EXHIBIT 99.3
Citigroup Mortgage Loan Purchase Agreement
MORTGAGE LOAN PURCHASE AGREEMENT
This Mortgage Loan Purchase Agreement, dated as of December 1, 2003
(the "Agreement"), is entered into between Citigroup Global Markets Realty Corp.
(the "Seller") and Wachovia Commercial Mortgage Securities, Inc. (the
"Purchaser").
The Seller intends to sell and the Purchaser intends to purchase
certain multifamily and commercial mortgage loans (the "Mortgage Loans")
identified on the schedule (the "Mortgage Loan Schedule") annexed hereto as
Exhibit A. The Purchaser intends to deposit the Mortgage Loans, along with
certain other mortgage loans (the "Other Mortgage Loans"), into a trust fund
(the "Trust Fund"), the beneficial ownership of which will be evidenced by
multiple classes (each, a "Class") of mortgage pass-through certificates (the
"Certificates"). One or more "real estate mortgage investment conduit" ("REMIC")
elections will be made with respect to most of the Trust Fund. The Trust Fund
will be created and the Certificates will be issued pursuant to a Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), dated as of
December 1, 2003, among the Purchaser, as depositor, Wachovia Bank, National
Association, as master servicer (in such capacity, the "Master Servicer"),
Lennar Partners, Inc., as special servicer (the "Special Servicer"), Wells Fargo
Bank Minnesota, N.A., as trustee (the "Trustee") and LaSalle Bank National
Association, as paying agent (in such capacity, the "Paying Agent"). Capitalized
terms used but not defined herein (including the Schedules attached hereto) have
the respective meanings set forth in the Pooling and Servicing Agreement.
Now, therefore, in consideration of the premises and the mutual
agreements set forth herein, the parties agree as follows:
SECTION 1. Agreement to Purchase.
The Seller agrees to sell, and the Purchaser agrees to purchase, the
Mortgage Loans identified on the Mortgage Loan Schedule. The Mortgage Loan
Schedule may be amended to reflect the actual Mortgage Loans delivered to the
Purchaser pursuant to the terms hereof. The Mortgage Loans are expected to have
an aggregate principal balance of $163,505,074.31 (the "Citigroup 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 Citigroup
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 $1,149,211,695 (subject to a variance of plus or minus 5.0%). The
purchase and sale of the Mortgage Loans shall take place December 23, 2003, or
such other date as shall be mutually acceptable to the parties to this Agreement
(the "Closing Date"). The consideration (the "Aggregate Purchase Price") for the
Mortgage Loans shall be equal to (i) % of the Citigroup Mortgage Loan
Balance as of the Cut-Off Date, plus (ii) $586,460, which amount represents the
amount of interest accrued on the Citigroup Mortgage Loan Balance at the related
Net Mortgage Rate for the period from and including the Cut-Off Date up to but
not including the Closing Date.
The Aggregate Purchase Price shall be paid to the Seller or its
designee by wire transfer in immediately available funds on the Closing Date.
SECTION 2. Conveyance of Mortgage Loans.
(a) Effective as of the Closing Date, subject only to receipt of the
Aggregate Purchase Price and satisfaction of the other conditions to closing
that are for the benefit of the Seller, the Seller does hereby sell, transfer,
assign, set over and otherwise convey to the Purchaser, without recourse (except
as set forth in this Agreement), all the right, title and interest of the Seller
in and to the Mortgage Loans identified on the Mortgage Loan Schedule as of such
date, on a servicing released basis, together with all of the Seller's right,
title and interest in and to the proceeds of any related title, hazard, primary
mortgage or other insurance proceeds.
(b) The Purchaser or its assignee shall be entitled to receive all
scheduled payments of principal and interest due after the Cut-Off Date, and all
other recoveries of principal and interest collected after the Cut-Off Date
(other than in respect of principal and interest on the Mortgage Loans due on or
before the Cut-Off Date). All scheduled payments of principal and interest due
on or before the Cut-Off Date but collected on or after the Cut-Off Date, and
recoveries of principal and interest collected on or before the Cut-Off Date
(only in respect of principal and interest on the Mortgage Loans due on or
before the Cut-Off Date and principal prepayments thereon), shall belong to, and
shall be promptly remitted to, the Seller.
(c) No later than the Closing Date, the Seller shall, on behalf of
the Purchaser, deliver to the Trustee, the documents and instruments specified
below with respect to each Mortgage Loan (each a "Mortgage File"). All Mortgage
Files so delivered will be held by the Trustee in escrow at all times prior to
the Closing Date. Each Mortgage File shall contain the following documents:
(i) the original executed Mortgage Note including any power of
attorney related to the execution thereof, together with any and all
intervening endorsements thereon, endorsed on its face or by allonge
attached thereto (without recourse, representation or warranty, express or
implied) to the order of Wells Fargo Bank Minnesota, N.A., as trustee for
the registered holders of Wachovia Bank Commercial Mortgage Trust,
Commercial Mortgage Pass-Through Certificates, Series 2003-C9 or in blank
(or a lost note affidavit and indemnity with a copy of such Mortgage Note
attached thereto);
(ii) an original or copy of the Mortgage, together with any and all
intervening assignments thereof, in each case (unless not yet returned by
the applicable recording office) with evidence of recording indicated
thereon or certified by the applicable recording office;
(iii) an original or copy of any related Assignment of Leases (if
such item is a document separate from the Mortgage), together with any and
all intervening assignments thereof, in each case (unless not yet returned
by the applicable recording office) with evidence of recording indicated
thereon or certified by the applicable recording office;
(iv) an original executed assignment, in recordable form (except for
any missing recording information), of (a) the Mortgage, (b) any related
Assignment of Leases (if such item is a document separate from the
Mortgage and to the extent not already assigned pursuant to preceding
clause (a)) and (c) any other recorded document relating to the Mortgage
Loan otherwise included in the Mortgage File, in favor of Wells Fargo Bank
Minnesota, N.A., as trustee for the registered holders of Wachovia Bank
Commercial Mortgage Trust, Commercial Mortgage Pass-Through Certificates,
Series 2003-C9, 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 Wells Fargo Bank Minnesota, N.A., as trustee for
the registered holders of Wachovia Bank Commercial Mortgage Trust,
Commercial Mortgage Pass-Through Certificates, Series 2003-C9, 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
Amendment, in form suitable for filing in favor of Wells Fargo Bank
Minnesota, N.A., as trustee for the registered holders of Wachovia Bank
Commercial Mortgage Trust, Commercial Mortgage Pass-Through Certificates,
Series 2003-C9, as assignee, or in blank;
(ix) an original or copy of (a) any Ground Lease or (b) any loan
guaranty, indemnity, ground lessor estoppel, environmental insurance
policy or Lease Enhancement Policy;
(x) any intercreditor agreement relating to permitted debt
(including, without limitation, mezzanine debt) of the Mortgagor;
(xi) copies of any loan agreement, escrow agreement or security
agreement relating to a Mortgage Loan;
(xii) a copy of any letter of credit and related transfer documents
relating to a Mortgage Loan; and
(xiii) with respect to any Companion Loan, all of the above
documents with respect to such Companion Loan and the related
Intercreditor Agreement; provided that a copy of each mortgage note
relating to such Companion Loan, rather than the original, shall be
provided, and no assignments shall be provided.
(d) The Seller shall take all actions reasonably necessary (i) to
permit the Trustee to fulfill its obligations pursuant to Section 2.01(d) of the
Pooling and Servicing Agreement and (ii) to perform its obligations described in
Section 2.01(d) of the Pooling and Servicing Agreement. Without limiting the
generality of the foregoing, if a draw upon a letter of credit is required
before its transfer to the Trust Fund can be completed, the Seller shall draw
upon such letter of credit for the benefit of the Trust pursuant to written
instructions from the Master Servicer. The Seller shall reimburse the Trustee
for all reasonable costs and expenses, if any, incurred by the Trustee for
recording any documents described in Section 2(c)(iv)(c) hereof and filing any
assignments of UCC Financing Statements described in the proviso in the third to
last sentence in Section 2.02(a) of the Pooling and Servicing Agreement.
(e) All documents and records (except draft documents,
attorney-client privileged communications and internal correspondence and credit
and other underwriting analysis of the Seller) relating to each Mortgage Loan
and in the Seller's possession (the "Additional Mortgage Loan Documents") that
are not required to be delivered to the Trustee shall promptly be delivered or
caused to be delivered by the Seller to the Master Servicer or at the direction
of the Master Servicer to the appropriate sub-servicer, together with any
related escrow amounts and reserve amounts.
(f) The Seller shall take such actions as are reasonably necessary
to assign or otherwise grant to the Trust Fund the benefit of any letters of
credit in the name of the Seller which secure any Mortgage Loan.
SECTION 3. Representations, Warranties and Covenants of Seller.
(a) The Seller hereby represents and warrants to and covenants with
the Purchaser, as of the date hereof, that:
(i) The Seller is a corporation organized and validly existing and
in good standing under the laws of the State of 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 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 a cash amount equal
to the Aggregate Purchase Price. The consideration received by the Seller
upon the sale of the Mortgage Loans to the Purchaser will constitute at
least reasonably equivalent value and fair consideration for the Mortgage
Loans. The Seller will be solvent at all relevant times prior to, and will
not be rendered insolvent by, the sale of the Mortgage Loans to the
Purchaser. The Seller is not selling the Mortgage Loans to the Purchaser
with any intent to hinder, delay or defraud any of the creditors of the
Seller.
(b) The Seller hereby makes the representations and warranties
contained in Schedule I for the benefit of the Purchaser and the Trustee for the
benefit of the Certificateholders as of the Closing Date, with respect to (and
solely with respect to) each Mortgage Loan, which representations and warranties
are subject to the exceptions set forth on Schedule II.
(c) With respect to the schedule of exceptions delivered by the
Trustee on the Closing Date, within fifteen (15) Business Days (or, in the
reasonable discretion of the Controlling Class Representative, thirty (30)
Business Days) of the Closing Date, with respect to the documents specified in
clauses (i), (ii), (vii), (ix) (solely with respect to Ground Leases) and (xii)
of the definition of Mortgage File, the Seller shall cure any material exception
listed therein (for the avoidance of doubt, any deficiencies with respect to the
documents specified in clause (ii) resulting solely from a delay in the return
of the related documents from the applicable recording office, shall be cured in
the time and manner described in Section 2.01(c) of the Pooling and Servicing
Agreement). If such exception is not so cured, the Seller shall either (1)
repurchase the related Mortgage Loan, (2) with respect to exceptions relating to
clause (xii) of the definition of "Mortgage File", deposit with the Trustee an
amount, to be held in trust in a Special Reserve Account pursuant to the Pooling
and Servicing Agreement, equal to the amount of the undelivered letter of credit
(in the alternative, the Seller may deliver to the Trustee, with a certified
copy to the Master Servicer and Trustee, a letter of credit for the benefit of
the Master Servicer on behalf of the Trustee and upon the same terms and
conditions as the undelivered letter of credit) which the Master Servicer on
behalf of the Trustee may use (or draw upon, as the case may be) under the same
circumstances and conditions as the Master Servicer would have been entitled to
draw on the undelivered letter of credit, or (3) with respect to any exceptions
relating to clauses (i), (ii) and (vii), deposit with the Trustee an amount, to
be held in trust in a Special Reserve Account pursuant to the Pooling and
Servicing Agreement, equal to 25% of the Stated Principal Balance of the related
Mortgage Loan on such date. Any funds or letter of credit deposited pursuant to
clauses (2) and (3) shall be held by the Trustee until the earlier of (x) the
date on which the Master Servicer certifies to the Trustee and the Controlling
Class Representative that such exception has been cured (or the Trustee
certifies the same to the Controlling Class Representative), at which time such
funds or letter of credit, as applicable, shall be returned to the Seller and
(y) thirty (30) Business Days or, if the Controlling Class Representative has
extended the cure period, forty-five (45) Business Days after the Closing Date;
provided, however, that if such exception is not cured within such thirty (30)
Business Days or forty-five (45) Business Days, as the case may be, (A) in the
case of clause (2), the Trustee shall retain the funds or letter of credit, as
applicable, or (B) in the case of clause (3), the Seller shall repurchase the
related Mortgage Loan in accordance with the terms and conditions of this
Agreement, at which time such funds shall be applied to the Purchase Price of
the related Mortgage Loan and any letter of credit will be returned to the
Seller.
If the Seller receives written notice of a Document Defect or a
Breach pursuant to Section 2.03(a) of the Pooling and Servicing Agreement
relating to a Mortgage Loan, then the Seller shall not later than 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, the interest of the Trust therein or the interests of
any Certificateholder, cure such Document Defect or Breach, as the case may be,
in all material respects, which shall include payment of actual or provable
losses and any Additional Trust Fund Expenses directly resulting from any such
Document Defect or Breach or, if such Document Defect or Breach (other than
omissions solely due to a document not having been returned by the related
recording office) cannot be cured within such 90-day period, (i) repurchase the
affected Mortgage Loan at the applicable Purchase Price not later than the end
of such 90-day period or (ii) substitute a Qualified Substitute Mortgage Loan
for such affected Mortgage Loan not later than the end of such 90-day period
(and in no event later than the second anniversary of the Closing Date) and pay
the Master Servicer for deposit into the Certificate Account, any Substitution
Shortfall Amount in connection therewith; provided, however, that unless the
Breach would cause the Mortgage Loan not to be a Qualified Mortgage, and if such
Document Defect or Breach is capable of being cured but not within such 90-day
period and the Seller has commenced and is diligently proceeding with the cure
of such Document Defect or Breach within such 90-day period, such Seller shall
have an additional 90 days to complete such cure (or, failing such cure, to
repurchase or substitute 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, any letter of credit, any franchise agreement, any comfort letter and any
comfort letter transfer documents (collectively, the "Core Material Documents"))
shall be considered to materially and adversely affect the value of the related
Mortgage Loan, the interests of the Trust therein or the interests of any
Certificateholder unless the document with respect to which the Document Defect
exists is required in connection with an imminent enforcement of the mortgagee's
rights or remedies under the related Mortgage Loan, defending any claim asserted
by any borrower or third party with respect to the Mortgage Loan, establishing
the validity or priority of any lien or any collateral securing the Mortgage
Loan or for any immediate significant servicing obligations; provided, further,
with respect to Document Defects which materially and adversely affect the
interests of any Certificateholder, the interests of the Trust therein or the
value of the related Mortgage Loan, other than with respect to Document Defects
relating to the Core Material Documents, any applicable cure period following
the initial 90-day cure period may be extended by the Master Servicer or the
Special Servicer if the document involved is not needed imminently. Such
extension will end upon 30 days notice of such need as reasonably determined by
the Master Servicer or Special Servicer (with a possible 30 day extension if the
Master Servicer or Special Servicer agrees that the Seller is diligently
pursuing a cure). The Seller shall cure all Document Defects, which materially
and adversely affect the interests of any Certificateholder, the interests of
the Trust therein or the value of the related Mortgage Loan, regardless of the
document involved no later than 2 years following the Closing Date; provided
that the initial 90-day cure period referenced in this paragraph may not be
reduced. For a period of two years from the Closing Date, so long as there
remains any Mortgage File relating to a Mortgage Loan as to which there is any
uncured Document Defect or Breach, the Seller shall provide the officer's
certificate to the Trustee described above as to the reasons such Document
Defect or Breach remains uncured and as to the actions being taken to pursue
cure. Notwithstanding the foregoing, the delivery of a commitment to issue a
policy of lender's title insurance as described in clause 12 of Schedule I
hereof in lieu of the delivery of the actual policy of lender's title insurance
shall not be considered a Document Defect or Breach with respect to any Mortgage
File if such actual policy of insurance is delivered to the Trustee or a
Custodian on its behalf not later than the 90th day following the Closing Date.
If (i) any Mortgage Loan is required to be repurchased or
substituted for in the manner described above, (ii) such Mortgage Loan is
cross-collateralized and cross-defaulted with one or more other Mortgage Loans
(each, a "Crossed Loan"), and (iii) the applicable Document Defect or Breach
does not constitute a Document Defect or Breach, as the case may be, as to any
other Crossed Loan in such Crossed Group (without regard to this paragraph),
then the applicable Document Defect or Breach, as the case may be, will be
deemed to constitute a Document Defect or Breach, as the case may be, as to any
other Crossed Loan in the Crossed Group for purposes of this paragraph, and the
Seller will be required to repurchase or substitute for all of the remaining
Crossed Loan(s) in the related Crossed Group as provided in the immediately
preceding paragraph unless such other Crossed Loans in such Crossed Group
satisfy the Crossed Loan Repurchase Criteria and satisfy all other criteria for
substitution or repurchase of Mortgage Loans set forth herein. In the event that
the remaining Crossed Loans satisfy the aforementioned criteria, the Seller may
elect either to repurchase or substitute for only the affected Crossed Loan as
to which the related Breach or Document Defect exists or to repurchase or
substitute for all of the Crossed Loans in the related Crossed Group. The Seller
shall be responsible for the cost of any Appraisal required to be obtained by
the Master Servicer to determine if the Crossed Loan Repurchase Criteria have
been satisfied, so long as the scope and cost of such Appraisal has been
approved by the Seller (such approval not to be unreasonably withheld).
To the extent that the Seller is required to repurchase or
substitute for a Crossed Loan hereunder in the manner prescribed above while the
Trustee continues to hold any other Crossed Loans in such Crossed Group, neither
the Seller nor the Purchaser shall enforce any remedies against the other's
Primary Collateral, but each is permitted to exercise remedies against the
Primary Collateral securing its respective Crossed Loans, including with respect
to the Trustee, the Primary Collateral securing Crossed Loans still held by the
Trustee.
If the exercise of remedies by one party would materially impair the
ability of the other party to exercise its remedies with respect to the Primary
Collateral securing the Crossed Loans held by such party, then the Seller and
the Purchaser shall forbear from exercising such remedies until the Mortgage
Loan documents evidencing and securing the relevant Crossed Loans can be
modified in a manner that complies with this Agreement to remove the threat of
material impairment as a result of the exercise of remedies or some other
accommodation can be reached. Any reserve or other cash collateral or letters of
credit securing the Crossed Loans shall be allocated between such Crossed Loans
in accordance with the Mortgage Loan documents, or otherwise on a pro rata basis
based upon their outstanding Stated Principal Balances. Notwithstanding the
foregoing, if a Crossed Loan included in the Trust Fund is modified to terminate
the related cross-collateralization and/or cross-default provisions, as a
condition to such modification, the Seller shall furnish to the Trustee an
Opinion of Counsel that any modification shall not cause an Adverse REMIC Event.
Any expenses incurred by the Purchaser in connection with such modification or
accommodation (including but not limited to recoverable attorney fees) shall be
paid by the Seller.
(d) 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.
(e) 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 Section 3 of this Agreement. Nothing in this Agreement shall
prohibit the Purchaser or its assigns (including the Master Servicer and/or the
Special Servicer) from pursuing any course of action authorized by the Pooling
and Servicing Agreement while the Purchaser asserts a claim or brings a cause of
action to enforce any rights set forth herein against the Seller.
(f) With respect to any Mortgage Loan which has become a Defaulted
Mortgage Loan under the Pooling and Servicing Agreement or with respect to which
the related Mortgaged Property has been foreclosed and which is the subject of a
repurchase claim under this Agreement, in accordance with Section 2.03 of the
Pooling and Servicing Agreement, the Special Servicer shall notify the Seller in
writing of its intention to liquidate such Defaulted Mortgage Loan or REO
Property at least 45 days prior to any such action. If the Seller consents to
such sale and voluntarily agrees to (a) repurchase such Defaulted Mortgage Loan
or REO Property or (b) a court of competent jurisdiction determines that the
Seller is liable under this Agreement to repurchase such Defaulted Mortgage Loan
or REO Property then such Seller shall remit to the Purchaser an amount equal to
the difference if any of the price of such Defaulted Mortgage Loan or REO
Property as sold and the price at which the Seller would have to repurchase such
Defaulted Mortgage Loan or REO Property under this Agreement. The Seller shall
have 10 Business Days after receipt of notice to determine whether or not to
consent to such sale. If the Seller does not consent to such sale, the Special
Servicer shall contract with a Determination Party (as defined in the Pooling
and Servicing Agreement). If the related Determination Party determines that
such proposed sale is in accordance with the Servicing Standards and the
provisions of the Pooling and Servicing Agreement with respect to the sale of
Defaulted Mortgage Loans and REO Properties and subsequent to such sale, a court
of competent jurisdiction determines that Seller was liable under this Agreement
and required to repurchase such Defaulted Mortgage Loan or REO Property in
accordance with the terms hereof, then the Seller shall remit to Purchaser an
amount equal to the difference (if any) between the proceeds of the related
action and the price at which the Seller would have been obligated to pay had
the Seller repurchased such Defaulted Mortgage Loan or REO Property in
accordance with the terms hereof including the costs related to contracting with
the related Determination Party. If the related Determination Party determines
that the sale of the related Defaulted Mortgage Loan or REO Property is not in
accordance with the Servicing Standards and the provisions of the Pooling and
Servicing Agreement with respect to the sale of Defaulted Mortgage Loans and REO
Properties and the Special Servicer subsequently sells such Mortgage Loan or REO
Property, then the Seller will not be liable for any such difference (nor any
cost of contracting with the Determination Party).
(g) Notwithstanding the foregoing, if there exists a Breach relating
to whether or not the Mortgage Loan documents or any particular Mortgage Loan
document requires the related Mortgagor to bear the costs and expenses
associated with any particular action or matter under such Mortgage Loan
document(s) with respect to matters described in Representations 23 and 43 of
Schedule I, then the Purchaser shall direct the Seller in writing to wire
transfer to the Master Servicer for deposit into the Certificate Account, within
90 days of the Seller's receipt of such direction, the amount of any such costs
and expenses borne by the Purchaser, the Certificateholders, the Master
Servicer, the Special Servicer and the Trustee on their behalf that are the
basis of such Breach. Upon its making such deposit, the Seller shall be deemed
to have cured such Breach in all respects. Provided such payment is made in
full, this paragraph describes the sole remedy available to the Purchaser, the
Certificateholders, the Master Servicer, the Special Servicer and the Trustee on
their behalf regarding any such Breach and the Seller shall not be obligated to
repurchase the affected Mortgage Loan on account of such Breach or otherwise
cure such Breach.
SECTION 4. Representations and Warranties of the Purchaser. In order
to induce the Seller to enter into this Agreement, the Purchaser hereby
represents and warrants for the benefit of the Seller as of the date hereof
that:
(a) The Purchaser is a corporation duly organized, validly existing
and in good standing under the laws of the State of North Carolina. The
Purchaser has the full corporate power and authority and legal right to acquire
the Mortgage Loans from the Seller and to transfer the Mortgage Loans to the
Trustee.
(b) This Agreement has been duly and validly authorized, executed
and delivered by the Purchaser, all requisite action by the Purchaser's
directors and officers has been taken in connection therewith, and (assuming the
due authorization, execution and delivery hereof by the Seller) this Agreement
constitutes the valid, legal and binding agreement of the Purchaser, enforceable
against the Purchaser in accordance with its terms, except as such enforcement
may be limited by (A) laws relating to bankruptcy, insolvency, reorganization,
receivership or moratorium, (B) other laws relating to or affecting the rights
of creditors generally, or (C) general equity principles (regardless of whether
such enforcement is considered in a proceeding in equity or at law).
(c) Except as may be required under federal or state securities laws
(and which will be obtained on a timely basis), no consent, approval,
authorization or order of, registration or filing with, or notice to, any
governmental authority or court, is required, under federal or state law, for
the execution, delivery and performance by the Purchaser of or compliance by the
Purchaser with this Agreement, or the consummation by the Purchaser of any
transaction described in this Agreement.
(d) None of the acquisition of the Mortgage Loans by the Purchaser,
the transfer of the Mortgage Loans to the Trustee, 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 (A) any term or provision of the
Purchaser's articles of association or bylaws, (B) any term or provision of any
material agreement, contract, instrument or indenture, to which the Purchaser is
a party or by which the Purchaser is bound, or (C) any law, rule, regulation,
order, judgment, writ, injunction or decree of any court or governmental
authority having jurisdiction over the Purchaser or its assets.
(e) Under GAAP and for federal income tax purposes, the Purchaser
will report the transfer of the Mortgage Loans by the Seller to the Purchaser as
a sale of the Mortgage Loans to the Purchaser in exchange for consideration
consisting of a cash amount equal to the Aggregate Purchase Price.
(f) There is no action, suit, proceeding or investigation pending or
to the knowledge of the Purchaser, threatened against the Purchaser in any court
or by or before any other governmental agency or instrumentality which would
materially and adversely affect the validity of this Agreement or any action
taken in connection with the obligations of the Purchaser contemplated herein,
or which would be likely to impair materially the ability of the Purchaser to
enter into and/or perform 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 Cadwalader, Wickersham & Taft
LLP, Charlotte, North Carolina on the Closing Date.
The Closing shall be subject to each of the following conditions:
(a) All of the representations and warranties of the Seller set
forth in or made pursuant to Sections 3(a) and 3(b) of this Agreement and all of
the representations and warranties of the Purchaser set forth in Section 4 of
this Agreement shall be true and correct in all material respects as of the
Closing Date;
(b) The Pooling and Servicing Agreement (to the extent it affects
the obligations of the Seller hereunder) and all documents specified in Section
6 of this Agreement (the "Closing Documents"), in such forms as are agreed upon
and acceptable to the Purchaser, the Seller, the Underwriters 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 KPMG LLP or
Ernst & Young LLP, as applicable, 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
and the Underwriters may rely, to the effect that: (i) the representations and
warranties of the Seller in this Agreement are true and correct in all material
respects at and as of the Closing Date with the same effect as if made on such
date; and (ii) the Seller has, in all material respects, complied with all the
agreements and satisfied all the conditions on its part that are required under
this Agreement to be performed or satisfied at or prior to the Closing Date;
(c) An officer's certificate from an officer of the Seller (signed
in his/her capacity as an officer), dated the Closing Date, and upon which the
Purchaser may rely, to the effect that each individual who, as an officer or
representative of the Seller, signed this Agreement or any other document or
certificate delivered on or before the Closing Date in connection with the
transactions contemplated herein, was at the respective times of such signing
and delivery, and is as of the Closing Date, duly elected or appointed,
qualified and acting as such officer or representative, and the signatures of
such persons appearing on such documents and certificates are their genuine
signatures;
(d) An officer's certificate from an officer of the Seller (signed
in his/her capacity as an officer), dated the Closing Date, and upon which the
Purchaser and the Underwriters may rely, to the effect that with respect to the
Seller, the Mortgage Loans, the related Mortgagors and the related Mortgaged
Properties (i) such officer has carefully examined the Specified Portions of the
Prospectus Supplement and nothing has come to his attention that would lead him
to believe that the Specified Portions of the Prospectus Supplement, as of the
date of the Prospectus Supplement, or as of the Closing Date, included or
include any untrue statement of a material fact relating to the Mortgage Loans
or omitted or omit to state therein a material fact necessary in order to make
the statements therein relating to the Mortgage Loans, in light of the
circumstances under which they were made, not misleading, 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, in the light of the
circumstances under which they were made, not misleading. The "Specified
Portions" of the Prospectus Supplement shall consist of Annex A thereto, the
diskette which accompanies the Prospectus Supplement (insofar as such diskette
is consistent with such Annex A) 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 the Prospectus Supplement--The Parties--The
Mortgage Loan Sellers," "Summary of the Prospectus Supplement--The Mortgage
Loans," "Risk Factors--The Mortgage Loans," and "Description of the Mortgage
Pool--General," "--Mortgage Loan History," "--Certain Terms and Conditions of
the Mortgage Loans," "--Assessments of Property Condition," "--Co-Lender Loans,"
"--Additional Mortgage Loan Information," "--Twenty Largest Mortgage Loans,"
"--The Mortgage Loan Sellers," "--Underwriting Standards," and
"--Representations and Warranties; Repurchases and Substitutions." The
"Specified Portions" of the Memorandum shall consist of the Specified Portions
of the Prospectus Supplement and the first and second full paragraphs on page
"iii" of the Memorandum.
(e) The resolutions of the requisite committee of the Seller's board
of directors authorizing the Seller's entering into the transactions
contemplated by this Agreement, the certificate of incorporation and by-laws of
the Seller, and an original or copy of a certificate of good standing of the
Seller issued by the State of 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 and
each of the Rating Agencies, together with such other written opinions as may be
required by the Rating Agencies; and
(g) Such further certificates, opinions and documents as the
Purchaser may reasonably request.
SECTION 7. Indemnification.
(a) The Seller shall indemnify and hold harmless the Purchaser, the
Underwriters, the Initial Purchasers, their respective officers and directors,
and each person, if any, who controls the Purchaser or any Underwriter 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, 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 therein
(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 (I) any such untrue statement or alleged
untrue statement or omission or alleged omission occurring in, or with respect
to, such Disclosure Material, arises out of or is based upon an untrue statement
or omission with respect to the Mortgage Loans, the related Mortgagors and/or
the related Mortgaged Properties contained in the Data File (it being herein
acknowledged that the Data File was and will be used to prepare the Prospectus
Supplement and the Preliminary Prospectus Supplement, including without
limitation Annex A 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), (II) any such untrue
statement or alleged untrue statement or omission or alleged omission of a
material fact occurring in, or with respect to, such Disclosure Material, is
with respect to, or arises out of or is based upon an untrue statement or
omission of a material fact with respect to, the information regarding the
Mortgage Loans, the related Mortgagors, the related Mortgaged Properties and/or
the Seller set forth in the Specified Portions of each of the Prospectus
Supplement, the Preliminary Prospectus Supplement and the Memorandum, (III) any
such untrue statement or alleged untrue statement or omission or alleged
omission occurring in, or with respect to, such Disclosure Material, arises out
of or is based upon a breach of the representations and warranties of the Seller
set forth in or made pursuant to Section 3 or (IV) any such untrue statement or
alleged untrue statement or omission or alleged omission occurring in, or with
respect to, such Disclosure Material, arises out of or is based upon any other
written information concerning the characteristics of the Mortgage Loans, the
related Mortgagors or the related Mortgaged Properties furnished to the
Purchaser or the Underwriters by the Seller; provided that the indemnification
provided by this Section 7 shall not apply to the extent that such untrue
statement or omission of a material fact was made as a result of an error in the
manipulation of, or in any calculations based upon, or in any aggregation of the
information regarding the Mortgage Loans, the related Mortgagors and/or the
related Mortgaged Properties set forth in the Data File or Annex A to the
Prospectus Supplement or the Preliminary Prospectus Supplement to the extent
such information was not materially incorrect in the Data File or such Annex A,
as applicable, including without limitation the aggregation of such information
with comparable information relating to the Other Mortgage Loans.
Notwithstanding the foregoing, the indemnification provided in this Section 7(a)
shall not inure to the benefit of any Underwriter or Initial 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 information
described in clauses (I) through (IV) above is collectively referred to as the
"Seller Information". 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. 333-108944 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 November
14, 2003, as supplemented by the prospectus supplement dated December 11, 2003
(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 December 2, 2003 relating to the Registered Certificates,
including all annexes thereto; "Memorandum" shall mean the private placement
memorandum dated December 11, 2003, relating to the Non-Registered Certificates,
including all exhibits thereto; "Registered Certificates" shall mean the Class
A-1, Class A-2, 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 Kidder, Peabody Acceptance Corporation I, Kidder, Peabody
& Co. Incorporated, and Kidder 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 "Kidder
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 Kidder 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 December 1, 2003 and rendered by KPMG LLP or 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 Section 7(a) (except to the extent that such omission has prejudiced the
indemnifying party in any material respect) or from any liability which it may
have otherwise than under this Section 7. In case any such action is brought
against any indemnified party and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein, and to the extent that it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof, with counsel selected by the
indemnifying party and reasonably satisfactory to such indemnified party;
provided, however, that if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party or
parties shall have reasonably concluded that there may be legal defenses
available to it or them and/or other indemnified parties that are different from
or additional to those available to the indemnifying party, the indemnified
party shall have the right to select separate counsel to assert such legal
defenses and to otherwise participate in the defense of such action on behalf of
such indemnified party or parties. Upon receipt of notice from the indemnifying
party to such indemnified party of its election so to assume the defense of such
action and approval by the indemnified party of counsel, the indemnifying party
will not be liable for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof, unless (i) the
indemnified party shall have employed separate counsel in connection with the
assertion of legal defenses in accordance with the proviso to the preceding
sentence (it being understood, however, that the indemnifying party shall not be
liable for the expenses of more than one separate counsel, approved by the
Purchaser and the Underwriters, representing all the indemnified parties under
Section 7(a) who are parties to such action), (ii) the indemnifying party shall
not have employed counsel reasonably satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of
commencement of the action or (iii) the indemnifying party has authorized the
employment of counsel for the indemnified party at the expense of the
indemnifying party; and except that, if clause (i) or (iii) is applicable, such
liability shall only be in respect of the counsel referred to in such clause (i)
or (iii). Unless it shall assume the defense of any proceeding, an indemnifying
party shall not be liable for any settlement of any proceeding effected without
its written consent but, if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party shall indemnify the
indemnified party from and against any loss or liability by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel or any other expenses for
which the indemnifying party is obligated under this subsection, the
indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement. If an indemnifying party assumes the defense of any proceeding, it
shall be entitled to settle such proceeding with the consent of the indemnified
party or, if such settlement provides for an unconditional release of the
indemnified party in connection with all matters relating to the proceeding that
have been asserted against the indemnified party in such proceeding by the other
parties to such settlement, which release does not include a statement as to or
an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party without the consent of the indemnified party.
(d) If the indemnification provided for in this Section 7 is
unavailable to an indemnified party under Section 7(a) hereof or insufficient in
respect of any losses, claims, damages or liabilities referred to therein, then
the indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities, in such proportion as is
appropriate to reflect the relative fault of the indemnified and indemnifying
parties in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations (taking into account the parties' relative knowledge and access
to information concerning the matter with respect to which the claim was
asserted, the opportunity to correct and prevent any statement or omission or
failure to comply, and any other equitable considerations appropriate under the
circumstances). The relative fault of the indemnified and indemnifying parties
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by such parties;
provided that no Underwriter or Initial 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 within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act, and such Underwriter's officers and directors, shall
have the same rights to contribution as such Underwriter, and each director of
the Seller and each person, if any who controls the Seller within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same
rights to contribution as the Seller.
(e) The Purchaser and the Seller agree that it would not be just and
equitable if contribution pursuant to Section 7(d) were determined by pro rata
allocation or by any other method of allocation that does not take account of
the considerations referred to in Section 7(d) above. The amount paid or payable
by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in this Section 7 shall be deemed to include, subject to
the limitations set forth above, any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim, except where the indemnified party is required to bear such
expenses pursuant to this Section 7, which expenses the indemnifying party shall
pay as and when incurred, at the request of the indemnified party, to the extent
that the indemnifying party will be ultimately obligated to pay such expenses.
If any expenses so paid by the indemnifying party are subsequently determined to
not be required to be borne by the indemnifying party hereunder, the party that
received such payment shall promptly refund the amount so paid to the party
which made such payment. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the 1933 Act) 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, any of their respective directors or officers, or any person
controlling the Purchaser or the Underwriters, 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 Citigroup 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 Prospectus, Preliminary Prospectus Supplement 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, 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; 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.
SECTION 10. Covenants of Purchaser. The Purchaser shall provide the
Seller with all forms of Disclosure Materials (including the final form of the
Memorandum, the Preliminary Prospectus Supplement and 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 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 (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 and the other third party beneficiaries hereto in all respects
to the same extent as if they had been signatories hereof.
SECTION 19. Amendments. No term or provision of this Agreement may
be waived or modified unless such waiver or modification is in writing and
signed by a duly authorized officer of the party, or third party beneficiary,
against whom such waiver or modification is sought to be enforced. No amendment
to the Pooling and Servicing Agreement which relates to defined terms contained
therein, Section 2.01(d) thereof or the repurchase obligations or any other
obligations of the Seller shall be effective against the Seller (in such
capacity) unless the Seller shall have agreed to such amendment in writing.
SECTION 20. Accountants' Letters. The parties hereto shall cooperate
with KPMG LLP and 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.
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
CITIGROUP CAPITAL MARKETS REALTY CORP.
By: /s/ Angela J. Vleck
--------------------------------------
Name: Angela J. Vleck
Title: Authorized Agent
Address for Notices:
388 Greenwich Street, 11th Floor
New York, New York 10013
Telecopier No.: (212) 816-8306
Telephone No.: (212) 816-6000
PURCHASER
WACHOVIA COMMERCIAL MORTGAGE
SECURITIES, INC.
By: /s/ William J. Cohane
--------------------------------------
Name: William J. Cohane
Title: Managing Director
Address for Notices:
One Wachovia Center
301 South College Street
Charlotte, North Carolina 28288-0166
Telecopier No.: (704) 383-1942
Telephone No.: (704) 374-6161
SCHEDULE I
General Mortgage Representations and Warranties
For purposes of this Schedule, the phrases "to the knowledge of the
Seller" or "to the Seller's knowledge" shall mean, except where otherwise
expressly set forth below, the actual state of knowledge of the Seller or any
servicer acting on its behalf regarding the matters referred to, in each case:
(i) at the time of the Seller's origination or acquisition of the particular
Mortgage Loan, after the Seller having conducted such inquiry and due diligence
into such matters as would be customarily performed by a prudent institutional
commercial or multifamily, as applicable, mortgage lender; and (ii) subsequent
to such origination, the Seller having utilized monitoring practices that would
be utilized by a prudent commercial or multifamily, as applicable, mortgage
lender and having made prudent inquiry as to the knowledge of the servicer
servicing such Mortgage Loan on its behalf. Also for purposes of these
representations and warranties, the phrases "to the actual knowledge of the
Seller" or "to the Seller's actual knowledge" shall mean, except where otherwise
expressly set forth below, the actual state of knowledge of the Seller or any
servicer acting on its behalf without any express or implied obligation to make
inquiry. All information contained in documents which are part of or required to
be part of a Mortgage File shall be deemed to be within the knowledge and the
actual knowledge of the Seller. Wherever there is a reference to receipt by, or
possession of, the Seller of any information or documents, or to any action
taken by the Seller or not taken by the Seller, such reference shall include the
receipt or possession of such information or documents by, or the taking of such
action or the failure to take such action by, the Seller or any servicer acting
on its behalf.
1. The information pertaining to each Mortgage Loan set forth in the Mortgage
Loan Schedule was true and correct in all material respects as of the
Cut-Off Date and included all of the material information required by the
definition of Mortgage Loan Schedule.
2. As of the date of its origination, such Mortgage Loan complied in all
material respects with, or was exempt from, all requirements of federal,
state or local law relating to the origination of such Mortgage Loan.
3. Immediately prior to the sale, transfer and assignment to the Purchaser,
the Seller had good and marketable title to, and was the sole owner of,
each Mortgage Loan, and the Seller is transferring such Mortgage Loan free
and clear of any and all liens, pledges, charges, security interests or
any other ownership interests of any nature encumbering such Mortgage
Loan. Upon consummation of the transactions contemplated by 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 (other than those rights to servicing and related
compensation as reflected in the Mortgage Loan Schedule) free and clear of
any pledge, lien or security interest.
4. The proceeds of such Mortgage Loan have been fully disbursed and there is
no requirement for future advances thereunder.
5. Each related Mortgage Note, Mortgage, Assignment of Leases (if a document
separate from the Mortgage) and other agreement executed by the related
Mortgagor in connection with such Mortgage Loan is legal, valid and
binding obligation of the related Mortgagor (subject to any non-recourse
provisions therein and any state anti-deficiency or market value limit
deficiency legislation), enforceable in accordance with its terms, except
(i) that certain provisions contained in such Mortgage Loan documents are
or may be unenforceable in whole or in part under applicable state or
federal laws, but neither the application of any such laws to any such
provision nor the inclusion of any such provisions renders any of the
Mortgage Loan documents invalid as a whole and such Mortgage Loan
documents taken as a whole are enforceable to the extent necessary and
customary for the practical realization of the rights and benefits
afforded thereby and (ii) as such enforcement may be limited by
bankruptcy, insolvency, receivership, reorganization, moratorium,
redemption, liquidation or other laws affecting the enforcement of
creditors' rights generally, or by general principles of equity
(regardless of whether such enforcement is considered in a proceeding in
equity or at law). The related Mortgage Note and Mortgage contain no
provision limiting the right or ability of the Seller to assign, transfer
and convey the related Mortgage Loan to any other Person. With respect to
any Mortgaged Property that has tenants, there exists as either part of
the Mortgage or as a separate document, an assignment of leases.
6. As of the date of its origination, there was no valid offset, defense,
counterclaim, abatement or right to rescission with respect to any of the
related Mortgage Notes, Mortgage(s) or other agreements executed in
connection therewith, and, as of the Cut-Off Date, there is no valid
offset, defense, counterclaim or right to rescission with respect to such
Mortgage Note, Mortgage(s) or other agreements, except in each case, with
respect to the enforceability of any provisions requiring the payment of
default interest, late fees, additional interest, prepayment premiums or
yield maintenance charges, and the Seller has no knowledge of such rights,
defenses or counterclaims having been asserted.
7. Each related assignment of Mortgage and assignment of Assignment of Leases
from the Seller to the Trustee constitutes the legal, valid and binding
first priority assignment from the Seller, except as such enforcement may
be limited by bankruptcy, insolvency, redemption, reorganization,
liquidation, receivership, moratorium or other laws relating to or
affecting creditors' rights generally or by general principles of equity
(regardless of whether such enforcement is considered in a proceeding in
equity or at law). Each Mortgage and Assignment of Leases is freely
assignable.
8. Each related Mortgage is a valid and enforceable first lien on the related
Mortgaged Property subject only to the exceptions set forth in paragraph
(5) above and the following title exceptions (each such title exception, a
"Title Exception", and collectively, the "Title Exceptions"): (a) the lien
of current real property taxes, water charges, sewer rents and assessments
not yet due and payable, (b) covenants, conditions and restrictions,
rights of way, easements and other matters of public record, none of
which, individually or in the aggregate, materially and adversely
interferes with the current use of the Mortgaged Property or the security
intended to be provided by such Mortgage or with the Mortgagor's ability
to pay its obligations under the Mortgage Loan when they become due or
materially and adversely affects the value of the Mortgaged Property, (c)
the exceptions (general and specific) and exclusions set forth in the
applicable policy described in paragraph (12) below or appearing of
record, none of which, individually or in the aggregate, materially and
adversely interferes with the current use of the Mortgaged Property or the
security intended to be provided by such Mortgage or with the Mortgagor's
ability to pay its obligations under the Mortgage Loan when they become
due or materially and adversely affects the value of the Mortgaged
Property, (d) other matters to which like properties are commonly subject,
none of which, individually or in the aggregate, materially and adversely
interferes with the current use of the Mortgaged Property or the security
intended to be provided by such Mortgage or with the Mortgagor's ability
to pay its obligations under the Mortgage Loan when they become due or
materially and adversely affects the value of the Mortgaged Property, (e)
the right of tenants (whether under ground leases, space leases or
operating leases) at the Mortgaged Property to remain following a
foreclosure or similar proceeding (provided that such tenants are
performing under such leases) and (f) if such Mortgage Loan is a Crossed
Loan, the lien of the Mortgage for such other Mortgage Loan, none of
which, individually or in the aggregate, materially and adversely
interferes with the current use of the Mortgaged Property or the security
intended to be provided by such Mortgage or with the Mortgagor's ability
to pay its obligations under the Mortgage Loan when they become due or
materially and adversely affects the value of the Mortgaged Property.
Except with respect to Crossed Loans and as provided below, there are no
mortgage loans that are senior or pari passu with respect to the related
Mortgaged Property or such Mortgage Loan.
9. UCC Financing Statements have been filed and/or recorded (or, if not filed
and/or recorded, have been submitted in proper form for filing and
recording), in all public places necessary to perfect a valid security
interest in all items of personal property located on the Mortgaged
Property that are owned by the Mortgagor and either (i) are reasonably
necessary to operate the Mortgaged Property or (ii) are (as indicated in
the appraisal obtained in connection with the origination of the related
Mortgage Loan) material to the value of the Mortgaged Property (other than
any personal property subject to a purchase money security interest or a
sale and leaseback financing arrangement permitted under the terms of such
Mortgage Loan or any other personal property leases applicable to such
personal property), to the extent perfection may be effected pursuant to
applicable law by recording or filing, and the Mortgages, security
agreements, chattel Mortgages or equivalent documents related to and
delivered in connection with the related Mortgage Loan establish and
create a valid and enforceable lien and priority security interest on such
items of personalty except as such enforcement may be limited by
bankruptcy, insolvency, receivership, reorganization, moratorium,
redemption, liquidation or other laws affecting the enforcement of
creditor's rights generally, or by general principles of equity
(regardless of whether such enforcement is considered in a proceeding in
equity or at law). Notwithstanding any of the foregoing, no representation
is made as to the perfection of any security interest in rents or other
personal property to the extent that possession or control of such items
or actions other than the filing of UCC Financing Statements are required
in order to effect such perfection.
10. All real estate taxes and governmental assessments, or installments
thereof, which would be a lien on the Mortgaged Property and that prior to
the Cut-Off Date have become delinquent in respect of each related
Mortgaged Property have been paid, or an escrow of funds in an amount
sufficient to cover such payments has been established. For purposes of
this representation and warranty, real estate taxes and governmental
assessments and installments thereof shall not be considered delinquent
until the earlier of (a) the date on which interest and/or penalties would
first be payable thereon and (b) the date on which enforcement action is
entitled to be taken by the related taxing authority.
11. In the case of each Mortgage Loan, one or more engineering assessments
were performed and prepared by an independent engineering consultant firm,
which visited the related Mortgaged Property not more than 12 months prior
to the origination date of the related Mortgage Loan, and, except as set
forth in an engineering report prepared in connection with such
assessment, a copy of which has been delivered to the Purchaser or its
designee, the related Mortgaged Property is, to the Seller's knowledge,
relying solely on the review of such engineering assessment(s), in good
repair, free and clear of any damage that would materially and adversely
affect its value as security for such Mortgage Loan. If an engineering
report revealed any such damage or deficiencies, material deferred
maintenance or other similar conditions as described in the preceding
sentence either (1) an escrow of funds equal to at least 125% of the
amount estimated to effect the necessary repairs, or such other amount as
a prudent commercial mortgage lender would deem appropriate under the
circumstances was required or a letter of credit in such amount was
obtained or (2) such repairs and maintenance have been completed. As of
the date of origination of such Mortgage Loan there was no proceeding
pending, and subsequent to such date, the Seller has not received notice
of any pending or threatening proceeding for the condemnation of all or
any material portion of the Mortgaged Property securing any Mortgage Loan.
12. The Seller has received an ALTA lender's title insurance policy or a
comparable form of lender's title insurance policy (or if such policy has
not yet been issued, such insurance may be evidenced by escrow
instructions, a "marked up" pro forma or specimen policy or title
commitment, in either case, marked as binding and countersigned by the
title insurer or its authorized agent at the closing of the related
Mortgage Loan) as adopted in the applicable jurisdiction (the "Title
Insurance Policy"), which to the Seller's knowledge, was issued by a title
insurance company qualified to do business in the jurisdiction where the
applicable Mortgaged Property is located to the extent required, insuring
that the related Mortgage is a valid first lien in the original principal
amount of the related Mortgage Loan on the Mortgagor's fee simple interest
(or, if applicable, leasehold interest) in the portion of the Mortgaged
Property comprised of real estate, subject only to the Title Exceptions.
Such Title Insurance Policy was issued in connection with the origination
of the related Mortgage Loan. No claims have been made under such Title
Insurance Policy. Such Title Insurance Policy is in full force and effect,
provides that the originator of the related Mortgage Loan, its successors
or assigns is the sole named insured, and all premiums thereon have been
paid. The Seller has not done, by act or omission, and the Seller has no
knowledge of, anything that would impair the coverage under such Title
Insurance Policy. Immediately following the transfer and assignment of the
related Mortgage Loan to the Purchaser (including endorsement and delivery
of the related Mortgage Note to the Purchaser and recording of the related
Assignment of Mortgage in favor of Purchaser in the applicable real estate
records), such Title Insurance Policy will inure to the benefit of the
Purchaser without the consent of or notice to the title insurer. Such
Title Insurance Policy contains no material exclusions for, or
affirmatively insures against any losses arising from (other than in
jurisdictions in which affirmative insurance is unavailable) (a) access to
public roads, (b) that there are no material encroachments of any part of
the building thereon over easements and (c) that the land shown on the
survey is the same as the property legally described in the Mortgage.
13. Each Mortgaged Property was covered by (1) a fire and extended perils
included within the classification "All Risk of Physical Loss" insurance
policy in an amount (subject to a customary deductible) at least equal to
the lesser of the replacement cost of improvements located on such
Mortgaged Property, with no deduction for depreciation, or the outstanding
principal balance of the Mortgage Loan and in any event, the amount
necessary to avoid the operation of any co-insurance provisions; (2)
business interruption or rental loss insurance in an amount at least equal
to 12 months of operations of the related Mortgaged Property; and (3)
comprehensive general liability insurance against claims for personal and
bodily injury, death or property damage occurring on, in or about the
related Mortgaged Property in an amount customarily required by prudent
commercial mortgage lenders, but not less than $1 million. An
architectural or engineering consultant has performed an analysis of each
of the Mortgaged Properties located in seismic zones 3 or 4 in order to
evaluate the structural and seismic condition of such property, for the
sole purpose of assessing the probable maximum loss ("PML") for the
Mortgaged Property in the event of an earthquake. In such instance, the
PML was based on a 475 year lookback with a 10% probability of exceedance
in a 50 year period. If the resulting report concluded that the PML would
exceed 20% of the amount of the replacement costs of the improvements,
earthquake insurance on such Mortgaged Property was obtained by an insurer
rated at least "A-:V" (or the equivalent) by A.M. Best Company or "BBB-"
(or the equivalent) from S&P or Fitch. If the Mortgaged Property is
located in Florida or within 25 miles of the coast of Texas, Louisiana,
Mississippi, Alabama, Georgia, North Carolina or South Carolina such
Mortgaged Property is insured by windstorm insurance in an amount at least
equal to the lesser of (i) the outstanding principal balance of such
Mortgage Loan and (ii) 100% of the full insurable value, or 100% of the
replacement cost, of the improvements located on the related Mortgaged
Property. Such insurance is required by the Mortgage or related Mortgage
Loan documents and was in full force and effect with respect to each
related Mortgaged Property at origination and to the knowledge of the
Seller, all insurance coverage required under each Mortgage, is in full
force and effect with respect to each related Mortgaged Property; and no
notice of termination or cancellation with respect to any such insurance
policy has been received by the Seller; and except for certain amounts not
greater than amounts which would be considered prudent by a commercial
mortgage lender with respect to a similar mortgage loan and which are set
forth in the related Mortgage, any insurance proceeds in respect of a
casualty loss will be applied either to (1) the repair or restoration of
the related Mortgaged Property with mortgagee or a third party custodian
acceptable to the mortgagee having the right to hold and disburse the
proceeds as the repair or restoration progresses, other than with respect
to amounts that are customarily acceptable to commercial and multifamily
mortgage lending institutions, or (2) the reduction of the outstanding
principal balance of the Mortgage Loan and accrued interest thereon. To
the Seller's actual knowledge, the insurer with respect to each policy is
qualified to write insurance in the relevant jurisdiction to the extent
required. The insurance policies contain a standard mortgagee clause
naming the originator of the related Mortgage Loan, its successors and
assigns as loss payees in the case of property insurance policies and
additional insureds in the case of liability insurance policies and
provide that they are not terminable and may not be reduced without 30
days prior written notice to the mortgagee (or, with respect to
non-payment of premiums, 10 days prior written notice to the mortgagee) or
such lesser period as prescribed by applicable law. Each Mortgage 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 the
Mortgagor fails to do so. Additionally, for any Mortgage Loan having an
unpaid principal balance equal to or greater than $15,000,000, the Insurer
has a claims paying ability rating from S&P or Fitch of not less than "A-"
(or the equivalent) or A.M. Best of not less than "A-:V" (or the
equivalent).
14. (A) Other than payments due but not yet 30 days or more delinquent, there
is no material default, breach, violation or event of acceleration
existing under the related Mortgage or the related Mortgage Note, and to
the Seller's actual knowledge no event (other than payments due but not
yet delinquent) which, with the passage of time or with notice and the
expiration of any grace or cure period, would constitute a material
default, breach, violation or event of acceleration, provided, however,
that this representation and warranty does not address or otherwise cover
any default, breach, violation or event of acceleration that specifically
pertains to any matter otherwise covered by any other representation and
warranty made by the Seller in any paragraph of this Schedule I or in any
paragraph of Schedule II, and (B) the Seller has not waived any material
default, breach, violation or event of acceleration under such Mortgage or
Mortgage Note, except for a written waiver contained in the related
Mortgage File being delivered to the Purchaser, and no such waiver has
been granted since the date upon which the due diligence file related to
the applicable Mortgage Loan was delivered to Allied Capital Corporation,
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 constitutes a "qualified mortgage" within the meaning
of Section 860G(a)(3)of the Code, is directly secured by a Mortgage on a
commercial property or a multifamily residential property, and either (1)
substantially all of the proceeds of such Mortgage Loan were used to
acquire, improve or protect the portion of such commercial or multifamily
residential property that consists of an interest in real property (within
the meaning of Treasury Regulations Sections 1.856-3(c) and 1.856-3(d))
and such interest in real property was the only security for such Mortgage
Loan as of the Testing Date (as defined below), or (2) the fair market
value of the interest in real property which secures such Mortgage Loan
was at least equal to 80% of the principal amount of the Mortgage Loan (a)
as of the Testing Date, or (b) as of the Closing Date. For purposes of the
previous sentence, (1) the fair market value of the referenced interest in
real property shall first be reduced by (a) the amount of any lien on such
interest in real property that is senior to the Mortgage Loan, and (b) a
proportionate amount of any lien on such interest in real property that is
on a parity with the Mortgage Loan, and (2) the "Testing Date" shall be
the date on which the referenced Mortgage Loan was originated unless (a)
such Mortgage Loan was modified after the date of its origination in a
manner that would cause a "significant modification" of such Mortgage Loan
within the meaning of Treasury Regulations Section 1.1001-3(b), and (b)
such "significant modification" did not occur at a time when such Mortgage
Loan was in default or when default with respect to such Mortgage Loan was
reasonably foreseeable. However, if the referenced Mortgage Loan has been
subjected to a "significant modification" after the date of its
origination and at a time when such Mortgage Loan was not in default or
when default with respect to such Mortgage Loan was not reasonably
foreseeable, the Testing Date shall be the date upon which the latest such
"significant modification" occurred. The related Mortgaged Property, if
acquired by a REMIC in connection with the default or imminent default of
such Mortgage Loan, would constitute "foreclosure property" within the
meaning of Section 860G(a)(8) of the Code.
19. One or more environmental site assessments or updates thereof (meeting
American Society for Testing and Materials (ASTM) standards) were
performed by an environmental consulting firm independent of the Seller
and the Seller's affiliates with respect to each related Mortgaged
Property during the 18-months preceding the origination of the related
Mortgage Loan, and the Seller, having made no independent inquiry other
than to review the report(s) prepared in connection with the assessment(s)
referenced herein, has no actual knowledge and has received no notice of
any material adverse environmental condition or circumstance affecting
such Mortgaged Property that was not disclosed in such report(s). If any
such environmental report identified any Recognized Environmental
Condition (REC), as that term is defined in the Standard Practice for
Environmental Site Assessments: Phase I Environmental Site Assessment
Process Designation: E 1527-00, as recommended by the 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 of 100% or more of the amount
identified as necessary by the environmental consulting firm to address
the REC is held by the Seller for purposes of effecting same (and the
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 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 or insurance broker issuing such
policy prior to the issuance of such policy. The Mortgage Loan documents
require the borrower to comply with all applicable environmental laws and
each Mortgagor has agreed to indemnify the mortgagee for any losses
resulting from any material, adverse environmental condition or failure of
the Mortgagor to abide by such laws or has provided environmental
insurance.
20. Each related Mortgage and Assignment of Leases, together with applicable
state law, contains customary and enforceable provisions for comparable
mortgaged properties similarly situated such as to render the rights and
remedies of the holder thereof adequate for the practical realization
against the Mortgaged Property of the benefits of the security, including
realization by judicial or, if applicable, non-judicial foreclosure,
subject to the effects of bankruptcy, insolvency, reorganization,
receivership, moratorium, redemption, liquidation or similar law affecting
the right of creditors and the application of principles of equity.
21. No Mortgagor is a debtor in any state or federal bankruptcy or insolvency
proceeding.
22. Each Mortgage Loan is a whole loan (except in respect to each Co-Lender
Loan) and contains no equity participation by the lender or shared
appreciation feature and does not provide for any contingent or additional
interest in the form of participation in the cash flow of the related
Mortgaged Property or, other than the ARD Loans, provide for negative
amortization. The Seller holds no preferred equity interest.
23. The Mortgage contains a "due on sale" clause, which provides for the
acceleration of the payment of the unpaid principal balance of the
Mortgage Loan if, without the prior written consent of the holder of the
Mortgage, either the related Mortgaged Property, or any equity interest in
the related Mortgagor, is directly or indirectly transferred, sold or
pledged, other than by reason of family and estate planning transfers,
transfers of less than a controlling interest (as such term is defined in
the related Mortgage Loan documents) in the Mortgagor, issuance of
non-controlling new equity interests, transfers to an affiliate meeting
the requirements of the Mortgage Loan, transfers among existing members,
partners or shareholders in the Mortgagor, transfers among affiliated
Mortgagors with respect to Crossed Loans or multi-property Mortgage Loans
or transfers of a similar nature to the foregoing meeting the requirements
of the Mortgage Loan (such as pledges of ownership interests that do not
result in a change of control). The Mortgage requires the Mortgagor to pay
all reasonable fees and expenses associated with securing the consents or
approvals described in the preceding sentence including the cost of any
required counsel opinions relating to REMIC or other securitization and
tax issues and any applicable Rating Agency fees.
24. Except as set forth in the related Mortgage File, the terms of the related
Mortgage Note and Mortgage(s) have not been waived, modified, altered,
satisfied, impaired, canceled, subordinated or rescinded in any manner
which materially interferes with the security intended to be provided by
such Mortgage and no such waiver, modification, alteration, satisfaction,
impairment, cancellation, subordination or rescission has occurred since
the date upon which the due diligence file related to the applicable
Mortgage Loan was delivered to Allied Capital Corporation.
25. Each related Mortgaged Property was inspected by or on behalf of the
related originator or an affiliate during the 12 month period prior to the
related origination date.
26. Since origination, no material portion of the related Mortgaged Property
has been released from the lien of the related Mortgage, in any manner
which materially and adversely affects the value of the Mortgage Loan or
materially interferes with the security intended to be provided by such
Mortgage. The terms of the related Mortgage do not provide for release of
any material portion of the Mortgaged Property from the lien of the
Mortgage except (a) in consideration of payment therefor of not less than
125% of the related allocated loan amount of such Mortgaged Property, (b)
upon payment in full of such Mortgage Loan, (c) upon defeasance permitted
under the terms of such Mortgage Loan by means of substituting for the
Mortgaged Property (or, in the case of a Mortgage Loan secured by multiple
Mortgaged Properties, one or more of such Mortgaged Properties)
"government securities", as defined in the Investment Company Act of 1940,
as amended, sufficient to pay the Mortgage Loan in accordance with its
terms, (d) upon substitution of a replacement property with respect to
such Mortgage Loan as set forth on Schedule 26, (e) where release is
conditional upon the satisfaction of certain underwriting and legal
requirements which would be acceptable to a reasonably prudent commercial
mortgage lender and the payment of a release price that represents at
least 125% of the appraised value of such Mortgaged Property or (f)
releases of unimproved out-parcels or other portions of the Mortgaged
Property which will not have a material adverse effect on the underwritten
value of the security for the Mortgage Loan and which were not afforded
any value in the appraisal obtained at the origination of the Mortgage
Loan.
27. To the Seller's knowledge, as of the date of origination of such Mortgage
Loan, based on an opinion of counsel, an endorsement to the related title
policy, a zoning letter or a zoning report, and, to the Seller's
knowledge, as of the Cut-Off Date, there are no violations of any
applicable zoning ordinances, building codes and land laws applicable to
the Mortgaged Property, the improvements thereon or the use and occupancy
thereof which would have a material adverse effect on the value, operation
or net operating income of the Mortgaged Property which are not covered by
title insurance. Any non-conformity with zoning laws constitutes a legal
non-conforming use or structure which, in the event of casualty or
destruction, may be restored or repaired to the full extent of the use or
structure at the time of such casualty, or for which law and ordinance
insurance coverage has been obtained in amounts customarily required by
prudent commercial mortgage lenders, or such non-conformity does not
materially and adversely affect the use, operation or value of the
Mortgaged Property.
28. To the Seller's actual knowledge based on surveys and/or the title policy
referred to herein obtained in connection with the origination of each
Mortgage Loan, none of the material improvements which were included for
the purposes of determining the appraised value of the related Mortgaged
Property at the time of the origination of the Mortgage Loan lies outside
of the boundaries and building restriction lines of such property (except
Mortgaged Properties which are legal non-conforming uses), to an extent
which would have a material adverse affect on the value of the Mortgaged
Property or related Mortgagor's use and operation of such Mortgaged
Property (unless affirmatively covered by title insurance) and no
improvements on adjoining properties encroached upon such Mortgaged
Property to any material and adverse extent (unless affirmatively covered
by title insurance).
29. Each Mortgage Loan with an original principal balance over $5,000,000
requires the Mortgagor to be for at least for so long as the Mortgage Loan
is outstanding and, to Seller's actual knowledge, each Mortgagor is, a
Single-Purpose Entity. For this purpose, "Single-Purpose Entity" means a
person, other than an individual, whose organizational documents provide,
or which entity represented and covenanted in the related Mortgage Loan
documents, substantially to the effect that such Mortgagor (i) does not
and will not have any material assets other than those related to its
interest in such Mortgaged Property or Properties or the financing
thereof; (ii) does not and will not have any indebtedness other than as
permitted by the related Mortgage or other related Mortgage Loan
documents; (iii) maintains its own books, records and accounts, in each
case which are separate and apart from the books, records and accounts of
any other person; and (iv) holds itself out as being a legal entity,
separate and apart from any other person. With respect to each Mortgage
Loan with an original principal balance over $15,000,000, the
organizational documents of the related Mortgagor provide substantially to
the effect that such Mortgagor (i) does not and will not have any material
assets other than those related to its interest in such Mortgaged Property
or Properties or the financing thereof; (ii) does not and will not have
any indebtedness other than as permitted by the related Mortgage or other
related Mortgage Loan documents; (iii) maintains its own books, records
and accounts, in each case which are separate and apart from the books,
records and accounts of any other person; and (iv) holds itself out as
being a legal entity, separate and apart from any other person. Each such
Mortgage Loan having an original principal balance of $20,000,000 or more
has a counsel's opinion regarding non-consolidation of the Mortgagor in
any insolvency proceeding involving any other party. The organizational
documents of any Mortgagor on a Mortgage Loan having an original principal
balance of $15,000,000 or more which is a single member limited liability
company provide that the Mortgagor shall not dissolve or liquidate upon
the bankruptcy, dissolution, liquidation or death of the sole member. With
respect to any such single member limited liability company, which is the
Mortgagor on a Mortgage Loan having an original principal balance of
$15,000,000 or more, the Mortgage Loan has an opinion of such Mortgagor's
counsel confirming that the law of the jurisdiction in which such single
member limited liability company was organized permits such continued
existence upon such bankruptcy, dissolution, liquidation or death of the
sole member of the Mortgagor.
30. No advance of funds has been made other than pursuant to the loan
documents, directly or indirectly, by the Seller to the Mortgagor and, to
the Seller's actual knowledge, no funds have been received from any Person
other than the Mortgagor, for or on account of payments due on the
Mortgage Note or the Mortgage.
31. As of the date of origination and, to the Seller's actual knowledge, as of
the Cut-Off Date, there was no pending action, suit or proceeding, or
governmental investigation of which it has received notice, against the
Mortgagor or the related Mortgaged Property the adverse outcome of which
could reasonably be expected to materially and adversely affect such
Mortgagor's ability to pay principal, interest or any other amounts due
under such Mortgage Loan or the security intended to be provided by the
Mortgage Loan documents or the current use of the Mortgaged Property.
32. As of the date of origination, and, to the Seller's actual knowledge, as
of the Cut-Off Date, if the related Mortgage is a deed of trust, a
trustee, duly qualified under applicable law to serve as such, has either
been properly designated and serving under such Mortgage or may be
substituted in accordance with the Mortgage and applicable law.
33. The Mortgage Loan and the interest (exclusive of any default interest,
late charges or prepayment premiums) contracted for on such Mortgage Loan
(other than an ARD Loan after the Anticipated Repayment Date) complied as
of the date of origination with, or is exempt from, applicable state or
federal laws, regulations and other requirements pertaining to usury.
34. The related Mortgage Note is not secured by any collateral that secures a
Mortgage Loan that is not in the Trust Fund and each Crossed Loan is
cross-collateralized only with other Mortgage Loans sold pursuant to this
Agreement.
35. The improvements located on the Mortgaged Property are either not located
in a federally designated special flood hazard area or, if so located, the
Mortgagor is required to maintain or the mortgagee maintains, flood
insurance with respect to such improvements and such policy is in full
force and effect in an amount no less than the lesser of (i) the original
principal balance of the Mortgage Loan, (ii) the value of such
improvements on the related Mortgaged Property located in such flood
hazard area or (iii) the maximum allowed under the related federal flood
insurance program.
36. All escrow deposits and payments required pursuant to the Mortgage Loan as
of the Closing Date required to be deposited with the Seller in accordance
with the Mortgage Loan documents have been so deposited, are in the
possession, or under the control, of the Seller or its agent and there are
no deficiencies in connection therewith.
37. To the Seller's actual knowledge, based on the due diligence customarily
performed in the origination of comparable mortgage loans by prudent
commercial and multifamily mortgage lending institutions with respect to
the related geographic area and properties comparable to the related
Mortgaged Property, as of the date of origination of the Mortgage Loan,
the related Mortgagor, the related lessee, franchisor or operator was in
possession of all material licenses, permits and authorizations then
required for use of the related Mortgaged Property by the related
Mortgagor, and, as of the Cut-Off Date, the Seller has no actual knowledge
that the related Mortgagor, the related lessee, franchisor or operator was
not in possession of such licenses, permits and authorizations. The
Mortgage Loan documents require the borrower to maintain all such
licenses, permits, authorizations and franchises.
38. The origination (or acquisition, as the case may be), servicing and
collection practices used by the Seller with respect to the Mortgage Loan
have been in all respects legal and have met customary industry standards
for servicing of commercial mortgage loans for conduit loan programs.
39. Except for Mortgagors under Mortgage Loans the Mortgaged Property with
respect to which includes a Ground Lease, the related Mortgagor (or its
affiliate) has title in the fee simple interest in each related Mortgaged
Property.
40. The Mortgage Loan documents for each Mortgage Loan provide that each
Mortgage Loan is non-recourse to the related Mortgagor except that the
related Mortgagor and an additional guarantor who is a natural person
accepts responsibility for fraud and/or other intentional material
misrepresentation and environmental indemnity. Furthermore, the Mortgage
Loan documents for each Mortgage Loan provide that the related Mortgagor
and an additional guarantor, who is a natural person, shall be liable to
the lender for losses incurred due to the misapplication or
misappropriation of rents collected in advance or received by the related
Mortgagor after the occurrence of an event of default and not paid to the
Mortgagee or applied to the Mortgaged Property in the ordinary course of
business, misapplication or conversion by the Mortgagor of insurance
proceeds or condemnation awards or breach of the environmental covenants
in the related Mortgage Loan documents.
41. Subject to the exceptions set forth in paragraph (5) and upon possession
of the Mortgaged Property as required under applicable state law, the
Assignment of Leases set forth in the Mortgage or separate from the
related Mortgage and related to and delivered in connection with each
Mortgage Loan establishes and creates a valid, subsisting and enforceable
lien and security interest in the related Mortgagor's interest in all
leases, subleases, licenses or other agreements pursuant to which any
Person is entitled to occupy, use or possess all or any portion of the
real property.
42. With respect to such Mortgage Loan, any prepayment premium and Yield
Maintenance Charge constitutes a "customary prepayment penalty" within the
meaning of Treasury Regulations Section 1.860G-1(b)(2).
43. If such Mortgage Loan contains a provision for any defeasance of mortgage
collateral, such Mortgage Loan permits defeasance (1) no earlier than two
years after the Closing Date and (2) only with substitute collateral
constituting "government securities" within the meaning of Treasury
Regulations Section 1.860G-2(a)(8)(i) in an amount sufficient to make all
scheduled payments under the Mortgage Note. Such Mortgage Loan was not
originated with the intent to collateralize a REMIC offering with
obligations that are not real estate mortgages. In addition, if such
Mortgage contains such a defeasance provision, it provides (or otherwise
contains provisions pursuant to which the holder can require) that an
opinion be provided to the effect that such holder has a first priority
perfected security interest in the defeasance collateral. The related
Mortgage Loan documents permit the lender to charge all of its expenses
associated with a defeasance to the Mortgagor (including rating agencies'
fees, accounting fees and attorneys' fees), and provide that the related
Mortgagor must deliver (or otherwise, the Mortgage Loan documents contain
certain provisions pursuant to which the lender can require) (a) an
accountant's certification as to the adequacy of the defeasance collateral
to make payments under the related Mortgage Loan for the remainder of its
term, (b) an Opinion of Counsel that the defeasance complies with all
applicable REMIC Provisions, and (c) assurances from the Rating Agencies
that the defeasance will not result in the withdrawal, downgrade or
qualification of the ratings assigned to the Certificates. Notwithstanding
the foregoing, some of the Mortgage Loan documents may not affirmatively
contain all such requirements, but such requirements are effectively
present in such documents due to the general obligation to comply with the
REMIC Provisions and/or deliver a REMIC Opinion of Counsel.
44. To the extent required under applicable law as of the date of origination,
and necessary for the enforceability or collectability of the Mortgage
Loan, the originator of such Mortgage Loan was authorized to do business
in the jurisdiction in which the related Mortgaged Property is located at
all times when it originated and held the Mortgage Loan.
45. Neither the Seller nor any affiliate thereof has any obligation to make
any capital contributions to the Mortgagor under the Mortgage Loan.
46. None of the Mortgaged Properties is encumbered, and none of the Mortgage
Loan documents permits the related Mortgaged Property to be encumbered
subsequent to the Closing Date without the prior written consent of the
holder thereof, by any lien securing the payment of money junior to or of
equal priority with, or superior to, the lien of the related Mortgage
(other than Title Exceptions, taxes, assessments and contested mechanics
and materialmens liens that become payable after the Cut-Off Date of the
related Mortgage Loan).
47. Each related Mortgaged Property constitutes one or more complete separate
tax lots (or the related Mortgagor has covenanted to obtain separate tax
lots and a Person has indemnified the mortgagee for any loss suffered in
connection therewith or an escrow of funds in an amount sufficient to pay
taxes resulting from a breach thereof has been established) or is subject
to an endorsement under the related title insurance policy.
48. An appraisal of the related Mortgaged Property was conducted in connection
with the origination of such Mortgage Loan; and such appraisal satisfied
either (A) the requirements of the "Uniform Standards of Professional
Appraisal Practice" as adopted by the Appraisal Standards Board of the
Appraisal Foundation, or (B) the guidelines in Title XI of the Financial
Institutions Reform, Recovery and Enforcement Act or 1989, in either case
as in effect on the date such Mortgage Loan was originated.
49. In the origination and servicing of the Mortgage Loan, neither Seller nor
any prior holder of the Mortgage Loan participated in any fraud or
intentional material misrepresentation with respect to the Mortgage Loan.
To Seller's knowledge, no Mortgagor or guarantor originated a Mortgage
Loan.
50. Each Mortgage requires the Mortgagor upon request to provide the owner or
holder of the Mortgage with quarterly (except for some Mortgage Loans with
an original principal balance less than $5,000,000) and annual operating
statements (or a balance sheet and statement of income and expenses, rent
rolls (if there is more than one tenant) and related information, which
annual financial statements for all Mortgage Loans with an outstanding
principal balance greater than $20,000,000 are required to be audited by
an independent certified public accountant.
51. Each Mortgaged Property is served by public utilities, water and sewer (or
septic facilities) and otherwise appropriate for the use in which the
Mortgaged Property is currently being utilized.
52. If the Mortgaged Property securing any Mortgage Loan is covered by a
secured creditor policy, then:
(a) the Seller:
(i) has disclosed, or is aware that there has been disclosed, in
the application for such policy or otherwise to the insurer
under such policy the "pollution conditions" (as defined in
such policy) identified in any environmental reports related
to such Mortgaged Property which are in the Seller's
possession or are otherwise known to the Seller; or
(ii) has delivered or caused to be delivered to the insurer or its
agent under such policy copies of all environmental reports in
the Seller's possession related to such Mortgaged Property;
in each case, with respect to (i) or (ii), to the extent required by
such policy or to the extent the failure to make any such disclosure
or deliver any such report would materially and adversely affect the
Mortgagor's ability to recover under such policy;
(b) all premiums for such insurance have been paid;
(c) such insurance is in full force and effect;
(d) such insurance has a term of at least 5 years beyond the maturity
date (or the Anticipated Repayment Date for ARD Loans) of such
Mortgage Loan;
(e) an environmental report, a property condition report or an
engineering report was prepared that included an assessment for
lead-based paint ("LBP") (in the case of a multifamily property
built prior to 1978), asbestos-containing materials ("ACM") (in the
case of any property built prior to 1985) and radon gas ("RG") (in
the case of a multifamily property) at such Mortgaged Property and
(ii) if such report disclosed the existence of a material and
adverse LBP, ACM or RG environmental condition or circumstance
affecting such Mortgaged Property, then, except as otherwise
described on Schedule II, (A) the related Borrower was required to
remediate such condition or circumstance prior to the closing of the
subject Mortgage Loan, or (B) the related Borrower was required to
provide additional security reasonably estimated to be adequate to
cure such condition or circumstance, or (C) such report did not
recommend any action requiring the expenditure of any material funds
and the related Mortgage Loan documents require the related Borrower
to establish an operations and maintenance plan with respect to such
condition or circumstance after the closing of such Mortgage Loan;
and
(f) rights under such policy inure to the benefit of the Purchaser.
53. Each Mortgage Loan is secured by the fee interest in the related Mortgaged
Property, except with respect to loan numbers 43, 47, 65 and 76 listed on
the Mortgage Loan Schedule, which Mortgage Loans are secured by the
interest of the related Mortgagor as a lessee under a ground lease of a
Mortgaged Property (a "Ground Lease") (the term Ground Lease shall mean
such ground lease, all written amendments and modifications, and any
related estoppels or agreements from the ground lessor and, in the event
the Mortgagor's interest is a ground subleasehold, shall also include not
only such ground sublease but also the related ground lease), but not by
the related fee interest in such Mortgaged Property (the "Fee Interest")
and:
(a) Such Ground Lease or a memorandum thereof has been or will be duly
recorded; such Ground Lease permits the interest of the lessee
thereunder to be encumbered by the related Mortgage or, if consent
of the lessor thereunder is required, it has been obtained prior to
the Closing Date, and does not restrict the use of the related
Mortgaged Property by such lessee, its successors or assigns, in a
manner that would materially adversely affect the security provided
by the related Mortgage; and there has been no material change in
the terms of such Ground Lease since its recordation, with the
exception of written instruments which are a part of the related
Mortgage File;
(b) Such Ground Lease is not subject to any liens or encumbrances
superior to, or of equal priority with, the related Mortgage, other
than the related Fee Interest and Title Exceptions;
(c) The Mortgagor's interest in such Ground Lease is assignable to the
mortgagee and its successors and assigns upon notice to, but without
the consent of, the lessor thereunder (or, if such consent is
required, it has been obtained prior to the Cut-Off Date) and, in
the event that it is so assigned, is further assignable by the
mortgagee and its successors and assigns upon notice to, but without
the need to obtain the consent of, such lessor (or, if such consent
is required, it has been obtained prior to the Cut-Off Date);
(d) As of the Closing Date such Ground Lease is in full force and
effect, and the Seller has not received notice (nor is the Seller
otherwise aware) that any default has occurred under such Ground
Lease as of the Cut-Off Date;
(e) Seller or its agent has provided the lessor under the Ground Lease
with notice of its lien, and such Ground Lease requires the lessor
to give notice of any default by the lessee to the mortgagee, and
such Ground Lease, further provides that no notice of termination
given under such Ground Lease is effective against such mortgagee
unless a copy has been delivered to such mortgagee in the manner
described in such Ground Lease;
(f) The mortgagee under such Mortgage Loan is permitted a reasonable
opportunity to cure any default under such Ground Lease (including
where necessary, sufficient time to gain possession of the interest
of the lessee under the Ground Lease), which is curable after the
receipt of written notice of any such default, before the lessor
thereunder may terminate such Ground Lease, and all of the rights of
the Mortgagor under such Ground Lease and the related Mortgage
(insofar as it relates to the Ground Lease) may be exercised by or
on behalf of the mortgagee;
(g) Such Ground Lease has a current term (including one or more optional
renewal terms, which, under all circumstances, may be exercised, and
will be enforceable, by the Seller, its successors or assigns) which
extends not less than 10 years beyond the amortization term of the
related Mortgage Loan;
(h) Such Ground Lease requires the lessor to enter into a new lease with
the mortgagee under such Mortgage Loan upon termination of such
Ground Lease for any reason, including rejection of such Ground
Lease in a bankruptcy proceeding;
(i) Under the terms of such Ground Lease and the related Mortgage, taken
together, any related insurance proceeds or condemnation award will
be applied either (i) to the repair or restoration of all or part of
the related Mortgaged Property, with the mortgagee under such
Mortgage Loan or a trustee appointed by it having the right to hold
and disburse such proceeds as the repair or restoration progresses
(except in such cases where a provision entitling another party to
hold and disburse such proceeds would not be viewed as commercially
unreasonable by a prudent commercial mortgage lender), or (ii) to
the payment of the outstanding principal balance of such Mortgage
Loan together with any accrued interest thereon;
(j) Such Ground Lease does not impose any restrictions on subletting
which would be viewed as commercially unreasonable by a prudent
commercial mortgage lender; and the lessor thereunder is not
permitted, in the absence of an uncured default, to disturb the
possession, interest or quiet enjoyment of any lessee in the
relevant portion of the Mortgaged Property subject to such Ground
Lease for any reason, or in any manner, which would materially
adversely affect the security provided by the related Mortgage; and
(k) Such Ground Lease may not be amended or modified without the prior
consent of the mortgagee under such Mortgage Loan and any such
action without such consent is not binding on such mortgagee, its
successors or assigns.
54. Credit Tenant Leases. With respect to each Mortgage Loan secured by a
credit tenant lease (the "CTL")
(a) The base rental payments due under the related CTL, together with
any escrow payments held by the Seller or its designee, are equal to
or greater than the payments due with respect to the related
Mortgage Loan and are payable without notice or demand.
(b) The Mortgagor does not have any monetary obligations under the
related CTL (other than indemnifying the related Tenant for the
related Landlord's gross negligence or intentional misconduct and
maintaining in good condition and repairing the roof, structural and
exterior portions of the related leased property , for which a
reserve to cover any reasonably anticipated expenses has been
established), and every other material monetary obligation
associated with managing, owning, developing and operating the
leased property, including, but not limited to, costs associated
with utilities, taxes, insurance, maintenance and repairs is an
obligation of the related Tenant.
(c) The Mortgagor does not have any nonmonetary obligations, the
performance of which would involve a material expenditure of funds
or the non-performance of which would entitle the tenant to
terminate the related CTL under the related CTL, except for the
delivery of possession of the leased property and the Landlord's
obligation not to lease or otherwise permit the operation of
properties in competition with the leased property by any other
parties or entities under the control of the Landlord and except for
certain rights arising as a result of environmental contamination
which existed as of the rent commencement date and any environmental
contamination caused by third parties unrelated to Tenant after the
rent commencement date, however one or more environmental site
assessments were performed by an environmental consulting firm
independent of Seller and Seller's affiliates with respect to the
Mortgaged Property during the 18-months preceding the origination of
the Mortgage Loan, and Seller, having made no independent inquiry
other than to review the report(s) prepared in connection with the
assessment(s) referenced herein, has no knowledge and has received
no notice of any material and adverse environmental condition or
circumstance affecting the Mortgaged Property that was not disclosed
in such report(s).
(d) The related Tenant cannot terminate such CTL for any reason prior to
the payment in full of: (a) the principal balance of the related
Mortgage Loan; (b) all accrued and unpaid interest on such Mortgage
Loan; and (c) any other sums due and payable under such Mortgage
Loan, as of the termination date, which date is a rent payment date,
except for a material default by the related Mortgagor under the CTL
or due to a casualty or condemnation event, in which case, a Lease
Enhancement Policy insures against such risk or due to the
Landlord's breach of its obligation not to lease or otherwise permit
the operation of properties in competition with the leased property
by any other parties or entities under the control of the Landlord..
(e) In the event the related Tenant assigns or sublets the related
leased property, such Tenant (and if applicable, the related
guarantor) remains primarily obligated under the related CTL.
(f) Each leased property related to a Credit Lease Loan is one or more
separate tax lots, except properties concerning which adequate funds
have been escrowed to cover taxes due on the entire tax lot or lots.
(g) [RESERVED]
(h) The related Tenant has agreed to indemnify the Mortgagor from any
claims of any nature arising as a result of any hazardous material
affecting the leased property caused by the tenant and arising after
commencement of the CTL.
(i) In connection with Credit Lease Loans with respect to which a
Guaranty exists, the related guarantor guarantees the payment due
(and not merely collection) under the related CTL and such Guaranty,
on its face, contains no conditions to such payment.
(j) Except for the Credit Lease Loans which have residual value
insurance, each Credit Lease Loan fully amortizes over the term of
the loan, and there is no "balloon" payment due under such Credit
Lease Loan at maturity.
(k) No Tenant under a Credit Lease Loan and related documentation may
exercise any termination right or offset or set-off right (other
than abatement related to the existence of hazardous materials that
materially interfere with the Tenant's use and occupancy) which
shall be binding upon the related Mortgagee without providing prior
written notice of same to such Mortgagee.
(l) Each Tenant under each Credit Lease Loan and related documentation
is required to make all rental payments due under the applicable
Credit Lease to the holder of the Mortgage Loan (or an account
controlled by such holder).
(m) The related Mortgage Loan documents provide that the CTL cannot be
modified without the consent of the holder of the Mortgage Loan and
to the Seller's knowledge none of the terms of the CTL has been
impaired, waived, altered or modified in any respect since the
origination of the Mortgage Loan.
(n) Each leased property related to a Credit Lease Loan has or will have
a permanent certificate of occupancy, and the related Tenant
thereunder has commenced the payment of rent due under the
respective Credit Lease in accordance with its terms.
(o) Each Tenant has delivered a subordination, non-disturbance and
attornment agreement pursuant to which the respective Tenant has
agreed, in the event the related Mortgagee succeeds to the interest
of the Mortgagor under the Credit Lease by reason of foreclosure or
acceptance of a deed in lieu of foreclosure, the Tenant will attorn
to and recognize the Mortgagee as its Landlord under the Credit
Lease for the remainder of the term of the Credit Lease.
(p) To the Seller's knowledge, the leased property related to each
Credit Lease Loan is not subject to any other lease other than the
related Credit Lease or any ground lease pursuant to which the
related Mortgagor has acquired its interest in the respective leased
property, no Person has any possessory interest in, or right to
occupy, the subject leased property except under and pursuant to any
such Credit Lease or ground lease and the related Tenant under each
Credit Lease is in occupancy of the demised premises.
(q) To the Seller's knowledge, in reliance on a Tenant estoppel
certificate and representations made by the Tenant under the Credit
Lease or representations made by the related Mortgagor under the
Mortgage Loan documents, as of the date of origination of each
Credit Lease Loan (1) each Credit Lease was in full force and
effect, and no default by the related Mortgagor or any Tenant had
occurred under the Credit Lease, nor was there any existing
condition which, but for the passage of time or the giving of
notice, or both, would result in a default under the terms of the
Credit Lease, and (2) each Credit Lease has a term ending on or
after the maturity date (or anticipated repayment date) of the
related CTL.
(r) Each Tenant has delivered, in connection with the origination of the
related Mortgage Loan, an estoppel verifying the terms of the
related lease, acknowledging that no rent has been paid in advance,
and an estoppel and/or subordination and nondisturbance agreement
agreeing to attorn to the holder of the Mortgage Loan.
(s) A Lease Enhancement Policy (a "Policy") has been obtained for each
Credit Lease Loan and with respect to each Policy:
(i) Each Credit Lease Loan in connection with which the related
Credit Lease may be terminated upon the occurrence of a
casualty or condemnation has a noncancellable Lease
Enhancement Policy, other than for nonpayment or a transfer of
ownership of the leased property by the insured, from
Lexington Insurance Company (the "Company").
(ii) Payment under each Policy will be made at least within 15 days
of the Company's receiving a sworn proof of loss relating to a
claim.
(iii) The premium for each Policy has been paid in full as of the
Policy effective date for the related Policy and the Policy
cannot be terminated prior to the termination date except for
non-payment of premium or transfer of ownership of the leased
property unless (1) the loan documents provide that the
transferee assumes the Policy and (2) the Company had
previously approved the transfer.
(iv) The effective date for each Policy with respect to each Credit
Lease Loan is on or prior to the Closing Date.
(v) The termination date for each Policy with respect to each
Credit Lease Loan is the date upon which the outstanding
principal balance of the Credit Lease Loan is reduced to zero.
(vi) The insured amount for each such Policy is what the applicable
provider will pay to the loss payee upon notification of a
claim and is at least equal to the outstanding principal
balance of the related Mortgage Note at the time the claim is
made plus all accrued interest.
(vii) The Policy cannot be amended without the prior written consent
of the Trustee.
(viii) The Trustee and its assigns are designated as the loss payee
under each related Policy. All claims proceeds are payable to
the loss payee.
SCHEDULE II
EXCEPTIONS TO REPRESENTATIONS AND WARRANTIES
Exceptions to Representations for Citigroup Loans
Representations #8, #39 and #53
- --------------------------------------------------------------------------------
Loan Number Loan Name Description of Exception
- --------------------------------------------------------------------------------
43 Southwest Commons Shopping With respect to each of the loans
Center listed to the left, the mortgage
47 Circuit City Center loan is secured entirely or in
76 Walgreen's - Reno part by the interest of the
related mortgagor as a lessee
under a ground lease or
sub-ground lease of the mortgaged
property.
- --------------------------------------------------------------------------------
65 Gardens Shopping Center With respect to the loan listed
to the left, the mortgage loan is
secured, in part, by the interest
of the related mortgagor as a
lessee under a ground lease of
the mortgaged property. The
mortgagor has an option to
purchase the fee interest of the
landlord under the ground lease,
which the mortgagor has
exercised. The closing of the
purchase of the fee interest is
scheduled for December 4, 2003.
Under the loan documents the
closing of the fee interest must
occur by December 31, 2003.
$600,000 was held back at closing
to ensure the proper exercise of
the fee interest purchase
option. Upon consummation of the
fee acquisition, the loan
documents provide that, without
any further action, the loan
documents will automatically
spread to cover the fee interest
as additional collateral under
the mortgage loan.
- --------------------------------------------------------------------------------
Representation #13
- --------------------------------------------------------------------------------
Loan Number Loan Name Description of Exception
- --------------------------------------------------------------------------------
76 Walgreen's - Reno With respect to the loan listed
to the left, the tenant's lease
permits and Walgreen's has
elected to, self-insure for
required coverages under the
related loan documents, other
than with respect to liability
coverage, for which Walgreen's
maintains a separate policy. In
addition, the mortgaged property
is not covered by business
interruption or rental loss
insurance. However, Walgreen's
under the terms of its lease is
required to continue to pay rent
for the first 12 months following
a casualty.
- --------------------------------------------------------------------------------
Representation #24
- --------------------------------------------------------------------------------
Loan Number Loan Name Description of Exception
- --------------------------------------------------------------------------------
83 Eckerd - Baton Rouge With respect to the loans listed
89 Eckerd - Alexandria to the left, the
78 Eckerd - Ironside cross-collateralization and
100 Eckerd - Kerrville cross-default with a larger pool
of loans which are not part of the
trust mortgage pool has been
eliminated. In addition, although
required under the terms of the
mortgage, terrorism coverage has
been waived by the lender.
- --------------------------------------------------------------------------------
Representation #26
- --------------------------------------------------------------------------------
Loan Number Loan Name Description of Exception
- --------------------------------------------------------------------------------
83 Eckerd - Baton Rouge Each of the loans listed to the
89 Eckerd - Alexandria left are cross-collateralized and
78 Eckerd - Ironside cross-defaulted with each other.
100 Eckerd - Kerrville The respective mortgaged
properties can be released from
the effects of the cross in
connection with a defeasance by:
(a) delivering a defeasance
deposit sufficient for all
remaining payments which would
have been due under the loan or
loans being defeased; (b) meeting
certain financial tests including
debt service coverage ratios and
loan-to-value ratio tests; and (c)
the borrower must partially
defease the other
cross-collateralized loan or loans
in the amount equal to 125% of the
principal balance of the note
being defeased, less the current
outstanding principal balance of
such note as of the defeasance
date.
- --------------------------------------------------------------------------------
Representation #40
- --------------------------------------------------------------------------------
Loan Number Loan Name Description of Exception
- --------------------------------------------------------------------------------
9 Chester Springs Shopping With respect to the loan listed
Center to the left, there is no warm
body guarantor.
- --------------------------------------------------------------------------------
20 Penn Station Studios There is no guarantor in
connection with this loan.
- --------------------------------------------------------------------------------
43 Southwest Commons Shopping With respect to the loan listed
Center to the left, there is no
environmental indemnity agreement.
- --------------------------------------------------------------------------------
Representation #50
- --------------------------------------------------------------------------------
Loan Number Loan Name Description of Exception
- --------------------------------------------------------------------------------
9 Chester Springs Shopping With respect to the loans listed
Center to the left, the related mortgage
Bellair Plaza does not require that the annual
financial statements be audited
12 by an independent certified
public accountant.
- --------------------------------------------------------------------------------
Representation #52(d)
- --------------------------------------------------------------------------------
Loan Number Loan Name Description of Exception
- --------------------------------------------------------------------------------
43 Southwest Commons Shopping With respect to the loan listed
Center to the left, the secured creditor
policy does not extend at least 5
years beyond the maturity date of
the mortgage loan.
- --------------------------------------------------------------------------------
Representation #53(g)
- --------------------------------------------------------------------------------
Loan Number Loan Name Description of Exception
- --------------------------------------------------------------------------------
47 Circuit City Center With respect to the loan listed
to the left, the term with
respect to each of the ground
lease or sub-ground lease does
not extend 10 years beyond the
amortization term of the mortgage
loan.
---------------------------------------------------------------
65 Gardens Shopping Center The term of the ground lease in
connection with the mortgage loan
listed to the left, does not
extend 10 years beyond the
amortization term of the mortgage
loan. However, the mortgagor has
an option to purchase the fee
interest of the landlord under
the ground lease, which the
mortgagor has exercised. The
closing of the purchase of the
fee interest is scheduled for
December 4, 2003. Under the loan
documents the closing of the fee
interest must occur by December
31, 2003. $600,000 was held back
at closing to ensure the proper
exercise of the fee interest
purchase option. Upon
consummation of the fee
acquisition, the loan documents
provide that, without any further
action, the loan documents will
automatically spread to cover the
fee interest as additional
collateral under the mortgage
loan.
- --------------------------------------------------------------------------------
EXHIBIT A
Mortgage Loan Schedule
- ---------------------- ------------------------------------------------ ------------------------------ -------------------------
Mortgage Loan Number Property Name Address City
- ---------------------- ------------------------------------------------ ------------------------------ -------------------------
9 Chester Springs Shopping Center 147-237 Route 206 Chester
- ---------------------- ------------------------------------------------ ------------------------------ -------------------------
12 Bellair Plaza 2500 North Atlantic Avenue Daytona Beach
- ---------------------- ------------------------------------------------ ------------------------------ -------------------------
13 Miller Place Shopping Center 385 Route 25A Miller Place
- ---------------------- ------------------------------------------------ ------------------------------ -------------------------
17 Adagio Apartments 17126 Southeast 269th Place Covington
- ---------------------- ------------------------------------------------ ------------------------------ -------------------------
20 Penn Station Studios 1630 Stewart Street Santa Monica
- ---------------------- ------------------------------------------------ ------------------------------ -------------------------
31 Wal-Mart - Baldwin Hills, CA 4101 Crenshaw Boulevard Los Angeles
- ---------------------- ------------------------------------------------ ------------------------------ -------------------------
39 10 New King Street 10 New King Street North Castle
- ---------------------- ------------------------------------------------ ------------------------------ -------------------------
43 Southwest Commons Shopping Center 50 Southwest Cutoff Worcester
- ---------------------- ------------------------------------------------ ------------------------------ -------------------------
47 Circuit City Center 2600-2790 Pearl Street Boulder
- ---------------------- ------------------------------------------------ ------------------------------ -------------------------
48 Citrus Plaza 49-908 Jefferson Street Indio
- ---------------------- ------------------------------------------------ ------------------------------ -------------------------
61 One Ethel Road One Ethel Road Edison
- ---------------------- ------------------------------------------------ ------------------------------ -------------------------
64 Hy-Vee Plaza 139 North Belt Highway St. Joseph
- ---------------------- ------------------------------------------------ ------------------------------ -------------------------
65 Gardens Shopping Center 825-1005 Gardens Boulevard Charlottesville
- ---------------------- ------------------------------------------------ ------------------------------ -------------------------
72 Frederick Street Parking Garage 34 Market Place and 15 South Baltimore
Frederick Street
- ---------------------- ------------------------------------------------ ------------------------------ -------------------------
76 Walgreens - Reno, NV 750 North Virginia Street Reno
- ---------------------- ------------------------------------------------ ------------------------------ -------------------------
78 Eckerd - Ironside, TX 10225 Wurzbach Road San Antonio
- ---------------------- ------------------------------------------------ ------------------------------ -------------------------
83 Eckerd - Baton Rouge, LA 11430 Florida Boulevard Baton Rouge
- ---------------------- ------------------------------------------------ ------------------------------ -------------------------
89 Eckerd - Alexandria, LA 4443 Jackson Street Alexandria
- --------------------- ------------------------------------------------ ------------------------------ -------------------------
100 Eckerd - Kerrville, TX 112 Main Street Kerrville
- ---------------------- ------------------------------------------------ ------------------------------ -------------------------
- ---------------------- ------------- ------------------- ----------------------- ----------------------------- ----------------
Cut-Off Date Monthly
Mortgage Loan Number State Zip Code County Loan Balance ($) P&I Payments ($)
- ---------------------- ------------- ------------------- ----------------------- ----------------------------- ----------------
9 NJ 07930 Morris 24,949,093.60 142,104.14
- ---------------------- ------------- ------------------- ----------------------- ----------------------------- ----------------
12 FL 32118 Volusia 21,779,381.49 122812.4
- ---------------------- ------------- ------------------- ----------------------- ----------------------------- ----------------
13 NY 11764 Suffolk 20,219,344.76 119,662.57
- ---------------------- ------------- ------------------- ----------------------- ----------------------------- ----------------
17 WA 98042 King 14,976,882.59 80,221.70
- ---------------------- ------------- ------------------- ----------------------- ----------------------------- ----------------
20 CA 90404 Los Angeles 12,800,000.00 73,240.15
- ---------------------- ------------- ------------------- ----------------------- ----------------------------- ----------------
31 CA 90008 Los Angeles 9,099,519.51 55,120.32
- ---------------------- ------------- ------------------- ----------------------- ----------------------------- ----------------
39 NY 10604 Westchester 7,985,273.72 47,809.85
- ---------------------- ------------- ------------------- ----------------------- ----------------------------- ----------------
43 MA 01604 Worcester 7,301,908.12 43,595.53
- ---------------------- ------------- ------------------- ----------------------- ----------------------------- ----------------
47 CO 80302 Boulder 6,273,948.92 40,860.99
- ---------------------- ------------- ------------------- ----------------------- ----------------------------- ----------------
48 CA 92201 Riverside 6,089,530.53 37,677.85
- ---------------------- ------------- ------------------- ----------------------- ----------------------------- ----------------
61 NJ 08817 Middlesex 4,487,434.26 27,182.63
- ---------------------- ------------- ------------------- ----------------------- ----------------------------- ----------------
64 MO 64501 Buchanan 4,392,008.52 26,465.15
- ---------------------- ------------- ------------------- ----------------------- ----------------------------- ----------------
65 VA 22901 Albemarle 4,388,328.87 27,263.49
- ---------------------- ------------- ------------------- ----------------------- ----------------------------- ----------------
72 MD 21202 Baltimore City 3,994,183.39 25,649.94
- ---------------------- ------------- ------------------- ----------------------- ----------------------------- ----------------
76 NV 89501 Washoe 3,804,008.70 23,172.76
- ---------------------- ------------- ------------------- ----------------------- ----------------------------- ----------------
78 TX 78230 Bexar 3,309,023.52 21,748.22
- ---------------------- ------------- ------------------- ----------------------- ----------------------------- ----------------
83 LA 70815 East Baton Rouge Parish 2,963,304.72 19,476.01
- ---------------------- ------------- ------------------- ----------------------- ----------------------------- ----------------
89 LA 71303 Rapides 2,765,751.06 18,177.61
- --------------------- -------------- ------------------- ----------------------- ----------------------------- ----------------
100 TX 78028 Kerr 1,926,148.03 12,659.41
- ---------------------- ------------- ------------------- ----------------------- ----------------------------- ----------------
- ------------ ----------------------------------- ------------ ------------------- ----------------------- -------------------
Mortgage
Loan Number Property Name Grace Days Mortgage Rate (%) Number of Units Unit of Measure
- ------------ ----------------------------------- ------------ ------------------- ----------------------- -------------------
9 Chester Springs Shopping Center 5 5.5100% 224,138 Sq. Ft.
- ------------ ----------------------------------- ------------ ------------------- ----------------------- -------------------
12 Bellair Plaza 5 5.4000% 345,995 Sq. Ft.
- ------------ ----------------------------------- ------------ ------------------- ----------------------- -------------------
13 Miller Place Shopping Center 5 5.8700% 95,665 Sq. Ft.
- ------------ ----------------------------------- ------------ ------------------- ----------------------- -------------------
17 Adagio Apartments 5 4.9700% 200 Units
- ------------ ----------------------------------- ------------ ------------------- ----------------------- -------------------
20 Penn Station Studios 5 5.5700% 75,336 Sq. Ft.
- ------------ ----------------------------------- ------------ ------------------- ----------------------- -------------------
31 Wal-Mart - Baldwin Hills, CA 5 6.0700% 150,000 Sq. Ft.
- ------------ ----------------------------------- ------------ ------------------- ----------------------- -------------------
39 10 New King Street 5 5.9700% 50,621 Sq. Ft.
- ------------ ----------------------------------- ------------ ------------------- ----------------------- -------------------
43 Southwest Commons Shopping Center 5 5.9000% 94,983 Sq. Ft.
- ------------ ----------------------------------- ------------ ------------------- ----------------------- -------------------
47 Circuit City Center 5 6.0700% 44,218 Sq. Ft.
- ------------ ----------------------------------- ------------ ------------------- ----------------------- -------------------
48 Citrus Plaza 5 6.2800% 37,699 Sq. Ft.
- ------------ ----------------------------------- ------------ ------------------- ----------------------- -------------------
61 One Ethel Road 5 6.0700% 57,519 Sq. Ft.
- ------------ ----------------------------------- ------------ ------------------- ----------------------- -------------------
64 Hy-Vee Plaza 5 6.0300% 45,650 Sq. Ft.
- ------------ ----------------------------------- ------------ ------------------- ----------------------- -------------------
65 Gardens Shopping Center 5 6.3100% 48,748 Sq. Ft.
- ------------ ----------------------------------- ------------ ------------------- ----------------------- -------------------
72 Frederick Street Parking Garage 5 5.9500% 101,066 Sq. Ft.
- ------------ ----------------------------------- ------------ ------------------- ----------------------- -------------------
76 Walgreens - Reno, NV 5 6.0900% 15,067 Sq. Ft.
- ------------ ----------------------------------- ------------ ------------------- ----------------------- -------------------
78 Eckerd - Ironside, TX 5 6.0800% 10,908 Sq. Ft.
- ------------ ----------------------------------- ------------ ------------------- ----------------------- -------------------
83 Eckerd - Baton Rouge, LA 5 6.0800% 11,200 Sq. Ft.
- ------------ ----------------------------------- ------------ ------------------- ----------------------- -------------------
89 Eckerd - Alexandria, LA 5 6.0800% 12,544 Sq. Ft.
- ------------ ----------------------------------- ------------ ------------------- ----------------------- -------------------
100 Eckerd - Kerrville, TX 5 6.0800% 10,908 Sq. Ft.
- ------------ ----------------------------------- ------------ ------------------- ----------------------- -------------------
Mortgage Original Term to Remaining Term to
Loan Number Maturity or ARD (Mos.) Maturity or ARD (Mos.) Maturity Date or ARD
- ------------ ------------------------ -------------------------- ----------------------------------
9 120 118 1-Oct-2013
- ------------ ------------------------ -------------------------- ----------------------------------
12 120 116 1-Aug-2013
- ------------ ------------------------ -------------------------- ----------------------------------
13 120 119 1-Nov-2013
- ------------ ------------------------ -------------------------- ----------------------------------
17 108 107 1-Nov-2012
- ------------ ------------------------ -------------------------- ----------------------------------
20 108 106 1-Oct-2012
- ------------ ------------------------ -------------------------- ----------------------------------
31 120 117 1-Sep-2013
- ------------ ------------------------ -------------------------- ----------------------------------
39 120 118 1-Oct-2013
- ------------ ------------------------ -------------------------- ----------------------------------
43 120 113 1-May-2013
- ------------ ------------------------ -------------------------- ----------------------------------
47 120 117 1-Sep-2013
- ------------ ------------------------ -------------------------- ----------------------------------
48 120 118 1-Oct-2013
- ------------ ------------------------ -------------------------- ----------------------------------
61 120 117 1-Sep-2013
- ------------ ------------------------ -------------------------- ----------------------------------
64 120 118 1-Oct-2013
- ------------ ------------------------ -------------------------- ----------------------------------
65 120 117 1-Sep-2013
- ------------ ------------------------ -------------------------- ----------------------------------
72 120 119 1-Nov-2013
- ------------ ------------------------ -------------------------- ----------------------------------
76 120 113 1-May-2013
- ------------ ------------------------ -------------------------- ----------------------------------
78 108 99 1-Mar-2012
- ------------ ------------------------ -------------------------- ----------------------------------
83 108 99 1-Mar-2012
- ------------ ------------------------ -------------------------- ----------------------------------
89 108 99 1-Mar-2012
- ------------ ------------------------ -------------------------- ----------------------------------
100 108 99 1-Mar-2012
- ------------ ------------------------ -------------------------- ----------------------------------
- ----------- ---------------------------------- -------------------- ------------------- ---------------- --------------------
Mortgage Original Amort Remaining Amort Master Servicing
Loan Number Property Name Term (Mos.) Term (Mos.) Ground Lease Fee Rate
- ----------- ---------------------------------- -------------------- ------------------- ---------------- --------------------
9 Chester Springs Shopping Center 360 358 N 0.04000%
- ----------- ---------------------------------- -------------------- ------------------- ---------------- --------------------
12 Bellair Plaza 360 356 N 0.04000%
- ----------- ---------------------------------- -------------------- ------------------- ---------------- --------------------
13 Miller Place Shopping Center 360 359 N 0.04000%
- ----------- ---------------------------------- -------------------- ------------------- ---------------- --------------------
17 Adagio Apartments 360 359 N 0.08000%
- ----------- ---------------------------------- -------------------- ------------------- ---------------- --------------------
20 Penn Station Studios 360 360 N 0.04000%
- ----------- ---------------------------------- -------------------- ------------------- ---------------- --------------------
31 Wal-Mart - Baldwin Hills, CA 360 357 N 0.04000%
- ----------- ---------------------------------- -------------------- ------------------- ---------------- --------------------
39 10 New King Street 360 358 N 0.04000%
- ----------- ---------------------------------- -------------------- ------------------- ---------------- --------------------
43 Southwest Commons Shopping Center 360 353 Y 0.04000%
- ----------- ---------------------------------- -------------------- ------------------- ---------------- --------------------
47 Circuit City Center 300 297 Y 0.04000%
- ----------- ---------------------------------- -------------------- ------------------- ---------------- --------------------
48 Citrus Plaza 360 358 N 0.10000%
- ----------- ---------------------------------- -------------------- ------------------- ---------------- --------------------
61 One Ethel Road 360 357 N 0.04000%
- ----------- ---------------------------------- -------------------- ------------------- ---------------- --------------------
64 Hy-Vee Plaza 360 358 N 0.08000%
- ----------- ---------------------------------- -------------------- ------------------- ---------------- --------------------
65 Gardens Shopping Center 360 357 Y 0.04000%
- ----------- ---------------------------------- -------------------- ------------------- ---------------- --------------------
72 Frederick Street Parking Garage 300 299 N 0.04000%
- ----------- ---------------------------------- -------------------- ------------------- ---------------- --------------------
76 Walgreens - Reno, NV 360 353 Y 0.04000%
- ----------- ---------------------------------- -------------------- ------------------- ---------------- --------------------
78 Eckerd - Ironside, TX 300 291 N 0.07000%
- ----------- ---------------------------------- -------------------- ------------------- ---------------- --------------------
83 Eckerd - Baton Rouge, LA 300 291 N 0.07000%
- ----------- ---------------------------------- -------------------- ------------------- ---------------- --------------------
89 Eckerd - Alexandria, LA 300 291 N 0.07000%
- ----------- ---------------------------------- -------------------- ------------------- ---------------- --------------------
100 Eckerd - Kerrville, TX 300 291 N 0.07000%
- ----------- ---------------------------------- -------------------- ------------------- ---------------- --------------------
- ----------- ---------------- ----------------- ---------------- ------------------------ ------------------
Mortgage Anticipated Additional Environmental
Loan Number ARD Loans Repayment Date Interest Rate Loan Originator Insurance
- ----------- ---------------- ----------------- ---------------- ------------------------ ------------------
9 N CGM Y
- ----------- ---------------- ----------------- ---------------- ------------------------ ------------------
12 N CGM N
- ----------- ---------------- ----------------- ---------------- ------------------------ ------------------
13 N CGM N
- ----------- ---------------- ----------------- ---------------- ------------------------ ------------------
17 N CGM N
- ----------- ---------------- ----------------- ---------------- ------------------------ ------------------
20 N CGM N
- ----------- ---------------- ----------------- ---------------- ------------------------ ------------------
31 N CGM N
- ----------- ---------------- ----------------- ---------------- ------------------------ ------------------
39 N CGM N
- ----------- ---------------- ----------------- ---------------- ------------------------ ------------------
43 N CGM Y
- ----------- ---------------- ----------------- ---------------- ------------------------ ------------------
47 N CGM N
- ----------- ---------------- ----------------- ---------------- ------------------------ ------------------
48 N CGM N
- ----------- ---------------- ----------------- ---------------- ------------------------ ------------------
61 N CGM N
- ----------- ---------------- ----------------- ---------------- ------------------------ ------------------
64 N CGM N
- ----------- ---------------- ----------------- ---------------- ------------------------ ------------------
65 N CGM N
- ----------- ---------------- ----------------- ---------------- ------------------------ ------------------
72 N CGM N
- ----------- ---------------- ----------------- ---------------- ------------------------ ------------------
76 N CGM N
- ----------- ---------------- ----------------- ---------------- ------------------------ ------------------
78 N CGM N
- ----------- ---------------- ----------------- ---------------- ------------------------ ------------------
83 N CGM N
- ----------- ---------------- ----------------- ---------------- ------------------------ ------------------
89 N CGM N
- ----------- ---------------- ----------------- ---------------- ------------------------ ------------------
100 N CGM N
- ----------- ---------------- ----------------- ---------------- ------------------------ ------------------
- ----------- ----------------------------------- ---------------------- --------------- ------------------- ----------------
Cross Collateralized
Mortgage and Cross Defaulted Secured
Loan Number Property Name Loan Flag Defeasance Loan Early Defeasance by LC
- ----------- ----------------------------------- ---------------------- --------------- ------------------- ----------------
9 Chester Springs Shopping Center Y N N
- ----------- ----------------------------------- ---------------------- --------------- ------------------- ----------------
12 Bellair Plaza Y N N
- ----------- ----------------------------------- ---------------------- --------------- ------------------- ----------------
13 Miller Place Shopping Center Y N N
- ----------- ----------------------------------- ---------------------- --------------- ------------------- ----------------
17 Adagio Apartments Y N N
- ----------- ----------------------------------- ---------------------- --------------- ------------------- ----------------
20 Penn Station Studios Y N N
- ----------- ----------------------------------- ---------------------- --------------- ------------------- ----------------
31 Wal-Mart - Baldwin Hills, CA Y N N
- ----------- ----------------------------------- ---------------------- --------------- ------------------- ----------------
39 10 New King Street Y N N
- ----------- ----------------------------------- ---------------------- --------------- ------------------- ----------------
43 Southwest Commons Shopping Center Y N N
- ----------- ----------------------------------- ---------------------- --------------- ------------------- ----------------
47 Circuit City Center Y N N
- ----------- ----------------------------------- ---------------------- --------------- ------------------- ----------------
48 Citrus Plaza Y N N
- ----------- ----------------------------------- ---------------------- --------------- ------------------- ----------------
61 One Ethel Road N N N
- ----------- ----------------------------------- ---------------------- --------------- ------------------- ----------------
64 Hy-Vee Plaza Y N N
- ----------- ----------------------------------- ---------------------- --------------- ------------------- ----------------
65 Gardens Shopping Center Y N N
- ----------- ----------------------------------- ---------------------- --------------- ------------------- ----------------
72 Frederick Street Parking Garage Y N N
- ----------- ----------------------------------- ---------------------- --------------- ------------------- ----------------
76 Walgreens - Reno, NV Y N N
- ----------- ----------------------------------- ---------------------- --------------- ------------------- ----------------
78 Eckerd - Ironside, TX Eckerd Portfolio Y N N
- ----------- ----------------------------------- ---------------------- --------------- ------------------- ----------------
83 Eckerd - Baton Rouge, LA Eckerd Portfolio Y N N
- ----------- ----------------------------------- ---------------------- --------------- ------------------- ----------------
89 Eckerd - Alexandria, LA Eckerd Portfolio Y N N
- ----------- ----------------------------------- ---------------------- --------------- ------------------- ----------------
100 Eckerd - Kerrville, TX Eckerd Portfolio Y N N
- ----------- ----------------------------------- ---------------------- --------------- ------------------- ----------------
- ----------- -------------------- -------------------- ----------------------- ----------------------- -------------- --------
Initial Deposit Ongoing
Mortgage Interest Accrual Annual Deposit to to Capital Initial TI/LC
Loan Number Method Lockbox Replacement Reserve Improvements Reserve TI/LC Escrow Footnot
- ----------- -------------------- -------------------- ----------------------- ----------------------- -------------- --------
9 Actual/360 40,345
- ----------- -------------------- -------------------- ----------------------- ----------------------- -------------- --------
12 Actual/360 51,900 (1)
- ----------- -------------------- -------------------- ----------------------- ----------------------- -------------- --------
13 Actual/360 5,748 (1)
- ----------- -------------------- -------------------- ----------------------- ----------------------- -------------- --------
17 Actual/360 50,000
- ----------- -------------------- -------------------- ----------------------- ----------------------- -------------- --------
20 Actual/360
- ----------- -------------------- -------------------- ----------------------- ----------------------- -------------- --------
31 Actual/360 Springing
- ----------- -------------------- -------------------- ----------------------- ----------------------- -------------- --------
39 Actual/360 10,124 5,000 (1)
- ----------- -------------------- -------------------- ----------------------- ----------------------- -------------- --------
43 Actual/360 Springing 14,247 16,250 (1)
- ----------- -------------------- -------------------- ----------------------- ----------------------- -------------- --------
47 Actual/360 6,633 (1)
- ----------- -------------------- -------------------- ----------------------- ----------------------- -------------- --------
48 Actual/360 3,770 (1)
- ----------- -------------------- -------------------- ----------------------- ----------------------- -------------- --------
61 Actual/360 11,504 50,000
- ----------- -------------------- -------------------- ----------------------- ----------------------- -------------- --------
64 Actual/360 7,761 1,875 (1)
- ----------- -------------------- -------------------- ----------------------- ----------------------- -------------- --------
65 Actual/360 8,776 2,250 (1)
- ----------- -------------------- -------------------- ----------------------- ----------------------- -------------- --------
72 Actual/360 15,160
- ----------- -------------------- -------------------- ----------------------- ----------------------- -------------- --------
76 Actual/360 1,507
- ----------- -------------------- -------------------- ----------------------- ----------------------- -------------- --------
78 Actual/360 Day 1 1,636 (1)
- ----------- -------------------- -------------------- ----------------------- ----------------------- -------------- --------
83 Actual/360 Day 1 1,680 (1)
- ----------- -------------------- -------------------- ----------------------- ----------------------- -------------- --------
89 Actual/360 Day 1 1,882 (1)
- ----------- -------------------- -------------------- ----------------------- ----------------------- -------------- --------
100 Actual/360 Day 1 1,636 (1)
- ----------- -------------------- -------------------- ----------------------- ----------------------- -------------- --------
(1) In addition to any such escrows funded at loan closing for potential
TI/LC, these Mortgage Loans require funds to be escrowed during some or
all of the loan term for TI/LC expenses, which may be incurred during the
loan term. In certain instances, escrowed funds may be released to the
borrower upon satisfaction of certain leasing conditions.