EXHIBIT 10.1
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TRANSFER AND REPURCHASE AGREEMENT
by and between
LTC Properties, Inc.
and
LTC REMIC IV Corporation
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Dated as of
April 20, 1998
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THIS TRANSFER AND REPURCHASE AGREEMENT, dated as of April 20,
1998, by and between LTC Properties, Inc., a Maryland corporation ("LTC" or the
"Originator"), and LTC REMIC IV Corporation, a Delaware corporation (together
with its permitted assigns, the "Company").
WITNESSETH:
WHEREAS, the Company, a corporation organized under the laws of
Delaware, is a wholly owned subsidiary of LTC; and
WHEREAS, LTC will sell, transfer, convey and assign (the
"Transfer") to the Company all of its right, title and interest in, to and under
certain mortgage loans (the "Mortgage Loans") secured by first liens on
properties that provide health care and/or long-term nursing or assisted living
care, listed on the Mortgage Loan Schedule attached as Exhibit A hereto and all
of its right, title and interest in, to and under the LTC Commercial Mortgage
Pass-Through Certificates, Series 1993-1, Class E (the "Mortgage Certificates");
and
WHEREAS, LTC, in consideration for the Transfer of the Mortgage
Loans and Mortgage Certificates to the Company, will receive $116,940,335 in
cash and the Class F, Class G, Class R, Class LR, Class X-1 and Class X-2
Certificates having a principal balance of $34,245,541 which LTC will permit the
Company or a wholly-owned subsidiary of LTC to retain; and
WHEREAS, the Company will convey the Mortgage Loans and Mortgage
Certificates to a trust (the "Trust") formed pursuant to the Pooling and
Servicing Agreement (as defined below) on or about the date hereof and will
retain certain interests in the Mortgage Loans and Mortgage Certificates to the
extent provided in the Pooling and Servicing Agreement; and
WHEREAS, the Trust will issue pass-through certificates (the
"Certificates") which in the aggregate will represent the entire beneficial
ownership interest in the assets of the Trust, which assets will consist of the
Mortgage Loans, Mortgage Certificates and certain related assets; and
WHEREAS, it is a condition to the issuance of the Certificates
that LTC shall be required to repurchase the Mortgage Loans or Mortgage
Certificates under the circumstances and subject to the conditions set forth
herein and in the Pooling and Servicing Agreement.
NOW, THEREFORE, for and in consideration of the premises and the
mutual covenants hereinafter contained, the parties hereto covenant and agree as
follows:
ARTICLE I
DEFINITIONS
As used herein, the following terms shall have the meanings
herein specified unless the context otherwise requires. Defined terms in this
Agreement shall include in the singular number the plural and in the plural
number the singular. Capitalized terms used and not otherwise defined herein
shall have the respective meanings ascribed to such terms in the Pooling and
Servicing Agreement.
"AGREEMENT" shall mean this Transfer and Repurchase Agreement as
the same may from time to time hereafter be modified, supplemented or amended.
"APPRAISED VALUE" shall mean with respect to any Mortgaged
Property, the appraised value
thereof based upon the appraisal made or used by LTC in connection with the
origination of the related Mortgage Loan.
"BORROWER" shall mean any obligor under a Note.
"BUSINESS DAY" shall mean any day other than a Saturday, a Sunday
or a day on which banking institutions in the city of Chicago, Illinois (for so
long as LaSalle National Bank is the Trustee) or Philadelphia, Pennsylvania or
New York, New York (so long as GMAC Commercial Mortgage Corporation is the
Master Servicer) are authorized or obligated by law, executive order or
governmental decree to be closed, or LTC Properties, Inc., the Master Servicer
or the Trustee is closed.
"CODE" shall mean the Internal Revenue Code of 1986, any
successor statute thereto, and any temporary or final regulations of the United
States Department of the Treasury from time to time promulgated thereunder.
"COLLATERAL" shall mean all property (including the real property
listed on Exhibit A hereto) and interests in property now owned or hereafter
acquired in or upon which a lien has been or is purported or intended to have
been granted to the Trust under the Transaction Documents.
"DISQUALIFYING CONDITION" shall have the meaning assigned thereto
in Section 3.2(a)(xliii) hereof.
"ENVIRONMENTAL CONDITION" shall mean any condition or
circumstance that (i) may pose an imminent or substantial endangerment to the
public health or welfare or the environment, (ii) may result in a release or
threatened release of any Hazardous Materials, or (iii) may give rise to any
environmental claim or demand.
"GROUND LEASE" shall have the meaning assigned thereto in Section
3.2(a)(xxix) hereof.
"MORTGAGE LOAN SCHEDULE" shall mean Exhibit A to this Agreement.
"NET LEASE" shall mean with respect to any Mortgage Loan, a lease
covering substantially all of the related Mortgaged Property pursuant to which
the related tenant is obligated to pay (i) a minimum fixed rental substantially
sufficient, as of the date of origination of such Mortgage Loan, to pay in full
each related Monthly Payment on such Mortgage Loan (other than any Balloon
Payment), and (ii) all other charges commonly associated with the operation and
maintenance of such Mortgaged Property (other than exterior maintenance of
buildings and adjacent land and improvements located thereon), including,
without limitation, real estate taxes and assessments, insurance and structural
and non-structural repairs and maintenance. In the case of any Mortgage Loan
secured by more than one Mortgaged Property, the term "Net Lease" shall refer to
each Net Lease relating to each such Mortgaged Property.
"NURSING FACILITIES" shall mean Mortgaged Properties operating as
(i) skilled nursing facilities or (ii) assisted living facilities.
"PERSON" shall mean any individual, corporation, limited
liability company, partnership, joint venture, firm, association, joint-stock
company, trust, unincorporated organization or government or any agency
political subdivision thereof.
"POOLING AND SERVICING AGREEMENT" shall mean the Pooling and
Servicing Agreement dated as of May , 1998 by and among the Company, as
Depositor, LaSalle National Bank, as Trustee, GMAC Commercial Mortgage
Corporation, as Master Servicer and LTC, as Special Servicer.
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"QUALIFIED MORTGAGE" A Mortgage Loan that is a "qualified
mortgage" within the meaning of Code Section 860G(a)(3) (but without regard to
the rule in Treasury Regulation l.860G-2(f)(2) that treats a defective
obligation as a qualified mortgage, or any substantially similar successor
provision) and applicable Treasury Regulations promulgated pursuant thereto.
"QUALIFIED TITLE INSURER" shall mean any title insurer specified
on Exhibit B hereto.
"REPURCHASE PRICE" shall mean, with respect to (a) any Mortgage
Loan to be purchased or repurchased during any Prepayment Period pursuant to
this Agreement or the Pooling and Servicing Agreement, an amount, calculated by
the Master Servicer, or the Special Servicer, as applicable, equal to:
(i) the unpaid principal balance of such Mortgage Loan as of the
Due Date as to which a payment of principal was last made by
the Borrower; PLUS
(ii) unpaid accrued interest from the Due Date as to which
interest was last paid by the Borrower up to the Due Date in
the Due Period related to the same Determination Date as the
Prepayment Period in which the purchase or repurchase is to
occur at a rate equal to the Mortgage Interest Rate
applicable from time to time on the unpaid Principal Balance
of such Mortgage Loan; PLUS
(iii) any unreimbursed Servicer Advances on such Mortgage Loan,
plus interest thereon at the Advance Rate; PLUS
(iv) expenses reasonably incurred or to be incurred by the Master
Servicer, the Special Servicer or the Trustee in respect of
the breach or defect giving rise to the repurchase
obligation, including any expenses arising out of the
enforcement of the repurchase obligation; and
(b) the Mortgage Certificates to be purchased or repurchased
during any Prepayment Period pursuant to this Agreement or the Pooling and
Servicing Agreement, an amount to be calculated by the Master Servicer equal to
the unpaid principal amounts of such Mortgage Certificates on the date such
repurchase occurs plus accrued and unpaid interest through the last day of the
Interest Accrual Period in which such repurchase occurs, plus unpaid and
outstanding expenses for such Mortgage Certificates.
"TRANSACTIONS" shall mean the transactions contemplated by the
Transaction Documents.
"TRANSACTION DOCUMENTS" shall mean this Agreement, the Pooling
and Servicing Agreement and all other documents to which LTC or the Company is a
party which relate to the transfer of the Mortgage Loans and Mortgage
Certificates to the Company or the Trust or to the issuance of the Certificates.
ARTICLE II
ASSIGNMENT; PURCHASE PRICE
(a) LTC concurrently with the execution hereof, does hereby sell,
transfer, assign, set over and otherwise convey to the Company (i) all the
right, title and interest of LTC in and to the Mortgage Loans identified on
Exhibit A hereto, including all rights to payment in respect thereof under the
Notes and any and all related agreements, title insurance policies and any
security interest thereunder (whether in real or personal property or other
Collateral and whether tangible or intangible) and any guaranty or letter of
credit relating thereto and (ii) all the right, title and interest of LTC in and
to the Mortgage Certificates, without recourse and without
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warranty of any kind except as specifically set forth herein. The parties
intend that the above conveyance of the Mortgage Loans, Mortgage Certificates
and the related rights and property effected in the preceding paragraph
constitute an absolute transfer of such property by the Originator to the
Company. If such conveyance is deemed, however, to be a pledge of security for
a loan or the conveyance is found to not be effective, LTC hereby grants to the
Company, to secure its obligation to pay the Purchase Price, a first priority
security interest in all of LTC's right, title and interest in and to the
Mortgage Loans identified on the Mortgage Loan Schedule and the Mortgage
Certificates as of the Cut-off Date, including, without limitation, all interest
and principal due on or after the Cut-off Date (including any amounts received
by LTC before the Cut-off Date but due on or after the Cut-off Date), together
with LTC's right, title and interest in any related primary mortgage or other
insurance policies and any escrow, reserve, or other comparable accounts in
respect of the Mortgage Loans.
(b) In consideration for the transfer of the Mortgage Loans and
Mortgage Certificates to the Company, LTC will receive $116,940,335 in cash and
the Class F, Class G, Class R, Class LR, Class X-1 and Class X-2 Certificates,
having an aggregate principal balance of $34,245,541 (PROVIDED, THAT, the Class
X-1 and Class X-2 Certificates have no outstanding principal balance and are
only entitled to interest payments), which LTC will permit the Company or a
wholly-owned subsidiary of LTC to retain (such cash amount, together with the
Certificates, the "Purchase Price") which represents the purchase price for the
Mortgage Loans and Mortgage Certificate minus certain fees and expenses of
Xxxxxxx Xxxxx & Co. as initial purchaser of certain classes of the Certificates.
ARTICLE III
CORPORATE REPRESENTATIONS, WARRANTIES AND COVENANTS;
REPURCHASE OR SUBSTITUTION EVENTS
Section 3.1 CORPORATE REPRESENTATIONS, WARRANTIES AND COVENANTS.
As a condition to the execution and delivery of the Pooling and Servicing
Agreement and the completion of the Transactions contemplated thereby, LTC and
the Company make the following representations and warranties, which shall
survive the execution and delivery of this Agreement and all other Transaction
Documents.
(a) LTC represents and warrants that, as of the Closing Date (i)
it is duly authorized to execute and deliver this Agreement, to enter into the
Transactions and to perform its obligations hereunder and has taken all
necessary action to authorize such execution, delivery and performance, (ii) the
Person signing this Agreement on its behalf is duly authorized to do so on its
behalf and this Agreement has been duly executed and delivered by it, (iii) it
has obtained all authorizations of any governmental body required in connection
with this Agreement and the Transactions and such authorizations are in full
force and effect, (iv) the execution, delivery and performance of this Agreement
and the Transactions will not violate any law, ordinance, charter, by-law or
rule applicable to it or any material agreement or order or decree by which it
is bound or by which any of its assets are affected, (v) there is no action,
suit or proceeding against, or investigation of, it pending or threatened,
before any court, administrative agency or other tribunal which, either
individually or in the aggregate, (A) asserts the invalidity of this Agreement,
(B) seeks to prevent the consummation of any of the Transactions or (C) which
would materially and adversely affect the performance by it of its obligations
under, or the validity or enforceability of, this Agreement and (vi) this
Agreement constitutes a legal, valid and binding agreement of it, enforceable
against it in accordance with its terms, subject to applicable bankruptcy,
fraudulent conveyance, insolvency, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally, and subject, as to
enforceability, to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding in equity or at law).
(b) The Company has ensured and will continue to ensure
that: (a) its funds and other
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assets are identifiable and are not commingled with those of any Affiliate and
that it maintains bank accounts, corporate records and books of account separate
and apart from those of any Affiliate; (b) it pays from its assets all
obligations and indebtedness of any kind incurred by it; and (c) the business
and affairs of the Company are managed by or under the direction of its Board of
Directors. The assets and liabilities of the Company and its Affiliates,
including LTC, are and will continue to be readily ascertainable and subject to
segregation without requiring substantial time or expense to effect and account
for such segregated assets and liabilities.
(c) The Company conducts and will continue to conduct its
business solely in its own name so as not to mislead others as to the identity
of the company with which those others are concerned; LTC does not conduct its
business in the name of the Company or otherwise act in a manner that would lead
others to believe that they are dealing with the Company or its assets rather
than LTC and its assets. Without limiting the generality of the foregoing, all
oral and written communications including, without limitation, letters,
invoices, purchase orders, contracts, statements and applications, have been and
will be made solely in the name of the Company if they relate to the Company and
solely in the name of LTC if they relate to LTC. The Company and LTC have
separate stationery and other business forms. The Company has and will continue
to conduct its business from an office separate from that of LTC.
(d) The Company and LTC each is adequately capitalized for the
businesses in which it is engaged or in which it may become engaged. The
Company will not declare dividends to LTC if declaring dividends would result in
inadequate capitalization for the Company. Each of the Company and LTC will at
all times ensure that its capitalization is adequate in light of its business
and purpose. The Company will continue to provide for its own operating
expenses and liabilities from its own funds, and such expenses and liabilities
will not be paid by LTC, except that certain of the organizational expenses of
the Company have been paid by LTC. In addition, from time to time LTC may make
capital contributions to the Company to enable the Company to acquire certain
securities; any such capital contributions will be reflected as such on the
books and records of both LTC and the Company, and will be treated as capital
contributions for tax, accounting and other relevant purposes.
(e) The Company maintains, and will continue to maintain, cash
management systems separate from those of LTC. General overhead and
administrative expenses of LTC will not be charged or otherwise allocated to the
Company and such expenses of the Company will not be charged or otherwise
allocated to LTC (other than the organizational expenses referred to above).
There will be no guarantees made by the Company with respect to obligations of
LTC and there will be no guarantees made by LTC with respect to obligations of
the Company. Accordingly, the separate assets and liabilities of the Company
are and will continue to be readily ascertainable from those of LTC.
(f) The Company maintains corporate records distinct and
separately identifiable from the corporate records of LTC and any other person
or entity. The Company maintains full and complete financial records distinct
and separately identifiable from the financial records of LTC or any Affiliates.
These statements and reports are prepared and maintained in accordance with
generally accepted accounting principles, susceptible to audit and audited, at
least annually, in connection with the audit of LTC by independent public
accountants, in accordance with generally accepted auditing standards. LTC
prepares and files consolidated federal tax returns and combined financial
statements all of which will include the Company. The Company keeps its funds
separate and apart from the funds of LTC and any Affiliates, and its other
assets are separately identifiable and distinguishable from the assets of LTC
and any Affiliates. The Company will prepare and issue to its creditors
financial statements separate from those of LTC.
(g) When necessary, the Company obtains proper authorization
from its directors or stockholders, as appropriate, for corporate action. The
Company acts solely in its name and through its duly authorized officers or
agents in the conduct of its businesses.
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(h) The Company and LTC each do not and will not: (a) hold
itself out as having agreed to pay or become liable for the debts of LTC, in the
case of the Company, or the Company, in the case of LTC; (b) fail to correct any
known misrepresentation with respect to the foregoing; (c) operate or purport to
operate as an integrated, single economic unit with LTC, in the case of the
Company, or with the Company, in the case of LTC; (d) seek or obtain credit or
incur any obligation to any third party based upon the assets of LTC, in the
case of the Company, or upon the assets of the Company, in the case of LTC; or
(e) induce any such third party to rely reasonably on the creditworthiness of
LTC, in the case of the Company, or the creditworthiness of the Company, in the
case of LTC. The Company maintains and will continue to maintain an
arm's-length relationship with LTC. The Company maintains and will continue to
maintain management over its daily business affairs independent from that of LTC
and free of any undue or excessive control exercised by LTC; LTC maintains, and
will continue to maintain, management over its daily business affairs
independent from that of the Company and free of any undue or excessive control
exercised by the Company.
(i) The Company, prior to or contemporaneously with the sale of
the Mortgage Loans and Mortgage Certificates, will disclose all material
transactions associated with its acquisition of the Mortgage Loans and Mortgage
Certificates and the transfer of such Mortgage Loans and Mortgage Certificates
the Trust Fund by various means, including, without limitation, the filing of
UCC-1 financing statements and other communications.
(j) The annual financial statements of LTC and the Company,
including the consolidated financial statements of LTC, will disclose the
effects of the transactions in accordance with generally accepted accounting
principles. The consolidated financial statements of LTC will contain a
footnote stating that the Mortgage Loans and Mortgage Certificates have been
sold to the Company and the assets of the Company are not available to satisfy
the obligations of LTC or its other subsidiaries. The resolutions, agreements
and other instruments underlying the subject transactions will be continuously
maintained by LTC and the Company as official records.
Section 3.2 REPURCHASE OR SUBSTITUTION EVENTS. (a) Subject to the
provisions of Section 4.1 hereof, LTC agrees to remedy any violation described
below in all material respects or to repurchase or substitute a Mortgage Loan
upon the determination, as of the Closing Date and immediately prior to the
effectiveness of the transfer effected hereby or as of such other date
specifically provided herein, that one of the following statements is not true
in any material respect and such violation has a material adverse effect on the
Certificateholders:
(i) LTC is the sole owner and holder of such Mortgage Loan;
(ii) LTC has full right and authority to sell, assign and
transfer such Mortgage Loan;
(iii) The information set forth in the Mortgage Loan Schedule is
correct in all material respects at the date or dates
respecting which such information is furnished as specified
therein (or, if no date is specified, at and as of the
Closing Date);
(iv) Such Mortgage Loan is not a participation interest in a
mortgage loan, but is a whole loan, such Mortgage Loan does
not contain terms providing for a contingent interest, and
such Mortgage Loan does not contain an equity participation;
(v) Such Mortgage Loan complies, as of the date of origination,
with, or was exempt from, applicable state or federal laws,
regulations and other requirements pertaining to usury, and
the receipt of any amounts payable as interest or otherwise
from revenues derived from the operation of the related
Mortgaged Property or in respect of any equity participation
provision of such Mortgage Loan do not violate any
applicable federal, state or local law, regulation or
other requirement pertaining to usury; any or all other
requirements of any federal, state or local law,
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including, without limitation, truth-in-lending, real estate
settlement procedures, equal credit opportunity or
disclosure laws, applicable to such Mortgage Loan were
complied with as of the date of origination of such Mortgage
Loan;
(vi) The origination, servicing and collection practices used by
LTC or any prior holder of such Mortgage Loan have been in
all material respects legal, proper and prudent and have met
customary standards utilized by originators of mortgage
loans to long-term health care facilities in the areas where
the related Mortgaged Properties are located;
(vii) Such Mortgage Loan was originated by LTC or any agent
thereof, and complies with all the material terms,
conditions and requirements of the underwriting policies of
LTC in effect at the time of origination;
(viii) LTC is transferring such Mortgage Loan free and clear of any
and all liens, pledges, charges or security interests of any
nature encumbering such Mortgage Loan other than the lien
granted pursuant to Article II hereof and such transfer is
not subject to bulk sale law;
(ix) The proceeds of such Mortgage Loan have been fully disbursed
and there is no requirement for future advances thereunder;
(x) Each of the related Notes, related Mortgages and other
agreements providing security, credit support or other
assurances in connection therewith is a legal, valid and
binding obligation of the maker thereof (subject to any
nonrecourse provisions therein and any laws applicable
thereto of similar effect, such as antideficiency or
one-form-of-action rules), enforceable in accordance with
its terms, except as such enforcement may be limited by (A)
bankruptcy, insolvency, reorganization, fraudulent
conveyance or other similar 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), including without
limitation concepts of materiality, reasonableness, good
faith and fair dealing and the possible unavailability of
specific performance or injunctive relief, and (C) in the
case of certain personal guarantees executed in connection
with certain Mortgage Loans, the community property laws of
the states in which the persons executing such guarantees
are domiciled, and there is no valid offset, defense,
counterclaim or right to rescission with respect to such
Note, Mortgage or other agreements;
(xi) The related Assignment of Mortgage constitutes a legal,
valid and binding assignment of such Mortgage to the
Company, and the related reassignment of assignment of
leases and rents, if any, constitutes a legal, valid and
binding assignment thereof to the Company, subject to
applicable bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium and other similar laws
affecting the enforcement of creditors' rights and remedies
generally, and subject, as to enforceability, to general
principles of equity (regardless of whether such enforcement
is considered in a proceeding in equity or at law) including
principles of commercial reasonableness, good faith and fair
dealing;
(xii) The related Mortgage (including any related security
agreement included in the definition of such term) is a
valid and enforceable first lien on the related Mortgaged
Property, (except for the Mortgage on the Mortgaged
Property related to Mortgage Loans #85A and #85B, which are
valid and enforceable first lien securing such Mortgage Loan
and a valid and enforceable second lien securing such
related Mortgage Loan), which Mortgaged Property is free and
clear of all encumbrances and liens having priority
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over, or equal to, the lien of the Mortgage, except as such
enforcement may be limited by (A) bankruptcy, insolvency,
reorganization, fraudulent conveyance or other similar laws
affecting the enforcement of creditors' rights and remedies
generally, (B) general principles of equity (regardless of
whether such enforcement is considered in a proceeding in
equity or at law), including without limitation concepts of
materiality, reasonableness, good faith and fair dealing and
the possible unavailability of specific performance or
injunctive relief, and subject only to (i) liens for real
estate taxes and special assessments not yet due and
payable, (ii) covenants, conditions and restrictions, rights
of way, easements and other matters of public record as of
the date of recording of such Mortgage, such exceptions
appearing of record being acceptable to mortgage lending
institutions generally or specifically reflected in the
appraisal made in connection with the origination of the
related Mortgage Loan, none of which materially impairs the
value of the property or materially interferes with the
benefits of the security intended to be provided by such
Mortgage, (iii) exceptions and exclusions specifically
referred to in the lender's title insurance policy described
in clause (xxiii) below, none of which materially impairs
the value of the Mortgaged Property or interferes with the
use and operation of the premises as currently contemplated
or the ability of the Borrower to make payments of principal
and interest on the related Mortgage Loan when due, (iv) a
lien on the property to ensure the reimbursement of remedial
or response costs incurred by a State or the United States
as a result of an Environmental Condition, or (v) other
matters to which like properties are commonly subject none
of which, individually or in the aggregate, materially
impairs the value of the property or materially interferes
with the use and operation of the premises as currently
contemplated or the ability of the Borrower to make payments
of principal and interest on the related Mortgage Loan when
due; PROVIDED, HOWEVER, that the Borrower may grant security
interests in specific items of personal property located on
the related Mortgaged Property (or all of the Mortgaged
Properties in the case of Mortgage Loans secured by more
than one Mortgaged property) to the lessors of or
purchase-money lenders for said personal property, so long
as such encumbrances secure obligations of the Borrower in
an aggregate amount not in excess of eight thousand dollars
($8,000) per month;
(xiii) The related Mortgage has not been waived, modified, altered,
satisfied, cancelled or subordinated in any respect or
rescinded, or the related Mortgaged Property has not been
released from the lien or other encumbrance of, and the
related Borrower has not been released from its obligations
under, such Mortgage or the related Mortgage Note, in whole
or in any part, in a manner which materially interferes with
the benefits of the security intended to be provided by such
Mortgage or the use, enjoyment, value or marketability of
the related Mortgaged Property for the purposes specified in
such Mortgage; no guarantor has been released, in whole or
in part, under the related guaranty (if any); and no
instrument has been executed that would effect any such
cancellation, subordination, rescission or release, with the
exception of the written instruments which are part of the
related Mortgage File;
(xiv) All taxes, governmental assessments or water, sewer and
municipal charges that prior to the Cut-Off Date became due
and owing in respect of, and affect, the related Mortgaged
Property, and that by filing of a notice or other
appropriate instrument by a government agency could become a
lien on such Mortgaged Property, have been paid prior to
becoming delinquent, or a collateral pledge account with an
amount sufficient to cover such payments has been
established;
(xv) Neither the Originator nor any of its agents or Affiliates
has, directly or indirectly, advanced
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funds, or received any advance of funds by a party other
than the related Borrower, for the payment of any amount
required by the related Note or the related Mortgage,
except for interest accruing from the date of the Note or
date of disbursement of the proceeds of such Mortgage Loan,
whichever is later, to the date which preceded by 30 days
the first Due Date under the related Note;
(xvi) The proceeds of such Mortgage Loan to the related Borrower
at origination did not exceed the principal amount of such
Mortgage Loan and, taking into account any lien on the
related Mortgaged Property which is senior to or of equal
seniority as such Mortgage Loan, either (A) such Mortgage
Loan is secured by an interest in real property having a
fair market value (i) at least equal to 80% of the principal
balance of such Mortgage Loan at the later of the date such
Mortgage Loan was originated (or, with respect to those
Mortgage Loans between the Originator and its subsidiaries,
at the time the Mortgage Loan will be transferred to the
Trust) or the date upon which a significant modification (as
defined in Treasury Regulation Section 1.860G-2(b) of the
Code) occurred or (ii) at least equal to 80% of the
principal balance of such Mortgage Loan at the Closing Date;
or (B) substantially all the proceeds of such Mortgage Loan
were used to acquire, improve or protect the real property
that 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 Regulation
Section l.860G-2(a)(1)(ii) and no significant modification,
as defined in Treasury Regulation Section 1.860G-2(b), has
been made to such Mortgage Loan); PROVIDED, HOWEVER, that
the fair market value of the interest in real property
securing such Mortgage Loan shall be determined in
accordance with Section 1.856-3(a) of the Treasury
Regulations; PROVIDED, FURTHER, with respect to any Mortgage
Loan which provides for a partial release of the Mortgage
Property upon a partial payment of the Mortgage Loan, the
Allocable Loan Amount with respect to each property
independently would meet the 80% test described in clause
(i) of this subparagraph (xvi);
(xvii) There is no proceeding pending for the total or partial
condemnation of the related Mortgaged Property, and such
Mortgaged Property is in good repair and free and clear of
any damage that would affect materially and adversely the
value of such Mortgaged Property as security for such
Mortgage Loan or the use for which the premises were
intended;
(xviii) The related Mortgaged Property is free and clear of any
mechanics' and materialmen's liens, or liens in the nature
thereof, and no rights are outstanding that under law could
give rise to any such liens, any of which liens are or may
be senior to, or of equal priority with, the lien of the
related Mortgage, except those which are insured against by
the lender's title insurance policy referred to in clause
(xxiii) below;
(xix) None of the improvements which were included for the purpose
of determining the Appraised Value of the related Mortgaged
Property in connection with the origination of such Mortgage
Loan lies outside the boundaries and building restriction
lines of such property, no improvements on adjoining
properties materially encroach upon such Mortgaged Property,
and all improvements located on or forming a part of such
Mortgaged Property complied with applicable zoning laws
and/or set-back ordinances in force when such improvements
were placed on such Mortgaged Property except where (i)
non-compliance could not have a foreseeable material adverse
effect on such Mortgaged Property, (ii) the Mortgaged
Property has a variance or special use permit allowing the
non-compliance, or (iii) the improvements on the Mortgaged
Property were made prior to the effective date of the
applicable zoning ordinance and are therefore grandfathered;
9
(xx) At the time of origination of such Mortgage Loan and as of
the date of the transfer of such Mortgage Loan by LTC
hereunder, the related Borrower, lessee and/or operator was
in possession of all material federal, state and local
governmental and regulatory approvals, licenses, permits and
other authorizations then necessary and required by
applicable law for the use of the related Mortgaged Property
and all such approvals, licenses, permits and authorizations
were valid and in full force and effect;
(xxi) If the related Mortgaged Property is subject to a lease, the
related Borrower is the owner and holder of the landlord's
interest under any lease for use and occupancy of all or any
portion of the related Mortgaged Property; the related
Mortgage and related Assignment of Leases, Rents and Profits
provides for the appointment of a receiver for rents, or
provides for rents to be paid directly to the mortgagee in
the event of default, or allows the mortgagee to enter into
possession to collect the rents; no assignments have been
made of the landlord's interest in any such lease or any
portion of the rents, additional rents, charges, issues or
profits due and payable or to become due and payable under
any such lease, which assignments are presently outstanding
and have priority over the related Mortgage or any related
Assignment of Leases, Rents and Profits given in connection
with the origination of the related Mortgage, other than as
may be disclosed in the related lender's title insurance
policy referred to in clause (xxiii) below; and the related
Borrower is the beneficial owner of the related Mortgaged
Property with the exception of Mortgage Loan #142 with
respect to which the related Borrower has a leasehold
interest in one of the related Mortgaged Properties;
(xxii) Both the Originator and the Depositor were authorized to the
extent required under applicable law to transact and do
business in the jurisdiction in which the related Mortgaged
Property is located at all times when it held such Mortgage
Loan, or any failure to be so qualified has not impaired the
validity of such Mortgage Loan;
(xxiii) The related Mortgage is covered by a lender's title
insurance policy, issued by a Qualified Title Insurer,
insuring that the related Mortgage is a valid first lien
(except for the Mortgage on the Mortgaged Property related
to Mortgage Loans #85A and #85B, which are valid and
enforceable first lien securing such Mortgage Loan, and a
valid and enforceable second lien securing such Mortgage
Loan) on such Mortgaged Property; such title insurance
policy is in full force and effect, is freely assignable
(subject to obtaining the required assignment endorsement
upon payment of premium therefor if necessary) and (subject
to any required recordation of the appropriate Assignment of
Mortgage, the obtaining of the required assignment
endorsement, if any, and the payment of the required premium
therefor) will inure to the benefit of the Trustee as
mortgagee of record; such policy is not subject to
exceptions which are not acceptable to mortgage lending
institutions generally and which are not specifically
referenced in such title insurance policy, which impairs the
value of the property or materially interferes with the use
and operation of the premises as currently contemplated or
the ability of the Borrower to make payments of principal
and interest on the related Mortgage Loan when due; and
neither the Originator nor any prior mortgagee has done, by
act or omission, anything which would materially impair the
value of the property or materially impair the use and
operation of the premises as currently contemplated or the
ability of the related Borrower to make payments of
principal and interest on the related Mortgage Loan when
due;
(xxiv) There is no material default, breach, violation or event of
acceleration existing under the related Mortgage or the
related Note or an event (other than payments due but not
yet delinquent) which, with the passage of time or with
notice and the expiration of any grace or cure period, would
constitute a material default, breach, violation or event of
acceleration; there has been no
10
knowing waiver of any default, breach, violation or event of
acceleration of any of the foregoing, and no Person other
than the holder of such Note may declare an event of default
or accelerate the related indebtedness under any such
Mortgage Loan, Mortgage or Note;
(xxv) As of the Cut-Off Date, no Mortgage Loan is 30 days or more
delinquent in payment beyond its related Due Date and no
Mortgage Loan has been more than 30 days delinquent in
payment more than once during the 12 months prior to the
Cut-Off Date without giving effect to any grace period
permitted by the related Mortgage or Note;
(xxvi) The related Note or the related Mortgage contains customary
and enforceable provisions such as to render the rights and
remedies of the holder thereof adequate for the realization
against the related Mortgaged Property of the benefits of
the security (except as may be limited as described in
clause (x) above), including realization by judicial or, if
applicable, nonjudicial foreclosure, and there is no
exemption available to the Borrower which would interfere
with such right to foreclosure other than as described in
clauses (xi) and (xii) above;
(xxvii) The facility located on the related Mortgaged Property and
the operator with respect to such facility has all
certificates, licenses, permits or other authorization
required by applicable law for the operation of such
facility, and, to the extent such facility participates in
Medicaid, Medicare or other similar programs, such facility
and operator holds a valid certification for such
participation, appropriate for the level of care provided at
such facility;
(xxviii) The related Mortgaged Property is insured by a fire and
extended perils insurance policy issued by a Qualified
Insurer (as defined in the Pooling and Servicing Agreement),
providing coverage against loss or damage sustained by
reason of fire, lightning, windstorm, hail, explosion,
aircraft, vehicles and smoke, and, to the extent required as
of the date of origination by LTC consistent with its normal
commercial mortgage lending practices, against other risks
insured against by Persons operating like properties in the
locality of such Mortgaged Property including flood
insurance in the event that the related Mortgaged Property
is located within the 100-year flood zone, in an amount
which is at least equal to the lesser of the current
principal balance of such Mortgage Loan or the replacement
cost of the improvements which are a part of such Mortgaged
Property; all premium installments then due on such
insurance policy have been paid; such insurance policy
requires prior notice to the insured of termination or
cancellation, and no such notice has been received; the
related Mortgage or related Mortgage Loan documents obligate
the related Borrower to maintain all such insurance and
authorizes the mortgagee, upon such Borrower's failure to do
so, to maintain such insurance at the Borrower's cost or
expense and to seek reimbursement therefor from such
Borrower; the related Mortgage or related Mortgage Loan
documents obligate the related Borrower to apply any
insurance proceeds either to the repair and restoration of
all or part of the related Mortgaged Property, and such
Borrower or trustee appointed by such Borrower has the right
to hold and disburse such proceeds as the repair and
restoration progresses or to apply such proceeds to the
outstanding principal balance, together with any accrued
interest thereon, of the related Mortgage Loan;
(xxix) The related Borrower owns the related Mortgaged Property in
fee simple (except for Mortgage Loan #142 which is partially
secured by a leasehold interest (the "Ground Lease"), except
as title may be qualified in the related lender's title
insurance policy referred to in clause (xxiii) above, and
with respect to such Mortgage Loan #142:
(1) The Mortgage does not by its terms provide that it
will be subordinated to the lien of any other
mortgage and upon the occurrence of an event of
default under the terms of the Mortgage by the
Borrower, the mortgagee has the right to foreclose or
otherwise exercise its rights with respect to the
leasehold interest
11
within a commercially reasonable time;
(2) The Ground Lease or a memorandum thereof has been
duly recorded, the Ground Lease permits the interest
of the lessee thereunder to be encumbered by the
related Mortgage, and there has not been a material
change in the terms of the Ground Lease since its
recordation, with the exception of written
instruments which are part of the related Mortgage
File;
(3) Except as indicated in the related title insurance
policy or opinion of title, the ground lessee's
interest in the Ground Lease is not subject to any
liens or encumbrances superior to, or of equal
priority with the related Mortgage, other than the
related ground lessor's related fee interest;
(4) The related Borrower's interest in the Ground Lease
is assignable to the Trustee upon notice to, but
without the consent of, the lessor thereunder (or, if
any such consent is required, it has been obtained
prior to the Closing Date) or, in the event that it
is so assigned, it is further assignable by the
Trustee and its successors and assigns upon notice
to, but without a need to obtain the consent of, such
lessor;
(5) To the best of the Originator's knowledge, as of the
Closing Date, the Ground Lease is in full force and
effect and no default has occurred under the Ground
Lease and there is no existing condition which, but
for the passage of time or the giving of notice,
would result in a default under the terms of the
Ground Lease;
(6) The Ground Lease requires the lessor thereunder to
give notice of any default by the lessee to the
mortgagee; or the Ground Lease or an estoppel letter
received by the mortgagee from the lessor further
provides that notice of termination given under the
Ground Lease is not effective against the mortgagee
unless a copy of the notice has been delivered to the
mortgagee in the manner described in such Ground
Lease;
(7) The mortgagee is permitted a reasonable opportunity
(including, where necessary, sufficient time to gain
possession of the interest of the lessee under the
Ground Lease) to cure any default under the Ground
Lease, which is curable after the receipt of notice
of any the default before the lessor thereunder may
terminate the Ground Lease;
(8) The Ground Lease has a term which extends not less
than 10 years beyond the maturity date of the related
Mortgage Loan;
(9) The Ground Lease requires the lessor to enter into a
new lease upon termination of the Ground Lease for
any reason, including rejection of the Ground Lease
in a bankruptcy proceeding; and
(10) Under the terms of the Ground Lease and the related
Mortgage, taken together, any related insurance
proceeds will be applied either to the repair or
restoration of all or part of the related Mortgaged
Property, with the mortgagee or a trustee appointed
by it having the right to hold and disburse the
proceeds as the repair or restoration progresses, or
to the payment of the outstanding principal balance
of the Mortgage Loan together with any accrued
interest thereon.
12
(xxx) If the related Mortgage is a deed of trust, a trustee, duly
qualified under applicable law to serve as such, has been
properly designated and currently so serves and is named in
the deed of trust or has been substituted in accordance with
applicable law, and no fees or expenses are or will become
payable to the trustee under the deed of trust, except in
connection with a trustee's sale after default by the
related Borrower or in connection with the release of the
related Mortgaged Property or related security for such
Mortgage Loan following the payment of such Mortgage Loan in
full;
(xxxi) The related Note is not secured by any collateral except the
lien of the related Mortgage, any related Assignment of
Leases and Rents and any related security agreement,
guaranties, debt service reserves or other such instruments
of collateral, the related Mortgaged Property and the other
collateral for such Mortgage Loan do not secure any mortgage
loan that is not included in the Trust Fund on the Closing
Date;
(xxxii) No Mortgage Loan, Note or Mortgage requires the mortgagee to
release any portion of the Mortgaged Property from the lien
of the Mortgage except upon payment in full of such Mortgage
Loan at maturity or in connection with a Permitted
Prepayment of the Mortgage Loan (or in the case of Mortgage
Loans secured by more than one Mortgaged Property, payment
of a release price in connection with the sale of one or
more (but not all) of the Mortgaged Properties);
(xxxiii) To LTC's knowledge, there was no existing circumstance or
condition with respect to the related Mortgage, Mortgaged
Property, Borrower, tenant or operator of the Mortgaged
Property relating to such Mortgage Loan (giving effect to
any non-recourse provisions therein) that in LTC's
reasonable determination would cause such Mortgage Loan to
be subject to imminent default except such circumstances and
conditions which have been cured prior to the date hereof;
(xxxiv) Each related Mortgaged Property is on a separate tax parcel,
assessed for real estate tax purposes separate and apart
from any other property owned by the related Borrower or any
other Person;
(xxxv) The related Assignment of Leases and Rents creates a valid
first priority assignment of, or security interest in, the
right to receive all payments due under the related Net
Lease, if any, which right may be exercised by the mortgagee
upon the occurrence of an event of default by the related
Borrower under the terms of the related Mortgage;
(xxxvi) The related Note does not provide for a grace period that
exceeds fifteen Business Days during which remittance by the
related Borrower of any scheduled Monthly Payment for such
Mortgage Loan may be deferred without the payment of any
default interest or late charge therefor, and there is no
difference for any period between the amount of interest
accrued on such Mortgage Loan and the amount of interest
payable thereon;
(xxxvii) In the event of a foreclosure under the related Mortgage,
any related Net Lease, if any, will either (i) be
extinguished by reason of being subordinate to the related
Mortgage, without any non-disturbance or attornment
obligations; or (ii) continue in full force and effect,
either because such Net Lease is superior in time and has
not been subordinated, or because non-disturbance and
attornment obligations have been given;
(xxxviii) There is no action pending or, to LTC's knowledge,
threatened, to terminate the related facility's
participation in the Medicaid or Medicare program, and the
execution of any Trans-
13
action Documents will not adversely affect the facility's
participation in such programs;
(xxxix) The related Mortgage or the related Note contains no
provision limiting or restricting the right or ability of
LTC to assign, transfer or convey such Mortgage or Note to
any other person or entity;
(xl) Interest with respect to 17 of the Mortgage Loans is accrued
on the basis of a 360-day year consisting of twelve 30-day
months and interest with respect to the remaining 23
Mortgage Loans is accrued on the basis of a 365-day year;
(xli) No Mortgage Loan or Note permits the related Borrower to
incur or maintain a second lien on the related Mortgaged
Property without the prior consent of the related mortgagee;
(xlii) To the best of the Originator's knowledge, there is no
pending action, suit, proceeding, arbitration or
governmental investigation against the related Borrower or
the related Mortgaged Property which could have a material
effect on the interests of the Certificateholders, with the
exception of certain pending litigation against Retirement
Care Associates, which directly or through its affiliates
operates or manages the Mortgaged Properties securing
Mortgage Loans #000, #000, #000, #000 and #189;
(xliii) Any escrow deposits and payments relating to a Mortgage Loan
are under the control of the Originator or the Depositor and
all amounts required to be deposited in any escrow accounts
with respect to each Mortgage Loan by the related Borrowers
have been deposited;
(xliv) As to each Nursing Facility which constitutes a skilled
nursing facility;
(1) To the best of LTC's knowledge, each Nursing Facility
and each Nursing Facility operator complies with all
laws, regulations, quality and safety standards, and
requirements of the applicable state Department of
Health (each a "DOH") and all other state or federal
governmental authorities;
(2) To the best of LTC's knowledge, all governmental
licenses, permits, regulatory agreements or other
approvals or agreements required for the operation of
each Nursing Facility are held by the applicable
Borrower in the name of the Borrower and are in full
force and effect, including without limitation, a
valid certificate of need ("CON") or similar
certificate, license, or approval issued by the DOH
for the requisite number of beds, and approved
provider status in any approved provider payment
program (collectively, the "Licenses");
(3) The Licenses, including without limitation, the CON:
(A) may not, under the terms of the related loan
documents, be, and to the best of LTC's
knowledge, have not been, transferred to any
location other than the Nursing Facility; and
(B) to the best of LTC's knowledge, have not been
pledged as collateral security for any other
loan or indebtedness as of the origination date
for such Mortgage Loan;
(4) So long as the Certificates remain outstanding, the
Originator will not consent to allow
14
any Borrower to:
(A) amend or otherwise reduce a Nursing Facility's
authorized bed capacity and/or the number of
beds approved by the DOH; or
(B) replace or transfer all or any material portion
of any Nursing Facility's beds to another site
or location;
(5) To the best of LTC's knowledge, each Nursing Facility
is not the subject of any pending action by any state
or federal regulatory agency which might result in
the revocation or loss of the Licenses;
(6) To the best of LTC's knowledge, each Nursing Facility
is in compliance with all requirements for
participation in Medicare and Medicaid, including
without limitation, the Medicare and Medicaid Patient
Protection Act of 1987;
(7) To the best of LTC's knowledge, no notice of any
violation has been received from a government agency
that would, directly or indirectly, or with the
passage of time:
(A) have a material adverse impact on any
Borrower's ability to accept and/or retain
patients;
(B) modify, limit or annul any Borrower's Licenses;
or
(C) affect any Borrower's continued participation
in the Medicaid or Medicare programs, or any
successor programs thereto;
(8) To the best of LTC's knowledge, no material physical
plant waivers of licensure standards exist at any of
the Nursing Facilities;
(9) To the best of LTC's knowledge, no Nursing Facility
had a Level [A] violation which was not resolved
prior to the origination of the Mortgage Loan; and
(10) To the best of LTC's knowledge, there are no current
or pending Medicaid or Medicare recoupment efforts at
any of the Nursing Facilities;
(11) To the best of the Originator's knowledge, at the
time the related Mortgage Loan was originated, all
material licenses, including without limitation, the
related CON, are held free from restrictions or known
conflicts which would materially impair the use or
operation of the Nursing Facility;
(12) Each Mortgage Loan contains restrictions against
rescinding, withdrawing, revoking, amending,
modifying, supplementing, or otherwise altering the
nature, tenor or scope of the licenses for the
related Nursing Facility;
(13) To the best of the Originator's knowledge, at the
time the related Mortgage Loan was originated, each
related Nursing Facility was in conformance in all
material respects with all insurance, reimbursement
and cost reporting requirements, and, to the extent
required, had a current provider agreement which was
in full force and effect under
15
Medicare and Medicaid;
(14) To the best of the Originator's knowledge, at the
time the related Mortgage Loan was originated, there
was no revocation, suspension, termination,
probation, restriction, limitation, or nonrenewal
affecting any borrower, operator, or Nursing Facility
or any participation or provider agreement with any
third-party payor, including Medicare, Medicaid, Blue
Cross and/or Blue Shield, and any other private
commercial insurance managed care and employee
assistance program to which any operator was subject;
(15) With the exception of Mortgage Loans #000, #000,
#000, #000 and #189, at the time the related Mortgage
Loan was originated, the Originator had no actual
knowledge that any borrower had pledged its
receivables as collateral security for any other loan
or indebtedness;
(16) The Originator has no actual knowledge that any
existing agreement material to the management or
operation of any related Nursing Facility is not in
full force or effect or that there is any breach or
default under any such agreement by any party
thereto.
(xlvii) There is no condition or circumstance existing as a result
of, or arising from, the presence of Hazardous Materials on
a Mortgaged Property such that the Mortgage Loan secured by
the affected Mortgaged Property would be ineligible, solely
by reason of such condition, for purchase by FNMA under the
terms of Section 501.04 of the Guide (assuming such Mortgage
Loan were secured by multifamily residential property),
including a condition or circumstance that would constitute,
solely by reason of such condition or circumstance, a
material violation of applicable federal, state or local law
in effect as of the Closing Date (such condition described
in this clause, a "Disqualifying Condition"); and
(xlviii) Each Mortgage Loan and Mortgage Certificate is a "qualified
mortgage" within the meaning of Section 860(G) of the code
(without regard to Section 1.860G-2(f)(2) of the Treasury
Regulations).
(b) LTC agrees to remedy any violation described below in all material respects
or to repurchase the Mortgage Certificates upon the determination, as of the
Closing Date and immediately prior to the effectiveness of the transfer effected
hereby if one of the following statements is not true in any respect and such
violation has a material adverse affect on the interests of the
Certificateholders:(i) LTC has marketable title to, and was the sole owner and
beneficial record holder of, such Mortgage Certificates, (ii) LTC has full power
and authority to sell and assign such Mortgage Certificates free and clear of
any and all liens, pledges, charges and security interests created by or through
the Company, and (iv) when such Mortgage Certificates are transferred in
accordance with the provisions of this Agreement, the Trustee will be the
beneficial and record owner thereof.
ARTICLE IV
MORTGAGE LOAN AND MORTGAGE CERTIFICATES
REPURCHASES OR SUBSTITUTIONS
Section 4.1 MORTGAGE LOAN REPURCHASES OR SUBSTITUTIONS AND
MORTGAGE CERTIFICATE REPURCHASES. (a) If (i)(x) upon the existence of any
violation of any representation or warranty described in Section
3.2(a)(xlvii) hereof with respect to any Mortgage Loan except for subsection
3.2(xlvii) (referred to herein as an "event") which event materially and
adversely affects the interests of the Certificateholders or (y) any
documenta-
16
tion described in Section 2.1 of the Pooling and Servicing Agreement relating to
any Mortgage Loan shall be missing or defective, as identified in the Trustee's
Exception Report pursuant to the Pooling and Servicing Agreement, and such
absence or defect materially and adversely affects the interests of the
Certificateholders; and (ii) LTC shall not have cured in all material respects
such event, omission or defect within ninety (90) days of discovery of such
event, omission or defect, then (iii) LTC shall, at its option, either
repurchase such Mortgage Loan or substitute a new mortgage loan meeting and
subject to the requirements of Section 2.2(b) of the Pooling and Servicing
Agreement (a "Substitute Mortgage Loan") for the Mortgage Loan to which such
event, omission or defect relates, and in either case, as provided in clause (c)
below, within such ninety (90) day period.
If there exists any violation of any representation or warranty
described in Section 3.2(b) hereof with respect to the Mortgage Certificates and
LTC shall not have remedied in all material respects such violation within
ninety (90) days of discovery of such violation, then LTC shall repurchase such
Mortgage Certificates at a price equal to the Repurchase Price applicable to the
Mortgage Certificates.
The repurchase or substitution obligation described in this
paragraph will constitute the sole remedy of the Certificateholders or the
Trustee, on behalf of the Certificateholders, with respect to the conditions
described in this paragraph (a).
(b) If, as of the Closing Date of a Mortgage Loan, the
representation and warranty contained in Section 3.2(xlvii) was not true and
correct as to the related Mortgaged Property LTC shall, within 90 days of
receipt from the Master Servicer, the Special Servicer or the Trustee of a
written request and of the certifications described in (iii) below, at LTC's
option, either (x) cure such Disqualifying Condition or (y) repurchase the
affected Mortgage Loan or Mortgage Loans on a whole loan servicing-released
basis at the Repurchase Price in the manner provided in Section 2.2(b) of the
Pooling and Servicing Agreement, provided that each of the following conditions
is satisfied:
(i) Such Mortgage Loan is at least 60 days delinquent and no action
has been taken to initiate foreclosure proceedings or to accept a
deed in lieu of foreclosure and the Special Servicer has not
taken possession of, or taken over the operation of, the related
Mortgaged Property, and the Special Servicer shall have delivered
to LTC a certification as to the foregoing;
(ii) The Special Servicer shall have delivered to LTC and the Trustee,
at the expense of the Trust Fund, an Environmental Assessment
indicating the presence of a Disqualifying Condition; and
(iii) The Master Servicer and the Special Servicer shall each provide a
written certification to LTC that the Special Servicer has acted
in compliance with the servicing standard set forth in Section
3.1 of the Pooling and Servicing Agreement and has not, by any
action, created, caused or contributed to a Disqualifying
Condition.
The repurchase obligation described in this paragraph will
constitute the sole remedy of the Certificateholders or the Trustee, on behalf
of the Certificateholders, with respect to a Disqualifying Condition. LTC shall
not be responsible for any Disqualifying Condition which may arise on a
Mortgaged Property after the Closing Date.
(c) If LTC elects to repurchase a Mortgage Loan or is required
to repurchase the Mortgage Certificates in accordance with the terms and
conditions set forth herein and in the Pooling and Servicing Agreement, the
repurchase shall be for an amount equal to the Repurchase Price applicable to
such Mortgage Loan or the Mortgage Certificates, as applicable, as of the date
of repurchase. If LTC elects to substitute a Substitute Mortgage Loan
hereunder, such substitution shall be effected under the terms and conditions,
and subject to the limitations, provided in Section 2.2(b) of the Pooling and
Servicing Agreement, including (i) the
17
requirement that LTC deliver to the Company or the Trustee, as the case may be,
for each such Mortgage Loan each of the documents set forth in Section 2.1 of
the Pooling and Servicing Agreement and such documents as are requested by the
Company or the Trustee and (ii) the receipt by the Trustee of the prior written
consent from the Rating Agency that such substitution of a Mortgage Loan will
not result in the qualification, downgrade or withdrawal of the rating then
assigned to any Class of Certificates then outstanding.
(d) In the case of a Substitute Mortgage Loan, LTC will provide
the Rating Agency with an Environmental Assessment prepared in accordance with
the requirements of the Pooling and Servicing Agreement with respect to the
Mortgaged Property or Mortgaged Properties securing such Substitute Mortgage
Loan. In addition, any substitution of a Mortgage is subject to the receipt by
the Trustee of written confirmation by the Rating Agency that such substitution
will not result in a qualification, downgrade or withdrawal of the rating then
assigned to any Class of Certificates then outstanding.
The Substitute Mortgage Loan shall have characteristics such that
the events set forth in Section 3.2 herein (other than Section 3.2(xxxiv)) do
not exist as of the date of substitution and would not have existed had such
Substitute Mortgage Loan originally been a Mortgage Loan and shall be subject to
the remedies set forth in this Section 4.1.
ARTICLE V
MISCELLANEOUS
Section 5.1 NOTICES. Except as otherwise expressly provided
herein, all notices, requests and demands to or upon the respective parties
hereto to be effective shall be in writing and shall be deemed to have been duly
given or made upon receipt at the addresses specified below, or to such other
addresses as may be designated by any party in a written notice to the other
parties hereto.
If to LTC, as follows:
LTC Properties, Inc.
000 Xxxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxxxxx
with copies thereof to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx
and
LTC Properties, Inc.
000 Xxxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx
Senior Vice President and General Counsel
18
If to the Company, as follows:
LTC REMIC IV Corporation
000 Xxxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxxxx
with copies thereof to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx
and
LTC REMIC IV Corporation
000 Xxxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attention: Xxxx Xxxxxx
Vice President and Assistant General Counsel
Section 5.2 SUCCESSORS AND ASSIGNS; ASSIGNMENTS. This Agreement
shall be binding upon and inure to the benefit of LTC, the Company and their
respective successors and assigns, except that LTC shall not assign or transfer
(by operation of law or otherwise) any of its rights or obligations under this
Agreement without the prior written consent of the Company and the Trustee and
any assignment hereof by LTC without such prior written consent shall be null
and void for all purposes; PROVIDED, HOWEVER, no such consent shall be required
if prior written confirmation has been obtained from the Rating Agency to the
effect that such assignment or transfer would not result in the qualification,
downgrade or withdrawal of the rating then assigned by the Rating Agency to any
Class of Certificates then outstanding. LTC hereby acknowledges and agrees that
the Company is assigning to the Trustee all of its right, title and interest in
and to this Agreement for the benefit of the Certificateholders pursuant to the
Pooling and Servicing Agreement. The rights of the Company hereunder are hereby
assigned to the Trustee which shall be assigned to a third party beneficiary
hereof.
Section 5.3. AMENDMENTS AND WAIVERS. Neither this Agreement nor
any terms hereof or thereof may be amended, supplemented, modified or waived
except by means of written instrument executed by each of the parties hereto and
the Trustee.
Section 5.4. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND
BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE
PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW).
Section 5.5 EFFECTIVENESS. This Agreement shall become effective
upon the execution and delivery of this Agreement by LTC on the Closing Date.
Section 5.6 HEADINGS DESCRIPTIVE. The headings of the several
sections and subsections of this Agreement are inserted for convenience only and
shall not in any way affect the meaning or construction of any provision of this
Agreement.
Section 5.7 MARSHALLING; RECAPTURE. The Company shall not be
under any obligation to marshal
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any assets in favor of LTC or any other party. To the extent the Company
receives any payment by or on behalf of LTC, which payment or any part thereof
is subsequently invalidated, declared to be fraudulent or preferential, set
aside or required to be repaid to LTC or its estate, trustee, receiver,
custodian or any other party under any bankruptcy law, state or federal law,
common law or equitable cause, then to the extent of such payment or repayment,
the obligation or part thereof which has been paid, reduced or satisfied by the
amount so repaid shall be reinstated by the amount so repaid and shall be
included within the liabilities of LTC to the Company as of the date such
initial payment, reduction or satisfaction occurred.
Section 5.8 SEVERABILITY. In case any provision or obligation
under this Agreement or the other Transaction Documents shall be invalid,
illegal or unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations, or of such provision
or obligation in any other jurisdiction, shall not in any way be affected or
impaired thereby.
Section 5.9 CAPITALIZATION. Capitalized terms used in this
Agreement that are not defined herein shall have their respective meanings set
forth in the Pooling and Servicing Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized representatives to execute and deliver this Agreement as of the date
first above written.
LTC PROPERTIES, INC.
By: /s/ XXXXXX X. XXXXXXX
---------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior V.P. and General Counsel
LTC REMIC IV CORPORATION
By: /s/ XXXXXX X. XXXXXXX
---------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior V.P. and General Counsel
Accepted by:
GMAC COMMERCIAL MORTGAGE CORPORATION
By: /s/ XXXXXXX XXXXXXXXX
---------------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: Senior President
Exhibit A
MORTGAGE LOAN SCHEDULE
Exhibit B
QUALIFIED TITLE INSURERS
[1. Chicago Title Insurance Company
2. Commonwealth Title Insurance Company
3. Lawyers Title Insurance Company
4. Xxxxxxx Title Guaranty Company
5. Alamo Title Insurance of Texas
6. First American Title Insurance Company
7. Attorneys' Title Insurance Fund, Inc.]
