MORTGAGE LOAN PURCHASE AND SALE AGREEMENT
This Mortgage Loan Purchase and Sale Agreement (the "Agreement") dated as
of October 22, 1996, is between Asset Securitization Corporation, a Delaware
corporation (the "Company"), and Nomura Asset Capital Corporation, a Delaware
corporation (the "Seller"). The Seller agrees to sell, and the Company agrees to
purchase (i) the mortgage loans (the "Mortgage Loans") described in, and set
forth in, the Mortgage Loan Schedule attached as Exhibit B to the Pooling and
Servicing Agreement dated as of October 1, 1996 (the "Pooling and Servicing
Agreement"), among the Company, AMRESCO Management, Inc., as servicer (in such
capacity, the "Servicer"), CRIIMI MAE Services Limited Partnership, as special
servicer, LaSalle National Bank, as trustee (the "Trustee"), and ABN AMRO Bank
N.V., as fiscal agent, relating to the issuance of the Asset Securitization
Corporation, Commercial Mortgage Pass-Through Certificates, Series 1996-D3 (the
"Certificates") and (ii) the participation interest of the seller, pursuant to
the participation agreement dated the Closing Date, between the Seller and the
Company (the "Anchorage Participation"), the in Mortgage Loan (the "Anchorage
Loan") secured by the property (the "Anchorage Property") identified as the
"Anchorage Shopping Center" on the Mortgage Loan Schedule. Capitalized terms
used without definition herein shall have the respective meanings assigned to
them in the Pooling and Servicing Agreement or, if not defined therein, in the
Underwriting Agreement, dated October 16, 1996 (the "Underwriting Agreement"),
by and between the Company and Nomura Securities International, Inc. (in such
capacity, the "Underwriter") or in the Purchase Agreement, dated October 22,
1996 (the "Purchase Agreement"), by and between the Company and Nomura
Securities International, Inc. (in such capacity, the "Placement Agent").
1. Purchase Price; Purchase and Sale. The purchase price (the "Purchase
Price") for the Mortgage Loans and the Anchorage Participation shall be an
amount agreed upon by the parties in a separate writing, which amount shall be
payable by the Company to the Seller on the Closing Date (except as provided
below) in immediately available funds. The closing for the purchase and sale of
the Mortgage Loans and the Anchorage Participation shall take place at the
offices of Cadwalader, Xxxxxxxxxx & Xxxx, New York, New York, at 10:00 a.m. New
York time, on the Closing Date.
On the Closing Date, the Company shall pay the Purchase Price to the
Seller. As of the Closing Date, the Seller hereby sells, transfers, assigns,
sets over and otherwise conveys to the Company all the right, title and interest
of the Seller in and to the Mortgage Loans and the Anchorage Participation,
including all interest and principal due on or with respect to the Mortgage
Loans and the Anchorage Participation after the Cut-off Date, 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 policies. In addition, as of
the Closing Date, the Seller hereby transfers, assigns, sets over and otherwise
conveys to the Company all the right, title and interest of the Seller in and to
the Originator's Mortgage Loan Purchase Agreements (as defined below) and each
of which is attached hereto, insofar as such rights relate to the Mortgage Loans
including, but not limited to, the obligations of the Originators (as defined
below) pursuant to the Originator's Mortgage Loan Purchase Agreements to
repurchase Mortgage Loans with respect to which there exists a breach of one or
more of the Originator's representations and warranties made in the applicable
Originator's Mortgage Loan Purchase Agreement. The Company hereby directs the
Seller, and the Seller hereby agrees, to deliver to the Trustee all documents,
instruments and agreements required to be delivered by the Company to the
Custodian on behalf of the Trustee under the Pooling and Servicing Agreement and
such other documents, instruments and agreements as the Company or the Trustee
shall reasonably request. "Originator's Mortgage Loan Purchase Agreements" mean
(i) the Mortgage Loan Purchase Agreement, dated as of May 16, 1994, by and
between the Seller and Bloomfield Acceptance Company, LLC ("Bloomfield"), (ii)
the Mortgage Loan Purchase Agreement, dated as of May 12, 1994, by and between
the Seller and Hanover Capital Mortgage Corporation ("Hanover"), (iii) the
Mortgage Loan Purchase Agreement, dated as of August 2, 1994, by and between the
Seller and Remsen Partners Ltd. ("Remsen"), (iv) the Mortgage Loan Purchase
Agreement dated October 31, 1994 by and between the Seller and Continental
Xxxxxxx Associates, Inc. ("Continental Xxxxxxx"), (v) Mortgage Loan Purchase
Agreement dated _____, by and between the Seller and NBD Bank, N.A. ("NBD") and
(vi) the Mortgage Loan Purchase Agreement dated June 6, 1994, by and between the
Seller and First Maryland Mortgage Corporation ("FMMC"). "Originators" mean
Bloomfield, NBD, Remsen, Continental Xxxxxxx and FMMC.
2. Representations and Warranties. (a) The Seller hereby represents and
warrants to the Company as of the Closing Date that:
(i) The Seller is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware
with full power and authority to carry on its business as
presently conducted by it;
(ii) The Seller has taken all necessary action to authorize the
execution, delivery and performance of this Agreement by it,
and has the power and authority to execute, deliver and
perform this Agreement and all the transactions contemplated
hereby, including, but not limited to, the power and authority
to sell, assign and transfer the Mortgage Loans in accordance
with this Agreement;
(iii) Assuming the due authorization, execution and delivery of this
Agreement by the Company, this Agreement and all of the
obligations of the Seller hereunder are the legal, valid and
binding obligations of the Seller, enforceable in accordance
with the terms of this Agreement, except as such enforcement
may be limited by bankruptcy, insolvency, reorganization,
liquidation, receivership, moratorium or other laws relating
to or affecting creditors' rights generally, or by general
principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at
law);
(iv) The execution and delivery of this Agreement and the
performance of its obligations hereunder by the Seller does
not conflict with any provision of any law or regulation to
which the Seller is subject, or conflict with, result in a
breach of or constitute a default under any of the terms,
conditions or provisions of any agreement or instrument to
which the Seller is a party or by which it is bound, or any
order or decree applicable to the Seller, or result in the
creation or imposition of any lien on any of the Seller's
assets or property, which would materially and adversely
affect the ability of the Seller to carry out the transactions
contemplated by this Agreement. The Seller has obtained any
consent, approval, authorization or order of any court or
governmental agency or body required for the execution,
delivery and performance by the Seller of this Agreement; and
(v) There is no action, suit or proceeding pending against the
Seller in any court or by or before any other governmental
agency or instrumentality which would materially and adversely
affect the ability of the Seller to carry out its obligations
under this Agreement or have a material adverse effect on the
financial condition of the Seller or the ability of the Seller
to perform its obligations under this Agreement.
(b) The Seller hereby represents and warrants with respect to each Mortgage
Loan and the Anchorage Participation, as applicable, that as of the date
specified below or, if no such date is specified, as of the Closing Date:
(i) Immediately prior to the sale, transfer and assignment to the
Company, each related Note and Mortgage and the Anchorage
Participation were not subject to an assignment (other than to
the Seller) or pledge, and the Seller had good and marketable
title to, and was the sole owner of, the Mortgage Loan and the
Anchorage Participation;
(ii) The Seller has full right and authority to sell, assign and
transfer such Mortgage Loan and the Anchorage Participation
and the assignment to the Company constitutes a legal, valid
and binding assignment of such Mortgage and the Anchorage
Participation, as applicable;
(iii) The Seller is transferring such Mortgage Loan and the
Anchorage Participation free and clear of any and all liens,
pledges, charges or security interests of any nature
encumbering such Mortgage Loan and the Anchorage Participation
subject to the matters described in clause (xi) below;
(iv) Each related Note, Mortgage, Assignment of Leases and Rents
(if any) and other agreement executed in connection with such
Mortgage Loan are legal, valid and binding obligations of the
related Borrower, enforceable in accordance with their terms,
except as such enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or other laws affecting
the enforcement of creditors rights generally, or by general
principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at
law) and to the best of the Seller's knowledge, there is no
valid defense, counterclaim, or right of rescission available
to the related Borrower with respect to such Note, Mortgage
and other agreements;
(v) Each related Assignment of Leases and Rents creates a valid,
collateral or first priority assignment of, or a valid first
priority security interest in, certain rights under the
related lease, subject only to a license granted to the
related Borrower to exercise certain rights and to perform
certain obligations of the lessor under such lease, including
the right to operate the related Mortgaged Property; no person
other than the related Borrower owns any interest in any
payments due under such lease that is superior to or of equal
priority with the mortgagee's interest therein;
(vi) Each related assignment of Mortgage from the Seller to the
Company and any related Reassignment of Assignment of Leases
and Rents, if any, or assignment of any other agreement
executed in connection with such Mortgage Loan, from the
Seller to the Company constitutes the legal, valid and binding
assignment from the Seller to the Company, except as such
enforcement may be limited by bankruptcy, insolvency,
reorganization, liquidation, receivership, moratorium or other
laws relating to or affecting creditors' rights generally, or
by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at
law);
(vii) Since origination, and except as set forth in the related
Mortgage File or in the mortgage file relating to the
Anchorage Loan, such Mortgage Loan and the Anchorage
Participation have not been modified, altered, satisfied,
canceled, subordinated or rescinded and, each related
Mortgaged Property has not been released from the lien of the
related Mortgage in any manner which materially interferes
with the security intended to be provided by such Mortgage;
(viii) Each related Mortgage is a valid and enforceable first lien on
the related Mortgaged Property (subject to the matters
described in clause (xi) below), and such Mortgaged Property
is free and clear of any mechanics' and materialmen's liens
which are prior to or equal with the lien of the related
Mortgage, except those which are insured against by a lender's
title insurance policy (as described below);
(ix) The Seller has not taken any action that would cause the
representations and warranties made by each related Borrower
in the Mortgage Loan not to be true;
(x) The Seller has no knowledge that the representations and
warranties made by each related Borrower in such Mortgage Loan
are not true in any material respect;
(xi) The lien of each related Mortgage is a first priority lien in
the original principal amount of such Mortgage Loan or
allocated loan amount of the portions of the Mortgaged
Property covered thereby (as set forth on the Mortgage Loan
Schedule) after all advances of principal 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 (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 interferes with the current use of the
Mortgaged Property or the security intended to be provided by
such Mortgage or with the borrower's ability to pay its
obligations when they become due or the value of the Mortgaged
Property and (c) the exceptions (general and specific) set
forth in such policy, none of which, individually or in the
aggregate, materially interferes with the security intended to
be provided by such Mortgage or with the borrower's ability to
pay its obligations when they become due or the value of the
Mortgaged Property; such policy is assignable to the Company
without the consent of or any notification to the insurer, and
is in full force and effect upon the consummation of the
transactions contemplated by this Agreement; no claims have
been made under such policy and the Seller has not done
anything, by act or omission, and the Seller has no knowledge
of any matter, which would impair or diminish the coverage of
such policy;
(xii) The proceeds of such Mortgage Loan have been fully disbursed
and there is no requirement for future advances thereunder and
the Seller covenants that it will not make any future advances
under the Mortgage Loan to the related Borrower;
(xiii) Each related Mortgaged Property is free of any material damage
that would affect materially and adversely the value of such
Mortgaged Property as security for the Mortgage Loan and there
is no proceeding pending for the total or partial condemnation
of such Mortgaged Property;
(xiv) Each of the related Borrowers (and, in the case of certain
loans, each of the operators of the senior housing/healthcare
facilities) is in possession of all material licenses, permits
and other authorizations necessary and required by all
applicable laws for the conduct of its business and all such
licenses, permits and authorizations are valid and in full
force and effect, and if a related Mortgaged Property is
improved by a senior housing or healthcare facility, the most
recent inspection or survey by governmental authorities having
jurisdiction in connection with such licenses, permits and
authorizations did not cite such Mortgaged Property for
material violations (which shall include only "Level A"
violations that have not been cured);
(xv) The Seller has inspected or caused to be inspected each
related Mortgaged Property within the past 12 months or within
1 month of origination of the Mortgage Loan;
(xvi) Such Mortgage Loan does not have a shared appreciation
feature, other contingent interest feature or negative
amortization;
(xvii) Such Mortgage Loan is a whole loan and contains no equity
participation by the Seller or the applicable Originator;
(xviii) The Mortgage Rate (exclusive of any default interest, late
charges, or prepayment premiums) of such Mortgage Loan
complied as of the date of origination with, or is exempt
from, applicable state or federal laws, regulations and other
requirements pertaining to usury; any and all other
requirements of any federal, state or local laws, including,
without limitation, truth-in-lending, real estate settlement
procedures, equal credit opportunity or disclosure laws,
applicable to such Mortgage Loan have been complied with as of
the date of origination of such Mortgage Loan. All Prepayment
premiums and yield maintenance premiums constitutes "customary
prepayment penalties" within the meanings of ss.1860(b)(2) of
the Code;
(xix) No fraudulent acts were committed by the Seller during the
origination process of any such Mortgage Loan originated by
it. To the best of the Seller's knowledge, the origination,
servicing and collection of each Mortgage Loan is in all
respect legal, proper and prudent in accordance with customary
industry standards;
(xx) All taxes and governmental assessments that prior to the
Closing Date became due and owing 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;
(xxi) All escrow deposits and payments required pursuant to the
Mortgage Loans are in the possession, or under the control, of
the Seller or its agent and there are no deficiencies in
connection therewith and all such escrows and deposits have
been conveyed by the Seller to the Company and identified as
such with appropriate detail;
(xxii) To the extent required under applicable law, as of the Cut-off
Date, the Seller was authorized to transact and do business in
the jurisdiction in which each related Mortgaged Property is
located at all times when it held the Mortgage Loan;
(xxiii) Each related Mortgaged Property is insured by a fire and
extended perils insurance policy, issued by an insurer meeting
the requirements of the Pooling and Servicing Agreement, in an
amount not less than the replacement cost and the amount
necessary to avoid the operation of any co-insurance
provisions with respect to the Mortgaged Property; each
related Mortgaged Property is also covered by business
interruption insurance and comprehensive general liability
insurance in amounts generally required by institutional
lenders for similar properties; all premiums on such insurance
policies required to be paid as of the date hereof have been
paid; such insurance policies require prior notice to the
insured of termination or cancellation, and no such notice has
been received; each related Mortgage or Loan Agreement
obligates the related Borrower to maintain all such insurance
and, at such Borrower's failure to do so, authorizes the
mortgagee to maintain such insurance at the Borrower's cost
and expense and to seek reimbursement therefor from such
Borrower;
(xxiv) There is no default, breach, violation or event of
acceleration existing under the related Mortgage or the
related Note and, to the Seller's 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 and does constitute a default, breach,
violation or event of acceleration;
(xxv) Such Mortgage Loan has not been more than 30 days delinquent
since origination and as of the Cut-off Date was not 30 or
more days delinquent;
(xxvi) Each related Mortgage contains customary and enforceable
provisions such as to render the rights and remedies of the
holder thereof adequate for the realization against the
Mortgaged Property of the benefits of the security, including
realization by judicial or, if applicable, non-judicial
foreclosure, and there is no exemption available to the
Borrower which would interfere with such right to foreclose.
To the best of the Seller's knowledge, no Borrower is a debtor
in a state or federal bankruptcy or insolvency preceding;
(xxvii) In each related Mortgage or Loan Agreement, the related
Borrower represents and warrants that except as set forth in
certain environmental reports or other documents previously
provided to the Rating Agencies and to the best of its
knowledge it has not used, caused or permitted to exist and
will not use, cause or permit to exist on the related
Mortgaged Property any Hazardous Materials in any manner which
violates federal, state or local laws, ordinances,
regulations, orders, directives or policies governing the use,
storage, treatment, transportation, manufacture, refinement,
handling, production or disposal of Hazardous Materials; the
related Borrower agrees to indemnify, defend and hold the
mortgagee and its successors and assigns harmless from and
against losses, liabilities, damages, injuries, penalties,
fines, expenses, and claims of any kind whatsoever (including
attorneys' fees and costs) paid, incurred or suffered by, or
asserted against, any such party resulting from a breach of
certain representations, warranties or covenants given by the
Borrower in such Mortgage or Loan Agreement. A Phase I
environmental report was conducted by a reputable
environmental engineer in connection with such Mortgage Loan,
which report, except as disclosed in Exhibit A attached hereto
did not indicate any material non-compliance or material
existence of Hazardous Materials. To the best of the Seller's
knowledge, each related Mortgaged Property, except as
disclosed in Exhibit A attached hereto, is in material
compliance with all applicable federal, state and local laws
pertaining to environmental hazards, and to the best of
Seller's knowledge, no notice of violation of such laws has
been issued by any governmental agency or authority; the
Seller has not taken any action which would cause the related
Mortgaged Property not to be in compliance with all federal,
state and local laws pertaining to environmental hazards;
(xxviii) 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, the related
Mortgaged Property, or any interest therein, is directly or
indirectly transferred or sold, or encumbered in connection
with subordinate financing and each related Mortgage prohibits
the pledge or encumbrance of the Mortgaged Property without
the consent of the holder of the Mortgaged Loan;
(xxix) (1) The Mortgage Loan is directly secured by a Mortgage on a
commercial property or multifamily residential property, and
(2) the fair market value of such real property as evidenced
by an MAI appraisal conducted within 12 months of the
origination of the Mortgage Loan was at least equal to 80% of
the principal amount of the Mortgage Loan (a) at origination
(or if the Mortgage Loan has been modified in a manner that
constituted a deemed exchange under Section 1001 of the Code
at a time when the Mortgage Loan was not in default or default
with respect thereto was not reasonably foreseeable, the date
of the last such modification) or (b) at the Closing Date;
provided that the fair market value of the real property
interest must first be reduced by (A) the amount of any lien
on the real property interest that is senior to the Mortgage
Loan (unless such senior lien also secures a Mortgage Loan, in
which event the computation described in (a) and (b) shall be
made on an aggregated basis) and (B) a proportionate amount of
any lien that is in parity with the Mortgage Loan (unless such
other lien secures a Mortgage Loan that is
cross-collateralized with such Mortgage Loan, in which event
the computation described in (a) and (b) shall be made on an
aggregate basis). All improvements included for MAI appraisals
are within the boundaries of the related Mortgaged Property;
(xxx) The Mortgage Loan Schedule is complete and accurate in all
respects;
(xxxi) Each Mortgage Loan and Anchorage Participation constitutes a
"qualified mortgage" within the meaning of Section 860G(a)(3)
of the Code (but without regard to the rule in Treasury
Regulations 1.860 G-2(f)(2) that treats a defective obligation
as a qualified mortgage, or any substantially similar
successor provision);
(xxxii) Each Mortgaged Property is in compliance with all applicable
laws, zoning ordinances, rules, covenants and restrictions
affecting the construction, occupancy, use and operation of
such Mortgaged Property. All inspections, licenses and
certificates required, including certificates of occupancy,
whether by law, ordinance, regulation or insurance standards
to be made or issued with regard to the Mortgaged Property,
have been obtained and are in full force and effect;
(xxxiii) (A) Each Borrower of a Mortgage Loan is an entity whose
organizational documents provide that it is, and at least so
long as the Mortgage Loan is outstanding will continue to be,
a single-purpose entity. (For this purpose, "single-purpose
entity" shall mean a person, other than an individual, which
is formed or organized solely for the purpose of owning and
operating a single property, does not engage in any business
unrelated to such property and its financing, does not have
any assets other than those related to its interest in the
property or its financing, or any indebtedness other than as
permitted by the related Mortgage or the other Mortgage Loan
Documents, has its own books and records and accounts separate
and apart from any other person, and holds itself out as being
a legal entity, separate and apart from any other person);
(B) A non-consolidation opinion was obtained for each
Borrower or affiliated group of Borrowers of Mortgage
Loans or groups of Mortgage Loans with an original
principal balance in excess of $20,000,000;
(C) The general partners or managing members of Borrowers
or affiliated Borrowers of Mortgage Loans or groups
of Mortgage Loans representing more than 5% of the
Initial Pool Balance have an independent director;
(xxxiv) With respect to any Mortgage Loan where the entire estate of
the related Borrower therein is a leasehold estate, the Seller
represents and warrants that:
(A) The ground lease or a memorandum regarding it has
been duly recorded. The ground lease permits the
interest of the lessee to be encumbered by the
related Mortgage and does not restrict the use of the
related Mortgaged Property by such lessee, its
successors or assigns in a manner that would
adversely affect the security provided by the related
Mortgage. There has been no material change in the
terms of such ground lease since its recordation,
except by written instruments, all of which are
included in the related Mortgage File;
(B) The lessor under such ground lease has agreed in
writing and included in the related Mortgage File
that the ground lease may not be amended, modified,
canceled or terminated without the prior written
consent of the mortgagee and that any such action
without such consent is not binding on the mortgagee,
its successors or assigns;
(C) The ground lease has an original term (or an original
term plus one or more optional renewal terms, which,
under all circumstances, may be exercised, and will
be enforceable, by the mortgagee) that extends not
less than 10 years beyond the stated maturity of the
related Mortgage Loan;
(D) The ground lease is not subject to any liens or
encumbrances superior to, or of equal priority with,
the Mortgage. The ground lease is, and provides that
it shall remain, prior to any Mortgage or other lien
upon the related fee interest;
(E) The ground lease is assignable to the mortgagee under
the leasehold estate and its assigns without the
consent of the lessor thereunder;
(F) As of the date of execution and delivery, the ground
lease is in full force and effect and no default has
occurred, nor is there any existing condition which,
but for the passage of time or giving of notice,
would result in a default under the terms of the
ground lease;
(G) 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;
(H) A mortgagee is permitted a reasonable opportunity
(including, where necessary, sufficient time to gain
possession of the interest of the lessee under the
ground lease through legal proceedings, or to take
other action so long as the mortgagee is proceeding
diligently) to cure any default under the ground
lease which is curable after the receipt of notice of
any default before the lessor may terminate the
ground lease. All rights of the mortgagee under the
ground lease and the related Mortgage (insofar as it
relates to the ground lease) may be exercised by or
on behalf of the mortgagee;
(I) The ground lease does not impose any restrictions on
subletting that would be viewed as commercially
unreasonable by an institutional investor. The lessor
is not permitted to disturb the possession, interest
or quiet enjoyment of any subtenant of the lessee in
the relevant portion of the Mortgaged Property
subject to the ground lease for any reason, or in any
manner, which would adversely affect the security
provided by the related Mortgage;
(J) Under the terms of the ground lease and the related
Mortgage, 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 of the
outstanding principal balance of the Mortgage Loan,
together with any accrued interest; and
(K) Under the terms of the ground lease and the related
Mortgage, any related insurance proceeds, or
condemnation award in respect of a total or
substantially total loss or taking of the related
Mortgaged Property will be applied first to the
payment of the outstanding principal balance of the
Mortgage Loan, together with any accrued interest
(except as provided by applicable law or in cases
where a different allocation would not be viewed as
commercially unreasonable by any institutional
investor, taking into account the relative duration
of the ground lease and the related Mortgage and the
ratio of the market value of the related Mortgage
property to the outstanding principal balance of such
Mortgage Loan). Until the principal balance and
accrued interest rate are paid in full, neither the
lessee nor the lessor under the ground lease will
have the option to terminate or modify the ground
lease without prior written consent of the mortgagee
as a result of any casualty or partial condemnation,
except to provide for an abatement of the rent;
(xxxv) With respect to the Mortgaged Properties that have earthquake
insurance as of the Cut-off Date, such insurance will be
maintained until the principal balances of the related
Mortgage Loans are paid in full;
(xxxvi) With respect to Mortgage Loans that are cross-collateralized,
all other loans that are cross-collateralized by such Mortgage
Loans are included in the Mortgage Pool;
(xxxvii) Neither the Seller nor any affiliate thereof has any
obligation or right to make any capital contribution to any
Borrower under a Mortgage Loan, other than contributions made
on or prior to the Closing Date;
(xxxviii)Except as disclosed in the Prospectus Supplement dated
October 16, 1996 and relating to the Certificates, no borrower
under a Mortgage Loan is an affiliate of a borrower under any
other Mortgage Loan; and
(xxxix) After receipt of the Purchase Price, the Seller has no right
of set-off with respect to the transfer of the Mortgage Loans
and the Anchorage Participation to the Purchaser.
(c) The Seller has not dealt with any broker, investment banker, agent or
other person (other than the Company, the Underwriter and the Placement Agent)
who may be entitled to any commission or compensation in connection with the
sale to the Company of the Mortgages Loans.
3. Notice of Breach; Cure and Repurchase. (a) Pursuant to the Pooling and
Servicing Agreement, the Seller and the Company shall be given notice of (A) any
breach of any representation or warranty contained in Section 2(b) (i), (ii),
(iii), (iv), (v), (vi), (vii), (viii), (ix), (xi), (xii), (xv), (xvi), (xvii),
(xviii), (xix), (xx), (xxiv), (xxv), (xxvii), (xxix), (xxxi) or (xxxv) and (B)
any breach of any representation or warranty contained in Section 2(b), (x),
(xiii), (xiv), (xxi), (xxii), (xxiii), (xxvi), (xxviii), (xxx), (xxxii),
(xxxiii), (xxxiv), (xxxvi), (xxxvii), (xxxviii) or (xxxix) that materially and
adversely affects the value of such Mortgage Loan or the interests of the
holders of the Certificates therein.
(b) Within 90 days of the receipt of the notice (or with respect to
the representation and warranty contained in Section 2(b)(xxx) or (xxxii),
discovery) of a breach provided for in clause (a), the Seller shall either (i)
repurchase the related Mortgage Loan or Anchorage Participation at the
Repurchase Price or (ii) promptly cure such breach in all material respects;
provided, however, that in the event that such breach (other than a breach of
Section 2(b)(xxx) or (xxxii)) 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 breach within such 90 day period, the Seller shall have an
additional 90 days to complete such cure, 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 the reason such breach is not capable
of being cured within the initial 90 day period and what actions the Seller is
pursuing in connection with the cure thereof and stating that the Seller
anticipates that such breach will be cured within the additional 90 day period;
and provided, further, that in the event that the Seller fails to complete the
cure of such breach within such additional 90 day period, the Repurchase Price
shall also include interest at the Advance Rate on any Advance made by the
Servicer in respect of the related Mortgage Loan or the Anchorage Participation.
Upon any such repurchase of a Mortgage Loan or the Anchorage Participation by
Seller, the Company shall execute and deliver such instruments of transfer or
assignment presented to it by Seller, in each case without recourse, as shall be
necessary to vest in Seller the legal and beneficial ownership of such Mortgage
Loan or the Anchorage Participation (including any property acquired in respect
thereof or proceeds of any insurance policy with respect thereto) and the rights
with respect thereto under the applicable Originator's Mortgage Loan Purchase
Agreement (including, without limitation, the rights and remedies with respect
to representations and warranties made by the Originator thereunder relating to
such Mortgage Loan), and shall deliver the related Mortgage File to Seller or
its designee after receipt of the related repurchase price.
(c) The Seller hereby acknowledges the assignment by the Company to
the Trustee, as trustee under the Pooling and Servicing Agreement, for the
benefit of the Holders of the Certificates, of the representations and
warranties contained herein and of the obligation of the Seller to repurchase a
Mortgage Loan or the Anchorage Participation pursuant to this Section. The
Trustee or its designee may enforce such obligation as provided in Section 8(b)
hereof.
4. Opinions of Counsel. The Seller hereby covenants to the Company to,
simultaneously with the execution hereof, deliver or cause to be delivered to
the Company opinions of counsel as to various corporate matters in form
satisfactory to the Company.
5. Underwriting. The Seller hereby agrees to furnish any and all
information, documents, certificates, letters or opinions with respect to the
Mortgage Loans or the Anchorage Participation, reasonably requested by the
Company in order to perform any of its obligations or satisfy any of the
conditions on its part to be performed or satisfied pursuant to the Underwriting
Agreement or the Purchase Agreement at or prior to the Closing Date.
6. Costs. The Company shall pay all expenses incidental to the performance
of its obligations under the Underwriting Agreement and the Purchase Agreement,
including without limitation (i) any recording fees or fees for title policy
endorsements and continuations, (ii) the expenses of preparing, printing and
reproducing the Prospectus Supplement, Private Placement Memorandum dated
October 22, 1996 relating to the Certificates, the Underwriting Agreement, the
Placement Agreement, the Pooling and Servicing Agreement and the Certificates
and (iii) the cost of delivering the Certificates to the office of the
Underwriter or the purchaser of the Certificates, as applicable, insured to the
satisfaction of the Underwriter or such purchaser, as applicable.
7. Notices. All communications hereunder shall be in writing and effective
only upon receipt and, if sent to the Company, will be mailed, delivered or
telegraphed and confirmed to it at 2 World Xxxxxxxxx Xxxxxx - Xxxxxxxx X, Xxx
Xxxx, Xxx Xxxx 00000-0000 attention of Manager - Mortgage Finance Department,
or, if sent to the Seller, will be mailed, delivered or telegraphed and
confirmed to it at 2 World Xxxxxxxxx Xxxxxx - Xxxxxxxx X, Xxx Xxxx, Xxx Xxxx
00000-0000 attention of Manager - Mortgage Finance Department.
8. Trustee Beneficiary. The representations, warranties and agreements made
by the Seller in this Agreement are made for the benefit of, and may be enforced
by or on behalf of, the Trustee and the Holders of Certificates to the same
extent that the Company has rights against the Seller under this Agreement in
respect of representations, warranties and agreements made by the Seller herein
and such representations and warranties shall survive delivery of the respective
Mortgage Files to the Trustee until the termination of the Pooling and Servicing
Agreement.
9. Miscellaneous. This Agreement will be governed by and construed in
accordance with the substantive laws of the State of New York. Neither this
Agreement nor any term hereof may be changed, waived, discharged or terminated
except by a writing signed by the party against whom enforcement of such change,
waiver, discharge or termination is sought. This Agreement may not be changed in
any manner which would have a material adverse effect on Holders of Certificates
without the prior written consent of the Trustee. The Trustee shall be protected
in consenting to any such change to the same extent provided in Section 10.07 of
the Pooling and Servicing Agreement. This Agreement may be executed in any
number of counterparts, each of which shall for all purposes be deemed to be an
original and all of which shall together constitute but one and the same
instrument. This Agreement will inure to the benefit of and be binding upon the
parties hereto and their respective successors and assigns, and no other person
will have any right or obligation hereunder, other than as provided in Section 8
hereof.
10. Third Party Beneficiary. Nomura Securities International, Inc. is an
intended third party beneficiary of the representations and warranties of the
Seller set forth in Article 2 hereof.
IN WITNESS WHEREOF, the Company and the Seller have caused this Agreement
to be duly executed by their respective officers as of the day and year first
above written.
ASSET SECURITIZATION CORPORATION
By:_______________________________
Name:
Title:
NOMURA ASSET CAPITAL CORPORATION
By: _______________________________
Name:
Title:
EXHIBIT A
EXCEPTIONS TO THE MORTGAGE LOAN REPRESENTATIONS
(xii) The proceeds of the Anchorage Loan have not been fully
disbursed and the Seller is under an obligation to make a
future advance with respect to such loan in the event that
certain financial conditions are satisfied. The proceeds of
the Anchorage Loan with respect to the Anchorage
Participation have been fully disbursed and there is no
requirement for a future advance with respect thereto. The
Seller covenants that it will not make any future advances
with respect to the Anchorage Participation;
(xxxiv)(B)With respect to the ground lease covering the Mortgaged
Property known as Mariner's Village, the lessor under the
related ground lease is the City of Los Angeles and has not
agreed that the ground lease may only be amended, modified,
canceled or terminated with the prior written consent of
mortgagee. With respect to the ground lease covering the
Mortgaged Property known as Redondo Beach Best Western, the
lessor has not agreed that the ground lease may be
terminated only with the prior consent of mortgagee. With
respect to the ground lease covering the Mortgaged Property
known as Bolsa Marketplace, the lessor has not agreed that
the ground lease may be terminated only with the prior
consent of mortgagee. With respect to the ground lease
covering the Mortgaged Property known as 0000 Xxxxxxxx
Xxxxxxxxx, the lessor has not agreed that the ground lease
may be terminated only with the prior consent of mortgagee;
(D) With respect to the ground lease covering the Mortgaged
Property known as Redondo Beach Best Western, the ground
lease does not provide that "it shall remain" prior to any
lien upon the fee interest. With respect to the ground lease
covering the Mortgaged Property known as Bolsa Marketplace,
the ground lease does not affirmatively provide that "it
shall remain" prior to any lien upon the fee interest. With
respect to the ground lease covering the Mortgaged Property
known as 0000 Xxxxxxxx Xxxxxxxxx, the ground lease does not
provide that "it shall remain" prior to any lien upon the
fee interest;
(E) With respect to the ground lease covering the Mortgaged
Property known as Redondo Beach Best Western, any subsequent
transfer following foreclosure or transfer by deed in lieu
of foreclosure is subject to the prior consent of the
lessor, which consent will not be unreasonably withheld;
(I) With respect to the ground lease covering the Mortgaged
Property known as Mariner's Village, the ground lessor has
retained the right to approve subleases in excess of one
year;
(K) With respect to the ground lease covering the Mortgaged
Property known as Mariner's Village, under the terms of the
ground lease and the related Mortgage, any related insurance
proceeds, or condemnation award in respect of a total or
substantially total loss or taking of the related Mortgaged
Property will be applied first to the restoration of the
related Mortgaged Property and then to the payment of the
outstanding principal balance of the Mortgage Loan, together
with any accrued interest. With respect to the ground lease
covering the Mortgaged Property known as Redondo Beach Best
Western, under the terms of the ground lease and the related
Mortgage, any related insurance proceeds will be applied
first to the restoration of the related Mortgaged Property
and then to the payment of the outstanding principal balance
of the Mortgage Loan, together with any accrued interest.
With respect to the ground lease covering the Mortgaged
Property known as Bolsa Marketplace, under the terms of the
ground lease and the related Mortgage, any related insurance
proceeds, or condemnation award in respect of a partial
condemnation will be applied first to the restoration of the
related Mortgaged Property and then to the payment of the
outstanding principal balance of the Mortgage Loan, together
with any accrued interest. With respect to the ground lease
covering the Mortgaged Property known as 0000 Xxxxxxxx
Xxxxxxxxx, under the terms of the ground lease and the
related Mortgage, any condemnation proceeds not applied to
the restoration of the Mortgaged Property are allocated as
follows: (i) first $1,000,000 to lessor; (ii) next, to the
payment of the outstanding principal balance of the Mortgage
Loan, together with any accrued interest; and (iii) balance
to lessor. Lessor has the right to terminate the ground
lease if 40% or more of the area of either the Mortgaged
Property or the first floor of the property is taken; and
(xxxvii) With respect to the Mortgage Loan known as the Pacific
Properties loan, the Seller has an option under the related
Mortgage to convert some or all of the related Mortgage Loan
into a "preferred equity" interest. As of the Closing Date
the Seller has irrevocably waived such right and the
Trustee, as successor to the Seller's rights under such
Mortgage, has been instructed to not exercise such
conversion right at any time.
