MORTGAGE LOAN PURCHASE AGREEMENT
THIS MORTGAGE LOAN PURCHASE AGREEMENT (this "Agreement") is dated as of
June 8, 2004 between CDC MORTGAGE CAPITAL INC. (the "Seller") and CITIGROUP
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 June 1, 2004,
among the Purchaser, as depositor, Wachovia Bank, National Association, as
master servicer (the "Master Servicer"), Lennar Partners, Inc., as special
servicer (the "Special Servicer"), LaSalle Bank National Association, as trustee
(the "Trustee") and ABN AMRO Bank N.V., as fiscal agent (the "Fiscal Agent").
Capitalized terms used herein (including the schedules attached hereto) but not
defined herein (or in such schedules) 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.
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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 $170,820,948 (the "CDCMC 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 CDCMC Mortgage
Loan Balance, together with the aggregate principal balance of the Other
Mortgage Loans as of the Cut-off Date (after giving effect to any payments due
on or before such date whether or not such payments are received), is expected
to equal an aggregate principal balance (the "Cut-off Date Pool Balance") of
$1,185,741,012 (subject to a variance of plus or minus 5.0%). The purchase and
sale of the Mortgage Loans shall take place on June 24, 2004 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 consist of an amount equal to (i) 99.952% of the CDCMC Mortgage Loan
Balance as of the Cut-off Date, plus (ii) $626,102, which amount represents the
amount of interest accrued on the CDCMC Mortgage Loan Balance at, in the case of
the portion thereof attributable to each Mortgage Loan, the related Net Mortgage
Rate for the period from and including the Cut-off Date up to but not including
the Closing Date.
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.
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(a) Effective as of the Closing Date, subject only to receipt 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 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 (with a copy to the Master Servicer and the
Special Servicer), 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 LaSalle Bank National Association, as trustee
for the registered holders of Citigroup Commercial Mortgage Trust
2004-C1, Commercial Mortgage Pass-Through Certificates, Series 2004-C1 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
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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 and, if delivered in blank, the
name of the assignee), of (A) the Mortgage, (B) any related Assignment of
Leases (if such item is a document separate from the Mortgage) and (C)
any other recorded document relating to the Mortgage Loan otherwise
included in the Mortgage File, in favor of LaSalle Bank National
Association, as trustee for the registered holders of Citigroup
Commercial Mortgage Trust 2004-C1, Commercial Mortgage Pass-Through
Certificates, Series 2004-C1, or in blank;
(v) an original assignment of all unrecorded documents relating to
the Mortgage Loan (to the extent not already assigned pursuant to clause
(iv) above), in favor of LaSalle Bank National Association, as trustee
for the registered holders of Citigroup Commercial Mortgage Trust
2004-C1, Commercial Mortgage Pass-Through Certificates, Series 2004-C1,
or in blank;
(vi) originals or copies of any consolidation, assumption,
substitution and modification agreements in those instances where the
terms or provisions of the Mortgage or Mortgage Note have been
consolidated or modified or the Mortgage Loan has been assumed 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
Financing Statement assignment, in form suitable for filing in favor of
LaSalle Bank National Association, as trustee for the registered holders
of Citigroup Commercial Mortgage Trust 2004-C1, Commercial Mortgage
Pass-Through Certificates, Series 2004-C1, as assignee, or in blank;
(ix) an original or copy of (A) any Ground Lease or (B) any loan
guaranty, indemnity, ground lessor estoppel or environmental insurance
policy or lease enhancement policy;
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(x) any intercreditor, co-lender or similar agreement relating to
permitted debt of the Mortgagor; and
(xi) copies of any loan agreement, escrow agreement, security
agreement or letter of credit relating to a Mortgage Loan.
(d) The Seller shall take all actions reasonably necessary to permit the
Trustee to fulfill its obligations pursuant to Section 2.01(d) of the Pooling
and Servicing Agreement, including bearing the out-of-pocket costs and expenses
of the Trustee in connection with the performance by the Trustee of its
recording, filing and delivery obligations pursuant to Section 2.01(d) of the
Pooling and Servicing Agreement. The Seller shall reimburse the Trustee for all
reasonable costs and expenses incurred for recording any documents described in
Section 2(c)(iv)(C).
(e) All documents and records (except draft documents, attorney-client
privileged communications and internal correspondence, credit underwriting or
due diligence analyses, credit committee briefs or memoranda or other internal
approval documents or data or internal worksheets, memoranda, communications or
evaluations and other underwriting analysis of the Seller) relating to, and
necessary for the servicing and administration of, each Mortgage Loan and in the
Seller's possession 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. 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 pursuant to written
instructions from the Master Servicer.
SECTION 3. Representations, Warranties and Covenants of Seller.
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(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 New York 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
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other laws 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; and
(viii) Under generally accepted accounting principles ("GAAP") and
for federal income tax purposes, the Seller will report the transfer of
the Mortgage Loans to the Purchaser as a sale of the Mortgage Loans to
the Purchaser in exchange for consideration consisting of the Aggregate
Purchase Price. The consideration received by
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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.
(b) The Seller hereby makes the representations and warranties contained
in Schedule I and Schedule II hereto with respect to each Mortgage Loan, for the
benefit of the Purchaser and the Trustee (for the benefit of the
Certificateholders) as of the Closing Date, which representations and warranties
are subject to the exceptions set forth on Schedule III.
(c) If the Seller receives written notice of a Document Defect or a
Breach pursuant to Section 2.03(a) of the Pooling and Servicing Agreement
relating to a Mortgage Loan, then the Seller shall, not later than 90 days from
receipt of such notice (or, in the case of a Document Defect or Breach relating
to a Mortgage Loan not being a "qualified mortgage" within the meaning of the
REMIC Provisions (a "Qualified Mortgage"), not later than 90 days from any party
to the Pooling and Servicing Agreement discovering such Document Defect or
Breach, provided the Seller receives such notice in a timely manner), if such
Document Defect or Breach shall materially and adversely affect the value of the
applicable Mortgage Loan or the interests of the Certificateholders therein,
cure such Document Defect or Breach, as the case may be, in all material
respects, which shall include payment of actual losses and any Additional Trust
Fund Expenses directly resulting therefrom 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,
if 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, then unless
such Document Defect or Breach would cause the Mortgage Loan not to be a
Qualified Mortgage, such Seller shall have an additional 90 days to complete
such cure (or, failing such cure, to repurchase or substitute for the related
Mortgage Loan); and provided, further, that with respect to such additional
90-day period the Seller shall have delivered an officer's certificate to the
Trustee setting forth what actions the Seller is pursuing in connection with the
cure thereof and stating that the Seller anticipates that such Document Defect
or Breach will be cured within the additional 90-day period; and provided,
further, that no Document Defect (other than with respect to a Mortgage Note,
Mortgage, title insurance policy, Ground Lease or any letter of credit) shall be
considered to materially and adversely affect the value of the related Mortgage
Loan or the interests of the Certificateholders therein unless the document with
respect to which the Document Defect exists is required in connection with an
imminent enforcement of the mortgagee's rights or remedies under the related
Mortgage Loan, defending any claim asserted by any borrower or third party with
respect to the related Mortgage Loan, establishing the validity or priority of
any lien on any collateral securing the related Mortgage
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Loan or for any immediate significant servicing obligations. 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 an uncured Document Defect, the Seller
shall provide the officer's certificate to the Trustee described above as to the
reasons such Document Defect 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 paragraph 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 with respect to any Mortgage
Loan if such actual policy of insurance is delivered to the Trustee or a
Custodian on its behalf not later than the 90th day following the Closing Date.
(d) If (i) any Mortgage Loan is required to be repurchased or substituted
for in the manner described above, (ii) such Mortgage Loan is 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 each 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, as applicable, of Mortgage Loans set forth herein or in the Pooling
and Servicing Agreement. 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 purchase
or substitute for a Crossed Loan hereunder in the manner prescribed above while
the Purchaser 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 Purchaser, the Primary Collateral securing the Crossed Loans
still held by the Purchaser, so long as such exercise does not materially impair
the ability of the other party to exercise its remedies against its Primary
Collateral.
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.
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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 such modification shall not cause an Adverse
REMIC Event. Any expenses incurred 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 deleted 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.
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 Delaware. The Purchaser has the
full corporate power and authority and legal right to acquire the Mortgage Loans
from the Seller and to transfer the Mortgage Loans to the Trustee.
(b) This Agreement has been duly and validly authorized, executed and
delivered by the Purchaser, all requisite action by the Purchaser's directors
and officers has been taken in connection therewith, and (assuming the due
authorization, execution and delivery hereof by the Seller) this Agreement
constitutes the valid, legal and binding agreement of the Purchaser, enforceable
against the Purchaser in accordance with its terms, except as such enforcement
may be limited by (i) laws relating to bankruptcy, insolvency, reorganization,
receivership or moratorium, (ii) other laws relating to or affecting the rights
of creditors
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generally, or (iii) general equity principles (regardless of whether such
enforcement is considered in a proceeding in equity or at law).
(c) Except as may be required under federal or state securities laws (and
which will be obtained on a timely basis), no consent, approval, authorization
or order of, registration or filing with, or notice to, any governmental
authority or court, is required, under federal or state law, for the execution,
delivery and performance by the Purchaser of or compliance by the Purchaser with
this Agreement, or the consummation by the Purchaser of any transaction
described in this Agreement.
(d) None of the acquisition of the Mortgage Loans by the Purchaser, the
transfer of the Mortgage Loans to the Trustee, and the execution, delivery or
performance of this Agreement by the Purchaser, results or will result in the
creation or imposition of any lien on any of the Purchaser's assets or property,
or conflicts or will conflict with, results or will result in a breach of, or
constitutes or will constitute a default under (i) any term or provision of the
Purchaser's articles of association or bylaws, (ii) 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 (iii) 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 the Aggregate Purchase Price.
(f) There is no action, suit, proceeding or investigation pending or to
the knowledge of the Purchaser, threatened against the Purchaser in any court or
by or before any other governmental agency or instrumentality which would
materially and adversely affect the validity of this Agreement or any action
taken in connection with the obligations of the Purchaser contemplated herein,
or which would be likely to impair materially the ability of the Purchaser to
enter into and/or perform under the terms of this Agreement.
(g) The Purchaser is not in default with respect to any order or decree
of any court or any order, regulation or demand of any federal, state, municipal
or governmental agency, which default might have consequences that would
materially and adversely affect the condition (financial or other) or operations
of the Purchaser or its properties or might have consequences that would
materially and adversely affect its performance hereunder.
SECTION 5. Closing. The closing of the sale of the Mortgage Loans (the
"Closing") shall be held at the offices of Sidley Xxxxxx Xxxxx & Xxxx LLP, New
York, New York 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 Section 3(a) and Section 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;
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(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) A letter from the independent accounting firm of Ernst & Young LLP in
form satisfactory to the Purchaser, relating to certain information regarding
the Mortgage Loans and Certificates as set forth in the Prospectus and
Prospectus Supplement, respectively.
Both parties agree to use their best efforts to perform their respective
obligations hereunder in a manner that will enable the Purchaser to purchase the
Mortgage Loans on the Closing Date.
SECTION 6. Closing Documents. The Closing Documents shall consist of the
following:
(a) This Agreement duly executed by the Purchaser and the Seller;
(b) A certificate of the Seller, executed by a duly authorized officer of
the Seller and dated the Closing Date, and upon which the Purchaser, 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
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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 (i) such officer has carefully examined the Specified Portions (as defined
below) 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 the Seller or omitted or omit to state therein a material
fact necessary in order to make the statements therein relating to the Mortgage
Loans or the Seller, in light of the circumstances under which they were made,
not misleading, and (ii) 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 or the Seller, in the light of the circumstances under which they were
made, not misleading. The "Specified Portions" of the Prospectus Supplement
shall consist of Annexes X-0, X-0, X-0 and B thereto, the diskette which
accompanies the Prospectus Supplement (insofar as such diskette is consistent
with such Annexes X-0, X-0, X-0 and B) and the following sections of the
Prospectus Supplement (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--Relevant Parties--
Mortgage Loan Sellers," "Summary of Prospectus Supplement--The Underlying
Mortgage Loans and the Mortgaged Real Properties," "Risk Factors--Risks Related
to the Underlying Mortgage Loans," and "Description of the Mortgage Pool." The
"Specified Portions" of the Memorandum shall consist of the Specified Portions
of the Prospectus Supplement and "Summary of the Offering Memorandum--Relevant
Parties--Mortgage Loan Sellers".
(e) The certificate of incorporation and by-laws of the Seller, and a
certificate of good standing of the Seller issued by the State of New York 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.
11
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 Purchaser or any Underwriter or
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 any untrue statement or alleged untrue statement of a material fact
contained in (A) the Prospectus Supplement, the Preliminary Prospectus
Supplement, the Memorandum, the Diskette or, insofar as they are required to be
filed as part of the Registration Statement pursuant to the No-Action Letters,
any Computational Materials or ABS Term Sheets with respect to the Registered
Certificates, or in any revision or amendment of or supplement to any of the
foregoing, (B) any items similar to Computational Materials or ABS Term Sheets
forwarded by the Seller to the Initial Purchasers, or in any revision or
amendment of or supplement to any of the foregoing or (C) 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) and (C) above being
defined as the "Disclosure Material"), or (ii) arise out of or are based upon
the omission or alleged omission to state in the Disclosure Material (in the
case of Computational Materials and ABS Term Sheets, when read in conjunction
with the Prospectus Supplement, in the case of items similar to Computational
Materials and ABS Term Sheets, 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 (C) above, when read in conjunction
with the Memorandum) 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 the Disclosure Material
described in clauses (A) and (B) of the definition thereof, only if and to the
extent that (1) 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 Prospectus Supplement and
the Preliminary Prospectus Supplement, including without limitation Annexes X-0,
X-0, X-0 and B thereto, the Memorandum, the Diskette, any Computational
Materials and ABS Term Sheets with respect to the Registered Certificates and
any items similar to Computational Materials and ABS Term Sheets forwarded to
prospective investors in the Non-Registered Certificates), (2) 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 (which shall include all
statements in the sections constituting the Specified Portions that purport to
summarize the terms of any intercreditor, co-lender or similar agreement
relating
12
to a Mortgage Loan, including, without limitation, those terms thereof that
address servicing and administration) of each of the Prospectus Supplement, the
Preliminary Prospectus Supplement and the Memorandum, (3) 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 of this Agreement or (4) 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 and/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 Annexes X-0, X-0, X-0 and B to the Prospectus Supplement or the
Preliminary Prospectus Supplement to the extent such information was not
materially incorrect in the Data File or such Annexes X-0, X-0, X-0 and B, 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 Purchaser (or to
the benefit of any person controlling such Underwriter or Initial Purchaser)
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 (in either case, as
corrected or amended, if applicable), as applicable, and (y) a copy of the
Prospectus or Memorandum (in either case, as corrected or amended, if
applicable), as applicable, shall not have been sent to such person at or prior
to the written confirmation of the sale of such Certificates to such person, and
(z) in the case of a corrected or amended Prospectus or Memorandum, such
Underwriter or Initial Purchaser received written notice of such correction or
amendment prior to the written confirmation of such 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.
This indemnity will be in addition to any liability which the Seller may
otherwise have.
(b) For purposes of this Agreement, "Registration Statement" shall mean
such registration statement No. 333-108125 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 May 24,
2004, as supplemented by the prospectus supplement dated June 8, 2004 (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 prospectus
supplement dated May 24, 2004 relating to the Registered Certificates, including
all annexes thereto; "Memorandum" shall mean the private placement memorandum
dated June 8, 2004, relating to the Non-Registered Certificates, including all
exhibits thereto; "Registered Certificates" shall mean the Class A-1, Class A-2,
13
Class A-3, Class A-4, Class B, Class C, Class D and Class E Certificates;
"Non-Registered Certificates" shall mean the Certificates other than the
Registered Certificates; "Computational Materials" shall have the meaning
assigned thereto in the no-action letter dated May 20, 1994 issued by the
Division of Corporation Finance of the Securities and Exchange Commission (the
"Commission") to Xxxxxx, Xxxxxxx Acceptance Corporation I, Xxxxxx, Peabody & Co.
Incorporated, and Xxxxxx Structured Asset Corporation and the no-action letter
dated May 27, 1994 issued by the Division of Corporation Finance of the
Commission to the Public Securities Association (together, the "Xxxxxx
Letters"); "ABS Term Sheets" shall have the meaning assigned thereto in the
no-action letter dated February 17, 1995 issued by the Division of Corporation
Finance of the Commission to the Public Securities Association (the "PSA Letter"
and, together with the Xxxxxx Letters, the "No-Action Letters"); "Diskette"
shall mean the diskette or compact disc attached to each of the Prospectus and
the Memorandum; and "Data File" shall mean the compilation of information and
data regarding the Mortgage Loans covered by the Agreed Upon Procedures Letters
dated May 24, 2004 and June 8, 2004 and rendered by Ernst & Young LLP, as the
case may be (a "hard copy" of which Data File was initialed on behalf of the
Seller and the Purchaser).
(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 this Section 7 (except to the extent that such omission has prejudiced the
indemnifying party in any material respect) or from any liability which it may
have otherwise than under this Section 7. In case any such action is brought
against any indemnified party and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein, and to the extent that it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof, with counsel selected by the
indemnifying party and 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 and the Underwriters or the Initial Purchasers, as the case may be,
representing all the indemnified parties under this Section 7 who are parties to
such action), (ii) the indemnifying party shall not have employed counsel
reasonably satisfactory to
14
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 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 proceedings 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 proceedings 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 Purchaser 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 Purchaser 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 Purchaser within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act, and such Underwriter's or Initial
Purchaser's officers and directors, shall have the same rights to contribution
as such Underwriter or Initial Purchaser, as the case may be, and each director
of the
15
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 CDCMC Mortgage Loan Balance
represents as of the Cut-off Date Pool Balance): (i) the costs and expenses of
printing and delivering the Pooling and Servicing Agreement and the
Certificates; (ii) the costs and expenses of printing (or otherwise reproducing)
and delivering a preliminary and final Prospectus and Memorandum relating to the
Certificates; (iii) the initial fees, costs, and expenses of the Trustee
(including reasonable attorneys' fees); (iv) the filing fee charged by the
Securities and Exchange Commission for registration of the Certificates so
registered; (v) the fees charged by the Rating Agencies to rate the Certificates
so rated; (vi) the fees and disbursements of a firm of certified public
accountants selected by the Purchaser and the Seller with respect to numerical
information in respect of the Mortgage Loans and the Certificates included in
the Prospectus, the Memorandum and any related Computational Materials or ABS
Term Sheets, including in respect of the cost of obtaining any "comfort letters"
with respect to such items; (vii) the reasonable out-of-pocket costs and
expenses in connection with the qualification or exemption of the Certificates
under state securities or "Blue Sky" laws,
16
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 and the 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 such Seller's Mortgage Loans. All other costs and
expenses in connection with the transactions contemplated hereunder shall be
borne by the party incurring such expense.
SECTION 9. Grant of a Security Interest. It is the express intent of the
parties hereto that the conveyance of the Mortgage Loans by the Seller to the
Purchaser as provided in Section 2 hereof be, and be construed as, a sale of the
Mortgage Loans by the Seller to the Purchaser and not as a pledge of the
Mortgage Loans by the Seller to the Purchaser to secure a debt or other
obligation of the Seller. However, if, notwithstanding the aforementioned intent
of the parties, the Mortgage Loans are held to be property of the Seller, then,
(a) it is the express intent of the parties that such conveyance be deemed a
pledge of the Mortgage Loans by the Seller to the Purchaser to secure a debt or
other obligation of the Seller, and (b) (i) this Agreement shall also be deemed
to be a security agreement within the meaning of Article 9 of the Uniform
Commercial Code of the applicable jurisdiction; (ii) the conveyance provided for
in Section 2 hereof shall be deemed to be a grant by the Seller to the Purchaser
of a security interest in all of the Seller's right, title and interest in and
to the Mortgage Loans, and all amounts payable to the holder of the Mortgage
Loans in accordance with the terms thereof, and all proceeds of the conversion,
voluntary or involuntary, of the foregoing into cash, instruments, securities or
other property, including, without limitation, all amounts, other than
investment earnings, from time to time held or invested in the Certificate
Account, the Distribution Account or, if established, the REO Account (each as
defined in the Pooling and Servicing Agreement) whether in the form of cash,
instruments, securities or other property; (iii) the assignment to the Trustee
of the interest of the Purchaser as contemplated by Section 1 hereof shall be
deemed to be an assignment of any security interest created hereunder; (iv) the
possession by the Trustee or any of its agents, including, without limitation,
the Custodian, of the Mortgage Notes, and such other items of property as
constitute instruments, money, negotiable documents or chattel paper shall be
deemed to be possession by the secured party for purposes of perfecting the
security interest pursuant to Section 9-313 of the Uniform Commercial Code of
the applicable jurisdiction; and (v) notifications to persons (other than the
Trustee) holding such property, and acknowledgments, receipts or confirmations
from persons (other than the Trustee) holding such property, shall be deemed
notifications to, or acknowledgments, receipts or confirmations from, financial
intermediaries, bailees or agents (as applicable) of the secured party for the
purpose of perfecting such security interest under applicable law. The Seller
and the Purchaser shall, to the extent consistent with this Agreement, take such
actions as may be necessary to ensure that, if this Agreement were deemed to
create a security interest in the Mortgage Loans, such security interest would
be deemed to be a perfected security interest of first priority under applicable
law and will be maintained as such throughout the term of this Agreement and the
Pooling and Servicing Agreement.
17
SECTION 10. Covenants of Purchaser. The Purchaser shall provide the
Seller with all forms of Disclosure Materials (including the final form of the
Memorandum and the preliminary and final forms 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. 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
18
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 (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.
19
SECTION 20. Accountants' Letters. The parties hereto shall cooperate with
Ernst & Young LLP in making available all information and taking all steps
reasonably necessary to permit such accountants to deliver the letters required
by the Underwriting Agreement.
SECTION 21. Knowledge. Whenever a representation or warranty or other
statement in this Agreement is made with respect to a Person's "knowledge," such
statement refers to such Person's employees or agents who were or are
responsible for or involved with the indicated matter and have actual knowledge
of the matter in question.
[SIGNATURES COMMENCE ON THE FOLLOWING PAGE]
20
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
CDC MORTGAGE CAPITAL INC.
By:
-------------------------
Name:
Title:
Address for Notices:
Telecopier No.:
Telephone No.:
PURCHASER
CITIGROUP COMMERCIAL MORTGAGE
SECURITIES INC.
By:
-------------------------
Name:
Title:
Address for Notices:
Telecopier No.:
Telephone No.:
21
SCHEDULE I
GENERAL MORTGAGE REPRESENTATIONS AND WARRANTIES
1. The information pertaining to each Mortgage Loan set forth in the
Mortgage Loan Schedule was true and correct in all material respects as of the
Cut-off Date.
2. As of the date of its origination, such Mortgage Loan complied in all
material respects with, or was exempt from, all requirements of federal, state
or local law relating to the origination of such Mortgage Loan.
3. Immediately prior to the sale, transfer and assignment to the
Purchaser, the Seller had good and marketable title to, and was the sole owner
of, each Mortgage Loan, and the Seller is transferring such Mortgage Loan free
and clear of any and all liens, pledges, charges or security interests of any
nature encumbering such Mortgage Loan. Upon consummation of the transactions
contemplated by the Mortgage Loan Purchase Agreement, the Seller will have
validly and effectively conveyed to the Purchaser all legal and beneficial
interest in and to such Mortgage Loan free and clear of any pledge, lien or
security interest.
4. The proceeds of such Mortgage Loan have been fully disbursed and there
is no requirement for future advances thereunder by the Mortgagee.
5. Each related Mortgage Note, Mortgage, Assignment of Leases (if any)
and other agreement executed 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
(a) 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 (b) 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.
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
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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.
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, ground rents, water charges, sewer rents and
assessments not yet due and payable, (b) covenants, conditions and restrictions,
rights of way, easements and other matters of public record, none of which,
individually or in the aggregate, materially 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 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
cross-collateralized with any other Mortgage Loan, the lien of the Mortgage for
such other Mortgage Loan, none of which, individually or in the aggregate,
materially and adversely interferes with the current use of the Mortgaged
Property or the security intended to be provided by such Mortgage or with the
Mortgagor's ability to pay its obligations under the Mortgage Loan when they
become due or materially and adversely affects the value of the Mortgaged
Property. Except with respect to cross-collateralized and cross-defaulted
Mortgage Loans, there are no mortgage loans that are senior or pari passu with
respect to the related Mortgaged Property or such Mortgage Loan.
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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 at the time of the origination of the
Mortgage Loan to perfect a valid security interest in all items of personal
property reasonably necessary to operate the Mortgaged Property owned by a
Mortgagor and located on the related Mortgaged Property (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. To the Seller's actual knowledge as of the Cut-off Date, and to the
Seller's actual knowledge based solely upon due diligence customarily performed
with the origination of comparable mortgage loans by the Seller, each related
Mortgaged Property was free and clear of any material damage (other than
deferred maintenance for which escrows were established at origination) that
would affect materially and adversely the value of such Mortgaged Property as
security for the Mortgage Loan and to the Seller's actual knowledge as of the
Cut-off Date there was no proceeding pending for the total or partial
condemnation of such Mortgaged Property.
12. The lien of each related Mortgage as a first priority lien in the
original principal amount of such Mortgage Loan after all advances of principal
(as set forth on the Mortgage Loan Schedule) is insured by an ALTA lender's
title insurance policy (or a binding commitment therefor), or its equivalent as
adopted in the applicable jurisdiction, insuring the Seller, its successors and
assigns, subject only to the Title Exceptions; the Seller or its successors or
assigns is the named insured of such policy; such policy is
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assignable without consent of the insurer and will inure to the benefit of the
Trustee as mortgagee of record; is in full force and effect upon the
consummation of the transactions contemplated by this Agreement; all premiums
thereon have been paid; no claims have been made under such policy and the
Seller has not done anything, by act or omission, and the Seller has no actual
knowledge of any matter, which would impair or diminish the coverage of such
policy. The insurer issuing such policy is either (x) a nationally recognized
title insurance company or (y) qualified to do business in the jurisdiction in
which the related Mortgaged Property is located to the extent required; such
policy contains no material exclusions for, or affirmatively insures (except for
any Mortgaged Property located in a jurisdiction where such insurance is not
available) (a) access to a public road (except as provided below) or (b) against
any loss due to encroachments of any material portion of the improvements
thereon.
13. Except as provided below, as of the date of its origination, all
insurance coverage required under each related Mortgage was in full force and
effect with respect to each related Mortgaged Property, which insurance covered
such risks as were customarily acceptable to prudent commercial and multifamily
mortgage lending institutions lending on the security of property comparable to
the related Mortgaged Property in the jurisdiction in which such Mortgaged
Property is located, and with respect to a fire and extended perils insurance
policy, was in an amount (subject to a customary deductible) at least equal to
the lesser of (i) the replacement cost of improvements located on such Mortgaged
Property, or (ii) the initial principal balance of the Mortgage Loan, and in any
event, the amount necessary to prevent operation of any co-insurance provisions,
and, except if such Mortgaged Property is operated as a mobile home park, such
Mortgaged Property is also covered by business interruption or rental loss
insurance, in an amount at least equal to 12 months of operations of the related
Mortgaged Property (or in the case of a Mortgaged Property without any elevator,
6 months); and, except as provided below, as of the Cut-off Date, to the actual
knowledge of the Seller, all insurance coverage required under each Mortgage,
which insurance covers such risks and is in such amounts as are customarily
acceptable to prudent commercial and multifamily mortgage lending institutions
lending on the security of property comparable to the related Mortgaged Property
in the jurisdiction in which such Mortgaged Property is located, is in full
force and effect with respect to each related Mortgaged Property; all premiums
due and payable through the Closing Date have been paid; and no notice of
termination or cancellation with respect to any such insurance policy has been
received by the Seller; and except for certain amounts not greater than amounts
which would be considered prudent by an institutional commercial mortgage lender
with respect to a similar Mortgage Loan and which are set forth in the related
Mortgage, any insurance proceeds in respect of a casualty loss, will be applied
either (i) to the repair or restoration of all or part of the related Mortgaged
Property or (ii) the reduction of the outstanding principal balance of the
Mortgage Loan, subject in either case to requirements with respect to leases at
the related Mortgaged Property and to other exceptions customarily provided for
by prudent institutional lenders for similar loans. The Mortgaged Property is
also covered by comprehensive general liability insurance against claims for
personal and bodily injury, death or property damage occurring on, in or about
the related Mortgaged Property, in an amount customarily required by prudent
institutional lenders.
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The insurance policies contain a standard mortgagee clause naming the
Seller, its successors and assigns as loss payee, in the case of a property
insurance policy, and additional insured in the case of a liability insurance
policy and provide that they are not terminable without 30 days prior written
notice to the Mortgagee (or, with respect to non-payment, 10 days prior written
notice to the Mortgagee) or such lesser period as prescribed by applicable law.
Each Mortgage requires that the Mortgagor maintain insurance as described above
or permits the Mortgagee to require insurance as described above, and permits
the Mortgagee to purchase such insurance at the Mortgagor's expense if Mortgagor
fails to do so.
14. Except as provided below, (a) other than payments due but not yet 30
days or more delinquent, to the Seller's actual knowledge, based upon due
diligence customarily performed with the servicing of comparable mortgage loans
by prudent institutional lenders, there is no material default, breach,
violation or event of acceleration existing under the related Mortgage or the
related Mortgage Note, and to the Seller's actual knowledge no event (other than
payments due but not yet delinquent) which, with the passage of time or with
notice and the expiration of any grace or cure period, would constitute a
material default, breach, violation or event of acceleration; provided, however,
that this representation and warranty does not address or otherwise cover any
default, breach, violation or event of acceleration that specifically pertains
to any matter otherwise covered by any other representation and warranty made by
the Seller in any paragraphs 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 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 does not provide for or permit, without the
prior written consent of the holder of the Mortgage Note, each related Mortgaged
Property to secure any other promissory note or obligation except as expressly
described in such Mortgage.
18. Each Mortgage Loan is directly secured by a Mortgage on a commercial
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property or a multifamily residential property, and either (a) 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 (b) 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 (i) as of the Testing Date, or (ii) as of the Closing Date. For purposes of
the previous sentence, (A) the fair market value of the referenced interest in
real property shall first be reduced by (1) the amount of any lien on such
interest in real property that is senior to the Mortgage Loan, and (2) a
proportionate amount of any lien on such interest in real property that is on a
parity with the Mortgage Loan, and (B) the "Testing Date" shall be the date on
which the referenced Mortgage Loan was originated unless (1) 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 (2) such "significant modification" did not
occur at a time when such Mortgage Loan was in default or when default with
respect to such Mortgage Loan was reasonably foreseeable. However, if the
referenced Mortgage Loan has been subjected to a "significant modification"
after the date of its origination and at a time when such Mortgage Loan was not
in default or when default with respect to such Mortgage Loan was not reasonably
foreseeable, the Testing Date shall be the date upon which the latest such
"significant modification" occurred. The Mortgage Loan documents with respect to
each Defeasance Loan do not allow such Defeasance Loan to be defeased prior to
two years after the Startup Day.
19. One or more environmental site assessments, updates or transaction
screens thereof were performed by an environmental consulting firm independent
of the Seller and the Seller's affiliates with respect to each related Mortgaged
Property during the 18-months preceding the origination of the related Mortgage
Loan, and the Seller, having made no independent inquiry other than to review
the report(s) prepared in connection with the assessment(s), updates or
transaction screens referenced herein, has no actual knowledge and has received
no notice of any material and adverse environmental condition or circumstance
affecting such Mortgaged Property that was not disclosed in such report(s). 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 American Society for Testing and Materials
(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
greater than 100% 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 borrower has covenanted in the Mortgage Loan documents
to perform such work), (ii) the related borrower 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
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regulation, (iii) the borrower 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 issuing such policy prior to
the issuance of such policy.
20. Each related Mortgage and Assignment of Leases, together with
applicable state law, contains customary and enforceable provisions 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. At the time of origination and, to the actual knowledge of Seller as
of the Cut-off Date, no Mortgagor is a debtor in, and no Mortgaged Property is
the subject of, any state or federal bankruptcy or insolvency proceeding.
22. Each Mortgage Loan is a whole loan 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.
23. Subject to certain exceptions, which are customarily acceptable to
prudent commercial and multifamily mortgage lending institutions lending on the
security of property comparable to the related Mortgaged Property, each related
Mortgage or loan agreement contains provisions for the acceleration of the
payment of the unpaid principal balance of such Mortgage Loan if, without
complying with the requirements of the Mortgage or loan agreement, (a) the
related Mortgaged Property, or any controlling interest in the related
Mortgagor, is directly transferred or sold (other than by reason of family and
estate planning transfers, transfers by devise, descent or operation of law upon
the death of a member, general partner or shareholder of the related Borrower
and transfers of less than a controlling interest in a mortgagor, issuance of
non-controlling new equity interests, transfers among existing members, partners
or shareholders in the Mortgagor or an affiliate thereof, 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 interest that do not result
in a change of control) or a substitution or release of collateral within the
parameters of paragraph (26) below), or (b) the related Mortgaged Property is
encumbered in connection with subordinate financing by a lien or security
interest against the related Mortgaged Property, other than any existing
permitted additional debt.
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24. Except as set forth in the related Mortgage File, the terms of the
related Mortgage Note and Mortgage(s) have not been waived, modified, altered,
satisfied, impaired, canceled, subordinated or rescinded in any manner which
materially interferes with the security intended to be provided by such
Mortgage.
25. Except as provided below, each related Mortgaged Property was
inspected by or on behalf of the related originator or an affiliate during the
12 month period prior to the related origination date.
26. Since origination, no material portion of the related Mortgaged
Property has been released from the lien of the related Mortgage in any manner
which materially and adversely affects the value of the Mortgage Loan or
materially interferes with the security intended to be provided by such
Mortgage, and, except with respect to Mortgage Loans (a) which permit defeasance
by means of substituting for the Mortgaged Property (or, in the case of a
Mortgage Loan secured by multiple Mortgaged Properties, one or more of such
Mortgaged Properties) U.S. Treasury obligations sufficient to pay the Mortgage
Loans (or portions thereof) in accordance with their terms, (b) where a release
of the portion of the Mortgaged Property was contemplated at origination and
such portion was not considered material for purposes of underwriting the
Mortgage Loan, (c) where release is conditional upon the satisfaction of certain
underwriting and legal requirements and the payment of a release price that
represents adequate consideration for such Mortgaged Property or the portion
thereof that is being released, or (d) which permit the related Mortgagor to
substitute a replacement property in compliance with REMIC Provisions or (e)
which permit the release(s) of unimproved out-parcels or other portions of the
Mortgaged Property that will not have a material adverse affect on the
underwritten value of the security for the Mortgage Loan or that were not
allocated to any value in the underwriting during the origination of the
Mortgage Loan, the terms of the related Mortgage do not provide for release of
any portion of the Mortgaged Property from the lien of the Mortgage except in
consideration of payment in full therefor.
27. Except as provided below, to the Seller's actual knowledge, based
upon a letter from governmental authorities, a legal opinion, an endorsement to
the related title policy, or based upon other due diligence considered
reasonable by prudent commercial conduit mortgage lenders in the area where the
applicable Mortgaged Property is located, as of the date of origination of such
Mortgage Loan and as of the Cut-off Date, there are no material violations of
any applicable zoning ordinances, building codes and land laws applicable to the
Mortgaged Property or the use and occupancy thereof which (a) are not insured by
an ALTA lender's title insurance policy (or a binding commitment therefor), or
its equivalent as adopted in the applicable jurisdiction, or a law and ordinance
insurance policy or (b) would have a material adverse effect on the value,
operation or net operating income of the Mortgaged Property.
28. To the Seller's actual knowledge 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
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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. With respect to at least 95% of such Seller's Mortgage Loans (by
balance) having a Cut-off Date Balance in excess of 1% of the Initial Pool
Balance, the related Mortgagor has covenanted in its organizational documents
and/or the Mortgage Loan documents to own no significant asset other than the
related Mortgaged Property or Mortgaged Properties, as applicable, and assets
incidental to its ownership and operation of such Mortgaged Property, and to
hold itself out as being a legal entity, separate and apart from any other
Person.
30. No advance of funds has been made other than pursuant to the loan
documents, directly or indirectly, by the Seller to the Mortgagor and, to the
Seller's actual knowledge, no funds have been received from any Person other
than the Mortgagor, for or on account of payments due on the Mortgage Note or
the Mortgage.
31. As of the date of origination and, to the Seller's actual knowledge,
as of the Cut-off Date, there was no pending action, suit or proceeding, or
governmental investigation of which it has received notice, against the
Mortgagor or the related Mortgaged Property 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 complied as of the
date of origination with, or was exempt from, applicable state or federal laws,
regulations and other requirements pertaining to usury.
34. The related Mortgage Note is not secured by any collateral that
secures a Mortgage Loan that is not in the Trust Fund and each Mortgage Loan
that is cross-collateralized is cross-collateralized only with other Mortgage
Loans sold pursuant to this Agreement.
35. The improvements located on the Mortgaged Property are either not
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located in a federally designated special flood hazard area or the Mortgagor is
required to maintain or the mortgagee maintains, flood insurance with respect to
such improvements and such policy is in full force and effect.
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, and, as of the Cut-off Date, the Seller has no
actual knowledge that the related Mortgagor, the related lessee, franchisor or
operator was not in possession of such licenses, permits and authorizations.
38. The origination (or acquisition, as the case may be), servicing and
collection practices used by the Seller 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. Except as provided below, the Mortgage Loan documents for each
Mortgage Loan provide that each Mortgage Loan is non-recourse to the related
Mortgagor except that the related Mortgagor accepts responsibility for fraud
and/or other intentional material misrepresentation. Furthermore, except as
provided below, the Mortgage Loan documents for each Mortgage Loan provide that
the related Mortgagor shall be liable to the lender for losses incurred due to
the misapplication or misappropriation of rents collected in advance or received
by the related Mortgagor after the occurrence of an event of default 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), 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.
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42. With respect to such Mortgage Loan, any prepayment premium
constitutes a "customary prepayment penalty" within the meaning of Treasury
Regulations Section 1.860G-1(b)(2).
43. If such Mortgage Loan contains a provision for any defeasance of
mortgage collateral, such Mortgage Loan permits defeasance (a) no earlier than
two years after the Closing Date, and (b) 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. 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) (i) 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,
(ii) an Opinion of Counsel that the defeasance complies with all applicable
REMIC Provisions, and (iii) 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 are encumbered, and none of the Mortgage Loan
documents permit 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 materialmen's liens that become
payable after the after the Cut-off Date of the related Mortgage Loan).
I-11
SCHEDULE II
GROUND LEASE REPRESENTATIONS AND WARRANTIES
With respect to each Mortgage Loan secured by a leasehold interest
(except with respect to any Mortgage Loan also secured by a fee interest in the
related Mortgaged Property), the Seller represents and warrants the following
with respect to the related Ground Lease:
1. Such Ground Lease or a memorandum thereof has been or will be duly
recorded no later than 30 days after the Closing Date and such Ground Lease
permits the interest of the lessee thereunder to be encumbered by the related
Mortgage or, if consent of the lessor thereunder is required, it has been
obtained prior to the Closing Date.
2. Upon the foreclosure of the Mortgage Loan (or acceptance of a deed in
lieu thereof), the Mortgagor's interest in such ground lease is assignable to
the mortgagee under the leasehold estate and its assigns without the consent of
the lessor thereunder (or, if any such consent is required, it has been obtained
prior to the Closing Date).
3. Such Ground Lease may not be amended, modified, canceled or terminated
without the prior written consent of the mortgagee and any such action without
such consent is not binding on the mortgagee, its successors or assigns, except
termination or cancellation if (a) an event of default occurs under the Ground
Lease, (b) notice thereof is provided to the mortgagee and (c) such default is
curable by the mortgagee as provided in the Ground Lease but remains uncured
beyond the applicable cure period.
4. To the actual knowledge of the Seller, at the Closing Date, such
Ground Lease is in full force and effect and other than payments due but not yet
30 days or more delinquent, (a) there is no material default, and (b) there is
no event which, with the passage of time or with notice and the expiration of
any grace or cure period, would constitute a material default under such Ground
Lease.
5. The ground lease or ancillary agreement between the lessor and the
lessee requires the lessor to give notice of any default by the lessee to the
mortgagee. The ground lease or ancillary agreement further provides that no
notice given is effective against the mortgagee unless a copy has been given to
the mortgagee in a manner described in the ground lease or ancillary agreement.
6. The ground lease (a) is not subject to any liens or encumbrances
superior to, or of equal priority with, the Mortgage, subject, however, to only
the Title Exceptions or (b) is subject to a subordination, non-disturbance and
attornment agreement to which the mortgagee on the lessor's fee interest in the
Mortgaged Property is subject.
7. A mortgagee is permitted a reasonable opportunity (including, where
necessary, sufficient time to gain possession of the interest of the lessee
under the ground
II-1
lease) to cure any curable default under such Ground Lease before the lessor
thereunder may terminate such Ground Lease.
8. Such Ground Lease has an original term (together with any extension
options, whether or not currently exercised, set forth therein all of which can
be exercised by the mortgagee if the mortgagee acquires the lessee's rights
under the Ground Lease) that extends not less than 20 years beyond the Stated
Maturity Date.
9. Under the terms of such Ground Lease, any estoppel or consent letter
received by the mortgagee from the lessor, and the related Mortgage, taken
together, any related insurance proceeds or condemnation award (other than in
respect of a total or substantially total loss or taking) will be applied either
to the repair or restoration of all or part of the related Mortgaged Property,
with the mortgagee or a trustee appointed by it having the right to hold and
disburse such proceeds as repair or restoration progresses, or to the payment or
defeasance of the outstanding principal balance of the Mortgage Loan, together
with any accrued interest (except in cases where a different allocation would
not be viewed as commercially unreasonable by any commercial mortgage lender,
taking into account the relative duration of the ground lease and the related
Mortgage and the ratio of the market value of the related Mortgaged Property to
the outstanding principal balance of such Mortgage Loan).
10. The ground lease does not impose any restrictions on subletting that
would be viewed as commercially unreasonable by a prudent commercial lender.
11. The ground lessor under such Ground Lease is required to enter into a
new lease upon termination of the Ground Lease for any reason, including the
rejection of the Ground Lease in bankruptcy.
II-2
SCHEDULE III
EXCEPTIONS TO REPRESENTATIONS AND WARRANTIES
[NONE.]
III-1
EXHIBIT A
MORTGAGE LOAN SCHEDULE
CONTROL
NUMBER LOAN/PROPERTY NAME PROPERTY ADDRESS CITY COUNTY STATE
------------- ----------------------------------- ------------------------------ --------------- ------------ ---------
26 305 Madison 000 Xxxxxxx Xxx. Xxxxxxxxxx Xxxxxx XX
27 DFS-Guam 0000 Xxxx Xxx Xxxxxxx Xxxx Xxxxx Xxx NAP Guam
40 Hall Office Park 2611 & 2811 Internet Frisco Collin TX
Boulevard
45 Victoria Mall 0000 Xxxxx Xxxxxxx Xxxxxx Xxxxxxxx Xxxxxxxx XX
46 Promenade Office Park 4165 & 0000 X. Xxxxxxxx Xxxx Xxxxxxxx Xxxxxxx XX
Blvd Village
47 Briarwood 000 Xxxx Xxxxxxxxx Xxxxx Xxxxxxxx Xxxx Xxxxxxx XX
56 The Berkeley Center 2200 - 0000 Xxxxxxxx Xxxxxx, Xxxxxxxx Xxxxxxx XX
2070 Allston Way, & 0000
Xxxxxxxxx Xxxxxx
57 North Tech Business Center 0000 Xxxxxx Xxxx Xxxxxx Xxxxxx TX
00 Xxxxxxx Xxxxx Xxxxxxxx Xxxxxx 000 Xxxxx Xxxxxx Xxxxxxxxx Xxxxxxxxxx XX
00 Xxxx Xxxxxx Xxxxxxx Xxxxx 0000 - 0000 Xxxx Xxxxxx Xxxx Xxxxxx Xxx Xxxxxxx XX
Parkway
80 Village Xxxxx Apartments 000 Xxxx Xxxxxx Xxxxxxxxxx Xxxxxxx XX
99 Longhaven West MHP 0000 Xxxx Xxxxxxxxx Xxxx Xxxxxxx Xxxxxxxx XX
MONTHLY
ALLOCATED DEBT
CONTROL CUT-OFF CUT-OFF DATE SERVICE
NUMBER ZIP CODE DATE BALANCE BALANCE PAYMENT
------------- --------- ------------- --------------- -------------
26 07960 28,355,937.71 28,355,937.71 165,859.43(b)
27 96911 26,864,654.71 26,864,654.71 156,537.06
40 75034 21,914,933.88 21,914,933.88 131,547.72
45 77904 18,786,387.57 18,786,387.57 121,374.11
46 91362 11,988,263.55 11,988,263.55 66,983.20
47 91360 5,594,532.85 5,594,532.85 31,284.56
56 94704 12,935,059.30 12,935,059.30 81,827.16
57 78728 12,190,376.95 12,190,376.95 74,610.42
65 12010 11,000,000.00 11,000,000.00 66,623.90
67 91790 9,846,801.14 9,846,801.14 58,452.61(c)
80 17112 6,700,000.00 6,700,000.00 44,217.03
99 85031 4,644,000.00 4,644,000.00 26,720.63
A-1
REMAINING TERM TO ORIGINAL
CONTROL ORIGINAL TERM TO MATURITY/ARD MATURITY/ARD SCHEDULED AMORTIZATION AMORTIZATION
NUMBER MORTGAGE RATE (MONTHS) (MONTHS) MATURITY DATE TYPE TERM (MONTHS)
------------- --------------- ------------------------------- ------------------- -------------- ---------------- --------------
26 5.5500% 120 113 11/01/13 Balloon 312
27 5.6900% 120 115 01/01/14 Balloon 360
40 5.9750% 120 116 02/01/14 Balloon 360
45 5.9100% 120 112 10/09/13 Balloon 300
46 5.3465% 120 119 05/01/14 Balloon 360
47 5.3538% 120 119 05/01/14 Balloon 360
56 6.4600% 120 114 12/01/13 Balloon 360
57 6.1860% 120 119 05/01/14 Balloon 360
65 6.0950% 132 132 06/01/15 Balloon 360
67 5.7650% 120 113 11/09/13 Balloon 360
80 5.0000% 120 120 06/01/14 Balloon 240
99 5.3600% 120 119 05/01/14 Partial 336
IO/Balloon
REMAINING MASTER
CONTROL AMORTIZATION SERVICING
NUMBER TERM (MONTHS) GROUND LEASE FEE RATE
------------- -------------- ---------------- -----------
26 305 No 0.04000%
27 355 No 0.04000%
40 356 No 0.04000%
45 292 No 0.04000%
46 359 No 0.04000%
47 359 No 0.04000%
56 354 No 0.04000%
57 359 No 0.04000%
65 360 No 0.04000%
67 360 Partial 0.04000%
Leasehold
80 240 No 0.04000%
99 336 No 0.04000%
A-2
CROSS
COLLATERALIZED/
CROSS
DEFAULTED
CONTROL ARD ANTICIPATED MORTGAGE ENVIRONMENTAL (MORTGAGE LOAN
NUMBER LOAN REPAYMENT DATE ADDITIONAL INTEREST RATE AFTER ARD LOAN SELLER POLICY GROUP)
------------- ------- ------------------ ------------------------------------------ ------------- ----------- ----------------
26 No CDCMC No No
27 No CDCMC No No
40 No CDCMC No No
45 No CDCMC No No
46 No CDCMC No No
47 No CDCMC No No
56 No CDCMC No No
57 No CDCMC No No
65 No CDCMC No No
67 No CDCMC No No
80 No CDCMC No No
99 No CDCMC No No
SECURED BY INTEREST
DEFEASANCE LETTER OF RESERVE
CONTROL LOAN? CREDIT MORTGAGE LOAN?
NUMBER (YES/NO) (YES/NO) (YES/NO)
------------- ------------ -------------- -----------------
26 Yes No Actual/360
27 Yes No Actual/360
40 Yes "Yes, Actual/360
$5,000,000
LOC for XXXX
Telecom
which serves
as
additional
collateral
on their
lease."
45 Yes No Actual/360
46 Yes No Actual/360
47 Yes No Actual/360
56 Yes No Actual/360
57 Yes No Actual/360
65 Yes No Actual/360
67 Yes No Actual/360
80 Yes No Actual/360
99 Yes No Actual/360
A-3
DEFERRED ESCROWED
MAINTENANCE ESCROWED ESCROWED TI/LC
ESCROW ENVIRONMENTAL REPLACEMENT ANNUAL RESERVES
CONTROL CURRENT ESCROW CURRENT RESERVES REPLACEMENT INITIAL
NUMBER TYPE OF LOCKBOX BALANCE BALANCE INITIAL DEPOSIT RESERVES DEPOSIT
------------- ------------------------- --------------- ----------------- ----------------- --------------- -------------
26 In-Place Hard 0 0 0 0 0
27 Springing Hard 0 0 0 0 0
40 In-Place Hard 0 0 0 46,464 0
45 In-Place Hard 275,012 0 0 66,903 0
46 Springing Hard 0 625 0 14,976 250,000
47 Springing Hard 0 0 0 8,406 250,000
56 In-Place Hard 177,700 0 0 13,850 660,000
57 In-Place Hard 0 0 0 26,312 0
65 Springing Hard 0 0 0 18,528 0
67 In-Place Hard 104,017 0 0 13,145 350,000
80 None 100,000 0 0 51,000 NAP
99 Springing Soft 107,500 0 0 0 NAP
ESCROWED
CONTROL ANNUAL TI/XX XXXXX PROPERTY PROPERTY SIZE
NUMBER RESERVES PERIOD SIZE UNIT TYPE
------------- --------------- ----------- ------------ ---------------
26 0 0 212,232 SF
27 0 5 73,572 SF
40 $10,416.67 / 5 232,177 SF
mo. thru
1/1/09;
$31,250 / mo.
thereafter
45 $33,334 / mo. 0 445,862 SF
thru 12/9/03;
$27,084 /mo.
thru 12/9/06;
& $18,750 /
mo. thereafter
46 112,320 5 74,880 SF
47 63,060 5 42,029 SF
56 130,962 5 92,686 SF
57 200,413 5 175,413 SF
65 26,640 5 102,425 SF
67 $5,416.67 / 0 87,636 SF
mo. thru
11/9/09;
$3,333.33 /
mo.
thereafter.
Plus
$4,166.67 /
mo. day one
until
$500,000
(inclusive of
upfront
amount) is
deposited for
Good Guys
lease is
renewed or
new tenant.
80 NAP 5 204 Units
99 NAP 5 314 Units
Footnotes:
(b) Represents highest debt service payment based on a 312 month amortization
schedule which will start with the February 2008 payment. Monthly debt service
is currently based on a 420 month amortization schedule through the January 2008
payment.
(c) Prior to July 2004, monthly debt service payment was $70,294.01, based on a
240 month amortization schedule.
A-4
