage Loan having an original principal
balance of $15,000,000 or more which is a single member limited liability
company provide that the Mortgagor shall not dissolve or liquidate upon
the bankruptcy, dissolution, liquidation or death of the sole member. With
respect to any such single member limited liability company, which is the
Mortgagor on a Mortgage Loan having an original principal balance of
$15,000,000 or more, the Mortgage Loan has an opinion of such Mortgagor's
counsel confirming that the law of the jurisdiction in which such single
member limited liability company was organized permits such continued
existence upon such bankruptcy, dissolution, liquidation or death of the
sole member of the Mortgagor.
30. No advance of funds has been made other than pursuant to the loan
documents, directly or indirectly, by the Seller to the Mortgagor and, to
the Seller's actual knowledge, no funds have been received from any Person
other than the Mortgagor, for or on account of payments due on the
Mortgage Note or the Mortgage.
31. As of the date of origination and, to the Seller's actual knowledge, as of
the Cut-Off Date, there was no pending action, suit or proceeding, or
governmental investigation of which it has received notice, against the
Mortgagor or the related Mortgaged Property the adverse outcome of which
could reasonably be expected to materially and adversely affect such
Mortgagor's ability to pay principal, interest or any other amounts due
under such Mortgage Loan or the security intended to be provided by the
Mortgage Loan documents or the current use of the Mortgaged Property.
32. As of the date of origination, and, to the Seller's actual knowledge, as
of the Cut Off Date, if the related Mortgage is a deed of trust, a
trustee, duly qualified under applicable law to serve as such, has either
been properly designated and serving under such Mortgage or may be
substituted in accordance with the Mortgage and applicable law.
33. The Mortgage Loan and the interest (exclusive of any default interest,
late charges or Prepayment Premiums) contracted for on such Mortgage Loan
(other than an ARD Loan after the Anticipated Repayment Date) complied as
of the date of origination with, or is exempt from, applicable state or
federal laws, regulations and other requirements pertaining to usury.
34. Except with respect to the Companion Loan of any Co-Lender Loan, the
related Mortgage Note is not secured by any collateral that secures a
Mortgage Loan that is not in the Trust Fund and each Crossed Loan is
cross-collateralized only with other Mortgage Loans sold pursuant to this
Agreement.
35. The improvements located on the Mortgaged Property are either not located
in a federally designated special flood hazard area or, if so located, the
Mortgagor is required to maintain or the mortgagee maintains, flood
insurance with respect to such improvements and such policy is in full
force and effect in an amount no less than the lesser of (i) the original
principal balance of the Mortgage Loan, (ii) the value of such
improvements on the related Mortgaged Property located in such flood
hazard area or (iii) the maximum allowed under the related federal flood
insurance program.
36. All escrow deposits and payments required pursuant to the Mortgage Loan as
of the Closing Date required to be deposited with the Seller in accordance
with the Mortgage Loan documents have been so deposited, are in the
possession, or under the control, of the Seller or its agent and there are
no deficiencies in connection therewith.
37. To the Seller's actual knowledge, based on the due diligence customarily
performed in the origination of comparable mortgage loans by prudent
commercial and multifamily mortgage lending institutions with respect to
the related geographic area and properties comparable to the related
Mortgaged Property, as of the date of origination of the Mortgage Loan,
the related Mortgagor, the related lessee, franchisor or operator was in
possession of all material licenses, permits and authorizations then
required for use of the related Mortgaged Property by the related
Mortgagor, and, as of the Cut-Off Date, the Seller has no actual knowledge
that the related Mortgagor, the related lessee, franchisor or operator was
not in possession of such licenses, permits and authorizations. The
Mortgage Loan documents require the Mortgagor to maintain all such
licenses, permits, authorizations and franchises.
38. The origination (or acquisition, as the case may be), servicing and
collection practices used by the Seller with respect to the Mortgage Loan
have been in all respects legal and have met customary industry standards
for servicing of commercial mortgage loans for conduit loan programs.
39. Except for Mortgagors under Mortgage Loans the Mortgaged Property with
respect to which includes a Ground Lease, the related Mortgagor (or its
affiliate) has title in the fee simple interest in each related Mortgaged
Property.
40. The Mortgage Loan documents for each Mortgage Loan provide that each
Mortgage Loan is non-recourse to the related Mortgagor except that the
related Mortgagor and an additional guarantor who is a natural person
accepts responsibility for fraud and/or other intentional material
misrepresentation and environmental indemnity. Furthermore, the Mortgage
Loan documents for each Mortgage Loan provide that the related Mortgagor
and an additional guarantor, who is a natural person, shall be liable to
the lender for losses incurred due to the misapplication or
misappropriation of rents collected in advance or received by the related
Mortgagor after the occurrence of an event of default and not paid to the
mortgagee or applied to the Mortgaged Property in the ordinary course of
business, misapplication or conversion by the Mortgagor of insurance
proceeds or condemnation awards or breach of the environmental covenants
in the related Mortgage Loan documents.
41. Subject to the exceptions set forth in paragraph (5) and upon possession
of the Mortgaged Property as required under applicable state law, the
Assignment of Leases set forth in the Mortgage or separate from the
related Mortgage and related to and delivered in connection with each
Mortgage Loan establishes and creates a valid, subsisting and enforceable
lien and security interest in the related Mortgagor's interest in all
leases, subleases, licenses or other agreements pursuant to which any
Person is entitled to occupy, use or possess all or any portion of the
real property.
42. With respect to such Mortgage Loan, any Prepayment Premium and Yield
Maintenance Charge constitutes a "customary prepayment penalty" within the
meaning of Treasury Regulations Section 1.860G-1(b)(2).
43. If such Mortgage Loan contains a provision for any defeasance of mortgage
collateral, such Mortgage Loan permits defeasance (1) no earlier than two
years after the Closing Date and (2) only with substitute collateral
constituting "government securities" within the meaning of Treasury
Regulations Section 1.860G-2(a)(8)(i) in an amount sufficient to make all
scheduled payments under the Mortgage Note. Such Mortgage Loan was not
originated with the intent to collateralize a REMIC offering with
obligations that are not real estate mortgages. In addition, if such
Mortgage contains such a defeasance provision, it provides (or otherwise
contains provisions pursuant to which the holder can require) that an
opinion be provided to the effect that such holder has a first priority
perfected security interest in the defeasance collateral. The related
Mortgage Loan documents permit the lender to charge all of its expenses
associated with a defeasance to the Mortgagor (including Rating Agencies'
fees, accounting fees and attorneys' fees), and provide that the related
Mortgagor must deliver (or otherwise, the Mortgage Loan documents contain
certain provisions pursuant to which the lender can require) (a) an
accountant's certification as to the adequacy of the defeasance collateral
to make payments under the related Mortgage Loan for the remainder of its
term, (b) an Opinion of Counsel that the defeasance complies with all
applicable REMIC Provisions, and (c) assurances from the Rating Agencies
that the defeasance will not result in the withdrawal, downgrade or
qualification of the ratings assigned to the Certificates. Notwithstanding
the foregoing, some of the Mortgage Loan documents may not affirmatively
contain all such requirements, but such requirements are effectively
present in such documents due to the general obligation to comply with the
REMIC Provisions and/or deliver a REMIC Opinion of Counsel.
44. To the extent required under applicable law as of the date of origination,
and necessary for the enforceability or collectability of the Mortgage
Loan, the originator of such Mortgage Loan was authorized to do business
in the jurisdiction in which the related Mortgaged Property is located at
all times when it originated and held the Mortgage Loan.
45. Neither the Seller nor any affiliate thereof has any obligation to make
any capital contributions to the Mortgagor under the Mortgage Loan.
46. Except with respect to the Companion Loan of any Co-Lender Loan, none of
the Mortgaged Properties is encumbered, and none of the Mortgage Loan
documents permits the related Mortgaged Property to be encumbered
subsequent to the Closing Date without the prior written consent of the
holder thereof, by any lien securing the payment of money junior to or of
equal priority with, or superior to, the lien of the related Mortgage
(other than Title Exceptions, taxes, assessments and contested mechanics
and materialmens liens that become payable after the Cut-Off Date of the
related Mortgage Loan).
47. Each related Mortgaged Property constitutes one or more complete separate
tax lots (or the related Mortgagor has covenanted to obtain separate tax
lots and a Person has indemnified the mortgagee for any loss suffered in
connection therewith or an escrow of funds in an amount sufficient to pay
taxes resulting from a breach thereof has been established) or is subject
to an endorsement under the related title insurance policy.
48. An appraisal of the related Mortgaged Property was conducted in connection
with the origination of such Mortgage Loan; and such appraisal satisfied
either (A) the requirements of the "Uniform Standards of Professional
Appraisal Practice" as adopted by the Appraisal Standards Board of the
Appraisal Foundation, or (B) the guidelines in Title XI of the Financial
Institutions Reform, Recovery and Enforcement Act or 1989, in either case
as in effect on the date such Mortgage Loan was originated.
49. In the origination and servicing of the Mortgage Loan, neither Seller nor
any prior holder of the Mortgage Loan participated in any fraud or
intentional material misrepresentation with respect to the Mortgage Loan.
To Seller's knowledge, no Mortgagor or guarantor originated a Mortgage
Loan.
50. Each Mortgage or related Mortgage Loan documents require the Mortgagor,
upon request, to provide the owner or holder of the Mortgage with
quarterly (except for some Mortgage Loans with an original principal
balance less than $5,000,000) and annual operating statements (or a
balance sheet and statement of income and expenses), rent rolls (if there
is more than one tenant) and related information, which annual financial
statements for all Mortgage Loans with an outstanding principal balance
greater than $20,000,000 are required to be audited by an independent
certified public accountant.
51. Each Mortgaged Property is served by public utilities, water and sewer (or
septic facilities) and otherwise appropriate for the use in which the
Mortgaged Property is currently being utilized.
52. If the Mortgaged Property securing any Mortgage Loan is covered by a
secured creditor policy, then:
(a) the Seller:
(i) has disclosed, or is aware that there has been
disclosed, in the application for such policy or
otherwise to the insurer under such policy the
"pollution conditions" (as defined in such policy)
identified in any environmental reports related to such
Mortgaged Property which are in the Seller's possession
or are otherwise known to the Seller; or
(ii) has delivered or caused to be delivered to the insurer
or its agent under such policy copies of all
environmental reports in the Seller's possession related
to such Mortgaged Property;
in each case, with respect to (i) or (ii), to the extent required by such
policy or to the extent the failure to make any such disclosure or deliver
any such report would materially and adversely affect the Mortgagor's
ability to recover under such policy;
(b) all premiums for such insurance have been paid;
(c) such insurance is in full force and effect;
(d) such insurance has a term of at least five years beyond the maturity
date (or the Anticipated Repayment Date for ARD Loans) of such
Mortgage Loan;
(e) an environmental report, a property condition report or an
engineering report was prepared that included an assessment for
lead-based paint ("LBP") (in the case of a multifamily property
built prior to 1978), asbestos-containing materials ("ACM") (in the
case of any property built prior to 1985) and radon gas ("RG") (in
the case of a multifamily property) at such Mortgaged Property and
(ii) if such report disclosed the existence of a material and
adverse LBP, ACM or RG environmental condition or circumstance
affecting such Mortgaged Property, then, except as otherwise
described on Schedule II, (A) the related Mortgagor was required to
remediate such condition or circumstance prior to the closing of the
subject Mortgage Loan, or (B) the related Mortgagor was required to
provide additional security reasonably estimated to be adequate to
cure such condition or circumstance, or (C) such report did not
recommend any action requiring the expenditure of any material funds
and the related Mortgage Loan documents require the related
Mortgagor to establish an operations and maintenance plan with
respect to such condition or circumstance after the closing of such
Mortgage Loan; and
(f) rights under such policy inure to the benefit of the Purchaser.
53. Each Mortgage Loan was originated by or for a savings and loan
association, savings bank, commercial bank, credit union, insurance
company, or similar institution that is supervised and examined by a
Federal or State authority, or by a mortgagee approved by the Secretary of
Housing and Urban Development pursuant to Sections 203 and 211 of the
National Housing Act; each Mortgaged Property consists of one or more
separate tax parcels of real property upon which is located one or more
commercial structures and otherwise meets the requirements for eligibility
under the Secondary Mortgage Market Enhancement Act of 1984 for commercial
property; and
54. Each Mortgage Loan is secured by the fee interest in the related Mortgaged
Property, except with respect to loan numbers 39, 116 and 123 listed on
the Mortgage Loan Schedule, which Mortgage Loans are secured by the
interest of the related Mortgagor as a lessee under a ground lease of a
Mortgaged Property (a "Ground Lease") (the term Ground Lease shall mean
such ground lease, all written amendments and modifications, and any
related estoppels or agreements from the ground lessor and, in the event
the Mortgagor's interest is a ground subleasehold, shall also include not
only such ground sublease but also the related ground lease) (or, with
respect to loan numbers 39 and 123, which Mortgage Loans are secured by
fee interests with respect to certain of the related Mortgaged Properties
and ground leases with respect to other of the related Mortgaged
Properties), but not by the related fee interest in such Mortgaged
Property (the "Fee Interest") and:
(a) Such Ground Lease or a memorandum thereof has been or will be duly
recorded; such Ground Lease permits the interest of the lessee
thereunder to be encumbered by the related Mortgage or, if consent
of the lessor thereunder is required, it has been obtained prior to
the Closing Date, and does not restrict the use of the related
Mortgaged Property by such lessee, its successors or assigns, in a
manner that would materially adversely affect the security provided
by the related Mortgage; and there has been no material change in
the terms of such Ground Lease since its recordation, with the
exception of written instruments which are a part of the related
Mortgage File;
(b) Such Ground Lease is not subject to any liens or encumbrances
superior to, or of equal priority with, the related Mortgage, other
than the related Fee Interest and Title Exceptions;
(c) The Mortgagor's interest in such Ground Lease is assignable to the
mortgagee and its successors and assigns upon notice to, but without
the consent of, the lessor thereunder (or, if such consent is
required, it has been obtained prior to the Cut-Off Date) and, in
the event that it is so assigned, is further assignable by the
mortgagee and its successors and assigns upon notice to, but without
the need to obtain the consent of, such lessor (or, if such consent
is required, it has been obtained prior to the Cut-Off Date);
(d) As of the Closing Date such Ground Lease is in full force and
effect, and the Seller has not received notice (nor is the Seller
otherwise aware) that any default has occurred under such Ground
Lease as of the Cut-Off Date;
(e) Seller or its agent has provided the lessor under the Ground Lease
with notice of its lien, and such Ground Lease requires the lessor
to give notice of any default by the lessee to the mortgagee, and
such Ground Lease, further provides that no notice of termination
given under such Ground Lease is effective against such mortgagee
unless a copy has been delivered to such mortgagee in the manner
described in such Ground Lease;
(f) The mortgagee under such Mortgage Loan is permitted a reasonable
opportunity to cure any default under such Ground Lease (including
where necessary, sufficient time to gain possession of the interest
of the lessee under the Ground Lease), which is curable after the
receipt of written notice of any such default, before the lessor
thereunder may terminate such Ground Lease, and all of the rights of
the Mortgagor under such Ground Lease and the related Mortgage
(insofar as it relates to the Ground Lease) may be exercised by or
on behalf of the mortgagee;
(g) Such Ground Lease has a current term (including one or more optional
renewal terms, which, under all circumstances, may be exercised, and
will be enforceable, by the Seller, its successors or assigns) which
extends not less than 10 years beyond the amortization term of the
related Mortgage Loan;
(h) Such Ground Lease requires the lessor to enter into a new lease with
the mortgagee under such Mortgage Loan upon termination of such
Ground Lease for any reason, including rejection of such Ground
Lease in a bankruptcy proceeding;
(i) Under the terms of such Ground Lease and the related Mortgage, taken
together, any related insurance proceeds or condemnation award will
be applied either (i) to the repair or restoration of all or part of
the related Mortgaged Property, with the mortgagee under such
Mortgage Loan or a trustee appointed by it having the right to hold
and disburse such proceeds as the repair or restoration progresses
(except in such cases where a provision entitling another party to
hold and disburse such proceeds would not be viewed as commercially
unreasonable by a prudent commercial mortgage lender), or (ii) to
the payment of the outstanding principal balance of such Mortgage
Loan together with any accrued interest thereon;
(j) Such Ground Lease does not impose any restrictions on subletting
which would be viewed as commercially unreasonable by a prudent
commercial mortgage lender; and the lessor thereunder is not
permitted, in the absence of an uncured default, to disturb the
possession, interest or quiet enjoyment of any lessee in the
relevant portion of the Mortgaged Property subject to such Ground
Lease for any reason, or in any manner, which would materially
adversely affect the security provided by the related Mortgage; and
(k) Such Ground Lease may not be amended or modified without the prior
consent of the mortgagee under such Mortgage Loan and any such
action without such consent is not binding on such mortgagee, its
successors or assigns.
SCHEDULE II
EXCEPTIONS TO REPRESENTATIONS AND WARRANTIES
[See Attached]
WBCMT 2006-C-27
SCHEDULE OF EXCEPTIONS TO REPRESENTATION AND WARRANTIES
Representation #3
---------------------------------------------------------------------------
Loan Number Loan Name Description of Exception
---------------------------------------------------------------------------
Centennial Plaza The agreement between the Oxnard
Community Development Commission
("CDC") and the Borrower involves a
Right of Reverter, which allows the
CDC to take control of the subject
property if several operating
covenants are not met. These covenants
require that the property be in
continual use for the next 25 years as
a movie theater and that the revenue
from the theater equal or exceed
$208,000 per month in any 60-month
period.
The title policy insures against any
losses that are sustained in relation
to the Right of Reverter. These losses
include damages if the Right of
Reverter is ever exercised.
There exist three Notes in the amount
of $1,800,000 which are secured by
equity interest in the borrower. The
said Notes are owed to the Oxnard
Community Development Commission
("CDC") and have a term of 25 years
and an interest rate of 5%.
---------------------------------------------------------------------------
Sedalia Medical The city has a 15 year right of
Office revertion to the property if it is not
used as a professional office.
Title coverage was obtained over
revertion. Recourse provisions include
loss and damage and the city provided
a subordination with notice and right
to cure within 30 days. Per the
subordination agreement, if breeched,
the revertion is only to the misused
portion.
---------------------------------------------------------------------------
Fairfield Inn and Pursuant to the Cherokee Code
Suites - published by Order of the Tribal
Cherokee, NC Council of the Eastern Band of
Cherokee Indians (to which the
mortgage loan is subject), the
Mortgagor's leasehold interest does
not have priority over any lien or
claim arising from a Tribal levy or
assessment imposed against the
mortgaged property after recording the
mortgage.
---------------------------------------------------------------------------
Lakeridge West The property also secures a B-Note
Apartments with a principal balance of $800,000.
---------------------------------------------------------------------------
Yuma Palms There is $8,000,000 of existing
mezzanine financing. Incoming TIC
funds shall be used to pay down the
mezzanine loan. After 9 months a cash
flow sweep shall be triggered and
continue until mezzanine is paid in
full.
---------------------------------------------------------------------------
Representation #4
---------------------------------------------------------------------------
Loan Number Loan Name Description of Exception
---------------------------------------------------------------------------
Best Western At closing a portion of the loan
Xxxxxx, Forest proceeds were escrowed to be disbursed
Hills MHC, upon satisfying certain criteria
Glendale Center, outlined in the loan documents.
Lakemont Ridge RV
and MHC, Mobile
Estates, Sherwood
& Bourne End MHC,
Village Mall,
Westwood MHC,
Xxxx Xxxxx,
Forest Hill,
Bangs MHP
---------------------------------------------------------------------------
Representation #8
---------------------------------------------------------------------------
Loan Number Loan Name Description of Exception
---------------------------------------------------------------------------
Centennial Plaza The agreement between the Oxnard
Community Development Commission
("CDC") and the Borrower involves a
Right of Reverter, which allows the
CDC to take control of the subject
property if several operating
covenants are not met. These covenants
require that the property be in
continual use for the next 25 years as
a movie theater and that the revenue
from the theater equal or exceed
$208,000 per month in any 60-month
period.
The title policy insures against any
losses that are sustained in relation
to the Right of Reverter. These losses
include damages if the Right of
Reverter is ever exercised.
There exist three Notes in the amount
of $1,800,000 which are secured by
equity interest in the borrower. The
said Notes are owed to the Oxnard
Community Development Commission
("CDC") and have a term of 25 years
and an interest rate of 5%.
---------------------------------------------------------------------------
Sedalia Medical The city has a 15 year right of
Office revertion to the property if it is not
used as a professional office.
Title coverage was obtained over
revertion. Recourse provisions include
loss and damage and the city provided
a subordination with notice and right
to cure within 30 days. Per the
subordination agreement, if breeched,
the revertion is only to the misused
portion.
---------------------------------------------------------------------------
Fairfield Inn and Pursuant to the Cherokee Code
Suites - published by Order of the Tribal
Cherokee, NC Council of the Eastern Band of
Cherokee Indians (to which the
mortgage loan is subject), the
Mortgagor's leasehold interest does
not have priority over any lien or
claim arising from a Tribal levy or
assessment imposed against the
mortgaged property after recording the
mortgage.
---------------------------------------------------------------------------
Lakeridge West The property also secures a B-Note
Apartments with a principal balance of $800,000.
---------------------------------------------------------------------------
Yuma Palms There is $8,000,000 of existing
mezzanine financing. Incoming TIC
funds shall be used to pay down the
mezzanine loan. After 9 months a cash
flow sweep shall be triggered and
continue until mezzanine is paid in
full.
---------------------------------------------------------------------------
Representation #11
---------------------------------------------------------------------------
Loan Number Loan Name Description of Exception
---------------------------------------------------------------------------
DEA Building, An immediate repair reserve was not
Yuma Palms collected at closing.
---------------------------------------------------------------------------
Glendale Center There is also an Adjacent Land Parcel
for which Xxxxxxx is considering
development opportunities. The
Adjacent Land Parcel is currently part
of the collateral, but may be released
subsequent to closing. Development may
commence prior to the release of the
parcel and the Lender has been
indemnified for any losses.
---------------------------------------------------------------------------
315 South Xxxxxxx Borrower recently completed the first
Drive phase of an estimated $2.0 million
capital improvement plan. The second
phase of capital improvements has been
started and is an ongoing process. It
is expected to be completed in
September 2006.
---------------------------------------------------------------------------
Rancho Las Brisas The borrower plans on renovating units
as they turnover, estimated at 40% per
year over the next two to three years.
At closing, $650,000 from Loan
proceeds was placed into a CapEx
Reserve to be held with Lender's
designee to fund renovation
expenditures.
---------------------------------------------------------------------------
Representation #12
---------------------------------------------------------------------------
Loan Number Loan Name Description of Exception
---------------------------------------------------------------------------
Fairfield Inn and Pursuant to the Cherokee Code
Suites - published by Order of the Tribal
Cherokee, NC Council of the Eastern Band of
Cherokee Indians (to which the
mortgage loan is subject), the
Mortgagor's leasehold interest does
not have priority over any lien or
claim arising from a Tribal levy or
assessment imposed against the
mortgaged property after recording the
mortgage.
---------------------------------------------------------------------------
Representation #13
---------------------------------------------------------------------------
Loan Number Loan Name Description of Exception
---------------------------------------------------------------------------
Shell Creek Resort The property is covered by four months
of business interruption insurance. A
non recourse carveout was added to the
Note and Indemnity making Borrower and
Indemnitor personally liable for one
month of Rent Loss insurance proceeds.
In the event 12 months of Rent Loss
insurance is subsequently available
for the property, Lender may require
that borrower obtain such insurance.
---------------------------------------------------------------------------
Yuma Palms If any of the policies of insurance
contain an exclusion from coverage for
acts of terrorism, Mortgagor shall not
be required to obtain such coverage
provided (I) an Inland entity executes
a guaranty, in form and substance
satisfactory to Lender, guaranteeing
in the event of any act of terrorism,
payment to Lender of any sums that
would have been payable to Lender
under such coverage (which shall be
applied by Lender in accordance with
6.4 hereof), and (II) the Inland
entity maintains a net worth of at
least $300,000,000 (as determined by
such entity's most recent audited
financial statements), such entity
maintains a direct or indirect
ownership interest in Mortgagor, and
the aggregate loan to value ratio (as
determined by Lender) ("LTV") for all
properties on which such entity has a
direct or indirect ownership interest
shall not exceed 60%, however, the
Inland entity may exceed the 60% LTV
for a period not to exceed six (6)
months out of any twelve (12) month
period either (1) during the time
period when the Inland entity is
offering securities to the public or
2) when in the business judgment of
the Inland entity, exceeding an LTV of
60% is necessary given existing
circumstances of the credit
environment, but in no event shall the
LTV exceed 65% if the Inland entity
maintains a net worth greater than or
equal to $300,000,000, but less than
$400,000,000, or 70% if the Inland
entity maintains a net worth of at
least $400,000,000.
---------------------------------------------------------------------------
DEA Building Tenant may self insure.
---------------------------------------------------------------------------
Pan Am Building Upon policy expiration (and each
expiration thereafter), terrorism
insurance will be required up to a
cost that is the lesser of i)110% of
the previous annual all-risk hazard
premium amounts, or ii)150% of a
stand-alone Terrorism Insurance policy.
---------------------------------------------------------------------------
Representation #17
---------------------------------------------------------------------------
Lakeridge West The property also secures a B-Note
Apartments with a principal balance of $800,000.
---------------------------------------------------------------------------
Yuma Palms There is $8,000,000 of existing
mezzanine financing. Incoming TIC
funds shall be used to pay down the
mezzanine loan. After 9 months a cash
flow sweep shall be triggered and
continue until mezzanine is paid in
full.
---------------------------------------------------------------------------
Crown Building Secondary debt secured by the property
will be allowed subject to a maximum
LTV of 70% and a minimum DSCR of 1.60x
for the total debt.
---------------------------------------------------------------------------
Centennial Plaza There exist three Notes in the amount
of $1,800,000 which are secured by
equity interest in the borrower. The
said Notes are owed to the Oxnard
Community Development Commission
("CDC") and have a term of 25 years
and an interest rate of 5%.
---------------------------------------------------------------------------
Representation #19
---------------------------------------------------------------------------
Loan Number Loan Name Description of Exception
---------------------------------------------------------------------------
Glendale Center The subject property is located within
a portion of the San Xxxxxxxx Valley
that is listed as a Superfund site on
the National Priority List (NPL). This
area is part of the San Xxxxxxxx
Valley Groundwater Basin, which is
contaminated with volatile organic
compounds (VOCs), including
trichloroethylene (TCE) and
perchloroethylene (PCE). It should be
noted that the subject property has
not been identified as a responsible
party and the drinking water at the
site is supplied by the local
municipality.
---------------------------------------------------------------------------
Crown Building, There is no entity or warm body on the
315 South Xxxxxxx carveouts.
---------------------------------------------------------------------------
Yuma Palms Only the mortgagor is liable for the
environmental covenants.
---------------------------------------------------------------------------
Bernalillo Liability for each tenant in common is
Marketplace; limited to their contribution.
Cherry Creek
Business Park;
DEA Building; Pan
Am Building;
Pineview
Apartments;
Stonehue Center;
Village Mall;
Model T Plaza
---------------------------------------------------------------------------
Embassy Suites There is no warm body for the
Lake Tahoe; environmental carveouts.
Glendale Center;
Rocky Branch
Shopping Center;
10333 Harwin;
17043 El Camino
---------------------------------------------------------------------------
Representation #22
---------------------------------------------------------------------------
Yuma Palms There is $8,000,000 of existing
mezzanine financing currently held by
NCCI. Incoming TIC funds shall be used
to pay down the mezzanine loan. After
9 months a cash flow sweep shall be
triggered and continue until mezzanine
is paid in full.
---------------------------------------------------------------------------
Centennial Plaza There exist three Notes in the amount
of $1,800,000 which are secured by
equity interest in the borrower. The
said Notes are owed to the Oxnard
Community Development Commission
("CDC") and have a term of 25 years
and an interest rate of 5%.
---------------------------------------------------------------------------
Representation #23
---------------------------------------------------------------------------
Loan Number Loan Name Description of Exception
---------------------------------------------------------------------------
Encino Town Center Transfer of limited partnership
interests in Borrower to persons who
are limited partners at the time of
closing shall not be a violation of
the Due on Sale clause so long as the
Borrower is reconstituted, if
necessary, so that persons responsible
for the management of the property and
Borrower remain unchanged.
---------------------------------------------------------------------------
Garden Valley Up to 49% of the non-managing
interests are freely transferable. The
property may be transferred to a newly
formed SPE wholly owned and controlled
by Westwind Enterprises, Ltd. so long
as Xxx X. Xxxxxx, XX maintains
managerial control and his total
family interests in the entity do not
decrease.
---------------------------------------------------------------------------
Glendale Center The following transfers shall not be
deemed to be a Transfer and shall not
require Lender's consent: i) Sale or
transfer, in one or a series of
transactions, of not more than 49% of
the stock in a Restricted Party; ii)
Sale or transfer, directly or
indirectly, in one or a series of
transactions, of not more than 49% of
the limited partnership interests or
non managing limited liability company
interests in a Restricted Party.
---------------------------------------------------------------------------
Yuma Palms A transfer does not include a) any
issuance, sale or transfer of interest
in/to the REIT, a wholly owned
subsidiary of the REIT, or any other
reit sponsored by Inland American Real
Estate Trust, Inc. or other entity
created through merger b) transfer by
devise or descent or by operation of
law upon the death of a member of
Mortgagor, c) a transfer to a
transferee in which the sponsor or a
directly or indirectly owned affiliate
owns at least 20% of the transferee
and is the managing entity and d) a
sale, transfer or hypothecation of a
membership interest in Mortgagor by
the current member(s) to an immediate
family member of such member. After 12
months of loan closing, Mortgagor may
transfer greater than 49% of the
direct or indirect interests in the
Mortgagor, provided that the transfer
is to a Qualified Entity. A Qualified
Entity is an entity with x) a net
worth of $200,000,000 y) sufficient
experience as determined by Lender,
and z) which owns or manages retail
properties containing at least
1,000,000 square feet of gross
leasable area.
---------------------------------------------------------------------------
Bernalillo Transfers of interest in Mortgagor are
Marketplace; permitted to any entity that is party
Business Park; to or will be party to the related TIC
DEA Building; Pan Agreement.
Am Building;
Pineview
Apartments;
Stonehue Center;
Village Mall;
Model T Plaza
---------------------------------------------------------------------------
Cherry Creek Transfers of interest in Mortgagor are
permitted to any entity that is party
to or will be party to the related TIC
Agreement. Additionally, Borrower may
make an interim transfer to
ScanlanKemperBard Companies, LLC or
its members upon satisfaction of
certain conditions.
---------------------------------------------------------------------------
Crown Building Secured and unsecured secondary debt
will be allowed subject to a maximum
LTV of 70% and a minimum DSCR of 1.60x
for the total debt.
---------------------------------------------------------------------------
Pan Am Building Mezzanine financing will be allowed
subject to a maximum LTV of 85% and a
minimum DSCR of 1.10x for the total
debt.
---------------------------------------------------------------------------
San Antonio Mezzanine financing will be allowed
Retail Portfolio subject to a maximum LTV of 75% and a
minimum DSCR of 1.25x for the total
debt.
---------------------------------------------------------------------------
315 South Xxxxxxx Mezzanine financing will be allowed
Drive subject to a maximum LTV of 80% and a
minimum DSCR of 1.10x for the total
debt.
---------------------------------------------------------------------------
Cherry Creek Mezzanine financing will be allowed
Business Park subject to a maximum LTV of 80% and a
minimum DSCR of 1.20x for the total
debt.
---------------------------------------------------------------------------
Representation #26
---------------------------------------------------------------------------
Loan Number Loan Name Description of Exception
---------------------------------------------------------------------------
10333 Harwin - Properties may be released from cross
Houston, TX; upon achieving i) 1.20 DSCR; ii) Max
17043 El Camino of 80% LTV; iii) Annualized NOI for
property for preceding min. of 6
months must be at least $908,152 for
00000 Xxxxxx - Xxxxxxx, XX or $462,390
for 17043 El Camino
---------------------------------------------------------------------------
Comfort Suites - Following the initial two-year lockout
Pineville & period, Lender will allow the release
Quality Inn and of the Quality Inn & Suites pursuant
Suites - Hickory to conditions including a pay down of
the Loan balance at 150% of the then
outstanding principal balance, subject
to the applicable Yield Maintenance
penalties; the remaining subject
collateral maintaining the Minimum
DSCR of 1.35x and a Maximum LTV of
75%.
---------------------------------------------------------------------------
DEA Building, An unimproved portion of the property
Model T Plaza may be freely released.
---------------------------------------------------------------------------
Lakemont Ridge RV To the extent any mobile homes are
and MHP abandoned by any tenants, Borrower may
obtain title and dispose of such
mobile homes pursuant to applicable
Florida law without replacing such
Collateral.
---------------------------------------------------------------------------
Glendale Center There is an Adjacent Land Parcel for
which Xxxxxxx is considering
development opportunities. The
Adjacent Land Parcel is currently part
of the collateral, but may be released
subsequent to closing provided various
conditions in the loan documents are
met.
At loan closing, a ground lease had
been entered into between the
Borrower, as lessor, and an affiliate
of the Borrower, as lessee, with
respect to the Adjacent Parcel, a
memorandum of which has been recorded
(the "Ground Lease"). Prior to release
of the parcel, the Ground Lease will
be modified consistent with the latest
development plans and requirements.
Xxxxxxx has indemnified the lender for
any losses incurred prior to or during
the release of the parcel. Development
may commence prior to the release of
the parcel and the Lender has been
indemnified for any losses.
---------------------------------------------------------------------------
San Antonio After the Earliest Permitted
Retail Portfolio Defeasance Date, Lender shall consent
from time to time to a release of
either the Xxxxxxxxx West Property or
South Xxxxxx Property together with
improvements from the lien of the
Mortgage provided various conditions
are met including an LTV of 80%; a
DSCR of 1.20x; and a paydown of 120%
of the Allocated Value for the
property being released.
---------------------------------------------------------------------------
Walgreens - 153 The 7-Eleven portion of the property
Kearny may be released from the subject
collateral. The loan must be paid down
at 110% of the attributable value for
the 7-Eleven suite and the remaining
collateral must meet the minimum DSCR
of 1.06x and maximum LTV of 75%. In
addition, there are basement space,
mezzanine space and airspace parcels
that may be freely released from the
collateral.
---------------------------------------------------------------------------
Representation #27
---------------------------------------------------------------------------
Loan Number Loan Name Description of Exception
---------------------------------------------------------------------------
Lakemont Ridge RV Borrower has received 6 Notices of Non
and MHP Compliance/Notice of Violation Letters
with regard to issues at the on-site
waste water treatment facility and/or
Storm Water Pond No. 1. An escrow was
established at closing to address the
noted violations.
---------------------------------------------------------------------------
San Antonio The Jazzercise space in the Xxxxxxxxx
Retail Portfolio property did not have a certificate of
occupancy.
---------------------------------------------------------------------------
Representation #29
---------------------------------------------------------------------------
Loan Number Loan Name Description of Exception
---------------------------------------------------------------------------
315 South A non-consolidation opinion was not
Xxxxxxx, Encino obtained.
Town Center
---------------------------------------------------------------------------
Representation #31
---------------------------------------------------------------------------
Loan Number Loan Name Description of Exception
---------------------------------------------------------------------------
Bangs Mobile Home Bangs Mobile Home Park and Xxxxxx
Park Bangs personally are being sued for
damages in excess of $45,000. $50,000
was held back at closing to cover the
potential cost of this law suit until
such time as it is settled.
---------------------------------------------------------------------------
Suntree Apartments The lender was notified of a pending
litigation by a subcontractor against
the construction company and the
previous property owner of the subject
property. At loan closing, the
construction company was in the
process of posting a bond for the
claim which would be used to satisfy
any judgment. At closing, $200,000 was
held back to cover costs of the claim
in case the borrower does not post the
bond. Once the bond has been posted or
the claim has been dismissed, the
lender shall release the funds to the
borrower.
---------------------------------------------------------------------------
Garden Valley There is a judgement against the
sponsor for $3,000,000 related to an
accidental death on a playground. The
sponsor's insurance company is
appealing and this matter will
probably be settled for a lesser
amount. The primary carrier is TIG
provides $1 million and the $10
million umbrella policy is with AIG.
---------------------------------------------------------------------------
Sedalia Medical The sponsor is subject to a suit
Office related to losses in a profit sharing
plan. According to the correspondent,
the maximum potential loss is $99,000
and the plan has assets of $1.5-1.6
million.
---------------------------------------------------------------------------
Representation #34
---------------------------------------------------------------------------
Loan Number Loan Name Description of Exception
---------------------------------------------------------------------------
Lakeridge West The property also secures a B-Note
Apartments with a principal balance of $800,000.
---------------------------------------------------------------------------
Representation #35
---------------------------------------------------------------------------
Loan Number Loan Name Description of Exception
---------------------------------------------------------------------------
Sherwood/Bourne An unimproved portion of the property
lies within a flood zone. Flood
insurance was not required.
---------------------------------------------------------------------------
Representation #37
---------------------------------------------------------------------------
Loan Number Loan Name Description of Exception
---------------------------------------------------------------------------
Lakemont Ridge RV Borrower has received 6 Notices of Non
and MHP Compliance/Notice of Violation Letters
with regard to issues at the on-site
waste water treatment facility and/or
Storm Water Pond No. 1. An escrow was
established at closing to address the
noted violations.
---------------------------------------------------------------------------
San Antonio The Jazzercise space in the Xxxxxxxxx
Retail Portfolio property did not have a certificate of
occupancy.
---------------------------------------------------------------------------
Representation #40
---------------------------------------------------------------------------
Loan Number Loan Name Description of Exception
---------------------------------------------------------------------------
Crown Building, There is no entity or warm body on the
315 South Xxxxxxx carveouts.
---------------------------------------------------------------------------
Yuma Palms Only the mortgagor is liable for the
environmental covenants.
---------------------------------------------------------------------------
Bernalillo Liability for each tenant in common is
Marketplace; limited to their contribution.
Cherry Creek
Business Park;
DEA Building; Pan
Am Building;
Pineview
Apartments;
Stonehue Center;
Village Mall;
Model T Plaza
---------------------------------------------------------------------------
Embassy Suites There is no warm body for the
Lake Tahoe; carveouts.
Glendale Center;
Rocky Branch
Shopping Center;
10333 Harwin;
17043 El Camino
---------------------------------------------------------------------------
Representation #46
---------------------------------------------------------------------------
Loan Number Loan Name Description of Exception
---------------------------------------------------------------------------
Lakeridge West The property also secures a B-Note
Apartments with a principal balance of $800,000.
---------------------------------------------------------------------------
Crown Building Secured and unsecured secondary debt
will be allowed subject to a maximum
LTV of 70% and a minimum DSCR of 1.60x
for the total debt.
---------------------------------------------------------------------------
Pan Am Building Mezzanine financing will be allowed
subject to a maximum LTV of 85% and a
minimum DSCR of 1.10x for the total
debt.
---------------------------------------------------------------------------
San Antonio Mezzanine financing will be allowed
Retail Portfolio subject to a maximum LTV of 75% and a
minimum DSCR of 1.25x for the total
debt.
---------------------------------------------------------------------------
315 South Xxxxxxx Mezzanine financing will be allowed
Drive subject to a maximum LTV of 80% and a
minimum DSCR of 1.10x for the total
debt.
---------------------------------------------------------------------------
Cherry Creek Mezzanine financing will be allowed
Business Park subject to a maximum LTV of 80% and a
minimum DSCR of 1.20x for the total
debt.
---------------------------------------------------------------------------
Representation #47
---------------------------------------------------------------------------
Loan Number Loan Name Description of Exception
---------------------------------------------------------------------------
Model T Plaza The tax lot covering the property also
covers real property that is not
collateral. The Borrower is required
to promptly file a separate tax lot
application. The entire tax lot's
assessments are taken into account in
calculating the impound account
deposits.
---------------------------------------------------------------------------
Shell Creek Resort There is a 10' X 106' foot strip of
land which lies north of Lot 7 and
south of Lot 8 that Borrower does not
currently hold title to, but which is
included in one of the two tax parcels
for the property.
---------------------------------------------------------------------------
Walgreens - 153 The tax parcel currently includes
Kearny property that is not owned by the
Borrower. All stops to obtain a
separate tax parcel have been
completed.
---------------------------------------------------------------------------
Representation #50
---------------------------------------------------------------------------
Loan Number Loan Name Description of Exception
---------------------------------------------------------------------------
315 South Xxxxxxx Audited financial statements are not
Drive, Embassy required.
Suites Lake
Tahoe, Encino
Town Center,
Glendale Center,
Pan Am Building,
Rancho Las
Brisas, Village
Mall, Yuma Palms
---------------------------------------------------------------------------
Representation #51
---------------------------------------------------------------------------
Loan Number Loan Name Description of Exception
---------------------------------------------------------------------------
Lakemont Ridge, The property utilizes well water.
Shell Creek
---------------------------------------------------------------------------
Representation #53
---------------------------------------------------------------------------
Loan Number Loan Name Description of Exception
---------------------------------------------------------------------------
Model T Plaza The tax lot covering the property also
covers real property that is not
collateral. The Borrower is required
to promptly file a separate tax lot
application. The entire tax lot's
assessments are taken into account in
calculating the impound account
deposits.
---------------------------------------------------------------------------
Shell Creek Resort There is a 10' X 106' foot strip of
land which lies north of Lot 7 and
south of Lot 8 that Borrower does not
currently hold title to, but which is
included in one of the two tax parcels
for the property.
---------------------------------------------------------------------------
Walgreens - 153 The tax parcel currently includes
Kearny property that is not owned by the
Borrower. All stops to obtain a
separate tax parcel have been
completed.
---------------------------------------------------------------------------
Representation #54
---------------------------------------------------------------------------
Loan Number Loan Name Description of Exception
---------------------------------------------------------------------------
Best Western - Fee/Leasehold
Ramsey, NJ
---------------------------------------------------------------------------
000 Xxxxx Xxxxxxx Xxx/Xxxxxxxxx
Xxxxx
---------------------------------------------------------------------------
Fairfield Inn and Leasehold
Suites - Cherokee
---------------------------------------------------------------------------
Representation #54 - All subsections
---------------------------------------------------------------------------
Loan Number Loan Name Description of Exception
---------------------------------------------------------------------------
Best Western - The property is structured with a
Ramsey, NJ related party ground lease that serves
as an operating lease and generally
does not meet any of the
representations. Lender has both a fee
and leasehold interest.
---------------------------------------------------------------------------
4
Representation #54 b
---------------------------------------------------------------------------
Loan Number Loan Name Description of Exception
---------------------------------------------------------------------------
Fairfield Inn and Pursuant to the Cherokee Code
Suites published by Order of the Tribal
Council of the Eastern Band of
Cherokee Indians (to which the
mortgage loan is subject), the
Mortgagor's leasehold interest does
not have priority over any lien or
claim arising from a Tribal levy or
assessment imposed against the
mortgaged property after recording the
mortgage.
---------------------------------------------------------------------------
Representation #54 h
---------------------------------------------------------------------------
Loan Number Loan Name Description of Exception
---------------------------------------------------------------------------
315 South Xxxxxxx The ground lease is silent as to
requiring a new lease upon rejection
in bankruptcy.
---------------------------------------------------------------------------
Representation #54 i
---------------------------------------------------------------------------
Loan Number Loan Name Description of Exception
---------------------------------------------------------------------------
Fairfield Inn and The Ground Lease requires that any
Suites casualty insurance proceeds be applied
to the repair or restoration of the
mortgage property (and not to the
repayment of the outstanding principal
balance of the mortgage loan).
Further, the ground lease requires
that insurance proceeds be deposited
in escrow with an institution approved
by the Tribal Secretary. The Borrower
provided an additional recourse
carveout provision providing that the
Mortgage Loan shall be fully recourse
to Borrower and Indemnitor in the
event that a casualty occurs and an
event of default occurs thereafter but
prior to the completion of the repairs
and restoration of the damaged
improvements.
---------------------------------------------------------------------------
315 South Xxxxxxx The lender does not have the right to
hold and disburse casualty proceeds or
condemnation awards.
---------------------------------------------------------------------------
EXHIBIT A
Mortgage Loan Schedule
Mortgage Loan Number Loan Group Number Property Name
-------------------- ----------------- ----------------------------------------
7 1 Glendale Center
10 1 Yuma Palms Regional Center
11 1 Pan Am Building
12 1 Embassy Suites - South Lake Tahoe, CA(2)
27 1 Xxxxxx Xxxx Xxxxxx
00 0 Xxxxxx Xxx Xxxxxx Apartments(3)
39 1 000 Xxxxx Xxxxxxx Xxxxx
40 1 Village Mall(4)
00 0 XXX Xxxxxxxx - Xxxxxxx(0)
00 0 Centennial Plaza
58 1 Model X Xxxxx
00 0 Xxxxxx Xxxx MHP
64 2 Lincoln Towers Apartments
69 2 Lakeridge Apartments
70 1 Cherry Creek Business Park
76 1 00000 Xxxxxx - Xxxxxxx, XX
84 1 Xxxxxx Xxxx Xxxx XX
00 0 Xxxx-Xxxxx Xxxxxx Shopping Center
90 1 0000-0000 Xxxxxxx Xxxxxx
00 0 Xxxxx Xxxxxxx MHP
94 1 Walgreens-153 Kearny
00 0 Xxxxxxx Xxxxxxx XXX
00 0 0000-0000 Xxxxxxx Xxxxxx
103 1 Westwood MHC
000 0 Xxxxxxxxxx Xxxxxxxxxxx
000 0 0000-0000 Xxxxxxx Xxxxxx
110 1 17043 Xx Xxxxxx
000 0 Xxxxxxxxx Xxx & Xxxxxx - Xxxxxxxx, XX
117 2 Garden Valley MHC
119 1 Days Inn - Asheville, NC(6)
121 1 Comfort Suites - Pineville, NC
123 1 Best Western - Ramsey, NJ(7)
126 1 Lakemont Ridge RV & MHC
128 1 Hawthorn Suites - Huntersville, NC
130 1 Stonehue Retail Center
131 1 San Antonio Retail Pool
131.01 South Xxxxxx Street
131.02 Xxxxxxxxx Xxxx Xxxxxxxx Xxxxxx
000 0 Xxxxx Xxxxx Xxxx
135 1 Bangs MHP
139 1 Sedalia Xxxxxxx Xxxxxx Xxxxxxxx
000 0 Xxx Xxxx Xxxxx
147 2 Pineview Apartments
148 1 Kodiak Self Storage
149 2 Sherwood & Bourne End Pool
149.01 Bourne End MHP
149.02 Sherwood Court MHP
153 1 Rocky Branch Shopping Center
158 1 Quality Inn & Suites - Hickory, NC
160 1 Crown Building
Mortgage Loan Number Address City State Zip Code
-------------------- ----------------------------------------------------------------- ------------------- ----- --------
7 000 Xxxxx Xxxxx Xxxxxxxxx Xxxxxxxx XX 00000
10 1305-1550 South Xxxx Xxxxx Xxxxxxx Xxxx XX 00000
11 0000 Xxxxxxxxx Xxxxxxxxx Xxxxxxxx XX 00000
12 0000 Xxxx Xxxxx Xxxxxxxxx Xxxxx Xxxx Xxxxx XX 00000
27 17130-17240 Ventura Xxxxxxxxx Xxxxxx XX 00000
32 00000 Xxx Xxxxxx Xxxx Xxxxxxxx XX 00000
39 000 Xxxxx Xxxxxxx Xxxxx Xxxxxxx Xxxxx XX 00000
40 0000 Xxxxx Xxxxxxxxx Xxxxxx Xxxxxxxx XX 00000
41 000 Xxxxxx Xxxxxx Xxxxxxx XX 00000
57 NWC West 0xx Xxxxxx xxx Xxxxx X Xxxxxx Xxxxxx XX 00000
58 00000-00000 Xxxxxxxx Xxxxxx Xxxxxxxx Xxxx XX 00000
63 0000-0000 Xxxxxx Xxxx Xxxxx Xxxx Xxxxx XX 00000
64 00000 Xxxxxxx Xxxx Xxx Xxxx XX 00000
69 0000 Xxxxxx Xxxxxx Xxxx XX 00000
70 0000 Xxxxxx Xxxxx Xxxxx Xxxxx Xxxxxx XX 00000
76 00000 Xxxxxx Xxxxx Xxxxxxx XX 00000
84 0000 Xxxxx Xxxxxxxxx Xxxxxxxxxx Xxxxxxxx XX 00000
89 14630-14820 Xxxx Xxxxxx Xxxxxxx XX 00000
90 0000-0000 Xxxxxxx Xxxxxx and 000 Xxxxx Xxxxxxxx Xxxxxxx Xxxxxxxxx Xxx Xxxxxxx XX 00000
93 00000 Xxxxx Xxxxxx Xxxxxxxxxxx XX 00000
94 000 Xxxxxx Xxxxxx Xxx Xxxxxxxxx XX 00000
95 00000 Xxxx Xxxxxx Xxxxx Xxxxx XX 00000
98 0000-0000 Xxxxxxx Xxxxxx and 000 Xxxxx Xxxxxx Xxxxxx Xxx Xxxxxxx XX 00000
103 000 Xxxxxxxx Xxxxxx Xxxxx XX 00000
106 000-000 Xxxx XX XXxxxxx 000 Xxxxxxxxxx XX 00000
107 0000-0000 Xxxxxxx Xxxxxx Xxx Xxxxxxx XX 00000
110 17043-17049 El Xxxxxx Xxxx Xxxxxxx XX 00000
116 000 Xxxxxxxxx Xxxx Xxxxxxxx XX 00000
117 0000 Xxxxx Xxxxxxxxx Xxxxxx Xxx Xxxxxxx XX 00000
119 000 Xxxxxx Xxxx Xxxxxxxxx XX 00000
121 00000 Xxxxxxx Xxxxxxx Xxxxxxxxx XX 00000
123 0000 Xxxxx 00 Xxxxx Xxxxxx XX 00000
126 0000 Xxxxx Xxxxxx Xxxxxxxxxx XX 00000
128 00000 Xxxxxxxx Xxxxx Xxxxxxxxxxxx XX 00000
130 00000 Xxxxxxx Xxxx Xxx Xxxxxxx XX 00000
000 Xxxxxxx Xxx Xxxxxxx XX Various
131.01 0000 Xxxxx Xxxxxx Xxxxxx Xxx Xxxxxxx XX 00000
131.02 0000 Xxxxxxxx Xxxxx Xxx Xxxxxxx XX 00000
134 00000 Xxxxxxxxxx Xxxx Xxxx Xxxxx Xxxxx XX 00000
135 00 Xxxxxxx Xxxx Xxxx Xxxxx XX 00000
139 0000 Xxxxxxx Xxxx Xxxxxxxxx XX 00000
144 0000 Xxxxxxx Xxxx Xxxxxx XX 00000
147 000 Xxxxxxx Xxxxxx Xxxxxx XX 00000
148 0000 Xxxxxx Xxxx Xxxxxxx XX 00000
149 Xxxxxxx Xxxx XX 00000
149.01 0 Xxxxxxx Xxxxx Xxxx XX 00000
149.02 000 Xxxx Xxxx Xxxxxx Xxxx XX 00000
153 0000 Xxxx Xxxx Xxxxxx Xxxxxx Xxxxxx XX 00000
158 0000 00xx Xxxxxx Xxxxx Xxxxxxxxx Xxxxxxx XX 00000
160 0000 Xxxxx Xxxxxx Xxxxxxx Xxxxx XX 00000
Mortgage Loan Number County Cut-Off Date Loan Balance ($) Monthly P&I Payments ($) Grace Days Mortgage Rate (%)
-------------------- -------------- ----------------------------- ------------------------ ---------- -----------------
7 Los Angeles 125,000,000.00 IO 5.8175%
10 Yuma 62,530,000.00 IO 5.4700%
11 Honolulu 60,000,000.00 IO 6.1700%
12 El Dorado 59,358,226.66 379,363.34 6.6000%
27 Los Angeles 24,500,000.00 148,310.51 6.0900%
32 Riverside 22,675,000.00 IO 6.8400%
39 Los Angeles 20,000,000.00 IO 6.2200%
40 Vermilion 20,000,000.00 122,493.80 6.2000%
41 Xxxxx 19,607,638.17 123,621.96 6.4600%
57 Ventura 15,583,810.58 110,357.09 7.0100%
58 Xxxxx 15,200,000.00 94,182.97 6.3100%
63 Tarrant 13,590,813.93 88,118.96 6.7400%
64 Oakland 13,200,000.00 80,674.67 6.1800%
69 Washoe 11,940,786.32 73,733.72 6.2700%
70 Denver 11,500,000.00 70,807.48 6.2500%
76 Xxxxxx 10,574,580.22 62,295.08 5.7800%
84 Oakland 9,075,307.39 54,126.91 5.9260%
89 Xxxxx 8,000,000.00 45,473.33 5.5100%
90 Los Angeles 7,900,000.00 48,538.94 10 6.2300%
00 Xxx Xxxxxxxxxx 7,500,000.00 45,643.57 6.1400%
94 San Francisco 7,500,000.00 47,652.00 6.5500%
95 Riverside 7,494,058.65 45,789.27 6.1700%
98 Los Angeles 6,800,000.00 41,559.68 10 6.1800%
103 Xxxx 5,995,947.32 38,876.01 6.7400%
106 Xxxxxxxx 5,600,000.00 34,370.97 6.2200%
107 Los Angeles 5,300,000.00 32,564.10 10 6.2300%
110 Xxxxxx 5,043,796.49 29,713.11 5.7800%
116 Xxxxx 4,680,402.83 29,681.71 5.7900%
117 Bexar 4,613,064.51 27,254.41 5.7900%
000 Xxxxxxxx 4,494,898.37 30,637.88 6.5900%
000 Xxxxxxxxxxx 4,263,583.20 27,858.32 6.1200%
123 Bergen 4,192,194.26 31,314.07 6.5000%
000 Xxxx 4,000,000.00 24,824.13 6.3250%
000 Xxxxxxxxxxx 3,695,378.58 24,088.56 6.1100%
130 Bexar 3,500,000.00 21,572.87 6.2600%
131 Bexar 3,497,286.70 21,550.08 6.2500%
131.01 Bexar
131.02 Bexar
000 Xxxxxxxxx 3,100,000.00 19,046.93 6.2300%
000 Xxxxxxxxxx 3,084,837.37 19,328.13 6.4000%
000 Xxxxxxxx 2,747,833.21 16,825.06 6.1900%
000 Xxxxxxxx 2,522,944.78 14,841.92 5.7800%
147 Jasper 2,096,442.68 13,053.23 6.3400%
148 Cabarrus 1,998,625.41 12,879.04 10 6.6800%
149 Miami 1,960,000.00 12,311.29 6.4400%
149.01 Miami
149.02 Miami
153 White 1,495,037.46 10,594.72 6.3900%
000 Xxxxxxx 1,246,776.69 8,300.04 6.3200%
160 Orange 1,200,000.00 IO 5.9800%
Mortgage Loan Number Number of Units Unit of Measure Original Term to Maturity or ARD (Mos.)
-------------------- --------------- --------------- ---------------------------------------
7 382,841 Sq. Ft. 120
10 400,141 Sq. Ft. 120
11 210,670 Sq. Ft. 120
12 400 Rooms 120
27 139,921 Sq. Ft. 120
32 200 Units 60
39 68,430 Sq. Ft. 120
40 477,280 Sq. Ft. 120
41 68,063 Sq. Ft. 120
57 59,630 Sq. Ft. 300
58 140,103 Sq. Ft. 120
63 433 Pads 120
64 473 Units 120
69 126 Units 120
70 140,990 Sq. Ft. 84
76 147,927 Sq. Ft. 120
84 74,500 Sq. Ft. 120
89 48,921 Sq. Ft. 120
90 12,800 Sq. Ft. 120
93 239 Pads 60
94 18,018 Sq. Ft. 120
95 248 Pads 60
98 15,872 Sq. Ft. 120
103 261 Pads 120
106 34,000 Sq. Ft. 120
107 9,061 Sq. Ft. 120
110 81,423 Sq. Ft. 120
116 100 Rooms 120
117 480 Pads 120
119 129 Rooms 120
121 116 Rooms 120
123 82 Rooms 120
126 355 Pads 120
128 91 Rooms 120
130 21,076 Sq. Ft. 120
131 65,434 Sq. Ft. 120
131.01 38,356 Sq. Ft.
131.02 27,078 Sq. Ft.
134 235 Pads 120
135 101 Pads 120
139 20,038 Sq. Ft. 120
144 42,585 Sq. Ft. 120
147 88 Units 120
148 48,175 Sq. Ft. 120
149 114 Pads 60
149.01 66 Pads
149.02 48 Pads
153 12,925 Sq. Ft. 120
158 100 Rooms 120
160 25,522 Sq. Ft. 120
Mortgage Loan Number Remaining Term to Maturity or ARD (Mos.) Maturity Date or ARD Original Amort Term (Mos.)
-------------------- ---------------------------------------- -------------------- --------------------------
7 119 07/11/16 IO
10 119 07/11/16 IO
11 120 08/11/16 IO
12 119 07/11/16 360
27 119 07/11/16 360
32 59 07/11/11 IO
39 119 07/11/16 IO
40 113 01/11/16 360
41 118 06/11/16 360
57 299 07/11/31 300
58 117 05/11/16 360
63 119 07/11/16 360
64 118 06/11/16 360
69 119 07/06/16 360
70 83 07/11/13 360
76 114 02/11/16 360
84 117 05/11/16 360
89 118 06/11/16 360
90 120 08/01/16 360
93 60 08/11/11 360
94 119 07/11/16 360
95 59 07/11/11 360
98 120 08/01/16 360
103 119 07/11/16 360
106 119 07/11/16 360
107 120 08/01/16 360
110 114 02/11/16 360
116 117 05/01/16 300
117 112 12/11/15 360
119 119 07/01/16 300
121 118 06/01/16 300
123 119 07/11/16 240
126 120 08/11/16 360
128 119 07/01/16 300
130 118 06/11/16 360
131 119 07/11/16 360
131.01
131.02
134 120 08/11/16 360
135 118 06/11/16 360
139 119 07/11/16 360
144 115 03/11/16 360
147 118 06/11/16 360
148 119 07/01/16 360
149 60 08/11/11 360
149.01
149.02
153 118 06/11/16 264
158 118 06/01/16 300
160 119 07/11/16 IO
Mortgage Loan Number Remaining Amort Term (Mos.) Ground Lease Master Servicing Fee Rate ARD Loan
-------------------- --------------------------- ------------ ------------------------- --------
7 IO Fee 0.02000% N
10 IO Fee 0.02000% N
11 IO Fee 0.02000% N
12 359 Fee 0.02000% N
27 360 Fee 0.03000% N
32 IO Fee 0.02000% N
39 IO Both 0.02000% N
40 360 Fee 0.06000% N
41 360 Fee 0.06000% N
57 299 Fee 0.02000% N
58 360 Fee 0.06000% N
63 359 Fee 0.02000% N
64 360 Fee 0.03000% N
69 359 Fee 0.08000% N
70 360 Fee 0.02000% N
76 354 Fee 0.02000% N
84 357 Fee 0.02000% N
89 360 Fee 0.02000% N
90 360 Fee 0.02000% N
93 360 Fee 0.02000% N
94 360 Fee 0.02000% N
95 359 Fee 0.02000% N
98 360 Fee 0.02000% N
103 359 Fee 0.02000% N
106 360 Fee 0.02000% N
107 360 Fee 0.02000% N
110 354 Fee 0.02000% N
116 297 Leasehold 0.04000% N
117 352 Fee 0.02000% N
119 299 Fee 0.09000% N
121 298 Fee 0.06000% N
123 239 Both 0.02000% N
126 360 Fee 0.02000% N
128 299 Fee 0.06000% N
130 360 Fee 0.02000% N
131 359 Fee 0.02000% N
131.01 Fee
131.02 Fee
134 360 Fee 0.02000% N
135 358 Fee 0.02000% N
139 359 Fee 0.02000% N
144 355 Fee 0.02000% N
147 358 Fee 0.06000% N
148 359 Fee 0.09000% N
149 360 Fee 0.02000% N
149.01 Fee
149.02 Fee
153 262 Fee 0.02000% N
158 298 Fee 0.06000% N
160 IO Fee 0.02000% N
Mortgage Loan Number Anticipated Repayment Date Additional Interest Rate Loan Originator Environmental Insurance
-------------------- -------------------------- ------------------------ --------------- -----------------------
7 Nomura N
10 Nomura N
11 Nomura N
12 Nomura N
27 Nomura N
32 Nomura N
39 Nomura N
40 Nomura N
41 Nomura N
57 Nomura N
58 Nomura N
63 Nomura N
64 Nomura N
69 Nomura N
70 Nomura N
76 Nomura N
84 Nomura N
89 Nomura N
90 Nomura N
93 Nomura N
94 Nomura N
95 Nomura N
98 Nomura N
103 Nomura N
106 Nomura N
107 Nomura N
110 Nomura N
116 Nomura N
117 Nomura N
119 Nomura N
121 Nomura N
123 Nomura N
126 Nomura N
128 Nomura N
130 Nomura N
131 Nomura N
131.01 N
131.02 N
134 Nomura N
135 Nomura N
139 Nomura N
144 Nomura N
147 Nomura N
148 Nomura N
149 Nomura N
149.01 N
149.02 N
153 Nomura N
158 Nomura N
160 Nomura N
Mortgage Loan Number Cross Collateralized and Cross Defaulted Loan Flag Prepayment Provisions Early Defeasance
-------------------- -------------------------------------------------- --------------------- ----------------
7 Y N
10 N N
11 N N
12 Y N
27 Y N
32 Y N
39 Y N
40 Y N
41 Y N
57 Y N
58 Y N
63 Y N
64 Y N
69 Y N
70 Y N
76 B&R Portfolio Y N
84 Y N
89 Y N
90 Y N
93 Y N
94 Y N
95 Y N
98 Y N
103 Y N
106 Y N
107 Y N
110 B&R Portfolio Y N
116 Y N
117 Y N
119 N N
121 Hickory Hospitality Investments Portfolio Y N
123 Y N
126 Y N
128 Y N
130 Y N
131 Y N
131.01
131.02
134 Y X
000 X X
000 X X
000 X N
147 N N
148 N N
149 Y N
149.01
149.02
000 X X
000 Xxxxxxx Hospitality Investments Portfolio Y N
160 N N
Mortgage Loan Number Secured by LC Interest Accrual Method Lockbox Annual Deposit to Replacement Reserves
-------------------- ------------- ----------------------- --------- --------------------------------------
7 N Actual/360 Day 1
10 N 30/360
11 N Actual/360 Day 1 31,601
12 N Actual/360 Day 1 3.0% Yearly Gross Revenue
27 N Actual/360 Springing
32 N Actual/360 Day 1 30,000
39 N Actual/360 Day 1 13,686
40 N Actual/360 Springing 114,531
41 N Actual/360 Day 1 10,212
57 N Actual/360 Day 1 5,967
58 N Actual/360 14,024
63 N Actual/360
64 N Actual/360
69 N Actual/360 Day 1 31,500
70 N Actual/360 Day 1 21,149
76 N Actual/360 29,641
84 N Actual/360 Day 1 10,529
89 N Actual/360 8,925
90 N Actual/360 Springing 1,920
93 N Actual/360
94 N Actual/360 Day 1 2,703
95 N Actual/360
98 N Actual/360 Springing 2,765
103 N Actual/360
106 N Actual/360
107 N Actual/360 Springing 1,359
110 N Actual/360 16,294
116 N Actual/360 4.0% of Yearly Gross Revenue
117 N Actual/360
119 N Actual/360 Day 1 4.0% of Yearly Gross Revenue
121 N Actual/360 4.0% of Yearly Gross Revenue
123 N Actual/360 Day 1 79,638
126 N Actual/360
128 N Actual/360 4.0% of Yearly Gross Revenue
130 N Actual/360 3,166
131 N Actual/360 Day 1 12,269
131.01
131.02
134 N Actual/360
135 N Actual/360 5,050
139 N Actual/360 3,988
144 N Actual/360 Day 1 6,388
147 N Actual/360 22,000
148 N Actual/360 4,824
149 N Actual/360
149.01
149.02
153 N Actual/360
158 N Actual/360 6.6% of Yearly Gross Revenue
160 N Actual/360
Mortgage Loan Number Initial Deposit to Capital Improvements Reserve Initial TI/LC Escrow Ongoing TI/LC Footnote
-------------------- ----------------------------------------------- -------------------- ----------------------
7 7,500 (1)
10
11 350,000
12
27
32
39
40 1,500,000 (1)
41
57 (1)
58 (1)
63
64 250,000
69 147,375
70 25,250 (1)
76 12,500 (1)
84 2,813 (1)
89 (1)
90 (1)
93
94
95
98 (1)
103
106 (1)
107 (1)
110 (1)
116
117
119 418,750
121
123 9,500
126 38,136
128 2,500
130 8,375 (1)
131 50,000 (1)
131.01
131.02
134
135 12,500
139 (1)
144 53,750 (1)
147 27,500
148 1,250
149
149.01
149.02
153
158
160
(1) In addition to any such escrows funded at loan closing for potential TI/LC,
these Mortgage Loans require funds to be escrowed during some or all of the loan
terms for TI/LC expenses, which may be incurred during the loan term. In certain
instances, escrowed funds may be released to the borrower upon satisfaction of
certain leasing conditions.
(2) Annual Deposit to Replacement Reserves is the greater of (i) 3.0% of yearly
gross revenue (which may be increased to 5.0% during the last two years of the
original term of the franchise agreement if during such time any franchise
inspection report is not above 90.0%) or (ii) the actual amount as required by
the related management agreement.
(3) Commencing August 11, 2008, Annual Deposit to Replacement Reserves is
$30,000.
(4) With respect to the Village Mall Loan, the current balance of the TI/LC
Reserve is $100,000.
(5) With respect to the DEA Building - Detroit Loan, interest-only payments
commence in January 2013 through loan maturity.
(6) Commencing August 1, 2007, Annual Deposit to Replacement Reserves is 4.0% of
yearly gross revenue.
(7) Annual Deposit to Replacement Reserves is $79,638 through April 2007 and
4.0% of yearly gross revenue thereafter.
See "DESCRIPTION OF THE MORTGAGED POOL - Additional Mortgage Loan Information"
in the prospectus supplement.
EXHIBIT B
Free Writing Prospectuses
1. Free Writing Prospectus, dated July 29, 2006
2. Free Writing Prospectus, dated July 29, 2006
3. Free Writing Prospectus, dated August 4, 2006
[GRAPHIC OMITTED - Cover page of Term Sheet dated July 29, 2006]
[GRAPHIC OMITTED - Cover page of Free Writing Prospectus dated July 29, 2006]
[GRAPHIC OMITTED - Cover page of revised Free Writing Prospectus dated August 4,
2006]
