EXHIBIT 99.1
EXECUTION COPY
MORTGAGE LOAN PURCHASE AGREEMENT
This Mortgage Loan Purchase Agreement (this "Agreement"), is dated and
effective as of April 28, 1998, between GMAC Commercial Mortgage Corporation as
seller (the "Seller") and GMAC Commercial Mortgage Securities, Inc. as purchaser
(the "Purchaser").
The Seller desires to sell, assign, transfer and otherwise convey to the
Purchaser, and the Purchaser desires to purchase, subject to the terms and
conditions set forth below, the multifamily and commercial mortgage loans (the
"Mortgage Loans") identified on the schedule annexed hereto as Exhibit A (the
"Mortgage Loan Schedule").
It is expected that the Mortgage Loans will be transferred, together with
other multifamily and commercial mortgage loans to a trust fund (the "Trust
Fund") to be formed by the Purchaser, 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 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 May 1, 1998 (the "Pooling and
Servicing Agreement"), among the Purchaser 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.
The Purchaser intends to sell certain of the Certificates to Deutsche
Xxxxxx Xxxxxxxx Inc., Xxxxxx Brothers Inc. and Residential Funding Securities
Corp. (together, the "Underwriters") pursuant to an underwriting agreement dated
the date hereof (the "Underwriting Agreement"). The Purchaser intends to sell
the remaining Certificates (the "Non-Registered Certificates") to Deutsche
Xxxxxx Xxxxxxxx Inc. and Xxxxxx Brothers Inc. (the "Initial Purchasers"),
pursuant to a certificate purchase agreement dated the date hereof (the
"Certificate Purchase Agreement").
Now, therefore, in consideration of the premises and the mutual agreements
set forth herein, the parties agree as follows:
SECTION 1. Agreement to Purchase.
The Seller agrees to sell, assign, transfer and otherwise convey to the
Purchaser, and the Purchaser agrees to purchase, the Mortgage Loans. The
purchase and sale of the Mortgage Loans shall take place on May 18, 1998 or such
other date as shall be mutually acceptable to the parties hereto (the "Closing
Date"). As of the close of business on May 1, 1998 (the "Cut-off Date"), the
Mortgage Loans will have an aggregate principal balance (the "Aggregate Cut-off
Date Balance"), after application of all payments of principal due thereon on or
before such date, whether or not received, of $1,198,282,763, subject to a
variance of plus or minus 5%. The purchase price for the Mortgage Loans shall be
determined and paid to the Seller in accordance with the terms of an allocation
agreement dated the date hereof (the "Allocation Agreement"), to which the
Seller and Purchaser, among others, are parties.
SECTION 2. Conveyance of Mortgage Loans.
(a) Effective as of the Closing Date, subject only to receipt by the Seller
of the purchase price referred to in Section 1 hereof (exclusive of any
applicable holdback for transaction expenses in accordance with the Allocation
Agreement), the Seller does hereby sell, transfer, assign, set over and
otherwise convey to the Purchaser, without recourse, all the right, title and
interest of the Seller in and to the Mortgage Loans identified on the Mortgage
Loan Schedule as of such date, including all interest and principal received or
receivable by the Seller on or with respect to the Mortgage Loans after the
Cut-off Date, together with all of the Seller's right, title and interest in and
to the proceeds of any related title, hazard, or other insurance policies and
any escrow, reserve or other comparable accounts related to the Mortgage Loans.
The Purchaser shall be entitled to (and, to the extent received by or on behalf
of the Seller, the Seller shall deliver or cause to be delivered to or at the
direction of the Purchaser) all scheduled payments of principal and interest due
on the Mortgage Loans after the Cut-off Date, and all other recoveries of
principal and interest collected thereon after the Cut-off Date. All scheduled
payments of principal and interest due thereon on or before the Cut-off Date and
collected after the Cut-off Date shall belong to the Seller.
(b) In connection with the Seller's assignment pursuant to subsection (a)
above, the Seller hereby agrees 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 hereto) for each Mortgage Loan so
assigned. It is further acknowledged and agreed by the Seller that the Purchaser
intends to cause the Trustee to perform a limited review of such Mortgage Files
to enable the Trustee to confirm to the Purchaser on or before the Closing Date
that the Mortgage Note referred to in clause (i) of Exhibit B has been delivered
by the Seller with respect to each such Mortgage File. In the event Seller fails
to so deliver each such Mortgage File to the Trustee, the Purchaser 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. 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, 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 2(b) shall be deemed to have been
satisfied as to such missing item, and such missing item shall be deemed to have
been
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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 Purchaser (or any subsequent owner of the affected
Mortgage Loan, including without limitation the Trustee) within 180 days of the
Closing Date (or within such longer period after the Closing Date as the
Purchaser (or such subsequent owner) may consent to, which consent shall not be
unreasonably withheld so long as the Seller has provided the Purchaser (or such
subsequent owner) with evidence of such recording or filing, as the case may be,
or has certified to the Purchaser (or such subsequent owner) as to the
occurrence of such recording or filing, as the case may be, and is, as certified
to the Purchaser (or such subsequent owner) no less often than quarterly, in
good faith attempting to obtain from the appropriate county recorder's or filing
office such original or copy). 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 solely
because such policy has not yet been issued, the delivery requirements of this
Section 2(b) 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 Purchaser (or any subsequent owner of the
affected Mortgage Loan, including without limitation the 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 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. On the Closing Date, upon
notification from the Seller that the purchase price referred to in Section 1
(exclusive of any applicable holdback for transaction expenses in accordance
with the Allocation Agreement) has been received by the Seller, the Trustee
shall be authorized to release to the Purchaser or its designee all of the
Mortgage Files in the Trustee's possession relating to the Mortgage Loans.
(c) As to each Mortgage Loan, the Seller shall be responsible for all costs
associated with the recording or filing, as the case may be, of each assignment
referred to in clauses (iii) and (v) of Exhibit B and each UCC-2 and UCC-3, if
any, referred to in clause (xi)(B) of Exhibit B; 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
Purchaser (or any subsequent owner of the affected Mortgage Loan, including
without limitation the Trustee) for recording or filing, as appropriate, at the
Seller's expense.
(d) All documents and records in the Seller's possession (or under its
control) relating to the Mortgage Loans that are not required to be a part of a
Mortgage File in accordance with Exhibit B (all such other documents and
records, as to any Mortgage Loan, the "Servicing File"), together with all
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escrow payments, reserve funds and other comparable funds in the possession of
the Seller (or under its control) with respect to the Mortgage Loans, shall
(unless they are held by a sub-servicer that shall, as of the Closing Date,
begin acting on behalf of the Master Servicer pursuant to a written agreement
between such parties) be delivered by the Seller (or its agent) to the Purchaser
(or its designee) no later than the Closing Date. If a sub-servicer shall, as of
the Closing Date, begin acting on behalf of the Master Servicer with respect to
any Mortgage Loan pursuant to a written agreement between such parties, the
Seller shall deliver a copy of the related Servicing File to the Master
Servicer.
(e) The Seller's records will reflect the transfer of the Mortgage Loans to
the Purchaser as a sale.
SECTION 3. Examination of Mortgage Loan Files and Due Diligence Review.
The Seller shall reasonably cooperate with any examination of the Mortgage
Files and Servicing Files that may be undertaken by or on behalf of the
Purchaser. The fact that the Purchaser has conducted or has failed to conduct
any partial or complete examination of the Mortgage Files and/or Servicing Files
shall not affect the Purchaser's right to pursue any remedy available in equity
or at law for a breach of the Seller's representations, warranties and covenants
set forth in or contemplated by Section 4.
SECTION 4. Representations, Warranties and Covenants of the Seller.
(a) The Seller 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 Purchaser, and its successors and assigns (including,
without limitation, the Trustee and the holders of the Certificates), each of
the representations and warranties set forth in Exhibit C, 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) Neither the Seller nor anyone acting on its behalf has (A)
offered, pledged, sold, disposed of or otherwise transferred any
Certificate, any interest in any Certificate or any other similar security
to any person in any manner, (B) solicited any offer to buy or to accept a
pledge, disposition or other transfer of any Certificate, any interest in
any Certificate or any other similar security from any person in any
manner, (C) otherwise approached or negotiated with respect to any
Certificate, any interest in any Certificate or any other similar security
with any person in any manner, (D) made any general solicitation by means
of general advertising or in any other manner with respect to any
Certificate, any interest in any Certificate or any similar security, or
(E) taken any other action, that (in the case of any of the acts described
in clauses (A) through (E) above) would constitute or result in a violation
of the Securities Act or any state securities law relating to or in
connection with the issuance of the Certificates or require registration or
qualification pursuant to the Securities Act or any state securities law of
any Certificate not otherwise intended to be a Registered Certificate. In
addition, the Seller will not act, nor has it authorized or will it
authorize any person to act, in any manner set forth in the foregoing
sentence with respect to any of the Certificates or interests therein. For
purposes of this paragraph 4(b)(viii), the term "similar security" shall be
deemed to include, without limitation,
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any security evidencing or, upon issuance, that would have evidenced an
interest in the Mortgage Loans or any substantial number thereof.
(ix) Insofar as it relates to the Mortgage Loans, the information set
forth on pages A-9 through A-13, inclusive, of Annex A to the Prospectus
Supplement (as defined in Section 9) (the "Loan Detail") and, to the extent
consistent therewith, the information set forth on the diskette attached to
the Prospectus Supplement and the accompanying prospectus (the "Diskette"),
is true and correct in all material respects. Insofar as it relates to the
Mortgage Loans and/or the Seller and does not represent a restatement or
aggregation of the information on the Loan Detail, the information set
forth in the Prospectus Supplement and the Memorandum (also as defined in
Section 9) under the headings "Summary of the Prospectus Supplement--The
Mortgage Asset Pool", "Risk Factors--The Mortgage Loans" and "Description
of the Mortgage Asset Pool", set forth on Annex A to the Prospectus
Supplement and (to the extent it contains information consistent with that
on such Annex A) set forth on the Diskette, does not contain any untrue
statement of a material fact or (in the case of the Memorandum, when read
together with the other information specified therein as being available
for review by investors) omit to state any material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading.
(x) 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) the filing or recording of financing
statements, instruments of assignment and other similar documents necessary
in connection with Seller's sale of the Mortgage Loans to the Purchaser,
(2) such consents, approvals, authorizations, qualifications,
registrations, filings or notices as have been obtained or made and (3)
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 affects the interests of the Purchaser or a
breach of any of the representations and warranties made pursuant to subsection
(a) above and set forth in Exhibit C 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 Trustee and the
holders of the Certificates), the party discovering such breach shall give
prompt written notice to the other party hereto.
SECTION 5. Representations, Warranties and Covenants of the Purchaser.
(a) The Purchaser, as of the date hereof, hereby represents and warrants
to, and covenants with, the Seller that:
(i) The Purchaser is a corporation duly organized, validly existing
and in good standing under the laws of State of Delaware.
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(ii) The execution and delivery of this Agreement by the Purchaser,
and the performance and compliance with the terms of this Agreement by the
Purchaser, will not violate the Purchaser's organizational documents or
constitute a default (or an event which, with notice or lapse of time, or
both, would constitute a default) under, or result in the breach of, any
material agreement or other instrument to which it is a party or which is
applicable to it or any of its assets.
(iii) The Purchaser has the full power and authority to enter into and
consummate all transactions contemplated by this Agreement, has duly
authorized the execution, delivery and performance of this Agreement, and
has duly executed and delivered this Agreement.
(iv) This Agreement, assuming due authorization, execution and
delivery by the Seller, constitutes a valid, legal and binding obligation
of the Purchaser, enforceable against the Purchaser in accordance with the
terms hereof, subject to (A) applicable bankruptcy, insolvency,
reorganization, moratorium and other laws affecting the enforcement of
creditors' rights generally, and (B) general principles of equity,
regardless of whether such enforcement is considered in a proceeding in
equity or at law.
(v) The Purchaser is not in violation of, and its execution and
delivery of this Agreement and its performance and compliance with the
terms of this Agreement will not constitute a violation of, any law, any
order or decree of any court or arbiter, or any order, regulation or demand
of any federal, state or local governmental or regulatory authority, which
violation, in the Purchaser's good faith and reasonable judgment, is likely
to affect materially and adversely either the ability of the Purchaser to
perform its obligations under this Agreement or the financial condition of
the Purchaser.
(vi) No litigation is pending or, to the best of the Purchaser's
knowledge, threatened against the Purchaser which would prohibit the
Purchaser from entering into this Agreement or, in the Purchaser's good
faith and reasonable judgment, is likely to materially and adversely affect
either the ability of the Purchaser to perform its obligations under this
Agreement or the financial condition of the Purchaser.
(vii) The Purchaser has not dealt with any broker, investment banker,
agent or other person, other than the Seller, 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 transactions contemplated hereby.
(viii) No consent, approval, authorization or order of, registration
or filing with, or notice to, any governmental authority or court is
required, under federal or state law, for the execution, delivery and
performance of or compliance by the Purchaser with this Agreement, or the
consummation by the Purchaser of any transaction contemplated hereby, other
than (1) such consents, approvals, authorizations, qualifications,
registrations, filings or notices as have been obtained or made and (2)
where the lack of such consent, approval, authorization, qualification,
registration, filing or notice would not have a material adverse effect on
the performance by the Purchaser under this Agreement.
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(b) 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 6. 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) in respect of the
Mortgage File for any Mortgage Loan or a breach of any representation or
warranty made pursuant to Section 4(a) and set forth in Exhibit C, 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 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) 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.
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.
(b) Notwithstanding Section 6(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 C-1 to Exhibit C 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 C 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 "Material
Breach"), the Seller shall be required, at its option, to either (i) cure such
Material Breach in all material respects or (ii) repurchase the affected
Mortgage Loan, in each case, within the applicable Permitted Cure Period. If any
such Material Breach
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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 foregoing, and subject to the following paragraph, the
"Permitted Cure Period" applicable to any Defect or Material 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 Material Breach, as the case may be; provided that if such Defect
or Material 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 Material 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 Material Documents Defect or Material Breach, as the
case may be, and the Seller is diligently attempting to effect such correction
or cure, then the applicable Permitted Cure Period shall, with the consent of
the Purchaser or its assignee (which consent shall not be unreasonably
withheld), be extended for an additional 90 days.
(c) In connection with any repurchase of or substitution for a Mortgage
Loan contemplated by this Section 6, 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 in the same manner. The form and sufficiency of all such
instruments and certificates shall be the responsibility of the Seller.
(d) Except as provided in Section 2(b), this Section 6 provides the sole
remedies available to the Purchaser, and its successors and assigns (including,
without limitation, 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 4(a) and set forth in Exhibit C, or in connection with
the circumstances described in Section 6(b). If the Seller defaults on its
obligations to repurchase any Mortgage Loan in accordance with Section 6(a) or
6(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.
SECTION 7. Closing.
The closing of the sale of the Mortgage Loans (the "Closing") shall be held
at the offices of Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx LLP, 000 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000 at 10:00 a.m., New York City time, on the Closing Date.
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The Closing shall be subject to each of the following conditions:
(i) All of the representations and warranties of the Seller specified
herein shall be true and correct as of the Closing Date, and the Aggregate
Cut-off Date Balance shall be within the range permitted by Section 1 of
this Agreement;
(ii) All documents specified in Section 8 (the "Closing Documents"),
in such forms as are agreed upon and acceptable to the Purchaser, shall be
duly executed and delivered by all signatories as required pursuant to the
respective terms thereof;
(iii) The Seller shall have delivered and released to the Trustee, the
Purchaser or the Purchaser's designee, as the case may be, all documents
and funds required to be so delivered pursuant to Section 2;
(iv) The result of any examination of the Mortgage Files and Servicing
Files performed by or on behalf of the Purchaser pursuant to Section 3
shall be satisfactory to the Purchaser in its sole determination;
(v) All other terms and conditions of this Agreement required to be
complied with on or before the Closing Date shall have been complied with,
and the Seller shall have the ability to comply with all terms and
conditions and perform all duties and obligations required to be complied
with or performed after the Closing Date;
(vi) The Seller shall have paid or agreed to pay all fees, costs and
expenses payable by it to the Purchaser pursuant to this Agreement; and
(vii) Neither the Underwriting Agreement nor the Certificate Purchase
Agreement shall have been terminated in accordance with its terms.
Both parties agree to use their best efforts to perform their respective
obligations hereunder in a manner that will enable the Purchaser to purchase the
Mortgage Loans on the Closing Date.
SECTION 8. Closing Documents.
The Closing Documents shall consist of the following:
(a) This Agreement duly executed and delivered by the Purchaser and the
Seller;
(b) An Officer's Certificate substantially in the form of Exhibit D-1
hereto, executed by the Secretary or an assistant secretary of the Seller, and
dated the Closing Date, and upon which the Purchaser and each Underwriter may
rely, attaching thereto as exhibits the organizational documents of the Seller;
(c) A certificate of good standing regarding the Seller from the Secretary
of State for the State of California, dated not earlier than 30 days prior to
the Closing Date;
10
(d) A certificate of the Seller substantially in the form of Exhibit D-2
hereto, executed by an executive officer or authorized signatory of the Seller
and dated the Closing Date, and upon which the Purchaser and each Underwriter
may rely;
(e) Written opinions of counsel for the Seller, substantially in the form
of Exhibits D-3A and D-3B hereto and subject to such reasonable assumptions and
qualifications as may be requested by counsel for the Seller and acceptable to
counsel for the Purchaser, dated the Closing Date and addressed to the Purchaser
and each Underwriter;
(f) Any other opinions of counsel for the Seller reasonably requested by
the Rating Agencies in connection with the issuance of the Certificates, each of
which shall include the Purchaser and each Underwriter as an addressee; and
(g) Such further certificates, opinions and documents as the Purchaser may
reasonably request.
SECTION 9. Indemnification.
(a) The Seller agrees to indemnify and hold harmless the Purchaser, its
officers and directors, and each person, if any, who controls the Purchaser
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), against
any and all losses, claims, damages or liabilities, joint or several, to which
they or any of them may become subject under the Securities Act, the Exchange
Act or other federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in the Prospectus Supplement, the
Memorandum, the Diskette or, insofar as they are required to be filed as part of
the Registration Statement pursuant to the No-Action Letters, any Computational
Materials or ABS Term Sheets with respect to the Registered Certificates, or in
any revision or amendment thereof or supplement thereto, or arise out of or are
based upon the omission or alleged omission (in the case of any such
Computational Materials or ABS Term Sheets, when read in conjunction with the
Prospectus and, in the case of the Memorandum, when read together with the other
information specified therein as being available for review by investors) to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading; but only if and to the extent that (i) any such untrue
statement or alleged untrue statement is with respect to information regarding
the Mortgage Loans contained in the Loan Detail or, to the extent consistent
therewith, the Diskette, or (ii) any such untrue statement or alleged untrue
statement or omission or alleged omission is with respect to information
regarding the Seller or the Mortgage Loans contained in the Prospectus
Supplement or the Memorandum under the headings "Summary of Prospectus
Supplement - The Mortgage Asset Pool", "Risk Factors - The Mortgage Loans"
and/or "Description of the Mortgage Asset Pool" or contained on Annex A to the
Prospectus Supplement (exclusive of the Loan Detail), and such information does
not represent a restatement or aggregation of information contained in the Loan
Detail; or (iii) such untrue statement, alleged untrue statement, omission or
alleged omission arises out of or is based upon a breach of the representations
and warranties of the Seller set forth in or made pursuant to Section 4;
provided, that the indemnification provided by this Section 9 shall not apply to
the extent that such untrue statement of a material fact or omission of a
material fact necessary to make the statements made, in light of the
circumstances in which they were made, not misleading, was made as a result of
an error in the
11
manipulation of, or calculations based upon, the Loan Detail. This indemnity
agreement will be in addition to any liability which the Seller may otherwise
have.
For purposes of the foregoing, "Registration Statement" shall mean the
registration statement No. 333-37717 filed by the Purchaser on Form S-3,
including without limitation exhibits thereto and information incorporated
therein by reference; "Prospectus" shall mean the prospectus dated December 17,
1997, as supplemented by the prospectus supplement dated April 28, 1998 (the
"Prospectus Supplement"), relating to the Registered Certificates; "Memorandum"
shall mean the private placement memorandum dated April 28, 1998, relating to
the Non-Registered Certificates; "Computational Materials" shall have the
meaning assigned thereto in the no-action letter dated May 20, 1994 issued by
the Division of Corporation Finance of the Securities and Exchange Commission
(the "Commission") to Xxxxxx, Peabody Acceptance Corporation I, Xxxxxx, Xxxxxxx
& Co. Incorporated, and Xxxxxx Structured Asset Corporation and the no-action
letter dated May 27, 1994 issued by the Division of Corporation Finance of the
Commission to the Public Securities Association (together, the "Xxxxxx
Letters"); and "ABS Term Sheets" shall have the meaning assigned thereto in the
no-action letter dated February 17, 1995 issued by the Division of Corporation
Finance of the Commission to the Public Securities Association (the "PSA Letter"
and, together with the Xxxxxx Letters, the "No-Action Letters").
(b) Promptly after receipt by any person entitled to indemnification under
this Section 9 (each, an "indemnified party") of notice of the commencement of
any action, such indemnified party will, if a claim in respect thereof is to be
made against the Seller (the "indemnifying party") under this Section 9, notify
the indemnifying party in writing of the commencement thereof; but the omission
to notify the indemnifying party will not relieve it from any liability that it
may have to any indemnified party otherwise than under this Section 9. In case
any such action is brought against any indemnified party and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein, and to the extent that it may elect by written
notice delivered to the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof, with counsel
satisfactory to such indemnified party; provided, however, that if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party or parties shall have reasonably
concluded that there may be legal defenses available to it or them and/or other
indemnified parties that are different from or additional to those available to
the indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assert such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party to such indemnified
party of its election to assume the defense of such action and approval by the
indemnified party of counsel, which approval will not be unreasonably withheld,
the indemnifying party will not be liable for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof, unless (i) the indemnified party shall have employed separate counsel
in connection with the assertion of legal defenses in accordance with the
proviso to the preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel, approved by the Purchaser and the indemnifying party,
representing all the indemnified parties under Section 9(a) who are parties to
such action), (ii) the indemnifying party shall not have employed counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after notice of commencement of the action or
(iii) the indemnifying party has authorized the employment of counsel for the
indemnified party at the expense of the indemnifying party;
12
and except that, if clause (i) or (iii) is applicable, such liability shall only
be in respect of the counsel referred to in such clause (i) or (iii).
(c) If the indemnification provided for in this Section 9 is due in
accordance with its terms but is for any reason held by a court to be
unavailable to an indemnified party on grounds of policy or otherwise, then the
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities, in such proportion as is
appropriate to reflect the relative fault of the indemnified and indemnifying
parties in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative fault of the indemnified and indemnifying parties
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by such parties
(d) The Purchaser and the Seller agree that it would not be just and
equitable if contribution pursuant to Section 9(c) were determined by pro rata
allocation or by any other method of allocation that does not take account of
the considerations referred to in Section 9(c) above. The amount paid or payable
by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in this Section 9 shall be deemed to include, subject to
the limitations set forth above, any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim, except where the indemnified party is required to bear such
expenses pursuant to this Section 9, which expenses the indemnifying party shall
pay as and when incurred, at the request of the indemnified party, to the extent
that the indemnifying party will be ultimately obligated to pay such expenses.
If any expenses so paid by the indemnifying party are subsequently determined to
not be required to be borne by the indemnifying party hereunder, the party that
received such payment shall promptly refund the amount so paid to the party
which made such payment. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(e) The indemnity and contribution agreements contained in this Section 9
shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by any indemnified
party, and (iii) acceptance of and payment for any of the Certificates.
SECTION 10. Costs.
Costs relating to the transactions contemplated hereby shall be borne by
the respective parties hereto in accordance with the Allocation Agreement.
SECTION 11. Notices.
All demands, notices and communications hereunder shall be in writing and
shall be deemed to have been duly given if personally delivered to or mailed, by
registered mail, postage prepaid, by overnight mail or courier service, or
transmitted by facsimile and confirmed by a similar mailed writing, if to the
Purchaser, addressed to GMAC Commercial Mortgage Securities, Inc. at 000 Xxxxxxx
Xxxx, X.X. Xxx 0000, Xxxxxxx, Xxxxxxxxxxxx 00000-0000, Attention: Structured
Finance Manager, facsimile no. (000) 000-0000, with a copy to the General
Counsel, GMAC Commercial Mortgage Corporation,
13
or such other address or facsimile number as may hereafter be furnished to the
Seller in writing by the Purchaser; and if to the Seller, addressed to GMAC
Commercial Mortgage Corporation, at 000 Xxxxxxx Xxxx, X.X. Xxx 0000, Xxxxxxx,
Xxxxxxxxxxxx 00000-0000, Attention: Structured Finance Manager, facsimile no.
(000) 000-0000, with a copy to GMAC Commercial Mortgage Corporation, or to such
other address or facsimile number as the Seller may designate in writing to the
Purchaser.
SECTION 12. Third Party Beneficiaries.
Each of the officers, directors and controlling persons referred to in
Section 9 hereof is an intended third party beneficiary of the covenants and
indemnities of the Seller set forth in Section 9 of this Agreement. It is
acknowledged and agreed that such covenants and indemnities may be enforced by
or on behalf of any such person or entity against the Seller to the same extent
as if it was a party hereto.
SECTION 13. 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 14. 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 15. 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 16. GOVERNING LAW.
THIS AGREEMENT AND THE RIGHTS, DUTIES, OBLIGATIONS AND RESPONSIBILITIES OF
THE PARTIES HERETO SHALL BE GOVERNED IN ACCORDANCE WITH THE INTERNAL LAWS AND
DECISIONS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES
EXCEPT THAT THE PARTIES HERETO
14
INTEND THAT THE PROVISIONS OF SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS
LAW SHALL APPLY TO THIS AGREEMENT.
SECTION 17. Further Assurances.
The Seller and the Purchaser agree to execute and deliver such instruments
and take such further actions as the other party may, from time to time,
reasonably request in order to effectuate the purposes and to carry out the
terms of this Agreement.
SECTION 18. Successors and Assigns.
The rights and obligations of the Seller under this Agreement shall not be
assigned by the Seller without the prior written consent of the Purchaser,
except that any person into which the Seller may be merged or consolidated, or
any corporation 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, as may be required to effect the purposes of the
Pooling and Servicing Agreement, and the assignee shall, to the extent of such
assignment, succeed to the rights and obligations hereunder of the Purchaser.
Subject to the foregoing, this Agreement shall bind and inure to the benefit of
and be enforceable by the Seller and the Purchaser, and their permitted
successors and assigns, and the indemnified parties referred to in Section 9.
SECTION 19. 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. In
addition, this Agreement may not be changed in any manner which would have a
material adverse effect on any third party beneficiary under Section 12 hereof
without the prior consent of that person.
15
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 Xxxxxx
------------------------------------
Name: Xxxxx Xxxxxx
Title: Senior Vice President
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
By: /s/ Xxxxx Xxxxxx
------------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
EXHIBIT A
MORTGAGE LOAN SCHEDULE
The Mortgage Loan Schedule shall set forth, among other things, the
following information with respect to each Mortgage Loan:
(i) the loan number;
(ii) the street address (including city, state and zip code) of
the related Mortgaged Property;
(iii) the Mortgage Rate in effect as of the Cut-off Date and
whether such Mortgage Loan is an ARM Loan or a Fixed-Rate
Loan;
(iv) the original principal balance;
(v) the Cut-off Date Balance;
(vi) the (A) remaining term to stated maturity, (B) with respect
to each ARD Loan, the Anticipated Repayment Date and (C)
Stated Maturity Date;
(vii) the Due Date;
(viii) the amount of the Monthly Payment due on the first Due Date
following the Cut-off Date;
(ix) in the case of an ARM Loan, the (A) Index, (B) Gross
Margin, (C) first Mortgage Rate adjustment date following
the Cut-off Date and the frequency of Mortgage Rate
adjustments, and (D) maximum and minimum lifetime Mortgage
Rate, if any;
(x) whether such Mortgage Loan is an ARD Loan or a Defeasance
Loan; and
(xi) the Master Servicing Fee Rate.
The Mortgage Loan Schedule shall also set forth the aggregate Cut-off Date
Balance for all of the Mortgage Loans. Such list may be in the form of more than
one list, collectively setting forth all of the information required.
A-1
EXHIBIT B
THE MORTGAGE FILE
The "Mortgage File" for any Mortgage Loan shall (other than with respect to
the Mortgage Loan identified as "GMAC 1010" on the Mortgage Loan Schedule),
subject to Section 2(b), collectively consist of the following documents:
(i) the original Mortgage Note, endorsed by the most recent
endorsee prior to the Trustee or, if none, by the
originator, without recourse, either in blank or to the
order of the Trustee in the following form: "Pay to the
order of LaSalle National Bank, as trustee for the
registered holders of GMAC Commercial Mortgage Securities,
Inc., Mortgage Pass-Through Certificates, Series 1998-C1,
without recourse";
(ii) the original or a copy of the Mortgage and, if applicable,
the originals or copies of any intervening assignments
thereof showing a complete chain of assignment from the
originator of the Mortgage Loan to the most recent assignee
of record thereof prior to the Trustee, if any, in each
case with evidence of recording indicated thereon;
(iii) an 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);
(iv) the original or a copy of the related Assignment of Leases
(if such item is a document separate from the Mortgage)
and, if applicable, the originals or copies of any
intervening assignments thereof showing a complete chain of
assignment from the originator of the Mortgage Loan to the
most recent assignee of record thereof prior to the
Trustee, if any, in each case with evidence of recording
thereon;
(v) an original assignment of any related Assignment of Leases
(if such item is a document separate from 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), which assignment may be included as part of
the corresponding assignment of Mortgage referred to in
clause (iii) above;
(vi) an original or copy of any related security agreement (if
such item is a document separate from the Mortgage) and, if
applicable, the originals or copies of any intervening
assignments thereof showing a complete chain of assignment
from the originator of the Mortgage Loan to the most recent
assignee of record thereof prior to the Trustee, if any;
B-1
(vii) an original assignment of any related security agreement
(if such item is a document separate from the Mortgage)
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),
which assignment may be included as part of the
corresponding assignment of Mortgage referred to in clause
(iii) above;
(viii) originals or copies of all assumption, modification,
written assurance and substitution agreements, with
evidence of recording thereon if appropriate, in those
instances where the terms or provisions of the Mortgage,
Mortgage Note or any related security document have been
modified or the Mortgage Loan has been assumed;
(ix) the original or a copy of the lender's title insurance
policy issued as of the date of the origination of the
Mortgage Loan, together with all endorsements or riders (or
copies thereof) that were issued with or subsequent to the
issuance of such policy, insuring the priority of the
Mortgage as a first lien on the Mortgaged Property;
(x) the original or a copy of any guaranty of the obligations
of the mortgagor under the Mortgage Loan together with (A)
if applicable, the original or copies of any intervening
assignments of such guaranty showing a complete chain of
assignment from the originator of the Mortgage Loan to the
most recent assignee thereof prior to the Trustee, if any,
and (B) an original assignment of such guaranty executed by
the most recent assignee thereof prior to the Trustee or,
if none, by the originator;
(xi) (A) file or certified copies of any UCC financing
statements and continuation statements which were filed in
order to perfect (and maintain the perfection of) any
security interest held by the originator of the Mortgage
Loan (and each assignee of record prior to the Trustee) in
and to the personalty of the mortgagor at the Mortgaged
Property (in each case with evidence of filing thereon) and
which were in the possession of the Seller (or its agent)
at the time the Mortgage Files were delivered to the
Trustee and (B) if any such security interest is perfected
and the earlier UCC financing statements and continuation
statements were in the possession of the Seller, a UCC
financing statement executed by the most recent assignee of
record prior to the Trustee or, if none, by the originator,
evidencing the transfer of such security interest, either
in blank or in favor of the Trustee;
(xii) the original or a copy of the power of attorney (with
evidence of recording thereon, if appropriate) granted by
the Mortgagor if the Mortgage, Mortgage Note or other
document or instrument referred to above was signed on
behalf of the Mortgagor; and
B-2
(xiii) if the Mortgagor has a leasehold interest in the related
Mortgaged Property, the original ground lease or a copy
thereof;
provided that whenever the term "Mortgage File" is used to refer to documents
actually received by the Purchaser or the Trustee, such term shall not be deemed
to include such documents and instruments required to be included therein unless
they are actually so received. The original assignments referred to in clauses
(iii), (v), (vii) and (x)(B), may be in the form of one or more instruments in
recordable form in any applicable filing offices. The "Mortgage File" with
respect to the Mortgage Loan identified as "GMAC 1010" on the Mortgage Loan
Schedule shall, subject to Section 2(b), collectively consist of :
(a) the documents referred to in clauses (i), (ii), (iv), (vi),
(viii), (ix), (x), (xi) (but only in the condition delivered to
the Seller), (xii) and (xiii);
(b) the Amended and Restated Trust Agreement, dated as of April 1,
1998, among Senior Living Properties LLC, SLP Illinois, LLC, ZC
Specialty Insurance Company, the Seller, HSCP Funding, Inc.,
Complete Care Services, L.P. and The First National Bank of
Chicago;
(c) the Subrogation and Note Purchase Agreement, dated as of February
6, 1998, between the Seller and ZC Specialty Insurance Company;
(d) the First Amendment to the Subrogation and Note Purchase
Agreement, dated as of April 1, 1998, between the Seller and ZC
Specialty Insurance Company;
(e) the Loan Agreement, dated as of February 6, 1998, among Senior
Living Properties LLC, SLP Illinois, LLC and the Seller;
(f) the First Amendment to Loan Agreement dated as of April 1, 1998,
among Senior Living Properties LLC, SLP Illinois, LLC and the
Seller.
B-3
EXHIBIT C
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 C-1 hereto, that:
(i) Ownership of Mortgage Loans. Immediately prior to the transfer thereof
to the Purchaser, the Seller 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
Purchaser free and clear of any pledge, lien, encumbrance or security interest.
(ii) Authority to Transfer Mortgage Loans. The Seller 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 Seller'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 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, 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
Mortgage Loan Purchase Agreement of which this Exhibit C 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, 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.
(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
C-1
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. The
Seller has not, 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. The Seller has not 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 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 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
C-2
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.
(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
three 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
C-3
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 assignment of the related Mortgage referred to
in clause (iii) of Exhibit B 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 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
C-4
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) [Reserved.]
(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.
(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 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 each Mortgage Loan to the related
Mortgagor at origination did not exceed the non-contingent principal amount of
the Mortgage Loan and either: (A)
C-5
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 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) Inspection. In connection with the origination or acquisition of
each Mortgage Loan, the Seller inspected or caused to be inspected the Mortgaged
Property.
(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:
(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;
C-6
(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 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) A mortgagee is permitted a reasonable opportunity (including,
where necessary, sufficient time to gain possession of the
interest of the lessee under such Ground Lease) to cure any
default under such Ground Lease, which is curable after the
receipt of notice of any such default, before the lessor
thereunder may terminate such Ground Lease;
(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;
(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 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; and
(i) Such Ground Lease does not impose any restrictions on subletting
which would
C-7
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.
(j) Such Ground Lease 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 without the prior written consent of the holder
thereof or the satisfaction of debt service coverage or similar conditions
specified therein.
(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. Except for those Mortgage Loans identified on
Schedule C-1 hereto which represent 2.95% of the Mortgage Loans by Cut-Off Date
Principal Balance, 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 assets other than those related to its interest in and
C-8
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) [Reserved.]
(xlvi) 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 May 1, 1998), (ii) only with substitute
collateral constituting "government securities" within the meaning of Treas.
Reg. ss. 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 C shall survive delivery of the respective Mortgage Files
to the Purchaser and/or the Trustee and shall inure to the benefit of the
Purchaser, and its successors and assigns (including without limitation the
Trustee and the holders of the Certificates), notwithstanding any restrictive or
qualified endorsement or assignment.
C-9
SCHEDULE C-1 to EXHIBIT C
EXCEPTIONS TO REPRESENTATIONS AND WARRANTIES
(v) Permitted Encumbrances
The following loan(s) have permitted encumbrances that materially affect
the security intended to be provided by the related Mortgage, the current
use and operation of the related Mortgaged Property.
Loan Number Property Issue
----------- -------- -----
GMAC 4090 Time Warner Building Tax lot doesn't coincide
with property described
in Mortgage.
Senior Living Properties-Texas Properties
GMAC 1010AZ Xxxxxx 15 foot wide easement runs
directly under building
GMAC 1010AU Electra Building encroaches
approximately 2 feet onto
sewer line for roughly
9.2 feet
GMAC 1010CB Riverside Two 20 foot sewer
easements run directly
underneath the building.
Senior Living Portfolio-Illinois properties
GMAC 1010AB Scotchwood Encroachment of building
onto easement by
approximately 3 feet.
(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.
Loan Number Property Issue
----------- -------- -----
GMAC 4090 Time Warner Building Tax lot doesn't coincide
with property described
in Mortgage
(xxiii) No Material Encroachments
The following loan(s) have material encroachments by improvements which
lie outside the boundaries and building restriction lines of such
properties to a material extent or improvements from adjoining properties
encroaching upon the Mortgaged Properties, which are not covered by
affirmative title insurance coverage.
C-10
Loan Number Property Issue
----------- -------- -----
GMAC 3300 Sunrise Apartments I Various setback violations
ranging from 2 to 13 feet
Senior Living Portfolio-Texas properties
GMAC 0000XX Xxxxxx Xxxxxxx Rear setbacks are
violated by 38 feet on
southerly part of building
GMAC 0000XX Xxxxxx Healthcare Ctr. Small setback encroachment
of approximately 1 foot at
corner of entrance to
building.
GMAC 1010BB Xxxxxx Living Ctr 16 foot building
encroachment onto setback
GMAC 1010BE Xxxxxx Metal utility building
encroaches approximately
14 feet onto adjoining
property
GMAC 1010BJ Xxxxxxx Place One-story metal building
lies completely outside
of west boundary line.
The improvement located on or forming a part of the Mortgaged Property does
not comply in all material respects with applicable zoning laws and
ordinances.
Loan Number Property Issue
----------- -------- -----
GMAC 1010BJ Xxxxxxx Place Parking spaces required
are 53, only 39 provided.
(xxix) Licenses, Permits, Etc. The following loan(s) are improved with a skilled
nursing, congregate care or assisted living facility(ies) to the extent
such facility(ies) participates in Medicaid or Medicare, such facility(ies)
are in compliance in all material respects with the requirements of such
programs.
Loan Number Property Issue
----------- -------- -----
GMAC 1010 Senior Living Portfolio Each Illinois facility is
operating under a
provisional license.
Application has been
made for the transfer of
the licenses in Texas.
The licenses will not be
transferred until after
an inspection of each
facility has been
completed by appropriate
authorities. The
Illinois and Texas
facilities are in the
process of completing the
requisite supplemental
paperwork with the local
and state health
departments to
participate in the
Medicare and Medicaid
programs. Until the
application process is
complete the
C-11
facilities will not
receive Medicare or
Medicaid reimbursement.
(xliv) Borrowers on the following loan(s) are not single purpose entities to the
extent shown on the attached spreadsheet:
Loan Number Property
----------- --------
GMAC 1350 Xxxxxxx Penn
GMAC 1370 Garden Village Retirement
GMAC 1470 Loyalhanna
GMAC 2240 New Hope
GMAC 2540 Evergreen Retirement
GMAC 3070 Studio City
GMAC 3260 Sunnyvale Nursing
GMAC 3340 Heritage Living
GMAC 2030 Tassaraja
C-12
Single Purpose Entity Criteria
------------------------------------------------------------------------------------------------------------------------------------
Organized solely May not engage in No other assets No other Separate books and Holds itself
for owning and any business indebtedness records out as
operating unrelated to incurred or to be separate
mortgaged premises property incurred and apart
------------------------------------------------------------------------------------------------------------------------------------
Xxxxxxx Penn Y Y Y N N N
------------------------------------------------------------------------------------------------------------------------------------
Garden Village N Y N N N N
------------------------------------------------------------------------------------------------------------------------------------
Loyalhanna Y Y Y N N N
------------------------------------------------------------------------------------------------------------------------------------
New Hope N N N N N N
------------------------------------------------------------------------------------------------------------------------------------
Evergreen N N N N N N
------------------------------------------------------------------------------------------------------------------------------------
Studio City N N N N N N
------------------------------------------------------------------------------------------------------------------------------------
Sunnyvale N N N N N N
------------------------------------------------------------------------------------------------------------------------------------
Heritage Y Y Y N N N
------------------------------------------------------------------------------------------------------------------------------------
Tassajara N N N N N N
------------------------------------------------------------------------------------------------------------------------------------
Y = YES MEETS CRITERIA
N = DOES NOT MEET CRITERIA
X-00
XXXXXXX X-0
FORM OF CERTIFICATE OF AN OFFICER OF
THE SELLER
Certificate of Officer of GMAC Commercial Mortgage Corporation ("GMACCM")
I, _________________, a _________________ of GMACCM (the "Seller"), hereby
certify as follows:
The Seller is a corporation duly organized and validly existing under the
laws of the State of California.
Attached hereto as Exhibit I are true and correct copies of the Certificate
of Incorporation and By-Laws of the Seller, which Certificate of Incorporation
and By-Laws are on the date hereof, and have been at all times in full force and
effect.
To the best of my knowledge, no proceedings looking toward liquidation or
dissolution of the Seller are pending or contemplated.
Each person listed below is and has been the duly elected and qualified
officer or authorized signatory of the Seller and his genuine signature is set
forth opposite his name:
Name Office Signature
---- ------ ---------
Each person listed above who signed, either manually or by facsimile
signature, the Mortgage Loan Purchase Agreement, dated as of April 28, 1998 (the
"Purchase Agreement"), between the Seller and GMAC Commercial Mortgage
Securities, Inc. providing for the purchase by GMAC Commercial Mortgage
Securities, Inc. from the Seller of the Mortgage Loans, was, at the respective
times of such signing and delivery, duly authorized or appointed to execute such
documents in such capacity, and the signatures of such persons or facsimiles
thereof appearing on such documents are their genuine signatures.
Capitalized terms not otherwise defined herein have the meanings assigned
to them in the Purchase Agreement.
D-1-1
IN WITNESS WHEREOF, the undersigned has executed this certificate as of May
[__], 1998.
By:
---------------------------------------
Name:
Title:
I, [name], [title], hereby certify that ________________ is a duly elected
or appointed, as the case may be, qualified and acting ______________ of the
Seller and that the signatures appearing above is her genuine signatures.
IN WITNESS WHEREOF, the undersigned has executed this certificate as of May
[__], 1998.
By:
---------------------------------------
Name:
Title:
X-0-0
XXXXXXX X-0
FORM OF CERTIFICATE OF THE SELLER
Certificate of GMAC Commercial Mortgage Corporation
In connection with the execution and delivery by GMAC Commercial Mortgage
Corporation (the "Seller") of, and the consummation of the transaction
contemplated by, that certain Mortgage Loan Purchase Agreement, dated as of
April 28, 1998 (the "Purchase Agreement"), between GMAC Commercial Mortgage
Securities, Inc. and the Seller, the Seller hereby certifies that (i) the
representations and warranties of the Seller in the Purchase Agreement are true
and correct in all material respects at and as of the date hereof with the same
effect as if made on the date hereof, and (ii) the Seller has, in all material
respects, complied with all the agreements and satisfied all the conditions on
its part to be performed or satisfied at or prior to the date hereof.
Capitalized terms not otherwise defined herein have the meanings assigned to
them in the Purchase Agreement.
Certified this ___ day of May, 1998.
GMAC COMMERCIAL MORTGAGE CORPORATION
By:
---------------------------------------
Name:
Title:
EXHIBIT D-3A
FORM OF OPINION I OF COUNSEL TO THE SELLER
May [__], 1998
To: Persons on Annex A
Re: GMAC Commercial Mortgage Corporation,
Mortgage Pass-Through Certificates, Series 1998-C1
Ladies and Gentlemen:
I am General Counsel to GMAC Commercial Mortgage Corporation (the
"Seller"). In that capacity, I am familiar with the issuance of certain Mortgage
Pass-Through Certificates, Series 1998-C1 (the "Certificates"), evidencing
undivided interests in a trust fund (the "Trust Fund") consisting primarily of
certain mortgage loans (the "Mortgage Loans"), pursuant to a Pooling and
Servicing Agreement, dated as of May 1, 1998 (the "Pooling and Servicing
Agreement"), among GMAC Commercial Mortgage Securities, Inc. (the "Company") as
depositor, the Seller as master servicer and special servicer, LaSalle National
Bank as trustee (the "Trustee") and ABN AMRO Bank N.V. as fiscal agent.
Certain of the Mortgage Loans were purchased by the Company from the
Seller, pursuant to, and for the consideration described in, the Mortgage Loan
Purchase Agreement, dated as of April 28, 1998 (the "GMACCM Mortgage Loan
Purchase Agreement"), between the Company and the Seller. Certain of the
Mortgage Loans were purchased by the Company from German American Capital
Corporation ("GACC"), pursuant to, and for the consideration described in, the
Mortgage Loan Purchase Agreement, dated as of April 28, 1998 (the "GACC Mortgage
Loan Purchase Agreement"), between GACC and the Company. The Pooling and
Servicing Agreement and the GMACCM Mortgage Loan Purchase Agreement are referred
to herein together as the "Agreements." Capitalized terms not defined herein
have the meanings set forth in the Agreements. This opinion is rendered pursuant
to Section 8(e) of the GMACCM Mortgage Loan Purchase Agreement.
The Company has sold the Class X, Class X-0, Xxxxx X-0, Class B, Class C,
Class D, Class E and Class F Certificates (collectively, the "Publicly Offered
Certificates") to Deutsche Xxxxxx Xxxxxxxx Inc. and Xxxxxx Brothers Inc. as
representatives (the "Representatives") for themselves and the other
underwriters (the "Underwriters") named in the Underwriting Agreement, dated as
of April 28, 1998 (the "Underwriting Agreement"), among the Company, the Seller,
and the Representatives, and sold the Class G, Class H, Class J, Class K, Class
L, Class M, Class N, Class R-I, Class R-II and Class R-III Certificates
(collectively, the "Privately Offered Certificates") to Deutsche Xxxxxx Xxxxxxxx
Inc. and Xxxxxx Brothers Inc. as initial purchasers (the "Initial Purchasers")
pursuant to the Certificate Purchase Agreement, dated as of April 28, 1998 (the
"Certificate Purchase Agreement"), among the Company, the Seller and the Initial
Purchasers.
D-3A-1
In connection with rendering this opinion letter, I have examined or have
caused persons under my supervision to examine the Agreements and such other
records and other documents as I have deemed necessary. I have further assumed
that there is not and will not be any other agreement that materially
supplements or otherwise modifies the agreements expressed in the Agreements. As
to matters of fact, I have examined and relied upon representations of parties
contained in the Agreements and, where I have deemed appropriate,
representations and certifications of officers of the Company, the Seller, the
Trustee, other transaction participants or public officials. I have assumed the
authenticity of all documents submitted to me as originals, the genuineness of
all signatures other than officers of the Seller and the conformity to the
originals of all documents submitted to me as copies. I have assumed that all
parties, except for the Company and] the Seller, had the corporate power and
authority to enter into and perform all obligations thereunder. As to such
parties, I also have assumed the due authorization by all requisite corporate
action, the due execution and delivery and the enforceability of such documents.
I have further assumed the conformity of the Mortgage Loans and related
documents to the requirements of the Agreements.
In rendering this opinion letter, I do not express any opinion concerning
any law other than the law of the Commonwealth of Pennsylvania, the General
Corporation Law of the State of Delaware and the federal law of the United
States, and I do not express any opinion concerning the application of the
"doing business" laws or the securities laws of any jurisdiction other than the
federal securities laws of the United States. To the extent that any of the
matters upon which I am opining herein are governed by laws ("Other Laws") other
than the laws identified in the preceding sentence, I have assumed with your
permission and without independent verification or investigation as to the
reasonableness of such assumption, that such Other Laws and judicial
interpretation thereof do not vary in any respect material to this opinion from
the corresponding laws of the Commonwealth of Pennsylvania and judicial
interpretations thereof. I do not express any opinion on any issue not expressly
addressed below.
Based upon the foregoing, I am of the opinion that:
1. The Seller is duly incorporated and is validly existing as a corporation in
good standing under the laws of the State of California, and has the
requisite power and authority, corporate or other, to own its properties
and conduct its business, as presently conducted by it, and to enter into
and perform its obligations under the Agreements.
2. Each of the Agreements has been duly and validly authorized, executed and
delivered by the Seller and, upon due authorization, execution and delivery
by the other parties thereto, will constitute the valid, legal and binding
agreements of the Seller, enforceable against the Seller in accordance with
their terms, except as enforceability may be limited by (i) bankruptcy,
insolvency, liquidation, receivership, moratorium, reorganization or other
similar laws affecting the rights of creditors, (ii) general principles of
equity, whether enforcement is sought in a proceeding in equity or at law,
and (iii) public policy considerations underlying the securities laws, to
the extent that such public policy considerations limit the enforceability
of the provisions of the Agreements which purport to provide
indemnification with respect to securities law violations.
D-3A-2
3. No consent, approval, authorization or order of the Commonwealth of
Pennsylvania, or federal court or governmental agency or body is required
for the consummation by the Seller of the transactions contemplated by the
terms of the Agreements, except for those consents, approvals,
authorizations or orders which previously have been obtained.
4. Neither the consummation of any of the transactions contemplated by, nor
the fulfillment by the Seller of any other of the terms of, the Agreements,
will result in a material breach of any term or provision of the charter or
bylaws of the Seller or any Commonwealth of Pennsylvania or federal statute
or regulation or conflict with, result in a material breach, violation or
acceleration of or constitute a material default under the terms of any
indenture or other material agreement or instrument to which the Seller is
a party or by which it is bound or any order or regulation of any
Commonwealth of Pennsylvania or federal court, regulatory body,
administrative agency or governmental body having jurisdiction over the
Seller.
D-3A-3
This opinion letter is rendered for the sole benefit of each addressee
hereof, and no other person or entity, except Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx
LLP, is entitled to rely hereon without prior written consent. Copies of this
opinion letter may not be furnished to any other person or entity, nor may any
portion of this opinion letter be quoted, circulated or referred to in any other
document without my prior written consent.
Very truly yours,
Xxxxx Xxxxxxx-Xxxx
General Counsel
D-3A-4
Annex A
GMAC Commercial Mortgage Securities, Inc.
Deutsche Xxxxxx Xxxxxxxx Inc.
Xxxxxx Brothers Inc.
Residential Funding Securities Corporation
LaSalle National Bank
ABN AMRO Bank N.V.
Xxxxx'x Investors Service, Inc.
FITCH IBCA Inc.
D-3A-5
EXHIBIT D-3B
FORM OF OPINION II OF COUNSEL TO THE SELLER
