SUPPLEMENTAL AGREEMENT
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This Supplemental Agreement (this "Agreement"), is dated and effective
as of May 16, 2003, between GMAC Commercial Mortgage Corporation as seller (the
"Mortgage Loan Seller") and German American Capital Corporation as purchaser
(the "Purchaser").
WHEREAS, the Mortgage Loan Seller sold certain mortgage loans to the
Purchaser pursuant to a certain Mortgage Loan Purchase Agreement, dated as of
March 29, 2001 (as amended, the "GACC Purchase Agreement").
WHEREAS, the Purchaser intends to sell the mortgage loans as shown on
Exhibit A hereto (the "Mortgage Loans") to GMAC Commercial Mortgage Securities,
Inc. as Depositor, (the "Depositor") pursuant to a certain Mortgage Loan
Purchase Agreement, dated as of May 16, 2003 (the "Mortgage Loan Purchase
Agreement") and the Depositor intends to transfer the Mortgage Loans, together
with other multifamily and commercial mortgage loans, to a trust fund (the
"Trust Fund") to be formed by the Depositor, beneficial ownership of which will
be evidenced by a series of mortgage pass-through certificates (the
"Certificates"). Certain classes of the Certificates will be rated by ▇▇▇▇▇'▇
Investors Service, Inc. and Standard & Poor's Ratings Services, a division of
The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. (together, the "Rating Agencies"). Certain
classes of the Certificates (the "Registered Certificates") will be registered
under the Securities Act of 1933, as amended (the "Securities Act"). The Trust
Fund will be created and the Certificates will be issued pursuant to a pooling
and servicing agreement to be dated as of May 1, 2003 (the "Pooling and
Servicing Agreement"), among the Depositor as depositor, GMAC Commercial
Mortgage Corporation as master servicer (in such capacity, the "Master
Servicer") and special servicer, LaSalle Bank National Association, as trustee
(in such capacity, the "Trustee"), and ABN AMRO Bank N.V., as fiscal agent.
Capitalized terms not otherwise defined herein have the meanings assigned to
them in the Pooling and Servicing Agreement as in effect on the Closing Date (as
defined below).
WHEREAS, the Depositor intends to sell the Class A-1, Class A-2, Class
A-3, Class B, Class C, Class D and Class E Certificates to ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated and Deutsche Bank Securities Inc. (together,
the "Underwriters"), pursuant to an underwriting agreement dated the date hereof
(the "Underwriting Agreement"). The Depositor intends to sell the Class X-1,
Class X-2, Class A-1A, Class F, Class G, Class H, Class J, Class K, Class L,
Class M, Class N-1, Class N-2, Class O, Class P and Class Q Certificates to
▇▇▇▇▇▇▇, Sachs & Co., ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated and Deutsche Bank
Securities Inc. (in such capacity, each an "Initial Purchaser") pursuant to a
certificate purchase agreement, dated the date hereof (the "Certificate Purchase
Agreements"). The Depositor intends to sell the Class R-I, Class R-II and Class
R-III Certificates to a Qualified Institutional Buyer (in such capacity, an
"Initial Purchaser").
WHEREAS, each of the Mortgage Loan Seller and the Purchaser, in
connection with the transaction described above, desires to amend and supplement
certain of the provisions of the GACC Purchase Agreement as it relates to the
Mortgage Loans in order to facilitate such transaction and in contemplation of
the assignment by the Purchaser to the Depositor of all of its right, title and
interest in and to this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements set forth herein, the parties agree as follows:
SECTION 1. Amendment of GACC Purchase Agreement.
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The parties hereto agree that, with respect to the Mortgage Loans only,
the GACC Purchase Agreement is hereby amended to the extent that the provisions
of such GACC Purchase Agreement are inconsistent with this Agreement.
SECTION 2. Representations, Warranties and Covenants of the Mortgage
Loan Seller.
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(a) The Mortgage Loan Seller hereby makes, as of May 29, 2003 (the
"Closing Date") (or as of such other date specifically provided in the
particular representation or warranty), to and for the benefit of the Purchaser,
and its successors and assigns (including, without limitation, the Depositor,
the Trustee and the holders of the Certificates), each of the representations
and warranties set forth in Exhibit B, with such changes or modifications as may
be permitted or required by the Rating Agencies.
(b) In addition, the Mortgage Loan Seller, as of the date hereof,
hereby represents and warrants to, and covenants with, the Purchaser that:
(i) The Mortgage Loan Seller is a corporation, duly organized,
validly existing and in good standing under the laws of the State of
California, and is in compliance with the laws of each State in which
any Mortgaged Property is located to the extent necessary to ensure the
enforceability of each Mortgage Loan and to perform its obligations
under this Agreement.
(ii) The execution and delivery of this Agreement by the
Mortgage Loan Seller, and the performance and compliance with the terms
of this Agreement by the Mortgage Loan Seller, will not violate the
Mortgage Loan Seller's organizational documents or constitute a default
(or an event which, with notice or lapse of time, or both, would
constitute a default) under, or result in the breach of, any material
agreement or other instrument to which it is a party or which is
applicable to it or any of its assets, in each case which materially
and adversely affects the ability of the Mortgage Loan Seller to carry
out the transactions contemplated by this Agreement.
(iii) The Mortgage Loan Seller has the full power and
authority to enter into and consummate all transactions contemplated by
this Agreement, has duly authorized the execution, delivery and
performance of this Agreement, and has duly executed and delivered this
Agreement.
(iv) This Agreement, assuming due authorization, execution and
delivery by the Purchaser, constitutes a valid, legal and binding
obligation of the Mortgage Loan Seller, enforceable against the
Mortgage Loan Seller in accordance with the terms hereof, subject to
(A) applicable bankruptcy, insolvency, reorganization, moratorium and
other laws affecting the enforcement of creditors' rights generally,
(B) general principles of equity, regardless of whether such
enforcement is considered in a proceeding in equity or at law, and (C)
public policy considerations underlying the securities laws, to the
extent that such public policy considerations
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limit the enforceability of the provisions of this Agreement that
purport to provide indemnification for securities laws liabilities.
(v) The Mortgage Loan Seller is not in violation of, and its
execution and delivery of this Agreement and its performance and
compliance with the terms of this Agreement will not constitute a
violation of, any law, any order or decree of any court or arbiter, or
any order, regulation or demand of any federal, state or local
governmental or regulatory authority, which violation, in the Mortgage
Loan Seller's good faith and reasonable judgment, is likely to affect
materially and adversely either the ability of the Mortgage Loan Seller
to perform its obligations under this Agreement or the financial
condition of the Mortgage Loan Seller.
(vi) No litigation is pending with regard to which the
Mortgage Loan Seller has received service of process or, to the best of
the Mortgage Loan Seller's knowledge, threatened against the Mortgage
Loan Seller the outcome of which, in the Mortgage Loan Seller's good
faith and reasonable judgment, could reasonably be expected to prohibit
the Mortgage Loan Seller from entering into this Agreement or
materially and adversely affect either the ability of the Mortgage Loan
Seller to perform its obligations under this Agreement or the financial
condition of the Mortgage Loan Seller.
(vii) The Mortgage Loan Seller has not dealt with any broker,
investment banker, agent or other person, other than the Purchaser, the
Underwriters, the Initial Purchasers and their respective affiliates,
that may be entitled to any commission or compensation in connection
with the sale of the Mortgage Loans or the consummation of any of the
other transactions contemplated hereby.
(viii) 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 (including, with
respect to any bulk sale laws), for the execution, delivery and
performance of or compliance by the Mortgage Loan Seller with this
Agreement, or the consummation by the Mortgage Loan Seller of any
transaction contemplated hereby, other than (1) such consents,
approvals, authorizations, qualifications, registrations, filings or
notices as have been obtained or made and (2) where the lack of such
consent, approval, authorization, qualification, registration, filing
or notice would not have a material adverse effect on the performance
by the Mortgage Loan Seller under this Agreement.
(c) Upon discovery by any of the parties hereto of a breach of any of
the representations and warranties made pursuant to and set forth in subsection
(b) above which materially and adversely affects the interests of the Purchaser
or its successors or assigns or a Material Breach, the party discovering such
breach shall give prompt written notice to the other party hereto or if this
Agreement has been assigned by the Purchaser, to such assignee. The
representations, warranties and covenants set forth in Section 2(a) shall, as
between the Mortgage Loan Seller and the Purchaser, supplement, and as between
the Mortgage Loan Seller and any successors or assigns of the Purchaser, replace
and amend and restate in their entirety, the representations, warranties and
covenants of the Mortgage Loan Seller made pursuant to Section 4.1(a) of the
GACC Purchase Agreement to the extent they relate to the Mortgage Loans.
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SECTION 3. Representations, Warranties and Covenants of the Purchaser.
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(a) The Purchaser, as of the date hereof, hereby represents and
warrants to, and covenants with, the Mortgage Loan Seller that:
(i) The Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of the State of Maryland.
(ii) The execution and delivery of this Agreement by the
Purchaser, and the performance and compliance with the terms of this
Agreement by the Purchaser, will not violate the Purchaser's
organizational documents or constitute a default (or an event which,
with notice or lapse of time, or both, would constitute a default)
under, or result in the breach of, any material agreement or other
instrument to which it is a party or which is applicable to it or any
of its assets, in each case which materially and adversely affects the
ability of the Purchaser to carry out the transactions contemplated by
this Agreement.
(iii) The Purchaser has the full power and authority to enter
into and consummate all transactions contemplated by this Agreement,
has duly authorized the execution, delivery and performance of this
Agreement, and has duly executed and delivered this Agreement.
(iv) This Agreement, assuming due authorization, execution and
delivery by the Mortgage Loan Seller, constitutes a valid, legal and
binding obligation of the Purchaser, enforceable against the Purchaser
in accordance with the terms hereof, subject to (A) applicable
bankruptcy, insolvency, reorganization, moratorium and other laws
affecting the enforcement of creditors' rights generally, (B) general
principles of equity, regardless of whether such enforcement is
considered in a proceeding in equity or at law, and (C) public policy
considerations underlying the securities laws, to the extent that such
public policy considerations limit the enforceability of the provisions
of this Agreement that purport to provide indemnification for
securities laws liabilities.
(v) The Purchaser is not in violation of, and its execution
and delivery of this Agreement and its performance and compliance with
the terms of this Agreement will not constitute a violation of, any
law, any order or decree of any court or arbiter, or any order,
regulation or demand of any federal, state or local governmental or
regulatory authority, which violation, in the Purchaser's good faith
and reasonable judgment, is likely to affect materially and adversely
either the ability of the Purchaser to perform its obligations under
this Agreement or the financial condition of the Purchaser.
(vi) No litigation is pending or, to the best of the
Purchaser's knowledge, threatened against the Purchaser which would
prohibit the Purchaser from entering into this Agreement or, in the
Purchaser's good faith and reasonable judgment, is likely to materially
and adversely affect either the ability of the Purchaser to perform its
obligations under this Agreement or the financial condition of the
Purchaser.
(vii) The Purchaser has not dealt with any broker, investment
banker, agent or other person, other than the Mortgage Loan Seller, the
Underwriters, the Initial Purchasers and their respective affiliates,
that may be entitled to any commission or compensation in connection
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with the sale of the Mortgage Loans or the consummation of any of the
transactions contemplated hereby.
(viii) No consent, approval, authorization or order of,
registration or filing with, or notice to, any governmental authority
or court is required, under federal or state law, for the execution,
delivery and performance of or compliance by the Purchaser with this
Agreement, or the consummation by the Purchaser of any transaction
contemplated hereby, other than (1) such consents, approvals,
authorizations, qualifications, registrations, filings or notices as
have been obtained or made and (2) where the lack of such consent,
approval, authorization, qualification, registration, filing or notice
would not have a material adverse effect on the performance by the
Purchaser under this Agreement.
(b) The Purchaser hereby makes, as of the Closing Date (or as of such
other date specifically provided in the particular representation or warranty),
to and for the benefit of the Mortgage Loan Seller, and its successors and
assigns, with respect to each Mortgage Loan each of the representations and
warranties set forth below:
(i) Immediately prior to the transfer thereof to the
Depositor, the Purchaser had whatever title to such Mortgage Loan as
was conveyed to it by the Mortgage Loan Seller, free and clear of any
and all liens, encumbrances and other interests on, in or to such
Mortgage Loan (other than, in certain cases, the right of a third party
servicer to directly service such Mortgage Loan) created by the
Purchaser. Such transfer validly assigns such title to such Mortgage
Loan to the Depositor free and clear of any pledge, lien, encumbrance
or security interest created by the Purchaser;
(ii) The Purchaser has full right and authority to sell,
assign and transfer its interest in such Mortgage Loan;
(iii) The Purchaser has not done anything that would
materially impair the coverage under the lender's title insurance
policy that insures the lien of the related Mortgage;
(iv) The Purchaser has not waived any material default,
breach, violation or event of acceleration existing under the related
Mortgage or Mortgage Note;
(v) To the Purchaser's actual knowledge, without independent
inquiry as to the provisions of the Mortgage Loans, there is no valid
offset, defense or counterclaim to such Mortgage Loan arising out of
the Purchaser's actions or holding of the Mortgage Loans; and
(vi) The terms of the related Mortgage and the Mortgage Note
have not been impaired, waived, altered or modified by the Purchaser in
any material respect, except as specifically set forth in the related
Mortgage File;
provided, that with respect to the representations and warranties in clauses
(iii), (iv), (v) and (vi) above, such representations and warranties cover only
actions taken directly by the Purchaser and its Affiliates or taken by the
Mortgage Loan Seller at the direction of the Purchaser.
(c) Upon discovery by any of the parties hereto of a breach of any of
the representations and warranties set forth above which materially and
adversely affects the
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interests of the Mortgage Loan Seller, the party discovering such breach shall
give prompt written notice to the other party hereto.
SECTION 4. Repurchases.
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(a) Within 90 days of the earlier of discovery or receipt of notice by
the Mortgage Loan Seller, from either the Purchaser or any successor or assign
thereof, of a Defect (as defined in the Pooling and Servicing Agreement as in
effect on the Closing Date) in respect of the Mortgage File for any Mortgage
Loan or a breach of any representation or warranty made pursuant to Section 2(a)
and set forth in Exhibit B (a "Breach"), which Defect or Breach, as the case may
be, materially and adversely affects the value of any Mortgage Loan or any
Mortgaged Property or the interests therein of the Purchaser or its successors
and assigns (including, without limitation, the Trustee and the holders of the
Certificates), the Mortgage Loan Seller shall cure such Defect or Breach, as the
case may be, in all material respects or repurchase the affected Mortgage Loan
from the then owner(s) thereof at the applicable Purchase Price (as defined in
the Pooling and Servicing Agreement as in effect on the Closing Date) by payment
of such Purchase Price by wire transfer of immediately available funds to the
account designated by such owner(s); provided, however, that in lieu of
effecting any such repurchase, the Mortgage Loan Seller will be permitted to
deliver a Qualifying Substitute Mortgage Loan and to pay a cash amount equal to
the applicable Substitution Shortfall Amount, subject to the terms and
conditions of the Pooling and Servicing Agreement as in effect on the Closing
Date; provided, further, that if such Defect relates to clause (18) of Exhibit B
of the Mortgage Loan Purchase Agreement, the Mortgage Loan Seller may deposit
with the Master Servicer an amount, to be held in a Special Reserve Account (as
defined in the Pooling and Servicing Agreement as in effect on the Closing
Date), equal to the amount of the undelivered letter of credit (or
alternatively, the Mortgage Loan Seller may deliver to the Master Servicer, with
a copy to the Purchaser or any successor or assign thereof, a letter of credit
for the benefit of the Master Servicer on behalf of the Purchaser and upon the
same terms and conditions as the undelivered letter of credit) which the Master
Servicer on behalf of the Purchaser 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. Any such letter of
credit or funds shall be held by the Master Servicer until the earlier of (i)
the date on which the Master Servicer certifies to the Purchaser or any
successor or assign thereof that such Defect has been cured, at which time such
letter of credit or funds shall be returned to the Mortgage Loan Seller and (ii)
the date on which the Mortgage Loan is repurchased.
If the Mortgage Loan Seller is notified of a Defect in any Mortgage
File that corresponds to information set forth in the Mortgage Loan Schedule,
the Mortgage Loan Seller shall promptly correct such Defect and provide a new,
corrected Mortgage Loan Schedule to the Purchaser or any successor or assign
thereof, which corrected Mortgage Loan Schedule shall be deemed to amend and
replace the existing Mortgage Loan Schedule for all purposes.
In addition, if, as of the Closing Date, any Mortgage Loan is secured
by a Mortgage that does not constitute a valid first lien upon the related
Mortgaged Property, including all buildings located thereon and all fixtures
attached thereto, or if a Mortgage is subject to something other than (A) the
lien of current real property taxes and assessments not yet due and payable, (B)
covenants, conditions and restrictions, rights of way, easements and other
matters of public
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record, (C) exceptions and exclusions specifically referred to in the lender's
title insurance policy issued or, as evidenced by a "marked-up" commitment, to
be issued in respect of such Mortgage Loan and (D) those exceptions set forth on
Schedule B-1 to Exhibit B hereto (the exceptions set forth in the foregoing
clauses (A), (B), (C) and (D) collectively, "Permitted Encumbrances"), or if the
insurer that issued the Title Policy referred to in clause (6) of Exhibit B
hereto in respect of any Mortgage Loan was not qualified to do business in the
state in which the related Mortgaged Property is located, and in either case
such failure materially and adversely affects the interests of holders of
Certificates (any such failure that materially and adversely affects the
interests of holders of Certificates, also a "Breach"), the Mortgage Loan Seller
shall be required, at its option, to either (i) cure such Breach in all material
respects or (ii) repurchase the affected Mortgage Loan, in each case, within the
applicable Permitted Cure Period. If any such Breach is not corrected or cured
in all material respects within the applicable Permitted Cure Period, the
Mortgage Loan Seller shall, not later than the last day of such Permitted Cure
Period, (i) repurchase the affected Mortgage Loan from the Purchaser or its
assignee at the applicable Purchase Price or (ii) if within the three-month
period commencing on the Closing Date (or within the two-year period commencing
on the Closing Date if the related Mortgage Loan is a "defective obligation"
within the meaning of Section 860G(a)(4)(B)(ii) of the Code and Treasury
Regulation Section 1.860G-2(f)), at its option, replace such Mortgage Loan with
a Qualifying Substitute Mortgage Loan and pay any corresponding Substitution
Shortfall Amount. The Mortgage Loan Seller agrees that any such repurchase or
substitution shall be completed in accordance with and subject to the terms and
conditions of the Pooling and Servicing Agreement.
For purposes of the preceding paragraph only, the "Permitted Cure
Period" applicable to any Breach in respect of any Mortgage Loan shall be the
90-day period immediately following the earlier of the discovery by the Mortgage
Loan Seller or receipt by the Mortgage Loan Seller of notice of such Breach;
provided, that if such Breach cannot be corrected or cured in all material
respects within such 90-day period, but it is reasonably likely that such Breach
could be corrected or cured within 180 days of the earlier of discovery by the
Mortgage Loan Seller and receipt by the Mortgage Loan Seller of notice of such
Breach, and the Mortgage Loan Seller is diligently attempting to effect such
correction or cure, then the applicable Permitted Cure Period shall, with the
consent of the Purchaser or its assignee (which consent shall not be
unreasonably withheld), be extended for an additional 90 days, unless (i) the
affected Mortgage Loan is in default and (ii) the applicable Breach constitutes
a Material Document Defect (as defined in the Pooling and Servicing Agreement)
other than a Material Document Defect resulting solely from a delay caused by
the public recording or filing office where documents have been sent for
recording or filing.
(b) Notwithstanding Section 4(a), within 60 days of the earlier of
discovery or receipt of notice by the Mortgage Loan Seller, from either the
Purchaser or any successor or assign thereof, that any Mortgage Loan does not
constitute a "qualified mortgage" within the meaning of Section 860G(a)(3) of
the Code, the Mortgage Loan Seller shall repurchase such Mortgage Loan from the
then owner(s) thereof at the applicable Purchase Price by payment of such
Purchase Price by wire transfer of immediately available funds to the account
designated by such owner(s).
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(c) In connection with any repurchase of or substitution for a Mortgage
Loan contemplated by this Section 4, the then owner(s) thereof shall tender or
cause to be tendered promptly to the Mortgage Loan Seller, upon delivery of a
receipt executed by the Mortgage Loan Seller, the related Mortgage File and
Servicing File, and each document that constitutes a part of the Mortgage File
that was endorsed or assigned to the Purchaser or the Trustee shall be endorsed
or assigned, as the case may be, to the Mortgage Loan Seller or its designee in
the same manner. The form and sufficiency of all such instruments and
certificates shall be the responsibility of the Mortgage Loan Seller.
(d) This Section 4 provides the sole remedies available to the
Purchaser, and its successors and assigns (including, without limitation, the
Depositor, the Trustee and the holders of the Certificates) respecting any
Defect in a Mortgage File or any Breach, or in connection with the circumstances
described in Section 4(b). If the Mortgage Loan Seller defaults on its
obligations to repurchase or replace any Mortgage Loan in accordance with
Section 4(a) or 4(b) or disputes its obligation to repurchase or replace any
Mortgage Loan in accordance with either such subsection, the Purchaser or its
successors and assigns may take such action as is appropriate to enforce such
payment or performance, including, without limitation, the institution and
prosecution of appropriate proceedings. The Mortgage Loan Seller shall reimburse
the Purchaser for all necessary and reasonable costs and expenses incurred in
connection with such enforcement. The remedies provided in this Section 4 shall
replace and amend and restate in their entirety the provisions of Section 4.3 of
the GSMC Purchase Agreement with respect to the Mortgage Loans.
(e) In the event that (i) any Mortgage Loan that is a
Cross-Collateralized Mortgage Loan (as defined in the Pooling and Servicing
Agreement) is required to be repurchased pursuant to this Section 4 as a result
of a Breach, Defect or other event, and (ii) the cross-collateralization
provisions of the related Cross-Collateralized Mortgage Loans cannot be released
to the extent required by Section 2.03 of the Pooling and Servicing Agreement to
permit repurchase of the affected Mortgage Loan within the time period specified
in this Agreement for such repurchase, the Mortgage Loan Seller shall repurchase
the affected Mortgage Loan and all of the related Cross-Collateralized Mortgage
Loans not so released.
SECTION 5. Conveyance of Mortgage Files.
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(a) In connection with the Purchaser's assignment of the Mortgage Loans
to the Depositor pursuant to the Mortgage Loan Purchase Agreement, the Purchaser
hereby covenants with the Mortgage Loan Seller that, at least five (5) Business
Days before the Closing Date, it shall have delivered to and deposited with the
Trustee, the Mortgage File (as described on Exhibit B) for each Mortgage Loan so
assigned to the extent that such Mortgage File was delivered to the Purchaser.
In the event the Purchaser fails to so deliver each such Mortgage File to the
Trustee, the Mortgage Loan Seller and its successors and assigns shall be
entitled to pursue any rights or remedies in respect of such failure as may be
available under applicable law.
(b) In connection with the Mortgage Loan Seller's assignment of the
Mortgage Loans pursuant to the GSMC Purchase Agreement, the Mortgage Loan Seller
hereby agrees that, to the extent any Mortgage Files (as described on Exhibit B
to the Mortgage Loan Purchase Agreement) in its possession and has not been
previously delivered and deposited with the
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Purchaser, the Mortgage Loan Seller hereby covenants with the Purchaser that, at
least five (5) Business Days before the Closing Date, it shall have delivered to
and deposited with the Trustee, such Mortgage File. For the benefit of the
Purchaser and its successors and assigns, the Mortgage Loan Seller acknowledges
and agrees that the Depositor intends to cause the Trustee to perform a limited
review of the Mortgage Files relating to the Mortgage Loans to enable the
Trustee to confirm to the Depositor on or before the Closing Date that the
Mortgage Note referred to in clause (1) of Exhibit B of the Mortgage Loan
Purchase Agreement has been delivered to the Trustee with respect to each such
Mortgage File. If the Mortgage Loan Seller cannot deliver, or cause to be
delivered as to any Mortgage Loan, the original Mortgage Note, the Mortgage Loan
Seller shall deliver a copy or duplicate original of such Mortgage Note,
together with an affidavit certifying that the original thereof has been lost or
destroyed. If the Mortgage Loan Seller cannot deliver, or cause to be delivered,
as to any Mortgage Loan, the original or a copy of any of the documents and/or
instruments referred to in clauses (2), (4), (8), (10)(A), (12) or (20) of
Exhibit B of the Mortgage Loan Purchase Agreement, with evidence of recording
thereof, solely because of a delay caused by the public recording or filing
office where such document or instrument has been delivered for recordation or
filing, or because such original recorded document has been lost or returned
from the recording or filing office and subsequently lost, as the case may be,
the delivery requirements of this Section 5 shall be deemed to have been
satisfied as to such missing item, and such missing item shall be deemed to have
been included in the related Mortgage File, provided, that a photocopy of such
missing document or instrument certified by the Mortgage Loan Seller to be a
true and complete copy of the original thereof submitted for recording or
filing, as the case may be) has been delivered to the Trustee on or before the
Closing Date, and either the original of such missing document or instrument, or
a copy thereof, with evidence of recording or filing, as the case may be,
thereon, is delivered to or at the direction of the Depositor or Trustee within
180 days of the Closing Date (or within such longer period after the Closing
Date as the Trustee (or such subsequent owner) may consent to, which consent
shall not be unreasonably withheld so long as the Mortgage Loan Seller has
provided the Depositor or Trustee with evidence of such recording or filing, as
the case may be, or has certified to the Depositor or Trustee as to the
occurrence of such recording or filing, as the case may be, and is, as certified
to the Trustee no less often than quarterly, in good faith attempting to obtain
from the appropriate county recorder's or filing office such original or copy).
(c) If the Mortgage Loan Seller cannot deliver, or cause to be
delivered, as to any Mortgage Loan, the original or a copy of the related
lender's title insurance policy referred to in clause (9) of Exhibit B of the
Mortgage Loan Purchase Agreement solely because such policy has not yet been
issued, the delivery requirements of this Section 5 shall be deemed to be
satisfied as to such missing item, and such missing item shall be deemed to have
been included in the related Mortgage File, provided, that the Mortgage Loan
Seller has delivered to the Trustee, on or before the Closing Date, a commitment
for title insurance "marked-up" at the closing of such Mortgage Loan, and the
Mortgage Loan Seller shall deliver to or at the direction of the Depositor or
Trustee, promptly following the receipt thereof, the original related lender's
title insurance policy (or a copy thereof). In addition, notwithstanding
anything to the contrary contained herein, if there exists with respect to any
group of related cross-collateralized Mortgage Loans only one original of any
document referred to in Exhibit B of the Mortgage Loan Purchase Agreement
covering all the Mortgage Loans in such group, then the inclusion of
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the original of such document in the Mortgage File for any of the Mortgage Loans
in such group shall be deemed an inclusion of such original in the Mortgage File
for each such Mortgage Loan.
(d) As to each Mortgage Loan, the Mortgage Loan Seller, at its own
cost, shall be responsible for (i) the recording or filing, as the case may be,
of each assignment referred to in clauses (3) and (5) of Exhibit B to the
Mortgage Loan Agreement and each UCC-2 and UCC-3, if any, referred to in clause
(11)(B) of Exhibit B to the Mortgage Loan Purchase Agreement and (ii) the
delivery of a copy of any such document or instrument to the Master Servicer
promptly following its return to the Trustee or its designee after such
recording or filing. If any such document or instrument is lost or returned
unrecorded or unfiled, as the case may be, because of a defect therein, the
Mortgage Loan Seller shall promptly prepare or cause the preparation of a
substitute therefor or cure or cause the curing of such defect, as the case may
be, and shall thereafter deliver the substitute or corrected document to or at
the direction of the Depositor or (or any subsequent owner of the affected
Mortgage Loan, including without limitation the Trustee) for recording or
filing, as appropriate, at the Mortgage Loan Seller's expense.
SECTION 6. Representations, Warranties and Agreements to Survive Delivery.
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All representations, warranties and agreements contained in this
Agreement, incorporated herein by reference or contained in the certificates of
officers of the Mortgage Loan Seller submitted pursuant hereto, shall remain
operative and in full force and effect and shall survive delivery of the
Mortgage Loans by the Mortgage Loan Seller to the Purchaser or its designee.
SECTION 7. Costs.
-----
Costs relating to the transactions contemplated hereby and in the
Mortgage Loan Purchase Agreement shall be borne by the Mortgage Loan Seller.
SECTION 8. Indemnification.
---------------
(a) The Purchaser agrees to indemnify and hold harmless the Mortgage
Loan Seller against any and all losses, claims, damages or liabilities, joint or
several, to which it may become subject insofar as such losses, claims, damages
or liabilities (or actions in respect thereto) arise out of or are based upon
the breach of any of the Purchaser's representations or warranties contained in
Section 3(b) of this Agreement. This indemnity will be in addition to any
liability which the Purchaser may otherwise have.
(b) The indemnity agreement contained in this Section 8 shall remain
operative and in full force and effect regardless of (i) any termination of this
Agreement, or (ii) any investigation made by any indemnified party.
SECTION 9. 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
10
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 10. Counterparts.
------------
This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
SECTION 11. 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 THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES
EXCEPT THAT THE PARTIES HERETO INTEND THAT THE PROVISIONS OF SECTION 5-1401 OF
THE NEW YORK GENERAL OBLIGATIONS LAW SHALL APPLY TO THIS AGREEMENT.
SECTION 12. Further Assurances.
------------------
The Mortgage Loan 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 13. Successors and Assigns.
----------------------
The rights and obligations of the Mortgage Loan Seller under this
Agreement shall not be assigned by the Mortgage Loan Seller without the prior
written consent of the Purchaser, except that any person into which the Mortgage
Loan Seller may be merged or consolidated, or any corporation or other entity
resulting from any merger, conversion or consolidation to which the Mortgage
Loan Seller is a party, or any person succeeding to all or substantially all of
the business of the Mortgage Loan Seller, shall be the successor to the Mortgage
Loan Seller hereunder. The Purchaser and its assignee have the right to assign
its interest under this Agreement, in whole or in part. Subject to the
foregoing, this Agreement shall bind and inure to the benefit of and be
enforceable by the Mortgage Loan Seller and the Purchaser, and their permitted
successors and assigns.
SECTION 14. Amendments.
----------
No term or provision of this Agreement may be amended, waived, modified
or in any way altered, unless such amendment, waiver, modification or alteration
is in writing and signed by a duly authorized officer of the party against whom
such amendment, waiver, modification or alteration is sought to be enforced.
11
IN WITNESS WHEREOF, the parties hereto have caused their names to be
signed hereto by their respective duly authorized officers as of the date first
above written.
GMAC COMMERCIAL MORTGAGE
CORPORATION
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President
GERMAN AMERICAN CAPITAL
CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Authorized Signatory
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
S-1
EXHIBIT A
MORTGAGE LOAN SCHEDULE
MORTGAGE
RATE RATE ORIGINAL
LOAN NUMBER PROPERTY NAME ADDRESS CITY STATE ZIP CODE (%) TYPE BALANCE ($)
------------------------------------------------------------------------------------------------------------------------------
39216 ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 6.09000 Fixed 59,000,000
REMAINING ANTICIPATED DATE
CUT-OFF DATE TERM TO MATURITY DATE REPAYMENT PAYMENT MONTHLY ARD CREDIT LEASE
LOAN NUMBER BALANCE ($) MATURITY (MOS.) OR ARD DATE DUE PAYMENT LOAN LOAN
---------------------------------------------------------------------------------------------------------------------
39216 58,767,308 116 1/1/2013 1 357,155.91
ANNUAL ADDITIONAL
CROSS COLLATERALIZED DEBT BROKER STRIP SERVICING ENVIRONMENTAL
LOAN NUMBER PREPAYMENT PROVISION GROUPS SERVICE ($) LOAN FEE LOAN INSURANCE LOAN
------------------------------------------------------------------------------------------------------------------------------
39216 Lockout/28_Defeasance/88_0%/4 4,285,871
LETTER OF SERVICING
LOAN NUMBER CREDIT LOAN LEASEHOLD FEE RATE (%) LOAN SELLER
-------------------------------------------------------------------------------------------------------------
39216 0.12730 GMACCM
A-1
EXHIBIT B
REPRESENTATIONS AND WARRANTIES OF THE MORTGAGE LOAN SELLER
REGARDING THE INDIVIDUAL MORTGAGE LOANS
With respect to each Mortgage Loan, the Mortgage Loan Seller hereby
represents and warrants, as of the date herein below specified or, if no such
date is specified, as of the Closing Date, except as set forth on Schedule B-1
hereto, that:
1) Mortgage Loan Schedule. The information set forth in the Mortgage Loan
Schedule is complete, true and correct in all material respects as of
the date of this Agreement and as of the Cut-off Date.
2) Whole Loan; Ownership of Mortgage Loans. Each Mortgage Loan is a whole
loan and not a participation interest in a mortgage loan. Immediately
prior to the transfer to the Purchaser of the Mortgage Loans, the
Seller had good title to, and was the sole owner of, each Mortgage
Loan. The Seller has full right, power and authority to transfer and
assign each of the Mortgage Loans to or at the direction of the
Purchaser and has validly and effectively conveyed (or caused to be
conveyed) to the Purchaser or its designee all of the Seller's legal
and beneficial interest in and to the Mortgage Loans free and clear of
any and all pledges, liens, charges, security interests and/or other
encumbrances. The sale of the Mortgage Loans to the Purchaser or its
designee does not require the Seller to obtain any governmental or
regulatory approval or consent that has not been obtained.
3) Payment Record. No scheduled payment of principal and interest under
any Mortgage Loan was 30 days or more past due as of the Cut-off Date,
and no Mortgage Loan was 30 days or more delinquent in the twelve-month
period immediately preceding the Cut-off Date.
4) Permitted Encumbrances. The Permitted Encumbrances (as defined in the
Mortgage Loan Purchase Agreement of which this Exhibit B forms a part)
do not materially interfere with the security intended to be provided
by the related Mortgage, the current use or operation of the related
Mortgaged Property or the current ability of the Mortgaged Property to
generate net operating income sufficient to service the Mortgage Loan.
If the Mortgaged Property is operated as a nursing facility, a
hospitality property or a multifamily property, the Mortgage, together
with any separate security agreement, similar agreement and UCC
financing statement, if any, establishes and creates a first priority,
perfected security interest (subject only to any prior purchase money
security interest), to the extent such security interest can be
perfected by the recordation of a Mortgage or the filing of a UCC
financing statement, in all personal property owned by the Mortgagor
that is used in, and is reasonably necessary to, the operation of the
related Mortgaged Property.
5) Assignment of Leases and Rents. The Assignment of Leases related to and
delivered in connection with each Mortgage Loan establishes and creates
a valid, subsisting and, subject to the exceptions set forth in
paragraph 13 below, enforceable first priority lien and first priority
security interest in the related Mortgagor's interest in all leases,
sub-
B-1
leases, licenses or other agreements pursuant to which any person is
entitled to occupy, use or possess all or any portion of the real
property subject to the related Mortgage, and each assignor thereunder
has the full right to assign the same. The related assignment of any
Assignment of Leases not included in a Mortgage has been executed and
delivered in favor of the Trustee and is in recordable form and
constitutes a legal, valid and binding assignment, sufficient to convey
to the assignee named therein all of the assignor's right, title and
interest in, to and under such Assignment of Leases.
6) Mortgage Status; Waivers and Modifications. No Mortgage has been
satisfied, cancelled, rescinded or subordinated in whole or in part,
and the related Mortgaged Property has not been released from the lien
of such Mortgage, in whole or in part (except for partial reconveyances
of real property that are set forth on Schedule B-1 to this Exhibit B),
nor has any instrument been executed that would effect any such
satisfaction, cancellation, subordination, rescission or release, in
any manner that, in each case, materially adversely affects the value
of the related Mortgaged Property. None of the terms of any Mortgage
Note, Mortgage or Assignment of Leases has been impaired, waived,
altered or modified in any respect, except by written instruments, all
of which are included in the related Mortgage File.
7) Condition of Property; Condemnation. (i) With respect to the Mortgaged
Properties securing the Mortgage Loans that were the subject of an
engineering report within 18 months prior to the Cut-off Date as set
forth on Schedule B-1 to this Exhibit B, each Mortgaged Property is, to
the Seller's knowledge, free and clear of any damage (or adequate
reserves therefor have been established) that would materially and
adversely affect its value as security for the related Mortgage Loan,
and (ii) with respect to the Mortgaged Properties securing the Mortgage
Loans that were not the subject of an engineering report within 18
months prior to the Cut-off Date as set forth on Schedule B-1 to this
Exhibit B, each Mortgaged Property is in good repair and condition and
all building systems contained therein are in good working order (or
adequate reserves therefor have been established) and each Mortgaged
Property is free of structural defects, in each case, that would
materially and adversely affect its value as security for the related
Mortgage Loan as of the date hereof. The Seller has received no notice
of the commencement of any proceeding for the condemnation of all or
any material portion of any Mortgaged Property. To the Seller's
knowledge (based on surveys and/or title insurance obtained in
connection with the origination of the Mortgage Loans), as of the date
of the origination of each Mortgage Loan, all of the material
improvements on the related Mortgaged Property that were considered in
determining the appraised value of the Mortgaged Property lay wholly
within the boundaries and building restriction lines of such property,
except for encroachments that are insured against by the lender's title
insurance policy referred to herein or that do not materially and
adversely affect the value or marketability of such Mortgaged Property,
and no improvements on adjoining properties materially encroached upon
such Mortgaged Property so as to materially and adversely affect the
value or marketability of such Mortgaged Property, except those
encroachments that are insured against by the Title Policy referred to
herein.
8) Title Insurance. Each Mortgaged Property is covered by an American Land
Title Association (or an equivalent form of) lender's title insurance
policy or a marked-up title
B-2
insurance commitment (on which the required premium has been paid)
which evidences such title insurance policy (the "Title Policy") in the
original principal amount of the related Mortgage Loan after all
advances of principal. Each Title Policy insures that the related
Mortgage is a valid first priority lien on such Mortgaged Property,
subject only to Permitted Encumbrances. Each Title Policy (or, if it
has yet to be issued, the coverage to be provided thereby) is in full
force and effect, all premiums thereon have been paid and no material
claims have been made thereunder and no claims have been paid
thereunder. No holder of the related Mortgage has done, by act or
omission, anything that would materially impair the coverage under such
Title Policy. Immediately following the transfer and assignment of the
related Mortgage Loan to the Trustee, such Title Policy (or, if it has
yet to be issued, the coverage to be provided thereby) will inure to
the benefit of the Trustee without the consent of or notice to the
insurer. To the Seller's knowledge, the insurer issuing such Title
Policy is qualified to do business in the jurisdiction in which the
related Mortgaged Property is located.
9) No Holdbacks. The proceeds of each Mortgage Loan have been fully
disbursed and there is no obligation for future advances with respect
thereto. With respect to each Mortgage Loan, any and all requirements
as to completion of any on-site or off-site improvement and as to
disbursements of any funds escrowed for such purpose that were to have
been complied with on or before the Closing Date have been complied
with, or any such funds so escrowed have not been released.
10) Mortgage Provisions. The Mortgage Note or Mortgage for each Mortgage
Loan, together with applicable state law, contains customary and
enforceable provisions (subject to the exceptions set forth in
paragraph 13) such as to render the rights and remedies of the holder
thereof adequate for the practical realization against the related
Mortgaged Property of the principal benefits of the security intended
to be provided thereby.
11) Trustee under Deed of Trust. If any Mortgage is a deed of trust, (1) a
trustee, duly qualified under applicable law to serve as such, is
properly designated and serving under such Mortgage, and (2) no fees or
expenses are payable to such trustee by the Seller, the Purchaser or
any transferee thereof except in connection with a trustee's sale after
default by the related Mortgagor or in connection with any full or
partial release of the related Mortgaged Property or related security
for the related Mortgage Loan.
12) Environmental Conditions.
i) With respect to the Mortgaged Properties securing the
Mortgage Loans that were the subject of an environmental site
assessment within 18 months prior to the Cut-off Date as set forth on
Schedule B-1 to this Exhibit B, an environmental site assessment, or an
update of a previous such report, was performed with respect to each
Mortgaged Property in connection with the origination or the sale of
the related Mortgage Loan, a report of each such assessment (or the
most recent assessment with respect to each Mortgaged Property) (an
"Environmental Report") has been delivered to the Purchaser, and the
Seller has no knowledge of any material and adverse environmental
condition or circumstance affecting any Mortgaged Property that was not
disclosed in such report. Each Mortgage requires the related Mortgagor
to comply with all applicable
B-3
federal, state and local environmental laws and regulations. Where such
assessment disclosed the existence of a material and adverse
environmental condition or circumstance affecting any Mortgaged
Property, (i) a party not related to the Mortgagor was identified as
the responsible party for such condition or circumstance or (ii)
environmental insurance covering such condition was obtained or must be
maintained until the condition is remediated or (iii) the related
Mortgagor was required either to provide additional security that was
deemed to be sufficient by the originator in light of the circumstances
and/or to establish an operations and maintenance plan. In the case of
each Mortgage Loan set forth on Schedule B-1 to this Exhibit B, (i)
such Mortgage Loan is the subject of a Secured Creditor Impaired
Property Policy, issued by the issuer set forth on Schedule B-1 (the
"Policy Issuer") and effective as of the date thereof (the
"Environmental Insurance Policy"), (ii) the Environmental Insurance
Policy is in full force and effect, (iii)(a) a property condition or
engineering report was prepared with respect to lead based paint
("LBP"), asbestos containing materials ("ACM") and radon gas ("RG") at
each related Mortgaged Property and (b) if such report disclosed the
existence of a material and adverse LBP, ACM or RG environmental
condition or circumstance affecting the related Mortgaged Property, the
related Mortgagor (A) was required to remediate the identified
condition prior to closing the Mortgage Loan or provide additional
security, or establish with the lender a reserve from loan proceeds, in
an amount deemed to be sufficient by the Seller for the remediation of
the problem and/or (B) agreed in the Mortgage Loan documents to
establish an operations and maintenance plan after the closing of the
Mortgage Loan, (iv) on the effective date of the Environmental
Insurance Policy, Seller as originator had no knowledge of any material
and adverse environmental condition or circumstance affecting the
Mortgaged Property (other than the existence of LBP, ACM or RG) that
was not disclosed to the Policy Issuer in one or more of the following:
(a) the application for insurance, (b) a borrower questionnaire that
was provided to the Policy Issuer or (c) an engineering or other report
provided to the Policy Issuer and (v) the premium of any Environmental
Insurance Policy has been paid through the maturity of the policy's
term and the term of such policy extends at least five years beyond the
maturity of the Mortgage Loan.
ii) With respect to the Mortgaged Properties securing the
Mortgage Loans that were not the subject of an environmental site
assessment within 18 months prior to the Cut-off Date as set forth on
Schedule B-1 to this Exhibit B, (i) no Hazardous Material is present on
such Mortgaged Property such that (1) the value of such Mortgaged
Property is materially and adversely affected or (2) under applicable
federal, state or local law, (a) such Hazardous Material could be
required to be eliminated at a cost materially and adversely affecting
the value of the Mortgaged Property before such Mortgaged Property
could be altered, renovated, demolished or transferred or (b) the
presence of such Hazardous Material could (upon action by the
appropriate governmental authorities) subject the owner of such
Mortgaged Property, or the holders of a security interest therein, to
liability for the cost of eliminating such Hazardous Material or the
hazard created thereby at a cost materially and adversely affecting the
value of the Mortgaged Property, and (ii) such Mortgaged Property is in
material compliance with all applicable federal, state and local laws
pertaining to Hazardous Materials or environmental hazards, any
noncompliance with such laws does not have a material adverse effect on
the value of such Mortgaged Property and neither Seller nor, to
Seller's
B-4
knowledge, the related Mortgagor or any current tenant thereon, has
received any notice of violation or potential violation of any such
law.
iii) "Hazardous Materials" means gasoline, petroleum products,
explosives, radioactive materials, polychlorinated biphenyls or related
or similar materials, and any other substance or material as may be
defined as a hazardous or toxic substance by any federal, state or
local environmental law, ordinance, rule, regulation or order,
including without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended (42 U.S.C.ss.ss.9601
et seq.), the Hazardous Materials Transportation Act as amended (42
U.S.C.ss.ss.6901 et seq.), the Federal Water Pollution Control Act as
amended (33 U.S.C.ss.ss.1251 et seq.), the Clean Air Act (42
U.S.C.ss.ss.1251 et seq.) and any regulations promulgated pursuant
thereto.
13) Loan Document Status. Each Mortgage Note, Mortgage and other agreement
that evidences or secures such Mortgage Loan and was executed by or on
behalf of the related Mortgagor is the legal, valid and binding
obligation of the maker thereof (subject to any non-recourse provisions
contained in any of the foregoing agreements and any applicable state
anti-deficiency or market value limit deficiency legislation),
enforceable in accordance with its terms, except as such enforcement
may be limited by bankruptcy, insolvency, reorganization or other
similar laws affecting the enforcement of creditors' rights generally,
and by general principles of equity (regardless of whether such
enforcement is considered in a proceeding in equity or at law) and
there is no valid defense, counterclaim or right of offset or
rescission available to the related Mortgagor with respect to such
Mortgage Note, Mortgage or other agreement.
14) Insurance. Each Mortgaged Property is, and is required pursuant to the
related Mortgage to be, insured by (a) a fire and extended perils
insurance policy providing coverage against loss or damage sustained by
reason of fire, lightning, windstorm, hail, explosion, riot, riot
attending a strike, civil commotion, aircraft, vehicles and smoke, and,
to the extent required as of the date of origination by the originator
of such Mortgage Loan consistent with its normal commercial mortgage
lending practices, against other risks insured against by persons
operating like properties in the locality of the Mortgaged Property in
an amount not less than the lesser of the principal balance of the
related Mortgage Loan and the replacement cost of the Mortgaged
Property, and contains no provisions for a deduction for depreciation,
and not less than the amount necessary to avoid the operation of any
co-insurance provisions with respect to the Mortgaged Property; (b) a
business interruption or rental loss insurance policy, in an amount at
least equal to six months of operations of the Mortgaged Property; (c)
a flood insurance policy (if any portion of buildings or other
structures on the Mortgaged Property are located in an area identified
by the Federal Emergency Management Agency as having special flood
hazards and the Federal Emergency Management Agency requires flood
insurance to be maintained); and (d) a comprehensive general liability
insurance policy in amounts as are generally required by commercial
mortgage lenders, and in any event not less than $1 million per
occurrence. Such insurance policy contains a standard mortgagee clause
that names the mortgagee as an additional insured in the case of
liability insurance policies and as a loss payee in the case of
property insurance policies and requires prior notice to the holder of
the Mortgage of termination or cancellation. No such notice has been
B-5
received, including any notice of nonpayment of premiums, that has not
been cured. Each Mortgage obligates the related Mortgagor to maintain
all such insurance and, upon such Mortgagor's failure to do so,
authorizes the holder of the Mortgage to maintain such insurance at the
Mortgagor's cost and expense and to seek reimbursement therefor from
such Mortgagor. Each Mortgage provides that casualty insurance proceeds
will be applied (a) to the restoration or repair of the related
Mortgaged Property, (b) to the restoration or repair of the related
Mortgaged Property, with any excess insurance proceeds after
restoration or repair being paid to the Mortgagor, or (c) to the
reduction of the principal amount of the Mortgage Loan.
15) Taxes and Assessments. As of the Closing Date, there are no delinquent
or unpaid taxes, assessments (including assessments payable in future
installments) or other outstanding charges affecting any Mortgaged
Property that are or may become a lien of priority equal to or higher
than the lien of the related Mortgage. For purposes of this
representation and warranty, real property taxes and assessments shall
not be considered unpaid until the date on which interest or penalties
would be first payable thereon.
16) Mortgagor Bankruptcy. No Mortgaged Property, nor any portion thereof is
the subject of, and no Mortgagor under a Mortgage loan is, a debtor in
any state or federal bankruptcy or insolvency or similar proceeding.
17) Leasehold Estate. Each Mortgaged Property consists of a fee simple
estate in real estate or, if the related Mortgage Loan is secured in
whole or in part by the interest of a Mortgagor as a lessee under a
ground lease of a Mortgaged Property (a "Ground Lease"), by the related
Mortgagor's interest in the Ground Lease but not by the related fee
interest in such Mortgaged Property (the "Fee Interest"), and as to
such Ground Leases:
i) Such Ground Lease or a memorandum thereof has been or will
be duly recorded; such Ground Lease (or the related estoppel letter or
lender protection agreement between the Seller and related lessor) does
not prohibit the current use of the Mortgaged Property and does not
prohibit the interest of the lessee thereunder to be encumbered by the
related Mortgage; and there has been no material change in the payment
terms of such Ground Lease since the origination of the related
Mortgage Loan, with the exception of material changes reflected in
written instruments that are a part of the related Mortgage File;
ii) The lessee's interest in such Ground Lease is not subject
to any liens or encumbrances superior to, or of equal priority with,
the related Mortgage, other than Permitted Encumbrances;
iii) The Mortgagor's interest in such Ground Lease is
assignable to the Purchaser and its successors and assigns upon notice
to, but without the consent of, the lessor thereunder (or, if such
consent is required, it has been obtained prior to the Closing Date)
and, in the event that it is so assigned, is further assignable by the
Purchaser and its successors and assigns upon notice to, but without
the need to obtain the consent of, such lessor or if such lessor's
consent is required it cannot be unreasonably withheld;
B-6
iv) Such Ground Lease is in full force and effect, and the
Ground Lease provides that no material amendment to such Ground Lease
is binding on a mortgagee unless the mortgagee has consented thereto,
and the Seller has received no notice that an event of default has
occurred thereunder, and, to the Seller's knowledge, there exists no
condition that, but for the passage of time or the giving of notice, or
both, would result in an event of default under the terms of such
Ground Lease;
v) Such Ground Lease, or an estoppel letter or other
agreement, (A) requires the lessor under such Ground Lease to give
notice of any default by the lessee to the holder of the Mortgage; and
(B) provides that no notice of termination given under such Ground
Lease is effective against the holder of the Mortgage unless a copy of
such notice has been delivered to such holder and the lessor has
offered or is required to enter into a new lease with such holder on
terms that do not materially vary from the economic terms of the Ground
Lease;
vi) A mortgagee is permitted a reasonable opportunity
(including, where necessary, sufficient time to gain possession of the
interest of the lessee under such Ground Lease) to cure any default
under such Ground Lease, which is curable after the receipt of notice
of any such default, before the lessor thereunder may terminate such
Ground Lease;
vii) Such Ground Lease has an original term (including any
extension options set forth therein) which extends not less than twenty
years beyond the Stated Maturity Date of the related Mortgage Loan;
viii) Under the terms of such Ground Lease and the related
Mortgage, taken together, any related insurance proceeds or
condemnation award awarded to the holder of the ground lease interest
will be applied either (A) to the repair or restoration of all or part
of the related Mortgaged Property, with the mortgagee or a trustee
appointed by the related Mortgage having the right to hold and disburse
such proceeds as the repair or restoration progresses (except in such
cases where a provision entitling a third party to hold and disburse
such proceeds would not be viewed as commercially unreasonable by a
prudent commercial mortgage lender), or (B) to the payment of the
outstanding principal balance of the Mortgage Loan together with any
accrued interest thereon;
ix) Such Ground Lease does not impose any restrictions on
subletting which would be viewed as commercially unreasonable by
prudent commercial mortgage lenders lending on a similar Mortgaged
Property in the lending area where the Mortgaged Property is located;
and such Ground Lease contains a covenant that the lessor thereunder is
not permitted, in the absence of an uncured default, to disturb the
possession, interest or quiet enjoyment of the lessee thereunder for
any reason, or in any manner, which would materially adversely affect
the security provided by the related Mortgage; and
x) Such Ground Lease requires the Lessor to enter into a new
lease upon termination of such Ground Lease if the Ground Lease is
rejected in a bankruptcy proceeding.
B-7
18) Escrow Deposits. All escrow deposits and payments relating to each
Mortgage Loan that are, as of the Closing Date, required to be
deposited or paid have been so deposited or paid.
19) Qualified Mortgage. Such Mortgage Loan is a "qualified mortgage" within
the meaning of Section 860G(a)(3) of the Code and Treasury regulation
section 1.860G-2(a), and the related Mortgaged Property, if acquired in
connection with the default or imminent default of such Mortgage Loan,
would constitute "foreclosure property" within the meaning of Section
860G(a)(8) (without regard to Section 856(e)(4) of the Code).
20) [Reserved]
21) Advancement of Funds by the Seller. No holder of a Mortgage Loan has
advanced funds or induced, solicited or knowingly received any advance
of funds from a party other than the owner of the related Mortgaged
Property, directly or indirectly, for the payment of any amount
required by such Mortgage Loan.
22) No Mechanics' Liens. Each Mortgaged Property is free and clear of any
and all mechanics' and materialmen's liens that are prior or equal to
the lien of the related Mortgage, and no rights are outstanding that
under law could give rise to any such lien that would be prior or equal
to the lien of the related Mortgage except, in each case, for liens
insured against by the Title Policy referred to herein.
23) Compliance with Usury Laws. Each Mortgage Loan complied with all
applicable usury laws in effect at its date of origination.
24) Cross-collateralization. No Mortgage Loan is cross-collateralized or
cross-defaulted with any loan other than one or more other Mortgage
Loans.
25) Releases of Mortgaged Property. Except as described in the next
sentence, no Mortgage Note or Mortgage requires the mortgagee to
release all or any material portion of the related Mortgaged Property
that was included in the appraisal for such Mortgaged Property, and/or
generates income from the lien of the related Mortgage except upon
payment in full of all amounts due under the related Mortgage Loan or
in connection with the defeasance provisions of the related Note and
Mortgage. The Mortgages relating to those Mortgage Loans identified on
Schedule B-1 hereto require the mortgagee to grant releases of portions
of the related Mortgaged Properties upon (a) the satisfaction of
certain legal and underwriting requirements and/or (b) the payment of a
release price and prepayment consideration in connection therewith.
Except as described in the first sentence hereof and for those Mortgage
Loans identified on Schedule B-1 hereto, no Mortgage Loan permits the
full or partial release or substitution of collateral unless the
mortgagee or servicer can require the Borrower to provide an opinion of
tax counsel to the effect that such release or substitution of
collateral (a) would not constitute a "significant modification" of
such Mortgage Loan within the meaning of Treas. Reg. ss.1.1001-3 and
(b) would not cause such Mortgage Loan to fail to be a "qualified
mortgage" within the meaning of Section 860G(a)(3)(A) of the Code.
B-8
26) No Equity Participation or Contingent Interest. No Mortgage Loan
contains any equity participation by the lender or provides for
negative amortization (except that the ARD Loan may provide for the
accrual of interest at an increased rate after the Anticipated
Repayment Date) or for any contingent or additional interest in the
form of participation in the cash flow of the related Mortgaged
Property.
27) No Material Default. There exists no material Event of Default, breach,
violation or event of acceleration (and, to the Seller's actual
knowledge, no event which, with the passage of time or the giving of
notice, or both, would constitute any of the foregoing) under the
documents evidencing or securing the Mortgage Loan, in any such case to
the extent the same materially and adversely affects the value of the
Mortgage Loan and the related Mortgaged Property; provided, however,
that this representation and warranty does not address or otherwise
cover any default, breach, violation or event of acceleration that
specifically pertains to any matter otherwise covered by any other
representation and warranty made by the Seller in any of paragraphs 3,
7, 12, 14, 15, 16 and 17 of this Exhibit B.
28) Inspections. The Seller (or if the Seller is not the originator, the
originator of the Mortgage Loan) has inspected or caused to be
inspected each Mortgaged Property in connection with the origination of
the related Mortgage Loan.
29) Local Law Compliance. Based on due diligence considered reasonable by
prudent commercial mortgage lenders in the lending area where the
Mortgaged Property is located, the improvements located on or forming
part of each Mortgaged Property comply with applicable zoning laws and
ordinances, or constitute a legal non-conforming use or structure or,
if any such improvement does not so comply, such non-compliance does
not materially and adversely affect the value of the related Mortgaged
Property, such value as determined by the appraisal performed at
origination or in connection with the sale of the related Mortgage Loan
by the Seller hereunder.
30) Junior Liens. None of the Mortgage Loans permits the related Mortgaged
Property to be encumbered by any lien (other than a Permitted
Encumbrance) junior to or of equal priority with the lien of the
related Mortgage without the prior written consent of the holder
thereof or the satisfaction of debt service coverage or similar
criteria specified therein. The Seller has no knowledge that any of the
Mortgaged Properties is encumbered by any lien junior to the lien of
the related Mortgage.
31) Actions Concerning Mortgage Loans. To the knowledge of the Seller,
there are no actions, suits or proceedings before any court,
administrative agency or arbitrator concerning any Mortgage Loan,
Mortgagor or related Mortgaged Property that might adversely affect
title to the Mortgaged Property or the validity or enforceability of
the related Mortgage or that might materially and adversely affect the
value of the Mortgaged Property as security for the Mortgage Loan or
the use for which the premises were intended.
B-9
32) Servicing. The servicing and collection practices used by the Seller or
any prior holder or servicer of each Mortgage Loan have been in all
material respects legal, proper and prudent and have met customary
industry standards.
33) Licenses and Permits. To the Seller's knowledge, based on due diligence
that it customarily performs in the origination of comparable mortgage
loans, as of the date of origination of each Mortgage Loan or as of the
date of the sale of the related Mortgage Loan by the Seller hereunder,
the related Mortgagor was in possession of all material licenses,
permits and franchises required by applicable law for the ownership and
operation of the related Mortgaged Property as it was then operated.
34) Assisted Living Facility Regulation. If the Mortgaged Property is
operated as an assisted living facility, to the Seller's knowledge (a)
the related Mortgagor is in compliance in all material respects with
all federal and state laws applicable to the use and operation of the
related Mortgaged Property and (b) if the operator of the Mortgaged
Property participates in Medicare or Medicaid programs, the facility is
in compliance in all material respects with the requirements for
participation in such programs.
35) Collateral in Trust. The Mortgage Note for each Mortgage Loan is not
secured by a pledge of any collateral that has not been assigned to the
Purchaser.
36) Due on Sale. Each Mortgage Loan contains a "due on sale" clause, which
provides for the acceleration of the payment of the unpaid principal
balance of the Mortgage Loan if, without prior written consent of the
holder of the Mortgage, the property subject to the Mortgage or any
material portion thereof, or a controlling interest in the related
Mortgagor, is transferred, sold or encumbered; provided, however, that
certain Mortgage Loans provide a mechanism for the assumption of the
loan by a third party upon the Mortgagor's satisfaction of certain
conditions precedent, and upon payment of a transfer fee, if any, or
transfer of interests in the Mortgagor or constituent entities of the
Mortgagor to a third party or parties related to the Mortgagor upon the
Mortgagor's satisfaction of certain conditions precedent.
37) Single Purpose Entity. The Mortgagor on each Mortgage Loan with a
Cut-off Date Principal Balance in excess of $10 million, was, as of the
origination of the Mortgage Loan, a Single Purpose Entity. For this
purpose, a "Single Purpose Entity" shall mean an entity, other than an
individual, whose organizational documents provide substantially to the
effect that it was formed or organized solely for the purpose of owning
and operating one or more of the Mortgaged Properties securing the
Mortgage Loans and prohibit it from engaging in any business unrelated
to such Mortgaged Property or Properties, and whose organizational
documents further provide, or which entity represented in the related
Mortgage Loan documents, substantially to the effect that it does not
have any assets other than those related to its interest in and
operation of such Mortgaged Property or Properties, or any indebtedness
other than as permitted by the related Mortgage(s) or the other related
Mortgage Loan documents, that it has its own books and records and
accounts separate and apart from any other person (other than a
Mortgagor for a Mortgage Loan that is cross-collateralized and
cross-defaulted with the related Mortgage
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Loan), and that it holds itself out as a legal entity, separate and
apart from any other person.
38) Non-Recourse Exceptions. The Mortgage Loan documents for each Mortgage
Loan provide that such Mortgage Loan constitutes either (a) the
recourse obligations of at least one natural person or (b) the
non-recourse obligations of the related Mortgagor, provided, that at
least one natural person (and the Mortgagor if the Mortgagor is not a
natural person) is liable to the holder of the Mortgage Loan for
damages arising in the case of fraud or willful misrepresentation by
the Mortgagor, misappropriation of rents, insurance proceeds or
condemnation awards and breaches of the environmental covenants in the
Mortgage Loan documents.
39) Defeasance and Assumption Costs. The related Mortgage Loan Documents
provide that the related borrower is responsible for the payment of all
reasonable costs and expenses of the lender incurred in connection with
the defeasance of such Mortgage Loan and the release of the related
Mortgaged Property, and the borrower is required to pay all reasonable
costs and expenses of the lender associated with the approval of an
assumption of such Mortgage Loan.
40) Defeasance. No Mortgage Loan provides that it can be defeased until the
date that is more than two years after the Closing Date or provides
that it can be defeased with any property other than government
securities (as defined in Section 2(a)(16) of the Investment Company
Act of 1940, as amended) or any direct non-callable security issued or
guaranteed as to principal or interest by the United States.
41) Prepayment Premiums. As of the applicable date of origination of each
such Mortgage Loan, any prepayment premiums and yield maintenance
charges payable under the terms of the Mortgage Loans, in respect of
voluntary prepayments, constituted customary prepayment premiums and
yield maintenance charges for commercial mortgage loans.
42) [Reserved]
For purposes of these representations and warranties, the phrases "to
the knowledge of the Mortgage Loan Seller" or "to the Mortgage Loan Seller's
knowledge" shall mean (except where otherwise expressly set forth below) the
actual state of knowledge of the Mortgage Loan Seller (i) after the Mortgage
Loan Seller's having conducted such inquiry and due diligence into such matters
as would be customarily performed by prudent institutional commercial or
multifamily, as applicable, mortgage lenders, and in all events as required by
the Mortgage Loan Seller's underwriting standards, at the time of the Mortgage
Loan Seller's origination or acquisition of the particular Mortgage Loan; and
(ii) subsequent to such origination, utilizing the monitoring practices
customarily utilized by prudent commercial or multifamily, as applicable,
mortgage lenders with respect to securitizable commercial or multifamily, as
applicable, mortgage loans, including inquiry with a representative of the loan
servicer designated as the party responsible for the knowledge of the servicer
pertaining to the Mortgage Loans. Also for purposes of these representations and
warranties, the phrases "to the actual knowledge of the Mortgage Loan Seller" or
"to the Mortgage Loan Seller's actual knowledge" shall mean (except where
otherwise expressly set forth below) the actual state of knowledge of the
Mortgage Loan
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Seller without any express or implied obligation to make inquiry. All
information contained in the documents included in the definition of Mortgage
File in the Pooling and Servicing Agreement shall be deemed to be within the
knowledge and the actual knowledge of the Mortgage Loan Seller, to the extent
that the Mortgage Loan Seller or its closing counsel or custodian, if any, has
reviewed or had possession of such document at any time. For purposes of these
representations and warranties, to the extent that any representation or
warranty is qualified by the Mortgage Loan Seller's knowledge with respect to
the contents of the Mortgage Note, Mortgage, lender's title policy and any
letters of credit or Ground Leases, if such document is not included in the
Mortgage File, the Mortgage Loan Seller shall make such representation or
warranty without any such qualification. Wherever there is a reference in a
representation or warranty to receipt by, or possession of, the Mortgage Loan
Seller of any information or documents, or to any action taken by the Mortgage
Loan Seller or to any action which has not been taken by the Mortgage Loan
Seller or its agents or employees, such reference shall include the receipt or
possession of such information or documents by, or the taking of such action or
the not taking such action by, the Mortgage Loan Seller. For purposes of these
representations and warranties, when referring to the conduct of "reasonable
prudent institutional commercial or multifamily, as applicable mortgage lenders"
(or similar such phrases and terms), such conduct shall be measured by reference
to the industry standards generally in effect as of the date the related
representation or warranty relates to or is made.
It is understood and agreed that the representations and warranties set
forth in this Exhibit B shall survive delivery of the respective Mortgage Files
to the Purchaser, the Depositor and/or the Trustee and shall inure to the
benefit of the Purchaser, and its successors and assigns (including without
limitation the Depositor, the Trustee and the holders of the Certificates),
notwithstanding any restrictive or qualified endorsement or assignment.
B-12
SCHEDULE B-1 TO EXHIBIT B
EXCEPTIONS TO REPRESENTATIONS AND WARRANTIES
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LOAN # MORTGAGE LOAN(S) DESCRIPTION OF EXCEPTION
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39216 ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ No natural person is liable for the breach of
environmental covenants under the related mortgage
loan documents.
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