Exhibit 99.5
EXECUTION COPY
SUPPLEMENTAL AGREEMENT
This Supplemental Agreement (this "Agreement"), is dated and effective as
of August 21, 1998, between GMAC Commercial Mortgage Corporation as seller (the
"Seller") and Restructured Asset Certificates with Enhanced Returns, Series
1998-ML Trust as purchaser (the "Purchaser"), of which LaSalle National Bank is
the trustee (in such capacity, the "Purchaser Trustee").
WHEREAS, the Seller sold certain mortgage loans to the Purchaser pursuant
to a certain Mortgage Loan Purchase Agreement (the "ML Trust Purchase
Agreement"), dated as of June 30, 1998.
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 August 21, 1998 (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 Standard
& Poor's Ratings Services, Xxxxx'x Investors Service, Inc. and FITCH IBCA, 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 August 1, 1998 (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 (in such
capacity, the "Special Servicer"), LaSalle National Bank 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 certain of the Certificates to
Xxxxxx Brothers Inc. 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 remaining
Certificates (the "Non-Registered Certificates") to Xxxxxx Brothers Inc. (the
"Initial Purchaser"), pursuant to a certificate purchase agreement dated the
date hereof (the "Certificate Purchase Agreement").
WHEREAS, each of the Seller and the Purchaser, in connection with the
transactions described above, desires to amend and supplement certain of the
provisions of the ML Trust
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Purchase Agreement as they relate to the Mortgage Loans in order to facilitate
such transactions 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 ML TRUST PURCHASE AGREEMENT.
The parties hereto agree that, with respect to the Mortgage Loans
only, the ML Trust Purchase Agreement is hereby amended to the extent that the
provisions of the ML Trust Purchase Agreement are inconsistent with this
Agreement.
SECTION 2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER.
(a) The Seller hereby makes, as of August 27, 1998 (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 Seller, as of the date hereof, hereby represents
and warrants to, and covenants with, the Purchaser that:
(i) The 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 Seller,
and the performance and compliance with the terms of this Agreement by the
Seller, will not violate the 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 affect the ability of the Seller to carry out the transactions
contemplated by this Agreement.
(iii) The 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.
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(iv) This Agreement, assuming due authorization, execution and
delivery by the Purchaser, constitutes a valid, legal and binding
obligation of the Seller, enforceable against the 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 limit the
enforceability of the provisions of this Agreement that purport to provide
indemnification for securities laws liabilities.
(v) The 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 Seller's good faith and reasonable judgment, is likely to
affect materially and adversely either the ability of the Seller to perform
its obligations under this Agreement or the financial condition of the
Seller.
(vi) No litigation is pending with regard to which Seller has
received service of process or, to the best of the Seller's knowledge,
threatened against the Seller the outcome of which, in the Seller's good
faith and reasonable judgment, could reasonably be expected to prohibit the
Seller from entering into this Agreement or materially and adversely affect
the ability of the Seller to perform its obligations under this Agreement.
(vii) The 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 Seller with this Agreement, or the consummation by the
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
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
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affects the interests of the Purchaser or its successors or assigns or a breach
of any of the representations and warranties made pursuant to subsection (a)
above and set forth in EXHIBIT B which materially and adversely affects the
value of any Mortgage Loan or the interests therein of the Purchaser or its
successors and assigns (including, without limitation the Depositor, the Trustee
and the holders of the Certificates), the party discovering such breach shall
give prompt written notice to the other party hereto or if this Agreement is
assigned, to such assignee. The representations, warranties and covenants set
forth in this Section 2(a) shall replace and amend and restate in their entirety
the representations, warranties and covenants of the Seller set forth in Section
4.1(a) of the ML Trust Purchase Agreement to the extent they relate to the
Mortgage Loans.
SECTION 3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASER TRUSTEE.
(a) The Purchaser Trustee, as of the date hereof, hereby represents and
warrants to, and covenants with, the Seller that:
(i) The Purchaser Trustee is duly organized, validly existing
and in good standing under the laws of the United States.
(ii) The execution and delivery of this Agreement by the
Purchaser Trustee, and the performance and compliance with the terms of
this Agreement by the Purchaser Trustee, will not violate the Purchaser
Trustee'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.
(iii) The Purchaser Trustee 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 Seller, constitutes a valid, legal and binding obligation
of the Purchaser Trustee, enforceable against the Purchaser Trustee in
accordance with the terms hereof, subject to (A) applicable bankruptcy,
insolvency, reorganization, moratorium and other laws affecting the
enforcement of creditors' rights generally, and (B) general principles of
equity, regardless of whether such enforcement is considered in a
proceeding in equity or at law.
(v) The Purchaser Trustee 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 Trustee's good faith and
reasonable judgment,
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is likely to affect materially and adversely either the ability of the
Purchaser Trustee to perform its obligations under this Agreement or the
financial condition of the Purchaser Trustee.
(vi) No litigation is pending or, to the best of the Purchaser
Trustee's knowledge, threatened against the Purchaser Trustee or the
Purchaser which would prohibit the Purchaser Trustee or the Purchaser from
entering into this Agreement or, in the Purchaser Trustee's good faith and
reasonable judgment, is likely to materially and adversely affect either
the ability of the Purchaser Trustee or the Purchaser to perform its
obligations under this Agreement or the financial condition of the
Purchaser Trustee or the Purchaser.
(vii) The Purchaser Trustee has not dealt with any broker,
investment banker, agent or other person, other than the Seller, the
Underwriters, the Initial Purchaser 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 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 Trustee with this
Agreement, or the consummation by the Purchaser Trustee 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 Trustee 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 Seller, and its successor and assigns, with
respect to each Mortgage Loan each of the representations and warranties set
forth below with such changes or modifications as may be permitted or required
by the Rating Agencies:
(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 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 subservicer to directly service such Mortgage Loan). Such
transfer validly assigns such title to such Mortgage Loan to the Depositor
free and clear of any pledge, lien, encumbrance or security interest
executed by the Purchaser.
(ii) The Purchaser has full right and authority to sell, assign
and transfer its interest in such Mortgage Loan.
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(iii) The Purchaser has not, by act or omission, 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 best of the Purchaser's knowledge, there is no valid
offset, defense or counterclaim to such Mortgage Loan.
(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.
(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 interests of the Seller, the party discovering such breach
shall give prompt written notice to the other party hereto.
SECTION 4. REPURCHASES.
(a) Within 90 days of the earlier of discovery or receipt of notice by
the 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 the interests therein of
the Purchaser or its successors and assigns (including, without limitation, the
Depositor, the Trustee and the holders of the Certificates), the 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
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.
If the Seller is notified of a Defect in any Mortgage File that corresponds
to information set forth in the Mortgage Loan Schedule, the Seller shall
promptly correct such Defect and provide a new, corrected Mortgage Loan Schedule
to the Purchaser, which corrected Mortgage Loan Schedule shall be deemed to
amend and replace the existing Mortgage Loan Schedule for all purposes.
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(b) Notwithstanding Section 4(a), within 60 days of the earlier of
discovery or receipt of notice by the 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
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).
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 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 (vi) 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 holder of Certificates, (any such failure that materially and
adversely affects the interests of holders of Certificates, also a "Breach"),
the 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 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 860(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 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 Defect or Breach in respect of any Mortgage Loan shall be the
90-day period immediately following the earlier of the discovery by the Seller
or receipt by the Seller of notice of such Defect or Breach, as the case may be;
provided that if such Defect or Breach, as the case may be, cannot be corrected
or cured in all material respects within such 90-day period, but is reasonably
likely that such Defect or Breach, as the case may be, could be corrected or
cured within 180 days of the earlier of discovery by the Seller and receipt by
the Seller of notice of such Defect or Breach, as the case may be, and the
Seller is diligently attempting to effect such correction or cure, then the
applicable Permitted
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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.
(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 Seller, upon delivery of a receipt executed
by the 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 Seller or its designee in the same manner. The form and sufficiency of
all such instruments and certificates shall be the responsibility of the 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 of any representation or warranty made
pursuant to Section 2(a) and set forth in EXHIBIT B, or in connection with the
circumstances described in Section 4(b). If the Seller defaults on its
obligations to repurchase any Mortgage Loan in accordance with Section 4(a) or
4(b) or disputes its obligation to repurchase 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 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 ML Trust Purchase Agreement.
SECTION 5. CONVEYANCE OF MORTGAGE FILES.
(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 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 to the Mortgage Loan Purchase
Agreement) for each Mortgage Loan so assigned to the extent that such Mortgage
File was delivered to the Purchaser. In the event Purchaser fails to so deliver
each such Mortgage File to the Trustee, the 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) For the benefit of the Purchaser and its successors and assigns,
the 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 (i) of EXHIBIT B
of the Mortgage Loan Purchase Agreement has been delivered to the Trustee with
respect to each such Mortgage File. If the Seller cannot deliver, or cause to
be delivered as to any Mortgage Loan, the original Mortgage Note, the Seller
shall deliver a copy or duplicate original of such Mortgage
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Note, together with an affidavit certifying that the original thereof has been
lost or destroyed. If the 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 (ii), (iv), (viii), (xi)(A) and (xii) of
EXHIBIT B of the Mortgage Loan Purchase Agreement, with evidence of recording
thereon, 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 copy of such
document or instrument (without evidence of recording or filing thereon, but
certified (which certificate may relate to multiple documents and/or
instruments) by the 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, 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 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 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 (ix) 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 Seller has delivered to the Trustee a
commitment for title insurance "marked-up" at the closing of such Mortgage Loan,
and the 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 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 Seller shall be responsible for all
costs associated with (i) the recording or filing, as the case may be, of each
assignment referred to in clauses (iii) and (v) of EXHIBIT B to the Mortgage
Loan Agreement and each UCC-2 and UCC-3, if any, referred to in clause (xi)(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
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Trustee or its designee after such recording or filing; provided that the Seller
shall not be responsible for actually recording or filing any such document or
instrument. If any such document or instrument is lost or returned unrecorded
or unfiled, as the case may be, because of a defect therein, the 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 the Trustee for recording or filing, as appropriate, at the
Seller's expense.
SECTION 6. 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 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 Seller.
SECTION 8. 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 9. 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 10. GOVERNING LAW.
THIS AGREEMENT AND THE RIGHTS, DUTIES, OBLIGATIONS AND RESPONSIBILITIES OF
THE PARTIES HERETO SHALL BE GOVERNED IN
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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 11. 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 12. 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 or other entity 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, to the Depositor and the Depositor 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 and the Purchaser, and their
permitted successors and assigns.
SECTION 13. 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.
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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.
GMAC COMMERCIAL MORTGAGE CORPORATION
By: /s/ Xxxxx Xxxxxxx
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Name: Xxxxx Xxxxxxx
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Title: Vice President
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RESTRUCTURED ASSET CERTIFICATES WITH
ENHANCED RETURNS, SERIES 1998-ML TRUST
By: LaSalle National Bank, not in its
individual capacity, but solely as
trustee under the Trust Agreement,
as amended and restated, dated as
of June 26, 1998, between Xxxxxx
Xxx Inc., as sponsor, and LaSalle
National Bank, as trustee.
By: /s/ Xxxxxxx Xxxxx
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Name: Xxxxxxx Xxxxx
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Title: First Vice President
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S-11 1998-C2 ML Trust Supplemental Agreement
EXHIBIT A
MORTGAGE LOAN SCHEDULE
A-1
EXHIBIT B
REPRESENTATIONS AND WARRANTIES OF THE SELLER
REGARDING THE INDIVIDUAL MORTGAGE LOANS
With respect to each Mortgage Loan, the Seller hereby represents and
warrants, as of the date hereinbelow specified or, if no such date is specified,
as of the Closing Date, except as set forth on Schedule B-1 hereto, that:
(i) OWNERSHIP OF MORTGAGE LOANS. Immediately prior to the transfer
thereof to the Depositor, the Purchaser had good and marketable title to, and
was the sole owner and holder of, such Mortgage Loan, 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 subservicer to directly service
such Mortgage Loan). Such transfer validly assigns ownership of such Mortgage
Loan to the Depositor free and clear of any pledge, lien, encumbrance or
security interest.
(ii) AUTHORITY TO TRANSFER MORTGAGE LOANS. The Purchaser has full right
and authority to sell, assign and transfer such Mortgage Loan. No provision of
the Mortgage Note, Mortgage or other loan document relating to such Mortgage
Loan prohibits or restricts the Purchaser's right to assign or transfer such
Mortgage Loan.
(iii) MORTGAGE LOAN SCHEDULE. The information pertaining to such
Mortgage Loan set forth in the Mortgage Loan Schedule attached as Exhibit A
hereto was true and correct in all material respects as of the Cut-off Date.
(iv) PAYMENT RECORD. Such Mortgage Loan was not as of the Cut-off Date
for such Mortgage Loan, and has not been during the twelve-month period prior
thereto, 30 days or more delinquent in respect of any debt service payment
required thereunder, without giving effect to any applicable grace period.
(v) PERMITTED ENCUMBRANCES. The Permitted Encumbrances (as defined in
the 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.
B-1
(vi) TITLE INSURANCE. The lien of the related Mortgage is insured by an
ALTA lender's title insurance policy ("Title Policy"), or its equivalent as
adopted in the applicable jurisdiction, issued by a nationally recognized title
insurance company, insuring the originator of such Mortgage Loan, its successors
and assigns, as to the first priority lien of the Mortgage in the original
principal amount of the Mortgage Loan after all advances of principal, subject
only to Permitted Encumbrances (or, if a title insurance policy has not yet been
issued in respect of the Mortgage Loan, a policy meeting the foregoing
description is evidenced by a commitment for title insurance "marked-up" at the
closing of such loan). 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, to the Seller's knowledge, no material claims have
been made thereunder and no claims have been paid thereunder. Neither the
Seller nor the Purchaser has, by act or omission, done 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.
(vii) NO WAIVERS BY SELLER OF MATERIAL DEFAULTS. Neither the Seller nor
the Purchaser has waived any material default, breach, violation or event of
acceleration existing under the related Mortgage or Mortgage Note.
(viii) NO OFFSETS, DEFENSES OR COUNTERCLAIMS. There is no valid offset,
defense or counterclaim to such Mortgage Loan.
(ix) CONDITION OF PROPERTY; CONDEMNATION. Except as set forth in any
engineering report prepared in connection with the origination of (or obtained
in connection with or otherwise following the Seller's acquisition of) such
Mortgage Loan, the related Mortgaged Property is, to the Seller's knowledge,
free and clear of any damage that would materially and adversely affect its
value as security for such Mortgage Loan. The Seller has no actual notice of
the commencement of a proceeding for the condemnation of all or any material
portion of the related Mortgaged Property.
(x) COMPLIANCE WITH USURY LAWS. Such Mortgage Loan complied with all
applicable usury laws in effect at its date of origination.
(xi) FULL DISBURSEMENT OF MORTGAGE LOAN PROCEEDS. The proceeds of such
Mortgage Loan have been fully disbursed and there is no requirement for future
advances thereunder.
(xii) ENFORCEABILITY. The related Mortgage Note and Mortgage and all
other documents and instruments evidencing, guaranteeing, insuring or otherwise
securing such Mortgage Loan have been duly and properly executed by the parties
thereto, and each 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 legislation),
enforceable in accordance with its
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terms, except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, receivership, moratorium or other laws relating to or affecting
the rights of creditors generally and by general principles of equity
(regardless of whether such enforcement is considered in a proceeding in equity
or at law).
(xiii) INSURANCE. All improvements upon the related Mortgaged Property
are insured against loss by hazards of extended coverage in an amount (subject
to a customary deductible) at least equal to the lesser of the outstanding
principal balance of such Mortgage Loan and 100% of the full replacement cost of
the improvements located on such Mortgaged Property and the related hazard
insurance policy contains appropriate endorsements to avoid the application of
co-insurance provisions and does not permit reduction in insurance proceeds for
depreciation. If any portion of the related Mortgaged Property was, at the time
of the origination of such Mortgage Loan, in an area identified in the Federal
Register by the Federal Emergency Management Agency as having special flood
hazards, and flood insurance was available, a flood insurance policy meeting any
requirements of the then current guidelines of the Federal Insurance
Administration is in effect with a generally acceptable insurance carrier, in an
amount representing coverage not less than the least of (1) the outstanding
principal balance of such Mortgage Loan, (2) the full insurable value of such
Mortgaged Property, (3) the maximum amount of insurance available under the
National Flood Insurance Act of 1968, as amended, and (4) 100% of the
replacement cost of the improvements located on such Mortgaged Property. In
addition, the Mortgage requires the Mortgagor to maintain in respect of the
Mortgaged Property comprehensive general liability insurance in amounts
generally required by the Seller, and at least six months rental or business
interruption insurance, and all such insurance required by the Mortgage to be
maintained is in full force and effect. Each such insurance policy requires
prior notice to the holder of the Mortgage of termination or cancellation, and
no such notice has been received, including any notice of nonpayment of
premiums, that has not been cured.
(xiv) ENVIRONMENTAL CONDITION. The related Mortgaged Property was
subject to one or more environmental site assessments (or an update of a
previously conducted assessment), which was (were) performed on behalf of the
Seller, or as to which the related report was delivered to the Seller in
connection with its origination or acquisition of such Mortgage Loan; and the
Seller, having made no independent inquiry other than reviewing the resulting
report(s) and/or employing an environmental consultant to perform the
assessment(s) referenced herein, has no knowledge of any material and adverse
environmental conditions or circumstance affecting such Mortgaged Property that
was not disclosed in the related report(s). The Seller has not taken any action
with respect to such Mortgage Loan or the related Mortgaged Property that could
subject the Purchaser, or its successors and assigns in respect of the Mortgage
Loan, to any liability under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended ("CERCLA") or any other
applicable federal, state or local environmental law, and the Seller has not
received any actual notice of a material violation of CERCLA or any applicable
federal, state or local environmental law with respect to the related Mortgaged
Property that was not disclosed in the related report. The related Mortgage or
loan documents in the related Mortgage File requires the Mortgagor to comply
with all applicable federal, state and local environmental laws and regulations.
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(xv) NO CROSS-COLLATERALIZATION WITH OTHER MORTGAGE LOANS. Such
Mortgage Loan is not cross-collateralized with any mortgage loan that will not
be included in the Trust Fund.
(xvi) WAIVERS AND MODIFICATIONS. The terms of the related Mortgage and
the Mortgage Note have not been impaired, waived, altered or modified in any
material respect, except as specifically set forth in the related Mortgage File.
(xvii) TAXES AND ASSESSMENTS. There are no delinquent taxes, ground rents,
assessments for improvements or other similar outstanding charges affecting the
related Mortgaged Property which 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 and/or penalties would be
payable thereon.
(xviii) MORTGAGOR'S INTEREST IN MORTGAGED PROPERTY. Except in the case of
two Mortgage Loans as to which the interest of the related Mortgagor in the
related Mortgaged Property is in whole or in part a leasehold estate, the
interest of the related Mortgagor in the related Mortgaged Property consists of
a fee simple estate in real property.
(xix) WHOLE LOAN. Each Mortgage Loan is a whole loan and not a
participation interest.
(xx) VALID ASSIGNMENT. The original assignment of the Mortgage, in
recordable form, executed by the most recent assignee of record thereof prior to
the Trustee or, if none, by the originator, either in blank or in favor of the
Trustee (in such capacity) included in the Mortgage File constitutes the legal,
valid and binding assignment of such Mortgage from the relevant assignor to the
Trustee. 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, subject only to Permitted
Encumbrances, enforceable first priority lien and first priority 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 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, executed and
delivered in favor of the Trustee 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.
(xxi) ESCROWS. All escrow deposits relating to such Mortgage Loan that
are, as of the Closing Date, required to be deposited with the mortgagee or its
agent have been so deposited.
(xxii) NO MECHANICS' OR MATERIALMEN'S LIENS. As of the date of
origination of such Mortgage Loan and, to the actual knowledge of the Seller, as
of the Closing Date, the related Mortgaged Property was and is free and clear of
any mechanics' and materialmen's liens or liens
B-4
in the nature thereof which create a lien prior to that created by the related
Mortgage, except those which are insured against by the Title Policy referred to
in (vi) above.
(xxiii) NO MATERIAL ENCROACHMENTS. To the Seller's knowledge (based on
surveys and/or title insurance obtained in connection with the origination of
such Mortgage Loan), as of the date of such origination, no improvement that was
included for the purpose of determining the appraised value of the related
Mortgaged Property at the time of origination of such Mortgage Loan lay outside
the boundaries and building restriction lines of such property to any material
extent (unless affirmatively covered by the title insurance referred to in
paragraph (vi) above), and no improvements on adjoining properties encroached
upon such Mortgaged Property to any material extent. To the Seller's knowledge,
based upon opinions of counsel and/or other due diligence customarily performed
by the Seller, the improvements located on or forming part of such Mortgaged
Property comply in all material respects with applicable zoning laws and
ordinances (except to the extent that they may constitute legal non-conforming
uses).
(xxiv) ORIGINATOR AUTHORIZED. To the extent required under applicable law
as of the Closing Date, 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 held the Mortgage Loan to the extent necessary to
ensure the enforceability of such Mortgage Loan.
(xxv) NO MATERIAL DEFAULT. (A) To the Seller's knowledge, there exists no
material default, breach or event of acceleration under the related Mortgage or
Mortgage Note, and (B) the Seller has not received actual notice of any event
(other than payments due but not yet delinquent) that, with the passage of time
or with notice and the expiration of any grace or cure period, would constitute
such a material default, breach or event of acceleration; provided, however,
that this representation and warranty does not cover any default, breach or
event of acceleration that specifically pertains to any matter otherwise covered
or addressed by any other representation and warranty made by the Seller herein.
(xxvi) INSPECTION. In connection with the origination or acquisition of
each Mortgage Loan, the Seller inspected or caused to be inspected the Mortgaged
Property.
(xxvii) NO EQUITY PARTICIPATION OR CONTINGENT INTEREST. The Mortgage Loan
contains no equity participation by the lender, 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 for negative amortization.
(xxviii) NO ADVANCES OF FUNDS. No holder of the Mortgage Loan has, to the
Seller's knowledge, 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 the
Mortgage Loan.
B-5
(xxix) LICENSES, PERMITS, ETC. To the Seller's knowledge, based on due
diligence customarily performed in the origination of comparable mortgage loans
by the Seller, as of the date of origination of the Mortgage Loan, the related
Mortgagor or operator of the related Mortgaged Property was in possession of all
material licenses, permits and authorizations required by applicable laws for
the ownership and operation of the related Mortgaged Property as it was then
operated and if a related Mortgaged Property is improved by a skilled nursing,
congregate care or assisted living facility, the most recent inspection or
survey by governmental authorities having jurisdiction in connection with such
licenses, permits and authorizations did not cite such Mortgaged Property for
material violations (which shall include only "Level A" (or equivalent)
violations in the case of skilled nursing facilities) that had not been cured or
as to which a plan of correction had not been submitted to and accepted by such
governmental authorities. To the extent such facility participates in Medicaid
or Medicare, such facility is in compliance in all material respects with the
requirements of such program.
(xxx) SERVICING. The servicing and collection practices used with
respect to the Mortgage Loan have complied with applicable law in all material
respects and are consistent with the servicing standard set forth in
Section 3.01(a) of the Pooling and Servicing Agreement.
(xxxi) CUSTOMARY REMEDIES. The related Mortgage or Mortgage Note,
together with applicable state law, contains customary and enforceable
provisions (subject to the exceptions set forth in paragraph (xii)) such as to
render the rights and remedies of the holders thereof adequate for the practical
realization against the related Mortgaged Property of the principal benefits of
the security intended to be provided thereby.
(xxxii) INSURANCE AND CONDEMNATION PROCEEDS. The related Mortgage provides
that insurance proceeds and condemnation proceeds will be applied for one of the
following purposes: either to restore or repair the Mortgaged Property, or to
repay the principal of the Mortgage Loan, or otherwise at the option of the
holder of the Mortgage.
(xxxiii) LTV. The gross proceeds of such Mortgage Loan to the related
Mortgagor at origination did not exceed the non-contingent principal amount of
the Mortgage Loan and either: (A) such Mortgage Loan is secured by an interest
in real property having a fair market value (1) at the date the Mortgage Loan
was originated at least equal to 80 percent of the original principal balance of
the Mortgage Loan or (2) at the Closing Date at least equal to 80 percent of the
principal balance of the Mortgage Loan on such date; provided that for purposes
hereof, the fair market value of the real property interest must first be
reduced by (X) the amount of any lien on the real property interest that is
senior to the Mortgage Loan and (Y) a proportionate amount of any lien that is
in parity with the Mortgage Loan (unless such other lien secures a Mortgage Loan
that is cross-collateralized with such Mortgage Loan, in which event the
computation described in clauses (1) and (2) of this paragraph (xxxiii) shall be
made on a PRO RATA basis in accordance with the fair market values of the
Mortgaged Properties securing such cross-collateralized Mortgage Loans; or (B)
substantially all the proceeds of such Mortgage Loan were used to acquire,
improve or protect the real property which
B-6
served as the only security for such Mortgage Loan (other than a recourse
feature or other third party credit enhancement within the meaning of Treasury
Regulations Section 1.860G-2(a)(1)(ii)).
(xxxiv) LTV AND SIGNIFICANT MODIFICATIONS. If the Mortgage Loan was
"significantly modified" prior to the Closing Date so as to result in a taxable
exchange under Section 1001 of the Code, it either (A) was modified as a result
of the default or reasonably foreseeable default of such Mortgage Loan or (B)
satisfies the provisions of either clause (A)(1) of paragraph (xxxiii)
(substituting the date of the last such modification for the date the Mortgage
Loan was originated) or clause (A)(2) of paragraph (xxxiii), including the
proviso thereto.
(xxxv) CREDIT LEASE LOANS. With respect to each Mortgage Loan which is a
Credit Lease Loan:
(A) To the Seller's knowledge, each credit lease ("Credit Lease")
contains customary and enforceable provisions which render the
rights and remedies of the lessor thereunder adequate for the
enforcement and satisfaction of the lessor's rights thereunder;
(B) To the Seller's knowledge, in reliance on a tenant estoppel
certificate and representation made by the tenant under the Credit
Lease or representations made by the related borrower under the
Mortgage Loan documents, as of the closing date of each Credit
Lease Loan (a) each Credit Lease was in full force and effect, and
no default by the borrower or the tenant has occurred under the
Credit Lease, nor is 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, (b) none of the
terms of the Credit Lease have been impaired, waived, altered or
modified in any respect (except as described in the related tenant
estoppel), (c) no tenant has been released, in whole or in part,
from its obligations under the Credit Leases, (d) there is no right
of rescission, offset, abatement, diminution, defense or
counterclaim to any Credit Lease, nor will the operation of any of
the terms of the Credit Leases, or the exercise of any rights
thereunder, render the Credit Lease unenforceable, in whole or in
part, or subject to any right of rescission, offset, abatement,
diminution, defense or counterclaim, and no such right of
rescission, offset, abatement, diminution, defense or counterclaim
has been asserted with respect thereto, and (e) each Credit Lease
has a term ending on or after the final maturity of the related
Credit Lease Loan;
(C) The Mortgaged Property is not subject to any lease other than the
related Credit Lease, no Person has any possessory interest in, or
right to occupy, the Mortgaged Property except under and pursuant
to such Credit Lease and the tenant under the related Credit Lease
is in occupancy of the Mortgaged Property;
B-7
(D) The lease payments under the related Credit Lease are sufficient to
pay the entire amount of scheduled interest and principal on the
Credit Lease Loan, subject to the rights of the Tenant to terminate
the Credit Lease or offset, xxxxx, suspend or otherwise diminish
any amounts payable by the tenant under the Credit Lease. Each
Credit Lease Loan fully amortizes over its original term, and,
there is no "balloon" payment of rent due under the Credit Leases;
(E) Under the terms of the Credit Leases, the lessee is not permitted
to assign its interest or obligations under the Credit Lease unless
such lessee remains fully liable thereunder;
(F) The mortgagee is entitled to notice of any event of default from
the tenant under Credit Leases;
(G) Each tenant under a Credit Lease is required to make all rental
payments directly to the mortgagee, its successors and assigns
under the related Credit Lease Loan;
(H) Each Credit Lease Loan provides that the related Credit Lease
cannot be modified without the consent of the mortgagee under the
related Credit Lease Loan; and
(I) Each Credit Lease Loan under which a Credit Lease may be terminated
upon the occurrence of a casualty or condemnation requires upon
such termination the payment in full by the tenant of: (a) the
principal balance of the loan and (b) all accrued and unpaid
interest on the Mortgage Loan. Under the Credit Lease for each
Credit Lease Loan, upon the occurrence of a casualty or
condemnation, the tenant has no right of rent abatement.
(xxxvi) LITIGATION. To the Seller's actual knowledge, there are no pending
actions, suits or proceedings by or before any court or governmental authority
against or affecting the related Mortgagor or the related Mortgaged Property
that, if determined adversely to such Mortgagor or Mortgaged Property, would
materially and adversely affect the value of the Mortgaged Property or the
ability of the Mortgagor to pay principal, interest or any other amounts due
under such Mortgage Loan.
(xxxvii) LEASEHOLD ESTATE. Each Mortgaged Property consists of the
related Mortgagor's 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") or if the Mortgage Loan is secured
in whole or in part by a Ground Lease and a Fee Interest, either (1) the ground
lessor's fee interest is subordinated to the lien of the Mortgage or (2) the
following apply to such Ground Lease:
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(A) To the actual knowledge of the Seller, 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) permits 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;
(B) 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 the ground lessor's related fee
interest and Permitted Encumbrances;
(C) 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;
(D) Such Ground Lease is in full force and effect, and the Seller has
received no notice that an event of default has occurred
thereunder, and, to the Seller's actual 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;
(E) Such Ground Lease, or an estoppel letter or other agreement,
requires the lessor under such Ground Lease to give notice of any
default by the lessee to the mortgagee, provided that the mortgagee
under such Mortgage Loan has provided the lessor with notice of its
lien in accordance with the provisions of such Ground Lease, and
such Ground Lease, or an estoppel letter or other agreement,
further provides that no notice of termination given under such
Ground Lease is effective against the mortgagee unless a copy has
been delivered to the mortgagee;
(F) The mortgagee under such Mortgage Loan 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;
(G) Such Ground Lease has an original term (including any extension
options set forth therein) which extends not less than ten years
beyond the Stated Maturity Date of the related Mortgage Loan;
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(H) Under the terms of such Ground Lease and the related Mortgage,
taken together, any related insurance proceeds other than in
respect of a total or substantially total loss or taking, will be
applied either to the repair or restoration of all or part of the
related Mortgaged Property, with the mortgagee 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 to the
payment of the outstanding principal balance of the Mortgage Loan
together with any accrued interest thereon;
(I) Such Ground Lease does not impose any restrictions on subletting
which would be viewed, as of the date of origination of the related
Mortgage Loan, as commercially unreasonable by the Seller; 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 any subtenant of the
lessee, or in any manner, which would materially adversely affect
the security provided by the related Mortgage; and
(J) Such Ground Lease, or an estoppel letter or other agreement
requires the lessor to enter into a new lease in the event of a
termination of the Ground Lease by reason of a default by the
Mortgagor under the Ground Lease, including, rejection of the
ground lease in a bankruptcy proceeding.
(xxxviii) DEED OF TRUST. If the related Mortgage is a deed of trust, a
trustee, duly qualified under applicable law to serve as such, is properly
designated and serving under such Mortgage.
(xxxix) LIEN RELEASES. Except in cases where either (a) a release of a
portion of the Mortgaged Property was contemplated at origination of the
Mortgage Loan and such portion was not considered material for purposes of
underwriting the Mortgage Loan or (b) release is conditioned upon the
satisfaction of certain underwriting and legal requirements and the payment of a
release price, the related Mortgage Note or Mortgage does not require the holder
thereof to release all or any portion of the Mortgaged Property from the lien of
the related Mortgage except upon payment in full of all amounts due under such
Mortgage Loan.
(xl) JUNIOR LIENS. The Mortgage Loan does not permit the related
Mortgaged Property to be encumbered by any lien junior to or of equal priority
with the lien of the related Mortgage (excluding any lien relating to another
Mortgage Loan that is cross-collateralized with such Mortgage Loan) without the
prior written consent of the holder thereof or the satisfaction of debt service
coverage or similar conditions specified therein.
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(xli) MORTGAGOR BANKRUPTCY. To the Seller's knowledge, the Mortgagor is
not a debtor in any state or federal bankruptcy or insolvency proceeding.
(xlii) DUE ORGANIZATION OF MORTGAGORS. As of the date of origination of
each Mortgage, each related Mortgagor which is not a natural person was duly
organized and validly existing under the laws of the state of its jurisdiction.
(xliii) DUE-ON-SALE. The Mortgage Loan contains provisions for the
acceleration of the payment of the unpaid principal balance of such Mortgage
Loan if, without complying with the requirements of such Mortgage Loan, the
related Mortgaged Property, or any controlling interest therein, is directly or
indirectly transferred or sold.
(xliv) SINGLE PURPOSE ENTITY. The Mortgagor is an entity, other than an
individual, whose organizational documents or the related Mortgage Loan
Documents provide substantially to the effect that the Mortgagor: (A) is
formed or organized solely for the purpose of owning and operating one or more
of the Mortgaged Properties securing the Mortgage Loans, (B) may not engage in
any business unrelated to such Mortgaged Property or Mortgaged Properties, (C)
does not have any material assets other than those related to its interest in
and operation of such Mortgage Property or Mortgaged Properties, (D) may not
incur indebtedness other than as permitted by the related Mortgage or other
Mortgage Loan Documents, (E) has its own books and records separate and apart
from any other person, and (F) holds itself out as a legal entity, separate and
apart from any other person.
(xlv) DEFEASANCE PROVISIONS. Any Mortgage Loan which contains a
provision for any defeasance of mortgage collateral either (A) requires the
consent of the holder of the Mortgage Loan to any defeasance, or (B) permits
defeasance (i) no earlier than two years after the Closing Date (as defined in
the Pooling and Servicing Agreement, dated as of August 1, 1998), (ii) only with
substitute collateral constituting "government securities" within the meaning of
Treas. Reg. Section 1.860G-2(a)(8)(i), and (iii) only to facilitate the
disposition of mortgage real property and not as a part of an arrangement to
collateralize a REMIC offering with obligations that are not real estate
mortgages.
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-11
SCHEDULE B-1 TO EXHIBIT B
EXCEPTIONS TO REPRESENTATIONS AND WARRANTIES
v. PERMITTED ENCUMBRANCES
A first priority, perfected security interest in accounts receivable can
not be established on the following Mortgage Loan(s).
Loan Number Property Issue
----------- -------- -----
Brandywine Portfolio:
GMAC2990 Xxxxxxx Health First priority line of credit for
Accounts Receivable
Financing of $2.5 million w/
Commerce Bank.
GMAC2980 Meadowview Nursing Same as Xxxxxxx Health.
GMAC2960 Xxx Xxx Same as Xxxxxxx Health except it is
$1.5 million.
GMAC2970 Laurelton Village Same as Xxxxxxx Health except it is
$1.5 million.
GMAC3200 Stratford House Borrower leases property to HPO.
HPO has $3 million working capital
line of credit with DVI secured by
Accounts Receivable. DVI/GMACCM &
HPO have entered into an
Inter-Creditor Agreement with
respect to the Accounts Receivable.
GMAC2840 Corpus Christi First lien security interest in
Nursing Center Accounts Receivable for working
capital, currently no cap limit.
B-12
xiii. INSURANCE
Loan Number Property Issue
----------- -------- -----
GMAC1250 Circuit City Per the instructions of Circuit
City, the property insurer,
Travelers and St. Xxxx, will not
disclose the deductible on the
property insurance certificate.
Business income/rental loss
coverage is not required per the
lease agreement. The Seller has
obtained a condemnation and rental
loss policy from Chub Custom.
Policy will cover rent loss from
condemnation by eminent domain plus
loss of rents if building is
damaged 40% or more and tenant
terminates lease.
GMAC1600 Greenfields Retirement The property insurance policy
Community (Cascade) contains 90% coinsurance clause.
GMAC2450 000 Xxxxx Xxxxxx Xxxxxxxxx policy contains an 80%
coinsurance clause which cannot be
deleted and there are no other
known options where the insurance
can be purchased.
Rental insurance policy contains 30
day waiting period and provides
coverage as follows:
90 days, 100% of loss;
next 90 days, maximum of 75% of
loss;
next 90 days, maximum of 50% of
loss;
B-13
next 60 days, maximum of 25% of
loss.
xxiii. NO MATERIAL ENCROACHMENTS
The improvement(s) located on or forming a part of the Mortgaged Property
do not comply in all material respects with applicable zoning laws and
ordinances.
Loan Number Property Issue
----------- -------- -----
GMAC1150 Preferred Freezer
Warehouse Thirteen (13) parking spaces
located onto adjacent land. Also
concrete bins, pads and ramp
encroach onto adjacent parcel.
GMAC3230 Cypress Corners No zoning letter. Letter is a
post-closing item. Loan is fully
recourse until received.
xxxvii. LEASEHOLD ESTATE
The following Mortgage loan(s) are secured in whole or in part by the
interest of the borrower as a lessee under a Ground Lease.
e. The Ground Lease does not require the lessor to give notice to the
mortgagee of any default by the lessee.
Loan Number Property Issue
----------- -------- -----
GMAC2090A Peak Medical-
Butte parcel Lease does not require lessor to
notify mortgagee of a default nor
provide that the landlord's
termination of lease is ineffective
without prior notice to the
mortgagee.
i. The Ground Lease does not require the lessor to enter into a new lease
with the mortgagee upon termination of the Ground Lease for any reason,
including, rejection of the Ground Lease in a bankruptcy or insolvency
proceeding of the lessee.
B-14
Loan Number Property Issue
----------- -------- -----
GMAC2090A Peak Medical-
Butte parcel The lease does not require landlord
to enter into a new lease with
mortgagee on termination.
GMAC2080D OPERS Portfolio-
Rehoboth Outlet I The ground lease does not require
the lessor to enter into a new
lease with the mortgagee upon
termination of the ground lease for
any reason, including rejection of
ground lease in a bankruptcy or
insolvency proceeding of the
lessee.
xliv. SINGLE PURPOSE ENTITY
Borrowers on the following loan(s) are not single purpose entities to the
extent shown on the attached spreadsheet.
Loan Number Property
----------- --------
GMAC1600 Greenfield Retirement
GMAC2090A Peak Medical
GMAC2990 Brandywine-Xxxxxxx Health
GMAC2960 Brandywine-Xxx Xxx
GMAC2970 Xxxxxxxxxx-Xxxxxxxxx Xxxxxxx
XXXX0000 Brandywine-Meadowview Nursing
GMAC1960 Desert Sky
GMAC2630 Xxxxxxxx Office Park
GMAC1700 9 Commonwealth
GMAC1360 The Parkview (TORCH)
xlv. CREDIT LEASE LOANS
(b)(v) The following Mortgage Loans have a credit lease term ending prior
to the final maturity date of the related Mortgage.
B-15
Loan Number Property Issue
----------- -------- -----
GMAC1640 Eckerds-San Antonio Loan matures on 6/1/2018 while the
lease expires on 9/30/2017.
GMAC1670 Xxxxxx-Xxxxxxxx Loan matures on 6/1/2018 while the
lease expires on 11/25/2017.
GMAC1450 Walgreens-Council Bluff Loan matures on 1/1/2018 while the
lease expires on 10/30/2017.
d. The following Mortgage Loan(s) have lease payments under the Credit Lease
which are not sufficient to pay the entire amount of scheduled interest and
principal, subject to the rights of the Tenant to terminate the Credit
Lease or offset, xxxxx, suspend or otherwise diminish any amounts payable
by the tenant under the Credit Lease in which each Credit Lease fully
amortizes over the original term, and, there is no balloon payment of rent
due under the Credit Leases.
Loan Number Property Issue
----------- -------- -----
GMAC1640 Eckerds-San Antonio Loan matures on 6/1/2018 while the
lease expires on 9/30/2017.
GMAC1670 Xxxxxx-Xxxxxxxx Loan matures on 6/1/2018 while the
lease expires on 11/25/2017.
GMAC1450 Walgreens-Council Bluff Loan matures on 1/1/2018 while the
lease expires on 10/30/2017.
i. Each Credit Lease Loan, under which a Credit Lease may be terminated upon
the occurrence of a casualty or condemnation, does not require upon such
termination the payment in full by the Tenant of (a) the principal balance
of the loan and (b) all accrued and unpaid interest on the Mortgage Loan.
Under the Credit Lease for each Credit Lease Loan, upon the occurrence of a
casualty or condemnation the Tenant will not have any rights of rent
abatement.
Loan Number Property Issue
----------- -------- -----
GMAC1640 Eckerd-San Antonio Lease provides for no abatement for
rent or casualty. If during that
last two years of the term of the
lease, the restoration cost is more
than one-third of the replacement
value,
B-16
then either party has right to
terminate. If so terminated all
insurance proceeds go to landlord.
As to condemnation, in the event of
total taking the lease terminates,
rent is abated. In event of
partial taking there will be a
pro-rata abatement of rent.
Condemnation insurance was
purchased at closing (one-time
premium policy).
GMAC1670 Xxxxxx-Xxxxxxxx Same as Eckerd-San Antonio
GMAC1250 Circuit City In the case of casualty where less
than 40% damage to the property is
sustained, the lease does not
terminate and payment of rent
continues. If 40% or more of the
property sustains damage, the
tenant has the option to terminate
the lease and the proceeds are paid
to Landlord. During the last 2
years of the term of the lease, if
the casualty has material impact on
tenant's business, tenant may
terminate and Lender receives
proceeds. Should condemnation
occur of 25% or more of the
improvements or 25% or more of the
parking spaces, the tenant has the
option to terminate the lease and
rent abates. If less than 25% is
taken, there is a pro-rata
abatement. If the taking is in the
last two years and the tenant's
business is materially impacted,
the tenant has the right to
terminate the lease. Condemnation
insurance is in place (one-time
pre-paid policy).
GMAC1450 Walgreens-Council Bluffs If casualty occurs, then abatement
is proportionate to the damage
during reconstruction. If
restoration not completed within
180 days, the tenant may cancel.
If destruction is
B-17
at least 25% of the value of the
property during last the two years
of the lease, the tenant or
landlord has the right to terminate
and rent abates. Condemnation is
not addressed in lease. Rental
payments are paid directly to
Borrower.
EXCEPTIONS
TO
SINGLE PURPOSE ENTITY CRITERIA
--------------------------------------------------------------------------------------------------------------------------
Property Organized solely May not engage in No No other Separate Holds itself
for owning and any business or other indebtedness books and out as
operating activity unrelated to assets incurred records separate
mortgaged premises property or to be and apart
incurred
--------------------------------------------------------------------------------------------------------------------------
Greenfield
Retirement Yes Yes No Yes No No
--------------------------------------------------------------------------------------------------------------------------
Peak Medical Yes Yes Yes Yes Yes No
--------------------------------------------------------------------------------------------------------------------------
K-Mart Yes Yes Yes Yes Yes No
--------------------------------------------------------------------------------------------------------------------------
Pear Orchard No No No No No No
--------------------------------------------------------------------------------------------------------------------------
Cedar Apartments No No No No No No
--------------------------------------------------------------------------------------------------------------------------
Montbello No No No No No No
--------------------------------------------------------------------------------------------------------------------------
Brandywine -
Xxxxxxx Health Yes Yes No Yes Yes No
--------------------------------------------------------------------------------------------------------------------------
Brandywine -
Xxx Xxx Yes Yes No Yes Yes No
--------------------------------------------------------------------------------------------------------------------------
Brandywine -
Meadowview
Nursing Yes Yes No Yes Yes No
--------------------------------------------------------------------------------------------------------------------------
Brandywine -
Laurelton Village Yes Yes No Yes Yes No
--------------------------------------------------------------------------------------------------------------------------
Desert Sky* No No No No No No
--------------------------------------------------------------------------------------------------------------------------
Xxxxxxxx Office*
Park No No No No No No
--------------------------------------------------------------------------------------------------------------------------
9 Commonwealth No No No No No No
--------------------------------------------------------------------------------------------------------------------------
The Parkview
(TORCH) Yes Yes Yes Yes No No
--------------------------------------------------------------------------------------------------------------------------
Builder's Square Yes Yes Yes No No No
--------------------------------------------------------------------------------------------------------------------------
* Tenants in common.
B-18
