EXECUTION COPY
MORTGAGE LOAN PURCHASE AGREEMENT
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This Mortgage Loan Purchase Agreement (this "Agreement"), is dated and
effective as of August 14, 2003, between German American Capital Corporation as
Mortgage Loan Seller (the "Mortgage Loan Seller" or "GACC") and GMAC Commercial
Mortgage Securities, Inc. as purchaser (the "Purchaser").
The Mortgage Loan 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"). Certain other multifamily and
commercial mortgage loans (the "Other Mortgage Loans") will be purchased by the
Purchaser from (i) GMAC Commercial Mortgage Corporation ("GMACCM"), pursuant to,
and for the consideration described in, the Mortgage Loan Purchase Agreement,
dated as of August 14, 2003 (the "GMACCM Mortgage Loan Purchase Agreement"),
between the Purchaser and GMACCM, (ii) Xxxxxx Xxxxxxx Mortgage Capital, Inc.
("MSMC"), pursuant to, and for the consideration described in, the Mortgage Loan
Purchase Agreement, dated as of August 14, 2003 (the "MSMC Mortgage Loan
Purchase Agreement"), between the Purchaser and MSMC, (iii) Xxxxxxx Sachs
Mortgage Company ("GSMC"), pursuant to, and for the consideration described in,
the Mortgage Loan Purchase Agreement, dated as of August 14, 2003 (the
"GSMC-Owned Mortgage Loan Purchase Agreement"), between the Purchaser and GSMC,
and (iv) GSMC, pursuant to, and for the consideration described in, the Mortgage
Loan Purchase Agreement, dated as of August 14, 2003 (the "GSMC Mortgage Loan
Purchase Agreement"), between the Purchaser and GSMC. The Mortgage Loan Seller,
GMACCM, MSMC and GSMC are collectively referred to as the "Mortgage Loan
Sellers."
It is expected that the Mortgage Loans will be transferred, together with
the Other 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 Fitch Ratings and Standard & Poor's Ratings
Services, a division of The XxXxxx-Xxxx Companies, Inc. (together, the "Rating
Agencies"). Certain classes of the Certificates (the "Registered Certificates")
will be registered under the Securities Act of 1933, as amended (the "Securities
Act"). The Trust Fund will be created and the Certificates will be issued
pursuant to a pooling and servicing agreement to be dated as of August 1, 2003
(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 and Xxxxx Fargo Bank Minnesota, National
Association, as trustee (in such capacity, the "Trustee") and serviced companion
loan paying agent. Capitalized terms not otherwise defined herein have the
meanings assigned to them in the Pooling and Servicing Agreement as in effect on
the Closing Date.
The Purchaser intends to sell the Class A-1, Class A-2, Class B, Class C,
Class D and Class E Certificates to Xxxxxx Xxxxxxx & Co. Incorporated, Deutsche
Bank Securities Inc. and Xxxxxxx, Sachs & Co. (together, the "Underwriters"),
pursuant to an underwriting agreement dated the date hereof (the "Underwriting
Agreement"). The Purchaser intends to sell the Class X-1, Class X-2, Class F,
Class G, Class H, Class J, Class K, Class L, Class M, Class N, Class O and Class
P Certificates to Xxxxxx Xxxxxxx & Co. Incorporated, Deutsche Bank Securities
Inc.
and Xxxxxxx, Sachs & Co. (in such capacity, each an "Initial Purchaser")
pursuant to a certificate purchase agreement, dated the date hereof (the
"Certificate Purchase Agreement"). The Purchaser intends to sell the Class R-I,
Class R-II and Class R-III Certificates to Wachovia Bank, N.A. (in such
capacity, an "Initial Purchaser"). The Class X-1, Class X-2, Class F, Class G,
Class H, Class J, Class K, Class L, Class M, Class N, Class O, Class P, Class
R-I, Class R-II and Class R-III Certificates are collectively referred to as the
"Non-Registered Certificates."
Now, therefore, in consideration of the premises and the mutual agreements
set forth herein, the parties agree as follows:
SECTION 1. Agreement to Purchase.
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The Mortgage Loan 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 August
28, 2003 or such other date as shall be mutually acceptable to the parties
hereto (the "Closing Date"). The "Cut-off Date" with respect to any Mortgage
Loan is the Due Date for such Mortgage Loan in August 2003. As of the close of
business on their respective Cut-off Dates (which Cut-off Dates may occur after
the Closing 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
$340,951,777, subject to a variance of plus or minus 5%. The purchase price for
the Mortgage Loans shall be determined by the parties pursuant to an agreed upon
term sheet.
SECTION 2. Conveyance of Mortgage Loans.
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(a) Effective as of the Closing Date, subject only to receipt by the
Mortgage Loan Seller of the purchase price referred to in Section 1 hereof
(exclusive of any applicable holdback for transaction expenses), the Mortgage
Loan Seller does hereby sell, transfer, assign, set over and otherwise convey to
the Purchaser, without recourse, all the right, title and interest of the
Mortgage Loan 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 Mortgage Loan Seller on or with respect to the Mortgage Loans
after the Cut-off Date for each such Mortgage Loan, together with all of the
Mortgage Loan 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 Mortgage Loan
Seller, the Mortgage Loan 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 for each such Mortgage Loan,
and all other recoveries of principal and interest collected thereon after such
Cut-off Date. All scheduled payments of principal and interest due thereon on or
before the Cut-off Date for each Mortgage Loan and collected after such Cut-off
Date shall belong to the Mortgage Loan Seller.
(b) In connection with the Mortgage Loan Seller's assignment pursuant to
subsection (a) above, the Mortgage Loan Seller acknowledges that the Depositor
has directed the Mortgage Loan Seller, and the Mortgage Loan Seller hereby
agrees, to deliver the Mortgage File
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(as such term is defined in the Pooling and Servicing Agreement) to the Trustee,
and otherwise comply with the requirements of Sections 2.01(b), 2.01(c) and
2.01(d) of the Pooling and Servicing Agreement, 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.
(c) The Mortgage Loan 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.
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The Mortgage Loan 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 Mortgage Loan Seller's
representations, warranties and covenants set forth in or contemplated by
Section 4.
SECTION 4. Representations, Warranties and Covenants of the Mortgage Loan
Seller.
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(a) The Mortgage Loan 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
B, with such changes or modifications as may be permitted or required by the
Rating Agencies.
(b) In addition, the Mortgage Loan Seller, as of the date hereof, hereby
represents and warrants to, and covenants with, the Purchaser that:
(i) The Mortgage Loan Seller is a corporation, duly organized, validly
existing and in good standing under the laws of the State of Maryland, and
is in compliance with the laws of each State in which any Mortgaged
Property is located to the extent necessary to ensure the enforceability of
each Mortgage Loan and to perform its obligations under this Agreement.
(ii) The execution and delivery of this Agreement by the Mortgage Loan
Seller, and the performance and compliance with the terms of this Agreement
by the Mortgage Loan Seller, will not violate the Mortgage Loan Seller's
organizational documents or constitute a default (or an event which, with
notice or lapse of time, or both, would constitute a default) under, or
result in the breach of, any material agreement or other instrument to
which it is a party or which is applicable to it or any of its assets, in
each case which materially and adversely affect the ability of the Mortgage
Loan Seller to carry out the transactions contemplated by this Agreement.
(iii) The Mortgage Loan Seller has the full power and authority to
enter into and consummate all transactions contemplated by this Agreement,
has duly authorized
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the execution, delivery and performance of this Agreement, and has duly executed
and delivered this Agreement.
(iv) This Agreement, assuming due authorization, execution and
delivery by the Purchaser, constitutes a valid, legal and binding
obligation of the Mortgage Loan Seller, enforceable against the Mortgage
Loan Seller in accordance with the terms hereof, subject to (A) applicable
bankruptcy, insolvency, reorganization, moratorium and other laws affecting
the enforcement of creditors' rights generally, (B) general principles of
equity, regardless of whether such enforcement is considered in a
proceeding in equity or at law, and (C) public policy considerations
underlying the securities laws, to the extent that such public policy
considerations limit the enforceability of the provisions of this Agreement
that purport to provide indemnification for securities laws liabilities.
(v) The Mortgage Loan Seller is not in violation of, and its execution
and delivery of this Agreement and its performance and compliance with the
terms of this Agreement will not constitute a violation of, any law, any
order or decree of any court or arbiter, or any order, regulation or demand
of any federal, state or local governmental or regulatory authority, which
violation, in the Mortgage Loan Seller's good faith and reasonable
judgment, is likely to affect materially and adversely either the ability
of the Mortgage Loan Seller to perform its obligations under this Agreement
or the financial condition of the Mortgage Loan Seller.
(vi) No litigation is pending with regard to which the Mortgage Loan
Seller has received service of process or, to the best of the Mortgage Loan
Seller's knowledge, threatened against the Mortgage Loan Seller the outcome
of which, in the Mortgage Loan Seller's good faith and reasonable judgment,
could reasonably be expected to prohibit the Mortgage Loan Seller from
entering into this Agreement or materially and adversely affect the ability
of the Mortgage Loan Seller to perform its obligations under this
Agreement.
(vii) The Mortgage Loan Seller has not dealt with any broker,
investment banker, agent or other person, other than the Purchaser, the
Underwriters, the Initial Purchasers and their respective affiliates, that
may be entitled to any commission or compensation in connection with the
sale of the Mortgage Loans or the consummation of any of the other
transactions contemplated hereby.
(viii) Neither the Mortgage Loan 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
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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 Mortgage Loan
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, any security evidencing or, upon issuance,
that would have evidenced an interest in the Mortgage Loans or the Other
Mortgage Loans or any substantial number thereof.
(ix) Insofar as it relates to the Mortgage Loans, the information set
forth on pages A-16 through A-17, 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 (other than the Boulevard Mall Loan (as defined in the
Prospectus Supplement)) and the Mortgaged Properties related to such
Mortgage Loans and/or the Mortgage Loan 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 (as
defined in Section 9) under the headings "Summary of Series 2003-C2
Transaction--The Mortgage Pool," "--Geographic -Concentrations of the
Mortgaged Properties," "--Property Types," "--Prepayment or Call Protection
Provided by the Mortgage Loans," "Payment Terms of the Mortgage Loans,"
"Risk Factors" and "Description of the Mortgage 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. Insofar as it relates to the
Boulevard Mall Whole Loan (as defined in the Prospectus Supplement) and the
Mortgaged Property related thereto 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 (as defined in
Section 9) under the headings "Summary of Series 2003-C2 Transaction--The
Mortgage Pool," "--Geographic Concentrations of the Mortgaged Properties,"
"--Property Types," "--Prepayment or Call Protection Provided by the
Mortgage Loans," "--Payment Terms of the Mortgage Loans," "Risk Factors,"
"Description of the Mortgage Pool," "Servicing of the Mortgage Loans," "The
Pooling and Servicing Agreement," and "Description of the Certificates,"
set forth on Annex A and/or Annex B to the Prospectus Supplement (provided,
that with respect to the information in Annex B, "Servicing of the Mortgage
Loans," "The Pooling and Servicing Agreement," and "Description of the
Certificates," only such portions that solely relate to the Boulevard Mall
Whole Loan) 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
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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
Mortgage Loan Seller with this Agreement, or the consummation by the
Mortgage Loan 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 Mortgage Loan
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
Mortgage Loan Seller under this Agreement.
(c) Upon discovery by any of the parties hereto of a breach of any of the
representations and warranties made pursuant to and set forth in subsection (b)
above which materially and adversely affects the interests of the Purchaser or a
breach of any of the representations and warranties made pursuant to subsection
(a) above and set forth in Exhibit B which materially and adversely affects the
value of any Mortgage Loan or the interests therein of the Purchaser or its
successors and assigns (including, without limitation the 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.
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(a) The Purchaser, as of the date hereof, hereby represents and warrants
to, and covenants with, the Mortgage Loan Seller that:
(i) The Purchaser is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware.
(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 Mortgage Loan Seller, constitutes a valid, legal and
binding obligation of the Purchaser, enforceable against the Purchaser in
accordance with the terms hereof, subject
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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 Mortgage Loan 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.
(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 Mortgage Loan Seller, the party discovering such
breach shall give prompt written notice to the other party hereto.
SECTION 6. Repurchases.
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The Mortgage Loan Seller hereby agrees to comply with Sections 2.02 and
2.03 of the Pooling and Servicing Agreement, including, but not limited to, any
obligation to repurchase or substitute Mortgage Loans in respect of any Material
Breach or Material Document Defect.
SECTION 7. Closing.
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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.
The Closing shall be subject to each of the following conditions:
(i) All of the representations and warranties of the Mortgage Loan
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 reasonably acceptable to the
Purchaser, shall be duly executed and delivered by all signatories as
required pursuant to the respective terms thereof;
(iii) The Mortgage Loan 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 Mortgage Loan 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 Mortgage Loan 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.
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The Closing Documents shall consist of the following:
(a) This Agreement duly executed and delivered by the Purchaser and the
Mortgage Loan Seller;
(b) An Officer's Certificate substantially in the form of Exhibit C-1
hereto, executed by the Secretary or an assistant secretary of the Mortgage Loan
Seller, and dated the Closing
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Date, and upon which the Purchaser and each Underwriter may rely, attaching
thereto as exhibits the organizational documents of the Mortgage Loan Seller;
(c) A certificate of good standing regarding the Mortgage Loan Seller from
the Secretary of State for the State of Maryland, dated not earlier than 30 days
prior to the Closing Date;
(d) A certificate of the Mortgage Loan Seller substantially in the form of
Exhibit C-2 hereto, executed by an executive officer or authorized signatory of
the Mortgage Loan Seller and dated the Closing Date, and upon which the
Purchaser and each Underwriter may rely;
(e) Written opinions of counsel for the Mortgage Loan Seller, in a form
reasonably acceptable to counsel for the Purchaser and subject to such
reasonable assumptions and qualifications as may be requested by counsel for the
Mortgage Loan 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 Mortgage Loan 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.
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(a) The Mortgage Loan 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 (other than the Boulevard
Mall Loan) contained in the Loan Detail or, to the extent consistent therewith,
the Diskette or contained in the Term Sheet Diskette, to the extent consistent
with the Term Sheet Master Tape, or (ii) any such untrue
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statement or alleged untrue statement or omission or alleged omission is with
respect to information regarding the Mortgage Loan Seller, the Mortgage Loans
(other than the Boulevard Mall Loan) or the Mortgaged Properties contained in
the Prospectus Supplement or the Memorandum under the headings "Summary of
Series 2003-C2 Transaction--The Mortgage Pool," "--Geographic Concentrations of
the Mortgaged Properties," "--Property Types," "--Prepayment or Call Protection
Provided by the Mortgage Loans," "--Payment Terms of the Mortgage Loans," "Risk
Factors" and "Description of the Mortgage 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) any such untrue statement or alleged untrue statement or
omission or alleged omission is with respect to information regarding the
Boulevard Mall Whole Loan or the Mortgaged Property related thereto contained in
the Prospectus Supplement or the Memorandum under the headings "Summary of
Series 2003-C2 Transaction--The Mortgage Pool," "--Geographic Concentrations of
the Mortgaged Properties," "--Property Types," "--Prepayment or Call Protection
Provided by the Mortgage Loans," "--Payment Terms of the Mortgage Loans," "Risk
Factors," "Description of the Mortgage Pool," "Servicing of the Mortgage Loans,"
"The Pooling and Servicing Agreement" and/or "Description of the Certificates"
or contained on Annex A and/or Annex B to the Prospectus Supplement (exclusive
of the Loan Detail) (provided, that with respect to the information in Annex B,
"Servicing of the Mortgage Loans," "The Pooling and Servicing Agreement," and
"Description of the Certificates," only such portions that solely relate to the
Boulevard Mall Whole Loan), and such information does not represent a
restatement or aggregation of information contained in the Loan Detail; or (iv)
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 Mortgage Loan 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
manipulation of, or calculations based upon, the Loan Detail. This indemnity
agreement will be in addition to any liability which the Mortgage Loan Seller
may otherwise have.
For purposes of the foregoing, "Registration Statement" shall mean the
registration statement No. 333-107510 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 July 31,
2003, as supplemented by the prospectus supplement dated August 14, 2003, (the
"Prospectus Supplement"), relating to the Registered Certificates; "Memorandum"
shall mean the private placement memorandum dated August 14, 2003, 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, Xxxxxxx Acceptance Corporation I, Xxxxxx, Peabody
& 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"). The mortgage
loan information and information related thereto contained on the diskette
attached
10
to any ABS Term Sheets or Computational Materials is referred to herein as the
"Term Sheet Diskette" and the tape provided by the Mortgage Loan Seller that was
used to create the Term Sheet Diskette is referred to herein as the "Term Sheet
Master Tape." References herein to ABS Term Sheets or Computational Materials
shall include any Term Sheet Diskette provided therewith.
(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 Mortgage Loan 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; 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
11
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 Mortgage Loan 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.
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 Xxxxxx
Xxxx, Xxxxxxx, Xxxxxxxxxxxx 00000-0000, Attention: Structured Finance Manager,
facsimile no. (000) 000-0000, with a copy to the General Counsel, GMAC
Commercial Mortgage Corporation, or such other address or facsimile number as
may hereafter be furnished to the Mortgage Loan Seller in writing by the
Purchaser; and if to the Mortgage Loan Seller, addressed to German American
Capital Corporation, 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxx
Xxxx, facsimile no. (000) 000-0000, with a copy to Xxxxx Xxxxxx, Xxxxxx &
Xxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, facsimile no. (212)
751-4864 or to such other address or facsimile number as the Mortgage Loan
Seller may designate in writing to the Purchaser.
SECTION 12. Third Party Beneficiaries.
-------------------------
12
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 Mortgage Loan 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 Mortgage
Loan 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 Mortgage Loan Seller submitted pursuant hereto, shall remain operative and
in full force and effect and shall survive delivery of the Mortgage Loans by the
Mortgage Loan Seller to the Purchaser or its designee.
SECTION 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 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 Mortgage Loan Seller and the Purchaser agree to execute and deliver
such instruments and take such further actions as the other party may, from time
to time, reasonably request in order to effectuate the purposes and to carry out
the terms of this Agreement.
SECTION 18. Successors and Assigns.
----------------------
13
The rights and obligations of the Mortgage Loan Seller under this Agreement
shall not be assigned by the Mortgage Loan Seller without the prior written
consent of the Purchaser, except that any person into which the Mortgage Loan
Seller may be merged or consolidated, or any corporation or other entity
resulting from any merger, conversion or consolidation to which the Mortgage
Loan Seller is a party, or any person succeeding to all or substantially all of
the business of the Mortgage Loan Seller, shall be the successor to the Mortgage
Loan Seller hereunder. The Purchaser 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 Mortgage Loan 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.
14
IN WITNESS WHEREOF, the Mortgage Loan 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.
GERMAN AMERICAN CAPITAL CORPORATION
By:
-----------------------------------------
Name:
Title:
By:
-----------------------------------------
Name:
Title:
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
By:
-----------------------------------------
Name: Xxxxx Xxxxxxx
Title: Vice President
S-1
EXHIBIT A
MORTGAGE LOAN SCHEDULE
Loan Number Property Name Xxxxxxx Xxxx Xxxxx
------------------------------------------------------------------------------------------------------------------------------------
XX00000 Xxxxxxxxx Xxxx 0000 Xxxxx Xxxxxxxx Xxxxxxx Xxx Xxxxx Nevada
DBM18752 000 Xxxxxxx Xxxxxx 000 Xxxxxxx Xxxxxx Xxx Xxxx Xxx Xxxx
DBM18727 La Frontera Village - I 100-220 Sundance Parkway Round Rock Texas
DBM18807 Victoria Place 00000 Xxxxxxxx Xxxxx Xxxxxx Xxxxxxx Xxxxxxx
DBM18404 Gateway Center Bed Bath & Beyond 381, 409 & 000 Xxxxxxx Xxxxx Xxxxxxxx Xxx Xxxx
DBM18861 Wachovia Tower 00 Xxxxx Xxxxxx Xxxxxx Xxxxxxx Xxxxxxx
DBM18317 Virginia FF Retail Portfolio Various Various Virginia
DBM18317-1 Kempsville Shopping Center 0000-0000 Xxxxxxxxxx Xxxx Xxxxxxxx Xxxxx Xxxxxxxx
DBM18317-2 General Booth Shopping Center 1615 General Booth Boulevard Virginia Beach Virginia
XXX00000-0 Xxxx Xxxxx Xxxxxxx Shopping Center 0000 Xxxxx Xxxx Xxxxxx Xxxxxxx Xxxxxxxx
DBM18317-4 Little Creek Shopping Center 000 Xxxx Xxxxxx Xxxxx Xxxx Xxxxxxx Xxxxxxxx
XXX00000-0 Xxxx Xxxxx Xxxxxxxxxx Shopping Center 0000 Xxxxxxxxxx Xxxxxxxx Xxxxx Xxxxxxxxxx Xxxxxxxx
DBM18816 Wiener Portfolio I Various Various New York
DBM18816-1 000-00 Xxxxxxx Xxx. 000-00 Xxxxxxx Xxxxxx Xxxxxxxx Xxx Xxxx
DBM18816-2 00-00 00xx Xxxx 00-00 00xx Xxxx Xxxxxxx Xxxxxxx Xxx Xxxx
DBM18816-3 00-00 00xx Xxxxxx 00-00 00xx Xxxxxx Xxxxxxx Xxxxxxx Xxx Xxxx
DBM18816-4 000-000 Xxxx 00xx Xxxxxx 000-000 Xxxx 00xx Xxxxxx Xxx Xxxx Xxx Xxxx
DBM18982 Canterbury and Oxford Apartments 0000 Xxxxxxxxxx Xxxxx Xxxxxx Xxxxx Xxxxx Xxxxxxxx
DBM18863 Laurel Springs Apartments 0000 Xxx Xxxxx Xxxx Xxxx Xxxxx Xxxxx Xxxxxxxx
DBM18747 Colonial Financial Center Xxx Xxxxxxxx Xxxxxx Xxxxxxxxxx Xxxxxxx
DBM18856 Ocotillo Plaza 0000 Xxxx Xxxxxxxxx Xxxxxx Xxx Xxxxx Xxxxxx
DBM17820 Wiloaks Apartments 0000 Xxxxxxx Xxxxx Xxxxxxxxxx Xxxxxxx
DBM18886 Country Gables Apartments 00000 Xxxxx 00xx Xxxxxx Xxxxxxxx Xxxxxxx
DBM18864 Walgreens Melbourne 0000 Xxxxxxx Xxxx Xxxxxxxxx Xxxxxxx
DBM18808 Windsor Tower Apartments 0000 Xxxx Xxxxxx Xxxxxxx Xxxxxxxxx Xxxxx Xxxxxxx
Mortgage Remaining
Rate Rate Original Cut-Off Date Term to Date
Loan Number Zip Code (%) Type Balance ($) Balance ($) Maturity (Mos.) Maturity Date ARD date payment due
------------------------------------------------------------------------------------------------------------------------------------
GA18896 89109 4.27375 Fixed 48,728,500 48,667,436 119 7/1/2013 1
DBM18752 10016 4.57000 Fixed 45,000,000 45,000,000 60 8/1/2008 1
DBM18727 78681 5.20000 Fixed 35,400,000 35,400,000 120 8/1/2013 1
DBM18807 32828 4.72600 Fixed 34,120,000 34,120,000 120 8/1/2013 1
DBM18404 11239 5.43000 Fixed 34,100,000 34,029,329 118 6/1/2013 1
DBM18861 32801 4.97000 Fixed 26,500,000 26,500,000 60 8/1/2008 1
DBM18317 Various 6.10000 Fixed 26,000,000 26,000,000 120 8/1/2013 8/1/2033 1
DBM18317-1 23464
DBM18317-2 23454
DBM18317-3 23434
DBM18317-4 23505
DBM18317-5 23430
DBM18816 Various 4.89000 Fixed 23,840,000 23,814,006 59 7/1/2008 1
DBM18816-1 11355
DBM18816-2 11372
DBM18816-3 11372
DBM18816-4 10019
DBM18982 29579 5.40000 Fixed 22,000,000 22,000,000 120 8/1/2013 1
DBM18863 27265 4.91000 Fixed 11,600,000 11,587,411 119 7/1/2013 1
DBM18747 36104 4.33000 Fixed 11,040,000 11,026,335 59 7/1/2008 1
DBM18856 89121 5.47000 Fixed 6,800,000 6,800,000 84 8/1/2010 1
DBM17820 30039 5.76000 Fixed 5,100,000 5,100,000 120 8/1/2013 1
DBM18886 85306 5.47000 Fixed 5,000,000 5,000,000 120 8/1/2013 1
DBM18864 32940 6.53000 Fixed 3,907,259 3,907,259 297 5/1/2028 1
DBM18808 34470 4.75000 Fixed 2,000,000 2,000,000 60 8/1/2008 1
Cross
Monthly ARD Credit Lease Collateralized Annualized Debt Broker Strip
Loan Number payment Loan Loan Prepayment Provision Groups Service Loan
------------------------------------------------------------------------------------------------------------------------------------
GA18896 240,393 Lockout/25_Defeasance/91_0%/4 2,884,715
DBM18752 229,884 Lockout/24_Defeasance/32_0%/4 2,758,606
DBM18727 194,385 Lockout/24_Defeasance/92_0%/4 2,332,623
DBM18807 177,493 Lockout/24_Defeasance/92_0%/4 2,129,914
DBM18404 192,121 Lockout/26_Defeasance/90_0%/4 2,305,453
DBM18861 141,772 Lockout/24_Defeasance/32_0%/4 1,701,267
DBM18317 157,559 Yes Lockout/24_Defeasance/89_0%/7 1,890,704
DBM18317-1 Yes
DBM18317-2 Yes
DBM18317-3 Yes
DBM18317-4 Yes
DBM18317-5 Yes
DBM18816 126,380 Lockout/25_Defeasance/31_0%/4 1,516,565
DBM18816-1
DBM18816-2
DBM18816-3
DBM18816-4
DBM18982 123,537 Lockout/24_Defeasance/92_0%/4 1,482,441
DBM18863 61,635 Lockout/25_Defeasance/91_0%/4 739,618
DBM18747 54,828 Lockout/25_Defeasance/28_0%/7 657,942
DBM18856 38,482 Lockout/24_Defeasance/56_0%/4 461,781 Yes
DBM17820 29,795 Lockout/24_Defeasance/92_0%/4 357,535
DBM18886 28,295 Lockout/24_Defeasance/92_0%/4 339,545
DBM18864 26,795 Yes Lockout /24_Defeasance/272_0%/1 321,535
DBM18808 10,433 Lockout/24_Defeasance/32_0%/4 125,195
Servicing Environmental Letter of Servicing
Loan Number Fee Loan Insurance Loan Credit Loan Leasehold Fee Rate (%) Loan Seller
-------------------------------------------------------------------------------------------------------
GA18896 Yes 4.27375 GACC
DBM18752 4.57000 GACC
DBM18727 5.20000 GACC
DBM18807 4.72600 GACC
DBM18404 5.43000 GACC
DBM18861 Yes 4.97000 GACC
DBM18317 6.10000 GACC
DBM18317-1 GACC
DBM18317-2 GACC
DBM18317-3 GACC
DBM18317-4 GACC
DBM18317-5 GACC
DBM18816 4.89000 GACC
DBM18816-1 GACC
DBM18816-2 GACC
DBM18816-3 GACC
DBM18816-4 GACC
DBM18982 5.40000 GACC
DBM18863 4.91000 GACC
DBM18747 4.33000 GACC
DBM18856 5.47000 GACC
DBM17820 5.76000 GACC
DBM18886 5.47000 GACC
DBM18864 6.53000 GACC
DBM18808 4.75000 GACC
A-1
EXHIBIT B
REPRESENTATIONS AND WARRANTIES OF THE MORTGAGE LOAN SELLER
REGARDING THE INDIVIDUAL MORTGAGE LOANS
For purposes of these representations and warranties, the phrases "to the
knowledge of the Mortgage Loan Seller" or "to the Mortgage Loan Seller's
knowledge" shall mean, except where otherwise expressly set forth below, the
actual state of knowledge of the Mortgage Loan Seller or any servicer acting on
its behalf regarding the matters referred to, in each case: (i) after the
Mortgage Loan Seller's having conducted such inquiry and due diligence into such
matters as would be customarily performed by prudent institutional commercial or
multifamily, as applicable, mortgage lenders, and in all events as required by
the Mortgage Loan Seller's underwriting standards, at the time of the Mortgage
Loan Seller's origination or acquisition of the particular Mortgage Loan; and
(ii) subsequent to such origination, utilizing the servicing and monitoring
practices customarily utilized by prudent commercial mortgage loan servicers
with respect to securitizable commercial or multifamily, as applicable, mortgage
loans. Also for purposes of these representations and warranties, the phrases
"to the actual knowledge of the Mortgage Loan Seller" or "to the Mortgage Loan
Seller's actual knowledge" shall mean, except where otherwise expressly set
forth below, the actual state of knowledge of the Mortgage Loan Seller or any
servicer acting on its behalf without any express or implied obligation to make
inquiry. All information contained in documents included in the definition of
Mortgage File in the Pooling and Servicing Agreement shall be deemed to be
within the knowledge and the actual knowledge of the Mortgage Loan Seller, to
the extent that the Mortgage Loan Seller or its closing counsel or custodian, if
any, have reviewed or had possession of such document at any time. For purposes
of these representations and warranties, to the extent that any representation
or warranty is qualified by the Mortgage Loan Seller's knowledge with respect to
the contents of the Note, Mortgage, lender's title policy and any letters of
credit or ground leases, if such document is not included in the Mortgage File,
the Mortgage Loan Seller shall make such representation or warranty without any
such qualification. Wherever there is a reference in a representation or
warranty to receipt by, or possession of, the Mortgage Loan Seller of any
information or documents, or to any action taken by the Mortgage Loan Seller or
to any action which has not been taken by the Mortgage Loan Seller or its agents
or employees, such reference shall include the receipt or possession of such
information or documents by, or the taking of such action or the not taking such
action by, either of the Mortgage Loan Seller or any servicer acting on its
behalf. For purposes of these representations and warranties, when referring to
the conduct of "reasonable prudent institutional commercial or multifamily, as
applicable mortgage lenders" (or similar such phrases and terms), such conduct
shall be measured by reference to the industry standards generally in effect as
of the date the related representation or warranty relates to or is made.
The Mortgage Loan Seller hereby represents and warrants with respect to the
Mortgage Loans that, as of the date herein below specified or, if no such date
is specified, as of the Closing Date, and subject to Section 18 of this
Agreement:
1. Mortgage Loan Schedule. The information pertaining to each Mortgage Loan
----------------------
set forth in the Mortgage Loan Schedule to the Pooling and Servicing Agreement
was true
B-2
and accurate in all material respects as of the Cut-Off Date and contains all of
the information set forth in the definition of "Mortgage Loan Schedule" in the
Pooling and Servicing Agreement.
2. Ownership of Mortgage Loans. Immediately prior to the transfer of the
----------------------------
Mortgage Loans to the Purchaser, the Mortgage Loan Seller had good title to, and
was the sole owner of, each Mortgage Loan. The Mortgage Loan Seller has full
right, power and authority to sell, transfer and assign each Mortgage Loan to,
or at the direction of, the Purchaser free and clear of any and all pledges,
liens, charges, security interests, participation interests and/or other
interests and encumbrances (other than the rights to servicing and related
compensation as reflected in the Mortgage Loan Schedule). Subject to the
completion of the names and addresses of the assignees and endorsees and any
missing recording information in all instruments of transfer or assignment and
endorsements and the completion of all recording and filing contemplated hereby
and by the Pooling and Servicing Agreement, the Mortgage Loan Seller will have
validly and effectively conveyed to the Purchaser all legal and beneficial
interest in and to each Mortgage Loan free and clear of any pledge, lien,
charge, security interest or other encumbrance (except for certain servicing
rights described on Schedule B-41 hereto or otherwise contemplated by this
Agreement or the Pooling and Servicing Agreement). The sale of the Mortgage
Loans to the Purchaser or its designee does not require the Mortgage Loan Seller
to obtain any governmental or regulatory approval or consent that has not been
obtained. Each Mortgage Note is, or shall be as of the Closing Date, endorsed to
the Purchaser, or its designee, in conformity with the requirements of the
definition of "Mortgage File" in the Pooling and Servicing Agreement and each
such endorsement is genuine.
3. Payment Record. Such Mortgage Loan was not as of the Cut-off Date for
---------------
such Mortgage Loan, and has not been during the twelve-month period prior
thereto, 30 days or more delinquent in respect of any debt service payment
required thereunder, without giving effect to any applicable grace period.
4. Lien; Valid Assignment. The Mortgage related to and delivered in
------------------------
connection with each Mortgage Loan constitutes a legal, valid and, subject to
the exceptions set forth in Paragraph 13 below, enforceable first priority lien
upon the related Mortgaged Property, except for the following (collectively, the
"Permitted Encumbrances"): (a) the lien for current real estate taxes, water
charges, sewer rents and assessments not yet due and payable; (b) covenants,
conditions and restrictions, rights of way, easements and other matters that are
of public record and are referred to in the related lender's title insurance
policy (or, if not yet issued, referred to in a pro forma title policy or title
policy commitment meeting the requirements described in Paragraph 8 below); (c)
exceptions and exclusions specifically referred to in the related lender's title
insurance policy (or, if not yet issued, referred to in a pro forma title policy
or title policy commitment meeting the requirements described in Paragraph 8
below); (d) other matters to which like properties are commonly subject; (e) the
rights of tenants (as tenants only) under leases (including subleases)
pertaining to the related Mortgaged Property; (f) condominium declarations of
record and identified in the related lender's title insurance policy (or, if not
yet issued, identified in a pro forma title policy or title policy commitment
meeting the requirements described in Paragraph 8 below); and (g) if such
Mortgage Loan constitutes a Cross-Collateralized Mortgage Loan, the lien of the
Mortgage for another Mortgage Loan contained in the same group of
Cross-Collateralized Mortgage Loans. With respect to each Mortgage Loan, such
Permitted Encumbrances do not, individually or in the aggregate,
B-3
materially interfere with the security intended to be provided by the related
Mortgage, the current principal use of the related Mortgaged Property, the
current ability of the related Mortgaged Property to generate income sufficient
to service such Mortgage Loan or materially and adversely affect the value of
the Mortgage Loan . The related assignment of the Mortgage for each Mortgage
Loan, executed and delivered in favor of the Trustee, is in recordable form (but
for insertion of the name and address of the assignee and any related recording
information which is not yet available to the Mortgage Loan Seller) to validly
and effectively convey the assignor's interest therein and constitutes a legal,
valid, binding and, subject to the exceptions set forth in Paragraph 13 below,
enforceable assignment of such Mortgage from the relevant assignor to the
Trustee.
5. Assignment of Leases. There exists as part of the related Mortgage File
--------------------
an Assignment of Leases (an "Assignment of Leases") either as a separate
document or as part of the Mortgage. Each related Assignment of Leases creates a
valid, first priority collateral assignment of, or a valid perfected first
priority lien on or security interest in, certain rights under the related lease
or leases, including the right to receive all payment due under the related
Lease, subject only to a license granted to the related Mortgagor to exercise
certain rights and to perform certain obligations of the lessor under such lease
or leases, including the right to operate the related leased property and none
of the related leases contains any restriction on such collateral assignment or
creation of a security interest therein, as applicable. 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 (but for insertion of the name and
address of the assignee and any related recording information which is not yet
available to the Mortgage Loan Seller) to validly and effectively convey the
assignor's interest therein and constitutes a legal, valid, binding and, subject
to the exceptions set forth in Paragraph 13 below, enforceable assignment of
such Assignment of Leases from the relevant assignor to the Trustee.
6. Mortgage Status; Waivers and Modifications. The terms of the Mortgage
--------------------------------------------
Loan have not been waived, modified, altered, satisfied, impaired, canceled,
subordinated or rescinded in any manner which materially interferes with the
security provided by such Mortgage Loan and the related Mortgaged Property other
than any material amendment or modification which has been effected pursuant to
a written instrument and has been duly submitted for recordation to the extent
necessary to protect the interests of the mortgagee, and is a part of the
related Mortgage File. Except as set forth on Schedule B-6, no consents,
waivers, modifications, alterations or assumptions of any kind with respect to a
Mortgage Loan have occurred since the date upon which the due diligence file
related to the applicable Mortgage Loan was delivered to Allied Capital
Corporation. The Mortgage Loan Seller has not taken any affirmative action
inconsistent with the Servicing Standard that would cause the representations
and warranties of the related Mortgagor under the Mortgage Loan not to be true
and correct in any material respect.
7. Condition of Property; Condemnation. In the case of each Mortgage Loan,
------------------------------------
one or more engineering reports were prepared in connection with the origination
of such Mortgage Loan by an independent third-party engineering firm who
inspected the Mortgaged Property, and except as set forth in such engineering
assessment(s) or on Schedule B-7A, the related Mortgaged Property is, to the
Mortgage Loan Seller's knowledge, free and clear of any damage that would
materially and adversely affect its value as security for such Mortgage Loan
B-4
(except in cases set forth in clauses (a), (b) and (c) below). As of origination
of such Mortgage Loan there was no proceeding pending, and subsequent to such
date, the Mortgage Loan Seller has not received actual notice of, any proceeding
pending for the condemnation of all or any material portion of the Mortgaged
Property. Except as set forth on Schedule B-7B, if any of the engineering
reports referred to above in this Paragraph 7 revealed any material damage or
material deferred maintenance, then one of the following is true: (a) the
repairs and/or maintenance necessary to correct such condition have been
completed in all material respects; (b) an escrow of funds is required or a
letter of credit was obtained in a percentage equal to 125% of the amount
reasonably estimated to be sufficient to complete the repairs and/or maintenance
necessary to correct such condition; or (c) the reasonable estimate of the cost
to complete the repairs and/or maintenance necessary to correct such condition
represented no more than (i) 2% of the value of the related Mortgaged Property
as reflected in an appraisal conducted in connection with the origination of the
subject Mortgage Loan or (ii) $50,000 whichever is less. As of the date of the
origination of each Mortgage Loan, except as set forth on Schedule B-7B: (x) all
of the material improvements on the related Mortgaged Property lay wholly within
the boundaries and, to the extent in effect at the time of construction,
building restriction lines of such property, except for encroachments that are
insured against by the lender's title insurance policy referred to in Paragraph
8 below or that do not affect the value or current principal use of such
Mortgaged Property to any material extent, (y) no improvements on adjoining
properties encroached upon such Mortgaged Property so as to affect the value or
current principal use of such Mortgaged Property to any material extent, except
those encroachments that are insured against by the lender's title insurance
policy referred to in Paragraph 8 below and (z) the Mortgaged Property securing
each Mortgage Loan is located on or adjacent to a public road, or has access to
an irrevocable easement permitting ingress and egress.
8. Title Insurance. The lien of each Mortgage securing a Mortgage Loan is
---------------
insured by an American Land Title Association (or an equivalent form of)
lender's title insurance policy (the "Title Policy") (except that if such policy
is yet to be issued, such insurance may be evidenced by a "marked up" pro forma
policy or title commitment in either case marked as binding and countersigned by
the title company or its authorized agent, either on its face or by an
acknowledged closing instruction or escrow letter) in the original principal
amount of such Mortgage Loan after all advances of principal, insuring the
originator of the related Mortgage Loan, its successors and assigns (as the sole
insured) that the related Mortgage is a valid first priority lien on such
Mortgaged Property, subject only to the Permitted Encumbrances. Such 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, the Mortgage Loan
Seller has made no claims thereunder and, to the Mortgage Loan Seller's
knowledge, no prior holder of the related Mortgage has made any claims
thereunder and no claims have been paid thereunder. The Mortgage Loan Seller has
not, and to the Mortgage Loan Seller's knowledge, no prior holder of the related
Mortgage has 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 (including endorsement and delivery of the related
Mortgage Note to the Purchaser or its designee and recording of the related
Assignment of Mortgage in favor of the Purchaser or its designee in the
applicable real estate records), 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. Such Title Policy
contains no exclusion for any of the following circumstances, or it
affirmatively insures (unless the related Mortgaged Property is located in a
B-5
jurisdiction where such affirmative insurance is not available), (a) that the
related Mortgaged Property has access to a public road, and (b) that the area
shown on the survey, if any, reviewed or prepared in connection with the
origination of the related Mortgage Loan is the same as the property legally
described in the related Mortgage. Such Title Policy contains no exclusion
regarding the encroachment upon any easements of any permanent improvements
located on the related Mortgaged Property for which the grantee of such easement
has the ability to force removal of such improvement, or such Title Policy
affirmatively insures against losses caused by forced removal of any material
permanent improvements on the related Mortgaged Property that encroach upon any
material easements.
9. No Holdback. The proceeds of each Mortgage Loan have been fully
------------
disbursed (except in those cases where the full amount of the Mortgage Loan has
been disbursed but a portion thereof is being held in escrow or reserve accounts
pending the satisfaction of certain conditions relating to leasing, repairs or
other matters with respect to the related Mortgaged Property), and there is no
obligation for future advances with respect thereto. If the related Mortgage
Loan documents include any requirements regarding (a) the completion of any
on-site or off-site improvements and (b) the disbursement of any funds escrowed
for such purpose, and if those requirements were to have been complied with on
or before the Closing Date, then such requirements have been complied with in
all material respects or such funds so escrowed have not been released except to
the extent specifically provided by the related Mortgage Loan documents.
10. Mortgage Provisions. The Mortgage Note, Mortgage (along with any
--------------------
security agreement and UCC financing statement) and Assignment of Leases for
each Mortgage Loan, together with applicable state law, contain customary and,
subject to the exceptions set forth in Paragraph 13 below, enforceable
provisions for commercial Mortgage Loans such as to render the rights and
remedies of the holder thereof adequate for the practical realization against
the related Mortgaged Property of the principal benefits of the security
intended to be provided thereby. The Mortgage Loan documents for each Mortgage
Loan, subject to applicable law, provide for the appointment of a receiver for
the collection of rents or for the related mortgagee to enter into possession to
collect the rents if there is an event of default under such Mortgage Loan.
11. Trustee under Deed of Trust. If the Mortgage for any Mortgage Loan is a
---------------------------
deed of trust, then (a) a trustee, duly qualified under applicable law to serve
as such, has either (i) been properly designated, has accepted such designation
and currently so serves or (ii) may be substituted in accordance with the
Mortgage and applicable law, and (b) no fees or expenses are payable to such
trustee by the Mortgage Loan Seller, the Depositor or any transferee thereof
except for such fees and expenses (all of which are the obligation of the
related Mortgagor under the related Mortgage Loan documents) as would be payable
in connection with a trustee's sale after default by the related Mortgagor or in
connection with any full or partial release of the related Mortgaged Property or
related security for such Mortgage Loan.
12. Environmental Conditions. Except in the case of the Mortgaged
-------------------------
Properties identified on Schedule B-12A, (a) an environmental site assessment
meeting the requirements of the American Society for Testing and Materials and
covering all environmental hazards typically assessed for similar properties
including use, type and tenants of the Mortgaged
B-6
Property ("Environmental Report"), or an update of such an assessment, was
performed by a licensed (to the extent required by applicable state law)
reputable, independent third-party environmental consulting firm with respect to
each Mortgaged Property in connection with the origination of such Mortgage Loan
and/or thereafter updated such that, except as set forth on Schedule B-12B, such
Environmental Report is dated no earlier than twelve months prior to the Closing
Date, (b) a copy of each such Environmental Report has been delivered to the
Purchaser, and (c) either: (i) no such Environmental Report provides that as of
the date of the report there is a material violation of any applicable
environmental laws with respect to any circumstances or conditions relating to
the related Mortgaged Property; or (ii) if any such Environmental Report does
reveal any such circumstances or conditions with respect to the related
Mortgaged Property and the same have not been subsequently remediated in all
material respects, then, except as described on Schedule B-12C, one or more of
the following are true: (A) one or more parties not related to or including the
related Mortgagor and collectively having financial resources reasonably
estimated by the Mortgage Loan Seller at the time of origination to be adequate
to cure the subject violation in all material respects, were identified as the
responsible party or parties for such condition or circumstance and such
condition or circumstance does not materially impair the value of the Mortgaged
Property, (B) the related Mortgagor was required to provide additional security
reasonably estimated by the Mortgage Loan Seller at the time of origination to
be adequate to cure the subject violation in all material respects, (C) if and
to the extent that such condition or circumstances can, based upon the
recommendation set forth in the subject Environmental Report, be remediated or
otherwise appropriately addressed in all material respects through the
implementation of an operations and maintenance plan, the related Mortgagor was
required to obtain and maintain an operations and maintenance plan, (D) the
related Mortgagor, or other responsible party, provided a "no further action"
letter or other evidence reasonably acceptable to a reasonably prudent
commercial mortgage lender that applicable federal, state or local governmental
authorities had no current intention of taking any action, and are not requiring
any action, in respect of such condition or circumstance, (E) such conditions or
circumstances were investigated further and based upon such additional
investigation, an independent third-party environmental consultant recommended
no further investigation or remediation, (F) the expenditure of funds reasonably
estimated to be necessary to effect such remediation is not greater than the
lesser of 2% of the outstanding principal balance of the related Mortgage Loan
or $50,000, (G) there exists an escrow of funds reasonably estimated by the
Mortgage Loan Seller at origination to be sufficient for purposes of effecting
such remediation, (H) the related Mortgaged Property is identified on Schedule
B-12D and insured under a policy of insurance subject to per occurrence and
aggregate limits and a deductible, each as set forth on Schedule B-12D, against
certain losses arising from such circumstances and conditions or (I) a party
with financial resources reasonably estimated by the Mortgage Loan Seller at the
time of origination to be adequate to cure the subject violation in all material
respects provided a guaranty or indemnity to the related Mortgagor to cover the
costs of any required investigation, testing, monitoring or remediation. To the
Mortgage Loan Seller's actual knowledge, having made no independent inquiry
other than reviewing the Environmental Reports(s) and employing an environmental
consultant to perform the assessment(s) referenced herein, there are no material
circumstances or conditions with respect to any Mortgaged Property not revealed
in any such Environmental Report, where obtained, that render such Mortgaged
Property in material violation of any applicable environmental laws. The
Mortgage Loan documents for each Mortgage Loan require the related Mortgagor to
comply with all applicable
B-7
federal, state and local environmental laws and regulations. The Mortgage Loan
Seller has not taken any affirmative action which would cause the Mortgaged
Property securing any Mortgage Loan not to be in compliance with all federal,
state and local laws pertaining to environmental hazards. Each Mortgagor
represents and warrants in the related Mortgage Loan documents substantially to
the effect that, except as set forth in certain specified environmental reports
and to the Mortgagor's knowledge, as of the date of origination, it has not
used, caused or permitted to exist and will not use, cause or permit to exist on
the related Mortgaged Property any hazardous materials which violate federal,
state or local laws, ordinances, regulations, orders, directives, or policies
governing the use, storage, treatment, transportation, manufacture, refinement,
handling, production or disposal of hazardous materials. Unless the related
Mortgaged Property is identified on Schedule B-12D, the related Mortgagor (or an
affiliate thereof) has agreed to indemnify mortgagee against, or otherwise be
liable for, any and all losses resulting from a breach of environmental
representations, warranties or covenants given by the Mortgagor in connection
with such Mortgage Loan, generally including any and all losses, liabilities,
damages, injuries, penalties, fines, expenses and claims of any kind or nature
whatsoever (including without limitation, attorneys' fees and expenses) paid,
incurred or suffered by or asserted against, any such party resulting from such
breach.
13. Loan Document Status. Each Mortgage Note, Mortgage, and other agreement
--------------------
executed by or on behalf of the related Mortgagor, or any guarantor of
non-recourse exceptions and environmental liability, with respect to each
Mortgage Loan is the legal, valid and binding obligation of the maker thereof
(subject to any non-recourse provisions contained in any of the foregoing
agreements and any applicable state anti-deficiency or market value limit
deficiency legislation), enforceable in accordance with its terms, except as
such enforcement may be limited by (i) bankruptcy, insolvency, reorganization,
fraudulent transfer and conveyance or other similar laws affecting the
enforcement of creditors' rights generally and (ii) general principles of equity
(regardless of whether such enforcement is considered in a proceeding in equity
or at law), and except that certain provisions in such loan documents may be
further limited or rendered unenforceable by applicable law. There is no right
of rescission, offset, abatement, diminution or valid defense or counterclaim
available to the related Mortgagor with respect to such Mortgage Note, Mortgage
or other agreements that would deny the mortgagee the principal benefits
intended to be provided thereby. The Mortgage Loan Seller has no actual
knowledge of any such rights, defenses or counterclaims having been asserted.
14. Insurance. Except as otherwise set forth on Schedule B-14A, all
---------
improvements upon each Mortgaged Property are insured under a fire and extended
perils insurance policy included within the classification "All Risk of Physical
Loss" insurance (or the equivalent) policy in an amount (subject to a customary
and reasonable deductible) at least equal to the full insurable replacement cost
of the improvements located on such Mortgaged Property, and if applicable, the
related hazard insurance policy contains appropriate endorsements to avoid the
application of coinsurance and does not permit reduction in insurance proceeds
for depreciation. Except in the case of the Mortgaged Properties identified on
Schedule B-14B hereto, each Mortgaged Property is the subject of a business
interruption, actual loss sustained or rent loss insurance policy providing
coverage for at least twelve (12) months (or a specified dollar amount which is
reasonably estimated to cover no less than twelve (12) months of rental income).
If any portion of the improvements upon the related Mortgaged Property was, at
the time of the origination of such Mortgage Loan, in a flood zone area as
identified in the Federal
B-8
Register by the Federal Emergency Management Agency as a 100 year flood zone or
special hazard area, and flood insurance was available, a flood insurance policy
meeting any requirements of the then current guidelines of the Federal Insurance
Administration is in effect with a generally acceptable insurance carrier, in an
amount representing coverage not less than the least of (1) the outstanding
principal balance of such Mortgage Loan, (2) the full insurable value of such
Mortgaged Property, (3) the maximum amount of insurance available under the
National Flood Insurance Act of 1968, as amended, or (4) 100% of the replacement
cost of the improvements located on such Mortgaged Property. If any Mortgaged
Property is located in the state of California or in a "seismic zone" 3 or 4, a
seismic assessment was conducted (except in the case of mobile home parks) at
the time of originations and seismic insurance was obtained to the extent such
Mortgaged Property has a PML of greater than twenty percent (20%) calculated
using at least a 450 a year look back with a 10% probability of exceedance in a
50 year period. If the Mortgaged Property for any Mortgage Loan is located in
any of the locations set forth on Schedule B-14WS, then such Mortgaged Property
is insured by windstorm insurance in an amount at least equal to the lesser of
(i) the outstanding principal balance of such Mortgage Loan and (ii) 100% of the
insurable replacement cost of the improvements located on the related Mortgaged
Property. All such hazard and flood insurance policies contain a standard
mortgagee clause for the benefit of the holder of the related Mortgage, its
successors and assigns, as mortgagee, and are not terminable (nor may the amount
of coverage provided thereunder be reduced) without thirty (30) days' (fifteen
(15) days for non-payment of premiums) prior written notice to the mortgagee;
and no such notice has been received, including any notice of nonpayment of
premiums, that has not been cured. Each Mortgaged Property and all improvements
thereon are also covered by comprehensive general liability insurance in such
amounts as are generally required by reasonably prudent commercial lenders or as
recommended by a reputable, independent insurance consultant. If any Mortgaged
Property is, to the Mortgage Loan Seller's knowledge, a materially
non-conforming use or structure under applicable zoning laws and ordinances,
then, in the event of a material casualty or destruction, one or more of the
following is true: (i) such Mortgaged Property may be restored or repaired to
materially the same extent of the use or structure at the time of such casualty;
(ii) such Mortgaged Property is covered by law and ordinance insurance in an
amount customarily required by reasonably prudent commercial mortgage lenders or
as recommended by a reputable, independent insurance consultant; or (iii) the
amount of hazard insurance currently in place and required by the related
Mortgage Loan documents would generate proceeds sufficient to pay off the
subject Mortgage Loan. Additionally, the insurer for all of the required
coverages set forth herein has a claims paying ability rating from Standard &
Poor's, Xxxxx'x or Xxxxx Ratings of not less than A-minus (or the equivalent),
or from A.M. Best of not less than "A:V" (or the equivalent) except that for any
Mortgage Loan having a Cut-off Date Principal Balance equal to or greater than
$20,000,000, the insurer for all of the required coverages set forth herein has
a claims paying ability rating from Standard & Poor's, Xxxxx'x or Fitch of not
less than A (or the equivalent), or from A.M. Best of not less than "A:IX" (or
the equivalent). With respect to each Mortgage Loan, the related Mortgage Loan
documents require that the related Mortgagor or a tenant of such Mortgagor
maintain insurance as described above or permit the Mortgagee to require
insurance as described above. Except under circumstances set forth in the
related Mortgage Loan documents that would be reasonably acceptable to a prudent
commercial mortgage lender or that would not otherwise materially and adversely
affect the security intended to be provided by the related Mortgage, the
Mortgage Loan documents for each Mortgage Loan
B-9
provide that proceeds paid under any such casualty insurance policy will (or, at
the lender's option, will) be applied either to the repair or restoration of the
related Mortgaged Property or to the payment of amounts due under such Mortgage
Loan; provided that the related Mortgage Loan documents may entitle the related
Mortgagor to any portion of such proceeds remaining after the repair or
restoration of the related Mortgaged Property or payment of amounts due under
the Mortgage Loan; and provided, further, that, if the related Mortgagor holds a
leasehold interest in the related Mortgaged Property, the application of such
proceeds will be subject to the terms of the related Ground Lease (as defined in
Paragraph 18 below). Based on the due diligence performed by the Mortgage Loan
Mortgage Loan Seller, which in all events was at least such due diligence as a
prudent commercial mortgage lender (with respect to the below referenced
insurance policies regarding the origination of the related Mortgage Loan) or a
prudent commercial mortgage servicer (with respect to any renewal of the below
referenced insurance policies since the origination of the related Mortgage
Loan) would undertake with respect to such issue after September 11, 2001, for
each Mortgage Loan, except as indicated on Schedule B-14C, the related all risk
property casualty insurance policy and business interruption policy do not
specifically exclude acts of terrorism, or any related damage claims, from
coverage as of the later of (i) the date of origination of the Mortgage Loan and
(ii) the last date as of which the policy was renewed or amended except as
indicated on Schedule __, and the related loan documents do not expressly
prohibit or waive such coverage, except to the extent that any right to require
such coverage may be limited by commercially reasonable availability. To the
Mortgage Loan Seller's actual knowledge, all insurance policies described above
are with an insurance carrier qualified to write insurance in the relevant
jurisdiction and all insurance described above is in full force and effect.
15. Taxes and Assessments. No real estate taxes or governmental assessments
---------------------
or governmental charges that prior to the Cut-Off Date became due and owing in
respect of each Mortgaged Property are delinquent and unpaid, or, an escrow of
funds in an amount sufficient to pay such payments has been established. Such
taxes, assessments and charges shall not be considered delinquent and unpaid
until the date on which interest or penalties may first be payable thereon.
16. Mortgagor Bankruptcy. No Mortgaged Property, nor any portion thereof is
--------------------
the subject of, and no Mortgagor under a Mortgage Loan is a debtor in, any state
or federal bankruptcy, insolvency or similar proceeding.
17. Local Law Compliance. To the Mortgage Loan Seller's knowledge, based
--------------------
upon a letter from governmental authorities, an opinion of counsel, a zoning
consultant's report, an endorsement to the related Title Policy, or (when such
would be acceptable to a reasonably prudent commercial mortgage lender) a
representation of the related Mortgagor at the time of origination of the
subject Mortgage Loan, or based on such other due diligence considered
reasonable by prudent commercial mortgage lenders in the lending area where the
subject Mortgaged Property is located, except as described on Schedule B-17, the
improvements located on or forming part of, and the existing use of, each
Mortgaged Property: (i) are not in violation of any applicable building codes or
land laws applicable to the Mortgaged Property, the improvements thereon or the
use and occupancy thereof which would have a material adverse effect on the
value, operation, current principal use or net operating income of the Mortgaged
Property which are not covered by title insurance; and (ii) are in material
compliance with
B-10
applicable zoning laws and ordinances, including all such applicable parking
ordinances or requirements, or constitute a legal non-conforming use or
structure (provided that with respect to any non-conformity with such laws or
ordinances either: (x) in the event of casualty or destruction, the use or
structure may be restored or repaired to the full extent of the use or structure
at the time of such casualty as provided in Paragraph 14 above; (y) law and
ordinance insurance coverage has been obtained for the structure or use as
provided in Paragraph 14 above; or (z) such non-compliance does not materially
and adversely affect the value of the related Mortgaged Property).
18. Leasehold Estate Only. If any Mortgage Loan is secured by the interest
---------------------
of a Mortgagor as a lessee under a ground lease (together with any and all
written amendments and modifications thereof and any and all estoppels from or
other agreements with the ground lessor, a "Ground Lease"), but not by the
related fee interest in the subject real property (the "Fee Interest"), then,
except as set forth on Schedule B-18:
(a) Such Ground Lease or a memorandum thereof has been or will be duly
recorded; such Ground Lease permits the interest of the lessee thereunder to be
encumbered by the related Mortgage and does not restrict the use of the related
Mortgaged Property by such lessee, its successors or assigns in a manner that
would materially adversely affect the security provided by the related Mortgage;
to the extent required under such Ground Lease, the lessor under such Ground
Lease has been sent notice of the lien of the related Mortgage in accordance
with the provisions of such Ground Lease; and there has been no material change
in the terms of such Ground Lease since its recordation, with the exception of
material changes reflected in written instruments which are a part of the
related Mortgage File;
(b) The lessee's interest in such Ground Lease is not subject to any
liens or encumbrances superior to, or of equal priority with, the related
Mortgage, other than Permitted Encumbrances, and such Ground Lease provides that
it shall remain superior to any mortgage or other lien upon the related Fee
Interest;
(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 Mortgage
Loan Seller has not received, as of the Closing Date, any notice that an event
of default has occurred thereunder and to the Mortgage Loan 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 requires the lessor under such Ground Lease
thereunder to give notice of any default by the lessee to the mortgagee under
such Mortgage Loan provided such mortgagee has provided such lessor with notice
of its lien in accordance with the provisions of such Ground Lease and such
Ground Lease further provides that no notice of termination given under such
Ground Lease is effective against the mortgagee under such
B-11
Mortgage Loan unless a copy has been delivered to such mortgagee in the manner
described in such Ground Lease and the Mortgage Loan Seller has provided such
lessor with notice of the lien of the related Mortgage in accordance with the
provisions of such Ground Lease;
(f) The mortgagee under such Mortgage Loan is permitted a reasonable
opportunity (including, where necessary, sufficient time to gain possession of
the interest of the lessee under such Ground Lease) to cure any default under
such Ground Lease, which is curable after the receipt of notice of any such
default, before the lessor thereunder may terminate such Ground Lease;
(g) Except as set forth on Schedule B-18G, such Ground Lease has an
original term (or an original term plus options exercisable by the holder of the
related Mortgage) which extends not less than twenty (20) years beyond the end
of the amortization term of such Mortgage Loan;
(h) Such Ground Lease requires the lessor to enter into a new lease
with a mortgagee upon termination of such Ground Lease by reason of default by
the Mortgagor including termination as a result of a rejection of such Ground
Lease in a bankruptcy proceeding;
(i) Under the terms of such Ground Lease and the related Mortgage,
taken together, any related insurance proceeds, 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. Under the terms of
such Ground Lease and the related Mortgage Loan documents, taken together, any
condemnation proceeds or awards in respect of a total or substantially total
taking will be applied first to the payment of the outstanding principal and
interest on the Mortgage Loan (except as otherwise provided by applicable law)
and subject to any rights to require the improvements to be rebuilt;
(j) Such Ground Lease does not impose any restrictions on subletting
which would be viewed as commercially unreasonable by a prudent commercial
mortgage lender and 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;
(k) The lessor under such Ground Lease is not permitted in the absence
of an uncured default to disturb the possession, interest or quiet enjoyment of
the tenant in any manner, which would materially adversely affect the security
provided by such Ground Lease and the related Mortgage; and
(l) Such Ground Lease provides that it may not be amended or modified
without the prior consent of the mortgagee under such Mortgage Loan and that any
such action without such consent is not binding on such mortgagee, its
successors or assigns.
B-12
19. Qualified Mortgage. Such Mortgage Loan is a "qualified mortgage"
------------------
within the meaning of Section 860G(a)(3) of the Code and Treasury regulation
section 1.860G-2(a), and the related Mortgaged Property, if acquired in
connection with the default or imminent default of such Mortgage Loan, would
constitute "foreclosure property" within the meaning of Section 860G(a)(8)
(without regard to Section 856(e)(4) of the Code).
20. Advancement of Funds. The Mortgage Loan Seller has not (nor, to
---------------------
the Mortgage Loan Seller's knowledge, has any prior holder of such Mortgage
Loan) advanced funds or knowingly received any advance of funds from a party
other than the owner of the related Mortgaged Property (or a tenant at or the
property manager of the related Mortgaged Property), for the payment of any
amount required by such Mortgage Loan, except for interest accruing from the
date of origination of such Mortgage Loan or the date of disbursement of the
Mortgage Loan proceeds, whichever is later, to the date which preceded by 30
days the first due date under the related Mortgage Note.
21. No Equity Interest, Equity Participation or Contingent Interest.
---------------------------------------------------------------
No Mortgage Loan contains any equity participation by the lender or shared
appreciation feature and does not provide for any contingent or additional
interest in the form of participation in the cash flow of the related Mortgaged
Property or provide for negative amortization. Neither the Mortgage Loan Seller
nor any Affiliate thereof has any obligation to make any capital contribution to
the Mortgagor under the Mortgage Loan or otherwise.
22. Legal Proceedings. To the Mortgage Loan Seller's knowledge, as of
-----------------
origination of the Mortgage Loan, there were no, and to the Mortgage Loan
Seller's actual knowledge, as of the Closing Date, there are no pending actions,
suits, litigation or other proceedings by or before any court or governmental
authority against or affecting the Mortgagor (or any guarantor to the extent a
reasonably prudent commercial or multifamily, as applicable, mortgage lender
would consider such guarantor material to the underwriting of such Mortgage
Loan) under any Mortgage Loan 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 as security for such
Mortgage Loan, the Mortgagor's ability to pay principal, interest or any other
amounts due under such Mortgage Loan or the ability of any such guarantor to
meet its obligations under the applicable guaranty.
23. Other Mortgage Liens. Except as otherwise set forth on Schedule
--------------------
B-23, none of the Mortgage Loans permits the related Mortgaged Property or any
direct controlling interest in the related Mortgagor to be encumbered by any
mortgage lien or, in the case of a direct controlling interest in the related
Mortgagor, a lien to secure any other debt, without the prior written consent of
the holder of the subject Mortgage Loan or the satisfaction of debt service
coverage or similar criteria specified therein. To the Mortgage Loan Seller's
knowledge, as of origination of the subject Mortgage Loan, and to the Mortgage
Loan Seller's actual knowledge, as of the Closing Date, except as otherwise set
forth on Schedule B-23, and except for cases involving other Mortgage Loans, no
Mortgaged Property securing the subject Mortgage Loan is encumbered by any other
mortgage liens (other than Permitted Encumbrances) and no direct controlling
equity interest in the related Mortgagor is encumbered by a lien to secure any
other debt. The related Mortgage Loan documents do not specifically prohibit the
mortgagee from requiring the Mortgagor under each Mortgage Loan to pay all
reasonable costs and
B-13
expenses related to any required consent to an encumbrance, including reasonable
legal fees and expenses and any applicable Rating Agency fees, or would permit
the subject mortgagee to withhold such consent if such costs and expenses are
not paid by a party other than such mortgagee.
24. No Mechanics' Liens. To the Mortgage Loan Seller's knowledge, as
-------------------
of the origination of the Mortgage Loan, and, to the Mortgage Loan Seller's
actual knowledge, as of the Closing Date: (i) each Mortgaged Property (exclusive
of any related personal property) is free and clear of any and all mechanics'
and materialmen's liens that are prior or equal to the lien of the related
Mortgage and that are not bonded or escrowed for or covered by title insurance,
and (ii) no rights are outstanding that under law could give rise to any such
mechanic's or materialmen's lien that would be prior or equal to the lien of the
related Mortgage and that is not bonded or escrowed for or covered by title
insurance.
25. Compliance with Usury Laws. Each Mortgage Loan complied with, or
--------------------------
was exempt from, all applicable usury laws in effect at its date of origination.
26. Licenses and Permits. Except as set forth on Schedule B-26, each
----------------------
Mortgage Loan contains provisions substantially to the effect that, to the
extent required by applicable law, each Mortgagor is required to be qualified to
do business and requires the related Mortgagor and the related Mortgaged
Property to be in material compliance with all regulations, licenses, permits,
authorizations, restrictive covenants and zoning, parking and building laws or
ordinances, in each case to the extent required by law or to the extent that the
failure to be so qualified or in compliance would have a material and adverse
effect upon the enforceability of the Mortgage Loan or upon the practical
realization against the related Mortgaged Property of the principal benefits of
the security intended to be provided thereby.
27. Cross-Collateralization. No Mortgage Loan is cross-collateralized with
-----------------------
any loan which is outside the Mortgage Pool. With respect to any group of
cross-collateralized Mortgage Loans, the sum of the amounts of the respective
Mortgages upon which recording taxes and fees were paid in an amount sufficient
to allow the mortgagee to realize on the Mortgaged Properties in an amount at
least equal to the original principal balance of such Mortgage Loan.
28. Releases of Mortgaged Properties. Except as set forth on Schedule
-----------------------------------
B-28A, no Mortgage Note or Mortgage requires the mortgagee to release all or any
material portion of the related Mortgaged Property from the lien of the related
Mortgage except upon: (i) payment in full of all amounts due under the related
Mortgage Loan or (ii) delivery of "government securities" within the meaning of
Treas. Reg. Section 1.860G-2(a)(8)(i) in connection with a defeasance of the
related Mortgage Loan; provided that the Mortgage Loans that are
Cross-Collateralized Mortgage Loans, and the other individual Mortgage Loans
secured by multiple parcels, may require the respective mortgagee(s) to grant
releases of material portions of the related Mortgaged Property or the release
of one or more related Mortgaged Properties upon: (i) the satisfaction of
certain legal and underwriting requirements, (ii) the payment of a release price
for the released property or parcel as set forth on Schedule B-28B or (iii) the
delivery of comparable substitute real estate collateral subject to certain
conditions precedent as set forth on Schedule B-28C. Notwithstanding the
foregoing, any Mortgage Loan
B-14
may permit the unconditional release of one or more unimproved parcels of land
to which the Mortgage Loan Seller did not give any material value in its
underwriting of such Mortgage Loan. No release or partial release of any
Mortgaged Property, or any portion thereof, expressly permitted pursuant to the
terms of any Mortgage Note or Mortgage will constitute a significant
modification of the related Mortgage Loan under Treas. Reg. Section
1.860G-2(b)(2). With respect to any release or substitution, the related
Mortgagor is required to pay all reasonable costs and expenses associated
therewith incurred by the mortgagee including any Rating Agency fees and
expenses.
29. Defeasance. Each Mortgage Loan containing provisions for defeasance of
----------
all or a portion of the Mortgaged Property either (i) requires the prior written
consent of, and compliance with all conditions set by, the holder of the
Mortgage Loan, or (ii) requires confirmation from the rating agencies rating the
certificates of any securitization transaction in which such Mortgage Loan is
included that such defeasance will not cause the downgrade, withdrawal or
qualification of the then current ratings of such certificates, and (iii)
requires that (A) defeasance must occur in accordance with the requirements of,
and within the time permitted by, applicable REMIC rules and regulations, (B)
the replacement collateral consists of non-callable U.S. government securities
in an amount sufficient to make all scheduled payments under such Mortgage Loan
when due, (C) at the mortgagee's election, the Mortgage Loan may only be assumed
by a single-purpose entity designated or approved by the holder of the Mortgage
Loan and (D) counsel provide an opinion that the Trustee has a perfected
security interest in such U.S. government securities prior to any other claim or
interest. The Mortgagor is required by the Mortgage Loan documents to pay all
reasonable costs and expenses, including but not limited to Rating Agency fees,
accountants fees and legal fees, associated with such defeasance.
30. Inspection. Except as set forth on Schedule B-30, the Mortgage Loan
----------
Seller, an affiliate of the Mortgage Loan Seller, or a correspondent in the
conduit funding program of the Mortgage Loan Seller, inspected, or caused the
inspection of, each Mortgaged Property within twelve (12) months of the Closing
Date.
31. No Material Default. Other than payments due but not yet 30 days or
--------------------
more past due, there exists no material default, breach, violation or event of
acceleration under the Mortgage Note or Mortgage for any Mortgage Loan;
provided, however, that this representation and warranty does not cover any
default, breach, violation or event of acceleration that specifically pertains
to or arises out of the subject matter otherwise covered by any other
representation and warranty made by the Mortgage Loan Seller in this Exhibit B.
32. Due-on-Sale. The Mortgage for each Mortgage Loan contains a
-----------
"due-on-sale" clause, which provides for the acceleration of the payment of the
unpaid principal balance of such Mortgage Loan if, without the prior written
consent of the holder of such Mortgage, either the related Mortgaged Property,
or any direct controlling equity interest in the related Mortgagor, is
transferred or sold, other than by reason of family and estate planning
transfers, transfers of less than a controlling interest in the Mortgagor,
transfers of shares in public companies, issuance of non-controlling new equity
interests, transfers to an affiliate meeting the requirements of the Mortgage
Loan, transfers among existing members, partners or shareholders in the
Mortgagor, transfers among affiliated Mortgagors with respect to
cross-collateralized
B-15
Mortgaged Loans or multi-property Mortgage Loans, transfers among co-Mortgagors
or transfers of a similar nature to the foregoing meeting the requirements of
the Mortgage Loan. The related Mortgage Loan documents require the Mortgagor
under each Mortgage Loan to pay all reasonable fees and expenses associated with
securing the consent or approval of the holder of the related Mortgage for all
such actions requiring such consent or approval under the related Mortgage,
including Rating Agency fees and the cost of counsel opinions relating to REMIC
or other securitization tax issues.
33. Single Purpose Entity. Except as otherwise described on Schedule B-33
---------------------
hereto, each Mortgage Loan with an original principal balance over $5,000,000.00
requires the related Mortgagor to be, at least for so long as the Mortgage Loan
is outstanding, and to the Mortgage Loan Seller's actual knowledge, the related
Mortgagor is, a Single-Purpose Entity. For this purpose, "Single-Purpose Entity"
means a person, other than an individual, which is formed or organized solely
for the purpose of owning and operating the related Mortgaged Property or
Properties; does not engage in any business unrelated to such Mortgaged Property
or Properties and the financing thereof; and whose organizational documents
provide, or which entity represented and covenanted in the related Mortgage Loan
documents, substantially to the effect that such Mortgagor (i) does not and will
not have any material assets other than those related to its interest in such
Mortgaged Property or Properties or the financing thereof; (ii) does not and
will not have any indebtedness other than as permitted by the related Mortgage
or other related Mortgage Loan documents; (iii) maintains its own books, records
and accounts, in each case which are separate and apart from the books, records
and accounts of any other person; and (iv) holds itself out as being a legal
entity, separate and apart from any other person. In addition, each Mortgage
Loan with a Cut-off Date Principal Balance of $20,000,000 or more, except as set
forth on Schedule B-33, the related Mortgagor's organizational documents provide
substantially to the effect that the Mortgagor shall: conduct business in its
own name; not guarantee or assume the debts or obligations of any other person;
not commingle its assets or funds with those of any other person; prepare
separate tax returns and financial statements, or if part of a consolidated
group, be shown as a separate member of such group; transact business with
affiliates on an arm's length basis; hold itself out as being a legal entity,
separate and apart from any other person, and such organizational documents
further provide substantially to the effect that: any dissolution and winding up
or insolvency filing for such entity is prohibited or requires the consent of an
independent director or member or the unanimous consent of all partners or
members, as applicable; such documents may not be amended with respect to the
Single-Purpose Entity requirements without the approval of the mortgagee or
rating agencies; the Mortgagor shall have an outside independent director or
member. The Mortgage Loan Seller has obtained, and the Servicing File contains,
with respect to each Mortgage Loan having a Cut-off Date Principal Balance of
$20,000,000 or more, in connection with its origination or acquisition thereof,
a counsel's opinion regarding non-consolidation of the Mortgagor. The
organization documents of any Mortgagor on a Mortgage Loan having a Cut-off Date
Principal Balance of $20,000,000 or more that is a single member limited
liability company, provide that the Mortgagor shall not dissolve or liquidate
upon the bankruptcy, dissolution, liquidation or death of the sole member and
the Mortgage Loan Seller has obtained in connection with its origination or
acquisition of the subject Mortgage Loan, and the Servicing File contains, an
opinion of such Mortgagor's counsel confirming that the law of the jurisdiction
in which such single member limited liability company was organized permits such
continued existence upon such bankruptcy, dissolution, liquidation or death of
the sole member of the Mortgagor and that the applicable law
B-16
provides that creditors of the single member may only attach the assets of the
member including the membership interests in the Mortgagor but not the assets of
the Mortgagor.
34. Whole Loan. Each Mortgage Loan is a whole loan and not a participation
----------
interest in a mortgage loan.
35. Tax Parcels. Except as described on Schedule B-35 of this Agreement,
-----------
each Mortgaged Property constitutes one or more complete separate tax lots
containing no other property, or is subject to an endorsement under the related
Title Policy insuring same, or an application for the creation of separate tax
lots complying in all respects with the applicable laws and requirements of the
applicable governing authority has been made and approved by the applicable
governing authority and such separate tax lots shall be effective for the next
tax year.
36. Security Interests. UCC Financing Statements have been filed and/or
-------------------
recorded (or, if not filed and/or recorded, have been submitted in proper form
for filing and recording), in all public places necessary to perfect a valid
security interest in all items of personal property owned by a Mortgagor and
located on the related Mortgaged Property (other than any personal property
subject to a leasing arrangement or purchase money security interest permitted
under the terms of such Mortgage Loan or any other applicable personal property
leases, provided, the related Mortgage Loan documents contain a provision
providing for the assignment of such leases and related contracts to the
mortgagee in the event of a foreclosure of the Mortgage Loan), which in all
cases, includes any elevators and all Mortgagor-owned furniture, fixtures and
equipment material to the operation and use of the Mortgaged Property as
presently operated, and if such Mortgaged Property is a hotel or self-storage
facility, operated by the related Mortgagor, then such personal property
constitutes all of the material personal property required to operate the
Mortgagor's business as currently operated (other than any personal property
subject to a leasing arrangement or purchase money security interest permitted
under the terms of such Mortgage Loan or any other applicable personal property
leases, provided, the related Mortgage Loan documents contain a provision
providing for the assignment of such leases and related contracts to the
mortgagee in the event of a foreclosure of the Mortgage Loan) and the Mortgages,
security agreements, chattel mortgages or equivalent documents related to and
delivered in connection with the related Mortgage Loan establish and create a
valid and enforceable first priority (except as noted above in this Paragraph
36) lien and security interest, to the extent perfection may be effected
pursuant to applicable law solely by recording or filing UCC Financing
Statements, on such items of personalty except as enforceability may be limited
as set forth in Paragraph 13. In the case of each Mortgage Loan secured by a
hotel, the related loan documents contain such provisions as are necessary and
UCC Financing Statements have been filed as necessary, in each case, to perfect
a valid first security interest in Mortgagor's related operating revenues with
respect to such Mortgaged Property. An assignment of each UCC Financing
Statement relating to the Mortgage Loan has been completed or will be prepared
in blank which the Purchaser or Trustee, as applicable, or its designee is
authorized to complete and to file in the filing office in which such Financing
Statement was filed. Notwithstanding any of the foregoing, no representation is
made as to the perfection or priority of any security interest in rents or other
personal property to the extent that possession or control of such items or
actions other than the filing of UCC Financing Statements are required in order
to effect such perfection.
B-17
37. Disclosure to Environmental Insurer and Other Matters. If the Mortgaged
-----------------------------------------------------
Property securing any Mortgage Loan is covered by a secured creditor impaired
property policy, then the Mortgage Loan Seller:
(a) has disclosed, or is aware that there has been disclosed, in the
application for such policy or otherwise to the insurer under such policy the
"pollution conditions" (as defined in such policy) identified in any
environmental reports related to such Mortgaged Property which are in the
Mortgage Loan Seller's possession or are otherwise known to the Mortgage Loan
Seller; or
(b) has delivered or caused to be delivered to the insurer under such
policy copies of all environmental reports in the Mortgage Loan Seller's
possession related to such Mortgaged Property;
in each case to the extent required by such policy or to the extent the failure
to make any such disclosure or deliver any such report would materially and
adversely affect the Purchaser's ability to recover under such policy. If the
Mortgaged Property securing any Mortgage Loan is covered by a secured creditor
impaired property policy, then: (v) all premiums for such insurance have been
paid and any deductible is held in escrow by the Mortgage Loan Seller and will
be transferred to the Purchaser; (w) such insurance is in full force and effect;
(x) the policy is in an amount equal to at least 125% of the principal balance
of the Mortgage Loan; (y) the policy has a term that ends no sooner than five
(5) years after the maturity date of the Mortgage Loan and is not cancelable
during such term; and (z) (i) an environmental report, a property condition
report or an engineering report was prepared that included an assessment for
lead based paint ("LBP") (in the case of a multifamily property built prior to
1978), asbestos containing materials ("ACM") (in the case of any property built
prior to 1985) and radon gas ("RG") (in the case of a multifamily property) at
such Mortgaged Property and (ii) if such report disclosed the existence of a
material and adverse LBP, ACM or RG environmental condition or circumstance
affecting such Mortgaged Property, then, except as otherwise described on
Schedule B-38, (A) the related Mortgagor was required to remediate such
condition or circumstance prior to the closing of the subject Mortgage Loan, or
(B) the related Mortgagor was required to provide additional security reasonably
estimated to be adequate to cure such condition or circumstance, or (C) the
related Mortgage Loan documents require the related Mortgagor to establish an
operations and maintenance plan with respect to such condition or circumstance
after the closing of such Mortgage Loan. If the Mortgage Loan is listed on
Schedule B-12D and the environmental insurance for such Mortgage Loan is not a
secured creditor policy but was required to be obtained by the Mortgagor, then
the holder of the Mortgage Loan is entitled to be an additional insured under
such policy, all premiums have been paid, such insurance is in full force and
effect and, to the Mortgage Loan Seller's knowledge, the Mortgagor has made the
disclosures and complied with the requirements of clauses (a) and (b) of this
Paragraph 37.
38. Prepayment Premiums and Yield Maintenance Charges. Prepayment Premiums
-------------------------------------------------
and Yield Maintenance Charges payable with respect to each Mortgage Loan, if
any, constitute "customary prepayment penalties" within meaning of Treas. Reg.
Section 1.860G-1(b)(2).
B-18
39. Operating Statements. Except as set forth on Schedule B-39, each
---------------------
Mortgage Loan requires the Mortgagor, in some cases only at the request of the
holder of the related Mortgage, to provide the owner or holder of the related
Mortgage with at least quarterly and annual operating statements, rent rolls (if
there is more than one tenant) and related information and annual financial
statements, which annual financial statements with respect to each Mortgage Loan
with an original principal balance greater than $20 million shall be audited (or
prepared and certified) by an independent certified public accountant upon the
request of the holder of the related Mortgage.
40. Recourse. Each Mortgage Loan is non-recourse; provided that, except as
--------
described on Schedule B-40, the Mortgagor and either a principal of the
Mortgagor or other individual guarantor, with assets other than any interest in
the Mortgagor, is liable in the event of (i) fraud or material intentional
misrepresentation, (ii) misapplication or misappropriation of rents, insurance
payments, condemnation awards or tenant security deposits (to the extent
received by the related Mortgagor after the occurrence of an event of default
and not paid to the Mortgagee or applied to the Mortgaged Property in the
ordinary course of business), (iii) violation of applicable environmental laws
or breaches of environmental covenants or (iv) the filing of a voluntary
bankruptcy or insolvency proceeding by the Mortgagor; and provided, further,
that, with respect to clause (iii) of the preceding proviso, an indemnification
against losses related to such violations or environmental insurance shall
satisfy such requirement. No waiver of liability for such non-recourse
exceptions has been granted to the Mortgagor or any such guarantor or principal
by the Mortgage Loan Seller or anyone acting on behalf of the Mortgage Loan
Seller.
41. Assignment of Collateral. There is no material collateral securing any
------------------------
Mortgage Loan that has not been assigned to the Purchaser.
42. Fee Simple or Leasehold Interests. The interest of the related
-------------------------------------
Mortgagor in the Mortgaged Property securing each Mortgage Loan includes a fee
simple and/or leasehold estate or interest in real property and the improvements
thereon.
43. Servicing. The servicing and collection practices used with respect to
---------
the Mortgage Loan have complied with applicable law and the servicing standard
set forth in Section 3.01(a) of the Pooling and Servicing Agreement.
44. Originator's Authorization To Do Business. To the extent required under
-----------------------------------------
applicable law, at all times when it held such Mortgage Loan, the originator of
such Mortgage Loan was authorized to do business in the jurisdiction in which
the related Mortgaged Property is located to the extent necessary to ensure the
enforceability of such Mortgage Loan.
45. No Fraud In Origination. In the origination of the Mortgage Loan, none
-----------------------
of the Mortgage Loan Seller, the originator, or any employee or mortgage broker,
if any, of the Mortgage Loan Seller or the originator, engaged in any fraud or
intentional material misrepresentation with respect to the Mortgagor, the
Mortgaged Property or any guarantor. To the Mortgage Loan Seller's actual
knowledge, no Mortgagor is guilty of defrauding or making an intentional
material misrepresentation to the Mortgage Loan Seller or originator with
respect to the origination of the Mortgage Loan, the Mortgagor or the Mortgaged
Property.
B-19
46. Appraisal. In connection with its origination or acquisition of each
---------
Mortgage Loan, the Mortgage Loan Seller obtained an appraisal of the related
Mortgaged Property, which appraisal is signed by an appraiser, who, to the
Mortgage Loan Seller's actual knowledge, had no interest, direct or indirect, in
the Mortgagor, the Mortgaged Property or in any loan made on the security of the
Mortgaged Property, and whose compensation is not affected by the approval or
disapproval of the Mortgage Loan; the appraisal provides that it satisfy the
requirements of the "Uniform Standards of Professional Appraisal Practice" as
adopted by the Appraisal Standards Board of the Appraisal Foundation, all as in
effect on the date the Mortgage Loan was originated.
47. Jurisdiction of Organization. In respect of each Mortgage Loan, in
------------------------------
reliance on certified copies of incorporation or partnership or other entity
documents, as applicable, delivered in connection with the origination of such
Mortgage Loan, the related Mortgagor is an entity organized under the laws of a
state of the United States of America, the District of Columbia or the
Commonwealth of Puerto Rico.
48. Mortgagor Concentration. Except as otherwise specified on Schedule
------------------------
B-48, no single Mortgagor, and to Mortgage Loan Seller's knowledge, no group of
affiliated Mortgagors is/are the obligor(s) under any one or more Mortgage Loans
with a Cut-off Date Principal Balance of $50,000,000 or more.
49. Escrows. All escrow deposits (including capital improvements and
-------
environmental remediation reserves) relating to any Mortgage Loan that were
required to be delivered to the lender under the terms of the related Mortgage
Loan documents, have been received and, to the extent of any remaining balances
of such escrow deposits, are in the possession or under the control of the
Mortgage Loan Seller or its agents (which shall include the Master Servicer).
All such escrow deposits which are required for the administration and servicing
of such Mortgage Loan are conveyed hereunder to the Purchaser.
B-20
SCHEDULE to EXHIBIT B
EXCEPTIONS TO REPRESENTATIONS AND WARRANTIES
GERMAN AMERICAN CAPITAL CORPORATION
Rep. 14. Insurance. Mortgage Loan No. DBM 18404, Gateway Center, does not
---------
require business interruption insurance in an amount equal to at least twelve
months of operations of the Mortgaged Property. Instead, the Mortgage Loan
requires business interruption insurance covering actual losses up to a maximum
aggregate amount of $5,500,000 with respect to tenants at the Mortgaged Property
and the adjacent property, but only to the extent such tenants have an abatement
right for insurable casualty pursuant to the terms of their respective leases.
Mortgage Loan No. DBM 18864, Walgreens Melbourne, provides that the Mortgagor is
not required to obtain insurance contemplated by this representation if
Walgreens Co., as tenant, complies with the insurance requirements under its
lease with Mortgagor for the Mortgaged Property and satisfies certain other
conditions. The insurance requirements under the lease do not require business
interruption insurance, the naming of the mortgagee as an additional insured or
that the insurance providers maintain specific ratings. However, under the terms
of its lease, the tenant has no right to xxxxx rent on account of a casualty or
condemnation until the twenty-fourth year of the lease term. In addition, the
insurance provider must be authorized to do business in the state where the
Mortgaged Property is located and be governed by regulatory authority which
establishes maximum rates in the vicinity of the Mortgaged Property. The lease
also permits the tenant to self-insure if it has a net worth of at least
$200,000,000.
Rep 23. Other Mortgage Liens. Mortgage Loan No. GA 18896, Boulevard Mall, is
---------------------
secured by a mortgage that also secures pari passu and subordinate indebtedness,
as described in the discussion of representation 27, below.
Rep. 27. Cross-collateralization. Mortgage Loan No. GA 18896, Boulevard Mall, is
-----------------------
cross-defaulted and cross-collateralized with two other component notes made to
the related Mortgagor and affecting the Mortgaged Property. The other notes are
in the original amounts of $48,728,500 (designated as Note A1), $22,543,000
(designated as Note B).
Rep. 28. Releases of Mortgaged Properties. Mortgage Loan No. DBM 18317, Virginia
--------------------------------
FF Retail Portfolio, permits release of an individual mortgaged property from
the mortgage lien in connection with partial defeasance, provided, among other
conditions, that (i) the borrower pays a release price equal to 125% of the
allocated loan amount, multiplied by a fraction whose numerator is the
outstanding principal balance of the Loan on the date of such partial release
and whose denominator is the original outstanding principal balance of the Loan,
(ii) the underwritten debt service coverage ratio for the remaining property is
at least 1.30x, (iii) the maximum loan-to-value ratio for the remaining property
is not more than 75% and (iv) if requested by lender, the borrower shall furnish
a rating agency confirmation of no resulting downgrade to the ratings of the
REMIC securities.
Rep. 32. Due on Sale. Mortgage Loan No. DBM 18404, Gateway Center, provides that
-----------
transfers of direct or indirect interests in The Related Companies, L.P.
("TRC"), a sponsor of the Mortgagor, are permitted without the consent of the
lender and are not subject to any other
B-21
transfer restrictions in the loan documents. In addition, the loan documents
permit all or any portion of the direct or indirect ownership interests in RBV
Gateway, LLC (a member of the owner of the Mortgagor) to be transferred without
lender consent, provided, however, that if such transfer will result in an
entity that has not been previously approved by the lender owning more than a
49% (direct or indirect) ownership interest in the Mortgagor, then such transfer
will be subject to, among other things, receipt by the lender of a satisfactory
nonconsolidation opinion and evidence from the Rating Agencies that such
transfer will not result in the withdrawal, downgrade or qualification of the
ratings assigned to any of the Certificates.
In addition, the Gateway Center loan documents permit TRC and Blackacre Capital
Partners, L.P. (the managing member of Blackacre Gateway (as defined below)) to
pledge their interest in Related Retail, LP (the managing member of the managing
member of the owner of the Mortgagor) and in Blackacre RBV Gateway, LLC
("Blackacre Gateway") (the managing member of a member of the owner of the
Mortgagor), respectively, or interests in themselves, as collateral in
traditional corporate financings with institutional lenders without the consent
of the lender. The loan documents also permit the direct and indirect owners of
Blackacre Gateway or LR Gateway LLC (a member of a member of the owner of the
Mortgagor) to pledge all or any portion of their membership interest in
Blackacre Gateway or LR Gateway, LLC, as applicable, as collateral for a
mezzanine loan, subject to the satisfaction of conditions including, but not
limited to, an aggregate debt service coverage ratio of at least 1.15x, an
aggregate loan-to-value ratio of not more than 85% and the delivery of a
satisfactory intercreditor and subordination agreement.
Rep. 33. Single Purpose Entity. Mortgage Loan No. DBM 18317, Virginia FF Retail
---------------------
Portfolio, is a loan with a principal balance in excess of $20,000,000 that does
not meet all of the requirements of "Single Purpose Entity," as defined in this
representation. Specifically, the related borrowers, Virginia General Booth LLC,
Virginia Kempsville LLC, Xxxxxxxx Xxxxxx Creek LLC, Virginia Smithfield LLC and
Virginia Suffolk LLC are not required to have an independent director, although
one of each of their managing members is required to have an independent
director.
Mortgage Loan No. DBM 18816, Wiener Portfolio, is a loan with a principal
balance in excess of $20,000,000 that does not meet all of the requirements of
"Single Purpose Entity," as defined in this representation. Specifically, the
related borrowers, West 50th Street Realty Co., LLC, Xxxxxxx Avenue Realty Co.,
LLC, 00-00 00xx Xxxx Realty Co., LLC and 00-00 00xx Xxxxxx Realty Co., LLC are
not required to have an independent director, although one of each of their
managing members is required to have an independent director.
Mortgage Loan No. DBM 18861, Wachovia Tower, is also a loan with a principal
balance in excess of $20,000,000 for which the related Borrower is not required
to have an independent director, although its general partner has an independent
director.
Mortgage Loan No. DBM 18982, Canterbury and Oxford Apartments, is also a loan
with a principal balance in excess of $20,000,000 for which the related Borrower
is not required to have an independent director, although its managing member
has an independent director.
Rep. 40. Recourse. Mortgage Loan No. GA 18896, Boulevard Mall, is a Mortgage
--------
Loan
B-22
without recourse to any natural person for damages arising in the case of each
of the items enumerated in this representation.
Mortgage Loan No. DBM 18727, 000 Xxxxxxx Xxxxxx, is a Mortgage Loan without
recourse to any natural person for damages arising in the case of each of the
items enumerated in this representation.
Mortgage Loan No. DBM 18861, Wachovia Tower, is a Mortgage Loan without recourse
to any natural person for damages arising in the case of each of the items
enumerated in this representation.
Mortgage Loan No. DBM 18404, Gateway Center, is a Mortgage Loan without recourse
to any natural person for damages arising in the case of each of the items
enumerated in this representation. Instead, such guarantees were given by The
Related Companies, L.P., a sponsor of the Mortgagor, and the guaranty given by
The Related Companies, L.P. as to a voluntary of involuntary bankruptcy expires
nine months from the date of such guaranty. The Related Companies, L.P. has also
given a separate environmental indemnity.
Mortgage Loan No. DBM 18727, La Frontera, is a Mortgage Loan without recourse to
any natural person for damages arising in connection with breaches of the
environmental covenants in the Mortgage Loan Documents. Instead, the
environmental guaranty was given by National Real Estate Management Corp., an
affiliate of the loan's sponsor. Certain companies that are principals of the
Mortgagor have also given a separate environmental indemnity.
Mortgage Loan No. DBM 18807, Victoria Place, is a Mortgage Loan without recourse
to any natural person for damages arising in the case of each of the items
enumerated in this representation. Instead, such guarantees were given by
Xxxxxxx and Xxxxxx, Inc., a sponsor of the Mortgagor. Xxxxxxx and Xxxxxx, Inc.
has also given a separate environmental indemnity.
Mortgage Loan No. DBM 17820, Wiloaks Apartments, is a Mortgage Loan without
recourse to any natural person for damages arising in the case of each of the
items enumerated in this representation. Instead, such guarantees were given by
GCL Assets I, LLC, an affiliate of the Mortgagor. GCL Assets I, LLC has also
given a separate environmental indemnity.
B-23
-------------------------------------- -------------------------------------------------------------------------------
STATE COUNTIES & SPECIFIC CITIES
-------------------------------------- -------------------------------------------------------------------------------
Alabama Xxxxxxx and Mobile
-------------------------------------- -------------------------------------------------------------------------------
Delaware Sussex
-------------------------------------- -------------------------------------------------------------------------------
Florida Entire State - All Counties
-------------------------------------- -------------------------------------------------------------------------------
Xxxxxxx Xxxxx, Camden, Chatham, Glynn, Liberty, XxXxxxxx
-------------------------------------- -------------------------------------------------------------------------------
Hawaii Entire State - All Counties
-------------------------------------- -------------------------------------------------------------------------------
Louisiana Cameron, Iberia, Jefferson, Lafourche, Orleans, Plaquemines, St. Xxxxxxx,
St. Xxxx, St. Tammany, Terrebonne, Xxxxxxxxxx
-------------------------------------- -------------------------------------------------------------------------------
Massachusetts Barnstable, Bristol, Dukes, Nantucket, Plymouth
-------------------------------------- -------------------------------------------------------------------------------
Maryland Xxxxxxx, Dorchester, Somerset, St. Mary's, Wicomico, Warchester
-------------------------------------- -------------------------------------------------------------------------------
Mississippi Hancock, Harrison, Xxxxxxx
-------------------------------------- -------------------------------------------------------------------------------
North Carolina Xxxxxxxx, Xxxxxx, Brunswick, Camden, Carteret, Choswan, Currituck, Dare,
Hyde, New Hanover, Onslow, Pamlico, Pasquotank, Xxxxxx, Perquimans, Tyrell,
Washington
-------------------------------------- -------------------------------------------------------------------------------
New Jersey Atlantic, Cape May, Cumberland, Monmouth, Ocean
-------------------------------------- -------------------------------------------------------------------------------
New York Nassau, Suffolk
-------------------------------------- -------------------------------------------------------------------------------
Puerto Rico Entire Commonwealth - All Counties
-------------------------------------- -------------------------------------------------------------------------------
South Carolina Beaufort Berkeley, Charleston, Colleton, Georgetown, Horry
-------------------------------------- -------------------------------------------------------------------------------
Texas Aransas, Brazorla, Calhoun, Cameron, Xxxxxxxx, Galveston, Town of Baytown,
Jackson, Jefferson, Kenedyl, Kleiberg, Matagoda, Nueces, Xxxxxxx, San
Xxxxxxxx, Willacy
-------------------------------------- -------------------------------------------------------------------------------
Virginia Accomack, Chesapeake City, Gloucester, Hampton City, Isle of Wight, Lancaster,
Xxxxxxx Field City, Little Creek City, Xxxxxxx, Middlesex, Newport News City,
Norfolk City, Northampton, Northumberland, Posquoson City, Portsmith
City, Suffolk City, Virginia Beach City, York.
-------------------------------------- -------------------------------------------------------------------------------
B-24
Schedule B-28B
Mortgage Loan No. DBM 18317, Virginia FF Retail Portfolio, permits release of an
individual mortgaged property from the mortgage lien in connection with partial
defeasance, provided, among other conditions, that the borrower pays a release
price equal to (i) the allocated loan amount of the released property multiplied
by (ii) 125% multiplied by (iii) a fraction whose numerator is the outstanding
principal balance of the Loan on the date of such partial release and whose
denominator is the original outstanding principal balance of the Loan. The
allocated loan amounts for each of the properties in the portfolio are as
follows:
---------------------------- -------------------------
Property Allocated Loan Amount
---------------------------- -------------------------
General Booth $5,680,000
---------------------------- -------------------------
Kempsville $6,520,000
---------------------------- -------------------------
Little Creek $5,200,000
---------------------------- -------------------------
Suffolk $5,050,000
---------------------------- -------------------------
Smithfield $3,550,000
---------------------------- -------------------------
B-25
EXHIBIT C-1
FORM OF CERTIFICATE OF AN OFFICER OF THE MORTGAGE LOAN SELLER
Certificate of Officer of German American Capital Corporation (the
"Mortgage Loan Seller") --------------------
I, _______________________, a __________________ of the Mortgage Loan
Seller, hereby certify as follows:
The Mortgage Loan Seller is a corporation duly organized and validly
existing under the laws of the State of Maryland.
Attached hereto as Exhibit I are true and correct copies of the Certificate
of Incorporation and By-Laws of the Mortgage Loan 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 Mortgage Loan Seller are pending or contemplated.
Each person listed below is and has been the duly elected and qualified
officer or authorized signatory of the Mortgage Loan 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 August 14, 2003
(the "Purchase Agreement"), between the Mortgage Loan Seller and GMAC Commercial
Mortgage Securities, Inc. providing for the purchase by GMAC Commercial Mortgage
Securities, Inc. from the Mortgage Loan 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.
C-1-1
IN WITNESS WHEREOF, the undersigned has executed this certificate as of
August ____, 2003.
By:
-----------------------------------------
Name:
Title:
I, _____________________________, _______________________________, hereby
certify that ____________________________ is a duly elected or appointed, as the
case may be, qualified and acting _________________________ of the Mortgage Loan
Seller and that the signature appearing above is his or her genuine signature.
C-1-2
IN WITNESS WHEREOF, the undersigned has executed this certificate as of
____________ ____, 2003.
By:
-----------------------------------------
Name:
Title:
C-1-3
EXHIBIT C-2
FORM OF CERTIFICATE OF THE MORTGAGE LOAN SELLER
Certificate of German American Capital Corporation
--------------------------------------------------
In connection with the execution and delivery by German American Capital
Corporation (the "Mortgage Loan Seller") of, and the consummation of the
transaction contemplated by, that certain Mortgage Loan Purchase Agreement,
dated as of August 14, 2003 (the "Purchase Agreement"), between GMAC Commercial
Mortgage Securities, Inc. and the Mortgage Loan Seller, the Mortgage Loan Seller
hereby certifies that (i) the representations and warranties of the Mortgage
Loan 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 Mortgage Loan 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.
Certified this ____ day of August, 2003.
GERMAN AMERICAN CAPITAL CORPORATION
By:
-----------------------------------------
Name:
Title:
By:
-----------------------------------------
Name:
Title:
C-2-1
