<PAGE>
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities and Exchange Act of 1934
Date of Report (Date of earliest event reported): December 22, 1998
MERRILL LYNCH MORTGAGE INVESTORS, INC.
--------------------------------------
(Exact name of registrant as specified in its governing instruments)
Delaware 333-38073 13-3416059
- ---------------------------- ------------------------ ----------------
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of Incorporation) Identification No.)
World Financial Center
North Tower
New York, New York 10281
----------------------------------------
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (212) 449-0336
===============================================================================
<PAGE>
Item 1, Items 3 through 6, and Items 8 and 9 are not included because they are
not applicable.
Item 2. Acquisition or Disposition of Assets.
On December 22, 1998, a single series of mortgage pass-through
certificates, entitled Merrill Lynch Mortgage Investors, Inc., Mortgage
Pass-Through Certificates, Series 1998-C3 (the "Certificates"), was issued
pursuant to a pooling and servicing agreement (the "Pooling Agreement")
attached hereto as Exhibit 4.1 and dated as of December 1, 1998, among Merrill
Lynch Mortgage Investors, Inc. as depositor (the "Registrant"), GE Capital Loan
Services, Inc, as master servicer, GE Capital Realty Group, Inc. as special
servicer, and The Chase Manhattan Bank as trustee. The Certificates consist of
seventeen classes (each, a "Class") of Certificates, eight of which Classes are
designated as the "Class A-1 Certificates", the "Class A-2 Certificates", the
"Class A-3 Certificates", the "Class B Certificates", the "Class C
Certificates", the "Class D Certificates", the "Class E Certificates" and the
"Class IO Certificates" (collectively, the "Offered Certificates"); and nine of
which Classes are designated as the "Class F Certificates", the "Class G
Certificates", the "Class H Certificates", the "Class J Certificates", the
"Class K Certificates", the "Class L Certificates", the "Class R-I
Certificates", the "Class R-II Certificates" and the "Class R-III Certificates"
(collectively, the "Private Certificates"). The Certificates evidence in the
aggregate the entire beneficial ownership interest in a trust fund (the "Trust
Fund") consisting primarily of 139 multifamily and commercial mortgage loans
(the "Mortgage Loans") having an aggregate principal balance as of December 1,
1998 (the "Cut-Off Date") of approximately $638,408,606. Each Mortgage Loan is
secured by a first mortgage lien on a fee simple estate in an income producing
property, with the exception of seven Mortgage Loans which are fully secured by
a leasehold estate in income producing real property.
All of the Mortgage Loans, having an aggregate principal balance of
approximately $638,408,606 (the "Cut-Off Date Balance"), were acquired by the
Registrant from Merrill Lynch Mortgage Capital Inc. ("MLMC") pursuant to a
Mortgage Loan Purchase Agreement, dated as of December 1, 1998 (the "Purchase
Agreement"), between the Registrant and MLMC. The purchase prices (collectively
the "Purchase Price") for the Mortgage Loans under the Purchase Agreement
consisted of a cash amount equal to (i) 100% of the Cut-Off Date Balance plus
(ii) interest accrued on the related Mortgage Loans at the related Mortgage
Rate. The source of funds for payment of the Purchase Price was the proceeds
derived from the sale of the Certificates by the Registrant to Merrill Lynch,
Pierce, Fenner & Smith Incorporated ("MLPF&S") pursuant to an Underwriting
Agreement, dated as of December 22, 1998 (the "Underwriting Agreement"), among
the Registrant and MLPF&S (pertaining to the Offered Certificates) and a
Certificate Purchase Agreement, dated as of December 22, 1998, among the
Registrant and MLPF&S (pertaining to the Private Certificates). The Registrant
is a wholly-owned limited purpose finance subsidiary of MLMC. On December 22,
1998, the Registrant transferred the Mortgage Loans to the Trust Fund pursuant
to the Pooling Agreement. The consideration received by the Registrant in
exchange for such transfer consisted of the Certificates.
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The Certificates have the following initial Certificate Balances and initial
Pass-Through Rates:
Initial Pass-Through
Class Initial Certificate Balance Rate
- -----
A-1 ............... $129,870,000 5.65%
A-2 ............... $ 75,490,000 5.87%
A-3 ............... $243,122,000 5.88%
B ................. $ 33,516,000 (1)
C ................. $ 35,112,000 (1)
D ................. $ 38,305,000 (1)
E ................. $ 7,980,000 (1)
IO ................ (2) (3)
F ................. $ 35,113,000 6.00%
G ................. $ 4,788,000 6.00%
H ................. $ 14,364,000 6.00%
J ................. $ 3,192,000 6.00%
K ................. $ 17,556,605 6.00%
L ................. (4) (4)
R-I ............... N/A(5) N/A(5)
R-II .............. N/A(5) N/A(5)
R-III ............. N/A(5) N/A(5)
- ---------------
(1) The Pass-Through Rates applicable to the Class B, Class C, Class D and
Class E Certificates will equal the Weighted Average Net Mortgage Rate
minus 0.92%, 0.54%, 0.00% and 0.00%, respectively.
(2) The Class IO Certificates will not have a Certificate Balance nor will
they entitle the holders thereof to receive distributions of
principal.
(3) Holders of the Class IO Certificates will be entitled to receive
distributions of interests in an amount equal to the aggregate
interest accrued on the notional amount of each of its Components.
(4) The Class L Certificates will not have a Certificate Balance nor will
they entitle the holders thereof to receive distributions of principal
or interest, other than certain amounts.
(5) The Class R-1, Class R-II and Class R-III Certificates have no
Certificate Balance and do not bear interest.
The Offered Certificates and the Mortgage Loans are described in more
detail in the Prospectus, dated February 25, 1998, and the Prospectus
Supplement, dated December 17, 1998, as previously filed with the Securities
and Exchange Commission pursuant to Rule 424(b)(5). Capitalized terms used but
not otherwise defined herein have the meanings set forth in the Prospectus
Supplement.
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Item 7. Financial Statements and Exhibits
(a) Financial Statements - Not Applicable
(b) Pro Forma Financial Information - Not Applicable
(c) Exhibits
1.1 Underwriting Agreement, dated as of December 22,
1998, among Merrill Lynch Mortgage Investors, Inc.
and Merrill Lynch, Pierce, Fenner & Smith
Incorporated.
4.1 Pooling and Servicing Agreement, dated as of
December 1, 1998, among Merrill Lynch Mortgage
Investors, Inc. as depositor, GE Capital Loan
Services, Inc. as master servicer, GE Capital Realty
Group, Inc. as special servicer, and The Chase
Manhattan Bank as trustee.
99.1 Mortgage Loan Purchase Agreement, dated as of
December 1, 1998, between Merrill Lynch Mortgage
Investors, Inc. and Merrill Lynch Mortgage Capital
Inc.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
MERRILL LYNCH MORTGAGE INVESTORS, INC.
By: /s/ Michael M. McGovern
--------------------------------------
Name: Michael M. McGovern
Title: Secretary and Director
Dated: January 7, 1999
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EXHIBIT INDEX
The following exhibits are being filed herewith:
Exhibit No. Description
- ----------- -----------
1.1 Underwriting Agreement, dated as of December 22, 1998, among
Merrill Lynch Mortgage Investors, Inc. and Merrill Lynch,
Pierce, Fenner & Smith Incorporated.
4.1 Pooling and Servicing Agreement, dated as of December 1,
1998, among Merrill Lynch Mortgage Investors, Inc. as
depositor, GE Capital Loan Services, Inc. as master servicer,
GE Capital Realty Group, Inc. as special servicer, and The
Chase Manhattan Bank as trustee.
99.1 Mortgage Loan Purchase Agreement, dated as of December 1,
1998, between Merrill Lynch Mortgage Investors, Inc. and
Merrill Lynch Mortgage Capital Inc.
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MERRILL LYNCH MORTGAGE INVESTORS, INC.
(a Delaware Corporation)
UNDERWRITING AGREEMENT
$563,395,000 (Approximate)
Mortgage Pass-Through Certificates, Series 1998-C3
December 22, 1998
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<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
1. Representations and Warranties...............................................................................2
(a) Representations and Warranties by the Company..........................................................2
(i) Compliance with Registration Requirements.....................................................2
(ii) Incorporated Documents.......................................................................3
(iii) No Material Adverse Change in Business......................................................4
(iv) Good Standing of the Company.................................................................4
(v) Authorization of Agreement....................................................................4
(vi) Authorization of Other Agreements............................................................4
(vii) Description of the Pooling and Servicing Agreement..........................................4
(viii) Description of the Certificates............................................................5
(ix) Absence of Defaults and Conflicts............................................................5
(x) Absence of Labor Dispute......................................................................6
(xi) Absence of Proceedings.......................................................................6
(xii) Accuracy of Exhibits........................................................................6
(xiii) Possession of Intellectual Property........................................................6
(xiv) Absence of Further Requirements.............................................................7
(xv) Possession of Licenses and Permits...........................................................7
(xvi) Tax Returns.................................................................................7
(xvii) Investment Company Act.....................................................................8
(xviii) Environmental Laws........................................................................8
(xix) No Liens....................................................................................8
(xx) Sale of Mortgage Loans.......................................................................9
(xxi) Ratings.....................................................................................9
(xxii) Taxes......................................................................................9
(b) Officer's Certificates.................................................................................9
2. Sale and Delivery to the Underwriters; Closing...............................................................10
(a) Certificates...........................................................................................10
(b) Payment................................................................................................10
(c) Denominations; Registration............................................................................10
3. Covenants of the Company....................................................................................10
(a) Compliance with Securities Regulations and Commission Requests.........................................10
(b) Filing of Amendments...................................................................................11
(c) Delivery of Registration Statements....................................................................11
(d) Delivery of Prospectuses...............................................................................11
(e) Continued Compliance with Securities Laws..............................................................11
(f) Blue Sky Qualifications................................................................................12
(g) Reporting Requirements.................................................................................12
(h) Rating of Certificates.................................................................................12
(i) DTC....................................................................................................12
(j) Restriction on Sale of Securities......................................................................13
4. Payment, of Expenses........................................................................................13
(a) Expenses...............................................................................................13
(b) Termination of Agreement...............................................................................13
5. Conditions of Underwriters' Obligations.....................................................................13
(a) Effectiveness of Registration Statement................................................................14
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<CAPTION>
<S> <C>
(b) Opinion of Counsel for the Master Servicer and the Special Servicer....................................14
(c) Opinion of Counsel for the Underwriters................................................................14
(d) Officers' Certificate of the Company...................................................................14
(e) Officers' Certificates of the Master Servicer and the Special Servicer.................................14
(f) Accountant's Comfort Letter............................................................................15
(g) Bring-down Comfort Letter..............................................................................15
(h) Maintenance of Rating..................................................................................15
(i) Underwriter Opinion of Counsel for Trustee.............................................................15
(j) Opinion of Tax and ERISA Counsel.......................................................................15
(k) Opinion of Counsel for the Company.....................................................................15
(l) Additional Documents...................................................................................16
(m) Termination of Agreement...............................................................................16
6. Indemnification..............................................................................................16
(a) Indemnification of Underwriter..........................................................................16
(b) Indemnification of the Company, Directors and Officers..................................................18
(c) Actions against Parties; Notification...................................................................19
(d) Settlement without Consent if Failure to Reimburse......................................................20
7. Contribution.................................................................................................20
8. Representations, Warranties and Agreements to Survive Delivery...............................................22
9. Termination of Agreement.....................................................................................22
(a) Termination; General....................................................................................22
(b) Liabilities.............................................................................................22
10. Notices.....................................................................................................22
11. Parties.....................................................................................................23
12. GOVERNING LAW AND TIME......................................................................................23
13. Effect of Headings..........................................................................................23
14. Miscellaneous...............................................................................................23
</TABLE>
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$563,395,000 (Approximate)
MERRILL LYNCH MORTGAGE INVESTORS, INC.
(a Delaware corporation)
Mortgage Pass-Through Certificates, Series 1998-C3
UNDERWRITING AGREEMENT
----------------------
December 22, 1998
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
Merrill Lynch Mortgage Investors, Inc., a Delaware
corporation (the "Company"), confirms its agreement with Merrill Lynch, Pierce,
Fenner & Smith Incorporated (referred to herein as "MLPF&S" or the
"Underwriter"), with respect to the issue and sale by the Company and the
purchase by each Underwriter of the initial certificate balance set forth in
Schedule A hereto of $563,395,000 (Approximate) aggregate initial certificate
balance of the Company's Mortgage Pass-Through Certificates, Series 1998-C3
(the "Certificates"). The Certificates will evidence beneficial ownership
interests in a trust fund (the "Trust Fund") to be formed by the Company and
consisting primarily of a segregated pool (the "Mortgage Pool") of multifamily
and commercial mortgage loans (the "Mortgage Loans") to be purchased from
Merrill Lynch Mortgage Capital Inc., (the "Mortgage Loan Seller"). The
Certificates are to be issued pursuant to a pooling and servicing agreement,
dated as of December 1, 1998 (the "Pooling and Servicing Agreement"), among the
Company as depositor, The Chase Manhattan Bank as trustee (the "Trustee"), GE
Capital Loan Services, Inc. as master servicer (in such capacity, the "Master
Servicer") and GE Capital Realty Group, Inc. as special servicer (in such
capacity, the "Special Servicer"). Certificates issued in book-entry form will
be issued to Cede & Co. as nominee of The Depository Trust Company ("DTC")
pursuant to a letter agreement, to be dated as of the Closing Time (as defined
in Section 2(b)) (the "DTC Agreement"), among the Depositor, the Trustee and
DTC.
The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (File No.
333-38073) relating to the Certificates, and the offering thereof from time to
time in accordance with Rule 415 under the Securities Act of 1933, as amended
(the "1933 Act"), and has filed, and proposes to file, such amendments thereto
as may have been required to the date hereof and as shall be
<PAGE>
required to the effective date thereof pursuant to the 1933 Act and the rules
of the Commission thereunder (the "1933 Act Regulations"). Such registration
statement, as amended at the time when each becomes effective under the 1933
Act and at the Closing Time defined below, is referred to herein as the
"Registration Statement". The Company proposes to file with the Commission
pursuant to Rule 424(b)(5) under the 1933 Regulations a supplement (the
"Prospectus Supplement") to the form of prospectus (as may be amended in
connection with such Prospectus Supplement, the "Basic Prospectus"; the Basic
Prospectus, together with the Prospectus Supplement, the "Prospectus"). Any
preliminary form of the Prospectus that has heretofore been filed pursuant to
Rule 424(b) or prior to the effective date of the Registration Statement,
pursuant to Rule 402(a) or 424(a) is hereinafter called a "preliminary
prospectus".
For purposes of this Agreement, all references to the
Registration Statement, any preliminary prospectus, the Prospectus or any
amendment or supplement to any of the foregoing shall be deemed to include the
copy filed with the Commission pursuant to its Electronic Data Gathering
Analysis and Retrieval system ("EDGAR").
All references in this Agreement to financial statements and
schedules and other information which is "contained," "included" or "stated" in
the Registration Statement, any preliminary prospectus or the Prospectus (or
other references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which are incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to mean and include the filing of
any document under the Securities Exchange Act of 1934, as amended (the "1934
Act") which is incorporated by reference in the Registration Statement, such
preliminary prospectus or the Prospectus, as the case may be.
Capitalized terms used but not defined herein shall have the
meanings given to them in the Pooling and Servicing Agreement.
1. Representations and Warranties.
------------------------------
(a) Representations and Warranties by the Company. The
Company represents and warrants to the Underwriter as of the date hereof, and
as of the Closing Time referred to in Section 2(b) hereof, and agrees with each
Underwriter as follows:
(i) Compliance with Registration Requirements. The
Company meets the requirements for use of Form S-3 under the 1933 Act.
The Registration Statement has become effective under the 1933 Act and
no stop order suspending
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the effectiveness of the Registration Statement has been issued under
the 1933 Act and no proceedings for that purpose have been instituted
or are pending or, to the knowledge of the Company, are contemplated
by the Commission, and any request on the part of the Commission for
additional information has been complied with. At the time the
Registration Statement became effective and at the Closing Time, the
Registration Statement and any amendments and supplements thereto
complied and will comply in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations and the
Trust Indenture Act of 1939, as amended (the "1939 Act") and the rules
and regulations of the Commission thereunder (the "1939 Act
Regulations"), and did not and will not contain any untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading. Neither the Prospectus nor any amendments or supplements
thereto, at the time the Prospectus or any such amendment or
supplement was issued and at the Closing Time, included or will
include an untrue statement of a material fact or omitted or will omit
to state a material fact necessary in order to make the statements
therein in the light of the circumstances under which they were made,
not misleading. The representations and warranties in this subsection
shall not apply to statements in or omissions from the Registration
Statement or Prospectus made in reliance upon and in conformity with
information furnished to the Company in writing (including electronic
media) by the Underwriters expressly for use in the Registration
Statement or Prospectus.
The Prospectus filed as part of the Registration
Statement as originally filed or as part of any amendment thereto, or
filed pursuant to Rule 424 under the 1933 Act, complied when so filed
in all material respects with the 1933 Act Regulations and the
Prospectus delivered to each Underwriter for use in connection with
this offering was identical to the electronically transmitted copies
thereof filed with the Commission pursuant to EDGAR, except to the
extent permitted by Regulation S-T.
(ii) Incorporated Documents. The documents
incorporated or deemed to be incorporated by reference in the
Registration Statement and the Prospectus, at the time they were or
hereafter are filed with the Commission, complied and will comply in
all material respects with the requirements of the 1934 Act and the
rules and regulations of the Commission thereunder (the "1934 Act
Regulations"), and, when read together with the other information in
the Prospectus, at the time the Registration Statement became
effective, at the time the Prospectus was issued and at the Closing
Time, did not and will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the
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statements therein not misleading, in light of the circumstances in
which they were made.
(iii) No Material Adverse Change in Business. Since
the respective dates as of which information is given in the
Registration Statement and the Prospectus, except as otherwise stated
therein, (A) there has been no material adverse change in the
financial condition, earnings, business affairs or business prospects
of the Company (a "Material Adverse Effect"), whether or not arising
in the ordinary course of business and (B) there have been no
transactions entered into by the Company, other than those in the
ordinary course of business, which are material with respect to the
Company.
(iv) Good Standing of the Company. The Company has
been duly incorporated and is validly existing as a corporation in
good standing under the laws of the State of Delaware and has
corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Prospectus and to
enter into and perform its obligations under this Agreement; and the
Company is duly qualified as a foreign corporation to transact
business and is in good standing in each other jurisdiction in which
such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure so to qualify or to be in good standing would not result in a
Material Adverse Effect.
(v) Authorization of Agreement. This Agreement has
been duly authorized, executed and delivered by the Company.
(vi) Authorization of Other Agreements. Each of the
Pooling and Servicing Agreement, the Mortgage Loan Purchase Agreement
and this Agreement has been duly authorized and, at the Closing Time,
will have been duly executed and delivered by the Company and will
each constitute a legal, valid and binding instrument enforceable
against the Company in accordance with its terms, subject (i) to
applicable bankruptcy, reorganization, insolvency, moratorium or other
similar laws affecting creditors' rights generally, (ii) as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law) and (iii)
as to enforceability with respect to rights of indemnity thereunder,
to limitations of public policy under applicable securities laws.
(vii) Description of the Pooling and Servicing
Agreement. The description of the Pooling and Servicing Agreement in
the Prospectus conforms in all material respects with the terms
thereof. At the Closing Time, the Pooling and Servicing Agreement will
conform in all material
4
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respects to the description thereof contained in the Prospectus.
(viii) Description of the Certificates. The
Certificates have been duly authorized by the Company for issuance and
sale pursuant to this Agreement and the Pooling and Servicing
Agreement (or will have been so authorized prior to the issuance of
the Certificates), and the Certificates and the Class F, Class G,
Class H, Class J, Class K, Class L, Class R-I, Class R-II and Class
R-III Certificates when duly authorized, executed, issued,
authenticated and delivered pursuant to the provisions of this
Agreement, the Certificate Purchase Agreement (the "Certificate
Purchase Agreement") of even date herewith between the Company and
MLPF&S, and the Pooling and Servicing Agreement against payment of the
consideration therefor in accordance with this Agreement and the
Certificate Purchase Agreement, will be validly issued and outstanding
and shall be entitled to the benefits of the Pooling and Servicing
Agreement, except as the enforceability thereof may be limited by the
effect of (a) bankruptcy, reorganization insolvency, moratorium or
other similar laws effecting creditors' rights generally and (b)
general principles of equity (regardless of whether enforcement is
sought in a proceeding in equity or at law). The description of the
Certificates in the Prospectus conforms or will conform in all
material respects with the terms thereof and will be in substantially
the respective forms to be filed on Form 8-K within 15 days after the
Closing Time and incorporated by reference, as the case may be, as
exhibits to the Registration Statement.
(ix) Absence of Defaults and Conflicts. The Company
is not in violation of its charter or by-laws or in default in the
performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed of
trust, loan or credit agreement, note, lease or other agreement or
instrument to which the Company is a party or by which it may be
bound, or to which any of the property or assets of the Company is
subject (collectively, "Agreements and Instruments") except for such
defaults that would not result in a Material Adverse Effect; and the
execution, delivery and performance of this Agreement and any other
agreement or instrument entered into or issued or to be entered into
or issued by the Company in connection with the transactions of the
Company contemplated hereby or thereby or in the Registration
Statement and the consummation of the transactions contemplated herein
and in the Registration Statement (including the issuance and sale of
the Certificates) and compliance by the Company with its obligations
hereunder have been duly authorized by all necessary corporate action
and do not and will not, whether with or without the giving of notice
or passage of time or
5
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both, conflict with or constitute a breach of, or default or a
Repayment Event (as defined below) under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Company pursuant to, the Agreements and Instruments
except for such conflicts, breaches, defaults, Repayment Events or
liens, charges or encumbrances that, singly or in the aggregate, would
not result in a Material Adverse Effect, nor will such action result
in any violation of the provisions of the charter or by-laws of the
Company or any applicable law, statute, rule, regulation, judgment,
order, writ or decree of any government, government instrumentality or
court, domestic or foreign, having jurisdiction over the Company or
any of its assets or properties that, singly or in the aggregate,
would have a Material Adverse Effect. As used herein, a "Repayment
Event" means any event or condition which gives the holder of any
note, debenture or other evidence of indebtedness (or any person
acting on such holder's behalf) the right to require the repurchase,
redemption or repayment of all or a portion of such indebtedness by
the Company or its affiliates.
(x) Absence of Labor Dispute No labor dispute with
the employees of the Company exists or, to the knowledge of the
Company, is imminent.
(xi) Absence of Proceedings. There is no action,
suit or proceeding before or by any court or governmental agency or
body, domestic or foreign, now pending or, to the knowledge of the
Company, threatened against or affecting the Company which would
reasonably be expected to result in a Material Adverse Effect, or
which would reasonably be expected to materially and adversely affect
the properties or assets of the Company taken as a whole or the
consummation of this Agreement or the performance by the Company of
its obligations hereunder. The aggregate of all pending legal or
governmental proceedings to which the Company is a party or of which
any of its property or assets is the subject which are not described
in the Registration Statement, including ordinary routine litigation
incidental to the business, would not reasonably be expected to result
in a Material Adverse Effect.
(xii) Accuracy of Exhibits. There are no contracts
or documents which are required to be described in the Registration
Statement, the Prospectus or the documents incorporated by reference
therein or to be filed as exhibits thereto which have not been so
described and filed as required, except for any documents permitted to
be filed on Form 8-K within 15 days after the Closing Time.
(xiii) Possession of Intellectual Property. The
Company owns or possesses, or can acquire on reasonable terms,
adequate patents, patent rights, licenses,
6
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inventions, copyrights, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks, service marks, trade
names or other intellectual property (collectively, "Intellectual
Property"), if any, necessary to carry on the business now operated by
it, and the Company has not received any notice or is not otherwise
aware of any infringement of or conflict with asserted rights of
others with respect to any Intellectual Property or of any facts or
circumstances which would render any Intellectual Property invalid or
inadequate to protect the interest of the Company and which
infringement or conflict (if the subject of any unfavorable decision,
ruling or finding) or invalidity or inadequacy, singly or in the
aggregate, would result in a Material Adverse Effect.
(xiv) Absence of Further Requirements. No filing
with, or authorization, approval, consent, license, order,
registration, qualification or decree of, any court or governmental
authority or agency is necessary or required for the performance by
the Company of its obligations hereunder, in connection with the
offering, issuance or sale of the Certificates hereunder or the
consummation of the transactions of the Company contemplated by this
Agreement, except such as may be required under the 1933 Act
Regulations, the 1939 Act Regulations or state securities or blue sky
laws.
(xv) Possession of Licenses and Permits. The Company
possesses such permits, licenses, approvals, consents and other
authorizations (collectively, "Governmental Licenses") issued by the
appropriate federal, state, local or foreign regulatory agencies or
bodies necessary to enter into, and perform its obligations under this
Agreement and to conduct the business now operated by it; the Company
is in compliance with the terms and conditions of all such
Governmental Licenses, except where the failure so to comply would
not, singly or in the aggregate, have a Material Adverse Effect; all
the Governmental Licenses are valid and in full force and effect,
except when the invalidity of such Governmental Licenses or the
failure of such Governmental Licenses to be in full force and effect
would not have a Material Adverse Effect; and the Company has not
received any notice of proceedings relating to the revocation or
modification of any such Governmental Licenses which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a Material Adverse Effect.
(xvi) Tax Returns. The Company has filed all
federal, state, local and foreign tax returns that are required to be
filed or has duly requested extensions thereof and has paid all taxes
required to be paid by it and any related assessments, fines or
penalties, except for any
7
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such tax, assessment, fine or penalty that is being contested in good
faith and by appropriate proceedings; and adequate charges, accruals
and reserves have been provided for in respect of all federal, state,
local and foreign taxes for all periods as to which the tax liability
of the Company has not been finally determined or remains open to
examination by applicable taxing authorities.
(xvii) Investment Company Act. The Company is not
and upon the issuance and sale of the Certificates as herein
contemplated and the application of the net proceeds therefrom as
described in the Prospectus will not be, an "investment company" or an
entity "controlled" by an "investment company" as such terms are
defined in the Investment Company Act of 1940, as amended (the "1940
Act"). The Trust Fund is not required to be registered as an
"investment company" under the 1940 Act.
(xviii) Environmental Laws. Except as described in
the Registration Statement and except such matters as would not,
singly or in the aggregate, result in a Material Adverse Effect, (A)
the Company is not in violation of any federal, state, local or
foreign statute, law, rule regulation, ordinance, code, policy or rule
of common law or any judicial or administrative order, consent, decree
or judgment, relating to pollution or protection of human health, the
environment (including, without limitation, ambient air, surface
water, groundwater, land surface or subsurface strata) or wildlife,
including, without limitation, laws and regulations relating to the
release or threatened release of chemicals, pollutants, contaminants,
wastes, toxic substances, hazardous substances, petroleum or petroleum
products (collectively, "Hazardous Materials") or to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport
or handling of Hazardous Materials (collectively, "Environmental
Laws"), (B) the Company has all permits, authorizations and approvals
required under any applicable Environmental Laws and is in compliance
with its requirements, (C) there are no pending or threatened
administrative, regulatory or judicial actions, suits, demands, demand
letters, claims, liens, notices of noncompliance or violation,
investigation or proceedings relating to any Environmental Law against
the Company and (D) there are no events or circumstances that would
reasonably be expected to form the basis of an order for clean-up or
remediation, or an action, suit or proceeding by any private party or
governmental body or agency, against or affecting the Company relating
to Hazardous Materials or Environmental Laws.
(xix) No Liens. At the time of the execution and
delivery of the Pooling and Servicing Agreement, the Company (A) will
convey to the Trustee, or cause to be conveyed to the Trustee, all of
its right, title and
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interest in and to the Mortgage Loans, free and clear of any lien,
mortgage, pledge, charge, encumbrance, adverse claim or other security
interest (collectively, "Liens") granted by or imposed upon the
Company, (B) will not have assigned to any person any of its right,
title or interest in such Mortgage Loans or in the Pooling and
Servicing Agreement or the Certificates, and (C) will have the power
and authority to transfer such Mortgage Loans to the Trustee and to
sell the Certificates to the Underwriters, and upon delivery to the
Underwriters of the Certificates pursuant hereto, each Underwriter
will have good title to the Certificates purchased by such
Underwriter, in each case free of Liens (excluding Liens granted by or
imposed upon such Underwriter by Persons other than the Company or any
Affiliate thereof).
(xx) Sale of Mortgage Loans. Under generally
accepted accounting principles ("GAAP") and for federal income tax
purposes, the Company will report the transfer of the Mortgage Loans
to the Trustee in exchange for the Certificates and the sale of the
Certificates to the Underwriters pursuant to this Agreement as a sale
of the interests in the Mortgage Loans evidenced by the Certificates.
The consideration received by the Company upon the sale of the
Certificates to the Underwriters will constitute reasonably equivalent
value and fair consideration for the Certificates. The Company will be
solvent at all relevant times prior to, and will not be rendered
insolvent by, the sale of the Certificates to the Underwriters. The
Company is not selling the Certificates to the Underwriters with any
intent to hinder, delay or defraud any of the creditors of the
Company.
(xxi) Ratings. At the Closing Time, the respective
classes of Certificates shall have been assigned ratings no lower than
those set forth in Schedule A hereto by the nationally recognized
statistical rating organizations identified in Schedule A hereto (the
"Rating Agencies").
(xxii) Taxes. Any taxes, fees and other governmental
charges in connection with the execution, delivery and issuance of
this Agreement, the Pooling and Servicing Agreement, the Mortgage Loan
Purchase Agreements and the Certificates payable by the Company (other
than income taxes) have been paid or will be paid at or prior to the
Closing Time.
(b) Officer's Certificates. Any certificate signed by
any officer of the Company and delivered to the Underwriters or to counsel for
the Underwriter shall be deemed a representation and warranty by the Company to
the Underwriters as to the matters covered thereby.
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2. Sale and Delivery to the Underwriters; Closing.
----------------------------------------------
(a) Certificates. On the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, the Company agrees to sell to the Underwriter, and the Underwriter
agrees to purchase from the Company, at the purchase price set forth in
Schedule A, the aggregate initial certificate balance of Certificates set forth
in Schedule A.
(b) Payment. Payment of the purchase price for, and
delivery of the Certificates shall be made at the office of Willkie Farr &
Gallagher or at such other place as shall be agreed upon by the Underwriter and
the Company, at 10:00 A.M. on or about December 22, 1998 or such other time not
later than ten business days after such date as shall be agreed upon by the
Underwriters and the Company (such time and date of payment and delivery being
herein called the "Closing Time").
Payment shall be made to the Company by wire transfer of
immediately available funds to a bank account designated by the Company,
against delivery to each Underwriter for the account of such Underwriter of the
Certificates to be purchased by them. The Certificates shall be registered in
the name of Cede & Co., pursuant to the DTC Agreement and shall be made
available for examination and packaging by the Underwriters in the City of New
York not later than 10:00 A.M. on the last business day prior to the Closing
Time.
(c) Denominations; Registration. The Certificates shall
be in such denominations as the Underwriter may request in writing at least one
full business day before the Closing Time.
3. Covenants of the Company. The Company covenants with
each Underwriter as follows:
(a) Compliance with Securities Regulations and
Commission Requests. The Company will notify the Underwriter immediately, and
confirm the notice in writing, (i) when any post-effective amendment to the
Registration Statement shall become effective, or any supplement to the
Prospectus or any amended Prospectus that relates to the offering of the
Certificates shall have been filed, (ii) of the receipt of any comments from
the Commission, (iii) of any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus or for
additional information, and (iv) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or of any
other order preventing or suspending the use of any preliminary prospectus, or
of the suspension of the qualification of the Certificates for offering or sale
in any jurisdiction, or of the initiation or threatening of any proceedings for
any of such purposes. The Company will promptly effect the filings necessary
pursuant to Rule 424(b) and will
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take such steps as it deems necessary to ascertain promptly whether the form of
prospectus transmitted for filing under Rule 424(b) was received for filing by
the Commission and, in the event that it was not, it will promptly file such
prospectus. The Company will make every reasonable effort to prevent the
issuance of any stop order and, if any such order is issued, to obtain the
lifting thereof at the earliest possible moment.
(b) Filing of Amendments. The Company will give each
Underwriter notice of its intention to file or prepare any amendment to the
Registration Statement or any amendment, supplement or revision to either the
Basic Prospectus or to the Prospectus, whether pursuant to the 1933 Act, the
1934 Act or otherwise (other than reports to be filed pursuant to the 1934
Act), will furnish each Underwriter with copies of any such documents a
reasonable amount of time prior to such proposed filing or use, as the case may
be, and will not file or use any such document to which either Underwriter or
counsel for the Underwriters shall object.
(c) Delivery of Registration Statements. Upon request the
Company will deliver to the Underwriter and counsel for the Underwriter,
without charge, a signed copy of the Registration Statement as originally filed
and of each amendment thereto (including exhibits filed therewith or
incorporated by reference therein and documents incorporated or deemed to be
incorporated by reference therein) and a conformed copy of all consents and
certificates of experts. The copies of the Registration Statement and each
amendment thereto furnished to the Underwriter will be identical to the
electronically transmitted copies thereof filed with the Commission pursuant to
EDGAR, except to the extent permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered to
the Underwriter, without charge, as many copies of each preliminary prospectus,
if any, as each the Underwriter reasonably requested, and the Company hereby
consents to the use of such copies for purposes permitted by the 1933 Act. The
Company will furnish to the Underwriter, without charge, during the period when
the Prospectus is required to be delivered under the 1933 Act or the 1934 Act,
such number of copies of the Prospectus (as amended or supplemented) as the
Underwriter may reasonably request. The Prospectus and any amendments or
supplements thereto furnished to the Underwriter will be identical to the
electronically transmitted copies thereof filed with the Commission pursuant to
EDGAR, except to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company
will comply with the 1933 Act and the 1933 Act Regulations, the 1934 Act and
the 1934 Act Regulations and the 1939 Act and the 1939 Act Regulations so as to
permit the completion of the distribution of the Certificates as contemplated
in this Agreement and in the Prospectus. If at any
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time when a prospectus is required by the 1933 Act to be delivered in
connection with sales of the Certificates, any event shall occur or condition
shall exist as a result of which it is necessary, in the opinion of counsel for
the Underwriter or for the Company, to amend the Registration Statement or
amend or supplement the Prospectus in order that the Prospectus will not
include any untrue statements of a material fact or omit to state a material
fact necessary in order to make the statements therein not misleading in the
light of the circumstances existing at the time it is delivered to a purchaser,
or if it shall be necessary, in the opinion of such counsel, at any such time
to amend the Registration Statement or amend or supplement the Prospectus in
order to comply with the requirements of the 1933 Act or the 1933 Act
Regulations, the Company will promptly prepare and file with the Commission,
subject to Section 3(b), such amendment or supplement as may be necessary to
correct such statement or omission or to make the Registration Statement or the
Prospectus comply with such requirements, and the Company will furnish to the
Underwriter such number of copies of such amendment or supplement as each such
Underwriter may reasonably request.
(f) Blue Sky Qualifications. The Company will use its best
efforts, in cooperation with the Underwriter, to qualify the Certificates for
offering and sale under the applicable securities laws of such states and other
jurisdictions as the Underwriter may designate and to maintain such
qualifications in effect for a period of not less than one year from the
effective date of the Registration Statement; provided, however, that the
Company shall not be obligated to file any general consent to service of
process or to qualify as a foreign corporation or as a dealer in securities in
any jurisdiction in which it is not so qualified or to subject itself to
taxation in respect of doing business in any jurisdiction in which it is not
otherwise so subject. The Company will also supply the Underwriter with such
information as is necessary for the determination of the legality of the
Certificates for investment under the laws of such jurisdictions as the
Underwriter may request.
(g) Reporting Requirements. The Company, during the period
when the Prospectus is required to be delivered under the 1933 Act or the 1934
Act, will file all documents required to be filed with the Commission pursuant
to the 1934 Act within the time periods required by the 1934 Act and the 1934
Act Regulations.
(h) Rating of Certificates. The Company shall take all
reasonable action necessary to enable Standard & Poor's Ratings Service, a
division of The McGraw Hill Companies, Inc., ("S&P"), and Moody's Investors
Service, Inc. ("Moody's") to provide their respective credit ratings of the
Certificates as described in the Prospectus.
(i) DTC. The Company will cooperate with the Underwriter and
use its best efforts to permit the Certificates
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to be eligible for clearance and settlement through the facilities of DTC.
(j) Restriction on Sale of Securities. During the period
from the date hereof to the Closing Time, the Company will not, without the
prior written consent of the Underwriter, directly or indirectly, issue, sell,
offer or agree to sell, grant any option for the sale of, or otherwise dispose
of, any other mortgage-related securities of the Company or securities of the
Company that are convertible into, or exchangeable for, the Certificates or
such other securities.
4. Payment of Expenses.
-------------------
(a) Expenses. The Company will pay all expenses incident to
the performance of its obligations under this Agreement, including (i) the
preparation, printing and any filing of the Registration Statement (including
any schedules or exhibits and any document incorporated therein by reference)
originally filed and of each amendment or supplement thereto, (ii) the
preparation, printing and delivery to each Underwriter of this Agreement, the
Pooling and Servicing Agreement and such other documents as may be required in
connection with the offering, purchase, sale and delivery of the Certificates,
(iii) the preparation, issuance and delivery of the Certificates to the
Underwriter, including any charges of DTC in connection therewith, (iv) the
fees and disbursements of the Company's accountants and other advisors, (v) the
qualification of the Certificates under securities laws in accordance with the
provisions of Section 3(f) hereof, including filing fees and the reasonable
fees and disbursements of counsel for the Underwriters in connection therewith
and in connection with the preparation of the Blue Sky Survey and any
supplement thereto, (vi) the printing and delivery to each Underwriter of
copies of each preliminary prospectus and of the Prospectus and any amendments
or supplements thereto, (vii) the fees and expenses of the Trustee, the Master
Servicer and the Special Servicer, including the fees and disbursements of
counsel for the Trustee, the Master Servicer and the Special Servicer in
connection with the Pooling and Servicing Agreement and the Certificates and
(viii) any fees payable in connection with the rating of the Certificates.
(b) Termination of Agreement. If this Agreement is
terminated by the Underwriter in accordance with the provisions of Section 5 or
Section 9(a)(i) hereof, the Company shall reimburse such Underwriter for all of
its out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriter.
5. Conditions of Underwriters' Obligations. The obligations
of the Underwriter hereunder are subject to the accuracy of the representations
and warranties of the Company contained in Section 1 hereof or in certificates
of any officer of the Company delivered pursuant to the provisions hereof, to
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<PAGE>
the performance by the Company of its covenants and other obligations
hereunder, and to the following further conditions:
(a) Effectiveness of Registration Statement. At the Closing
Time no stop order suspending the effectiveness of the Registration Statement
shall have been issued under the 1933 Act or proceedings therefor initiated or
threatened by the Commission, and any request on the part of the Commission for
additional information shall have been complied with to the reasonable
satisfaction of counsel to the Underwriters.
(b) Opinion of Counsel for the Master Servicer and the
Special Servicer. At the Closing Time, the Underwriter shall have received the
favorable opinion, dated as of the Closing Time, of counsel for the Master
Servicer and the Special Servicer, in form and substance satisfactory to
counsel for the Underwriter.
(c) Opinion of Counsel for the Underwriters. At the Closing
Time, the Underwriter shall have received the favorable opinion, dated as of
the Closing Time, of counsel for the Underwriter. Such counsel may also state
that, insofar as such opinion involves factual matters, they have relied, to
the extent they deem proper, upon certificates of officers of the Underwriter
and certificates of public officials.
(d) Officers' Certificate of the Company. At the Closing
Time, there shall not have been, since the date hereof or since the respective
dates as of which information is given in the Prospectus, any material adverse
change in the financial condition, earnings, business affairs or business
prospects of the Company, whether or not arising in the ordinary course of
business, and each Underwriter shall have received a certificate of the
President or a Vice President of the Company dated as of the Closing Time, to
the effect that (i) there has been no such material adverse change, (ii) the
representations and warranties in Section 1(a) hereof are true and correct in
all material respects with the same force and effect as though expressly made
at and as of the Closing Time, (iii) each has complied in all material respects
with all agreements and satisfied all conditions on its part to be performed or
satisfied in all material respects at or prior to the Closing Time, and (iv) no
stop order suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been instituted or are pending
or, to the Company's knowledge, are contemplated by the Commission.
(e) Officers' Certificates of the Master Servicer and the
Special Servicer. At the Closing Time, there shall not have been, since the
date hereof or since the respective dates as of which information is given in
the Prospectus, any material adverse change in the financial condition,
earnings, business affairs or business prospects of the Master Servicer and its
subsidiaries considered as one enterprise, whether or not arising
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<PAGE>
in the ordinary course of business, and each Underwriter shall have received a
certificate of the President or a Vice President of the Master Servicer and the
Special Servicer, dated as of the Closing Time, to that effect.
(f) Accountant's Comfort Letter. At or prior to the time of
the execution of this Agreement, each Underwriter shall have received from
PriceWaterhouseCoopers, LLP ("PWC") a letter dated such date, in form and
substance satisfactory to the Underwriter, containing statements and
information of the type ordinarily included in accountants' "comfort letters"
to the Underwriter with respect to certain financial information contained in
the Registration Statement and the Prospectus.
(g) Bring-down Comfort Letter. At the Closing Time, each
Underwriter shall have received from PWC a letter, dated as of the Closing
Time, to the effect that it reaffirms the statements made in its letter
furnished pursuant to subsection (f) of this Section, except that the specified
date referred to shall be a date not more than three business days prior to the
Closing Time.
(h) Maintenance of Rating. At the Closing Time, the
Certificates shall have received the ratings set forth in Schedule A and the
Company shall have delivered to each Underwriter a letter dated the Closing
Time, from each such rating agency, or other evidence satisfactory to each
Underwriter, confirming that the Certificates have such ratings.
(i) Opinion of Counsel for Trustee. At the Closing Time, the
Underwriter shall have received the favorable opinion, dated as of the Closing
Time, of counsel for the Trustee, in form and substance satisfactory to counsel
for the Underwriter.
(j) Opinion of Tax and ERISA Counsel. At the Closing Time,
the Underwriter shall have received a favorable opinion, dated as of the
Closing Time, of tax and ERISA counsel to the Company with respect to the
Certificates (i) regarding the qualification of each of REMIC I, REMIC II and
REMIC III (as each such term is defined in the Pooling and Servicing Agreement)
as a real estate mortgage investment conduit within the meaning of Sections
860A through 860G of the Internal Revenue Code of 1986, as amended, and (ii) to
the effect that the statements in the Basic Prospectus and the Prospectus
Supplement under the headings "MATERIAL FEDERAL INCOME TAX CONSEQUENCES" and
"ERISA CONSIDERATIONS", to the extent that they constitute matters of State of
New York or federal law or legal conclusions with respect thereto, while not
purporting to discuss all possible consequences of investment in the
Certificates described therein, are correct in all material respects with
respect to those consequences or matters that are discussed therein.
(k) Opinion of Counsel for the Company. At the Closing Time,
the Underwriter shall have received the favorable
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opinion, dated as of the Closing Time, of counsel for the Company, in form and
substance satisfactory to counsel for the Underwriter.
(l) Additional Documents. At the Closing Time, counsel for
the Underwriter shall have been furnished with such documents and opinions as
they may require for the purpose of enabling them to pass upon the issuance and
sale of the Certificates as herein contemplated, or in order to evidence the
accuracy of any of the representations or warranties, or the fulfillment of any
of the conditions, herein contained; and all proceedings taken by the Company
in connection with the issuance and sale of the Certificates as herein
contemplated shall be satisfactory in form and substance to the Underwriter and
counsel for the Underwriter.
(m) Termination of Agreement. If any condition specified in
this Section shall not have been fulfilled when and as required to be
fulfilled, this Agreement may be terminated by the Underwriter by notice to the
Company at any time at or prior to the Closing Time, and such termination shall
be without liability of any party to any other party except as provided in
Section 4 and except that Sections 1, 6, 7 and 8 shall survive any such
termination and remain in full force and effect.
6. Indemnification.
---------------
(a) Indemnification of Underwriter. The Company agrees to
indemnify and hold harmless the Underwriter and each person, if any, who
controls such Underwriter, as the case may be, within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, arising out of any untrue
statement or alleged untrue statement of a material fact contained in
the Registration Statement (or any amendment thereto), or the omission
or alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading or arising out
of any untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto), or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading;
(ii) against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, arising out of any untrue
statement or alleged untrue statement of a material fact contained in
the Computational Materials, ABS Term Sheets or Collateral Term Sheets
distributed by such
16
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Underwriter, unless such untrue statement or alleged untrue statement
of a material fact was made in reliance upon and in conformity with
Derived Information provided by such Underwriter expressly for use in
the Computational Materials, ABS Term Sheets or Collateral Term Sheets
and the untrue statement or alleged untrue statement did not derive
from an inaccuracy in the Seller-Provided Information used in the
preparation of such Computational Materials, ABS Term Sheets or
Collateral Term Sheets;
(iii) against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation, or any
investigation or proceeding by any governmental agency or body,
commenced or threatened, or of any claim whatsoever based upon any
such untrue statement or omission, or any such alleged untrue
statement or omission; provided that (subject to Section 6(d) below)
any such settlement is effected with the written consent of the
Company; and
(iv) against any and all expense whatsoever, as
incurred (including the fees and disbursements of counsel chosen by
the Underwriter), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding
by any governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue statement or omission, or
any such alleged untrue statement or omission, to the extent that any
such expense is not paid under (i), (ii) or (iii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information (including information provided
in electronic format) furnished to the Company by the Underwriter expressly for
use in the Registration Statement (or any amendment thereto), or any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto); provided further that the Company's agreement to indemnify and
reimburse the Underwriter (or any officer or director thereof or any person
controlling such Underwriter) under this Section 6 shall not apply to any loss,
claim, damage, liability or expense arising out of or relating to claims
asserted by any person who purchased any Registered Certificates pursuant to
the Preliminary Prospectus Supplement that are the subject of such loss, claim,
damage, liability or expense, if such person did not receive a copy of the
Prospectus Supplement concurrently with or prior to the settlement of the sale
of such Registered Certificates to such person in any case where the untrue
statement or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact contained in such Preliminary
Prospectus
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Supplement which was the basis of any such claims, was corrected in the
Prospectus Supplement.
(b) Indemnification of the Company, Directors and Officers.
The Underwriter agrees to indemnify and hold harmless the Company, its
directors and its officers who signed the Registration Statement, and each
person, if any, who controls the Company within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act as follows (i) against any and all
loss, liability, claim, damage and expense described in the indemnity contained
in subsection (a) of this Section, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto) or any preliminary prospectus
or the Prospectus (or any amendment or supplement thereto) in reliance upon and
in conformity with written information (including information provided in
electronic format) furnished to the Company by the Underwriter expressly for
use in the Registration Statement (or amendment thereto) or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto), and (ii)
against any and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section, as incurred, but only
with respect to untrue statements or alleged untrue statements made in the
Computational Materials, Collateral Term Sheets or ABS Term Sheets to the
extent that such untrue statement or alleged untrue statement of a material
fact was made in reliance upon and in conformity with Derived Information
provided by the Underwriter expressly for use in the Computational Materials,
the ABS Term Sheets or the Collateral Term Sheets and the untrue statements or
alleged untrue statements did not derive from an inaccuracy in the
Seller-Provided Information used in the preparation of such Computational
Materials, ABS Term Sheets or Collateral Term Sheets.
For purposes of this Agreement, "Computational Materials" shall have the
meaning given such term in the No-Action Letter of May 20, 1994 issued by the
Commission to Kidder, Peabody Acceptance Corporation I, Kidder, Peabody & Co.
Incorporated and Kidder Structured Asset Corporation, as made applicable to
other issuers and underwriters by the Commission in response to the request of
the Public Securities Association dated May 24, 1994 (collectively, the
"Kidder/PSA Letter"), and the requirements of the No-Action Letter of February
17, 1995 issued by the Commission to the Public Securities Association (the
"PSA Letter" and, together with the Kidder/PSA Letter, the "No-Action
Letters"), but shall include only those Computational Materials that have been
prepared or delivered to prospective investors by the Underwriter. For purposes
hereof, "ABS Term Sheets" and "Collateral Term Sheets" shall have the meanings
given such terms in the PSA Letter but shall include only those ABS Term Sheets
or Collateral Term Sheets that have been prepared or delivered to prospective
investors by the Underwriter. For purposes hereof,
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"Derived Information" means such portion, if any, of the information delivered
to the Company by such Underwriter for filing with the Commission on Form 8-K
and (i) is not contained in the Prospectus without taking into account
information incorporated therein by reference, and (ii) does not constitute
Seller-Provided Information. "Seller-Provided Information" means any computer
tape (or other information) furnished to such Underwriter by or on behalf of
the Company, including, but not limited to, any information provided by any
Mortgage Loan Seller expressly for use in the Registration Statement (or any
amendment thereto), or any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto).
(c) Actions against Parties; Notification. Each indemnified
party shall give notice as promptly as reasonably practicable to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure to so notify an indemnifying
party shall not relieve such indemnifying party from any liability hereunder to
the extent it is not materially prejudiced as a result thereof and in any event
shall not relieve it from any liability which it may have otherwise than on
account of this indemnity agreement. In the case of parties indemnified
pursuant to Section 6(a) above, counsel to the indemnified parties shall be
selected by the Underwriters and, in the case of parties indemnified pursuant
to Section 6(b) above, counsel to the indemnified parties shall be selected by
the Company. An indemnifying party may participate at its own expense in the
defense of any such action; provided, however, that counsel to the indemnifying
party shall not (except with the consent of the indemnified party) also be
counsel to the indemnified party. In no event shall the indemnifying parties be
liable for fees and the expenses of more than one counsel (in addition to any
local counsel) separate from their own counsel for all indemnified parties in
connection with any one action or separate but similar or related actions in
the same jurisdiction arising out of the same general allegations or
circumstances. No indemnifying party shall, without the prior written consent
of the related indemnified party, which consent shall not be unreasonably
withheld or delayed, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body,
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commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof by such indemnified party (whether or not the indemnified parties are
actual or potential parties thereto), unless such settlement, compromise or
consent (i) includes an unconditional release of each indemnified party from
all liability arising out of such litigation, investigation, proceeding or
claim and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act by or on behalf of any indemnified party. An
indemnifying party shall not be liable under any settlement or compromise or
consent to the entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened in writing, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof by an indemnified party which is effected without the prior written
consent of such indemnifying party, which consent will not be unreasonably
withheld or delayed.
(d) Settlement without Consent if Failure to Reimburse.
Notwithstanding anything to the contrary contained in Section 6(c), if at any
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 6(a)(iii) effected without its written consent
if (i) such settlement is entered into more that 60 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 45 days prior to
such settlement being entered into and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such request prior to
the date of such settlement.
7. Contribution. If the indemnification provided for in
Section 6 hereof is due in accordance with its terms but is for any reason
unavailable to or insufficient to hold harmless an indemnified party in respect
of any losses, liabilities, claims, damages or expenses referred to therein,
then each indemnifying party shall contribute to the aggregate amount of such
losses, liabilities, claims, damages and expenses incurred by such indemnified
party, as incurred, (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and such Underwriter
on the other hand from the offering and sale of the Certificates pursuant to
this Agreement or (ii) if the allocation provided by clause (i) is not
permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company on the one hand and of the Underwriter on the
other hand in connection with the statements or omissions which resulted in
such losses, liabilities, claims, damages or expenses, as well as any other
relevant equitable considerations.
The relative benefits received by the Company on the one hand
and the Underwriter on the other hand in connection with the offering and sale
of the Certificates pursuant to this Agreement shall be deemed to be in the
same respective proportions as the total net proceeds from the offering and
sale of the Certificates pursuant to this Agreement (before deducting expenses)
received by the Company and the total underwriting discount received by the
Underwriter, in each case as set forth on Schedule A, bear to the aggregate
initial purchase price of the Certificates as set forth on Schedule A. The
relative fault of the Company on the one hand and the Underwriter on the other
hand shall be determined by reference to, among other things,
20
<PAGE>
whether any such untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Underwriter and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Underwriter agree that it would not be
just and equitable if contribution pursuant to this Section 7 were determined
by pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to above in this Section 7.
The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section 7 shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission. In the
event that any expenses so paid by the indemnifying party are subsequently
determined not be required to be borne by the indemnifying party hereunder
(whether in connection with indemnification pursuant to Section 6 or
contribution pursuant to this Section 7), the party which received such payment
shall promptly refund the amount so paid to the party which made such payment.
Notwithstanding the provisions of this Section 7, each
Underwriter shall not be required to contribute any amount in excess of the
amount by which the total purchase price for the Certificates underwritten by
the Underwriter and distributed to the public were offered to the public
exceeds the amount of any damages which the Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution
from any person who was not guilty of fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who
controls the Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as the
Underwriter and each person, if any, who controls the Company within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have
the same rights to contribution as the Company. The Underwriter's obligations
to contribute pursuant to this Section 7 is in proportion to the initial
certificate balance of Certificates set forth opposite its name in Schedule A
hereto.
21
<PAGE>
8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company submitted pursuant
hereto, shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of the Underwriter or controlling person, or
by or on behalf of the Company, and shall survive delivery of the Certificates
to the Underwriter.
9. Termination of Agreement.
------------------------
(a) Termination; General. The Underwriter may terminate this
Agreement, by notice to the Company, at any time at or prior to the Closing
Time (i) if there has been, since the time of execution of this Agreement or
since the respective dates as of which information is given in the Prospectus,
any material adverse change in the financial condition, earnings, business
affairs or business prospects of the Company or of the Mortgage Loan Seller,
whether or not arising in the ordinary course of business, or (ii) if there has
occurred any material adverse change in the financial markets in the United
States, any outbreak of hostilities or escalation thereof or other calamity or
crisis or any change or development involving a prospective change in national
or international political, financial or economic conditions, in each case the
effect of which is such as to make it, in the judgment of the Underwriter,
impracticable to market the Certificates or to enforce contracts for the sale
of the Certificates, or (iii) if trading in any securities of the Company or of
the Mortgage Loan Seller has been suspended or limited by the Commission or the
New York Stock Exchange, or if trading generally on the American Stock Exchange
or the New York Stock Exchange or on the Nasdaq National Market has been
suspended or limited, or minimum or maximum prices for trading have been fixed,
or maximum ranges for prices have been required, by any of said exchanges or by
such system or by order of the Commission, the National Association of
Securities Dealers, Inc. or any other governmental authority, or (iv) if a
banking moratorium has been declared by either Federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to
Section 9(a), such termination shall be without liability of any party to any
other party except as provided in Section 4 hereof, and provided further that
Sections 1, 6, 7 and 8 shall survive such termination and remain in full force
and effect.
10. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given upon receipt if
mailed, delivered by courier or transmitted by any standard form of
telecommunication. Notices to Merrill Lynch shall be directed to Merrill Lynch,
Pierce, Fenner & Smith Incorporated, World Financial Center, North Tower, New
York, New York 10281, Attention: Real Estate Investment
22
<PAGE>
Banking; and notices to the Company shall be directed to Merrill Lynch Mortgage
Investors, Inc., World Financial Center, North Tower, New York, New York 10281,
Attention: Secretary, with a copy to the Treasurer, or, as to any party, such
other address as may hereafter be furnished by such party to the others in
writing.
11. Parties. This Agreement shall each inure to the benefit
of and be binding upon the Underwriter, the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriter, the Company and their respective successors and the controlling
persons and officers and directors referred to in Sections 6 and 7 and their
heirs and legal representatives, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision herein contained. This
Agreement and all conditions and provisions hereof are intended to be for the
sole and exclusive benefit of the Underwriter, the Company and their respective
successors, and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm
or corporation. No purchaser of Certificates from the Underwriter shall be
deemed to be a successor by reason merely of such purchase.
12. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
13. Effect of Headings. The Section and other headings
herein and in the Table of Contents are for convenience of reference only and
shall not affect the construction hereof.
14. Miscellaneous. This Agreement supersedes all prior or
contemporaneous agreements and understandings relating to the subject matter
hereof. Neither this Agreement nor any term hereof may be changed, waived,
discharged or terminated except by a writing signed by the party against whom
enforcement of such change, waiver, discharge or termination is sought. This
Agreement may be signed in any number of counterparts, each of which shall be
deemed an original, which taken together shall constitute one and the same
instrument.
23
<PAGE>
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement among the Underwriters and the Company in accordance with its terms.
Very truly yours,
MERRILL LYNCH MORTGAGE INVESTORS, INC.
By: /s/ Michael M. McGovern
---------------------------------
Name: Michael M. McGovern
Title: Authorized Signatory
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: /s/ Robert J. Fitzpatrick
---------------------------------------
Name: Robert J. Fitzpatrick
Title: Authorized Signatory
24
<PAGE>
SCHEDULE A
----------
UNDERWRITING AGREEMENT, DATED DECEMBER 22, 1998
CUT-OFF DATE: December 1, 1998
CERTIFICATES: Commercial Mortgage Acceptance Corp.,
Mortgage Pass-Through
Certificates, Series 1998-C3
<TABLE>
<CAPTION>
Initial
Certificate
Balance of Initial Pass- Purchase Rating
Class Designation Class Through Rate Price(1) (2)
- ----------------- ---------- ------------- -------- ------
<S> <C> <C> <C> <C>
A-1 $129,870,000 5.65% 100.48% Aaa/AAA
A-2 75,490,000 5.87% 100.47% Aaa/AAA
A-3 243,122,000 5.88% 100.47% Aaa/AAA
B 33,516,000 (3) 100.48% Aa2/AA
C 35,112,000 (3) 100.50% A2/A
D 38,305,000 (3) 95.23% Baa2/BBB
E 7,980,000 (3) 88.42% Baa3/BBB-
IO (4) (4) 6.30% Aaa/AAAr
</TABLE>
(1) Expressed as a percentage of the initial aggregate Certificate Balance
of the relevant Class of Certificates to be purchased. The purchase
price for each Class of the Certificates will include accrued interest
at the initial Pass-Through Rate therefor on the aggregate stated
amount thereof to be purchased from the Cut-Off Date to but not
including the Closing Date.
(2) By each of Moody's and Standard & Poor's Rating Services, respectively.
(3) The Pass-Through Rates applicable to the Class B, Class C, Class D and
Class E Certificates will equal the Weighted Average Net Mortgage Rate
minus 0.92%, 0.54%, 0.00% and 0.00%, respectively.
(4) The Class IO Certificates will not have a principal balance nor will
they entitle the holders thereof to receive distributions of
principal, but will entitle such holders to receive payments of
interest equal to the aggregate of the interest accrued on the
notional amount of each of its Components. The initial notional amount
is $638,408,605.
<PAGE>
=====================================
MERRILL LYNCH MORTGAGE INVESTORS, INC.
Depositor
and
GE CAPITAL LOAN SERVICES, INC.
Master Servicer
and
GE CAPITAL REALTY GROUP, INC.
Special Servicer
and
THE CHASE MANHATTAN BANK
Trustee
POOLING AND SERVICING AGREEMENT
Dated as of December 1, 1998
Mortgage Pass-Through Certificates
Series 1998-C3
=====================================
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE I DEFINITIONS
SECTION 1.01. Defined Terms ......................................................................................2
Accrued Certificate Interest................................................................................2
Accrued Component Interest..................................................................................3
Acquisition Date............................................................................................3
Additional Information......................................................................................3
Additional Interest.........................................................................................3
Additional Interest Distribution Account....................................................................3
Additional Interest Rate....................................................................................3
Additional Trust Fund Expense...............................................................................3
Advance.....................................................................................................4
Adverse REMIC Event.........................................................................................4
Affiliate...................................................................................................4
Agreement...................................................................................................4
Anticipated Repayment Date..................................................................................4
Appraisal...................................................................................................4
Appraisal Reduction Amount..................................................................................4
Appraised Value.............................................................................................5
ARD Mortgage Loans..........................................................................................5
Assignment of Leases........................................................................................5
Assumed Scheduled Payment...................................................................................5
Authenticating Agent........................................................................................5
Available Distribution Amount...............................................................................6
Balloon Mortgage Loan.......................................................................................6
Balloon Payment.............................................................................................6
Bankruptcy Code.............................................................................................6
Book-Entry Certificate......................................................................................6
Breach......................................................................................................6
Business Day................................................................................................6
CERCLA......................................................................................................6
Certificate.................................................................................................7
Certificate Account.........................................................................................7
Certificate Factor..........................................................................................7
Certificate Notional Amount.................................................................................7
Certificate Owner...........................................................................................7
Certificate Principal Balance...............................................................................7
Certificate Register........................................................................................7
Certificate Registrar.......................................................................................7
Certificateholder...........................................................................................7
i
<PAGE>
Class.......................................................................................................8
Class A-1 Certificate.......................................................................................8
Class A-2 Certificate.......................................................................................8
Class A-3 Certificate.......................................................................................8
Class B Certificate.........................................................................................8
Class C Certificate.........................................................................................8
Class D Certificate.........................................................................................8
Class E Certificate.........................................................................................8
Class F Certificate.........................................................................................9
Class G Certificate.........................................................................................9
Class H Certificate.........................................................................................9
Class IO Certificate........................................................................................9
Class J Certificate.........................................................................................9
Class K Certificate.........................................................................................9
Class L Certificate.........................................................................................9
Class Prepayment Percentage.................................................................................9
Class Principal Balance.....................................................................................9
Class R-I Certificate......................................................................................10
Class R-II Certificate.....................................................................................10
Class R-III Certificate....................................................................................10
Closing Date...............................................................................................10
Code.......................................................................................................10
Collection Period..........................................................................................10
Comparative Financial Status Report........................................................................10
Component..................................................................................................10
Component Notional Amount..................................................................................11
Controlling Class..........................................................................................11
Corporate Trust Office.....................................................................................11
Corrected Mortgage Loan....................................................................................11
Credit Lease...............................................................................................11
Credit Lease Loan..........................................................................................11
CSSA Loan File Report......................................................................................11
CSSA Property File Report..................................................................................11
Custodian..................................................................................................11
Cut-off Date...............................................................................................12
Cut-off Date Balance.......................................................................................12
Debt Service Coverage Ratio................................................................................12
Defaulted Mortgage Loan....................................................................................12
Defeasance Collateral......................................................................................12
Defeasance Loan............................................................................................12
Definitive Certificate.....................................................................................12
Delinquent Loan Status Report..............................................................................12
Depositor..................................................................................................12
Depository.................................................................................................13
ii
<PAGE>
Depository Participant.....................................................................................13
Determination Date.........................................................................................13
Directly Operate...........................................................................................13
Disqualified Organization..................................................................................13
Distributable Certificate Interest.........................................................................14
Distribution Account.......................................................................................14
Distribution Date..........................................................................................14
Document Defect............................................................................................14
Due Date...................................................................................................14
Eligible Account...........................................................................................14
Environmental Assessment...................................................................................15
ERISA......................................................................................................15
Escrow Payment.............................................................................................15
Event of Default...........................................................................................15
Exchange Act...............................................................................................15
FDIC.......................................................................................................15
FHLMC......................................................................................................15
Final Recovery Determination...............................................................................15
FNMA.......................................................................................................15
Guaranty...................................................................................................16
Hazardous Materials........................................................................................16
Historical Loan Modification Report........................................................................16
Historical Loss Estimate Report............................................................................16
Holder.....................................................................................................16
HUD-Approved Servicer......................................................................................16
Impound Reserve............................................................................................16
Independent................................................................................................16
Independent Appraiser......................................................................................17
Independent Contractor.....................................................................................17
Insurance Policy...........................................................................................17
Insurance Proceeds.........................................................................................17
Interested Person..........................................................................................17
Investment Account.........................................................................................17
Issue Price................................................................................................17
Late Collections...........................................................................................17
Lease Enhancement Policy...................................................................................18
Lease Enhancement Policy Issuer............................................................................18
Lease Enhancement Policy Termination Event.................................................................18
Liquidation Event..........................................................................................18
Liquidation Proceeds.......................................................................................18
Loan-to-Value Ratio........................................................................................19
Majority Subordinate Certificateholder.....................................................................19
Master Servicer............................................................................................19
Master Servicing Fee.......................................................................................19
iii
<PAGE>
Master Servicing Fee Rate..................................................................................19
Merrill Lynch..............................................................................................19
Monthly Payment............................................................................................19
Moody's....................................................................................................20
Mortgage...................................................................................................20
Mortgage File..............................................................................................20
Mortgage Loan..............................................................................................21
Mortgage Loan Purchase Agreements..........................................................................21
Mortgage Loan Schedule.....................................................................................21
Mortgage Loan Seller.......................................................................................22
Mortgage Note..............................................................................................22
Mortgage Pool..............................................................................................22
Mortgage Rate..............................................................................................23
Mortgaged Property.........................................................................................23
Mortgagor..................................................................................................23
Net Aggregate Prepayment Interest Shortfall................................................................23
Net Investment Earnings....................................................................................23
Net Investment Loss........................................................................................23
Net Mortgage Rate..........................................................................................23
Net Operating Income.......................................................................................24
New Lease..................................................................................................24
NOI Adjustment Worksheet...................................................................................24
Nonrecoverable Advance.....................................................................................24
Nonrecoverable P&I Advance.................................................................................24
Nonrecoverable Servicing Advance...........................................................................24
Non-Registered Certificate.................................................................................24
Non-United States Person...................................................................................24
Officers' Certificate......................................................................................24
Operating Statement Analysis...............................................................................25
Opinion of Counsel.........................................................................................25
Original Component Notional Amount.........................................................................25
Original Class Principal Balance...........................................................................25
OTS........................................................................................................25
Ownership Interest.........................................................................................25
Pass-Through Rate..........................................................................................25
Paying Agent...............................................................................................26
Percentage Interest........................................................................................26
Percentage Premium.........................................................................................26
Permitted Investments......................................................................................26
Permitted Transferee.......................................................................................28
Person.....................................................................................................28
P&I Advance................................................................................................28
P&I Advance Date...........................................................................................28
P&I Advance Date...........................................................................................28
iv
<PAGE>
Plurality Residual Certificateholder.......................................................................28
Prepayment Assumption......................................................................................28
Prepayment Interest Excess.................................................................................28
Prepayment Interest Shortfall..............................................................................28
Prepayment Premium.........................................................................................29
Prime Rate.................................................................................................29
Principal Distribution Amount..............................................................................29
Principal Prepayment.......................................................................................30
Principal Recovery Fee.....................................................................................30
Prospectus.................................................................................................30
Prospectus Supplement......................................................................................30
Purchase Price.............................................................................................30
Qualified Insurer..........................................................................................31
Qualified Substitute Mortgage Loan.........................................................................31
Rated Final Distribution Date..............................................................................32
Rating Agency..............................................................................................32
Realized Loss..............................................................................................32
Record Date................................................................................................33
Registered Certificate.....................................................................................33
Regular Certificate........................................................................................33
Reimbursement Rate.........................................................................................33
Remaining Cash Flow........................................................................................33
REMIC......................................................................................................33
REMIC I....................................................................................................33
REMIC I Regular Interest...................................................................................34
REMIC I Remittance Rate....................................................................................34
REMIC II...................................................................................................34
REMIC II Regular Interest..................................................................................34
REMIC II Remittance Rate...................................................................................34
REMIC III..................................................................................................34
REMIC III Certificate......................................................................................34
REMIC Administrator........................................................................................34
REMIC Provisions...........................................................................................34
Rents from Real Property...................................................................................34
REO Account................................................................................................35
REO Acquisition............................................................................................35
REO Disposition............................................................................................35
REO Extension..............................................................................................35
REO Loan...................................................................................................35
REO Property...............................................................................................36
REO Revenues...............................................................................................36
REO Tax....................................................................................................36
REO Status Report..........................................................................................36
Request for Release........................................................................................36
v
<PAGE>
Required Appraisal.........................................................................................36
Required Appraisal Mortgage Loan...........................................................................36
Required Appraisal Value...................................................................................36
Reserve Account............................................................................................37
Reserve Funds..............................................................................................37
Residual Certificate.......................................................................................37
Responsible Officer........................................................................................37
Revised Rate...............................................................................................37
Scheduled Payment..........................................................................................37
Securities Act.............................................................................................37
Senior Certificate.........................................................................................37
Sequential Pay Certificate.................................................................................37
Servicing Account..........................................................................................38
Servicing Advances.........................................................................................38
Servicing Fee..............................................................................................38
Servicing File.............................................................................................38
Servicing Officer..........................................................................................38
Servicing Standard.........................................................................................38
Servicing Transfer Event...................................................................................39
Single Certificate.........................................................................................39
Special Servicer...........................................................................................39
Special Servicing Fee......................................................................................39
Special Servicing Fee Rate.................................................................................39
Specially Serviced Mortgage Loan...........................................................................39
Standard & Poor's..........................................................................................41
Startup Day................................................................................................41
State and Local Taxes......................................................................................41
Stated Maturity Date.......................................................................................41
Stated Principal Balance...................................................................................42
Statement to Certificateholders":..........................................................................42
Subordinated Certificate...................................................................................42
Sub-Servicer...............................................................................................42
Sub-Servicing Agreement....................................................................................42
Substitution Shortfall Amount..............................................................................42
Tax Matters Person.........................................................................................42
Tax Returns................................................................................................43
Transfer...................................................................................................43
Transferee.................................................................................................43
Transferor.................................................................................................43
Trust Fund.................................................................................................43
Trustee....................................................................................................43
Trustee's Fee..............................................................................................43
Trustee Fee Rate...........................................................................................43
Trustee Liability..........................................................................................43
vi
<PAGE>
UCC........................................................................................................43
UCC Financing Statement....................................................................................43
Uncertificated Accrued Interest............................................................................43
Uncertificated Distributable Interest......................................................................44
Uncertificated Principal Balance...........................................................................44
Underwriter................................................................................................45
United States Person.......................................................................................45
USAP.......................................................................................................45
Voting Rights..............................................................................................45
Watch List.................................................................................................45
Weighted Average Effective REMIC I Remittance Rate.........................................................45
Yield Maintenance Charge...................................................................................46
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES; ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.01. Conveyance of Mortgage Loans.......................................................................47
SECTION 2.02. Acceptance of the Trust Fund by Trustee............................................................48
SECTION 2.03. Mortgage Loan Seller's Repurchase or Substitution of Mortgage Loans for Document
Defects and Breaches of Representations and Warranties..................................49
SECTION 2.04. Representations and Warranties of Depositor........................................................52
SECTION 2.05. Execution, Authentication and Delivery of Class R-I Certificates; Creation of REMIC
I Regular Interests.....................................................................53
SECTION 2.06. Conveyance of REMIC I Regular Interests; Acceptance of REMIC II by Trustee.........................54
SECTION 2.07. Execution, Authentication and Delivery of Class R-II Certificates..................................54
SECTION 2.08. Conveyance of REMIC II Regular Interests; Acceptance of REMIC III by Trustee.......................54
SECTION 2.09. Execution, Authentication and Delivery of REMIC III Certificates...................................54
SECTION 2.10. Execution, Authentication and Delivery of Class L Certificates.....................................55
ARTICLE III ADMINISTRATION AND SERVICING OF THE TRUST FUND
SECTION 3.01. Administration of the Mortgage Loans...............................................................55
SECTION 3.02. Collection of Mortgage Loan Payments...............................................................57
SECTION 3.03. Collection of Taxes, Assessments and Similar Items; Servicing Accounts; Reserve
Accounts................................................................................59
SECTION 3.04. Certificate Account, Distribution Account and Additional Interest Distribution
Account.................................................................................63
SECTION 3.05. Permitted Withdrawals From the Certificate Account and the Distribution Account....................66
vii
<PAGE>
SECTION 3.06 Investment of Funds in the Servicing Accounts, the Reserve Accounts, the Certificate
Account, the Additional Interest Distribution Account and the REO Account...............69
SECTION 3.07. Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage......................71
SECTION 3.08. Enforcement of Alienation Clauses..................................................................75
SECTION 3.09. Realization Upon Defaulted Mortgage Loans; Required Appraisals.....................................76
SECTION 3.10. Trustee and Custodian to Cooperate; Release of Mortgage Files......................................80
SECTION 3.11. Servicing Compensation.............................................................................81
SECTION 3.12. Property Inspections; Collection of Financial Statements; Delivery of Certain
Reports.................................................................................84
SECTION 3.13. Annual Statement as to Compliance..................................................................86
SECTION 3.14. Reports by Independent Public Accountants..........................................................86
SECTION 3.15. Access to Certain Information......................................................................86
SECTION 3.16. Title to REO Property; REO Account.................................................................89
SECTION 3.17. Management of REO Property.........................................................................91
SECTION 3.18. Sale of Mortgage Loans and REO Properties..........................................................94
SECTION 3.19. Additional Obligations of Master Servicer..........................................................97
SECTION 3.20. Modifications, Waivers, Amendments and Consents....................................................97
SECTION 3.21. Transfer of Servicing Between Master Servicer and Special Servicer; Record Keeping................102
SECTION 3.22. Sub-Servicing Agreements..........................................................................104
SECTION 3.23. Representations, Warranties and Covenants of Master Servicer and Special Servicer.................106
ARTICLE IV PAYMENTS TO CERTIFICATEHOLDERS
SECTION 4.01. Distributions.....................................................................................110
SECTION 4.02. Statements to Certificateholders; CSSA Loan File Report...........................................120
SECTION 4.03. P&I Advances......................................................................................126
SECTION 4.04. Allocation of Realized Losses and Additional Trust Fund Expenses..................................129
SECTION 4.05. Calculations......................................................................................130
SECTION 4.06. Use of Agents.....................................................................................130
ARTICLE V THE CERTIFICATES
SECTION 5.01. The Certificates..................................................................................131
SECTION 5.02. Registration of Transfer and Exchange of Certificates.............................................131
SECTION 5.03. Book-Entry Certificates...........................................................................137
SECTION 5.04. Mutilated, Destroyed, Lost or Stolen Certificates.................................................138
SECTION 5.05. Persons Deemed Owners.............................................................................138
viii
<PAGE>
ARTICLE VI THE DEPOSITOR, THE MASTER SERVICER, THE SPECIAL SERVICER AND THE CONTROLLING CLASS REPRESENTATIVE
SECTION 6.01. Liability of Depositor, Master Servicer and Special Servicer......................................140
SECTION 6.02. Merger, Consolidation or Conversion of Depositor or Master Servicer or Special
Servicer...............................................................................140
SECTION 6.03. Limitation on Liability of Depositor, Master Servicer and Special Servicer........................140
SECTION 6.04. Resignation of Master Servicer and the Special Servicer; Assignment of Rights and
Obligations............................................................................141
SECTION 6.05. Rights of Depositor and Trustee in Respect of Master Servicer and the Special
Servicer...............................................................................142
SECTION 6.06. Depositor, Master Servicer and Special Servicer to Cooperate with Trustee.........................143
SECTION 6.07. Depositor, Special Servicer and Trustee to Cooperate with Master Servicer.........................143
SECTION 6.08. Depositor, Master Servicer and Trustee to Cooperate with Special Servicer.........................143
SECTION 6.09. Designation of Special Servicer by the Controlling Class..........................................143
SECTION 6.10. Master Servicer or Special Servicer as Owner of a Certificate.....................................145
SECTION 6.11. The Controlling Class Representative..............................................................146
ARTICLE VII DEFAULT
SECTION 7.01. Events of Default.................................................................................148
SECTION 7.02. Trustee to Act; Appointment of Successor..........................................................151
SECTION 7.03. Notification to Certificateholders................................................................153
SECTION 7.04. Waiver of Events of Default.......................................................................153
SECTION 7.05. Additional Remedies of Trustee Upon Event of Default..............................................154
ARTICLE VIII CONCERNING THE TRUSTEE
SECTION 8.01. Duties of Trustee.................................................................................155
SECTION 8.02. Certain Matters Affecting Trustee.................................................................156
SECTION 8.03. Trustee Not Liable for Validity or Sufficiency of Certificates or Mortgage Loans..................157
SECTION 8.04. Trustee May Own Certificates......................................................................158
SECTION 8.05. Fees and Expenses of Trustee; Indemnification of Trustee..........................................158
SECTION 8.06. Eligibility Requirements for Trustee..............................................................159
SECTION 8.07. Resignation and Removal of Trustee................................................................159
SECTION 8.08. Successor Trustee.................................................................................161
SECTION 8.09. Merger or Consolidation of Trustee................................................................161
SECTION 8.10. Appointment of Co-Trustee or Separate Trustee.....................................................161
SECTION 8.11. Appointment of Custodians.........................................................................163
SECTION 8.12. Appointment of Authenticating Agents..............................................................163
ix
<PAGE>
SECTION 8.13. Appointment of Paying Agent.......................................................................164
SECTION 8.14. Appointment of REMIC Administrators...............................................................165
SECTION 8.15. Access to Certain Information.....................................................................166
SECTION 8.16. Representations, Warranties and Covenants of Trustee..............................................166
SECTION 8.17. Reports to the Securities and Exchange Commission; Available Information..........................168
ARTICLE IX TERMINATION
SECTION 9.01. Termination Upon Repurchase or Liquidation of All Mortgage Loans..................................169
SECTION 9.02. Additional Termination Requirements...............................................................176
ARTICLE X ADDITIONAL REMIC PROVISIONS
SECTION 10.01. REMIC Administration.............................................................................178
ARTICLE XI MISCELLANEOUS PROVISIONS
SECTION 11.01. Amendment........................................................................................183
SECTION 11.02. Recordation of Agreement; Counterparts...........................................................185
SECTION 11.03. Limitation on Rights of Certificateholders.......................................................185
SECTION 11.04. Governing Law....................................................................................186
SECTION 11.05. Notices..........................................................................................186
SECTION 11.06. Severability of Provisions.......................................................................187
SECTION 11.07. Grant of a Security Interest.....................................................................187
SECTION 11.08. Successors and Assigns; Beneficiaries............................................................187
SECTION 11.09. Article and Section Headings.....................................................................187
SECTION 11.10. Notices to and From Rating Agencies..............................................................187
SECTION 11.11. Complete Agreement...............................................................................188
</TABLE>
x
<PAGE>
<TABLE>
<CAPTION>
EXHIBITS
Exhibit Description Exhibit No. Section Reference
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Form of Class A-1 Certificate A-1 Section 1.01 Definition of
"Class A-1 Certificate"
Form of Class A-2 Certificate A-2 Section 1.01 Definition of
"Class A-2 Certificate"
Form of Class A-3 Certificate A-3 Section 1.01 Definition of
"Class A-3 Certificate"
Form of Class IO Certificate A-4 Section 1.01 Definition of
"Class IO Certificate"
Form of Class B Certificate A-5 Section 1.01 Definition of
"Class B Certificate"
Form of Class C Certificate A-6 Section 1.01 Definition of
"Class C Certificate"
Form of Class D Certificate A-7 Section 1.01 Definition of
"Class D Certificate"
Form of Class E Certificate A-8 Section 1.01 Definition of
"Class E Certificate"
Form of Class F Certificate A-9 Section 1.01 Definition of
"Class F Certificate"
Form of Class G Certificate A-10 Section 1.01 Definition of
"Class G Certificate"
Form of Class H Certificate A-11 Section 1.01 Definition of
"Class H Certificate"
Form of Class J Certificate A-12 Section 1.01 Definition of
"Class J Certificate"
Form of Class K Certificate A-13 Section 1.01 Definition of
"Class K Certificate"
Form of Class L Certificate A-14 Section 1.01 Definition of
"Class L Certificate"
xi
<PAGE>
Form of Class R-I Certificate A-15 Section 1.01 Definition of
"Class R-I Certificate"
Form of Class R-II Certificate A-16 Section 1.01 Definition of
"Class R-II Certificate"
Form of Class R-III Certificate A-17 Section 1.01 Definition of
"Class R-III Certificate"
Mortgage Loan Schedule B Section 1.01 Definition of
"Mortgage Loan Schedule"
Form of Schedule of Exceptions to Mortgage C Section 2.02(a)
File Delivery
Form of Master Servicer Request for Release D-1 Section 1.01 Definition of
"Request for Release";
Section 2.03(b); Section
3.10(a); and Section 3.10(b)
Form of Special Servicer Request for Release D-2 Section 1.01 Definition of
"Request for Release"; Section 3.10(b)
Calculation of NOI/Debt Service Coverage E-1 Section 1.01 Definition of
Ratios "Net Operating Income"; Section 3.12(b)
Form of Transferor Certificate F-1 Section 5.02(b)
Form of Transferee Certificate for QIBs F-2 Section 5.02(b)
Form of Transferee Certificate for Non-QIBs F-3 Section 5.02(b)
Form of Transferee Letter for Transfers of G Section 5.02(c)
Subordinated Certificates to Non-Plan
Entities
Form of Transfer Affidavit and Agreement H-1 Section 5.02(d)(i)(B)
regarding Class R-I, R-II and R-III
Certificates
xii
<PAGE>
Form of Transferor Certificate regarding H-2 Section 5.02(d)(i)(D)
Class R-I, R-II and R-III Certificates
Form of Notice and Acknowledgment I-1 Section 6.09
Form of Acknowledgment of Proposed Special I-2 Section 6.09
Servicer
[RESERVED]
Form of Schedule of Certificateholders K Section 4.02(a)
Form of CSSA Property File Report L Section 3.12(c)
Form of Comparative Financial Status Report M Section 3.12(b) and 3.12(c)
Form of REO Status Report N Section 3.12(b) and 3.12(c)
Form of Watch List O Section 3.12(b) and 3.12(c)
Form of Delinquent Loan Status Report P Section 3.12(b) and 3.12(c)
Form of Historical Loan Modification Report Q Section 3.12(b) and 3.12(c)
Form of Historical Loss Estimate Report R Section 3.12(b) and 3.12(c)
Form of NOI Adjustment Worksheet S Section 3.12(b) and 3.12(c)
Form of Operating Statement Analysis T Section 3.12(b) and 3.12(c)
Form of CSSA Loan File Report U Section 4.02(b)
Form of Certificateholder Confirmation V-1 Section 3.15
Certificate
xiii
<PAGE>
Form of Prospective Purchaser Certificate V-2 Section 3.15
Form of Lost Note Affidavit and Indemnity W Definition of Mortgage File
</TABLE>
xiv
<PAGE>
This Pooling and Servicing Agreement (this "Agreement") is
dated and effective as of December 1, 1998, among MERRILL LYNCH MORTGAGE
INVESTORS, INC., as Depositor, GE Capital Loan Services, Inc., as Master
Servicer, GE CAPITAL REALTY GROUP, INC., as Special Servicer, and THE CHASE
MANHATTAN BANK, as Trustee.
PRELIMINARY STATEMENT:
The Depositor intends to sell mortgage pass-through
certificates (collectively, the "Certificates"), to be issued hereunder in
multiple classes (each, a "Class"), which in the aggregate will evidence the
entire beneficial ownership interest in a trust fund (the "Trust Fund") to be
created hereunder.
As provided herein, the Trustee will elect to treat the
segregated pool of assets consisting of the Mortgage Loans and a portion of the
interest payments thereon other than Additional Interest, as well as certain
other related assets subject to this Agreement as a REMIC for federal income
tax purposes, and such segregated pool of assets will be designated as "REMIC
I." The Class R-I Certificates will represent the sole class of "residual
interests" in REMIC I for purposes of the REMIC Provisions under the federal
income tax law. Except as provided below, each REMIC I Regular Interest will
relate to a specific Mortgage Loan. Each such REMIC I Regular Interest will have
a remittance rate equal to the unmodified Net Mortgage Rate as of the Closing
Date of the Mortgage Loan to which such REMIC I Regular Interest relates and an
initial Uncertificated Principal Balance equal to the Cut-Off Date Balance of
the Mortgage Loan to which such REMIC I Regular Interest relates. None of the
REMIC I Regular Interests will be certificated.
As provided herein, the Trustee will elect to treat the
segregated pool of assets consisting of the REMIC I Regular Interests as a REMIC
for federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC II." The Class R-II Certificates will represent the sole
class of "residual interests" in REMIC II for purposes of the REMIC Provisions
under federal income tax law. The REMIC II Remittance Rate with respect to each
Class of the REMIC II Regular Interests will be calculated in accordance with
the definition of "REMIC II Remittance Rate". The initial Uncertificated
Principal Balance of each Class of the REMIC II Regular Interests will equal the
Original Class Principal Balance of the corresponding Class of the REMIC III
Certificates described below. None of the REMIC II Regular Interests will be
certificated.
As provided herein, the Trustee will elect to treat the
segregated pool of assets consisting of the REMIC II Regular Interests as a
REMIC for federal income tax purposes, and such segregated pool of assets will
be designated as "REMIC III". The Class R-III Certificates will evidence the
sole class of "residual interests" in REMIC III for purposes of the REMIC
Provisions under federal income tax law. For federal income tax purposes, each
Class of the Regular Certificates (other than the Class IO Certificates) and
each of the Components of the Class IO Certificates will be designated as a
separate regular interest in REMIC III for purposes of the REMIC Provisions
under federal income tax law.
<PAGE>
-2-
The following table sets forth the Class designation of the
REMIC III Certificates other than the Class IO and Class R-III Certificates, the
corresponding REMIC II Regular Interests, the corresponding Component of the
Class IO Certificates and the Original Class Principal Balance for each Class of
the Regular Certificates other than the Class IO Certificates.
<TABLE>
<CAPTION>
Corresponding
Class of
Class REMIC II Corresponding Original Class
Designation Regular Interests IO Component Principal Balance
----------- ----------------- ------------ -----------------
<S> <C> <C> <C>
Class A-1 P IO-A1 $129,870,000
Class A-2 Q IO-A2 $ 75,490,000
Class A-3 IO-A3 $243,122,000
Class B R IO-B $ 33,516,000
Class C S IO-C $ 35,112,000
Class D T IO-D $ 38,305,000
Class E U IO-E $ 7,980,000
Class F V IO-F $ 35,113,000
Class G W IO-G $ 4,788,000
Class H X IO-H $ 14,364,000
Class J Y IO-J $ 3,192,000
Class K Z IO-K $ 17,556,605
</TABLE>
The Class L Certificate will not constitute an interest in
REMIC I, REMIC II, REMIC III.
In consideration of the mutual agreements herein contained,
the Depositor, the Master Servicer, the Special Servicer and the Trustee agree
as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms.
Whenever used in this Agreement, including in the Preliminary
Statement, the following words and phrases, unless the context otherwise
requires, shall have the meanings specified in this Article.
"Accrued Certificate Interest": With respect to any Class of
Regular Certificates (other than the Class IO Certificates) for any Distribution
Date, one month's
<PAGE>
-3-
interest at the Pass-Through Rate applicable to such Class of Certificates,
accrued on the related Class Principal Balance outstanding immediately prior to
such Distribution Date and with respect to the Class IO Certificates for any
Distribution Date, the sum of Accrued Component Interest for each of its
Components for such Distribution Date. Accrued Certificate Interest shall be
calculated on the basis of a 360-day year consisting of twelve 30-day months.
"Accrued Component Interest": With respect to each Component
of the Class IO Certificates for any Distribution Date, the sum of one month's
interest at the Pass-Through Rate applicable to such Component for such
Distribution Date, accrued on the Component Notional Amount of such Component
outstanding immediately prior to such Distribution Date. Accrued Component
Interest shall be calculated on the basis of a 360-day year consisting of twelve
30-day months.
"Acquisition Date": With respect to any REO Property, the
first day on which such REO Property is considered to be acquired by the Trust
Fund within the meaning of Treasury Regulations Section 1.856-6(b)(1), which is
the first day on which the Trust Fund is treated as the owner of such REO
Property for federal income tax purposes.
"Additional Information": As defined in Section 4.02(a).
"Additional Interest": With respect to each of the ARD
Mortgage Loans indicated on the Mortgage Loan Schedule as having a Revised Rate,
interest accrued on such ARD Mortgage Loan at the Additional Interest Rate and
any interest which accrues on such interest at the Revised Rate. The Additional
Interest shall not be an asset of REMIC I, REMIC II or REMIC III.
"Additional Interest Distribution Account": The trust account
or accounts created and maintained as a separate trust account or accounts by
the Trustee pursuant to Section 3.04(c), which shall be entitled "The Chase
Manhattan Bank, as Trustee, in trust for Holders of Merrill Lynch Mortgage
Investors, Inc., Mortgage Pass-Through Certificates, Series 1998-C3, Additional
Interest Distribution Account" and which must be an Eligible Account. The
Additional Interest Distribution Account shall not be an asset of REMIC I,
REMIC II or REMIC III.
"Additional Interest Rate": With respect to each of the ARD
Mortgage Loans, the excess of (i) the applicable Revised Rate over (ii) the
applicable Mortgage Rate immediately prior to the related Anticipated Repayment
Date, each as set forth in the Mortgage Loan Schedule.
"Additional Trust Fund Expense": Any Special Servicing Fees,
Principal Recovery Fees and, in accordance with Sections 3.03(d) and 4.03(d),
interest payable to the Master Servicer, the Special Servicer and the Trustee on
Advances (to the extent not offset by late charges on the related Mortgage Loans
and default interest), as well as any of the expenses of the Trust Fund that may
be withdrawn (x) pursuant to any of clauses (viii), (ix), (xi), (xii)
<PAGE>
-4-
and (xiii) of Section 3.05(a) out of general collections on the Mortgage Loans
and any REO Properties on deposit in the Certificate Account or (y) pursuant to
clause (ii) or any of clauses (iv) through (vi) of Section 3.05(b) out of
general collections on the Mortgage Loans and any REO Properties on deposit in
the Distribution Account; provided, that for purposes of the allocations
contemplated by Section 4.04 no such expense shall be deemed to have been
incurred by the Trust Fund until such time as the payment thereof is actually
made from the Certificate Account or the Distribution Account, as the case may
be.
"Advance": Any P&I Advance or Servicing Advance.
"Adverse REMIC Event": As defined in Section 10.01(i).
"Affiliate": With respect to any specified Person, any other
Person controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect to
any specified Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Agreement": This Pooling and Servicing Agreement and all
amendments hereof and supplements hereto.
"Anticipated Repayment Date": With respect to an ARD Mortgage
Loan, the date upon which such ARD Mortgage Loan commences accruing interest
at the Revised Rate.
"Appraisal": With respect to any Mortgage Loan, an Independent
appraisal of the related Mortgaged Property conducted in accordance with the
standards of the Appraisal Institute by an Independent Appraiser, which
Independent Appraiser shall be advised to take into account the factors
specified in Section 3.18(e), including without limitation, any environmental,
engineering or other third-party reports available, and other factors that a
prudent real estate appraiser would consider.
"Appraisal Reduction Amount": The excess, if any, of (a) the
sum of, as of the Determination Date immediately succeeding the date on which a
Required Appraisal is obtained (without duplication), (i) the Stated Principal
Balance of the subject Required Appraisal Mortgage Loan, (ii) to the extent not
previously advanced by or on behalf of the Master Servicer or the Trustee, all
unpaid interest on the Required Appraisal Mortgage Loan through the most recent
Due Date prior to such Determination Date at a per annum rate equal to the
related Net Mortgage Rate, (iii) all accrued but unpaid Servicing Fees and
Additional Trust Fund Expenses in respect of such Required Appraisal Mortgage
Loan, (iv) all related unreimbursed Advances (plus accrued interest thereon)
made by or on behalf of the Master Servicer, the Special Servicer or the Trustee
with respect to such Required Appraisal Mortgage Loan and (v) all currently due
and unpaid real estate taxes (net of any amounts escrowed therefor) and
assessments, insurance premiums, and, if applicable, ground rents in respect of
the related Mortgaged Property, over (b) the Required Appraisal Value; provided,
that if the
<PAGE>
-5-
related Required Appraisal Mortgage Loan becomes a Corrected Mortgage Loan, then
the Appraisal Reduction Amount shall be deemed to be zero, subject to such
Mortgage Loan again becoming a Required Appraisal Mortgage Loan, and provided
further, that with respect to any Mortgage Loan that becomes a Required
Appraisal Mortgage Loan pursuant to clause (iii) of the definition thereof, the
Appraisal Reduction Amount shall be deemed to exist, notwithstanding such
Required Appraisal Mortgage Loan becoming a Corrected Mortgage Loan, for so long
as the terms of the modification effected pursuant to Section 3.20 are in
effect.
"Appraised Value": With respect to each Mortgaged Property,
the appraised value thereof based upon the most recent Appraisal or update
thereof that is contained in the related Servicing File.
"ARD Mortgage Loans": The Mortgage Loans noted as such on the
Mortgage Loan Schedule, which Mortgage Loans substantially fully amortize
through their respective remaining terms to maturity, but provide that if the
unamortized principal amount thereof is not repaid on a specified date prior to
maturity set forth in the related Mortgage Note, the Mortgage Loan will accrue
at a higher interest rate the collection of which will be limited as hereinafter
provided in this Agreement.
"Assignment of Leases": With respect to any Mortgaged
Property, any assignment of leases, rents and profits or similar document or
instrument executed by the Mortgagor in connection with the origination of the
related Mortgage Loan.
"Assumed Scheduled Payment": With respect to any Balloon
Mortgage Loan following its Stated Maturity Date (provided that such Mortgage
Loan has not been paid in full on or before such date and no other Liquidation
Event has occurred in respect thereof) and for any subsequent Due Date therefor
as of which such Mortgage Loan remains outstanding and part of the Trust Fund,
the scheduled monthly payment of principal and/or interest deemed to be due in
respect thereof on such Due Date equal to the Scheduled Payment that would have
been due in respect of such Mortgage Loan on such Due Date if it had been
required to continue to pay in accordance with the amortization schedule in
effect prior to its Stated Maturity Date and without regard to the occurrence of
its Stated Maturity Date. With respect to any REO Loan, for any Due Date
therefor as of which the related REO Property remains part of the Trust Fund,
the scheduled monthly payment of principal and/or interest deemed to be due in
respect thereof on such Due Date equal to the Scheduled Payment that would have
been due in respect of the predecessor Mortgage Loan on such Due Date had it
remained outstanding (or, if the predecessor Mortgage Loan was a Balloon
Mortgage Loan and such Due Date coincides with or follows what had been its
Stated Maturity Date, the Assumed Scheduled Payment that would have been deemed
due in respect of the predecessor Mortgage Loan on such Due Date had it remained
outstanding).
"Authenticating Agent": Any authenticating agent appointed
pursuant to Section 8.12.
<PAGE>
-6-
"Available Distribution Amount": With respect to any
Distribution Date, an amount equal to, without duplication, (a) the sum of (i)
the aggregate of the amounts on deposit in the Certificate Account and the
Distribution Account as of the close of business on the related Determination
Date and the amounts collected by or on behalf of the Master Servicer as of the
close of business on such Determination Date and required to be deposited in the
Certificate Account, (ii) the aggregate amount of any P&I Advances made by the
Master Servicer or the Trustee for distribution on the Certificates on such
Distribution Date pursuant to Section 4.03, (iii) the aggregate amount
transferred from the REO Account (if established) to the Certificate Account
during the month of such Distribution Date, on or prior to the P&I Advance Date
in such month, pursuant to Section 3.16(c), and (iv) the aggregate amount
deposited by the Master Servicer in the Distribution Account for such
Distribution Date pursuant to Section 3.19 in connection with Prepayment
Interest Shortfalls, net of (b) the portion of the amount described in
subclauses (a)(i) and (a)(iii) of this definition that represents one or more of
the following: (i) collected Monthly Payments that are due on a Due Date
following the end of the related Collection Period, (ii) any amounts payable or
reimbursable to any Person from the (A) Certificate Account pursuant to clauses
(ii)-(xiv) of Section 3.05(a) or (B) the Distribution Account pursuant to
clauses (ii) - (viii) of Section 3.05(b), (iii) Prepayment Premiums, (iv)
Additional Interest, and (v) any amounts deposited in the Certificate Account or
the Distribution Account in error.
"Balloon Mortgage Loan": Any Mortgage Loan that by its
original terms or by virtue of any modification entered into as of the Closing
Date provides for an amortization schedule extending beyond its Stated Maturity
Date.
"Balloon Payment": With respect to any Balloon Mortgage Loan
as of any date of determination, the Scheduled Payment payable on the Stated
Maturity Date of such Mortgage Loan.
"Bankruptcy Code": The federal Bankruptcy Code, as amended
from time to time (Title 11 of the United States Code).
"Book-Entry Certificate": Any Certificate registered in the
name of the Depository or its nominee.
"Breach": As defined in Section 2.03(a).
"Business Day": Any day other than a Saturday, a Sunday or a
day on which banking institutions in New York, New York, Houston or Dallas,
Texas, Jacksonville, Florida or the cities in which the Corporate Trust Office
of the Trustee or the offices of the Master Servicer are located, are authorized
or obligated by law or executive order to remain closed.
"CERCLA": The Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended.
<PAGE>
-7-
"Certificate": Any one of the Depositor's Mortgage
Pass-Through Certificates, Series 1998-C3, as executed by the Certificate
Registrar and authenticated and delivered hereunder by the Authenticating Agent.
"Certificate Account": The segregated account or accounts
created and maintained by the Master Servicer pursuant to Section 3.04(a) on
behalf of the Trustee in trust for Certificateholders, which shall be entitled
"GE Capital Loan Services, Inc., as Master Servicer for Chase Manhattan Bank, as
Trustee, on behalf of and in trust for the registered holders of Merrill Lynch
Mortgage Investors, Inc., Mortgage Pass-Through Certificates, Series 1998-C3."
"Certificate Factor": With respect to any Class of Sequential
Pay Certificates, as of any date of determination, a fraction, expressed as a
decimal carried to eight places, the numerator of which is the then current
Class Principal Balance of such Class of Sequential Pay Certificates, as the
case may be, and the denominator of which is the related Original Class
Principal Balance.
"Certificate Notional Amount": The sum of the Component
Notional Amounts with respect to each of the Components.
"Certificate Owner": With respect to a Book-Entry Certificate,
the Person who is the beneficial owner of such Certificate as reflected on the
books of the Depository or on the books of a Depository Participant or on the
books of an indirect participating brokerage firm for which a Depository
Participant acts as agent.
"Certificate Principal Balance": With respect to any
Sequential Pay Certificate, as of any date of determination, the then
outstanding principal amount of such Certificate equal to the product of (a) the
Percentage Interest evidenced by such Certificate, multiplied by (b) the then
Class Principal Balance of the Class of Certificates to which such Certificate
belongs.
"Certificate Register" and "Certificate Registrar": The
register maintained and the registrar appointed pursuant to Section 5.02.
"Certificateholder": The Person in whose name a Certificate is
registered in the Certificate Register, except that (i) neither a Disqualified
Organization nor a Non-United States Person shall be Holder of a Residual
Certificate for any purpose hereof and, (ii) solely for the purposes of giving
any consent, approval or waiver pursuant to this Agreement that relates to any
of the Depositor, the Mortgage Loan Seller, the Master Servicer, the Special
Servicer, or the Trustee in its respective capacity as such (except with respect
to amendments referred to in Sections 3.20(d) and 11.01 hereof and any consent,
approval or waiver required or permitted to be made by the Majority Subordinate
Certificateholder), any Certificate registered in the name of the Depositor, the
Mortgage Loan Seller, the Master Servicer, the Special Servicer, or the Trustee,
as the case may be, or any Certificate registered in the name of any of its
Affiliates, shall be deemed not to be outstanding, and the Voting Rights to
which it is entitled shall not be taken into account in determining whether the
requisite percentage of
<PAGE>
-8-
Voting Rights necessary to effect any such consent, approval or waiver that
relates to it has been obtained. The Certificate Registrar shall be entitled to
request and rely upon a certificate of the Depositor, the Master Servicer or the
Special Servicer in determining whether a Certificate is registered in the name
of an Affiliate of such Person. All references herein to "Holders" or
"Certificateholders" shall reflect the rights of Certificate Owners as they may
indirectly exercise such rights through the Depository and the Depository
Participants, except as otherwise specified herein; provided, however, that the
parties hereto shall be required to recognize as a "Holder" or
"Certificateholder" only the Person in whose name a Certificate is registered in
the Certificate Register.
"Class": Collectively, all of the Certificates bearing the
same alphabetical and, if applicable, numerical class designation.
"Class A-1 Certificate": Any one of the Certificates with a
"Class A-1" designation on the face thereof, substantially in the form of
Exhibit A-1 attached hereto, and evidencing a portion of a "regular interest" in
REMIC III for purposes of the REMIC Provisions.
"Class A-2 Certificate": Any one of the Certificates with a
"Class A-2" designation on the face thereof, substantially in the form of
Exhibit A-2 attached hereto, and evidencing a portion of a "regular interest" in
REMIC III for purposes of the REMIC Provisions.
"Class A-3 Certificate": Any one of the Certificates with a
"Class A-3" designation on the face thereof, substantially in the form of
Exhibit A-3 attached hereto, and evidencing a portion of a "regular interest" in
REMIC III for purposes of the REMIC Provisions.
"Class B Certificate": Any one of the Certificates with a
"Class B" designation on the face thereof, substantially in the form of Exhibit
A-4 attached hereto, and evidencing a portion of a "regular interest" in REMIC
III for purposes of the REMIC Provisions.
"Class C Certificate": Any one of the Certificates with a
"Class C" designation on the face thereof, substantially in the form of Exhibit
A-5 attached hereto, and evidencing a portion of a "regular interest" in REMIC
III for purposes of the REMIC Provisions.
"Class D Certificate": Any one of the Certificates with a
"Class D" designation on the face thereof, substantially in the form of Exhibit
A-6 attached hereto, and evidencing a portion of a "regular interest" in REMIC
III for purposes of the REMIC Provisions.
"Class E Certificate": Any one of the Certificates with a
"Class E" designation on the face thereof, substantially in the form of Exhibit
A-7 attached hereto, and evidencing a portion of a "regular interest" in REMIC
III for purposes of the REMIC Provisions.
<PAGE>
-9-
"Class F Certificate": Any one of the Certificates with a
"Class F" designation on the face thereof, substantially in the form of Exhibit
A-8 attached hereto, and evidencing a portion of a "regular interest" in REMIC
III for purposes of the REMIC Provisions.
"Class G Certificate": Any one of the Certificates with a
"Class G" designation on the face thereof, substantially in the form of Exhibit
A-9 attached hereto, and evidencing a portion of a "regular interest" in REMIC
III for purposes of the REMIC Provisions.
"Class H Certificate": Any of the Certificates with a "Class
H" designation on the face thereof, substantially in the form of Exhibit A-10
attached hereto, and evidencing a portion of a "regular interest" in REMIC III
for purposes of the REMIC Provisions.
"Class IO Certificate": Any one of the Certificates with a
"Class IO" designation on the face thereof, substantially in the form of Exhibit
A-4 attached hereto, and evidencing a portion of the aggregate of the
Components, each of which shall constitute a separate "regular interest" in
REMIC III for purposes of the REMIC Provisions.
"Class J Certificate": Any of the Certificates with a "Class
J" designation on the face thereof, substantially in the form of Exhibit A-11
attached hereto, and evidencing a portion of a "regular interest" in REMIC III
for purposes of the REMIC Provisions.
"Class K Certificate": Any of the Certificates with a "Class
K" designation on the face thereof, substantially in the form of Exhibit A-12
attached hereto, and evidencing a portion of a "regular interest" in REMIC III
for purposes of the REMIC Provisions.
"Class L Certificate": Any of the Certificates with a "Class
L" designation on the face thereof, substantially in the form of Exhibit A-13
attached hereto, and evidencing the right to receive Additional Interest, which
portion of the Trust Fund will be treated as a grantor trust (and not as part of
REMIC I, REMIC II or REMIC III) for federal income tax purposes.
"Class Prepayment Percentage": With respect to any
Distribution Date and any Class of the Sequential Pay Certificates, the
percentage obtained by dividing the portion, if any, of the Principal
Distribution Amount distributed to the respective Class of Sequential Pay
Certificates on such Distribution Date, by the total Principal Distribution
Amount distributed to all Classes of Sequential Pay Certificates on such
Distribution Date.
"Class Principal Balance": As of the Closing Date, the Class
Principal Balance of each Class of Sequential Pay Certificates shall equal the
Original Class Principal Balance thereof. On each Distribution Date, the Class
Principal Balance of each such Class of Certificates shall be reduced by the
amount of any distributions of principal made thereon on such Distribution Date
pursuant to Section 4.01 or 9.01, as applicable, and shall be further reduced by
the amount of any Realized Losses and Additional Trust Fund Expenses allocated
thereto on such Distribution Date pursuant to Section 4.04(a). Distributions in
respect of a reimbursement of Realized Losses and Additional Trust Fund Expenses
previously allocated to
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a Class of Sequential Pay Certificates shall not constitute distributions of
principal and shall not result in reduction of the related Class Principal
Balance.
"Class R-I Certificate": Any one of the Certificates with a
"Class R-I" designation on the face thereof, substantially in the form of
Exhibit A-14 attached hereto, and evidencing the sole class of "residual
interests" in REMIC I for purposes of the REMIC Provisions.
"Class R-II Certificate": Any one of the Certificates with a
"Class R-II" designation on the face thereof, substantially in the form of
Exhibit A-15 attached hereto, and evidencing the sole class of "residual
interests" in REMIC II for purposes of the REMIC Provisions.
"Class R-III Certificate": Any one of the Certificates with
a "Class R-III" designation on the face thereof, substantially in the form of
Exhibit A-16 attached hereto, and evidencing the sole class of "residual
interests" in REMIC III for purposes of the REMIC Provisions.
"Closing Date": December 22, 1998.
"Code": The Internal Revenue Code of 1986, as amended.
"Collection Period": With respect to any Distribution Date,
the period commencing on the day immediately following the Determination Date
for the preceding Distribution Date (or, in the case of the initial Distribution
Date, commencing immediately following the Cut-Off Date) and ending on and
including the related Determination Date.
"Comparative Financial Status Report": A report substantially
containing the content described in Exhibit N attached hereto, setting forth,
among other things, the occupancy, revenue, net operating income and Debt
Service Coverage Ratio for each Mortgage Loan or the related Mortgaged Property,
as of the last day of the calendar month immediately preceding the preparation
of such report, for (i) each of the three immediately preceding monthly periods
(to the extent such information is available), (ii) the most current available
year-to-date, (iii) the previous two full fiscal years, and (iv) the "base year"
(representing the original analysis of information used as of the Cut-Off Date).
For the purposes of the Special Servicer's production of any such report that is
required to state information for any period prior to the Cut-Off Date, the
Special Servicer may conclusively rely (without independent verification),
absent manifest error, on information provided to it by the Mortgage Loan
Seller.
"Component": Each of the twelve Components of the Class IO
Certificates, and collectively, the "Components," each evidencing a separate
"regular interest" in REMIC III for purposes of the REMIC Provisions and
corresponding to a Class of Sequential Pay Certificates.
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"Component Notional Amount": With respect to each Component
and any Distribution Date, an amount equal to the Class Principal Balance of
its corresponding Class of Sequential Pay Certificates as of such Distribution
Date.
"Controlling Class": As of any date of determination, the
Class of Sequential Pay Certificates outstanding (a) which bears the latest
alphabetical Class designation and (b) the Class Principal Balance of which is
greater than 20% of the Original Class Principal Balance thereof; provided,
however, that if no such Class of Certificates has a Class Principal Balance
greater than 20% of its Original Class Balance, the Controlling Class shall be
the Class of Sequential Pay Certificates bearing the latest alphabetical Class
designation. With respect to determining the Controlling Class, the Class A-1,
Class A-2 and Class A-3 Certificates shall be deemed a single Class of
Certificates.
"Controlling Class Representative" as defined in Section 6.11.
"Corporate Trust Office": The principal corporate trust office
of the Trustee at which at any particular time its corporate trust business with
respect to this Agreement shall be administered, which office at the date of the
execution of this Agreement is located at 450 West 33rd Street, 8th Floor, New
York, New York 10001, Attn.: Structured Finance Services - CMBS.
"Corrected Mortgage Loan": Any Mortgage Loan that had been
a Specially Serviced Mortgage Loan but has ceased to be such in accordance with
the definition of "Specially Serviced Mortgage Loan".
"Credit Lease": With respect to each Credit Lease Loan, the
lease agreement between the Mortgagor as lessor and the Tenant as lessee of
the related mortgage.
"Credit Lease Loan": Each Mortgage Loan that is identified as
a "Credit Lease Loan" on the Mortgage Loan Schedule.
"CSSA Loan File Report": The monthly report in the "CSSA loan
file" format substantially containing the information called for therein for the
Mortgage Loans, a form of which is attached hereto as Exhibit V.
"CSSA Property File Report": The monthly report in the "CSSA
property file" format containing the information called for therein for each
Mortgaged Property, a form of which is attached hereto as Exhibit L, which for
each Distribution Date shall set forth certain information set forth therein as
of the end of the preceding calendar month.
"Custodian": A Person who is at any time appointed by the
Trustee pursuant to Section 8.11 as a document custodian for the Mortgage Files,
which Person shall not be the Depositor, the Mortgage Loan Seller or an
Affiliate of the Depositor or the Mortgage Loan Seller. If no such custodian has
been appointed or if such custodian has been so appointed, but the Trustee shall
have terminated such appointment, then the Trustee shall be the Custodian.
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"Cut-Off Date": December 1, 1998.
"Cut-Off Date Balance": With respect to any Mortgage Loan, the
outstanding principal balance of such Mortgage Loan as of the Cut-Off Date,
after application of all unscheduled payments of principal received on or before
such date and the principal component of all Scheduled Payments due on or before
such date, whether or not received.
"Debt Service Coverage Ratio": With respect to any Mortgage
Loan, as of any date of determination, the ratio of (x) the annualized Net
Operating Income (before payment of any debt service on such Mortgage Loan)
generated by the related Mortgaged Property during the most recently ended
period of not less than six months and not more than twelve months for which
financial statements, if available (whether or not audited) have been received
by or on behalf of the Mortgage Loan Seller (prior to the Closing Date) or the
Master Servicer or the Special Servicer (following the Closing Date), to (y)
twelve times the amount of the Monthly Payment in effect for such Mortgage Loan
as of such date of determination.
"Defaulted Mortgage Loan": A Mortgage Loan (i) that is
delinquent in an amount equal to at least two Monthly Payments (not including
the Balloon Payment) or is delinquent thirty days or more in respect of its
Balloon Payment, in either case such delinquency to be determined without giving
effect to any grace period permitted by the related Mortgage or Mortgage Note
and without regard to any acceleration of payments under the related Mortgage
and Mortgage Note, or (ii) as to which the Master Servicer or the Special
Servicer has, by written notice to the related Mortgagor, accelerated the
maturity of the indebtedness evidenced by the related Mortgage Note.
"Defeasance Collateral": With respect to any Defeasance Loan,
non-callable United States Treasury obligations (or obligations guaranteed by
the full faith and credit of the United States) required or permitted to be
pledged in lieu of prepayment pursuant to the terms thereof.
"Defeasance Loan": Any Mortgage Loan identified as a
Defeasance Loan on the Mortgage Loan Schedule which permits the related
Mortgagor to pledge Defeasance Collateral to the holder of such Mortgage Loan in
lieu of prepayment.
"Definitive Certificate": As defined in Section 5.03(a).
"Delinquent Loan Status Report": A report substantially
containing the content described in Exhibit P attached hereto setting forth,
among other things, those Mortgage Loans which, as of the close of business on
the Determination Date immediately preceding the preparation of such report,
were delinquent 30-59 days, delinquent 60-89 days, delinquent 90 days or more,
current but are Specially Serviced Mortgage Loans or were in foreclosure but
were not REO Property.
"Depositor": Merrill Lynch Mortgage Investors, Inc. or its
successor in interest.
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"Depository": The Depository Trust Company, or any successor
Depository hereafter named as contemplated by Section 5.03(c). The nominee of
the initial Depository, for purposes of registering those Certificates that are
to be Book-Entry Certificates, is Cede & Co. The Depository shall at all times
be a "clearing corporation" as defined in Section 8-102(3) of the Uniform
Commercial Code of the State of New York and a "clearing agency" registered
pursuant to the provisions of Section 17A of the Exchange Act.
"Depository Participant": A broker, dealer, bank or other
financial institution or other Person for whom from time to time the Depository
effects book-entry transfers and pledges of securities deposited with the
Depository.
"Determination Date": With respect to any Distribution Date,
the tenth day of the month in which such Distribution Date occurs, or if such
tenth day is not a Business Day, the immediately preceding Business Day.
"Directly Operate": With respect to any REO Property, the
furnishing or rendering of services to the tenants thereof, the management or
operation of such REO Property, the holding of such REO Property primarily for
sale or lease, the performance of any construction work thereon or any use of
such REO Property in a trade or business conducted by REMIC I other than through
an Independent Contractor; provided, however, that the Special Servicer or any
Sub-Servicer on behalf of the Trust Fund, shall not be considered to Directly
Operate an REO Property solely because such Special Servicer or Sub-Servicer
establishes rental terms, chooses tenants, enters into or renews leases, deals
with taxes and insurance, or makes decisions as to repairs or capital
expenditures with respect to such REO Property.
"Disqualified Organization": Any of the following: (i) the
United States or a possession thereof, any State or any political subdivision
thereof, or any agency or instrumentality of any of the foregoing (other than an
instrumentality which is a corporation if all of its activities are subject to
tax and, except for FHLMC, a majority of its board of directors is not selected
by any such governmental unit), (ii) a foreign government, international
organization, or any agency or instrumentality of either of the foregoing, (iii)
any organization (except certain farmers' cooperatives described in Section 521
of the Code) which is exempt from the tax imposed by Chapter 1 of the Code
(unless such organization is subject to the tax imposed by Section 511 of the
Code on unrelated business taxable income), (iv) rural electric and telephone
cooperatives described in Section 1381 of the Code or (v) any other Person so
designated by the Trustee or the Certificate Registrar based upon an Opinion of
Counsel that the holding of an Ownership Interest in a Residual Certificate by
such Person may cause the Trust Fund or any Person having an Ownership Interest
in any Class of Certificates, other than such Person, to incur a liability for
any federal tax imposed under the Code that would not otherwise be imposed but
for the Transfer of a Residual Certificate to such Person. The terms "United
States", "State" and "international organization" shall have the meanings set
forth in Section 7701 of the Code or successor provisions.
<PAGE>
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"Distributable Certificate Interest": With respect to any
Class of Regular Certificates for any Distribution Date, the Accrued Certificate
Interest in respect of such Class of Certificates for such Distribution Date,
reduced (to not less than zero) by the product of (i) any Net Aggregate
Prepayment Interest Shortfall for such Distribution Date, multiplied by (ii) a
fraction, expressed as a decimal, the numerator of which is the Accrued
Certificate Interest in respect of such Class of Certificates for such
Distribution Date, and the denominator of which is the aggregate Accrued
Certificate Interest in respect of all the Classes of Regular Certificates for
such Distribution Date.
"Distribution Account": The segregated account or accounts
created and maintained by the Paying Agent on behalf of the Trustee pursuant to
Section 3.04(b) which shall be entitled "Chase Manhattan Bank, as Trustee, in
trust for the registered holders of Merrill Lynch Mortgage Investors, Inc.,
Mortgage Pass-Through Certificates, Series 1998-C3."
"Distribution Date": The later of (a) the 15th day of any
month, or if such 15th day is not a Business Day, the Business Day immediately
following and (b) the fourth Business Day following the related Determination
Date, commencing on January 15, 1999.
"Document Defect": As defined in Section 2.03(a).
"Due Date": With respect to (i) any Mortgage Loan on or prior
to its Stated Maturity Date, the day of the month set forth in the related
Mortgage Note on which each Monthly Payment on such Mortgage Loan is scheduled
to be first due; (ii) any Mortgage Loan after its Stated Maturity Date, the day
of the month set forth in the related Mortgage Note on which each Monthly
Payment on such Mortgage Loan had been scheduled to be first due; and (iii) any
REO Loan, the day of the month set forth in the related Mortgage Note on which
each Monthly Payment on the related Mortgage Loan had been scheduled to be first
due.
"Eligible Account": Any of (i) an account maintained with a
federal or state chartered depository institution or trust company (including
the Trustee), and (a) with respect to deposits held for 30 days or more in such
account, the long-term deposit or unsecured debt obligations of which are rated
"AA" by Standard & Poor's, and "Aa2" by Moody's (if then rated by Moody's) or,
in each such case, such lower rating as will not result in qualification,
downgrading or withdrawal of the ratings then assigned to the Certificates, as
evidenced in writing by the Rating Agencies, at any time such funds are on
deposit therein, or (b) with respect to deposits held for less than 30 days in
such account, the short-term deposits of which are rated P-1 by Moody's (if then
rated by Moody's) and A-1 by Standard & Poor's or, in each such case, such lower
rating as will not result in qualification, downgrading or withdrawal of the
ratings then assigned to the Certificates, as evidenced in writing by the Rating
Agencies at any time such funds are on deposit therein; provided, however, that
notwithstanding the foregoing, "Eligible Account" shall include deposits held at
Bankers Trust New York Corp. for more than 30 days so long as its long term
unsecured debt obligations are rated at least A- and its short term unsecured
obligations are rated at least A-1 by Standard and Poor's, A1 by Moody's and AA-
by Fitch or NationsBank, N.A., or (ii) a segregated trust
<PAGE>
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account or accounts maintained with a federal or state chartered depository
institution or trust company acting in its fiduciary capacity, which, in the
case of a state chartered depository institution or trust company, is subject to
regulations regarding fiduciary funds on deposit therein substantially similar
to 12 CFR ss. 9.10(b), having in either case a combined capital and surplus of
at least $50,000,000 and subject to supervision or examination by federal or
state authority, or the use of such account would not, in and of itself, cause a
qualification, downgrading or withdrawal of the then current rating assigned to
any Class of Certificates, as confirmed in writing by each Rating Agency.
"Environmental Assessment": A "Phase I assessment" as
described in, and meeting the criteria of (a) (i) Chapter 5 of the FNMA
Multifamily Guide or any successor provisions covering the same subject matter,
in the case of Specially Serviced Mortgage Loans as to which the related
Mortgaged Property is a multifamily property, or (ii) the Servicing Standard, in
the case of any other Specially Serviced Mortgage Loans, and (b) the American
Society for Testing and Materials.
"ERISA": The Employee Retirement Income Security Act of 1974,
as amended.
"Escrow Payment": Any payment received by the Master Servicer
or the Special Servicer for the account of any Mortgagor for application toward
the payment of real estate taxes, assessments, insurance premiums, ground rents
(if applicable) and other items for which an escrow or reserve has been created
in respect of the related Mortgaged Property (other than Reserve Funds).
"Event of Default": One or more of the events described in
Section 7.01(a).
"Exchange Act": The Securities Exchange Act of 1934.
"FDIC": Federal Deposit Insurance Corporation or any
successor.
"FHLMC": Federal Home Loan Mortgage Corporation or any
successor.
"Final Recovery Determination": A determination by the Special
Servicer with respect to any Defaulted Mortgage Loan or REO Property (other than
a Mortgage Loan or REO Property, as the case may be, that was purchased by the
Mortgage Loan Seller pursuant to the Mortgage Loan Purchase Agreement, by the
Majority Subordinate Certificateholder pursuant to Section 3.18(b), by the
Master Servicer or the Special Servicer pursuant to Section 3.18(c) or by the
Depositor, the Majority Subordinate Certificateholder the Special Servicer or
the Master Servicer pursuant to Section 9.01) that there has been a recovery of
all Insurance Proceeds, Liquidation Proceeds and other payments or recoveries
that the Special Servicer has determined, in accordance with the Servicing
Standard, will be ultimately recoverable.
"FNMA": Federal National Mortgage Association or any
successor.
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"Guaranty": With respect to a Credit Lease Loan, a guarantee
agreement executed by an affiliate of the related Tenant that guarantees the
Tenant's obligations under the related Credit Lease.
"Hazardous Materials": Any dangerous, toxic or hazardous
pollutants, chemicals, wastes, or substances, including, without limitation,
those so identified pursuant to CERCLA or any other federal, state or local
environmental related laws and regulations now existing or hereafter enacted,
and specifically including, without limitation, asbestos and asbestos-containing
materials, polychlorinated biphenyls ("PCBs"), radon gas, petroleum and
petroleum products and urea formaldehyde.
"Historical Loan Modification Report": A report substantially
containing the content described in Exhibit Q attached hereto, setting forth,
among other things, those Mortgage Loans which, as of the close of business on
the Determination Date immediately preceding the preparation of such report,
have been modified pursuant to this Agreement (i) during the related Collection
Period and (ii) since the Cut-Off Date, showing the original and the revised
terms thereof.
"Historical Loss Estimate Report": A report substantially
containing the content described in Exhibit R attached hereto, setting forth,
among other things, as of the close of business on the Determination Date
immediately preceding the preparation of such report, (i) the aggregate amount
of Liquidation Proceeds and expenses relating to each Final Recovery
Determination made, both during the related Collection Period and historically,
and (ii) the amount of Realized Losses occurring during the related Collection
Period, set forth on a Mortgage Loan-by-Mortgage Loan basis.
"Holder": A Certificateholder.
"HUD-Approved Servicer": A servicer approved by the Secretary
of Housing and Urban Development pursuant to Section 207 of the National Housing
Act.
"Impound Reserve": As defined in Section 3.16(c) hereof.
"Independent": When used with respect to any specified Person,
any such Person who (i) is in fact independent of the Depositor, the Mortgage
Loan Seller, the Master Servicer, the Special Servicer and any and all
Affiliates thereof, (ii) does not have any direct financial interest in or any
material indirect financial interest in any of the Depositor, the Mortgage Loan
Seller, the Master Servicer, the Special Servicer or any Affiliate thereof, and
(iii) is not connected with the Depositor, the Mortgage Loan Seller, the Master
Servicer, the Special Servicer or any Affiliate thereof as an officer, employee,
promoter, underwriter, trustee, partner, director or Person performing similar
functions; provided, however, that a Person shall not fail to be Independent of
the Depositor, the Mortgage Loan Seller, the Master Servicer, the Special
Servicer or any Affiliate thereof merely because such Person is the beneficial
owner of 1% or less of any class of securities issued by the Depositor, the
Master Servicer, the Special Servicer or any Affiliate thereof, as the case may
be.
<PAGE>
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"Independent Appraiser": An Independent professional real
estate appraiser who is a member in good standing of the Appraisal Institute,
who is, if the State in which the subject Mortgaged Property is located
certifies or licenses appraisers, certified or licensed in such State, and who
has a minimum of five years experience in the subject property type and market.
"Independent Contractor": Any Person that would be an
"independent contractor" with respect to REMIC I within the meaning of Section
856(d)(3) of the Code if REMIC I were a real estate investment trust (except
that the ownership test set forth in that section shall be considered to be met
by any Person that owns, directly or indirectly, 35 percent or more of any Class
of Certificates, or such other interest in any Class of Certificates as is set
forth in an Opinion of Counsel, which shall be at no expense to the Master
Servicer, the Special Servicer, the Trustee or the Trust Fund, delivered to the
Trustee), so long as REMIC I does not receive or derive any income from such
Person and provided that the relationship between such Person and REMIC I is at
arm's length, all within the meaning of Treasury Regulations Section
1.856-4(b)(5), or any other Person upon receipt by the Trustee of an Opinion of
Counsel, which shall be at no expense to the Master Servicer, the Special
Servicer, the Trustee or the Trust Fund, to the effect that the taking of any
action in respect of any REO Property by such Person, subject to any conditions
therein specified, that is otherwise herein contemplated to be taken by an
Independent Contractor will not cause such REO Property to cease to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code, or
cause any income realized in respect of such REO Property to fail to qualify as
Rents from Real Property.
"Insurance Policy": With respect to any Mortgage Loan, any
hazard insurance policy, flood insurance policy, title policy, Lease Enhancement
Policy or other insurance policy that is maintained from time to time in respect
of such Mortgage Loan or the related Mortgaged Property.
"Insurance Proceeds": Proceeds paid under any Insurance
Policy, to the extent such proceeds are not applied to the restoration of the
related Mortgaged Property, released to the Mortgagor, or any tenants or ground
lessors, as the case may be, pursuant to the terms of the related Mortgage or
lease, in accordance with the Servicing Standard.
"Interested Person": The Depositor, the Mortgage Loan Seller,
the Master Servicer, the Special Servicer, the Trustee, any Holder of a
Certificate, or any Affiliate of any such Person.
"Investment Account": As defined in Section 3.06(a).
"Issue Price": With respect to each Class of Certificates, the
"issue price" as defined in the applicable provisions of the Code and Treasury
Regulations promulgated thereunder.
"Late Collections": With respect to any Mortgage Loan, all
amounts received thereon during any Collection Period, other than default
interest or late payment fees, whether as
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payments, Insurance Proceeds, Liquidation Proceeds or otherwise, which represent
late collections of the principal and/or interest portions of a Scheduled
Payment (other than a Balloon Payment) or an Assumed Scheduled Payment in
respect of such Mortgage Loan due or deemed due on a Due Date in a previous
Collection Period, or on a Due Date coinciding with or preceding the Cut-Off
Date, and not previously recovered. With respect to any REO Loan, all amounts
received in connection with the related REO Property during any Collection
Period, whether as Insurance Proceeds, Liquidation Proceeds, REO Revenues or
otherwise, which represent late collections of the principal and/or interest
portions of an Assumed Scheduled Payment in respect of the predecessor Mortgage
Loan or of an Assumed Scheduled Payment in respect of such REO Loan due or
deemed due on a Due Date in a previous Collection Period and not previously
recovered.
"Lease Enhancement Policy": With respect to a Credit Lease
Loan, any non-cancelable residual value insurance policy that insures payment of
the Balloon Payment or credit lease enhancement insurance policy that insures
against certain losses arising out of casualty and/or condemnation of the
related Mortgaged Property.
"Lease Enhancement Policy Issuer": With respect to any Lease
Enhancement Policy, RVI America Insurance Co. or Chubb Custom Insurance Company
together with any assignee, successor or subsequent insurer thereunder.
"Lease Enhancement Policy Termination Event": With respect to
any Lease Enhancement Policy, any abatement, rescission, cancellation,
termination, contest, legal process, arbitration or disavowal of liability.
"Liquidation Event": With respect to any Mortgage Loan, any of
the following events: (i) such Mortgage Loan is paid in full; (ii) a Final
Recovery Determination is made with respect to such Mortgage Loan; (iii) such
Mortgage Loan is repurchased by the Mortgage Loan Seller pursuant to the
Mortgage Loan Purchase Agreement; or (iv) such Mortgage Loan is purchased by the
Majority Subordinate Certificateholder pursuant to Section 3.18(b), by the
Master Servicer or the Special Servicer pursuant to Section 3.18(c) or by the
Depositor, the Majority Subordinate Certificateholder, the Special Servicer or
the Master Servicer pursuant to Section 9.01. With respect to any REO Property
(and the related REO Loan), any of the following events: (i) a Final Recovery
Determination is made with respect to such REO Property; or (ii) such REO
Property is purchased by the Depositor, the Majority Subordinate
Certificateholder, the Special Servicer or the Master Servicer pursuant to
Section 9.01.
"Liquidation Proceeds": All cash amounts (other than Insurance
Proceeds and REO Revenues) received by the Master Servicer or the Special
Servicer in connection with: (i) the taking of all or a part of a Mortgaged
Property by exercise of the power of eminent domain or condemnation, subject,
however, to the rights of any tenants and ground lessors, as the case may be,
and the terms of the related Mortgage; (ii) the liquidation of a Mortgaged
Property or other collateral constituting security for a defaulted Mortgage
Loan, through trustee's sale, foreclosure sale, REO Disposition or otherwise,
exclusive of any portion thereof required to be released to the related
Mortgagor in accordance with applicable law and the terms and conditions of the
related
<PAGE>
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Mortgage Note and Mortgage; (iii) the realization upon any deficiency judgment
obtained against a Mortgagor; (iv) the purchase of a Defaulted Mortgage Loan by
the Majority Subordinate Certificateholder pursuant to Section 3.18(b) or by the
Master Servicer or the Special Servicer pursuant to Section 3.18(c) or any other
sale thereof pursuant to Section 3.18(d); (v) the repurchase of a Mortgage Loan
by the Mortgage Loan Seller pursuant to the Mortgage Loan Purchase Agreement; or
(vi) the purchase of a Mortgage Loan or REO Property by the Depositor, the
Majority Subordinate Certificateholders, the Special Servicer or the Master
Servicer pursuant to Section 9.01.
"Loan-to-Value Ratio": With respect to any Mortgage Loan, as
of any date of determination, a fraction, expressed as a percentage, the
numerator of which is the then current principal amount of such Mortgage Loan,
and the denominator of which is the Appraised Value of the related Mortgaged
Property.
"Majority Subordinate Certificateholder": As of any date of
determination, any single Holder of Certificates entitled to greater than 50% of
the Voting Rights allocated to the Controlling Class; provided, however, that if
there is no Holder of Certificates entitled to greater than 50% of the Voting
Rights of such Class, the single Holder of Certificates with the largest
percentage of Voting Rights allocated to such Class. With respect to determining
the Majority Subordinate Certificateholder, the Class A-1, Class A-2 and Class
A-3 Certificates shall be deemed to be a single Class of Certificates, with such
Voting Rights allocated among the Holders of Certificates of such Classes in
proportion to the respective Certificate Principal Balances of such Certificates
as of such date of determination.
"Master Servicer": GE Capital Loan Services, Inc., its
successor in interest, or any successor master servicer appointed as herein
provided.
"Master Servicing Fee": With respect to each Mortgage Loan and
REO Loan, the fee payable to the Master Servicer pursuant to Section 3.11(a).
"Master Servicing Fee Rate": With respect to each Mortgage
Loan the per annum rate set forth for such Mortgage Loan under the column
"Master Servicing Fee" on the Mortgage Loan Schedule.
"Merrill Lynch": Merrill Lynch, Pierce, Fenner & Smith
Incorporated or its successor in interest.
"Monthly Payment": With respect to any Mortgage Loan as of any
Due Date, the scheduled monthly payment of principal and interest or interest
only on such Mortgage Loan, including any Balloon Payment, that is actually
payable by the related Mortgagor from time to time under the terms of the
related Mortgage Note (as such terms may be changed or modified in connection
with a bankruptcy or similar proceeding involving the related Mortgagor or by
reason of a modification, waiver or amendment granted or agreed to by the
Special Servicer pursuant to Section 3.20).
<PAGE>
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"Moody's": Moody's Investors Service, Inc. or its successor in
interest. If neither such rating agency nor any successor remains in existence,
"Moody's" shall be deemed to refer to such other nationally recognized
statistical rating agency or other comparable Person designated by the
Depositor, notice of which designation shall be given in writing to the Trustee,
the Master Servicer and the Special Servicer, and specific ratings of Moody's
Investors Service, Inc. herein referenced shall be deemed to refer to the
equivalent ratings of the party so designated.
"Mortgage": With respect to any Mortgage Loan, the mortgage,
deed of trust, deed to secure debt or similar instrument that secures the
Mortgage Note and creates a lien on the related Mortgaged Property.
"Mortgage File": With respect to any Mortgage Loan,
collectively the following documents:
(i) the original executed Mortgage Note endorsed
(without recourse, representation or warranty,
express or implied) to the order of The Chase
Manhattan Bank, as trustee for the registered
holders of Merrill Lynch Mortgage Investors, Inc.,
Mortgage Pass-Through Certificates, Series
1998-C3;
(ii) an original or copy of the Mortgage and of any
intervening assignments thereof, in each case with
evidence of recording indicated thereon;
(iii) an original or copy of any related Assignment of
Leases (if such item is a document separate from
the Mortgage) and of any intervening assignment
thereof, in each case with evidence of recording
indicated thereon;
(iv) (a) an original executed assignment of the
Mortgage in recordable form, (b) any related
Assignment of Leases (if such item is a document
separate from the Mortgage) in recordable form and
(c) any other recorded document relating to the
Mortgage Loan otherwise included in the Mortgage
File, in favor of The Chase Manhattan Bank as
trustee for the registered holders of Merrill
Lynch Mortgage Investors, Inc., Mortgage
Pass-Through Certificates, Series 1998-C3, in
recordable form;
(v) an original assignment of all unrecorded documents
relating to the Mortgage Loan, in favor of The
Chase Manhattan Bank, as trustee for the
registered holders of Merrill Lynch Mortgage
Investors, Inc., Mortgage Pass-Through
Certificates, Series 1998-C3;
(vi) originals or copies of any written modification
agreements in those instances where the terms or
provision of the Mortgage or Mortgage Note have
been modified;
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(vii) the original or a copy of the policy or
certificate of lender's title insurance issued on
the date of the origination of such Mortgage Loan,
or, if such policy has not been issued, an
irrevocable, binding commitment to issue such
title insurance policy; and
(viii) any filed copies of any prior UCC Financing
Statements in favor of the originator of such
Mortgage Loan or in favor of any assignee prior to
the Trustee (but only to the extent the Mortgage
Loan Seller had possession of such UCC Financing
Statements prior to the Closing Date) and, if
there is an effective UCC Financing Statement in
favor of the Mortgage Loan Seller on record with
the applicable public office for UCC Financing
Statements, an original UCC-2 or UCC-3 assignment,
as appropriate, in favor of The Chase Manhattan
Bank, as trustee for the registered holders of
Merrill Lynch Mortgage Investors, Inc., Mortgage
Pass-Through Certificates, Series 1998-C3 in
recordable form.
provided that whenever the term "Mortgage File" is used to refer to documents
actually received by the Trustee or by a Custodian on its behalf, such term
shall not be deemed to include such documents required to be included therein
unless they are actually so received, and with respect to any receipt or
certification by the Trustee or the Custodian for documents described in clause
(vi) of this definition, shall be deemed to include only such documents to the
extent a Responsible Officer of the Trustee or Custodian has actual knowledge of
their existence
"Mortgage Loan": Each of the mortgage loans listed on the
Mortgage Loan Schedule and any Qualified Substitute Mortgage Loan from time to
time held in the Trust Fund. As used herein, the term "Mortgage Loan" includes
the related Mortgage Note, Mortgage and other security documents contained in
the related Mortgage File.
"Mortgage Loan Purchase Agreement": The Mortgage Loan Purchase
Agreement, dated as of December 1, 1998, between the Depositor and the Mortgage
Loan Seller and relating to the transfer of the related Mortgage Loans to the
Depositor.
"Mortgage Loan Schedule": The list of Mortgage Loans
transferred on the Closing Date to the Trustee as part of REMIC I, attached
hereto as Exhibit B and in a computer readable format. Such list shall set forth
the following information with respect to each Mortgage Loan:
(i) the Mortgage Loan number;
(ii) the street address (including city, state and zip
code) of the related Mortgaged Property;
(iii) the Cut-Off Date Balance;
(iv) the amount of the Monthly Payment due on the first
Due Date following the Closing Date;
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(v) the Mortgage Rate;
(vi) the (A) remaining term to stated maturity and (B)
the Stated Maturity Date;
(vii) in the case of a Balloon Mortgage Loan, the
remaining amortization term;
(viii) whether the Mortgage Loan is secured by a Mortgage
on a leasehold interest;
(ix) whether the Mortgage Loan is an ARD Mortgage Loan
and if so, the Anticipated Repayment Date and the
Revised Rate;
(x) the Master Servicing Fee Rate;
(xi) the Mortgage Loan Seller;
(xii) the related Sub-Servicer;
(xiii) whether such Mortgage Loan is a Defeasance Loan;
(xiv) whether the interest accrual method for such
Mortgage Loan is actual/360 or 30/360;
(xv) whether such Mortgage Loan is cross-defaulted or
cross-collateralized with any other Mortgage Loan;
(xvi) whether such Mortgage Loan is a Credit Lease Loan
and if so, the related Tenant or guarantor of such
Credit Lease Loan; and
(xvii) whether such Mortgage Loan is insured by a Lease
Enhancement Policy and if so whether such policy
is a residual value insurance policy.
"Mortgage Loan Seller": Merrill Lynch Mortgage Capital Inc. or
its successor in interest.
"Mortgage Note": The original executed note evidencing the
indebtedness of a Mortgagor under a Mortgage Loan, together with any rider,
addendum or amendment thereto, or any renewal, substitution or replacement of
such note.
"Mortgage Pool": Collectively, all of the Mortgage Loans and
any successor REO Loans.
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"Mortgage Rate": With respect to (i) any Mortgage Loan on or
prior to its Stated Maturity Date, the fixed annualized rate, not including any
Additional Interest Rate, at which interest is scheduled (in the absence of a
default) to accrue on such Mortgage Loan from time to time in accordance with
the related Mortgage Note and applicable law; (ii) any Mortgage Loan after its
Stated Maturity Date, the annualized rate described in clause (i) above
determined without regard to the passage of such Maturity Date but giving effect
to any modification thereof as contemplated by Section 3.20; and (iii) any REO
Loan, the annualized rate described in clause (i) or (ii), as applicable, above
determined as if the predecessor Mortgage Loan had remained outstanding.
"Mortgaged Property": The property subject to the lien of a
Mortgage.
"Mortgagor": The obligor or obligors on a Mortgage Note,
including without limitation, any Person that has acquired the related Mortgaged
Property and assumed the obligations of the original obligor under the Mortgage
Note.
"Net Aggregate Prepayment Interest Shortfall": With respect to
any Distribution Date, the amount, if any, by which (a) the aggregate of all
Prepayment Interest Shortfalls incurred in connection with the receipt of
Principal Prepayments on the Mortgage Loans during the related Collection
Period, exceeds (b) the aggregate amount deposited by the Master Servicer in the
Certificate Account for such Distribution Date pursuant to Section 3.19 in
connection with such Prepayment Interest Shortfalls.
"Net Investment Earnings": With respect to the Certificate
Account or the REO Account (if any) for any Collection Period, the amount, if
any, by which the aggregate of all interest and other income realized during
such Collection Period on funds held in such account, exceeds the aggregate of
all losses of principal, if any, incurred during such Collection Period in
connection with the investment of such funds in accordance with Section 3.06.
"Net Investment Loss": With respect to the Certificate Account
or the REO Account (if any) for any Collection Period, the amount by which the
aggregate of all losses of principal, if any, incurred during such Collection
Period in connection with the investment of funds held in such account in
accordance with Section 3.06, exceeds the aggregate of all interest and other
income realized during such Collection Period on such funds.
"Net Mortgage Rate": With respect to any Mortgage Loan or any
REO Loan, as of any date of determination, a rate per annum equal to the related
Mortgage Rate minus the sum of the Trustee Fee Rate and the applicable Master
Servicing Fee Rate; provided, that if the related Mortgage Rate has been
modified in connection with a bankruptcy or similar proceeding involving the
related Mortgagor or a modification, waiver or amendment granted or agreed to by
the Special Servicer pursuant to Section 3.20, the Net Mortgage Rate for such
Mortgage Loan or REO Loan shall be calculated without regard to such event; and
provided further, that if interest in respect of such Mortgage Loan or REO Loan
is not accrued on the basis of a 360-day year consisting of twelve 30-day
months, then, solely for purposes of determining the related REMIC I Remittance
Rate and thereby calculating the Weighted Average Effective REMIC I Remittance
Rate, the
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REMIC II Remittance Rate and the Pass-Through Rate for each of the Components
for any Distribution Date, such Net Mortgage Rate will, to the extent
appropriate, be adjusted from accrual period to accrual period to compensate for
such difference.
"Net Operating Income": As defined in and determined in
accordance with the provisions of Exhibit E-1 attached hereto.
"New Lease": Any lease of REO Property entered into on behalf
of REMIC I, including any lease renewed, modified or extended on behalf of REMIC
I if REMIC I has the right to renegotiate the terms of such lease.
"NOI Adjustment Worksheet": A report prepared by the Special
Servicer, substantially containing the content described in Exhibit T attached
hereto, presenting the computations made in accordance with the methodology
described in Exhibit S to "normalize" the full year net operating income and
debt service coverage numbers used in the other reports required by this
Agreement, delivered to the Master Servicer with each annual operating statement
for a Mortgaged Property pursuant to Section 3.12(b).
"Nonrecoverable Advance": Any Nonrecoverable P&I Advance or
Nonrecoverable Servicing Advance.
"Nonrecoverable P&I Advance": Any P&I Advance previously made
or proposed to be made in respect of any Mortgage Loan or REO Loan by the Master
Servicer or Trustee, as the case may be, that, as determined by the Master
Servicer in accordance with the Servicing Standard with respect to such P&I
Advance will not be ultimately recoverable from late payments, Insurance
Proceeds or Liquidation Proceeds, or any other recovery on or in respect of such
Mortgage Loan or REO Loan.
"Nonrecoverable Servicing Advance": Any Servicing Advance
previously made or proposed to be made in respect of a Mortgage Loan or REO Loan
by the Master Servicer, the Special Servicer or Trustee, as the case may be,
that, as determined by the Master Servicer, the Special Servicer or the Trustee
in accordance with the Servicing Standard, will not be ultimately recoverable
from late payments, Insurance Proceeds, Liquidation Proceeds, or any other
recovery on or in respect of such Mortgage Loan or REO Property.
"Non-Registered Certificate": Unless and until registered
under the Securities Act, any Class F, Class G, Class H, Class J, Class K, Class
L, Class R-I, Class R-II or Class R-III Certificate.
"Non-United States Person": Any Person other than a United
States Person.
"Officers' Certificate": A certificate signed by a Servicing
Officer of the Master Servicer or the Special Servicer, as the case may be, or
by a Responsible Officer of the Trustee.
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"Operating Statement Analysis": With respect to each Mortgage
Loan and REO Property, a report substantially containing the content described
in Exhibit T attached hereto.
"Opinion of Counsel": A written opinion of counsel (which
counsel shall be Independent of the Depositor, the Master Servicer and the
Special Servicer) acceptable to and delivered to the Trustee or the Master
Servicer, as the case may be.
"Original Component Notional Amount": With respect to each
Component, the initial Component Notional Amount thereof as of the Closing Date
equal to the Original Class Principal Balance of the corresponding Class of
Sequential Pay Certificates as of the Closing Date.
"Original Class Principal Balance": With respect to any Class
of Sequential Pay Certificates, the initial Class Principal Balance thereof as
of the Closing Date, in each case as specified in the Preliminary Statement.
"OTS": The Office of Thrift Supervision or any successor
thereto.
"Ownership Interest": As to any Certificate, any ownership or
security interest in such Certificate as the Holder thereof and any other
interest therein, whether direct or indirect, legal or beneficial, as owner or
as pledgee.
"Pass-Through Rate": For any Distribution Date, with respect
to:
(i) the Class A-1, Class A-2 and Class A-3
Certificates, 5.65%, 5.87% and 5.88%,
respectively;
(ii) the Class B, C, D and E Certificates, the REMIC II
Remittance Rate for such Distribution Date minus
0.92%, 0.54%, 0.00% and 0.00%, respectively (but
not less than zero);
(iii) each of the Class F, G, H, J and K Certificates,
6.00%;
(iv) Components IO-A1, IO A-2 and IO A-3, the REMIC II
Remittance Rate for such Distribution Date minus
5.65%, 5.87% and 5.88%, respectively (but not less
than zero);
(v) Components IO-B, IO-C, IO-D and IO-E, 0.92%,
0.54%, 0.00% and 0.00%, respectively; and
(vi) Each of components IO-F, IO-G, IO-H, IO-J and
IO-K, the REMIC II Remittance Rate for such
Distribution Date minus 6.00% (but not less than
zero).
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"Paying Agent": The paying agent appointed pursuant to Section
8.13. If no such paying agent has been appointed or if such paying agent has
been so appointed, but the Trustee shall have terminated such appointment, then
the Trustee shall be the Paying Agent.
"Percentage Interest": With respect to any Sequential Pay
Certificate, a percentage, the numerator of which is the initial Certificate
Principal Balance of such Certificate as of the Closing Date, as specified on
the face thereof, and the denominator of which is the Original Class Principal
Balance of the relevant Class. With respect to any Class IO Certificate, a
percentage, the numerator of which is the initial Certificate Notional Amount of
such Certificate as of the Closing Date, as specified on the face thereof, and
the denominator of which is the aggregate Original Class Principal Balances of
the Sequential Pay Certificates. With respect to a Class L Certificate or a
Residual Certificate, the percentage interest in distributions to be made with
respect to the relevant Class, as stated on the face of such Certificate.
"Percentage Premium": Any premium, penalty or fee (other than
a Yield Maintenance Charge) paid or payable, as the context requires, by a
Mortgagor in connection with a Principal Prepayment.
"Permitted Investments": Any one or more of the following
obligations or securities having maturities of 365 days or less (including
obligations or securities of the Trustee if otherwise qualifying hereunder):
(i) direct obligations of, or obligations fully
guaranteed as to timely payment of principal and
interest by, the United States or any agency or
instrumentality thereof, provided such obligations
are backed by the full faith and credit of the
United States. Such obligations must be limited to
those instruments that have a predetermined fixed
dollar amount of principal due at maturity that
cannot vary or change. If rated, such an
obligation should not have an "r" highlighter
affixed to its rating by Standard & Poor's.
Interest may either be fixed or variable. Interest
should be tied to a single interest rate index
plus a single fixed spread (if any), and move
proportionately with that index. Such investments
should not be relied upon for a fixed yield;
(ii) repurchase obligations with respect to any
security described in clause (i) above (having
original maturities of not more than 365 days),
provided that the short-term deposit or debt
obligations, of the party agreeing to repurchase
such obligations are rated in the highest
short-term rating category of each of Moody's and
Standard & Poor's or such lower rating as will not
result in qualification, downgrading or withdrawal
of the ratings then assigned to the Certificates,
as evidenced in writing by the Rating Agencies. In
addition, any such item should not have an "r"
highlighter affixed to its rating by Standard &
Poor's, and its terms should have a predetermined
fixed dollar amount of principal due at maturity
that cannot vary or change. Interest may either be
fixed or
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variable, and should be tied to a single interest
rate index plus a single fixed spread (if any),
and move proportionately with that index. Such
investments should not be relied upon for a fixed
yield;
(iii) unsecured certificates of deposit, time deposits,
demand deposits and bankers' acceptances of any
bank or trust company organized under the laws of
the United States or any state thereof (having
original maturities of not more than 365 days),
the short-term obligations of which are rated in
the highest rating category of each of Moody's and
Standard & Poor's or such lower rating as will not
result in qualification, downgrading or withdrawal
of the ratings then assigned to the Certificates,
as evidenced in writing by the Rating Agencies. In
addition, any such item should not have an "r"
highlighter affixed to its rating by Standard &
Poor's, and its terms should have a predetermined
fixed dollar amount of principal due at maturity
that cannot vary or change. Interest may either be
fixed or variable, and should be tied to a single
interest rate index plus a single fixed spread (if
any), and move proportionately with that index.
Such investments should not be relied upon for a
fixed yield;
(iv) commercial paper (having original maturities of
not more than 365 days) of any corporation
incorporated under the laws of the United States
or any state thereof (or if not so incorporated,
the commercial paper is United States Dollar
denominated and amounts payable thereunder are not
subject to any withholding imposed by any
non-United States jurisdiction) which is rated in
the highest short-term rating category of each of
Moody's and Standard & Poor's or such lower rating
as will not result in qualification, downgrading
or withdrawal of the ratings then assigned to the
Certificates, as evidenced in writing by the
Rating Agencies. The commercial paper should not
have an "r" highlighter affixed to its rating by
Standard & Poor's and by its terms should have a
predetermined fixed dollar amount of principal due
at maturity that cannot vary or change. Interest
may either be fixed or variable. Interest should
be tied to a single interest rate index plus a
single fixed spread (if any), and move
proportionately with that index. Such investments
should not be relied upon for a fixed yield;
(v) units of money market funds rated in the highest
rating category of Moody's and AAAm or AAAm-G by
Standard & Poor's (or such lower rating as will not
result in qualification, downgrading or withdrawal
of the ratings then assigned to the Certificates,
as evidenced in writing by the Rating Agencies) and
which seek to maintain a constant net asset value;
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(vi) any other obligation or security acceptable to each
Rating Agency, evidence of which acceptability
shall be provided in writing by each Rating Agency
to the Master Servicer, the Special Servicer and
the Trustee that such investment would not result
in a downgrading, qualification, or withdrawal of
the ratings then assigned to the Certificates;
provided that (1) no investment described hereunder shall evidence either the
right to receive (x) only interest with respect to such investment or (y) a
yield to maturity greater than 120% of the yield to maturity at par of the
underlying obligations; and (2) that no investment described hereunder may be
purchased at a price greater than par if such investment may be prepaid or
called at a price less than its purchase price prior to stated maturity.
"Permitted Transferee": Any Transferee of a Residual
Certificate other than a Disqualified Organization or Non-United States Person.
"Person": Any individual, corporation, partnership, joint
venture, association, joint-stock company, limited liability company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"P&I Advance": As to any Mortgage Loan or REO Loan, any
advance made by the Master Servicer or the Trustee pursuant to Section 4.03(a)
and (b).
"P&I Advance Date": The Business Day immediately preceding
each Distribution Date.
"Plan": As defined in Section 5.02(c).
"Plurality Residual Certificateholder": As to any taxable year
of REMIC I, REMIC II or REMIC III, the Holder of Certificates with the largest
Percentage Interest of the related Class of Residual Certificates.
"Prepayment Assumption": For purposes of determining the
accrual of original issue discount, market discount and premium, if any, on the
Certificates for federal income tax purposes, 0% CPR (within the meaning of the
Prospectus), except each ARD Mortgage Loan is assumed to be paid in full on its
Anticipated Repayment Date.
"Prepayment Interest Excess": With respect to any Mortgage
Loan that was subject to a Principal Prepayment in full or in part during any
Collection Period, which Principal Prepayment was applied to such Mortgage Loan
following such Mortgage Loan's Due Date in such Collection Period, the amount of
interest (net of the related Trustee Fee and Master Servicing Fee) accrued on
the amount of such Principal Prepayment during the period from and after such
Due Date, to the extent collected (exclusive of any Prepayment Premium
collected).
"Prepayment Interest Shortfall": With respect to any Mortgage
Loan (other than a Specially Serviced Mortgage Loan) that was subject to a
Principal Prepayment in full or in part
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during any Collection Period, which Principal Prepayment was applied to such
Mortgage Loan prior to such Mortgage Loan's Due Date in such Collection Period,
the amount of interest (excluding Additional Interest), to the extent not
collected from the related Mortgagor (without regard to any Prepayment Premium
that may have been collected), that would have accrued at a rate per annum equal
to the sum of (x) the Net Mortgage Rate for such Mortgage Loan and (y) the
Trustee Fee Rate on the amount of such Principal Prepayment during the period
commencing on the date as of which such Principal Prepayment was applied to such
Mortgage Loan and ending on the day immediately preceding such Due Date,
inclusive.
"Prepayment Premium": Any Yield Maintenance Charge or
Percentage Premium paid or payable, as the context requires, by a Mortgagor in
connection with a Principal Prepayment.
"Prime Rate": The "prime rate" published in the "Money Rates"
section of The Wall Street Journal, as such "prime rate" may change from time to
time. If The Wall Street Journal ceases to publish the "prime rate," then the
Master Servicer shall select an equivalent publication that publishes such
"prime rate"; and if such "prime rate" is no longer generally published or is
limited, regulated or administered by a governmental or quasi-governmental body,
then the Master Servicer shall select a comparable interest rate index. In
either case, such selection shall be made by the Master Servicer in its sole
discretion and the Master Servicer shall notify the Trustee and the Special
Servicer in writing of its selection.
"Principal Distribution Amount": With respect to any
Distribution Date, the aggregate of the following (without duplication):
(a) the aggregate of the principal portions of all
Scheduled Payments (other than Balloon Payments) due (to the
extent received or advanced) and any Assumed Scheduled
Payments in respect of the Mortgage Loans for their respective
Due Dates occurring during the related Collection Period;
(b) the aggregate of all Principal Prepayments
received on the Mortgage Loans during the related Collection
Period (including any Remaining Cash Flow);
(c) with respect to any Mortgage Loan as to which the
related Stated Maturity Date occurred during or prior to the
related Collection Period, any payment of principal (exclusive
of any amounts described in clause (d) below) made by or on
behalf of the related Mortgagor during the related Collection
Period (including any Balloon Payment), net of any portion of
such payment that represents a recovery of the principal
portion of any Scheduled Payment (other than a Balloon
Payment) due, or the principal portion of any Assumed
Scheduled Payment deemed due, in respect of such Mortgage Loan
on a Due Date during or prior to the related Collection Period
and not previously recovered;
(d) the aggregate of all Liquidation Proceeds and
Insurance Proceeds that were received on the Mortgage Loans
during the related Collection Period and that
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were identified and applied by the Master Servicer as
recoveries of principal of such Mortgage Loans, in each case
net of any portion of such amounts that represents a recovery
of the principal portion of any Scheduled Payment (other than
a Balloon Payment) due, or of the principal portion of any
Assumed Scheduled Payment deemed due, in respect of the
related Mortgage Loan on a Due Date during or prior to the
related Collection Period and not previously recovered;
(e) with respect to any REO Properties, the aggregate
of the principal portions of all Assumed Scheduled Payments in
respect of the related REO Loans for their respective Due
Dates occurring during the related Collection Period;
(f) with respect to any REO Properties, the aggregate
of all Liquidation Proceeds, Insurance Proceeds and REO
Revenues that were received during the related Collection
Period on such REO Properties and that were identified and
applied by the Master Servicer and/or Special Servicer as
recoveries of principal of the related REO Loans, in each case
net of any portion of such amounts that represents a recovery
of the principal portion of any Scheduled Payment (other than
a Balloon Payment) due, or of the principal portion of any
Assumed Scheduled Payment deemed due, in respect of the
related REO Loan or the predecessor Mortgage Loan on a Due
Date during or prior to the related Collection Period and not
previously recovered; and
(g) if such Distribution Date is subsequent to the
initial Distribution Date, the excess, if any, of the
Principal Distribution Amount for the immediately preceding
Distribution Date, over the aggregate distributions of
principal made on the Certificates on such immediately
preceding Distribution Date pursuant to Section 4.01.
"Principal Prepayment": Any payment of principal made by the
Mortgagor on a Mortgage Loan that is received in advance of its scheduled Due
Date; and provided that it shall not include a payment of principal that is
accompanied by an amount of interest representing scheduled interest due on any
date or dates in any month or months subsequent to the month of prepayment.
"Principal Recovery Fee": With respect to each Specially
Serviced Mortgage Loan, Corrected Mortgage Loan and REO Loan, the fee payable to
the Special Servicer out of certain related principal recoveries pursuant to the
second paragraph of Section 3.11(c).
"Prospectus": The prospectus dated February 25, 1998, as
supplemented by the Prospectus Supplement, relating to the Registered
Certificates.
"Prospectus Supplement": The prospectus supplement dated
December 17, 1998, relating to the Registered Certificates.
"Purchase Price": With respect to any Mortgage Loan to be
purchased by the Mortgage Loan Seller pursuant to the Mortgage Loan Purchase
Agreement, by the Majority
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Subordinate Certificateholder pursuant to Section 3.18(b), by the Master
Servicer or the Special Servicer pursuant to Section 3.18(c) or by the Majority
Subordinate Certificateholder, the Depositor, the Special Servicer or the Master
Servicer pursuant to Section 9.01 or to be otherwise sold pursuant to Section
3.18(d), a cash price equal to the outstanding principal balance of such
Mortgage Loan as of the date of purchase, together with (a) all accrued and
unpaid interest on such Mortgage Loan at the related Mortgage Rate to but not
including the Due Date in the Collection Period of purchase plus any accrued
interest on P&I Advances, (b) all related and unreimbursed Servicing Advances
plus any accrued interest thereon at the applicable Reimbursement Rate, (c) any
reasonable costs and expenses incurred by the Trust Fund in connection with any
such purchase or substitution by the Mortgage Loan Seller and (d) any other
Additional Trust Fund Expenses in respect of such Mortgage Loan (except that
Additional Trust Fund Expenses in respect of such Mortgage Loan allocable to any
Class of Certificates owned by the Majority Subordinate Certificateholder shall
not be included in the Purchase Price with respect to a purchase made by the
Majority Subordinate Certificateholder pursuant to Section 3.18(b) or Section
9.01); provided, that the Purchase Price shall not be reduced by any outstanding
P&I Advance.
"Qualified Insurer": An insurance company or security or
bonding company qualified to write the related Insurance Policy in the relevant
jurisdiction.
"Qualified Substitute Mortgage Loan": A mortgage loan which
must, on the date of substitution: (i) have an outstanding Stated Principal
Balance, after application of all scheduled payments of principal and interest
due during or prior to the month of substitution, not in excess of the Stated
Principal Balance of the deleted Mortgage Loan as of the Due Date in the
calendar month during which the substitution occurs; (ii) have a Mortgage Rate
not less than the Mortgage Rate of the deleted Mortgage Loan; (iii) have the
same Due Date as the deleted Mortgage Loan; (iv) accrue interest on the same
basis as the deleted Mortgage Loan (for example, on the basis of a 360-day year
consisting of twelve 30-day months); (v) have a remaining term to stated
maturity not greater than, and not more than two years less than, the remaining
term to stated maturity of the deleted Mortgage Loan; (vi) have an original
Loan-to-Value Ratio not higher than that of the deleted Mortgage Loan and a
current Loan-to-Value Ratio not higher than the then current Loan-to-Value Ratio
of the deleted Mortgage Loan; (vii) comply as of the date of substitution with
all of the representations and warranties set forth in the Mortgage Loan
Purchase Agreement; (viii) have an environmental report with respect to the
related Mortgaged Property which will be delivered as a part of the related
Mortgage File; (ix) have an original Debt Service Coverage Ratio of not less
than the original Debt Service Coverage Ratio of the deleted Mortgage Loan and a
current Debt Service Coverage Ratio of not less than the current Debt Service
Coverage Ratio of the deleted Mortgage Loan; (x) be determined by an Opinion of
Counsel to be a "qualified replacement mortgage" within the meaning of Section
860G(a)(4) of the Code; (xi) not have a maturity date after the date three years
prior to the Rated Final Distribution Date; (xii) not be substituted for a
deleted Mortgage Loan unless the Trustee has received prior confirmation in
writing by each Rating Agency that such substitution will not result in the
withdrawal, downgrade, or qualification of the rating assigned by the Rating
Agency to any Class of Certificates then rated by the Rating Agency (the cost,
if any, of obtaining such confirmation to be paid by the Mortgage Loan Seller);
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(xiii) has a date of origination which is the same as or later than the Cut-Off
Date; (xiv) has been approved by the Controlling Class Representative; provided,
that the Controlling Class Representative shall cease to have the right to
approve the substitution of a Qualified Substitute Mortgage Loan for a deleted
Mortgage Loan after the aggregate of the Stated Principal Balances of all
Qualified Substitute Mortgage Loans which were previously substituted for
deleted Mortgage Loans exceeds 10% of the aggregate Cut-Off Date Balance of all
the Mortgage Loans; provided, further, that such approval of the Controlling
Class Representative may not be unreasonably withheld, as determined by the
Special Servicer; (xv) not have been previously rejected by the Controlling
Class Representative pursuant to clause (xiv) above; and (xvi) not be
substituted for a deleted Mortgage Loan if it would result in the termination of
the REMIC status of any of the REMICs established under this Agreement or the
imposition of tax on any of such REMICs other than a tax on income expressly
permitted or contemplated to be received by the terms of this Agreement. In the
event that one or more mortgage loans are substituted for one or more deleted
Mortgage Loans, then the amounts described in clause (i) shall be determined on
the basis of aggregate principal balances and the rates described in clause (ii)
above and the remaining term to stated maturity referred to in clause (v) above
shall be determined on a weighted average basis. When a Qualified Substitute
Mortgage Loan is substituted for a deleted Mortgage Loan, the Mortgage Loan
Seller shall certify that the Mortgage Loan meets all of the requirements of the
above definition and shall send such certification to the Trustee.
"Rated Final Distribution Date": Solely for purposes of
satisfying Treasury Regulations Section 1.860G-1(a)(4)(iii) and with respect to
(i) each REMIC I Regular Interest, (ii) each REMIC II Regular Interest, (iii)
each Class of Regular Certificates (other than the Class IO Certificates) and
(iv) each Component, December 15, 2030.
"Rating Agency": Each of Moody's and Standard & Poor's.
"Realized Loss": With respect to: (1) each Defaulted Mortgage
Loan as to which a Final Recovery Determination has been made, or with respect
to any successor REO Loan as to which a Final Recovery Determination has been
made as to the related REO Property, an amount (not less than zero) equal to (a)
the unpaid principal balance of such Mortgage Loan or REO Loan, as the case may
be, as of the commencement of the Collection Period in which the Final Recovery
Determination was made, plus (b) without taking into account the amount
described in subclause (1)(d) of this definition, all accrued but unpaid
interest on such Mortgage Loan or REO Loan, as the case may be, at the related
Mortgage Rate to but not including the Due Date in the Collection Period in
which the Final Recovery Determination was made, plus (c) any related
unreimbursed Servicing Advances as of the commencement of the Collection Period
in which the Final Recovery Determination was made, together with any new
related Servicing Advances made during such Collection Period, minus (d) all
payments and proceeds, if any, received in respect of such Mortgage Loan or REO
Loan, as the case may be, during the Collection Period in which such Final
Recovery Determination was made; (2) each Defaulted Mortgage Loan as to which
any portion of the principal or previously accrued interest (excluding
Additional Interest) payable thereunder was canceled in connection with a
bankruptcy or similar proceeding involving the related Mortgagor or a
modification, waiver or amendment of such Mortgage Loan granted or agreed to by
the Special Servicer pursuant to Section 3.20, the amount of such principal or
interest (excluding Additional Interest) so canceled; and (3) each Mortgage Loan
as to which the Mortgage Rate thereon has been permanently reduced and not
recaptured for any period in connection with a bankruptcy or similar proceeding
involving the related Mortgagor or
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a modification, waiver or amendment of such Mortgage Loan granted or agreed to
by the Special Servicer pursuant to Section 3.20, the amount of the consequent
reduction in the interest portion of each successive Monthly Payment due
thereon. Each such Realized Loss determined pursuant to clause (3) above shall
be deemed to have been incurred on the Due Date for each affected Monthly
Payment.
"Record Date": With respect to any Distribution Date, the last
Business Day of the month immediately preceding the month in which such
Distribution Date occurs.
"Registered Certificate": Any Class A-1, Class A-2, Class A-3,
Class B, Class C, Class D, Class E or Class IO Certificate.
"Regular Certificate": Any REMIC III Certificate other than a
Class R-III Certificate.
"Reimbursement Rate": The rate, compounded monthly, applicable
to the accrual of interest on Servicing Advances in accordance with Section
3.03(d) and on P&I Advances in accordance with Section 4.03(d), which rate is
equal to the Prime Rate.
"Remaining Cash Flow": With respect to an ARD Mortgage Loan,
all monthly cash flow generated by the related Mortgaged Property in excess of
(i) the Scheduled Payment for a particular Due Date and (ii) operating expenses
and certain other expenses set forth in the related Mortgage Note.
"REMIC": A "real estate mortgage investment conduit" as
defined in Section 860D of the Code.
"REMIC I": The segregated pool of assets subject hereto,
constituting the primary trust created hereby and to be administered hereunder
with respect to which a separate REMIC election is to be made and, consisting
of: (i) the Mortgage Loans as from time to time are subject to this Agreement
and all payments under and proceeds of such Mortgage Loans received (excluding
the Additional Interest and (X) payments of principal and interest due, and
principal prepayments received, on or before the Cut-Off Date, (Y) any other
interest payable on the Mortgage Loans which is attributable to any portion of a
Servicing Fee that is deemed to be in excess of the amount which constitutes
reasonable servicing compensation within the meaning of the REMIC Provisions,
and (Z) the Reserve Funds in the Reserve Accounts), together with all documents
included in the related Mortgage Files and any Escrow Payments; (ii) any REO
Property acquired in respect of a Mortgage Loan; (iii) such funds or assets as
from time to time are deposited in the Certificate Account, the Distribution
Account and, if established, the REO Account (other than amounts excluded
pursuant to clause (i) above); and (iv) the rights of the Depositor under the
Mortgage Loan Purchase Agreement.
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"REMIC I Regular Interest": Any of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a "regular interest" in REMIC I, as described in the Preliminary
Statement hereto.
"REMIC I Remittance Rate": With respect to any REMIC I Regular
Interest, the Net Mortgage Rate as of the Cut-Off Date for the related Mortgage
Loan (or any successor REO Loan) to which such REMIC I Regular Interest relates.
"REMIC II": The segregated pool of assets consisting of all of
the REMIC I Regular Interests conveyed in trust to the Trustee for the benefit
of REMIC III, as holder of the REMIC II Regular Interests, and the Holders of
the Class R-II Certificates pursuant to Section 2.06, with respect to which a
separate REMIC election is to be made.
"REMIC II Regular Interest": Any of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a "regular interest" in REMIC II. Each REMIC II Regular Interest
shall accrue interest at the REMIC II Remittance Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto. The designations for the respective REMIC II Regular Interests are set
forth in the Preliminary Statement hereto.
"REMIC II Remittance Rate": With respect to each REMIC II
Regular Interest for any Distribution Date, the Weighted Average Effective REMIC
I Remittance Rate for such Distribution Date.
"REMIC III": The segregated pool of assets consisting of all
of the REMIC II Regular Interests conveyed in trust to the Trustee for the
benefit of the Holders of the REMIC III Certificates pursuant to Section 2.08,
with respect to which a separate REMIC election is to be made.
"REMIC III": Any Class A-1, Class A-2, Class A-3, Class B,
Class C, Class D, Class E, Class F, Class G, Class H, Class J, Class K, Class IO
or Class R-III Certificate.
"REMIC Administrator": The Trustee or any REMIC administrator
appointed pursuant to Section 8.14.
"REMIC Provisions": Provisions of the federal income tax law
relating to real estate mortgage investment conduits, which appear at Sections
860A through 860G of Subchapter M of Chapter 1 of the Code, and related
provisions, and proposed, temporary and final Treasury Regulations and any
published rulings, notices and announcements promulgated thereunder, as the
foregoing may be in effect from time to time.
"Rents from Real Property": With respect to any REO Property,
gross income of the character described in Section 856(d) of the Code.
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"REO Account": A segregated account or accounts created and
maintained by the Special Servicer pursuant to Section 3.16 on behalf of the
Trustee in trust for the Certificateholders, which shall be entitled "GE Capital
Realty Group, Inc. as Special Servicer, in trust for Holders of Merrill Lynch
Mortgage Investors, Inc., Mortgage Pass-Through Certificates, Series 1998-C3.".
"REO Aquisition": The acquisition of any REO Property
pursuant to Section 3.09.
"REO Disposition": The sale or other disposition of any REO
Property pursuant to Section 3.18(d).
"REO Extension": As defined in Section 3.16(a).
"REO Loan": The Mortgage Loan deemed for purposes hereof to
be outstanding with respect to each REO Property. Each REO Loan shall be deemed
to provide for monthly payments of principal and/or interest equal to its
Assumed Scheduled Payment and otherwise to have the same terms and conditions
as its predecessor Mortgage Loan (such terms and conditions to be applied
without regard to the default on such predecessor Mortgage Loan). Each REO Loan
shall be deemed to have an initial unpaid principal balance and Stated
Principal Balance equal to the unpaid principal balance and Stated Principal
Balance, respectively, of its predecessor Mortgage Loan as of the date of the
related REO Acquisition. All Scheduled Payments (other than a Balloon Payment),
Assumed Scheduled Payments (in the case of a Balloon Mortgage Loan delinquent
in respect of its Balloon Payment) and other amounts due and owing, or deemed
to be due and owing, in respect of the predecessor Mortgage Loan as of the date
of the related REO Acquisition, shall be deemed to continue to be due and owing
in respect of an REO Loan. Collections in respect of each REO Loan (after
provision for amounts to be applied to the payment of, or to be reimbursed to
the Trustee first and then to the Master Servicer and the Special Servicer on a
pari passu basis, for the payment of, the costs of operating, managing and
maintaining the related REO Property or for the reimbursement to the Trustee
first and then to the Master Servicer and the Special Servicer on a pari passu
basis for other related Servicing Advances) shall be treated: first, as a
recovery of accrued and unpaid interest on such REO Loan at the related
Mortgage Rate to but not including the Due Date in the Collection Period of
receipt; second, as a recovery of principal of such REO Loan to the extent of
its entire unpaid principal balance; and third, in accordance with the normal
servicing practices of the Master Servicer, as a recovery of any other amounts
due and owing in respect of such REO Loan. Notwithstanding the foregoing, all
amounts payable or reimbursable to the Master Servicer, the Special Servicer or
the Trustee in respect of the predecessor Mortgage Loan as of the date of the
related REO Acquisition, including, without limitation, any unpaid Servicing
Fees and any unreimbursed Servicing Advances and P&I Advances, together with
any interest accrued and payable to the Master Servicer, the Special Servicer
or the Trustee in respect of such Servicing Advances and P&I Advances in
accordance with Sections 3.03(d) and 4.03(d), shall continue to be payable or
reimbursable to
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the Master Servicer, the Special Servicer or the Trustee, as the case may be, in
respect of an REO Loan pursuant to Section 3.05(a).
"REO Property": A Mortgaged Property acquired on behalf of the
Trust Fund in the name of the Trustee for the benefit of the Certificateholders
through foreclosure, acceptance of a deed-in-lieu of foreclosure or otherwise in
accordance with applicable law in connection with the default or imminent
default of a Mortgage Loan.
"REO Revenues": All income, rents, profits and proceeds
derived from the ownership, operation or leasing of any REO Property.
"REO Tax": As defined in Section 3.17(a).
"REO Status Report": A report substantially containing the
content described in Exhibit N attached hereto, setting forth, among other
things, with respect to each REO Property that was included in the Trust Fund as
of the close of business on the Determination Date immediately preceding the
preparation of such report, (i) the acquisition date of such REO Property, (ii)
the amount of income collected with respect to such REO Property (net of related
expenses) and other amounts, if any, received on such REO Property during the
related Collection Period and (iii) the value of the REO Property based on the
most recent appraisal or other valuation thereof available to the Special
Servicer as of such Determination Date (including any prepared internally by the
Special Servicer).
"Request for Release": A request signed by a Servicing
Officer, as applicable, of the Master Servicer in the form of Exhibit D-1
attached hereto or of the Special Servicer in the form of Exhibit D-2 attached
hereto.
"Required Appraisal": With respect to each Required Appraisal
Mortgage Loan, an Independent appraisal of the related Mortgaged Property
prepared in accordance with 12 CFR ss. 225.62 and conducted in accordance with
the standards of the Appraisal Institute from an Independent Appraiser selected
by the Special Servicer.
"Required Appraisal Mortgage Loan": Each Mortgage Loan (i)
that is sixty (60) days or more delinquent in respect of any Monthly Payments,
(ii) that is an REO Loan as to which the related REO Property is acquired on
behalf of the Trust Fund, (iii) that has been modified by the Special Servicer
to reduce the amount of any Monthly Payment, other than a Balloon Payment, (iv)
with respect to which sixty days elapse after a receiver is appointed and
continues in such capacity in respect of the related Mortgaged Property, (v)
with respect to which sixty days elapse after the Mortgagor of which shall have
filed a petition or been subjected to the appointment of a conservator or
receiver or liquidator in any insolvency or related proceeding or (vi) a Balloon
Payment with respect to which is due and has not been paid on its Stated
Maturity Date.
"Required Appraisal Value": An amount equal to 90% of the
Appraised Value (net of any prior liens and estimated liquidation expenses) of
the Mortgaged Property related to
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the subject Required Appraisal Mortgage Loan as determined by a Required
Appraisal or any letter update of such Required Appraisal; and provided further
that for purposes of determining any Appraisal Reduction Amount in respect of
such Required Appraisal Mortgage Loan, such Appraisal Reduction Amount shall be
amended annually to reflect the Required Appraisal Value determined pursuant to
any Required Appraisal or letter update of a Required Appraisal conducted
subsequent to the original Required Appraisal performed pursuant to Section
3.09(a).
"Reserve Account": The account or accounts created and
maintained pursuant to Section 3.03(f).
"Reserve Funds": With respect to any Mortgage Loan, any
amounts delivered by the related Mortgagor to be held in escrow by or on behalf
of the mortgagee representing reserves for repairs and/or capital improvements
to the related Mortgaged Property.
"Residual Certificate": A Class R-I, Class R-II or Class R-III
Certificate.
"Responsible Officer": When used with respect to the Trustee,
any officer or assistant officer in the Corporate Trust Department of the
Trustee or any other officer or assistant officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers to whom a particular matter is referred by the Trustee because of such
officer's knowledge of and familiarity with the particular subject.
"Revised Rate": With respect to an ARD Mortgage Loan, the
increased interest rate after the Anticipated Repayment Date (in the absence of
a default) for such ARD Mortgage Loan, as calculated and as set forth in the
related Mortgage Loan documents.
"Scheduled Payment": With respect to any Mortgage Loan, for
any Due Date following the Cut-Off Date as of which it is outstanding, the
scheduled monthly payment of principal and interest on such Mortgage Loan that
is or would be, as the case may be, payable by the related Mortgagor on such Due
Date under the terms of the related Mortgage Note as in effect on the Closing
Date, but without regard to (i) any subsequent change in or modification of such
terms in connection with a bankruptcy or similar proceeding involving the
related Mortgagor or a modification, waiver or amendment of such Mortgage Loan
granted or agreed to by the Special Servicer pursuant to Section 3.20, or (ii)
the application of any Remaining Cash Flow with respect to an ARD Mortgage Loan,
and assuming that each prior Scheduled Payment has been made in a timely manner.
"Securities Act": The Securities Act of 1933, as amended.
"Senior Certificate": Any Class A-1, Class A-2, Class A-3 or
Class IO Certificate.
"Sequential Pay Certificate": Any Class A-1, Class A-2, Class
A-3, Class B, Class C, Class D, Class E, Class F, Class G, Class H, Class J or
Class K Certificates.
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"Servicing Account": The account or accounts created and
maintained pursuant to Section 3.03(a).
"Servicing Advances": All customary, reasonable and necessary
"out of pocket" costs and expenses incurred by or on behalf of the Master
Servicer, Special Servicer or the Trustee in its capacity as successor servicer
(to the extent not reimbursed by the Master Servicer) in connection with the
servicing of a Mortgage Loan, or in connection with the administration of any
REO Property, including, but not limited to, the cost of (a) compliance with the
obligations of the Master Servicer and the Special Servicer, if any, set forth
in Section 3.03(c), (b) the preservation, insurance, restoration, protection and
management of a Mortgaged Property, including the cost of any "forced placed"
insurance policy purchased by the Master Servicer to the extent such cost is
allocable to a particular Mortgaged Property that the Master Servicer or the
Special Servicer is required to cause to be insured pursuant to Section 3.07(a),
(c) obtaining any Insurance Proceeds or any Liquidation Proceeds of the nature
described in clauses (i)-(v) of the definition of "Liquidation Proceeds," (d)
any enforcement or judicial proceedings with respect to a Mortgaged Property,
including, without limitation, foreclosures, (e) any Required Appraisal or other
appraisal, (f) the operation, management, maintenance and liquidation of any REO
Property, including, without limitation, appraisals and (g) compliance with the
obligations of the Master Servicer or the Trustee set forth in Section 2.03(a).
Notwithstanding anything to the contrary, "Servicing Advances" shall not include
allocable overhead of the Master Servicer or the Special Servicer, which shall
include costs for office space, office equipment, supplies and related expenses,
employee salaries and related expenses and similar internal costs and expenses.
"Servicing Fee": The Master Servicing Fee and the Special
Servicing Fee.
"Servicing File": Any documents (other than documents required
to be part of the related Mortgage File) in the possession of the Depositor (and
delivered to the Master Servicer or Special Servicer) and relating to the
origination and servicing of any Mortgage Loan, including appraisals, surveys,
engineering reports and environmental reports.
"Servicing Officer": Any officer or employee of the Master
Servicer or the Special Servicer involved in, or responsible for, the
administration and servicing of the Mortgage Loans, whose name and specimen
signature appear on a list of servicing officers furnished by such party to the
Trustee and the Depositor on the Closing Date, as such list may be amended from
time to time.
"Servicing Standard": With respect to the Master Servicer or
the Special Servicer, the servicing and administration of the Mortgage Loans for
which it is responsible hereunder (a) in the same manner in which, and with the
same care, skill, prudence and diligence with which, the Master Servicer or the
Special Servicer, as the case may be, generally services and administers similar
mortgage loans with similar borrowers (i) for other third-party portfolios,
giving due consideration to customary and usual standards of practice of prudent
institutional commercial mortgage lenders servicing their own loans or (ii) held
in its own portfolio, whichever standard is higher, (b) with a view to the
maximization of the
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recovery on such Mortgage Loan on a net present value basis, and (c) without
regard to (i) any relationship that the Master Servicer or the Special Servicer,
as the case may be, or any Affiliate thereof may have with the related
Mortgagor, the Depositor or any other party to the transaction; (ii) the
ownership of any Certificate by the Master Servicer or the Special Servicer, as
the case may be, or by any Affiliate thereof; (iii) the right of the Master
Servicer or the Special Servicer, as the case may be, to receive compensation or
other fees for its services rendered pursuant to this Agreement; (iv) the
obligations of the Master Servicer or the Special Servicer, as the case may be,
to make Advances; and (v) the ownership, servicing or management for others of
any other mortgage loans or mortgaged property.
"Servicing Transfer Event": With respect to any Mortgage Loan,
the occurrence of any of the events described in clauses (a) through (g) of the
definition of "Specially Serviced Mortgage Loan".
"Single Certificate": For purposes of Section 4.02, a
hypothetical Certificate of any Class of Regular Certificates evidencing a
$1,000 denomination.
"Special Servicer": GE Capital Realty Group, Inc., its
successor in interest, or any successor special servicer appointed as herein
provided.
"Special Servicing Fee": With respect to each Specially
Serviced Mortgage Loan and each REO Loan, the fee designated as such and payable
to the Special Servicer pursuant to the first paragraph of Section 3.11(c).
"Special Servicing Fee Rate": With respect to each Specially
Serviced Mortgage Loan and each REO Loan, 0.25% per annum.
"Specially Serviced Mortgage Loan": Any Mortgage Loan as to
which any of the following events have occurred:
(a) the related Mortgagor shall have failed to make any Monthly
Payment, which failure continues unremedied for 45 days (or,
in the case of a Balloon Payment, if the Master Servicer
receives written evidence from an institutional lender of
such lender's commitment to refinance such Mortgage Loan and
the related Mortgagor continues to make monthly payments of
principal and interest in an amount at least equal to the
Monthly Payment due on the Due Date immediately preceding
the scheduled maturity date, such longer period (not to
exceed 120 days) within which such refinancing will occur);
or
(b) the Master Servicer shall have determined, in its good faith
reasonable judgment, based on communications with the
related Mortgagor, that a default in making a Monthly
Payment is likely to occur within 30 days and is likely to
remain unremedied for at least 60 days (or, in the case of a
Balloon Payment, if the Master Servicer has received written
evidence
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from an institutional lender of such lender's commitment to
refinance such Mortgage Loan and if the Master Servicer
reasonably expects the related Mortgagor to continue to make
monthly payments of principal and interest in an amount at
least equal to the Monthly Payment due on the Due Date
immediately preceding the scheduled maturity date, such
longer period (not to exceed 120 days) within which such
refinancing will occur); or
(c) there shall have occurred a default (other than as described
in clauses (a) above under the related Mortgage Loan
documents that in the good faith reasonable judgment of the
Master Servicer materially impairs the value of the
Mortgaged Property as security for the Mortgage Loan or
otherwise materially adversely affects the interests of
Certificateholders and that continues unremedied for the
applicable grace period under the terms of the Mortgage Loan
(or, if no grace period is specified, for 30 days); or
(d) a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises in an
involuntary case under any present or future federal or
state bankruptcy, insolvency or similar law or the
appointment of a conservator or receiver or liquidator in
any insolvency, readjustment of debt, marshaling of assets
and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been
entered against the related Mortgagor and such decree or
order shall have remained in force undischarged or unstayed
for a period of 60 days; or
(e) the related Mortgagor shall have consented to (or otherwise
have been subjected to) the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of
debt, marshaling of assets and liabilities or similar
proceedings of or relating to such Mortgagor or of or
relating to all or substantially all of its property; or
(f) the related Mortgagor shall have admitted in writing its
inability to pay its debts generally as they become due,
filed a petition to take advantage of any applicable
insolvency or reorganization statute, made an assignment for
the benefit of its creditors, or voluntarily suspended
payment of its obligations; or
(g) the Master Servicer shall have received notice of the
commencement of foreclosure or similar proceedings with
respect to the related Mortgaged Property;
provided, however, that a Mortgage Loan will cease to be a Specially Serviced
Mortgage Loan:
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(w) with respect to the circumstances described in clause (a)
above, when the related Mortgagor has made three consecutive
full and timely Monthly Payments under the terms of such
Mortgage Loan (as such terms may be changed or modified in
connection with a bankruptcy or similar proceeding involving
the related Mortgagor or by reason of a modification, waiver
or amendment granted or agreed to by the Special Servicer
pursuant to Section 3.20);
(x) with respect to the circumstances described in clauses (b),
(d), (e) and (f) above, when such circumstances cease to
exist in the good faith reasonable judgment of the Special
Servicer, but, with respect to any bankruptcy or insolvency
proceedings described in clauses (d), (e) and (f), no later
than 5 days following the entry of an order or decree
dismissing such proceeding;
(y) with respect to the circumstances described in clause (c)
above, when such default is cured; and
(z) with respect to the circumstances described in clause (g)
above, when such proceedings are terminated;
so long as at that time no circumstance identified in clauses (a) through (g)
above exists that would cause the Mortgage Loan to continue to be characterized
as a Specially Serviced Mortgage Loan.
"Standard & Poor's": Standard & Poor's Ratings Services, a
division of The McGraw-Hill Companies, Inc., or its successor in interest. If
neither such rating agency nor any successor remains in existence, "Standard &
Poor's" shall be deemed to refer to such other nationally recognized statistical
rating agency or other comparable Person designated by the Depositor, notice of
which designation shall be given in writing to the Trustee, the Master Servicer
and the Special Servicer, and specific ratings of Standard & Poor's Ratings
Services herein referenced shall be deemed to refer to the equivalent ratings of
the party so designated.
"Startup Day": With respect to each of REMIC I, REMIC II and
REMIC III, the day designated as such in Section 10.01(c).
"State and Local Taxes": Taxes imposed by any states of
Delaware, Texas and New York and by any other state or local taxing authorities
as may, by notice to the Trustee, assert jurisdiction over the trust fund or any
portion thereof, or which, according to an Opinion of Counsel addressed to the
Trustee, have such jurisdiction.
"Stated Maturity Date": With respect to any Mortgage Loan, the
Due Date specified in the Mortgage Note (as in effect on the Closing Date) on
which the last payment of principal is due and payable under the terms of the
Mortgage Note (as in effect on the Closing Date), without regard to any change
in or modification of such terms in connection with a
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bankruptcy or similar proceeding involving the related Mortgagor or a
modification, waiver or amendment of such Mortgage Loan granted or agreed to by
the Special Servicer pursuant to Section 3.20.
"Stated Principal Balance": With respect to any Mortgage Loan
(and any successor REO Loan), the Cut-Off Date Balance of such Mortgage Loan
(or, in the case of a Qualified Substitute Mortgage Loan, the unpaid principal
balance after application of all principal payments due on or before the related
date of substitution, whether or not received), as reduced on each Distribution
Date (to not less than zero) by (i) all payments (or advances in lieu thereof)
and other collections of principal of such Mortgage Loan (or successor REO Loan)
that are due or received, as the case may be, during the related Collection
Period and distributed to Certificateholders on such Distribution Date, and (ii)
the principal portion of any Realized Loss incurred in respect of such Mortgage
Loan (or successor or REO Loan) during the related Collection Period for such
Distribution Date. Notwithstanding the foregoing, if a Liquidation Event occurs
in respect of any Mortgage Loan or REO Property, then the "Stated Principal
Balance" of such Mortgage Loan or of the related REO Loan, as the case may be,
shall be zero commencing as of the Distribution Date in the Collection Period
next following the Collection Period in which such Liquidation Event occurred.
"Statement to Certificateholders": As defined in Section
4.02(a).
"Subordinated Certificate": Any Class B, Class C, Class D,
Class E, Class F, Class G, Class H, Class J, Class K or Class L Certificate.
"Sub-Servicer": Any Person with which the Master Servicer or
the Special Servicer has entered into a Sub-Servicing Agreement.
"Sub-Servicing Agreement": The written contract between the
Master Servicer or the Special Servicer, on the one hand, and any Sub-Servicer,
on the other hand, relating to servicing and administration of Mortgage Loans as
provided in Section 3.22.
"Substitution Shortfall Amount": With respect to a
substitution pursuant to Section 2.03(a) hereof, an amount equal to the
difference between the Purchase Price of the Mortgage Loan being replaced
calculated as of the date of substitution and the Stated Principal Balance of
the related Qualified Substitute Mortgage Loan as of the date of substitution.
In the event that one or more Qualified Substitute Mortgage Loans are
substituted (at the same time) for one or more deleted Mortgage Loans, the
Substitution Shortfall Amount shall be determined as provided in the preceding
sentence on the basis of the aggregate Purchase Prices of the Mortgage Loan or
Loans being replaced and the aggregate Stated Principal Balances of the related
Qualified Substitute Mortgage Loan or Loans.
"Tax Matters Person": With respect to each of the REMICs
created hereunder, the Person designated as the "tax matters person" of such
REMIC in the manner provided under Treasury Regulations Section 1.860F-4(d) and
Temporary Treasury Regulations Section 301.6231(a)(7)-1T, which Person shall be
the applicable Plurality Residual Certificateholder.
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"Tax Returns": With respect to (i) each of the REMICs created
hereunder, the federal income tax return on Internal Revenue Service Form 1066,
U.S. Real Estate Mortgage Investment Conduit Income Tax Return, including
Schedule Q thereto, Quarterly Notice to Residual Interest Holders of REMIC
Taxable Income or Net Loss Allocation, or any successor forms, to be filed on
behalf of each of REMIC I, REMIC II and REMIC III due to its classification as a
REMIC under the REMIC Provisions, and (ii) with respect to Additional Interest
and any other portion of the Trust Fund that does not constitute part of REMIC
I, REMIC II and REMIC III, Internal Revenue Service Form 1041, together, in each
case, with any and all other information, reports or returns that may be
required to be furnished to the Certificateholders or filed with the Internal
Revenue Service under any applicable provisions of federal tax law or any other
governmental taxing authority under applicable State and Local Tax laws.
"Transfer": Any direct or indirect transfer, sale, pledge,
hypothecation, or other form of assignment of any Ownership Interest in a
Certificate.
"Transferee": Any Person who is acquiring by Transfer any
Ownership Interest in a Certificate.
"Transferor": Any Person who is disposing by Transfer any
Ownership Interest in a Certificate.
"Trust Fund": Collectively, (i) all of the assets of REMIC I,
REMIC II and REMIC III, (ii) the Additional Interest and any other interest on
the Mortgage Loans which is attributable to any portion of a Servicing Fee that
is deemed to be in excess of the amount of such Servicing Fee that constitutes
reasonable servicing compensation within the meaning of the REMIC Provisions and
(iii) the Reserve Funds in the Reserve Accounts.
"Trustee": The Chase Manhattan Bank, a New York banking
corporation, its successor in interest, or any successor trustee appointed as
herein provided.
"Trustee Fee": The fee designated as such and payable to the
Trustee pursuant to Section 8.05.
"Trustee Fee Rate": 0.0045% per annum.
"Trustee Liability": As defined in Section 8.05(b).
"UCC": The Uniform Commercial Code in effect in the applicable
jurisdiction.
"UCC Financing Statement": A financing statement executed and
filed pursuant to the Uniform Commercial Code, as in effect in any relevant
jurisdiction.
"Uncertificated Accrued Interest": With respect to any REMIC I
Regular Interest, for any Distribution Date, one month's interest at the REMIC I
Remittance Rate applicable to such REMIC I Regular Interest as of the
commencement of the Collection Period
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for such Distribution Date, accrued on the Uncertificated Principal Balance of
such REMIC I Regular Interest outstanding immediately prior to such Distribution
Date and, to the extent permitted under applicable law, also on any
Uncertificated Distributable Interest in respect of such REMIC I Regular
Interest from prior Distribution Dates that was not previously deemed paid. With
respect to any REMIC II Regular Interest, for any Distribution Date, one month's
interest at the REMIC II Remittance Rate, accrued on the Uncertificated
Principal Balance of such REMIC II Regular Interest outstanding immediately
prior to such Distribution Date. Uncertificated Accrued Interest in respect of
any REMIC I Regular Interest or any REMIC II Regular Interest shall accrue on
the basis of a 360-day year consisting of twelve 30-day months.
"Uncertificated Distributable Interest": With respect to any
REMIC I Regular Interest for any Distribution Date, the Uncertificated Accrued
Interest in respect of such REMIC I Regular Interest for such Distribution Date,
reduced (to not less than zero) by the product of (i) any Net Aggregate
Prepayment Interest Shortfall for such Distribution Date, multiplied by (ii) a
fraction, the numerator of which is the Uncertificated Accrued Interest in
respect of such REMIC I Regular Interest for such Distribution Date, and the
denominator of which is the aggregate Uncertificated Accrued Interest in respect
of all the REMIC I Regular Interest for such Distribution Date. With respect to
any REMIC II Regular Interest for any Distribution Date, the Uncertificated
Accrued Interest in respect of such REMIC II Regular Interest for such
Distribution Date, reduced (to not less than zero) by the product of (i) any Net
Aggregate Prepayment Interest Shortfall for such Distribution Date, multiplied
by (ii) a fraction, expressed as a percentage, the numerator of which is the
Uncertificated Accrued Interest in respect of such REMIC II Regular Interest for
such Distribution Date, and the denominator of which is the aggregate
Uncertificated Accrued Interest in respect of all the REMIC II Regular Interests
for such Distribution Date.
"Uncertificated Principal Balance": The principal amount of
any REMIC I Regular Interest or REMIC II Regular Interest outstanding as of any
date of determination. As of the Closing Date, the Uncertificated Principal
Balance of each REMIC I Regular Interest shall equal the Cut-Off Date Balance of
the related Mortgage Loan. As of the Cut-Off Date, the Uncertificated Principal
Balance of each REMIC II Regular Interest shall equal the Original Class
Principal Balance of the corresponding Class of REMIC III Certificates. On each
Distribution Date, the Uncertificated Principal Balance of each REMIC II Regular
Interest shall be reduced by all distributions of principal deemed to have been
made thereon on such Distribution Date pursuant to Section 4.01(h), and shall be
further reduced on such Distribution Date by all Realized Losses and Additional
Trust Fund Expenses deemed to have been allocated thereto on such Distribution
Date pursuant to Section 4.04(b). On each Distribution Date, the Uncertificated
Principal Balance of each REMIC I Regular Interest shall be reduced by all
distributions of principal deemed to have been made in respect of such REMIC I
Regular Interest on such Distribution Date pursuant to Section 4.01(i), and
shall be further reduced on such Distribution Date by such Realized Losses and
Additional Trust Fund Expenses deemed to have been allocated thereto on such
Distribution Date pursuant to Section 4.04(c).
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"Underwriter": Merrill Lynch.
"United States Person": A citizen or resident of the United
States, a corporation, partnership or other entity created or organized in, or
under the laws of, the United States or any political subdivision thereof, an
estate whose income is includible in gross income for United States federal
income tax purposes regardless of its source, or a trust if a court within the
U.S. is able to exercise primary supervision over the administration of the
trust and one or more U.S. fiduciaries have the authority to control all
substantial decisions of the trust, all within the meaning of Section 7701(a) of
the Code.
"USAP": The Uniform Single Audit Program for Mortgage Bankers.
"Voting Rights": The portion of the voting rights of all of
the Certificates which is allocated to any Certificate. At all times during the
term of this Agreement, 100% of the Voting Rights shall be allocated among the
Holders of the Sequential Pay Certificates in proportion to the respective Class
Principal Balances of their Certificates. Voting Rights allocated to a Class of
Certificateholders shall be allocated among such Certificateholders in
proportion to the Percentage Interests evidenced by their respective
Certificates. In addition, if any of the Master Servicer, the Special Servicer
and any Affiliate thereof is the holder of any Certificate, neither the Master
Servicer, the Special Servicer nor any Affiliate thereof, in its capacity as a
Certificateholder, shall have Voting Rights with respect to matters concerning
compensation affecting the Master Servicer or the Special Servicer. The Class
IO, Class R-I, Class R-II, Class R-III and Class L Certificates shall not have
any Voting Rights.
"Watch List": As of each Determination Date a report,
substantially in the form of Exhibit O attached hereto, identifying each
Mortgage Loan that is not a Specially Serviced Mortgage Loan (i) with a Debt
Service Coverage Ratio of less than 1.10, (ii) that has a Stated Maturity Date
occurring in the next sixty days, (iii) that is delinquent in its real estate
taxes, (iv) for which any outstanding Advances exist for 30 days or more, (v)
that has been a Specially Serviced Mortgage Loan in the past 90 days, (vi) for
which the Debt Service Coverage Ratio has decreased by more than 25% in the
prior 12 months, (vii) for which any lease relating to more than 25% of the
related Mortgaged Property has expired, been terminated or is in default (viii)
that is 30 or more days late in making its Monthly Payment three or more times
in the preceding twelve months, (ix) that the related Mortgagor has material
deferred maintenance for the related Mortgaged Property or (x) that is 30 or
more days delinquent.
"Weighted Average Effective REMIC I Remittance Rate": With
respect to any Distribution Date, the rate per annum equal to the weighted
average, expressed as a percentage and rounded to eight decimal places, of the
respective REMIC I Remittance Rates in respect of all of the REMIC I Regular
Interests as of the commencement of the related Collection Period, weighted on
the basis of the respective Uncertificated Principal Balances of such REMIC I
Regular Interests outstanding immediately prior to such Distribution Date.
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"Yield Maintenance Charge": Payments paid or payable, as the
context requires, on a Mortgage Loan as the result of a Principal Prepayment
thereon, not otherwise due thereon in respect of principal or interest, which
have been calculated (based on Scheduled Payments on such Mortgage Loan) to
compensate the holder for reinvestment losses based on the aggregate payment of
interest which would have accrued on such Mortgage Loan on each subsequent Due
Date through the maturity date of such Mortgage Loan, at a rate set forth in the
related Mortgage Loan documents or otherwise, at a calculated as the difference
between the Mortgage Rate on such Mortgage Loan and the applicable U.S. treasury
rate in effect on the date of Principal Prepayment thereof, as set forth in the
Wall Street Journal, discounted at a rate set forth in the related Mortgage Note
at or near the time of prepayment. Any other prepayment premiums, penalties and
fees not so calculated will not be considered "Yield Maintenance Charges."
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ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES;
ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.01. Conveyance of Mortgage Loans.
(a) The Depositor, concurrently with the execution and
delivery hereof, does hereby assign, sell, transfer, set over and otherwise
convey to the Trust Fund, without recourse, for the benefit of the
Certificateholders (and for the benefit of the other parties to this Agreement
as their respective interests may appear) all the right, title and interest of
the Depositor, in, to and under (i) the Mortgage Loans, (ii) the Mortgage Loan
Purchase Agreement and (iii) all other assets included or to be included in the
Trust Fund. Such assignment includes all interest and principal received or
receivable on or with respect to the Mortgage Loans and due after the Cut-Off
Date. The transfer of the Mortgage Loans and the related rights and property
accomplished hereby is absolute and, notwithstanding Section 11.07, is intended
by the parties to constitute a sale.
(b) In connection with the Depositor's assignment pursuant to
Section 2.01(a) above, the Depositor shall direct, and hereby represents and
warrants that it has directed, the Mortgage Loan Seller pursuant to the Mortgage
Loan Purchase Agreement to deliver to and deposit with, or cause to be delivered
to and deposited with, the Trustee or a Custodian appointed thereby (with a copy
to the Master Servicer and the Special Servicer), on or before the Closing Date,
the Mortgage File for each Mortgage Loan so assigned. None of the Trustee, any
Custodian, the Master Servicer or the Special Servicer shall be liable for any
failure by the Mortgage Loan Seller or the Depositor to comply with the document
delivery requirements of the Mortgage Loan Purchase Agreement and this Section
2.01(b).
(c) The Trustee shall, at the Depositor's expense and
direction, as to each Mortgage Loan, promptly (and in any event within 45 days
following the later of the Closing Date or the delivery of such assignments and
UCC Financing Statements to the Custodian) cause to be submitted for recording
or filing, as the case may be, in the appropriate public office for real
property records or UCC Financing Statements, as appropriate and to the extent
timely delivered to the Custodian in final, recordable form, each assignment of
Mortgage, assignment of Assignment of Leases and any other recordable documents
relating to the Mortgage Loan, in favor of the Trustee referred to in clause
(iv) of the definition of "Mortgage File" and each UCC-2 and UCC-3 assignment in
favor of the Trustee and so delivered to the Custodian and referred to in clause
(viii) of the definition of "Mortgage File." Each such assignment shall reflect
that it should be returned by the public recording office to the Custodian or
its designee following recording, and each such UCC-2 and UCC-3 assignment shall
reflect that the file copy thereof should be returned to the Custodian or its
designee following filing (and the Custodian shall forward a copy of each
document to the Master Servicer upon receipt); provided, that in those instances
where the public recording office retains the original assignment of Mortgage or
assignment of Assignment of Leases, the
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Custodian shall obtain therefrom a certified copy of the recorded original. If
any such document or instrument is lost or returned unrecorded or unfiled, as
the case may be, because of a defect therein, the Trustee shall direct the
Mortgage Loan Seller pursuant to the Mortgage Loan Purchase Agreement promptly
to prepare or cause to be prepared a substitute therefor or cure such defect, as
the case may be, and thereafter the Trustee shall upon receipt thereof cause the
same to be duly recorded or filed, as appropriate.
(d) All documents and records in the possession of the
Depositor or the Mortgage Loan Seller that relate to the Mortgage Loans and that
are not required to be a part of a Mortgage File in accordance with the
definition thereof shall be delivered to the Master Servicer (at the expense of
the Depositor or the Mortgage Loan Seller, as applicable) on or before the
Closing Date and shall be held by the Master Servicer on behalf of the Trustee
in trust for the benefit of the Certificateholders.
(e) In connection with the Depositor's assignment pursuant to
Section 2.01(a) above, the Depositor shall deliver to the Custodian and the
Master Servicer on or before the Closing Date a copy of a fully executed
counterpart of the Mortgage Loan Purchase Agreement, as in full force and effect
on the Closing Date.
SECTION 2.02. Acceptance of the Trust Fund by Trustee.
(a) The Trustee, by its execution and delivery of this
Agreement, acknowledges receipt of the Depositor's assignment to it of its
right, title and interest in the assets that constitute the Trust Fund, and
further acknowledges receipt by it or a Custodian on its behalf, subject to the
proviso in the definition of "Mortgage File" and the provisions of Section 2.01
and subject to the further review provided for in Section 2.02(b), of (i) the
Mortgage File delivered to it for each Mortgage Loan and (ii) a copy of a fully
executed counterpart of the Mortgage Loan Purchase Agreement, all in good faith
and without notice of any adverse claim, and declares that it or a Custodian on
its behalf holds and will hold such documents and the other documents received
by it that constitute portions of the Mortgage Files, and that it holds and will
hold the Mortgage Loans and other assets included in the Trust Fund, in trust
for the exclusive use and benefit of all present and future Certificateholders.
The Custodian hereby certifies to each of the Depositor, the Master Servicer,
the Special Servicer, the Trustee and the Mortgage Loan Seller, that except as
identified in a written notice, a copy of which shall have been delivered by the
Custodian on or prior to the Closing Date to each of the Depositor, the Master
Servicer, the Special Servicer, the Trustee and the Mortgage Loan Seller,
without regard to the proviso in the definition of "Mortgage File", each of the
documents specified in clause (i) of the definition of Mortgage File are in its
possession. In addition, within forty-five (45) Business Days after the Closing,
the Trustee or the Custodian on its behalf will review the Mortgage Files and
certify to each of the Depositor, the Master Servicer, the Special Servicer, the
Majority Subordinate Certificateholder and the Mortgage Loan Seller that, except
as specifically identified in the Schedule of Exceptions to Mortgage File
Delivery in substantially the form annexed hereto as Exhibit C, (i) without
regard to the proviso in the definition of "Mortgage File," all documents
specified in clauses
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(i) through (v) and (vii), and to the extent provided in the related Mortgage
File actually known by a Responsible Officer of the Trustee to be required,
clauses (vi) and (viii) of the definition of "Mortgage File" are in its
possession, (ii) all documents delivered or caused to be delivered by the
Mortgage Loan Seller constituting the related Mortgage File have been reviewed
by it and appear regular on their face and appear to relate to such Mortgage
Loan, and (iii) based on such examination and only as to the foregoing
documents, the information set forth in the Mortgage Loan Schedule with respect
to the items specified in clauses (ii), (v) and (vi)(B) of the definition of
"Mortgage Loan Schedule" is correct. Notwithstanding the above, the Custodian
may deliver a revised Schedule of Exceptions to Mortgage File Delivery to the
Depositor within 60 days after the Closing Date. Such revised schedule shall be
treated as if it was attached hereto as Exhibit C.
(b) Within 90 days after the Closing Date, the Custodian shall
certify in writing to each of the Depositor, the Master Servicer, the Special
Servicer, the Majority Subordinate Certificateholder, the Trustee and the
Mortgage Loan Seller that, as to each Mortgage Loan listed on the Mortgage Loan
Schedule (other than any Mortgage Loan as to which a Liquidation Event has
occurred or any Mortgage Loan specifically identified in any exception report
annexed thereto as not being covered by such certification): (i) all documents
specified in clauses (i) through (iv) (except clause (iv)(b) and (c), unless the
Custodian has knowledge thereof), (v) and (vii) and, to the extent provided in
the related Mortgage File, clauses (vi) and (viii) of the definition of
"Mortgage File" are in its possession, (ii) all documents received by it in
respect of such Mortgage Loan have been reviewed by it and appear regular on
their face and appear to relate to such Mortgage Loan, and (iii) based on the
examinations referred to in Section 2.02(a) above and this Section 2.02(b) and
only as to the foregoing documents, the information set forth in the Mortgage
Loan Schedule with respect to the items specified in clauses (ii), (v) and
(vi)(B) of the definition of "Mortgage Loan Schedule" is correct.
(c) None of the Trustee, the Master Servicer, the Special
Servicer or any Custodian is under any duty or obligation to inspect, review or
examine any of the documents, instruments, certificates or other papers relating
to the Mortgage Loans delivered to it to determine that the same are valid,
legal, effective, genuine, enforceable, in recordable form, sufficient or
appropriate for the represented purpose or that they are other than what they
purport to be on their face.
SECTION 2.03. Mortgage Loan Seller's Repurchase or
Substitution of Mortgage Loans for Document
Defects and Breaches of Representations and
Warranties.
(a) If any party hereto discovers that any document or
documents constituting a part of a Mortgage File has not been properly executed,
is missing, contains information that does not conform in any respect with the
corresponding information set forth in the Mortgage Loan Schedule, or does not
appear to be regular on its face (each, a "Document Defect"), or discovers or
receives notice of a breach of any representation or
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warranty relating to the Mortgage Loans set forth in the Mortgage Loan Purchase
Agreement (a "Breach"), and such Document Defect or Breach, as the case may be,
materially and adversely affects the interests of the Certificateholders or the
value of the affected Mortgage Loan, such party shall give prompt written notice
to the other parties hereto, to the Majority Subordinate Certificateholder and
to the Rating Agencies. Promptly upon becoming aware of any such Document Defect
or Breach (including through such written notice provided by any party hereto,
as provided above), the Master Servicer shall request that the Mortgage Loan
Seller, not later than 90 days from the Mortgage Loan Seller's receipt of such
notice (or, in the case of a Document Defect or Breach relating to a Mortgage
Loan not being a "qualified mortgage" within the meaning of the REMIC
Provisions, not later than 90 days of any party to this Agreement discovering
such Document Defect or Breach), if such Document Defect or Breach shall
materially and adversely affect the value of the related Mortgage Loan or the
interest of the Certificateholders therein, cure such Document Defect or Breach,
as the case may be, in all material respects, which shall include payment of
losses and any Additional Trust Fund Expenses associated therewith or, if such
Document Defect or Breach (other than omissions solely due to a document not
having been returned by the related recording office) cannot be cured within
such 90-day period, either (i) repurchase the affected Mortgage Loan at the
applicable Purchase Price not later than the end of such 90-day period in
accordance with the Mortgage Loan Purchase Agreement or (ii) substitute a
Qualified Substitute Mortgage Loan for such affected Mortgage Loan and pay the
Trustee for deposit into the Certificate Account any Substitution Shortfall
Amount in connection therewith not later than the end of such 90-day period in
accordance with the Mortgage Loan Purchase Agreement; provided, however, that if
such Document Defect or Breach is capable of being cured but not within such
90-day period, such Document Defect or Breach does not relate to the Mortgage
Loan not being treated as a "qualified mortgage" within the meaning of the REMIC
Provisions, and the Mortgage Loan Seller has commenced and is diligently
proceeding with the cure of such Document Defect or Breach within such 90-day
period, the Mortgage Loan Seller shall have an additional 90 days to complete
such cure (or, failing such cure, to repurchase the related Mortgage Loan or
substitute a Qualified Substitute Mortgage Loan as provided above); and
provided, further, that with respect to such additional 90-day period the
Mortgage Loan Seller shall have delivered an Officer's Certificate to the
Trustee setting forth the reason such Document Defect or Breach is not capable
of being cured within the initial 90-day period and what actions the Mortgage
Loan Seller is pursuing in connection with the cure thereof and stating that the
Mortgage Loan Seller anticipates that such Document Defect or Breach will be
cured within the additional 90-day period. If the affected Mortgage Loan is to
be repurchased or substituted, the Master Servicer shall designate the
Certificate Account as the account to which funds in the amount of the Purchase
Price or the Substitution Shortfall Amount, as applicable, are to be wired. Any
such repurchase or substitution of a Mortgage Loan shall be on a whole loan,
servicing released basis. Notwithstanding the foregoing, the delivery of a
commitment to issue a policy of lender's title insurance in lieu of the delivery
of the actual policy of lender's title insurance shall not be considered a
Document Defect with respect to any Mortgage File if such actual policy of
insurance is delivered to the Trustee or a Custodian on its behalf not later
than the 90th day following the Closing Date. Any reasonable out-of-pocket
expense incurred by the Master Servicer or the Trustee, as the case may be, in
carrying
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out its duties pursuant to this Section 2.03(a) or Section 2.03(b) shall
constitute a Servicing Advance; provided, however, that the Master Servicer or
the Trustee, as the case may be, shall use reasonable efforts to collect such
out-of-pocket expenses from the Mortgage Loan Seller.
(b) In connection with any repurchase or substitution of one
or more Mortgage Loans contemplated by this Section 2.03, upon receipt of a
certificate of a Servicing Officer certifying as to the receipt of the
applicable Purchase Price(s) in the Certificate Account (in the case of any such
repurchase) or the receipt of the applicable Substitution Shortfall Amount(s) in
the Certificate Account and the delivery of the Mortgage File(s) and the
Servicing File(s) for the related Qualified Substitute Mortgage Loan(s) to the
Custodian and the Master Servicer, respectively (in the case of any such
substitution), (i) the Trustee shall execute and deliver such endorsements and
assignments as are provided to it by the Master Servicer, in each case without
recourse, representation or warranty, as shall be necessary to vest in the
Mortgage Loan Seller the legal and beneficial ownership of each repurchased
Mortgage Loan or deleted Mortgage Loan, as applicable, being released pursuant
to this Section 2.03, and (ii) the Trustee, the Custodian, the Master Servicer
and the Special Servicer shall each tender to the Mortgage Loan Seller, upon
delivery to each of them of a receipt executed by the Mortgage Loan Seller, all
portions of the Mortgage File and other documents pertaining to each such
Mortgage Loan possessed by it; provided, that such tender by the Trustee or the
Custodian shall be conditioned upon its receipt from the Master Servicer of a
Request for Release. Thereafter, the Trustee, the Custodian, the Master Servicer
and the Special Servicer shall have no further responsibility with regard to the
related repurchased Mortgage Loan(s) or deleted Mortgage Loan(s), as applicable,
and the related Mortgage File(s) and Servicing File(s). The Master Servicer
shall, and is hereby authorized and empowered by the Trustee to, prepare,
execute and deliver in its own name, on behalf of the Certificateholders and the
Trustee or any of them, the endorsements and assignments contemplated by this
Section 2.03, and the Trustee shall execute any powers of attorney that are
prepared and delivered to the Trustee by the Master Servicer and are necessary
to permit the Master Servicer to do so. The Master Servicer shall indemnify the
Trustee for any reasonable costs, fees, liabilities and expenses incurred by the
Trustee in connection with the negligent or willful misuse by the Master
Servicer of such powers of attorney.
(c) No substitution of a Qualified Substitute Mortgage Loan or
Loans may be made in any calendar month after the Determination Date for such
month. Monthly Payments due with respect to any Qualified Substitute Mortgage
Loan after the related date of substitution shall be part of REMIC I. Monthly
Payments due with respect to any Qualified Substitute Mortgage Loan on or prior
to the related date of substitution shall not be part of the Trust Fund or REMIC
I and will (to the extent received by the Master Servicer) be remitted by the
Master Servicer to the Mortgage Loan Seller promptly following receipt.
(d) The Mortgage Loan Purchase Agreement provides the sole
remedies available to the Certificateholders, or the Trustee on behalf of
the Certificateholders,
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respecting any Document Defect or Breach with respect to the Mortgage Loans
purchased by the Depositor thereunder.
SECTION 2.04. Representations and Warranties of Depositor.
(a) The Depositor hereby represents and warrants to the
Trustee, for its own benefit and the benefit of the Certificateholders, and to
the Master Servicer and the Special Servicer, as of the Closing Date, that:
(i) The Depositor is a corporation duly organized,
validly existing and in good standing under the laws of the
State of Delaware and possesses all licenses and
authorizations necessary to carry on its business.
(ii) The execution and delivery of this Agreement by
the Depositor, and the performance and compliance with the
terms of this Agreement by the Depositor, does not and will
not violate the Depositor's certificate of incorporation or
bylaws 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) No consent, approval or authorization of or
designation, declaration, notice or filing with any
governmental authority, corporation, person or firm on the
part of the Depositor is required in connection with the valid
execution and delivery of this Agreement or the consummation
of any other transactions contemplated hereby.
(iv) The Depositor has the full power and authority
to carry on its business as now being conducted and 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.
(v) This Agreement, assuming due authorization,
execution and delivery by each of the other parties hereto,
constitutes a valid, legal and binding obligation of the
Depositor, enforceable against the Depositor in accordance
with the terms hereof, subject to (A) applicable bankruptcy,
insolvency, reorganization, moratorium and other laws
affecting the enforcement of creditors' rights generally, and
(B) general principles of equity, regardless of whether such
enforcement is considered in a proceeding in equity or at law.
(vi) The Depositor 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
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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 Depositor's good
faith and reasonable judgment, is likely to affect materially
and adversely either the ability of the Depositor to perform
its obligations under this Agreement or the financial
condition of the Depositor.
(vii) The transfer of the Mortgage Loans to the Trust
Fund as contemplated herein requires no regulatory approval,
other than any such approvals as have been obtained, and is
not subject to any bulk transfer or similar law in effect in
any applicable jurisdiction.
(viii) No litigation is pending or, to the best of
the Depositor's knowledge, threatened against the Depositor
that, if determined adversely to the Depositor, would prohibit
the Depositor from entering into this Agreement or, in the
Depositor's good faith and reasonable judgment, is likely to
materially and adversely affect either the ability of the
Depositor to perform its obligations under this Agreement or
the financial condition of the Depositor.
(ix) Immediately prior to the transfer of the
Mortgage Loans to the Trust Fund pursuant to this Agreement,
(A) the Depositor has good and marketable title to, and is the
sole owner and holder of, each Mortgage Loan; and (B) the
Depositor has full right and authority to sell, assign and
transfer the Mortgage Loans.
(x) The Depositor is transferring the Mortgage Loans
to the Trust Fund free and clear of any liens, pledges,
charges and security interests.
(b) The representations and warranties of the Depositor set
forth in Section 2.04(a) shall survive the execution and delivery of this
Agreement and shall inure to the benefit of the Persons for whose benefit they
were made for so long as the Trust Fund remains in existence. Upon discovery by
any party hereto of any breach of any of the foregoing representations and
warranties, the party discovering such breach shall give prompt written notice
to the other parties and to the Rating Agencies.
SECTION 2.05. Execution, Authentication and
Delivery of Class R-I Certificates;
Creation of REMIC I Regular Interests.
The Trustee hereby acknowledges the assignment to it, in its
capacity as Trustee, of the assets included in the Trust Fund. Concurrently with
such assignment and in exchange therefor, (a) the Trustee agrees to hold a
portion of each of the Mortgage Loans (other than Additional Interest) as part
of REMIC I and (b) the Certificate Registrar, pursuant to the written request of
the Depositor executed by an officer of the Depositor, has executed, and the
Authenticating Agent has authenticated and delivered to or upon the order of the
Depositor, the Class R-I Certificates in authorized denominations. The interests
evidenced by the Class R-I Certificates, together with the REMIC I Regular
Interests, constitute the entire
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beneficial ownership of REMIC I. The rights of the Class R-I Certificateholders
and REMIC II (as Holder of the REMIC I Regular Interests) to receive
distributions from the proceeds of REMIC I in respect of the Class R-I
Certificates and the REMIC I Regular Interests, respectively, and all ownership
interests evidenced or constituted by the Class R-I Certificates and the REMIC I
Regular Interests, shall be as set forth in this Agreement.
SECTION 2.06. Conveyance of REMIC I Regular
Interests; Acceptance of REMIC II by
Trustee.
The Depositor, as of the Closing Date, and concurrently with
the execution and delivery of this Agreement, does hereby assign without
recourse all the right, title and interest of the Depositor in and to the REMIC
I Regular Interests to the Trust Fund for the benefit of the respective Holders
of the REMIC II Regular Interests and the Class R-II Certificates. The Trustee
acknowledges the assignment to it of the right, title and interest of the
Depositor in the REMIC I Regular Interests and declares that it holds and will
hold the same in trust for the exclusive use and benefit of all present and
future Holders of the REMIC II Regular Interests and the Class R-II
Certificates.
SECTION 2.07. Execution, Authentication and
Delivery of Class R-II Certificates.
The Trustee, pursuant to the written request of the Depositor
executed by an officer of the Depositor, has executed, as the Certificate
Registrar, authenticated, as the Authenticating Agent, and delivered to or upon
the written order of the Depositor, the Class R-II Certificates in authorized
denominations.
SECTION 2.08. Conveyance of REMIC II Regular
Interests; Acceptance of REMIC III
by Trustee.
The Depositor, as of the Closing Date, and concurrently with
the execution and delivery of this Agreement, does hereby assign without
recourse all the right, title and interest of the Depositor in and to the REMIC
II Regular Interests to the Trust Fund for the benefit of the Holders of the
REMIC III Certificates. The Trustee acknowledges the assignment to it of the
REMIC II Regular Interests and declares that it holds and will hold the same in
trust for the exclusive use and benefit of all present and future Holders of the
REMIC III Certificates.
SECTION 2.09. Execution, Authentication and
Delivery of REMIC III Certificates.
Concurrently with the assignment to it of the REMIC II Regular
Interests and in exchange therefor, the Certificate Registrar has executed, and
the Trustee, as the Authenticating Agent, has authenticated and delivered to or
upon the written order of the Depositor, the REMIC III Certificates in
authorized denominations evidencing the entire beneficial ownership of REMIC
III. The rights of the holders of the respective Classes of REMIC III
Certificates to receive distributions from the proceeds of REMIC III in respect
of
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their REMIC III Certificates, and all ownership interests evidenced or
constituted by the respective Classes of REMIC III Certificates in such
distributions, shall be as set forth in this Agreement.
SECTION 2.10. Execution, Authentication and
Delivery of Class L Certificates.
Concurrently with the assignment to the Trustee of the assets
included in the grantor trust hereunder and in exchange therefor, the
Certificate Registrar has executed, and the Trustee, as the Authenticating
Agent, has authenticated and delivered to or upon the written order of the
Depositor, the Class L Certificates evidencing the entire beneficial ownership
of the Additional Interest. The rights of the holders of the Class L
Certificates to receive distributions from the proceeds of the Additional
Interest in respect of their Class L Certificates, and all ownership interests
evidenced or constituted by the Classes of L Certificates in such distributions,
shall be as set forth in this Agreement.
ARTICLE III
ADMINISTRATION AND SERVICING OF THE TRUST FUND
SECTION 3.01. Administration of the Mortgage
Loans.
(a) Each of the Master Servicer and the Special Servicer shall
service and administer the Mortgage Loans that each is obligated to service and
administer pursuant to this Agreement on behalf of the Trust Fund, for the
benefit of the Certificateholders, in accordance with any and all applicable
laws, the terms of this Agreement and the terms of the respective Mortgage Loans
and, to the extent consistent with the foregoing, in accordance with the
Servicing Standard. Without limiting the foregoing, and subject to Section 3.21,
(i) the Master Servicer shall service and administer all Mortgage Loans that are
not Specially Serviced Mortgage Loans, and (ii) the Special Servicer shall
service and administer (x) each Specially Serviced Mortgage Loan and (y) REO
Property; provided, however, that the Master Servicer shall continue to collect
information and prepare all reports required to be prepared by the Master
Servicer and provided to the Trustee hereunder with respect to any Specially
Serviced Mortgage Loans and REO Properties (and the related REO Loans), and
shall make Servicing Advances and/or reimburse the Special Servicer for
reimbursable expenses which constitute a Servicing Advance with respect to
Specially Serviced Mortgage Loans and REO Properties and further shall render
such incidental services with respect to any Specially Serviced Mortgage Loans
and REO Properties as are specifically provided for herein. The Special Servicer
shall notify the Master Servicer, by delivery of an Officer's Certificate of the
Special Servicer, of the costs and expenses incurred or to be incurred by the
Special Servicer with respect to any Specially Serviced Mortgage Loan, REO Loan
or REO Property. The Master Servicer shall reimburse the Special Servicer for
any Servicing Advance made by the Special Servicer out of the Certificate
Account pursuant to Section 3.05(a) or (i) if the Master Servicer determines
such Servicing Advance is not a Nonrecoverable Servicing Advance, the
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Master Servicer shall make a Servicing Advance with respect to such costs and
expenses or reimburse the Special Servicer for such costs and expenses pursuant
to Section 3.05(a) or (ii) the Master Servicer shall notify the Special Servicer
that the Master Servicer has determined that the Servicing Advance is a
Nonrecoverable Servicing Advance. Neither the Master Servicer nor the Special
Servicer shall be required to make any Servicing Advance to the extent such
Servicing Advance, if made, would constitute a Nonrecoverable Servicing Advance.
Notwithstanding any obligation of or action to be taken by the Special Servicer
herein, unless a provision in this Agreement specifically requires that the
Special Servicer make a Servicing Advance, the Special Servicer may, but shall
have no obligation to, make any Servicing Advance out of its own funds and shall
have no obligation to take any action required or permitted hereunder if such
action would require it to make a Servicing Advance out of its own funds. All
references herein to the respective duties of the Master Servicer and the
Special Servicer, and to the areas in which they may exercise discretion, shall
be subject to Section 3.21.
(b) Subject to Section 3.01(a), and with respect to the
Special Servicer, Sections 6.09 and 6.11, the Master Servicer and the Special
Servicer, each shall have full power and authority, acting alone, or through one
or more Sub-Servicers as provided in Section 3.22, to do or cause to be done any
and all things in connection with such servicing and administration which it may
deem necessary or desirable. Without limiting the generality of the foregoing,
each of the Master Servicer and the Special Servicer, in its own name, with
respect to each of the Mortgage Loans it is obligated to service hereunder, is
hereby authorized and empowered by the Trustee to execute and deliver, on behalf
of the Certificateholders and the Trustee or any of them, (i) any and all
financing statements, continuation statements and other documents or instruments
necessary to maintain the lien created by any Mortgage or other security
document in the related Mortgage File on the related Mortgaged Property and
related collateral; (ii) in accordance with the Servicing Standard and subject
to Section 3.20, any and all modifications, waivers, amendments or consents to
or with respect to any documents contained in the related Mortgage File; and
(iii) any and all instruments of satisfaction or cancellation, or of partial or
full release or discharge, and all other comparable instruments. Subject to
Section 3.10, the Trustee shall, at the written request of the Master Servicer
or the Special Servicer, promptly execute any limited powers of attorney and
other documents furnished by the Master Servicer or the Special Servicer that
are necessary or appropriate to enable them to carry out their servicing and
administrative duties hereunder. The Master Servicer shall indemnify the Trustee
for any reasonable costs, fees, liabilities and expenses incurred by the Trustee
in connection with the negligent or willful misuse by the Master Servicer of
such powers of attorney.
(c) The relationship of each of the Master Servicer and the
Special Servicer to the Trustee under this Agreement is intended by the parties
to be that of an Independent Contractor and not that of a joint venture, partner
or agent and neither the Master Servicer nor the Special Servicer shall have any
liability for each other's action or inaction pursuant to this Agreement. Except
as set forth in this Agreement, the Trustee shall not have any liability for the
action or inaction of any other party pursuant to this Agreement.
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SECTION 3.02. Collection of Mortgage Loan Payments.
(a) Each of the Master Servicer or the Special Servicer shall
undertake reasonable efforts to collect all payments required under the terms
and provisions of the Mortgage Loans it is obligated to service hereunder and
shall, to the extent such procedures shall be consistent with this Agreement,
follow such collection procedures in accordance with the Servicing Standard.
Consistent with the foregoing, the Special Servicer, with regard to a Specially
Serviced Mortgage Loan, or the Master Servicer, with regard to a Mortgage Loan
that is not a Specially Serviced Mortgage Loan, may waive any default interest
or late payment charge in connection with any payment on a Mortgage Loan.
(b) All amounts collected in respect of any Mortgage Loan in
the form of payments from Mortgagors, Liquidation Proceeds (insofar as such
Liquidation Proceeds are of the nature described in clauses (i) through (iii) of
the definition thereof) or Insurance Proceeds shall be applied to either amounts
due and owing under the related Mortgage Note and Mortgage (including, without
limitation, for principal and accrued and unpaid interest) in accordance with
the express provisions of the related Mortgage Note and Mortgage or, if required
pursuant to the express provisions of the related Mortgage, or as determined by
the Master Servicer or Special Servicer in accordance with the Servicing
Standard, to the repair or restoration of the related Mortgaged Property, and,
in the absence of such express provisions, shall be applied for purposes of this
Agreement: first, as a recovery of any related and unreimbursed Advances plus
interest accrued thereon; second, as a recovery of accrued and unpaid interest,
to the extent such amounts have not been previously advanced, at the related
Mortgage Rate on such Mortgage Loan; third, as a recovery of principal of such
Mortgage Loan then due and owing, to the extent such amounts have not been
previously advanced, including, without limitation, by reason of acceleration of
the Mortgage Loan following a default thereunder; fourth, in accordance with the
normal servicing practices of the Master Servicer, as a recovery of any other
amounts then due and owing under such Mortgage Loan, including, without
limitation, late charges, Prepayment Premiums and default interest; fifth, as a
recovery of any remaining principal of such Mortgage Loan to the extent of its
entire remaining unpaid principal balance; and sixth, with respect to any ARD
Mortgage Loan after its Anticipated Repayment Date, as a recovery of any
interest to accrue on such ARD Mortgage Loan at a rate in excess of the related
Mortgage Rate. All amounts collected on any Mortgage Loan in the form of
Liquidation Proceeds of the nature described in clauses (iv) through (vi) of the
definition thereof shall be deemed to be applied: first, as a recovery of any
related and unreimbursed Advances plus interest accrued thereon; second, as a
recovery of accrued and unpaid interest, to the extent such amounts have not
been previously advanced, at the related Mortgage Rate on such Mortgage Loan to
but not including the Due Date in the Collection Period of receipt; third, as a
recovery of principal, to the extent such amounts have not been previously
advanced, of such Mortgage Loan to the extent of its entire unpaid principal
balance; and fourth, with respect to any ARD Mortgage Loan after its Anticipated
Repayment Date, as a recovery of any interest to accrue on such ARD Mortgage
Loan at a rate in excess of the related Mortgage Rate. No such amounts shall be
applied to the items constituting additional servicing compensation as described
in the first sentence of Section
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3.11(b) or 3.11(d) unless and until all principal and interest then due and
payable on such Mortgage Loan has been collected. Amounts collected on any REO
Loan shall be deemed to be applied in accordance with the definition thereof.
The provisions of this paragraph with respect to the application of amounts
collected on any Mortgage Loan shall not alter in any way the right of the
Master Servicer, the Special Servicer, the Trustee or any other Person to
receive payments from the Certificate Account as set forth in clauses (ii)
through (xiv) of Section 3.05(a) from amounts so applied.
(c) With respect to an ARD Mortgage Loan, notwithstanding any
provision herein to the contrary, the Master Servicer or the Special Servicer,
as the case may be, shall have the authority, subject to Section 3.20 hereof, to
waive or otherwise modify any Additional Interest due and accruing if the
related Mortgagor demonstrates (to the satisfaction of the Master Servicer or
the Special Servicer) its ability to prepay the entire principal balance of the
related ARD Mortgage Loan and accrued and unpaid interest thereon at the
applicable Mortgage Rate, any related and unreimbursed Servicing Advances plus
any interest thereon and any Additional Trust Fund Expenses in respect of such
Mortgage Loan.
(d) Within 30 days after the Closing Date (or such earlier
time as may be required under the terms of Lease Enhancement Policy), the Master
Servicer shall notify the Lease Enhancement Policy Issuer that (i) both the
Master Servicer and the Special Servicer shall be sent notices under each Lease
Enhancement Policy and (ii) the Trustee for the benefit of the
Certificateholders shall be the loss payee under each Lease Enhancement Policy.
In the event that the Master Servicer has knowledge of any event (an "Insured
Event") giving rise to a claim under any Lease Enhancement Policy, the Master
Servicer shall prepare and file a "proof of loss" form with the Lease
Enhancement Policy Issuer within five Business Days after obtaining knowledge of
any Insured Event under the related policy which has occurred and is continuing,
take such other action as may be required to bring a claim under the related
policy, and shall diligently process any claims under such policy in accordance
with the Servicing Standard and the terms of the related policy. The Special
Servicer shall give notice to the Master Servicer of any claim made under any
Lease Enhancement Policy and of any Lease Enhancement Policy Termination Event
of which the Master Servicer does not already have notice. The Master Servicer
shall review and be familiar with the terms and conditions of each Lease
Enhancement Policy and when the Master Servicer has actual knowledge of an
insured event, shall monitor the dates by which any claim or action must be
taken under each Lease Enhancement Policy to realize the full value of such
Lease Enhancement Policy for the benefit of the Certificateholders and shall
promptly, but in no event later than ten Business Days prior to any date on
which any action must be taken under the Lease Enhancement Policy to realize the
full value of such Lease Enhancement Policy for the benefit of the
Certificateholders, the Master Servicer shall take such action, consistent with
the Servicing Standard and the terms of the related policy.
In the event that the Master Servicer receives notice of any
Lease Enhancement Policy Termination Event, the Master Servicer shall promptly,
but in no event later than five Business Days after receipt of such notice,
notify the Special Servicer and the Trustee, and the
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Trustee shall notify the Rating Agencies and the Controlling Class
Representative of such Lease Enhancement Policy Termination Event in writing.
The Master Servicer shall, address such Lease Enhancement Policy Termination
Event in accordance with the Servicing Standard and the terms of the related
policy. Any legal fees incurred in connection with a resolution of a Lease
Enhancement Policy Termination Event shall be paid by the Master Servicer as a
Servicing Advance and shall be reimbursable from the Mortgagor or other
responsible party, and if not recoverable using efforts in accordance with the
Servicing Standard, then in accordance with Section 3.05(a).
SECTION 3.03. Collection of Taxes, Assessments
and Similar Items; Servicing
Accounts; Reserve Accounts.
(a) The Master Servicer shall, as to all Mortgage Loans,
establish and maintain one or more accounts (the "Servicing Accounts"), into
which all Escrow Payments shall be deposited and retained. Each Servicing
Account shall be an Eligible Account. The Special Servicer shall promptly remit
any Escrow Payments that it receives to the Master Servicer for deposit into the
applicable Servicing Account. With respect to any such amounts paid by check to
the order of the Special Servicer, the Special Servicer shall endorse such
checks, without recourse, to the order of the Master Servicer and shall promptly
remit any such check to the Master Servicer. Withdrawals of amounts so collected
from a Servicing Account may be made (to the extent amounts have been escrowed
for such purpose) only to: (i) effect payment of real estate taxes, assessments,
insurance premiums, ground rents (if applicable) and other items for which funds
have been escrowed in the Servicing Account; (ii) reimburse the Trustee first
and the Master Servicer and the Special Servicer on a pari passu basis for any
Servicing Advances; (iii) refund to Mortgagors any sums as may be determined to
be overages; (iv) pay interest, if required and as described below, to
Mortgagors on balances in the Servicing Account; (v) pay itself interest and
investment income on balances in the Servicing Account as described in Section
3.06(b), if and to the extent not required by law or the terms of Mortgage Loan
to be paid to the Mortgagor; or (vi) clear and terminate the Servicing Account
at the termination of this Agreement in accordance with Section 9.01. To the
extent permitted by law or the applicable Mortgage Loan, funds in the Servicing
Accounts may be invested only in Permitted Investments in accordance with the
provisions of Section 3.06. The Master Servicer shall pay or cause to be paid to
the Mortgagors interest, if any, earned on the investment of funds in Servicing
Accounts maintained thereby, if required by law or the terms of the related
Mortgage Loan. If the Master Servicer shall deposit in a Servicing Account any
amount not required to be deposited therein, it may at any time withdraw such
amount from such Servicing Account, any provision herein to the contrary
notwithstanding. The Servicing Accounts shall not be considered part of the
segregated pool of assets constituting REMIC I.
(b) The Master Servicer as to each Mortgaged Property (other
than REO Property) and the Special Servicer as to any REO Property shall, (i)
maintain accurate records with respect to the related Mortgaged Property or REO
Property, as applicable, reflecting the status of real estate taxes, assessments
and other similar items that are or may become a lien
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thereon and the status of insurance premiums and any ground rents payable in
respect thereof and (ii) use reasonable efforts to obtain, from time to time,
all bills for the payment of such items (including renewal premiums) and shall
effect payment thereof prior to the applicable penalty or termination date. For
purposes of effecting any such payment for which it is responsible, the Master
Servicer shall apply Escrow Payments as allowed under the terms of the related
Mortgage Loan and applicable law or, if such Mortgage Loan does not require the
related Mortgagor to escrow for the payment of real estate taxes, assessments,
insurance premiums, ground rents (if applicable) and similar items, the Master
Servicer shall, as to those Mortgage Loans it is obligated to service hereunder
and at the time the Master Servicer determines in accordance with the Servicing
Standard that any such payments have not been made when due, enforce the
requirement of the related Mortgage that the Mortgagor make payments in respect
of such items and provide proof of such payment to the Master Servicer. With
respect to any Specially Serviced Mortgage Loan, the Master Servicer shall
notify the Special Servicer within five Business Days after the Master Servicer
becomes aware of any failure by the related Mortgagor to make such payments
prior to such time as interest and/or penalties first begin to accrue thereon
and the Special Servicer shall, consistent with the Servicing Standard, and to
the extent permitted by the terms of the applicable Mortgage Loan documents,
seek to require that such payments be made by the Mortgagor and that proof of
such payment be provided to the Special Servicer and the Master Servicer.
(c) With respect to all Mortgage Loans and REO Loans (in each
case to the extent set forth herein) in respect of which the Mortgage Loan
documents or applicable law requires the related Mortgagor to escrow payments
for (i) real estate taxes, assessments and other similar items, (ii) ground
rents (if applicable), (iii) water rates, tenant improvements or leasing
commission expenses, environmental remediation expenses and other similar items
and (iv) premiums on Insurance Policies, the Master Servicer shall, make a
Servicing Advance with respect to the related Mortgaged Property in an amount
equal to all such funds as are necessary for the purpose of effecting the
payment of (i) real estate taxes, assessments and other similar items, (ii)
ground rents (if applicable), (iii) water rates, tenant improvement or leasing
commission expenses, environmental remediation expenses and other similar items
and (iv) premiums on Insurance Policies, in each instance if and to the extent
Escrow Payments (if any) collected from the related Mortgagor are insufficient
to pay such item when due and the related Mortgagor has failed to pay such item
on a timely basis, and provided that the particular Servicing Advance would not,
if made, constitute a Nonrecoverable Servicing Advance. With respect to any
Mortgage Loan that does not require the Mortgagor to escrow such payments, the
Master Servicer shall, consistent with the Servicing Standard seek to require
that any such payments be made by the Mortgagor at the time they first become
due. If such Mortgagor fails to pay any of the items referred to in clauses
(i)-(iv) above on a timely basis and collections from the Mortgagor are
insufficient to pay any such items when due, the Master Servicer shall,
promptly, upon the Master Servicer discovering that such Mortgagor failed to
make such payment using efforts consistent with the Servicing Standard to make
such a determination, make a Servicing Advance with respect to any shortfall,
subject to the Master Servicer determining that such Advance if made would not
be a Nonrecoverable Advance. All such Servicing Advances shall be reimbursable
in the first instance from related collections
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from the Mortgagors, and further as provided in Section 3.05(a). To the extent
that the amounts on deposit in the applicable REO Account are insufficient to
pay any of the items referred to in the first sentence of this paragraph, with
respect to the related REO Property, the Special Servicer shall advise the
Master Servicer, by delivery of an Officer's Certificate, of the amounts of
funds required to cover such shortfall, and the Master Servicer shall make a
Servicing Advance with respect thereto, subject to the Master Servicer
determining such Servicing Advance if made would not be a Nonrecoverable
Advance. In the case of any Specially Serviced Mortgage Loans other than REO
Loans, if a Mortgagor fails to pay any of the items referred to in the first
sentence of this paragraph on a timely basis and collections from the Mortgagor
are insufficient to pay any such item when due, the Master Servicer shall make a
Servicing Advance with respect thereto, subject to the Master Servicer
determining that such Servicing Advance if made would not be a Nonrecoverable
Servicing Advance. The Special Servicer shall not make a Servicing Advance
pursuant to this Section 3.03(c). No costs incurred by the Master Servicer in
effecting the payment of real estate taxes, assessments and, if applicable,
ground rents on or in respect of such Mortgaged Properties or REO Properties
shall, for purposes of this Agreement, including, without limitation, the Paying
Agent's calculation of monthly distributions to Certificateholders, be added to
the unpaid Stated Principal Balances of the related Mortgage Loans,
notwithstanding that the terms of such Mortgage Loans so permit. The foregoing
shall in no way limit the Master Servicer's or Special Servicer's ability to
charge and collect from the Mortgagor such costs together with interest thereon.
If the Master Servicer is required under any provision of this
Agreement (including, but not limited to, this Section 3.03(c)) to make a
Servicing Advance, but does not do so within 15 days after such Advance is
required to be made, the Trustee shall, if a Responsible Officer of the Trustee
has actual knowledge of such failure on the part of the Master Servicer give
written notice of such failure to the Master Servicer. If such Servicing Advance
is not made by the Master Servicer within three Business Days after such notice
then (subject to a determination that such Servicing Advance would not be a
Nonrecoverable Servicing Advance) the Trustee as successor Master Servicer
pursuant to Section 7.02 shall make such Servicing Advance. Any failure by the
Master Servicer to make a Servicing Advance hereunder shall constitute an Event
of Default by the Master Servicer subject to and as provided in Section 7.01.
(d) In connection with its recovery of any Servicing Advance
from the Certificate Account pursuant to Section 3.05(a), each of the Trustee,
the Master Servicer and the Special Servicer (in that order) shall be entitled
to receive, first out of any default interest collected with respect to the
related Mortgage Loan and then out of any amounts then on deposit in the
Certificate Account, any unpaid interest at the Reimbursement Rate in effect
from time to time, compounded monthly, accrued on the amount of such Servicing
Advance from the date made to but not including the date of reimbursement. The
Master Servicer shall reimburse itself, the Special Servicer or the Trustee, as
appropriate and in accordance with Section 3.05(a), for any Servicing Advance as
soon as practicable after funds available for such purpose are deposited in the
Certificate Account.
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(e) The determination by either the Master Servicer, the
Trustee or the Special Servicer that it has made a Nonrecoverable Servicing
Advance or that any proposed Servicing Advance, if made, would constitute a
Nonrecoverable Servicing Advance, shall be made in accordance with the Servicing
Standard and shall be evidenced by an Officers' Certificate delivered promptly
to the Trustee and the Depositor (and to the extent such determination is made
by the Special Servicer, the Master Servicer), setting forth the basis for such
determination, together with a copy of any appraisal of the related Mortgaged
Property or REO Property, as the case may be; which appraisal shall take into
account the factors specified in Section 3.18(e), including without limitation,
any environmental, engineering or other third party reports available, and other
factors that a prudent real estate appraiser would consider and conducted in
accordance with the standards of the Appraisal Institute performed pursuant to
Section 3.09(a) by the Master Servicer or by the Special Servicer if the
Mortgage Loan is a Defaulted Mortgage Loan or, if no such appraisal has been
performed, a copy of an appraisal of the related Mortgaged Property or REO
Property performed within the twelve months preceding such determination by an
Independent Appraiser or other expert in real estate matters, and further
accompanied by related Mortgagor operating statements and financial statements,
budgets and rent rolls of the related Mortgaged Property and any engineers'
reports, environmental surveys or similar reports that the Master Servicer or
the Special Servicer may have obtained and that support such determination. The
Trustee shall be entitled to rely, conclusively, on any determination by the
Master Servicer or the Special Servicer that a Servicing Advance, if made, would
be a Nonrecoverable Advance; provided, however, that if the Master Servicer or
the Special Servicer has failed to make a Servicing Advance for reasons other
than a determination by the Master Servicer or the Special Servicer, as
applicable, that such Servicing Advance would be a Nonrecoverable Advance, the
Trustee as successor Master Servicer pursuant to Section 7.02 shall make such
Servicing Advance within the time periods required by Section 3.03(c) unless the
Trustee, in good faith, makes a determination that such Servicing Advance would
be a Nonrecoverable Advance.
(f) The Master Servicer shall, as to all Mortgage Loans,
establish and maintain, as applicable, one or more accounts (the "Reserve
Accounts"), into which all Reserve Funds, if any, shall be deposited and
retained. Withdrawals of amounts so deposited may be made (i) to pay for, or to
reimburse the related Mortgagor in connection with, the related repairs and/or
capital improvements at the related Mortgaged Property in accordance with the
Servicing Standard, and such withdrawals are made in accordance with the
Servicing Standard and the terms of the related Mortgage Note, Mortgage and any
agreement with the related Mortgagor governing such Reserve Funds and (ii)
unless the Mortgage Loan documents provide otherwise, to pay the Master Servicer
interest and investment income earned on amounts in the Reserve Accounts as
described below. To the extent permitted in the applicable Mortgage, funds in
the Reserve Accounts may be invested only in Permitted Investments in accordance
with the provisions of Section 3.06. All Reserve Accounts shall be Eligible
Accounts. The Reserve Accounts shall not be considered part of the segregated
pool of assets comprising REMIC I, REMIC II or REMIC III. Consistent with the
Servicing Standard, the Master Servicer may waive or extend the date set forth
in any agreement governing such Reserve Accounts by which the required repairs
and/or capital improvements
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at the related Mortgaged Property must be completed if the related Mortgagor is
diligently undertaking such repairs or capital improvements.
SECTION 3.04. Certificate Account, Distribution
Account and Additional Interest
Distribution Account.
(a) The Master Servicer shall establish and maintain one or
more accounts (collectively, the "Certificate Account"), held on behalf of the
Trustee in trust for the benefit of the Certificateholders. The Certificate
Account shall be an Eligible Account. The Master Servicer shall deposit or cause
to be deposited in the Certificate Account, within one Business Day of receipt
of available funds (in the case of payments by Mortgagors or other collections
on the Mortgage Loans) or as otherwise required hereunder, the following
payments and collections received or made by the Master Servicer or on its
behalf subsequent to the Cut-Off Date (other than in respect of principal and
interest on the Mortgage Loans due and payable on or before the Cut-Off Date,
which payments shall be delivered promptly to the Mortgage Loan Seller or its
designee, with negotiable instruments endorsed as necessary and appropriate
without recourse), or payments (other than Principal Prepayments) received by it
on or prior to the Cut-Off Date but allocable to a period subsequent thereto:
(i) all payments on account of principal of the
Mortgage Loans;
(ii) all payments on account of interest on the
Mortgage Loans, including Additional Interest;
(iii) all Prepayment Premiums;
(iv) all Insurance Proceeds and Liquidation Proceeds
(other than Liquidation Proceeds described in clause (vi) of
the definition thereof that are required to be deposited in
the Distribution Account pursuant to Section 9.01) received in
respect of any Mortgage Loan;
(v) any amounts required to be deposited by the
Master Servicer pursuant to Section 3.06 in connection with
losses incurred with respect to Permitted Investments of funds
held in the Certificate Account;
(vi) any amounts required to be deposited by the
Master Servicer or the Special Servicer pursuant to Section
3.07(b) in connection with losses resulting from a deductible
clause in a blanket hazard policy;
(vii) any amounts required to be transferred from an
REO Account pursuant to Section 3.16(c); and
(viii) any amount in respect of Purchase Prices and
Substitution Shortfall amounts pursuant to Section 2.03(b).
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The foregoing requirements for deposit in the Certificate
Account shall be exclusive. Notwithstanding the foregoing, actual payments from
Mortgagors in the nature of Escrow Payments, amounts to be deposited in Reserve
Accounts, and amounts that the Master Servicer and the Special Servicer are
entitled to retain as additional servicing compensation pursuant to Sections
3.11(b) and (d) (except, with respect to default interest to the extent
necessary to offset interest accrued on Advances), need not be deposited by the
Master Servicer in the Certificate Account. If the Master Servicer shall deposit
in the Certificate Account any amount not required to be deposited therein, it
may at any time withdraw such amount from the Certificate Account, any provision
herein to the contrary notwithstanding. The Master Servicer shall promptly
deliver to the Special Servicer as additional servicing compensation in
accordance with Sections 3.11(b) and (d) assumption fees, late charges and other
transaction fees received by the Master Servicer to which the Special Servicer
is entitled pursuant to either of such Sections upon receipt of a certificate of
a Servicing Officer of the Special Servicer describing the item and amount. The
Certificate Account shall be maintained as a segregated account, separate and
apart from trust funds created for mortgage pass-through certificates of other
series and the other accounts of the Master Servicer.
Upon receipt of any of the amounts described in clauses (i)
through (iv) above with respect to any Mortgage Loan, the Special Servicer shall
promptly, but in no event later than two Business Days after receipt, remit such
amounts to the Master Servicer for deposit into the Certificate Account in
accordance with the second preceding paragraph, unless the Special Servicer
determines, consistent with the Servicing Standard, that a particular item
should not be deposited because of a restrictive endorsement or other
appropriate reason. Any such amounts received by the Special Servicer with
respect to an REO Property shall be deposited by the Special Servicer into the
REO Account and remitted to the Master Servicer for deposit into the Certificate
Account pursuant to Section 3.16(c). With respect to any such amounts paid by
check to the order of the Special Servicer, the Special Servicer shall endorse
such check to the order of the Master Servicer and shall deliver promptly, but
in no event later than three Business Days after receipt, any such check to the
Master Servicer by overnight courier, unless the Special Servicer determines,
consistent with the Servicing Standard, that a particular item cannot be so
endorsed and delivered because of a restrictive endorsement or other appropriate
reason.
(b) The Paying Agent shall establish and maintain one or more
trust accounts (collectively, the "Distribution Account") to be held in trust
for the benefit of the Certificateholders. The Distribution Account shall be an
Eligible Account. The Master Servicer shall deliver to the Paying Agent each
month on or before the P&I Advance Date therein, for deposit in the Distribution
Account, an aggregate amount of immediately available funds equal to that
portion of the Available Distribution Amount for the related Distribution Date
then on deposit in the Certificate Account, together with (i) any Prepayment
Premiums received on the Mortgage Loans during the related Collection Period and
(ii) in the case of the final Distribution Date, any additional amounts
contemplated by the second paragraph of Section 9.01. All amounts on deposit in
the Distribution Account shall remain uninvested.
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In addition, the Master Servicer shall, as and when required
hereunder, deliver to the Paying Agent for deposit in the Distribution Account:
(i) any P&I Advances required to be made by the
Master Servicer in accordance with Section 4.03(a);
(ii) any amounts required to be deposited by the
Master Servicer pursuant to Section 3.06 in connection with
losses realized on Permitted Investments with respect to funds
held in the Distribution Account;
(iii) any amounts required to be deposited by the
Master Servicer pursuant to Section 3.19 in connection with
Prepayment Interest Shortfalls; and
(iv) the Purchase Price paid in connection with the
purchase by the Master Servicer of all of the Mortgage Loans
and any REO Properties pursuant to Section 9.01, exclusive of
the portion of such amounts required to be deposited in the
Certificate Account pursuant to Section 9.01.
The Paying Agent shall, upon receipt, deposit in the
Distribution Account any and all amounts received by the Paying Agent that are
required by the terms of this Agreement to be deposited therein.
(c) Prior to the first P&I Advance Date relating to any
Collection Period in which Additional Interest is received, the Trustee shall
establish and maintain the Additional Interest Distribution Account in the name
of the Trustee in trust for the benefit of the Holder(s) of the Class L
Certificates or its assignee. The Additional Interest Distribution Account shall
be established and maintained as an Eligible Account as part of the Trust Fund
but shall not constitute part of REMIC I, REMIC II OR REMIC III. On or before
the P&I Advance Date related to the applicable Distribution Date, the Master
Servicer shall deliver to the Paying Agent for deposit in the Additional
Interest Distribution Account an amount equal to the Additional Interest
received during the related Collection Period. Following the distribution of any
Additional Interest to the Holder(s) of the Class L Certificates or its assignee
on the first Distribution Date after which there are no longer any ARD Mortgage
Loans outstanding, the Trustee shall terminate the Additional Interest
Distribution Account.
(d) Funds in the Additional Interest Distribution Account may
be invested only in Permitted Investments in accordance with the provisions of
Section 3.06. The Master Servicer and Paying Agent, as the case may be, shall
give notice to each other, the Trustee, the Special Servicer and the Rating
Agencies of the location of the Additional Interest Distribution Account as of
the Closing Date and of the new location of the Additional Interest Distribution
Account, prior to any change thereof.
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SECTION 3.05. Permitted Withdrawals From the
Certificate Account and the
Distribution Account.
(a) The Master Servicer may, from time to time, make
withdrawals from the Certificate Account for any of the following purposes (the
order set forth below not constituting an order of priority for such
withdrawals):
(i) to remit to the Paying Agent for deposit (A) in
the Distribution Account the amounts required to be so
deposited pursuant to the first paragraph of Section 3.04(b)
and (B) in the Additional Interest Distribution Account, the
amounts required to be deposited pursuant to Section 3.04(c);
(ii) to reimburse the Trustee and itself, in that
order, for unreimbursed P&I Advances, the Master Servicer's
right to reimburse the Trustee and itself, in that order,
pursuant to this clause (ii) with respect to any P&I Advance
(other than Nonrecoverable Advances, which are reimbursable
pursuant to clause (vii) below) being limited to, amounts that
represent Late Collections of interest (net of the related
Master Servicing Fee) on and principal (net of any related
Principal Recovery Fee) received in respect of the particular
Mortgage Loan or REO Loan as to which such P&I Advance was
made;
(iii) to pay to itself earned and unpaid Master
Servicing Fees in respect of each Mortgage Loan and REO Loan,
the Master Servicer's right to payment pursuant to this clause
(iii) with respect to any Mortgage Loan or REO Loan being
limited to, amounts received on or in respect of such Mortgage
Loan (whether in the form of payments, Liquidation Proceeds or
Insurance Proceeds) or such REO Loan (whether in the form of
REO Revenues, Liquidation Proceeds or Insurance Proceeds) that
are allocable as a recovery of interest thereon;
(iv) to pay to the Special Servicer, out of general
collections on the Mortgage Loans and any REO Property, earned
and unpaid Special Servicing Fees in respect of each Specially
Serviced Mortgage Loan and REO Loan;
(v) to pay the Special Servicer (or, if applicable, a
predecessor Special Servicer) earned and unpaid Principal
Recovery Fees in respect of each Specially Serviced Mortgage
Loan, Corrected Mortgage Loan and REO Loan, the Special
Servicer's (or, if applicable, any predecessor Special
Servicer's) right to payment pursuant to this clause (v) with
respect to any such Mortgage Loan or REO Loan being limited
to, amounts received on or in respect of such Mortgage Loan
(whether in the form of payments, Liquidation Proceeds or
Insurance Proceeds) or such REO Loan (whether in the form of
REO Revenues, Liquidation Proceeds or Insurance Proceeds) that
are allocable as a recovery of principal thereon (provided
that no Principal Recovery Fee shall be payable out of any
Liquidation Proceeds received in connection with the purchase
of any
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Mortgage Loan or REO Property by the Mortgage Loan Seller
pursuant to the Mortgage Loan Purchase Agreement, by the
Majority Subordinate Certificateholder pursuant to Section
3.18(b) or by the Master Servicer, Special Servicer, the
Majority Subordinate Certificateholder or Depositor pursuant
to Section 9.01);
(vi) to reimburse the Trustee first and then itself
and the Special Servicer on a pari passu basis for any
unreimbursed Servicing Advances, the Trustee's, the Master
Servicer's or Special Servicer's right, as the case may be, to
reimbursement pursuant to this clause (vi) with respect to any
Servicing Advance being limited to, payments made by the
related Mortgagor that are allocable to such Servicing
Advance, or from the Liquidation Proceeds, Insurance Proceeds
and, if applicable, REO Revenues received in respect of the
particular Mortgage Loan or REO Property as to which such
Servicing Advance was made;
(vii) to reimburse the Trustee first, and then itself
and the Special Servicer on a pari passu basis, for any
unreimbursed Advances that have been determined to be
Nonrecoverable Advances or to pay, with respect to any
Mortgage Loan or REO Loan as to which a Final Recovery
Determination has been made, any related earned Master
Servicing Fee to itself, that remained unpaid in accordance
with clause (iii) above;
(viii) at such time as it reimburses itself, the
Special Servicer or the Trustee for any unreimbursed Advance
pursuant to clause (ii), (vi) or (vii) above or reimburses the
Special Servicer pursuant to Section 3.09 for any unreimbursed
Servicing Advance, to pay the Trustee first, and then itself
and the Special Servicer on a pari passu basis, first out of
default interest received with respect to the related Mortgage
Loan and then out of general collections on the Mortgage Loans
and any REO Properties, any interest accrued and payable
thereon in accordance with Section 3.03(d) or 4.03(d), as
applicable;
(ix) to pay, out of general collections on the
Mortgage Loans and any REO Property, for costs and expenses
incurred by the Trust Fund pursuant to Section 3.09(c) and
4.01(h);
(x) to pay itself, as additional servicing
compensation in accordance with Section 3.11(b), interest and
investment income earned in respect of amounts held in the
Certificate Account as provided in Section 3.06(b), but only
to the extent of the Net Investment Earnings with respect to
the Certificate Account for any Collection Period;
(xi) to pay, out of general collections on the
Mortgage Loans and any REO Properties, for the cost of an
Independent Appraiser or other expert in real estate matters
retained pursuant to Section 3.03(e), 3.09(a), 3.18(e) or
4.03(c);
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(xii) to pay, out of general collections on the
Mortgage Loans and any REO Properties, itself, the Special
Servicer, the Depositor, or any of their respective directors,
officers, employees and agents, as the case may be, any
amounts payable to any such Person pursuant to Section 6.03;
(xiii) to pay, out of general collections on the
Mortgage Loans and any REO Properties, for (A) the advice of
counsel contemplated by Section 3.17(a)(iii), (B) the cost of
the Opinions of Counsel contemplated by Sections 3.09(b)(ii),
3.09(c), 3.16(a) and 11.02(a), (C) the cost of an Opinion of
Counsel contemplated by Section 11.01(a) or 11.01(c) in
connection with any amendment to this Agreement requested by
the Master Servicer or the Special Servicer that protects or
is in furtherance of the rights and interests of
Certificateholders, (D) the cost of obtaining the REO
Extension sought by the Special Servicer as contemplated by
Section 3.16(a), and (E) the cost of recording this Agreement
in accordance with Section 11.02(a);
(xiv) to pay itself, the Special Servicer, the
Mortgage Loan Seller, the Majority Subordinate
Certificateholder or any other Person, as the case may be,
with respect to each Mortgage Loan, if any, previously
purchased by such Person pursuant to this Agreement, all
amounts received thereon subsequent to the date of purchase;
and
(xv) to clear and terminate the Certificate Account
at the termination of this Agreement pursuant to Section 9.01.
The Master Servicer shall keep and maintain separate
accounting records, on a loan-by-loan and property-by-property basis in the case
of REO Property when appropriate, in connection with any withdrawal from the
Certificate Account pursuant to clauses (ii) - (xiv) above.
The Master Servicer shall pay to the Special Servicer (or to
third-party contractors at the direction of the Special Servicer) or the Trustee
from the Certificate Account amounts permitted to be paid to the Special
Servicer (or to such third-party contractors) or the Trustee therefrom promptly
upon receipt of a certificate of a Servicing Officer of the Special Servicer or
of a Responsible Officer of the Trustee, as the case may be, describing the item
and amount to which the Special Servicer (or such third-party contractors) or
the Trustee is entitled. The Master Servicer may rely conclusively on any such
certificate and shall have no duty to re-calculate the amounts stated therein.
The Special Servicer shall keep and maintain separate accounting for each
Specially Serviced Mortgage Loan and REO Property, on a loan-by-loan and
property-by-property basis, for the purpose of justifying any request for
withdrawal from the Certificate Account. With respect to each Mortgage Loan for
which it makes an Advance, the Trustee shall keep and maintain separate
accounting for each Mortgage Loan, on a loan by loan and property basis, for the
purpose of justifying any request for withdrawal from the Certificate Account
for reimbursements of Advances or interest thereon.
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(b) The Paying Agent may, from time to time, make withdrawals
from the Distribution Account for any of the following purposes (in no
particular order of priority):
(i) to make distributions to Certificateholders
on each Distribution Date pursuant to Section 4.01 or 9.01,
as applicable;
(ii) to pay the Trustee or any of its directors,
officers, employees and agents, as the case may be, any
amounts payable or reimbursable to any such Person pursuant to
Section 8.05(b);
(iii) [RESERVED]
(iv) to pay for the cost of the Opinions of Counsel
sought by the Trustee (A) as provided in clause (v) of the
definition of "Disqualified Organization", (B) as contemplated
by Section 10.01(i), or (C) as contemplated by Section
11.01(a) or 11.01(c) in connection with any amendment to this
Agreement requested by the Trustee which amendment is in
furtherance of the rights and interests of Certificateholders;
(v) to pay any and all federal, state and local taxes
imposed on any of the REMICs created hereunder or on the
assets or transactions of any such REMIC, together with all
incidental costs and expenses, to the extent none of the
Trustee, the REMIC Administrator, the Master Servicer or the
Special Servicer is liable therefor pursuant to Section
10.01(j);
(vi) to pay the REMIC Administrator any amounts
reimbursable to it pursuant to Section 10.01(f);
(vii) to pay to the Master Servicer any amounts
deposited by the Master Servicer in the Distribution Account
not required to be deposited therein; and
(viii) to clear and terminate the Distribution
Account at the termination of this Agreement pursuant to
Section 9.01.
SECTION 3.06 Investment of Funds in the Servicing
Accounts, the Reserve Accounts, the
Certificate Account, the Additional Interest
Distribution Account and the REO Account.
(a) The Master Servicer may direct in writing any depository
institution maintaining a Servicing Account, a Reserve Account, the Certificate
Account or the Additional Interest Distribution Account (each, for purposes of
this Section 3.06, an "Investment Account"), and the Special Servicer may direct
in writing any depository institution maintaining the REO Account (also, for
purposes of this Section 3.06, an "Investment Account"), to invest, or if it is
such depository institution, may itself invest, the funds held
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therein only in one or more Permitted Investments bearing interest or sold at a
discount, and maturing, unless payable on demand, no later than the Business Day
immediately preceding the next succeeding date on which such funds are required
to be withdrawn from such account pursuant to this Agreement. In the event that
the Master Servicer shall have failed to give investment directions for any
Servicing Account, any Reserve Account, the Certificate Account or the
Additional Interest Distribution Account (exclusive of any accounts as are held
by the Master Servicer) or the Special Servicer shall have failed to give
investment directions for the REO Account by 11:00 A.M. New York time on any
Business Day on which there may be uninvested cash, such funds held in the REO
account shall be invested in securities described in clause (i) of the
definition of the term "Permitted Investments"; and such funds held in such
other accounts shall be invested in a Permitted Investment. All such Permitted
Investments shall be held to maturity, unless payable on demand. Any investment
of funds in an Investment Account shall be made in the name of the Trustee (in
its capacity as such). The Master Servicer (with respect to Permitted
Investments of amounts in the Servicing Accounts, the Reserve Accounts, the
Certificate Account and the Additional Interest Distribution Account) and the
Special Servicer (with respect to Permitted Investments of amounts in the REO
Account), on behalf of the Trustee, shall (and the Master Servicer and the
Special Servicer, as applicable, are hereby designated as the person that shall)
maintain continuous possession of any Permitted Investment that is either (i) a
"certificated security", as such term is defined in the UCC, or (ii) other
property in which a secured party may perfect its security interest by
possession under the UCC or any other applicable law. Possession of any such
Permitted Investment by the Master Servicer or the Special Servicer shall
constitute possession by a Person designated by the Trust for purposes of
Section 8-313 of the UCC and possession by the Trustee, as secured party, for
purposes of Section 9-305 of the UCC and any other applicable law. If amounts on
deposit in an Investment Account are at any time invested in a Permitted
Investment payable on demand, the Master Servicer (in the case of the
Certificate Account, the Additional Interest Distribution Account, Servicing
Accounts and Reserve Accounts), or the Special Servicer (in the case of the REO
Account) shall:
(x) consistent with any notice required to be given
thereunder, demand that payment thereon be made on the last day such
Permitted Investment may otherwise mature hereunder in an amount equal
to the lesser of (1) all amounts then payable thereunder and (2) the
amount required to be withdrawn on such date; and
(y) demand payment of all amounts due thereunder promptly upon
determination by the Master Servicer or the Special Servicer, as the
case may be, that such Permitted Investment would not constitute a
Permitted Investment in respect of funds thereafter on deposit in the
Investment Account.
(b) Whether or not the Master Servicer directs the investment
of funds in any of the Servicing Accounts, the Reserve Accounts, the Certificate
Account, or the Additional Interest Distribution Account, interest and
investment income realized on funds deposited therein, to the extent of the Net
Investment Earnings, if any, for each Collection Period, unless the Mortgage
Loan documents provide otherwise, shall be for the sole and
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exclusive benefit of the Master Servicer and shall be subject to its withdrawal
in accordance with Section 3.03(a), 3.03(f) or 3.05(a), as applicable. Whether
or not the Special Servicer directs the investment of funds in the REO Account,
interest and investment income realized on funds deposited therein, to the
extent of the Net Investment Earnings, if any, for each Collection Period, shall
be for the sole and exclusive benefit of the Special Servicer and shall be
subject to its withdrawal in accordance with Section 3.16(b). If any loss of
principal shall be incurred in respect of any Permitted Investment on deposit in
any Investment Account, the Master Servicer (in the case of the Certificate
Account, the Additional Interest Distribution Account, the Servicing Accounts
and the Reserve Accounts) and the Special Servicer (in the case of the REO
Account) shall promptly deposit therein from its own funds, without right of
reimbursement, no later than the end of the Collection Period during which such
loss was incurred, the amount of the Net Investment Loss, if any, for such
Collection Period, except to the extent the amounts are invested for the benefit
of the Mortgagor under applicable law or the related Mortgage Loan documents.
The income or gain realized from investments on funds deposited in the Servicing
Account or Reserve Account shall be paid or credited to the related Mortgagor
from time to time to the extent required by law or the related Mortgage Loan
documents. The Master Servicer and Special Servicer shall have no liability for
the bankruptcy or insolvency of any institution holding an Eligible Account or
Permitted Investments.
(c) Except as otherwise expressly provided in this Agreement,
if any default occurs in the making of a payment due under any Permitted
Investment, or if a default occurs in any other performance required under any
Permitted Investment and the Special Servicer or the Master Servicer fails to
deposit any losses with respect to such Permitted Investment pursuant to
Section 3.06(b), the Trustee may and, subject to Section 8.02, upon the
written request of Holders of Certificates entitled to not less than 25% of
the Voting Rights allocated to any Class, shall take such action as may be
appropriate to enforce such payment or performance, including the institution
and prosecution of appropriate proceedings.
(d) Notwithstanding the investment of funds held in any
Investment Account, for purposes of the calculations hereunder, including,
without limitation, the calculation of the Available Distribution Amount, the
amounts so invested shall be deemed to remain on deposit in such Investment
Account.
SECTION 3.07. Maintenance of Insurance Policies;
Errors and Omissions and Fidelity Coverage.
(a) The Master Servicer (with respect to Mortgage Loans other
than Specially Serviced Mortgaged Loans) and the Special Servicer (with respect
to Specially Serviced Mortgage Loans) shall, consistent with the Servicing
Standard, cause to be maintained for each Mortgaged Property all insurance
coverage as is required under the related Mortgage; provided that if and to the
extent that any such Mortgage permits the holder thereof any discretion (by way
of consent, approval or otherwise) as to the insurance coverage that the related
Mortgagor is required to maintain, the Master Servicer shall exercise such
discretion in
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a manner consistent with the Servicing Standard; and provided further that, if
and to the extent that a Mortgage so permits, the related Mortgagor shall be
required to exercise its reasonable best efforts to obtain the required
insurance coverage from Qualified Insurers that have a "claims paying ability"
rating of at least "A" from Standard & Poor's and a financial strength rating of
"A2" or better from Moody's (or Standard & Poor's and a comparable rating from
at least one other nationally recognized statistical rating agency, if such
insurer is not rated by Moody's). In connection with fourteen Mortgage Loans
(control numbers MLMI-004, MLMI-012, MLMI-080, MLMI-078, MLMI-082, MLMI-073,
MLMI-019, MLMI-077, MLMI-001, MLMI-036, MLMI-008, MLMI-085, MLMI-015 and
MLMI-081), with respect to which Mortgage Loans the related Mortgage Loan
documents require or permit the related mortgagee to require that earthquake
insurance be maintained, the Master Servicer or Special Servicer, as applicable,
shall use reasonable efforts consistent with the Servicing Standard to require
the related Mortgagor to maintain earthquake insurance as required or permitted
by the Mortgage Loan documents. With respect to any other Mortgage Loan that
requires or permits the related lender to require that earthquake insurance be
maintained, the Majority Subordinate Certificateholder may request that
earthquake insurance be secured for one or more Mortgaged Properties and the
Master Servicer or Special Servicer, as applicable, shall use reasonable efforts
consistent with the Servicing Standard to enforce such obligation. With respect
to any Mortgage Loan (i) that does not require or permit the related lender to
require that earthquake insurance be maintained or (ii) that the Master Servicer
or Special Servicer, as applicable, has been unable to enforce the provisions of
the preceding two sentences, the Majority Subordinate Certificateholder may
request that earthquake insurance be secured by the Master Servicer or Special
Servicer, as applicable, at the expense of the Majority Subordinate
Certificateholder. Subject to Section 3.17(a), the Special Servicer shall also
cause to be maintained for each REO Property no less insurance coverage than was
previously required of the Mortgagor under the related Mortgage; provided that
all such insurance shall be obtained from Qualified Insurers that, if they are
providing casualty insurance, shall have a claims paying ability rating of at
least "A" from Standard & Poor's and a financial strength rating of "A2" or
better from Moody's (or Standard & Poor's and a comparable rating from one other
nationally recognized statistical rating agency, if such insurer is not rated by
Moody's) or such lower rating as will not result in qualification, downgrading
or withdrawal of the ratings then assigned to the Certificates, as evidenced in
writing by the Rating Agencies. All such insurance policies shall contain (if
they insure against loss to property and do not relate to an REO Property) a
"standard" mortgagee clause, with loss payable to the Master Servicer (in the
case of insurance maintained in respect of Mortgage Loans), and shall be in the
name of the Special Servicer (in the case of insurance maintained in respect of
REO Properties), on behalf of the Trust Fund; in each case such insurance shall
be issued by an insurer authorized under applicable law to issue such insurance.
Any amounts collected by the Master Servicer or the Special Servicer under any
such policies (other than amounts to be applied to the restoration or repair of
the related Mortgaged Property or REO Property or amounts to be released to the
related Mortgagor, in each case subject to the rights of any tenants and ground
lessors, as the case may be, and in each case in accordance with the terms of
the related Mortgage and the Servicing Standard) shall be deposited in the
Certificate Account, subject to withdrawal pursuant to Section 3.05(a), in the
case of amounts received in respect of a Mortgage Loan, or in the REO
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Account, subject to withdrawal pursuant to Section 3.16(c), in the case of
amounts received in respect of an REO Property. Any cost incurred by the Master
Servicer or the Special Servicer in maintaining any such insurance shall not,
for purposes hereof, including, without limitation, calculating monthly
distributions to Certificateholders, be added to unpaid principal balance of the
related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so
permit.
(b) If the Master Servicer or the Special Servicer shall
obtain and maintain, or cause to be obtained and maintained, a blanket policy or
a master forced place policy insuring against hazard losses on all of the
Mortgage Loans and/or REO Properties that it is required to service and
administer, then, to the extent such policy (i) is obtained from a Qualified
Insurer having a claims-paying rating of "A" or better from Standard & Poor's
and a financial strength rating of "A2" or better from Moody's (or Standard &
Poor's and a comparable rating from one other nationally recognized statistical
rating agency, if such insurer is not rated by Moody's) or such lower rating of
any Rating Agency or rating from any other nationally recognized statistical
rating agency as will not result in qualification, downgrading or withdrawal of
the ratings then assigned to the Certificates, as evidenced in writing by the
Rating Agencies, and (ii) provides protection equivalent to the individual
policies otherwise required, the Master Servicer or the Special Servicer, as the
case may be, shall conclusively be deemed to have satisfied its obligation to
cause hazard insurance to be maintained on the related Mortgaged Properties
and/or REO Properties. Such blanket policy may contain a deductible clause (not
in excess of a customary amount), in which case the Master Servicer or the
Special Servicer, as appropriate, shall, if there shall not have been maintained
on the related Mortgaged Property or REO Property a hazard insurance policy
complying with the requirements of Section 3.07(a), and there shall have been
one or more losses that would have been covered by such policy, promptly deposit
into the Certificate Account from its own funds the amount not otherwise payable
under the blanket policy because of such deductible clause, to the extent that
any such deductible exceeds the deductible limitations that pertained to the
related Mortgage Loan, or, in the absence of such deductible limitation that
pertained to the related Mortgage Loan, or, in the absence of such deductible
limitation, the deductible limitation which is consistent with the Servicing
Standard. The Master Servicer or the Special Servicer, as appropriate, shall
prepare and present, on behalf of itself, the Trustee and Certificateholders,
claims under any such blanket policy in a timely fashion in accordance with the
terms of such policy. Costs to the Master Servicer of maintaining insurance
policies pursuant to this Section 3.07 (including the incremental cost related
to any Mortgaged Property with respect to any blanket policy or master forced
place policy described in this Section 3.07(b) shall be paid by the Master
Servicer as a Servicing Advance and shall be reimbursable to the Master Servicer
with interest at the Reimbursement Rate, and costs to the Special Servicer of
maintaining insurance policies pursuant to this Section 3.07 shall be paid and
reimbursed in accordance with Section 3.17(b).
(c) Each of the Master Servicer and the Special Servicer shall
at all times during the term of this Agreement (or, in the case of the Special
Servicer, at all times during the term of this Agreement in which Specially
Serviced Mortgage Loans or REO Properties are part of the Trust Fund) keep in
force with Qualified Insurers a fidelity bond issued by an
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insurer having a claims-paying rating of "A" or better from Standard & Poor's
and a financial strength rating of "Aa2" or better from Moody's (if then rated
by Moody's) respectively, or such lower rating of any Rating Agency or rating
from any other nationally recognized statistical rating agency as will not
result in qualification, downgrading or withdrawal of the ratings then assigned
to the Certificates, as evidenced in writing by the Rating Agencies, such
fidelity bond to be in such form and amount as would permit it to be a qualified
FNMA seller-servicer of multifamily mortgage loans, or in such other form and
amount as would not cause the qualification, downgrading or withdrawal of any
rating assigned by any Rating Agency to the Certificates (as evidenced in
writing from each Rating Agency). Each of the Master Servicer and the Special
Servicer shall be deemed to have complied with the foregoing provision if an
Affiliate thereof has such fidelity bond coverage and, by the terms of such
fidelity bond, the coverage afforded thereunder extends to the Master Servicer
or the Special Servicer, as the case may be. Such fidelity bond shall provide
for ten days' written notice to the Trustee prior to any cancellation.
Each of the Master Servicer and the Special Servicer shall at
all times during the term of this Agreement (or, in the case of the Special
Servicer, at all times during the term of this Agreement in which Specially
Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund)
also keep in force with Qualified Insurers having a claims-paying rating of "A"
or better from Standard & Poor's and a financial strength rating of "Aa2" or
better from Moody's or such lower rating as will not result in qualification,
downgrading or withdrawal of the ratings then assigned to the Certificates, as
evidenced in writing by the Rating Agencies, respectively, a policy or policies
of insurance covering loss occasioned by the errors and omissions of its
officers, employees and agents in connection with its servicing obligations
hereunder, which policy or policies shall be in such form and amount as would
permit it to be a qualified FNMA seller-servicer of multifamily mortgage loans,
or in such other form and amount as would not adversely affect any rating
assigned by any Rating Agency to the Certificates (as evidenced in writing from
each Rating Agency). Each of the Master Servicer and the Special Servicer shall
be deemed to have complied with the foregoing provisions if an Affiliate thereof
has such insurance and, by the terms of such policy or policies, the coverage
afforded thereunder extends to the Master Servicer or the Special Servicer, as
the case may be. Any such errors and omissions policy shall provide for ten
days' written notice to the Trustee prior to cancellation. The Master Servicer
and the Special Servicer shall each cause the Trustee to be an additional
insured or loss payee on any policy currently in place or procured pursuant to
the requirements of this Section 3.07(c).
For so long as the long-term debt obligations of the Master
Servicer or Special Servicer, as the case may be, are rated at least "A" or the
equivalent by all of the Rating Agencies (or such lower rating as will not
result in qualification, downgrading or withdrawal of the ratings then assigned
to the Certificates, as evidenced in writing by the Rating Agencies), such
Person may self-insure with respect to the risks described in this subsection.
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SECTION 3.08. Enforcement of Alienation Clauses.
With respect to those Mortgage Loans it is obligated to
service hereunder, each of the Master Servicer and the Special Servicer, as
applicable, on behalf of the Trustee as the mortgagee of record, shall, to the
extent permitted by applicable law, enforce the restrictions contained in the
related Mortgage on transfers or further encumbrances of the related Mortgaged
Property and on transfers of interests in the related Mortgagor, unless the
Master Servicer or the Special Servicer, as applicable, has determined,
consistent with the Servicing Standard, that waiver of such restrictions would
be in accordance with the Servicing Standard. Promptly after the Master Servicer
or the Special Servicer, as applicable, has made any such determination, the
Master Servicer or the Special Servicer, as applicable, shall deliver to the
Trustee, the Majority Subordinate Certificateholder, the Rating Agencies and the
Master Servicer (if such determination is made by the Special Servicer) an
Officers' Certificate setting forth the basis for such determination. Neither
the Master Servicer nor the Special Servicer shall (a) grant any such waiver in
respect of a due-on-encumbrance provision for any Mortgage Loan without
receiving (i) the prior written confirmation from the Rating Agencies that such
action would not result in a downgrading, qualification or withdrawal of the
ratings then assigned to the Certificates (the Master Servicer or the Special
Servicer, as applicable, shall use its reasonable efforts to have the cost, if
any, of obtaining such confirmation paid by the Mortgagor; if such cost is not
paid by the Mortgagor, the Master Servicer shall advance such amount as a
Servicing Advance, unless such Advance would be a Nonrecoverable Advance) and
(ii) the approval of the Controlling Class Representative, which if not received
by the Master Servicer or Special Servicer, as applicable, within ten Business
Days of the delivery of the related notices shall be deemed to be given;
provided, the Controlling Class Representative may not unreasonably withhold
such approval and may not cause the Master Servicer or the Special Servicer to
violate any terms or provisions of this Agreement or any other agreement
contemplated hereby, or (b) grant a waiver in respect of a due on sale provision
for any Mortgage Loan (or a group of Mortgage Loans that are
cross-collateralized or cross defaulted with each other or which relate to a
single Mortgagor or group of affiliated Mortgagors) that has a then current
stated Principal Balance at the time of such determination either (i) in excess
of 5% of the aggregate the current Stated Principal Balance of all Mortgage
Loans or (ii) in excess of $20 million, without receiving (x) prior written
confirmation from the Rating Agencies that such action would not result in a
downgrading, qualification or withdrawal of the ratings then assigned to the
Certificates (the Master Servicer or the Special Servicer, as applicable, shall
use its reasonable efforts to have the cost, if any, of obtaining such
confirmation paid by the Mortgagor; if such cost is not paid by the Mortgagor,
the Master Servicer shall advance such amount as a Servicing Advance, unless
such Advance would be a Nonrecoverable Advance) and (y) the approval of the
Controlling Class Representative, which if not received by the Master Servicer
or Special Servicer, as applicable, within ten Business Days of the delivery of
the related notices shall be deemed to be given; provided, the Controlling Class
Representative may not unreasonably withhold such approval and may not cause the
Master Servicer or the Special Servicer to violate any terms or provisions of
this Agreement or any other agreement contemplated hereby.
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SECTION 3.09. Realization Upon Defaulted Mortgage
Loans; Required Appraisals.
(a) The Special Servicer shall, subject to Sections 3.09(b)
through 3.09(d), exercise reasonable efforts, consistent with the Servicing
Standard, to foreclose upon or otherwise comparably convert the ownership of
properties securing such of the Mortgage Loans as come into and continue in
default and as to which no satisfactory arrangements can be made for collection
of delinquent payments, including, without limitation, pursuant to Section 3.20.
The Special Servicer shall notify the Master Servicer, by delivery of an
Officer's Certificate of the Special Servicer, of the costs and expenses
incurred or reasonably expected to be incurred by the Special Servicer in any
such foreclosure or other proceeding, and subject to the Master Servicer's
determining, that, if made such Servicing Advance would not be a Nonrecoverable
Servicing Advance, the Master Servicer shall make a Servicing Advance with
respect to such costs and expenses or reimburse the Special Servicer for such
costs and expenses pursuant to Section 3.05(a). Nothing contained in this
Section 3.09 shall be construed so as to require the Master Servicer or the
Special Servicer, as applicable, on behalf of the Trust Fund, to make a bid on
any Mortgaged Property at a foreclosure sale or similar proceeding that is in
excess of the fair market value of such property, as determined by the Master
Servicer or the Special Servicer, as applicable, in its reasonable and good
faith judgment taking into account the factors described in Section 3.18(e) and
the results of any appraisal obtained pursuant to the following sentence, all
such bids to be made in a manner consistent with the Servicing Standard. If and
when the Master Servicer or the Special Servicer, as applicable, deems it
necessary and prudent for purposes of establishing the fair market value of any
Mortgaged Property securing a defaulted Mortgage Loan, whether for purposes of
bidding at foreclosure or otherwise, it may, at the expense of the Trust Fund,
have an Appraisal performed with respect to such property by an Independent
Appraiser or other expert in real estate matters; which Appraisal shall take
into account the factors specified in Section 3.18(e), including, without
limitation, any environmental, engineering or other third party reports
available, and other factors that a prudent real estate appraiser would
consider. With respect to each Required Appraisal Mortgage Loan, the Special
Servicer shall obtain a Required Appraisal within 60 days of a Mortgage Loan
becoming a Required Appraisal Mortgage Loan (unless an appraisal meeting the
requirements of a Required Appraisal was obtained for such Required Appraisal
Mortgage Loan within the prior 12 months in which case such appraisal shall be
the Required Appraisal) and thereafter shall obtain a letter update of such
Required Appraisal once every 12 months if such Mortgage Loan remains a Required
Appraisal Mortgage Loan. The Special Servicer shall request that the Master
Servicer advance the cost of such Required Appraisal and the Master Servicer
shall make such advance, provided, the obligation of the Master Servicer to make
such advance shall be subject to the Master Servicer's determination that such
advance would not be a Nonrecoverable Advance; provided, however, that such
expense will be subject to reimbursement to the Master Servicer as a Servicing
Advance out of the Certificate Account pursuant to Section 3.05(a) and the
obligation of the Master Servicer to make such Servicing Advance and obtain such
Required Appraisal shall be subject to the Master Servicer's determination that
such Servicing Advance would not be a Nonrecoverable Advance. At any time that
any Appraisal Reduction Amount exists with respect to any
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Required Appraisal Loan, the Controlling Class Representative may, at its own
expense, (i) direct the Special Servicer to obtain and deliver to the Master
Servicer and the Trustee an appraisal that satisfies the requirements of a
"Required Appraisal", and, to the extent the appraisals are different, the
Special Servicer shall cause an independent third party appraiser to determine
the appropriate amount to be used in determining the Appraisal Reduction Amount
or (ii) upon the expiration of six months from the date on which the appraisal
was obtained by the Special Servicer with respect to such Required Appraisal
Loan, direct the Special Servicer to obtain and deliver to the Master Servicer
and the Trustee an update of the appraisal previously obtained by the Special
Servicer in connection with such Required Appraisal Loan for the purpose of
determining the appropriate amount to be used in determining the Appraisal
Reduction Amount.
(b) The Special Servicer shall not acquire any personal
property pursuant to this Section 3.09 unless either:
(i) such personal property is incident to real
property (within the meaning of Section 856(e)(1) of the Code)
so acquired by the Special Servicer; or
(ii) the Special Servicer shall have obtained an
Opinion of Counsel (the cost of which may be withdrawn from
the Certificate Account pursuant to Section 3.05(a)) to the
effect that the holding of such personal property as part of
the Trust Fund will not cause the imposition of a tax on any
of REMIC I, REMIC II or REMIC III under the REMIC Provisions
or cause any of REMIC I, REMIC II or REMIC III to fail to
qualify as a REMIC at any time that any Certificate is
outstanding.
(c) Notwithstanding the foregoing provisions of this Section
3.09, neither the Master Servicer nor the Special Servicer shall, on behalf of
the Trust Fund, obtain title to a Mortgaged Property by deed in lieu of
foreclosure or otherwise, or take any other action with respect to any Mortgaged
Property, if, as a result of any such action, the Trustee, on behalf of the
Certificateholders, could, in the reasonable judgment of the Master Servicer or
the Special Servicer, as the case may be, in accordance with the Servicing
Standard, be considered to hold title to, to be a "mortgagee-in-possession" of,
or to be an "owner" or "operator" of such Mortgaged Property within the meaning
of CERCLA or any comparable law (a "potentially responsible party"), unless (as
evidenced by an Officers' Certificate to such effect delivered to the Trustee
that shall specify all of the bases for such determination) the Special Servicer
has previously determined in accordance with the Servicing Standard, and based
on an Environmental Assessment of such Mortgaged Property which was performed by
a person who regularly conducts Environmental Assessments and which was
performed within six months prior to any such acquisition of title or other
action (a copy of such Environmental Assessment shall be delivered to the
Trustee and the Master Servicer), that:
(i) the Mortgaged Property is in compliance with
applicable environmental laws and regulations or, if not, that
it would maximize the
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recovery to the Certificateholders on a present value basis
(the relevant discounting of anticipated collections that will
be distributable to Certificateholders to be performed at the
related Mortgage Rate) to acquire title to or possession of
the Mortgaged Property and to take such actions as are
necessary to bring the Mortgaged Property into compliance
therewith in all material respects; and
(ii) there are no circumstances or conditions present
at the Mortgaged Property relating to the use, management or
disposal of Hazardous Materials for which investigation,
testing, monitoring, containment, clean-up or remediation
could be required under any applicable environmental laws and
regulations or, if such circumstances or conditions are
present for which any such action could reasonably be expected
to be required, that it would maximize the recovery to the
Certificateholders on a present value basis (the relevant
discounting of anticipated collections that will be
distributable to Certificateholders to be performed at the
related Mortgage Rate) to acquire title to or possession of
the Mortgaged Property and to take such actions with respect
to the affected Mortgaged Property.
The Special Servicer shall undertake, in good faith,
reasonable efforts to make the determination referred to in the preceding
paragraph and may conclusively rely on the Environmental Assessment referred to
above in making such determination. The cost of any such Environmental
Assessment may be reimbursed to the Master Servicer from the Certificate Account
as a Servicing Advance; and if any such Environmental Assessment so warrants,
the Special Servicer shall request the Master Servicer to make a Servicing
Advance for the cost to perform such additional environmental testing as it
deems necessary and prudent to determine whether the conditions described in
clauses (i) and (ii) of the preceding paragraph have been satisfied, in each
case subject to the Master Servicer's determination that such Advance, if made,
would not be a Nonrecoverable Advance. Neither the Master Servicer nor the
Special Servicer shall be required to make any Advance for remedial or
corrective action. The cost of any such action shall be paid out of the
Certificate Account.
(d) If the environmental testing contemplated by Section
3.09(c) above establishes that any of the conditions set forth in clauses (i)
and (ii) of the first sentence thereof has not been satisfied with respect to
any Mortgaged Property securing a defaulted Mortgage Loan, the Special Servicer,
subject to Section 6.11, shall take such action as is in accordance with the
Servicing Standard (other than proceeding against the Mortgaged Property) and,
at such time as it deems appropriate, may, on behalf of the Trustee, release all
or a portion of such Mortgaged Property from the lien of the related Mortgage;
provided that if such Mortgage Loan has a then outstanding principal balance of
greater than $1 million, prior to the release of all or a portion of the related
Mortgaged Property from the lien of the related Mortgage, (i) the Special
Servicer shall have notified the Rating Agencies, the Controlling Class
Representative, the Trustee and the Master Servicer in writing of its intention
to so release all or a portion of such Mortgaged Property and the bases for such
intention, (ii) the
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Trustee shall have notified the Certificateholders in writing of the Special
Servicer's intention to so release all or a portion of such Mortgaged Property
and (iii) the Holders of Certificates entitled to a majority of the Voting
Rights shall have consented to such release within 30 days of the Trustee's
distributing such notice (failure to respond by the end of such 30-day period
being deemed consent).
(e) The Special Servicer shall report to the Master Servicer,
the Trustee and the Controlling Class Representative monthly in writing as to
any actions taken by the Special Servicer with respect to any Mortgaged Property
that represents security for a defaulted Mortgage Loan as to which the
environmental testing contemplated in Section 3.09(c) above has revealed that
any of the conditions set forth in clauses (i) and (ii) of the first sentence
thereof has not been satisfied, in each case until the earlier to occur of
satisfaction of all such conditions and release of the lien of the related
Mortgage on such Mortgaged Property.
(f) The Special Servicer shall have the right to determine, in
accordance with the Servicing Standard, the advisability of seeking to obtain a
deficiency judgment if the state in which the Mortgaged Property is located and
the terms of the Mortgage Loan permit such an action and shall, in accordance
with the Servicing Standard, seek such deficiency judgment if it deems
advisable.
(g) The Special Servicer shall prepare and file information
returns with respect to the receipt of mortgage interest received in a trade or
business, the reports of foreclosures and abandonments of any Mortgaged Property
and the information returns relating to cancellation of indebtedness income with
respect to any Mortgaged Property required by Sections 6050H, 6050J and 6050P of
the Code and each year deliver to the Trustee and the Master Servicer an
Officers' Certificate stating that such reports have been filed. Such reports
shall be in form and substance sufficient to meet the reporting requirements
imposed by Sections 6050H, 6050J and 6050P of the Code.
(h) The Special Servicer shall maintain accurate records,
prepared by a Servicing Officer, of each Final Recovery Determination in respect
of any Specially Serviced Mortgage Loan or REO Property and the basis thereof.
Each Final Recovery Determination shall be evidenced by an Officers' Certificate
delivered to the Trustee, the Master Servicer and the Controlling Class
Representative, no later than the third Business Day following such Final
Recovery Determination.
(i) Upon reasonable request of the Master Servicer, the
Special Servicer shall deliver to it and the related Sub-Servicer any other
information and copies of any other documents in its possession with respect to
a Specially Serviced Mortgage Loan or the related Mortgaged Property.
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SECTION 3.10. Trustee and Custodian to Cooperate;
Release of Mortgage Files.
(a) Upon the payment in full of any Mortgage Loan, or the
receipt by the Master Servicer of a notification that payment in full shall be
escrowed in a manner customary for such purposes, the Master Servicer shall
promptly notify the Trustee in writing who shall release or cause the related
Custodian to release, by a certification (which certification shall be in the
form of a Request for Release in the form of Exhibit D-1 attached hereto and
shall be accompanied by the form of a release or discharge and shall include a
statement to the effect that all amounts received or to be received in
connection with such payment which are required to be deposited in the
Certificate Account pursuant to Section 3.04(a) have been or will be so
deposited) of a Servicing Officer (a copy of which certification shall be
delivered to the Special Servicer) and shall request delivery to it of the
related Mortgage File. Upon receipt of such certification and request, the
Trustee shall release, or cause any related Custodian to release, the related
Mortgage File to the Master Servicer and shall deliver to the Master Servicer
such release or discharge, duly executed. Ordinary and reasonable expenses
incurred in connection with any instrument of satisfaction or deed of
reconveyance shall not be chargeable to the Certificate Account or the
Distribution Account.
(b) If from time to time, and as appropriate for servicing or
foreclosure of any Mortgage Loan, the Master Servicer or the Special Servicer
shall otherwise require any Mortgage File (or any portion thereof), the Trustee,
upon request of the Master Servicer and receipt from the Master Servicer of a
Request for Release in the form of Exhibit D-1 attached hereto signed by a
Servicing Officer thereof, or upon request of the Special Servicer and receipt
from the Special Servicer of a Request for Release in the form of Exhibit D-2
attached hereto, shall release, or cause any related Custodian to release, such
Mortgage File (or portion thereof) to the Master Servicer or the Special
Servicer, as the case may be. Upon return of such Mortgage File (or portion
thereof) to the Trustee or related Custodian, or the delivery to the Trustee of
a certificate of a Servicing Officer of the Special Servicer stating that such
Mortgage Loan was liquidated and that all amounts received or to be received in
connection with such liquidation that are required to be deposited into the
Certificate Account pursuant to Section 3.04(a) have been or will be so
deposited, or that such Mortgage Loan has become an REO Property, a copy of the
Request for Release shall be released by the Trustee or related Custodian to the
Master Servicer or the Special Servicer, as applicable.
(c) Within seven Business Days (or within such shorter period
(but no less than three Business Days) as execution and delivery can reasonably
be accomplished if the Special Servicer notifies the Trustee of an exigency) of
the Special Servicer's request therefor, the Trustee shall execute and deliver
to the Special Servicer (or the Special Servicer may execute and deliver in the
name of the Trustee based on a limited power of attorney issued in favor of the
Special Servicer pursuant to Section 3.01(b)), in the form supplied to the
Trustee, any court pleadings, requests for trustee's sale or other documents
stated by the Special Servicer to be reasonably necessary to the foreclosure or
trustee's sale in respect of a Mortgaged Property or REO Property or to any
legal action brought to obtain judgment against
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any Mortgagor on the Mortgage Note or Mortgage or to obtain a deficiency
judgment, or to enforce any other remedies or rights provided by the Mortgage
Note or Mortgage or otherwise available at law or in equity or to defend any
legal action or counterclaim filed against the Trust Fund, the Master Servicer
or the Special Servicer. Together with such documents or pleadings, the Special
Servicer shall deliver to the Trustee a certificate of a Servicing Officer
requesting that such pleadings or documents be executed by the Trustee and
certifying as to the reason such documents or pleadings are required and that
the execution and delivery thereof by the Trustee will not invalidate or
otherwise affect the lien of the Mortgage, except for the termination of such a
lien upon completion of the foreclosure or trustee's sale.
SECTION 3.11. Servicing Compensation.
(a) As compensation for its activities hereunder, the Master
Servicer shall be entitled to receive the Master Servicing Fee with respect to
each Mortgage Loan (including each Specially Serviced Mortgage Loan) and REO
Loan. As to each such Mortgage Loan and REO Loan, the Master Servicing Fee shall
accrue at the related Master Servicing Fee Rate and on the same principal amount
and in the same manner respecting which the related interest payment due on such
Mortgage Loan or deemed to be due on such REO Loan is computed. The Master
Servicing Fee with respect to any Mortgage Loan or REO Loan shall cease to
accrue if a Liquidation Event occurs in respect thereof. Earned but unpaid
Master Servicing Fees shall be payable monthly, on a loan-by-loan basis, from
payments of interest on each Mortgage Loan and REO Revenues allocable as
interest on each REO Loan. The Master Servicer shall be entitled to recover
unpaid Master Servicing Fees in respect of any Mortgage Loan or REO Loan out of
that portion of related Insurance Proceeds or Liquidation Proceeds allocable as
recoveries of interest, to the extent permitted by Section 3.05(a)(iii). The
right to receive the Master Servicing Fee may not be transferred in whole or in
part except in connection with the transfer of all of the Master Servicer's
responsibilities and obligations under this Agreement.
(b) Additional servicing compensation in the form of late
charges and default interest (except to the extent such default interest is
applied to offset interest accrued on Advances with respect to the related
Mortgage Loan), interest in escrow to the extent not payable to the Mortgagor,
assumption fees, application fees, modification fees for modifications made
pursuant to Section 3.20(i), exit fees, repayment fees, charges for beneficiary
statements or demands, amounts collected for checks returned for insufficient
funds and any similar fees (excluding Prepayment Premiums), in each case to the
extent actually paid by a Mortgagor with respect to a Mortgage Loan that is not
a Specially Serviced Mortgage Loan, may be retained by the Master Servicer and
are not required to be deposited in the Certificate Account. The Master Servicer
shall also be entitled to additional servicing compensation in the form of (i)
Prepayment Interest Excesses (but only insofar as the aggregate of such
Prepayment Interest Excesses collected during any Collection Period exceeds the
aggregate amount of Prepayment Interest Shortfalls incurred during such
Collection Period) and (ii) interest and other income earned on the Certificate
Account and the Additional Interest Distribution Account and to the extent not
required to be paid to any Mortgagor under
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applicable law, interest or other income earned on deposits in the Reserve
Accounts and the Servicing Accounts in accordance with Section 3.06(b) (but only
to the extent of the Net Investment Earnings, if any, with respect to each such
account for each Collection Period). The Master Servicer shall be required to
pay out of its own funds all expenses incurred by it in connection with its
servicing activities hereunder (including, without limitation, payment of any
amounts due and owing to any of its Sub-Servicers and the premiums for any
blanket policy insuring against hazard losses pursuant to Section 3.07(b) other
than costs treated as a Servicing Advance in such Section 3.07(b)), if and to
the extent such expenses are not payable directly out of the Certificate
Account, and the Master Servicer shall not be entitled to reimbursement therefor
except as expressly provided in this Agreement.
(c) As compensation for its activities hereunder, the Special
Servicer shall be entitled to receive the Special Servicing Fee with respect to
each Specially Serviced Mortgage Loan and each REO Loan. As to each Specially
Serviced Mortgage Loan and REO Loan, the Special Servicing Fee shall accrue from
time to time at the Special Servicing Fee Rate on the same principal amount and
in the same manner respecting which the related interest payment due on such
Mortgage Loan or deemed to be due on such REO Loan is computed. The Special
Servicing Fee with respect to any Specially Serviced Mortgage Loan or REO Loan
shall cease to accrue as of the date a Liquidation Event occurs in respect
thereof or it becomes a Corrected Mortgage Loan. Earned but unpaid Special
Servicing Fees shall be payable monthly out of general collections on the
Mortgage Loans and any REO Properties on deposit in the Certificate Account
pursuant to Section 3.05(a).
In addition, with respect to each Specially Serviced Mortgage
Loan, Corrected Mortgage Loan and REO Loan, the Special Servicer shall be
entitled to the Principal Recovery Fee payable out of, and equal to 0.25% of,
all amounts (whether in the form of payments, Insurance Proceeds, Liquidation
Proceeds or REO Revenues) received in respect of such Mortgage Loan (or, in the
case of an REO Loan, in respect of the related REO Property) while such Mortgage
Loan is a Specially Serviced Mortgage Loan or REO Loan and allocable as a
recovery of principal in accordance with Section 3.02(b) or the definition of
"REO Loan", as applicable; provided that if any such recovered amounts are
received within six months subsequent to the termination of the previous Special
Servicer, if any, and such termination was not the result of resignation or
termination by default pursuant to Sections 6.04 and 7.01, respectively, then
the successor Special Servicer shall pay to such terminated Special Servicer a
fraction of the Principal Recovery Fee earned by the successor Special Servicer,
the numerator of which is the number of days such Specially Serviced Mortgage
Loan or REO Loan was serviced by the terminated Special Servicer and the
denominator of which is the total number of days such Specially Serviced
Mortgage Loan or REO Loan was serviced prior to becoming a Corrected Mortgage
Loan or being liquidated, as applicable. Further, no Principal Recovery Fee
shall be payable in connection with, or out of Liquidation Proceeds resulting
from, the purchase of any Mortgage Loan or REO Property by the Mortgage Loan
Seller pursuant to the Mortgage Loan Purchase Agreement, by the Majority
Subordinate Certificateholder pursuant to Section 3.18(b), by the Master
Servicer or the Special Servicer pursuant to Section 3.18(c) or by the
Depositor, the Master Servicer, the Special Servicer or
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the Majority Subordinate Certificateholder pursuant to Section 9.01; provided
further that if any Person is acting as Special Servicer at such time as any
Specially Serviced Mortgage Loan became a Corrected Mortgage Loan and such
Person is subsequently terminated as Special Servicer hereunder, and if such
Corrected Mortgage Loan was still a Corrected Mortgage Loan at the time of such
termination, then such Person shall, following such termination, continue to be
entitled to all Principal Recovery Fees payable in respect to such Corrected
Mortgage Loan, and no successor Special Servicer shall be entitled to any
Principal Recovery Fees payable in respect thereof, in either case unless and
until such Corrected Mortgage Loan again becomes a Specially Serviced Mortgage
Loan or becomes an REO Loan; and provided further that if any Person is
terminated as Special Servicer hereunder while the sale of any Specially
Serviced Mortgage Loan or REO Property is pending, then (subject to the second
preceding proviso) such Person shall be entitled to all, and the successor
Special Servicer shall be entitled to none, of the Principal Recovery Fee
payable in connection with the receipt of the Liquidation Proceeds derived from
such sale.
The Special Servicer's right to receive the Special Servicing
Fee and the Principal Recovery Fee may not be transferred in whole or in part
except in connection with the transfer of all of the Special Servicer's
responsibilities and obligations under Sections 6.02, 6.04 and 6.09.
(d) Additional servicing compensation in the form of late
charges and default interest (except to the extent such default interest is
applied to offset interest accrued on Advances), assumption fees, application
fees, charges for beneficiary statements or demands, modification fees, amounts
collected for checks returned for insufficient funds and any similar fees
(excluding Prepayment Premiums), in each case to the extent actually paid by a
Mortgagor with respect to a Specially Serviced Mortgage Loan, shall be promptly
paid to the Special Servicer by the Master Servicer and shall not be required to
be deposited in the Certificate Account pursuant to Section 3.04(a). The Special
Servicer shall also be entitled to additional servicing compensation in the form
of: (i) interest or other income earned on deposits in the REO Account, if
established, in accordance with Section 3.06(b) (but only to the extent of the
Net Investment Earnings, if any, with respect to the REO Account for each
Collection Period); and (ii) to the extent not required to be paid to any
Mortgagor under applicable law, any interest or other income earned on deposits
in the Servicing Accounts maintained by the Special Servicer. The Special
Servicer shall be required to pay out of its own funds all expenses incurred by
it in connection with its servicing activities hereunder (including, without
limitation, payment of any amounts due and owing to any of its Sub-Servicers and
the premiums for any blanket policy, other than the incremental cost of such
policy attributable to the addition of a Mortgaged Property, obtained by it
insuring against hazard losses pursuant to Section 3.07(b)), and the Special
Servicer shall be entitled to reimbursement therefor as expressly provided in
Section 3.05(a) if and to the extent such expenses are not payable directly out
of the Certificate Account or the REO Account.
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SECTION 3.12. Property Inspections; Collection of
Financial Statements; Delivery of
Certain Reports.
(a) The Special Servicer shall (subject to its right to do so
pursuant to the related Mortgage) at its expense perform or cause to be
performed a physical inspection of a Mortgaged Property as soon as practicable
after a related Mortgage Loan becomes a Specially Serviced Mortgage Loan, and
with respect to any other Mortgaged Properties, upon written notice to the
Master Servicer so long as such other Mortgaged Property has not been inspected
by, or on behalf of, the Master Servicer and the Master Servicer and has not
caused such inspection to have been performed. The Master Servicer shall at its
expense perform or cause to be performed an inspection of all the Mortgaged
Properties at least once per calendar year (or in the case of Mortgage Loans
with an initial principal balance of less than $2,000,000, every other calendar
year), if the Special Servicer has not already done so in that calendar year
pursuant to the preceding sentence. The Master Servicer or the Special Servicer,
as the case may be, shall prepare a written report of each such inspection
performed by it that sets forth in detail the condition of the Mortgaged
Property and that specifies the existence of: (i) any sale, transfer or
abandonment of the Mortgaged Property of which the Master Servicer or the
Special Servicer, as applicable, is aware, (ii) any change in the condition or
value of the Mortgaged Property that it, in its reasonable judgment, considers
material, or (iii) any waste committed on the Mortgaged Property. The Special
Servicer and the Master Servicer, as applicable, shall, no later than 30 days
after the related inspection (or, if prepared by a third party, no later than 30
days after receipt of such reports), deliver copies of all such inspection
reports to the Trustee and the Trustee shall make copies of all such inspection
reports available for review by Certificateholders and Certificate Owners during
normal business hours at the offices of the Trustee and deliver copies thereof
to the Controlling Class Representative. The Special Servicer shall forward
copies of any such inspection reports to the Master Servicer.
The Special Servicer will, promptly (but in no event later
than 60 days) after a Mortgage Loan becomes a Specially Serviced Mortgage Loan,
give written notice to the Master Servicer and the Trustee (a copy of which
notice the Trustee shall provide to the Controlling Class Representative and the
Rating Agencies) which will include an explanation as to the reasons such
Mortgage Loan became a Specially Serviced Mortgage Loan and the Special
Servicer's plan for servicing such Mortgage Loan.
(b) Not later than 2:00 P.M. New York time on the second
Business Day after each Determination Date, the Master Servicer shall deliver or
cause to be delivered to the Trustee and the Trustee shall, within three
Business Days, deliver to the Rating Agencies the following reports with respect
to the Mortgage Loans (and, if applicable, the related REO Properties) providing
the required information as of the end of the preceding calendar month: (i) a
CSSA Property File Report; (ii) a Comparative Financial Status Report; (iii) a
NOI Adjustment Worksheet, (iv) an Operating Statement Analysis report with
respect to the Mortgage Loans that are not Specially Serviced Mortgage Loans and
(v) a Watch List Report. Not later than 2:00 P.M. New York time on the first
Business Day following each Determination Date, the Special Servicer shall
deliver or cause to be delivered to the Master
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Servicer the following reports with respect to the Mortgage Loans (and, if
applicable, the related REO Properties) providing the required information as of
such Determination Date: (i) the Delinquent Loan Status Report with respect to
the Mortgage Loans that are Specially Serviced Mortgage Loans; (ii) an
Historical Loss Estimate Report; (iii) an Historical Loan Modification Report;
(iv) an REO Status Report; and (v) a Watch List Report; and with respect to the
Specially Serviced Mortgage Loans, the information required to be delivered by
the Trustee to the Certificateholders pursuant to Section 4.02(a) (xi)(C) - (F),
(xiii) and (xiv)(B). Not later than 2:00 P.M. New York time on the second
Business Day after each Determination Date, and to the extent it has received
information from the Special Servicer, as applicable, the Master Servicer shall
deliver to the Trustee such information as required to be delivered by the
Trustee to the Certificateholders pursuant to Sections 4.02(a) (vi)(A),
(xi)(C) - (F), (xiii) and (xiv)(B).
(c) The Master Servicer shall deliver to the Trustee the
reports set forth in Section 3.12(b) in an electronic format reasonably
acceptable to the Trustee with respect to the reports set forth in Section
3.12(b). The Trustee may, absent manifest error, conclusively rely on the
reports to be provided by the Master Servicer pursuant to Section 3.12(b).
The Master Servicer or the Special Servicer, as applicable,
shall, consistent with the Servicing Standard, endeavor to obtain quarterly and
annual operating statements and rent rolls with respect to each of the Mortgage
Loans and REO Properties, which efforts shall include in the case of Mortgage
Loans, a letter sent to the related Mortgagor each quarter (followed up with
telephone calls) requesting such quarterly and annual operating statements and
rent rolls until they are received to the extent such action is consistent with
applicable law. With respect to each Mortgaged Property and REO Property the
Master Servicer will prepare and deliver an Operating Statement Analysis as set
forth in Section 3.12(b) for the related Mortgaged Property or REO Property for
or as of the end the prior calendar month together with copies of the operating
statements and rent rolls for the related Mortgaged Property or REO Property.
Within forty-five days after receipt by the Master Servicer of
any annual operating statements with respect to any Mortgaged Property or REO
Property, the Master Servicer shall prepare or update an NOI Adjustment
Worksheet for such Mortgaged Property or REO Property (with the annual operating
statements attached thereto as an exhibit).
The Master Servicer shall maintain one Operating Statement
Analysis report for each Mortgaged Property and REO Property. The Operating
Statement Analysis report for each Mortgaged Property is to be updated by the
Master Servicer and such updated report shall be delivered in electronic format
to the Trustee within forty-five days after receipt by the Master Servicer of
updated operating statements for such Mortgaged Property. The Master Servicer
will use the "Normalized" column from the NOI Adjustment Worksheet to update the
Operating Statement Analysis report and will use any operating statements
received with respect to any Mortgaged Property to update the Operating
Statement Analysis report for such Mortgaged Property, such updates to be
completed in electronic format and delivered to the Trustee within thirty days
after receipt of the necessary information.
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SECTION 3.13. Annual Statement as to Compliance.
Each of the Master Servicer and the Special Servicer shall
deliver to the Trustee, the Controlling Class Representative, the Underwriter,
and the Rating Agencies, and, in the case of the Special Servicer, to the Master
Servicer, on or before April 30 of each year, beginning April 30, 2000, an
Officers' Certificate stating, as to each signer thereof, that (i) a review of
the activities of the Master Servicer or the Special Servicer, as the case may
be, during the preceding calendar year and of its performance under this
Agreement has been made under such officer's supervision, (ii) to the best of
such officer's knowledge, based on such review, the Master Servicer or the
Special Servicer, as the case may be, has fulfilled all of its obligations under
this Agreement in all material respects throughout such year, or, if there has
been a default in the fulfillment of any such obligation, specifying each such
default known to such officer and the nature and status thereof and (iii) the
Master Servicer or the Special Servicer, as the case may be, has received no
notice regarding qualification, or challenging the status, of any portion of the
Trust Fund as a REMIC from the Internal Revenue Service or any other
governmental agency or body or, if it has received any such notice, specifying
the details thereof. The Master Servicer and Special Servicer shall deliver a
copy of such Officer's Certificate to the Depositor.
SECTION 3.14. Reports by Independent Public
Accountants.
On or before April 30 of each year, beginning April 30, 2,000
each of the Master Servicer and the Special Servicer at its expense shall cause
a firm of Independent public accountants (which may also render other services
to the Master Servicer or the Special Servicer) that is a member of the American
Institute of Certified Public Accountants to furnish a statement to the Trustee,
the Underwriter, the Rating Agencies, the Depositor and, in the case of the
Special Servicer, to the Master Servicer to the effect that such firm has
examined the servicing operations of the Master Servicer or the Special
Servicer, as the case may be, for the previous calendar year (except that the
first such report shall cover the period from the Closing Date through December
31, 1999) and that, on the basis of such examination, conducted substantially in
compliance with USAP, such firm confirms that the Master Servicer or the Special
Servicer, as the case may be, complied with the minimum servicing standards
identified in USAP, in all material respects, except for such significant
exceptions or errors in records that, in the opinion of such firm, the USAP
requires it to report. In rendering such statement, such firm may rely, as to
matters relating to direct servicing of mortgage loans by Sub-Servicers, upon
comparable statements for examinations conducted substantially in compliance
with the Uniform Single Audit Program for Mortgage Bankers (rendered within one
year of such statement) of independent public accountants with respect to the
related Sub-Servicer.
SECTION 3.15. Access to Certain Information.
(a) Upon ten days prior written notice, to the extent such
items are not in the Trustee's possession the Master Servicer (with respect to
the items in clauses (a), (b), (c), (d) and (h) below), the Special Servicer
(with respect to the items in clauses (e), (f), (g), (h) and
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(i) below) and the Trustee to the extent any such items are in its possession,
shall make available at their respective offices primarily responsible for
administration of the Mortgage Loans (or in the case of The Chase Manhattan
Bank, at its Corporate Trust Office, except with respect to item (g), which will
be maintained at its offices in New York or Texas), during normal business
hours, for review by any Certificateholder or any person identified by a Holder
or its designated agent in writing to the Trustee, the Master Servicer or the
Special Servicer, as the case may be, as a prospective transferee of such an
interest, the Trustee, the Rating Agencies, the Underwriter and anyone specified
thereby and the Depositor originals or copies of the following items: (a) this
Agreement and any amendments thereto, (b) all Statements to Certificateholders
delivered to holders of the relevant Class of Certificates since the Closing
Date and all reports, statements and analyses delivered by the Master Servicer
since the Closing Date pursuant to Section 3.12(c), (c) all Officers'
Certificates delivered by the Master Servicer since the Closing Date pursuant to
Section 3.13, (d) all accountants' reports delivered to the Master Servicer
since the Closing Date as described in Section 3.14, (e) the most recent
property inspection report prepared by or on behalf of the Special Servicer or
the Master Servicer in respect of each Mortgaged Property pursuant to Section
3.12(a) hereof, (f) the most recent Mortgaged Property annual operating
statements and rent roll, if any, collected by or on behalf of the Special
Servicer and delivered to the Master Servicer, (g) any and all modifications,
waivers and amendments of the terms of a Mortgage Loan entered into by the
Special Servicer or the Master Servicer and (h) any and all Officers'
Certificates and other evidence delivered by the Master Servicer or the Special
Servicer, as the case may be, to support its determination that any Advance was
or, if made, would be a Nonrecoverable Advance. Copies of any and all of the
foregoing items will be available from the Master Servicer or the Special
Servicer, as the case may be, upon request at the expense of the requesting
party and shall be provided to any of the Rating Agencies at no cost pursuant to
any of their requests.
In connection with providing access to or copies of the items
described in the preceding paragraph pursuant to this Section 3.15, the Trustee
shall require: (a) in the case of Certificate Owners, a confirmation executed by
the requesting Person substantially in the form of Exhibit W-1 hereto (or such
other form as may be reasonably acceptable to the Trustee) generally to the
effect that such Person is a beneficial holder of Book-Entry Certificates and,
subject to the last sentence of this paragraph, will keep such information
confidential (except that such Certificate Owner may provide such information to
any other Person that holds or is contemplating the purchase of any Certificate
or interest therein, provided that such other Person confirms in writing such
ownership interest or prospective ownership interest and agrees to keep such
information confidential); and (b) in the case of a prospective purchaser of a
Certificate or an interest therein, confirmation executed by the requesting
Person substantially in the form of Exhibit W-2 hereto (or such other form as
may be reasonably acceptable to the Trustee) generally to the effect that such
Person is a prospective purchaser of a Certificate or an interest therein, is
requesting the information for use in evaluating a possible investment in
Certificates and, subject to the last sentence of this paragraph, will otherwise
keep such information confidential. The Holders of the Certificates, by their
acceptance thereof, will be deemed to have agreed, subject to the last sentence
of this
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paragraph, to keep such information confidential (except that any Holder may
provide such information obtained by it to any other Person that holds or is
contemplating the purchase of any Certificate or interest therein, provided that
such other Person confirms in writing such ownership interest or prospective
ownership interest and agrees to keep such information confidential).
Notwithstanding the foregoing, no Certificateholder, Certificate Owner or
prospective Certificateholder or Certificate Owner shall be obligated to keep
confidential any information received from the Trustee pursuant to this Section
3.15 that has previously been made available via the Trustee's Internet Website
or has previously been filed with the Commission, and the Trustee shall not
require either of the certifications contemplated by the second preceding
sentence in connection with providing any information pursuant to this Section
3.15 that has previously been made available via the Trustee's Internet Website
or has previously been filed with the Commission.
Each of the Master Servicer and the Special Servicer shall
afford to the Trustee, the Controlling Class Representative, the Rating Agencies
and the Depositor, and to the OTS, the FDIC and any other banking or insurance
regulatory authority that may exercise authority over any Certificateholder,
access to any records regarding the Mortgage Loans and the servicing thereof
within its control, except to the extent it is prohibited from doing so by
applicable law or contract or to the extent such information is subject to a
privilege under applicable law to be asserted on behalf of the
Certificateholders. Such access shall be afforded only upon reasonable prior
written request and during normal business hours at the offices of the Master
Servicer, the Special Servicer or any Sub-Servicer, as the case may be,
designated by it.
The Trustee, the Master Servicer, the Special Servicer and the
Underwriter may require payment from the related Certificateholder of a sum
sufficient to cover the reasonable costs and expenses of providing any such
information or access pursuant to this Section 3.15 to, or at the request of,
the Certificateholders or prospective transferees, including, without
limitation, copy charges and reasonable fees for employee time and for space.
(b) The Trustee will make available each month, to any
interested party, the Statement to Certificateholders via the Trustee's Internet
Website, electronic bulletin board and fax-on-demand service. In addition,
pursuant to the terms of one or more written agreements (each an "Internet
Disclosure Agreement") that may be entered into after the date hereof, between
the Depositor on the one hand and the Trustee on the other hand, the Trustee may
make available certain information, reports and documents with respect to the
Mortgage Loans and the transactions contemplated hereby, including, without
limitation, the CSSA Loan File Report, the CSSA Property File Report and the
reports contemplated by Section 3.12(c), on the Trustee's internet website. None
of the Depositor, the Master Servicer or the Trustee possesses any obligation to
enter an Internet Disclosure Agreement. The Trustee will not post or disclose
information, reports, data files or documents with respect to the Mortgage Loans
and the transactions contemplated hereby unless it is expressly permitted to
post such information pursuant to the terms hereof or pursuant to the terms of
an Internet Disclosure Agreement. Provided that each of the Master Servicer, the
Special Servicer and the Trustee
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prepare and disseminate all information and reports pursuant to the terms of
this Agreement, none of the Master Servicer, the Special Servicer or the Trustee
shall be liable for the dissemination of such information or reports. The
Trustee's website will be located at "www.globaltrustservices.com". The
Trustee's electronic bulletin board may be accessed by calling (800) 204-2737 or
(713) 216-2933 for loan level information, and interested parties may request
such information by calling (212) 946-3471. For assistance with regard to the
above-mentioned services, Certificate Owners may call (212) 946-3246.
If three or more Holders or the Controlling Class
Representative (hereinafter referred to as "Applicants" with a single Person
which (together with its Affiliates) is the Holder of more than one Class of
Certificates being viewed as a single Applicant for these purposes) apply in
writing to the Trustee, and such application states that the Applicants' desire
to communicate with other Holders with respect to their rights under this
Agreement or under the Certificates and is accompanied by a copy of the
communication which such Applicants propose to transmit, then the Trustee shall,
within five Business Days after the receipt of such application, send, at the
Applicants' expense, the written communication proffered by the Applicants to
all Certificateholders at their addresses as they appear in the Certificate
Register.
SECTION 3.16. Title to REO Property; REO Account.
(a) If title to any REO Property is acquired, the deed or
certificate of sale shall be issued to the Trustee or its nominee on behalf of
the Certificateholders. The Special Servicer, on behalf of the Trust Fund, shall
sell any REO Property by the end of the third year following the calendar year
in which REMIC I acquires ownership of such REO Property for purposes of Section
860G(a)(8) of the Code, unless the Special Servicer either (i) applies, more
than sixty days prior to the end of such third succeeding calendar year, and is
granted an extension of time (an "REO Extension") by the Internal Revenue
Service to sell such REO Property or (ii) obtains for the Trustee an Opinion of
Counsel, addressed to the Trustee, the Special Servicer and the Master Servicer,
to the effect that the holding by REMIC I of such REO Property subsequent to the
end of such third succeeding calendar year will not result in the imposition of
taxes on "prohibited transactions" (as defined in Section 860F of the Code) of
any of REMIC I, REMIC II or REMIC III or cause any of REMIC I, REMIC II or REMIC
III to fail to qualify as a REMIC at any time that any Certificates are
outstanding. If the Special Servicer is granted the REO Extension contemplated
by clause (i) of the immediately preceding sentence or obtains the Opinion of
Counsel contemplated by clause (ii) of the immediately preceding sentence, the
Special Servicer shall sell such REO Property within such extended period as is
permitted by such REO Extension or such Opinion of Counsel, as the case may be.
Any expense incurred by the Special Servicer in connection with its obtaining
the REO Extension contemplated by clause (i) of the second preceding sentence or
its obtaining the Opinion of Counsel contemplated by clause (ii) of the second
preceding sentence, shall be an expense of the Trust Fund payable out of the
Certificate Account pursuant to Section 3.05(a).
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(b) The Special Servicer shall segregate and hold all funds
collected and received in connection with any REO Property separate and apart
from its own funds and general assets. If an REO Acquisition shall occur, the
Special Servicer shall establish and maintain one or more accounts
(collectively, the "REO Account"), held on behalf of the Trustee in trust for
the benefit of the Certificateholders, for the retention of revenues and other
proceeds derived from each REO Property. The REO Account shall be an Eligible
Account. The Special Servicer shall deposit, or cause to be deposited, in the
REO Account, upon receipt, all REO Revenues, Insurance Proceeds and Liquidation
Proceeds received in respect of an REO Property. Funds in the REO Account may be
invested only in Permitted Investments in accordance with Section 3.06. The
Special Servicer shall be entitled to make withdrawals from the REO Account to
pay itself, as additional servicing compensation in accordance with Section
3.11(d), interest and investment income earned in respect of amounts held in the
REO Account as provided in Section 3.06(b) (but only to the extent of the Net
Investment Earnings with respect to the REO Account for any Collection Period).
The Special Servicer shall give written notice to the Trustee and the Master
Servicer of the location of the REO Account when first established and of the
new location of the REO Account prior to any change thereof.
(c) The Special Servicer shall withdraw from the REO Account
funds necessary for the proper operation, management, maintenance and
disposition of any REO Property, but only to the extent of amounts on deposit in
the REO Account relating to such REO Property (including any monthly reserve or
escrow amounts necessary to accumulate sufficient funds for taxes, insurance and
anticipated capital expenditures (the "Impound Reserve")). On each Determination
Date, the Special Servicer shall withdraw from the REO Account and deposit into
the Certificate Account or deliver to the Master Servicer (which shall deposit
such amounts into the Certificate Account) the aggregate of all amounts received
in respect of each REO Property during the most recently ended Collection
Period, net of any withdrawals made out of such amounts pursuant to the
preceding sentence; provided that in addition to the Impound Reserve the Special
Servicer may retain in the REO Account such portion of proceeds and collections
as may be necessary to maintain a reserve of sufficient funds for the proper
operation, management and maintenance of the related REO Property (including
without limitation the creation of a reasonable reserve for repairs,
replacements and other related expenses), such reserve not to exceed $10,000
with respect to each such REO Property or to cover a period of more than twelve
months.
(d) The Special Servicer shall keep and maintain separate
records, on a property-by-property basis, for the purpose of accounting for all
deposits to, and withdrawals from, the REO Account pursuant to Section 3.16(b)
or (c). The Special Servicer shall provide the Master Servicer any information
with respect to the REO Account as is reasonably requested by the Master
Servicer.
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SECTION 3.17. Management of REO Property.
(a) Prior to the acquisition of title to a Mortgaged Property,
the Special Servicer shall review the operation of such Mortgaged Property and
determine the nature of the income that would be derived from such property if
it were acquired by the Trust Fund. If the Special Servicer determines from such
review that:
(i) None of the income from Directly Operating such
Mortgaged Property would be subject to tax as "net income from
foreclosure property" within the meaning of the REMIC
Provisions or would be subject to the tax imposed on
"prohibited transactions" under Section 860F of the Code
(either such tax referred to herein as an "REO Tax"), such
Mortgaged Property may be Directly Operated by the Special
Servicer as REO Property;
(ii) Directly Operating such Mortgaged Property as an
REO Property could result in income from such property that
would be subject to an REO Tax, but that a lease of such
property to another party to operate such property, or the
performance of some services by an Independent Contractor with
respect to such property, or another method of operating such
property would not result in income subject to an REO Tax,
then the Special Servicer may (provided, that in the good
faith and reasonable judgment of the Special Servicer, it is
commercially reasonable) acquire such Mortgaged Property as
REO Property and so lease or operate such REO Property; or
(iii) It is reasonable to believe that Directly
Operating such property as REO Property could result in income
subject to an REO Tax and that no commercially reasonable
means exists to operate such property as REO Property without
the Trust Fund incurring or possibly incurring an REO Tax on
income from such property, the Special Servicer shall deliver
to the REMIC Administrator and the Controlling Class
Representative, in writing, a proposed plan (the "Proposed
Plan") to manage such property as REO Property. Such plan
shall include potential sources of income, and to the extent
commercially reasonable, estimates of the amount of income
from each such source. Within a reasonable period of time
after receipt of such plan, the REMIC Administrator shall
consult with the Special Servicer and shall advise the Special
Servicer and the Controlling Class Representative of the REMIC
Administrator's federal income tax reporting position with
respect to the various sources of income that the Trust Fund
would derive under the Proposed Plan. In addition, the REMIC
Administrator shall (to the extent reasonably possible) advise
the Special Servicer and the Controlling Class Representative
of the estimated amount of taxes that the Trust Fund would be
required to pay with respect to each such source of income.
After receiving the information described in the two preceding
sentences from the REMIC Administrator, the Special Servicer
shall either (A) implement the Proposed Plan (after acquiring
the respective
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Mortgaged Property as REO Property) or (B) manage and operate
such property in a manner that would not result in the
imposition of an REO Tax on the income derived from such
property. All of the REMIC Administrator's expenses (including
any fees and expenses of counsel or other experts reasonably
retained by it) incurred pursuant to this section shall be
reimbursed to it from the Trust Fund in accordance with
Section 10.01(f).
The Special Servicer's decision as to how each REO Property
shall be managed and operated shall be based on the Servicing Standard and in
any case on the good faith and reasonable judgment of the Special Servicer as to
which means would be in the best interest of the Certificateholders by
maximizing (to the extent commercially feasible) the net after-tax REO Revenues
received by the Trust Fund with respect to such property and, to the extent
consistent with the foregoing, in the same manner as would prudent mortgage loan
servicers and asset managers operating acquired mortgaged property comparable to
the respective Mortgaged Property. Both the Special Servicer and the REMIC
Administrator may, at the expense of the Trust Fund payable pursuant to Section
3.05(a)(xiii), consult with counsel.
(b) Subject to Section 3.17(a)(iii), if title to any REO
Property is acquired, the Special Servicer shall manage, conserve, protect and
operate such REO Property for the benefit of the Certificateholders solely for
the purpose of its prompt disposition and sale in a manner that does not and
will not cause such REO Property to fail to qualify as "foreclosure property"
within the meaning of Section 860G(a)(8) of the Code or, except as contemplated
by Section 3.17(a), either result in the receipt by REMIC I, REMIC II or REMIC
III of any "income from nonpermitted assets" within the meaning of Section
860F(a)(2)(B) of the Code or result in an Adverse REMIC Event. Subject to the
foregoing, however, the Special Servicer shall have full power and authority to
do any and all things in connection therewith as are consistent with the
Servicing Standard and, consistent therewith, shall withdraw from the REO
Account, to the extent of amounts on deposit therein with respect to any REO
Property, funds necessary for the proper operation, management, maintenance and
disposition of such REO Property, including without limitation:
(i) all insurance premiums due and payable in
respect of such REO Property;
(ii) all real estate taxes and assessments in respect
of such REO Property that may result in the imposition of a
lien thereon;
(iii) any ground rents in respect of such REO
Property; and
(iv) all costs and expenses necessary to maintain,
lease, sell, protect, manage, operate and restore such REO
Property.
To the extent that amounts on deposit in the REO Account in respect of any REO
Property are insufficient for the purposes set forth in clauses (i) - (iv) above
with respect to such REO Property, the Master Servicer shall, pursuant to the
procedures and limitation set forth in
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Section 3.01, make Servicing Advances in such amounts as are necessary for such
purposes unless (as evidenced by an Officers' Certificate delivered to the
Trustee and the Master Servicer) the Master Servicer would not make such
advances if the Master Servicer owned such REO Property or the Master Servicer
determines, in accordance with the Servicing Standard, that such payment would
be a Nonrecoverable Advance; provided, however, that the Special Servicer may
make any such Servicing Advance without regard to recoverability if it is a
necessary fee or expense incurred in connection with the defense or prosecution
of legal proceedings.
(c) The Special Servicer may contract with any Independent
Contractor for the operation and management of any REO Property, provided that:
(i) the terms and conditions of any such
contract may not be inconsistent herewith and shall reflect
an agreement reached at arm's length;
(ii) the fees of such Independent Contractor (which
shall be expenses of the Trust Fund) shall be reasonable and
customary in consideration of the nature and locality of the
REO Property;
(iii) except as permitted under Section 3.17(a), any
such contract shall require, or shall be administered to
require, that the Independent Contractor, in a timely manner,
(A) pay all costs and expenses incurred in connection with the
operation and management of such REO Property, including,
without limitation, those listed in Section 3.17(b) above, and
(B) except to the extent that such revenues are derived from
any services rendered by the Independent Contractor to tenants
of the REO Property that are not customarily furnished or
rendered in connection with the rental of real property
(within the meaning of Section 1.856-4(b)(5) of the Treasury
Regulations or any successor provision), remit all related
revenues collected (net of its fees and such costs and
expenses) to the Special Servicer upon receipt;
(iv) none of the provisions of this Section 3.17(c)
relating to any such contract or to actions taken through any
such Independent Contractor shall be deemed to relieve the
Special Servicer of any of its duties and obligations
hereunder with respect to the operation and management of any
such REO Property; and
(v) the Special Servicer shall be obligated with
respect thereto to the same extent as if it alone were
performing all duties and obligations in connection with the
operation and management of such REO Property.
The Special Servicer shall be entitled to enter into any agreement with any
Independent Contractor performing services for it related to its duties and
obligations hereunder for indemnification of the Special Servicer by such
Independent Contractor, and nothing in this Agreement shall be deemed to limit
or modify such indemnification. No agreement entered
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into pursuant to this Section 3.17(c) shall be deemed a Sub-Servicing Agreement
for purposes of Section 3.22.
SECTION 3.18. Sale of Mortgage Loans and REO
Properties.
(a) The Master Servicer, the Special Servicer or the Trustee
may sell or purchase, or permit the sale or purchase of, a Mortgage Loan or REO
Property only on the terms and subject to the conditions set forth in this
Section 3.18 or as otherwise expressly provided in or contemplated by Sections
2.03(a), 2.02(b) and 9.01.
(b) Subject to Sections 2.03(a) and 2.02(b), if the Special
Servicer has determined in good faith that any Defaulted Mortgage Loan will
become subject to foreclosure proceedings, the Special Servicer shall promptly
so notify in writing the Trustee, the Majority Subordinate Certificateholder and
the Master Servicer. The Majority Subordinate Certificateholder may at its
option purchase from the Trust Fund, at a price equal to the Purchase Price, any
such Mortgage Loan. The Purchase Price for any Mortgage Loan purchased under
this paragraph (b) shall be deposited into the Certificate Account, and the
Custodian, upon receipt of an Officers' Certificate from the Master Servicer to
the effect that such deposit has been made, shall release or cause to be
released to the Majority Subordinate Certificateholder the related Mortgage
File, and shall execute and deliver such instruments of transfer or assignment,
in each case without recourse, as shall be provided to it and are reasonably
necessary to vest in the Majority Subordinate Certificateholder ownership of
such Mortgage Loan. In connection with any such purchase, the Special Servicer
shall deliver the related Servicing File to the Majority Subordinate
Certificateholder.
(c) If the Majority Subordinate Certificateholder has not
purchased any Defaulted Mortgage Loan within 30 days of its having received
notice in respect thereof pursuant to Section 3.18(b) above, either the Master
Servicer or the Special Servicer (with preference given to the Master Servicer)
may at its option purchase such Mortgage Loan from the Trust Fund, at a price
equal to the Purchase Price. The Purchase Price for any such Mortgage Loan
purchased under this paragraph (c) shall be deposited into the Certificate
Account, and the Custodian, upon receipt of an Officers' Certificate from the
Master Servicer to the effect that such deposit has been made, shall release or
cause to be released to the Master Servicer or the Special Servicer, as
applicable, the related Mortgage File, and shall execute and deliver such
instruments of transfer or assignment, in each case without recourse, as shall
be provided to it and are reasonably necessary to vest in the Master Servicer or
the Special Servicer, as applicable, the ownership of such Mortgage Loan. In
connection with any such purchase by the Master Servicer, the Special Servicer
shall deliver the related Servicing File to the Master Servicer.
(d) The Special Servicer may, subject to Section 6.11, offer
to sell any Defaulted Mortgage Loan not otherwise purchased pursuant to Sections
3.18(b) and 3.18(c) above, if and when the Special Servicer determines,
consistent with the Servicing Standard, that such a sale would be in the best
economic interests of the Certificateholders. Such offer shall be made in a
commercially reasonable manner (which, for purposes hereof, includes an
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offer to sell without representation or warranty other than customary warranties
of title and condition, if liability for breach thereof is limited to recourse
against the Trust Fund) for a period of not less than 10 days. The Majority
Subordinate Certificateholder, the Master Servicer and the Special Servicer may
offer to purchase any such Specially Serviced Mortgage Loan or REO Property
pursuant to this Section 3.18(d).
Unless the Special Servicer determines that acceptance of any
bid would not be in the best economic interests of the Certificateholders, the
Special Servicer shall accept the highest cash bid received from any Person that
constitutes a fair price for such Mortgage Loan. In the absence of any bid
determined as provided below to be fair, the Special Servicer shall proceed with
respect to such Defaulted Mortgage Loan in accordance with Section 3.09.
The Special Servicer shall, subject to Section 6.11, use its
best efforts to solicit bids for each REO Property in such manner as will be
reasonably likely to realize a fair price within the time period provided for by
Section 3.16(a). The Special Servicer shall accept the first (and, if multiple
bids are received contemporaneously or subsequently, the highest, provided that
the Special Servicer is not obligated to the first bidder) cash bid received
from any Person that constitutes a fair price for such REO Property. If the
Special Servicer reasonably believes that it will be unable to realize a fair
price for any REO Property within the time constraints imposed by Section
3.16(a), the Special Servicer shall dispose of such REO Property upon such terms
and conditions as the Special Servicer shall deem necessary and desirable to
maximize the recovery thereon under the circumstances and, in connection
therewith, shall accept the highest outstanding cash bid, regardless of from
whom received.
The Special Servicer shall give the Trustee and the Master
Servicer not less than three Business Days' prior written notice of its
intention to sell any Mortgage Loan or REO Property pursuant to this Section
3.18(d). No Interested Person shall be obligated to submit a bid to purchase any
such Mortgage Loan or REO Property, and notwithstanding anything to the contrary
herein, neither the Trustee, in its individual capacity, nor any of its
Affiliates may bid for or purchase any Defaulted Mortgage Loan or any REO
Property pursuant hereto.
(e) Whether any cash bid constitutes a fair price for any
Defaulted Mortgage Loan or REO Property, as the case may be, for purposes of
Section 3.18(d), shall be determined by the Special Servicer (except as
otherwise provided below in this Section 3.18(e)). In determining whether any
bid received from an Interested Person represents a fair price for any such
Mortgage Loan or REO Property, the Special Servicer shall be supplied with and
may rely on a narrative appraisal prepared at the expense of the Trust Fund by
an Independent Appraiser, retained by the Special Servicer. The Special Servicer
may rely on a certification of any bidder to the effect that such bidder is not
an Interested Person. Such appraiser shall be selected by the Special Servicer
if the Special Servicer is not bidding with respect to a Defaulted Mortgage Loan
or REO Property and shall be selected by the Master Servicer if the Special
Servicer is bidding, or if the Master Servicer and the Special Servicer are
affiliated, by the Trustee; provided, if the Trustee selects an MAI appraiser,
the Trustee shall be deemed to have satisfied its obligation to select an
appraiser. The Special Servicer
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shall not bid with respect to a Defaulted Mortgage Loan or REO Property if the
Master Servicer has informed it that the Master Servicer intends to submit a
bid. Where any Interested Person is among those bidding with respect to a
Mortgage Loan or REO Property, the Special Servicer shall require that all bids
be submitted in writing and be accompanied by a refundable deposit of cash in an
amount equal to 5% of the bid amount. In determining whether any bid from a
Person other than an Interested Person or from an Interested Person other than
the Special Servicer constitutes a fair price for any such Mortgage Loan or REO
Property, the Special Servicer shall take into account (in addition to the
results of any appraisal described above and any appraisal that it may have
obtained pursuant to Section 3.09(a)), and any appraiser or other expert in real
estate matters shall be instructed to take into account, as applicable, among
other factors, the period and amount of any delinquency on the affected Mortgage
Loan, the occupancy level and physical condition of the Mortgaged Property or
REO Property, the state of the local economy and the obligation to dispose of
any REO Property within the time period specified in Section 3.16(a). The
Purchase Price for any such Mortgage Loan or REO Property shall in all cases be
deemed a fair price. Notwithstanding the other provisions of this Section 3.18
(but excluding a purchase pursuant to Section 3.18(c)), no cash bid from the
Master Servicer, Special Servicer or any of their Affiliates thereof shall
constitute a fair price for any Defaulted Mortgage Loan or REO Property unless
such bid is the highest bid received and at least two independent bids (not
including the bid of the Master Servicer, Special Servicer or any Affiliate)
have been received. In the event the bid of the Special Servicer or any
Affiliate is the only bid received or is the higher of only two bids received,
then additional bids shall be solicited. If an additional bid or bids are
received and the original bid of the Special Servicer or any Affiliate is the
highest of all bids received, then the bid of the Special Servicer or such
Affiliate shall be deemed to constitute a fair price.
(f) Subject to Sections 3.18(a) through 3.18(e) above, the
Special Servicer shall act on behalf of the Trustee for the benefit of the Trust
Fund in negotiating and taking any other action necessary or appropriate in
connection with the sale of any Defaulted Mortgage Loan or REO Property, and the
collection of all amounts payable in connection therewith. In connection
therewith (other than in connection with a purchase by the Majority Subordinate
Certificateholder where such Majority Subordinate Certificateholder is the
Special Servicer or an Affiliate of the Special Servicer), the Special Servicer
may charge prospective bidders, and may retain, fees that approximate the
Special Servicer's actual costs in the preparation and delivery of information
pertaining to such sales or evaluating bids without obligation to deposit such
amounts into the Certificate Account. Any sale of a Defaulted Mortgage Loan or
any REO Property shall be final, without recourse to the Trustee or the Trust
Fund and without representations and warranties of title and condition, unless
liability for breach thereof is limited to recourse against the Trust Fund, and
if such sale is consummated in accordance with the terms of this Agreement,
neither the Special Servicer nor the Trustee shall have any liability to any
Certificateholder with respect to the purchase price therefor accepted by the
Special Servicer.
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(g) Any sale of a Defaulted Mortgage Loan or any REO Property
shall be for cash only (unless changes in the REMIC Provisions or authoritative
interpretations thereof made or issued subsequent to the Startup Day allow a
sale for other consideration).
(h) The Special Servicer shall not be obligated by any of the
foregoing paragraphs of this Section 3.18 to accept the highest bid if the
Special Servicer determines, in accordance with the Servicing Standard, that
rejection of such bid would be in the best interests of the Certificateholders
(as a collective whole). In addition, the Special Servicer may accept a lower
bid (from any person or entity other than itself or an Affiliate), if it
determines, in accordance with the Servicing Standard, that acceptance of such
bid would be in the best interests of the Certificateholders (as a collective
whole) (for example, if the prospective buyer making the lower bid is more
likely to perform its obligations or the terms offered by the prospective buyer
making the lower bid are more favorable).
SECTION 3.19. Additional Obligations of Master
Servicer.
The Master Servicer shall deliver to the Paying Agent for
deposit in the Distribution Account on each P&I Advance Date, without any right
of reimbursement therefor, an amount equal to the aggregate of any Prepayment
Interest Shortfalls incurred in connection with Principal Prepayments received
during the most recently ended Collection Period (but only up to the sum of (i)
a portion of the Master Servicing Fee for the related Collection Period equal to
.01% per annum on a Mortgage Loan on an aggregate basis and (ii) any Prepayment
Interest Excess received during such Collection Period); provided, however, that
to the extent the Master Servicer accepts a prepayment on any day other than the
Due Date and the applicable Mortgage Loan documents only permit the Mortgagor to
make a prepayment on the Due Date, the Master Servicer shall deposit an amount
equal to the sum of (i) the entire aggregate Master Servicer Fee payable to the
Master Servicer for the related Collection Period plus (ii) any Prepayment
Interest Excess received during such Collection Period.
SECTION 3.20. Modifications, Waivers, Amendments
and Consents.
(a) Subject to Sections 3.20(b) through 3.20(l) below and
Section 6.11, the Master Servicer or the Special Servicer may, on behalf of, and
for the benefit of, the Trust Fund, agree to any modification, waiver or
amendment of any term of any Mortgage Loan without the consent of the Trustee or
any Certificateholder.
(b) All modifications, waivers or amendments of any Mortgage
Loan shall be in writing and shall be considered and effected in accordance with
the Servicing Standard. In addition, neither the Master Servicer nor Special
Servicer shall be required to seek the consent of any Certificateholder or
obtain a Nondisqualification Opinion in order to approve certain routine
modifications, waivers or amendments of the Loan Documents, including: (i)
waivers of minor covenant defaults (other than financial covenants), including
late financial statements; (ii) releases of non-material parcels of a Mortgaged
Property (provided that releases as to which the Loan Documents expressly
require the mortgagee thereunder to make
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such releases upon the satisfaction of certain conditions shall be made as
required by the Loan Documents); (iii) grants of easements that do not
materially affect the use or value of a Mortgaged Property or the Mortgagor's
ability to make any payments with respect to the related Mortgage Loan; and (iv)
any other modifications, waivers or amendments which the Master Servicer
determines, in accordance with the Servicing Standard; provided, that the Master
Servicer has reasonably determined that any such modification, waiver or
amendment (w) would not in any way affect a payment term of the Certificates,
(x) would not constitute a "significant modification" of such Mortgage Loan
pursuant to Treasury Regulations Section 1.860G-2(b) and would not otherwise
adversely affect the REMIC status of either REMIC Pool (which may, at the option
of the Servicer, be evidenced by a Nondisqualification Option), (y) agreeing to
such modification, waiver or amendment would be consistent with the Servicing
Standard, and (z) agreeing to such modification, waiver or amendment shall not
violate the terms, provisions or limitations of this Agreement or any other
document contemplated hereby.
(c) Except as provided in 3.20(d) and the last sentence of
Section 3.02(a), the Master Servicer or the Special Servicer, as applicable, on
behalf of the Trust Fund, shall not agree or consent to any modification, waiver
or amendment of any term of any Mortgage Loan that would:
(i) affect the amount or timing of any related
payment of principal, interest or other amount (including
Prepayment Premiums, but excluding default interest and
amounts payable as additional servicing compensation) payable
thereunder;
(ii) affect the obligation of the related Mortgagor
to pay a Prepayment Premium or permit a Principal Prepayment
during any period in which the related Mortgage Note prohibits
Principal Prepayments;
(iii) except as expressly contemplated by the related
Mortgage or pursuant to Section 3.09(d), result in a release
of the lien of the Mortgage on any material portion of the
related Mortgaged Property without a corresponding Principal
Prepayment in an amount not less than the fair market value
(as determined by an appraisal by an Independent Appraiser
delivered to the Special Servicer at the expense of the
related Mortgagor and upon which the Special Servicer may
conclusively rely) of the property to be released;
(iv) in the judgment of the Master Servicer or the
Special Servicer, as applicable, otherwise materially impair
the security for such Mortgage Loan or reduce the likelihood
of timely payment of amounts due thereon.
(d) Notwithstanding Section 3.20(c), but subject to the third
paragraph of this Section 3.20(d) and the rights of the Controlling Class
Representative set forth in Section 6.11, the Special Servicer may (i) reduce
the amounts owing under any Specially Serviced Mortgage Loan by forgiving
principal, accrued interest or any Prepayment Premium,
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(ii) reduce the amount of the monthly payment on any Specially Serviced Mortgage
Loan, including by way of a reduction in the related Mortgage Rate, (iii)
forbear in the enforcement of any right granted under any Mortgage Note or
Mortgage relating to a Specially Serviced Mortgage Loan or (iv) accept a
principal prepayment on any Specially Serviced Mortgage Loan during any Lockout
Period; provided that (A) the related Mortgagor is in default with respect to
the Specially Serviced Mortgage Loan or, in the judgment of the Special
Servicer, such default is reasonably foreseeable, (B) in the sole, good faith
judgment of the Special Servicer, such modification would increase the recovery
on the Mortgage Loan to Certificateholders on a net present value basis (the
relevant discounting of amounts that will be distributable to Certificateholders
to be performed at the related Mortgage Rate) and (C) such modification, waiver
or amendment would not both (1) effect an exchange or reissuance of the Mortgage
Loan under Section 1001 of the Code (and the Treasury regulations promulgated
thereunder) and (2) cause REMIC I, REMIC II or REMIC III to fail to qualify as a
REMIC under the Code or result in the imposition of any tax on "prohibited
transactions" or "contributions" after the Startup Day under the REMIC
Provisions.
In addition, notwithstanding Section 3.20(c), but subject to
the third paragraph of this Section 3.20(d), the Special Servicer may extend the
date on which any Balloon Payment is scheduled to be due in respect of a
Specially Serviced Mortgage Loan if the conditions set forth in the proviso to
the prior paragraph are satisfied and the Special Servicer has obtained an
appraisal in accordance with the Standards of the Appraisal Institute of the
related Mortgaged Property, performed by an Independent Appraiser, in connection
with such extension, which appraisal supports the determination of the Special
Servicer contemplated by clause (B) of the proviso to the immediately preceding
paragraph.
In no event will the Special Servicer (i) extend the maturity
date of a Mortgage Loan beyond a date that is two years prior to the Rated Final
Distribution Date, (ii) extend the maturity date of any Mortgage Loan which has
a Mortgage Rate below the prevailing interest rate for comparable loans at the
time of such modification as determined by the Special Servicer, unless (A) such
Mortgage Loan is a Balloon Loan, (B) the related Mortgagor has failed to make
the Balloon Payment at its scheduled maturity and (C) such Balloon Loan is not a
Specially Serviced Mortgage Loan (other than by reason of the failure to make
its Balloon Payment) and has not been 30 days delinquent with respect to a
Monthly Payment (other than the Balloon Payment) in the preceding twelve months,
in which case the Special Servicer may permit up to three one-year extensions at
the existing Mortgage Rate for such Mortgage Loan (provided that such
limitations of extensions made at below market rate shall not limit the ability
of the Special Servicer to extend the maturity date of any Mortgage Loan at an
interest rate at or in excess to the prevailing rate for comparable loans at the
time of such modification), (iii) if the Mortgage Loan is secured by a Ground
Lease, extend the maturity date of such Mortgage Loan beyond a date which is
less than 10 years prior to the expiration of the term of such Ground Lease,
including renewal options; or (iv) defer interest due on any Mortgage Loan in
excess of 10% of the Stated Principal Balance of such Mortgage Loan or defer the
collection of interest on any Mortgage Loan without accruing interest on such
deferred interest at a rate at least equal to the Mortgage Rate of such Mortgage
Loan.
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The determination of the Special Servicer contemplated by
clause (B) of the proviso to the first paragraph, and clause (ii) of the third
paragraph, of this Section 3.20(d) shall be evidenced by an Officer's
Certificate to such effect delivered to the Trustee and the Master Servicer and
describing in reasonable detail the basis for the Special Servicer's
determination. The Special Servicer shall append to such Officer's Certificate
any information including but not limited to income and expense statements, rent
rolls, property inspection reports and appraisals that support such
determination.
(e) Any payment of interest that is deferred pursuant to any
modification, waiver or amendment permitted hereunder, shall not, for purposes
hereof, including, without limitation, calculating monthly distributions to
Certificateholders, be added to the unpaid principal balance of the related
Mortgage Loan, notwithstanding that the terms of such modification, waiver or
amendment so permit. The foregoing shall in no way limit the Special Servicer's
ability to charge and collect from the Mortgagor costs otherwise collectible
under the terms of the related Mortgage Note and this Agreement together with
interest thereon.
(f) The Master Servicer or Special Servicer may, as a
condition to granting any request by a Mortgagor for consent, modification,
waiver or indulgence or any other matter or thing, the granting of which is
within its discretion pursuant to the terms of the instruments evidencing or
securing the related Mortgage Loan and is permitted by the terms of this
Agreement, require that such Mortgagor pay to it (i) as additional servicing
compensation, a reasonable or customary fee for the additional services
performed in connection with such request, and (ii) any related costs and
expenses incurred by it. In no event shall the Special Servicer be entitled to
payment for such fees or expenses unless such payment is collected from the
related Mortgagor.
(g) The Master Servicer or Special Servicer (with respect to
Specially Serviced Mortgage Loans) shall notify the Master Servicer and the
Trustee, and the Trustee shall notify the Controlling Class Representative, the
Rating Agencies, in writing, of any modification, waiver or amendment of any
term of any Mortgage Loan (including fees charged the Mortgagor) and the date
thereof, and shall deliver to the Custodian for deposit in the related Mortgage
File, an original counterpart of the agreement relating to such modification,
waiver or amendment, promptly (and in any event within ten Business Days)
following the execution thereof. Copies of each agreement whereby any such
modification, waiver or amendment of any term of any Mortgage Loan is effected
shall be sent to the Controlling Class Representative and otherwise be made
available for review upon prior request during normal business hours at the
offices of the Special Servicer pursuant to Section 3.15(g) hereof.
(h) If, with respect to any Defeasance Loan, the Master
Servicer shall receive a notice from the related Mortgagor that it intends to
defease the related Defeasance Loan in accordance with the terms thereof, except
as set forth below, the Master Servicer shall (a) promptly respond to such
notice in a manner which would require that the Mortgagor pledge Defeasance
Collateral in lieu of such prepayment pursuant to the terms of the related
Mortgage Note, (b) notify the Trustee and the Trustee shall notify each Rating
Agency, the
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Controlling Class Representative and the Underwriter in writing of the request
to defease a Mortgage Loan, and (c) upon the written confirmation from each
Rating Agency described in the next paragraph, take such further action as
provided in such Mortgage Note to effectuate such pledge, including the purchase
and perfection of the Defeasance Collateral in the name of the Trustee, as
trustee for the registered holders of Merrill Lynch Mortgage Investors, Inc.,
Mortgage Pass-Through Certificates, Series 1998-C3.
Notwithstanding the above, except as provided in the Mortgage
Loan documents, the Master Servicer shall not permit a pledge of Defeasance
Collateral in lieu of prepayment under a Defeasance Loan if (i) such defeasance
would occur within two years of the Startup Day, (ii) such Defeasance Loan (or
any applicable agreement executed in connection with the related defeasance)
provides that the Mortgagor will be liable for any shortfalls from the
Defeasance Collateral or otherwise become subjected to recourse liability with
respect to the Defeasance Loan, (iii) such defeasance would result in a new
Mortgagor (other than a new entity that will hold the Defeasance Collateral) on
the Defeasance Loan (unless such new Mortgagor is acquiring the Mortgaged
Property that was the initial security for the Defeasance Loan), or (iv) any
Rating Agency does not confirm in writing to the Master Servicer that the
acceptance of a pledge of the Defeasance Collateral in lieu of a full prepayment
will not result in a downgrade, withdrawal or qualification of the ratings then
assigned by it to any Class of Certificates.
(i) For any Mortgage Loan other than a Specially Serviced
Mortgage Loan and subject to the rights of the Special Servicer set forth in
this Section 3.20, the Master Servicer shall be responsible for any request by a
Mortgagor for the consent of the mortgagee for a modification, waiver or
amendment of any term with respect to:
(i) Approving routine leasing activity (including any
subordination, standstill and attornment agreements) with
respect to leases for less than the lesser of (a) 20,000
square feet and (b) 20% of the related Mortgaged Property; and
(ii) Approving a change of the property manager at
the request of the related Mortgagor provided that the
successor property manager is not affiliated with the
Mortgagor and is a nationally or regionally recognized manager
of similar properties.
(j) With respect to a Mortgage Loan secured by a Mortgaged
Property which is a hospitality property and to the extent the related loan
documents do not prohibit, neither the Master Servicer nor the Special Servicer
shall consent to any change in the franchise affiliation of such Mortgaged
Property without receiving (i) the prior written confirmation from the Rating
Agencies that such action would not result in a downgrading, qualification or
withdrawal of the ratings then assigned to the Certificates and (ii) approval of
the Controlling Class Representative.
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(k) The Master Servicer or the Special Servicer, as
applicable, shall provide written notices to the Controlling Class
Representative of any waiver, amendment or modification of any Lease Enhancement
Policy. With respect to any Mortgage Loan that, at the time of determination,
has a Stated Principal Balance either (i) in excess of 5% of the Stated
Principal Balance of all the Mortgage Loans or (ii) in excess of $20 million the
Special Servicer shall not consent to the modification, waiver or amendment of a
Lease Enhancement Policy without (i) receiving prior written confirmation from
each Rating Agency that such modification, waiver or amendment will not result
in a qualification, downgrade or withdrawal of the ratings on the Certificates
or the prior written consent of each Rating Agency and (ii) the approval of the
Controlling Class Representative, which if not received by the Master Servicer
or the Special Servicer, as applicable, within ten Business Days of delivery of
the related notice, shall be deemed to be given; provided, the Controlling Class
Representative may not unreasonably withhold such approval and may not cause the
Master Servicer or Special Servicer, as applicable, to violate any terms of this
Agreement or any other agreement contemplated hereby. The Master Servicer shall
not consent to any modification, waiver or amendment of any Lease Enhancement
Policy.
(l) The Master Servicer or the Special Servicer, as
applicable, shall provide written notice to the Controlling Class Representative
of the incurrence of subordinated or secured liens on a Mortgaged Property.
Neither the Master Servicer nor the Special Servicer may approve of the
incurrence of subordinated or secured liens on a Mortgaged Property without (i)
the prior written confirmation of the Rating Agencies that such action would not
result in a qualification, downgrade or withdrawal of the ratings then assigned
to the Certificates and (ii) the approval of the Controlling Class
Representative, which if not received by the Master Servicer or the Special
Servicer, as applicable, within ten Business Days of delivery of the related
notice, shall be deemed to be given; provided, the Controlling Class
Representative may not unreasonably withhold such approval and may not cause the
Master Servicer or Special Servicer, as applicable, to violate any terms of this
Agreement or any other agreement contemplated hereby.
SECTION 3.21. Transfer of Servicing Between
Master Servicer and Special
Servicer; Record Keeping.
(a) Upon determining that a Servicing Transfer Event has
occurred with respect to any Mortgage Loan and if the Master Servicer is not
also the Special Servicer, the Master Servicer shall promptly give notice
thereof to the Special Servicer and the Trustee, and shall deliver a copy of the
related Servicing File, to the Special Servicer and shall use reasonable efforts
to provide the Special Servicer with all information, documents (or copies
thereof) and records (including records stored electronically on computer tapes,
magnetic discs and the like) relating to the Mortgage Loan either in the Master
Servicer's or any of its directors', officers', employees', affiliates' or
agents' possession or control or otherwise available to the Master Servicer
without undue burden or expense, and reasonably requested by the Special
Servicer to enable it to assume its functions hereunder with respect thereto
without acting through a Sub-Servicer. The Master Servicer shall use reasonable
efforts to comply
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with the preceding sentence within five Business Days of determining that a
Servicing Transfer Event has occurred; provided, however, if the information,
documents and records requested by the Special Servicer are not contained in the
Servicing File, the Master Servicer shall have such period of time as reasonably
necessary to make such delivery.
Upon determining that a Specially Serviced Mortgage Loan has
become a Corrected Mortgage Loan and if the Master Servicer is not also the
Special Servicer, the Special Servicer shall promptly give notice thereof to the
Master Servicer and the Trustee, and shall return the related Servicing File and
all other information, documents and records that were not part of the Servicing
File when it was delivered to the Special Servicer within five Business Days of
the occurrence, to the Master Servicer (or such other Person as may be directed
by the Master Servicer) and upon giving such notice, and returning such
Servicing File, to the Master Servicer (or such other Person as may be directed
by the Master Servicer), the Special Servicer's obligation to service such
Mortgage Loan, and the Special Servicer's right to receive the Special Servicing
Fee with respect to such Mortgage Loan, shall terminate, and the obligations of
the Master Servicer to service and administer such Mortgage Loan shall resume.
(b) In servicing any Specially Serviced Mortgage Loans, the
Special Servicer shall provide to the Custodian originals of documents included
within the definition of "Mortgage File" for inclusion in the related Mortgage
File (with a copy of each such original to the Master Servicer), and copies of
any additional related Mortgage Loan information, including correspondence with
the related Mortgagor.
(c) On or before each Determination Date, the Special Servicer
shall deliver to the Master Servicer, each Rating Agency and the Controlling
Class Representative (or such other Person as may be directed by the Master
Servicer) a statement in writing and in computer readable format (the form of
such statement to be agreed upon by the Master Servicer) describing, on a
loan-by-loan and property-by-property basis, (1) insofar as it relates to
Specially Serviced Mortgage Loans and REO Properties, the information described
in clauses (x) through (xiii) of Section 4.02(a) and, insofar as it relates to
the Special Servicer, the information described in clauses (xxiii) and (xxiv) of
Section 4.02(a), (2) the amount of all payments, Insurance Proceeds and
Liquidation Proceeds received, and the amount of any Realized Loss incurred,
with respect to each Specially Serviced Mortgage Loan during the related
Collection Period, and the amount of all REO Revenues, Insurance Proceeds and
Liquidation Proceeds received, and the amount of any Realized Loss incurred,
with respect to each REO Property during the related Collection Period, (3) the
amount, purpose and date of all Servicing Advances made by the Special Servicer
with respect to each Specially Serviced Mortgage Loan and REO Property during
the related Collection Period and (4) such additional information relating to
the Specially Serviced Mortgage Loans and REO Properties as the Master Servicer
reasonably requests to enable it to perform its responsibilities under this
Agreement. Notwithstanding the foregoing provisions of this subsection (c), the
Master Servicer shall maintain ongoing payment records with respect to each of
the Specially Serviced Mortgage Loans and REO Properties and shall provide the
Special Servicer with any
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information reasonably available to the Master Servicer required by the Special
Servicer to perform its duties under this Agreement.
SECTION 3.22. Sub-Servicing Agreements.
(a) The Master Servicer and the Special Servicer may enter
into Sub-Servicing Agreements to provide for the performance by third parties of
any or all of their respective obligations hereunder, provided that, in each
case, the Sub-Servicing Agreement:
(i) is consistent with this Agreement in all material respects
and requires the Sub-Servicer to comply with all of the applicable conditions of
this Agreement; (ii) provides that if the Master Servicer or the Special
Servicer, as the case may be, shall for any reason no longer act in such
capacity hereunder (including, without limitation, by reason of an Event of
Default), the Trustee or its designee may thereupon assume all of the rights
and, except to the extent they arose prior to the date of assumption,
obligations of the Master Servicer or the Special Servicer, as the case may be,
under such agreement or may terminate such subservicing agreement without cause
and without payment of any penalty or termination fee (unless the Sub-Servicer
under such Sub-Servicing Agreement was a Sub-Servicer as of the Closing Date);
(iii) provides that the Trustee, for the benefit of the Certificateholders,
shall be a third party beneficiary under such agreement, but that (except to the
extent the Trustee or its designee assumes the obligations of the Master
Servicer or the Special Servicer, as the case may be, thereunder as contemplated
by the immediately preceding clause (ii)) none of the Trustee, the Trust Fund,
any successor Master Servicer or Special Servicer, as the case may be, or any
Certificateholder shall have any duties under such agreement or any liabilities
arising therefrom; (iv) permits any purchaser of a Mortgage Loan pursuant to
this Agreement to terminate such agreement with respect to such purchased
Mortgage Loan at its option and without penalty, (v) does not permit the
Sub-Servicer to enter into or consent to any modification, waiver or amendment
or otherwise take any action on behalf of the Special Servicer contemplated by
Section 3.20 hereof without the consent of such Special Servicer, and (vi) does
not permit the Sub-Servicer any rights of indemnification that may be satisfied
out of assets of the Trust Fund other than those specifically set forth in the
related Mortgage Loan documents. In addition, each Sub-Servicing Agreement
entered into by the Master Servicer shall provide that such agreement shall be
subject to Section 3.21 hereof with respect to any Mortgage Loan that becomes a
Specially Serviced Mortgage Loan. The Master Servicer and the Special Servicer
each shall deliver to the Trustee and to each other copies of all Sub-Servicing
Agreements, and any amendments thereto and modifications thereof, entered into
by it promptly upon its execution and delivery of such documents. References in
this Agreement to actions taken or to be taken by the Master Servicer or the
Special Servicer include actions taken or to be taken by a Sub-Servicer on
behalf of the Master Servicer or the Special Servicer, as the case may be; and,
in connection therewith, all amounts advanced by any Sub-Servicer to satisfy the
obligations of the Master Servicer or the Special Servicer hereunder to make P&I
Advances or Servicing Advances shall be deemed to have been advanced by the
Master Servicer or the Special Servicer, as the case may be, out of its own
funds and, accordingly, such P&I Advances or Servicing Advances shall be
recoverable by
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such Sub-Servicer in the same manner and out of the same funds as if such
Sub-Servicer were the Master Servicer or the Special Servicer, as the case may
be. For so long as they are outstanding, Advances shall accrue interest in
accordance with Sections 3.03(d) and 4.03(d), such interest to be allocable
between the Master Servicer or the Special Servicer, as the case may be, and
such Sub-Servicer as they may agree. For purposes of this Agreement, the Master
Servicer and the Special Servicer each shall be deemed to have received any
payment when a Sub-Servicer retained by it receives such payment. The Master
Servicer and the Special Servicer each shall notify the other, the Trustee and
the Depositor in writing promptly of the appointment by it of any Sub-Servicer.
Notwithstanding the foregoing, however, third party contractors of the Master
Servicer or Special Servicer for incidental ministerial functions shall not be
considered Sub-Servicers and shall not be subject to this Section 3.22, provided
that the Master Servicer and the Special Servicer shall remain responsible for
the actions of such contractors and shall pay the fees and expenses of such
contractors unless otherwise provided in this Agreement.
(b) Each Sub-Servicer (i) shall be authorized to transact
business in the state or states in which the related Mortgaged Properties it is
to service are situated, if and to the extent required by applicable law, and
(ii) shall be an approved conventional seller/servicer of mortgage loans for
FHLMC or FNMA or a HUD-Approved Servicer.
(c) The Master Servicer and the Special Servicer, for the
benefit of the Trustee and the Certificateholders, shall (at no expense to the
Trustee, the Certificateholders or the Trust Fund) monitor the performance and
enforce the obligations of their respective Sub-Servicers under the related
Sub-Servicing Agreements. Such enforcement, including, without limitation, the
legal prosecution of claims, termination of Sub-Servicing Agreements in
accordance with their respective terms and the pursuit of other appropriate
remedies, shall be in such form and carried out to such an extent and at such
time as the Master Servicer or the Special Servicer, as applicable, in its good
faith business judgment, would require were it the owner of the Mortgage Loans.
Subject to the terms of the related Sub-Servicing Agreement, the Master Servicer
and the Special Servicer may each have the right to remove a Sub-Servicer at any
time it considers such removal to be in the best interests of
Certificateholders.
(d) If the Master Servicer or the Special Servicer ceases to
serve as such under this Agreement for any reason (including by reason of an
Event of Default) and no successor Master Servicer or Special Servicer, as the
case may be, has succeeded to its rights and assumed its obligations hereunder
or, in the case of the Special Servicer, no replacement Special Servicer has
been designated pursuant to Section 6.09, then the Trustee or its designee
shall succeed to the rights and assume the obligations of the Master Servicer
or the Special Servicer under any Sub-Servicing Agreement, unless the Trustee
elects to terminate any such Sub-Servicing Agreement, which election may be
made with or without cause unless the Sub-Servicing Agreement is in effect as
of the Closing Date, in which event the Sub-Servicing Agreement may only be
terminated upon the occurrence of an event of default (as defined in the
applicable Sub-Servicing Agreement). Any termination fee payable to any
Sub-Servicer pursuant to any Sub-Servicing Agreement shall not be the
obligation of either the Trustee or the Trust Fund. In any event, if a
Sub-Servicing Agreement is to be assumed by the Trustee or another successor
thereto, the Master Servicer or the Special Servicer, as applicable, at its
expense shall, upon request of the Trustee, deliver to the assuming party all
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documents and records relating to such Sub-Servicing Agreement and the Mortgage
Loans then being serviced thereunder and an accounting of amounts collected and
held on behalf of it thereunder, and otherwise use its best efforts to effect
the orderly and efficient transfer of the Sub-Servicing Agreement to the
assuming party.
(e) Notwithstanding any Sub-Servicing Agreement, the Master
Servicer and the Special Servicer shall remain obligated and liable to the
Trustee and the Certificateholders for the performance of their respective
obligations and duties under this Agreement in accordance with the provisions
hereof to the same extent and under the same terms and conditions as if each
alone were servicing and administering the Mortgage Loans or REO Properties for
which it is responsible.
SECTION 3.23. Representations, Warranties and
Covenants of Master Servicer and
Special Servicer.
(a) The Master Servicer, in such capacity, hereby represents
and warrants to the Trustee, for its own benefit and the benefit of the
Certificateholders, and to the Depositor and the Special Servicer, as of the
Closing Date, that:
(i) The Master Servicer is a corporation, duly
organized, validly existing and in good standing under the
laws of the State of Delaware, and the Master Servicer is in
compliance with the laws of each State in which any Mortgaged
Property is located to the extent necessary to perform its
obligations under this Agreement.
(ii) The execution and delivery of this Agreement by
the Master Servicer, and the performance and compliance with
the terms of this Agreement by the Master Servicer, will not
violate the Master Servicer's articles of incorporation or
by-laws 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 Master Servicer has the full power and
authority to carry on its business as now being conducted and
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 each of the other parties hereto,
constitutes a valid, legal and binding obligation of the
Master Servicer, enforceable against the Master Servicer in
accordance with the terms hereof, subject to (A) applicable
bankruptcy, insolvency, reorganization, moratorium and other
laws affecting the enforcement of creditors' rights generally,
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and (B) general principles of equity, regardless of whether
such enforcement is considered in a proceeding in equity or at
law.
(v) The Master Servicer 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 Master
Servicer's good faith and reasonable judgment, is likely to
affect materially and adversely either the ability of the
Master Servicer to perform its obligations under this
Agreement or the financial condition of the Master Servicer.
(vi) No litigation is pending or, to the best of the
Master Servicer's knowledge, threatened, against the Master
Servicer that would prohibit the Master Servicer from entering
into this Agreement or, in the Master Servicer's good faith
and reasonable judgment, is likely to materially and adversely
affect either the ability of the Master Servicer to perform
its obligations under this Agreement or the financial
condition of the Master Servicer.
(vii) Each officer, director, employee, consultant or
advisor of the Master Servicer with responsibilities
concerning the servicing and administration of Mortgage Loans
is covered by errors and omissions insurance in the amounts
and with the coverage as, and to the extent, required by
Section 3.07(c).
(viii) The net worth of the Master Servicer (or, in
the case of the initial Master Servicer, the consolidated net
worth thereof and of its direct or indirect parent),
determined in accordance with generally accepted accounting
principles, is not less than $15,000,000.
(ix) Any consent, approval, authorization or order of
any court or governmental agency or body required for the
execution, delivery and performance by the Master Servicer of
or compliance by the Master Servicer with this Agreement or
the consummation of the transactions contemplated by this
Agreement has been obtained and is effective.
(x) The Master Servicer possesses all insurance
required pursuant to Section 3.07(c) of this Agreement.
(xi) The Master Servicer acknowledges and agrees that
the Servicing Fee represents no more than reasonable
compensation for the services being provided by the Master
Servicer and that such Servicing Fee paid to the Master
Servicer shall be treated for accounting and tax purposes by
the Master Servicer as compensation for the servicing and
administration of the Mortgage Loans.
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(xii) The Master Servicer has examined each existing
Sub-Servicing Agreement, and is familiar with the terms
thereof and the terms of such Sub-Servicing Agreements are and
will not be materially inconsistent with the provision of this
Agreement.
(b) The Special Servicer, in such capacity, hereby represents
and warrants to the Trustee, for its own benefit and the benefit of the
Certificateholders, and to the Depositor and the Master Servicer, as of the
Closing Date, that:
(i) The Special Servicer is a Texas corporation, duly
organized, validly existing and in good standing under the
laws of the State of Texas, and the Special Servicer is in
compliance with the laws of each State in which any Mortgaged
Property is located to the extent necessary to perform its
obligations under this Agreement.
(ii) The execution and delivery of this Agreement by
the Special Servicer, and the performance and compliance with
the terms of this Agreement by the Special Servicer, will not
violate the Special Servicer's certificate of incorporation or
constitute a default (or an event which, with notice or lapse
of time, or both, would constitute a default) under, or result
in a 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 Special Servicer has the full power and
authority to carry on its business as now being conducted and
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 each of the other parties hereto,
constitutes a valid, legal and binding obligation of the
Special Servicer, enforceable against the Special Servicer in
accordance with the terms hereof, subject to (A) applicable
bankruptcy, insolvency, reorganization, moratorium and other
laws affecting the enforcement of creditors' rights generally,
and (B) general principles of equity, regardless of whether
such enforcement is considered in a proceeding in equity or at
law.
(v) The Special Servicer 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 Special
Servicer's good faith and reasonable judgment, is likely to
affect materially and adversely either the ability of the
Special Servicer to perform its obligations under this
Agreement or the financial condition of the Special Servicer.
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(vi) No litigation is pending or, to the best of the
Special Servicer's knowledge, threatened, against the Special
Servicer that would prohibit the Special Servicer from
entering into this Agreement or, in the Special Servicer's
good faith and reasonable judgment, is likely to materially
and adversely affect either the ability of the Special
Servicer to perform its obligations under this Agreement or
the financial condition of the Special Servicer.
(vii) Each officer, director and employee of the
Special Servicer with responsibilities concerning the
servicing and administration of Mortgage Loans is covered by
errors and omissions insurance in the amounts and with the
coverage required by Section 3.07(c).
(viii) Any consent, approval, authorization or order
of any court or governmental agency or body required for the
execution, delivery and performance by the Special Servicer of
or compliance by the Special Servicer with this Agreement or
the consummation of the transactions contemplated by this
Agreement has been obtained and is effective.
(ix) The Special Servicer possesses all insurance
required pursuant to Section 3.07(c) of this Agreement.
(x) The Special Servicer acknowledges and agrees that
the Special Servicing Fee represents reasonable compensation
for the services being provided by the Special Servicer and
that the Special Servicer shall treat the entire Special
Servicing Fee for accounting and tax purposes as compensation
for the servicing and administration of any Specially Serviced
Mortgage Loans and REO Loans.
(xi) The Special Servicer has examined each existing
Sub-Servicing Agreement, if any, and is familiar with the
terms thereof and the terms of such Sub-Servicing Agreements
will not be materially inconsistent with the provisions of
this Agreement.
(c) The representations and warranties of the Master Servicer
and the Special Servicer, set forth in Sections 3.23(a) and (b), respectively,
shall survive the execution and delivery of this Agreement and shall inure to
the benefit of the Persons for whose benefit they were made for so long as the
Trust Fund remains in existence. Upon discovery by any party hereto of any
breach of any of the foregoing representations and warranties, the party
discovering such breach shall give prompt written notice to the other parties.
(d) The Master Servicer covenants, to the best knowledge of
the Master Servicer which knowledge may be based upon information obtained from
vendors who have responded to inquiries by the Master Servicer and/or from
information obtained by the Master Servicer from sources which the Master
Servicer reasonably believes are reliable, that by August 31, 1999, any
custom-made software or hardware designed or purchased or licensed by the Master
Servicer, which the Master Servicer has identified as being mission-critical to
its
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business for purposes of its operations and for purposes of compiling, reporting
or generating data required by this Agreement, will be capable of accurately
performing calculations or other processing with respect to dates after August
31, 1999 as a result of the changing of the date from 1999 to 2000, including
leap year calculations, when used for the purpose for which it was intended,
assuming that all other products, including other software or hardware, when
used in combination with such software or hardware designed, purchased or
licensed by the Master Servicer properly exchange date data. A breach of the
covenant set forth in this Section 3.23(d) shall constitute an Event of Default
pursuant to Section 7.01(xi) and such Event of Default shall be the sole remedy
against the Master Servicer for the breach of this covenant.
(e) The Special Servicer hereby covenants, to the best
knowledge of the Special Servicer which knowledge may be based upon information
obtained from vendors who have responded to inquiries by the Special Servicer
and/or from information obtained by the Special Servicer from sources which the
Special Servicer reasonably believes are reliable, that by August 31, 1999, any
custom-made software or hardware designed or purchased or licensed by the
Special Servicer, which the Special Servicer has identified as being
mission-critical to its business for purposes of its operations and for purposes
of compiling, reporting or generating data required by this Agreement, will be
capable of accurately performing calculations or other processing with respect
to dates after August 31, 1999 as a result of the changing of the date from 1999
to 2000, including leap year calculations, when used for the purpose for which
it was intended, assuming that all other products, including other software or
hardware, when used in combination with such software or hardware designed,
purchased or licensed by the Special Servicer properly exchange date data. A
breach of the covenant set forth in this Section 3.23(e) shall constitute an
Event of Default pursuant to Section 7.01(xi) and such Event of Default shall be
the sole remedy against the Special Servicer for the breach of this covenant.
ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS
SECTION 4.01. Distributions.
(a) On each Distribution Date, the Paying Agent shall (except
as otherwise provided in Section 9.01), based solely on information provided by
the Master Servicer and the Special Servicer, apply amounts on deposit in the
Distribution Account, after payment of amounts payable from the Distribution
Account in accordance with Section 3.05(b)(ii) through (viii), in each case to
the extent of the remaining portion of the Available Distribution Amount, in the
following order of priority:
(i) to distributions of interest to the Holders of
the Senior Certificates in an amount equal to, and pro rata in
accordance with, all Distributable Certificate Interest in
respect of each Class of Senior Certificates
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for such Distribution Date and, to the extent not previously
paid, for all prior Distribution Dates;
(ii) to distributions of principal to the Holders of
the Class A-1 Certificates, in an amount (not to exceed the
Class Principal Balance of the Class A-1 Certificates
outstanding immediately prior to such Distribution Date) equal
to the entire Principal Distribution Amount for such
Distribution Date;
(iii) after the Class Principal Balance of the Class
A-1 Certificates has been reduced to zero, to distributions of
principal to the Holders of the Class A-2 Certificates, in an
amount (not to exceed the Class Principal Balance of the Class
A-2 Certificates outstanding immediately prior to such
Distribution Date) equal to the entire Principal Distribution
Amount for such Distribution Date (net of any portion thereof
distributed on such Distribution Date to the Holders of the
Class A-1 Certificates pursuant to clause (ii) above);
(iv) after the Class Principal Balance of the Class
A-2 Certificates has been reduced to zero, to distributions of
principal to the Holders of the Class A-3 Certificates, in an
amount (not to exceed the Class Principal Balance of the Class
A-3 Certificates outstanding immediately prior to such
Distribution Date) equal to the entire Principal Distribution
Amount for such Distribution Date (net of any portion thereof
distributed on such Distribution Date to the Holders of the
Class A-1 and Class A-2 Certificates pursuant to any prior
clause of this Section 4.01(a));
(v) to distributions to the Holders of the Class A-1
Certificates, the Class A-2 Certificates and the Class A-3
Certificates, pro rata, in accordance with the outstanding
Class Principal Balances of each such Classes of Certificates
in an amount equal to, and in reimbursement of, all Realized
Losses and Additional Trust Fund Expenses, if any, previously
allocated to such Classes of Certificates and not previously
reimbursed plus interest on any such Realized Losses or
Additional Trust Fund Expenses, accrued at the applicable
Pass-Through Rate from the date such Realized Losses and/or
Additional Trust Fund Expenses were allocated to such Class;
(vi) to distributions of interest to the Holders of
the Class B Certificates in an amount equal to all
Distributable Certificate Interest in respect of such Class of
Certificates for such Distribution Date and, to the extent not
previously paid, for all prior Distribution Dates;
(vii) after the Class Principal Balances of the Class
A-1 Certificates, the Class A-2 Certificates and the Class A-3
Certificates have been reduced to zero, to distributions of
principal to the Holders of the Class B Certificates, in an
amount (not to exceed the Class Principal Balance of the Class
B Certificates outstanding immediately prior to such
Distribution Date) equal to the entire
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Principal Distribution Amount for such Distribution Date (net
of any portion thereof distributed on such Distribution Date
to the Holders of any other Class of Certificates pursuant to
any prior clause of this Section 4.01(a));
(viii) to distributions to the Holders of the Class B
Certificates, in an amount equal to, and in reimbursement of,
all Realized Losses and Additional Trust Fund Expenses, if
any, previously allocated to the Class B Certificates and not
previously reimbursed plus interest on any such Realized
Losses or Additional Trust Fund Expenses, accrued at the
applicable Pass-Through Rate from the date such Realized
Losses and/or Additional Trust Fund Expenses were allocated to
such Class;
(ix) to distributions of interest to the Holders of
the Class C Certificates in an amount equal to all
Distributable Certificate Interest in respect of such Class of
Certificates for such Distribution Date, and, to the extent
not previously paid, for all prior Distribution Dates;
(x) after the Class Principal Balance of the Class B
Certificates has been reduced to zero, to distributions of
principal to the Holders of the Class C Certificates, in an
amount (not to exceed the Class Principal Balance of the Class
C Certificates outstanding immediately prior to such
Distribution Date) equal to the entire Principal Distribution
Amount for such Distribution Date (net of any portion thereof
distributed on such Distribution Date to the Holders of any
other Class of Certificates pursuant to any prior clause of
this Section 4.01(a));
(xi) to distributions to the Holders of the Class C
Certificates, in an amount equal to, and in reimbursement of,
all Realized Losses and Additional Trust Fund Expenses, if
any, previously allocated to the Class C Certificates and not
previously reimbursed plus interest on any such Realized
Losses or Additional Trust Fund Expenses, accrued at the
applicable Pass-Through Rate from the date such Realized
Losses and/or Additional Trust Fund Expenses were allocated to
such Class;
(xii) to distributions of interest to the Holders of
the Class D Certificates, in an amount equal to all
Distributable Certificate Interest in respect of the Class D
Certificates for such Distribution Date and, to the extent not
previously paid, for all prior Distribution Dates;
(xiii) after the Class Principal Balance of the Class
C Certificates has been reduced to zero, to distributions of
principal to the Holders of the Class D Certificates, in an
amount (not to exceed the Class Principal Balance of the Class
D Certificates outstanding immediately prior to such
Distribution Date) equal to the entire Principal Distribution
Amount for such Distribution Date (net of any portion thereof
distributed on such Distribution Date to the Holders of
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any other Class of Certificates pursuant to any prior clause
of this Section 4.01(a));
(xiv) to distributions to the Holders of the Class D
Certificates, in an amount equal to, and in reimbursement of,
all Realized Losses and Additional Trust Fund Expenses, if
any, previously allocated to the Class D Certificates and not
previously reimbursed plus interest on any such Realized
Losses or Additional Trust Fund Expenses, accrued at the
applicable Pass-Through Rate from the date such Realized
Losses and/or Additional Trust Fund Expenses were allocated to
such Class;
(xv) to distributions of interest to the Holders of
the Class E Certificates, in an amount equal to all
Distributable Certificate Interest in respect of the Class E
Certificates for such Distribution Date and, to the extent not
previously paid, for all prior Distribution Dates;
(xvi) after the Class Principal Balance of the Class
D Certificates has been reduced to zero, to distributions of
principal to the Holders of the Class E Certificates, in an
amount (not to exceed the Class Principal Balance of the Class
E Certificates outstanding immediately prior to such
Distribution Date) equal to the entire Principal Distribution
Amount for such Distribution Date (net of any portion thereof
distributed on such Distribution Date to the Holders of any
other Class of Certificates pursuant to any prior clause of
this Section 4.01(a));
(xvii) to distributions to the Holders of the Class E
Certificates, in an amount equal to, and in reimbursement of,
all Realized Losses and Additional Trust Fund Expenses, if
any, previously allocated to the Class E Certificates and not
previously reimbursed, plus interest on any such Realized
Losses or Additional Trust Fund Expenses, accrued at the
applicable Pass-Through Rate from the date such Realized
Losses and/or Additional Trust Fund Expenses were allocated to
such Class;
(xviii) to distributions of interest to the Holders
of the Class F Certificates, in an amount equal to all
Distributable Certificate Interest in respect of the Class F
Certificates for such Distribution Date and, to the extent not
previously paid, for all prior Distribution Dates;
(xix) after the Class Principal Balance of the Class
E Certificates has been reduced to zero, to distributions of
principal to the Holders of the Class F Certificates, in an
amount (not to exceed the Class Principal Balance of the Class
F Certificates outstanding immediately prior to such
Distribution Date) equal to the entire Principal Distribution
Amount for such Distribution Date (net of any portion thereof
distributed on such Distribution Date to the Holders of
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any other Class of Certificates pursuant to any prior clause
of this Section 4.01(a));
(xx) to distributions to the Holders of the Class F
Certificates, in an amount equal to, and in reimbursement of,
all Realized Losses and Additional Trust Fund Expenses, if
any, previously allocated to the Class F Certificates and not
previously reimbursed, plus interest on any such Realized
Losses or Additional Trust Fund Expenses, accrued at the
applicable Pass-Through Rate from the date such Realized
Losses and/or Additional Trust Fund Expenses were allocated to
such Class;
(xxi) to distributions of interest to the Holders of
the Class G Certificates, in an amount equal to all
Distributable Certificate Interest in respect of the Class G
Certificates for such Distribution Date and, to the extent not
previously paid, for all prior Distribution Dates;
(xxii) after the Class Principal Balance of the Class
F Certificates has been reduced to zero, to distributions of
principal to the Holders of the Class G Certificates, in an
amount (not to exceed the Class Principal Balance of the Class
G Certificates outstanding immediately prior to such
Distribution Date) equal to the entire Principal Distribution
Amount for such Distribution Date (net of any portion thereof
distributed on such Distribution Date to the Holders of any
other Class of Certificates pursuant to any prior clause of
this Section 4.01(a));
(xxiii) to distributions to the Holders of the Class
G Certificates, in an amount equal to, and in reimbursement
of, all Realized Losses and Additional Trust Fund Expenses, if
any, previously allocated to the Class G Certificates and not
previously reimbursed, plus interest on any such Realized
Losses or Additional Trust Fund Expenses, accrued at the
applicable Pass-Through Rate from the date such Realized
Losses and/or Additional Trust Fund Expenses were allocated to
such Class;
(xxiv) to distributions of interest to the Holders of
Class H Certificates, in an amount equal to all Distributable
Certificate Interest in respect of the Class H Certificates
for such Distribution Date and, to the extent not previously
paid, for all prior Distribution Dates;
(xxv) after the Class Principal Balance of the Class
G Certificates has been reduced to zero, to distributions of
principal to the Holders of the Class H Certificates, in an
amount (not to exceed the Class Principal Balance of the Class
H Certificates outstanding immediately prior to such
Distribution Date) equal to the entire Principal Distribution
Amount for such Distribution Date (net of any portion thereof
distributed on such Distribution Date to the Holders of
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any other Class of Certificates pursuant to any prior clause
of this Section 4.01(a));
(xxvi) to distributions to the Holders of the Class H
Certificates, in an amount equal to, and in reimbursement of,
all Realized Losses and Additional Trust Fund Expenses, if
any, previously allocated to the Class H Certificates and not
previously reimbursed, plus interest on any such Realized
Losses or Additional Trust Fund Expenses, accrued at the
applicable Pass-Through Rate from the date such Realized
Losses and/or Additional Trust Fund Expenses were allocated to
such Class;
(xxvii) to distributions of interest to the Holders
of Class J Certificates, in an amount equal to all
Distributable Certificate Interest in respect of the Class J
Certificates for such Distribution Date and, to the extent not
previously paid, for all prior Distribution Dates;
(xxviii) after the Class Principal Balance of the
Class H Certificates has been reduced to zero, to
distributions of principal to the Holders of the Class J
Certificates, in an amount (not to exceed the Class Principal
Balance of the Class J Certificates outstanding immediately
prior to such Distribution Date) equal to the entire Principal
Distribution Amount for such Distribution Date (net of any
portion thereof distributed on such Distribution Date to the
Holders of any other Class of Certificates pursuant to any
prior clause of this Section 4.01(a));
(xxix) to distributions to the Holders of the Class J
Certificates, in an amount equal to, and in reimbursement of,
all Realized Losses and Additional Trust Fund Expenses, if
any, previously allocated to the Class J Certificates and not
previously reimbursed, plus interest on any such Realized
Losses or Additional Trust Fund Expenses, accrued at the
applicable Pass-Through Rate from the date such Realized
Losses and/or Additional Trust Fund Expenses were allocated to
such Class;
(xxx) to distributions of interest to the Holders of
Class K Certificates, in an amount equal to all Distributable
Certificate Interest in respect of the Class K Certificates
for such Distribution Date and, to the extent not previously
paid, for all prior Distribution Dates;
(xxxi) after the Class Principal Balance of the Class
J Certificates has been reduced to zero, to distributions of
principal to the Holders of the Class K Certificates, in an
amount (not to exceed the Class Principal Balance of the Class
K Certificates outstanding immediately prior to such
Distribution Date) equal to the entire Principal Distribution
Amount for such Distribution Date (net of any portion thereof
distributed on such Distribution Date to the Holders of
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any other Class of Certificates pursuant to any prior clauses
of this Section 4.01(a));
(xxxii) to distributions to the Holders of the Class
K Certificates, in an amount equal to, and in reimbursement
of, all Realized Losses and Additional Trust Fund Expenses, if
any, previously allocated to the Class K Certificates and not
previously reimbursed, plus interest on any such Realized
Losses or Additional Trust Fund Expenses, accrued at the
applicable Pass-Through Rate from the date such Realized
Losses and/or Additional Trust Fund Expenses were allocated to
such Class; and
(xxxiii) to distributions to the Holders of the Class
R-I Certificates, in an amount equal to the balance, if any,
of the Available Distribution Amount for such Distribution
Date remaining after the distributions to be made on such
Distribution Date pursuant to clauses (i) through (xxxii)
above.
After the Certificate Balance of the Subordinate Certificates
has been reduced to zero, distributions of principal will be made in respect of
the Class A-1, Class A-2 and Class A-3 Certificates, pro rata.
(b) On each Distribution Date, the Paying Agent shall withdraw
from the Distribution Account any amount on deposit therein that represents
Prepayment Premiums actually collected on the Mortgage Loans and any REO Loans
during the related Collection Period and shall distribute such amount in respect
of the Class A-1, Class A-2, Class A-3, Class B, Class C, Class D, Class E,
Class F, Class G and IO Certificates, as additional interest, as follows: Until
the aggregate Certificate Principal Balance of the Sequential Pay Certificates
has been reduced to zero, to the Holders of the Class A-1, Class A-2, Class A-3,
Class B, Class C, Class D, Class E, Class F, and Class G Certificates, then
entitled to distributions of principal with respect to such Mortgage Loan on
such Distribution Date in the case of each Class thereof, in an amount equal to
the amount of each such Prepayment Premium, multiplied by (a) a fraction (which
in no event may be greater than one) the numerator of which is equal to the
excess, if any, of the Pass-Through Rate of such Class of Sequential Pay
Certificates over the relevant Discount Rate (as defined below), and the
denominator of which is equal to the excess, if any, of the Mortgage Rate of the
prepaid Mortgage Loan over the relevant Discount Rate, and (b) a fraction, the
numerator of which is equal to the amount of principal distributable on such
Class of Sequential Pay Certificates on such Distribution Date, and the
denominator of which is the Principal Distribution Amount for such Distribution
Date. The portion, if any, of the Prepayment Premium remaining after any such
payments to the Holders of the Class A-1, Class A-2, Class A-3, Class B, Class
C, Class D, Class E, Class F, and Class G Certificates will be distributed to
the Holders of the Class IO Certificates. The "Discount Rate" applicable to any
Class of Sequential Pay Certificates will be equal to the yield (when compounded
monthly) on the U.S. Treasury issue (primary issue) with a maturity date closest
to the maturity date for the prepaid Mortgage Loan as set forth in The Wall
Street Journal. In the event that there are two such U.S. Treasury issues (a)
with the
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same coupon, the issue with the lower yield will be utilized, and (b) with
maturity dates equally close to the maturity date for the prepaid Mortgage Loan,
the issue with the earliest maturity date will be utilized.
(c) On each Distribution Date, any Additional Interest
collected during the related Collection Period and available in the Additional
Interest Distribution Account shall be distributed to the Holders of the Class L
Certificates.
(d) All distributions made with respect to each Class on each
Distribution Date shall be allocated pro rata among the outstanding Certificates
in such Class based on their respective Percentage Interests. Except as
otherwise provided below, all such distributions with respect to each Class on
each Distribution Date shall be made to the Certificateholders of the respective
Class of record at the close of business on the related Record Date and shall be
made by wire transfer of immediately available funds to the account of any such
Certificateholder at a bank or other entity having appropriate facilities
therefor, if such Certificateholder shall have provided the Paying Agent with
wiring instructions no less than five Business Days prior to the related Record
Date (which wiring instructions may be in the form of a standing order
applicable to all subsequent Distribution Dates) or otherwise by check mailed to
the address of such Certificateholder as it appears in the Certificate Register.
The final distribution on each Certificate (determined without regard to any
possible future reimbursement of any Realized Loss or Additional Trust Fund
Expense previously allocated to such Certificate) will be made in like manner,
but only upon presentation and surrender of such Certificate at the offices of
the Certificate Registrar or such other location specified in the notice to
Certificateholders of such final distribution. Prior to any termination of the
Trust Fund pursuant to Section 9.01, any distribution that is to be made with
respect to a Certificate in reimbursement of a Realized Loss or Additional Trust
Fund Expense previously allocated thereto, which reimbursement is to occur after
the date on which such Certificate is surrendered as contemplated by the
preceding sentence, will be made by check mailed to the address of the
Certificateholder that surrendered such Certificate as such address last
appeared in the Certificate Register or to any other address of which the Paying
Agent was subsequently notified in writing. If such check is returned to the
Paying Agent, the Paying Agent, directly or through an agent, shall take such
reasonable steps to contact the related Holder and deliver such check as it
shall deem appropriate. Any funds in respect of a check returned to the Paying
Agent shall be set aside by the Paying Agent and held uninvested in trust and
credited to the account of the appropriate Holder. The costs and expenses of
locating the appropriate Holder and holding such funds shall be paid out of such
funds. No interest shall accrue or be payable to any former Holder on any amount
held in trust hereunder. If the Paying Agent has not, after having taken such
reasonable steps, located the related Holder by the second anniversary of the
initial sending of a check, the Paying Agent shall, to the extent it is not
required to dispose of such unclaimed funds otherwise in accordance with
applicable state escheatment law, distribute the unclaimed funds to the Class
R-I Certificateholder.
(e) Each distribution with respect to a Book-Entry Certificate
shall be paid to the Depository, as Holder thereof, and the Depository shall be
responsible for crediting the
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amount of such distribution to the accounts of its Depository Participants in
accordance with its normal procedures. Each Depository Participant shall be
responsible for disbursing such distribution to the related Certificate Owners
that it represents and to each indirect participating brokerage firm (a
"brokerage firm" or "indirect participating firm") for which it acts as agent.
Each brokerage firm shall be responsible for disbursing funds to the related
Certificate Owners that it represents. None of the Trustee, the Paying Agent,
the Certificate Registrar, the Depositor or the Master Servicer shall have any
responsibility therefor except as otherwise provided by this Agreement or
applicable law. The Trustee and the Depositor shall perform their respective
obligations under the Letter of Representations among the Depositor, the Trustee
and the initial Depository.
(f) The rights of the Certificateholders to receive
distributions from the proceeds of the Trust Fund in respect of the
Certificates, and all rights and interests of the Certificateholders in and to
such distributions, shall be as set forth in this Agreement. Neither the Holders
of any Class of Certificates nor any party hereto shall in any way be
responsible or liable to the Holders of any other Class of Certificates in
respect of amounts properly previously distributed on the Certificates.
(g) Except as otherwise provided in Section 9.01, whenever the
Paying Agent expects that the final distribution with respect to any Class of
Certificates (determined without regard to any possible future reimbursement of
any Realized Loss or Additional Trust Fund Expense previously allocated to such
Class of Certificates) will be made on the next Distribution Date, the Paying
Agent shall, no later than five days after the related Determination Date, mail
to each Holder of record on such date of such Class of Certificates a notice to
the effect that:
(i) the Paying Agent expects that the final
distribution with respect to such Class of Certificates will
be made on such Distribution Date but only upon presentation
and surrender of such Certificates at the office of the
Certificate Registrar or at such other location therein
specified, and
(ii) no interest shall accrue on such Certificates
from and after such Distribution Date.
Any funds not distributed to any Holder or Holders of Certificates of such Class
on such Distribution Date because of the failure of such Holder or Holders to
tender their Certificates shall, on such date, be set aside and held uninvested
in trust and credited to the account or accounts of the appropriate
non-tendering Holder or Holders. If any Certificates as to which notice has been
given pursuant to this Section 4.01(f) shall not have been surrendered for
cancellation within six months after the time specified in such notice, the
Paying Agent shall mail a second notice to the remaining non-tendering
Certificateholders to surrender their Certificates for cancellation in order to
receive the final distribution with respect thereto. If within one year after
the second notice all such Certificates shall not have been surrendered for
cancellation, the Paying Agent, directly or through an agent, shall take such
steps to contact the remaining non-tendering Certificateholders concerning the
surrender of their Certificates as
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it shall deem appropriate. The costs and expenses of holding such funds in trust
and of contacting such Certificateholders following the first anniversary of the
delivery of such second notice to the non-tendering Certificateholders shall be
paid out of such funds. No interest shall accrue or be payable to any former
Holder on any amount held in trust pursuant to this paragraph. If all of the
Certificates shall not have been surrendered for cancellation by the first
anniversary following delivery of the second notice, the Paying Agent shall
dispose of all unclaimed funds and other assets in accordance with applicable
state law.
(h) Notwithstanding any other provision of this Agreement, the
Paying Agent shall comply with all federal withholding requirements respecting
payments to Certificateholders of interest or original issue discount that the
Paying Agent reasonably believes are applicable under the Code and may consult
with counsel (the cost of which counsel shall be an expense of the Trust Fund)
in connection therewith. The consent of Certificateholders shall not be required
for such withholding. If the Paying Agent does withhold any amount from interest
or original issue discount payments or advances thereof to any Certificateholder
pursuant to federal withholding requirements, the Paying Agent shall indicate
the amount withheld to such Certificateholders.
(i) All distributions made in respect of any Class of
Certificates (other than the Class IO Certificates and the Class L Certificate)
on each Distribution Date pursuant to Section 4.01(a), 4.01(b) or 9.01 shall be
deemed to have first been distributed from REMIC II to REMIC III in respect of
its corresponding REMIC II Regular Interest set forth in the Preliminary
Statement hereto; all interest distributions made in respect of each Component
of the Class IO Certificates on each Distribution Date pursuant to Section
4.01(a), 4.01(b) or 9.01 shall be deemed to have first been distributed from
REMIC II to REMIC III in respect of the REMIC II Regular Interest corresponding
to the Class of Certificates having the same alphabetical and numerical (if any)
designation as such Component to the extent of one month's interest accrued at a
rate equal to the Pass-Through Rate for such Component on the Uncertificated
Principal Balance of such REMIC II Regular Interest immediately prior to such
Distribution Date.
(j) On each Distribution Date, the portion of the Available
Distribution Amount for such date distributed in respect of the Regular
Certificates pursuant to Section 4.01(a), 4.01(b) or 9.01 shall be deemed to
have first been distributed from REMIC I to REMIC II in respect of the REMIC I
Regular Interests, in each case to the extent of the remaining portions of such
funds, for the following purposes and in the following order of priority:
(i) as deemed distributions of interest in respect of
the REMIC I Regular Interests, in an amount equal to, and pro
rata in accordance with, all Uncertificated Distributable
Interest in respect of each such REMIC I Regular Interest for
such Distribution Date and, to the extent not previously
deemed distributed, for all prior Distribution Dates;
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(ii) as deemed distributions of principal in respect
of the REMIC I Regular Interests, in an amount equal to, and
pro rata in accordance with, as to each such REMIC I Regular
Interest, the excess, if any, of the Uncertificated Principal
Balance of such REMIC I Regular Interest outstanding
immediately prior to such Distribution Date, over the Stated
Principal Balance of the related Mortgage Loan (or successor
REO Loan) that will be outstanding immediately following such
Distribution Date; and
(iii) as deemed distributions in respect of the REMIC
I Regular Interests, in an amount equal to, pro rata in
accordance with, and in reimbursement of previously allocated
Realized Losses and Additional Trust Fund Expenses (with
compounded interest), allocated to each such REMIC I Regular
Interest.
Any Prepayment Premium distributed to any Class of
Certificates on any Distribution Date shall, in each case, be deemed to have
been distributed from REMIC I to REMIC II in respect of the REMIC I Regular
Interest corresponding to the prepaid Mortgage Loan or REO Loan, as the case may
be, in respect of which such premium was received.
SECTION 4.02. Statements to Certificateholders;
CSSA Loan File Report.
(a) On each Distribution Date, the Trustee shall forward by
mail (or by electronic transmission acceptable to the recipient) to all of the
Holders of each Class of Regular Certificates, a statement (a "Statement to
Certificateholders"), as to the distributions made on such Distribution Date,
based solely on information provided to it by the Master Servicer and the
Special Servicer, setting forth:
(i) the amount of the distribution on such
Distribution Date to the Holders of each Class of Regular
Certificates in reduction of the Class Principal Balance
thereof;
(ii) the amount of the distribution on such
Distribution Date to the Holders of each Class of Regular
Certificates allocable to Distributable Certificate Interest;
(iii) the amount of the distribution on such
Distribution Date to the Holders of each Class of Regular
Certificates allocable to Prepayment Premiums;
(iv) the amount of the distribution on such
Distribution Date to the Holders of each Class of Regular
Certificates in reimbursement of previously allocated Realized
Losses and Additional Trust Fund Expenses;
(v) the Available Distribution Amount for such
Distribution Date;
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(vi) (a) the aggregate amount of P&I Advances made in
respect of such Distribution Date pursuant to Section 4.03(a)
(with a detail of the amount by which such P&I Advances were
reduced as a result of any Appraisal Reduction Amount),
including, without limitation, any amounts applied pursuant to
Section 4.03(a)(ii), and the aggregate amount of unreimbursed
P&I Advances that had been outstanding at the close of
business on the related Determination Date and the aggregate
amount of interest accrued and payable to the Master Servicer
or the Trustee in respect of such unreimbursed P&I Advances in
accordance with Section 4.03(d) as of the close of business on
the related Determination Date and (b) the aggregate amount of
Servicing Advances as of the close of business on the related
Determination Date;
(vii) the aggregate unpaid principal balance of the
Mortgage Pool outstanding as of the close of business on the
related Determination Date;
(viii) the aggregate Stated Principal Balance of the
Mortgage Pool outstanding immediately before and immediately
after such Distribution Date;
(ix) the number, aggregate principal balance,
weighted average remaining term to maturity and weighted
average Mortgage Rate of the Mortgage Loans as of the close of
business on the related Determination Date;
(x) the number, aggregate unpaid principal balance
(as of the close of business on the related Determination
Date) and aggregate Stated Principal Balance (immediately
after such Distribution Date) of Mortgage Loans (A) delinquent
30-59 days, (B) delinquent 60-89 days, (C) delinquent more
than 89 days, (D) as to which foreclosure proceedings have
been commenced and (E) and Specially Series Mortgage Loans;
(xi) as to each Mortgage Loan referred to in the
preceding clause (x) above, (A) the loan number thereof, (B)
the Stated Principal Balance thereof immediately following
such Distribution Date, (C) whether the delinquency is in
respect of its Balloon Payment, (D) whether a notice of
acceleration has been sent to the Mortgagor and, if so, the
date of such notice, (E) if an Environmental Assessment of the
related Mortgaged Property has been performed as contemplated
by Section 3.09(c) and the assessment is such that the Special
Servicer cannot make the determination set forth in clauses
(i) and (ii) of the first sentence of Section 3.09(c), a brief
description of the results of such Environmental Assessment,
and (F) a brief description of the status of any foreclosure
proceedings or any workout or loan modification negotiations
with the related Mortgagor;
(xii) with respect to any Mortgage Loan as to which a
Liquidation Event occurred during the related Collection
Period (other than a payment in full), (A) the loan number
thereof, (B) the aggregate of all Liquidation Proceeds
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and other amounts received in connection with such Liquidation
Event (separately identifying the portion thereof allocable to
distributions on the Certificates), and (C) the amount of any
Realized Loss in connection with such Liquidation Event;
(xiii) with respect to each REO Property included in
the Trust Fund as of the close of business on the related
Determination Date, (A) the loan number of the related
Mortgage Loan, (B) the date of acquisition of such REO
Property by the Trust Fund, (C) the book value (within the
meaning of 12 C.F.R. ss. 571.13) of such REO Property, (D) the
aggregate of all REO Revenues and other amounts received with
respect to such REO Property during the related Collection
Period (separately identifying the portion thereof allocable
to distributions on the Certificates), (E) the Stated
Principal Balance of the related REO Loan immediately
following such Distribution Date, and (F) a brief description
of the Special Servicer's efforts since the last Distribution
Date to stabilize the tenancy of such REO Property, to repair
and restore such REO Property to marketable condition and to
sell such REO Property at its then current fair market value;
(xiv) with respect to any REO Property included in
the Trust Fund as to which a Final Recovery Determination was
made during the related Collection Period, (A) the loan number
of the related Mortgage Loan, (B) a brief description of the
basis for the Final Recovery Determination, (C) the aggregate
of all Liquidation Proceeds and other amounts received in
connection with such Final Recovery Determination (separately
identifying the portion thereof allocable to distributions on
the Certificates), and (D) the amount of any Realized Loss in
respect of the related REO Loan in connection with such Final
Recovery Determination;
(xv) the Accrued Certificate Interest and
Distributable Certificate Interest in respect of each Class
of Regular Certificates for such Distribution Date;
(xvi) any unpaid Distributable Certificate Interest
in respect of each Class of Regular Certificates after giving
effect to the distributions made on such Distribution Date;
(xvii) the Pass-Through Rate for each Class of
Regular Certificates for such Distribution Date;
(xviii) the Principal Distribution Amount for such
Distribution Date, separately identifying the respective
components thereof (and, in the case of any Principal
Prepayment or other unscheduled collection of principal
received during the related Collection Period, the loan number
for the related Mortgage Loan and the amount of such
prepayment or other collection of principal);
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(xix) the aggregate of all Realized Losses incurred
during the related Collection Period and all Additional Trust
Fund Expenses incurred during the related Collection Period;
(xix) the aggregate of all Realized Losses and
Additional Trust Fund Expenses that were allocated on such
Distribution Date;
(xxi) the Class Principal Balance of each Class of
Regular Certificates (other than the Class IO Certificates)
and the Component Notional Amount of each Component
outstanding immediately before and immediately after such
Distribution Date, separately identifying any reduction
therein due to the allocation of Realized Losses and
Additional Trust Fund Expenses on such Distribution Date;
(xxii) the Certificate Factor for each Class of
Regular Certificates immediately following such Distribution
Date;
(xxii) the aggregate amount of interest on P&I
Advances paid to the Master Servicer and the Trustee during
the related Collection Period in accordance with Section
4.03(d);
(xxiv) the aggregate amount of interest on Servicing
Advances paid to the Master Servicer, the Trustee and the
Special Servicer during the related Collection Period in
accordance with Section 3.03(d);
(xxv) the aggregate amount of servicing fees paid to
the Master Servicer and the Special Servicer during the
related Collection Period;
(xxvi) a brief description of any waiver,
modification or amendment of the terms of any Mortgage Loan
entered into by the Master Servicer or the Special Servicer
pursuant to Section 3.20 during the related Collection Period;
(xxvii) the amount of the distribution on such
Distribution Date to the holders of the Class L Certificates
in respect of Additional Interest; and
(xxviii) the amounts, if any, actually distributed
with respect to the Class R-I Certificates, Class R-II
Certificates and Class R-III Certificates on such Distribution
Date.
In the case of information to be furnished pursuant to clauses
(i) through (iv) above, the amounts shall be expressed as a dollar amount in the
aggregate for all Certificates of each applicable Class and per Single
Certificate. In the case of information provided to the Trustee as a basis for
information to be furnished pursuant to clauses (x) through (xiii), and (xxiv)
above, insofar as the underlying information is solely within the control of the
Special
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Servicer, the Trustee and the Master Servicer may, absent manifest error,
conclusively rely on the reports to be provided by the Special Servicer.
The Trustee may rely on and shall not be responsible absent
manifest error for the content or accuracy of any information provided by third
parties for purposes of preparing the Statement to Certificateholders and may
affix thereto any disclaimer it deems appropriate in its reasonable discretion
(without suggesting liability on the part of any other party hereto).
The Trustee shall deliver or shall cause to be delivered on
each Distribution Date by first class mail to each Certificateholder, the
Depositor, the Underwriter, the Controlling Class Representative, each Rating
Agency and any other Person designated in writing by the Depositor (on diskette
or via such other electronic medium as is mutually acceptable to the Trustee and
the recipient) or make available on the Trustee's Internet website on each
Distribution Date, a copy of the following nine reports or in the case of
reports to Persons designated in writing by the Depositor, any of the following
nine reports delivered to it by the Master Servicer pursuant to Section 3.12(b)
and 3.12(c): (i) the Delinquent Loan Status Report, (ii) the Historical Loss
Estimate Report, (iii) the Historical Loan Modification Report, (iv) the REO
Status Report, (v) the Watch List, (vi) a Comparative Financial Status Report,
(vii) an Operating Statement Analysis and (viii) an NOI Adjustment Worksheet.
The Trustee shall deliver or shall cause to be delivered on each Distribution
Date by first class mail (or by electronic transmission acceptable to the
recipient) to each Certificateholder, the Underwriter, the Depositor, each
Rating Agency and each other Person that received a Statement to
Certificateholders on such Distribution Date a hard copy (or by an electronic
medium acceptable to the recipient) of the CSSA Loan File Report and the CSSA
Property File Report containing information regarding each Mortgaged Property as
of the end of the preceding calendar month. The Trustee also shall deliver the
CSSA Loan File Report and CSSA Property File Report relating to any Distribution
Date by electronic medium (including computer diskette) the Controlling Class
Representative, to each Rating Agency and, upon written request, to the
Underwriter and to any Certificateholder or Certificate Owner entitled to
receive a hard copy thereof. Absent manifest error, none of the Master Servicer
or the Special Servicer shall be responsible for the accuracy or completeness of
any information supplied to it by a borrower or third party that is included in
any reports, statements, materials or information prepared or provided by the
Master Servicer or the Special Servicer, as applicable. The Trustee shall not be
responsible absent manifest error for the accuracy or completeness of any
information supplied to it for delivery pursuant to this Section. Neither the
Trustee, the Master Servicer nor the Special Servicer shall have any obligation
to verify the accuracy or completeness of any information provided by a
Mortgagor or third party.
The Trustee shall provide or make available a copy of each
Comparative Financial Status Report that it receives from the Master Servicer to
the Depositor, the Underwriter, the Controlling Class Representative and each
Rating Agency promptly after its receipt thereof pursuant to Section 3.12(c).
Any Certificateholder may obtain a copy of each Comparative Financial Status
Report upon written request to the Trustee. Upon specific written request, the
Trustee shall deliver a copy of each NOI Adjustment Worksheet that it
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receives from the Master Servicer pursuant to Section 3.12(c) to the Depositor
and each Rating Agency. The Trustee shall automatically deliver a copy of each
annual Operating Statement Analysis that it receives from the Master Servicer
pursuant to Section 3.12(c) to each Rating Agency and the Underwriter on or
before April 30th of such year. The Trustee shall provide or make available a
copy of each annual Operating Statement Analysis that it receives from the
Master Servicer pursuant to Section 3.12(c) to the Depositor. Any
Certificateholder may obtain a copy of any NOI Adjustment Worksheet or Operating
Statement Analysis in the possession of the Trustee upon written request and at
the expense of such Certificateholder.
Within a reasonable period of time after the end of each
calendar year, the Trustee shall send to each Person who at any time during the
calendar year was a Certificateholder of record, a report summarizing on an
annual basis (if appropriate) the items provided to Certificateholders pursuant
to Section 4.02(a)(i), (ii), (iii) and (iv) above and such other information as
may be required to enable such Certificateholders to prepare their federal
income tax returns. Such information shall include the amount of original issue
discount accrued on each Class of Certificates and information regarding the
expenses of the Trust. Such requirement shall be deemed to be satisfied to the
extent such information is provided pursuant to applicable requirements of the
Code from time to time in force.
On each Distribution Date, the Trustee shall provide or make
available to The Trepp Group (at 477 Madison Avenue, 18th Floor, New York, New
York 10022, or such other address as The Trepp Group may hereafter designate), a
copy of the reports forwarded to the Holders of the Regular Certificates on such
Distribution Date and a statement setting forth the amounts, if any, actually
distributed with respect to the Class R-I and Class R-II and Class R III
Certificates on such Distribution Date.
If any Certificate Owner does not receive through the
Depository or any of its Depository Participants any of the statements, reports
and/or other written information described above in this Section 4.02(a) that it
would otherwise be entitled to receive if it were the Holder of a Definitive
Certificate evidencing its ownership interest in the related Class of Book Entry
Certificates, then the Trustee shall mail or cause the mailing of such
statements, reports and/or other written information to such Certificate Owner
upon the request of such Certificate Owner made in writing to the Corporate
Trust Office (accompanied by current verification of such Certificate Owner's
ownership interest). Such portion of such information as may be agreed upon by
the Depositor and the Trustee shall be furnished to any such Person via
overnight courier delivery or telecopy from the Trustee; provided that the cost
of such overnight courier delivery or telecopy shall be an expense of the party
requesting such information.
The Trustee shall only be obligated to deliver the statements,
reports and information contemplated by this Section 4.02(a) to the extent it
receives the necessary underlying information from the Special Servicer or
Master Servicer, as applicable, and shall not be liable for any failure to
deliver any thereof on the prescribed due dates, to the extent caused by failure
to receive timely such underlying information. Nothing herein shall obligate
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the Trustee or the Master Servicer to violate any applicable law prohibiting
disclosure of information with respect to any Mortgagor and the failure of the
Trustee, Master Servicer or the Special Servicer to disseminate information for
such reason shall not be a breach hereof.
(b) Not later than 2:00 P.M. on the second Business Day
following each Determination Date the Master Servicer shall furnish to the
Trustee, the Depositor, the Underwriter and the Rating Agencies, by electronic
transmission (or in such other form to which the Trustee, the Underwriter or the
Depositor, as the case may be, and the Master Servicer may agree), with a hard
copy of such transmitted information to follow to the Underwriter and the
Depositor not later than the third Business Day following such Determination
Date and upon request, to the Trustee and the Rating Agencies, an accurate and
complete CSSA Loan File Report providing the required information for the
Mortgage Loans as of such Determination Date.
To the extent the Depositor or the Controlling Class
Representative requires additional information not required pursuant to the
terms of this Agreement, the Depositor or the Controlling Class Representative
may request (which request may only be made one time per month unless an Event
of Default has occurred and is continuing) of the Master Servicer or Special
Servicer, as applicable, that such information be delivered to the Depositor or
the Controlling Class Representative on the Distribution Date following the
Depositor's or the Controlling Class Representative's reasonable request
therefor (or if such request is made after the fourth Business Day preceding
such Distribution Date, the next succeeding Distribution Date), to the extent
such information is readily available to the Master Servicer or Special Servicer
without additional cost or expense for which the Master Servicer or Special
Servicer will not be reimbursed, the Master Servicer or the Special Servicer, as
applicable, shall provide such information to the Trustee and the Trustee shall
forward such information to the Rating Agencies.
In the performance of its obligations set forth in Section
4.05 and its other duties hereunder, the Trustee may conclusively rely on the
CSSA Loan File Report provided to it by the Master Servicer, and the Trustee
shall not be responsible to recompute, recalculate or verify the information
provided to it by the Master Servicer. In the case of information to be
furnished by the Master Servicer to the Trustee pursuant to this Section
4.02(b), insofar as such information is solely within the control of the Special
Servicer, the Master Servicer shall have no obligation to provide such
information until it has received such information from the Special Servicer,
shall not be in default hereunder due to a delay in providing the CSSA Loan File
Report caused by the Special Servicer's failure to timely provide any report
required under this Agreement and may, absent manifest error, conclusively rely
on the reports to be provided by the Special Servicer.
SECTION 4.03. P&I Advances.
(a) On or before 4:00 p.m., New York City time, on each P&I
Advance Date, the Master Servicer shall (i) apply amounts held in the
Certificate Account received after the Determination Date with respect to the
related Collection Period or for future distribution
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to Certificateholders in subsequent months in discharge of its obligation to
make P&I Advances, or (ii) if such amounts are insufficient to discharge such
obligation, subject to Section 4.03(c) below, remit from its own funds to the
Paying Agent for deposit into the Distribution Account an amount equal to the
aggregate amount of P&I Advances, if any, to be made in respect of the related
Distribution Date. The Master Servicer may also make P&I Advances in the form of
any combination of clauses (i) and (ii) above aggregating the total amount of
P&I Advances to be made. Any amounts held in the Certificate Account for future
distribution and so used to make P&I Advances shall be appropriately reflected
in the Master Servicer's records and replaced by the Master Servicer by deposit
in the Certificate Account on or before the next succeeding Determination Date
(to the extent not previously replaced through the deposit of Late Collections
of the delinquent principal and interest in respect of which such P&I Advances
were made). If, as of 4:00 p.m., New York City time, on any P&I Advance Date,
the Master Servicer shall not have made any P&I Advance required to be made on
such date pursuant to this Section 4.03(a) (and shall not have delivered to the
Trustee the requisite Officer's Certificate and documentation related to a
determination of nonrecoverability of a P&I Advance), then the Trustee shall
provide notice of such failure to a Servicing Officer of the Master Servicer by
facsimile transmission sent to telecopy number 281-405-7132 (or such alternative
number provided by the Master Servicer to the Trustee in writing) and by
telephone at telephone number 281-405-7000 (or such alternative number provided
by the Master Servicer to the Trustee in writing) as soon as possible, but in
any event before 5:00 p.m., New York City time, on such P&I Advance Date. If the
Trustee does not receive the full amount of such P&I Advances by 10:00 a.m., New
York City time, on the related Distribution Date, then, subject to Section
4.03(c), (i) the Trustee as successor servicer in accordance with Section 7.02
shall, no later than 11:00 a.m., New York City time, on such related
Distribution Date make the portion of such P&I Advances that was required to be,
but was not, made by the Master Servicer on such P&I Advance Date, and (ii) the
provisions of Sections 7.01 and 7.02 shall apply.
(b) The aggregate amount of P&I Advances to be made by the
Master Servicer or the Trustee in respect of any Distribution Date shall,
subject to Section 4.03(c) below, equal the aggregate of all Scheduled Payments
(other than Balloon Payments) and any Assumed Scheduled Payments, net of related
Master Servicing Fees and any related Principal Recovery Fees, due or deemed
due, as the case may be, in respect of the Mortgage Loans and any REO Loans on
their respective Due Dates during the related Collection Period, in each case to
the extent such amount was not paid by or on behalf of the related Mortgagor or
otherwise collected (including received as net income from REO Properties) as of
the close of business on the related Determination Date; provided, that, (i) if
the Monthly Payment on any Mortgage Loan has been reduced in connection with a
bankruptcy or similar proceeding involving the related Mortgagor or a
modification, waiver or amendment granted or agreed to by the Special Servicer
pursuant to Section 3.20, or if the final maturity on any Mortgage Loan shall be
extended in connection with a bankruptcy or similar proceeding involving the
related Mortgagor or a modification, waiver or amendment granted or agreed to by
the Special Servicer pursuant to Section 3.20, and the Monthly Payment due and
owing during the extension period is less than the related Assumed Scheduled
Payment, then the Master Servicer
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shall, as to such Mortgage Loan only, advance only the amount of the Monthly
Payment due and owing after taking into account such reduction (net of related
Master Servicing Fees and any related Principal Recovery Fees) in the event of
subsequent delinquencies thereon; and (ii) if it is determined that an Appraisal
Reduction Amount exists with respect to any Required Appraisal Loan, then, with
respect to the Distribution Date immediately following the date of such
determination and with respect to each subsequent Distribution Date for so long
as such Appraisal Reduction Amount exists with respect to such Required
Appraisal Loan, the Master Servicer or the Trustee will be required in the event
of subsequent delinquencies to advance in respect of such Mortgage Loan only an
amount equal to (1) the product of (A) the amount of the interest component of
the P&I Advance for such Mortgage Loan that would otherwise be required without
regard to this clause (ii), multiplied by (B) a fraction, the numerator of which
is equal to the Stated Principal Balance of such Mortgage Loan, net of such
Appraisal Reduction Amount, and the denominator of which is equal to the Stated
Principal Balance of such Mortgage Loan, plus (2) the principal amount of the
P&I Advance for such Mortgage Loan.
(c) Notwithstanding anything herein to the contrary, no P&I
Advance shall be required to be made hereunder if such P&I Advance would, if
made, constitute a Nonrecoverable P&I Advance. The determination by the Master
Servicer that it has made a Nonrecoverable P&I Advance or that any proposed P&I
Advance, if made, would constitute a Nonrecoverable P&I Advance, shall be
evidenced by an Officers' Certificate delivered to the Trustee, the Controlling
Class Representative and the Depositor on or before the related P&I Advance
Date, setting forth the basis for such determination, together with any other
information, including Appraisals or, if no such Appraisal has been performed
pursuant to this Section 4.03(c), a copy of an Appraisal of the related
Mortgaged Property performed within the twelve months preceding such
determination, related Mortgagor operating statements and financial statements,
budgets and rent rolls of the related Mortgaged Properties, engineers' reports,
environmental surveys and any similar reports that the Master Servicer may have
obtained consistent with the Servicing Standard and at the expense of the Trust
Fund, that support such determination by the Master Servicer. The Trustee shall
be entitled to rely, conclusively, on any determination by the Master Servicer
that a P&I Advance, if made, would be a Nonrecoverable Advance (and with respect
to a P&I Advance, the Trustee, as applicable, shall rely on the Master
Servicer's determination that the P&I Advance would be a Nonrecoverable Advance
if the Trustee determines that it does not have sufficient time to make such
determination); provided, however, that if the Master Servicer has failed to
make a P&I Advance for reasons other than a determination by the Master Servicer
that such P&I Advance would be Nonrecoverable Advance, the Trustee shall make
such Advance within the time periods required by Section 4.03(a) unless the
Trustee, in good faith, makes a determination prior to the times specified in
Section 4.03(a) that such P&I Advance would be a Nonrecoverable Advance. The
Trustee in determining whether or not a P&I Advance previously made is, or a
proposed P&I Advance, if made, would be, a Nonrecoverable Advance shall be
subject to the standards applicable to the Master Servicer hereunder.
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(d) In connection with the recovery by the Master Servicer or
the Trustee of any P&I Advance out of the Certificate Account pursuant to
Section 3.05(a), if default interest and late charges on the related Mortgage
Loan shall be insufficient therefor, the Master Servicer shall be entitled to
pay itself and the Trustee out of any amounts then on deposit in the Certificate
Account, interest at the Reimbursement Rate in effect from time to time
compounded annually, accrued on the amount of such P&I Advance from the date
made to but not including the date of reimbursement. The Master Servicer shall
reimburse itself or the Trustee, as applicable, for any outstanding P&I Advance
made thereby as soon as practicable after funds available for such purpose have
been received by the Master Servicer, and in no event shall interest accrue in
accordance with this Section 4.03(d) on any P&I Advance as to which the
corresponding Late Collection was received by the Master Servicer as of the
related P&I Advance Date.
SECTION 4.04. Allocation of Realized Losses and
Additional Trust Fund Expenses.
(a) On each Distribution Date, prior to the distributions to
be made on such date pursuant to Section 4.01, the Paying Agent shall allocate
to the respective Classes of Regular Certificates as follows the aggregate of
all Realized Losses and Additional Trust Fund Expenses that were incurred at any
time following the Cut-Off Date through the end of the related Collection
Period, and in any event that were not previously allocated pursuant to this
Section 4.04(a) on any prior Distribution Date, but only to the extent that (i)
the aggregate Certificate Principal Balance of the Regular Certificates as of
such Distribution Date (after taking into account all of the distributions made
on such Distribution Date pursuant to Section 4.01), exceeds (ii) the aggregate
Stated Principal Balance of the Mortgage Pool to be outstanding immediately
following such Distribution Date: first, to the Class K, Class J, Class H, Class
G, Class F, Class E, Class D, Class C and Class B Certificates, in that order,
until the respective remaining Class Principal Balance of each such Class has
been reduced to zero and second, to the Class A-1, Class A-2 and Class A-3
Certificates, pro rata, in accordance with the outstanding Certificate Principal
Balances of such Classes of Certificates, until the remaining Class Principal
Balance of each such Class has been reduced to zero. All Realized Losses and
Additional Trust Fund Expenses, if any, that have not been allocated to the
Regular Certificates as of the Distribution Date on which the aggregate
Certificate Principal Balance of such Certificates has been reduced to zero,
shall be deemed allocated to the Residual Certificates.
(b) Each Realized Loss and Additional Trust Fund Expense, if
any, allocated to any Regular Certificates on any Distribution Date shall be
deemed to have first been allocated to the corresponding class of REMIC II
Regular Interest with a corresponding reduction in the Uncertificated Principal
Balance of such REMIC II Regular Interest.
(c) On each Distribution Date, following the deemed
distributions to be made in respect of the REMIC I Regular Interests pursuant to
Section 4.01(j), the Uncertificated Principal Balance of each REMIC I Regular
Interest (after taking account of
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such deemed distributions) shall be reduced to equal the Stated Principal
Balance of the related Mortgage Loan or REO Loan, as the case may be, that will
be outstanding immediately following such Distribution Date. Such reductions
shall be deemed to be an allocation of Realized Losses and Additional Trust Fund
Expenses.
SECTION 4.05. Calculations.
The Paying Agent shall, provided it receives the necessary
information from the Master Servicer and the Special Servicer, be responsible
for performing all calculations necessary in connection with the actual and
deemed distributions and allocations to be made pursuant to Section 4.01,
Section 5.02(d) and Article IX and the actual and deemed allocations of Realized
Losses and Additional Trust Fund Expenses to be made pursuant to Section 4.04.
The Paying Agent shall calculate the Available Distribution Amount for each
Distribution Date and shall allocate such amount among Certificateholders in
accordance with this Agreement, and the Paying Agent shall have no obligation to
recompute, recalculate or verify any information provided to it by the Special
Servicer or Master Servicer. The calculations by the Paying Agent of such
amounts shall, in the absence of manifest error, be presumptively deemed to be
correct for all purposes hereunder.
SECTION 4.06. Use of Agents.
The Master Servicer or the Trustee may at its own expense
utilize agents or attorneys-in-fact in performing any of its obligations under
this Article IV (except the obligation to make P&I Advances), but no such
utilization shall relieve the Master Servicer or the Trustee from any of such
obligations, and the Master Servicer or the Trustee, as applicable, shall remain
responsible for all acts and omissions of any such agent or attorney-in-fact
(other than with respect to limited powers-of-attorney delivered by the Trustee
to the Master Servicer or Special Servicer pursuant to Section 2.03(b) and
3.01(b), as applicable, in which case the Trustee shall have no such
responsibility). The Master Servicer or the Trustee shall have all the
limitations upon liability and all the indemnities for the actions and omissions
of any such agent or attorney-in-fact that it has for its own actions hereunder
pursuant to Article VI or Article VIII hereof, as applicable, and any such agent
or attorney-in-fact shall have the benefit of all the limitations upon
liability, if any, and all the indemnities provided to the Master Servicer under
Section 6.03 or to the Trustee under Sections 8.01, 8.02 and 8.05, as
applicable.
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ARTICLE V
THE CERTIFICATES
SECTION 5.01. The Certificates.
(a) The Certificates will be substantially in the respective
forms attached hereto as Exhibits A-1 through A-16; provided, that any of the
Certificates may be issued with appropriate insertions, omissions, substitutions
and variations, and may have imprinted or otherwise reproduced thereon such
legend or legends, not inconsistent with the provisions of this Agreement, as
may be required to comply with any law or with rules or regulations pursuant
thereto, or with the rules of any securities market in which the Certificates
are admitted to trading, or to conform to general usage. The Certificates will
be issuable in registered form only; provided, however, that in accordance with
Section 5.03 beneficial ownership interests in the Registered Certificates shall
initially be held and transferred through the book-entry facilities of the
Depository. The Regular Certificates will be issuable only in denominations
corresponding to initial Certificate Principal Balances or initial Certificate
Notional Amount, as the case may be, as of the Closing Date of not less than
$1,000 in the case of the Registered Certificates, and not less than $250,000 in
the case of the Class F, Class G, Class H, Class J and Class K Certificates, and
in each such case in integral multiples of $1 in excess thereof. Neither the
Residual Certificates nor the Class L Certificates will have a Certificate
Principal Balance or Certificate Notional Amount.
(b) The Certificates shall be executed by manual or facsimile
signature on behalf of the Trustee by the Certificate Registrar hereunder by an
authorized signatory. Certificates bearing the manual or facsimile signatures of
individuals who were at any time the authorized officers of the Certificate
Registrar shall be entitled to all benefits under this Agreement, subject to the
following sentence, notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the authentication and delivery of such
Certificates or did not hold such offices at the date of such Certificates. No
Certificate shall be entitled to any benefit under this Agreement, or be valid
for any purpose, however, unless there appears on such Certificate a certificate
of authentication substantially in the form provided for herein executed by the
Authenticating Agent by manual signature, and such certificate of authentication
upon any Certificate shall be conclusive evidence, and the only evidence, that
such Certificate has been duly authenticated and delivered hereunder. All
Certificates shall be dated the date of their authentication.
SECTION 5.02. Registration of Transfer and
Exchange of Certificates.
(a) At all times during the term of this Agreement, there
shall be maintained at the office of the Certificate Registrar a Certificate
Register in which, subject to such reasonable regulations as the Certificate
Registrar (located as of the Closing Date at 450 West 33rd Street, 8th Floor,
New York, New York 10001, Attn.: Structured Finance Services -- CMBS) may
prescribe, the Certificate Registrar shall provide for the registration of
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Certificates and of transfers and exchanges of Certificates as herein provided.
The Trustee is hereby initially appointed (and hereby agrees to act in
accordance with the terms hereof) as Certificate Registrar for the purpose of
registering Certificates and transfers and exchanges of Certificates as herein
provided. The Certificate Registrar may appoint, by a written instrument
delivered to the Depositor, the Trustee (if the Trustee is not the Certificate
Registrar), the Special Servicer and the Master Servicer, any other bank or
trust company to act as Certificate Registrar under such conditions as the
predecessor Certificate Registrar may prescribe, provided that the predecessor
Certificate Registrar shall not be relieved of any of its duties or
responsibilities hereunder by reason of such appointment. If the Trustee resigns
or is removed in accordance with the terms hereof, the successor trustee shall
immediately succeed to its duties as Certificate Registrar. The Depositor, the
Trustee (if it is no longer the Certificate Registrar), the Master Servicer and
the Special Servicer shall have the right to inspect the Certificate Register or
to obtain a copy thereof at all reasonable times, and to rely conclusively upon
a certificate of the Certificate Registrar as to the information set forth in
the Certificate Register. Upon written request of any Certificateholder made for
purposes of communicating with other Certificateholders with respect to their
rights under this Agreement, the Certificate Registrar shall promptly furnish
such Certificateholder with a list of the other Certificateholders of record
identified in the Certificate Register at the time of the request.
(b) No transfer of any Non-Registered Certificate shall be
made unless that transfer is made pursuant to an effective registration
statement under the Securities Act, and effective registration or qualification
under applicable state securities laws, or is made in a transaction that does
not require such registration or qualification. If such a transfer is to be made
without registration under the Securities Act (other than in connection with the
initial issuance thereof or the initial transfer thereof by the Depositor or its
Affiliates), then the Certificate Registrar shall refuse to register such
transfer unless it receives (and upon receipt, may conclusively rely upon)
either: (i) a certificate from the Certificateholder desiring to effect such
transfer substantially in the form attached as Exhibit F-1 hereto, and a
certificate from such Certificateholder's prospective transferee substantially
in the form attached as either Exhibit F-2 hereto or as Exhibit F-3 hereto; or
(ii) an Opinion of Counsel satisfactory to the Certificate Registrar to the
effect that such transfer may be made without registration under the Securities
Act (which Opinion of Counsel shall not be an expense of the Trust Fund or of
the Depositor, the Master Servicer, the Special Servicer, the Trustee or the
Certificate Registrar in their respective capacities as such), together with the
written certification(s) as to the facts surrounding such transfer from the
Certificateholder desiring to effect such transfer and/or such
Certificateholder's prospective transferee on which such Opinion of Counsel is
based. None of the Depositor, the Trustee or the Certificate Registrar is
obligated to register or qualify any Class of Non-Registered Certificates under
the Securities Act or any other securities law or to take any action not
otherwise required under this Agreement to permit the transfer of any
Non-Registered Certificate without registration or qualification. Any Holder of
a Non-Registered Certificate desiring to effect such a transfer shall, and upon
acquisition of such a Certificate shall be deemed to have agreed to, indemnify
the Trustee, the Certificate Registrar and the Depositor against any liability
that may result if the transfer is not so exempt or is not made in accordance
with such federal and state laws.
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(c) No transfer of a Subordinated Certificate or any interest
therein shall be made (A) to any employee benefit plan or other retirement
arrangement, including individual retirement accounts and annuities, Keogh plans
and collective investment funds and separate accounts in which such plans,
accounts or arrangements are invested, that is subject to ERISA or the
prohibited transactions restrictions of Section 4975 of the Code (each, a
"Plan"), or (B) to any Person who is directly or indirectly purchasing such
Subordinated Certificate or interest therein on behalf of, as named fiduciary
of, as trustee of, or with assets of a Plan (including, without limitation, any
insurance company using assets in its general or separate account that may
constitute "plan assets" of a Plan); provided, that (i) such a transfer may be
made to an insurance company general account with respect to any Class of
Subordinated Certificates which is eligible for exemptive relief under Section
III of Prohibited Transaction Class Exemption 95-60 ("PTE 95-60"), provided that
the proposed transferee certifies that the conditions of Sections I, III and IV
of PTE 95-60 are satisfied with respect to such transfer, and (ii) such a
transfer may be made with respect to a Class F, Class G, Class H, Class J or
Class K Certificate if the prospective transferee provides the Certificate
Registrar with a certification of facts and an Opinion of Counsel (upon which
the Certificate Registrar may conclusively rely) which establish to the
satisfaction of the Certificate Registrar that such transfer will not result in
a violation of Section 406 of ERISA or Section 4975 of the Code or result in the
imposition of an excise tax under Section 4975 of the Code. As a condition to
its registration of the transfer of a Subordinated Certificate, the Certificate
Registrar shall have the right to require the prospective transferee of such
Certificate to execute a certification affidavit in the form attached as Exhibit
G hereto.
(d) (i) Each Person who has or who acquires any Ownership
Interest in a Residual Certificate shall be deemed by the acceptance or
acquisition of such Ownership Interest to have agreed to be bound by the
following provisions and to have irrevocably authorized the Paying Agent under
clause (ii)(A) below to deliver payments to a Person other than such Person and
to have irrevocably authorized the Certificate Registrar under clause (ii)(B)
below to negotiate the terms of any mandatory sale and to execute all
instruments of Transfer and to do all other things necessary in connection with
any such sale. The rights of each Person acquiring any Ownership Interest in a
Residual Certificate are expressly subject to the following provisions:
(A) Each Person holding or acquiring any
Ownership Interest in a Residual Certificate shall be
a Permitted Transferee and shall promptly notify the
Master Servicer, the Paying Agent and the Certificate
Registrar of any change or impending change in its
status as a Permitted Transferee.
(B) In connection with any proposed Transfer
of a Residual Certificate, the Certificate Registrar
shall require delivery to it, and shall not register
the Transfer of any Residual Certificate until its
receipt of an affidavit and agreement substantially
in the form attached hereto as Exhibit H-1 (in any
case, a "Transfer Affidavit and Agreement"), from
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the proposed Transferee, in form and substance
satisfactory to the Certificate Registrar, and
upon which the Certificate Registrar may, in the
absence of actual knowledge by a Responsible
Officer of either the Trustee or the Certificate
Registrar to the contrary, conclusively rely,
representing and warranting, among other things,
that such Transferee is a Permitted Transferee,
that it is not acquiring its Ownership Interest in
the Residual Certificate that is the subject of
the proposed Transfer as a nominee, trustee or
agent for any Person that is not a Permitted
Transferee, that for so long as it retains its
Ownership Interest in a Residual Certificate, it will
endeavor to remain a Permitted Transferee, and that
it has reviewed the provisions of this Section
5.02(d) and agrees to be bound by them.
(C) Notwithstanding the delivery of a
Transfer Affidavit and Agreement by a proposed
Transferee under clause (B) above, if a Responsible
Officer of the Certificate Registrar has actual
knowledge that the proposed Transferee is not a
Permitted Transferee, no Transfer of a Residual
Certificate to such proposed Transferee shall be
effected.
(D) Each Person holding or acquiring any
Ownership Interest in a Residual Certificate shall
agree (1) to require a Transfer Affidavit and
Agreement from any prospective Transferee to whom
such Person attempts to transfer its Ownership
Interest in such Residual Certificate and (2) not to
transfer its Ownership Interest in such Residual
Certificate unless it provides to the Certificate
Registrar a certificate substantially in the form
attached hereto as Exhibit H-2 stating that, among
other things, it has no actual knowledge that such
prospective Transferee is not a Permitted Transferee.
(E) Each Person holding or acquiring an
Ownership Interest in a Residual Certificate, by
purchasing an Ownership Interest in such Certificate,
agrees to give the Master Servicer and the Trustee
written notice that it is a "pass-through interest
holder" within the meaning of temporary Treasury
Regulations Section 1.67-3T(a)(2)(i)(A) immediately
upon acquiring an Ownership Interest in a Residual
Certificate, if it is, or is holding an Ownership
Interest in a Residual Certificate on behalf of, a
pass-through interest holder".
(ii) (A) If any purported Transferee shall become a
Holder of a Residual Certificate in violation of the
provisions of this Section 5.02(d), then the last preceding
Holder of such Residual Certificate that was in compliance
with the provisions of this Section 5.02(d) shall be restored,
to the extent permitted by law, to all rights as Holder
thereof retroactive to the date of registration of such
Transfer of such Residual Certificate. None of the Trustee,
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the Master Servicer or the Certificate Registrar shall be
under any liability to any Person for any registration of
Transfer of a Residual Certificate that is in fact not
permitted by this Section 5.02(d) or for making any payments
due on such Certificate to the Holder thereof or for taking
any other action with respect to such Holder under the
provisions of this Agreement.
(B) If any purported Transferee shall become
a Holder of a Residual Certificate in violation of the
restrictions in this Section 5.02(d) and to the extent that
the retroactive restoration of the rights of the Holder of
such Residual Certificate as described in clause (ii)(A) above
shall be invalid, illegal or unenforceable, then the
Certificate Registrar shall have the right, but not the
obligation, without notice to the Holder or any prior Holder
of such Residual Certificate, to sell such Residual
Certificate to a qualified purchaser selected by the REMIC
Administrator on such terms as the Certificate Registrar may
choose. Such purported Transferee shall promptly endorse and
deliver such Residual Certificate in accordance with the
instructions of the Certificate Registrar. Such purchaser may
be the Certificate Registrar itself or any Affiliate of the
Certificate Registrar. The proceeds of such sale, net of the
commissions (which may include commissions payable to the
Certificate Registrar or its Affiliates), expenses and taxes
due, if any, will be remitted by the Paying Agent to such
purported Transferee. The terms and conditions of any sale
under this clause (ii)(B) shall be determined in the sole
discretion of the Certificate Registrar, and the Certificate
Registrar shall not be liable to any Person having an
Ownership Interest in a Residual Certificate as a result of
its exercise of such discretion.
(iii) The Certificate Registrar shall make available
to the Internal Revenue Service and to those Persons specified
by the REMIC Provisions any information in its possession
which is necessary to compute any tax imposed (A) as a result
of the Transfer of a Residual Certificate to any Person who is
a Disqualified Organization, including the information
described in Treasury Regulations sections 1.860D-1(b)(5) and
1.860E-2(a)(5) with respect to the "excess inclusions" of such
Residual Certificate and (B) as a result of any regulated
investment company, real estate investment trust, common trust
fund, partnership, trust, estate or organization described in
Section 1381 of the Code that holds an Ownership Interest in a
Residual Certificate having as among its record holders at any
time any Person which is a Disqualified Organization, and the
Master Servicer and the Special Servicer shall furnish to the
Certificate Registrar all information in its possession
necessary for the Certificate Registrar to discharge such
obligation. The Person holding such Ownership Interest shall
be responsible for the reasonable compensation of the
Certificate Registrar, the Master Servicer and the Special
Servicer for providing such information.
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(iv) The provisions of this Section 5.02(d) set forth
prior to this clause (iv) may be modified, added to or
eliminated, provided that there shall have been delivered to
the Certificate Registrar and the Master Servicer the
following:
(A) written confirmation from each Rating
Agency to the effect that the modification of,
addition to or elimination of such provisions will
not cause such Rating Agency to downgrade its
then-current rating of any Class of Certificates; and
(B) an Opinion of Counsel, in form and
substance satisfactory to the Certificate Registrar
and the Master Servicer, obtained at the expense of
the party seeking such modification of, addition to
or elimination of such provisions (but in no event at
the expense of the Trust Fund), to the effect that
doing so will not cause any of REMIC I, REMIC II or
REMIC III to (x) cease to qualify as a REMIC or (y)
be subject to an entity-level tax caused by the
Transfer of any Residual Certificate to a Person
which is not a Permitted Transferee, or cause a
Person other than the prospective Transferee to be
subject to a REMIC-related tax caused by the Transfer
of a Residual Certificate to a Person that is not a
Permitted Transferee.
(e) Subject to the preceding provisions of this Section 5.02,
upon surrender for registration of transfer of any Certificate at the offices of
the Certificate Registrar maintained for such purpose, the Certificate Registrar
shall execute and the Authenticating Agent shall authenticate and deliver, in
the name of the designated transferee or transferees, one or more new
Certificates of the same Class of a like aggregate Percentage Interest.
(f) At the option of any Holder, its Certificates may be
exchanged for other Certificates of authorized denominations of the same Class
of a like aggregate Percentage Interest, upon surrender of the Certificates to
be exchanged at the offices of the Certificate Registrar maintained for such
purpose. Whenever any Certificates are so surrendered for exchange, the
Certificate Registrar shall execute and the Authenticating Agent shall
authenticate and deliver the Certificates which the Certificateholder making the
exchange is entitled to receive.
(g) Every Certificate presented or surrendered for transfer or
exchange shall (if so required by the Certificate Registrar) be duly endorsed
by, or be accompanied by a written instrument of transfer in the form
satisfactory to the Certificate Registrar duly executed by, the Holder thereof
or his attorney duly authorized in writing.
(h) No service charge shall be imposed for any transfer or
exchange of Certificates, but the Certificate Registrar may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.
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(i) All Certificates surrendered for transfer and exchange
shall be physically canceled by the Certificate Registrar, and the Certificate
Registrar shall dispose of such canceled Certificates in accordance with its
standard procedures.
(j) Upon request, the Certificate Registrar shall provide to
the Master Servicer, the Special Servicer and the Depositor notice of each
transfer of a Certificate and shall provide to each such Person with an updated
copy of the Certificate Register.
SECTION 5.03. Book-Entry Certificates.
(a) Each Class of Registered Certificates shall initially be
issued as one or more Certificates registered in the name of the Depository or
its nominee and, except as provided in Section 5.03(c) below, transfer of such
Certificates may not be registered by the Certificate Registrar unless such
transfer is to a successor Depository that agrees to hold such Certificates for
the respective Certificate Owners with Ownership Interests therein. Such
Certificate Owners shall hold and transfer their respective Ownership Interests
in and to such Certificates through the book-entry facilities of the Depository
and, except as provided in Section 5.03(c) below, shall not be entitled to
definitive, fully registered Certificates ("Definitive Certificates") in respect
of such Ownership Interests. All transfers by Certificate Owners of their
respective Ownership Interests in the Book-Entry Certificates shall be made in
accordance with the procedures established by the Depository Participant or
brokerage firm representing each such Certificate Owner. Each Depository
Participant shall only transfer the Ownership Interests in the Book-Entry
Certificates of Certificate Owners it represents or of brokerage firms for which
it acts as agent in accordance with the Depository's normal procedures.
(b) The Trustee, the Master Servicer, the Special Servicer,
the Depositor and the Certificate Registrar may for all purposes, including the
making of payments due on the Book-Entry Certificates, deal with the Depository
as the authorized representative of the Certificate Owners with respect to such
Certificates for the purposes of exercising the rights of Certificateholders
hereunder. The rights of Certificate Owners with respect to the Book-Entry
Certificates shall be limited to those established by law and agreements between
such Certificate Owners and the Depository Participants and brokerage firms
representing such Certificate Owners. Multiple requests and directions from, and
votes of, the Depository as Holder of the Book-Entry Certificates with respect
to any particular matter shall not be deemed inconsistent if they are made with
respect to different Certificate Owners. The Trustee may establish a reasonable
record date in connection with solicitations of consents from or voting by
Certificateholders and shall give notice to the Depository of such record date.
(c) If (i)(A) the Depositor advises the Trustee and the
Certificate Registrar in writing that the Depository is no longer willing or
able to properly discharge its responsibilities with respect to a Class of the
Book-Entry Certificates, and (B) the Depositor is unable to locate a qualified
successor, or (ii) the Depositor at its option advises the Trustee and the
Certificate Registrar in writing that it elects to terminate the book-entry
system through the Depository with respect to a Class of Book-Entry
Certificates, the Certificate Registrar shall
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notify all affected Certificate Owners, through the Depository, of the
occurrence of any such event and of the availability of Definitive Certificates
to such Certificate Owners requesting the same. Upon surrender to the
Certificate Registrar of the Book-Entry Certificates of any Class thereof by the
Depository, accompanied by registration instructions from the Depository for
registration of transfer, the Certificate Registrar shall execute, at the
Depositor's expense, and the Authenticating Agent shall authenticate and
deliver, the Definitive Certificates in respect of such Class to the Certificate
Owners identified in such instructions. The Depositor shall provide the
Certificate Registrar with an adequate inventory of Definitive Certificates.
None of the Depositor, the Master Servicer, the Special Servicer, the Trustee or
the Certificate Registrar shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying on,
such instructions. Upon the issuance of Definitive Certificates for purposes of
evidencing ownership of any Class of Registered Certificates, the registered
holders of such Definitive Certificates shall be recognized as
Certificateholders hereunder and, accordingly, shall be entitled directly to
receive payments on, to exercise Voting Rights with respect to, and to transfer
and exchange such Definitive Certificates.
SECTION 5.04. Mutilated, Destroyed, Lost or Stolen
Certificates.
If (i) any mutilated Certificate is surrendered to the
Certificate Registrar, or the Certificate Registrar receives evidence to its
satisfaction of the destruction, loss or theft of any Certificate, and (ii)
there is delivered to the Trustee and the Certificate Registrar such security or
indemnity as may be required by them to save each of them harmless, then, in the
absence of actual notice to the Trustee or the Certificate Registrar that such
Certificate has been acquired by a bona fide purchaser, the Certificate
Registrar shall execute and the Authenticating Agent shall authenticate and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Certificate, a new Certificate of the same Class and like Percentage
Interest. Upon the issuance of any new Certificate under this Section, the
Trustee and the Certificate Registrar may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the
Trustee and the Certificate Registrar) connected therewith. Any replacement
Certificate issued pursuant to this Section shall constitute complete and
indefeasible evidence of ownership in the applicable REMIC created hereunder, as
if originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
SECTION 5.05. Persons Deemed Owners.
Prior to due presentment for registration of transfer, the
Depositor, the Master Servicer, the Special Servicer, the Trustee, the
Certificate Registrar and any agent of any of them may treat the Person in whose
name any Certificate is registered as the owner of such Certificate for the
purpose of receiving distributions pursuant to Section 4.01 and for all other
purposes whatsoever and none of the Depositor, the Master Servicer, the Special
Servicer, the
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Trustee, the Certificate Registrar or any agent of any of them shall be affected
by notice to the contrary.
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ARTICLE VI
THE DEPOSITOR, THE MASTER SERVICER, THE SPECIAL SERVICER AND THE
CONTROLLING CLASS REPRESENTATIVE
SECTION 6.01. Liability of Depositor, Master
Servicer and Special Servicer.
The Depositor, the Master Servicer and the Special Servicer
shall be liable in accordance herewith only to the extent of the respective
obligations specifically imposed upon and undertaken by the Depositor, the
Master Servicer and the Special Servicer herein.
SECTION 6.02. Merger, Consolidation or Conversion
of Depositor or Master Servicer or
Special Servicer.
Subject to the following paragraph, the Depositor, the Master
Servicer and the Special Servicer shall each keep in full effect its existence,
rights and franchises as a corporation under the laws of the jurisdiction of its
incorporation or organization, and each will obtain and preserve its
qualification to do business as a foreign corporation in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, the Certificates or any of the Mortgage Loans
and to perform its respective duties under this Agreement.
The Depositor, the Master Servicer or the Special Servicer may
be merged or consolidated with or into any Person, or transfer all or
substantially all of its assets to any Person, in which case any Person
resulting from any merger or consolidation to which the Depositor, the Master
Servicer or the Special Servicer shall be a party, or any Person succeeding to
the business of the Depositor, the Master Servicer or the Special Servicer,
shall be the successor of the Depositor, the Master Servicer or the Special
Servicer, as the case may be, hereunder, without the execution or filing of any
paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding; provided, however, that no successor or
surviving Person shall succeed to the rights of the Master Servicer or the
Special Servicer unless (i) as evidenced in writing by the Rating Agencies, such
succession will not result in qualification, downgrading or withdrawal of the
ratings then assigned by the Rating Agencies to any Class of Certificates; and
(ii) in the case of a successor or surviving Person to the Master Servicer, such
successor or surviving Person shall have a net worth (or, in the case of the
initial Master Servicer, such successor or surviving Person and its immediate
parent shall have a consolidated net worth) of not less than $15,000,000.
SECTION 6.03. Limitation on Liability of
Depositor, Master Servicer and
Special Servicer.
None of the Depositor, the Master Servicer or the Special
Servicer shall be under any liability to the Trust Fund, the Trustee or the
Certificateholders for any action taken, or not taken, in good faith pursuant to
this Agreement, or for errors in judgment;
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provided, however, that this provision shall not protect the Depositor, the
Master Servicer or the Special Servicer against any liability to the Trust Fund,
the Trustee or the Certificateholders for the breach of a representation,
warranty or covenant made herein by such party, or against any expense or
liability specifically required to be borne by such party without right of
reimbursement pursuant to the terms hereof, or against any liability which would
otherwise be imposed by reason of misfeasance, bad faith or negligence in the
performance of obligations or duties hereunder. The Depositor, the Master
Servicer, the Special Servicer and any director, officer, employee or agent of
the Depositor, the Master Servicer or the Special Servicer may rely in good
faith on any document of any kind which, prima facie, is properly executed and
submitted by any Person respecting any matters arising hereunder. The Depositor,
the Master Servicer, the Special Servicer and any director, officer, employee or
agent of the Depositor, the Master Servicer or the Special Servicer shall be
indemnified and held harmless by the Trust Fund against any loss, liability or
reasonable expense incurred in connection with this Agreement or the
Certificates, other than any loss, liability or expense: (i) specifically
required to be borne by such party without right of reimbursement pursuant to
the terms hereof; (ii) incurred in connection with any breach by such party of a
representation, warranty or covenant made herein; or (iii) incurred by reason of
willful misfeasance, bad faith or negligence on the part of such party in the
performance of obligations or duties hereunder. None of the Depositor, the
Master Servicer or the Special Servicer shall be under any obligation to appear
in, prosecute or defend any legal action unless such action is related to its
respective duties under this Agreement and, unless it is specifically required
hereunder to bear the costs of such legal action, in its opinion does not
involve it in any ultimate expense or liability; provided, however, that the
Depositor, the Master Servicer or the Special Servicer may in its discretion
undertake any such action which it may deem necessary or desirable with respect
to the enforcement and/or protection of the rights and duties of the parties
hereto and the interests of the Certificateholders hereunder. In such event, the
legal expenses and costs of such action, and any liability resulting therefrom,
shall constitute a Servicing Advance, and the Depositor, the Master Servicer and
the Special Servicer shall be entitled to be reimbursed therefor from the
Certificate Account as provided in Section 3.05. In no event shall the Master
Servicer or the Special Servicer be liable or responsible for any action taken
or omitted to be taken by the other of them or by the Depositor, the Trustee or
any Certificateholder, subject to the provisions of the last paragraph of
Section 8.05.
SECTION 6.04. Resignation of Master Servicer and
the Special Servicer; Assignment of
Rights and Obligations
The Master Servicer and, subject to Section 6.09, the Special
Servicer shall resign from the obligations and duties hereby imposed on it, upon
a determination that its duties hereunder are no longer permissible under
applicable law or are in material conflict by reason of applicable law with any
other activities carried on by it (the other activities of the Master Servicer
or the Special Servicer, as the case may be, so causing such a conflict being of
a type and nature carried on by the Master Servicer or the Special Servicer, as
the case may be, at the date of this Agreement). Any such determination
requiring the resignation of the
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Master Servicer or the Special Servicer, as applicable, shall be evidenced by an
Opinion of Counsel to such effect which shall be delivered to the Trustee.
Unless applicable law requires the Master Servicer's or Special Servicer's
resignation to be effective immediately, and the Opinion of Counsel delivered
pursuant to the prior sentence so states, no such resignation shall become
effective until the Trustee or other successor shall have assumed the
responsibilities and obligations of the resigning party in accordance with
Section 7.02 hereof. Each of the Master Servicer and the Special Servicer shall
have the right to resign at any other time and to assign its rights and
obligations pursuant to this Agreement to a third party; provided, that, with
respect to the successor to either the Master Servicer or the Special Servicer,
(i) each of the Rating Agencies confirms in writing that the successor's
appointment or the assignment by the Master Servicer or Special Servicer, as the
case may be, will not result in a withdrawal, qualification or downgrade of any
rating or ratings assigned to any Class of Certificates, (ii) the resigning or
assigning party pays all costs and expenses in connection with such transfer,
(iii) the successor accepts appointment prior to the effectiveness of such
resignation; and (iv) in the event of assignment by the Master Servicer to a
third party, such third party satisfies all of the requirements for a successor
Master Servicer set forth in Section 7.02(a).
Consistent with the foregoing and except as provided in the
preceding paragraph, neither the Master Servicer nor the Special Servicer shall,
except as expressly provided herein, assign or transfer any of its rights,
benefits or privileges hereunder to any other Person, or, except as provided in
Sections 3.22 and 4.06, delegate to or subcontract with, or authorize or appoint
any other Person to perform any of the duties, covenants or obligations to be
performed by it hereunder unless the requirements for resignation set forth in
the immediately preceding paragraph are met. If, pursuant to any provision
hereof, the duties of the Master Servicer or the Special Servicer are
transferred to a successor thereto, the entire amount of compensation payable to
the Master Servicer or the Special Servicer, as the case may be, that accrues
pursuant hereto from and after the date of such transfer shall, except as
otherwise provided herein, be payable to such successor.
SECTION 6.05. Rights of Depositor and Trustee in
Respect of Master Servicer and the
Special Servicer.
The Master Servicer and the Special Servicer shall each afford
the Depositor and the Trustee, upon reasonable notice, during normal business
hours access to all records maintained thereby in respect of its rights and
obligations hereunder and access to officers thereof responsible for such
obligations. Upon reasonable request, each of the Master Servicer and, to the
extent relevant to the performance of the Special Servicer's duties hereunder,
the Special Servicer shall furnish the Depositor and the Trustee with its most
recent financial statements and such other information as it possesses, and
which it is not prohibited by applicable law or contract from disclosing,
regarding its business, affairs, property and condition, financial or otherwise,
except to the extent such information constitutes proprietary information or is
subject to a privilege under applicable law. The Depositor may, but is not
obligated to, enforce the obligations of the Master Servicer and the Special
Servicer hereunder and may, but is not obligated to, perform, or cause a
designee to perform, any defaulted
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obligation of the Master Servicer or Special Servicer hereunder or exercise the
rights of the Master Servicer and the Special Servicer hereunder; provided,
however, that neither the Master Servicer nor the Special Servicer shall be
relieved of any of its obligations hereunder by virtue of such performance by
the Depositor or its designee and, further provided, that the Depositor may not
exercise any right pursuant to Section 7.01 to terminate the Master Servicer or
the Special Servicer as a party to this Agreement. The Depositor shall not have
any responsibility or liability for any action or failure to act by the Master
Servicer or the Special Servicer and is not obligated to supervise the
performance of the Master Servicer or the Special Servicer under this Agreement
or otherwise.
SECTION 6.06. Depositor, Master Servicer and
Special Servicer to Cooperate with
Trustee.
The Depositor, the Master Servicer and the Special Servicer
shall each furnish such reports, certifications and information as are
reasonably requested by the Trustee in order to enable it to perform its duties
hereunder.
SECTION 6.07. Depositor, Special Servicer and
Trustee to Cooperate with Master
Servicer.
The Depositor, the Special Servicer and the Trustee shall each
furnish such reports, certifications and information as are reasonably requested
by the Master Servicer in order to enable it to perform its duties hereunder.
SECTION 6.08. Depositor, Master Servicer and
Trustee to Cooperate with Special
Servicer.
The Depositor, the Master Servicer and the Trustee shall each
furnish such reports, certifications and information as are reasonably requested
by the Special Servicer in order to enable it to perform its duties hereunder.
SECTION 6.09. Designation of Special Servicer by
the Controlling Class.
The Holder or Holders of the Certificates evidencing a
majority of the Voting Rights allocated to the Controlling Class may at any time
and from time to time designate a Person meeting the requirements set forth in
Section 6.02 to serve as Special Servicer hereunder and to replace any existing
Special Servicer or any Special Servicer that has resigned or otherwise ceased
to serve as Special Servicer by the delivery to the Trustee, the Master Servicer
and the existing Special Servicer of a written notice stating such designation,
provided, that the Controlling Class shall not re-appoint, or allow the
continuing performance by, a Special Servicer who has resigned or otherwise
ceased to serve as Special Servicer or as to which an Event of Default has
occurred and the parties hereto have exercised their rights under section 7.02
hereof. Notwithstanding the foregoing, with respect to any Specially Serviced
Mortgage Loan in respect of which the Holder or Holders of the Certificates
evidencing a majority of the Voting Rights allocated to the Controlling Class
owns an
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economic interest in the related Mortgagor or is the lender of partnership debt
to the related Mortgagor (the "Interested Holders"), the Holder or Holders of
the Certificates evidencing a majority of the Voting Rights allocated to the
Class of Sequential Pay Certificates (which meets the criteria set forth in
clauses (a) and (b) of the definition of Controlling Class and the majority of
the Voting Rights allocated thereto are not held by Interested Holders) shall
appoint one or more Persons to act as alternative special servicer or
alternative special servicers (in each case meeting the requirements set forth
in Section 6.02) with respect to such Specially Serviced Mortgage Loans and vest
in such Person or Persons, in such capacity, such powers, duties and obligations
of the Special Servicer with respect to such Specially Serviced Mortgage Loans,
and such Holder or Holders shall give written notice of such appointment to the
Master Servicer, the Special Servicer and the Trustee. The Trustee shall,
promptly after receiving any such notice, deliver to the Rating Agencies an
executed Notice and Acknowledgment in the form attached hereto as Exhibit I-1.
Any costs or expenses incurred in connection with the replacement by such Holder
or Holders of any Special Servicer previously appointed by such Holder or
Holders, for which the circumstances of such replacement are other than those
resulting from the resignation or termination of the Special Servicer pursuant
to Sections 6.04 and 7.01, respectively, or the appointment of an alternative
special servicer shall be borne by the Controlling Class. If such Holders have
not replaced the Special Servicer within 30 days of such Special Servicer's
resignation or the date such Special Servicer has ceased to serve in such
capacity the Trustee shall utilize its best efforts to designate a successor
Special Servicer meeting the requirements set forth in Sections 6.02 and 7.02.
The designated Person shall become the Special Servicer on the date that the
Trustee shall have received written confirmation from all of the Rating Agencies
that the appointment of such Person will not result in the qualification,
downgrading or withdrawal of the rating or ratings assigned to one or more
Classes of the Certificates. The appointment of such designated Person as
Special Servicer shall also be subject to receipt by the Trustee of (1) an
Acknowledgment of Proposed Special Servicer in the form attached hereto as
Exhibit I-2, executed by the designated Person and (ii) an Opinion of Counsel
(at the expense of the Person designated to become the Special Servicer) to the
effect that the designation of such Person to serve as Special Servicer is in
compliance with this Section 6.09 and all other applicable provisions of this
Agreement, that upon the execution and delivery of the Acknowledgment of
Proposed Special Servicer the designated Person shall be bound by the terms of
this Agreement and that this Agreement shall be enforceable against the
designated Person in accordance with its terms (subject to customary bankruptcy
and insolvency qualifications). Any existing Special Servicer shall be deemed to
have resigned simultaneously with such designated Person's becoming the Special
Servicer hereunder; provided, however, that the resigning or terminated Special
Servicer shall continue to be entitled to receive all amounts accrued or owing
to it under this Agreement on or prior to the effective date of such
resignation, whether in respect of Servicing Advances or otherwise, including,
without limitation, any Principal Recovery Fee or proportionate share thereof,
and it shall continue to be entitled to the benefits of Section 6.03
notwithstanding any such resignation. Such resigning Special Servicer shall
cooperate with the Trustee and the replacement Special Servicer in effecting the
termination of the resigning Special Servicer's responsibilities and rights
hereunder, including, without limitation, the transfer within two Business Days
to the replacement Special Servicer for
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administration by it of all cash amounts that shall at the time be or should
have been credited by the Special Servicer to the REO Account or delivered to
the Master Servicer or that are thereafter received with respect to Specially
Serviced Mortgage Loans and REO Properties.
SECTION 6.10. Master Servicer or Special Servicer
as Owner of a Certificate.
The Master Servicer or an Affiliate of the Master Servicer or
the Special Servicer or an Affiliate of the Special Servicer may become the
Holder of (or, in the case of a Book-Entry Certificate, Certificate Owner with
respect to) any Certificate with the same rights it would have (except as
otherwise set forth in the definition of "Certificateholder") if it were not the
Master Servicer or the Special Servicer or an Affiliate thereof. If, at any time
during which the Master Servicer or the Special Servicer or an Affiliate of the
Master Servicer or the Special Servicer is the Holder of (or, in the case of a
Book-Entry Certificate, Certificate Owner with respect to) any Certificate, the
Master Servicer or the Special Servicer proposes to take action (including for
this purpose, omitting to take action) that (i) is not expressly prohibited by
the terms hereof and would not, in the Master Servicer's or the Special
Servicer's good faith judgment, violate the Servicing Standard, and (ii) if
taken, might nonetheless, in the Master Servicer's or the Special Servicer's
good faith judgment, be considered by other Persons to violate the Servicing
Standard, the Master Servicer or the Special Servicer may (but need not) seek
the approval of the Certificateholders to such action by delivering to the
Trustee a written notice that (a) states that it is delivered pursuant to this
Section 6.10, (b) identifies the Percentage Interest in each Class of
Certificates beneficially owned by the Master Servicer or the Special Servicer
or an Affiliate of the Master Servicer or the Special Servicer, and (c)
describes in reasonable detail the action that the Master Servicer or the
Special Servicer proposes to take. The Trustee, upon receipt of such notice,
shall forward it to the Certificateholders (other than the Master Servicer and
its Affiliates or the Special Servicer and its Affiliates, as appropriate),
together with such instructions for response as the Trustee shall reasonably
determine. If at any time Certificateholders holding greater than 50% of the
Voting Rights of all Certificateholders (calculated without regard to the
Certificates beneficially owned by the Master Servicer or its Affiliates or the
Special Servicer or its Affiliates) shall have failed to object in writing to
the proposal described in the written notice within ten Business Days, and if
the Master Servicer or the Special Servicer shall act as proposed in the written
notice within fifteen (15) days after the expiration of such notice period, such
action shall be deemed to comply with the Servicing Standard. The Trustee shall
be entitled to reimbursement from the Master Servicer or the Special Servicer,
as applicable, for the reasonable expenses of the Trustee incurred pursuant to
this paragraph. It is not the intent of the foregoing provision that the Master
Servicer or the Special Servicer be permitted to invoke the procedure set forth
herein with respect to routine servicing matters arising hereunder, but rather
in the case of unusual circumstances.
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SECTION 6.11. The Controlling Class
Representative.
The Holder or Holders of the Certificates evidencing a
majority of the Voting Rights allocated to the Controlling Class may select a
representative (the "Controlling Class Representative") from whom the Special
Servicer will seek advice and approval and take direction under certain
circumstances as described herein. The Controlling Class Representative will be
entitled to advise the Special Servicer with respect to the following actions of
the Special Servicer, and the Special Servicer will not be permitted to take any
of the following actions unless the Controlling Class Representative has
approved such action in writing within ten Business Days after receipt of such
notice (provided that if such written notice has not been received by the
Special Servicer within ten Business Days, then the Controlling Class
Representative's approval will be deemed to have been given):
(i) any foreclosure upon or comparable conversion (which may
include acquisitions of an REO Property) of the ownership of properties
securing such of the Specially Serviced Mortgage Loans as come into and
continue in default;
(ii) any modification of a monetary term of a Mortgage Loan
other than a modification consisting of the extension of the maturity
date of a Mortgage Loan for one year or less;
(iii) any proposed sale of a Defaulted Mortgage Loan or REO
Property (other than in connection with the termination of the Trust
Fund);
(iv) any determination to bring an REO Property into
compliance with applicable environmental laws;
(v) any acceptance of substitute or additional collateral or
release of collateral for a Mortgage Loan, except as otherwise required
under the Mortgage Loan documents;
(vi) any waiver of a "due-on-sale" or "due-on-encumbrance"
clause;
(vii) any acceptance of an assumption agreement releasing a
borrower from liability under a Mortgage Loan; and
(viii) any acceptance of a discounted pay-off.
In addition, the Controlling Class Representative may direct
the Special Servicer to take, or to refrain from taking, such other actions as
the Controlling Class Representative may deem advisable or as to which provision
is otherwise made herein; provided that no such direction or approval rights
provided in this Section 6.11 may require or cause the Special Servicer to
violate any provision of this Agreement or the REMIC Provisions, including the
Special Servicer's obligation to act in accordance with the Servicing Standard
or expose the Master Servicer, the Special Servicer, the Trust Fund or the
Trustee to liability, or materially
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expand the scope of the Special Servicer's responsibilities hereunder. Any
reasonable out-of-pocket expenses incurred by the Special Servicer in connection
with its obtaining the approval of the Controlling Class Representative shall be
treated as a Servicing Advance and the Special Servicer shall be entitled to
reimbursement in respect thereof pursuant to Section 3.05(a).
In the event the Special Servicer determines that any
direction or objection of the Controlling Class Representative would cause the
Special Servicer to violate this Agreement, expose the Master Servicer, the
Special Servicer, the Trust Fund or Trustee to liability or materially expand
the scope of the Special Servicer's responsibilities, the Special Servicer shall
notify the Controlling Class Representative. The sole remedy of the Controlling
Class Representative shall be to seek removal of the Special Servicer and the
Special Servicer shall have no other liability with respect to such action. Any
such removal shall be deemed a removal of the Special Servicer without cause.
The Controlling Class Representative will have no liability to
the Certificateholders for any action taken, or for refraining from the taking
of any action, in good faith pursuant to this Agreement, or for errors in
judgment; provided, however, that the Controlling Class Representative will not
be protected against any liability which would otherwise be imposed by reason of
willful misfeasance, bad faith or gross negligence in the exercise of its rights
or by reason of reckless disregard in the exercise of its rights. By its
acceptance of a Certificate, each Certificateholder confirms its understanding
that the Controlling Class Representative may take actions that favor the
interests of one or more Classes of the Certificates over other Classes of the
Certificates, and that the Controlling Class Representative may have special
relationships and interests that conflict with those of holders of some Classes
of the Certificates and, absent willful misfeasance, bad faith or gross
negligence on the part of the Controlling Class Representative, agrees to take
no action against the Controlling Class Representative or any of its officers,
directors, employees, principals or agents as a result of such a special
relationship or conflict, and that the Controlling Class Representative will not
be deemed to have been grossly negligent or reckless, or to have acted in bad
faith or engaged in willful misfeasance or to have recklessly disregarded any
exercise of its rights by reason of its having acted solely in the interests of
the Controlling Class and that the Controlling Class Representative will have no
liability whatsoever for having so acted.
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ARTICLE VII
DEFAULT
SECTION 7.01. Events of Default.
(a) "Event of Default," wherever used herein, means any
one of the following events:
(i) any failure by the Master Servicer to deposit
into the Certificate Account, or to deposit into, or remit to
the Paying Agent for deposit into the Additional Interest
Distribution Account or the Distribution Account, any amount
(other than a P&I Advance) required to be so deposited or
distributed by it under this Agreement; or
(ii) any failure by the Special Servicer to deposit
into the REO Account or to deposit into, or to remit to the
Master Servicer for deposit into, the Certificate Account any
amount required to be so deposited or remitted under this
Agreement; provided; however, that if such failure to deposit
or remit occurs only once in any consecutive twelve-month
period, which failure is corrected by 10:00 a.m., New York
City time on the related Distribution Date, then with respect
to such one failure only, a default shall be deemed not to
have occurred; or
(iii) any failure on the part of the Master Servicer
or the Special Servicer duly to observe or perform in any
material respect any other of the covenants or agreements on
the part of the Master Servicer or the Special Servicer, as
the case may be, contained in this Agreement which continues
unremedied for a period of 30 days after the date on which
written notice of such failure, requiring the same to be
remedied, shall have been given to the Master Servicer and the
Special Servicer by any other party hereto or to the Master
Servicer or the Special Servicer, as the case may be (with a
copy to each other party hereto), by the Holders of
Certificates entitled to at least 25% of the Voting Rights;
provided, however, with respect to any failure which is not
reasonably curable within such 30-day period, the Master
Servicer and the Special Servicer, as applicable, shall have
an additional 30-day period to effect a cure, so long as it
has provided the Trustee with an Officer's Certificate
certifying that it has diligently pursued and is continuing to
diligently pursue a cure; or
(iv) any breach on the part of the Master Servicer or
the Special Servicer of any representation or warranty
contained in this Agreement that materially and adversely
affects the interests of any Class of Certificateholders and
which continues unremedied for a period of 30 days after the
date on which notice of such breach, requiring the same to be
remedied, shall have been given
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to the Master Servicer or the Special Servicer, as the case
may be, by any other party hereto or to the Master Servicer or
the Special Servicer, as the case may be (with a copy to each
other party hereto), by the Holders of Certificates entitled
to at least 25% of the Voting Rights; or
(v) a decree or order of a court or agency or
supervisory authority having jurisdiction in the premises in
an involuntary case under any present or future federal or
state bankruptcy, insolvency or similar law for the
appointment of a conservator, receiver, liquidator, trustee or
similar official in any bankruptcy, insolvency, readjustment
of debt, marshaling of assets and liabilities or similar
proceedings, or for the winding-up or liquidation of its
affairs, shall have been entered against the Master Servicer
or the Special Servicer and such decree or order shall have
remained in force undischarged or unstayed for a period of 60
days; or
(vi) the Master Servicer or the Special Servicer
shall consent to the appointment of a conservator, receiver,
liquidator, trustee or similar official in any bankruptcy,
insolvency, readjustment of debt, marshaling of assets and
liabilities or similar proceedings of or relating to it or of
or relating to all or substantially all of its property; or
(vii) the Master Servicer or the Special Servicer
shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take
advantage of any applicable bankruptcy, insolvency or
reorganization statute, make an assignment for the benefit of
its creditors, voluntarily suspend payment of its obligations,
or take any corporate action in furtherance of the foregoing;
or
(viii) the consolidated net worth of the Master
Servicer and of its direct or indirect parent, determined in
accordance with generally accepted accounting principles,
shall decline to less than $15,000,000; or
(ix) if the Master Servicer or Special Servicer, as
applicable, is not considered an "approved servicer" by
Standard & Poor's, or the Trustee shall have received a
written notice from Moody's (which the Trustee shall promptly
forward to the Master Servicer or the Special Servicer as the
case may be) to the effect that if the Master Servicer or
Special Servicer continues to act in such capacity, the rating
or ratings on one or more Classes of Certificates will be
qualified, downgraded or withdrawn and the Trustee shall not
have received a subsequent notice from Moody's (within 90 days
of receipt of the first notice) indicating anything to the
contrary (and upon the 91st day the provisions of Section
7.01(b) shall apply); or
(x) the Master Servicer shall fail to remit to the
Paying Agent for deposit into the Distribution Account by 4:00
p.m. on any P&I Advance Date,
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the full amount of P&I Advances required to be made on such
date; provided, however, that if such failure to remit by 4:00
p.m. on any P&I Advance Date occurs only once in any
consecutive twelve month period, which failure is corrected by
10:00 a.m., New York City time on the related Distribution
Date, then with respect to such one failure only, a default
shall be deemed not to have occurred; or
(xi) the Master Servicer or the Special Servicer
shall breach the covenant set forth in Section 3.23(d) or
3.23(e), respectively.
When a single entity acts as the Master Servicer and the Special Servicer, an
Event of Default in one capacity shall constitute an Event of Default in the
other capacity.
(b) If any Event of Default described in clauses (i) - (x) and
clause (xi) of subsection (a) above shall occur with respect to the Master
Servicer or the Special Servicer (in either case, for purposes of this Section
7.01(b), the "Defaulting Party") and shall be continuing, then, and in each and
every such case, so long as such Event of Default shall not have been remedied,
the Trustee may, and at the written direction of the Holders of Certificates
entitled to at least 25% of the Voting Rights, the Trustee shall, by notice in
writing to the Defaulting Party (with a copy of such notice to each other party
hereto and the Rating Agencies) terminate all of the rights and obligations (but
not the liabilities for actions and omissions occurring prior thereto) of the
Defaulting Party under this Agreement and in and to the Trust Fund, other than
its rights as a Certificateholder hereunder; provided that, if GE Capital Loan
Services, Inc. is terminated as initial Master Servicer hereunder, such
termination shall not preclude GE Capital Loan Services, Inc. from servicing,
subject to Section 3.22, as a Sub-Servicer in respect of the Mortgage Loans. If
an Event of Default described in clause (x) of subsection (a) above shall occur
with respect to the Master Servicer or, if applicable, the Special Servicer (in
either case, under such circumstances, for purposes of this Section 7.01(b), the
"Defaulting Party"), the Trustee shall, by notice in writing (to be sent
immediately by facsimile transmission) to the Defaulting Party (with a copy of
such notice to each other party hereto) and the Rating Agencies, terminate all
of the rights (except as set forth below) and obligations (but not the
liabilities for actions and omissions occurring prior thereto) of the Defaulting
Party under this Agreement and in and to the Trust Fund, other than its rights,
if any, as a Certificateholder hereunder. From and after the receipt by the
Defaulting Party of such written notice of termination, all authority and power
of the Defaulting Party under this Agreement, whether with respect to the
Certificates (other than as a holder of any Certificate) or the Mortgage Loans
or otherwise, shall pass to and be vested in the Trustee pursuant to and under
this Section, and, without limitation, the Trustee is hereby authorized and
empowered to execute and deliver, on behalf of and at the expense of the
Defaulting Party, as attorney-in-fact or otherwise, any and all documents and
other instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise.
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(c) The Master Servicer and the Special Servicer each agree
that, if it is terminated pursuant to Section 7.01(b), it shall promptly (and in
any event no later than ten Business Days subsequent to its receipt of the
notice of termination) provide the Trustee with all documents and records,
including those in electronic form, requested thereby to enable the Trustee to
assume the Master Servicer's or Special Servicer's, as the case may be,
functions hereunder, and shall cooperate with the Trustee in effecting the
termination of the Master Servicer's or Special Servicer's, as the case may be,
responsibilities and rights hereunder, including, without limitation, (i) in the
case of the Master Servicer, the immediate transfer to the Trustee or a
successor Master Servicer for administration by it of all cash amounts that
shall at the time be or should have been credited by the Master Servicer to the
Certificate Account, the Distribution Account, the Additional Interest
Distribution Account or a Servicing Account (if the Master Servicer is the
Defaulting Party) or that are thereafter received by or on behalf of the
terminated Master Servicer with respect to any Mortgage Loan or (ii) in the case
of the Special Servicer, the transfer within two Business Days to the Trustee or
a successor Special Servicer for administration by it of all cash amounts that
shall at the time be or should have been credited by the Special Servicer to the
REO Account, the Certificate Account or a Servicing Account or delivered to the
Master Servicer (if the Special Servicer is the Defaulting Party) or that are
thereafter received by or on behalf of the terminated Special Servicer with
respect to any Mortgage Loan or REO Property (provided, however, that the Master
Servicer and the Special Servicer each shall, if terminated pursuant to Section
7.01(b), continue to be entitled to receive all amounts accrued or owing to it
under this Agreement on or prior to the date of such termination, whether in
respect of Advances or otherwise, and it shall continue to be entitled to the
benefits of Section 6.03 notwithstanding any such termination).
(d) Any cost or expenses in connection with any actions to be
taken by the Master Servicer or Special Servicer or the Trustee pursuant to
Section 7.01(c) shall be borne by the Defaulting Party and if not paid by the
Defaulting Party within 90 days after the presentation of reasonable
documentation of such costs and expenses, such expense shall be reimbursed by
the Trust Fund; provided, however, that the Defaulting Party shall not thereby
be relieved of its liability for such expenses. If and to the extent that the
Defaulting Party has not reimbursed such costs and expenses, the Trustee shall
have an affirmative obligation to take all reasonable actions to collect such
expenses on behalf of and at the expense of the Trust Fund. For purposes of this
Section 7.01 and of Section 7.03(b), the Trustee shall not be deemed to have
knowledge of an event which constitutes, or which with the passage of time or
notice, or both, would constitute an Event of Default described in clauses
(i)-(x) of subsection (a) above unless a Responsible Officer of the Trustee has
actual knowledge thereof or unless notice of any event which is in fact such an
Event of Default is received by a Responsible Officer of the Trustee and such
notice references the Certificates, the Trust Fund or this Agreement.
SECTION 7.02. Trustee to Act; Appointment of
Successor.
On and after the time the Master Servicer or the Special
Servicer resigns pursuant to Section 6.04 or receives a notice of termination
pursuant to Section 7.01, the
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Trustee shall be the successor in all respects to the Master Servicer or the
Special Servicer, as the case may be, in its capacity as such under this
Agreement and the transactions set forth or provided for herein and shall have
all (and the former Master Servicer or the Special Servicer, as the case may be,
shall cease to have any) of the responsibilities, duties and liabilities (except
as provided in the next sentence) of the Master Servicer or the Special
Servicer, as the case may be, arising thereafter, including, without limitation,
if the Master Servicer is the resigning or terminated party, the Master
Servicer's obligation to make P&I Advances, including, without limitation, in
connection with any termination of the Master Servicer for an Event of Default
described in clause 7.01(a)(x), the unmade P&I Advances that gave rise to such
Event of Default; provided, that if the Master Servicer is the resigning or
terminated party, and if the Trustee is prohibited by law or regulation from
obligating itself to make P&I Advances (as evidenced by an Opinion of Counsel
delivered to the Depositor and the Rating Agencies) the Trustee shall not be
obligated to make such P&I Advances; and provided, further, that any failure to
perform such duties or responsibilities caused by the Master Servicer's or the
Special Servicer's, as the case may be, failure to provide information or monies
required by Section 7.01 shall not be considered a default by the Trustee
hereunder. Notwithstanding anything contrary in this Agreement, the Trustee
shall in no event be held responsible or liable with respect to any of the
representations and warranties of the resigning or terminated party (other than
the Trustee) or for any losses incurred by such resigning or terminated party
pursuant to Section 3.06 hereunder nor shall the Trustee be required to purchase
any Mortgage Loan hereunder. As compensation therefor, the Trustee shall be
entitled to all fees and other compensation which the resigning or terminated
party would have been entitled to if the resigning or terminated party had
continued to act hereunder. Notwithstanding the above, the Trustee may, if it
shall be unwilling in its sole discretion to so act as either Master Servicer or
Special Servicer, as the case may be, or shall, if it is unable to so act as
either Master Servicer or Special Servicer, as the case may be, if the Trustee
is not approved as a Master Servicer or a Special Servicer, as the case may be,
by any of the Rating Agencies or if the Holders of Certificates entitled to at
least 51% of the Voting Rights so request in writing to the Trustee, promptly
appoint, subject to the approval of each of the Rating Agencies (as evidenced by
written confirmation therefrom to the effect that the appointment of such
institution would not cause the qualification, downgrading or withdrawal of the
then current rating on any Class of Certificates) or petition a court of
competent jurisdiction to appoint, any established mortgage loan servicing
institution that meets the requirements of Section 6.02; provided, however, that
in the case of a resigning or terminated Special Servicer, such appointment
shall be subject to the rights of the Holders of Certificates evidencing a
majority of the Voting Rights allocated to the Controlling Class to designate a
successor pursuant to Section 6.09. Except with respect to an appointment
provided below, no appointment of a successor to the Master Servicer or the
Special Servicer hereunder shall be effective until the assumption of the
successor to such party of all its responsibilities, duties and liabilities
under this Agreement. Pending appointment of a successor to the Master Servicer
or the Special Servicer hereunder, the Trustee shall act in such capacity as
hereinabove provided. Notwithstanding the above, the Trustee shall, if the
Master Servicer is the resigning or terminated party, and the Trustee is
prohibited by law or regulation from making P&I Advances, promptly appoint any
established mortgage loan servicing institution that has a net worth of not less
than $15,000,000 and is otherwise
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acceptable to each Rating Agency (as evidenced by written confirmation therefrom
to the effect that the appointment of such institution would not cause the
qualification, downgrading or withdrawal of the then current rating on any Class
of Certificates), as the successor to the Master Servicer hereunder in the
assumption of all or any part of the responsibilities, duties or liabilities of
the Master Servicer hereunder (including, without limitation, the obligation to
make P&I Advances), which appointment will become effective immediately. In
connection with any such appointment and assumption described herein, the
Trustee may make such arrangements for the compensation of such successor out of
payments on the Mortgage Loans as it and such successor shall agree; provided,
however, that no such compensation shall be in excess of that permitted the
resigning or terminated party hereunder. Such successor and the other parties
hereto shall take such action, consistent with this Agreement, as shall be
necessary to effectuate any such succession.
SECTION 7.03. Notification to Certificateholders.
(a) Upon any resignation of the Master Servicer or the Special
Servicer pursuant to Section 6.04, any termination of the Master Servicer or the
Special Servicer pursuant to Section 7.01, any appointment of a successor to the
Master Servicer or the Special Servicer pursuant to Section 7.02 or the
effectiveness of any designation of a new Special Servicer pursuant to Section
6.09, the Trustee shall give prompt written notice thereof to Certificateholders
at their respective addresses appearing in the Certificate Register.
(b) Not later than the later of (i) 60 days after the
occurrence of any event which constitutes or, with notice or lapse of time or
both, would constitute an Event of Default and (ii) five days after a
Responsible Officer of the Trustee has written notice of the occurrence of such
an event, the Trustee shall transmit by mail to the Depositor and all
Certificateholders and the Rating Agencies notice of such occurrence, unless
such default shall have been cured.
SECTION 7.04. Waiver of Events of Default.
The Holders representing at least 66-2/3% of the Voting Rights
allocated to the Classes of Certificates affected by any Event of Default
hereunder may waive such Event of Default; provided, however, that an Event of
Default under clauses (i), (ii) or (x) of Section 7.01(a) may be waived only by
all of the Certificateholders of the affected Classes. Upon any such waiver of
an Event of Default, such Event of Default shall cease to exist and shall be
deemed to have been remedied for every purpose hereunder. No such waiver shall
extend to any subsequent or other Event of Default or impair any right
consequent thereon except to the extent expressly so waived. Notwithstanding any
other provisions of this Agreement, for purposes of waiving any Event of Default
pursuant to this Section 7.04, Certificates registered in the name of the
Depositor or any Affiliate of the Depositor shall be entitled to Voting Rights
with respect to the matters described above.
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SECTION 7.05. Additional Remedies of Trustee Upon
Event of Default.
During the continuance of any Event of Default, so long as
such Event of Default shall not have been remedied, the Trustee, in addition to
the rights specified in Section 7.01, shall have the right, in its own name and
as trustee of an express trust, to take all actions now or hereafter existing at
law, in equity or by statute to enforce its rights and remedies and to protect
the interests, and enforce the rights and remedies, of the Certificateholders
(including the institution and prosecution of all judicial, administrative and
other proceedings and the filings of proofs of claim and debt in connection
therewith). Except with respect to an Event of Default pursuant to Section
7.01(a)(ix) for which the sole remedy shall be the termination of the Master
Servicer (other than any obligations of the Master Servicer pursuant to Section
7.02) and as otherwise expressly provided in this Agreement, no remedy provided
for by this Agreement shall be exclusive of any other remedy, and each and every
remedy shall be cumulative and in addition to any other remedy, and no delay or
omission to exercise any right or remedy shall impair any such right or remedy
or shall be deemed to be a waiver of any Event of Default. Except as expressly
provided in Article VIII, under no circumstances shall the rights provided to
the Trustee under this Section 7.05 be construed as a duty or obligation of the
Trustee.
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ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.01. Duties of Trustee.
(a) The Trustee, prior to the occurrence of an Event of
Default and after the curing or waiver of all Events of Default which may have
occurred, undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement. If an Event of Default occurs and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Agreement, and use the same degree of care and skill in their
exercise as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs. Any permissive right of the Trustee contained in
this Agreement shall not be construed as a duty.
(b) The Trustee, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or other
instruments furnished to the Trustee which are specifically required to be
furnished pursuant to any provision of this Agreement (other than the Mortgage
Files, the review of which is specifically governed by the terms of Article II)
to the extent specifically set forth herein, shall examine them to determine
whether they conform to the requirements of this Agreement to the extent
specifically set forth herein. If any such instrument is found not to conform to
the requirements of this Agreement in a material manner, the Trustee shall take
such action as it deems appropriate to have the instrument corrected. The
Trustee shall not be responsible for the accuracy or content of any resolution,
certificate, statement, opinion, report, document, order or other instrument
furnished by the Depositor or the Master Servicer or the Special Servicer, and
accepted by the Trustee in good faith, pursuant to this Agreement.
(c) No provision of this Agreement shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act or its own misconduct; provided, however, that:
(i) Prior to the occurrence of an Event of Default,
and after the curing of all such Events of Default which may
have occurred, the duties and obligations of the Trustee shall
be determined solely by the express provisions of this
Agreement, the Trustee shall not be liable except for the
performance of such duties and obligations as are specifically
set forth in this Agreement, no implied covenants or
obligations shall be read into this Agreement against the
Trustee and, in the absence of bad faith on the part of the
Trustee, the Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the
Trustee and conforming to the requirements of this Agreement;
(ii) The Trustee shall not be personally liable for
an error of judgment made in good faith by a Responsible
Officer or Responsible Officers
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of the Trustee, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts if it was
required to do so;
(iii) The Trustee shall not be personally liable with
respect to any action taken, suffered or omitted to be taken
by it in good faith in accordance with the direction of
Holders of Certificates entitled to at least 25% of the Voting
Rights relating to the time, method and place of conducting
any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee,
under this Agreement; and
(iv) The protections, immunities and indemnities
afforded to the Trustee hereunder shall also be available to
it in its capacity as Paying Agent, Authenticating Agent,
Certificate Registrar, REMIC Administrator and Custodian.
SECTION 8.02. Certain Matters Affecting Trustee.
Except as otherwise provided in Section 8.01.
(i) the Trustee may rely upon and shall be protected in acting
or refraining from acting upon any resolution, Officers' Certificate,
certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, appraisal, bond or other paper
or document reasonably believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(ii) the Trustee may consult with counsel and the written
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken or suffered or
omitted by it hereunder in good faith and in accordance therewith;
(iii) the Trustee shall be under no obligation to exercise any
of the trusts or powers vested in it by this Agreement or to make any
investigation of matters arising hereunder or, except as provided in Section
10.01, to institute, conduct or defend any litigation hereunder or in relation
hereto at the request, order or direction of any of the Certificateholders,
pursuant to the provisions of this Agreement, unless such Certificateholders
shall have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which may be incurred therein or thereby; the
Trustee shall not be required to expend or risk its own funds or otherwise incur
any financial liability in the performance of any of its duties hereunder, or in
the exercise of any of its rights or powers, if it shall have reasonable grounds
for believing that repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it; provided, however, that
nothing contained herein shall, relieve the Trustee of the obligation, upon the
occurrence of an Event of Default which has not been cured, to exercise such of
the rights and powers vested in it by this Agreement, and to use the same degree
of care and skill in their exercise as a prudent man would exercise or use under
the circumstances in the conduct of his own affairs;
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(iv) the Trustee shall not be personally liable for any action
reasonably taken, suffered or omitted by it in good faith and believed by it to
be authorized or within the discretion or rights or powers conferred upon it by
this Agreement;
(v) prior to the occurrence of an Event of Default hereunder
and after the curing of all Events of Default which may have occurred, the
Trustee shall not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, approval, bond or other paper or document,
unless requested in writing to do so by Holders of Certificates entitled to at
least 25% of the Voting Rights; provided, however, that if the payment within a
reasonable time to the Trustee of the costs, expenses or liabilities likely to
be incurred by it in the making of such investigation is, in the opinion of the
Trustee, not reasonably assured to the Trustee by the security afforded to it by
the terms of this Agreement, the Trustee may require reasonable indemnity
against such expense or liability as a condition to taking any such action;
(vi) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys; provided, however, that the Trustee shall remain
responsible for all acts and omissions of such agents or attorneys within the
scope of their employment to the same extent as it is responsible for its own
actions and omissions hereunder;
(vii) the Trustee shall not be responsible for any act or
omission of the Master Servicer or the Special Servicer (unless the Trustee is
acting as Master Servicer or the Special Servicer) or the Depositor; and
(viii) Neither the Trustee nor the Certificate Registrar shall
have any obligation or duty to monitor, determine or inquire as to compliance
with any restriction on transfer imposed under Article V under this Agreement or
under applicable law with respect to any transfer of any Certificate or any
interest therein, other than to require delivery of the certification(s) and/or
Opinions of Counsel described in said Article applicable with respect to changes
in registration of record ownership of Certificates in the Certificate Register
and to examine the same to determine substantial compliance with the express
requirements of this Agreement. The Trustee and Certificate Registrar shall have
no liability for transfers, including transfers made through the book-entry
facilities of the Depository or between or among Depository Participants or
beneficial owners of the Certificates, made in violation of applicable
restrictions except for its failure to perform its express duties in connection
with changes in registration of record ownership in the Certificate Register.
SECTION 8.03. Trustee Not Liable for Validity or
Sufficiency of Certificates or
Mortgage Loans.
The recitals contained herein and in the Certificates, other
than the statements attributed to the Trustee in Article II and the signature of
the Certificate Registrar and the Authenticating Agent set forth on each
outstanding Certificate, shall be taken as the statements of the Depositor or
the Master Servicer or the Special Servicer, as the case may be, and the
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Trustee assumes no responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Agreement or of any
Certificate (other than as to the signature of the Trustee set forth thereon) or
of any Mortgage Loan or related document. The Trustee shall not be accountable
for the use or application by the Depositor of any of the Certificates issued to
it or of the proceeds of such Certificates, or for the use or application of any
funds paid to the Depositor in respect of the assignment of the Mortgage Loans
to the Trust Fund, or any funds deposited in or withdrawn from the Certificate
Account or any other account by or on behalf of the Depositor, the Master
Servicer or the Special Servicer. The Trustee shall not be responsible for the
accuracy or content of any resolution, certificate, statement, opinion, report,
document, order or other instrument furnished by the Depositor, the Master
Servicer or the Special Servicer, and accepted by the Trustee in good faith,
pursuant to this Agreement.
SECTION 8.04. Trustee May Own Certificates.
The Trustee or any agent of the Trustee, in its individual or
any other capacity, may become the owner or pledgee of Certificates with the
same rights (except as otherwise provided in the definition of
"Certificateholder") it would have if it were not the Trustee or such agent.
SECTION 8.05. Fees and Expenses of Trustee;
Indemnification of Trustee.
(a) On each Distribution Date, the Trustee shall withdraw from
the general funds on deposit in the Distribution Account, prior to any
distributions to be made therefrom on such date, and pay to itself all earned
but unpaid Trustee Fees, as compensation for all services rendered by the
Trustee in the execution of the trusts hereby created and in the exercise and
performance of any of the powers and duties of the Trustee hereunder. The
Trustee Fee shall accrue from time to time at a rate equal to one-twelfth of the
product of (a) the Trustee Fee Rate and (b) the aggregate Certificate Principal
Balance of the Certificates. The Trustee Fees (which shall not be limited by any
provision of law in regard to the compensation of a trustee of an express trust)
shall constitute the Trustee's sole compensation for such services to be
rendered by it.
(b) The Trustee and any director, officer, employee,
affiliate, agent or "control" person within the meaning of the Securities Act of
1933 of the Trustee shall be entitled to be indemnified for and held harmless by
the Trust Fund against any loss, liability or reasonable "out-of-pocket" expense
(including, without limitation, costs and expenses of litigation, and of
investigation, counsel fees, damages, judgments and amounts paid in settlement)
arising out of, or incurred in connection with this Agreement, the Mortgage
Loans or the Certificates ("Trustee Liability"); provided, that neither the
Trustee nor any of the other above specified Persons shall be entitled to
indemnification pursuant to this Section 8.05(b) for (1) any liability
specifically required to be borne thereby pursuant to the terms hereof, or (2)
any loss, liability or expense incurred by reason of willful misfeasance, bad
faith or negligence in the performance of the Trustee's obligations and duties
hereunder, or as may arise from a breach of any representation, warranty or
covenant of the Trustee made herein.
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The provisions of this Section 8.05(b) and of Section 8.05(c) shall survive any
resignation or removal of the Trustee and appointment of a successor trustee.
(c) If the Trustee Liability arises from the issuance or sale
of the Certificates and the indemnification provided for in Section 8.05(b) is
invalid or unenforceable, then the Trust Fund shall contribute to the amount
paid or payable by the Trustee as a result of such Trustee Liability in such
proportion as is appropriate to reflect the relative fault of any other parties
on the one hand and the Trustee on the other in connection with the actions or
omissions which resulted in such Trustee Liability, as well as any other
relevant equitable considerations.
SECTION 8.06. Eligibility Requirements for
Trustee.
The Trustee hereunder shall at all times be an association or
a corporation organized and doing business under the laws of the United States
of America or any State thereof or the District of Columbia, authorized under
such laws to exercise trust powers, having a combined capital and surplus of at
least $100,000,000 and subject to supervision or examination by federal or state
banking authority. If such association or corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section the combined capital and surplus of such association or corporation
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. The Trustee shall also be an entity
with a credit rating of at least "AA" by each Rating Agency other than Moody's
and "Aa3" by Moody's or such other rating that shall not result in the
qualification, downgrading or withdrawal of the rating or ratings assigned to
one or more Classes of the Certificates by any Rating Agency. In case at any
time the Trustee shall cease to be eligible in accordance with the provisions of
this Section, the Trustee shall resign immediately in the manner and with the
effect specified in Section 8.07; provided, that if the Trustee shall cease to
be so eligible because its combined capital and surplus is no longer at least
$100,000,000 or its long-term unsecured debt rating no longer conforms to the
requirements of the immediately preceding sentence, and if the Trustee proposes
to the other parties hereto to enter into an agreement with (and reasonably
acceptable to) each of them, and if in light of such agreement the Trustee's
continuing to act in such capacity would not (as evidenced in writing by each
Rating Agency) cause any Rating Agency to qualify, downgrade or withdraw any
rating assigned thereby to any Class of Certificates, then upon the execution
and delivery of such agreement the Trustee shall not be required to resign, and
may continue in such capacity, for so long as none of the ratings assigned by
the Rating Agencies to the Certificates is adversely affected thereby. The
corporation or association serving as Trustee may have normal banking and trust
relationships with the Depositor, the Master Servicer, the Special Servicer and
their respective Affiliates.
SECTION 8.07. Resignation and Removal of Trustee.
(a) The Trustee may at any time resign and be discharged from
the trusts hereby created by giving written notice thereof to the Depositor, the
Master Servicer, the
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Special Servicer and to all Certificateholders at their respective addresses set
forth in the Certificate Register. Upon receiving such notice of resignation,
the Master Servicer shall promptly appoint a successor trustee acceptable to the
Depositor by written instrument, in duplicate, which instrument shall be
delivered to the resigning Trustee and to the successor trustee. A copy of such
instrument shall be delivered to the Depositor, the Special Servicer and the
Certificateholders by the Master Servicer. If no successor trustee shall have
been so appointed and have accepted appointment within 30 days after the giving
of such notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor trustee.
(b) If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 8.06 and shall fail to resign after
written request therefor by the Depositor or the Master Servicer, or if at any
time the Trustee shall become incapable of acting, or shall be adjudged bankrupt
or insolvent, or a receiver of the Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation, conservation or
liquidation, or if the Trustee shall fail, if the Trustee is the Paying Agent
(other than by reason of the failure of either the Master Servicer or the
Special Servicer to timely perform its obligations hereunder or as a result of
other circumstances beyond the Trustee's reasonable control), to timely deliver
any report to be delivered by the Trustee pursuant to Section 4.02 and such
failure shall continue unremedied for a period of five days, or if the Paying
Agent (if different from the Trustee) fails to make distributions required
pursuant to Sections 3.05(b) or 4.01, then the Depositor may remove the Trustee
and appoint a successor trustee, if necessary, acceptable to the Master Servicer
by written instrument, in duplicate, which instrument shall be delivered to the
Trustee so removed and to the successor trustee. A copy of such instrument shall
be delivered to the Master Servicer, the Special Servicer and the
Certificateholders by the Depositor.
(c) The Holders of Certificates entitled to at least 51% of
the Voting Rights may at any time remove the Trustee and appoint a successor
trustee, if necessary, by written instrument or instruments, in triplicate,
signed by such Holders or their attorneys-in-fact duly authorized, one complete
set of which instruments shall be delivered to the Master Servicer, one complete
set to the Trustee so removed and one complete set to the successor trustee so
appointed. A copy of such instrument shall be delivered to the Depositor, the
Special Servicer and the remaining Certificateholders by the successor so
appointed. In the event that the Trustee is terminated or removed pursuant to
this Section 8.07, all of its rights and obligations under this Agreement and in
and to the Mortgage Loans shall be terminated, other than any rights or
obligations that accrued prior to the date of such termination or removal
(including the right to receive all fees, expenses and other amounts (including,
without limitation, P&I Advances and accrued interest thereon) accrued or owing
to it under this Agreement, with respect to periods prior to the date of such
termination or removal and no termination without cause shall be effective until
the payment of such amounts to the Trustee).
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(d) Any resignation or removal of the Trustee and appointment
of a successor trustee pursuant to any of the provisions of this Section 8.07
shall not become effective until acceptance of appointment by the successor
trustee as provided in Section 8.08.
SECTION 8.08. Successor Trustee.
(a) Any successor trustee appointed as provided in Section
8.07 shall execute, acknowledge and deliver to the Depositor, the Master
Servicer, the Special Servicer and to its predecessor trustee an instrument
accepting such appointment hereunder, and thereupon the resignation or removal
of the predecessor trustee shall become effective and such successor trustee,
without any further act, deed or conveyance, shall become fully vested with all
the rights, powers, duties and obligations of its predecessor hereunder, with
the like effect as if originally named as trustee herein. The predecessor
trustee shall deliver to the successor trustee all Mortgage Files and related
documents and statements held by it hereunder (other than any Mortgage Files at
the time held on its behalf by a Custodian, which Custodian shall become the
agent of the successor trustee), and the Depositor, the Master Servicer, the
Special Servicer and the predecessor trustee shall execute and deliver such
instruments and do such other things as may reasonably be required to more fully
and certainly vest and confirm in the successor trustee all such rights, powers,
duties and obligations, and to enable the successor trustee to perform its
obligations hereunder.
(b) No successor trustee shall accept appointment as provided
in this Section 8.08, unless at the time of such acceptance such successor
trustee shall be eligible under the provisions of Section 8.06.
(c) Upon acceptance of appointment by a successor trustee as
provided in this Section 8.08, such successor trustee shall mail notice of the
succession of such trustee hereunder to the Depositor and the
Certificateholders.
SECTION 8.09. Merger or Consolidation of Trustee.
Any entity into which the Trustee may be merged or converted
or with which it may be consolidated or any entity resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any entity
succeeding to the corporate trust business of the Trustee, shall be the
successor of the Trustee hereunder, provided such entity shall be eligible under
the provisions of Section 8.06, without the execution or filing of any paper or
any further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.
SECTION 8.10. Appointment of Co-Trustee or
Separate Trustee.
(a) Notwithstanding any other provisions hereof, at any time,
for the purpose of meeting any legal requirements of any jurisdiction in which
any part of the Trust Fund or property securing the same may at the time be
located, the Master Servicer and the Trustee acting jointly shall have the power
and shall execute and deliver all instruments to
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appoint one or more Persons approved by the Trustee to act as co-trustee or
co-trustees, jointly with the Trustee, or separate trustee or separate trustees,
of all or any part of the Trust Fund, and to vest in such Person or Persons, in
such capacity, such title to the Trust Fund, or any part thereof, and, subject
to the other provisions of this Section 8.10, such powers, duties, obligations,
rights and trusts as the Master Servicer and the Trustee may consider necessary
or desirable. If the Master Servicer shall not have joined in such appointment
within 15 days after the receipt by it of a request to do so, or in case an
Event of Default in respect of the Master Servicer shall have occurred and be
continuing, the Trustee alone shall have the power to make such appointment. No
co-trustee or separate trustee hereunder shall be required to meet the terms of
eligibility as a successor trustee under Section 8.06 hereunder and no notice to
Holders of Certificates of the appointment of co-trustee(s) or separate
trustee(s) shall be required under Section 8.08 hereof.
(b) In the case of any appointment of a co-trustee or separate
trustee pursuant to this Section 8.10 all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or co-trustee
jointly, except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed (whether as Trustee hereunder or
as successor to the Master Servicer or the Special Servicer hereunder), the
Trustee shall be incompetent or unqualified to perform such act or acts, in
which event such rights, powers, duties and obligations (including the holding
of title to the Trust Fund or any portion thereof in any such jurisdiction)
shall be exercised and performed by such separate trustee or co-trustee at the
direction of the Trustee.
(c) Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article VIII. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Trustee. Every such instrument shall be filed with the Trustee.
(d) Any separate trustee or co-trustee may, at any time,
constitute the Trustee, its agent or attorney-in-fact, with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Agreement on its behalf and in its name. If any separate trustee
or co-trustee shall cease to exist, become incapable of acting, resign or be
removed, all of its estates, properties, rights, remedies and trusts shall vest
in and be exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
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(e) The appointment of a co-trustee or separate trustee under
this Section 8.10 shall not relieve the Trustee of its duties and
responsibilities hereunder.
SECTION 8.11. Appointment of Custodians.
The Trustee may appoint at the Trustee's expense one or more
Custodians to hold all or a portion of the Mortgage Files as agent for the
Trustee. Each Custodian shall be a depository institution supervised and
regulated by a federal or state banking authority, shall have combined capital
and surplus of at least $10,000,000, shall be qualified to do business in the
jurisdiction in which it holds any Mortgage File and shall not be the Depositor
or any Affiliate of the Depositor. Neither the Master Servicer nor the Special
Servicer shall have any duty to verify that any such Custodian is qualified to
act as such in accordance with the preceding sentence. The Trustee may enter
into agreements to appoint a Custodian which is not the Trustee, provided that,
such agreement: (i) is consistent with this Agreement in all material respects
and requires the Custodian to comply with this Agreement in all material
respects and requires the Custodian to comply with all of the applicable
conditions of this Agreement; (ii) provides that if the Trustee shall for any
reason no longer act in the capacity of Trustee hereunder (including, without
limitation, by reason of an Event of Default), the successor trustee or its
designee may thereupon assume all of the rights and, except to the extent they
arose prior to the date of assumption, obligations of the Custodian under such
agreement or alternatively, may terminate such agreement without cause and
without payment of any penalty or termination fee; and (iii) does not permit the
Custodian any rights of indemnification that may be satisfied out of assets of
the Trust Fund. The appointment of one or more Custodians shall not relieve the
Trustee from any of its obligations hereunder, and the Trustee shall remain
responsible for all acts and omissions of any Custodian. The initial Custodian
shall be the Trustee. Notwithstanding anything herein to the contrary, if the
Trustee is no longer the Custodian, any provision or requirement herein
requiring notice or any information or documentation to be provided to the
Custodian shall be construed to require that such notice, information or
documents also be provided to the Trustee. Any Custodian hereunder (other than
the Trustee) shall at all times maintain a fidelity bond and errors and
omissions policy in amounts customary for custodians performing duties similar
to those set forth in this Agreement.
SECTION 8.12. Appointment of Authenticating Agents.
(a) The Trustee may appoint one or more Authenticating Agents,
which shall be authorized to act on behalf of the Trustee in authenticating
Certificates. Each Authenticating Agent must be organized and doing business
under the laws of the United States of America or of any State, authorized under
such laws to do a trust business, have a combined capital and surplus of at
least $15,000,000, and be subject to supervision or examination by federal or
state authorities. Each Authenticating Agent shall be subject to the same
obligations, standard of care, protection and indemnities as would be imposed
on, or would protect, the Trustee hereunder. The initial Authenticating Agent
shall be the Trustee. Notwithstanding anything herein to the contrary, if the
Trustee is no longer the Authenticating
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Agent, any provision or requirement herein requiring notice or any information
or documentation to be provided to the Authenticating Agent shall be construed
to require that such notice, information or documentation also be provided to
the Trustee.
(b) Any Person into which any Authenticating Agent may be
merged or converted or with which it may be consolidated, or any Person
resulting from any merger, conversion, or consolidation to which any
Authenticating Agent shall be a party, or any Person succeeding to the corporate
agency business of any Authenticating Agent, shall continue to be the
Authenticating Agent without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
(c) Any Authenticating Agent may at any time resign by giving
at least 30 days' advance written notice of resignation to the Trustee, the
Certificate Registrar, the Master Servicer, the Special Servicer and the
Depositor. The Trustee may at any time terminate the agency of any
Authenticating Agent by giving written notice of termination to such
Authenticating Agent, the Master Servicer, the Certificate Registrar and the
Depositor. Upon receiving a notice of resignation or upon such a termination, or
in case at any time any Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section 8.12, the Trustee may appoint a
successor Authenticating Agent, in which case the Trustee shall given written
notice of such appointment to the Master Servicer, the Certificate Registrar and
the Depositor and shall mail notice of such appointment to all Holders of
Certificates; provided, however, that no successor Authenticating Agent shall be
appointed unless eligible under the provisions of this Section 8.12. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers, duties and responsibilities of
its predecessor hereunder, with like effect as if originally named as
Authenticating Agent. No Authenticating Agent shall have responsibility or
liability for any action taken by it as such at the direction of the Trustee.
SECTION 8.13. Appointment of Paying Agent.
The Trustee may appoint a Paying Agent for the purpose of
making distributions to Certificateholders hereunder. The Trustee shall cause
such Paying Agent to execute and deliver to the Trustee an instrument in which
such Paying Agent shall agree with the Trustee that such Paying Agent will hold
all sums held by it for the payment to Certificateholders in an Eligible Account
in trust for the benefit of the Certificateholders entitled thereto until such
sums shall be paid to the Certificateholders. All funds remitted by the Trustee
or the Master Servicer to any such Paying Agent for the purpose of making
distributions shall be paid to Certificateholders on each Distribution Date and
any amounts not so paid shall be returned on such Distribution Date to the
Trustee or the Master Servicer, as applicable. If the Paying Agent is not the
Trustee or the Master Servicer, the Trustee or the Master Servicer shall remit
to the Paying Agent on the Business Day prior to each Distribution Date, by wire
transfer in immediately available funds, the funds to be distributed on such
Distribution Date. Any Paying Agent shall be either a bank or trust company or
otherwise authorized under law to exercise corporate trust powers and shall have
a rating of at least "A"
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(or its equivalent) by each of Standard & Poor's and Moody's, or such lower
rating as will not result in qualification, downgrading or withdrawal of the
ratings then assigned to the Certificates, as evidenced in writing by the Rating
Agencies. The Trustee may enter into agreements to appoint a Paying Agent which
is not the Trustee, provided that, such agreement: (i) is consistent with this
Agreement in all material respects and requires the Paying Agent to comply with
this Agreement in all material respects and requires the Paying Agent to comply
with all of the applicable conditions of this Agreement; (ii) provides that if
the Trustee shall for any reason no longer act in the capacity of Trustee
hereunder (including, without limitation, by reason of an Event of Default), the
successor trustee or its designee may thereupon assume all of the rights and,
except to the extent they arose prior to the date of assumption, obligations of
the Paying Agent under such agreement or alternatively, may terminate such
agreement without cause and without payment of any penalty or termination fee;
and (iii) does not permit the Paying Agent any rights of indemnification that
may be satisfied out of assets of the Trust Fund. The appointment of any Paying
Agent shall not relieve the Trustee from any of its obligations hereunder, and
the Trustee shall remain responsible for all acts and omissions of any Paying
Agent to the extent such Paying Agent would have been responsible pursuant to
the terms hereof. The initial Paying Agent shall be the Trustee. Notwithstanding
anything herein to the contrary, if the Trustee is no longer the Authenticating
Agent, any provision or requirement herein requiring notice or any information
to be provided to the Authenticating Agent shall be construed to require that
such notice, information or documentation also be provided to the Trustee.
SECTION 8.14. Appointment of REMIC Administrators.
(a) The Trustee may appoint one or more REMIC Administrators,
which shall be authorized to act on behalf of the Trustee in performing the
functions set forth in Sections 3.17 and 10.01 herein. Each REMIC Administrator
must be acceptable to the Trustee and must be organized and doing business under
the laws of the United States of America or of any State and be subject to
supervision or examination by federal or state authorities.
(b) Any Person into which any REMIC Administrator may be
merged or converted or with which it may be consolidated, or any Person
resulting from any merger, conversion, or consolidation to which any REMIC
Administrator shall be a party, or any Person succeeding to the corporate agency
business of any REMIC Administrator, shall continue to be the REMIC
Administrator without the execution or filing of any paper or any further act on
the part of the Trustee or the REMIC Administrator.
(c) Any REMIC Administrator may at any time resign by giving
at least 30 days' advance written notice of resignation to the Trustee, the
Certificate Registrar, the Paying Agent, the Master Servicer, the Special
Servicer and the Depositor. The Trustee may at any time terminate the agency of
any REMIC Administrator by giving written notice of termination to such REMIC
Administrator, the Master Servicer, the Certificate Registrar and the Depositor.
Upon receiving a notice of resignation or upon such a termination, or in case at
any time any REMIC Administrator shall cease to be eligible in accordance with
the provisions
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of this Section 8.14, the Trustee may appoint a successor REMIC Administrator,
in which case the Trustee shall given written notice of such appointment to the
Master Servicer and the Depositor and shall mail notice of such appointment to
all Holders of Certificates; provided, however, that no successor REMIC
Administrator shall be appointed unless eligible under the provisions of this
Section 8.14. Any successor REMIC Administrator upon acceptance of its
appointment hereunder shall become vested with all the rights, powers, duties
and responsibilities of its predecessor hereunder, with like effect as if
originally named as REMIC Administrator. No REMIC Administrator shall have
responsibility or liability for any action taken by it as such at the direction
of the Trustee.
SECTION 8.15. Access to Certain Information.
The Trustee shall afford to the Master Servicer, the Special
Servicer and the Depositor, any Certificateholder and to the OTS, the FDIC and
any other banking or insurance regulatory authority that may exercise authority
over any Certificateholder, access to any documentation regarding the Mortgage
Loans within its control that may be required to be provided by this Agreement
or by applicable law. Such access shall be afforded without charge but only upon
reasonable prior written request and during normal business hours at the offices
of the Trustee designated by it.
In connection with providing access to or copies of the
documentation described in the preceding paragraph, the Trustee shall require:
(a) in the case of Certificate Owners, a confirmation executed by the requesting
Person (in a form reasonably acceptable to the Trustee) generally to the effect
that such Person is a beneficial holder of Book Entry Certificates and will keep
such information confidential (except that such Certificate Owner may provide
such information to any other Person that holds or is contemplating the purchase
of any Certificate or interest therein, provided that such other Person confirms
in writing such ownership interest or prospective ownership interest and agrees
to keep such information confidential); and (b) in the case of a prospective
purchaser of a Certificate or an interest therein, confirmation executed by the
requesting Person (in the form reasonably acceptable to the Trustee) generally
to the effect that such Person is a prospective purchaser of a Certificate or an
interest therein, is requesting the information for use in evaluating a possible
investment in Certificates and will otherwise keep such information
confidential. The Holders of the Certificates, by their acceptance thereof, will
be deemed to have agreed to keep such information confidential (except that any
Holder may provide any such information obtained by it to any other Person that
holds or is contemplating the purchase of any Certificate or interest therein,
provided that such other Person confirms in writing such ownership interest or
prospective ownership interest and agrees to keep such information
confidential).
SECTION 8.16. Representations, Warranties and
Covenants of Trustee.
(a) The Trustee hereby represents and warrants to the Master
Servicer, the Special Servicer and the Depositor and for the benefit of the
Certificateholders, as of the Closing Date, that:
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(i) The Trustee is a national banking association duly
organized, validly existing and in good standing under the laws of the United
States.
(ii) The execution and delivery of this Agreement by the
Trustee, and the performance and compliance with the terms of this Agreement by
the Trustee, will not violate the Trustee's organizational documents or
constitute a default (or an event which, with notice or lapse of time, or both,
would constitute a default) under, or result in a breach of, any material
agreement or other material instrument to which it is a party or by which it is
bound.
(iii) Except to the extent that the laws of certain
jurisdictions in which any part of the Trust Fund may be located require that a
co-trustee or separate trustee be appointed to act with respect to such property
as contemplated by Section 8.10, the Trustee has the full power and authority to
carry on its business as now being conducted and 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 other parties hereto, constitutes a valid and binding obligation
of the Trustee, enforceable against the Trustee in accordance with the terms
hereof, subject to (A) applicable bankruptcy, insolvency, reorganization,
moratorium and other laws affecting the enforcement of creditors' rights
generally and the rights of creditors of banks, and (B) general principles of
equity, regardless of whether such enforcement is considered in a proceeding in
equity or at law.
(v) The Trustee is not in violation of, and its execution and
delivery of this Agreement and its performance and compliance with the terms of
this Agreement will not constitute a violation of, any law, any order or decree
of any court or arbiter, or any order, regulation or demand of any federal,
state or local governmental or regulatory authority, which violation, in the
Trustee's good faith and reasonable judgment, is likely to affect materially and
adversely the ability of the Trustee to perform its obligations under this
Agreement.
(vi) No litigation is pending or, to the best of the Trustee's
knowledge, threatened against the Trustee that, if determined adversely to the
Trustee, would prohibit the Trustee from entering into this Agreement or, in the
Trustee's good faith and reasonable judgment, is likely to materially and
adversely affect the ability of the Trustee to perform its obligations under
this Agreement.
(vii) Any consent, approval, authorization or order of any
court or governmental agency or body required for the execution, delivery and
performance by the Trustee of or compliance by the Trustee with this Agreement
or the consummation of the transactions contemplated by this Agreement has been
obtained and is effective.
(b) The Trustee covenants that by August 31, 1999, any
custom-made software or hardware designed or purchased or licensed by the
Trustee and used by the Trustee in the course of the operation or management of,
or the compiling, reporting or generation of
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data required by this Agreement will not contain any deficiency (x) in the
ability of such software or hardware to identify correctly or perform
calculations or other processing with respect to dates after August 31, 1999 or
(y) that would cause such software or hardware to be fit no longer for the
purpose for which it was intended by reason of the changing of the date from
1999 to 2000.
SECTION 8.17. Reports to the Securities and
Exchange Commission; Available
Information.
The Depositor shall prepare for filing, and the Trustee shall
execute, on behalf of the Trust Fund, and file with the Securities and Exchange
Commission, any and all reports, statements and information respecting the Trust
Fund and/or the Certificates required to be filed on behalf of the Trust Fund
under the Exchange Act. Upon such filing with the Securities and Exchange
Commission, the Trustee shall promptly deliver to the Depositor, the Master
Servicer and the Controlling Class Representative a copy of any such executed
report, statement or information. The Depositor shall promptly file, and
exercise its reasonable best efforts to obtain a favorable response to,
no-action requests to, or requests for other appropriate exemptive relief from,
the Securities and Exchange Commission regarding the usual and customary
exemption from certain reporting requirements granted to issuers of securities
similar to the Certificates. The Depositor agrees to indemnify and hold harmless
the Trustee with respect to any liability, cost or expenses, including
reasonable attorneys' fees, arising from the Trustee's execution of such
reports, statements and information that contain errors or omissions or is
otherwise misleading, provided, however, that if the indemnification provided
for herein is invalid or unenforceable, then the Depositor shall contribute to
the amount paid by the Trustee as a result of such liability in such amount as
is necessary to limit the Trustee's responsibility for any such payment to any
amount resulting from its own negligence or willful misconduct. The Trustee
shall have no responsibility to determine whether or not any filing may be
required and shall not have any responsibility to review or confirm in any way
the accuracy or the sufficiency of the contents of any such filing.
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ARTICLE IX
TERMINATION
SECTION 9.01. Termination Upon Repurchase or
Liquidation of All Mortgage Loans.
Subject to Section 9.02, the Trust Fund and the respective
obligations and responsibilities under this Agreement of the Depositor, the
Master Servicer, the Special Servicer and the Trustee (other than the
obligations of the Paying Agent on behalf of the Trustee to provide for and make
payments to Certificateholders as hereafter set forth) shall terminate upon
payment (or provision for payment) (i) to the Certificateholders of all amounts
held by or on behalf of the Trustee and required hereunder to be so paid on the
Distribution Date following the earlier to occur of (A) the purchase by the
Majority Subordinate Certificateholder, or if not purchased by such Person, the
Depositor, the Master Servicer or the Special Servicer of all Mortgage Loans and
each REO Property remaining in REMIC I at a price equal to (1) the aggregate
Purchase Price of all the Mortgage Loans included in REMIC I, plus (2) the
appraised value of each REO Property, if any, included in REMIC I, such
appraisal to be conducted by an Independent Appraiser selected by the Master
Servicer and approved by the Trustee, minus (3) if the purchaser is the Master
Servicer or the Special Servicer, the aggregate amount of unreimbursed Advances
made by the Master Servicer or the Special Servicer, as the case may be,
together with any interest accrued and payable to the Master Servicer or the
Special Servicer in respect of unreimbursed Advances in accordance with Sections
3.03(d) and 4.03(d) and any unpaid Servicing Fees remaining outstanding (which
items shall be deemed to have been paid or reimbursed to the Master Servicer or
the Special Servicer, as the case may be, in connection with such purchase), and
(B) the final payment or other liquidation (or any advance with respect thereto)
of the last Mortgage Loan or REO Property remaining in REMIC I, and (ii) to the
Trustee, the Master Servicer, the Special Servicer and the officers, directors,
employees and agents of each of them of all amounts which may have become due
and owing to any of them hereunder; provided, however, that in no event shall
the trust created hereby continue beyond the earlier of (i) the expiration of 21
years from the death of the last survivor of the descendants of Joseph P.
Kennedy, the late ambassador of the United States to the Court of St. James,
living on the date hereof, or (ii) the Rated Final Distribution Date specified
in Section 10.01(e).
The Majority Subordinate Certificateholder, or if not
purchased by such Person, the Depositor, the Master Servicer or the Special
Servicer may at its option elect to purchase all of the Mortgage Loans and each
REO Property remaining in REMIC I as contemplated by clause (i) of the preceding
paragraph by giving written notice to the other parties hereto no later than 60
days prior to the anticipated date of purchase; provided, however, that (i) the
aggregate Stated Principal Balance of the Mortgage Pool at the time of such
election is less than 1% of the aggregate Cut-Off Date Balance of the Mortgage
Pool set forth in the Preliminary Statement, and (ii) the Master Servicer shall
not have the right to effect such a purchase if, within 30 days following the
Master Servicer's delivery of a notice of election
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pursuant to this paragraph, the Depositor shall give notice of its election to
purchase all of the Mortgage Loans and each REO Property remaining in REMIC I
and shall thereafter effect such purchase in accordance with the terms hereof.
If the Trust Fund is to be terminated in connection with the Majority
Subordinate Certificateholder's, the Master Servicer's, the Special Servicer's
or the Depositor's purchase of all of the Mortgage Loans and each REO Property
remaining in REMIC I, Majority Subordinate Certificateholder, the Master
Servicer, the Special Servicer or the Depositor, as applicable, shall deliver to
the Paying Agent for deposit in the Distribution Account not later than the P&I
Advance Date relating to the Distribution Date on which the final distribution
on the Certificates is to occur an amount in immediately available funds equal
to the above-described purchase price. In addition, the Master Servicer shall
transfer to the Distribution Account all amounts required to be transferred
thereto on such P&I Advance Date from the Certificate Account pursuant to the
first paragraph of Section 3.04(b), together with any other amounts on deposit
in the Certificate Account that would otherwise be held for future distribution.
Upon written confirmation that such final deposit has been made, the Trustee
shall release or cause to be released to the Majority Subordinate
Certificateholder, the Master Servicer, the Special Servicer or the Depositor,
as applicable, the Mortgage Files for the remaining Mortgage Loans and shall
execute all assignments, endorsements and other instruments furnished to it by
the Majority Subordinate Certificateholder, the Master Servicer, the Special
Servicer or the Depositor, as applicable, as shall be necessary to effectuate
transfer of the Mortgage Loans and REO Properties to the Majority Subordinate
Certificateholder, the Master Servicer (or its designee), the Special Servicer
or the Depositor (or its designees), as applicable. Any transfer of Mortgage
Loans to the Depositor pursuant to this paragraph shall be on a
servicing-released basis. The out-of-pocket expenses incurred by the Master
Servicer in connection with a termination pursuant to this Section shall
constitute a Servicing Advance.
Notice of any termination shall be given promptly by the
Trustee by letter to Certificateholders mailed (a) if such notice is given in
connection with the Majority Subordinate Certificateholder's, the Master
Servicer's, the Special Servicer's or Depositor's purchase of the Mortgage Loans
and each REO Property remaining in REMIC I, not earlier than the 15th day and
not later than the 25th day of the month next preceding the month of the final
distribution on the Certificates or (b) otherwise during the month of such final
distribution on or before the Determination Date in such month to the extent a
Responsible Officer of the Trustee has knowledge of such termination, but in any
event not less than five days prior to such final Distribution Date, in each
case specifying (i) the Distribution Date upon which the Trust Fund will
terminate and final payment of the Certificates will be made, (ii) the amount of
any such final payment and (iii) that the Record Date otherwise applicable to
such Distribution Date is not applicable, payments being made only upon
presentation and surrender of the Certificates at the offices of the Certificate
Registrar or such other location therein designated. The Trustee shall give such
notice to the Majority Subordinate Certificateholder, the Master Servicer, the
Special Servicer and the Depositor at the time such notice is given to
Certificateholders.
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Upon presentation and surrender of the Certificates by the
Certificateholders on the final Distribution Date, the Paying Agent shall
distribute to each Certificateholder so presenting and surrendering its
Certificates such Certificateholder's Percentage Interest of that portion of the
amounts then on deposit in the Distribution Account that are allocable to
payments on the Class of Certificates so presented and surrendered. Amounts on
deposit in the Distribution Account as of the final Distribution Date, exclusive
of any portion thereof that would be payable to any Person in accordance with
clauses (ii) through (viii) of Section 3.05(b), and further exclusive of any
portion thereof that represents Prepayment Premiums, shall be allocated in the
following order of priority, in each case to the extent of remaining available
funds:
(i) to distributions of interest to the Holders of the Senior
Certificates, in an amount equal to, and pro rata in accordance with,
all Distributable Certificate Interest in respect of each Class of
Senior Certificates for such Distribution Date and, to the extent not
previously paid, for all prior Distribution Dates;
(ii) to distributions of principal to the Holders of the Class
A-1 Certificates, in an amount equal to the Class Principal Balance of
the Class A-1 Certificates outstanding immediately prior to such
Distribution Date;
(iii) after the Class Principal Balance of the Class A-1
Certificates has been reduced to zero, to distributions of principal to
the Holders of the Class A-2 Certificates, in an amount equal to the
Class Principal Balance of the Class A-2 Certificates outstanding
immediately prior to such Distribution Date;
(iv) after the Class Principal Balance of the Class A-2
Certificates has been reduced to zero, to distributions of principal to
the Holders of the Class A-3 Certificates, in an amount equal to the
Class Principal Balance of the Class A-3 Certificates outstanding
immediately prior to such Distribution Date;
(v) to distributions to the Holders of the Class A-1, Class
A-2 and Class A-3 Certificates, in an amount equal to, and pro rata in
accordance with the amount of Realized Losses and Additional Trust Fund
Expenses, if any, previously allocated to such Classes of Certificates
and for which no reimbursement has previously been received, to
reimburse such Holders for such Realized Losses and Additional Trust
Fund Expenses, if any, plus interest on any such Realized Losses or
Additional Trust Fund Expenses, accrued at the applicable Pass-Through
Rate from the date such Realized Losses and/or Additional Trust Fund
Expenses were allocated to such Class;
(vi) to distributions of interest to the Holders of the Class
B Certificates in an amount equal to all Distributable Certificate
Interest in respect of such Class of Certificates for such Distribution
Date and, to the extent not previously paid, for all prior Distribution
Dates;
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(vii) after the Class Principal Balances of the Class A-1
Certificates, the Class A-2 Certificates and the Class A-3 Certificates
have been reduced to zero, to distributions of principal to the Holders
of the Class B Certificates, in an amount equal to the Class Principal
Balance of the Class B Certificates outstanding immediately prior to
such Distribution Date;
(viii) to distributions to the Holders of the Class B
Certificates, in an amount equal to, and in reimbursement of, all
Realized Losses and Additional Trust Fund Expenses, if any, previously
allocated to the Class B Certificates and not previously reimbursed,
plus interest on any such Realized Losses or Additional Trust Fund
Expenses, accrued at the applicable Pass-Through Rate from the date
such Realized Losses and/or Additional Trust Fund Expenses were
allocated to such Class;
(ix) to distributions of interest to the Holders of the Class
C Certificates in an amount equal to all Distributable Certificate
Interest in respect of such Class of Certificates for such Distribution
Date and, to the extent not previously paid, for all prior Distribution
Dates;
(x) after the Class Principal Balance of the Class B
Certificates has been reduced to zero, to distributions of principal to
the Holders of the Class C Certificates, in an amount equal to the
Class Principal Balance of the Class C Certificates outstanding
immediately prior to such Distribution Date;
(xi) to distributions to the Holders of the Class C
Certificates, in an amount equal to, and in reimbursement of, all
Realized Losses and Additional Trust Fund Expenses, if any, previously
allocated to the Class C Certificates and not previously reimbursed,
plus interest on any such Realized Losses or Additional Trust Fund
Expenses, accrued at the applicable Pass-Through Rate from the date
such Realized Losses and/or Additional Trust Fund Expenses were
allocated to such Class;
(xii) to distributions of interest to the Holders of the Class
D Certificates, in an amount equal to all Distributable Certificate
Interest in respect of the Class D Certificates for such Distribution
Date and, to the extent not previously paid, for all prior Distribution
Dates;
(xiii) after the Class Principal Balance of the Class C
Certificates has been reduced to zero, to distributions of principal to
the Holders of the Class D Certificates, in an amount equal to the
Class Principal Balance of the Class D Certificates outstanding
immediately prior to such Distribution Date;
(xiv) to distributions to the Holders of the Class D
Certificates, in an amount equal to, and in reimbursement of, all
Realized Losses and Additional Trust Fund Expenses, if any, previously
allocated to the Class D Certificates and not previously reimbursed,
plus interest on any such Realized Losses or Additional Trust Fund
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Expenses, accrued at the applicable Pass-Through Rate from the date
such Realized Losses and/or Additional Trust Fund Expenses were
allocated to such Class;
(xv) to distributions of interest to the Holders of the Class
E Certificates, in an amount equal to all Distributable Certificate
Interest in respect of the Class E Certificates for such Distribution
Date and, to the extent not previously paid, for all prior Distribution
Dates;
(xvi) after the Class Principal Balance of the Class D
Certificates has been reduced to zero, to distributions of principal to
the Holders of the Class E Certificates, in an amount equal to the
Class Principal Balance of the Class E Certificates outstanding
immediately prior to such Distribution Date;
(xvii) to distributions to the Holders of the Class E
Certificates, in an amount equal to, and in reimbursement of, all
Realized Losses and Additional Trust Fund Expenses, if any, previously
allocated to the Class E Certificates and not previously reimbursed,
plus interest on any such Realized Losses or Additional Trust Fund
Expenses, accrued at the applicable Pass-Through Rate from the date
such Realized Losses and/or Additional Trust Fund Expenses were
allocated to such Class;
(xviii) to distributions of interest to the Holders of the
Class F Certificates, in an amount equal to all Distributable
Certificate Interest in respect of the Class F Certificates for such
Distribution Date and, to the extent not previously paid, for all prior
Distribution Dates;
(xix) after the Class Principal Balance of the Class E
Certificates has been reduced to zero, to distributions of principal to
the Holders of the Class F Certificates, in an amount equal to the
Class Principal Balance of the Class F Certificates outstanding
immediately prior to such Distribution Date;
(xx) to distributions to the Holders of the Class F
Certificates, in an amount equal to, and in reimbursement of, all
Realized Losses and Additional Trust Fund Expenses, if any, previously
allocated to the Class F Certificates and not previously reimbursed,
plus interest on any such Realized Losses or Additional Trust Fund
Expenses, accrued at the applicable Pass-Through Rate from the date
such Realized Losses and/or Additional Trust Fund Expenses were
allocated to such Class;
(xxi) to distributions of interest to the Holders of the Class
G Certificates, in an amount equal to all Distributable Certificate
Interest in respect of the Class G Certificates for such Distribution
Date and, to the extent not previously paid, for all prior Distribution
Dates;
(xxii) after the Class Principal Balance of the Class F
Certificates has been reduced to zero, to distributions of principal to
the Holders of the Class G Certificates,
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in an amount equal to the Class Principal Balance of the Class G
Certificates outstanding immediately prior to such Distribution Date;
(xxiii) to distributions to the Holders of the Class G
Certificates, in an amount equal to, and in reimbursement of, all
Realized Losses and Additional Trust Fund Expenses, if any, previously
allocated to the Class G Certificates and not previously reimbursed,
plus interest on any such Realized Losses or Additional Trust Fund
Expenses, accrued at the applicable Pass-Through Rate from the date
such Realized Losses and/or Additional Trust Fund Expenses were
allocated to such Class;
(xxiv) to distributions of interest to the Holders of the
Class H Certificates, in an amount equal to all Distributable
Certificate Interest in respect of the Class H Certificates for such
Distribution Date and, to the extent not previously paid, for all prior
Distribution Dates;
(xxv) after the Class Principal Balance of the Class G
Certificates has been reduced to zero, to distributions of principal to
the Holders of the Class H Certificates, in an amount equal to the
Class Principal Balance of the Class H Certificates outstanding
immediately prior to such Distribution Date;
(xxvi) to distributions to the Holders of the Class H, in an
amount equal to, and in reimbursement of, all Realized Losses and
Additional Trust Fund Expenses, if any, previously allocated to the
Class H Certificates and not previously reimbursed, plus interest on
any such Realized Losses or Additional Trust Fund Expenses, accrued at
the applicable Pass-Through Rate from the date such Realized Losses
and/or Additional Trust Fund Expenses were allocated to such Class;
(xxvii) to distributions of interest to the Holders of the
Class J Certificates, in an amount equal to all Distributable
Certificate Interest in respect of the Class J Certificates for such
Distribution Date and, to the extent not previously paid, for all prior
Distribution Dates;
(xxviii) after the Class Principal Balance of the Class H
Certificates has been reduced to zero, to distributions of principal to
the Holders of the Class J Certificates, in an amount equal to the
Class Principal Balance of the Class J Certificates outstanding
immediately prior to such Distribution Date;
(xxix) to distributions to the Holders of the Class J, in an
amount equal to, and in reimbursement of, all Realized Losses and
Additional Trust Fund Expenses, if any, previously allocated to the
Class J Certificates and not previously reimbursed, plus interest on
any such Realized Losses or Additional Trust Fund Expenses, accrued at
the applicable Pass-Through Rate from the date such Realized Losses
and/or Additional Trust Fund Expenses were allocated to such Class;
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(xxx) to distributions of interest to the Holders of the Class
K Certificates, in an amount equal to all Distributable Certificate
Interest in respect of the Class K Certificates for such Distribution
Date and, to the extent not previously paid, for all prior Distribution
Dates;
(xxxi) after the Class Principal Balance of the Class J
Certificates has been reduced to zero, to distributions of principal to
the Holders of the Class K Certificates, in an amount equal to the
Class Principal Balance of the Class K Certificates outstanding
immediately prior to such Distribution Date;
(xxxii) to distributions to the Holders of the Class K, in an
amount equal to, and in reimbursement of, all Realized Losses and
Additional Trust Fund Expenses, if any, previously allocated to the
Class K Certificates and not previously reimbursed, plus interest on
any such Realized Losses or Additional Trust Fund Expenses, accrued at
the applicable Pass-Through Rate from the date such Realized Losses
and/or Additional Trust Fund Expenses were allocated to such Class; and
(xxxiii) to distributions to the Holders of the Class R-I
Certificates, in an amount equal to the balance, if any, of the
Available Distribution Amount for such Distribution Date remaining
after the distributions to be made on such Distribution Date pursuant
to clauses (i) through (xxxii) above.
After the Certificate Balance of the Subordinate Certificates
has been reduced to zero, distributions of principal will be made in
respect of the Class A-1, Class A-2 and Class A-3 Certificates, pro
rata.
Any Prepayment Premiums on deposit in the Certificate Account
as of the final Distribution Date shall be distributed among the Holders of the
Regular Certificates, and any Additional Interest on deposit in the Additional
Interest Distribution Account as of the final Distribution Date shall be
distributed to the Holders of Class L Certificates, in accordance with Sections
4.01(b) and 4.01(c), respectively. Any funds not distributed to any Holder or
Holders of Certificates of such Class on such Distribution Date because of the
failure of such Holder or Holders to tender their Certificates shall, on such
date, be set aside and held uninvested in trust and credited to the account or
accounts of the appropriate non-tendering Holder or Holders. If any Certificates
as to which notice has been given pursuant to this Section 9.01 shall not have
been surrendered for cancellation within six months after the time specified in
such notice, the Paying Agent shall mail a second notice to the remaining
non-tendering Certificateholders to surrender their Certificates for
cancellation in order to receive the final distribution with respect thereto. If
within one year after the second notice all such Certificates shall not have
been surrendered for cancellation, the Paying Agent, directly or through an
agent, shall take such reasonable steps to contact the remaining non-tendering
Certificateholders concerning the surrender of their Certificates as it shall
deem appropriate. The costs and expenses of holding such funds in trust and of
contacting such Certificateholders following the first anniversary of the
delivery of such second notice to the non-tendering Certificateholders shall be
paid out of such funds. No interest shall accrue or be payable to
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any former Holder on any amount held in trust hereunder. If, within one year
after the second notice, all of the Certificates shall not have been surrendered
for cancellation, the Class R-I Certificateholder shall be entitled to all
unclaimed funds and other assets which remain subject thereto (to the extent it
is not required to dispose of such unclaimed funds and assets otherwise in
accordance with applicable state escheatment law.)
All actual distributions on the respective Classes of REMIC
III Certificates on the final Distribution Date in accordance with foregoing
provisions of this Section 9.01 shall be deemed to have first been distributed
from REMIC I to REMIC II on the various REMIC I Regular Interests in accordance
with Section 4.01(i).
SECTION 9.02. Additional Termination Requirements.
(a) If the Majority Subordinate Certificateholder the
Depositor, the Master Servicer or the Special Servicer purchases all of the
Mortgage Loans and each REO Property remaining in REMIC I as provided in Section
9.01, the Trust Fund (and, accordingly, REMIC I, REMIC II and REMIC III) shall
be terminated in accordance with the following additional requirements, unless
the Master Servicer, the Special Servicer or the Depositor, as applicable,
obtains at its own expense and delivers to the Trustee and the REMIC
Administrator and, in the case of Majority Subordinate Certificateholder or the
Depositor, to the Trustee and the Master Servicer, an Opinion of Counsel,
addressed to the Trustee, the REMIC Administrator and the Master Servicer, to
the effect that the failure of the Trust Fund to comply with the requirements of
this Section 9.02 will not result in the imposition of taxes on "prohibited
transactions" of REMIC I, REMIC II or REMIC III as defined in Section 860F of
the Code or cause REMIC I, REMIC II or REMIC III to fail to qualify as a REMIC
at any time that any Certificates are outstanding:
(i) the REMIC Administrator shall specify the first
day in the 90-day liquidation period in a statement attached
to the final Tax Return for each of REMIC I, REMIC II and
REMIC III pursuant to Treasury Regulations Section 1.860F-1
and shall satisfy all requirements of a qualified liquidation
under Section 860F of the Code and any regulations thereunder
as set forth in an Opinion of Counsel obtained by the
purchasing party at the expense of such purchasing party;
(ii) during such 90-day liquidation period and at or
prior to the time of making of the final payment on the
Certificates, the Trustee shall sell all of the assets of
REMIC I Majority Subordinate Certificateholder, to the Master
Servicer or the Depositor, as applicable, for cash; and
(iii) at the time of the making of the final payment
on the Certificates, the Paying Agent shall distribute or
credit, or cause to be distributed or credited, to the
Certificateholders in accordance with Section 9.01 all cash on
hand (other than cash retained to meet claims), and each of
REMIC I, REMIC II and REMIC III shall terminate at that time.
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(b) By their acceptance of Certificates, the Holders thereof
hereby agree to authorize the REMIC Administrator to specify the 90-day
liquidation period for each of REMIC I, REMIC II and REMIC III, which
authorization shall be binding upon all successor Certificateholders.
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ARTICLE X
ADDITIONAL REMIC PROVISIONS
SECTION 10.01. REMIC Administration.
(a) The REMIC Administrator shall elect to treat each of REMIC
I, REMIC II and REMIC III as a REMIC under the Code and, if necessary, under
applicable state law. Such election will be made on Form 1066 or other
appropriate federal or state Tax Returns for the taxable year ending on the last
day of the calendar year in which the Certificates are issued.
(b) The REMIC I Regular Interests, the REMIC II Regular
Interests and the Regular Certificates (or in the case of the Class IO
Certificates, each of its Components) are hereby designated as "regular
interests" (within the meaning of Section 860G(a)(1) of the Code) in REMIC I,
REMIC II and REMIC III, respectively. The Class R-I Certificates, the Class R-II
Certificates and the Class R-III Certificates are hereby designated as the
single class of "residual interests" (within the meaning of Section 860G(a)(2)
of the Code) in REMIC I, REMIC II and REMIC III, respectively. None of the
Master Servicer, the Special Servicer or the Trustee shall (to the extent within
its control) permit the creation of any other "interests" in REMIC I, REMIC II
or REMIC III (within the meaning of Treasury Regulations Section
1.860D-1(b)(1)).
(c) The Closing Date is hereby designated as the "startup day"
of REMIC I, REMIC II and REMIC III within the meaning of Section 860G(a)(9) of
the Code.
(d) Each Plurality Residual Certificateholder as to the
applicable taxable year is hereby designated as the Tax Matters Person of each
of REMIC I, REMIC II and REMIC III, and shall act on behalf of the related REMIC
in relation to any tax matter or controversy and shall represent the related
REMIC in any administrative or judicial proceeding relating to an examination or
audit by any governmental taxing authority; provided, that the REMIC
Administrator is hereby irrevocably appointed to act and shall act (in
consultation with the Tax Matters Person for each of REMIC I, REMIC II and REMIC
III) as agent and attorney-in-fact for the Tax Matters Person for each of REMIC
I, REMIC II and REMIC III in the performance of its duties as such.
(e) Solely for purposes of Treasury Regulations Sections
1.860G-1(a)(4)(iii), December 15, 2030, has been designated the "latest possible
maturity date" of each REMIC I Regular Interest, each REMIC II Regular Interest
and each Class of Regular Certificates (or in the case of the Class IO
Certificates, each of its Components).
(f) The Trustee shall pay any and all ordinary tax-related
expenses of any of REMIC I, REMIC II or REMIC III from the Trust Fund. Any
taxes, penalties, interest or extraordinary expenses including, but not limited
to, any professional fees or expenses related to audits or any administrative or
judicial proceedings with respect to any of REMIC I,
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REMIC II or REMIC III that involve the Internal Revenue Service or state or
local taxing authorities will (to the extent not payable by a specified Person
pursuant to Section 10.01(j)) be expenses of the Trust Fund.
(g) Within 30 days after the Closing Date, the REMIC
Administrator shall prepare and file with the Internal Revenue Service Form
8811, "Information Return for Real Estate Mortgage Investment Conduits (REMIC)
and Issuers of Collateralized Debt Obligations" for the Trust Fund. In addition,
the REMIC Administrator shall prepare, sign and file all of the other Tax
Returns in respect of REMIC I, REMIC II and REMIC III. The ordinary expenses of
preparing and filing such returns shall be borne by the REMIC Administrator
without any right of reimbursement therefor. The other parties hereto shall
provide on a timely basis to the REMIC Administrator or its designee such
information with respect to each of REMIC I, REMIC II and REMIC III as is in its
possession and reasonably requested by the REMIC Administrator to enable it to
perform its obligations under this Article. Without limiting the generality of
the foregoing, the Depositor, within ten days following the REMIC
Administrator's request therefor, shall provide in writing to the REMIC
Administrator such information as is reasonably requested by the REMIC
Administrator for tax purposes, as to the valuations and issue prices of the
Certificates, and the REMIC Administrator's duty to perform its reporting and
other tax compliance obligations under this Article X shall be subject to the
condition that it receives from the Depositor such information possessed by the
Depositor that is necessary to permit the Trustee to perform such obligations.
(h) The REMIC Administrator shall perform on behalf of each of
REMIC I, REMIC II and REMIC III all reporting and other tax compliance duties
that are the responsibility of each such REMIC under the Code, the REMIC
Provisions or other compliance guidance issued by the Internal Revenue Service
or, with respect to State and Local Taxes, any state or local taxing authority.
Included among such duties, the REMIC Administrator shall provide to: (i) any
Transferor of a Residual Certificate, such information as is necessary for the
application of any tax relating to the transfer of a Residual Certificate to any
Person who is not a Permitted Transferee; (ii) the Certificateholders, such
information or reports as are required by the Code or the REMIC Provisions,
including, without limitation, reports relating to interest, original issue
discount and market discount or premium (using the Prepayment Assumption as
required hereunder); and (iii) the Internal Revenue Service, the name, title,
address and telephone number of the Person who will serve as the representative
of each of REMIC I, REMIC II and REMIC III.
(i) The REMIC Administrator shall perform its duties hereunder
so as to maintain the status of each of REMIC I, REMIC II and REMIC III as a
REMIC under the REMIC Provisions (and the Trustee, the Master Servicer and the
Special Servicer shall assist the REMIC Administrator to the extent reasonably
requested by the REMIC Administrator and to the extent of information within the
Trustee's, the Master Servicer's or the Special Servicer's possession or
control). None of the REMIC Administrator, Master Servicer, the Special
Servicer, the REMIC Administrator or the Trustee shall knowingly take (or cause
any of REMIC I, REMIC II or REMIC III to take) any action or fail to take (or
fail to cause to be
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taken) any action that, under the REMIC Provisions, if taken or not taken, as
the case may be, could (i) endanger the status of any of REMIC I, REMIC II or
REMIC III as a REMIC, or (ii) except as provided in Section 3.17(a), result in
the imposition of a tax upon any of REMIC I, REMIC II or REMIC III (including,
but not limited to, the tax on prohibited transactions as defined in Section
860F(a)(2) of the Code, the tax on contributions to a REMIC set forth in Section
860G(d) of the Code or the result in the imposition of a tax on "net income from
foreclosure property" as defined in Section 860G(c) of the Code) (any such
endangerment or imposition, except as provided in Section 3.17(a)(iii), an
"Adverse REMIC Event"), unless the REMIC Administrator has obtained or received
an Opinion of Counsel (at the expense of the party requesting such action or at
the expense of the Trust Fund if the REMIC Administrator seeks to take such
action or to refrain from acting for the benefit of the Certificateholders) to
the effect that the contemplated action will not result in an Adverse REMIC
Event. The REMIC Administrator shall not take any action or fail to take any
action (whether or not authorized hereunder) as to which the Master Servicer or
the Special Servicer has advised it in writing that either the Master Servicer
or the Special Servicer has received or obtained an Opinion of Counsel to the
effect that an Adverse REMIC Event could occur with respect to such action. In
addition, prior to taking any action with respect to REMIC I, REMIC II or REMIC
III, or causing any of REMIC I, REMIC II or REMIC III to take any action, that
is not expressly permitted under the terms of this Agreement, the Master
Servicer and the Special Servicer shall consult with the REMIC Administrator or
its designee, in writing, with respect to whether such action could cause an
Adverse REMIC Event to occur. Neither the Master Servicer nor the Special
Servicer shall take any such action or cause any of REMIC I, REMIC II or REMIC
III to take any such action as to which the REMIC Administrator has advised it
in writing that an Adverse REMIC Event could occur, and neither the Master
Servicer nor the Special Servicer shall have any liability hereunder for any
action taken by it in accordance with the written instruments of the REMIC
Administrator. The REMIC Administrator may consult with counsel to make such
written advice, and the cost of same shall be borne by the party seeking to take
the action not expressly permitted by this Agreement, but in no event at the
cost or expense of the Trust Fund, the REMIC Administrator or the Trustee. At
all times as may be required by the Code, the REMIC Administrator shall make
reasonable efforts to ensure that substantially all of the assets of REMIC I,
REMIC II and REMIC III will consist of "qualified mortgages" as defined in
Section 860G(a)(3) of the Code and "permitted investments" as defined in Section
860G(a)(5) of the Code.
(j) If any tax is imposed on any of REMIC I, REMIC II or REMIC
III, including, without limitation, "prohibited transactions" taxes as defined
in Section 860F(a)(2) of the Code, any tax on "net income from foreclosure
property" as defined in Section 860G(c) of the Code, any taxes on contributions
to REMIC I, REMIC II or REMIC III after the Startup Day pursuant to Section
860G(d) of the Code, and any other tax imposed by the Code or any applicable
provisions of State or Local Tax laws (other than any tax permitted to be
incurred by the Special Servicer pursuant to Section 3.17(a)), such tax,
together with all incidental costs and expenses (including, without limitation,
penalties and reasonable attorneys' fees), shall be charged to and paid by: (i)
the REMIC Administrator, if such tax arises out of or results from a breach by
the REMIC Administrator of any of its obligations under this Article X provided
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that no liability shall be imposed upon the REMIC Administrator under this
clause if another party has responsibility for payment of such tax under clauses
(ii) - (vi) of this Section; (ii) the Special Servicer, if such tax arises out
of or results from a breach by the Special Servicer of any of its obligations
under Article III or this Article X; (iii) the Master Servicer, if such tax
arises out of or results from a breach by the Master Servicer of any of its
obligations under Article III or this Article X; (iv) the Trustee, if such tax
arises out of or results from a breach by the Trustee of any of its obligations
under this Article X; (v) the Depositor, if such tax was imposed due to the fact
that any of the Mortgage Loans did not, at the time of their transfer to the
REMIC I, constitute a "qualified mortgage" as defined in Section 860G(a)(3) of
the Code; or (vi) the Trust Fund in all other instances. Any tax permitted to be
incurred by the Special Servicer pursuant to Section 3.17(a)(iii) shall be
charged to and paid by the Trust Fund. Any such amounts payable by the Trust
Fund shall be paid by the Paying Agent upon the written direction of the REMIC
Administrator out of amounts on deposit in the Distribution Account in reduction
of the Available Distribution Amount pursuant to Section 3.05(b).
(k) The REMIC Administrator shall, for federal income tax
purposes, maintain books and records with respect to each of REMIC I, REMIC II
and REMIC III on a calendar year and on an accrual basis.
(l) Following the Startup Day, none of the Trustee, the Master
Servicer and the Special Servicer shall accept any contributions of assets to
REMIC I, REMIC II or REMIC III unless it shall have received an Opinion of
Counsel (at the expense of the party seeking to cause such contribution and in
no event at the expense of the Trust Fund or the Trustee) to the effect that the
inclusion of such assets in such REMIC will not cause: (i) such REMIC to fail to
qualify as a REMIC at any time that any Certificates are outstanding; or (ii)
the imposition of any tax on such REMIC under the REMIC Provisions or other
applicable provisions of federal, state and local law or ordinances.
(m) None of the Trustee, the Master Servicer and the Special
Servicer shall consent to or, to the extent it is within the control of such
Person, permit: (i) the sale or disposition of any of the Mortgage Loans (except
in connection with (A) the foreclosure of a Mortgage Loan, including, but not
limited to, the sale or other disposition of a Mortgaged Property acquired by
deed in lieu of foreclosure, (B) the bankruptcy of REMIC I, REMIC II or REMIC
III, (C) the termination of REMIC I, REMIC II and REMIC III pursuant to Article
IX of this Agreement, or (D) a purchase of Mortgage Loans pursuant to or as
contemplated by Article II or III of this Agreement); (ii) the sale or
disposition of any investments in the Certificate Account, the Distribution
Account or the REO Account for gain; or (iii) the acquisition of any assets for
REMIC I, REMIC II or REMIC III (other than (1) a Mortgaged Property acquired
through foreclosure, deed in lieu of foreclosure or otherwise in respect of a
defaulted Mortgage Loan, (2) a Qualified Substitute Mortgage Loan pursuant to
Article II hereof and (3) Permitted Investments acquired in connection with the
investment of funds in the Certificate Account, the Distribution Account or the
REO Account); in any event unless it has received an Opinion of Counsel (at the
expense of the party seeking to cause such sale, disposition, or acquisition but
in no event at the expense of the Trust Fund or the Trustee) to
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the effect that such sale, disposition, or acquisition will not cause: (x) REMIC
I, REMIC II or REMIC III to fail to qualify as a REMIC at any time that any
Certificates are outstanding; or (y) the imposition of any tax on REMIC I, REMIC
II or REMIC III under the REMIC Provisions or other applicable provisions of
federal, state and local law or ordinances.
(n) Except in connection with Section 3.17(a)(iii), none of
the Trustee, the Master Servicer and the Special Servicer shall enter into any
arrangement by which REMIC I, REMIC II or REMIC III will receive a fee or other
compensation for services nor, to the extent it is within its control, permit
REMIC I, REMIC II or REMIC III to receive any income from assets other than
"qualified mortgages" as defined in Section 860G(a)(3) of the Code or "permitted
investments" as defined in Section 860G(a)(5) of the Code.
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ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.01. Amendment.
(a) This Agreement may be amended from time to time by the
mutual agreement of the Depositor, the Master Servicer, the Special Servicer and
the Trustee, without the consent of any of the Certificateholders, (i) to cure
any ambiguity, (ii) to correct, modify or supplement any provision herein which
may be inconsistent with any other provision herein, (iii) to add any other
provisions with respect to matters or questions arising hereunder which shall
not be inconsistent with the provisions hereof, (iv) to relax or eliminate any
requirement hereunder imposed by the REMIC Provisions if the REMIC Provisions
are amended or clarified such that any such requirement may be relaxed or
eliminated, or (v) if such amendment, as evidenced by an Opinion of Counsel
delivered to the Master Servicer, the Special Servicer and the Trustee, is
reasonably necessary to comply with any requirements imposed by the Code or any
successor or amendatory statute or any temporary or final regulation, revenue
ruling, revenue procedure or other written official announcement or
interpretation relating to federal income tax laws or any such proposed action
which, if made effective, would apply retroactively to any of the REMICs created
hereunder at least from the effective date of such amendment, or would be
necessary to avoid the occurrence of a prohibited transaction or to reduce the
incidence of any tax that would arise from any actions taken with respect to the
operation of any such REMIC; provided, that such action (except any amendment
described in clause (v) above) shall not, as evidenced by an Opinion of Counsel
obtained by or delivered to the Master Servicer, the Special Servicer and the
Trustee (which opinion, insofar as economic issues involving a Class of
Certificates rated by a Rating Agency are concerned, may rely upon the assurance
of the Rating Agencies described below), adversely affect in any material
respect the interests of any Certificateholder; and provided further that the
Master Servicer, the Special Servicer and the Trustee shall have first obtained
from each Rating Agency written assurance that such amendment will not cause the
qualification, downgrading or withdrawal of the then current rating on any Class
of Certificates.
(b) This Agreement may also be amended from time to time by
the agreement of the Depositor, the Master Servicer, the Special Servicer and
the Trustee with the consent of the Holders of Certificates entitled to at least
51% of the Voting Rights allocated to the affected Classes for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or of modifying in any manner the rights of the
Holders of Certificates; provided, however, that no such amendment shall (i)
reduce in any manner the amount of, or delay the timing of, payments received or
advanced on Mortgage Loans which are required to be distributed on any
Certificate without the consent of the Holder of such Certificate, (ii) as
evidenced by an Opinion of Counsel obtained by or delivered to the Master
Servicer, the Special Servicer and the Trustee (which opinion, insofar as
economic issues involving a Class of Certificates rated by a Rating Agency are
concerned,
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may rely upon the assurance of the Rating Agencies described below), adversely
affect in any material respect the interests of the Holders of any Class of
Certificates in a manner other than as described in (i) without the consent of
the Holders of all Certificates of such Class, (iii) modify the provisions of
this Section 11.01 without the consent of the Holders of all Certificates then
outstanding, (iv) modify the provisions of Section 3.20 without the consent of
the Holders of Certificates entitled to all of the Voting Rights or (v) modify
the specified percentage of Voting Rights which are required to be held by
Certificateholders to consent or not to object to any action pursuant to any
provision of this Agreement without the consent of the Holders of all
Certificates then outstanding. Notwithstanding any other provision of this
Agreement, for purposes of the giving or withholding of consents pursuant to
this Section 11.01, Certificates registered in the name of the Depositor or any
Affiliate of the Depositor shall be entitled to the same Voting Rights with
respect to matters described above as they would if any other Person held such
Certificates, so long as neither the Depositor nor any of its Affiliates is
performing servicing duties with respect to any of the Mortgage Loans.
(c) Notwithstanding any contrary provision of this Agreement,
the Trustee shall not consent to any amendment to this Agreement unless it shall
first have obtained or been furnished with an Opinion of Counsel (at the expense
of the party seeking such amendment) to the effect that (i) such amendment or
the exercise of any power granted to the Trustee, the Master Servicer or the
Special Servicer in accordance with such amendment will not result in the
imposition of a tax on either of REMIC I, REMIC II or REMIC III pursuant to the
REMIC Provisions or cause either of REMIC I, REMIC II or REMIC III to fail to
qualify as a REMIC at any time that any Certificates are outstanding and (ii)
such amendment complies with the provisions of this Section 11.01.
(d) Promptly after the execution of any such amendment, the
Trustee shall send a copy thereof to each Certificateholder.
(e) It shall not be necessary for the consent of
Certificateholders under this Section 11.01 to approve the particular form of
any proposed amendment, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents and of evidencing
the authorization of the execution thereof by Certificateholders shall be
subject to such reasonable regulations as the Trustee may prescribe.
(f) Each of the Master Servicer, the Special Servicer and the
Trustee may but shall not be obligated to enter into any amendment pursuant to
this Section that affects its rights, duties and immunities under this Agreement
or otherwise.
(g) The cost of any Opinion of Counsel to be delivered
pursuant to Section 11.01(a), (b) or (c) shall be borne by the Person seeking
the related amendment, except that if the Master Servicer, the Special Servicer
or the Trustee requests any amendment of this Agreement that protects or is in
furtherance of the rights and interests of Certificateholders, the cost of any
Opinion of Counsel required in connection therewith pursuant to Section 11.01(a)
or (c) shall be payable out of the Certificate Account or the Distribution
Account pursuant to Section 3.05.
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SECTION 11.02. Recordation of Agreement;
Counterparts.
(a) To the extent permitted by applicable law, this Agreement
is subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any or
all of the properties subject to the Mortgages are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected by the Master Servicer at the expense of the Trust Fund, but only upon
direction accompanied by an Opinion of Counsel (the cost of which may be paid
out of the Certificate Account pursuant to Section 3.05(a)) to the effect that
such recordation materially and beneficially affects the interests of the
Certificateholders; provided, however, that the Trustee shall have no obligation
or responsibility to determine whether any such recordation of this Agreement is
required.
(b) For the purpose of facilitating the recordation of this
Agreement as herein provided and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
constitute but one and the same instrument.
SECTION 11.03. Limitation on Rights of
Certificateholders.
(a) The death or incapacity of any Certificateholder shall not
operate to terminate this Agreement or the Trust Fund, nor entitle such
Certificateholder's legal representatives or heirs to claim an accounting or to
take any action or proceeding in any court for a partition or winding up of the
Trust Fund, nor otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them.
(b) No Certificateholder shall have any right to vote (except
as expressly provided for herein) or in any manner otherwise control the
operation and management of the Trust Fund, or the obligations of the parties
hereto, nor shall anything herein set forth, or contained in the terms of the
Certificates, be construed so as to constitute the Certificateholders from time
to time as partners or members of an association; nor shall any
Certificateholder be under any liability to any third party by reason of any
action taken by the parties to this Agreement pursuant to any provision hereof.
(c) No Certificateholder shall have any right by virtue of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement or any Mortgage
Loan, unless, with respect to any suit, action or proceeding upon or under or
with respect to this Agreement, such Holder previously shall have given to the
Trustee a written notice of default hereunder, and of the continuance thereof,
as hereinbefore provided, and unless also the Holders of Certificates entitled
to at least 25% of the Voting Rights shall have made written request upon the
Trustee to institute such action, suit or proceeding in its own name as Trustee
hereunder and shall have offered to the Trustee such reasonable indemnity as it
may require against the costs, expenses and liabilities to be incurred therein
or thereby, and the Trustee, for 60 days after its receipt of such notice,
request and offer of indemnity, and without receiving notice to the contrary
from Holders of
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Certificates entitled to at least 25% of the Voting Rights, shall have neglected
or refused to institute any such action, suit or proceeding. It is understood
and intended, and expressly covenanted by each Certificateholder with every
other Certificateholder and the Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatsoever by virtue of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder, which priority or
preference is not otherwise provided for herein, or to enforce any right under
this Agreement, except in the manner herein provided and for the equal, ratable
and common benefit of all Certificateholders. For the protection and enforcement
of the provisions of this Section, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
SECTION 11.04. Governing Law.
This Agreement and the Certificates shall be construed in
accordance with the internal laws of the State of New York applicable to
agreements made and to be performed in said State, and the obligations, rights
and remedies of the parties hereunder shall be determined in accordance with
such laws without regard to conflicts of law principles.
SECTION 11.05. Notices.
Any communications provided for or permitted hereunder shall
be in writing and, unless otherwise expressly provided herein, shall be deemed
to have been duly given when delivered to: (i) in the case of the Depositor,
Merrill Lynch Mortgage Investors, Inc., World Financial Center, North Tower, 250
Vesey Street, New York, New York 10281, Attention: the Secretary, with a copy to
the treasurer, facsimile number: 212-449-0735; (ii) in the case of the Master
Servicer, GE Capital Loan Services, Inc., 363 N. Sam Houston Parkway East, Suite
1200, Houston, Texas 77060, Attention: Portfolio Manager Merrill Lynch Mortgage
Pass-Through Certificates, Series 1998-C3, facsimile number: 281-405-7132;
(iii) in the case of the Special Servicer, GE Capital Realty Group, Inc., 16479
Dallas Parkway, Suite 400, Addison, Texas 75001, Attention: Legal Department -
Merrill Lynch Mortgage Investors, Inc., Mortgage Pass-Through Certificates,
Series 1998-C3, facsimile number 972-447-2647; (iv) in the case of the Trustee,
The Chase Manhattan Bank, 450 West 33rd Street, 8th Floor, New York, New York
10001, Attn: Structured Finance Services - CMBS, facsimile number 212-946-8191;
and (v) in the case of the Rating Agencies, (A) Moody's Investors Service,
Inc., 99 Church Street, New York, New York 10007, Attention: CMBS Monitoring;
facsimile number: 212-553-1350; and (B) Standard & Poor's Ratings Group,
25 Broadway, New York, New York 10004, Attention: Real Estate Ratings Group,
Surveillance Manager, facsimile number: 212-412-0597; or as to each such Person
such other address as may hereafter be furnished by such Person to the parties
hereto in writing. Any communication required or permitted to be delivered to a
Certificateholder shall be deemed to have been duly given when mailed first
class, postage prepaid, to the address of such Holder as shown in the
Certificate Register.
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SECTION 11.06. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or
terms of this Agreement shall be for any reason whatsoever held invalid, then
such covenants, agreements, provisions or terms shall be deemed severable from
the remaining covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions of
this Agreement or of the Certificates or the rights of the Holders thereof.
SECTION 11.07. Grant of a Security Interest.
The Depositor intends that the conveyance of the Depositor's
right, title and interest in and to the Mortgage Loans pursuant to this
Agreement shall constitute a sale and not a pledge of security for a loan. If
such conveyance is deemed to be a pledge of security for a loan, however, the
Depositor intends that the rights and obligations of the parties to such loan
shall be established pursuant to the terms of this Agreement. The Depositor also
intends and agrees that, in such event, (i) the Depositor shall be deemed to
have granted to the Trustee (in such capacity) a first priority security
interest in the Depositor's entire right, title and interest in and to the
assets constituting the Trust Fund, and (ii) this Agreement shall constitute a
security agreement under applicable law. This Section 11.07 shall constitute
notice to the Trustee pursuant to any of the requirements of the New York UCC.
SECTION 11.08. Successors and Assigns; Beneficiaries.
The provisions of this Agreement shall be binding upon and
inure to the benefit of the respective successors and assigns of the parties
hereto, and all such provisions shall inure to the benefit of the
Certificateholders. No other Person, including, without limitation, any
Mortgagor, shall be entitled to any benefit or equitable right, remedy or claim
under this Agreement.
SECTION 11.09. Article and Section Headings.
The article and section headings herein are for convenience of
reference only, and shall not limit or otherwise affect the meaning hereof.
SECTION 11.10. Notices to and From Rating Agencies.
(a) The Trustee shall promptly provide notice to each Rating
Agency with respect to each of the following of which it has actual knowledge:
(i) any material change or amendment to this Agreement;
(ii) the occurrence of any Event of Default that
has not been cured;
(iii) the resignation or termination of the Master
Servicer or the Special Servicer;
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(iv) the repurchase or substitution of Mortgage Loans
by the Mortgage Loan Seller pursuant to the Mortgage Loan
Purchase Agreement;
(v) any change in the location of the
Distribution Account;
(vi) the final payment to any Class of
Certificateholders; and
(vii) each of its inspection reports described in
Section 3.12(a) and the statements and reports described in
Section 3.12(b), 3.12(c) and 3.12(d).
(b) The Master Servicer shall promptly provide notice to each
Rating Agency with respect to each of the following of which it has actual
knowledge:
(i) the resignation or removal of the Trustee; and
(ii) any change in the location of the Certificate
Account.
(c) The Special Servicer shall furnish each Rating Agency with
respect to a non-performing or defaulted Mortgage Loan such information as the
Rating Agency shall reasonably request and which the Special Servicer can
reasonably provide in accordance with applicable law and without waiving any
attorney-client privilege attached to such information. The Special Servicer may
attach any reasonable disclaimer it deems appropriate to such information.
(d) To the extent applicable and not previously delivered,
each of the Master Servicer and the Special Servicer shall promptly furnish to
each Rating Agency copies of the following items:
(i) each of its annual statements as to compliance
described in Section 3.13;
(ii) each of its annual independent public
accountants' servicing reports described in Section 3.14; and
(iii) any Officers' Certificate delivered by it to
the Trustee pursuant to Section 4.03(c) or 3.08.
(e) The Trustee shall (i) deliver to each Rating Agency the
items described in Section 3.15 and Section 4.02(a) and (ii) promptly deliver to
each Rating Agency a copy of any notices given pursuant to Section 7.03(a) or
Section 7.03(b).
SECTION 11.11. Complete Agreement.
This Agreement embodies the complete agreement among the
parties and may not be varied or terminated except by a written agreement
conforming to the provisions of
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Section 11.01. All prior negotiations or representations of the parties are
merged into this Agreement and shall have no force or effect unless expressly
stated herein.
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IN WITNESS WHEREOF, the parties hereto have caused their names
to be signed hereto by their respective officers thereunto duly authorized, in
each case as of the day and year first above written.
MERRILL LYNCH MORTGAGE INVESTORS, INC.
Depositor
By: /s/ Michael M. McGovern
---------------------------
Name: Michael M. McGovern
Title: Authorized Signatory
GE CAPITAL LOAN SERVICES, INC.
Master Servicer
By: /s/ Shari Hartwell-Cook
--------------------------
Name: Shari Hartwell-Cook
Title: Senior Vice President
GE CAPITAL REALTY GROUP, INC.
Special Servicer
By: /s/ Bruce D. Wheeless
---------------------------
Name: Bruce D. Wheeless
Title: Vice President
THE CHASE MANHATTAN BANK
Trustee
By: /s/ Thomas J. Provenzano
---------------------------
Name: Thomas J. Provenzano
Title: Vice President
<PAGE>
EXHIBIT A-1
FORM OF CLASS A-1 CERTIFICATE
CLASS A-1 MERRILL LYNCH MORTGAGE INVESTORS, INC.,
SERIES 1998-C3
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool of multifamily and commercial mortgage loans
(the "Mortgage Loans"), such pool being formed and sold by
MERRILL LYNCH MORTGAGE INVESTORS, INC.
<TABLE>
<CAPTION>
<S> <C>
Pass-Through Class Principal Balance of the Class A-1
Rate: ___% per annum Certificates as of the Closing Date: $129,870,000
Date of Pooling and Servicing Initial Certificate Principal Balance of this
Agreement: December 1, 1998 Class A-1 Certificate as of the Closing
Date: $______
Closing Date: December __, 1998 Aggregate Stated Principal
Balance of the Mortgage Loans
as of the Cut-Off Date:
$638,408,606
First Distribution Date:
January 15, 1999
Master Servicer: Trustee:
GE Capital Loan Services, Inc. The Chase Manhattan Bank
Special Servicer:
GE Capital Realty Group, Inc.
Certificate No. CUSIP No. 589929 SW9
</TABLE>
<PAGE>
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST CORPORATION, A NEW YORK CORPORATION ("DTC"), TO THE
CERTIFICATE REGISTRAR OR ANY AGENT THEREOF FOR REGISTRATION OF TRANSFER,
EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN THE
DEPOSITOR, THE UNDERWRITERS, THE MASTER SERVICER, THE SPECIAL SERVICER, THE
TRUSTEE, THE MORTGAGE LOAN SELLERS OR ANY OF THEIR AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE").
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN. IN ADDITION, IF THE AGGREGATE CERTIFICATE
PRINCIPAL BALANCE OF THE CLASS B, CLASS C, CLASS D, CLASS E, CLASS F, CLASS G,
CLASS H, CLASS J AND CLASS K CERTIFICATES OF THE SAME SERIES IS REDUCED TO
ZERO, THE CERTIFICATE PRINCIPAL BALANCE OF THE CLASS A-1 CERTIFICATES, THE
CLASS A-2 AND CLASS A-3 CERTIFICATES MAY BE REDUCED BY CERTAIN LOSSES AND
EXPENSES EXPERIENCED BY THE TRUST FUND AS SET FORTH IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN. ACCORDINGLY, THE OUTSTANDING
CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN ABOVE.
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<PAGE>
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class A-1 Certificate (obtained by
dividing the principal amount of this Class A-1 Certificate (its "Certificate
Principal Balance") as of the Closing Date by the aggregate principal amount of
all the Class A-1 Certificates (their "Class Principal Balance") as of the
Closing Date) in that certain beneficial ownership interest evidenced by all
the Class A-1 Certificates in the Trust Fund created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Merrill
Lynch Mortgage Investors, Inc. (hereinafter called the "Depositor", which term
includes any successor entity under the Agreement), GE Capital Loan Services,
Inc. (hereinafter called the "Master Servicer", which term includes any
successor entity under the Agreement), GE Capital Realty Group, Inc.
(hereinafter called the "Special Servicer", which term includes any successor
entities under the Agreement), and The Chase Manhattan Bank (hereinafter called
the "Trustee", which term includes any successor entity under the Agreement), a
summary of certain of the pertinent provisions of which is set forth hereafter.
To the extent not defined herein, the capitalized terms used herein have the
respective meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 15th day of each month or, if such 15th day is not a Business Day,
the Business Day immediately following (each, a "Distribution Date") (provided,
however, that the Distribution Date will be no earlier than the fourth Business
Day following the related Determination Date), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of the
Class A-1 Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on the Class A-1
Certificates will be made by The Chase Manhattan Bank, as paying agent (the
"Paying Agent"), by wire transfer of immediately available funds to the account
of the Person entitled thereto at a bank or other entity having appropriate
facilities therefor, if such Certificateholder shall have provided the Paying
Agent with wiring instructions no less than five Business Days prior to the
related Record Date (which wiring instructions may be in the form of a standing
order applicable to all subsequent distributions) or otherwise by check mailed
to the address of such Certificateholder as it appears in the Certificate
Register. Notwithstanding the foregoing, the final distribution on this
Certificate (determined without regard
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<PAGE>
to any possible future reimbursement of any Realized Loss or Additional Trust
Fund Expense previously allocated to this Certificate) will be made in like
manner, but only upon presentation and surrender of this Certificate at the
offices of the Trustee or such other location specified in the notice to the
Holder hereof of such final distribution. Also notwithstanding the foregoing,
any distribution that may be made with respect to this Certificate in
reimbursement of any Realized Loss or Additional Trust Fund Expense previously
allocated to this Certificate, which reimbursement is to occur after the date
on which this Certificate is surrendered as contemplated by the preceding
sentence, will be made by check mailed to the address of the Holder that
surrenders this Certificate as such address last appears in the Certificate
Register or to any such other address of which the Trustee is subsequently
notified in writing.
The Certificates are limited in right of distribution to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Certificate Account, the Distribution Account
and, if established, the REO Account may be made from time to time for purposes
other than, and, in certain cases, prior to, distributions to
Certificateholders, such purposes including the reimbursement of advances made,
or certain expenses incurred, with respect to the Mortgage Loans and the
payment of interest on such advances and expenses.
Any distribution to the Holder of this Certificate in
reduction of the Certificate Principal Balance hereof is binding on such Holder
and all future Holders of this Certificate and any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such distribution is made upon this Certificate.
The Class A-1 Certificates are issuable in fully registered
form only without coupons in minimum denominations specified in the Agreement.
As provided in the Agreement and subject to certain limitations therein set
forth, Class A-1 Certificates are exchangeable for new Class A-1 Certificates
in authorized denominations evidencing the same aggregate Percentage Interest,
as requested by the Holder surrendering the same.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices of the Certificate Registrar, duly endorsed by, or
accompanied by a written instrument of transfer in the form satisfactory to the
Certificate Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Class A-1 Certificates in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.
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<PAGE>
No service charge will be imposed for any registration of
transfer or exchange of Class A-1 Certificates, but the Certificate Registrar
may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of Class
A-1 Certificates.
Notwithstanding the foregoing, for so long as this
Certificate is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC, transfers of interests in
this Certificate shall be made through the book-entry facilities of DTC.
The Depositor, the Master Servicer, the Special Servicer, the
Trustee, the Paying Agent and the Certificate Registrar and any agent of the
Depositor, the Master Servicer, the Special Servicer, the Trustee, the Paying
Agent or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Special Servicer, the Trustee, the Paying
Agent, the Certificate Registrar or any such agent shall be affected by notice
to the contrary.
The Trust Fund and the obligations created by the Agreement shall
terminate upon distribution (or provision for distribution) to the
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be distributed to them pursuant to the Agreement following the
earlier of (i) the final payment or other liquidation (or any Advance with
respect thereto) of the last Mortgage Loan or REO Property remaining in the
Trust Fund, and (ii) the purchase by the Majority Subordinate Certificateholder,
the Depositor, the Master Servicer or the Special Servicer at a price determined
as provided in the Agreement of all Mortgage Loans and each REO Property
remaining in the Trust Fund. The Agreement permits, but does not require, the
Majority Subordinate Certificateholder, the Depositor, the Master Servicer or
the Special Servicer, in that order, to elect to purchase from the Trust Fund
all Mortgage Loans and each REO Property remaining therein. The exercise of
such right will effect early retirement of the Class A-1 Certificates; however,
such right to elect to purchase is subject to the aggregate Stated Principal
Balance of the Mortgage Pool at the time of election being less than 1% of the
aggregate Cut-Off Date Balance of the Mortgage Loans.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Special Servicer and the
Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Master Servicer, the Special Servicer and the
Trustee with the consent of the Holders of Certificates entitled to at least
51% of the Voting Rights allocated to the affected
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<PAGE>
Classes. Any such consent by the Holder of this Certificate shall be conclusive
and binding on such Holder and upon all future Holders of this Certificate and
of any Certificate issued upon the transfer hereof or in exchange herefor or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, including any amendment necessary to maintain the status
of the Trust Fund (or designated portions thereof) as a REMIC, without the
consent of the Holders of any of the Certificates.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, the Holder of this
Certificate shall not be entitled to any benefit under the Agreement or be
valid for any purpose.
The registered Holder hereof, by its acceptance hereof,
agrees that it will look solely to the Trust Fund (to the extent of its rights
therein) for distributions hereunder.
This Certificate shall be construed in accordance with the
internal laws of the State of New York applicable to agreements made and to be
performed in said State, and the obligations, rights and remedies of the Holder
hereof shall be determined in accordance with such laws.
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<PAGE>
IN WITNESS WHEREOF, the Certificate Registrar has caused this
Certificate to be duly executed.
Dated: December __, 1998
THE CHASE MANHATTAN BANK,
as Certificate Registrar
By:
----------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-1 Certificates referred to in the
within-mentioned Agreement.
THE CHASE MANHATTAN BANK
as Authenticating Agent
By:
----------------------
Authorized Officer
-7-
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Mortgage Pass-Through Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.
I (we) further direct the Certificate Registrar to issue a
new Mortgage Pass-Through Certificate of a like Percentage Interest and Class
to the above named assignee and deliver such Mortgage Pass-Through Certificate
to the following address:
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Dated:
------------------------------------
Signature by or on behalf of Assignor
------------------------------------
Signature Guaranteed
-8-
<PAGE>
DISTRIBUTION INSTRUCTIONS
The Assignee should include the following for purposes of
distribution:
Distributions shall, if permitted, be made by wire
transfer or otherwise, in immediately available funds, to _________________
_______________________________________________________________________________
for the account of ____________________________________________________________
_______________________________________________________________________________.
Distributions made by check (such check to be made
payable to _______________________________) and all applicable statements and
notices should be mailed to ___________________________________________________
_______________________________________________________________________________.
This information is provided by _____________________________,
the Assignee named above, or ______________, as its agent.
-9-
<PAGE>
EXHIBIT A-2
FORM OF CLASS A-2 CERTIFICATE
CLASS A-2 MERRILL LYNCH MORTGAGE INVESTORS, INC.,
SERIES 1998-C3
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool of multifamily and commercial mortgage loans
(the "Mortgage Loans"), such pool being formed and sold by
MERRILL LYNCH MORTGAGE INVESTORS, INC.
<TABLE>
<CAPTION>
<S> <C>
Pass-Through Class Principal Balance of the Class A-2
Rate: ___% per annum Certificates as of the Closing Date:
$75,490,000
Date of Pooling and Servicing Initial Certificate Principal Balance of
Agreement: December 1, 1998 this Class A-2 Certificate as of the
Closing Date: $______
Closing Date: December __, 1998 Aggregate Stated Principal
Balance of the Mortgage Loans
as of the Cut-Off Date:
$638,408,606
First Distribution Date:
January 15, 1999
Master Servicer: Trustee:
GE Capital Loan Services, Inc. The Chase Manhattan Bank
Special Servicer:
GE Capital Realty Group, Inc.
Certificate No. CUSIP No. 589929 SX7
</TABLE>
<PAGE>
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST CORPORATION, A NEW YORK CORPORATION ("DTC"), TO THE
CERTIFICATE REGISTRAR OR ANY AGENT THEREOF FOR REGISTRATION OF TRANSFER,
EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN THE
DEPOSITOR, THE UNDERWRITERS, THE MASTER SERVICER, THE SPECIAL SERVICER, THE
TRUSTEE, THE MORTGAGE LOAN SELLERS OR ANY OF THEIR AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 AS AMENDED (THE "CODE").
IF THE AGGREGATE CERTIFICATE PRINCIPAL BALANCE OF THE CLASS A-1 CERTIFICATES OF
THE SAME SERIES IS REDUCED TO ZERO, DISTRIBUTIONS IN REDUCTION OF THE
CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET
FORTH IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN. IN ADDITION,
IF THE AGGREGATE CERTIFICATE PRINCIPAL BALANCE OF THE CLASS B, CLASS C, CLASS
D, CLASS E, CLASS F, CLASS G, CLASS H, CLASS J AND CLASS K CERTIFICATES OF THE
SAME SERIES IS REDUCED TO ZERO, THE CERTIFICATE PRINCIPAL BALANCE OF CLASS A-2
CERTIFICATES, THE CLASS A-1 AND THE CLASS A-3 CERTIFICATES MAY BE REDUCED BY
CERTAIN LOSSES AND EXPENSES EXPERIENCED BY THE TRUST FUND AS SET FORTH IN THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN
THE AMOUNT SHOWN ABOVE.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class A-2 Certificate (obtained by
dividing the principal amount of this Class A-2 Certificate (its "Certificate
Principal Balance") as of the Closing Date by the aggregate principal amount of
all the Class A-2 Certificates (their "Class Principal Balance") as of the
Closing Date) in that certain beneficial ownership interest evidenced by all
the Class A-2 Certificates in the Trust Fund
-2-
<PAGE>
created pursuant to a Pooling and Servicing Agreement, dated as specified above
(the "Agreement"), among Merrill Lynch Mortgage Investors, Inc. (hereinafter
called the "Depositor", which term includes any successor entity under the
Agreement), GE Capital Loan Services, Inc. (hereinafter called the "Master
Servicer", which term includes any successor entity under the Agreement), GE
Capital Realty Group, Inc. (hereinafter called the "Special Servicer", which
term includes any successor entities under the Agreement), and The Chase
Manhattan Bank (hereinafter called the "Trustee", which term includes any
successor entity under the Agreement), a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the respective meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 15th day of each month or, if such 15th day is not a Business Day,
the Business Day immediately following (each, a "Distribution Date") (provided,
however, that the Distribution Date will be no earlier than the fourth Business
Day following the related Determination Date), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of the
Class A-2 Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on the Class A-2
Certificates will be made by The Chase Manhattan Bank, as paying agent (the
"Paying Agent"), by wire transfer of immediately available funds to the account
of the Person entitled thereto at a bank or other entity having appropriate
facilities therefor, if such Certificateholder shall have provided the Paying
Agent with wiring instructions no less than five Business Days prior to the
related Record Date (which wiring instructions may be in the form of a standing
order applicable to all subsequent distributions) or otherwise by check mailed
to the address of such Certificateholder as it appears in the Certificate
Register. Notwithstanding the foregoing, the final distribution on this
Certificate (determined without regard to any possible future reimbursement of
any Realized Loss or Additional Trust Fund Expense previously allocated to this
Certificate) will be made in like manner, but only upon presentation and
surrender of this Certificate at the offices of the Trustee or such other
location specified in the notice to the Holder hereof of such final
distribution. Also notwithstanding
-3-
<PAGE>
the foregoing, any distribution that may be made with respect to this
Certificate in reimbursement of any Realized Loss or Additional Trust Fund
Expense previously allocated to this Certificate, which reimbursement is to
occur after the date on which this Certificate is surrendered as contemplated
by the preceding sentence, will be made by check mailed to the address of the
Holder that surrenders this Certificate as such address last appears in the
Certificate Register or to any such other address of which the Trustee is
subsequently notified in writing.
The Certificates are limited in right of distribution to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Certificate Account, the Distribution Account
and, if established, the REO Account may be made from time to time for purposes
other than, and, in certain cases, prior to, distributions to
Certificateholders, such purposes including the reimbursement of advances made,
or certain expenses incurred, with respect to the Mortgage Loans and the
payment of interest on such advances and expenses.
Any distribution to the Holder of this Certificate in
reduction of the Certificate Principal Balance hereof is binding on such Holder
and all future Holders of this Certificate and any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such distribution is made upon this Certificate.
The Class A-2 Certificates are issuable in fully registered
form only without coupons in minimum denominations specified in the Agreement.
As provided in the Agreement and subject to certain limitations therein set
forth, Class A-2 Certificates are exchangeable for new Class A-2 Certificates
in authorized denominations evidencing the same aggregate Percentage Interest,
as requested by the Holder surrendering the same.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices of the Certificate Registrar, duly endorsed by, or
accompanied by a written instrument of transfer in the form satisfactory to the
Certificate Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Class A-2 Certificates in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.
No service charge will be imposed for any registration of
transfer or exchange of Class A-2 Certificates, but the
-4-
<PAGE>
Certificate Registrar may require payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in connection with any
transfer or exchange of Class A-2 Certificates.
Notwithstanding the foregoing, for so long as this
Certificate is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC, transfers of interests in
this Certificate shall be made through the book-entry facilities of DTC.
The Depositor, the Master Servicer, the Special Servicer, the
Trustee, the Paying Agent and the Certificate Registrar and any agent of the
Depositor, the Master Servicer, the Special Servicer, the Trustee, the Paying
Agent or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Special Servicer, the Trustee, the Paying
Agent, the Certificate Registrar or any such agent shall be affected by notice
to the contrary.
The Trust Fund and the obligations created by the Agreement
shall terminate upon distribution (or provision for distribution) to the
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be distributed to them pursuant to the Agreement following the
earlier of (i) the final payment or other liquidation (or any Advance with
respect thereto) of the last Mortgage Loan or REO Property remaining in the
Trust Fund, and (ii) the purchase by the Majority Subordinate
Certificateholder, the Depositor, the Master Servicer or the Special Servicer
at a price determined as provided in the Agreement of all Mortgage Loans and
each REO Property remaining in the Trust Fund. The Agreement permits, but does
not require, the Majority Subordinate Certificateholder, the Depositor, the
Master Servicer or the Special Servicer, in that order, to elect to purchase
from the Trust Fund all Mortgage Loans and each REO Property remaining therein.
The exercise of such right will effect early retirement of the Class A-2
Certificates; however, such right to elect to purchase is subject to the
aggregate Stated Principal Balance of the Mortgage Pool at the time of election
being less than 1% of the aggregate Cut-Off Date Balance of the Mortgage Loans.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Special Servicer and the
Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Master Servicer, the Special Servicer and the
Trustee with the consent of the Holders of Certificates entitled to at least
51% of the Voting Rights allocated to the affected
-5-
<PAGE>
Classes. Any such consent by the Holder of this Certificate shall be conclusive
and binding on such Holder and upon all future Holders of this Certificate and
of any Certificate issued upon the transfer hereof or in exchange herefor or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, including any amendment necessary to maintain the status
of the Trust Fund (or designated portions thereof) as a REMIC, without the
consent of the Holders of any of the Certificates.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, the Holder of this
Certificate shall not be entitled to any benefit under the Agreement or be
valid for any purpose.
The registered Holder hereof, by its acceptance hereof,
agrees that it will look solely to the Trust Fund (to the extent of its rights
therein) for distributions hereunder.
This Certificate shall be construed in accordance with the
internal laws of the State of New York applicable to agreements made and to be
performed in said State, and the obligations, rights and remedies of the Holder
hereof shall be determined in accordance with such laws.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-6-
<PAGE>
IN WITNESS WHEREOF, the Certificate Registrar has caused this
Certificate to be duly executed.
Dated: December __, 1998
THE CHASE MANHATTAN BANK,
as Certificate Registrar
By:______________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-2 Certificates referred to in the
within-mentioned Agreement.
THE CHASE MANHATTAN BANK
as Authenticating Agent
By:______________________
Authorized Officer
-7-
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
_______________________________________________________________________________
______________________________________________________________________________
_______________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Mortgage Pass-Through Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.
I (we) further direct the Certificate Registrar to issue a
new Mortgage Pass-Through Certificate of a like Percentage Interest and Class
to the above named assignee and deliver such Mortgage Pass-Through Certificate
to the following address:
_______________________________________________________________________________
_______________________________________________________________________________
Dated:
____________________________________
Signature by or on behalf of Assignor
____________________________________
Signature Guaranteed
-8-
<PAGE>
DISTRIBUTION INSTRUCTIONS
The Assignee should include the following for purposes of
distribution:
Distributions shall, if permitted, be made by wire transfer
or otherwise, in immediately available funds, to ______________________________
_______________________________________________________________________________
for the account of ____________________________________________________________
_______________________________________________________________________________.
Distributions made by check (such check to be made
payable to _________________________________) and all applicable statements and
notices should be mailed to ___________________________________________________
_______________________________________________________________________________.
This information is provided by ______________________,
the Assignee named above, or ______________, as its agent.
-9-
<PAGE>
EXHIBIT A-3
FORM OF CLASS A-3 CERTIFICATE
CLASS A-3 MERRILL LYNCH MORTGAGE INVESTORS, INC.,
SERIES 1998-C3
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool of multifamily and commercial mortgage loans
(the "Mortgage Loans"), such pool being formed and sold by
MERRILL LYNCH MORTGAGE INVESTORS, INC.
<TABLE>
<CAPTION>
<S> <C>
Pass-Through Class Principal Balance of the Class A-3
Rate: ___% per annum Certificates as of the Closing Date: $243,122,000
Date of Pooling and Servicing Initial Certificate Principal Balance of this Class
Agreement: December 1, 1998 A-3 Certificate as of the Closing Date: $______
Closing Date: December __, 1998 Aggregate Stated Principal
Balance of the Mortgage Loans
as of the Cut-Off Date:
$638,408,606
First Distribution Date:
January 15, 1999
Master Servicer: Trustee:
GE Capital Loan Services, Inc. The Chase Manhattan Bank
Special Servicer:
GE Capital Realty Group, Inc.
Certificate No. CUSIP No. 589929 SY5
</TABLE>
<PAGE>
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST CORPORATION, A NEW YORK CORPORATION ("DTC"), TO THE
CERTIFICATE REGISTRAR OR ANY AGENT THEREOF FOR REGISTRATION OF TRANSFER,
EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN THE
DEPOSITOR, THE UNDERWRITERS, THE MASTER SERVICER, THE SPECIAL SERVICER, THE
TRUSTEE, THE MORTGAGE LOAN SELLERS OR ANY OF THEIR AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 AS AMENDED (THE "CODE").
IF THE AGGREGATE CERTIFICATE PRINCIPAL BALANCES OF THE CLASS A-1 CERTIFICATES
AND THE CLASS A-2 CERTIFICATES OF THE SAME SERIES ARE REDUCED TO ZERO,
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN. IN ADDITION, IF THE AGGREGATE CERTIFICATE
PRINCIPAL BALANCE OF THE CLASS B, CLASS C, CLASS D, CLASS E, CLASS F, CLASS G,
CLASS H, CLASS J AND CLASS K CERTIFICATES OF THE SAME SERIES IS REDUCED TO
ZERO, THE CERTIFICATE PRINCIPAL BALANCE OF THE CLASS A-3 CERTIFICATES, THE
CLASS A-1 AND THE CLASS A-2 CERTIFICATES MAY BE REDUCED BY CERTAIN LOSSES AND
EXPENSES EXPERIENCED BY THE TRUST FUND AS SET FORTH IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN. ACCORDINGLY, THE OUTSTANDING
CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN ABOVE.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class A-3 Certificate (obtained by
dividing the principal amount of this Class A-3 Certificate (its "Certificate
Principal Balance") as of the Closing Date by the aggregate principal amount of
all the Class A-3 Certificates (their "Class Principal Balance") as of the
Closing Date) in that certain beneficial ownership interest evidenced by all
the Class A-3 Certificates in the Trust Fund
-2-
<PAGE>
created pursuant to a Pooling and Servicing Agreement, dated as specified
above (the "Agreement"), among Merrill Lynch Mortgage Investors, Inc.,
(hereinafter called the "Depositor", which term includes any successor entity
under the Agreement), GE Capital Loan Services, Inc. (hereinafter called the
"Master Servicer", which term includes any successor entity under the
Agreement), GE Capital Realty Group, Inc. (hereinafter called the "Special
Servicer", which term includes any successor entities under the Agreement),
and The Chase Manhattan Bank (hereinafter called the "Trustee", which term
includes any successor entity under the Agreement), a summary of certain of the
pertinent provisions of which is set forth hereafter. To the extent not defined
herein, the capitalized terms used herein have the respective meanings assigned
in the Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 15th day of each month or, if such 15th day is not a Business Day,
the Business Day immediately following (each, a "Distribution Date") (provided,
however, that the Distribution Date will be no earlier than the fourth Business
Day following the related Determination Date), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of the
Class A-3 Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on the Class A-3
Certificates will be made by The Chase Manhattan Bank, as paying agent (the
"Paying Agent"), by wire transfer of immediately available funds to the account
of the Person entitled thereto at a bank or other entity having appropriate
facilities therefor, if such Certificateholder shall have provided the Paying
Agent with wiring instructions no less than five Business Days prior to the
related Record Date (which wiring instructions may be in the form of a standing
order applicable to all subsequent distributions) or otherwise by check mailed
to the address of such Certificateholder as it appears in the Certificate
Register. Notwithstanding the foregoing, the final distribution on this
Certificate (determined without regard to any possible future reimbursement of
any Realized Loss or Additional Trust Fund Expense previously allocated to this
Certificate) will be made in like manner, but only upon presentation and
surrender of this Certificate at the offices of the Trustee or such other
location specified in the notice to the Holder hereof of such final
distribution. Also notwithstanding
-3-
<PAGE>
the foregoing, any distribution that may be made with respect to this
Certificate in reimbursement of any Realized Loss or Additional Trust Fund
Expense previously allocated to this Certificate, which reimbursement is to
occur after the date on which this Certificate is surrendered as contemplated
by the preceding sentence, will be made by check mailed to the address of the
Holder that surrenders this Certificate as such address last appears in the
Certificate Register or to any such other address of which the Trustee is
subsequently notified in writing.
The Certificates are limited in right of distribution to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Certificate Account, the Distribution Account
and, if established, the REO Account may be made from time to time for purposes
other than, and, in certain cases, prior to, distributions to
Certificateholders, such purposes including the reimbursement of advances made,
or certain expenses incurred, with respect to the Mortgage Loans and the
payment of interest on such advances and expenses.
Any distribution to the Holder of this Certificate in
reduction of the Certificate Principal Balance hereof is binding on such Holder
and all future Holders of this Certificate and any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such distribution is made upon this Certificate.
The Class A-3 Certificates are issuable in fully registered
form only without coupons in minimum denominations specified in the Agreement.
As provided in the Agreement and subject to certain limitations therein set
forth, Class A-3 Certificates are exchangeable for new Class A-3 Certificates
in authorized denominations evidencing the same aggregate Percentage Interest,
as requested by the Holder surrendering the same.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices of the Certificate Registrar, duly endorsed by, or
accompanied by a written instrument of transfer in the form satisfactory to the
Certificate Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Class A-3 Certificates in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.
No service charge will be imposed for any registration of
transfer or exchange of Class A-3 Certificates, but the
-4-
<PAGE>
Certificate Registrar may require payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection with
any transfer or exchange of Class A-3 Certificates.
Notwithstanding the foregoing, for so long as this
Certificate is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC, transfers of interests in
this Certificate shall be made through the book-entry facilities of DTC.
The Depositor, the Master Servicer, the Special Servicer, the
Trustee, the Paying Agent and the Certificate Registrar and any agent of the
Depositor, the Master Servicer, the Special Servicer, the Trustee, the Paying
Agent or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Special Servicer, the Trustee, the Paying
Agent, the Certificate Registrar or any such agent shall be affected by notice
to the contrary.
The Trust Fund and the obligations created by the Agreement
shall terminate upon distribution (or provision for distribution) to the
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be distributed to them pursuant to the Agreement following the
earlier of (i) the final payment or other liquidation (or any Advance with
respect thereto) of the last Mortgage Loan or REO Property remaining in the
Trust Fund, and (ii) the purchase by the Majority Subordinate
Certificateholder, the Depositor, the Master Servicer or the Special Servicer
at a price determined as provided in the Agreement of all Mortgage Loans and
each REO Property remaining in the Trust Fund. The Agreement permits, but does
not require, the Majority Subordinate Certificateholder, the Depositor, the
Master Servicer or the Special Servicer, in that order, to elect to purchase
from the Trust Fund all Mortgage Loans and each REO Property remaining therein.
The exercise of such right will effect early retirement of the Class A-3
Certificates; however, such right to elect to purchase is subject to the
aggregate Stated Principal Balance of the Mortgage Pool at the time of election
being less than 1% of the aggregate Cut-Off Date Balance of the Mortgage Loans.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Special Servicer and the
Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Master Servicer, the Special Servicer and the
Trustee with the consent of the Holders of Certificates entitled
-5-
<PAGE>
to at least 51% of the Voting Rights allocated to the affected Classes. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances, including any amendment necessary to maintain the status of the
Trust Fund (or designated portions thereof) as a REMIC, without the consent of
the Holders of any of the Certificates.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, the Holder of this
Certificate shall not be entitled to any benefit under the Agreement or be
valid for any purpose.
The registered Holder hereof, by its acceptance hereof,
agrees that it will look solely to the Trust Fund (to the extent of its rights
therein) for distributions hereunder.
This Certificate shall be construed in accordance with the
internal laws of the State of New York applicable to agreements made and to be
performed in said State, and the obligations, rights and remedies of the Holder
hereof shall be determined in accordance with such laws.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-6-
<PAGE>
IN WITNESS WHEREOF, the Certificate Registrar has caused this
Certificate to be duly executed.
Dated: December __, 1998
THE CHASE MANHATTAN BANK,
as Certificate Registrar
By: __________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-3 Certificates referred to in the
within-mentioned Agreement.
THE CHASE MANHATTAN BANK
as Authenticating Agent
By: __________________
Authorized Officer
-7-
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Mortgage Pass-Through Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.
I (we) further direct the Certificate Registrar to issue a
new Mortgage Pass-Through Certificate of a like Percentage Interest and Class
to the above named assignee and deliver such Mortgage Pass-Through Certificate
to the following address:
_______________________________________________________________________________
_______________________________________________________________________________
Dated:
_____________________________________
Signature by or on behalf of Assignor
_____________________________________
Signature Guaranteed
-8-
<PAGE>
DISTRIBUTION INSTRUCTIONS
The Assignee should include the following for purposes of distribution:
Distributions shall, if permitted, be made by wire transfer or
otherwise, in immediately available funds, to _________________________________
_______________________________________________________________________________
for the account of ____________________________________________________________
______________________________________________________________________________.
Distributions made by check (such check to be made payable to
__________________________________________) and all applicable statements and
notices should be mailed to ____________________________________.
This information is provided by ______________________, the Assignee
named above, or ______________, as its agent.
-9-
<PAGE>
EXHIBIT A-4
FORM OF CLASS IO CERTIFICATE
CLASS IO MERRILL LYNCH MORTGAGE INVESTORS, INC.,
SERIES 1998-C3
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool of multifamily and commercial mortgage loans
(the "Mortgage Loans"), such pool being formed and sold by
MERRILL LYNCH MORTGAGE INVESTORS, INC.
<TABLE>
<CAPTION>
<S> <C>
Pass-Through
Rate: ___%
Date of Pooling and Servicing Aggregate Certificate Notional Amount of the Class
Agreement: December __, 1998 IO Certificates as of the Closing Date: $638,408,605
Closing Date: December __, 1998 Certificate Notional Amount of this Class IO
Certificate as of the Closing Date:
$------
First Distribution Date: Aggregate Stated Principal Balance of the Mortgage
January 15, 1999 loans as of the Cut-Off Date $638,408,606
Master Servicer: Trustee:
GE Capital Loan Services, Inc. The Chase Manhattan Bank
Special Servicer:
GE Capital Realty Group, Inc.
Certificate No. CUSIP No. 589929 TD0
</TABLE>
THIS CERTIFICATE IS NOT ENTITLED TO INTEREST ON THE CERTIFICATE NOTIONAL AMOUNT,
BUT IS ENTITLED TO RECEIVE INTEREST ON ITS COMPONENTS AS SET FORTH IN THE
POOLING AND SERVICING AGREEMENT.
<PAGE>
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST CORPORATION, A NEW YORK CORPORATION ("DTC"), TO THE
CERTIFICATE REGISTRAR OR ANY AGENT THEREOF FOR REGISTRATION OF TRANSFER,
EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN THE
DEPOSITOR, THE UNDERWRITERS, THE MASTER SERVICER, THE SPECIAL SERVICER, THE
TRUSTEE, THE MORTGAGE LOAN SELLERS OR ANY OF THEIR AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE EVIDENCES A
BENEFICIAL OWNERSHIP INTEREST IN 12 "REGULAR INTERESTS" IN A "REAL ESTATE
MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE TERMS ARE DEFINED,
RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986,
AS AMENDED (THE "CODE"). THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE
PURPOSES OF APPLYING THE U.S. FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT
("OID") RULES TO THIS CERTIFICATE. THE ISSUE DATE OF THIS CERTIFICATE IS
DECEMBER __, 1998. ASSUMING THAT THE MORTGAGE LOANS PREPAY AT AN ASSUMED RATE
OF PREPAYMENT USED SOLELY FOR THE PURPOSES OF APPLYING THE OID RULES TO THE
CERTIFICATES EQUAL TO A CPR (AS DEFINED IN THE PROSPECTUS DATED FEBRUARY 28,
1998 AND THE PROSPECTUS SUPPLEMENT DATED DECEMBER 17, 1998 RELATING TO THIS
CERTIFICATE) OF 0% AND THAT THE ARD LOANS ARE REPAID IN FULL ON THEIR
RESPECTIVE ANTICIPATED REPAYMENT DATES AS SET FORTH IN SUCH PROSPECTUS
SUPPLEMENT (THE "PREPAYMENT ASSUMPTION"), THIS CERTIFICATE HAS BEEN ISSUED WITH
NO MORE THAN $________ OF OID PER $1,000 OF INITIAL CERTIFICATE NOTIONAL
AMOUNT, THE YIELD TO MATURITY IS ___% PER ANNUM, AND THE AMOUNT OF OID
ATTRIBUTABLE TO THE INITIAL ACCRUAL PERIOD IS NO MORE THAN $____________ PER
$1,000 OF INITIAL CERTIFICATE NOTIONAL AMOUNT, COMPUTED UNDER THE EXACT METHOD.
NO REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL PREPAY AT A RATE BASED
ON THE PREPAYMENT ASSUMPTION OR AT ANY OTHER RATE.
THIS CERTIFICATE DOES NOT HAVE A CERTIFICATE PRINCIPAL BALANCE AND WILL NOT
ENTITLE THE HOLDER HEREOF TO DISTRIBUTIONS OF PRINCIPAL.
-2-
<PAGE>
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class IO Certificate in that certain
beneficial ownership interest evidenced by all the Class IO Certificates in the
Trust Fund created pursuant to a Pooling and Servicing Agreement, dated as
specified above (the "Agreement"), among Merrill Lynch Mortgage Investors, Inc.
(hereinafter called the "Depositor", which term includes any successor entity
under the Agreement), GE Capital Loan Services, Inc. (hereinafter called the
"Master Servicer", which term includes any successor entity under the
Agreement), GE Capital Realty Group, Inc. (hereinafter called the "Special
Servicer", which term includes any successor entities under the Agreement), and
The Chase Manhattan Bank (hereinafter called the "Trustee", which term includes
any successor entity under the Agreement), a summary of certain of the
pertinent provisions of which is set forth hereafter. To the extent not defined
herein, the capitalized terms used herein have the respective meanings assigned
in the Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 15th day of each month or, if such 15th day is not a Business Day,
the Business Day immediately following (each, a "Distribution Date") (provided,
however, that the Distribution Date will be no earlier than the fourth Business
Day following the related Determination Date), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of the
Class IO Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on the Class IO
Certificates will be made by The Chase Manhattan Bank as paying agent (the
"Paying Agent"), by wire transfer of immediately available funds to the account
of the Person entitled thereto at a bank or other entity having appropriate
facilities therefor, if such Certificateholder shall have provided the Paying
Agent with wiring instructions no less than five Business Days prior to the
related Record Date (which wiring instructions may be in the form of a standing
order applicable to all subsequent distributions), or otherwise by check mailed
to the address of such Certificateholder as it appears in the Certificate
Register. Notwithstanding the foregoing, the final distribution on this
Certificate will be made in like manner, but only upon presentation and
surrender of
-3-
<PAGE>
this Certificate at the offices of the Trustee or such other location
specified in the notice to Certificateholders of such final distribution.
The Certificates are limited in right of distribution to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Certificate Account, the Distribution Account
and, if established, the REO Account may be made from time to time for purposes
other than, and, in certain cases, prior to, distributions to
Certificateholders, such purposes including the reimbursement of advances made,
or certain expenses incurred, with respect to the Mortgage Loans and the
payment of interest on such advances and expenses.
The Class IO Certificates are issuable in fully registered
form only without coupons in minimum denominations specified in the Agreement.
As provided in the Agreement and subject to certain limitations therein set
forth, Class IO Certificates are exchangeable for new Class IO Certificates in
authorized denominations evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices of the Certificate Registrar, duly endorsed by, or
accompanied by a written instrument of transfer in the form satisfactory to the
Certificate Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Class IO Certificates in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.
No service charge will be imposed for any registration of
transfer or exchange of Class IO Certificates, but the Certificate Registrar
may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of Class
IO Certificates.
Notwithstanding the foregoing, for so long as this
Certificate is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC, transfers of interests in
this Certificate shall be made through the book-entry facilities of DTC.
The Depositor, the Master Servicer, the Special Servicer, the
Trustee, the Paying Agent and the Certificate
-4-
<PAGE>
Registrar and any agent of the Depositor, the Master Servicer, the Special
Servicer, the Trustee, the Paying Agent or the Certificate Registrar may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and none of the Depositor, the Master Servicer, the Special
Servicer, the Trustee, the Paying Agent, the Certificate Registrar or any such
agent shall be affected by notice to the contrary.
The Trust Fund and the obligations created by the Agreement
shall terminate upon distribution (or provision for distribution) to the
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be distributed to them pursuant to the Agreement following the
earlier of (i) the final payment or other liquidation (or any Advance with
respect thereto) of the last Mortgage Loan or REO Property remaining in the
Trust Fund, and (ii) the purchase by the Majority Subordinate Certificate
Holder, the Depositor, the Master Servicer or the Special Servicer at a price
determined as provided in the Agreement of all Mortgage Loans and each REO
Property remaining in the Trust Fund. The Agreement permits, but does not
require, the Majority Subordinate Certificate Holder, the Depositor, the Master
Servicer or the Special Servicer, in that order, to elect to purchase from the
Trust Fund all Mortgage Loans and each REO Property remaining therein. The
exercise of such right will effect early retirement of the Class IO
Certificates; however, such right to elect to purchase is subject to the
aggregate Stated Principal Balance of the Mortgage Pool at the time of election
being less than 1% of the aggregate Cut-Off Date Balance of the Mortgage Loans.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Special Servicer and the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Master Servicer, the Special Servicer and the Trustee with
the consent of the Holders of Certificates entitled to at least 51% of the
Voting Rights allocated to the affected Classes. Any such consent by the Holder
of this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, including any amendment
necessary to maintain the status of the Trust Fund (or designated portions
thereof) as a REMIC, without the consent of the Holders of any of the
Certificates.
-5-
<PAGE>
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
The registered Holder hereof, by its acceptance hereof,
agrees that it will look solely to the Trust Fund (to the extent of its rights
therein) for distributions hereunder.
This Certificate shall be construed in accordance with the
internal laws of the State of New York applicable to agreements made and to be
performed in said State, and the obligations, rights and remedies of the Holder
hereof shall be determined in accordance with such laws.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-6-
<PAGE>
IN WITNESS WHEREOF, the Certificate Registrar has caused this
Certificate to be duly executed.
Dated: December __, 1998
THE CHASE MANHATTAN BANK
as Certificate Registrar
By:______________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class IO Certificates referred to in the
within-mentioned Agreement.
THE CHASE MANHATTAN BANK
as Authenticating Agent
By:______________________
Authorized Officer
-7-
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Mortgage Pass-Through Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.
I (we) further direct the Certificate Registrar to issue a
new Mortgage Pass-Through Certificate of a like Percentage Interest and Class
to the above named assignee and deliver such Mortgage Pass-Through Certificate
to the following address:______________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
Dated:
____________________________________
Signature by or on behalf of Assignor
____________________________________
Signature Guaranteed
-8-
<PAGE>
DISTRIBUTION INSTRUCTIONS
The Assignee should include the following for purposes of
distribution:
Distributions shall, if permitted, be made by wire transfer
or otherwise, in immediately available funds, to_______________________________
_______________________________________________________________________________
for the account of ____________________________________________________________
_______________________________________________________________________________
Distributions made by check (such check to be made payable to
_____________________________________) and all applicable statements and
notices should be mailed to ___________________________________________________
_______________________________________________________________________________
This information is provided by _____________________________,
the Assignee named above, or ______________, as its agent.
-9-
<PAGE>
EXHIBIT A-5
FORM OF CLASS B CERTIFICATE
CLASS B MERRILL LYNCH MORTGAGE INVESTORS, INC.,
SERIES 1998-C3
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool of multifamily and commercial mortgage loans
(the "Mortgage Loans"), such pool being formed and sold by
MERRILL LYNCH MORTGAGE INVESTORS, INC.
<TABLE>
<CAPTION>
<S> <C>
Initial Pass-Through Class Principal Balance of the Class B Certificates as
Rate: ___% of the Closing Date: $33,516,000
Date of Pooling and Servicing Initial Certificate Principal Balance of this Class B
Agreement: December 1, 1998 Certificate as of the Closing Date: $______
Closing Date: December __, 1998 Aggregate Stated Principal
Balance of the Mortgage Loans
as of the Cut-Off Date:
$638,408,606
First Distribution Date:
January 15, 1999
Master Servicer: Trustee:
GE Capital Loan Services, Inc. The Chase Manhattan Bank
Special Servicer:
GE Capital Realty Group, Inc.
Certificate No. CUSIP No. 589929 SZ2
</TABLE>
<PAGE>
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST CORPORATION, A NEW YORK CORPORATION ("DTC"), TO THE
CERTIFICATE REGISTRAR OR ANY AGENT THEREOF FOR REGISTRATION OF TRANSFER,
EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN THE
DEPOSITOR, THE UNDERWRITERS, THE MASTER SERVICER, THE SPECIAL SERVICER, THE
TRUSTEE, THE MORTGAGE LOAN SELLERS OR ANY OF THEIR AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1 CERTIFICATES, THE CLASS A-2
CERTIFICATES, THE CLASS A-3 CERTIFICATES AND THE CLASS IO CERTIFICATES OF THE
SAME SERIES TO THE EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN MAY BE MADE (A) TO ANY
EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT, INCLUDING INDIVIDUAL
RETIREMENT ACCOUNTS AND ANNUITIES, KEOGH PLANS AND COLLECTIVE INVESTMENT FUNDS
AND SEPARATE ACCOUNTS IN WHICH SUCH PLANS, ACCOUNTS OR ARRANGEMENTS ARE
INVESTED, THAT IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED ("ERISA"), OR THE PROHIBITED TRANSACTIONS RESTRICTIONS OF
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") (ANY
SUCH EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT, A "PLAN") OR (B) TO
ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS CERTIFICATE OR SUCH
INTEREST HEREIN ON BEHALF OF, AS NAMED FIDUCIARY OF, AS TRUSTEE OF, OR WITH
ASSETS OF A PLAN (INCLUDING, WITHOUT LIMITATION, ANY INSURANCE COMPANY USING
ASSETS IN ITS GENERAL OR SEPARATE ACCOUNT THAT MAY CONSTITUTE "PLAN ASSETS" OF
A PLAN); PROVIDED, THAT SUCH A TRANSFER MAY BE MADE TO AN INSURANCE COMPANY
GENERAL ACCOUNT IF (I) THIS CERTIFICATE IS ELIGIBLE FOR EXEMPTIVE RELIEF UNDER
SECTION III OF PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 ("PTE 95-60"), AND
(II) THE CONDITIONS OF SECTIONS I, III AND IV OF PTE 95-60 ARE SATISFIED WITH
RESPECT TO SUCH TRANSFER. AS A CONDITION TO THIS REGISTRATION OF TRANSFER OF A
CLASS B CERTIFICATE, THE CERTIFICATE REGISTRAR SHALL HAVE THE RIGHT TO REQUIRE
THE PROSPECTIVE TRANSFEREE OF SUCH CERTIFICATE, IF IT IS NOT A PLAN OR PERSON
DESCRIBED IN CLAUSE (B) OF THE PRECEDING SENTENCE, TO EXECUTE A CERTIFICATION
TO THAT EFFECT SUBSTANTIALLY IN THE FORM OF EXHIBIT G TO THE POOLING AND
SERVICING AGREEMENT REFEREED TO HEREIN.
-2-
<PAGE>
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
IF THE AGGREGATE CERTIFICATE PRINCIPAL BALANCE OF THE CLASS A-1 CERTIFICATES,
THE CLASS A-2 CERTIFICATES AND THE CLASS A-3 CERTIFICATES OF THE SAME SERIES
ARE REDUCED TO ZERO, DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL
BALANCE OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN. IN ADDITION, IF THE AGGREGATE
CERTIFICATE PRINCIPAL BALANCE OF THE CLASS C, CLASS D, CLASS E, CLASS F, CLASS
G, CLASS H, CLASS J AND CLASS K CERTIFICATES OF THE SAME SERIES IS REDUCED TO
ZERO, THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE MAY BE REDUCED BY
CERTAIN LOSSES AND EXPENSES EXPERIENCED BY THE TRUST FUND AS SET FORTH IN THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN
THE AMOUNT SHOWN ABOVE.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class B Certificate (obtained by dividing
the principal amount of this Class B Certificate (its "Certificate Principal
Balance") as of the Closing Date by the aggregate principal amount of all the
Class B Certificates (their "Class Principal Balance") as of the Closing Date)
in that certain beneficial ownership interest evidenced by all the Class B
Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Merrill Lynch
Mortgage Investors, Inc. (hereinafter called the "Depositor", which term
includes any successor entity under the Agreement), GE Capital Loan Services,
Inc. (hereinafter called the "Master Servicer", which term includes any
successor entity under the Agreement), GE Capital Realty Group, Inc.
(hereinafter called the "Special Servicer", which term includes any successor
entities under the Agreement), and The Chase Manhattan Bank (hereinafter called
the "Trustee", which term includes any successor entity under the Agreement), a
summary of certain of the pertinent provisions of which is set forth hereafter.
To the extent not defined herein, the capitalized terms used herein have the
respective meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 15th day of each month or, if such 15th day is not a Business Day,
the Business Day immediately following (each, a "Distribution Date"),
(provided, however, that the Distribution Date will be no earlier than the
fourth Business Day following the related Determination Date) commencing on the
first
-3-
<PAGE>
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of the
Class B Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on this Class B
Certificate will be made by The Chase Manhattan Bank, as paying agent (the
"Paying Agent"), by wire transfer of immediately available funds to the account
of the Person entitled thereto at a bank or other entity having appropriate
facilities therefor, if such Certificateholder shall have provided the Paying
Agent with wiring instructions no less than five Business Days prior to the
related Record Date (which wiring instructions may be in the form of a standing
order applicable to all subsequent distributions) or otherwise by check mailed
to the address of such Certificateholder as it appears in the Certificate
Register. Notwithstanding the foregoing, the final distribution on this
Certificate (determined without regard to any possible future reimbursement of
any Realized Loss or Additional Trust Fund Expense previously allocated to this
Certificate) will be made in like manner, but only upon presentation and
surrender of this Certificate at the offices of the Trustee or such other
location specified in the notice to the Holder hereof of such final
distribution. Also notwithstanding the foregoing, any distribution that may be
made with respect to this Certificate in reimbursement of any Realized Loss or
Additional Trust Fund Expense previously allocated to this Certificate, which
reimbursement is to occur after the date on which this Certificate is
surrendered as contemplated by the preceding sentence, will be made by check
mailed to the address of the Holder that surrenders this Certificate as such
address last appears in the Certificate Register or to any such other address
of which the Trustee is subsequently notified in writing.
The Certificates are limited in right of distribution to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Certificate Account, the Distribution Account
and, if established, the REO Account may be made from time to time for purposes
other than, and, in certain cases, prior to, distributions to
Certificateholders, such purposes including the reimbursement of advances made,
or certain expenses incurred, with respect to the Mortgage Loans and the
payment of interest on such advances and expenses.
Any distribution to the Holder of this Certificate in
reduction of the Certificate Principal Balance hereof is binding on such Holder
and all future Holders of this Certificate and any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such distribution is made upon this Certificate.
-4-
<PAGE>
The Class B Certificates are issuable in fully registered
form only without coupons in minimum denominations specified in the Agreement.
As provided in the Agreement and subject to certain limitations therein set
forth, Class B Certificates are exchangeable for new Class B Certificates in
authorized denominations evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices of the Certificate Registrar, duly endorsed by, or
accompanied by a written instrument of transfer in the form satisfactory to the
Certificate Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Class B Certificates in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.
No transfer of a Class B Certificate or any interest therein
shall be made to (A) a Plan or (B) any Person who is directly or indirectly
purchasing the Class B Certificate or interest therein on behalf of, as named
fiduciary of, as trustee of, or with assets of a Plan (including, without
limitation, any insurance company using assets in its general or separate
account that may constitute assets of a Plan). As a condition to its
registration of the transfer of a Class B Certificate, the Certificate
Registrar shall have the right to require the prospective transferee of such
Certificate, if it is not a Plan or Person described in clause (B) of the
preceding sentence, to execute a certification to that effect substantially in
the form of Exhibit H to the Agreement.
No service charge will be imposed for any registration of
transfer or exchange of Class B Certificates, but the Certificate Registrar may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of Class
B Certificates.
Notwithstanding the foregoing, for so long as this
Certificate is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC, transfers of interests in
this Certificate shall be made through the book-entry facilities of DTC.
The Depositor, the Master Servicer, the Special Servicer, the
Trustee, the Paying Agent and the Certificate Registrar and any agent of the
Depositor, the Master Servicer, the Special Servicer, the Trustee, the Paying
Agent or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Special Servicer, the Trustee, the Paying
Agent, the Certificate
-5-
<PAGE>
Registrar or any such agent shall be affected by notice to the contrary.
The Trust Fund and the obligations created by the Agreement
shall terminate upon distribution (or provision for distribution) to the
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be distributed to them pursuant to the Agreement following the
earlier of (i) the final payment or other liquidation (or any Advance with
respect thereto) of the last Mortgage Loan or REO Property remaining in the
Trust Fund, and (ii) the purchase by the Majority Subordinate
Certificateholder, the Depositor, the Master Servicer or Special Servicer at a
price determined as provided in the Agreement of all Mortgage Loans and each
REO Property remaining in the Trust Fund. The Agreement permits, but does not
require, the Majority Subordinate Certificateholder, the Depositor or the
Master Servicer, in that order, to elect to purchase from the Trust Fund all
Mortgage Loans and each REO Property remaining therein. The exercise of such
right will effect early retirement of the Class B Certificates; however, such
right to elect to purchase is subject to the aggregate Stated Principal Balance
of the Mortgage Pool at the time of election being less than 1% of the
aggregate Balance of the Mortgage Loans.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Special Servicer and the
Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Master Servicer, the Special Servicer and the
Trustee with the consent of the Holders of Certificates entitled to at least
51% of the Voting Rights allocated to the affected Classes. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange hereof or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, including any
amendment necessary to maintain the status of the Trust Fund (or designated
portions thereof) as a REMIC, without the consent of the Holders of any of the
Certificates.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, the Holder of this
Certificate shall not be entitled to any benefit under the Agreement or be
valid for any purpose.
The registered Holder hereof, by its acceptance hereof,
agrees that it will look solely to the Trust Fund (to the extent of its rights
therein) for distributions hereunder.
This Certificate shall be construed in accordance with the
internal laws of the State of New York applicable to
-6-
<PAGE>
agreements made and to be performed in said State, and the obligations, rights
and remedies of the Holder hereof shall be determined in accordance with such
laws.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-7-
<PAGE>
IN WITNESS WHEREOF, the Certificate Registrar has caused this
Certificate to be duly executed.
Dated: December __, 1998
THE CHASE MANHATTAN BANK
as Certificate Registrar
By: __________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class B Certificates referred to in the
within-mentioned Agreement.
THE CHASE MANHATTAN BANK
as Authenticating Agent
By: __________________
Authorized Officer
-8-
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Mortgage Pass-Through Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.
I (we) further direct the Certificate Registrar to issue a
new Mortgage Pass-Through Certificate of a like Percentage Interest and Class
to the above named assignee and deliver such Mortgage Pass-Through Certificate
to the following address:
_______________________________________________________________________________
_______________________________________________________________________________
Dated:
_____________________________________
Signature by or on behalf of Assignor
_____________________________________
Signature Guaranteed
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<PAGE>
DISTRIBUTION INSTRUCTIONS
The Assignee should include the following for purposes of
distribution:
Distributions shall, if permitted, be made by wire transfer or
otherwise, in immediately available funds, to _________________________________
_______________________________________________________________________________
__________________________________________ for the account of__________________
________________________________________________________________.
Distributions made by check (such check to be made payable to
________________________________) and all applicable statements and notices
should be mailed to ______________________
____________________________________________________________________________.
This information is provided by ____________________, the
Assignee named above, or _____________________, as its agent.
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<PAGE>
EXHIBIT A-6
FORM OF CLASS C CERTIFICATE
CLASS C MERRILL LYNCH MORTGAGE INVESTORS, INC.,
SERIES 1998-C3
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool of multifamily and commercial mortgage loans
(the "Mortgage Loans"), such pool being formed and sold by
MERRILL LYNCH MORTGAGE INVESTORS, INC.
<TABLE>
<CAPTION>
<S> <C>
Initial Pass-Through Class Principal Balance of the Class C Certificates as
Rate: ___% of the Closing Date: $35,112,000
Date of Pooling and Servicing Initial Certificate Principal Balance of this Class C
Agreement: December 1, 1998 Certificate as of the Closing Date: $______
Closing Date: December __, 1998 Aggregate Stated Principal
Balance of the Mortgage Loans
as of the Cut-Off Date:
$638,408,606
First Distribution Date:
January 15, 1999
Master Servicer: Trustee:
GE Capital Loan Services, Inc. The Chase Manhattan Bank
Special Servicer:
GE Capital Realty Group, Inc.
Certificate No. CUSIP No. 589929 TA6
</TABLE>
<PAGE>
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST CORPORATION, A NEW YORK CORPORATION ("DTC"), TO THE
CERTIFICATE REGISTRAR OR ANY AGENT THEREOF FOR REGISTRATION OF TRANSFER,
EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN THE
DEPOSITOR, THE UNDERWRITERS, THE MASTER SERVICER, THE SPECIAL SERVICER, THE
TRUSTEE, THE MORTGAGE LOAN SELLERS OR ANY OF THEIR AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1 CERTIFICATES, THE CLASS A-2
CERTIFICATES, THE CLASS A-3 CERTIFICATES, THE CLASS IO CERTIFICATES, AND THE
CLASS B CERTIFICATES OF THE SAME SERIES TO THE EXTENT DESCRIBED IN THE POOLING
AND SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN MAY BE MADE (A) TO ANY
EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT, INCLUDING INDIVIDUAL
RETIREMENT ACCOUNTS AND ANNUITIES, KEOGH PLANS AND COLLECTIVE INVESTMENT FUNDS
AND SEPARATE ACCOUNTS IN WHICH SUCH PLANS, ACCOUNTS OR ARRANGEMENTS ARE
INVESTED, THAT IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED ("ERISA"), OR THE PROHIBITED TRANSACTIONS RESTRICTIONS OF
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") (ANY
SUCH EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT, A "PLAN") OR (B) TO
ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS CERTIFICATE OR SUCH
INTEREST HEREIN ON BEHALF OF, AS NAMED FIDUCIARY OF, AS TRUSTEE OF, OR WITH
ASSETS OF A PLAN (INCLUDING, WITHOUT LIMITATION, ANY INSURANCE COMPANY USING
ASSETS IN ITS GENERAL OR SEPARATE ACCOUNT THAT MAY CONSTITUTE "PLAN ASSETS" OF
A PLAN); PROVIDED, THAT SUCH A TRANSFER MAY BE MADE TO AN INSURANCE COMPANY
GENERAL ACCOUNT IF (I) THIS CERTIFICATE IS ELIGIBLE FOR EXEMPTIVE RELIEF UNDER
SECTION III OF PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 ("PTE 95-60"), AND
(II) THE CONDITIONS OF SECTIONS I, III AND IV OF PTE 95-60 ARE SATISFIED WITH
RESPECT TO SUCH TRANSFER. AS A CONDITION TO THIS REGISTRATION OF TRANSFER OF A
CLASS C CERTIFICATE, THE CERTIFICATE REGISTRAR SHALL HAVE THE RIGHT TO REQUIRE
THE PROSPECTIVE TRANSFEREE OF SUCH CERTIFICATE, IF IT IS NOT A PLAN OR PERSON
DESCRIBED IN CLAUSE (B) OF THE PRECEDING SENTENCE, TO EXECUTE A CERTIFICATION
TO THAT EFFECT SUBSTANTIALLY IN THE FORM OF EXHIBIT G TO THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
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<PAGE>
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
IF THE AGGREGATE CERTIFICATE PRINCIPAL BALANCE OF THE CLASS A-1 CERTIFICATES,
CLASS A-2, CLASS A-3 CERTIFICATES AND CLASS B CERTIFICATES OF THE SAME SERIES
ARE REDUCED TO ZERO, DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL
BALANCE OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN. IN ADDITION, IF THE AGGREGATE
CERTIFICATE PRINCIPAL BALANCE OF THE CLASS D, CLASS E, CLASS F, CLASS G, CLASS
H, CLASS J AND CLASS K CERTIFICATES OF THE SAME SERIES IS REDUCED TO ZERO, THE
CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE MAY BE REDUCED BY CERTAIN
LOSSES AND EXPENSES EXPERIENCED BY THE TRUST FUND AS SET FORTH IN THE POOLING
AND SERVICING AGREEMENT REFERRED TO HEREIN. ACCORDINGLY, THE OUTSTANDING
CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN ABOVE.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class C Certificate (obtained by dividing
the principal amount of this Class C Certificate (its "Certificate Principal
Balance") as of the Closing Date by the aggregate principal amount of all the
Class C Certificates (their "Class Principal Balance") as of the Closing Date)
in that certain beneficial ownership interest evidenced by all the Class C
Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Merrill Lynch
Mortgage Investors, Inc. (hereinafter called the "Depositor", which term
includes any successor entity under the Agreement), GE Capital Loan Services,
Inc. (hereinafter called the "Master Servicer", which term includes any
successor entity under the Agreement), GE Capital Realty Group, Inc.
(hereinafter called the "Special Servicer", which term includes any successor
entities under the Agreement), and The Chase Manhattan Bank (hereinafter called
the "Trustee", which term includes any successor entity under the Agreement), a
summary of certain of the pertinent provisions of which is set forth hereafter.
To the extent not defined herein, the capitalized terms used herein have the
respective meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 15th day of each month or, if such 15th day is not a Business Day,
the Business Day immediately following (each, a "Distribution Date"),
(provided, however, that the Distribution Date will be no earlier than the
fourth Business Day following the related Determination Date) commencing on the
first
-3-
<PAGE>
Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the last Business Day of
the month immediately preceding the month of such distribution (the "Record
Date"), in an amount equal to the product of the Percentage Interest evidenced
by this Certificate and the amount required to be distributed to the Holders of
the Class C Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on this Class C
Certificate will be made by The Chase Manhattan Bank, as paying agent (the
"Paying Agent"), by wire transfer of immediately available funds to the account
of the Person entitled thereto at a bank or other entity having appropriate
facilities therefor, if such Certificateholder shall have provided the Paying
Agent with wiring instructions no less than five Business Days prior to the
related Record Date (which wiring instructions may be in the form of a standing
order applicable to all subsequent distributions) or otherwise by check mailed
to the address of such Certificateholder as it appears in the Certificate
Register. Notwithstanding the foregoing, the final distribution on this
Certificate (determined without regard to any possible future reimbursement of
any Realized Loss or Additional Trust Fund Expense previously allocated to this
Certificate) will be made in like manner, but only upon presentation and
surrender of this Certificate at the offices of the Trustee or such other
location specified in the notice to the Holder hereof of such final
distribution. Also notwithstanding the foregoing, any distribution that may be
made with respect to this Certificate in reimbursement of any Realized Loss or
Additional Trust Fund Expense previously allocated to this Certificate, which
reimbursement is to occur after the date on which this Certificate is
surrendered as contemplated by the preceding sentence, will be made by check
mailed to the address of the Holder that surrenders this Certificate as such
address last appears in the Certificate Register or to any such other address
of which the Trustee is subsequently notified in writing.
The Certificates are limited in right of distribution to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Certificate Account, the Distribution Account
and, if established, the REO Account may be made from time to time for purposes
other than, and, in certain cases, prior to, distributions to
Certificateholders, such purposes including the reimbursement of advances made,
or certain expenses incurred, with respect to the Mortgage Loans and the
payment of interest on such advances and expenses.
Any distribution to the Holder of this Certificate in
reduction of the Certificate Principal Balance hereof is binding on such Holder
and all future Holders of this Certificate and any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such distribution is made upon this Certificate.
-4-
<PAGE>
The Class C Certificates are issuable in fully registered
form only without coupons in minimum denominations specified in the Agreement.
As provided in the Agreement and subject to certain limitations therein set
forth, Class C Certificates are exchangeable for new Class C Certificates in
authorized denominations evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices of the Certificate Registrar, duly endorsed by, or
accompanied by a written instrument of transfer in the form satisfactory to the
Certificate Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Class C Certificates in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.
No transfer of a Class C Certificate or any interest therein
shall be made to (A) a Plan or (B) any Person who is directly or indirectly
purchasing the Class C Certificate or interest therein on behalf of, as named
fiduciary of, as trustee of, or with assets of a Plan (including, without
limitation, any insurance company using assets in its general or separate
account that may constitute assets of a Plan). As a condition to its
registration of the transfer of a Class C Certificate, the Certificate
Registrar shall have the right to require the prospective transferee of such
Certificate, if it is not a Plan or Person described in clause (B) of the
preceding sentence, to execute a certification to that effect substantially in
the form of Exhibit G to the Agreement.
No service charge will be imposed for any registration of
transfer or exchange of Class C Certificates, but the Certificate Registrar may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of Class
C Certificates.
Notwithstanding the foregoing, for so long as this
Certificate is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC, transfers of interests in
this Certificate shall be made through the book-entry facilities of DTC.
The Depositor, the Master Servicer, the Special Servicer and
the Trustee, the Paying Agent and the Certificate Registrar and any agent of
the Depositor, the Master Servicer, the Special Servicer, the Trustee, the
Paying Agent or the Certificate Registrar may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none
of the Depositor, the Master Servicer, the Special Servicer and the Trustee,
the Paying Agent, the Certificate
-5-
<PAGE>
Registrar or any such agent shall be affected by notice to the contrary.
The Trust Fund and the obligations created by the Agreement
shall terminate upon distribution (or provision for distribution) to the
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be distributed to them pursuant to the Agreement following the
earlier of (i) the final payment or other liquidation (or any Advance with
respect thereto) of the last Mortgage Loan or REO Property remaining in the
Trust Fund, and (ii) the purchase by the Majority Subordinate Certificate
Holder, the Depositor, the Master Servicer or the Special Servicer at a price
determined as provided in the Agreement of all Mortgage Loans and each REO
Property remaining in the Trust Fund. The Agreement permits, but does not
require, the Majority Subordinate Certificate Holder, the Depositor, the Master
Servicer or the Special Servicer, in that order, to elect to purchase from the
Trust Fund all Mortgage Loans and each REO Property remaining therein. The
exercise of such right will effect early retirement of the Class C
Certificates; however, such right to elect to purchase is subject to the
aggregate Stated Principal Balance of the Mortgage Pool at the time of election
being less than 1% of the aggregate Cut-Off Date Balance of the Mortgage Loans.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Special Servicer, the
Trustee and the Fiscal Agent and the rights of the Certificateholders under the
Agreement at any time by the Depositor, the Master Servicer, the Special
Servicer, the Trustee and the Fiscal Agent with the consent of the Holders of
Certificates entitled to at least 51% of the Voting Rights allocated to the
affected Classes. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange hereof or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof,
in certain limited circumstances, including any amendment necessary to maintain
the status of the Trust Fund (or designated portions thereof) as a REMIC,
without the consent of the Holders of any of the Certificates.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, the Holder of this
Certificate shall not be entitled to any benefit under the Agreement or be
valid for any purpose.
The registered Holder hereof, by its acceptance hereof,
agrees that it will look solely to the Trust Fund (to the extent of its rights
therein) for distributions hereunder.
-6-
<PAGE>
This Certificate shall be construed in accordance with the
internal laws of the State of New York applicable to agreements made and to be
performed in said State, and the obligations, rights and remedies of the Holder
hereof shall be determined in accordance with such laws.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-7-
<PAGE>
IN WITNESS WHEREOF, the Certificate Registrar has caused this
Certificate to be duly executed.
Dated: December __, 1998
THE CHASE MANHATTAN BANK
as Certificate Registrar
By: __________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class C Certificates referred to in the
within-mentioned Agreement.
THE CHASE MANHATTAN BANK
as Authenticating Agent
By: __________________
Authorized Officer
-8-
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Mortgage Pass-Through Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.
I (we) further direct the Certificate Registrar to issue a
new Mortgage Pass-Through Certificate of a like Percentage Interest and Class
to the above named assignee and deliver such Mortgage Pass-Through Certificate
to the following address:
_______________________________________________________________________________
_______________________________________________________________________________
Dated:
_____________________________________
Signature by or on behalf of Assignor
_____________________________________
Signature Guaranteed
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<PAGE>
DISTRIBUTION INSTRUCTIONS
The Assignee should include the following for purposes of
distribution:
Distributions shall, if permitted, be made by wire transfer or
otherwise, in immediately available funds, to _________________________________
__________________________________________ for the account of _________________
______________________________________________.
Distributions made by check (such check to be made payable to
________________________________) and all applicable statements and notices
should be mailed to ___________________________________________________________
_____________________________________________________________.
This information is provided by ____________________, the
Assignee named above, or _____________________, as its agent.
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<PAGE>
EXHIBIT A-7
FORM OF CLASS D CERTIFICATE
CLASS D MERRILL LYNCH MORTGAGE INVESTORS, INC.,
SERIES 1998-C3
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool of multifamily and commercial mortgage loans
(the "Mortgage Loans"), such pool being formed and sold by
MERRILL LYNCH MORTGAGE INVESTORS, INC.
<TABLE>
<CAPTION>
<S> <C>
Pass-Through Class Principal Balance of the Class D Certificates
Rate: ___% as of the Closing Date: $38,305,000
Date of Pooling and Servicing Initial Certificate Principal Balance of this Class D
Agreement: December 1, 1998 Certificate as of the Closing Date: $______
Closing Date: December __, 1998 Aggregate Stated Principal
Balance of the Mortgage Loans
as of the Cut-Off Date:
$638,408,606
First Distribution Date:
January 15, 1999
Master Servicer: Trustee:
GE Capital Loan Services, Inc. The Chase Manhattan Bank
Special Servicer:
GE Capital Realty Group, Inc.
Certificate No. CUSIP No. 589929 TB4
</TABLE>
<PAGE>
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST CORPORATION, A NEW YORK CORPORATION ("DTC"), TO THE
CERTIFICATE REGISTRAR OR ANY AGENT THEREOF FOR REGISTRATION OF TRANSFER,
EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN THE
DEPOSITOR, THE UNDERWRITERS, THE MASTER SERVICER, THE SPECIAL SERVICER, THE
TRUSTEE, THE MORTGAGE LOAN SELLERS OR ANY OF THEIR AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1, CLASS A-2, CLASS A-3, CLASS
IO, CLASS B AND CLASS C CERTIFICATES OF THE SAME SERIES TO THE EXTENT DESCRIBED
IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN MAY BE MADE (A) TO ANY
EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT, INCLUDING INDIVIDUAL
RETIREMENT ACCOUNTS AND ANNUITIES, KEOGH PLANS AND COLLECTIVE INVESTMENT FUNDS
AND SEPARATE ACCOUNTS IN WHICH SUCH PLANS, ACCOUNTS OR ARRANGEMENTS ARE
INVESTED, THAT IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED ("ERISA"), OR THE PROHIBITED TRANSACTIONS RESTRICTIONS OF
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") (ANY
SUCH EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT, A "PLAN") OR (B) TO
ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS CERTIFICATE OR SUCH
INTEREST HEREIN ON BEHALF OF, AS NAMED FIDUCIARY OF, AS TRUSTEE OF, OR WITH
ASSETS OF A PLAN (INCLUDING, WITHOUT LIMITATION, ANY INSURANCE COMPANY USING
ASSETS IN ITS GENERAL OR SEPARATE ACCOUNT THAT MAY CONSTITUTE "PLAN ASSETS" OF
A PLAN); PROVIDED, THAT SUCH A TRANSFER MAY BE MADE TO AN INSURANCE COMPANY
GENERAL ACCOUNT IF (I) THIS CERTIFICATE IS ELIGIBLE FOR EXEMPTIVE RELIEF UNDER
SECTION III OF PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 ("PTE 95-60"), AND
(II) THE CONDITIONS OF SECTIONS I, III AND IV OF PTE 95-60 ARE SATISFIED WITH
RESPECT TO SUCH TRANSFER. AS A CONDITION TO THIS REGISTRATION OF TRANSFER OF A
CLASS D CERTIFICATE, THE CERTIFICATE REGISTRAR SHALL HAVE THE RIGHT TO REQUIRE
THE PROSPECTIVE TRANSFEREE OF SUCH CERTIFICATE TO EXECUTE A CERTIFICATION
SUBSTANTIALLY IN THE FORM OF EXHIBIT G TO THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.
-2-
<PAGE>
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE. THE
FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES OF APPLYING THE U.S.
FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES TO THIS CERTIFICATE.
THE ISSUE DATE OF THIS CERTIFICATE IS DECEMBER __, 1998. ASSUMING THAT THE
MORTGAGE LOANS PREPAY AT AN ASSUMED RATE OF PREPAYMENT USED SOLELY FOR THE
PURPOSES OF APPLYING THE OID RULES TO THE CERTIFICATES EQUAL TO A CPR (AS
DEFINED IN THE PROSPECTUS DATED FEBRUARY 25, 1998 AND THE PROSPECTUS SUPPLEMENT
DATED DECEMBER 17, 1998 RELATING TO THIS CERTIFICATE) OF 0% AND THAT THE ARD
LOANS ARE REPAID IN FULL ON THEIR RESPECTIVE ANTICIPATED REPAYMENT DATES AS SET
FORTH IN SUCH PROSPECTUS SUPPLEMENT (THE "PREPAYMENT ASSUMPTION"), THIS
CERTIFICATE HAS BEEN ISSUED WITH NO MORE THAN $________ OF OID PER $1,000 OF
INITIAL CERTIFICATE PRINCIPAL BALANCE, THE YIELD TO MATURITY IS ___% PER ANNUM,
AND THE AMOUNT OF OID ATTRIBUTABLE TO THE INITIAL ACCRUAL PERIOD IS NO MORE
THAN $____________ PER $1,000 OF INITIAL CERTIFICATE PRINCIPAL BALANCE,
COMPUTED UNDER THE EXACT METHOD. NO REPRESENTATION IS MADE THAT THE MORTGAGE
LOANS WILL PREPAY AT A RATE BASED ON THE PREPAYMENT ASSUMPTION OR AT ANY OTHER
RATE.
IF THE AGGREGATE CERTIFICATE PRINCIPAL BALANCE OF THE CLASS A-1 CLASS A-2,
CLASS A-3, CLASS B AND CLASS C CERTIFICATES OF THE SAME SERIES IS REDUCED TO
ZERO, DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN. IN ADDITION, IF THE AGGREGATE CERTIFICATE
PRINCIPAL BALANCE OF THE CLASS E, CLASS F, CLASS G, CLASS H, CLASS J AND CLASS
K CERTIFICATES OF THE SAME SERIES IS REDUCED TO ZERO, THE CERTIFICATE PRINCIPAL
BALANCE OF THIS CERTIFICATE MAY BE REDUCED BY CERTAIN LOSSES AND EXPENSES
EXPERIENCED BY THE TRUST FUND AS SET FORTH IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN. ACCORDINGLY, THE OUTSTANDING CERTIFICATE
PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class D Certificate (obtained by dividing
the principal amount of this Class D Certificate (its "Certificate Principal
Balance") as of the Closing Date by the aggregate principal amount of all the
Class D Certificates (their "Class Principal Balance") as of the Closing Date)
in that certain beneficial ownership interest evidenced by all the Class D
Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Merrill Lynch
Mortgage Investors, Inc. (hereinafter called the "Depositor", which term
includes any successor entity under the Agreement), GE Capital Loan Services,
Inc. (hereinafter called the "Master Servicer", which term includes any
successor entity under the Agreement), GE Capital Realty Group, Inc.
(hereinafter called the "Special Servicer",
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<PAGE>
which term includes any successor entities under the Agreement), and The Chase
Manhattan Bank (hereinafter called the "Trustee", which term includes any
successor entity under the Agreement), a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the respective meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 15th day of each month or, if such 15th day is not a Business Day,
the Business Day immediately following (each, a "Distribution Date") (provided,
however, that the Distribution Date will be no earlier than the fourth Business
Day following the related Determination Date), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of the
Class D Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on this Class D
Certificate will be made by The Chase Manhattan Bank, as paying agent (the
"Paying Agent"), by wire transfer of immediately available funds to the account
of the Person entitled thereto at a bank or other entity having appropriate
facilities therefor, if such Certificateholder shall have provided the Paying
Agent with wiring instructions no less than five Business Days prior to the
related Record Date (which wiring instructions may be in the form of a standing
order applicable to all subsequent distributions) or otherwise by check mailed
to the address of such Certificateholder as it appears in the Certificate
Register. Notwithstanding the foregoing, the final distribution on this
Certificate (determined without regard to any possible future reimbursement of
any Realized Loss or Additional Trust Fund Expense previously allocated to this
Certificate) will be made in like manner, but only upon presentation and
surrender of this Certificate at the offices of the Trustee or such other
location specified in the notice to the Holders hereof of such final
distribution. Also notwithstanding the foregoing, any distribution that may be
made with respect to this Certificate in reimbursement of any Realized Loss or
Additional Trust Fund Expense previously allocated to this Certificate, which
reimbursement is to occur after the date on which this Certificate is
surrendered as contemplated by the preceding sentence, will be made by check
mailed to the address of the Holder that surrenders this Certificate as such
address last appears in the Certificate Register or to any such other address
of which the Trustee is subsequently notified in writing.
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<PAGE>
The Certificates are limited in right of distribution to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Certificate Account, the Distribution Account
and, if established, the REO Account may be made from time to time for purposes
other than, and, in certain cases, prior to, distributions to
Certificateholders, such purposes including the reimbursement of advances made,
or certain expenses incurred, with respect to the Mortgage Loans and the
payment of interest on such advances and expenses.
Any distribution to the Holder of this Certificate in
reduction of the Certificate Principal Balance hereof is binding on such Holder
and all future Holders of this Certificate and any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such distribution is made upon this Certificate.
The Class D Certificates are issuable in fully registered
form only without coupons in minimum denominations specified in the Agreement.
As provided in the Agreement and subject to certain limitations therein set
forth, Class D Certificates are exchangeable for new Class D Certificates in
authorized denominations evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices of the Certificate Registrar, duly endorsed by, or
accompanied by a written instrument of transfer in the form satisfactory to the
Certificate Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Class D Certificates in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.
No transfer of a Class D Certificate or any interest therein
shall be made to (A) a Plan or (B) any Person who is directly or indirectly
purchasing the Class D Certificate or interest therein on behalf of, as named
fiduciary of, as trustee of, or with assets of a Plan (including, without
limitation, any insurance company using assets in its general or separate
account that may constitute assets of a Plan). As a condition to its
registration of transfer of a Class D Certificate, the Certificate Registrar
shall have the right to require the prospective transferee of such Certificate
to execute a certification substantially in the form of Exhibit G to the
Agreement.
No service charge will be imposed for any registration of
transfer or exchange of Class D Certificates, but the
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<PAGE>
Certificate Registrar may require payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in connection with any transfer
or exchange of Class D Certificates.
Notwithstanding the foregoing, for so long as this
Certificate is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC, transfers of interests in
this Certificate shall be made through the book-entry facilities of DTC.
The Depositor, the Master Servicer, the Special Servicer, the
Trustee, the Paying Agent and the Certificate Registrar and any agent of the
Depositor, the Master Servicer, the Special Servicer, the Trustee, the Paying
Agent or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Special Servicer, the Trustee, the Paying
Agent, the Certificate Registrar or any such agent shall be affected by notice
to the contrary.
The Trust Fund and the obligations created by the Agreement
shall terminate upon distribution (or provision for distribution) to the
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be distributed to them pursuant to the Agreement following the
earlier of (i) the final payment or other liquidation (or any Advance with
respect thereto) of the last Mortgage Loan or REO Property remaining in the
Trust Fund, and (ii) the purchase by the Majority Subordinate Certificate
Holder, the Depositor, the Master Servicer or the Special Servicer at a price
determined as provided in the Agreement of all Mortgage Loans and each REO
Property remaining in the Trust Fund. The Agreement permits, but does not
require, the Majority Subordinate Certificate Holder, the Depositor, the Master
Servicer or the Special Servicer, in that order, to elect to purchase from the
Trust Fund all Mortgage Loans and each REO Property remaining therein. The
exercise of such right will effect early retirement of the Class D
Certificates; however, such right to elect to purchase is subject to the
aggregate Stated Principal Balance of the Mortgage Pool at the time of election
being less than 1% of the aggregate Cut-Off Date Balance of the Mortgage Loans.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Special Servicer and the
Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Master Servicer, the Special Servicer and the
Trustee with the consent of the Holders of Certificates entitled to at least
51% of the Voting Rights allocated to the affected Classes. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
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<PAGE>
upon the transfer hereof or in exchange herefor or in lieu hereof whether or
not notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, including any
amendment necessary to maintain the status of the Trust Fund (or designated
portions thereof) as a REMIC, without the consent of the Holders of any of the
Certificates.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, the Holder of this
Certificate shall not be entitled to any benefit under the Agreement or be
valid for any purpose.
The registered Holder hereof, by its acceptance hereof,
agrees that it will look solely to the Trust Fund (to the extent of its rights
therein) for distributions hereunder.
This Certificate shall be construed in accordance with the
internal laws of the State of New York applicable to agreements made and to be
performed in said State, and the obligations, rights and remedies of the Holder
hereof shall be determined in accordance with such laws.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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<PAGE>
IN WITNESS WHEREOF, the Certificate Registrar has caused this
Certificate to be duly executed.
Dated: December __, 1998
THE CHASE MANHATTAN BANK,
as Certificate Registrar
By: ______________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class D Certificates referred to in the
within-mentioned Agreement.
THE CHASE MANHATTAN BANK,
as Authenticating Agent
By: ______________________
Authorized Officer
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<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Mortgage Pass-Through Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.
I (we) further direct the Certificate Registrar to issue a
new Mortgage Pass-Through Certificate of a like Percentage Interest and Class
to the above named assignee and deliver such Mortgage Pass-Through Certificate
to the following address:
_______________________________________________________________________________
_______________________________________________________________________________
Dated:
_____________________________________
Signature by or on behalf of Assignor
_____________________________________
Signature Guaranteed
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<PAGE>
DISTRIBUTION INSTRUCTIONS
The Assignee should include the following for purposes of
distribution:
Distributions shall, if permitted, be made by wire transfer or
otherwise, in immediately available funds, to__________________________________
___________________________________________________ for the account of
________________________________________________________________.
Distributions made by check (such check to be made payable to
____________________) and all applicable statements and notices should be mailed
to ___________________________________________________________________________.
This information is provided by _________________________, the
Assignee named above, or ____________________________, as its agent.
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<PAGE>
EXHIBIT A-8
FORM OF CLASS E CERTIFICATE
CLASS E MERRILL LYNCH MORTGAGE INVESTORS, INC.,
SERIES 1998-C3
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool of multifamily and commercial mortgage loans
(the "Mortgage Loans"), such pool being formed and sold by
MERRILL LYNCH MORTGAGE INVESTORS, INC.
<TABLE>
<CAPTION>
<S> <C>
Pass-Through Class Principal Balance of the Class E Certificates
Rate: ___% as of the Closing Date:
$7,980,000
Date of Pooling and Servicing Initial Certificate Principal Balance of this Class E
Agreement: December 1, 1998 Certificate as of the Closing
Date: $______
Closing Date: December __, 1998 Aggregate Stated Principal
Balance of the Mortgage Loans
as of the Cut-Off Date:
$638,408,606
First Distribution Date:
January 15, 1999
Master Servicer: Trustee:
GE Capital Loan Services, Inc. The Chase Manhattan Bank
Special Servicer: CUSIP No. 589929 TC2
GE Capital Realty Group, Inc.
Certificate No.
</TABLE>
<PAGE>
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST CORPORATION, A NEW YORK CORPORATION ("DTC"), TO THE
CERTIFICATE REGISTRAR OR ANY AGENT THEREOF FOR REGISTRATION OF TRANSFER,
EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN THE
DEPOSITOR, THE UNDERWRITERS, THE MASTER SERVICER, THE SPECIAL SERVICER, THE
TRUSTEE, THE MORTGAGE LOAN SELLERS OR ANY OF THEIR AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1, CLASS A-2, CLASS A-3, CLASS
IO, CLASS B, CLASS C AND CLASS D CERTIFICATES OF THE SAME SERIES TO THE EXTENT
DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN MAY BE MADE (A) TO ANY
EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT, INCLUDING INDIVIDUAL
RETIREMENT ACCOUNTS AND ANNUITIES, KEOGH PLANS AND COLLECTIVE INVESTMENT FUNDS
AND SEPARATE ACCOUNTS IN WHICH SUCH PLANS, ACCOUNTS OR ARRANGEMENTS ARE
INVESTED, THAT IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED ("ERISA"), OR THE PROHIBITED TRANSACTIONS RESTRICTIONS OF
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") (ANY
SUCH EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT, A "PLAN") OR (B) TO
ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS CERTIFICATE OR SUCH
INTEREST HEREIN ON BEHALF OF, AS NAMED FIDUCIARY OF, AS TRUSTEE OF, OR WITH
ASSETS OF A PLAN (INCLUDING, WITHOUT LIMITATION, ANY INSURANCE COMPANY USING
ASSETS IN ITS GENERAL OR SEPARATE ACCOUNT THAT MAY CONSTITUTE "PLAN ASSETS" OF
A PLAN); PROVIDED, THAT SUCH A TRANSFER MAY BE MADE TO AN INSURANCE COMPANY
GENERAL ACCOUNT IF (I) THIS CERTIFICATE IS ELIGIBLE FOR EXEMPTIVE RELIEF UNDER
SECTION III OF PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 ("PTE 95-60"), AND
(II) THE CONDITIONS OF SECTIONS I, III AND IV OF PTE 95-60 ARE SATISFIED WITH
RESPECT TO SUCH TRANSFER. AS A CONDITION TO THIS REGISTRATION OF TRANSFER OF A
CLASS E CERTIFICATE, THE CERTIFICATE REGISTRAR SHALL HAVE THE RIGHT TO REQUIRE
THE PROSPECTIVE TRANSFEREE OF SUCH CERTIFICATE TO EXECUTE A CERTIFICATION
SUBSTANTIALLY IN THE FORM OF EXHIBIT G TO THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
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<PAGE>
CONDUIT" (A "REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G
AND 860D OF THE CODE. THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE
PURPOSES OF APPLYING THE U.S. FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID")
RULES TO THIS CERTIFICATE. THE ISSUE DATE OF THIS CERTIFICATE IS DECEMBER __,
1998. ASSUMING THAT THE MORTGAGE LOANS PREPAY AT AN ASSUMED RATE OF PREPAYMENT
USED SOLELY FOR THE PURPOSES OF APPLYING THE OID RULES TO THE CERTIFICATES EQUAL
TO A CPR (AS DEFINED IN THE PROSPECTUS DATED FEBRUARY 25, 1998 AND THE
PROSPECTUS SUPPLEMENT DATED DECEMBER 17, 1998 RELATING TO THIS CERTIFICATE) OF
0% AND THAT THE ARD LOANS ARE REPAID IN FULL ON THEIR RESPECTIVE ANTICIPATED
REPAYMENT DATES AS SET FORTH IN SUCH PROSPECTUS SUPPLEMENT (THE "PREPAYMENT
ASSUMPTION"), THIS CERTIFICATE HAS BEEN ISSUED WITH NO MORE THAN $________ OF
OID PER $1,000 OF INITIAL CERTIFICATE PRINCIPAL BALANCE, THE YIELD TO MATURITY
IS ___% PER ANNUM, AND THE AMOUNT OF OID ATTRIBUTABLE TO THE INITIAL ACCRUAL
PERIOD IS NO MORE THAN $____________ PER $1,000 OF INITIAL CERTIFICATE PRINCIPAL
BALANCE, COMPUTED UNDER THE EXACT METHOD. NO REPRESENTATION IS MADE THAT THE
MORTGAGE LOANS WILL PREPAY AT A RATE BASED ON THE PREPAYMENT ASSUMPTION OR AT
ANY OTHER RATE.
IF THE AGGREGATE CERTIFICATE PRINCIPAL BALANCE OF THE CLASS A-1, CLASS A-2,
CLASS A-3, CLASS B, CLASS C AND CLASS D CERTIFICATES OF THE SAME SERIES IS
REDUCED TO ZERO, DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL
BALANCE OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN. IN ADDITION, IF THE AGGREGATE
CERTIFICATE PRINCIPAL BALANCE OF THE CLASS F, CLASS G, CLASS H, CLASS J AND
CLASS K CERTIFICATES OF THE SAME SERIES IS REDUCED TO ZERO, THE CERTIFICATE
PRINCIPAL BALANCE OF THIS CERTIFICATE MAY BE REDUCED BY CERTAIN LOSSES AND
EXPENSES EXPERIENCED BY THE TRUST FUND AS SET FORTH IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN. ACCORDINGLY, THE OUTSTANDING
CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN ABOVE.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class E Certificate (obtained by dividing
the principal amount of this Class E Certificate (its "Certificate Principal
Balance") as of the Closing Date by the aggregate principal amount of all the
Class E Certificates (their "Class Principal Balance") as of the Closing Date)
in that certain beneficial ownership interest evidenced by all the Class E
Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Merrill Lynch
Mortgage Investors, Inc. (hereinafter called the "Depositor", which term
includes any successor entity under the Agreement), GE Capital Loan Services,
Inc. (hereinafter called the "Master Servicer", which term includes any
successor entity under the Agreement), GE Capital Realty Group, Inc.
(hereinafter called the "Special Servicer", which term includes any successor
entities under the Agreement), and The Chase Manhattan Bank (hereinafter called
the "Trustee",
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<PAGE>
which term includes any successor entity under the Agreement), a summary of
certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, the capitalized terms used herein have the respective
meanings assigned in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 15th day of each month or, if such 15th day is not a Business Day,
the Business Day immediately following (each, a "Distribution Date") (provided,
however, that the Distribution Date will be no earlier than the fourth Business
Day following the related Determination Date), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of the
Class E Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on this Class E
Certificate will be made by The Chase Manhattan Bank, as paying agent (the
"Paying Agent"), by wire transfer of immediately available funds to the account
of the Person entitled thereto at a bank or other entity having appropriate
facilities therefor, if such Certificateholder shall have provided the Paying
Agent with wiring instructions no less than five Business Days prior to the
related Record Date (which wiring instructions may be in the form of a standing
order applicable to all subsequent distributions) or otherwise by check mailed
to the address of such Certificateholder as it appears in the Certificate
Register. Notwithstanding the foregoing, the final distribution on this
Certificate (determined without regard to any possible future reimbursement of
any Realized Loss or Additional Trust Fund Expense previously allocated to this
Certificate) will be made in like manner, but only upon presentation and
surrender of this Certificate at the offices of the Trustee or such other
location specified in the notice to the Holders hereof of such final
distribution. Also notwithstanding the foregoing, any distribution that may be
made with respect to this Certificate in reimbursement of any Realized Loss or
Additional Trust Fund Expense previously allocated to this Certificate, which
reimbursement is to occur after the date on which this Certificate is
surrendered as contemplated by the preceding sentence, will be made by check
mailed to the address of the Holder that surrenders this Certificate as such
address last appears in the Certificate Register or to any such other address
of which the Trustee is subsequently notified in writing.
The Certificates are limited in right of distribution to
certain collections and recoveries respecting the Mortgage
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<PAGE>
Loans, all as more specifically set forth herein and in the Agreement. As
provided in the Agreement, withdrawals from the Certificate Account, the
Distribution Account and, if established, the REO Account may be made from time
to time for purposes other than, and, in certain cases, prior to, distributions
to Certificateholders, such purposes including the reimbursement of advances
made, or certain expenses incurred, with respect to the Mortgage Loans and the
payment of interest on such advances and expenses.
Any distribution to the Holder of this Certificate in
reduction of the Certificate Principal Balance hereof is binding on such Holder
and all future Holders of this Certificate and any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such distribution is made upon this Certificate.
The Class E Certificates are issuable in fully registered
form only without coupons in minimum denominations specified in the Agreement.
As provided in the Agreement and subject to certain limitations therein set
forth, Class E Certificates are exchangeable for new Class E Certificates in
authorized denominations evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices of the Certificate Registrar, duly endorsed by, or
accompanied by a written instrument of transfer in the form satisfactory to the
Certificate Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Class E Certificates in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.
No transfer of a Class E Certificate or any interest therein
shall be made to (A) a Plan or (B) any Person who is directly or indirectly
purchasing the Class D Certificate or interest therein on behalf of, as named
fiduciary of, as trustee of, or with assets of a Plan (including, without
limitation, any insurance company using assets in its general or separate
account that may constitute assets of a Plan). As a condition to its
registration of transfer of a Class E Certificate, the Certificate Registrar
shall have the right to require the prospective transferee of such Certificate
to execute a certification substantially in the form of Exhibit G to the
Agreement.
No service charge will be imposed for any registration of
transfer or exchange of Class E Certificates, but the Certificate Registrar may
require payment of a sum sufficient to
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<PAGE>
cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Class E Certificates.
Notwithstanding the foregoing, for so long as this
Certificate is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC, transfers of interests in
this Certificate shall be made through the book-entry facilities of DTC.
The Depositor, the Master Servicer, the Special Servicer, the
Trustee, the Paying Agent and the Certificate Registrar and any agent of the
Depositor, the Master Servicer, the Special Servicer, the Trustee, the Paying
Agent or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Special Servicer, the Trustee, the Paying
Agent, the Certificate Registrar or any such agent shall be affected by notice
to the contrary.
The Trust Fund and the obligations created by the Agreement
shall terminate upon distribution (or provision for distribution) to the
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be distributed to them pursuant to the Agreement following the
earlier of (i) the final payment or other liquidation (or any Advance with
respect thereto) of the last Mortgage Loan or REO Property remaining in the
Trust Fund, and (ii) the purchase by the Majority Subordinate Certificate
Holder, the Depositor, the Master Servicer or the Special Servicer at a price
determined as provided in the Agreement of all Mortgage Loans and each REO
Property remaining in the Trust Fund. The Agreement permits, but does not
require, the Majority Subordinate Certificate Holder, the Depositor, the Master
Servicer or the Special Servicer, in that order, to elect to purchase from the
Trust Fund all Mortgage Loans and each REO Property remaining therein. The
exercise of such right will effect early retirement of the Class E
Certificates; however, such right to elect to purchase is subject to the
aggregate Stated Principal Balance of the Mortgage Pool at the time of election
being less than 1% of the aggregate Cut-Off Date Balance of the Mortgage Loans.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Special Servicer and the
Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Master Servicer, the Special Servicer and the
Trustee with the consent of the Holders of Certificates entitled to at least
51% of the Voting Rights allocated to the affected Classes. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof
-6-
<PAGE>
whether or not notation of such consent is made upon this Certificate. The
Agreement also permits the amendment thereof, in certain limited circumstances,
including any amendment necessary to maintain the status of the Trust Fund (or
designated portions thereof) as a REMIC, without the consent of the Holders of
any of the Certificates.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, the Holder of this
Certificate shall not be entitled to any benefit under the Agreement or be
valid for any purpose.
The registered Holder hereof, by its acceptance hereof,
agrees that it will look solely to the Trust Fund (to the extent of its rights
therein) for distributions hereunder.
This Certificate shall be construed in accordance with the
internal laws of the State of New York applicable to agreements made and to be
performed in said State, and the obligations, rights and remedies of the Holder
hereof shall be determined in accordance with such laws.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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<PAGE>
IN WITNESS WHEREOF, the Certificate Registrar has caused this
Certificate to be duly executed.
Dated: December __, 1998
THE CHASE MANHATTAN BANK
as Certificate Registrar
By: __________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class E Certificates referred to in the
within-mentioned Agreement.
THE CHASE MANHATTAN BANK
as Authenticating Agent
By: __________________
Authorized Officer
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<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Mortgage Pass-Through Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.
I (we) further direct the Certificate Registrar to issue a
new Mortgage Pass-Through Certificate of a like Percentage Interest and Class
to the above named assignee and deliver such Mortgage Pass-Through Certificate
to the following address:______________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
Dated:
_____________________________________
Signature by or on behalf of Assignor
_____________________________________
Signature Guaranteed
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<PAGE>
DISTRIBUTION INSTRUCTIONS
The Assignee should include the following for purposes of
distribution:
Distributions shall, if permitted, be made by wire transfer or
otherwise, in immediately available funds, to _________________________________
______________________________________ for the account of _____________________
_______________________________.
Distributions made by check (such check to be made payable to
__________________________________________) and all applicable statements and
notices should be mailed to ____________________________________ .
This information is provided by ______________________, the
Assignee named above, or ______________, as its agent.
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<PAGE>
EXHIBIT A-9
FORM OF CLASS F CERTIFICATE
CLASS F MERRILL LYNCH MORTGAGE INVESTORS, INC.,
SERIES 1998-C3
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool of multifamily and commercial mortgage loans
(the "Mortgage Loans"), such pool being formed and sold by
MERRILL LYNCH MORTGAGE INVESTORS, INC.
<TABLE>
<CAPTION>
<S> <C>
Pass-Through Class Principal Balance of the Class F Certificates
Rate: ___% per annum as of the Closing Date:
$35,113,000
Date of Pooling and Servicing Initial Certificate Principal Balance of this Class F
Agreement: December 1, 1998 Certificate as of the Closing
Date: $______
Closing Date: December __, 1998 Aggregate Stated Principal
Balance of the Mortgage Loans
as of the Cut-Off Date:
$638,408,606
First Distribution Date:
January 15, 1999
Master Servicer: Trustee:
GE Capital Loan Services, Inc. The Chase Manhattan Bank
Special Servicer: CUSIP No. 589929 SR0
GE Capital Realty Group, Inc.
Certificate No.
</TABLE>
<PAGE>
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST CORPORATION, A NEW YORK CORPORATION ("DTC"), TO THE
CERTIFICATE REGISTRAR OR ANY AGENT THEREOF FOR REGISTRATION OF TRANSFER,
EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN THE
DEPOSITOR, THE UNDERWRITERS, THE MASTER SERVICER, THE SPECIAL SERVICER, THE
TRUSTEE, THE MORTGAGE LOAN SELLERS OR ANY OF THEIR AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1, CLASS A-2, CLASS A-3, CLASS
IO, CLASS B, CLASS C, CLASS D AND CLASS E CERTIFICATES OF THE SAME SERIES TO
THE EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES
LAWS OF ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS
CERTIFICATE WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A
TRANSACTION WHICH DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN MAY BE MADE (A) TO ANY
EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT, INCLUDING INDIVIDUAL
RETIREMENT ACCOUNTS AND ANNUITIES, KEOGH PLANS AND COLLECTIVE INVESTMENT FUNDS
AND SEPARATE ACCOUNTS IN WHICH SUCH PLANS, ACCOUNTS OR ARRANGEMENTS ARE
INVESTED, THAT IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED ("ERISA"), OR THE PROHIBITED TRANSACTIONS RESTRICTIONS OF
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") (ANY
SUCH EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT, A "PLAN"), OR (B)
TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS CERTIFICATE OR SUCH
INTEREST HEREIN ON BEHALF OF, AS NAMED FIDUCIARY OF, AS TRUSTEE OF, OR WITH
ASSETS OF A PLAN (INCLUDING, WITHOUT LIMITATION, ANY INSURANCE COMPANY USING
ASSETS IN ITS GENERAL OR SEPARATE ACCOUNT THAT MAY CONSTITUTE "PLAN ASSETS" OF
A PLAN); PROVIDED, THAT (A) SUCH A TRANSFER MAY BE MADE TO AN INSURANCE COMPANY
GENERAL ACCOUNT IF (I) THIS CERTIFICATE IS ELIGIBLE FOR EXEMPTIVE RELIEF UNDER
SECTION III OF PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 ("PTE 95-60"), AND
(II) THE CONDITIONS OF SECTIONS I, III AND IV OF PTE 95-60 ARE SATISFIED WITH
RESPECT TO
-2-
<PAGE>
SUCH TRANSFER AND (B) SUCH A TRANSFER MAY BE MADE IF THE PROSPECTIVE TRANSFEREE
PROVIDES THE CERTIFICATE REGISTRAR WITH A CERTIFICATION OF FACTS AND AN OPINION
OF COUNSEL THAT ESTABLISH TO THE SATISFACTION OF THE CERTIFICATE REGISTRAR THAT
SUCH TRANSFER WILL NOT RESULT IN A VIOLATION OF SECTION 406 OF ERISA OR SECTION
4975 OF THE CODE OR RESULT IN THE IMPOSITION OF AN EXCISE TAX UNDER SECTION 4975
OF THE CODE. AS A CONDITION TO ITS REGISTRATION OF TRANSFER OF A CLASS F
CERTIFICATE, THE CERTIFICATE REGISTRAR SHALL HAVE THE RIGHT TO REQUIRE THE
PROSPECTIVE TRANSFEREE OF SUCH CERTIFICATE TO EXECUTE A CERTIFICATION
SUBSTANTIALLY IN THE FORM OF EXHIBIT G TO THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE. THE
FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES OF APPLYING THE U.S.
FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES TO THIS CERTIFICATE.
THE ISSUE DATE OF THIS CERTIFICATE IS DECEMBER __, 1998. ASSUMING THAT THE
MORTGAGE LOANS PREPAY AT AN ASSUMED RATE OF PREPAYMENT USED SOLELY FOR THE
PURPOSES OF APPLYING THE OID RULES TO THE CERTIFICATES EQUAL TO A CPR (AS
DEFINED IN THE PROSPECTUS DATED FEBRUARY 25, 1998 AND THE PROSPECTUS SUPPLEMENT
DATED DECEMBER 17, 1998 RELATING TO THIS CERTIFICATE) OF 0% AND THAT THE ARD
LOANS ARE REPAID IN FULL ON THEIR RESPECTIVE ANTICIPATED REPAYMENT DATES AS SET
FORTH IN SUCH PROSPECTUS SUPPLEMENT (THE "PREPAYMENT ASSUMPTION"), THIS
CERTIFICATE HAS BEEN ISSUED WITH NO MORE THAN $________ OF OID PER $1,000 OF
INITIAL CERTIFICATE PRINCIPAL BALANCE, THE YIELD TO MATURITY IS ___% PER ANNUM,
AND THE AMOUNT OF OID ATTRIBUTABLE TO THE INITIAL ACCRUAL PERIOD IS NO MORE
THAN $____________ PER $1,000 OF INITIAL CERTIFICATE PRINCIPAL BALANCE,
COMPUTED UNDER THE EXACT METHOD. NO REPRESENTATION IS MADE THAT THE MORTGAGE
LOANS WILL PREPAY AT A RATE BASED ON THE PREPAYMENT ASSUMPTION OR AT ANY OTHER
RATE.
IF THE AGGREGATE CERTIFICATE PRINCIPAL BALANCE OF THE CLASS A-1, CLASS A-2,
CLASS A-3, CLASS B, CLASS C, CLASS D AND CLASS E CERTIFICATES OF THE SAME
SERIES IS REDUCED TO ZERO, DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE
PRINCIPAL BALANCE OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH IN THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN. IN ADDITION, IF THE
AGGREGATE CERTIFICATE PRINCIPAL BALANCE OF THE CLASS G, CLASS H, CLASS J AND
CLASS K CERTIFICATES OF THE SAME SERIES IS REDUCED TO ZERO, THE CERTIFICATE
PRINCIPAL BALANCE OF THIS CERTIFICATE MAY BE REDUCED BY CERTAIN LOSSES AND
EXPENSES EXPERIENCED BY THE TRUST FUND AS SET FORTH IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN. ACCORDINGLY, THE OUTSTANDING
CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN ABOVE.
-3-
<PAGE>
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class F Certificate (obtained by dividing
the principal amount of this Class F Certificate (its "Certificate Principal
Balance") as of the Closing Date by the aggregate principal amount of all the
Class F Certificates (their "Class Principal Balance") as of the Closing Date)
in that certain beneficial ownership interest evidenced by all the Class F
Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Merrill Lynch
Mortgage Investors, Inc. (hereinafter called the "Depositor", which term
includes any successor entity under the Agreement), GE Capital Loan Services,
Inc. (hereinafter called the "Master Servicer", which term includes any
successor entity under the Agreement), GE Capital Realty Group, Inc.
(hereinafter called the "Special Servicer", which term includes any successor
entities under the Agreement), and The Chase Manhattan Bank (hereinafter called
the "Trustee", which term includes any successor entity under the Agreement), a
summary of certain of the pertinent provisions of which is set forth hereafter.
To the extent not defined herein, the capitalized terms used herein have the
respective meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 15th day of each month or, if such 15th day is not a Business Day,
the Business Day immediately following (each, a "Distribution Date") (provided,
however, that the Distribution Date will be no earlier than the fourth Business
Day following the related Determination Date), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of the
Class F Certificates on the applicable Distribution Date pursuant to the
Agreement. All Distributions made under the Agreement on this Class F
Certificate will be made by The Chase Manhattan Bank, as paying agent (the
"Paying Agent"), by wire transfer of immediately available funds to the account
of the Person entitled thereto at a bank or other entity having appropriate
facilities therefor, if such Certificateholder shall have provided the Paying
Agent with wiring instructions no less than five Business Days prior to the
related Record Date (which wiring instructions may be in the form of a standing
order applicable to all subsequent distributions) or otherwise by check mailed
to the address of such Certificateholder as it appears in the Certificate
Register. Notwithstanding the foregoing, the final distribution on this
Certificate (determined without regard to any possible future reimbursement of
any Realized Loss or
-4-
<PAGE>
Additional Trust Fund Expense previously allocated to this Certificate) will be
made in like manner, but only upon presentation and surrender of this
Certificate at the offices of the Trustee or such other location specified in
the notice to the Holder hereof of such final distribution. Also notwithstanding
the foregoing, any distribution that may be made with respect to this
Certificate in reimbursement of any Realized Loss or Additional Trust Fund
Expense previously allocated to this Certificate, which reimbursement is to
occur after the date on which this Certificate is surrendered as contemplated
by the preceding sentence, will be made by check mailed to the address of the
Holder that surrenders this Certificate as such address last appears in the
Certificate Register or to any such other address of which the Trustee is
subsequently notified in writing.
The Certificates are limited in right of distribution to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Certificate Account, the Distribution Account
and, if established, the REO Account may be made from time to time for purposes
other than, and, in certain cases, prior to, distributions to
Certificateholders, such purposes including the reimbursement of advances made,
or certain expenses incurred, with respect to the Mortgage Loans and the
payment of interest on such advances and expenses.
Any distribution to the Holder of this Certificate in
reduction of the Certificate Principal Balance hereof is binding on such Holder
and all future Holders of this Certificate and any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such distribution is made upon this Certificate.
The Class F Certificates are issuable in fully registered
form only without coupons in minimum denominations specified in the Agreement.
As provided in the Agreement and subject to certain limitations therein set
forth, Class F Certificates are exchangeable for new Class F Certificates in
authorized denominations evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices of the Certificate Registrar, duly endorsed by, or
accompanied by a written instrument of transfer in the form satisfactory to the
Certificate Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Class F Certificates in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.
-5-
<PAGE>
No transfer of any Class F Certificate shall be made unless
that transfer is made pursuant to an effective registration statement under the
Securities Act, and effective registration or qualification under applicable
state securities laws, or is made in a transaction which does not require such
registration or qualification. If such a transfer is to be made without
registration under the Securities Act (other than in connection with the
initial issuance thereof or the initial transfer thereof by the Depositor or
any of its affiliates), then the Certificate Registrar shall refuse to register
such transfer unless it receives either: (i) a certificate from the
Certificateholder desiring to effect such transfer substantially in the form
attached as Exhibit F-1 to the Agreement, and a certificate from such
Certificateholder's prospective transferee substantially in the form attached
as either Exhibit F-2 or Exhibit F-3 to the Agreement; or (ii) an Opinion of
Counsel satisfactory to the Certificate Registrar to the effect that such
transfer may be made without registration under the Securities Act (which
Opinion of Counsel shall not be an expense of the Trust Fund or of the
Depositor, the Master Servicer, the Special Servicer, the Trustee or the
Certificate Registrar in their respective capacities as such), together with
the written certification(s) as to the facts surrounding such transfer from the
Certificateholder desiring to effect such transfer and/or such
Certificateholder's prospective transferee on which such Opinion of Counsel is
based. None of the Depositor, the Trustee or the Certificate Registrar is
obligated to register or qualify the Class F Certificates under the Securities
Act or any other securities law or to take any action not otherwise required
under the Agreement to permit the transfer of any Class F Certificate without
registration or qualification. Any Class F Certificateholder desiring to effect
such a transfer shall, and upon acquisition of its Class F Certificate agrees
to, indemnify the Trustee, the Certificate Registrar and the Depositor against
any liability that may result if the transfer is not so exempt or is not made
in accordance with such federal and state laws.
No service charge will be imposed for any registration of
transfer or exchange of Class F Certificates, but the Certificate Registrar may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of Class
F Certificates.
Notwithstanding the foregoing, for so long as this
Certificate is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC, transfers of interests in
this Certificate shall be made through the book-entry facilities of DTC.
The Depositor, the Master Servicer, the Special Servicer, the
Trustee, the Paying Agent and the Certificate Registrar and any agent of the
Depositor, the Master Servicer, the Special Servicer, the Trustee, the Paying
Agent or the Certificate Registrar may treat the Person in whose name this
-6-
<PAGE>
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Special Servicer, the Trustee, the Paying
Agent, the Certificate Registrar or any such agent shall be affected by notice
to the contrary.
The Trust Fund and the obligations created by the Agreement
shall terminate upon distribution (or provision for distribution) to the
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be distributed to them pursuant to the Agreement following the
earlier of (i) the final payment or other liquidation (or any Advance with
respect thereto) of the last Mortgage Loan or REO Property remaining in the
Trust Fund, and (ii) the purchase by the Majority Subordinate Certificate
Holder, the Depositor, the Master Servicer or the Special Servicer at a price
determined as provided in the Agreement of all Mortgage Loans and each REO
Property remaining in the Trust Fund. The Agreement permits, but does not
require, the Majority Subordinate Certificate Holder, the Depositor, the Master
Servicer or the Special Servicer, in that order, to elect to purchase from the
Trust Fund all Mortgage Loans and each REO Property remaining therein. The
exercise of such right will effect early retirement of the Class F
Certificates; however, such right to elect to purchase is subject to the
aggregate Stated Principal Balance of the Mortgage Pool at the time of election
being less than 1% of the aggregate Cut-Off Date Balance of the Mortgage Loans.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Special Servicer and the
Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Master Servicer, the Special Servicer and the
Trustee with the consent of the Holders of Certificates entitled to at least
51% of the Voting Rights allocated to the affected Classes. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or
not notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, including any
amendment necessary to maintain the status of the Trust Fund (or designated
portions thereof) as a REMIC, without the consent of the Holders of any of the
Certificates.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
-7-
<PAGE>
The registered Holder hereof, by its acceptance hereof,
agrees that it will look solely to the Trust Fund (to the extent of its rights
therein) for distributions hereunder.
This Certificate shall be construed in accordance with the
internal laws of the State of New York applicable to agreements made and to be
performed in said State, and the obligations, rights and remedies of the Holder
hereof shall be determined in accordance with such laws.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-8-
<PAGE>
IN WITNESS WHEREOF, the Certificate Registrar has caused this
Certificate to be duly executed.
Dated: December __, 1998
THE CHASE MANHATTAN BANK
as Certificate Registrar
By: __________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class F Certificates referred to in the
within-mentioned Agreement.
THE CHASE MANHATTAN BANK
as Authenticating Agent
By: __________________
Authorized Officer
-9-
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
__________________________________________
__________________________________________
__________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Mortgage Pass-Through Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.
I (we) further direct the Certificate Registrar to issue a
new Mortgage Pass-Through Certificate of a like Percentage Interest and Class
to the above named assignee and deliver such Mortgage Pass-Through Certificate
to the following address: _____________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
Dated:
_____________________________________
Signature by or on behalf of Assignor
_____________________________________
Signature Guaranteed
-10-
<PAGE>
DISTRIBUTION INSTRUCTIONS
The Assignee should include the following for purposes of
distribution:
Distributions shall, if permitted, be made by wire transfer or
otherwise, in immediately available funds, to _________________________________
__________________________________________________ for the account of _________
___________________________________________________________________.
Distributions made by check (such check to be made payable to
__________________________________________) and all applicable statements and
notices should be mailed to ____________________________________.
This information is provided by ______________________, the
Assignee named above, or ______________, as its agent.
-11-
<PAGE>
EXHIBIT A-10
FORM OF CLASS G CERTIFICATE
CLASS G MERRILL LYNCH MORTGAGE INVESTORS, INC.,
SERIES 1998-C3
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool of multifamily and commercial mortgage loans
(the "Mortgage Loans"), such pool being formed and sold by
MERRILL LYNCH MORTGAGE INVESTORS, INC.
<TABLE>
<CAPTION>
<S> <C>
Pass-Through Class Principal Balance of the Class G Certificates
Rate: ___% per annum as of the Closing Date:
$4,788,000
Date of Pooling and Servicing Initial Certificate Principal Balance of this Class G
Agreement: December 1, 1998 Certificate as of the Closing
Date: $______
Closing Date: December __, 1998 Aggregate Stated Principal
Balance of the Mortgage Loans
as of the Cut-Off Date:
$638,408,606
First Distribution Date:
January 15, 1999
Master Servicer: Trustee:
GE Capital Loan Services, Inc. The Chase Manhattan Bank
Special Servicer: CUSIP No. 589929 SS8
GE Capital Realty Group, Inc.
Certificate No.
</TABLE>
<PAGE>
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST CORPORATION, A NEW YORK CORPORATION ("DTC"), TO THE
CERTIFICATE REGISTRAR OR ANY AGENT THEREOF FOR REGISTRATION OF TRANSFER,
EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN THE
DEPOSITOR, THE UNDERWRITERS, THE MASTER SERVICER, THE SPECIAL SERVICER, THE
TRUSTEE, THE MORTGAGE LOAN SELLERS OR ANY OF THEIR AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1, CLASS A-2, CLASS A-3, CLASS
IO, CLASS B, CLASS C, CLASS D, CLASS E AND CLASS F CERTIFICATES OF THE SAME
SERIES TO THE EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED
TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES
LAWS OF ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS
CERTIFICATE WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A
TRANSACTION WHICH DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN MAY BE MADE (A) TO ANY
EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT, INCLUDING INDIVIDUAL
RETIREMENT ACCOUNTS AND ANNUITIES, KEOGH PLANS AND COLLECTIVE INVESTMENT FUNDS
AND SEPARATE ACCOUNTS IN WHICH SUCH PLANS, ACCOUNTS OR ARRANGEMENTS ARE
INVESTED, THAT IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED ("ERISA"), OR THE PROHIBITED TRANSACTIONS RESTRICTIONS OF
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") (ANY
SUCH EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT, A "PLAN"), OR (B)
TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS CERTIFICATE OR SUCH
INTEREST HEREIN ON BEHALF OF, AS NAMED FIDUCIARY OF, AS TRUSTEE OF, OR WITH
ASSETS OF A PLAN (INCLUDING, WITHOUT LIMITATION, ANY INSURANCE COMPANY USING
ASSETS IN ITS GENERAL OR SEPARATE ACCOUNT THAT MAY CONSTITUTE "PLAN ASSETS" OF
A PLAN); PROVIDED, THAT (A) SUCH A TRANSFER MAY BE MADE TO AN INSURANCE COMPANY
GENERAL ACCOUNT IF (I) THIS CERTIFICATE IS ELIGIBLE FOR EXEMPTIVE RELIEF UNDER
SECTION III OF PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 ("PTE 95-60"), AND
(II) THE CONDITIONS OF SECTIONS I, III AND IV OF PTE 95-60 ARE SATISFIED WITH
RESPECT TO
-2-
<PAGE>
SUCH TRANSFER AND (B) SUCH A TRANSFER MAY BE MADE IF THE PROSPECTIVE TRANSFEREE
PROVIDES THE CERTIFICATE REGISTRAR WITH A CERTIFICATION OF FACTS AND AN OPINION
OF COUNSEL THAT ESTABLISH TO THE SATISFACTION OF THE CERTIFICATE REGISTRAR THAT
SUCH TRANSFER WILL NOT RESULT IN A VIOLATION OF SECTION 406 OF ERISA OR
SECTION 4975 OF THE CODE OR RESULT IN THE IMPOSITION OF AN EXCISE TAX UNDER
SECTION 4975 OF THE CODE. AS A CONDITION TO ITS REGISTRATION OF TRANSFER OF A
CLASS G CERTIFICATE, THE CERTIFICATE REGISTRAR SHALL HAVE THE RIGHT TO REQUIRE
THE PROSPECTIVE TRANSFEREE OF SUCH CERTIFICATE TO EXECUTE A CERTIFICATION
SUBSTANTIALLY IN THE FORM OF EXHIBIT G TO THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE. THE
FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES OF APPLYING THE U.S.
FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES TO THIS CERTIFICATE.
THE ISSUE DATE OF THIS CERTIFICATE IS DECEMBER __, 1998. ASSUMING THAT THE
MORTGAGE LOANS PREPAY AT AN ASSUMED RATE OF PREPAYMENT USED SOLELY FOR THE
PURPOSES OF APPLYING THE OID RULES TO THE CERTIFICATES EQUAL TO A CPR (AS
DEFINED IN THE PROSPECTUS DATED FEBRUARY 25, 1998 AND THE PROSPECTUS SUPPLEMENT
DATED DECEMBER 17, 1998 RELATING TO THIS CERTIFICATE) OF 0% AND THAT THE ARD
LOANS ARE REPAID IN FULL ON THEIR RESPECTIVE ANTICIPATED REPAYMENT DATES AS SET
FORTH IN SUCH PROSPECTUS SUPPLEMENT (THE "PREPAYMENT ASSUMPTION"), THIS
CERTIFICATE HAS BEEN ISSUED WITH NO MORE THAN $________ OF OID PER $1,000 OF
INITIAL CERTIFICATE PRINCIPAL BALANCE, THE YIELD TO MATURITY IS ___% PER ANNUM,
AND THE AMOUNT OF OID ATTRIBUTABLE TO THE INITIAL ACCRUAL PERIOD IS NO MORE
THAN $____________ PER $1,000 OF INITIAL CERTIFICATE PRINCIPAL BALANCE,
COMPUTED UNDER THE EXACT METHOD. NO REPRESENTATION IS MADE THAT THE MORTGAGE
LOANS WILL PREPAY AT A RATE BASED ON THE PREPAYMENT ASSUMPTION OR AT ANY OTHER
RATE.
IF THE AGGREGATE CERTIFICATE PRINCIPAL BALANCE OF THE CLASS A-1, CLASS A-2,
CLASS A-3, CLASS B, CLASS C, CLASS D, CLASS E AND CLASS F CERTIFICATES OF THE
SAME SERIES IS REDUCED TO ZERO, DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE
PRINCIPAL BALANCE OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH IN THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN. IN ADDITION, IF THE
AGGREGATE CERTIFICATE PRINCIPAL BALANCE OF THE CLASS H, CLASS J AND CLASS K
CERTIFICATES OF THE SAME SERIES IS REDUCED TO ZERO, THE CERTIFICATE PRINCIPAL
BALANCE OF THIS CERTIFICATE MAY BE REDUCED BY CERTAIN LOSSES AND EXPENSES
EXPERIENCED BY THE TRUST FUND AS SET FORTH IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN. ACCORDINGLY, THE OUTSTANDING CERTIFICATE
PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE.
-3-
<PAGE>
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class G Certificate (obtained by dividing
the principal amount of this Class G Certificate (its "Certificate Principal
Balance") as of the Closing Date by the aggregate principal amount of all the
Class G Certificates (their "Class Principal Balance") as of the Closing Date)
in that certain beneficial ownership interest evidenced by all the Class G
Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Merrill Lynch
Mortgage Investors, Inc. (hereinafter called the "Depositor", which term
includes any successor entity under the Agreement), GE Capital Loan Services,
Inc. (hereinafter called the "Master Servicer", which term includes any
successor entity under the Agreement), GE Capital Realty Group, Inc.
(hereinafter called the "Special Servicer", which term includes any successor
entities under the Agreement), and The Chase Manhattan Bank (hereinafter called
the "Trustee", which term includes any successor entity under the Agreement), a
summary of certain of the pertinent provisions of which is set forth hereafter.
To the extent not defined herein, the capitalized terms used herein have the
respective meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 15th day of each month or, if such 15th day is not a Business Day,
the Business Day immediately following (each, a "Distribution Date") (provided,
however, that the Distribution Date will be no earlier than the fourth Business
Day following the related Determination Date), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of the
Class G Certificates on the applicable Distribution Date pursuant to the
Agreement. All Distributions made under the Agreement on this Class G
Certificate will be made by The Chase Manhattan Bank, as paying agent (the
"Paying Agent"), by wire transfer of immediately available funds to the account
of the Person entitled thereto at a bank or other entity having appropriate
facilities therefor, if such Certificateholder shall have provided the Paying
Agent with wiring instructions no less than five Business Days prior to the
related Record Date (which wiring instructions may be in the form of a standing
order applicable to all subsequent distributions) or otherwise by check mailed
to the address of such Certificateholder as it appears in the Certificate
Register. Notwithstanding the foregoing, the final distribution on this
Certificate (determined without regard to any possible future reimbursement of
any Realized Loss or
-4-
<PAGE>
Additional Trust Fund Expense previously allocated to this Certificate) will be
made in like manner, but only upon presentation and surrender of this
Certificate at the offices of the Trustee or such other location specified in
the notice to the Holder hereof of such final distribution. Also notwithstanding
the foregoing, any distribution that may be made with respect to this
Certificate in reimbursement of any Realized Loss or Additional Trust Fund
Expense previously allocated to this Certificate, which reimbursement is to
occur after the date on which this Certificate is surrendered as contemplated
by the preceding sentence, will be made by check mailed to the address of the
Holder that surrenders this Certificate as such address last appears in the
Certificate Register or to any such other address of which the Trustee is
subsequently notified in writing.
The Certificates are limited in right of distribution to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Certificate Account, the Distribution Account
and, if established, the REO Account may be made from time to time for purposes
other than, and, in certain cases, prior to, distributions to
Certificateholders, such purposes including the reimbursement of advances made,
or certain expenses incurred, with respect to the Mortgage Loans and the
payment of interest on such advances and expenses.
Any distribution to the Holder of this Certificate in
reduction of the Certificate Principal Balance hereof is binding on such Holder
and all future Holders of this Certificate and any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such distribution is made upon this Certificate.
The Class G Certificates are issuable in fully registered
form only without coupons in minimum denominations specified in the Agreement.
As provided in the Agreement and subject to certain limitations therein set
forth, Class G Certificates are exchangeable for new Class G Certificates in
authorized denominations evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices of the Certificate Registrar, duly endorsed by, or
accompanied by a written instrument of transfer in the form satisfactory to the
Certificate Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Class G Certificates in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.
-5-
<PAGE>
No transfer of any Class G Certificate shall be made unless
that transfer is made pursuant to an effective registration statement under the
Securities Act, and effective registration or qualification under applicable
state securities laws, or is made in a transaction which does not require such
registration or qualification. If such a transfer is to be made without
registration under the Securities Act (other than in connection with the
initial issuance thereof or the initial transfer thereof by the Depositor or
any of its affiliates), then the Certificate Registrar shall refuse to register
such transfer unless it receives either: (i) a certificate from the
Certificateholder desiring to effect such transfer substantially in the form
attached as Exhibit F-1 to the Agreement, and a certificate from such
Certificateholder's prospective transferee substantially in the form attached
as either Exhibit F-2 or Exhibit F-3 to the Agreement; or (ii) an Opinion of
Counsel satisfactory to the Certificate Registrar to the effect that such
transfer may be made without registration under the Securities Act (which
Opinion of Counsel shall not be an expense of the Trust Fund or of the
Depositor, the Master Servicer, the Special Servicer, the Trustee or the
Certificate Registrar in their respective capacities as such), together with
the written certification(s) as to the facts surrounding such transfer from the
Certificateholder desiring to effect such transfer and/or such
Certificateholder's prospective transferee on which such Opinion of Counsel is
based. None of the Depositor, the Trustee or the Certificate Registrar is
obligated to register or qualify the Class G Certificates under the Securities
Act or any other securities law or to take any action not otherwise required
under the Agreement to permit the transfer of any Class G Certificate without
registration or qualification. Any Class G Certificateholder desiring to effect
such a transfer shall, and upon acquisition of its Class G Certificate agrees
to, indemnify the Trustee, the Certificate Registrar and the Depositor against
any liability that may result if the transfer is not so exempt or is not made
in accordance with such federal and state laws.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices of the Certificate Registrar, duly endorsed by, or
accompanied by a written instrument of transfer in the form satisfactory to the
Certificate Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Class G Certificates in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.
No service charge will be imposed for any registration of
transfer or exchange of Class G Certificates, but the Certificate Registrar may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of Class
G Certificates.
-6-
<PAGE>
Notwithstanding the foregoing, for so long as this
Certificate is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC, transfers of interests in
this Certificate shall be made through the book-entry facilities of DTC.
The Depositor, the Master Servicer, the Special Servicer, the
Trustee, the Paying Agent and the Certificate Registrar and any agent of the
Depositor, the Master Servicer, the Special Servicer, the Trustee, the Paying
Agent or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Special Servicer, the Trustee, the Paying
Agent, the Certificate Registrar or any such agent shall be affected by notice
to the contrary.
The Trust Fund and the obligations created by the Agreement
shall terminate upon distribution (or provision for distribution) to the
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be distributed to them pursuant to the Agreement following the
earlier of (i) the final payment or other liquidation (or any Advance with
respect thereto) of the last Mortgage Loan or REO Property remaining in the
Trust Fund, and (ii) the purchase by the Majority Subordinate Certificate
Holder, the Depositor, the Master Servicer or the Special Servicer at a price
determined as provided in the Agreement of all Mortgage Loans and each REO
Property remaining in the Trust Fund. The Agreement permits, but does not
require, the Majority Subordinate Certificate Holder, the Depositor, the Master
Servicer or the Special Servicer, in that order, to elect to purchase from the
Trust Fund all Mortgage Loans and each REO Property remaining therein. The
exercise of such right will effect early retirement of the Class G
Certificates; however, such right to elect to purchase is subject to the
aggregate Stated Principal Balance of the Mortgage Pool at the time of election
being less than 1% of the aggregate Cut-Off Date Balance of the Mortgage Loans.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Special Servicer and the
Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Master Servicer, the Special Servicer and the
Trustee with the consent of the Holders of Certificates entitled to at least
51% of the Voting Rights allocated to the affected Classes. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or
not notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, including any
amendment
-7-
<PAGE>
necessary to maintain the status of the Trust Fund (or designated portions
thereof) as a REMIC, without the consent of the Holders of any of the
Certificates.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, the Holder of this
Certificate shall not be entitled to any benefit under the Agreement or be
valid for any purpose.
The registered Holder hereof, by its acceptance hereof,
agrees that it will look solely to the Trust Fund (to the extent of its rights
therein) for distributions hereunder.
This Certificate shall be construed in accordance with the
internal laws of the State of New York applicable to agreements made and to be
performed in said State, and the obligations, rights and remedies of the Holder
hereof shall be determined in accordance with such laws.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-8-
<PAGE>
IN WITNESS WHEREOF, the Certificate Registrar has caused this
Certificate to be duly executed.
Dated: December __, 1998
THE CHASE MANHATTAN BANK
as Certificate Registrar
By: __________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class G Certificates referred to in the
within-mentioned Agreement.
THE CHASE MANHATTAN BANK
as Authenticating Agent
By: __________________
Authorized Officer
-9-
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
______________________________
______________________________
______________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Mortgage Pass-Through Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.
I (we) further direct the Certificate Registrar to issue a
new Mortgage Pass-Through Certificate of a like Percentage Interest and Class
to the above named assignee and deliver such Mortgage Pass-Through Certificate
to the following address:______________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
Dated:
_____________________________________
Signature by or on behalf of Assignor
_____________________________________
Signature Guaranteed
-10-
<PAGE>
DISTRIBUTION INSTRUCTIONS
The Assignee should include the following for purposes of
distribution:
Distributions shall, if permitted, be made by wire transfer or
otherwise, in immediately available funds, to__________________________________
_______________________________________________________________________________
for the account of_____________________________________________________________
________________.
Distributions made by check (such check to be made payable to
__________________________________________) and all applicable statements and
notices should be mailed to ____________________________________.
This information is provided by ______________________,
the Assignee named above, or ______________, as its agent.
-11-
<PAGE>
EXHIBIT A-11
FORM OF CLASS H CERTIFICATE
CLASS H MERRILL LYNCH MORTGAGE INVESTORS, INC.,
SERIES 1998-C3
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool of multifamily mortgage loans (the "Mortgage
Loans"), such pool being formed and sold by
MERRILL LYNCH MORTGAGE INVESTORS, INC.
<TABLE>
<CAPTION>
<S> <C>
Pass-Through Class Principal Balance of the Class H Certificates
Rate: ___% per annum as of the Closing Date:
$14,364,000
Date of Pooling and Servicing Initial Certificate Principal Balance of this Class H
Agreement: December 1, 1998 Certificate as of the Closing
Date: $______
Closing Date: December __, 1998 Aggregate Stated Principal
Balance of the Mortgage Loans
as of the Cut-Off Date:
$638,408,606
First Distribution Date:
January 15, 1999
Master Servicer: Trustee:
GE Capital Loan Services, Inc. The Chase Manhattan Bank
Special Servicer: CUSIP No. 589929 ST6
GE Capital Realty Group, Inc.
Certificate No.
</TABLE>
<PAGE>
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST CORPORATION, A NEW YORK CORPORATION ("DTC"), TO THE
CERTIFICATE REGISTRAR OR ANY AGENT THEREOF FOR REGISTRATION OF TRANSFER,
EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN THE
DEPOSITOR, THE UNDERWRITERS, THE MASTER SERVICER, THE SPECIAL SERVICER, THE
TRUSTEE, THE MORTGAGE LOAN SELLERS OR ANY OF THEIR AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1, CLASS A-2, CLASS A-3, CLASS
IO, CLASS B, CLASS C, CLASS D, CLASS E, CLASS F AND CLASS G CERTIFICATES OF THE
SAME SERIES TO THE EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES
LAWS OF ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS
CERTIFICATE WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A
TRANSACTION WHICH DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN MAY BE MADE (A) TO ANY
EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT, INCLUDING INDIVIDUAL
RETIREMENT ACCOUNTS AND ANNUITIES, KEOGH PLANS AND COLLECTIVE INVESTMENT FUNDS
AND SEPARATE ACCOUNTS IN WHICH SUCH PLANS, ACCOUNTS OR ARRANGEMENTS ARE
INVESTED, THAT IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED ("ERISA"), OR THE PROHIBITED TRANSACTIONS RESTRICTIONS OF
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") (ANY
SUCH EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT, A "PLAN"), OR (B)
TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS CERTIFICATE OR SUCH
INTEREST HEREIN ON BEHALF OF, AS NAMED FIDUCIARY OF, AS TRUSTEE OF, OR WITH
ASSETS OF A PLAN (INCLUDING, WITHOUT LIMITATION, ANY INSURANCE COMPANY USING
ASSETS IN ITS GENERAL OR SEPARATE ACCOUNT THAT MAY CONSTITUTE "PLAN ASSETS" OF
A PLAN); PROVIDED, THAT (A) SUCH A TRANSFER MAY BE MADE TO AN INSURANCE COMPANY
GENERAL ACCOUNT IF (I) THIS CERTIFICATE IS ELIGIBLE FOR EXEMPTIVE RELIEF UNDER
SECTION III OF PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 ("PTE 95-60"), AND
(II) THE CONDITIONS OF
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<PAGE>
SECTIONS I, III AND IV OF PTE 95-60 ARE SATISFIED WITH RESPECT TO SUCH TRANSFER
AND (B) SUCH A TRANSFER MAY BE MADE IF THE PROSPECTIVE TRANSFEREE PROVIDES THE
CERTIFICATE REGISTRAR WITH A CERTIFICATION OF FACTS AND AN OPINION OF COUNSEL
THAT ESTABLISH TO THE SATISFACTION OF THE CERTIFICATE REGISTRAR THAT SUCH
TRANSFER WILL NOT RESULT IN A VIOLATION OF SECTION 406 OF ERISA OR SECTION 4975
OF THE CODE OR RESULT IN THE IMPOSITION OF AN EXCISE TAX UNDER SECTION 4975 OF
THE CODE. AS A CONDITION TO ITS REGISTRATION OF TRANSFER OF A CLASS H
CERTIFICATE, THE CERTIFICATE REGISTRAR SHALL HAVE THE RIGHT TO REQUIRE THE
PROSPECTIVE TRANSFEREE OF SUCH CERTIFICATE TO EXECUTE A CERTIFICATION
SUBSTANTIALLY IN THE FORM OF EXHIBIT G TO THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE. THE
FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES OF APPLYING THE U.S.
FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES TO THIS CERTIFICATE.
THE ISSUE DATE OF THIS CERTIFICATE IS DECEMBER __, 1998. ASSUMING THAT THE
MORTGAGE LOANS PREPAY AT AN ASSUMED RATE OF PREPAYMENT USED SOLELY FOR THE
PURPOSES OF APPLYING THE OID RULES TO THE CERTIFICATES EQUAL TO A CPR (AS
DEFINED IN THE PROSPECTUS DATED FEBRUARY 25, 1998 AND THE PROSPECTUS SUPPLEMENT
DATED DECEMBER 17, 1998 RELATING TO THIS CERTIFICATE) OF 0% AND THAT THE ARD
LOANS ARE REPAID IN FULL ON THEIR RESPECTIVE ANTICIPATED REPAYMENT DATES AS SET
FORTH IN SUCH PROSPECTUS SUPPLEMENT (THE "PREPAYMENT ASSUMPTION"), THIS
CERTIFICATE HAS BEEN ISSUED WITH NO MORE THAN $________ OF OID PER $1,000 OF
INITIAL CERTIFICATE PRINCIPAL BALANCE, THE YIELD TO MATURITY IS ___% PER ANNUM,
AND THE AMOUNT OF OID ATTRIBUTABLE TO THE INITIAL ACCRUAL PERIOD IS NO MORE
THAN $____________ PER $1,000 OF INITIAL CERTIFICATE PRINCIPAL BALANCE,
COMPUTED UNDER THE EXACT METHOD. NO REPRESENTATION IS MADE THAT THE MORTGAGE
LOANS WILL PREPAY AT A RATE BASED ON THE PREPAYMENT ASSUMPTION OR AT ANY OTHER
RATE.
IF THE AGGREGATE CERTIFICATE PRINCIPAL BALANCE OF THE CLASS A-1, CLASS A-2,
CLASS A-3, CLASS B, CLASS C, CLASS D, CLASS E, CLASS F AND CLASS G CERTIFICATES
OF THE SAME SERIES IS REDUCED TO ZERO, DISTRIBUTIONS IN REDUCTION OF THE
CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET
FORTH IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN. IN ADDITION,
IF THE AGGREGATE CERTIFICATE PRINCIPAL BALANCE OF THE CLASS J AND CLASS K
CERTIFICATES OF THE SAME SERIES IS REDUCED TO ZERO, THE CERTIFICATE PRINCIPAL
BALANCE OF THIS CERTIFICATE MAY BE REDUCED BY CERTAIN LOSSES AND EXPENSES
EXPERIENCED BY THE TRUST FUND AS SET FORTH IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN. ACCORDINGLY, THE OUTSTANDING CERTIFICATE
PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE.
-3-
<PAGE>
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class H Certificate (obtained by dividing
the principal amount of this Class H Certificate (its "Certificate Principal
Balance") as of the Closing Date by the aggregate principal amount of all the
Class H Certificates (their "Class Principal Balance") as of the Closing Date)
in that certain beneficial ownership interest evidenced by all the Class H
Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Merrill Lynch
Mortgage Investors, Inc. (hereinafter called the "Depositor", which term
includes any successor entity under the Agreement), GE Capital Loan Services,
Inc. (hereinafter called the "Master Servicer", which term includes any
successor entity under the Agreement), GE Capital Realty Group, Inc.
(hereinafter called the "Special Servicer", which term includes any successor
entities under the Agreement), and The Chase Manhattan Bank (hereinafter called
the "Trustee", which term includes any successor entity under the Agreement), a
summary of certain of the pertinent provisions of which is set forth hereafter.
To the extent not defined herein, the capitalized terms used herein have the
respective meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 15th day of each month or, if such 15th day is not a Business Day,
the Business Day immediately following (each, a "Distribution Date") (provided,
however, that the Distribution Date will be no earlier than the fourth Business
Day following the related Determination Date), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of the
Class H Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on this Class H
Certificate will be made by The Chase Manhattan Bank, as paying agent (the
"Paying Agent"), by wire transfer of immediately available funds to the account
of the Person entitled thereto at a bank or other entity having appropriate
facilities therefor, if such Certificateholder shall have provided the Paying
Agent with wiring instructions no less than five Business Days prior to the
related Record Date (which wiring instructions may be in the form of a standing
order applicable to all subsequent distributions) or otherwise by check mailed
to the address of such Certificateholder as it appears in the Certificate
Register. Notwithstanding the foregoing, the final distribution on this
Certificate (determined without regard to any possible future reimbursement of
any Realized Loss or
-4-
<PAGE>
Additional Trust Fund Expense previously allocated to this Certificate) will be
made in like manner, but only upon presentation and surrender of this
Certificate at the offices of the Trustee or such other location specified in
the notice to the Holder hereof of such final distribution. Also notwithstanding
the foregoing, any distribution that may be made with respect to this
Certificate in reimbursement of any Realized Loss or Additional Trust Fund
Expense previously allocated to this Certificate, which reimbursement is to
occur after the date on which this Certificate is surrendered as contemplated
by the preceding sentence, will be made by check mailed to the address of the
Holder that surrenders this Certificate as such address last appears in the
Certificate Register or to any such other address of which the Trustee is
subsequently notified in writing.
The Certificates are limited in right of distribution to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Certificate Account, the Distribution Account
and, if established, the REO Account may be made from time to time for purposes
other than, and, in certain cases, prior to, distributions to
Certificateholders, such purposes including the reimbursement of advances made,
or certain expenses incurred, with respect to the Mortgage Loans and the
payment of interest on such advances and expenses.
Any distribution to the Holder of this Certificate in
reduction of the Certificate Principal Balance hereof is binding on such Holder
and all future Holders of this Certificate and any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such distribution is made upon this Certificate.
The Class H Certificates are issuable in fully registered
form only without coupons in minimum denominations specified in the Agreement.
As provided in the Agreement and subject to certain limitations therein set
forth, Class H Certificates are exchangeable for new Class H Certificates in
authorized denominations evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices of the Certificate Registrar, duly endorsed by, or
accompanied by a written instrument of transfer in the form satisfactory to the
Certificate Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Class H Certificates in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.
-5-
<PAGE>
No transfer of any Class H Certificate shall be made unless
that transfer is made pursuant to an effective registration statement under the
Securities Act, and effective registration or qualification under applicable
state securities laws, or is made in a transaction which does not require such
registration or qualification. If such a transfer is to be made without
registration under the Securities Act (other than in connection with the
initial issuance thereof or the initial transfer thereof by the Depositor or
any of its affiliates), then the Certificate Registrar shall refuse to register
such transfer unless it receives either: (i) a certificate from the
Certificateholder desiring to effect such transfer substantially in the form
attached as Exhibit F-1 to the Agreement, and a certificate from such
Certificateholder's prospective transferee substantially in the form attached
as either Exhibit F-2 or Exhibit F-3 to the Agreement; or (ii) an Opinion of
Counsel satisfactory to the Certificate Registrar to the effect that such
transfer may be made without registration under the Securities Act (which
Opinion of Counsel shall not be an expense of the Trust Fund or of the
Depositor, the Master Servicer, the Special Servicer, the Trustee or the
Certificate Registrar in their respective capacities as such), together with
the written certification(s) as to the facts surrounding such transfer from the
Certificateholder desiring to effect such transfer and/or such
Certificateholder's prospective transferee on which such Opinion of Counsel is
based. None of the Depositor, the Trustee or the Certificate Registrar is
obligated to register or qualify the Class G Certificates under the Securities
Act or any other securities law or to take any action not otherwise required
under the Agreement to permit the transfer of any Class H Certificate without
registration or qualification. Any Class H Certificateholder desiring to effect
such a transfer shall, and upon acquisition of its Class H Certificate agrees
to, indemnify the Trustee, the Certificate Registrar and the Depositor against
any liability that may result if the transfer is not so exempt or is not made
in accordance with such federal and state laws.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices of the Certificate Registrar, duly endorsed by, or
accompanied by a written instrument of transfer in the form satisfactory to the
Certificate Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Class H Certificates in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.
No service charge will be imposed for any registration of
transfer or exchange of Class H Certificates, but the Certificate Registrar may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of Class
H Certificates.
-6-
<PAGE>
Notwithstanding the foregoing, for so long as this
Certificate is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC, transfers of interests in
this Certificate shall be made through the book-entry facilities of DTC.
The Depositor, the Master Servicer, the Special Servicer, the
Trustee, the Paying Agent and the Certificate Registrar and any agent of the
Depositor, the Master Servicer, the Special Servicer, the Trustee, the Paying
Agent or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Special Servicer, the Trustee, the Paying
Agent, the Certificate Registrar or any such agent shall be affected by notice
to the contrary.
The Trust Fund and the obligations created by the Agreement
shall terminate upon distribution (or provision for distribution) to the
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be distributed to them pursuant to the Agreement following the
earlier of (i) the final payment or other liquidation (or any Advance with
respect thereto) of the last Mortgage Loan or REO Property remaining in the
Trust Fund, and (ii) the purchase by the Majority Subordinate Certificate
Holder, the Depositor, the Master Servicer or the Special Servicer at a price
determined as provided in the Agreement of all Mortgage Loans and each REO
Property remaining in the Trust Fund. The Agreement permits, but does not
require, the Majority Subordinate Certificate Holder, the Depositor, the Master
Servicer or the Special Servicer, in that order, to elect to purchase from the
Trust Fund all Mortgage Loans and each REO Property remaining therein. The
exercise of such right will effect early retirement of the Class H
Certificates; however, such right to elect to purchase is subject to the
aggregate Stated Principal Balance of the Mortgage Pool at the time of election
being less than 1% of the aggregate Cut-Off Date Balance of the Mortgage Loans.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Special Servicer and the
Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Master Servicer, the Special Servicer and the
Trustee with the consent of the Holders of Certificates entitled to at least
51% of the Voting Rights allocated to the affected Classes. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or
not notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, including any
amendment
-7-
<PAGE>
necessary to maintain the status of the Trust Fund (or designated portions
thereof) as a REMIC, without the consent of the Holders of any of the
Certificates.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, the Holder of this
Certificate shall not be entitled to any benefit under the Agreement or be
valid for any purpose.
The registered Holder hereof, by its acceptance hereof,
agrees that it will look solely to the Trust Fund (to the extent of its rights
therein) for distributions hereunder.
This Certificate shall be construed in accordance with the
internal laws of the State of New York applicable to agreements made and to be
performed in said State, and the obligations, rights and remedies of the Holder
hereof shall be determined in accordance with such laws.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-8-
<PAGE>
IN WITNESS WHEREOF, the Certificate Registrar has caused this
Certificate to be duly executed.
Dated: December __, 1998
THE CHASE MANHATTAN BANK
as Certificate Registrar
By: __________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class H Certificates referred to in the
within-mentioned Agreement.
THE CHASE MANHATTAN BANK
as Authenticating Agent
By: __________________
Authorized Officer
-9-
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
_______________________________
_______________________________
_______________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Mortgage Pass-Through Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.
I (we) further direct the Certificate Registrar to issue a
new Mortgage Pass-Through Certificate of a like Percentage Interest and Class
to the above named assignee and deliver such Mortgage Pass-Through Certificate
to the following address:______________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
Dated:
_____________________________________
Signature by or on behalf of Assignor
_____________________________________
Signature Guaranteed
-10-
<PAGE>
DISTRIBUTION INSTRUCTIONS
The Assignee should include the following for purposes of
distribution:
Distributions shall, if permitted, be made by wire transfer or
otherwise, in immediately available funds, to _________________________________
________________________________ for the account of __________________________.
Distributions made by check (such check to be made payable to
______________________________________) and all applicable statements and
notices should be mailed to ____________________________________.
This information is provided by ______________________, the
Assignee named above, or ______________, as its agent.
-11-
<PAGE>
EXHIBIT A-12
FORM OF CLASS J CERTIFICATE
CLASS J MERRILL LYNCH MORTGAGE INVESTORS, INC.,
SERIES 1998-C3
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool of multifamily mortgage loans (the "Mortgage
Loans"), such pool being formed and sold by
MERRILL LYNCH MORTGAGE INVESTORS, INC.
<TABLE>
<CAPTION>
<S> <C>
Pass-Through Class Principal Balance of the Class J Certificates
Rate: ___% per annum as of the Closing Date:
$3,192,000
Date of Pooling and Servicing Initial Certificate Principal Balance of this Class J
Agreement: December 1, 1998 Certificate as of the Closing
Date: $______
Closing Date: December __, 1998 Aggregate Stated Principal
Balance of the Mortgage Loans
as of the Cut-Off Date:
$638,408,606
First Distribution Date:
January 15, 1999
Master Servicer: Trustee:
GE Capital Loan Services, Inc. The Chase Manhattan Bank
Special Servicer: CUSIP No. 589929 SU3
GE Capital Realty Group, Inc.
Certificate No.
</TABLE>
<PAGE>
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST CORPORATION, A NEW YORK CORPORATION ("DTC"), TO THE
CERTIFICATE REGISTRAR OR ANY AGENT THEREOF FOR REGISTRATION OF TRANSFER,
EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN THE
DEPOSITOR, THE UNDERWRITERS, THE MASTER SERVICER, THE SPECIAL SERVICER, THE
TRUSTEE, THE MORTGAGE LOAN SELLERS OR ANY OF THEIR AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1, CLASS A-2, CLASS A-3, CLASS
IO, CLASS B, CLASS C, CLASS D, CLASS E, CLASS F, CLASS G AND CLASS H
CERTIFICATES OF THE SAME SERIES TO THE EXTENT DESCRIBED IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES
LAWS OF ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS
CERTIFICATE WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A
TRANSACTION WHICH DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN MAY BE MADE (A) TO ANY
EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT, INCLUDING INDIVIDUAL
RETIREMENT ACCOUNTS AND ANNUITIES, KEOGH PLANS AND COLLECTIVE INVESTMENT FUNDS
AND SEPARATE ACCOUNTS IN WHICH SUCH PLANS, ACCOUNTS OR ARRANGEMENTS ARE
INVESTED, THAT IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED ("ERISA"), OR THE PROHIBITED TRANSACTIONS RESTRICTIONS OF
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") (ANY
SUCH EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT, A "PLAN"), OR (B)
TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS CERTIFICATE OR SUCH
INTEREST HEREIN ON BEHALF OF, AS NAMED FIDUCIARY OF, AS TRUSTEE OF, OR WITH
ASSETS OF A PLAN (INCLUDING, WITHOUT LIMITATION, ANY INSURANCE COMPANY USING
ASSETS IN ITS GENERAL OR SEPARATE ACCOUNT THAT MAY CONSTITUTE "PLAN ASSETS" OF
A PLAN); PROVIDED, THAT (A) SUCH A TRANSFER MAY BE MADE TO AN INSURANCE COMPANY
GENERAL ACCOUNT IF (I) THIS CERTIFICATE IS ELIGIBLE FOR EXEMPTIVE RELIEF UNDER
SECTION III OF PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 ("PTE 95-60"), AND
(II) THE CONDITIONS OF
-2-
<PAGE>
SECTIONS I, III AND IV OF PTE 95-60 ARE SATISFIED WITH RESPECT TO SUCH TRANSFER
AND (B) SUCH A TRANSFER MAY BE MADE IF THE PROSPECTIVE TRANSFEREE PROVIDES THE
CERTIFICATE REGISTRAR WITH A CERTIFICATION OF FACTS AND AN OPINION OF COUNSEL
THAT ESTABLISH TO THE SATISFACTION OF THE CERTIFICATE REGISTRAR THAT SUCH
TRANSFER WILL NOT RESULT IN A VIOLATION OF SECTION 406 OF ERISA OR SECTION 4975
OF THE CODE OR RESULT IN THE IMPOSITION OF AN EXCISE TAX UNDER SECTION 4975 OF
THE CODE. AS A CONDITION TO ITS REGISTRATION OF TRANSFER OF A CLASS J
CERTIFICATE, THE CERTIFICATE REGISTRAR SHALL HAVE THE RIGHT TO REQUIRE THE
PROSPECTIVE TRANSFEREE OF SUCH CERTIFICATE TO EXECUTE A CERTIFICATION
SUBSTANTIALLY IN THE FORM OF EXHIBIT G TO THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE. THE
FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES OF APPLYING THE U.S.
FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES TO THIS CERTIFICATE.
THE ISSUE DATE OF THIS CERTIFICATE IS DECEMBER __, 1998. ASSUMING THAT THE
MORTGAGE LOANS PREPAY AT AN ASSUMED RATE OF PREPAYMENT USED SOLELY FOR THE
PURPOSES OF APPLYING THE OID RULES TO THE CERTIFICATES EQUAL TO A CPR (AS
DEFINED IN THE PROSPECTUS DATED FEBRUARY 25, 1998 AND THE PROSPECTUS SUPPLEMENT
DATED DECEMBER 17, 1998 RELATING TO THIS CERTIFICATE) OF 0% AND THAT THE ARD
LOANS ARE REPAID IN FULL ON THEIR RESPECTIVE ANTICIPATED REPAYMENT DATES AS SET
FORTH IN SUCH PROSPECTUS SUPPLEMENT (THE "PREPAYMENT ASSUMPTION"), THIS
CERTIFICATE HAS BEEN ISSUED WITH NO MORE THAN $________ OF OID PER $1,000 OF
INITIAL CERTIFICATE PRINCIPAL BALANCE, THE YIELD TO MATURITY IS ___% PER ANNUM,
AND THE AMOUNT OF OID ATTRIBUTABLE TO THE INITIAL ACCRUAL PERIOD IS NO MORE
THAN $____________ PER $1,000 OF INITIAL CERTIFICATE PRINCIPAL BALANCE,
COMPUTED UNDER THE EXACT METHOD. NO REPRESENTATION IS MADE THAT THE MORTGAGE
LOANS WILL PREPAY AT A RATE BASED ON THE PREPAYMENT ASSUMPTION OR AT ANY OTHER
RATE.
IF THE AGGREGATE CERTIFICATE PRINCIPAL BALANCE OF THE CLASS A-1, CLASS A-2,
CLASS A-3, CLASS B, CLASS C, CLASS D, CLASS E, CLASS F, CLASS G AND CLASS H
CERTIFICATES OF THE SAME SERIES IS REDUCED TO ZERO, DISTRIBUTIONS IN REDUCTION
OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE MAY BE MADE MONTHLY AS
SET FORTH IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN. IN
ADDITION, IF THE AGGREGATE CERTIFICATE PRINCIPAL BALANCE OF THE CLASS K
CERTIFICATES OF THE SAME SERIES IS REDUCED TO ZERO, THE CERTIFICATE PRINCIPAL
BALANCE OF THIS CERTIFICATE MAY BE REDUCED BY CERTAIN LOSSES AND EXPENSES
EXPERIENCED BY THE TRUST FUND AS SET FORTH IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN. ACCORDINGLY, THE OUTSTANDING CERTIFICATE
PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE.
-3-
<PAGE>
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class J Certificate (obtained by dividing
the principal amount of this Class J Certificate (its "Certificate Principal
Balance") as of the Closing Date by the aggregate principal amount of all the
Class J Certificates (their "Class Principal Balance") as of the Closing Date)
in that certain beneficial ownership interest evidenced by all the Class J
Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Merrill Lynch
Mortgage Investors, Inc. (hereinafter called the "Depositor", which term
includes any successor entity under the Agreement), GE Capital Loan Services,
Inc. (hereinafter called the "Master Servicer", which term includes any
successor entity under the Agreement), GE Capital Realty Group, Inc.
(hereinafter called the "Special Servicer", which term includes any successor
entities under the Agreement), and The Chase Manhattan Bank (hereinafter called
the "Trustee", which term includes any successor entity under the Agreement), a
summary of certain of the pertinent provisions of which is set forth hereafter.
To the extent not defined herein, the capitalized terms used herein have the
respective meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 15th day of each month or, if such 15th day is not a Business Day,
the Business Day immediately following (each, a "Distribution Date") (provided,
however, that the Distribution Date will be no earlier than the fourth Business
Day following the related Determination Date), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of the
Class J Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on this Class J
Certificate will be made by The Chase Manhattan Bank, as paying agent (the
"Paying Agent"), by wire transfer of immediately available funds to the account
of the Person entitled thereto at a bank or other entity having appropriate
facilities therefor, if such Certificateholder shall have provided the Paying
Agent with wiring instructions no less than five Business Days prior to the
related Record Date (which wiring instructions may be in the form of a standing
order applicable to all subsequent distributions) or otherwise by check mailed
to the address of such Certificateholder as it appears in the Certificate
Register. Notwithstanding the foregoing, the final distribution on this
Certificate (determined without regard to any possible future reimbursement of
any Realized Loss or Additional Trust Fund Expense previously allocated to this
Certificate) will be made in like manner, but only upon presentation and
surrender of this Certificate at the offices of the Trustee or such other
location specified in the notice to the Holder hereof of such final
distribution. Also notwithstanding the foregoing, any distribution that may be
made with respect to this Certificate in reimbursement of any Realized Loss or
-4-
<PAGE>
Additional Trust Fund Expense previously allocated to this Certificate, which
reimbursement is to occur after the date on which this Certificate is
surrendered as contemplated by the preceding sentence, will be made by check
mailed to the address of the Holder that surrenders this Certificate as such
address last appears in the Certificate Register or to any such other address
of which the Trustee is subsequently notified in writing.
The Certificates are limited in right of distribution to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Certificate Account, the Distribution Account
and, if established, the REO Account may be made from time to time for purposes
other than, and, in certain cases, prior to, distributions to
Certificateholders, such purposes including the reimbursement of advances made,
or certain expenses incurred, with respect to the Mortgage Loans and the
payment of interest on such advances and expenses.
Any distribution to the Holder of this Certificate in
reduction of the Certificate Principal Balance hereof is binding on such Holder
and all future Holders of this Certificate and any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such distribution is made upon this Certificate.
The Class J Certificates are issuable in fully registered
form only without coupons in minimum denominations specified in the Agreement.
As provided in the Agreement and subject to certain limitations therein set
forth, Class J Certificates are exchangeable for new Class J Certificates in
authorized denominations evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices of the Certificate Registrar, duly endorsed by, or
accompanied by a written instrument of transfer in the form satisfactory to the
Certificate Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Class J Certificates in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.
-5-
<PAGE>
No transfer of any Class J Certificate shall be made unless
that transfer is made pursuant to an effective registration statement under the
Securities Act, and effective registration or qualification under applicable
state securities laws, or is made in a transaction which does not require such
registration or qualification. If such a transfer is to be made without
registration under the Securities Act (other than in connection with the
initial issuance thereof or the initial transfer thereof by the Depositor or
any of its affiliates), then the Certificate Registrar shall refuse to register
such transfer unless it receives either: (i) a certificate from the
Certificateholder desiring to effect such transfer substantially in the form
attached as Exhibit F-1 to the Agreement, and a certificate from such
Certificateholder's prospective transferee substantially in the form attached
as either Exhibit F-2 or Exhibit F-3 to the Agreement; or (ii) an Opinion of
Counsel satisfactory to the Certificate Registrar to the effect that such
transfer may be made without registration under the Securities Act (which
Opinion of Counsel shall not be an expense of the Trust Fund or of the
Depositor, the Master Servicer, the Special Servicer, the Trustee or the
Certificate Registrar in their respective capacities as such), together with
the written certification(s) as to the facts surrounding such transfer from the
Certificateholder desiring to effect such transfer and/or such
Certificateholder's prospective transferee on which such Opinion of Counsel is
based. None of the Depositor, the Trustee or the Certificate Registrar is
obligated to register or qualify the Class J Certificates under the Securities
Act or any other securities law or to take any action not otherwise required
under the Agreement to permit the transfer of any Class J Certificate without
registration or qualification. Any Class J Certificateholder desiring to effect
such a transfer shall, and upon acquisition of its Class J Certificate agrees
to, indemnify the Trustee, the Certificate Registrar and the Depositor against
any liability that may result if the transfer is not so exempt or is not made
in accordance with such federal and state laws.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices of the Certificate Registrar, duly endorsed by, or
accompanied by a written instrument of transfer in the form satisfactory to the
Certificate Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Class J Certificates in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.
No service charge will be imposed for any registration of
transfer or exchange of Class J Certificates, but the Certificate Registrar may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of Class
J Certificates.
-6-
<PAGE>
Notwithstanding the foregoing, for so long as this
Certificate is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC, transfers of interests in
this Certificate shall be made through the book-entry facilities of DTC.
The Depositor, the Master Servicer, the Special Servicer, the
Trustee, the Paying Agent and the Certificate Registrar and any agent of the
Depositor, the Master Servicer, the Special Servicer, the Trustee, the Paying
Agent or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Special Servicer, the Trustee, the Paying
Agent, the Certificate Registrar or any such agent shall be affected by notice
to the contrary.
The Trust Fund and the obligations created by the Agreement
shall terminate upon distribution (or provision for distribution) to the
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be distributed to them pursuant to the Agreement following the
earlier of (i) the final payment or other liquidation (or any Advance with
respect thereto) of the last Mortgage Loan or REO Property remaining in the
Trust Fund, and (ii) the purchase by the Majority Subordinate Certificate
Holder, the Depositor, the Master Servicer or the Special Servicer at a price
determined as provided in the Agreement of all Mortgage Loans and each REO
Property remaining in the Trust Fund. The Agreement permits, but does not
require, the Majority Subordinate Certificate Holder, the Depositor, the Master
Servicer or the Special Servicer, in that order, to elect to purchase from the
Trust Fund all Mortgage Loans and each REO Property remaining therein. The
exercise of such right will effect early retirement of the Class J
Certificates; however, such right to elect to purchase is subject to the
aggregate Stated Principal Balance of the Mortgage Pool at the time of election
being less than 1% of the aggregate Cut-Off Date Balance of the Mortgage Loans.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Special Servicer and the
Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Master Servicer, the Special Servicer and the
Trustee with the consent of the Holders of Certificates entitled to at least
51% of the Voting Rights allocated to the affected Classes. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or
not notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, including any
amendment
-7-
<PAGE>
necessary to maintain the status of the Trust Fund (or designated portions
thereof) as a REMIC, without the consent of the Holders of any of the
Certificates.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, the Holder of this
Certificate shall not be entitled to any benefit under the Agreement or be
valid for any purpose.
The registered Holder hereof, by its acceptance hereof,
agrees that it will look solely to the Trust Fund (to the extent of its rights
therein) for distributions hereunder.
This Certificate shall be construed in accordance with the
internal laws of the State of New York applicable to agreements made and to be
performed in said State, and the obligations, rights and remedies of the Holder
hereof shall be determined in accordance with such laws.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-8-
<PAGE>
IN WITNESS WHEREOF, the Certificate Registrar has caused this
Certificate to be duly executed.
Dated: December __, 1998
THE CHASE MANHATTAN BANK
as Certificate Registrar
By: __________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class J Certificates referred to in the
within-mentioned Agreement.
THE CHASE MANHATTAN BANK
as Authenticating Agent
By: __________________
Authorized Officer
-9-
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
_______________________________
_______________________________
_______________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Mortgage Pass-Through Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.
I (we) further direct the Certificate Registrar to issue a
new Mortgage Pass-Through Certificate of a like Percentage Interest and Class
to the above named assignee and deliver such Mortgage Pass-Through Certificate
to the following address: _____________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
Dated:
_____________________________________
Signature by or on behalf of Assignor
_____________________________________
Signature Guaranteed
-10-
<PAGE>
DISTRIBUTION INSTRUCTIONS
The Assignee should include the following for purposes of
distribution:
Distributions shall, if permitted, be made by wire transfer or
otherwise, in immediately available funds, to _________________________________
for the account of ____________________________________________________________
________________________________________.
Distributions made by check (such check to be made payable to
__________________________________________) and all applicable statements and
notices should be mailed to ____________________________________.
This information is provided by ______________________,
the Assignee named above, or ______________, as its agent.
-11-
<PAGE>
EXHIBIT A-13
FORM OF CLASS K CERTIFICATE
CLASS K MERRILL LYNCH MORTGAGE INVESTORS, INC.,
SERIES 1998-C3
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool of multifamily mortgage loans (the "Mortgage
Loans"), such pool being formed and sold by
MERRILL LYNCH MORTGAGE INVESTORS, INC.
<TABLE>
<CAPTION>
<S> <C>
Pass-Through Class Principal Balance of the Class K Certificates
Rate: ___% per annum as of the Closing Date:
$17,556,605
Date of Pooling and Servicing Initial Certificate Principal Balance of this Class K
Agreement: December 1, 1998 Certificate as of the Closing
Date: $______
Closing Date: December __, 1998 Aggregate Stated Principal
Balance of the Mortgage Loans
as of the Cut-Off Date:
$638,408,606
First Distribution Date:
January 15, 1999
Master Servicer: Trustee:
GE Capital Loan Services, Inc. The Chase Manhattan Bank
Special Servicer: CUSIP No. 589929 SV1
GE Capital Realty Group, Inc.
Certificate No.
</TABLE>
<PAGE>
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST CORPORATION, A NEW YORK CORPORATION ("DTC"), TO THE
CERTIFICATE REGISTRAR OR ANY AGENT THEREOF FOR REGISTRATION OF TRANSFER,
EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN THE
DEPOSITOR, THE UNDERWRITERS, THE MASTER SERVICER, THE SPECIAL SERVICER, THE
TRUSTEE, THE MORTGAGE LOAN SELLERS OR ANY OF THEIR AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1, CLASS A-2, CLASS A-3, CLASS
IO, CLASS B, CLASS C, CLASS D, CLASS E, CLASS F, CLASS G, CLASS H AND CLASS J
CERTIFICATES OF THE SAME SERIES TO THE EXTENT DESCRIBED IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES
LAWS OF ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS
CERTIFICATE WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A
TRANSACTION WHICH DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN MAY BE MADE (A) TO ANY
EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT, INCLUDING INDIVIDUAL
RETIREMENT ACCOUNTS AND ANNUITIES, KEOGH PLANS AND COLLECTIVE INVESTMENT FUNDS
AND SEPARATE ACCOUNTS IN WHICH SUCH PLANS, ACCOUNTS OR ARRANGEMENTS ARE
INVESTED, THAT IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED ("ERISA"), OR THE PROHIBITED TRANSACTIONS RESTRICTIONS OF
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") (ANY
SUCH EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT, A "PLAN"), OR (B)
TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS CERTIFICATE OR SUCH
INTEREST HEREIN ON BEHALF OF, AS NAMED FIDUCIARY OF, AS TRUSTEE OF, OR WITH
ASSETS OF A PLAN (INCLUDING, WITHOUT LIMITATION, ANY INSURANCE COMPANY USING
ASSETS IN ITS GENERAL OR SEPARATE ACCOUNT THAT MAY CONSTITUTE "PLAN ASSETS" OF
A PLAN); PROVIDED, THAT (A) SUCH A TRANSFER MAY BE MADE TO AN INSURANCE COMPANY
GENERAL ACCOUNT IF (I) THIS CERTIFICATE IS ELIGIBLE FOR EXEMPTIVE RELIEF UNDER
SECTION III OF PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 ("PTE 95-60"), AND
(II) THE CONDITIONS OF
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<PAGE>
SECTIONS I, III AND IV OF PTE 95-60 ARE SATISFIED WITH RESPECT TO SUCH TRANSFER
AND (B) SUCH A TRANSFER MAY BE MADE IF THE PROSPECTIVE TRANSFEREE PROVIDES THE
CERTIFICATE REGISTRAR WITH A CERTIFICATION OF FACTS AND AN OPINION OF COUNSEL
THAT ESTABLISH TO THE SATISFACTION OF THE CERTIFICATE REGISTRAR THAT SUCH
TRANSFER WILL NOT RESULT IN A VIOLATION OF SECTION 406 OF ERISA OR SECTION 4975
OF THE CODE OR RESULT IN THE IMPOSITION OF AN EXCISE TAX UNDER SECTION 4975 OF
THE CODE. AS A CONDITION TO ITS REGISTRATION OF TRANSFER OF A CLASS K
CERTIFICATE, THE CERTIFICATE REGISTRAR SHALL HAVE THE RIGHT TO REQUIRE THE
PROSPECTIVE TRANSFEREE OF SUCH CERTIFICATE TO EXECUTE A CERTIFICATION
SUBSTANTIALLY IN THE FORM OF EXHIBIT G TO THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE. THE
FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES OF APPLYING THE U.S.
FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES TO THIS CERTIFICATE.
THE ISSUE DATE OF THIS CERTIFICATE IS DECEMBER __, 1998. ASSUMING THAT THE
MORTGAGE LOANS PREPAY AT AN ASSUMED RATE OF PREPAYMENT USED SOLELY FOR THE
PURPOSES OF APPLYING THE OID RULES TO THE CERTIFICATES EQUAL TO A CPR (AS
DEFINED IN THE PROSPECTUS DATED FEBRUARY 25, 1998 AND THE PROSPECTUS SUPPLEMENT
DATED DECEMBER 17, 1998 RELATING TO THIS CERTIFICATE) OF 0% AND THAT THE ARD
LOANS ARE REPAID IN FULL ON THEIR RESPECTIVE ANTICIPATED REPAYMENT DATES AS SET
FORTH IN SUCH PROSPECTUS SUPPLEMENT (THE "PREPAYMENT ASSUMPTION"), THIS
CERTIFICATE HAS BEEN ISSUED WITH NO MORE THAN $________ OF OID PER $1,000 OF
INITIAL CERTIFICATE PRINCIPAL BALANCE, THE YIELD TO MATURITY IS ___% PER ANNUM,
AND THE AMOUNT OF OID ATTRIBUTABLE TO THE INITIAL ACCRUAL PERIOD IS NO MORE
THAN $____________ PER $1,000 OF INITIAL CERTIFICATE PRINCIPAL BALANCE,
COMPUTED UNDER THE EXACT METHOD. NO REPRESENTATION IS MADE THAT THE MORTGAGE
LOANS WILL PREPAY AT A RATE BASED ON THE PREPAYMENT ASSUMPTION OR AT ANY OTHER
RATE.
IF THE AGGREGATE CERTIFICATE PRINCIPAL BALANCE OF THE CLASS A-1, CLASS A-2,
CLASS A-3, CLASS B, CLASS C, CLASS D, CLASS E, CLASS F, CLASS G, CLASS H AND
CLASS J CERTIFICATES OF THE SAME SERIES IS REDUCED TO ZERO, DISTRIBUTIONS IN
REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE MAY BE MADE
MONTHLY AS SET FORTH IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
IN ADDITION, THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE MAY BE
REDUCED BY CERTAIN LOSSES AND EXPENSES EXPERIENCED BY THE TRUST FUND AS SET
FORTH IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN. ACCORDINGLY,
THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
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<PAGE>
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class K Certificate (obtained by dividing
the principal amount of this Class K Certificate (its "Certificate Principal
Balance") as of the Closing Date by the aggregate principal amount of all the
Class K Certificates (their "Class Principal Balance") as of the Closing Date)
in that certain beneficial ownership interest evidenced by all the Class K
Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Merrill Lynch
Mortgage Investors, Inc. (hereinafter called the "Depositor", which term
includes any successor entity under the Agreement), GE Capital Loan Services,
Inc. (hereinafter called the "Master Servicer", which term includes any
successor entity under the Agreement), GE Capital Realty Group, Inc.
(hereinafter called the "Special Servicer", which term includes any successor
entities under the Agreement), and The Chase Manhattan Bank (hereinafter called
the "Trustee", which term includes any successor entity under the Agreement), a
summary of certain of the pertinent provisions of which is set forth hereafter.
To the extent not defined herein, the capitalized terms used herein have the
respective meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 15th day of each month or, if such 15th day is not a Business Day,
the Business Day immediately following (each, a "Distribution Date") (provided,
however, that the Distribution Date will be no earlier than the fourth Business
Day following the related Determination Date), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of the
Class K Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on this Class K
Certificate will be made by The Chase Manhattan Bank, as paying agent (the
"Paying Agent"), by wire transfer of immediately available funds to the account
of the Person entitled thereto at a bank or other entity having appropriate
facilities therefor, if such Certificateholder shall have provided the Paying
Agent with wiring instructions no less than five Business Days prior to the
related Record Date (which wiring instructions may be in the form of a standing
order applicable to all subsequent distributions) or otherwise by check mailed
to the address of such Certificateholder as it appears in the Certificate
Register. Notwithstanding the foregoing, the final distribution on this
Certificate (determined without regard
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<PAGE>
to any possible future reimbursement of any Realized Loss or Additional Trust
Fund Expense previously allocated to this Certificate) will be made in like
manner, but only upon presentation and surrender of this Certificate at the
offices of the Trustee or such other location specified in the notice to the
Holder hereof of such final distribution. Also notwithstanding the foregoing,
any distribution that may be made with respect to this Certificate in
reimbursement of any Realized Loss or Additional Trust Fund Expense previously
allocated to this Certificate, which reimbursement is to occur after the date
on which this Certificate is surrendered as contemplated by the preceding
sentence, will be made by check mailed to the address of the Holder that
surrenders this Certificate as such address last appears in the Certificate
Register or to any such other address of which the Trustee is subsequently
notified in writing.
The Certificates are limited in right of distribution to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Certificate Account, the Distribution Account
and, if established, the REO Account may be made from time to time for purposes
other than, and, in certain cases, prior to, distributions to
Certificateholders, such purposes including the reimbursement of advances made,
or certain expenses incurred, with respect to the Mortgage Loans and the
payment of interest on such advances and expenses.
Any distribution to the Holder of this Certificate in
reduction of the Certificate Principal Balance hereof is binding on such Holder
and all future Holders of this Certificate and any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such distribution is made upon this Certificate.
The Class K Certificates are issuable in fully registered
form only without coupons in minimum denominations specified in the Agreement.
As provided in the Agreement and subject to certain limitations therein set
forth, Class K Certificates are exchangeable for new Class K Certificates in
authorized denominations evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices of the Certificate Registrar, duly endorsed by, or
accompanied by a written instrument of transfer in the form satisfactory to the
Certificate Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Class K Certificates in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.
-5-
<PAGE>
No transfer of any Class K Certificate shall be made unless
that transfer is made pursuant to an effective registration statement under the
Securities Act, and effective registration or qualification under applicable
state securities laws, or is made in a transaction which does not require such
registration or qualification. If such a transfer is to be made without
registration under the Securities Act (other than in connection with the
initial issuance thereof or the initial transfer thereof by the Depositor or
any of its affiliates), then the Certificate Registrar shall refuse to register
such transfer unless it receives either: (i) a certificate from the
Certificateholder desiring to effect such transfer substantially in the form
attached as Exhibit F-1 to the Agreement, and a certificate from such
Certificateholder's prospective transferee substantially in the form attached
as either Exhibit F-2 or Exhibit F-3 to the Agreement; or (ii) an Opinion of
Counsel satisfactory to the Certificate Registrar to the effect that such
transfer may be made without registration under the Securities Act (which
Opinion of Counsel shall not be an expense of the Trust Fund or of the
Depositor, the Master Servicer, the Special Servicer, the Trustee or the
Certificate Registrar in their respective capacities as such), together with
the written certification(s) as to the facts surrounding such transfer from the
Certificateholder desiring to effect such transfer and/or such
Certificateholder's prospective transferee on which such Opinion of Counsel is
based. None of the Depositor, the Trustee or the Certificate Registrar is
obligated to register or qualify the Class K Certificates under the Securities
Act or any other securities law or to take any action not otherwise required
under the Agreement to permit the transfer of any Class K Certificate without
registration or qualification. Any Class K Certificateholder desiring to effect
such a transfer shall, and upon acquisition of its Class K Certificate agrees
to, indemnify the Trustee, the Certificate Registrar and the Depositor against
any liability that may result if the transfer is not so exempt or is not made
in accordance with such federal and state laws.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices of the Certificate Registrar, duly endorsed by, or
accompanied by a written instrument of transfer in the form satisfactory to the
Certificate Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Class K Certificates in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.
No service charge will be imposed for any registration of
transfer or exchange of Class K Certificates, but the Certificate Registrar may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of Class
K Certificates.
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<PAGE>
Notwithstanding the foregoing, for so long as this
Certificate is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC, transfers of interests in
this Certificate shall be made through the book-entry facilities of DTC.
The Depositor, the Master Servicer, the Special Servicer, the
Trustee, the Paying Agent and the Certificate Registrar and any agent of the
Depositor, the Master Servicer, the Special Servicer, the Trustee, the Paying
Agent or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Special Servicer, the Trustee, the Paying
Agent, the Certificate Registrar or any such agent shall be affected by notice
to the contrary.
The Trust Fund and the obligations created by the Agreement
shall terminate upon distribution (or provision for distribution) to the
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be distributed to them pursuant to the Agreement following the
earlier of (i) the final payment or other liquidation (or any Advance with
respect thereto) of the last Mortgage Loan or REO Property remaining in the
Trust Fund, and (ii) the purchase by the Majority Subordinate Certificate
Holder, the Depositor, the Master Servicer or the Special Servicer at a price
determined as provided in the Agreement of all Mortgage Loans and each REO
Property remaining in the Trust Fund. The Agreement permits, but does not
require, the Majority Subordinate Certificate Holder, the Depositor, the Master
Servicer or the Special Servicer, in that order, to elect to purchase from the
Trust Fund all Mortgage Loans and each REO Property remaining therein. The
exercise of such right will effect early retirement of the Class K
Certificates; however, such right to elect to purchase is subject to the
aggregate Stated Principal Balance of the Mortgage Pool at the time of election
being less than 1% of the aggregate Cut-Off Date Balance of the Mortgage Loans.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Special Servicer and the
Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Master Servicer, the Special Servicer and the
Trustee with the consent of the Holders of Certificates entitled to at least
51% of the Voting Rights allocated to the affected Classes. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or
not notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, including any
amendment
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<PAGE>
necessary to maintain the status of the Trust Fund (or designated portions
thereof) as a REMIC, without the consent of the Holders of any of the
Certificates.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, the Holder of this
Certificate shall not be entitled to any benefit under the Agreement or be
valid for any purpose.
The registered Holder hereof, by its acceptance hereof,
agrees that it will look solely to the Trust Fund (to the extent of its rights
therein) for distributions hereunder.
This Certificate shall be construed in accordance with the
internal laws of the State of New York applicable to agreements made and to be
performed in said State, and the obligations, rights and remedies of the Holder
hereof shall be determined in accordance with such laws.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-8-
<PAGE>
IN WITNESS WHEREOF, the Certificate Registrar has caused this
Certificate to be duly executed.
Dated: December __, 1998
THE CHASE MANHATTAN BANK
as Certificate Registrar
By: __________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class K Certificates referred to in the
within-mentioned Agreement.
THE CHASE MANHATTAN BANK
as Authenticating Agent
By: __________________
Authorized Officer
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<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
________________________________________
________________________________________
________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Mortgage Pass-Through Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.
I (we) further direct the Certificate Registrar to issue a
new Mortgage Pass-Through Certificate of a like Percentage Interest and Class
to the above named assignee and deliver such Mortgage Pass-Through Certificate
to the following address:_____________________________________________________
______________________________________________________________________________
______________________________________________________________________________
Dated:
_____________________________________
Signature by or on behalf of Assignor
_____________________________________
Signature Guaranteed
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<PAGE>
DISTRIBUTION INSTRUCTIONS
The Assignee should include the following for purposes of
distribution:
Distributions shall, if permitted, be made by wire transfer or
otherwise, in immediately available funds, to _________________________________
_______________________________________________________________________________
for the account of___________________________________________________________.
Distributions made by check (such check to be made payable to
_____________________________________) and all applicable statements and notices
should be mailed to ____________________________________.
This information is provided by ______________________,
the Assignee named above, or ______________, as its agent.
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<PAGE>
EXHIBIT A-14
FORM OF CLASS L CERTIFICATE
CLASS L MORTGAGE PASS-THROUGH CERTIFICATE,
SERIES 1998-C3
evidencing a beneficial ownership interest in the Additional Interest included
in a trust fund (the "Trust Fund") consisting primarily of a pool of
multifamily mortgage loans (the "Mortgage Loans"), such pool being formed and
sold by
MERRILL LYNCH MORTGAGE INVESTORS, INC.
<TABLE>
<CAPTION>
<S> <C>
Percentage Interest evidenced by this Class L
Certificate: 100%
Date of Pooling and Servicing
Agreement: December 1, 1998
Closing Date: December __, 1998 Aggregate Stated Principal
Balance of the Mortgage Loans
as of the Cut-Off Date:
$638,408,606
First Distribution Date:
January 15, 1998
Master Servicer: Trustee:
GE Capital Loan Services, Inc. The Chase Manhattan Bank
Special Servicer:
GE Capital Realty Group, Inc.
Certificate No.
</TABLE>
<PAGE>
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN THE
DEPOSITOR, THE UNDERWRITER, THE MASTER SERVICER, THE SPECIAL SERVICER, THE
TRUSTEE, GENERAL ELECTRIC COMPANY, GENERAL ELECTRIC CAPITAL CORPORATION, THE
MORTGAGE LOAN SELLERS OR ANY OF THEIR AFFILIATES. NEITHER THIS CERTIFICATE NOR
THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY
OF THE UNITED STATES OR ANY OTHER PERSON.
THIS CERTIFICATE EVIDENCES AN UNDIVIDED BENEFICIAL OWNERSHIP INTEREST IN THE
ADDITIONAL INTEREST DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES
LAWS OF ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS
CERTIFICATE WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A
TRANSACTION WHICH DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN MAY BE MADE (A) TO ANY
EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT, INCLUDING INDIVIDUAL
RETIREMENT ACCOUNTS AND ANNUITIES, KEOGH PLANS AND COLLECTIVE INVESTMENT FUNDS
AND SEPARATE ACCOUNTS IN WHICH SUCH PLANS, ACCOUNTS OR ARRANGEMENTS ARE
INVESTED, THAT IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED ("ERISA"), OR THE PROHIBITED TRANSACTIONS RESTRICTIONS OF
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") (ANY
SUCH EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT, A "PLAN"), OR (B)
TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS CERTIFICATE ON
BEHALF OF, AS NAMED FIDUCIARY OF, AS TRUSTEE OF, OR WITH ASSETS OF A PLAN
(INCLUDING, WITHOUT LIMITATION, ANY INSURANCE COMPANY USING ASSETS IN ITS
GENERAL OR SEPARATE ACCOUNT THAT MAY CONSTITUTE "PLAN ASSETS" OF A PLAN).
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<PAGE>
This certifies that General Electric Capital Corporation is
the registered owner of the Percentage Interest on the face of this Certificate
specified in that certain beneficial ownership interest evidenced by all the
Class L Certificates in the Trust Fund created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Merrill
Lynch Mortgage Investors, Inc. (hereinafter called the "Depositor", which term
includes any successor entity under the Agreement), GE Capital Loan Services,
Inc. (in such capacity, hereinafter called the "Master Servicer", which term
includes any successor entity under the Agreement), GE Capital Realty Group,
Inc. (in such capacity, hereinafter called the "Special Servicer", which term
includes any successor entity under the Agreement), and The Chase Manhattan
Bank (hereinafter called the "Trustee", which term includes any successor
entity under the Agreement), a summary of certain of the pertinent provisions
of which is set forth hereafter. To the extent not defined herein, the
capitalized terms used herein have the respective meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 15th day of each month or, if such 15th day is not a Business Day,
the Business Day immediately following (each, a "Distribution Date") (provided,
however, that the Distribution Date will be no earlier than the fourth Business
Day following the related Determination Date), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of the
Class L Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on this Class L
Certificate will be made by The Chase Manhattan Bank, as paying agent (the
"Paying Agent"), by wire transfer of immediately available funds to the account
of the Person entitled thereto at a bank or other entity having appropriate
facilities therefor, if such Certificateholder shall have provided the Paying
Agent with wiring instructions no less than five Business Days prior to the
related Record Date (which wiring instructions may be in the form of a standing
order applicable to all subsequent distributions) or otherwise by check mailed
to the address of such Certificateholder as it appears in the Certificate
Register. Notwithstanding the foregoing, the final distribution on this
Certificate will be made in like manner, but only upon presentation and
surrender of this Certificate at the offices of the Trustee or such other
location
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<PAGE>
specified in the notice to the Holder hereof of such final distribution.
The Certificates are limited in right of distribution to
certain collections and recoveries of Additional Interest paid on certain of
the Mortgage Loans, as more specifically set forth herein and in the Agreement.
Any distribution to the Holder of this Certificate is binding
on such Holder and all future Holders of this Certificate and any Certificate
issued upon the transfer hereof or in exchange herefor or in lieu hereof
whether or not notation of such distribution is made upon this Certificate.
The Class L Certificates are issuable in fully registered
form only without coupons. As provided in the Agreement and subject to certain
limitations therein set forth, Class L Certificates are exchangeable for new
Class L Certificates in evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices of the Certificate Registrar, duly endorsed by, or
accompanied by a written instrument of transfer in the form satisfactory to the
Certificate Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Class L Certificates
evidencing the same aggregate Percentage Interest will be issued to the
designated transferee or transferees.
No transfer of any Class L Certificate shall be made unless
that transfer is made pursuant to an effective registration statement under the
Securities Act, and effective registration or qualification under applicable
state securities laws, or is made in a transaction which does not require such
registration or qualification. If such a transfer is to be made without
registration under the Securities Act (other than in connection with the
initial issuance thereof or the initial transfer thereof by the Depositor or
any of its affiliates), then the Certificate Registrar shall refuse to register
such transfer unless it receives either: (i) a certificate from the
Certificateholder desiring to effect such transfer substantially in the form
attached as Exhibit F-1 to the Agreement, and a certificate from such
Certificateholder's prospective transferee substantially in the form attached
as either Exhibit F-2 or Exhibit F-3 to the Agreement; or (ii) an Opinion of
Counsel satisfactory to the Certificate Registrar to the effect that such
transfer may be made without registration under the Securities Act (which
Opinion of Counsel shall not be an expense of the Trust Fund or of the
Depositor, the Master Servicer, the Special Servicer, the Trustee or the
Certificate Registrar in their
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<PAGE>
respective capacities as such), together with the written certification(s) as
to the facts surrounding such transfer from the Certificateholder desiring to
effect such transfer and/or such Certificateholder's prospective transferee on
which such Opinion of Counsel is based. None of the Depositor, the Trustee or
the Certificate Registrar is obligated to register or qualify the Class L
Certificates under the Securities Act or any other securities law or to take
any action not otherwise required under the Agreement to permit the transfer of
any Class L Certificate without registration or qualification. Any Class L
Certificateholder desiring to effect such a transfer shall, and upon acquisition
of its Class L Certificate agrees to, indemnify the Trustee, the Certificate
Registrar and the Depositor against any liability that may result if the
transfer is not so exempt or is not made in accordance with such federal and
state laws.
No service charge will be imposed for any registration of
transfer or exchange of Class L Certificates, but the Certificate Registrar may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of Class
L Certificates.
The Depositor, the Master Servicer, the Special Servicer, the
Trustee, the Paying Agent and the Certificate Registrar and any agent of the
Depositor, the Master Servicer, the Special Servicer, the Trustee, the Paying
Agent or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Special Servicer, the Trustee, the Paying
Agent, the Certificate Registrar or any such agent shall be affected by notice
to the contrary.
The Trust Fund and the obligations created by the Agreement
shall terminate upon distribution (or provision for distribution) to the
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be distributed to them pursuant to the Agreement following the
earlier of (i) the final payment or other liquidation (or any advance with
respect thereto) of the last Mortgage Loan or REO Property remaining in the
Trust Fund, and (ii) the purchase by the Master Servicer, the Special Servicer
or the Depositor at a price determined as provided in the Agreement of all
Mortgage Loans and each REO Property remaining in the Trust Fund. The Agreement
permits, but does not require, the Master Servicer, the Special Servicer or the
Depositor to purchase from the Trust Fund all Mortgage Loans and each REO
Property remaining therein. The exercise of such right will effect early
retirement of the Class L Certificates; however, such right to purchase is
subject to the aggregate Stated Principal Balance of the Mortgage Pool at the
time of purchase being less than 1% of the aggregate Stated Principal Balance
of the Mortgage Loans as of the Cut-Off Date.
-5-
<PAGE>
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Special Servicer and the
Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Master Servicer, the Special Servicer and the
Trustee with the consent of the Holders of Certificates entitled to at least
51% of the Voting Rights allocated to the affected Classes. The Agreement also
permits the amendment thereof, in certain limited circumstances, including any
amendment necessary to maintain the status of a portion of the Trust Fund as a
REMIC, without the consent of the Holders of any of the Certificates.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
The registered Holder hereof, by its acceptance hereof,
agrees that it will look solely to the Trust Fund (to the extent of its rights
therein) for distributions hereunder.
This Certificate shall be construed in accordance with the
internal laws of the State of New York applicable to agreements made and to be
performed in said State, and the obligations, rights and remedies of the Holder
hereof shall be determined in accordance with such laws.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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<PAGE>
IN WITNESS WHEREOF, the Certificate Registrar has caused this
Certificate to be duly executed.
Dated: December __, 1998
THE CHASE MANHATTAN BANK
as Certificate Registrar
By: __________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class L Certificates referred to in the
within-mentioned Agreement.
THE CHASE MANHATTAN BANK
as Authenticating Agent
By: __________________
Authorized Officer
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<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
_________________________________________
_________________________________________
_________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Mortgage Pass-Through Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.
I (we) further direct the Certificate Registrar to issue a
new Mortgage Pass-Through Certificate of a like Percentage Interest and Class
to the above named assignee and deliver such Mortgage Pass-Through Certificate
to the following address:______________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
Dated:
_____________________________________
Signature by or on behalf of Assignor
_____________________________________
Signature Guaranteed
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<PAGE>
DISTRIBUTION INSTRUCTIONS
The Assignee should include the following for purposes of
distribution:
Distributions shall, if permitted, be made by wire transfer or
otherwise, in immediately available funds, to _________________________________
for the account of ____________________________________________________________
_____________________________________________.
Distributions made by check (such check to be made payable to
________________________________) and all applicable statements and notices
should be mailed to ____________________________________.
This information is provided by ______________________,
the Assignee named above, or ______________, as its agent.
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<PAGE>
EXHIBIT A-15
FORM OF CLASS R-I CERTIFICATE
CLASS R-I MERRILL LYNCH MORTGAGE INVESTORS, INC.,
SERIES 1998-C3
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool of multifamily and commercial mortgage loans
(the "Mortgage Loans"), such pool being formed and sold by
MERRILL LYNCH MORTGAGE INVESTORS, INC.
<TABLE>
<CAPTION>
<S> <C>
Date of Pooling and Servicing Percentage Interest evidenced by this Class R-I
Agreement: December 1, 1998 Certificate: 100%
Closing Date: December __, 1998 Aggregate Stated Principal
Balance of the Mortgage Loans
as of the Cut-Off Date: $638,408,606
First Distribution Date:
January 15, 1999
Master Servicer: Trustee:
GE Capital Loan Services, Inc. The Chase Manhattan Bank
Special Servicer:
GE Capital Realty Group, Inc.
Certificate No.
</TABLE>
<PAGE>
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN THE
DEPOSITOR, THE UNDERWRITERS, THE MASTER SERVICER, THE SPECIAL SERVICER, THE
TRUSTEE, THE MORTGAGE LOAN SELLERS OR ANY OF THEIR AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
THIS CERTIFICATE IS SUBORDINATE TO ALL OF THE REMIC I REGULAR INTERESTS
DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR THE SECURITIES
LAWS OF ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS
CERTIFICATE WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A
TRANSACTION WHICH DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN MAY BE MADE (A) TO ANY
EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT, INCLUDING INDIVIDUAL
RETIREMENT ACCOUNTS AND ANNUITIES, KEOGH PLANS AND COLLECTIVE INVESTMENT FUNDS
AND SEPARATE ACCOUNTS IN WHICH SUCH PLANS, ACCOUNTS OR ARRANGEMENTS ARE
INVESTED, THAT IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED ("ERISA"), OR THE PROHIBITED TRANSACTIONS RESTRICTIONS OF
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") (ANY
SUCH EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT, A "PLAN"), OR (B)
TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS CERTIFICATE OR SUCH
INTEREST HEREIN ON BEHALF OF, AS NAMED FIDUCIARY OF, AS TRUSTEE OF, OR WITH
ASSETS OF A PLAN (INCLUDING, WITHOUT LIMITATION, ANY INSURANCE COMPANY USING
ASSETS IN ITS GENERAL OR SEPARATE ACCOUNT THAT MAY CONSTITUTE "PLAN ASSETS" OF
A PLAN). AS A CONDITION TO ITS REGISTRATION OF TRANSFER OF A CLASS R-I
CERTIFICATE, THE CERTIFICATE REGISTRAR SHALL HAVE THE RIGHT TO REQUIRE THE
PROSPECTIVE TRANSFEREE OF SUCH CERTIFICATE TO EXECUTE A CERTIFICATION
SUBSTANTIALLY IN THE FORM OF EXHIBIT G TO THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
CONSEQUENTLY, TRANSFER OF THIS CERTIFICATE IS ALSO SUBJECT TO THE ADDITIONAL
TAX-RELATED TRANSFER RESTRICTIONS DESCRIBED HEREIN. IF ANY PERSON BECOMES THE
REGISTERED HOLDER OF THIS CERTIFICATE IN VIOLATION OF SUCH TRANSFER
RESTRICTIONS, SUCH REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR
EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE A CERTIFICATEHOLDER
FOR ANY PURPOSE HEREUNDER OR UNDER THE POOLING AND SERVICING AGREEMENT REFERRED
TO HEREIN, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS
CERTIFICATE.
-2-
<PAGE>
This certifies that Merrill Lynch, Pierce, Fenner & Smith is
the registered owner of the Percentage Interest evidenced by this Class R-I
Certificate (as specified above) in that certain beneficial ownership interest
evidenced by all the Class R-I Certificates in the Trust Fund created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Merrill Lynch Mortgage Investors, Inc. (hereinafter called
the "Depositor", which term includes any successor entity under the Agreement),
GE Capital Loan Services, Inc. (hereinafter called the "Master Servicer", which
term includes any successor entity under the Agreement), GE Capital Realty
Group, Inc. (hereinafter called the "Special Servicer", which term includes any
successor entities under the Agreement), and The Chase Manhattan Bank
(hereinafter called the "Trustee", which term includes any successor entity
under the Agreement), a summary of certain of the pertinent provisions of which
is set forth hereafter. To the extent not defined herein, the capitalized terms
used herein have the respective meanings assigned in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 15th day of each month or, if such 15th day is not a Business Day,
the Business Day immediately following (each, a "Distribution Date") (provided,
however, that the Distribution Date will be no earlier than the fourth Business
Day following the related Determination Date), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount, if any, required to be distributed to the Holders
of the Class R-I Certificates on the applicable Distribution Date pursuant to
the Agreement. All distributions made under the Agreement on this Class R-I
Certificate will be made by check mailed to the address of the Person entitled
thereto, as such name and address appear in the Certificate Register.
Notwithstanding the foregoing, the final distribution on this Certificate will
be made in like manner, but only upon presentation and surrender of this
Certificate at the offices of the Trustee or such other location specified in
the notice to Certificateholders of such final distribution.
The Certificates are limited in right of distribution to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Certificate Account, the Distribution Account
and, if established, the REO Account may be made from time to time for purposes
other than, and, in certain cases, prior to,
-3-
<PAGE>
distributions to Certificateholders, such purposes including the reimbursement
of advances made, or certain expenses incurred, with respect to the Mortgage
Loans and the payment of interest on such advances and expenses.
The Class R-I Certificates are issuable in fully registered
form only without coupons, representing Percentage Interests specified in the
Agreement. As provided in the Agreement and subject to certain limitations
therein set forth, Class R-I Certificates are exchangeable for new Class R-I
Certificates as authorized in the Agreement evidencing the same aggregate
Percentage Interest, as requested by the Holder surrendering the same.
As provided in the Agreement and subject to certain
limitations therein set forth, the Transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices of the Certificate Registrar, duly endorsed by, or
accompanied by a written instrument of transfer in the form satisfactory to the
Certificate Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Class R-I Certificates in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated Transferee or Transferees.
No Transfer of any Class R-I Certificate shall be made unless
that transfer is made pursuant to an effective registration statement under the
Securities Act, and effective registration or qualification under applicable
state securities laws, or is made in a transaction which does not require such
registration or qualification. If a Transfer of any Class R-I Certificate is to
be made without registration under the Securities Act (other than in connection
with the initial issuance thereof or the initial transfer thereof by the
Depositor or any of its affiliates), then the Certificate Registrar shall
refuse to register such Transfer unless it receives either: (i) a certificate
from the Certificateholder desiring to effect such Transfer substantially in
the form attached as Exhibit F-1 to the Agreement, and a certificate from such
Certificateholder's prospective transferee substantially in the form attached
as either Exhibit F-2 or Exhibit F-3 to the Agreement; or (ii) an Opinion of
Counsel satisfactory to the Certificate Registrar to the effect that such
Transfer may be made without registration under the Securities Act (which
Opinion of Counsel shall not be an expense of the Trust Fund or of the
Depositor, the Master Servicer, the Special Servicer, the Trustee or the
Certificate Registrar in their respective capacities as such), together with
the written certification(s) as to the facts surrounding such transfer from the
Certificateholder desiring to effect such transfer and/or such
Certificateholder's prospective transferee on which such Opinion of Counsel is
based. None of the Depositor, the Trustee or the Certificate Registrar is
obligated to register or qualify the Class R-I Certificates under the
-4-
<PAGE>
Securities Act or any other securities law or to take any action not otherwise
required under the Agreement to permit the transfer of any Class R-I
Certificate without registration or qualification. Any Class R-I
Certificateholder desiring to effect such a Transfer shall, and upon
acquisition of its Class R-I Certificate agrees to, indemnify the Trustee, the
Certificate Registrar and the Depositor against any liability that may result
if the Transfer is not so exempt or is not made in accordance with such federal
and state laws.
No Transfer of a Class R-I Certificate or any interest
therein shall be made to (A) a Plan or (B) any Person who is directly or
indirectly purchasing the Class R-1 Certificate or interest therein on behalf
of, as named fiduciary of, as trustee of, or with assets of a Plan (including,
without limitation, any insurance company using assets in its general or
separate account that may constitute assets of a Plan). As a condition to its
registration of Transfer of a Class R-1 Certificate, the Certificate Registrar
shall have the right to require the prospective Transferee of such Certificate
to execute a certification substantially in the form of Exhibit G to the
Agreement.
Each Person who has or who acquires any Ownership Interest in
this Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the provisions of Section
5.02(d) of the Agreement and, if any purported Transferee shall become a Holder
of this Certificate in violation of the provisions of such Section 5.02(d), to
have irrevocably authorized The Chase Manhattan Bank as paying agent (the
"Paying Agent"), under clause (ii)(A) of such Section 5.02(d) to deliver
payments to a Person other than such Person and to have irrevocably authorized
the Certificate Registrar under clause (ii)(B) of such Section 5.02(d) to
negotiate the terms of any mandatory sale and to execute all instruments of
Transfer and to do all other things necessary in connection with any such sale.
Each Person holding or acquiring any Ownership Interest in this Certificate
must be a Permitted Transferee and shall promptly notify the Master Servicer,
the Paying Agent and the Certificate Registrar of any change or impending
change in its status as a Permitted Transferee. In connection with any proposed
Transfer of any Ownership Interest in this Certificate, the Certificate
Registrar shall require delivery to it, and shall not register the Transfer of
this Certificate until its receipt of, an affidavit and agreement substantially
in the form attached as Exhibit H-1 to the Agreement (a "Transfer Affidavit and
Agreement") from the proposed Transferee, in form and substance satisfactory to
the Certificate Registrar, representing and warranting, among other things,
that such Transferee is a Permitted Transferee, that it is not acquiring its
Ownership Interest in this Certificate as a nominee, trustee or agent for any
Person that is not a Permitted Transferee, that for so long as it retains its
Ownership Interest in this Certificate, it will endeavor to remain a Permitted
Transferee, and that it has
-5-
<PAGE>
reviewed the provisions of Section 5.02(d) of the Agreement and agrees to be
bound by them. Notwithstanding the delivery of a Transfer Affidavit and
Agreement by a proposed Transferee, if a Responsible Officer of the Certificate
Registrar has actual knowledge that the proposed Transferee is not a Permitted
Transferee, no Transfer of this Certificate to such proposed Transferee shall
be effected.
Each Person holding or acquiring any Ownership Interest in
this Certificate shall agree (x) to require a Transfer Affidavit and Agreement
from any other Person to whom such Person attempts to transfer its Ownership
Interest herein and (y) not to transfer its Ownership Interest unless it
provides to the Certificate Registrar a certificate substantially in the form
attached as Exhibit H-2 to the Agreement stating that, among other things, it
has no actual knowledge that such other Person is not a Permitted Transferee.
Each Person holding or acquiring an Ownership Interest in this Certificate, by
purchasing such Ownership Interest herein, agrees to give the Master Servicer
and the Trustee written notice that it is a "pass-through interest holder"
within the meaning of Temporary Treasury Regulations Section 1.67-3T(a)(2)(i)(A)
immediately upon acquiring such Ownership Interest, if it is, or is holding
such Ownership Interest on behalf of, a "pass-through interest holder".
The provisions of Section 5.02(d) of the Agreement may be
modified, added to or eliminated, provided that there shall have been delivered
to the Certificate Registrar and the Master Servicer the following: (a) written
confirmation from each Rating Agency to the effect that the modification of,
addition to or elimination of such provisions will not cause such Rating Agency
to downgrade its then-current ratings of any Class of Certificates; and (b) an
Opinion of Counsel, in form and substance satisfactory to the Certificate
Registrar and the Master Servicer, to the effect that doing so will not cause
any portion of the Trust Fund which is designated as a REMIC in the Agreement
to (x) cease to qualify as a REMIC or (y) be subject to an entity-level tax
caused by the Transfer of any Class R-I Certificate to a Person which is not a
Permitted Transferee, or cause a Person other than the prospective Transferee
to be subject to a REMIC-related tax caused by the Transfer of a Class R-I
Certificate to a Person which is not a Permitted Transferee.
A "Permitted Transferee" is any Transferee other than a
"Disqualified Organization" or a "Non-United States Person". A "Disqualified
Organization" is any of (i) the United States, any State or political
subdivision thereof, any possession of the United States, or any agency or
instrumentality of any of the foregoing (other than an instrumentality which is
a corporation if all of its activities are subject to tax and, except for the
FHLMC, a majority of its board of directors is not selected by such
governmental unit), (ii) a foreign government, any international organization,
or any agency or instrumentality of any of the foregoing, (iii) any
organization (other than certain
-6-
<PAGE>
farmers' cooperatives described in Section 521 of the Code) which is exempt
from the tax imposed by Chapter I of the Code (including the tax imposed by
Section 511 of the Code on unrelated business taxable income), (iv) rural
electric and telephone cooperatives described in Section 1381 of the Code and
(v) any other Person so designated by the Trustee based upon an Opinion of
Counsel provided to it that the holding of an Ownership Interest in a Class R-I
Certificate by such Person may cause the Trust Fund or any Person having an
Ownership Interest in any Class of Certificates (other than such Person) to
incur a liability for any federal tax imposed under the Code that would not
otherwise be imposed but for the Transfer of an Ownership Interest in a
Class R-I Certificate to such Person. The terms "United States", "State" and
"international organization" shall have the meanings set forth in Section 7701
of the Code or successor provisions.
A "Non-United States Person" is any Person other than a
United States Person. A "United States Person" is a citizen or resident of the
United States, a corporation, partnership or other entity created or organized
in, or under the laws of, the United States or any political subdivision
thereof, or an estate whose income is includible in gross income for United
States federal income tax purposes regardless of its source, or a trust if a
court within the U.S. is able to exercise primary supervision over the
administration of the trust and one or more U.S. fiduciaries have the authority
to control all substantial decisions of the trust.
No service charge will be imposed for any registration of
transfer or exchange of Class R-I Certificates, but the Certificate Registrar
may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of Class
R-I Certificates.
The Depositor, the Master Servicer, the Special Servicer, the
Trustee, the Paying Agent and the Certificate Registrar and any agent of the
Depositor, the Master Servicer, the Special Servicer, the Trustee, the Paying
Agent or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Special Servicer, the Trustee, the Paying
Agent, the Certificate Registrar or any such agent shall be affected by notice
to the contrary.
The Trust Fund and the obligations created by the Agreement
shall terminate upon distribution (or provision for distribution) to the
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be distributed to them pursuant to the Agreement following the
earlier of (i) the final payment or other liquidation (or any Advance with
respect thereto) of the last Mortgage Loan or REO Property remaining in
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<PAGE>
the Trust Fund, and (ii) the purchase by the Majority Subordinate Certificate
Holder, the Depositor, the Master Servicer or the Special Servicer at a price
determined as provided in the Agreement of all Mortgage Loans and each REO
Property remaining in the Trust Fund. The Agreement permits, but does not
require, the Majority Subordinate Certificate Holder, the Depositor, the Master
Servicer or the Special Servicer, in that order, to elect to purchase from the
Trust Fund all Mortgage Loans and each REO Property remaining therein. The
exercise of such right will effect early retirement of the Certificates;
however, such right to elect to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Pool at the time of election being less than
1% of the aggregate Cut-Off Date Balance of the Mortgage Loans.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Special Servicer and the
Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Master Servicer, the Special Servicer and the
Trustee with the consent of the Holders of Certificates entitled to at least
51% of the Voting Rights allocated to the affected Classes. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the Transfer hereof or in exchange herefor or in lieu hereof whether or
not notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, including any
amendment necessary to maintain the status of the Trust Fund (or designated
portions thereof) as a REMIC, without the consent of the Holders of any of the
Certificates.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, the Holder of this
Certificate shall not be entitled to any benefit under the Agreement or be
valid for any purpose.
The registered Holder hereof, by its acceptance hereof,
agrees that it will look solely to the Trust Fund (to the extent of its rights
therein) for distributions hereunder.
This Certificate shall be construed in accordance with the
internal laws of the State of New York applicable to agreements made and to be
performed in said State, and the obligations, rights and remedies of the Holder
hereof shall be determined in accordance with such laws.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-8-
<PAGE>
IN WITNESS WHEREOF, the Certificate Registrar has caused this
Certificate to be duly executed.
Dated: December __, 1998
THE CHASE MANHATTAN BANK
as Certificate Registrar
By: __________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class R-I Certificates referred to in the
within-mentioned Agreement.
THE CHASE MANHATTAN BANK
as Authenticating Agent
By: __________________
Authorized Officer
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<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Mortgage Pass-Through Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.
I (we) further direct the Certificate Registrar to issue a
new Mortgage Pass-Through Certificate of a like Percentage Interest and Class
to the above named assignee and deliver such Mortgage Pass-Through Certificate
to the following address:
_______________________________________________________________________________
_______________________________________________________________________________
Dated:
_____________________________________
Signature by or on behalf of Assignor
_____________________________________
Signature Guaranteed
-10-
<PAGE>
DISTRIBUTION INSTRUCTIONS
The Assignee should include the following for purposes of
distribution:
Distributions shall be made by check payable to______________
_______________________________________________________________________________
and mailed to _________________________________________________________________
Applicable statements and notices should be mailed to _______
______________________________.
This information is provided by ______________________,
the Assignee named above, or ______________, as its agent.
-11-
<PAGE>
EXHIBIT A-16
FORM OF CLASS R-II CERTIFICATE
CLASS R-II MERRILL LYNCH MORTGAGE INVESTORS, INC.,
SERIES 1998-C3
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool of multifamily and commercial mortgage loans
(the "Mortgage Loans"), such pool being formed and sold by
MERRILL LYNCH MORTGAGE INVESTORS, INC.
<TABLE>
<CAPTION>
<S> <C>
Date of Pooling and Servicing Percentage Interest evidenced by this Class R-II
Agreement: December 1, 1998 Certificate: 100%
Closing Date: December __, 1998 Aggregate Stated Principal
Balance of the Mortgage Loans
as of the Cut-Off Date: $638,408,606
First Distribution Date:
January 15, 1999
Master Servicer: Trustee:
GE Capital Loan Services, Inc. The Chase Manhattan Bank
Special Servicer:
GE Capital Realty Group, Inc.
Certificate No.
</TABLE>
<PAGE>
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN THE
DEPOSITOR, THE UNDERWRITERS, THE MASTER SERVICER, THE SPECIAL SERVICER, THE
TRUSTEE, THE MORTGAGE LOAN SELLERS OR ANY OF THEIR AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
THIS CERTIFICATE IS SUBORDINATE TO ALL OF THE REMIC I REGULAR INTERESTS
DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR THE SECURITIES
LAWS OF ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS
CERTIFICATE WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A
TRANSACTION WHICH DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN MAY BE MADE (A) TO ANY
EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT, INCLUDING INDIVIDUAL
RETIREMENT ACCOUNTS AND ANNUITIES, KEOGH PLANS AND COLLECTIVE INVESTMENT FUNDS
AND SEPARATE ACCOUNTS IN WHICH SUCH PLANS, ACCOUNTS OR ARRANGEMENTS ARE
INVESTED, THAT IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED ("ERISA"), OR THE PROHIBITED TRANSACTIONS RESTRICTIONS OF
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") (ANY
SUCH EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT, A "PLAN"), OR (B)
TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS CERTIFICATE OR SUCH
INTEREST HEREIN ON BEHALF OF, AS NAMED FIDUCIARY OF, AS TRUSTEE OF, OR WITH
ASSETS OF A PLAN (INCLUDING, WITHOUT LIMITATION, ANY INSURANCE COMPANY USING
ASSETS IN ITS GENERAL OR SEPARATE ACCOUNT THAT MAY CONSTITUTE "PLAN ASSETS" OF
A PLAN). AS A CONDITION TO ITS REGISTRATION OF TRANSFER OF A CLASS R-II
CERTIFICATE, THE CERTIFICATE REGISTRAR SHALL HAVE THE RIGHT TO REQUIRE THE
PROSPECTIVE TRANSFEREE OF SUCH CERTIFICATE TO EXECUTE A CERTIFICATION
SUBSTANTIALLY IN THE FORM OF EXHIBIT G TO THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
CONSEQUENTLY, TRANSFER OF THIS CERTIFICATE IS ALSO SUBJECT TO THE ADDITIONAL
TAX-RELATED TRANSFER RESTRICTIONS DESCRIBED HEREIN. IF ANY PERSON BECOMES THE
REGISTERED HOLDER OF THIS CERTIFICATE IN VIOLATION OF SUCH TRANSFER
RESTRICTIONS, SUCH REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR
EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE A CERTIFICATEHOLDER
FOR ANY PURPOSE HEREUNDER OR UNDER THE POOLING AND SERVICING AGREEMENT REFERRED
TO HEREIN, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS
CERTIFICATE.
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<PAGE>
This certifies that Merrill Lynch, Pierce, Fenner & Smith is
the registered owner of the Percentage Interest evidenced by this Class R-II
Certificate (obtained by dividing the principal amount of this Class R-II
Certificate (as specified above) in that certain beneficial ownership interest
evidenced by all the Class R-II Certificates in the Trust Fund created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Merrill Lynch Mortgage Investors, Inc. (hereinafter called
the "Depositor", which term includes any successor entity under the Agreement),
GE Capital Loan Services, Inc. (hereinafter called the "Master Servicer", which
term includes any successor entity under the Agreement), GE Capital Realty
Group, Inc. (hereinafter called the "Special Servicer", which term includes any
successor entities under the Agreement), and The Chase Manhattan Bank
(hereinafter called the "Trustee", which term includes any successor entity
under the Agreement), a summary of certain of the pertinent provisions of which
is set forth hereafter. To the extent not defined herein, the capitalized terms
used herein have the respective meanings assigned in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 15th day of each month or, if such 15th day is not a Business Day,
the Business Day immediately following (each, a "Distribution Date")(provided,
however, that the Distribution Date will be no earlier than the fourth Business
Day following the related Determination Date), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount, if any, required to be distributed to the Holders
of this Class R-II Certificate on the applicable Distribution Date pursuant to
the Agreement. All distributions made under the Agreement on this Class R-II
Certificate will be made by check mailed to the address of the Person entitled
thereto, as such name and address appear in the Certificate Register.
Notwithstanding the foregoing, the final distribution on this Certificate will
be made in like manner, but only upon presentation and surrender of this
Certificate at the offices of the Trustee or such other location specified in
the notice to Certificateholders of such final distribution.
The Certificates are limited in right of distribution to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Certificate Account, the Distribution Account
and, if established, the REO Account may be made from time to time for
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<PAGE>
purposes other than, and, in certain cases, prior to, distributions to
Certificateholders, such purposes including the reimbursement of advances made,
or certain expenses incurred, with respect to the Mortgage Loans and the
payment of interest on such advances and expenses.
The Class R-II Certificates are issuable in fully registered
form only without coupons, representing Percentage Interests specified in the
Agreement. As provided in the Agreement and subject to certain limitations
therein set forth, Class R-II Certificates are exchangeable for new Class R-II
Certificates as authorized in the Agreement, evidencing the same aggregate
Percentage Interest, as requested by the Holder surrendering the same.
As provided in the Agreement and subject to certain
limitations therein set forth, the Transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices of the Certificate Registrar, duly endorsed by, or
accompanied by a written instrument of transfer in the form satisfactory to the
Certificate Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Class R-II Certificates in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated Transferee or Transferees.
No Transfer of any Class R-II Certificate shall be made
unless that transfer is made pursuant to an effective registration statement
under the Securities Act, and effective registration or qualification under
applicable state securities laws, or is made in a transaction which does not
require such registration or qualification. If a Transfer of any Class R-II
Certificate is to be made without registration under the Securities Act (other
than in connection with the initial issuance thereof or the initial transfer
thereof by the Depositor or any of its affiliates), then the Certificate
Registrar shall refuse to register such Transfer unless it receives either: (i)
a certificate from the Certificateholder desiring to effect such Transfer
substantially in the form attached as Exhibit F-1 to the Agreement, and a
certificate from such Certificateholder's prospective transferee substantially
in the form attached as either Exhibit F-2 or Exhibit F-3 to the Agreement; or
(ii) an Opinion of Counsel satisfactory to the Certificate Registrar to the
effect that such Transfer may be made without registration under the Securities
Act (which Opinion of Counsel shall not be an expense of the Trust Fund or of
the Depositor, the Master Servicer, the Special Servicer, the Trustee or the
Certificate Registrar in their respective capacities as such), together with
the written certification(s) as to the facts surrounding such transfer from the
Certificateholder desiring to effect such transfer and/or such
Certificateholder's prospective transferee on which such Opinion of Counsel is
based. None of the Depositor, the Trustee or the Certificate Registrar is
obligated to register or qualify the Class R-II Certificates under the
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<PAGE>
Securities Act or any other securities law or to take any action not otherwise
required under the Agreement to permit the transfer of any Class R-II
Certificate without registration or qualification. Any Class R-II
Certificateholder desiring to effect such a Transfer shall, and upon
acquisition of its Class R-II Certificate agrees to, indemnify the Trustee, the
Certificate Registrar and the Depositor against any liability that may result
if the Transfer is not so exempt or is not made in accordance with such federal
and state laws.
No Transfer of a Class R-II Certificate or any interest
therein shall be made to (A) a Plan or (B) any Person who is directly or
indirectly purchasing the Class R-II Certificate or interest therein on behalf
of, as named fiduciary of, as trustee of, or with assets of a Plan (including,
without rotation, any insurance company using assets in its general or separate
account that may constitute assets of a Plan). As a condition to its
registration of Transfer of a Class R-II Certificate, the Certificate Registrar
shall have the right to require the prospective Transferee of such Certificate
to execute a certification substantially in the form of Exhibit G to the
Agreement.
Each Person who has or who acquires any Ownership Interest in
this Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the provisions of Section
5.02(d) of the Agreement and, if any purported Transferee shall become a Holder
of this Certificate in violation of the provisions of such Section 5.02(d), to
have irrevocably authorized The Chase Manhattan Bank as paying agent (the
"Paying Agent"), under clause (ii)(A) of such Section 5.02(d) to deliver
payments to a Person other than such Person and to have irrevocably authorized
the Certificate Registrar under clause (ii)(B) of such Section 5.02(d) to
negotiate the terms of any mandatory sale and to execute all instruments of
Transfer and to do all other things necessary in connection with any such sale.
Each Person holding or acquiring any Ownership Interest in this Certificate
must be a Permitted Transferee and shall promptly notify the Master Servicer,
the Paying Agent and the Certificate Registrar of any change or impending
change in its status as a Permitted Transferee. In connection with any proposed
Transfer of any Ownership Interest in this Certificate, the Certificate
Registrar shall require delivery to it, and shall not register the Transfer of
this Certificate until its receipt of, an affidavit and agreement substantially
in the form attached as Exhibit H-1 to the Agreement (a "Transfer Affidavit and
Agreement") from the proposed Transferee, in form and substance satisfactory to
the Certificate Registrar, representing and warranting, among other things,
that such Transferee is a Permitted Transferee, that it is not acquiring its
Ownership Interest in this Certificate as a nominee, trustee or agent for any
Person that is not a Permitted Transferee, that for so long as it retains its
Ownership Interest in this Certificate, it will
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<PAGE>
endeavor to remain a Permitted Transferee, and that it has reviewed the
provisions of Section 5.02(d) of the Agreement and agrees to be bound by them.
Notwithstanding the delivery of a Transfer Affidavit and Agreement by a
proposed Transferee, if a Responsible Officer of the Certificate Registrar has
actual knowledge that the proposed Transferee is not a Permitted Transferee, no
Transfer of an Ownership Interest in this Certificate to such proposed
Transferee shall be effected.
Each Person holding or acquiring any Ownership Interest in
this Certificate shall agree (x) to require a Transfer Affidavit and Agreement
from any other Person to whom such Person attempts to transfer its Ownership
Interest herein and (y) not to transfer its Ownership Interest unless it
provides to the Certificate Registrar a certificate substantially in the form
attached as Exhibit H-2 to the Agreement stating that, among other things, it
has no actual knowledge that such other Person is not a Permitted Transferee.
Each Person holding or acquiring an Ownership Interest in this Certificate, by
purchasing such Ownership Interest herein, agrees to give the Master Servicer
and the Trustee written notice that it is a "pass-through interest holder"
within the meaning of Temporary Treasury Regulations Section
1.67-3T(a)(2)(i)(A) immediately upon acquiring such Ownership Interest, if it
is, or is holding such Ownership Interest on behalf of, a "pass-through
interest holder".
The provisions of Section 5.02(d) of the Agreement may be
modified, added to or eliminated, provided that there shall have been delivered
to the Certificate Registrar and the Master Servicer the following: (a) written
confirmation from each Rating Agency to the effect that the modification of,
addition to or elimination of such provisions will not cause such Rating Agency
to downgrade its then-current ratings of any Class of Certificates; and (b) an
Opinion of Counsel, in form and substance satisfactory to the Certificate
Registrar and the Master Servicer, to the effect that doing so will not cause
any portion of the Trust Fund which is designated as a REMIC in the Agreement
to (x) cease to qualify as a REMIC or (y) be subject to an entity-level tax
caused by the Transfer of any Class R-II Certificate to a Person which is not a
Permitted Transferee, or cause a Person other than the prospective Transferee
to be subject to a REMIC-related tax caused by the Transfer of a Class R-II
Certificate to a Person which is not a Permitted Transferee.
A "Permitted Transferee" is any Transferee other than a
"Disqualified Organization" or a "Non-United States Person". A "Disqualified
Organization" is any of (i) the United States, any State or political
subdivision thereof, any possession of the United States, or any agency or
instrumentality of any of the foregoing (other than an instrumentality which is
a corporation if all of its activities are subject to tax and, except for the
FHLMC, a majority of its board of directors is not selected by such
governmental unit), (ii) a foreign government, any international organization,
or any agency or instrumentality of
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<PAGE>
any of the foregoing, (iii) any organization (other than certain farmers'
cooperatives described in Section 521 of the Code) which is exempt from the tax
imposed by Chapter I of the Code (including the tax imposed by Section 511 of
the Code on unrelated business taxable income), (iv) rural electric and
telephone cooperatives described in Section 1381 of the Code and (v) any other
Person so designated by the Trustee based upon an Opinion of Counsel provided
to it that the holding of an Ownership Interest in a Class R-II Certificate by
such Person may cause the Trust Fund or any Person having an Ownership Interest
in any Class of Certificates (other than such Person) to incur a liability for
any federal tax imposed under the Code that would not otherwise be imposed but
for the Transfer of an Ownership Interest in a Class R-II Certificate to such
Person. The terms "United States", "State" and "international organization"
shall have the meanings set forth in Section 7701 of the Code or successor
provisions.
A "Non-United States Person" is any Person other than a
United States Person. A "United States Person" is a citizen or resident of the
United States, a corporation, partnership or other entity created or organized
in, or under the laws of, the United States or any political subdivision
thereof, or an estate whose income is includible in gross income for United
States federal income tax purposes regardless of its source, or a trust if a
court within the U.S. is able to exercise primary supervision over the
administration of the trust and one or more U.S. fiduciaries have the authority
to control all substantial decisions of the trust.
No service charge will be imposed for any registration of
transfer or exchange of Class R-II Certificates, but the Certificate Registrar
may require payment of a but sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any transfer or
exchange of Class R-II Certificates.
The Depositor, the Master Servicer, the Special Servicer, the
Trustee, the Paying Agent and the Certificate Registrar and any agent of the
Depositor, the Master Servicer, the Special Servicer, the Trustee, the Paying
Agent or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Special Servicer, the Trustee, the Paying
Agent, the Certificate Registrar or any such agent shall be affected by notice
to the contrary.
The Trust Fund and the obligations created by the Agreement
shall terminate upon distribution (or provision for distribution) to the
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be distributed to them pursuant to the Agreement following the
earlier of (i) the final payment or other liquidation (or any Advance with
respect
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<PAGE>
thereto) of the last Mortgage Loan or REO Property remaining in the Trust Fund,
and (ii) the purchase by the Majority Subordinate Certificate Holder, the
Depositor, the Master Servicer or the Special Servicer at a price determined as
provided in the Agreement of all Mortgage Loans and each REO Property remaining
in the Trust Fund. The Agreement permits, but does not require, the Majority
Subordinate Certificate Holder, the Depositor, the Master Servicer or the
Special Servicer, in that order, to elect to purchase from the Trust Fund all
Mortgage Loans and each REO Property remaining therein. The exercise of such
right will effect early retirement of the Certificates; however, such right to
elect to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Pool at the time of election being less than 1% of the aggregate
Cut-Off Date Balance of the Mortgage Loans.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Special Servicer and the
Trustee, and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Master Servicer, the Special Servicer and the
Trustee with the consent of the Holders of Certificates entitled to at least
51% of the Voting Rights allocated to the affected Classes. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the Transfer hereof or in exchange herefor or in lieu hereof whether or
not notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, including any
amendment necessary to maintain the status of the Trust Fund (or designated
portions thereof) as a REMIC, without the consent of the Holders of any of the
Certificates.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, the Holder of this
Certificate shall not be entitled to any benefit under the Agreement or be
valid for any purpose.
The registered Holder hereof, by its acceptance hereof,
agrees that it will look solely to the Trust Fund (to the extent of its rights
therein) for distributions hereunder.
This Certificate shall be construed in accordance with the
internal laws of the State of New York applicable to agreements made and to be
performed in said State, and the obligations, rights and remedies of the Holder
hereof shall be determined in accordance with such laws.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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<PAGE>
IN WITNESS WHEREOF, the Certificate Registrar has caused this
Certificate to be duly executed.
Dated: December __, 1998
THE CHASE MANHATTAN BANK
as Certificate Registrar
By: __________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class R-II Certificates referred to in the
within-mentioned Agreement.
THE CHASE MANHATTAN BANK
as Authenticating Agent
By: __________________
Authorized Officer
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<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Mortgage Pass-Through Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.
I (we) further direct the Certificate Registrar to issue a
new Mortgage Pass-Through Certificate of a like Percentage Interest and Class
to the above named assignee and deliver such Mortgage Pass-Through Certificate
to the following address:
_______________________________________________________________________________
_______________________________________________________________________________
Dated:
_____________________________________
Signature by or on behalf of Assignor
_____________________________________
Signature Guaranteed
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<PAGE>
DISTRIBUTION INSTRUCTIONS
The Assignee should include the following for purposes of
distribution:
Distributions shall be by check made payable to _____________
_______________________________________________________________________________
and mailed to _______________________________________________.
Applicable statements and notices should be mailed to
_______________________________________________________________________________
_____________________________________________________________.
This information is provided by ______________________,
the Assignee named above, or ______________, as its agent.
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<PAGE>
EXHIBIT A-17
FORM OF CLASS R-III CERTIFICATE
CLASS R-III MERRILL LYNCH MORTGAGE INVESTORS, INC.,
SERIES 1998-C3
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool of multifamily and commercial mortgage loans
(the "Mortgage Loans"), such pool being formed and sold by
MERRILL LYNCH MORTGAGE INVESTORS, INC.
<TABLE>
<CAPTION>
<S> <C>
Date of Pooling and Servicing Percentage Interest evidenced by this Class R-III
Agreement: December 1, 1998 Certificate: 100%
Closing Date: December __, 1998 Aggregate Stated Principal
Balance of the Mortgage Loans
as of the Cut-Off Date: $638,408,606
First Distribution Date:
January 15, 1999
Master Servicer: Trustee:
GE Capital Loan Services, Inc. The Chase Manhattan Bank
Special Servicer:
GE Capital Realty Group, Inc.
Certificate No.
</TABLE>
<PAGE>
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN THE
DEPOSITOR, THE UNDERWRITERS, THE MASTER SERVICER, THE SPECIAL SERVICER, THE
TRUSTEE, THE MORTGAGE LOAN SELLERS OR ANY OF THEIR AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1, CLASS A-2, CLASS IO, CLASS B,
CLASS C, CLASS D, CLASS E, CLASS F, CLASS G, CLASS H, CLASS J, CLASS K, AND
CLASS L CERTIFICATES OF THE SAME SERIES TO THE EXTENT DESCRIBED IN THE POOLING
AND SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR THE SECURITIES
LAWS OF ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS
CERTIFICATE WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A
TRANSACTION WHICH DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN MAY BE MADE (A) TO ANY
EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT, INCLUDING INDIVIDUAL
RETIREMENT ACCOUNTS AND ANNUITIES, KEOGH PLANS AND COLLECTIVE INVESTMENT FUNDS
AND SEPARATE ACCOUNTS IN WHICH SUCH PLANS, ACCOUNTS OR ARRANGEMENTS ARE
INVESTED, THAT IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED ("ERISA"), OR THE PROHIBITED TRANSACTIONS RESTRICTIONS OF
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") (ANY
SUCH EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT, A "PLAN"), OR (B)
TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS CERTIFICATE OR SUCH
INTEREST HEREIN ON BEHALF OF, AS NAMED FIDUCIARY OF, AS TRUSTEE OF, OR WITH
ASSETS OF A PLAN (INCLUDING, WITHOUT LIMITATION, ANY INSURANCE COMPANY USING
ASSETS IN ITS GENERAL OR SEPARATE ACCOUNT THAT MAY CONSTITUTE "PLAN ASSETS" OF
A PLAN). AS A CONDITION TO ITS REGISTRATION OF TRANSFER OF A CLASS R-III
CERTIFICATE, THE CERTIFICATE REGISTRAR SHALL HAVE THE RIGHT TO REQUIRE THE
PROSPECTIVE TRANSFEREE OF SUCH CERTIFICATE TO EXECUTE A CERTIFICATION
SUBSTANTIALLY IN THE FORM OF EXHIBIT G TO THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
CONSEQUENTLY, TRANSFER OF THIS CERTIFICATE IS ALSO SUBJECT TO THE ADDITIONAL
TAX RELATED TRANSFER RESTRICTIONS DESCRIBED HEREIN. IF ANY PERSON BECOMES THE
REGISTERED HOLDER OF THIS CERTIFICATE IN VIOLATION OF SUCH TRANSFER
RESTRICTIONS, SUCH REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR
EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE A CERTIFICATEHOLDER
FOR ANY PURPOSE HEREUNDER OR UNDER THE POOLING AND SERVICING AGREEMENT REFERRED
TO HEREIN,
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<PAGE>
INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE.
This certifies that Merrill Lynch, Pierce, Fenner & Smith is
the registered owner of the Percentage Interest evidenced by this Class R-III
Certificate (obtained by dividing the principal amount of this Class R-III
Certificate (as specified above) in that certain beneficial ownership interest
evidenced by all the Class R-III Certificates in the Trust Fund created
pursuant to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Merrill Lynch Mortgage Investors, Inc. (hereinafter called
the "Depositor", which term includes any successor entity under the Agreement),
GE Capital Loan Services, Inc. (hereinafter called the "Master Servicer", which
term includes any successor entity under the Agreement), GE Capital Realty
Group, Inc. (hereinafter called the "Special Servicer", which term includes any
successor entities under the Agreement), and The Chase Manhattan Bank
(hereinafter called the "Trustee", which terms include any successor entities
under the Agreement), a summary of certain of the pertinent provisions of which
is set forth hereafter. To the extent not defined herein, the capitalized terms
used herein have the respective meanings assigned in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 15th day of each month or, if such 15th day is not a Business Day,
the Business Day immediately following (each, a "Distribution Date")(provided,
however, that the Distribution Date will be no earlier than the fourth Business
Day following the related Determination Date), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount, if any, required to be distributed to the Holders
of this Class R-III Certificate on the applicable Distribution Date pursuant to
the Agreement. All distributions made under the Agreement on this Class R-III
Certificate will be made by check mailed to the address of the Person entitled
thereto, as such name and address appear in the Certificate Register.
Notwithstanding the foregoing, the final distribution on this Certificate will
be made in like manner, but only upon presentation and surrender of this
Certificate at the offices of the Trustee or such other location specified in
the notice to Certificateholders of such final distribution.
The Certificates are limited in right of distribution to
certain collections and recoveries respecting the Mortgage
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<PAGE>
Loans, all as more specifically set forth herein and in the Agreement. As
provided in the Agreement, withdrawals from the Certificate Account, the
Distribution Account and, if established, the REO Account may be made from time
to time for purposes other than, and, in certain cases, prior to, distributions
to Certificateholders, such purposes including the reimbursement of advances
made, or certain expenses incurred, with respect to the Mortgage Loans and the
payment of interest on such advances and expenses.
The Class R-III Certificates are issuable in fully registered
form only without coupons, representing Percentage Interests specified in the
Agreement. As provided in the Agreement and subject to certain limitations
therein set forth, Class R-III Certificates are exchangeable for new Class
R-III Certificates as authorized in the Agreement evidencing the same aggregate
Percentage Interest, as requested by the Holder surrendering the same.
As provided in the Agreement and subject to certain
limitations therein set forth, the Transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices of the Certificate Registrar, duly endorsed by, or
accompanied by a written instrument of transfer in the form satisfactory to the
Certificate Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Class R-III Certificates
in authorized denominations evidencing the same aggregate Percentage Interest
will be issued to the designated Transferee or Transferees.
No Transfer of any Class R-III Certificate shall be made
unless that transfer is made pursuant to an effective registration statement
under the Securities Act, and effective registration or qualification under
applicable state securities laws, or is made in a transaction which does not
require such registration or qualification. If a Transfer of any Class R-III
Certificate is to be without registration under the Securities Act (other than
in connection with the initial issuance thereof or the initial transfer thereof
by the Depositor or any of its affiliates), then the Certificate Registrar
shall refuse to register such Transfer unless it receives either: (i) a
certificate from the Certificateholder desiring to effect such transfer
substantially in the form attached as Exhibit F-1 to the Agreement, and a
certificate from such Certificateholder's prospective transferee substantially
in the form attached as either Exhibit F-2 or Exhibit F-3 to the Agreement; or
(ii) an Opinion of Counsel satisfactory to the Certificate Registrar to the
effect that such Transfer may be made without registration under the Securities
Act (which Opinion of Counsel shall not be an expense of the Trust Fund or of
the Depositor, the Master Servicer, the Special Servicer, the Trustee or the
Certificate Registrar in their respective capacities as such), together with
the written certification(s) as to the facts surrounding such
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<PAGE>
transfer from the Certificateholder desiring to effect such transfer and/or such
Certificateholder's prospective transferee on which such Opinion of Counsel is
based. None of the Depositor, the Trustee or the Certificate Registrar is
obligated to register or qualify the Class R-III Certificates under the
Securities Act or any other securities law or to take any action not otherwise
required under the Agreement to permit the transfer of any Class R-III
Certificate without registration or qualification. Any Class R-III
Certificateholder desiring to effect such a Transfer shall, and upon
acquisition of its Class R-III Certificate agrees to, indemnify the Trustee,
the Certificate Registrar and the Depositor against any liability that may
result if the Transfer is not so exempt or is not made in accordance with such
federal and state laws.
No Transfer of a Class R-III Certificate or any interest
therein shall be made to (A) a Plan or (B) any Person who is directly or
indirectly purchasing the Class R-III Certificate or interest therein on behalf
of, as named fiduciary of, as trustee of, or with assets of a Plan (including,
without rotation, any insurance company using assets in its general or separate
account that may constitute assets of a Plan). As a condition to its
registration of Transfer of a Class R-III Certificate, the Certificate
Registrar shall have the right to require the prospective Transferee of such
Certificate to execute a certification substantially in the form of Exhibit G
to the Agreement.
Each Person who has or who acquires any Ownership Interest in
this Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the provisions of Section
5.02(d) of the Agreement and, if any purported Transferee shall become a Holder
of this Certificate in violation of the provisions of such Section 5.02(d), to
have irrevocably authorized The Chase Manhattan Bank as paying agent (the
"Paying Agent"), under clause (ii)(A) of such Section 5.02(d) to deliver
payments to a Person other than such Person and to have irrevocably authorized
the Certificate Registrar under clause (ii)(B) of such Section 5.02(d) to
negotiate the terms of any mandatory sale and to execute all instruments of
Transfer and to do all other things necessary in connection with any such sale.
Each Person holding or acquiring any Ownership Interest in this Certificate
must be a Permitted Transferee and shall promptly notify the Master Servicer,
the Paying Agent and the Certificate Registrar of any change or impending
change in its status as a Permitted Transferee. In connection with any proposed
Transfer of any Ownership Interest in this Certificate, the Certificate
Registrar shall require delivery to it, and shall not register the Transfer of
this Certificate until its receipt of, an affidavit and agreement substantially
in the form attached as Exhibit H-1 to the Agreement (a "Transfer Affidavit and
Agreement") from the proposed Transferee, in form and substance satisfactory to
the Certificate Registrar, representing and warranting, among other things,
that such Transferee is a
-5-
<PAGE>
Permitted Transferee, that it is not acquiring its Ownership Interest in this
Certificate as a nominee, trustee or agent for any Person that is not a
Permitted Transferee, that for so long as it retains its Ownership Interest in
this Certificate, it will endeavor to remain a Permitted Transferee, and that
it has reviewed the provisions of Section 5.02(d) of the Agreement and agrees
to be bound by them. Notwithstanding the delivery of a Transfer Affidavit and
Agreement by a proposed Transferee, if a Responsible Officer of the Certificate
Registrar has actual knowledge that the proposed Transferee is not a Permitted
Transferee, no Transfer of this Certificate to such proposed Transferee shall
be effected.
Each Person holding or acquiring any Ownership Interest in
this Certificate shall agree (x) to require a Transfer Affidavit and Agreement
from any other Person to whom such Person attempts to transfer its Ownership
Interest herein and (y) not to transfer its Ownership Interest unless it
provides to the Certificate Registrar a certificate substantially in the form
attached as Exhibit H-2 to the Agreement stating that, among other things, it
has no actual knowledge that such other Person is not a Permitted Transferee.
Each Person holding or acquiring an Ownership Interest in this Certificate, by
purchasing such Ownership Interest herein, agrees to give the Master Servicer
and the Trustee written notice that it is a "pass-through interest holder"
within the meaning of Temporary Treasury Regulations Section
1.67-3T(a)(2)(i)(A) immediately upon acquiring such Ownership Interest, if it
is, or is holding such Ownership Interest on behalf of, a "pass-through
interest holder".
The provisions of Section 5.02(d) of the Agreement may be
modified, added to or eliminated, provided that there shall have been delivered
to the Certificate Registrar and the Master Servicer the following: (a) written
confirmation from each Rating Agency to the effect that the modification of,
addition to or elimination of such provisions will not cause such Rating Agency
to downgrade its then-current ratings of any Class of Certificates; and (b) an
Opinion of Counsel, in form and substance satisfactory to the Certificate
Registrar and the Master Servicer, to the effect that doing so will not cause
any portion of the Trust Fund which is designated as a REMIC in the Agreement
to (x) cease to qualify as a REMIC or (y) be subject to an entity-level tax
caused by the Transfer of any Class R-III Certificate to a Person which is not
a Permitted Transferee, or cause a Person other than the prospective Transferee
to be subject to a REMIC-related tax caused by the Transfer of a Class R-III
Certificate to a Person which is not a Permitted Transferee.
A "Permitted Transferee" is any Transferee other than a
"Disqualified Organization" or a "Non-United States Person". A "Disqualified
Organization" is any of (i) the United States, any State or political
subdivision thereof, any possession of the United States, or any agency or
instrumentality of any of the
-6-
<PAGE>
foregoing (other than an instrumentality which is a corporation if all of its
activities are subject to tax and, except for the FHLMC, a majority of its
board of directors is not selected by such governmental unit), (ii) a foreign
government, any international organization, or any agency or instrumentality of
any of the foregoing, (iii) any organization (other than certain farmers'
cooperatives described in Section 521 of the Code) which is exempt from the tax
imposed by Chapter I of the Code (including the tax imposed by Section 511 of
the Code on unrelated business taxable income), (iv) rural electric and
telephone cooperatives described in Section 1381 of the Code and (v) any other
Person so designated by the Trustee based upon an Opinion of Counsel provided
to it that the holding of an Ownership Interest in a Class R-III Certificate by
such Person may cause the Trust Fund or any Person having an Ownership Interest
in any Class of Certificates (other than such Person) to incur a liability for
any federal tax imposed under the Code that would not otherwise be imposed but
for the Transfer of an Ownership Interest in a Class R-III Certificate to such
Person. The terms "United States", "State" and "international organization"
shall have the meanings set forth in Section 7701 of the Code or successor
provisions.
A "Non-United States Person" is any Person other than a
United States Person. A "United States Person" is a citizen or resident of the
United States, a corporation, partnership or other entity created or organized
in, or under the laws of, the United States or any political subdivision
thereof, or an estate whose income is includible in gross income for United
States federal income tax purposes regardless of its source, or a trust if a
court within the U.S. is able to exercise primary supervision over the
administration of the trust and one or more U.S. fiduciaries have the authority
to control all substantial decisions of the trust.
No service charge will be imposed for any registration of
transfer or exchange of Class R-III Certificates, but the Certificate Registrar
may require payment of a but sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any transfer or
exchange of Class R-III Certificates.
The Depositor, the Master Servicer, the Special Servicer, the
Trustee, the Paying Agent and the Certificate Registrar and any agent of the
Depositor, the Master Servicer, the Special Servicer, the Trustee, the Paying
Agent or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Special Servicer, the Trustee, the Paying
Agent, the Certificate Registrar or any such agent shall be affected by notice
to the contrary.
-7-
<PAGE>
The Trust Fund and the obligations created by the Agreement
shall terminate upon distribution (or provision for distribution) to the
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be distributed to them pursuant to the Agreement following the
earlier of (i) the final payment or other liquidation (or any Advance with
respect thereto) of the last Mortgage Loan or REO Property remaining in the
Trust Fund, and (ii) the purchase by the Majority Subordinate Certificate
Holder, the Depositor, the Master Servicer or the Special Servicer at a price
determined as provided in the Agreement of all Mortgage Loans and each REO
Property remaining in the Trust Fund. The Agreement permits, but does not
require, the Majority Subordinate Certificate Holder, the Depositor, the Master
Servicer or the Special Servicer, in that order, to elect to purchase from the
Trust Fund all Mortgage Loans and each REO Property remaining therein. The
exercise of such right will effect early retirement of the Certificates;
however, such right to elect to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Pool at the time of election being less than
1% of the aggregate Cut-Off Date Balance of the Mortgage Loans.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Special Servicer, the
Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Master Servicer, the Special Servicer and the
Trustee with the consent of the Holders of Certificates entitled to at least
51% of the Voting Rights allocated to the affected Classes. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the Transfer hereof or in exchange herefor or in lieu hereof whether or
not notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, including any
amendment necessary to maintain the status of the Trust Fund (or designated
portions thereof) as a REMIC, without the consent of the Holders of any of the
Certificates.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, the Holder of this
Certificate shall not be entitled to any benefit under the Agreement or be
valid for any purpose.
The registered Holder hereof, by its acceptance hereof,
agrees that it will look solely to the Trust Fund (to the extent of its rights
therein) for distributions hereunder.
-8-
<PAGE>
This Certificate shall be construed in accordance with the
internal laws of the State of New York applicable to agreements made and to be
performed in said State, and the obligations, rights and remedies of the Holder
hereof shall be determined in accordance with such laws.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-9-
<PAGE>
IN WITNESS WHEREOF, the Certificate Registrar has caused this
Certificate to be duly executed.
Dated: December __, 1998
THE CHASE MANHATTAN BANK
as Certificate Registrar
By: __________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class R-III Certificates referred to in the
within-mentioned Agreement.
THE CHASE MANHATTAN BANK
as Authenticating Agent
By: __________________
Authorized Officer
-10-
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Mortgage Pass-Through Certificate and hereby authorize(s) the registration of
transfer of such interest to assignee on the Certificate Register of the Trust
Fund.
I (we) further direct the Certificate Registrar to issue a
new Mortgage Pass-Through Certificate of a like Percentage Interest and Class
to the above named assignee and deliver such Mortgage Pass-Through Certificate
to the following address:
_______________________________________________________________________________
_______________________________________________________________________________
Dated:
_____________________________________
Signature by or on behalf of Assignor
_____________________________________
Signature Guaranteed
-11-
<PAGE>
DISTRIBUTION INSTRUCTIONS
The Assignee should include the following for purposes of
distribution:
Distributions shall be by check made payable to______________
_______________________________________________________________________________
and mailed to_____________________________________________________________.
Applicable statements and notices should be mailed to
_______________________________________________________________________________
_____________________________________________________________________________.
This information is provided by ______________________,
the Assignee named above, or ______________, as its agent.
-12-
<PAGE>
EXHIBIT B
MORTGAGE LOAN SCHEDULE
<TABLE>
<CAPTION>
CONTROL
NO. PROPERTY NAME PROPERTY TYPE
- ---------- --------------------------------- ---------------
<S> <C> <C>
MLMI-001 1 Beach Office
MLMI-003 1700 Broadway Office
MLMI-004 2 Northpoint Office
MLMI-005 3737 Hillcroft Apartments Multifamily
MLMI-007 6900 Lindbergh Blvd Industrial
MLMI-010 Bassett Furniture Retail
MLMI-011 Bentworth Apartments Multifamily
MLMI-012 Beverly-Brighton Shops Retail
MLMI-019 Corr-Pro (Mystic) Warehouse Industrial
MLMI-021 Crown Gardens Apartments Multifamily
MLMI-022 Deane Hill Apartments Multifamily
MLMI-023 Deerfield Apartments Multifamily
MLMI-024 East 61st Street Brownstone Multifamily
MLMI-028 Gazebo Inn Hospitality
MLMI-030 Heritage Apartments Multifamily
MLMI-031 Holcomb Woods Shopping Center Retail
MLMI-032 Kingsley Plaza Apartments Multifamily
MLMI-033 MeadowCrest Apartments Multifamily
MLMI-035 O'Neill Industrial Center Industrial
MLMI-038 Pippin-Good Samaritan Center Mixed Use
MLMI-041 Ramada Inn Airport Hospitality
MLMI-042 Reeve - Wildcreek Apartments Multifamily
MLMI-045 Sommerset Apartments Multifamily
MLMI-048 The Ansonia Commercial Retail
MLMI-050 The Shelton Multifamily
MLMI-051 The Wic Building Industrial
MLMI-052 Tiffany Apartments Multifamily
MLMI-053 Village at Brookside Apartments Multifamily
MLMI-056 Willowbrook Apartments Multifamily
MLMI-060 Woodhollow Apartments Multifamily
MLMI-062 Cerritos Village Retail
MLMI-064 Mercer Mall Retail
MLMI-067 Phelan Village Shopping Center Retail
MLMI-069 Argonne Avenue Apts Multifamily
MLMI-070 Sundown Apartments Multifamily
MLMI-071 Woodsdale Apartments Multifamily
MLMI-072 11707 Otsego Street Multifamily
MLMI-073 12460 Gladstone Industrial
MLMI-074 2019 North Main Street Multifamily
<PAGE>
<CAPTION>
CONTROL
NO. ADDRESS CITY STATE ZIP CODE
- ---------- ------------------------------------------------------ --------------- ------- ---------
<S> <C> <C> <C> <C>
MLMI-001 1 Beach Street San Francisco CA 94133
MLMI-003 1700 Broadway New York NY 10019
MLMI-004 2 Northpoint Street San Francisco CA 94133
MLMI-005 3737 Hillcroft Houston TX 77057
MLMI-007 6900 Lindbergh Blvd and 3125 South 70th Street Philadelphia PA 19142
MLMI-010 1915 S. Stemmons Freeway Lewisville TX 75067
MLMI-011 11655 Briar Forest Drive Houston TX 77077
MLMI-012 362-370 N. Beverly Drive Beverly Hills CA 90210
MLMI-019 301 SW 27th Street Renton WA 98055
MLMI-021 7001 Hillcroft Houston TX 77057
MLMI-022 7700 Gleason Drive Knoxville TN 37830
MLMI-023 640 Windsor Avenue Windsor CT 06095
MLMI-024 156 East 61st Street New York NY 10021
MLMI-028 2424 West Highway 76 Branson MO 65616
MLMI-030 2522-2532 Columbia Avenue Swissvale PA 15218
MLMI-031 1570 Holcomb Bridge Road Roswell GA 30076
MLMI-032 444 S. Kingsley Drive Los Angeles CA 90020
MLMI-033 9525 Lorene Lane San Antonio TX 78216
MLMI-035 1210 Stanbridge Street Norristown PA 19401
MLMI-038 2475 West Galbraith Road Cincinnati OH 45239
MLMI-041 76 Industrial Highway Essington PA 19029
MLMI-042 1511 Faro Drive Austin TX 78741
MLMI-045 830 S. Rancho Santa Fe Rd. San Marcos CA 92069
MLMI-048 2109 Broadway New York NY 10023
MLMI-050 5909 Luther Lane Dallas TX 75225
MLMI-051 4700 Wissahickson Ave Philadelphia PA 19129
MLMI-052 9600 McCombs Street El Paso TX 79924
MLMI-053 1404 East 41st Street Tulsa OK 74105
MLMI-056 14095 S. W. Walker Road Beaverton OR 97005
MLMI-060 480 Highway 332 Lake Jackson TX 77566
MLMI-062 19101-19151 Bloomfield Avenue & 12506-12544South St. Cerritos CA 90703
MLMI-064 3371 Brunswick Pike Lawrence NJ 08648
MLMI-067 4013-4083 Phelan Road Phelan CA 92371
MLMI-069 711 Argonne Avenue Atlanta GA 30308
MLMI-070 Cecil Lane Montgomery AL 36109
MLMI-071 100 Eastland Drive Woodruff SC 29388
MLMI-072 11707 Otsego Street Los Angeles CA 91607
MLMI-073 12460 Gladstone Sylmar CA 91342
MLMI-074 2019 North Main Street Royal Oak MI 48073
</TABLE>
B-1
<PAGE>
MORTGAGE LOAN SCHEDULE
<TABLE>
<CAPTION>
CONTROL
NO. PROPERTY NAME PROPERTY TYPE
- ---------- ----------------------------------- ---------------
<S> <C> <C>
MLMI-075 8245 Florin Road Mixed Use
MLMI-076 Ashikita Retail
MLMI-077 Balboa Plaza Retail
MLMI-078 BHB Properties LLC Retail
MLMI-079 Cherry Hills Apartments Multifamily
MLMI-080 Clifford Family Trust Retail
MLMI-081 Gabela Partners Industrial
MLMI-082 Hotton Retail
MLMI-083 Marie Cook Trustee Industrial
MLMI-084 Parkside Plaza, LLC Mixed Use
MLMI-085 Patio World Retail
MLMI-086 Rainbow Center Retail
MLMI-087 Rita A. Quam Family Trust Industrial
MLMI-088 Rivard Industrial
MLMI-089 Spring Valley Plaza Retail
MLMI-090 Stuart Sackley Retail
MLMI-100 Hastings Entertainment Retail
MLMI-101 2333 Walton Boulevard Industrial
MLMI-102 Embassy Suites - Oklahoma City Hospitality
MLMI-104 BJ's Wholesale Club Retail
MLMI-105 Country Club Care Center Healthcare
MLMI-106 Crown Care Center Healthcare
MLMI-107 1401 Morehead St. - Coca Cola Office
MLMI-108 Beacon Square Office
MLMI-109 Quadrangle Square Retail
MLMI-110 Station Plaza Shopping Center Retail
MLMI-111 Shenandoah Square Shopping Center Retail
MLMI-112 Holt and Eleanor Center Retail
MLMI-114 Oak Lawn Promenade Retail
MLMI-115 Santa Monica Sav-On Retail
MLMI-116 Seneca Park Plaza Shopping Center Retail
MLMI-117 Willowbrook Court Shopping Center Retail
MLMI-118 Waterbury Crossing Retail
MLMI-119 The LeConte Building Retail
MLMI-120 Office Max Retail
MLMI-124 Fairfield Inn - Beaverton Hospitality
MLMI-125 Courtyard by Marriott - Newburgh Hospitality
MLMI-126 Albany Thruway Courtyard Hospitality
MLMI-127 Fairfield Inn - Henrietta Hospitality
<CAPTION>
CONTROL
NO. ADDRESS CITY STATE ZIP CODE
- ---------- ------------------------------------------ ----------------- ------- ---------
<S> <C> <C> <C> <C>
MLMI-075 8245 Florin Road Sacramento CA 95828
MLMI-076 1331 7th Street Santa Monica CA 90401
MLMI-077 16844 Sherman Way Van Nuys CA 91406
MLMI-078 865 West Avenue I Lancaster CA 93534
MLMI-079 1536 E 3rd Street Newberg OR 97132
MLMI-080 501 E. Holt Ave Pomona CA 91767
MLMI-081 26860 Jefferson Avenue Murrietta CA 92590
MLMI-082 1528-1532 Locust Street Walnut Creek CA 94596
MLMI-083 2398 Railroad Street Corona CA 91720
MLMI-084 6683-6687 Bells Ferry Road Woodstock GA 30189
MLMI-085 23855 Hawthorne Blvd Torrance CA 90505
MLMI-086 2051 S. Rainbow Blvd. Las Vegas NV 89102
MLMI-087 3065-3069 Sheridan Street Las Vegas NV 89102
MLMI-088 3890 E. Craig Road Las Vegas NV 89030
MLMI-089 1551 E.Spring Valley Rd Richardson TX 75080
MLMI-090 909 N. Aviation Blvd Manhattan Beach CA 90266
MLMI-100 1630 Rio Rancho Blvd. Rio Rancho NM 87124
MLMI-101 2333 Walton Boulevard Auburn Hills MI 48326
MLMI-102 1815 S. Meridian Avenue Oklahoma City OK 73108
MLMI-104 2044 Red Lion Road Philadelphia PA 19115
MLMI-105 503 Regent Drive Warrensburg MO 64093
MLMI-106 3001 East Elm Street Harrisonville MO 64701
MLMI-107 1401 W. Morehead St Charlotte NC 28208
MLMI-108 140-169 West 6th Street San Pedro CA 90731
MLMI-109 630 Skylark Road Charleston SC 29202
MLMI-110 13408 - 13450 Jefferson Davis Highway an Woodbridge VA 22191
MLMI-111 932-958 Edwards Ferry Road Leesburg VA 20176
MLMI-112 416 East Holt Avenue Pomona CA 91767
MLMI-114 6310-6356 West 95th Street Oak Lawn IL 60453
MLMI-115 8491 West Santa Monica Boulevard West Hollywood CA 90036
MLMI-116 13501-13541 Clopper Road Germantown MD 20874
MLMI-117 17776 Tomball Parkway Houston TX 77064
MLMI-118 425 Bank Street Waterbury CT 06708
MLMI-119 10966 Le Conte Ave Los Angeles CA 90024
MLMI-120 5895 Katella Ave. Cypress CA 90630
MLMI-124 15583 N.W. Gateway Court Beaverton OR 97005
MLMI-125 One Govenor Drive Newburgh NY 12550
MLMI-126 1455 Washington Avenue Albany NY 12206
MLMI-127 4695 West Henrietta Road Henrietta NY 14467
</TABLE>
B-2
<PAGE>
MORTGAGE LOAN SCHEDULE
<TABLE>
<CAPTION>
CONTROL
NO. PROPERTY NAME PROPERTY TYPE
- ---------- ---------------------------------------------- ---------------
<S> <C> <C>
MLMI-128 Quality Inn City Center Hospitality
MLMI-133 Sammamish Ridge Multifamily
MLMI-134 Kenmore Estates Multifamily
MLMI-135 Independence Green Apartments Multifamily
MLMI-139 Walkers Ridge Multifamily
MLMI-140 Colonial House Multifamily
MLMI-141 Chapelcroft Multifamily
MLMI-142 Aspen Shadows Multifamily
MLMI-143 Antelope Manor Apartments Multifamily
MLMI-144 AAAABCO Gibson Mini Storage Mini Storage
MLMI-146 49er Mini Storage Mini Storage
MLMI-152 Chateau Brickyard Healthcare
MLMI-153 Holiday on the Bay Multifamily
MLMI-160 PetsMart, Inc. CTL
MLMI-162 Rite Aid CTL
MLMI-161 Heilig Meyers CTL
MLMI-163 Heilig Meyers CTL
MLMI-164 Kings Court Shopping Center Retail
MLMI-091 11307 Morrison Multifamily
MLMI-092 11660 Chenault Avenue Multifamily
MLMI-093 1346 Pine Street Multifamily
MLMI-094 1850 Williams Street Multifamily
MLMI-095 2790 Pine Street Multifamily
MLMI-096 Pine Valley Court (Colony Greene) Apartments Multifamily
MLMI-097 Doheny Drive Apartments Multifamily
MLMI-098 Hacienda de Camarillo Multifamily
MLMI-099 Peachtree & Willow Lake Apartments Multifamily
MLMI-008 Alexander House Apartments Multifamily
MLMI-020 Crosspointe Vista Apartments Multifamily
MLMI-034 Myrtle Cove Apartments Multifamily
MLMI-047 Tara Hall Apartments Multifamily
MLMI-049 The Atrium Cellini Apartments Multifamily
MLMI-055 Westcliff Apartments Multifamily
MLMI-057 Wilshire Village Shopping Center Retail
MLMI-058 Windsor Court Apartments Multifamily
MLMI-002 124 West 34th Street Retail
MLMI-006 502 West Office Center Office
MLMI-009 Arlington Park I Multifamily
MLMI-013 Bishops Landing Apartments Multifamily
<CAPTION>
CONTROL
NO. ADDRESS CITY STATE ZIP CODE
- ---------- ----------------------------------------- ------------------ ------- ---------
<S> <C> <C> <C> <C>
MLMI-128 154 West 600 South Salt Lake City UT 84101
MLMI-133 14820 Redmond Way Redmond WA 98052
MLMI-134 18810 68th Avenue NE Bothell WA 98011
MLMI-135 36700 Grand River Avenue Farmington Hills MI 48335
MLMI-139 Nifong Blvd. Old Mill Creek Road Columbia MO 65205
MLMI-140 818 2nd Street, PL NE Hickory NC 28601
MLMI-141 9629 Buselton Avenue Philadelphia PA 19115
MLMI-142 4025 Lake Mary Road Flagstaff AZ 86001
MLMI-143 7764 Poplar Avenue Citrus Heights CA 95610
MLMI-144 975 Suffelbeam Henderson NV 89014
MLMI-146 527 Truck Street Placerville CA 95667
MLMI-152 3080 South 1300 East Salt Lake City UT 84106
MLMI-153 Kettle Creek Road Toms River NJ 08753
MLMI-160 8210 Plaza Drive West Madison WI 53719
MLMI-162 1109 Benns Church Blvd. Smithfield VA 23430
MLMI-161 1406 E. 53rd Street Anderson IN 46013
MLMI-163 3521 Park Plaza Road Paducah KY 42001
MLMI-164 9530 Philadelphia Road Rossville MD 21237
MLMI-091 11307 Morrison Street North Hollywood CA 91601
MLMI-092 11660 Chenault Avenue Los Angeles CA 90049
MLMI-093 1346 Pine Street San Francisco CA 94109
MLMI-094 1850 Williams Street Simi Valley CA 93065
MLMI-095 2790 Pine Street San Francisco CA 94109
MLMI-096 116 Blackwood Clementon Rd Clementon NJ 08021
MLMI-097 215-217 South Doheny Drive Beverly Hills CA 90211
MLMI-098 831 Paseo Camarillo Camarillo CA 93010
MLMI-099 211 College Street & 106 Briarhill Road Florence MS 39073
MLMI-008 6060 Gulfton Houston TX 77081
MLMI-020 620 Comstock Street Seattle WA 98109
MLMI-034 9760 & 9860 Scyene Road Dallas TX 75227
MLMI-047 1601-1717 College Street Houston TX 77057
MLMI-049 6303 Gulfton Drive Houston TX 77081
MLMI-055 1404 Moore Avenue Portland TX 78374
MLMI-057 6102 E. Mockingbird Lane Dallas TX 75214
MLMI-058 219 S. 156th Street Burien WA 98148
MLMI-002 124 West 34th Street New York NY 10001
MLMI-006 502 West Office Center Fort Washington PA 19034
MLMI-009 3121 East Park Row Drive Arlington TX 76010
MLMI-013 333 East Brooks Street Norman OK 73069
</TABLE>
B-3
<PAGE>
MORTGAGE LOAN SCHEDULE
<TABLE>
<CAPTION>
CONTROL
NO. PROPERTY NAME PROPERTY TYPE ADDRESS CITY STATE ZIP CODE
- ---------- -------------------------------- ------------------ ------------------------------ -------------- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
MLMI-014 Cedar Village Mobile Home Park Mobile Home Park County Routes 224 & 214 Lincoln DE 19960
MLMI-015 Charleston Apartments Multifamily 2073 West Lindsay Street Norman OK 73069
MLMI-016 Childs Instant Homes Mobile Home Park 861 East Butler Ave Doylestown PA 18901
MLMI-017 City Villas Multifamily 837 16th Street San Diego CA 92101
MLMI-018 Clarendon Apartments Multifamily 1214 Crown Point Norman OK 73069
MLMI-025 Eastgate Apartments Multifamily 847 Dryden Road Dryden NY 14850
MLMI-026 Federal Express Building Industrial 528 West 34th Street New York NY 10001
MLMI-027 Foxmoor Apartments Multifamily 10843 N. Central Expwy. Dallas TX 75231
MLMI-029 Hartford Apartments Multifamily 4301 Hartford Drive Dallas TX 75219
MLMI-036 Pep Boys Plaza Retail 511-581 N. Main Steet Corona CA 91720
MLMI-037 Peppertree Apartments Multifamily 1850 Pepper Valley Lane El Cajon CA 92021
MLMI-039 Pond Plaza Retail 1160 Post Road Warwick RI 02888
MLMI-040 Quarters Apartments Multifamily 6415 Melody Lane Dallas TX 75231
MLMI-043 Republic Beverage Building Industrial 1010 Isuzu Parkway Grand Prarie TX 75050
MLMI-044 Royal Knight Apartments Multifamily 2610 Knight Street Dallas TX 75219
MLMI-046 Super 8 Rockwall Hospitality 1130 E 1-30 Rockwall TX 75087
MLMI-054 Village Square Apartments Multifamily 2612 Throckmorton Drive Dallas TX 75219
MLMI-059 Wong Family Trust Apartments Multifamily 1102-1106 W. St. Georges Ave Linden NJ 07036
MLMI-061 332 East 95th Street Multifamily 332 East 95th Street New York NY 10128
MLMI-065 Springfield Apartments Multifamily 1000 E. Lindsey Street Norman OK 73071
MLMI-066 Orleans East Apartments Multifamily 1541 East Larned Street Detroit MI 48207
MLMI-068 Redwood Village Apartments Multifamily 253-349 Redwood Avenue Paterson NJ 07055
</TABLE>
B-4
<PAGE>
MORTGAGE LOAN SCHEDULE
<TABLE>
<CAPTION>
CUT-OFF DATE P&I PAYMENT
CONTROL NO. PROPERTY NAME BALANCE (MONTHLY)
- ------------- --------------------------------- ------------------ -------------
<S> <C> <C> <C>
MLMI-001 1 Beach 10,480,964.30 66,367.14
MLMI-003 1700 Broadway 59,845,380.00 395,528.60
MLMI-004 2 Northpoint 10,480,964.30 66,367.14
MLMI-005 3737 Hillcroft Apartments 7,574,169.54 54,331.05
MLMI-007 6900 Lindbergh Blvd 4,982,001.30 36,380.78
MLMI-010 Bassett Furniture 2,391,059.53 17,118.19
MLMI-011 Bentworth Apartments 17,878,406.55 128,070.05
MLMI-012 Beverly-Brighton Shops 5,311,133.67 34,890.94
MLMI-019 Corr-Pro (Mystic) Warehouse 6,455,558.23 44,817.70
MLMI-021 Crown Gardens Apartments 1,860,739.63 14,276.03
MLMI-022 Deane Hill Apartments 4,830,724.36 32,340.20
MLMI-023 Deerfield Apartments 5,980,327.35 39,799.80
MLMI-024 East 61st Street Brownstone 1,680,709.04 12,473.26
MLMI-028 Gazebo Inn 1,789,201.13 13,922.12
MLMI-030 Heritage Apartments 830,420.89 6,506.56
MLMI-031 Holcomb Woods Shopping Center 8,157,431.60 59,458.64
MLMI-032 Kingsley Plaza Apartments 5,063,420.71 34,357.41
MLMI-033 MeadowCrest Apartments 3,472,280.72 24,460.06
MLMI-035 O'Neill Industrial Center 2,895,584.91 19,891.81
MLMI-038 Pippin-Good Samaritan Center 1,428,497.67 10,336.25
MLMI-041 Ramada Inn Airport 10,735,274.85 74,074.11
MLMI-042 Reeve - Wildcreek Apartments 4,860,271.99 34,440.63
MLMI-045 Sommerset Apartments 6,369,214.37 43,065.71
MLMI-048 The Ansonia Commercial 28,781,905.22 190,817.69
MLMI-050 The Shelton 13,509,336.59 90,031.84
MLMI-051 The Wic Building 15,514,008.20 113,460.13
MLMI-052 Tiffany Apartments 2,535,860.92 17,143.40
MLMI-053 Village at Brookside Apartments 1,485,634.68 10,857.04
MLMI-056 Willowbrook Apartments 2,889,196.94 20,684.48
MLMI-060 Woodhollow Apartments 2,512,045.07 17,385.23
MLMI-062 Cerritos Village 5,617,946.38 41,038.00
MLMI-064 Mercer Mall 23,979,568.42 165,431.58
MLMI-067 Phelan Village Shopping Center 3,621,867.09 24,762.08
MLMI-069 Argonne Avenue Apts 269,387.86 1,992.25
MLMI-070 Sundown Apartments 806,453.24 6,111.12
MLMI-071 Woodsdale Apartments 821,461.94 6,293.11
MLMI-072 11707 Otsego Street 477,427.74 3,563.99
MLMI-073 12460 Gladstone 1,471,867.72 10,859.72
MLMI-074 2019 North Main Street 702,479.74 5,050.71
<PAGE>
<CAPTION>
REMAINING REMAINING MATURITY DATE GROUND BALLOON/HYPERAM/
CONTROL NO. GROSS RATE TERM (MOS) AMORT (MOS) ARD DATE LEASE FULLY AMORT
- ------------- ------------ ------------ ------------- --------------- -------- -----------------
<S> <C> <C> <C> <C> <C> <C>
MLMI-001 6.500 130 358 10/01/2009 No Balloon
MLMI-003 6.810 177 357 09/01/2013 Yes Hyperam
MLMI-004 6.500 130 358 10/01/2009 Yes Balloon
MLMI-005 7.544 70 346 10/01/2004 No Balloon
MLMI-007 7.220 117 297 09/01/2008 No Balloon
MLMI-010 7.000 117 297 09/01/2008 No Hyperam
MLMI-011 7.538 107 347 11/01/2007 No Balloon
MLMI-012 6.760 142 358 10/01/2010 No Balloon
MLMI-019 7.250 111 351 03/01/2008 No Hyperam
MLMI-021 7.647 107 287 11/01/2007 No Balloon
MLMI-022 6.920 115 355 07/01/2008 No Balloon
MLMI-023 6.870 116 356 08/01/2008 No Balloon
MLMI-024 8.000 104 344 08/01/2007 No Balloon
MLMI-028 7.375 116 260 08/01/2008 No Balloon
MLMI-030 8.580 102 342 06/01/2007 No Balloon
MLMI-031 7.320 238 298 10/01/2018 No Balloon
MLMI-032 7.020 111 351 03/01/2008 No Balloon
MLMI-033 7.390 170 350 02/01/2013 No Balloon
MLMI-035 7.200 118 358 10/01/2008 No Balloon
MLMI-038 7.770 109 349 01/01/2008 No Balloon
MLMI-041 6.625 119 299 11/01/2008 No Balloon
MLMI-042 7.125 112 316 04/01/2008 No Balloon
MLMI-045 7.010 174 354 06/01/2013 No Balloon
MLMI-048 6.790 75 351 03/01/2005 No Hyperam
MLMI-050 6.850 112 352 04/01/2008 No Balloon
MLMI-051 7.250 118 298 10/01/2008 No Balloon
MLMI-052 7.000 113 353 05/01/2008 No Balloon
MLMI-053 7.160 76 292 04/01/2005 No Balloon
MLMI-056 7.000 297 297 09/01/2023 No Fully Amort
MLMI-060 7.210 110 350 02/01/2008 No Balloon
MLMI-062 7.250 119 299 11/01/2008 No Balloon
MLMI-064 7.250 119 359 11/01/2008 Yes Balloon
MLMI-067 7.160 119 359 11/01/2008 No Balloon
MLMI-069 7.375 118 298 10/01/2008 No Balloon
MLMI-070 7.625 176 296 08/01/2013 No Balloon
MLMI-071 7.750 116 296 08/01/2008 No Balloon
MLMI-072 8.125 112 352 04/01/2008 No Balloon
MLMI-073 8.000 52 352 04/01/2003 No Balloon
MLMI-074 7.750 115 355 07/01/2008 No Balloon
</TABLE>
B-5
<PAGE>
MORTGAGE LOAN SCHEDULE
<TABLE>
<CAPTION>
CUT-OFF DATE P&I PAYMENT
CONTROL NO. PROPERTY NAME BALANCE (MONTHLY)
- ------------- ----------------------------------- ---------------- -------------
<S> <C> <C> <C>
MLMI-075 8245 Florin Road 238,421.39 1,803.04
MLMI-076 Ashikita 573,045.02 4,219.15
MLMI-077 Balboa Plaza 622,567.27 4,695.42
MLMI-078 BHB Properties LLC 732,139.11 5,521.81
MLMI-079 Cherry Hills Apartments 593,125.00 4,522.43
MLMI-080 Clifford Family Trust 775,193.60 6,149.91
MLMI-081 Gabela Partners 1,255,095.62 9,465.96
MLMI-082 Hotton 772,430.68 5,754.35
MLMI-083 Marie Cook Trustee 894,454.14 7,096.05
MLMI-084 Parkside Plaza, LLC 560,569.49 4,709.44
MLMI-085 Patio World 695,765.53 5,197.48
MLMI-086 Rainbow Center 1,474,920.68 12,898.92
MLMI-087 Rita A. Quam Family Trust 736,289.13 5,896.48
MLMI-088 Rivard 535,602.43 4,589.94
MLMI-089 Spring Valley Plaza 906,991.66 6,766.01
MLMI-090 Stuart Sackley 376,808.77 2,873.07
MLMI-100 Hastings Entertainment 1,348,157.32 9,323.93
MLMI-101 2333 Walton Boulevard 4,659,887.00 36,276.46
MLMI-102 Embassy Suites - Oklahoma City 17,214,166.00 127,475.98
MLMI-104 BJ's Wholesale Club 7,189,570.00 47,901.78
MLMI-105 Country Club Care Center 3,854,142.75 30,744.57
MLMI-106 Crown Care Center 4,102,797.50 32,728.09
MLMI-107 1401 Morehead St. - Coca Cola 2,295,108.00 16,810.23
MLMI-108 Beacon Square 1,915,086.75 13,760.75
MLMI-109 Quadrangle Square 4,848,613.50 31,926.74
MLMI-110 Station Plaza Shopping Center 9,186,673.00 61,207.83
MLMI-111 Shenandoah Square Shopping Center 2,264,133.25 16,217.81
MLMI-112 Holt and Eleanor Center 423,509.72 4,668.90
MLMI-114 Oak Lawn Promenade 2,786,199.25 19,032.72
MLMI-115 Santa Monica Sav-On 4,831,808.50 35,348.51
MLMI-116 Seneca Park Plaza Shopping Center 2,341,734.25 16,639.31
MLMI-117 Willowbrook Court Shopping Center 7,988,270.00 52,955.83
MLMI-118 Waterbury Crossing 6,277,956.00 44,728.24
MLMI-119 The LeConte Building 1,469,972.88 10,613.93
MLMI-120 Office Max 3,010,956.25 20,695.58
MLMI-124 Fairfield Inn - Beaverton 4,894,634.50 37,011.11
MLMI-125 Courtyard by Marriott - Newburgh 4,619,728.00 34,178.34
MLMI-126 Albany Thruway Courtyard 4,519,842.00 33,439.35
MLMI-127 Fairfield Inn - Henrietta 2,846,751.25 21,061.25
<CAPTION>
REMAINING REMAINING MATURITY DATE GROUND BALLOON/HYPERAM/
CONTROL NO. GROSS RATE TERM (MOS) AMORT (MOS) ARD DATE LEASE FULLY AMORT
- ------------- ------------ ------------ ------------- --------------- -------- -----------------
<S> <C> <C> <C> <C> <C> <C>
MLMI-075 8.250 110 350 02/01/2008 No Balloon
MLMI-076 8.000 115 355 07/01/2008 No Balloon
MLMI-077 8.250 114 354 06/01/2008 No Balloon
MLMI-078 8.250 114 354 06/01/2008 No Balloon
MLMI-079 8.375 115 355 07/01/2008 No Balloon
MLMI-080 8.250 114 294 06/01/2008 No Balloon
MLMI-081 8.250 114 354 06/01/2008 No Balloon
MLMI-082 8.125 115 355 07/01/2008 No Balloon
MLMI-083 8.250 114 294 06/01/2008 No Balloon
MLMI-084 7.875 117 237 09/01/2008 No Balloon
MLMI-085 8.125 111 351 03/01/2008 No Balloon
MLMI-086 8.375 110 230 02/01/2008 No Balloon
MLMI-087 8.375 115 295 07/01/2008 No Balloon
MLMI-088 9.625 104 344 08/01/2007 No Balloon
MLMI-089 8.125 53 353 05/01/2003 No Balloon
MLMI-090 8.375 115 355 07/01/2008 No Balloon
MLMI-100 6.650 119 299 11/01/2008 No Balloon
MLMI-101 7.510 177 261 09/01/2013 No Balloon
MLMI-102 7.500 118 298 10/01/2008 No Balloon
MLMI-104 7.000 178 358 10/01/2013 No Balloon
MLMI-105 7.300 237 237 09/01/2018 No Fully Amort
MLMI-106 7.300 237 237 09/01/2018 No Fully Amort
MLMI-107 7.375 118 298 10/01/2008 No Balloon
MLMI-108 7.500 117 327 09/01/2008 No Balloon
MLMI-109 6.875 117 357 09/01/2008 No Balloon
MLMI-110 7.000 118 358 10/01/2008 No Balloon
MLMI-111 7.110 117 297 09/01/2008 No Balloon
MLMI-112 6.950 129 129 09/01/2009 No Fully Amort
MLMI-114 7.250 118 358 10/01/2008 No Balloon
MLMI-115 7.175 285 285 09/01/2022 No Fully Amort
MLMI-116 7.020 117 297 09/01/2008 No Balloon
MLMI-117 6.950 118 358 10/01/2008 No Balloon
MLMI-118 7.050 117 297 09/01/2008 No Balloon
MLMI-119 7.200 117 297 09/01/2008 No Balloon
MLMI-120 7.313 176 358 08/01/2013 No Balloon
MLMI-124 7.750 119 299 11/01/2008 No Balloon
MLMI-125 7.500 119 299 11/01/2008 Yes Balloon
MLMI-126 7.500 119 299 11/01/2008 Yes Balloon
MLMI-127 7.500 119 299 11/01/2008 Yes Balloon
</TABLE>
B-6
<PAGE>
MORTGAGE LOAN SCHEDULE
<TABLE>
<CAPTION>
CUT-OFF DATE P&I PAYMENT
CONTROL NO. PROPERTY NAME BALANCE (MONTHLY)
- ------------- ---------------------------------------------- ------------------ -------------
<S> <C> <C> <C>
MLMI-128 Quality Inn City Center 13,683,354.00 97,704.46
MLMI-133 Sammamish Ridge 5,000,000.00 28,708.33
MLMI-134 Kenmore Estates 6,765,511.00 45,149.27
MLMI-135 Independence Green Apartments 34,890,416.00 225,847.29
MLMI-139 Walkers Ridge 1,988,790.63 15,493.98
MLMI-140 Colonial House 2,092,587.75 14,842.36
MLMI-141 Chapelcroft 2,221,969.00 15,178.42
MLMI-142 Aspen Shadows 3,991,292.75 27,151.53
MLMI-143 Antelope Manor Apartments 1,825,736.38 12,052.38
MLMI-144 AAAABCO Gibson Mini Storage 3,587,622.00 25,789.57
MLMI-146 49er Mini Storage 1,568,913.25 11,631.72
MLMI-152 Chateau Brickyard 6,295,085.50 42,977.11
MLMI-153 Holiday on the Bay 12,000,000.00 78,631.11
MLMI-160 PetsMart, Inc. 3,737,476.25 29,055.89
MLMI-162 Rite Aid 1,738,277.63 12,225.38
MLMI-161 Heilig Meyers 3,204,461.50 23,054.91
MLMI-163 Heilig Meyers 1,409,963.13 10,144.16
MLMI-164 Kings Court Shopping Center 3,090,855.57 20,520.39
MLMI-091 11307 Morrison 1,116,673.03 8,052.47
MLMI-092 11660 Chenault Avenue 2,042,949.14 13,364.47
MLMI-093 1346 Pine Street 1,196,502.71 7,983.63
MLMI-094 1850 Williams Street 1,057,001.41 7,993.48
MLMI-095 2790 Pine Street 1,196,502.71 7,983.63
MLMI-096 Pine Valley Court (Colony Greene) Apartments 2,581,589.98 19,761.88
MLMI-097 Doheny Drive Apartments 2,086,310.72 15,044.66
MLMI-098 Hacienda de Camarillo 2,040,495.73 14,158.84
MLMI-099 Peachtree & Willow Lake Apartments 1,640,704.15 11,963.64
MLMI-008 Alexander House Apartments 2,776,993.52 19,540.37
MLMI-020 Crosspointe Vista Apartments 3,567,479.57 24,515.13
MLMI-034 Myrtle Cove Apartments 9,452,863.65 61,620.03
MLMI-047 Tara Hall Apartments 2,252,315.35 15,751.09
MLMI-049 The Atrium Cellini Apartments 2,702,444.67 18,303.34
MLMI-055 Westcliff Apartments 1,431,187.06 10,151.77
MLMI-057 Wilshire Village Shopping Center 2,589,399.25 18,584.42
MLMI-058 Windsor Court Apartments 2,497,769.30 16,751.53
MLMI-002 124 West 34th Street 2,192,712.38 16,779.60
MLMI-006 502 West Office Center 4,839,003.98 35,786.77
MLMI-009 Arlington Park I 1,990,111.74 13,273.71
MLMI-013 Bishops Landing Apartments 3,682,407.16 26,694.78
<CAPTION>
REMAINING REMAINING MATURITY DATE GROUND BALLOON/HYPERAM/
CONTROL NO. GROSS RATE TERM (MOS) AMORT (MOS) ARD DATE LEASE FULLY AMORT
- ------------- ------------ ------------ ------------- --------------- -------- -----------------
<S> <C> <C> <C> <C> <C> <C>
MLMI-128 7.100 119 299 11/01/2008 No Balloon
MLMI-133 6.890 116 IO 08/01/2008 No Balloon
MLMI-134 6.980 77 353 05/01/2005 No Balloon
MLMI-135 6.700 116 356 08/01/2008 No Balloon
MLMI-139 6.990 237 237 09/01/2018 No Fully Amort
MLMI-140 7.000 177 297 09/01/2013 No Balloon
MLMI-141 7.250 178 358 10/01/2013 No Balloon
MLMI-142 7.200 117 357 09/01/2008 No Balloon
MLMI-143 6.900 117 357 09/01/2008 No Balloon
MLMI-144 7.150 117 297 09/01/2008 No Balloon
MLMI-146 7.500 117 297 09/01/2008 No Balloon
MLMI-152 7.250 119 359 11/01/2008 No Balloon
MLMI-153 6.850 180 360 12/01/2013 No Hyperam
MLMI-160 8.580 114 354 06/01/2008 No Balloon
MLMI-162 6.875 237 295 09/01/2018 No Balloon
MLMI-161 7.420 152 318 08/01/2011 No Balloon
MLMI-163 7.420 152 318 08/01/2011 No Balloon
MLMI-164 6.950 116 356 08/01/2008 No Balloon
MLMI-091 7.750 111 351 03/01/2008 No Balloon
MLMI-092 6.800 116 356 08/01/2008 No Balloon
MLMI-093 7.000 116 356 08/01/2008 No Balloon
MLMI-094 8.250 110 350 02/01/2008 No Balloon
MLMI-095 7.000 116 356 08/01/2008 No Balloon
MLMI-096 8.375 109 349 01/01/2008 No Balloon
MLMI-097 7.750 111 351 03/01/2008 No Balloon
MLMI-098 7.375 114 354 06/01/2008 No Balloon
MLMI-099 7.875 112 352 04/01/2008 No Balloon
MLMI-008 7.050 112 316 04/01/2008 No Balloon
MLMI-020 7.130 73 349 01/01/2005 No Balloon
MLMI-034 6.730 112 352 04/01/2008 No Balloon
MLMI-047 7.340 113 353 05/01/2008 No Balloon
MLMI-049 7.010 112 352 04/01/2008 No Balloon
MLMI-055 6.870 115 295 07/01/2008 No Balloon
MLMI-057 7.000 115 295 07/01/2008 No Balloon
MLMI-058 6.970 119 359 11/01/2008 No Balloon
MLMI-002 7.750 117 297 09/01/2008 No Balloon
MLMI-006 7.375 142 298 10/01/2010 No Balloon
MLMI-009 6.875 114 354 06/01/2008 No Balloon
MLMI-013 7.125 176 296 08/01/2013 No Balloon
</TABLE>
B-7
<PAGE>
MORTGAGE LOAN SCHEDULE
<TABLE>
<CAPTION>
CUT-OFF DATE P&I PAYMENT
CONTROL NO. PROPERTY NAME BALANCE (MONTHLY)
- ------------- -------------------------------- ----------------- -------------
<S> <C> <C> <C>
MLMI-014 Cedar Village Mobile Home Park 1,165,188.06 9,121.32
MLMI-015 Charleston Apartments 2,041,446.91 14,799.01
MLMI-016 Childs Instant Homes 1,992,560.40 15,782.29
MLMI-017 City Villas 2,495,307.01 15,409.43
MLMI-018 Clarendon Apartments 2,929,752.96 21,238.59
MLMI-025 Eastgate Apartments 1,648,535.15 11,089.85
MLMI-026 Federal Express Building 7,948,039.63 71,358.12
MLMI-027 Foxmoor Apartments 5,607,995.75 44,777.19
MLMI-029 Hartford Apartments 2,484,317.51 17,063.20
MLMI-036 Pep Boys Plaza 2,391,400.98 17,510.00
MLMI-037 Peppertree Apartments 1,226,935.15 8,614.59
MLMI-039 Pond Plaza 1,420,966.00 12,833.74
MLMI-040 Quarters Apartments 3,329,450.94 23,807.00
MLMI-043 Republic Beverage Building 10,658,301.05 79,815.95
MLMI-044 Royal Knight Apartments 1,348,603.67 9,425.51
MLMI-046 Super 8 Rockwall 1,193,655.84 9,926.98
MLMI-054 Village Square Apartments 1,689,182.79 11,521.17
MLMI-059 Wong Family Trust Apartments 1,992,972.85 14,756.12
MLMI-061 332 East 95th Street 2,347,999.41 16,198.51
MLMI-065 Springfield Apartments 2,997,102.15 19,147.85
MLMI-066 Orleans East Apartments 2,297,914.66 15,262.42
MLMI-068 Redwood Village Apartments 6,191,945.76 44,220.91
<CAPTION>
REMAINING REMAINING MATURITY DATE GROUND BALLOON/HYPERAM/
CONTROL NO. GROSS RATE TERM (MOS) AMORT (MOS) ARD DATE LEASE FULLY AMORT
- ------------- ------------ ------------ ------------- --------------- -------- -----------------
<S> <C> <C> <C> <C> <C> <C>
MLMI-014 8.000 80 296 08/01/2005 No Balloon
MLMI-015 7.125 176 296 08/01/2013 No Balloon
MLMI-016 7.125 238 238 10/01/2018 No Fully Amort
MLMI-017 6.170 118 358 10/01/2008 No Balloon
MLMI-018 7.125 176 296 08/01/2013 No Balloon
MLMI-025 7.000 239 359 11/01/2018 No Balloon
MLMI-026 6.780 178 178 10/01/2013 No Fully Amort
MLMI-027 7.180 236 236 08/01/2018 No Fully Amort
MLMI-029 7.150 112 352 04/01/2008 No Balloon
MLMI-036 7.250 81 297 09/01/2005 Yes Balloon
MLMI-037 6.800 118 298 10/01/2008 No Balloon
MLMI-039 6.875 178 178 10/01/2013 No Fully Amort
MLMI-040 7.000 118 298 10/01/2008 No Balloon
MLMI-043 6.530 239 239 11/01/2018 No Fully Amort
MLMI-044 6.750 118 298 10/01/2008 No Balloon
MLMI-046 7.740 237 237 09/01/2018 No Fully Amort
MLMI-054 7.080 112 352 04/01/2008 No Balloon
MLMI-059 7.375 177 297 09/01/2013 No Balloon
MLMI-061 7.250 119 359 11/01/2008 No Balloon
MLMI-065 6.500 179 359 11/01/2013 No Balloon
MLMI-066 6.875 119 359 11/01/2008 No Balloon
MLMI-068 7.000 119 299 11/01/2008 No Balloon
</TABLE>
B-8
<PAGE>
MORTGAGE LOAN SCHEDULE
<TABLE>
<CAPTION>
SUB MASTER
CONTROL NO. PROPERTY NAME SERVICING FEES SERVICING FEES
- ------------- --------------------------------- ---------------- ----------------
<S> <C> <C> <C>
MLMI-001 1 Beach 0.0700 0.0350
MLMI-003 1700 Broadway 0.0700 0.0350
MLMI-004 2 Northpoint 0.0700 0.0350
MLMI-005 3737 Hillcroft Apartments 0.0700 0.0350
MLMI-007 6900 Lindbergh Blvd 0.0700 0.0350
MLMI-010 Bassett Furniture 0.0700 0.0350
MLMI-011 Bentworth Apartments 0.0700 0.0350
MLMI-012 Beverly-Brighton Shops 0.0700 0.0350
MLMI-019 Corr-Pro (Mystic) Warehouse 0.0700 0.0350
MLMI-021 Crown Gardens Apartments 0.0700 0.0350
MLMI-022 Deane Hill Apartments 0.0700 0.0350
MLMI-023 Deerfield Apartments 0.0700 0.0350
MLMI-024 East 61st Street Brownstone 0.0700 0.0350
MLMI-028 Gazebo Inn 0.0700 0.0350
MLMI-030 Heritage Apartments 0.0700 0.0350
MLMI-031 Holcomb Woods Shopping Center 0.0700 0.0350
MLMI-032 Kingsley Plaza Apartments 0.0700 0.0350
MLMI-033 MeadowCrest Apartments 0.0700 0.0350
MLMI-035 O'Neill Industrial Center 0.0700 0.0350
MLMI-038 Pippin-Good Samaritan Center 0.0700 0.0350
MLMI-041 Ramada Inn Airport 0.0700 0.0350
MLMI-042 Reeve - Wildcreek Apartments 0.0700 0.0350
MLMI-045 Sommerset Apartments 0.0700 0.0350
MLMI-048 The Ansonia Commercial 0.0700 0.0350
MLMI-050 The Shelton 0.0700 0.0350
MLMI-051 The Wic Building 0.0700 0.0350
MLMI-052 Tiffany Apartments 0.0700 0.0350
MLMI-053 Village at Brookside Apartments 0.0700 0.0350
MLMI-056 Willowbrook Apartments 0.0700 0.0350
MLMI-060 Woodhollow Apartments 0.0700 0.0350
MLMI-062 Cerritos Village 0.0700 0.0350
MLMI-064 Mercer Mall 0.0700 0.0350
MLMI-067 Phelan Village Shopping Center 0.0700 0.0350
MLMI-069 Argonne Avenue Apts 0.0700 0.0350
MLMI-070 Sundown Apartments 0.0700 0.0350
MLMI-071 Woodsdale Apartments 0.0700 0.0350
MLMI-072 11707 Otsego Street 0.0700 0.0350
MLMI-073 12460 Gladstone 0.0700 0.0350
MLMI-074 2019 North Main Street 0.0700 0.0350
<PAGE>
<CAPTION>
MORTGAGE INTEREST
CONTROL NO. LOAN SELLER SUBSERVICER DEFEASANCE ACCRUAL CROSS DEFAULTED
- ------------- ------------- -------------------------- ------------ ----------- ----------------
<S> <C> <C> <C> <C> <C>
MLMI-001 MLMI GE Capital Loan Services Y 30/360
MLMI-003 MLMI GE Capital Loan Services Y Actual/360
MLMI-004 MLMI GE Capital Loan Services Y 30/360
MLMI-005 MLMI GE Capital Loan Services Actual/360
MLMI-007 MLMI GE Capital Loan Services Y Actual/360
MLMI-010 MLMI GE Capital Loan Services Actual/360
MLMI-011 MLMI GE Capital Loan Services Actual/360
MLMI-012 MLMI GE Capital Loan Services Actual/360
MLMI-019 MLMI GE Capital Loan Services Actual/360
MLMI-021 MLMI GE Capital Loan Services Actual/360
MLMI-022 MLMI GE Capital Loan Services Actual/360
MLMI-023 MLMI GE Capital Loan Services Y Actual/360
MLMI-024 MLMI GE Capital Loan Services 30/360
MLMI-028 MLMI GE Capital Loan Services Y Actual/360
MLMI-030 MLMI GE Capital Loan Services Y 30/360
MLMI-031 MLMI GE Capital Loan Services Y Actual/360
MLMI-032 MLMI GE Capital Loan Services Actual/360
MLMI-033 MLMI GE Capital Loan Services Actual/360
MLMI-035 MLMI GE Capital Loan Services Y Actual/360
MLMI-038 MLMI GE Capital Loan Services 30/360
MLMI-041 MLMI GE Capital Loan Services Y Actual/360
MLMI-042 MLMI GE Capital Loan Services Actual/360
MLMI-045 MLMI GE Capital Loan Services Actual/360
MLMI-048 MLMI GE Capital Loan Services Actual/360
MLMI-050 MLMI GE Capital Loan Services Actual/360
MLMI-051 MLMI GE Capital Loan Services Y Actual/360
MLMI-052 MLMI GE Capital Loan Services Actual/360
MLMI-053 MLMI GE Capital Loan Services Actual/360
MLMI-056 MLMI GE Capital Loan Services Y Actual/360
MLMI-060 MLMI GE Capital Loan Services Actual/360
MLMI-062 MLMI GE Capital Loan Services Y Actual/360
MLMI-064 MLMI GE Capital Loan Services Y Actual/360
MLMI-067 MLMI GE Capital Loan Services Y Actual/360
MLMI-069 MLMI GE Capital Loan Services Y Actual/360
MLMI-070 MLMI GE Capital Loan Services Y Actual/360
MLMI-071 MLMI GE Capital Loan Services Y Actual/360
MLMI-072 MLMI GE Capital Loan Services 30/360
MLMI-073 MLMI GE Capital Loan Services 30/360
MLMI-074 MLMI GE Capital Loan Services 30/360
</TABLE>
B-9
<PAGE>
MORTGAGE LOAN SCHEDULE
<TABLE>
<CAPTION>
SUB MASTER
CONTROL NO. PROPERTY NAME SERVICING FEES SERVICING FEES
- ------------- ----------------------------------- ---------------- ----------------
<S> <C> <C> <C>
MLMI-075 8245 Florin Road 0.0700 0.0350
MLMI-076 Ashikita 0.0700 0.0350
MLMI-077 Balboa Plaza 0.0700 0.0350
MLMI-078 BHB Properties LLC 0.0700 0.0350
MLMI-079 Cherry Hills Apartments 0.0700 0.0350
MLMI-080 Clifford Family Trust 0.0700 0.0350
MLMI-081 Gabela Partners 0.0700 0.0350
MLMI-082 Hotton 0.0700 0.0350
MLMI-083 Marie Cook Trustee 0.0700 0.0350
MLMI-084 Parkside Plaza, LLC 0.0700 0.0350
MLMI-085 Patio World 0.0700 0.0350
MLMI-086 Rainbow Center 0.0700 0.0350
MLMI-087 Rita A. Quam Family Trust 0.0700 0.0350
MLMI-088 Rivard 0.0700 0.0350
MLMI-089 Spring Valley Plaza 0.0700 0.0350
MLMI-090 Stuart Sackley 0.0700 0.0350
MLMI-100 Hastings Entertainment 0.0700 0.0350
MLMI-101 2333 Walton Boulevard 0.0700 0.0350
MLMI-102 Embassy Suites - Oklahoma City 0.0700 0.0350
MLMI-104 BJ's Wholesale Club 0.0700 0.0350
MLMI-105 Country Club Care Center 0.0700 0.0350
MLMI-106 Crown Care Center 0.0700 0.0350
MLMI-107 1401 Morehead St. - Coca Cola 0.0700 0.0350
MLMI-108 Beacon Square 0.0700 0.0350
MLMI-109 Quadrangle Square 0.0700 0.0350
MLMI-110 Station Plaza Shopping Center 0.0700 0.0350
MLMI-111 Shenandoah Square Shopping Center 0.0700 0.0350
MLMI-112 Holt and Eleanor Center 0.0700 0.0350
MLMI-114 Oak Lawn Promenade 0.0700 0.0350
MLMI-115 Santa Monica Sav-On 0.0700 0.0350
MLMI-116 Seneca Park Plaza Shopping Center 0.0700 0.0350
MLMI-117 Willowbrook Court Shopping Center 0.0700 0.0350
MLMI-118 Waterbury Crossing 0.0700 0.0350
MLMI-119 The LeConte Building 0.0700 0.0350
MLMI-120 Office Max 0.0700 0.0350
MLMI-124 Fairfield Inn - Beaverton 0.0700 0.0350
MLMI-125 Courtyard by Marriott - Newburgh 0.0700 0.0350
MLMI-126 Albany Thruway Courtyard 0.0700 0.0350
MLMI-127 Fairfield Inn - Henrietta 0.0700 0.0350
<CAPTION>
MORTGAGE INTEREST
CONTROL NO. LOAN SELLER SUBSERVICER DEFEASANCE ACCRUAL CROSS DEFAULTED
- ------------- ------------- -------------------------- ------------ ------------ -------------------
<S> <C> <C> <C> <C> <C>
MLMI-075 MLMI GE Capital Loan Services 30/360
MLMI-076 MLMI GE Capital Loan Services 30/360
MLMI-077 MLMI GE Capital Loan Services 30/360
MLMI-078 MLMI GE Capital Loan Services 30/360
MLMI-079 MLMI GE Capital Loan Services 30/360
MLMI-080 MLMI GE Capital Loan Services 30/360
MLMI-081 MLMI GE Capital Loan Services 30/360
MLMI-082 MLMI GE Capital Loan Services 30/360
MLMI-083 MLMI GE Capital Loan Services 30/360
MLMI-084 MLMI GE Capital Loan Services Y Actual/360
MLMI-085 MLMI GE Capital Loan Services 30/360
MLMI-086 MLMI GE Capital Loan Services 30/360
MLMI-087 MLMI GE Capital Loan Services 30/360
MLMI-088 MLMI GE Capital Loan Services 30/360
MLMI-089 MLMI GE Capital Loan Services 30/360
MLMI-090 MLMI GE Capital Loan Services 30/360
MLMI-100 MLMI GE Capital Loan Services Y Actual/360
MLMI-101 MLMI GE Capital Loan Services Y Actual/360
MLMI-102 MLMI GE Capital Loan Services Y Actual/360
MLMI-104 MLMI GE Capital Loan Services Y Actual/360
MLMI-105 MLMI GE Capital Loan Services Y Actual/360 MLMI-106
MLMI-106 MLMI GE Capital Loan Services Y Actual/360 MLMI-105
MLMI-107 MLMI GE Capital Loan Services Y Actual/360
MLMI-108 MLMI GE Capital Loan Services Y Actual/360
MLMI-109 MLMI GE Capital Loan Services Y Actual/360
MLMI-110 MLMI GE Capital Loan Services Y Actual/360
MLMI-111 MLMI GE Capital Loan Services Y Actual/360
MLMI-112 MLMI GE Capital Loan Services Y Actual/360
MLMI-114 MLMI GE Capital Loan Services Y Actual/360
MLMI-115 MLMI GE Capital Loan Services Y Actual/360
MLMI-116 MLMI GE Capital Loan Services Y Actual/360
MLMI-117 MLMI GE Capital Loan Services Y Actual/360
MLMI-118 MLMI GE Capital Loan Services Y Actual/360
MLMI-119 MLMI GE Capital Loan Services Y Actual/360
MLMI-120 MLMI GE Capital Loan Services Y Actual/360
MLMI-124 MLMI GE Capital Loan Services Y Actual/360
MLMI-125 MLMI GE Capital Loan Services Y Actual/360 MLMI-127; MLMI-126
MLMI-126 MLMI GE Capital Loan Services Y Actual/360 MLMI-127; MLMI-125
MLMI-127 MLMI GE Capital Loan Services Y Actual/360 MLMI-125; MLMI-126
</TABLE>
B-10
<PAGE>
MORTGAGE LOAN SCHEDULE
<TABLE>
<CAPTION>
SUB MASTER
CONTROL NO. PROPERTY NAME SERVICING FEES SERVICING FEES
- ------------- ---------------------------------------------- ---------------- ----------------
<S> <C> <C> <C>
MLMI-128 Quality Inn City Center 0.0700 0.0350
MLMI-133 Sammamish Ridge 0.0700 0.0350
MLMI-134 Kenmore Estates 0.0700 0.0350
MLMI-135 Independence Green Apartments 0.0700 0.0350
MLMI-139 Walkers Ridge 0.0700 0.0350
MLMI-140 Colonial House 0.0700 0.0350
MLMI-141 Chapelcroft 0.0700 0.0350
MLMI-142 Aspen Shadows 0.0700 0.0350
MLMI-143 Antelope Manor Apartments 0.0700 0.0350
MLMI-144 AAAABCO Gibson Mini Storage 0.0700 0.0350
MLMI-146 49er Mini Storage 0.0700 0.0350
MLMI-152 Chateau Brickyard 0.0700 0.0350
MLMI-153 Holiday on the Bay 0.0700 0.0350
MLMI-160 PetsMart, Inc. 0.0700 0.0350
MLMI-162 Rite Aid 0.0700 0.0350
MLMI-161 Heilig Meyers 0.0700 0.0350
MLMI-163 Heilig Meyers 0.0700 0.0350
MLMI-164 Kings Court Shopping Center 0.0700 0.0350
MLMI-091 11307 Morrison 0.0700 0.0350
MLMI-092 11660 Chenault Avenue 0.0700 0.0350
MLMI-093 1346 Pine Street 0.0700 0.0350
MLMI-094 1850 Williams Street 0.0700 0.0350
MLMI-095 2790 Pine Street 0.0700 0.0350
MLMI-096 Pine Valley Court (Colony Greene) Apartments 0.0700 0.0350
MLMI-097 Doheny Drive Apartments 0.0700 0.0350
MLMI-098 Hacienda de Camarillo 0.0700 0.0350
MLMI-099 Peachtree & Willow Lake Apartments 0.0700 0.0350
MLMI-008 Alexander House Apartments 0.0600 0.0350
MLMI-020 Crosspointe Vista Apartments 0.0600 0.0350
MLMI-034 Myrtle Cove Apartments 0.0600 0.0350
MLMI-047 Tara Hall Apartments 0.0600 0.0350
MLMI-049 The Atrium Cellini Apartments 0.0600 0.0350
MLMI-055 Westcliff Apartments 0.0600 0.0350
MLMI-057 Wilshire Village Shopping Center 0.0600 0.0350
MLMI-058 Windsor Court Apartments 0.0600 0.0350
MLMI-002 124 West 34th Street 0.0900 0.0350
MLMI-006 502 West Office Center 0.0900 0.0350
MLMI-009 Arlington Park I 0.0900 0.0350
MLMI-013 Bishops Landing Apartments 0.0900 0.0350
<CAPTION>
MORTGAGE INTEREST
CONTROL NO. LOAN SELLER SUBSERVICER DEFEASANCE ACCRUAL CROSS DEFAULTED
- ------------- ------------- -------------------------- ------------ ----------- ----------------
<S> <C> <C> <C> <C> <C>
MLMI-128 MLMI GE Capital Loan Services Actual/360
MLMI-133 MLMI GE Capital Loan Services Y 30/360
MLMI-134 MLMI GE Capital Loan Services Actual/360
MLMI-135 MLMI GE Capital Loan Services Y Actual/360
MLMI-139 MLMI GE Capital Loan Services Y Actual/360
MLMI-140 MLMI GE Capital Loan Services Y Actual/360
MLMI-141 MLMI GE Capital Loan Services Y Actual/360
MLMI-142 MLMI GE Capital Loan Services Y Actual/360
MLMI-143 MLMI GE Capital Loan Services Y Actual/360
MLMI-144 MLMI GE Capital Loan Services Y Actual/360
MLMI-146 MLMI GE Capital Loan Services Y Actual/360
MLMI-152 MLMI GE Capital Loan Services Y Actual/360
MLMI-153 MLMI GE Capital Loan Services Y Actual/360
MLMI-160 MLMI GE Capital Loan Services Y 30/360
MLMI-162 MLMI GE Capital Loan Services Y 30/360
MLMI-161 MLMI GE Capital Loan Services Y 30/360
MLMI-163 MLMI GE Capital Loan Services Y 30/360
MLMI-164 MLMI GE Capital Loan Services Y Actual/360
MLMI-091 MLMI GE Capital Loan Services 30/360
MLMI-092 MLMI GE Capital Loan Services 30/360
MLMI-093 MLMI GE Capital Loan Services Actual/360
MLMI-094 MLMI GE Capital Loan Services 30/360
MLMI-095 MLMI GE Capital Loan Services Actual/360
MLMI-096 MLMI GE Capital Loan Services 30/360
MLMI-097 MLMI GE Capital Loan Services 30/360
MLMI-098 MLMI GE Capital Loan Services 30/360
MLMI-099 MLMI GE Capital Loan Services 30/360
MLMI-008 MLMI L.J. Melody & Co. Actual/360
MLMI-020 MLMI L.J. Melody & Co. Actual/360
MLMI-034 MLMI L.J. Melody & Co. Y 30/360
MLMI-047 MLMI L.J. Melody & Co. Actual/360
MLMI-049 MLMI L.J. Melody & Co. Actual/360
MLMI-055 MLMI L.J. Melody & Co. Actual/360
MLMI-057 MLMI L.J. Melody & Co. Actual/360
MLMI-058 MLMI L.J. Melody & Co. Y Actual/360
MLMI-002 MLMI MLCC Actual/360
MLMI-006 MLMI MLCC Y Actual/360
MLMI-009 MLMI MLCC Y Actual/360
MLMI-013 MLMI MLCC Actual/360
</TABLE>
B-11
<PAGE>
MORTGAGE LOAN SCHEDULE
<TABLE>
<CAPTION>
SUB MASTER
CONTROL NO. PROPERTY NAME SERVICING FEES SERVICING FEES
- ------------- -------------------------------- ---------------- ----------------
<S> <C> <C> <C>
MLMI-014 Cedar Village Mobile Home Park 0.0900 0.0350
MLMI-015 Charleston Apartments 0.0900 0.0350
MLMI-016 Childs Instant Homes 0.0900 0.0350
MLMI-017 City Villas 0.0900 0.0350
MLMI-018 Clarendon Apartments 0.0900 0.0350
MLMI-025 Eastgate Apartments 0.0900 0.0350
MLMI-026 Federal Express Building 0.0900 0.0350
MLMI-027 Foxmoor Apartments 0.0900 0.0350
MLMI-029 Hartford Apartments 0.0900 0.0350
MLMI-036 Pep Boys Plaza 0.0900 0.0350
MLMI-037 Peppertree Apartments 0.0900 0.0350
MLMI-039 Pond Plaza 0.0900 0.0350
MLMI-040 Quarters Apartments 0.0900 0.0350
MLMI-043 Republic Beverage Building 0.0900 0.0350
MLMI-044 Royal Knight Apartments 0.0900 0.0350
MLMI-046 Super 8 Rockwall 0.0900 0.0350
MLMI-054 Village Square Apartments 0.0900 0.0350
MLMI-059 Wong Family Trust Apartments 0.0900 0.0350
MLMI-061 332 East 95th Street 0.0900 0.0350
MLMI-065 Springfield Apartments 0.0900 0.0350
MLMI-066 Orleans East Apartments 0.0900 0.0350
MLMI-068 Redwood Village Apartments 0.0900 0.0350
<CAPTION>
MORTGAGE INTEREST
CONTROL NO. LOAN SELLER SUBSERVICER DEFEASANCE ACCRUAL CROSS DEFAULTED
- ------------- ------------- ------------- ------------ ----------- ----------------
<S> <C> <C> <C> <C> <C>
MLMI-014 MLMI MLCC Actual/360
MLMI-015 MLMI MLCC Actual/360
MLMI-016 MLMI MLCC Actual/360
MLMI-017 MLMI MLCC Y Actual/360
MLMI-018 MLMI MLCC Actual/360
MLMI-025 MLMI MLCC Y Actual/360
MLMI-026 MLMI MLCC Y Actual/360
MLMI-027 MLMI MLCC Y Actual/360
MLMI-029 MLMI MLCC Y Actual/360
MLMI-036 MLMI MLCC Actual/360
MLMI-037 MLMI MLCC Actual/360
MLMI-039 MLMI MLCC Actual/360
MLMI-040 MLMI MLCC Y Actual/360
MLMI-043 MLMI MLCC Y 30/360
MLMI-044 MLMI MLCC Y Actual/360
MLMI-046 MLMI MLCC Y Actual/360
MLMI-054 MLMI MLCC Y Actual/360
MLMI-059 MLMI MLCC Actual/360
MLMI-061 MLMI MLCC Y Actual/360
MLMI-065 MLMI MLCC Actual/360
MLMI-066 MLMI MLCC Y Actual/360
MLMI-068 MLMI MLCC Y Actual/360
</TABLE>
B-12
<PAGE>
EXHIBIT C
FORM OF SCHEDULE OF EXCEPTIONS TO MORTGAGE FILE DELIVERY
Merrill Lynch Mortgage Investors, Inc. 1998-C3
Control Borrower Document Document Exception
No. Name ID Status Description
- --------- ------------ ------------ ------------ ---------------
C-1
<PAGE>
EXHIBIT D-1
FORM OF MASTER SERVICER REQUEST FOR RELEASE
________, 199__
The Chase Manhattan Bank
450 West 33rd Street, 15th Floor
New York, New York 10001
Attention: Structured Finance Services - CMBS
Re: Merrill Lynch Mortgage Investors, Inc. Series 1998-C3
Ladies and Gentlemen:
In connection with the administration of the Mortgage Files held by
you as Custodian under a certain Pooling and Servicing Agreement dated as of
December 1, 1998 (the "Pooling and Servicing Agreement"), by and among Merrill
Lynch Mortgage Investors, Inc., as Depositor, GE Capital Loan Services, Inc.,
as Master Servicer, GE Capital Realty Group, Inc., as Special Servicer and you,
as Custodian, the undersigned hereby requests a release of the Mortgage File
(or the portion thereof specified below) held by you with respect to the
following described Mortgage Loan for the reason indicated below.
Mortgagor's Name:
Address:
Loan No.:
If only particular documents in the Mortgage File are requested, please specify
which:
Reason for requesting file (or portion thereof):
D-1-1
<PAGE>
________________ 1. Mortgage Loan paid in full.
The Master Servicer hereby certifies that all
amounts received in connection with the Mortgage
Loan that are required to be credited to the
Certificate Account pursuant to the Pooling and
Servicing Agreement, have been or will be so
credited.
________________ 2. Other. (Describe)
The undersigned acknowledges that the above Mortgage File (or
requested portion thereof) will be held by the undersigned in accordance with
the provisions of the Pooling and Servicing Agreement and will be (i) returned
to you or your designee within ten (10) days after resolution of the matter
specified in Item 2 or if the Mortgage Loan has been paid in full, the Mortgage
File (or such portion thereof) will be retained by us for at least [5] years.
Capitalized terms used but not defined herein shall have the meanings
ascribed to them in the Pooling and Servicing Agreement.
GE Capital Loan Services, Inc.
as Master Servicer
By:
---------------------------------------
Name:
Title
D-1-2
<PAGE>
EXHIBIT D-2
FORM OF SPECIAL SERVICER REQUEST FOR RELEASE
________, 199__
The Chase Manhattan Bank
450 West 33rd Street, 15th Floor
New York, New York 10001
Attention: Structured Finance Services - CMBS
Re: Merrill Lynch Mortgage Investors, Inc. Series 1998-C3
Ladies and Gentlemen:
In connection with the administration of the Mortgage Files held by
you as Custodian under a certain Pooling and Servicing Agreement dated as of
December 1, 1998 (the "Pooling and Servicing Agreement"), by and among Merrill
Lynch Mortgage Investors, Inc. as depositor, GE Capital Loan Services, Inc., as
Master Servicer, GE Capital Realty Group, Inc., as Special Servicer, and you,
as Custodian, the undersigned hereby requests a release of the Mortgage File
(or the portion thereof specified below) held by you with respect to the
following described Mortgage Loan for the reason indicated below.
Mortgagor's Name:
Address:
Loan No.:
If only particular documents in the Mortgage File are requested, please specify
which:
Reason for requesting file (or portion thereof):
D-2-1
<PAGE>
________________ 1. The Mortgage Loan is being foreclosed.
________________ 2. Other. (Describe)
_________The undersigned acknowledges that the above Mortgage File (or
requested portion thereof) will be held by the undersigned in accordance with
the provisions of the Pooling and Servicing Agreement and will be (i) returned
to you or your designee within ten (10) days of resolution of the matter
specified in Item 2 or (ii) if the Mortgage Loan is being foreclosed, the
Mortgage File (or such portion thereof) will be returned when no longer
required by us for such purpose.
_________Capitalized terms used but not defined herein shall have the meanings
ascribed to them in the Pooling and Servicing Agreement.
GE Capital Realty Group, Inc.
as Special Servicer
By:
-----------------------------------
Name:
Title:
D-2-2
<PAGE>
EXHIBIT E-1
CALCULATION OF NOI/DEBT SERVICE COVERAGE RATIOS
In general, NOI is the revenue derived from the use and operation of a
Mortgaged Property less operating expenses (such as utilities, administrative
expenses, repairs and maintenance, payroll, management fees and advertising),
fixed expenses (such as insurance, real estate taxes and, if applicable, ground
lease payments), stabilized tenant improvement costs and leasing commissions
and replacement reserves. NOI does not reflect interest expenses and non-cash
items such as depreciation and amortization, and generally does not reflect
capital expenditures, but does reflect reserves for replacements.
In determining the "revenue" component of NOI for each Rental
Property, the applicable Seller or originator generally relied on the most
recent certified rent roll supplied and certified by the related borrower and,
where the actual vacancy shown thereon and the market vacancy was less than 5%,
generally assumed a minimum of 5% vacancy in determining revenue from rents,
except that in the case of certain anchored shopping centers and certain single
tenant properties, space occupied by such anchor or single tenants may have
been disregarded in performing the vacancy adjustment due to the length of the
related leases or creditworthiness of such tenants, in accordance with the
respective Seller's underwriting standards. In determining the rental revenue
for each of the Rental Properties, the applicable Seller or originator either
reviewed rental revenue shown on the certified rolling 12-month operating
statements or annualized the rental revenue and reimbursement of expenses shown
on certified rent rolls or operating statements with respect to the prior one-
to 12-month periods. Generally, in the case of hospitality properties, gross
receipts were determined on the basis of historical operating levels shown on
the borrower-supplied operating statements, but in no case in excess of rolling
12-month operating statements. Occupancy rates and average daily room rates
were within the then current market ranges. In general, any non-recurring items
and non-property related revenue were eliminated from the calculation except in
the case of residential health care facilities.
In determining the "expense" component of NOI for each Rental
Property, the Seller or originator generally relied on full-year or
year-to-date financial statements and/or rolling 12-month operating statements
or financial statements supplied by the related borrower, except that (a) if
real estate tax or insurance expense information more current than that
reflected in the financial statements was available, the newer information was
used, (b) property management fees were generally assumed to be 3% to 5% of
effective gross revenue, (c) assumptions were made with respect to stabilized
reserves for leasing commissions and tenant improvement expenses and (d)
expenses were assumed to include annual replacement reserves. See Annex A to
the
E-1-1
<PAGE>
Prospectus Supplement. In addition, in some instances, the applicable Seller or
originator recharacterized as capital expenditures those items reported by
borrowers as operating expenses (thus increasing NOI) where such Seller or
originator determined appropriate.
The borrower's financial information used to determine NOI was in most
cases unaudited, and neither the Sellers nor the Depositor verified their
accuracy.
(i) References to "Cut-Off Date LTV" are references to the ratio,
expressed as a percentage of the Cut-Off Date Balance of a Mortgage Loan to the
appraised value, or with respect to one Mortgage Loan, or 9.2%, the market
value, of the related Mortgage Property as shown in the most recent third-party
appraisal or market value study thereof available to the related Seller prior
to the Cut-Off Date.
(ii) References to "Repayment LTV" are references to the ratio,
expressed as a percentage, of the expected balance of a Balloon Loan on its
scheduled maturity date or an ARD Loan on its Anticipated Repayment Date, as
the case may be (prior to the payment of any Balloon Payment or repayment of
principal), to the appraised value, or with respect to one Mortgage Loan, or
9.2%, the market value, of the related Mortgaged Property as shown on the most
recent third-party appraisal or market value study thereof available to the
related Seller prior to the Cut-Off Date.
(iii) References to "Loan per Sq. ft., Unit, Pad, Room or Bed" are,
for each Mortgage Loan secured by a lien on (1) a retail, industrial, medical
office or office property, (2) a multifamily or self-storage property, (3) a
manufactured housing community, (4) a hospitality property or (5) a healthcare
facility, respectively, references to the Cut-Off Date balance of such Mortgage
Loan divided by the number of square feet, dwelling or storage units, pads,
guest suites or rooms, or health care facility beds, as applicable, that
comprise the related Mortgaged Property, and, for each Mortgage Loan secured by
a lien on a retail, industrial, medical office or office property, references
to the Cut-Off Date Balance of such Mortgage Loan divided by the net rentable
square footage of the related Mortgaged Property.
(iv) References to "Year Built" are references to the year that a
Mortgaged Property was originally constructed. With respect to any Mortgaged
Property which was constructed in phases, the "Year Built" refers to the year
that the first phase was originally constructed.
(v) References to "weighted averages" are references to averages
weighted on the basis of the Cut-Off Date Balances of the related Mortgage
Loans or in the event of substantial renovation or rehabilitation of a
Mortgaged Property, the year in which such renovation or rehabilitation was
completed.
E-1-2
<PAGE>
(vi) References to "Mortgage Rate" are references to the interest rate
on a Mortgage Loan set forth in the related Mortgage Note on the Cut-Off Date.
(vii) References to "Initial Reserves at Closing" represent reserves
escrowed at closing for needed maintenance, repairs, replacements and
corrections or engineering and environmental issues as outlined in the
engineering and environmental reports. Such amounts typically represent 125% of
the costs of the work outlined in such reports and not completed by closing.
With respect to amounts considered de minimus and a part of ongoing
maintenance, a reserve was not established.
(viii) References to "Underwriting Reserves" represent amounts
underwritten on an annual basis to cover capital costs, as used by the
applicable Seller in determining NOI.
(ix) References to "Administrative Cost Rate" represent the sum of the
Master Servicing Fee Rate and the Trustee Fee Rate.
(x) References to "Occupancy Percentage" are, with respect to any
Mortgaged Property, references to (a) in the case of multifamily properties and
manufactured housing communities, the percentage of units or pads rented, (b)
in the case of medical office, office, industrial and retail properties, the
percentage of the net rentable square footage rented, (c) in the case of
self-storage facilities, either the percentage of the net rentable square
footage rented or the percentage of units rented (depending on borrower
reporting) and (d) in the case of congregate care facilities, the percentage of
beds rented.
(xi) References to "Stated Remaining Term" are references to the
remaining term to maturity for each Mortgage Loan (or the remaining number of
months to the Anticipated Repayment Date with respect to each ARD Loan) as the
Cut-Off Date.
The sum of any column of any of the following tables may not equal the
indicated total due to rounding.
The DSCR, Cut-Off Date LTV and the Repayment LTV calculations for the Mortgage
Loans are exclusive of Credit Lease Loans because the Credit Lease Loans were
originated primarily on the basis of the creditworthiness of the related Credit
Lease Tenants or Guarantors.
E-1-3
<PAGE>
EXHIBIT F-1
FORM OF TRANSFEROR CERTIFICATE
________, 199__
The Chase Manhattan Bank
450 West 33rd Street, 15th Floor
New York, NY 10001
Attention: Structured Finance Services-CMBS
Re: Merrill Lynch Mortgage Investors, Inc., Mortgage Pass-Through
Certificates, Series 1998-C3, Class [ ] (the "Certificates")
-------------------------------------------------------------
Ladies and Gentlemen:
This letter is delivered to you in connection with the transfer by
____________________ (the "Transferor") to _______________________ (the
"Transferee") of a Certificate (the "Transferred Certificate") [having an
initial principal balance as of December 22, 1998 (the "Closing Date") of
$_____________] [evidencing a __% percentage interest in the Class to which it
belongs]. The Certificates were issued pursuant to the Pooling and Servicing
Agreement (the "Pooling and Servicing Agreement"), dated as of December 1,
1998, among Merrill Lynch Mortgage Investors, Inc., as depositor, GE Capital
Loan Services, Inc., as master servicer, GE Capital Realty Group, Inc. as
special servicer and The Chase Manhattan Bank, as trustee. All terms used
herein and not otherwise defined shall have the meanings set forth in the
Pooling and Servicing Agreement. The Transferor hereby certifies, represents
and warrants to you, as Certificate Registrar, that:
1. The Transferor is the lawful owner of the Transferred
Certificate with the full right to transfer such Certificate free from
any and all claims and encumbrances whatsoever.
2. Neither the Transferor nor anyone acting on its behalf has
(a) offered, transferred, pledged, sold or otherwise disposed of 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 accepted a transfer, pledge or other disposition 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, or (e) taken any other action,
which (in the case of any of the acts described in clauses (a) through
(e) hereof) would constitute a distribution of any Certificate under
the
F-1-1
<PAGE>
Securities Act of 1933 (the "Securities Act"), or would render the
disposition of any Certificate a violation of Section 5 of the
Securities Act or any state securities laws, or would require
registration or qualification of any Certificate pursuant to the
Securities Act or any state securities laws.
Very truly yours,
------------------------------
(Transferor)
By:
---------------------------
Name:
-------------------------
Title:
------------------------
F-1-2
<PAGE>
EXHIBIT F-2
FORM OF TRANSFEREE CERTIFICATE
FOR QIBs
________, 199__
The Chase Manhattan Bank
450 West 33rd Street, 15th Floor
New York, NY 10001
Attention.: Structured Finance Services-CMBS
Re: Merrill Lynch Mortgage Investors, Inc., Mortgage Pass-Through
Certificates, Series 1998-C3, Class [ ] (the "Certificates")
------------------------------------------------------------
Ladies and Gentlemen:
This letter is delivered to you in connection with the transfer by
____________________ (the "Transferor") to _______________________ (the
"Transferee") of a Certificate (the "Transferred Certificate") [having an
initial principal balance as of December 22, 1998 (the "Closing Date") of
$_____________] [evidencing a __% percentage interest in the Class to which it
belongs]. The Certificates were issued pursuant to the Pooling and Servicing
Agreement (the "Pooling and Servicing Agreement"), dated as of December 1,
1998, among Merrill Lynch Mortgage Investors, Inc., as depositor, GE Capital
Loan Services, Inc., as master servicer, GE Capital Realty Group, Inc., as
special servicer and The Chase Manhattan Bank, as trustee. All terms used
herein and not otherwise defined shall have the meanings set forth in the
Pooling and Servicing Agreement. The Transferee hereby certifies, represents
and warrants to you, as Certificate Registrar, that:
1.The Transferee is a "qualified institutional buyer" as that
term is defined in Rule 144A ("Rule 144A") under the Securities Act of
1933 (the "Securities Act") and has completed one of the forms of
certification to that effect attached hereto as Annex 1 and Annex 2.
The Transferee is aware that the sale to it is being made in reliance
on Rule 144A. The Transferee is acquiring the Transferred Certificate
for its own account or for the account of a qualified institutional
buyer, and understands that such Certificate may be resold, pledged or
transferred only (i) to a person reasonably believed to be a qualified
institutional buyer that purchases for its own account or for the
account of a qualified institutional buyer to whom notice is given
that the resale, pledge or transfer is being made in reliance on Rule
144A, or (ii) pursuant to another exemption from registration under
the Securities Act.
F-2-1
<PAGE>
2.The Transferee has been furnished with all information
regarding (a) the Depositor, (b) the Certificates and distributions
thereon, (c) the nature, performance and servicing of the Mortgage
Loans, (d) the Pooling and Servicing Agreement, and (e) any credit
enhancement mechanism associated with the Certificates, and (f) all
related matters, that it has requested.
Very truly yours,
------------------------------
(Transferor)
By:
---------------------------
Name:
-------------------------
Title:
------------------------
F-2-2
<PAGE>
ANNEX 1 TO EXHIBIT F-2
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees Other Than Registered Investment Companies]
The undersigned hereby certifies as follows to [name of Transferor]
(the "Transferor") and The Chase Manhattan Bank, as Certificate Registrar, with
respect to the mortgage pass-through certificate being transferred (the
"Transferred Certificate") as described in the Transferee Certificate to which
this certification relates and to which this certification is an Annex:
1. As indicated below, the undersigned is the chief financial officer,
a person fulfilling an equivalent function, or other executive officer of the
entity purchasing the Transferred Certificate (the "Transferee").
2. The Transferee is a "qualified institutional buyer" as that term is
defined in Rule 144A under the Securities Act of 1933 ("Rule 144A") because (i)
the Transferee owned and/or invested on a discretionary basis $ in securities
(other than the excluded securities referred to below) as of the end of the
Transferee's most recent fiscal year (such amount being calculated in
accordance with Rule 144A) [Transferee must own and/or invest on a
discretionary basis at least $100,000,000 in securities unless Transferee is a
dealer, and, in that case, Transferee must own and/or invest on, a
discretionary basis at least $10,000,000 in securities.] and (ii) the
Transferee satisfies the criteria in the category marked below.
o Corporation, etc. The Transferee is a corporation (other than
a bank, savings and loan association or similar institution),
business trust, partnership, or any organization described in
Section 501(c)(3) of the Internal Revenue Code of 1986.
o Bank. The Transferee (a) is a national bank or a banking
institution organized under the laws of any State, U.S.
territory or the District of Columbia, the business of which
is substantially confined to banking and is supervised by the
State or territorial banking commission or similar official
or is a foreign bank or equivalent institution, and (b) has
an audited net worth of at least $25,000,000 as demonstrated
in its latest annual financial statements, a copy of which is
attached hereto, as of a date not more than 16 months
preceding the date of sale of the Certificate in the case of
a U.S. bank, and not more than 18 months preceding such date
of sale for a foreign bank or equivalent institution.
F-2-3
<PAGE>
o Savings and Loan. The Transferee (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is
supervised and examined by a State or Federal authority
having supervision over any such institutions or is a foreign
savings and loan association or equivalent institution and
(b) has an audited net worth of at least $25,000,000 as
demonstrated in its latest annual financial statements, a
copy of which is attached hereto, as of a date not more than
16 months preceding the date of sale of the Certificate in
the case of a U.S. savings and loan association, and not more
than 18 months preceding such date of sale for a foreign
savings and loan association or equivalent institution.
o Broker-dealer. The Transferee is a dealer registered pursuant
to Section 15 of the Securities Exchange Act of 1934.
o Insurance Company. The Transferee is an insurance company
whose primary and predominant business activity is the
writing of insurance or the reinsuring of risks underwritten
by insurance companies and which is subject to supervision by
the insurance commissioner or a similar official or agency of
a State, U.S. territory or the District of Columbia.
o State or Local Plan. The Transferee is a plan established and
maintained by a State, its political subdivisions, or any
agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees.
o ERISA Plan. The Transferee is an employee benefit plan within
the meaning of Title I of the Employee Retirement Income
Security Act of 1974.
o Investment Advisor. The Transferee is an investment advisor
registered under the Investment Advisers Act of 1940.
o Other. (Please supply a brief description of the entity and a
cross-reference to the paragraph and subparagraph under
subsection (a)(1) of Rule 144A pursuant to which it
qualifies. Note that registered investment companies should
complete Annex 2 rather than this Annex 1.)
------------------
-------------------------------------------------------------
-------------------------------------------------------------
-------------------------------------------------------------
3. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the
F-2-4
<PAGE>
Transferee, (ii) securities that are part of an unsold allotment to or
subscription by the Transferee, if the Transferee is a dealer, (iii) bank
deposit notes and certificates of deposit, (iv) loan participations, (v)
repurchase agreements, (vi) securities owned but subject to a repurchase
agreement and (vii) currency, interest rate and commodity swaps. For purposes
of determining the aggregate amount of securities owned and/or invested on a
discretionary basis by the Transferee, the Transferee did not include any of
the securities referred to in this paragraph.
4. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Transferee, the
Transferee used the cost of such securities to the Transferee, unless the
Transferee reports its securities holdings in its financial statements on the
basis of their market value, and no current information with respect to the
cost of those securities has been published, in which case the securities were
valued at market. Further, in determining such aggregate amount, the Transferee
may have included securities owned by subsidiaries of the Transferee, but only
if such subsidiaries are consolidated with the Transferee in its financial
statements prepared in accordance with generally accepted accounting principles
and if the investments of such subsidiaries are managed under the Transferee's
direction. However, such securities were not included if the Transferee is a
majority-owned, consolidated subsidiary of another enterprise and the
Transferee is not itself a reporting company under the Securities Exchange Act
of 1934.
5. The Transferee acknowledges that it is familiar with Rule 144A and
understands that the parties to which this certification is being made are
relying and will continue to rely on the statements made herein because one or
more sales to the Transferee may be in reliance on Rule 144A.
Will the Transferee be purchasing the
Transferred Certificate only for the ----- -----
Transferee's own account? Yes No
6. If the answer to the foregoing question is "no", then in each case
where the Transferee is purchasing for an account other than its own, such
account belongs to a third party that is itself a "qualified institutional
buyer" within the meaning of Rule 144A, and the "qualified institutional buyer"
status of such third party has been established by the Transferee through one
or more of the appropriate methods contemplated by Rule 144A.
7. The Transferee will notify each of the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice is given, the Transferee's purchase of the Transferred
Certificate will constitute a reaffirmation of this certification as of the
date of such
F-2-5
<PAGE>
purchase. In addition, if the Transferee is a bank or savings and loan as
provided above, the Transferee agrees that it will furnish to such parties any
updated annual financial statements that become available on or before the date
of such purchase, promptly after they become available.
-------------------------------
Print Name of Transferee
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
F-2-6
<PAGE>
ANNEX 2 TO EXHIBIT F-2
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees That Are Registered Investment Companies]
The undersigned hereby certifies as follows to [name of Transferor]
(the "Transferor") and The Chase Manhattan Bank, as Certificate Registrar, with
respect to the mortgage pass-through certificate being transferred (the
"Transferred Certificate") as described in the Transferee Certificate to which
this certification relates and to which this certification is an Annex:
1. As indicated below, the undersigned is the chief financial officer,
a person fulfilling an equivalent function, or other executive officer of the
entity purchasing the Transferred Certificate (the "Transferee") or, if the
Transferee is a "qualified institutional buyer" as that term is defined in Rule
144A under the Securities Act of 1933 ("Rule 144A") because the Transferee is
part of a Family of Investment Companies (as defined below), is an executive
officer of the investment adviser (the "Adviser").
2. The Transferee is a "qualified institutional buyer" as defined in
Rule 144A because (i) the Transferee is an investment company registered under
the Investment Company Act of 1940, and (ii) as marked below, the Transferee
alone owned and/or invested on a discretionary basis, or the Transferee's
Family of Investment Companies owned, at least $100,000,000 in securities
(other than the excluded securities referred to below) as of the end of the
Transferee's most recent fiscal year. For purposes of determining the amount of
securities owned by the Transferee or the Transferee's Family of Investment
Companies, the cost of such securities was used, unless the Transferee or any
member of the Transferee's Family of Investment Companies, as the case may be,
reports its securities holdings in its financial statements on the basis of
their market value, and no current information with respect to the cost of
those securities has been published, in which case the securities of such
entity were valued at market.
o The Transferee owned and/or invested on a discretionary basis
$ in securities (other than the excluded securities referred
to below) as of the end of the Transferee's most recent
fiscal year (such amount being calculated in accordance with
Rule 144A).
o The Transferee is part of a Family of Investment Companies
which owned in the aggregate $ in securities (other than the
excluded securities referred to below) as of the end of the
Transferee's most recent fiscal year (such amount being
calculated in accordance with Rule 144A).
F-2-7
<PAGE>
3. The term "Family of Investment Companies" as used herein means two
or more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Transferee or are part of
the Transferee's Family of Investment Companies, (ii) bank deposit notes and
certificates of deposit, (iii) loan participations, (iv) repurchase agreements,
(v) securities owned but subject to a repurchase agreement and (vi) currency,
interest rate and commodity swaps. For purposes of determining the aggregate
amount of securities owned and/or invested on a discretionary basis by the
Transferee, or owned by the Transferee's Family of Investment Companies, the
securities referred to in this paragraph were excluded.
5. The Transferee is familiar with Rule 144A and understands that the
parties to which this certification is being made are relying and will continue
to rely on the statements made herein because one or more sales to the
Transferee will be in reliance on Rule 144A.
Will the Transferee be purchasing the
Transferred Certificate only for the ----- -----
Transferee's own account? Yes No
6. If the answer to the foregoing question is "no", then in each case
where the Transferee is purchasing for an account other than its own, such
account belongs to a third party that is itself a "qualified institutional
buyer" within the meaning of Rule 144A, and the "qualified institutional buyer"
status of such third party has been established by the Transferee through one
or more of the appropriate methods contemplated by Rule 144A.
[REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK]
F-2-8
<PAGE>
7. The undersigned will notify the parties to which this certification
is made of any changes in the information and conclusions herein. Until such
notice, the Transferee's purchase of the Transferred Certificate will
constitute a reaffirmation of this certification by the undersigned as of the
date of such purchase.
-------------------------------
Print Name of Transferee or
Adviser
-------------------------------
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
IF AN ADVISER:
-------------------------------
Print Name of Transferee
Date:
--------------------------
F-2-9
<PAGE>
EXHIBIT F-3
FORM OF TRANSFEREE CERTIFICATE
FOR NON-QIBs
________, 199__
The Chase Manhattan Bank
450 West 33rd Street, 15th Floor
New York, NY 10001
Attention.: Structured Finance Services-CMBS
Re: Merrill Lynch Mortgage Investors, Inc., Mortgage Pass-Through
Certificates, Series 1998-C3, Class [_] (the "Certificates")
------------------------------------------------------------
Ladies and Gentlemen:
This letter is delivered to you in connection with the transfer by
____________________ by (the "Transferor") to _______________________ (the
"Transferee") of a Certificate (the "Transferred Certificate") [having an
initial principal balance as of December 22, 1998 (the "Closing Date") of
$_____________] [evidencing a ___% percentage interest in the Class to which it
belongs]. The Certificates were issued pursuant to the Pooling and Servicing
Agreement (the "Pooling and Servicing Agreement"), dated as of December 1,
1998, among Merrill Lynch Mortgage Investors, Inc., as depositor (the
"Depositor"), GE Capital Loan Services, Inc., as master servicer, GE Capital
Realty Group, Inc., as special servicer and The Chase Manhattan Bank, as
trustee. All terms used herein and not otherwise defined shall have the
meanings set forth in the Pooling and Servicing Agreement. The Transferee
hereby certifies, represents and warrants to you, as Certificate Registrar,
that:
1. The Transferee is acquiring the Transferred Certificate for its own
account for investment and not with a view to or for sale or transfer in
connection with any distribution thereof, in whole or in part, in any manner
which would violate the Securities Act of 1933, as amended (the "Securities
Act"), or any applicable state securities laws.
2. The Transferee understands that (a) the Certificates have not been
and will not be registered under the Securities Act or registered or qualified
under any applicable state securities laws, (b) neither the Depositor nor the
Trustee is obligated so to register or qualify the Certificates and (c) the
Certificates may not be resold or transferred unless they are (i) registered
pursuant to the Securities Act and registered or qualified pursuant to any
applicable state securities laws or (ii) sold or transferred in transactions
which are exempt from such registration and qualification and the Certificate
Registrar
F-3-1
<PAGE>
has received either (A) certifications from both the transferor and the
transferee (substantially in the forms attached to the Pooling and Servicing
Agreement) setting forth the facts surrounding the transfer or (B) an opinion
of counsel satisfactory to the Certificate Registrar with respect to the
availability of such exemption, together with copies of the certification(s)
from the Transferor and/or Transferee setting forth the facts surrounding the
transfer upon which such opinion is based.
3. The Transferee understands that it may not sell or otherwise
transfer any portion of its interest in the Transferred Certificate except in
compliance with the provisions of Section 5.02 of the Pooling and Servicing
Agreement, which provisions it has carefully reviewed, and that the Transferred
Certificate will bear legends substantially to the following effect:
THE CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED OR QUALIFIED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE
SECURITIES LAWS OF ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS
CERTIFICATE WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A
TRANSACTION WHICH DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
- - AND -
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT
OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF
1986 (THE "CODE"), OR TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING
THIS CERTIFICATE ON BEHALF OF, AS NAMED FIDUCIARY OF, AS TRUSTEE OF, OR WITH
ASSETS OF ANY SUCH EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT, WILL
BE REGISTERED EXCEPT IN COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.
4. Neither the Transferee 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 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, or (e)
taken any other action, that (in the case of any of the acts described in
clauses (a) through (e) above) would constitute a distribution of any
Certificate under the Securities Act, would render the disposition of any
Certificate a violation of Section 5 of the Securities Act or any state
securities law or
F-3-2
<PAGE>
would require registration or qualification of any Certificate pursuant
thereto. The Transferee 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 Certificate.
5. The Transferee has been furnished with all information regarding
(a) the Depositor, (b) the Certificates and distributions thereon, (c) the
Pooling and Servicing Agreement, and (d) all related matters, that it has
requested.
6. The Transferee is an "accredited investor" as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act and has such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of an investment in the Certificates; the Transferee has
sought such accounting, legal and tax advice as it has considered necessary to
make an informed investment decision; and the Transferee is able to bear the
economic risks of such an investment and can afford a complete loss of such
investment.
Very truly yours,
------------------------------
(Transferee)
By:
---------------------------
Name:
-------------------------
Title:
------------------------
F-3-3
<PAGE>
EXHIBIT G
FORM OF TRANSFEREE LETTER (RELATING TO ERISA)
________, 199__
The Chase Manhattan Bank
450 West 33rd Street, 15th Floor
New York, NY 10001
Attention.: Structured Finance Services-CMBS
Re: Merrill Lynch Mortgage Investors, Inc., Mortgage Pass-Through
Certificates, Series 1998-C3, Class [ ] (the "Certificates")
------------------------------------------------------------
Ladies and Gentlemen:
This letter is delivered to you in connection with the transfer by
____________________ (the "Transferor") to _______________________ (the
"Transferee") of the Class ______________ Certificates (the "Transferred
Certificate") (having principal balances as of December 22, 1998 (the "Closing
Date") of $_____________ evidencing a __% interest in the Classes to which they
belong). The Certificates were issued pursuant to a Pooling and Servicing
Agreement, dated as of December 1, 1998 (the "Pooling and Servicing
Agreement"), among Merrill Lynch Mortgage Investors, Inc., as depositor, GE
Capital Loan Services, Inc., as master servicer, GE Capital Realty Group, Inc.,
as special servicer and The Chase Manhattan Bank, as trustee. Capitalized terms
used but not defined herein shall have the meanings set forth in the Pooling
and Servicing Agreement. The Transferee hereby certifies, represents and
warrants to you that:
Either: (1) the Transferee is not an employee benefit plan within the
meaning of section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA") (a "Plan"), or a plan within the meaning of section
4975(e)(1) of the Internal Revenue Code of 1986, as amended (the "Code") (also,
a "Plan"), and the Transferee is not directly or indirectly purchasing the
Transferred Certificate on behalf of, as investment manager of, as named
fiduciary of, as trustee of, or with assets of a Plan (including any insurance
company using assets in its general or separate account that may constitute
assets of a Plan); or (2) the Transferee's purchase of the Transferred
Certificate will not result in a prohibited transaction under section 406 of
ERISA or section 4975 of the Code or subject the Master Servicer, the Special
Servicer or the Trustee to any obligation in addition to those undertaken in
the Pooling and Servicing Agreement.
IN WITNESS WHEREOF, the undersigned has executed this certificate as
of the date first written above.
G-1-1
<PAGE>
------------------------------
[Name of Transferee]
By:
---------------------------
Name:
-------------------------
Title:
------------------------
G-1-2
<PAGE>
EXHIBIT H-1
FORM OF TRANSFER AFFIDAVIT AND AGREEMENT
REGARDING CLASS R-I, R-II AND R-III CERTIFICATES
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
[NAME OF OFFICER], being first duly sworn, deposes, and
represents and warrants:
1. That he is a [Title of Officer] of [Name of Owner] (the
"Owner"), a corporation duly organized and existing under the laws of
the [State of ___________] [the United States], and the owner of the
Merrill Lynch Mortgage Investors, Inc., Mortgage Pass-Through
Certificates, Series 1998-C3, Class [R-I, R-II, R-III] evidencing a
___% Percentage Interest (the "Class [R-I, R-II, R-III]
Certificates"). Capitalized terms used but not defined herein have the
meanings assigned to such terms in the Pooling and Servicing Agreement
dated as of December 1, 1998, among Merrill Lynch Mortgage Investors,
Inc., as Depositor, GE Capital Loan Services, Inc., as Master
Servicer, GE Capital Realty Group, Inc., as Special Servicer, and The
Chase Manhattan Bank, as Trustee.
2. That the Owner (i) is and will be a "Permitted Transferee"
as of _____ _, 199_ and (ii) is acquiring the Class [R-I, R-II, R-III]
Certificates for its own account or for the account of another Owner
from which it has received an affidavit in substantially the same form
as this affidavit. A "Permitted Transferee" is any person other than a
"disqualified organization" or a Non-United States Person. For this
purpose, a "disqualified organization" means any of the following: (i)
the United States, any State or political subdivision thereof, any
possession of the United States, or any agency or instrumentality of
any of the foregoing (other than an instrumentality which is a
corporation if all of its activities are subject to tax and, except of
the FHLMC, a majority of its board of directors is not selected by
such governmental unit), (ii) a foreign government, any international
organization, or any agency or instrumentality of any of the
foregoing, (iii) any organization (other than certain farmers'
cooperatives described in Section 521 of the Internal Revenue Code of
1986, as amended (the "Code")) which is exempt from the tax imposed by
Chapter 1 of the Code (unless such organization is subject to the tax
imposed by Section 511 of the Code on unrelated business taxable
income), (iv) rural electric and
H-1-1
<PAGE>
telephone cooperatives described in Section 1381(a)(2)(C) of the Code
and (v) any other Person so designated by the Trustee based upon an
Opinion of Counsel that the holding of an Ownership Interest in a
Class [R-I, R-II, R-III] Certificate by such Person may cause the
Trust Fund or any Person having an Ownership Interest in any Class of
Certificates, other than such Person, to incur a liability for any
federal tax imposed under the Code that would not otherwise be imposed
but for the Transfer of an Ownership Interest in a Class [R-I, R-II,
R-III] Certificate to such Person. The terms "United States", "State"
and "international organization" shall have the meanings set forth in
Section 7701 of the Code or successor provisions.
A "Non-United States Person" is any Person other than a
United States Person. A "United States Person" is a citizen or
resident of the United States, a corporation, partnership or other
entity created or organized in, or under the laws of, the United
States or any political subdivision thereof, or an estate or trust
whose income is includible in gross income for United States federal
income tax purposes regardless of its source, or a trust if a court
within the U.S. is able to exercise primary supervision over the
administration of the trust and one or more U.S. fiduciaries have the
authority to control all substantial decisions of the trust.
3. That the Owner is aware (i) of the tax that would be
imposed on transfers of the Class [R-I, R-II, R-III] Certificates to
disqualified organizations under the Code that applies to all
transfers of the Class [R-I, R-II, R-III] Certificates; (ii) that such
tax would be on the transferor, or, if such transfer is through an
agent (which person includes a broker, nominee or middleman) for a
disqualified organization transferee, on the agent; (iii) that the
person otherwise liable for the tax shall be relieved of liability for
the tax if the transferee furnishes to such person an affidavit that
the transferee is not a disqualified organization and, at the time of
transfer, such person does not have actual knowledge that the
affidavit is false; and (iv) that the Class [R-I, R-II, R-III]
Certificates may be "noneconomic residual interests" within the
meaning of Treasury regulation section 1.860E-I(c)(2) and that the
transferor of a "noneconomic residual interest" will remain liable for
any taxes due with respect to the income on such residual interest,
unless no significant purpose of the transfer is to enable the
transferor to impede the assessment or collection of tax.
4. That the Owner is aware of the tax imposed on a
"pass-through entity" holding the Class [R-I, R-II, R-III]
Certificates if at any time during the taxable year of the
pass-through entity a non-Permitted Transferee is the record holder of
an interest in such entity. For this purpose, a
H-1-2
<PAGE>
"pass through entity" includes a regulated investment company, a real
estate investment trust or common trust fund, a partnership, trust or
estate, and certain cooperatives.
5. That the Owner is aware that the Certificate Registrar
will not register the transfer of any Class [R-I, R-II, R-III]
Certificate unless the transferee, or the transferee's agent, delivers
to the Trustee, among other things, an affidavit in substantially the
same form as this affidavit. The Owner expressly agrees that it will
not consummate any such transfer if it knows or believes that any of
the representations contained in such affidavit and agreement are
false.
6. That the Owner consents to any additional restrictions or
arrangements that shall be deemed necessary upon advice of counsel to
constitute a reasonable arrangement to ensure that the Class [R-I,
R-II, R-III] Certificates will only be owned, directly or indirectly,
by Permitted Transferees.
7. That the Owner's taxpayer identification number is
_____________.
8. That the Owner has reviewed the restrictions set forth on
the face of the Class [R-I, R-II, R-III] Certificates and the
provisions of Section 5.02 of the Pooling and Servicing Agreement
under which the Class [R-I, R-II, R-III] Certificates were issued
(and, in particular, the Owner is aware that such Section authorizes
the Trustee to deliver payments to a person other than the Owner and
negotiate a mandatory sale by the Trustee in the event that the Owner
holds such Certificate in violation of Section 5.02); and that the
Owner expressly agrees to be bound by and to comply with such
restrictions and provisions.
9. That the Owner is not acquiring and will not transfer the
Class [R-I, R-II, R-III] Certificates in order to impede the
assessment or collection of any tax.
10. That the Owner anticipates that it will, so long as it
holds any of the Class [R-I, R-II, R-III] Certificates, have
sufficient assets to pay any taxes owed by the holder of such Class
[R-I, R-II, R-III] Certificates.
11. That the Owner has no present knowledge that it may
become insolvent or subject to a bankruptcy proceeding for so long as
it holds any of the Class [R-I, R-II, R-III] Certificates.
12. That the Owner has no present knowledge or expectation
that it will be unable to pay any United States taxes owed by it so
long as any of the Certificates remain
H-1-3
<PAGE>
outstanding. In this regard, the Owner hereby represents to and for
the benefit of the Person from whom it acquired the Class [R-I, R-II,
R-III] Certificates that the Owner intends to pay taxes associated
with holding the Class [R-I, R-II, R-III] Certificates as they become
due, fully understanding that it may incur tax liabilities in excess
of any cash flows generated by the Class [R-I, R-II, R-III]
Certificates.
13. That the Owner is not acquiring the Class [R-I, R-II,
R-III] Certificates with the intent to transfer any of the Class [R-I,
R-II, R-III] Certificates to any person or entity that will not have
sufficient assets to pay any taxes owed by the holder of such Class
[R-I, R-II, R-III] Certificates, or that may become insolvent or
subject to a bankruptcy proceeding, for so long as the Class [R-I,
R-II, R-III] Certificates remain outstanding.
14. That Owner will, in connection with any transfer that it
makes of the Class [R-I, R-II, R-III] Certificates, obtain from its
transferee the representations required by Section 5.02(d) of the
Pooling and Servicing Agreement under which the Class [R-I, R-II,
R-III] Certificates were issued and will not consummate any such
transfer if it knows, or knows facts that should lead it to believe,
that any such representations are false.
15. That Owner will, in connection with any transfer that it
makes of any Class [R-I, R-II, R-III] Certificate, deliver to the
Certificate Registrar an affidavit, which represents and warrants that
it is not transferring such Class [R-I, R-II, R-III] Certificate to
impede the assessment or collection of any tax and that it has no
actual knowledge that the proposed transferee: (i) has insufficient
assets to pay any taxes owed by such transferee as holder of such
Class [R-I, R-II, R-III] Certificate; (ii) may become insolvent or
subject to a bankruptcy proceeding, for so long as the Class [R-I,
R-II, R-III] Certificates remain outstanding; and (iii) is not a
"Permitted Transferee".
H-1-4
<PAGE>
IN WITNESS WHEREOF, the Owner has caused this instrument to be
executed on its behalf, by its [Title of Officer] and Authorized Signatory,
attested by its [Assistant] Secretary, this ____ day of _____, 199_.
[NAME OF OWNER]
By:
------------------------------
[Name of Officer]
[Title of Officer]
- -------------------------------
[Assistant] Secretary
Personally appeared before me the above-named [Name of Officer], known
or proved to me to be the same person who executed the foregoing instrument and
to be [Title of Officer], and acknowledged to me that he executed the same as
his free act and deed and the free act and deed of the Owner.
Subscribed and sworn before me this ____ day of _____ 199_.
----------------------------------
NOTARY PUBLIC
COUNTY OF
-----------------
STATE OF
-----------------
My Commission expires the
____ day of _____________, 19__.
H-1-5
<PAGE>
EXHIBIT H-2
FORM OF TRANSFEROR CERTIFICATE
REGARDING CLASS R-I, R-II AND R-III CERTIFICATES
________, 199__
The Chase Manhattan Bank
450 West 33rd Street, 15th Floor
New York, NY 10001
Attention.: Structured Finance Services-CMBS
Re: Merrill Lynch Mortgage Investors, Inc.,
Mortgage Pass-Through Certificates, Series 1998-C3, Class
[R-I, R-II, R-III], evidencing a ____% percentage interest in
the Class to which they belong
-------------------------------------------------------------
Dear Sirs:
This letter is delivered to you in connection with the transfer by
____________________________________ (the "Transferor") to
______________________________________________ (the "Transferees") of the
captioned Class [R-I, R-II, R-III] Certificates (the "Class [R-I, R-II, R-III]
Certificates"), pursuant to Section 5.02 of the Pooling and Servicing Agreement
(the "Pooling and Servicing Agreement"), dated as of December 1, 1998, among
Merrill Lynch Mortgage Investors, Inc., as depositor, GE Capital Loan Services,
Inc., as master servicer, GE Capital Realty Group, Inc., as special servicer,
and The Chase Manhattan Bank, as trustee. All terms used herein and not
otherwise defined shall have the meanings set forth in the Pooling and
Servicing Agreement. The Transferor hereby represents and warrants to you, as
Certificate Registrar, that:
1. No purpose of the Transferor relating to the transfer of
the Class [R-I, R-II, R-III] Certificates by the Transferor to the
Transferee is or will be to impede the assessment or collection of any
tax.
2. The Transferor understands that the Transferee has
delivered to you a Transfer Affidavit and Agreement in the
H-2-1
<PAGE>
form attached to the Pooling and Servicing Agreement as Exhibit H-1.
The Transferor does not know or believe that any representation
contained therein is false.
3. The Transferor has at the time of this transfer conducted
a reasonable investigation of the financial condition of the
Transferee as contemplated by Treasury Regulation Section
1.860E-1(c)(4)(i) and, as a result of that investigation, the
Transferor has determined that the Transferee has historically paid
its debts as they became due and has found no significant evidence to
indicate that the Transferee will not continue to pay its debts as
they become due in the future. The Transferor understands that the
transfer of the Class [R-I, R-II, R-III] Certificates may not be
respected for United States income tax purposes (and the Transferor
may continue to be liable for United States income taxes associated
therewith) unless the Transferor has conducted such an investigation.
Very truly yours,
------------------------------
(Transferor)
By:
---------------------------
Name:
-------------------------
Title:
------------------------
H-2-2
<PAGE>
EXHIBIT I-1
Form of Notice and Acknowledgment
________, 199__
Moody's Investors Service
99 Church Street
New York, NY 10007
Standard & Poor's Ratings Agency
25 Broadway
New York, New York 10004
Ladies and Gentlemen:
This notice is being delivered pursuant to Section 6.09 of the Pooling
and Servicing Agreement dated as of December 1, 1998 relating to Merrill Lynch
Mortgage Investors, Inc., Mortgage Pass-Through Certificates, Series 1998-C3
(the "Agreement"). Any term with initial capital letters not otherwise defined
in this notice has the meaning given such term in the Agreement.
Notice is hereby given that the Holders of Certificates evidencing a
majority of the Voting Rights allocated to the Controlling Class have
designated ___________________ to serve as the Special Servicer under the
Agreement.
The designation of ____________________ as Special Servicer will
become final if certain conditions are met and if neither of you deliver to The
Chase Manhattan Bank, the trustee under the Agreement (the "Trustee"), within
45 days after the date of the delivery of this notice to you, a written notice
stating that if the person designated to become the Special Servicer were to
serve as the Special Servicer, then the rating or ratings of one or more
Classes of the Certificates would be qualified, downgraded or withdrawn.
I-1-1
<PAGE>
Please acknowledge receipt of this notice by signing the enclosed copy
of this notice where indicated below and returning it to the Trustee.
Very truly yours,
THE CHASE MANHATTAN BANK
By:
---------------------------
Title:
------------------------
I-1-2
<PAGE>
Receipt acknowledged:
Standard & Poor's Ratings Agency Moody's Investors Service, Inc.
By: By:
------------------------------ -----------------------------
Title: Title:
--------------------------- --------------------------
Date: Date:
---------------------------- ---------------------------
I-1-3
<PAGE>
EXHIBIT I-2
FORM OF ACKNOWLEDGMENT OF PROPOSED SPECIAL SERVICER
________, 199__
The Chase Manhattan Bank
450 West 33rd Street, 15th Floor
New York, NY 10001
Attention.: Structured Finance Services-CMBS
Ladies & Gentlemen:
Pursuant to Section 6.09 of the Pooling and Servicing Agreement dated
as of December 1, 1998 relating to Merrill Lynch Mortgage Investors, Inc.
Mortgage Pass-Through Certificates, Series 1998-C3 (the "Agreement"), the
undersigned hereby agrees with all the other parties to the Agreement that the
undersigned shall serve as Special Servicer under, and as defined in, the
Agreement. The undersigned hereby acknowledges that, as of the date hereof, it
is and shall be a party to the Agreement and bound thereby to the full extent
indicated therein in the capacity of Special Servicer. The undersigned hereby
makes, as of the date hereof, the representations and warranties set forth in
Section 3.23(b) as if it were the Special Servicer thereunder.
------------------------------
By:
---------------------------
Name:
-------------------------
Title:
------------------------
I-2-1
<PAGE>
EXHIBIT J
[RESERVED]
J-1
<PAGE>
EXHIBIT K
FORM OF SCHEDULE OF CERTIFICATEHOLDERS
Initial
Certificate
Class Principal Balance Name of Holder Address
----- ----------------- -------------- -------
K-1
<PAGE>
EXHIBIT L
FORM OF CSSA PROPERTY FILE REPORT
<TABLE>
<CAPTION>
- --------------------------------------------- -----------------------------------
FIELD FORMAT
FIELD NAME NUMBER TYPE EXAMPLE
- --------------------------------------------- -----------------------------------
<S> <C> <C> <C>
Transaction Id 1 AN XXX97001
Loan ID 2 AN XXX9701A
Prospectus Loan ID 3 AN 00000000012345
Property ID 4 AN 1001-001
Distribution Date 5 AN YYYYMMDD
Cross-Collateralized Loan Grouping 6 Numeric 9(3)
Property Name 7 AN Text
Property Address 8 AN Text
Property City 9 AN Text
Property State 10 AN FL
Property Zip Code 11 AN 30303
Property County 12 AN Text
Property Type Code 13 AN MF
Year Built 14 AN YYYY
Year Last Renovated 15 AN YYYY
Net Square Feet At Securitization 16 Numeric 25000
# Of Units/Beds/Rooms At Securitization 17 Numeric 75
Property Status 18 AN 1
Allocated Percentage of Loan at Securitization 19 Numeric 0.75
Current Allocated Percentage 20 Numeric 0.75
Current Allocated Loan Amount 21 Numeric 5900900
Ground Lease (Y/S/N) 22 AN N
Other Escrow / Reserve Balances 23 Numeric 25000
Most Recent Appraisal Date 24 AN YYYYMMDD
Most Recent Appraisal Value 25 Numeric 1000000
Date Asset is Expected to Be Resolved 26 AN YYYYMMDD
Foreclosure Date 27 AN YYYYMMDD
- --------------------------------------------- -----------------------------------
REO Date 28 AN YYYYMMDD
Occupancy % 29 Numeric 0.75
Occupancy Date 30 Numeric YYYYMMDD
Date Lease Rollover Review 31 AN YYYYMMDD
% Sq. Feet expiring 1-12 months 32 Numeric 0.20
% Sq. Feet expiring 13-24 months 33 Numeric 0.20
% Sq. Feet expiring 25-36 months 34 Numeric 0.20
% Sq. Feet expiring 37-48 months 35 Numeric 0.20
% Sq. Feet expiring 49-60 months 36 Numeric 0.20
Largest Tenant 37 AN Text
Square Feet of Largest Tenant 38 Numeric 15000
2nd Largest Tenant 39 AN Text
Square Feet of 2nd Largest Tenant 40 Numeric 15000
3rd Largest Tenant 41 AN Text
Square Feet of 3rd Largest Tenant 42 Numeric 15000
Fiscal Year End Month 43 Numeric 12
Securitization Financials As Of Date 44 AN YYYYMMDD
Revenue At Securitization 45 Numeric 1000000
Operating Expenses At Securitization 46 Numeric 1000000
NOI At Securitization 47 Numeric 1000000
DSCR At Securitization 48 Numeric 1.5
Appraisal Value At Securitization 49 Numeric 1000000
Appraisal Date At Securitization 50 AN YYYYMMDD
Physical Occupancy At Securitization 51 Numeric
Date of Last Inspection 52 AN YYYYMMDD
- --------------------------------------------- -----------------------------------
Preceding FY Financial As of Date 53 AN YYYYMMDD
Preceding Fiscal Year Revenue 54 Numeric 1,000,000
Preceding Fiscal Year Expenses 55 Numeric 1,000,000
Preceding Fiscal Year NOI 56 Numeric 1,000,000
Preceding Fiscal Year Debt Service Amt. 57 Numeric 1,000,000
Preceding Fiscal Year DSCR 58 Numeric 1.30
Preceding Fiscal Year Physical Occupancy 59 Numeric 0.90
Sec Preceding FY Financial As of Date 60 AN YYYYMMDD
Second Preceding FY Revenue 61 Numeric 1,000,000
Second Preceding FY Expenses 62 Numeric 1,000,000
Second Preceding FY NOI 63 Numeric 1,000,000
Second Preceding FY Debt Service 64 Numeric 1,000,000
Second Preceding FY DSCR 65 Numeric 1.30
Sec Preceding FY Physical Occupancy 66 Numeric 0.90
- --------------------------------------------- -----------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------- ------------
CSSA
DESCRIPTION/COMMENTS LOAN
- ---------------------------------------------------------------------------- ------------
<S> <C>
S1,P1
S3,P3
From Offering Document S4,P4
Should contain Prospectus ID and propety identifier, e.g., 1001-001, 1000-002
P5
All Loans With The Same Numeric Value Are Crossed S75
S55
S56
S57
S58
S59
S60
S61
S64
P80
RT, IN, WH, OF, MU, SS,OT = SF S62
MF, MHP, LO, HC = Units S63
1=FCL, 2=REO, 3=Defeased, 4=Partial Release, 5= Released, 6= Same as
at securitization
Issuer to allocate loan % attributable to property for multi-property loans
Calculation based on Current Allocated Loan Amount and Current SPB for
associated loan.
Maintained by servicer. P7
Either Y=Yes, S=Subordinat, N= No ground lease S74
S77
P74
P75
Could be different dates for different properties if foreclosing P79
P42
- ---------------------------------------------------------------------------- ------------
P43
Map to "Most Recent Fiscal YTD Phys. Occ." in CSSA P71
Add a new field to the CSSA Loan file. P71
Roll over review to be completed every 12 months
For Office, WH, Retail, Industrial *Only if disclosed in the offering document
For Office, WH, Retail, Industrial *Only if disclosed in the offering document
For Office, WH, Retail, Industrial *Only if disclosed in the offering document
Needed to indicate month ending for borrower's Fiscal Year
S72
S70
S71
S65
S66
S67
S68
S69
- ---------------------------------------------------------------------------- ------------
P58
P52
P53
P54
P55
P56
P57
P65
P59
P60
P61
P62
P63
P64
- ---------------------------------------------------------------------------- ------------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
RELATIONSHIP TO CORRESPONDING CSSA 100.1 FIELD
- --------------------------------------------------------------------------------------------------------------------
<S> <C>
Same as CSSA Loan File
Same as CSSA Loan File
Same as CSSA Loan File
Same as CSSA Loan File
If Multi-Prop, no rollup to CSSA Loan File. Populate S55 with"Various."
If Multi-Prop, no rollup to CSSA Loan File. Populate S56 with"Various."
If Multi-Prop, and all same then populate S57 with City, otherwise, "Various". Missing info= "incomplete"
If Multi-Prop, and all same then populate S58 with State, otherwise, "Various". Missing info= "incomplete"
If Multi-Prop, and all same then populate S59 with Zip, otherwise, "Various". Missing info= "incomplete"
If Multi-Prop, and all same then populate S60 with County, otherwise, "Various". Missing info= "incomplete"
If Multi-Prop and all same then populate S61 with property type otherwise "Various". Missing Info ="incomplete"
If Multi-Prop, and all same then populate S64 with year otherwise, "000000".
If Multi-Prop, and all same then populate P80 with year otherwise, "000000".
Roll-up to loan file if populated. If missing one or more than populate with "00000"
Roll-up to loan file if populated. If missing one or more than populate with "00000"
If multi-prop and all same than populate CSSA Loan file with property, status, otherwise various.
No field needed in Cssa Loan file
No field needed in Cssa Loan file
Roll-up to Current Ending SPB (P7)
If any property is Y, or S then S74=Y
If any property populated, then S77=Y
If Multi-Prop, and all same then populate P74 with date, otherwise, "000000".
Roll-up to CSSA Loan File if populated. If missing any appraisal value, than populate P75 with "000000)
If Multi-Prop, latest date from affiliated properties for P79.
If Multi-Prop, and all same then populate P42 with date, otherwise, "000000".
- --------------------------------------------------------------------------------------------------------------------
If Multi-Prop, and all same then populate P43 with date, otherwise, "000000".
[Weighted Average] For P71=Sum((Curr. Allocated % Prop A) *(Occupancy Prop A)...(Curr. Allocated % Prop Z) *
(Occupancy Prop Z)). If missing one, then, "00000"
If Multi-Prop, and all same then populate with date, otherwise, "various+K62".
No Roll up to the CSSA loan format.
No Roll up to the CSSA loan format.
No Roll up to the CSSA loan format.
No Roll up to the CSSA loan format.
No Roll up to the CSSA loan format.
No Roll up to the CSSA loan format.
No Roll up to the CSSA loan format.
No Roll up to the CSSA loan format.
No Roll up to the CSSA loan format.
No Roll up to the CSSA loan format.
No Roll up to the CSSA loan format.
No Roll up to the CSSA loan format.
No Roll up to the CSSA loan format.
If Multi-Prop, and all same then populate S72 with date, otherwise, "000000".
Roll up to the CSSA Loan Format, if missing any properties populate S70 with "0000"
Roll up to the CSSA Loan Format, if missing any properties populate S71 with "0000"
Roll up to the CSSA Loan Format, if missing any properties populate S85 with "0000"
[Weighted Average] S66=Sum((Allocated % at Sec. Prop A) *(DSCR Prop A)...((Allocated % at Sec. Prop Z) *
(DSCR Prop Z). If missing one, "00000"
Roll up to the CSSA Loan Format, if missing any properties populate S70 with "0000"
If Multi-Prop, and all same then populate S68 with date, otherwise, "000000".
Weighted Average
- --------------------------------------------------------------------------------------------------------------------
If Multi-Prop, and all same then populate P58 with date, otherwise, "000000+K23K46".K1
No Roll up to the CSSA loan format.
No Roll up to the CSSA loan format.
No Roll up to the CSSA loan format.
No Roll up to the CSSA loan format.
No Roll up to the CSSA loan format.
No Roll up to the CSSA loan format.
No Roll up to the CSSA loan format.
No Roll up to the CSSA loan format.
No Roll up to the CSSA loan format.
No Roll up to the CSSA loan format.
No Roll up to the CSSA loan format.
No Roll up to the CSSA loan format.
No Roll up to the CSSA loan format.
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
L-1
<PAGE>
EXHIBIT M
FORM OF COMPARATIVE FINANCIAL STATUS REPORT
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
LAST
PROPERTY PAID ANNUAL
PROSPECTUS INSPECTION SCHEDULED THRU DEBT
ID NAME CITY STATE DATE LOAN BALANCE DATE SERVICE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Total:
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
ORIGINAL UNDERWRITING INFORMATION 2ND PRECEDING ANNUAL OPERATING INFORMATION
BASIS YEAR AS OF NORMALIZED
FINANCIAL FINANCIAL
INFO AS OF % TOTAL $ INFO AS OF % TOTAL $
DATE OCCUPIED REVENUE NOI DSCR DATE OCCUPIED REVENUE NOI DSCR
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
PRECEDING ANNUAL OPERATING INFORMATION TRAILING FINANCIAL OR YTD INFORMATION
AS OF NORMALIZED ACTUAL
FINANCIAL
INFO AS OF % TOTAL $ FS START FS END TOTAL $
DATE OCCUPIED REVENUE NOI DSCR DATE DATE REVENUE NOI
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------
NET CHANGE
PRECEDING & BASIS
%
% TOTAL
DSCR OCCUPIED REVENUE DSCR
- --------------------------------------------------
<S> <C> <C> <C>
- --------------------------------------------------
</TABLE>
M-1
<PAGE>
EXHIBIT N
FORM OF REO STATUS REPORT
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
SCHEDULED
PROPERTY SQ. FT. OR PAID THRU LOAN
PROSPECTUS ID NAME TYPE CITY STATE UNITS DATE BALANCE
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
OTHER
TOTAL P&I TOTAL ADVANCES CURRENT LTM LTM CAP RATE
ADVANCES TO EXPENSES (TAXES & TOTAL MONTHLY MATURITY NOI NOI/ ASSIGN VALUATION
DATE TO DATE ESCROW) EXPOSURE P&I DATE DATE DSC *** DATE
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
VALUE APPRAISAL TOTAL
USING NOI BPO OR LOSS USING APPRAISAL REO PENDING
& CAP INTERNAL 92% APPR. ESTIMATED REDUCTION TRANSFER ACQUISITION RESOLUTION
RATE VALUE** OR BPO RECOVERY % REALIZED DATE DATE DATE COMMENTS
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
App. - Appraisal, BPO - Brokers Opinion, Int - Internal
*** How to determine the cap rate is agreed upon by Underwriting and servicers
- - to be provided by third party.
N-1
<PAGE>
EXHIBIT O
FORM OF WATCH LIST
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
PAID
PROPERTY SCHEDULED THRU MATURITY
PROSPECTUS ID NAME TYPE CITY STATE LOAN BALANCE DATE DATE LTM* DSCR COMMENT/REASON ON WATCH LIST
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
TOTAL
</TABLE>
* LTM - Last 12 months either trailing or last annual.
O-1
<PAGE>
EXHIBIT P
FORM OF DELINQUENT LOAN STATUS REPORT
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
SCHEDULED TOTAL P&I TOTAL
PROPERTY SQ. FT. OR PAID THRU LOAN ADVANCES TO EXPENSES TO
PROSPECTUS ID NAME TYPE CITY STATE UNITS DATE BALANCE DATE DATE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
90+ DAYS DELINQUENT
60+ DAYS DELINQUENT
30+ DAYS DELINQUENT
CURRENT & SPECIAL SERVICER
</TABLE>
<TABLE>
<CAPTION>
OTHER
- -----------------------------------------------------------------------------------------------------------------------------------
ADVANCES VALUE USING
(TAXES & TOTAL CURRENT CURRENT MATURITY LTM NOI *** CAP RATE NOI & CAP
ESCROW) EXPOSURE MONTHLY P&I INTEREST RATE DATE DATE LTM NOI LTM DSCR ASSIGNED RATE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
<TABLE>
<CAPTION>
APPRAISAL TOTAL
- -----------------------------------------------------------------------------------------------------------------------------------
BPO OR LOSS USING APPRAISAL EXPECTED
VALUATION INTERNAL 90% APPR. OR ESTIMATED REDUCTION TRANSFER RESOLUTION FCL START FCL SALE WORKOUT
DATE VALUE** BPO RECOVERY % REALIZED DATE DATE DATE DATE STRATEGY COMMENTS
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
FCL - Foreclosure
LTM - Latest 12 Months either Last Annual or Trailing 12 months
*Workout Strategy should match the CSSA Loan file using abbreviated words in
place of a code number such as (FCL - In Foreclosure, MOD - Modification, DPO -
Discount Payoff, NS - Note Sale, BK - Bankruptcy, PP - Payment Plan TBD - To Be
Determined It is possible to combine the status codes if the loan is going in
more than one direction. (ie. FCL/MOD, BK/MOD, BK/FCL/DPO)
**App - Appraisal, BPO - Broker Opinion, Int. - Internal Value
***How to determine the cap rate is agreed upon by Underwriter and Servicers -
to be provided by third party.
P-1
<PAGE>
EXHIBIT Q
FORM OF HISTORICAL LOAN MODIFICATION REPORT
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
BALANCE
MOD/ WHEN SENT BALANCE AT THE # MTHS
PROSPECTUS EXTENSION EFFECT TO SPECIAL EFFECTIVE DATE OF FOR RATE
ID CITY STATE FLAG DATE SERVICER REHABILITATION OLD RATE CHANGE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL # (2) EST.
MTHS FOR (1) REALIZED FUTURE
NEW OLD NEW CHANGE OF LOSS TO INTEREST LOSS
RATE OLD P&I NEW P&I MATURITY MATURITY MOD TRUST TO TRUST COMMENT
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
TOTAL FOR ALL LOANS:
TOTAL FOR LOANS IN CURRENT MONTH:
# OF LOANS $ BALANCE
MODIFICATIONS: 0 $0.00
MATURITY DATE EXTENSIONS: 0 $0.00
-------------------------------------------------------------------------
TOTAL: 0 $0.00
(1) Actual principal loss taken by bonds
(2) Expected future loss due to a rate reduction. This is just an estimate at the time of the modification.
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Q-1
<PAGE>
EXHIBIT R
FORM OF HISTORICAL LOSS ESTIMATE REPORT
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
LAST
% APPRAISAL OR EFFECT NET AMT
PROSPECTUS PROPERTY RECEIVED BROKERS DATE OF RECEIVED SCHEDULED
ID NAME TYPE CITY STATE FROM SALE OPINION SALE SALES PRICE FROM SALE BALANCE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL ALL LOANS: $0.00
CURRENT MONTH ONLY: $0.00
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
DATE LOSS MINOR ADJ LOSS % OF
TOTAL P&I TOTAL SERVICING FEES ACTUAL LOSSES PASSED MINOR ADJ TO PASSED TOTAL LOSS WITH SCHEDULED
ADVANCED EXPENSES EXPENSES NET PROCEEDS PASSED THRU THRU TRUST THRU ADJUSTMENTS BALANCE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
R-1
<PAGE>
EXHIBIT S
FORM OF NOI ADJUSTMENT WORKSHEET
PROPERTY OVERVIEW
Prospectus Number
GE Loan Number
Asset Name
Property Type:
Property Address:
#REFI
Year Built/Year Renovated:
<TABLE>
<CAPTION>
Borrower Adjustment Normalized
-------- ---------- ----------
<S> <C> <C> <C>
Occupancy Rate *
Average Rental Income
-----------------------------------------------------------------
* Occupancy rates are year end or the ending date of the financial statement for the period.
</TABLE>
INCOME:
Number of Months Annualized 1998
----------
<TABLE>
<CAPTION>
Borrower
Actual Adjustment Normalized
-------------------------------------------------------------------
<S> <C> <C> <C>
Rental Income $0 $0 $0
Percentage Rents $0 $0 $0
Expense Recoveries $0 $0 $0
Other Income $0 $0 $0
Less: Vacancies $0 $0 $0
-------------------------------------------------------------------
EFFECTIVE GROSS INCOME $0 $0 $0
-------------------------------------------------------------------
Normalized - Full year financial statements that have been reviewed by the underwriter or
the Servicer
** Servicer will not be expected to "Normalize" these YTD numbers
OPERATING EXPENSES:
Real Estate Taxes $0 $0 $0
Property Insurance $0 $0 $0
Utilities $0 $0 $0
General & Administration $0 $0 $0
Repairs and Maintenance $0 $0 $0
Management Fees $0 $0 $0
Payroll & Benefits Expense $0 $0 $0
Advertising & Marketing $0 $0 $0
Professional Fees $0 $0 $0
Other Expenses $0 $0 $0
Ground Rent $0 $0 $0
TOTAL OPERATING EXPENSES $0 $0 $0
-------------------------------------------------------------------
OPERATING EXPENSE RATIO
-------------------------------------------------------------------
NET OPERATING INCOME $0 $0 $0
-------------------------------------------------------------------
Leasing Commissions $0 $0 $0
Tenant Improvements $0 $0 $0
Replacement Reserve $0 $0 $0
TOTAL CAPITAL ITEMS $0 $0 $0
-------------------------------------------------------------------
N.O.I. AFTER CAPITAL ITEMS $0 $0 $0
-------------------------------------------------------------------
DEBT SERVICE (PER SERVICER) $0 $0 $0
CASH FLOW AFTER DEBT SERVICE $0 $0 $0
-------------------------------------------------------------------
DSCR: (NOI/DEBT SERVICE)
-------------------------------------------------------------------
DSCR: (AFTER RESERVES\CAPITAL EXP.)
-------------------------------------------------------------------
SOURCE OF FINANCIAL DATA:
-------------------------------------------------------------------
(ie. operating statements, financial statements, tax return, other)
NOTES AND ASSUMPTIONS:
- ---------------------------------------------------------------------------------------------------------
This report should be completed by the Servicer for any "Normalization" of the Borrower's numbers
INCOME:
EXPENSE:
CAPITAL ITEMS:
</TABLE>
S-1
<PAGE>
EXHIBIT T
FORM OF OPERATING STATEMENT ANALYSIS
PROPERTY OVERVIEW
Prospectus Number
GE Loan Number
Property Name
Property Type:
Property Address, City, State:
Net Rentable Square Feet or # of Units:
Year Built/ Year Renovated:
<TABLE>
<CAPTION>
Year of Operations Underwriting 1998 YTD
------------ ---- ---
<S> <C> <C> <C>
Occupancy Rate *
Average Rental Income
* Occupancy rates are year end or the ending date of the financial statement for the period.
INCOME: No. of Mos.
-----------
Number of Months 3rd Prior Year 2nd Prior Year Prior Year Current Year 0
-------------- -------------- ---------- ------------ ------------
Period Ended Underwriting 1998
Statement Classification Base Line Normalized Normalized Normalized Normalized
--------- ---------- ---------- ---------- ----------
Rental Income $0 $0 $0 $0 $0 $0
Percentage Rents $0 $0 $0 $0 $0 $0
Expense Recoveries $0 $0 $0 $0 $0 $0
Other Income $0 $0 $0 $0 $0 $0
Less: Vacancies $0 $0 $0 $0 $0 $0
-----------------------------------------------------------------------------------------
EFFECTIVE GROSS INCOME $0 $0 $0 $0 $0 $0
-----------------------------------------------------------------------------------------
Normalized - Full year financial statements that have been reviewed by the underwriter
or the Servicer
** Servicer will not be expected to "Normalize" these YTD numbers
</TABLE>
<TABLE>
<CAPTION>
Current to Base Current to prior
Variance Variance
-------- --------
<S> <C>
</TABLE>
<TABLE>
<CAPTION>
OPERATING EXPENSES:
<S> <C> <C> <C> <C> <C> <C>
Real Estate Taxes $0 $0 $0 $0 $0 $0
Property Insurance $0 $0 $0 $0 $0 $0
Utilities $0 $0 $0 $0 $0 $0
General & Administation $0 $0 $0 $0 $0 $0
Repairs and Maintenance $0 $0 $0 $0 $0 $0
Management Fees $0 $0 $0 $0 $0 $0
Payroll & Benefits Expense $0 $0 $0 $0 $0 $0
Advertising & Marketing $0 $0 $0 $0 $0 $0
Professional Fees $0 $0 $0 $0 $0 $0
Other Expenses $0 $0 $0 $0 $0 $0
Ground Rent $0 $0 $0 $0 $0 $0
TOTAL OPERATING EXPENSES $0 $0 $0 $0 $0 $0
-----------------------------------------------------------------------------------------
OPERATING EXPENSE RATIO
-----------------------------------------------------------------------------------------
NET OPERATING INCOME $0 $0 $0 $0 $0 $0
-----------------------------------------------------------------------------------------
Leasing Commissions $0 $0 $0 $0 $0 $0
Tenant Improvements $0 $0 $0 $0 $0 $0
Replacement Reserve $0 $0 $0 $0 $0 $0
TOTAL CAPITAL ITEMS $0 $0 $0 $0 $0 $0
-----------------------------------------------------------------------------------------
N.O.I. AFTER CAPITAL ITEMS $0 $0 $0 $0 $0 $0
-----------------------------------------------------------------------------------------
DEBT SERVICE (PER SERVICER) $0 $0 $0 $0 $0 $0
CASH FLOW AFTER DEBT SERVICE $0 $0 $0 $0 $0 $0
-----------------------------------------------------------------------------------------
DSCR: (NOI/DEBT SERVICE)
-----------------------------------------------------------------------------------------
DSCR: (AFTER RESERVES
\CAPITAL EXP.)
-----------------------------------------------------------------------------------------
SOURCE OF FINANCIAL DATA:
-----------------------------------------------------------------------------------------
(ie. operating statements, financial statements, tax return, other)
</TABLE>
NOTES AND ASSUMPTIONS:
- -------------------------------------------------------------------------------
The years shown above will roll always showing a three year history.
@ Base line operating information is YTD as of:
INCOME:
EXPENSE:
CAPITAL ITEMS:
T-1
<PAGE>
EXHIBIT U
FORM OF CSSA LOAN FILE REPORT
<TABLE>
<CAPTION>
SPECIFICATION DESCRIPTION/COMMENTS
- --------------------------------------- -------------------------------------------------------------------------------------------
<S> <C>
Acceptable Media Types Magnetic Tape, Diskette, Electronic Transfer
Character Set ASCII
Field Delineation Comma
Density (Bytes-Per-Inch) 1600 or 6250
Magnetic Tape Label None (unlabeled)
Magnetic Tape Blocking Factor 10285 (17 records per block)
Physical Media Label Servicer Name; Data Type (Collection Period Data); Density (Bytes-Per-Inch); Blocking
Factor; Record Length
Return Address Label Required for return of physical media (magnetic tape or diskette)
- --------------------------------------- -------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
FIELD FORMAT
FIELD NAME NUMBER TYPE EXAMPLE DESCRIPTION/COMMENTS
- --------------------------------------- ---------------------------------------- -------------------------------------------------
<S> <C> <C> <C> <C>
Transaction Id 1 AN XXX97001 Unique Issue Identification Mnemonic
Group Id 2 AN XXX9701A Unique Identification Number Assigned To Each
Loan Group Within An Issue
Loan Id 3 AN 00000000012345 Unique Identification Number Assigned To Each
Collateral Item In A Pool
Prospectus Id 4 AN 123 Unique Identification Number Assigned To Each
Collateral Item In The Prospectus
Distribution Date 5 AN YYYYMMDD Date Payments Made To Certificateholders
Current Beginning Sched Balance 6 Numeric 100000.00 Outstanding Scheduled Principal Balance At The
Beginning Of The Current Period
Current Ending Scheduled Balance 7 Numeric 100000.00 Outstanding Scheduled Principal Balance At The
End Of The Current Period
Paid To Date 8 AN YYYYMMDD Due Date Of The Last Interest Payment Received
Current Index Rate 9 Numeric 0.09 Index Rate Used In The Determination Of The
Current Period Gross Interest Rate
Current Note Rate 10 Numeric 0.09 Annualized Gross Rate Applicable To Calculate
The Current Period Scheduled Interest
Maturity Date 11 AN YYYYMMDD Date Collateral Is Scheduled To Make Its Final
Payment
Servicer and Trustee Fee Rate 12 Numeric 0.00025 Annualized Fee Paid To The Servicer And Trustee
Fee Rate/Strip Rate 1 13 Numeric 0.00001 Annualized Fee/Strip Netted Against Current
Note Rate = Net Pass-Through Rate
Fee Rate/Strip Rate 2 14 Numeric 0.00001 Annualized Fee/Strip Netted Against Current
Note Rate = Net Pass-Through Rate
Fee Rate/Strip Rate 3 15 Numeric 0.00001 Annualized Fee/Strip Netted Against Current
Note Rate = Net Pass-Through Rate
Fee Rate/Strip Rate 4 16 Numeric 0.00001 Annualized Fee/Strip Netted Against Current
Note Rate = Net Pass-Through Rate
Fee Rate/Strip Rate 5 17 Numeric 0.00001 Annualized Fee/Strip Netted Against Current
Note Rate = Net Pass-Through Rate
Net Pass-Through Rate 18 Numeric 0.0897 Annualized Interest Rate Applicable To Calculate
The Current Period Remittance Int.
Next Index Rate 19 Numeric 0.09 Index Rate Used In The Determination Of The Next
Period Gross Interest Rate
Next Note Rate 20 Numeric 0.09 Annualized Gross Interest Rate Applicable To
Calc Of The Next Period Sch. Interest
Next Rate Adjustment Date 21 AN YYYYMMDD Date Note Rate Is Next Scheduled To Change
Next Payment Adjustment Date 22 AN YYYYMMDD Date Scheduled P&I Amount Is Next Scheduled
To Change
- --------------------------------------- ---------------------------------------- -------------------------------------------------
</TABLE>
U-1
<PAGE>
FORM OF CSSA LOAN FILE REPORT (CONT'D)
<TABLE>
<CAPTION>
- --------------------------------------- ---------------------------------------- -------------------------------------------------
FIELD FORMAT
FIELD NAME NUMBER TYPE EXAMPLE DESCRIPTION/COMMENTS
- --------------------------------------- ---------------------------------------- -------------------------------------------------
<S> <C> <C> <C> <C>
Scheduled Interest Amount 23 Numeric 1000.00 Scheduled Gross Interest Payment Due For
The Current Period
Scheduled Principal Amount 24 Numeric 1000.00 Scheduled Principal Payment Due For The
Current Period
Total Scheduled P&I Due 25 Numeric 1000.00 Scheduled Principal And Interest Payment
Due For The Current Period
Neg am/Deferred Interest Amount 26 Numeric 1000.00 Negative Amortization/Deferred Interest
Amount Due For The Current Period
Unscheduled Principal Collections 27 Numeric 1000.00 Unscheduled Payments Of Principal Received
During The Related Collection Period
Other Principal Adjustments 28 Numeric 1000.00 Unscheduled Principal Adjustments For The
Related Collection Period
Liquidation/Prepayment Date 29 AN YYYYMMDD Date Unscheduled Payment Of Principal
Received
Prepayment Penalty/Yld Maint Rec'd 30 Numeric 1000.00 Additional Payment Req'd From Borrower Due
To Prepayment Of Loan Prior To Maturity
Prepayment Interest Excess (Shortfall) 31 Numeric 1000.00 Scheduled Gross Interest Applicable To
The Prepayment Amount
Liquidation/Prepayment Code 32 Numeric 1 See Liquidation/Prepayment Codes Legend
Most Recent ASER $ 33 Numeric 1000.00 Excess Of The Principal Balance Over The Defined
Appraisal Percentage
Most Recent ASER Date 34 AN YYYYMMDD Date ASER Amount Applied To Loan
Cumulative ASER $ 35 Numeric 1000.00 Cumulative ASER Amount
Actual Balance 36 Numeric 100000.00 Outstanding Actual Principal Balance At The End
Of The Current Period
Total P&I Advance Outstanding 37 Numeric 1000.00 Outstanding P&I Advances At The End Of The
Current Period
Total T&I Advance Outstanding 38 Numeric 1000.00 Outstanding Taxes & Insurance Advances At The
End Of The Current Period
Other Expense Advance Outstanding 39 Numeric 1000.00 Other Outstanding Advances At The End Of The
Current Period
Status of Loan 40 AN 1 See Status Of Loan Legend
In Bankruptcy 41 AN Y Bankruptcy Status Of Loan (If In Bankruptcy "Y",
Else "N")
Foreclosure Date 42 AN YYYYMMDD Date Of Foreclosure
REO Date 43 AN YYYYMMDD Date Of REO
Bankruptcy Date 44 AN YYYYMMDD Date Of Bankruptcy
Net Proceeds Received on Liquidation 45 Numeric 100000.00 Net Proceeds Rec'd On Liquidation To Be Remitted
To The Tr Per The Tr Doc'n
Liquidation Expense 46 Numeric 100000.00 Expenses Associated With The Liq'n To Be Netted
From The Tr Per The Tr Doc'n
Realized Loss to Trust 47 Numeric 10000.00 Liquidation Balance Less Net Liquidation
Proceeds Received
Date of Last Modification 48 AN YYYYMMDD Date Loan Was Modified
Modification Code 49 Numeric 1 See Modification Codes Legend
Modified Note Rate 50 Numeric 0.09 Note Rate Loan Modified To
Modified Payment Rate 51 Numeric 0.09 Payment Rate Loan Modified To
Preceding Fiscal Year Revenue 52 Numeric 1000.00 Preceding Fiscal Year Revenue
Preceding Fiscal Year Expenses 53 Numeric 1000.00 Preceding Fiscal Year Expenses
Preceding Fiscal Year NOI 54 Numeric 1000.00 Preceding Fiscal Year Net Op Income
Preceding Fiscal Year Debt Svc Amt. 55 Numeric 1000.00 Preceding Fiscal Year Debt Svc Amount
Preceding Fiscal Year DSCR 56 Numeric 2.55 Preceding Fiscal Yr Debt Svc Cvrge Ratio
- --------------------------------------- ---------------------------------------- -------------------------------------------------
</TABLE>
All Financial Update Fields Are Calculated and/or Presented In The Manner
Described In The Associated Trust Documentation.
U-2
<PAGE>
FORM OF CSSA LOAN FILE REPORT (CONT'D)
<TABLE>
<CAPTION>
FIELD FORMAT
FIELD NAME NUMBER TYPE EXAMPLE DESCRIPTION/COMMENTS
- --------------------------------------- ---------------------------------------- -------------------------------------------------
<S> <C> <C> <C> <C>
Preceding Fiscal Yr Physical Occ'y 57 Numeric 0.85 Preceding Fiscal Year Physical Occupancy
Preceding FY Financial As of Date 58 AN YYYYMMDD Preceding Fiscal Year Financial As Of Date
Second Preceding FY Revenue 59 Numeric 1000.00 Second Preceding Fiscal Year Revenue
Second Preceding FY Expenses 60 Numeric 1000.00 Second Preceding Fiscal Year Expenses
Second Preceding FY NOI 61 Numeric 1000.00 Second Preceding Fiscal Year Net Operating Income
Second Preceding FY Debt Service 62 Numeric 1000.00 Second Preceding Fiscal Year Debt Service
Second Preceding FY DSCR 63 Numeric 2.55 Second Preceding Fiscal Year Debt Svc Cvrge Ratio
Sec Preceding FY Physical Occ'y 64 Numeric 0.85 Second Preceding Fiscal Year Physical Occupancy
Sec Preceding FY Fin'l As of Date 65 AN YYYYMMDD Second Preceding Fiscal Year Financial As Of Date
Most Recent Fiscal YTD Revenue 66 Numeric 1000.00 Most Recent Fiscal Year To Date Revenue
Most Recent Fiscal YTD Expenses 67 Numeric 1000.00 Most Recent Fiscal Year To Date Expenses
Most Recent Fiscal YTD NOI 68 Numeric 1000.00 Most Recent Fiscal Year To Date Net Operating
Income
Most Recent Fiscal YTD Debt Service 69 Numeric 1000.00 Most Recent Fiscal Year To Date Debt Service
Most Recent Fiscal YTD DSCR 70 Numeric 2.55 Most Recent Fiscal Year To Date Debt Service
Coverage Ratio
Most Recent Fiscal YTD Phys. Occ. 71 Numeric 0.85 Most Recent Fiscal Year To Date Physical
Occupancy
Most Recent Fiscal YTD Start Date 72 AN YYYYMMDD Most Recent Fiscal Year To Date Start Date
Most Recent Fiscal YTD End Date 73 AN YYYYMMDD Most Recent Fiscal Year To Date End Date
Most Recent Appraisal Date 74 AN YYYYMMDD The Date Of The Latest Available Appraisal
For The Property
Most Recent Appraisal Value 75 Numeric 100000.00 The Latest Available Appraisal Value For
The Property
Workout Strategy Code 76 Numeric 1 See Workout Strategy Codes Legend
Most Recent Spec Svc Transfer Date 77 AN YYYYMMDD Date Transferred To The Special Servicer
Most Recent Master Svc Return Date 78 AN YYYYMMDD Date Returned To The Master Servicer
Date Asset Expected to Be Resolved 79 AN YYYYMMDD Date Asset Is Expected To Be Resolved
Year Last Renovated 80 AN 1997 Year Property Last Renovated
- --------------------------------------- ---------------------------------------- -------------------------------------------------
NEW FIELDS ADDED:
- --------------------------------------- ---------------------------------------- -------------------------------------------------
Cap Rate Assigned 81 Numeric 10 Cap Rate Assigned
FCL Sale Date (Expected or Actual) 82 AN YYYYMMDD FCL Sale Date Expected or Actual
- --------------------------------------- ---------------------------------------- -------------------------------------------------
</TABLE>
Most Recent Fiscal YTD Figures Are From The Last Financials Processed By The
Servicer Pursuant To The Terms Of The Trust Document, And Cover The Period From
The Start Date To The End Date.
U-3
<PAGE>
FORM OF CSSA LOAN FILE REPORT (CONT'D)
<TABLE>
<CAPTION>
- ---------------------------------------- --------------------------------------------------------- ------------------------------
LIQUIDATION/PREPAYMENT CODE STATUS OF MORTGAGE LOAN MODIFICATION CODE
LEGEND LEGEND LEGEND
- ---------------------------------------- --------------------------------------------------------- ------------------------------
<S> <C> <C>
1 Partial Liq'n (Curtailment) A Payment Not Received But Still In Grace Period 1 Maturity Date Extension
2 Payoff Prior To Maturity B Late Payment But Less Than 1 Month Delinquent 2 Amortization Change
3 Disposition 0 Current 3 Principal Write-Off
4 Repurchase 1 One Month Delinquent 4 Combination
5 Full Payoff At Maturity 2 Two Months Delinquent
6 DPO 3 Three Or More Months Delinquent
7 Liquidation 4 Assumed Sched Payment (Performing Matured Ball'n)
7 Foreclosure
9 REO
</TABLE>
-----------------------------------------------------
WORKOUT STRATEGY CODE
LEGEND
-----------------------------------------------------
1 Modification
2 Foreclosure
3 Bankruptcy
4 Extension
5 Note Sale
6 DPO
7 REO
8 Resolved
9 Pending Return to Master Servicer
10 Deed In Lieu Of Foreclosure
-----------------------------------------------------
U-4
<PAGE>
EXHIBIT V-1
FORM OF CERTIFICATEHOLDER CONFIRMATION CERTIFICATE
REQUEST BY BENEFICIAL HOLDER
[Date]
The Chase Manhattan Bank
450 West 33rd Street, 15th Floor
New York, NY 10001
Attention.: Structured Finance Services-CMBS
Re: Merrill Lynch Mortgage Investors, Inc., Series 1998-C3
In accordance with Section 3.15 of the Pooling and Servicing
Agreement, dated as of December 1, 1998 (the "Pooling and Servicing
Agreement"), among Merrill Lynch Mortgage Investors, Inc., as depositor (the
"Depositor"), GE Capital Loan Services, Inc., as master servicer, GE Capital
Realty Group, Inc., as special servicer, and The Chase Manhattan Bank, as
trustee (in such capacity, the "Trustee"), with respect to the Merrill Lynch
Mortgage Investors, Inc., Mortgage Pass-Through Certificates, Series 1998-C3
(the "Certificates"), the undersigned hereby certifies and agrees as follows:
1. The undersigned is a beneficial owner of the Class ____
Certificates.
2. The undersigned is requesting the information identified on
the schedule attached hereto pursuant to Section 3.15 of
the Pooling and Servicing Agreement (the "Information").
3. In consideration of the Trustee's disclosure to the
undersigned of the Information, the undersigned will keep
the Information confidential (except from such outside
persons as are assisting it in making the evaluation
described in paragraph 2), and such Information will not,
without the prior written consent of the Trustee, be
disclosed by the undersigned or by its officers, directors,
partners, employees, agents or representatives
(collectively, the "Representatives") in any manner
whatsoever, in whole or in part; provided that the
undersigned may provide all or any part of the Information
to any other person or entity that holds or is
contemplating the purchase of any Certificate or interest
therein, but only if such person or entity confirms in
writing such ownership interest or prospective ownership
interest and agrees to keep it confidential.
V-1-1
<PAGE>
4. The undersigned will not use or disclose the Information in
any manner which could result in a violation of any
provision of the Securities Act of 1933, as amended, (the
"Securities Act"), or the Securities Exchange Act of 1934,
as amended, or would require registration of any
Certificate pursuant to Section 5 of the Securities Act.
5. The undersigned shall be fully liable for any breach of
this agreement by itself or any of its Representatives and
shall indemnify the Depositor, the Trustee and the Trust
for any loss, liability or expense incurred thereby with
respect to any such breach by the undersigned or any of its
Representatives.
IN WITNESS WHEREOF, the undersigned has caused its name to be signed
hereto by its duly authorized officer, as of the day and year written above.
[BENEFICIAL HOLDER OF A CERTIFICATE]
By:___________________________
Name:_________________________
Title:________________________
V-1-2
<PAGE>
EXHIBIT V-2
FORM PROSPECTIVE PURCHASER CERTIFICATE
[Date]
[TRUSTEE]
Re: Merrill Lynch Mortgage Investors, Inc., Mortgage
Pass-Through Certificates, Series 1998-C3 (the "Certificates").
In accordance with Section 3.15 of the Pooling and Servicing
Agreement, dated as of December 1, 1998 (the "Pooling and Servicing
Agreement"), among Merrill Lynch Mortgage Investors, Inc., as depositor (the
"Depositor"), GE Capital Loan Services, Inc., as master servicer, GE Capital
Realty Group, Inc., as special servicer, and The Chase Bank Manhattan Bank, as
trustee (in such capacity, the "Trustee"), with respect to the Merrill Lynch
Mortgage Investors, Inc., Mortgage Pass-Through Certificates, Series 1998-C3
(the "Certificates"), the undersigned hereby certifies and agrees as follows:
1. The undersigned is contemplating an investment in the Class
__ Certificates.
The undersigned is requesting the following information for
use in evaluating such possible investment:
___ (i) the information identified on the schedule attached
hereto pursuant to Section 3.15 of the Pooling and
Servicing Agreement; or
___ (ii) the Distribution Date Statements provided pursuant
to Section 4.02 of the Pooling and Servicing Agreement
(collectively, the "Information").
2. In consideration of the Trustee's disclosure to the
undersigned of the Information, the undersigned will keep
the Information confidential (except from such outside
persons as are assisting it in making the investment
decision described in paragraphs 1 and 2), and such
Information will not, without the prior written consent of
the Trustee, be disclosed by the undersigned or by its
officers, directors, partners employees, agents or
representatives (collectively, the "Representatives") in
any manner whatsoever, in whole or in part.
<PAGE>
3. The undersigned will not use or disclose the Information in
any manner which could result in a violation of any
provision of the Securities Act of 1933, as amended (the
"Securities Act"), or the Securities Exchange Act of 1934,
as amended, or would require registration of any
Certificate pursuant to Section 5 of the Securities Act.
4. The undersigned shall be fully liable for any breach of
this agreement by itself or any of its Representatives and
shall indemnify the Depositor, the Trustee and the Trust
for any loss, liability or expense incurred thereby with
respect to any such breach by the undersigned or any of its
Representatives.
IN WITNESS WHEREOF, the undersigned has caused its name to be
signed hereto by its duly authorized officer, as of the day and year written
above.
[PROSPECTIVE PURCHASER]
By:________________________________
Name:
Title:
V-2-2
<PAGE>
EXHIBIT W
FORM OF LOST NOTE AFFIDAVIT AND INDEMNITY
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
_______________, ______________, being duly sworn, deposes and says:
1. that he is an authorized signatory of [Insert Name of Seller]
("______");
2. that ______ is the owner and holder of a mortgage loan in the
original principal amount of $________ secured by a mortgage (the "Mortgage")
on the premises known as ___________ __________ located in _________;
3. (a) that ______, after having conducted a diligent investigation of
its records and files, has been unable to locate the following original note
and believes that said original Note has been lost, misfiled, misplaced or
destroyed due to a clerical error:
a Note in the original sum of $________ made by ________, to
[Name of Payee], under date of ________ (the "Note");
4. that the Note is now owned and held by ______,
5. that the Note has not been paid off, satisfied, assigned,
transferred, encumbered, endorsed, pledged, hypothecated, or otherwise disposed
of and that the original Note has been either lost, misfiled, misplaced or
destroyed;
6. that no other person, firm, corporation or other entity has any
right, title, interest or claim in the Note except ______;
7. upon assignment of the Note by ______ to Merrill Lynch Mortgage
Investors, Inc. (the "Depositor") and subsequent assignment by Depositor to The
Chase Bank Manhattan Bank solely in its capacity of trustee for the benefit of
the Holders of Merrill Lynch Mortgage Investors, Inc. Mortgage Pass-Through
Certificate, Series 1998-C3 (the "Trustee") (which assignment may, at the
discretion of the Depositor, be made directly by ______ to the Trustee) ______
covenants and agrees (a) promptly to deliver to the Trustee the original Note
if it is subsequently found, and (b) to indemnity and hold harmless the Trustee
and its successors and assigns from and against any and all costs,
<PAGE>
expenses and monetary losses arising as a result of ______'s or the Depositor's
failure to deliver said original Note to the Trustee.
[INSERT NAME OF SELLER]
By:_______________________
Authorized Signatory
Sworn to before me this ___ day of ___________.
W-1-2
<PAGE>
MORTGAGE LOAN PURCHASE AGREEMENT
This Mortgage Loan Purchase Agreement, dated as of December
1, 1998 (the "Agreement"), is between Merrill Lynch Mortgage Investors, Inc., a
Delaware corporation (the "Company"), and Merrill Lynch Mortgage Capital, Inc.,
a Delaware corporation (the "Mortgage Loan Seller"). The Mortgage Loan Seller
agrees to sell, and the Company agrees to purchase, the mortgage loans (the
"Mortgage Loans") described in, and set forth in, the Mortgage Loan Schedule
attached as Exhibit A to this Agreement (the "Mortgage Loan Schedule"). The
Company intends to deposit the Mortgage Loans and other assets into a trust
(the "Trust") and cause the creation of a series of certificates to be known as
Merrill Lynch Mortgage Investors, Inc., Commercial Mortgage Pass-Through
Certificates, Series 1998-C3 (the "Certificates"), evidencing beneficial
ownership interests in the Mortgage Loans and other assets, under a Pooling and
Servicing Agreement, to be dated as of December 1, 1998 (the "Pooling and
Servicing Agreement"), among the Company, as depositor, GE Capital Loan
Services, Inc., as master servicer (the "Master Servicer"), GE Capital Realty
Group, Inc., as special servicer (the "Special Servicer") and The Chase
Manhattan Bank, N.A., as trustee (the "Trustee"). The Company intends to sell
certain Certificates to the Underwriter pursuant to the Underwriting Agreement
(the "Underwriting Agreement") between the Company and the Underwriter and
certain other Certificates to the Underwriter pursuant to the Certificate
Purchase Agreement (the "Certificate Purchase Agreement") between the Company
and the Underwriter. The transactions described above are herein referred to as
the "Securitization Transaction". Capitalized terms used but not otherwise
defined herein shall have the respective meanings given to them in the Pooling
and Servicing Agreement without giving effect to any amendment thereto unless
the Mortgage Loan Seller has given its consent to such amendment in writing and
signed by a duly authorized officer of the Mortgage Loan Seller.
1. Purchase Price; Purchase and Sale. (a) The purchase price
(the "Purchase Price") for the Mortgage Loans shall consist of a cash amount
equal to $638,408,606. The Purchase Price amount shall be payable by the
Company to the Mortgage Loan Seller on December 22, 1998 or such other date as
shall be mutually acceptable to the parties hereto (the "Closing Date") in
immediately available funds. The closing for the purchase and sale of the
Mortgage Loans shall take place at the offices of Willkie Farr & Gallagher, 787
Seventh Avenue, New York, New York 10019, at 10:00 a.m. (New York time), on the
Closing Date.
(b) The Mortgage Loan Seller does hereby, as of the Closing
Date, sell, transfer, assign, set over and convey (on a servicing released
basis) to the Company, its successors and
<PAGE>
assigns, without recourse, and the Company does hereby, as of the Closing Date,
purchase, all the right, title and interest of the Mortgage Loan Seller in and
to the Mortgage Loans, including all interest and principal due on or with
respect to the Mortgage Loans after the Cut-Off Date, together with all of the
Mortgage Loan Seller's right, title and interest in and to (i) the proceeds of
any related title, hazard, primary mortgage or other insurance policies
received on or with respect to the Mortgage Loans after the Cut-Off Date and
(ii) all reserve accounts and escrow accounts established pursuant to the
related Mortgage Loan documents and the funds on deposit therein. All scheduled
payments of interest and principal due on or before the Cut-Off Date but
collected after the Cut-Off Date, and recoveries of interest and principal
collected before the Cut-Off Date, shall belong to, and be promptly remitted to
the Mortgage Loan Seller. In connection with such sale, transfer and assignment
to the Company, (A) the Mortgage Loan Seller shall pay to the Master Servicer
as the agent of the Trustee, on the Closing Date, an amount equal to all
payments of principal and interest and escrow payments received by the Mortgage
Loan Seller in respect of the Mortgage Loans which were due after the Cut-Off
Date, provided that with respect to all such payments received by the Mortgage
Loan Seller one Business Day prior to the Closing Date or at any time
thereafter, the Mortgage Loan Seller will remit such payments to the Master
Servicer within two Business Days following receipt; and (B) the Mortgage Loan
Seller shall cause the transfer of the reserve accounts and escrow accounts
related to the Mortgage Loans to the Master Servicer as agent of the Trustee on
the Closing Date. The Company hereby directs the Mortgage Loan Seller, and the
Mortgage Loan Seller hereby agrees, to deliver to each of the Trustee, the
Custodian, the Master Servicer and the Special Servicer (x) all documents,
instruments and agreements required to be delivered by the Company to the
Trustee, the Custodian, the Master Servicer and the Special Servicer under
Section 2.01 of the Pooling and Servicing Agreement, and meeting all the
requirements of such Section 2.01 and (y) such other documents, instruments and
agreements as the Company, the Trustee, the Custodian, the Master Servicer and
the Special Servicer shall reasonably request. In connection with the Mortgage
Loan Seller's delivery of Mortgage Loan documents in accordance with the
preceding sentence, the Mortgage Loan Seller hereby authorizes the Trustee as
the transferee of the Company to complete each endorsement or assignment in
blank appearing thereon in favor of the Trustee in such manner as the Trustee
shall determine in the exercise of its sole discretion (provided that such
endorsement or assignment will be without recourse, representation or warranty
to the Mortgage Loan Seller except as expressly set forth in this Agreement).
If, notwithstanding the Mortgage Loan Seller's representation to the contrary,
the Mortgage Loan Seller's endorsement of any Mortgage Note by allonge and
delivery of such allonge, together with such Mortgage Note, to the Trustee is
not effective under applicable law to legally and validly assign such Mortgage
Note to the Trustee, the Mortgage Loan Seller shall promptly, at its sole cost,
upon the
-2-
<PAGE>
written request of the Company, the Trustee or the Master Servicer, endorse such
Mortgage Note so as to legally and validly assign such Mortgage Note to the
Trustee. If the Mortgage Loan Seller cannot deliver any original or certified
recorded or filed document required to be recorded or filed prior to the
Closing Date and to be delivered as a part of a Mortgage File on or before the
Closing Date, the Mortgage Loan Seller shall use its best efforts, promptly
upon receipt thereof and in any case not later than 45 days after the Closing
Date, to deliver or cause to be delivered such original or certified recorded
or filed document to the Custodian (with a copy to each of the Master Servicer
and the Special Servicer) unless the Mortgage Loan Seller is delayed in making
such delivery by reason of the fact that such document has not been returned by
the appropriate recording or filing office, in which case, the Mortgage Loan
Seller shall notify the Company, the Trustee, the Custodian and the Master
Servicer in writing of such delay and shall deliver such document to the
Trustee (with a copy to each of the Master Servicer and the Special Servicer)
promptly upon the Mortgage Loan Seller's receipt thereof. The Mortgage Loan
Schedule may be amended to reflect the actual Mortgage Loans.
(c) The Purchase Price refers to the proceeds of the sale of
the Certificates allocated to the Mortgage Loan Seller which, upon the final
determination of such amount, will be reduced by the Mortgage Loan Seller's
share of the Transaction Expenses (as defined herein), the preparation,
completion, filing and recording expenses relating to the Mortgage Loans as
described below in Section 1(e) and underwriting and placement commissions or
fees owed by the Mortgage Loan Seller to the Underwriter as provided in
Sections 1(d), (e) and (f) below.
(d) Concurrently with the distribution of the Purchase Price
to the Mortgage Loan Seller under Section 1(a), the Mortgage Loan Seller shall
pay to the Company its proportionate share of the estimated Transaction
Expenses and the estimated preparation, completion, filing, and recording
expenses relating to the Mortgage Loans described below in Section 1(e).
(e) The Mortgage Loan Seller authorizes the Master Servicer
as the agent of the Trustee to engage one or more third parties to effectuate,
at the Mortgage Loan Seller's expense, the preparation or completion and the
filing or recording of any Assignment of Mortgage, any Form UCC-2 or UCC-3
assignment and any reassignment of Assignment of Leases required to be
delivered, with respect to the Mortgage Loans, pursuant to the Pooling and
Servicing Agreement which has not yet been submitted for filing or recordation
on or before the Closing Date. The Company will deduct from the Purchase Price,
and promptly remit to the Master Servicer, the Master Servicer's estimate of
the costs and expenses of the preparation, completion, filing and recording the
Mortgage Loan documents described in the immediately preceding sentence,
including, without limitation, filing fees, recording fees and the reasonable
fees charged by
-3-
<PAGE>
such third parties. If any such Mortgage Loan document is lost or returned
unrecorded or unfiled, as the case may be, because of a defect therein, the
Mortgage Loan Seller shall promptly prepare or cause the preparation of a
substitute therefor or cure or cause the curing of such defect, as the case may
be, and shall thereafter deliver the substitute or corrected document to or at
the direction of the Master Servicer as the agent of the Trustee for recording
or filing, as appropriate, at the Mortgage Loan Seller's expense.
(f) If the amounts deducted by the Company with respect to
the Mortgage Loan Seller's share of the estimated Transaction Expenses or the
estimated preparation, completion, filing and recording expenses described in
the preceding paragraph are subsequently determined to be less than or greater
than the actual amounts owed to the Company by the Mortgage Loan Seller with
respect thereto, the Mortgage Loan Seller shall promptly reimburse the Company
or its designee for the amount of such deficiency, or the Company shall refund,
or cause to be refunded, to the Mortgage Loan Seller the amount of such excess,
as the case may be.
For purposes of this Agreement, the term "Transaction
Expenses" shall mean any and all costs and expenses reasonably incurred by the
Company, and certain other costs and expenses reasonably incurred by other
parties to the Securitization Transaction as set forth below, in connection
with the Securitization Transaction, including, without limitation: (i) the
fees and disbursements of the Company's attorneys (including such fees and
disbursements related to the Company's acquisition of the Mortgage Loans and
the Other Mortgage Loans); (ii) the itemized reasonable out-of-pocket expenses
of the Underwriters; (iii) the Trustee's fees and out-of-pocket expenses
(including the fees and disbursements of its attorneys) incurred in entering
into the Pooling and Servicing Agreement; (iv) the fees charged by the Rating
Agencies for rating any of the Certificates (including surveillance fees to be
prepaid to the Rating Agencies or any amount paid from the proceeds of the sale
of the Certificates, in connection with the closing of the Securitization
Transaction, to a Person for assuming the obligation to pay surveillance fees);
(v) the fees and disbursements of accountants and other professionals engaged
by the Company in connection with the Securitization Transaction; (vi) the SEC
filing fees with respect to the Company's shelf registration to the extent of
the principal amount of those Certificates which are publicly issued in
connection with the Securitization Transaction; (vii) the out-of-pocket
expenses of each of the Master Servicer and the Special Servicer (including the
fees and disbursements of their respective attorneys) incurred in connection
with the Securitization Transaction; (viii) state securities filing fees and
related expenses (including the fees and disbursements of attorneys engaged to
prepare state Blue Sky memoranda); (ix) the costs of preparing, printing and
delivering the Prospectus, the Prospectus Supplement
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<PAGE>
or the Private Placement Memorandum, dated December 21, 1998, the Certificates,
including any fees incurred in connection with obtaining Cusip numbers for the
Certificates; (x) sales, transfer or similar taxes (including additions thereto)
arising in connection with the sale of the Certificates to the Underwriters or
investors; and (xi) the negative value of the Residual Certificates under the
Pooling and Servicing Agreement. Transaction Expenses shall not include other
loan-related expenses of the Mortgage Loan Seller, including, without
limitation, appraisals or environmental, engineering or other reports requested
by Rating Agencies or reasonably requested by other parties to the
Securitization Transaction or potential investors in the non-investment grade
Certificates.
2. Representations and Warranties and Covenants.
(a) The Mortgage Loan Seller hereby represents and warrants
to the Company and to the Trustee (for the benefit of the Certificateholders)
as the transferee of the Company, as of the date hereof being brought down in a
closing certificate that:
(i) The Mortgage Loan Seller is a
Delaware corporation duly organized, validly
existing and in good standing under the laws of the
State of Delaware, with the necessary corporate
power and authority to own its assets and conduct
its business as now being conducted, is duly
qualified as a foreign corporation in good standing
in all jurisdictions in which the ownership or lease
of its property or the conduct of its business
requires such qualification, except where the
failure to be so qualified would not have a material
adverse effect on the value of the Mortgage Loans
and the ability of the Mortgage Loan Seller to
perform its obligations hereunder, and the Mortgage
Loan Seller has taken all necessary corporate action
to authorize the execution, delivery and performance
of this Agreement by it, and has the necessary
corporate power and authority to execute, deliver
and perform this Agreement and all the transactions
of the Mortgage Loan Seller contemplated hereby,
including, but not limited to, the power and
authority to sell, assign, transfer, set over and
convey the Mortgage Loans in accordance with this
Agreement;
(ii) This Agreement has been duly
authorized, executed and delivered by the Mortgage
Loan Seller and assuming the due authorization,
execution and delivery by the Company, will
constitute a legal, valid and binding obligation of
the Mortgage Loan Seller, enforceable against the
Mortgage Loan Seller in accordance with its
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<PAGE>
respective terms, except as such enforcement may be
limited by bankruptcy, insolvency, reorganization,
receivership, moratorium or other similar laws
affecting the enforcement of creditors' rights
generally, and by general principles of equity
(regardless of whether such enforceability is
considered in a proceeding in equity or at law), or
by public policy considerations underlying the
securities laws, to the extent that such public
policy considerations limit the enforceability of
the provisions of this Agreement which purport to
provide indemnification from liabilities under
applicable securities laws;
(iii) The execution and delivery of
this Agreement by the Mortgage Loan Seller and the
performance of its obligations hereunder (1) will
not conflict with any provision of any law or
regulation to which the Mortgage Loan Seller is
subject, or conflict with, result in a breach of or
constitute a default under any of the terms,
conditions or provisions of any of the Mortgage Loan
Seller's organizational documents or any agreement
or instrument to which the Mortgage Loan Seller is a
party or by which it is bound, or any order or
decree applicable to the Mortgage Loan Seller, or
result in the creation or imposition of any lien on
any of the Mortgage Loan Seller's assets or
property, in each case which would materially and
adversely affect the ability of the Mortgage Loan
Seller to carry out the transactions contemplated by
this Agreement; and (2) does not require the consent
of any third party or such consent has been
obtained;
(iv) There is no action, suit,
proceeding or, to the knowledge of the Mortgage Loan
Seller, investigation pending and, to the knowledge
of the Mortgage Loan Seller there is no action,
suit, proceeding or investigation threatened against
the Mortgage Loan Seller in any court or by or
before any other governmental agency or
instrumentality which, in the Mortgage Loan Seller's
good faith and reasonable judgment, would materially
and adversely affect the validity of the Mortgage
Loans or the ability of the Mortgage Loan Seller to
enter into, or which would impair materially and
adversely the ability of the Mortgage Loan Seller to
carry out the transactions contemplated by, this
Agreement;
(v) The Mortgage Loan Seller is not
in default with respect to any order or decree of
any court or any order, regulation or demand of any
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<PAGE>
federal, state, municipal or governmental agency,
which default might have consequences that, in the
Mortgage Loan Seller's good faith and reasonable
judgment, would materially and adversely affect the
financial condition or operations of the Mortgage
Loan Seller or its properties taken as a whole or
might have consequences that would materially and
adversely affect its performance hereunder;
(vi) No consent, approval,
authorization or order of any court or governmental
agency or body is required for the execution,
delivery and performance by the Mortgage Loan Seller
of or compliance by the Mortgage Loan Seller with
this Agreement or the consummation of the
transactions of the Mortgage Loan Seller
contemplated by this Agreement, other than those
which have been obtained by the Mortgage Loan
Seller;
(vii) The transfer, assignment and
conveyance of the Mortgage Loans by the Mortgage
Loan Seller to the Company is not subject to bulk
transfer laws or any similar statutory provisions in
effect in any applicable jurisdiction;
(viii) Under generally accepted
accounting principles ("GAAP") and for federal
income tax purposes, the Mortgage Loan Seller will
report the transfer of the Mortgage Loans to the
Company as a sale of the Mortgage Loans to the
Company. The consideration received by the Mortgage
Loan Seller upon the sale of the Mortgage Loans to
the Company will constitute reasonably equivalent
value and fair consideration for the Mortgage Loans.
The Mortgage Loan Seller will be solvent at all
relevant times prior to, and will not be rendered
insolvent by, the sale of the Mortgage Loans to the
Company. The Mortgage Loan Seller is not selling the
Mortgage Loans to the Company with any intent to
hinder, delay or defraud any of the creditors of the
Mortgage Loan Seller; and
(ix) The Mortgage Loan Seller has
not dealt with any Person (other than the
Underwriters) that may be entitled, by reason of any
act or omission of the Mortgage Loan Seller, to any
commission or compensation in connection with the
sale of the Mortgage Loans to the Company hereunder.
(b) The Mortgage Loan Seller hereby makes to the Company and
to the Trustee (for the benefit of the
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<PAGE>
Certificateholders) as the transferee of the Company the representations and
warranties contained in Schedule I, Schedule II, Schedule III and Schedule IV
with respect to each Mortgage Loan as of the date specified therein or, if no
such date is specified, as of the date hereof.
(c) If Credit Lease Loans are sold hereunder, the Mortgage
Loan Seller hereby covenants that it shall, within 10 days of the Closing Date,
notify the Lease Enhancement Policy Issuer that (i) both the Master Servicer
and Special Servicer shall be sent notices under each Lease Enhancement Policy,
and (ii) the Trustee c/o GE Capital Loan Services, Inc., as agent for the
Trustee for the benefit of the registered holders of Merrill Lynch Mortgage
Investors, Inc. Mortgage Pass-Through Certificates, Series 1998-C3, shall be
the loss payee or the named insured, as appropriate, under each Lease
Enhancement Policy.
3. Notice of Breach; Cure and Repurchase.
(a) Pursuant to the Pooling and Servicing Agreement, the
Mortgage Loan Seller and the Company shall be given notice of any Breach or
Document Defect that materially and adversely affects the value of such
Mortgage Loan or the interests of the holders of the Certificates therein.
(b) Upon notice pursuant to Section 3(a) herein, the Mortgage
Loan Seller shall, not later than 90 days after the Mortgage Loan Seller's
receipt of notice of such Breach or Document Defect (or, in the case of a
Document Defect or Breach relating to a Mortgage Loan not being a "qualified
mortgage" within the meaning of the Section 860G(a)(3) of the Internal Revenue
Code of 1986, as amended (but without regard to the rule in Treasury Regulation
Section 1.860G-2(f)(2) that treats a defective obligation as a "qualified
mortgage" under certain circumstances) (a "Qualified Mortgage"), not later than
90 days after any party to this Agreement or to the Pooling and Servicing
Agreement discovering such Document Defect or Breach), if such Breach or
Document Defect shall materially and adversely affect the value of such
Mortgage Loan or the interests of the holders of the Certificates therein, cure
such Document Defect or Breach, as the case may be, in all material respects
or, if such Document Defect or Breach (other than omissions solely due to a
document not having been returned by the related recording office) cannot be
cured within the periods herein set forth, either (i) repurchase the affected
Mortgage Loan at the applicable Repurchase Price (as defined below) or (ii)
substitute a Qualified Substitute Mortgage Loan for such affected Mortgage Loan
and pay the Trustee any Substitution Shortfall Amount in connection therewith;
provided, however, that if such Document Defect or Breach is capable of being
cured but not within such 90-day period, such Document Defect or Breach does
not relate to any Mortgage Loan not being a Qualified Mortgage, and the
Mortgage Loan Seller has commenced and is diligently proceeding
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<PAGE>
with the cure of such Document Defect or Breach within such 90-day period, the
Mortgage Loan Seller shall with respect to any such Document Defect or Breach,
have an additional 90 day period to complete such cure (or failing such cure, to
complete such repurchase or substitution); provided, further, that with respect
to such additional 90-day period, the Mortgage Loan Seller shall have delivered
an Officer's Certificate to the Master Servicer and the Trustee setting forth
the reason such Document Defect or Breach is not capable of being cured within
the initial 90-day period and what actions the Mortgage Loan Seller is pursuing
in connection with the cure thereof and stating that the Mortgage Loan Seller
anticipates that such Document Defect or Breach will be cured within such
additional 90-day period. In connection with any Breach of the representation
and warranty set forth in clause (xliii) of Schedule I with respect to a group
of Mortgage Loans to the same borrower or to borrowers that are affiliated with
one another, the Mortgage Loan Seller may cure such Breach by repurchasing or
replacing with a Qualified Substitute Mortgage Loan or Loans one or more of
such Mortgage Loans, and the Mortgage Loan Seller may choose which Mortgage
Loan or Loans to repurchase or replace as long as the aggregate principal
balance of such Mortgage Loans not being repurchased by the Mortgage Loan
Seller determined as of the Cut-Off Date is less than or equal to the
applicable amount set forth on Exhibit I-XLIII(B) attached hereto. If the
affected Mortgage Loan is to be repurchased, the Mortgage Loan Seller shall, on
the date of repurchase, remit the Repurchase Price by wire transfer of
immediately available funds in accordance with the directions of the Master
Servicer as agent for the Trustee. If the affected Mortgage Loan is to be
substituted, (I) the Mortgage Loan Seller shall, on the date of substitution,
remit the Substitution Shortfall Amount by wire transfer of immediately
available funds in accordance with the directions of the Master Servicer as
agent for the Trustee; (II) no such substitution may be made in any calendar
month after the Determination Date for such month; (III) the Mortgage Loan
Seller shall, on the date of substitution, certify in writing to the Trustee
and the Master Servicer that the Qualified Substitute Mortgage Loan(s) meets
all of the requirements of the definition of Qualified Substitute Mortgage Loan
in the Pooling and Servicing Agreement and that the representations and
warranties set forth in Section 2 are true and correct with respect to the
Mortgage Loan Seller and such Qualified Substitute Mortgage Loan(s) (which
includes a mortgage loan schedule describing such Qualified Substitute Mortgage
Loan(s) substantially in the form of Exhibit A)) and shall agree with the
Trustee in writing to be subject to the terms and provisions of the Mortgage
Loan Seller under Sections 3, 7, 8, 9, 10, 11, 12, 13, 14 and 15 with respect
to such Qualified Substitute Mortgage Loan(s) as of the date of substitution;
(IV) scheduled payments of principal and interest due with respect to any such
Qualified Substitute Mortgage Loan after the related date of substitution shall
be part of the Trust Fund; and (V) scheduled payments of principal and interest
due with respect to any such Qualified Substitute Mortgage Loan on or prior to
the related date of substitution shall not be part of
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<PAGE>
the Trust Fund, and the Mortgage Loan Seller shall be entitled to receive such
payments promptly following receipt thereof by the Master Servicer as the agent
of the Trustee. The delivery of an original pro forma or specimen title
insurance policy or an original marked, redated and recertified commitment to
issue a policy of lender's title insurance in lieu of the delivery of the actual
policy of lender's title insurance shall not be considered a Document Defect
with respect to any Mortgage File if such actual policy of insurance is
delivered to the Trustee or a Custodian on its behalf not later than the 90th
day following the Closing Date.
The "Repurchase Price" with respect to any Mortgage Loan or
REO Loan to be repurchased pursuant to this Agreement and Section 2.03 of the
Pooling and Servicing Agreement, shall have the meaning given to the term
"Purchase Price" in the Pooling and Servicing Agreement without giving effect
to any amendment thereto unless the Mortgage Loan Seller has given its consent
to such amendment in writing and signed by a duly authorized officer of the
Mortgage Loan Seller.
(c) Upon any substitution for or repurchase of a Mortgage
Loan contemplated by Section 3(b) above, the Trustee, the Custodian, the Master
Servicer and the Special Servicer shall each tender to the Mortgage Loan
Seller, all portions of the Mortgage File, the Servicing File and other
documents pertaining to such Mortgage Loan possessed by it, and each document
that constitutes a part of the Mortgage File that was endorsed or assigned to
the Trustee shall be endorsed or assigned, as the case may be, to the Mortgage
Loan Seller in each case without recourse, representation or warranty, as shall
be necessary to vest in the Mortgage Loan Seller the legal and beneficial
ownership of such Mortgage Loan (including any property acquired in respect
thereof or proceeds of any insurance policy with respect thereto).
(d) Section 3(b) of this Agreement provides the sole and
exclusive remedy available to the Company, the Trustee on behalf of the
Certificateholders or any other party, respecting any Document Defect or any
Breach.
(e) Subject to the terms of this Agreement, and
notwithstanding any restrictive or qualified endorsement on any Mortgage Note,
assignment of Mortgage or assignment of Assignment of Leases, the Mortgage Loan
Seller hereby acknowledges the assignment by the Company to the Trustee, as
trustee under the Pooling and Servicing Agreement, for the benefit of the
Certificateholders, of the representations and warranties contained herein and
of the obligation of the Mortgage Loan Seller to cure, substitute for or
repurchase a Mortgage Loan pursuant to this Section. The Trustee or its
designee may enforce such obligations as provided in Section 8 hereof.
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<PAGE>
4. Representations, Warranties and Agreements of Company.
(a) The Company hereby represents and warrants to the
Mortgage Loan Seller, as of the date hereof (or such other date as is specified
in the related representation or warranty), as follows:
(i) The Company is a corporation
duly organized, validly existing and in good
standing under the laws of the State of Delaware,
with full corporate power and authority to own its
assets and conduct its business, is duly qualified
as a foreign corporation in good standing in all
jurisdictions in which the ownership or lease of its
property or the conduct of its business requires
such qualification, except where the failure to be
so qualified would not have a material adverse
effect on the ability of the Company to perform its
obligations hereunder, and the Company has taken all
necessary action to authorize the execution,
delivery and performance of this Agreement by it,
and has the power and authority to execute, deliver
and perform this Agreement and all the transactions
of the Company contemplated hereby;
(ii) This Agreement has been duly
authorized, executed and delivered by the Company
and constitutes a valid and binding obligation of
the Company, enforceable against the Company in
accordance with its terms, except as such
enforcement may be limited by bankruptcy,
reorganization, insolvency, receivership, moratorium
and other similar laws affecting the enforcement of
creditors' rights generally and by general
principles of equity (regardless of whether such
enforceability is considered in a proceeding in
equity or at law);
(iii) The execution and delivery of
this Agreement by the Company and the performance of
its obligations hereunder will not conflict with any
provision of any law or regulation to which the
Company is subject, or conflict with, result in a
breach of or constitute a default under any of the
terms, conditions or provisions of any of the
Company's organizational documents or any agreement
or instrument to which the Company is a party or by
which it is bound, or any law, rule, regulation,
judgment, writ, injunction, order or decree
applicable to the Company, or result in the creation
or imposition of any lien on any of the Company's
assets or property, in
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<PAGE>
each case which would materially and adversely affect
the ability of the Company to carry out the
transactions contemplated by this Agreement;
(iv) There is no action, suit,
proceeding or, to the knowledge of the Company,
investigation pending and, to the knowledge of the
Company, there is no action, suit, proceeding or
investigation threatened against the Company in any
court or by or before any other governmental agency
or instrumentality which would materially and
adversely affect the validity of this Agreement or
any action taken in connection with the obligations
of the Company contemplated herein, or which would
be likely to impair materially the ability of the
Company to perform under the terms of this
Agreement;
(v) The Company is not in default
with respect to any order or decree of any court or
any order, regulation or demand of any federal,
state, municipal or governmental agency, which
default might have consequences that would
materially and adversely affect the financial
condition or operations of the Company or its
properties taken as a whole or might have
consequences that would materially and adversely
affect its performance hereunder;
(vi) No consent, approval,
authorization or order of any court or governmental
agency or body is required for the execution,
delivery and performance by the Company of, or
compliance by the Company with, this Agreement or
the consummation of the transactions of the Company
contemplated by this Agreement other than those that
have been obtained by the Company; and
(vii) Under GAAP and for federal
income tax purposes, the Company will report the
transfer of the Mortgage Loans by the Mortgage Loan
Seller to the Company as a sale of the Mortgage
Loans to the Company.
5. Company's Conditions to Closing. The obligations of the
Company under this Agreement to purchase the Mortgage Loans and pay the
Purchase Price on the Closing Date shall be subject to the satisfaction, on or
before the Closing Date, or such other date specified herein, of the following
conditions:
(a) The obligations of the Mortgage Loan Seller required to
be performed by it at or prior to the Closing Date pursuant to the terms of
this Agreement shall have been duly performed and complied with and all of the
representations and
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<PAGE>
warranties of the Mortgage Loan Seller under this Agreement shall be true and
correct in all material respects, and no event shall have occurred which, with
notice or the passage of time, or both, would constitute a material default
under this Agreement.
(b) The Company or its designee shall have received all of
the following closing documents, in such forms as are agreed upon and
acceptable to the Company and in form and substance satisfactory to the
Company, the Underwriters and their respective counsel, duly executed by all
signatories other than the Company as required pursuant to the respective terms
thereof:
(i) with respect to each Mortgage
Loan, the related Mortgage File and Servicing File,
which Mortgage Files shall be delivered to and held
by the Trustee and the Master Servicer,
respectively, on behalf of the Company , provided,
however, that as provided in this Agreement and in
Section 2.01 of the Pooling and Servicing Agreement,
the Mortgage Loan Seller may deliver certain
Mortgage File documents (not including the Mortgage
Notes and the related endorsements, allonges and
lost note indemnities) after the Closing Date;
(ii) the final Mortgage Loan
Schedule;
(iii) an officer's certificate from
the Mortgage Loan Seller dated as of the Closing
Date, in the form attached hereto as Exhibit B;
(iv) an opinion of Mortgage Loan
Seller's counsel, subject to its customary
exceptions and carve-outs for opinions of this type,
in form and substance reasonably acceptable to the
Company and its counsel and the Rating Agencies,
which states in substance the opinions set forth on
Exhibit C hereto; and
(v) such other documents,
certificates and opinions as the Company may
reasonably request to effectuate the transactions
contemplated by this Agreement.
(c) The Mortgage Loan Seller hereby agrees to furnish such
other information, documents, certificates, letters or opinions with respect to
the Mortgage Loans or itself as may be reasonably requested by the Company in
order for the Company to perform any of its obligations or satisfy any of the
conditions on its part to be performed or satisfied pursuant to the
Underwriting Agreement, the Certificate Purchase Agreement, the Pooling and
Servicing Agreement or this Agreement.
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<PAGE>
6. Indemnification and Contribution.
(a) The Mortgage Loan Seller shall indemnify and hold
harmless the Company, the Underwriters, their respective officers and
directors, and each person, if any, who controls the Company or the
Underwriters within the meaning of either Section 15 of the Securities Act of
1933, as amended (the "1933 Act") or Section 20 of the Securities Exchange Act
of 1934, as amended (the "1934 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 1933 Act, the 1934 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) (i)
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact relating to the Mortgage Loans, the related Mortgagors, the
related Mortgaged Properties or the Mortgage Loan Seller contained in (A) the
Preliminary Prospectus Supplement, the Prospectus Supplement and the Memorandum
(insofar as the following are incorporated as part of the Memorandum) under the
headings "SUMMARY OF PROSPECTUS SUPPLEMENT -- The Mortgage Loan Seller," "--The
Mortgage Loans--Security for the Mortgage Loans," "--Property Types,"
"--Geographic Concentrations," "--Prepayment Provisions," "--Borrower
Concentration," "RISK FACTORS -- Certain Risk Factors Associated with the
Mortgage Loans" or "DESCRIPTION OF THE MORTGAGE POOL," the geographic
distribution map set forth on the inside cover page of either the Preliminary
Prospectus Supplement or the Prospectus Supplement, Annex A or Annex D to the
Preliminary Prospectus Supplement, Annex A or Annex D to the Prospectus
Supplement, the Diskette (as defined herein) or, insofar as they are required
to be filed as part of the Registration Statement pursuant to the No-Action
Letters, any Computational Materials, ABS Term Sheets or Collateral Term Sheets
with respect to the Registered Certificates, or in any revision or amendment of
or supplement to any of the foregoing or (B) any items similar to Computational
Materials, ABS Term Sheets or Collateral Term Sheets forwarded to prospective
investors in the Non-Registered Certificates or (C) the Master Tape (as defined
herein) (it being herein acknowledged that the Master Tape was used to prepare
the Preliminary Prospectus Supplement, including, without limitation, Annex A
and Annex D thereto, the Prospectus Supplement, including, without limitation,
Annex A and Annex D thereto, the Memorandum, the Diskette, the Computational
Materials, ABS Term Sheets and Collateral Term Sheets with respect to the
Registered Certificates and any items similar to Computational Materials, ABS
Term Sheets and Collateral Term Sheets forwarded to prospective investors in
the Non-Registered Certificates), or (ii) arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
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<PAGE>
but, in the case of any Computational Materials, ABS Term Sheets and Collateral
Term Sheets with respect to the Registered Certificates and any items similar to
Computational Materials, ABS Term Sheets and Collateral Term Sheets forwarded to
prospective investors in the Non-Registered Certificates, only if and to the
extent that any such untrue statement or alleged untrue statement or omission or
alleged omission (I) arises out of or is based upon an untrue statement or
omission with respect to the Mortgage Loans, the related Mortgagors or the
related Mortgaged Properties contained in the Master Tape, (II) is contained in
the information regarding the Mortgage Loans, the related Mortgagors, the
related Mortgaged Properties or the Mortgage Loan Seller set forth in the
Preliminary Prospectus Supplement, the Prospectus Supplement or the Memorandum
(insofar as the following are incorporated as part of the Memorandum) under the
headings "SUMMARY OF PROSPECTUS SUPPLEMENT -- The Mortgage Loan Seller," "--The
Mortgage Loans--Security for the Mortgage Loans," "--Property Types,"
"--Geographic Concentrations," "--Prepayment Provisions," "--Borrower
Concentration," "RISK FACTORS -- Certain Risk Factors Associated with the
Mortgage Loans" or "DESCRIPTION OF THE MORTGAGE POOL," [the geographic
distribution map set forth on the inside cover page of either the Preliminary
Prospectus Supplement or the Prospectus Supplement], or Annex A or Annex D to
the Prospectus Supplement; provided that the foregoing were provided to the
Mortgage Loan Seller for its review, or (III) arises out of or is based upon a
breach of any of the representations and warranties of the Mortgage Loan Seller
set forth in or made pursuant to Section 2; provided that the indemnification
provided by this Section 6 shall not apply to the extent that such untrue
statement or omission was made as a result of an error in (x) the manipulation
of, or (y) any calculations based upon, or (z) any aggregation (other than an
aggregation made in the Master Tape by the Mortgage Loan Seller) of, the
information regarding the Mortgage Loans, the related Mortgagor, the related
Mortgaged Properties or the Mortgage Loan Seller set forth in the Master Tape or
in Annex A or Annex D to the Preliminary Prospectus Supplement or in Annex A or
Annex D to the Prospectus Supplement, including without limitation, the
aggregation of such information with comparable information relating to the
Other Mortgage Loans conveyed by the Other Mortgage Loan Sellers; provided
further that the Mortgage Loan Seller's agreement to indemnify and reimburse the
Underwriters, their respective officers and directors, or any person controlling
the Underwriters under this Section 6 shall not apply to any loss, claim,
damage, liability or expense arising out of or relating to claims asserted by
any person who purchased any Registered Certificates pursuant to the Preliminary
Prospectus Supplement that are the subject of such claims if such person did not
receive a copy of the Prospectus Supplement upon or before settlement of the
sale of such Registered Certificates to such Person, in any case where the
untrue statement or alleged untrue statement of a material fact
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<PAGE>
or the omission or alleged omission to state a material fact contained in such
Preliminary Prospectus Supplement which was the basis of any such claim was
corrected in the Prospectus Supplement. In addition, the Mortgage Loan Seller
agrees to reimburse any indemnified party with respect to any and all expenses
whatsoever, as incurred (including the fees and disbursements of such
indemnified party's counsel), reasonably incurred in investigating, preparing
or defending against any litigation, or any investigation or proceeding by any
government agency or body, commenced or threatened, or any claim whatsoever
based upon any such untrue statement or omission or any such alleged untrue
statement or omission. This indemnity agreement will be in addition to any
liability which the Mortgage Loan Seller may otherwise have.
For purposes of this Agreement, "Registration Statement"
shall mean the registration statement No. 333-38073 filed by the Company on
Form S-3, including without limitation exhibits thereto and information
incorporated therein by reference; "Prospectus" shall mean the prospectus dated
February 25, 1998, as supplemented by the prospectus supplement dated December
17, 1998 (the "Prospectus Supplement"), relating to the Registered
Certificates, including all annexes thereto; the "Preliminary Prospectus
Supplement" shall mean the Preliminary Prospectus Supplement dated December 7,
1998, relating to the Registered Certificates, including all annexes thereto;
"Memorandum" shall mean the private placement memorandum dated December 21,
1998, relating to the Non-Registered Certificates; "Registered Certificates"
shall mean, collectively, the Certificates denominated as the Class A-1, Class
A-2, Class A-3, Class IO, Class B, Class C, Class D and Class E Certificates;
"Non-Registered Certificates" shall mean the Certificates other than the
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 Kidder, Peabody Acceptance Corporation I, Kidder, Peabody &
Co. Incorporated, and Kidder Structured Asset Corporation and the no-action
letter dated May 24, 1994 issued by the Division of Corporation Finance of the
Commission to the Public Securities Association (together, the "Kidder
Letters"); "ABS Term Sheets" and "Collateral Term Sheets" shall have the
meanings 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 Kidder Letters,
the "No-Action Letters"); "Diskette" shall mean either the diskette attached to
the Preliminary Prospectus Supplement (together with the Prospectus) or the
diskette attached to each of the Prospectus Supplement (together with the
Prospectus) and the Memorandum; and the "Master Tape" shall mean the
compilation of information and data regarding the Mortgage Loans and the Other
Mortgage Loans covered by the Independent Accountants' Reports on Applying
Agreed-Upon Procedures dated December 17, 1998 and December 21, 1998 and
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<PAGE>
rendered by PriceWaterhouseCoopers LLP (a "hard copy" of which Master Tape was
initialed on behalf of the Mortgage Loan Seller and the Company).
(b) Promptly after receipt by an indemnified party under this
Section 6 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying
party under this Section 6, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party will
not relieve the indemnifying party from any liability which it may have to any
indemnified party under this Section 6, except to the extent that it has been
prejudiced in any material respect, or from any liability which it may have,
otherwise than under this Section 6. 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 at
its own expense 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
reasonably satisfactory to such indemnified party; provided that if the
defendants in any such action include both the indemnified party and the
indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assert the legal defenses available to such
indemnified party or parties 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 shall not be unreasonably withheld), the indemnifying
party will not be liable to such indemnified party for legal or other expenses
incurred by the indemnified party in connection with the defense thereof unless
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 counsel, in addition to its own
counsel, (together with one local counsel, if applicable), for all indemnified
parties in connection with any one action or separate but similar or related
actions in the same jurisdiction arising out of the same general allegations or
circumstances). No indemnifying party shall, without the prior written consent
of the related indemnified party, which consent shall not be unreasonably
withheld or delayed, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 6 by such indemnified party (whether or not the indemnified
parties are actual or potential parties thereto), unless such settlement,
compromise or consent (i) includes an unconditional release of such indemnified
party from all
-17-
<PAGE>
liability arising out of such litigation, investigation, proceeding or claim
and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act by or on behalf of any indemnified party. The
indemnifying party shall not be liable under any settlement or compromise or
consent to the entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever in respect of which indemnification or
contribution could be sought under this Section 6 by an indemnified party which
is effected without the prior written consent of such indemnifying party, which
consent will not be unreasonably withheld or delayed; provided, however, that
if at any time an indemnified party shall have requested the indemnifying party
to reimburse the indemnified party for fees and expenses of counsel, the
indemnifying party agrees that it shall be liable for such settlement,
compromise or consent to the entry of judgment effected without its written
consent, if (A) such settlement, compromise or consent to the entry of judgment
is entered into more than 60 days after the receipt by the indemnifying party
of the aforesaid request, (B) the indemnifying party shall have received notice
of the terms of such settlement, compromise or consent to the entry of judgment
at least 45 days prior to such settlement, compromise, or consent to the entry
of judgment being entered into and (C) the indemnifying shall not have
reimbursed such indemnified party in accordance with such request prior to the
date of such settlement, compromise of consent to the entry of judgment.
(c) If the indemnification provided for in this Section 6 is
due in accordance with its terms but is for any reason unavailable to, or
insufficient to hold harmless, an indemnified party under this Section 6, then
the Mortgage Loan Seller and such indemnified party shall contribute to the
amount paid or payable by such indemnified party as a result of the losses,
claims, damages, liabilities or expenses as incurred, referred to in subsection
(a) or (b) above, (i) in such proportion as is appropriate to reflect the
relative benefits received by the Mortgage Loan Seller on the one hand and such
indemnified party on the other hand from the offering and sale of the
Certificates or (ii) if the allocation provided by clause (i) is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above, but also the relative fault
of the Mortgage Loan Seller on the one hand and such indemnified party on the
other in connection with the statement or omission that resulted in such
losses, claims, damages, liabilities and expenses, as well as any other
relevant equitable considerations. The relative benefits received by the
Mortgage Loan Seller on the one hand and such indemnified party on the other
hand in connection with the offering and sale of the Certificates shall be
deemed to be in the same respective proportion as the total proceeds received
or contemplated to be received by the Mortgage Loan Seller from the offering
and sale of the Certificates, whether or not such offering and sale are
consummated, bears to the proceeds
-18-
<PAGE>
retained or contemplated to be retained by such indemnified party with respect
to the offering and sale of the Certificates. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Mortgage Loan Seller or
such indemnified party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission. The Mortgage Loan Seller and the Company agree that it would not be
just and equitable if contribution pursuant to this subsection (c) were to be
determined by per capita allocation or by any other method of allocation that
does not take account of the equitable considerations referred to herein. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities and expenses referred to in the first sentence of
this subsection (c) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating,
preparing or defending against litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened in writing, or any
claim whatsoever based upon any such untrue or alleged untrue statement or
omission or alleged omission. In the event that any expenses so paid by the
Mortgage Loan Seller are subsequently determined not to be required to be borne
by the Mortgage Loan Seller hereunder (whether in connection with
indemnification pursuant to Section 6(a) or contribution pursuant to this
subsection (c)), the indemnified party which received such payment shall
promptly refund the amount so paid to the Mortgage Loan Seller. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the 1933 Act) shall be entitled to contribution from any person who was not
also guilty of such fraudulent misrepresentation. For purposes of this
subsection (c), each person, if any, who controls the Company within the
meaning of Section 15 of 1933 Act or Section 20 of the 1934 Act shall have the
same rights to contribution as the Company, and each person, if any, who
controls an Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as such
Underwriter.
(d) Each Underwriter is an intended third party beneficiary
of this Section 6.
7. Notices. All communications hereunder shall be in writing
and effective only upon receipt and, if sent to the Company, will be mailed,
hand delivered, couriered or sent by facsimile transmission and confirmed at
World Financial Center, New York, New York 10281, attention Michael M.
McGovern, fax number: (212) 449-0265 or, if sent to the Mortgage Loan Seller,
will be mailed, hand delivered, couriered or sent by facsimile transmission and
confirmed to it at 100 Church Street, 18th Floor, New York, New York
10080-6518, Attention: Robert J. Fitzpatrick, Fax Number: (212) 602-7552.
-19-
<PAGE>
8. Trust as Beneficiary. The representations, warranties and
agreements made by the Mortgage Loan Seller in Section 2 of this Agreement are
also made for the benefit of, and may also be enforced by or on behalf of, the
Trustee (for the benefit of the Certificateholders) as the assignee of the
Company, and the Master Servicer or the Special Servicer, as provided in the
Pooling and Servicing Agreement, as agent of the Trustee to the same extent
that the Company has rights against the Mortgage Loan Seller under this
Agreement in respect such representations, warranties and agreements.
9. Miscellaneous. THIS AGREEMENT WILL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES. This Agreement may be executed
in any number of counterparts, each of which shall for all purposes be deemed
to be an original and all of which shall together constitute but one and the
same instrument. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective successors and permitted assigns,
and no other person will have any right or obligation hereunder, other than as
provided herein.
10. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement, or in certificates of officers of the Mortgage Loan Seller and the
Company submitted pursuant hereto, shall remain operative and in full force and
effect and shall survive the transfer and sale of the Mortgage Loans to the
Company and by the Company to the Trustee notwithstanding any language to the
contrary contained in any endorsement of any Mortgage Loan; provided that the
representations, warranties and agreements (other than Section 6) shall
terminate upon the termination of the Pooling and Servicing Agreement.
11. Severability. If any provision of this Agreement shall be
prohibited or invalid under applicable law, this Agreement shall be ineffective
only to such extent, without invalidating the remainder of this Agreement.
12. Further Assurances. The Mortgage Loan Seller and the
Company agree to execute and deliver such instruments and take such actions as
the other party may, from time to time, reasonably request in order to
effectuate the purpose and to carry out the terms of this Agreement.
13. Amendments. This Agreement supercedes all prior
agreements and understandings between the parties hereto relating to the
subject matter hereof. Neither this Agreement nor any term hereof may be
changed, waived, discharged or terminated except by a writing signed by a duly
authorized officer of the party against whom enforcement of such change,
waiver, discharge or termination is sought to be enforced. This Agreement may
not be changed or waived in any manner which would have a material
-20-
<PAGE>
adverse effect on Certificateholders without the prior written consent of the
Trustee.
14. Mortgage Loan Seller's Costs. Except as specifically
provided in this Agreement, the Mortgage Loan Seller shall pay all costs and
expenses incidental to the performance of its duties and obligations under this
Agreement, including, without limitation, costs and expenses incurred by the
Mortgage Loan Seller (including the fees and disbursements of the Mortgage Loan
Seller's counsel) in reviewing, and providing opinions relating to, this
Agreement, the Pooling and Servicing Agreement, the Prospectus Supplement, the
Memorandum, the Preliminary Prospectus Supplement and the Preliminary
Memorandum and the Mortgage Loan Seller's out-of-pocket expenses related to
meetings with the Rating Agencies or other circumstances in which the Company
or an Underwriter specifically requests the Mortgage Loan Seller's assistance.
The Mortgage Loan Seller shall also pay all recording fees, filing fees, fees
for title policy endorsements and continuations and other charges related to
the transfer of the Mortgage Loans to the Trustee as the transferee of the
Company.
15. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall, for all purposes, be deemed to be
an original and all of which shall together constitute but one and the same
agreement.
[Signature page follows]
-21-
<PAGE>
IN WITNESS WHEREOF, the Company and the Mortgage Loan Seller
have caused this Agreement to be duly executed by their respective officers as
of the day and year first above written.
MERRILL LYNCH MORTGAGE CAPITAL, INC.
By: /s/ Robert J. Fitzpatrick
------------------------------------
Name: Robert J. Fitzpatrick
Title: Authorized Signatory
MERRILL LYNCH MORTGAGE INVESTORS, INC.
By: /s/ Michael M. McGovern
------------------------------------
Name: Michael M. McGovern
Title: Authorized Signatory
<PAGE>
EXHIBIT A
MORTGAGE LOAN SCHEDULE
<TABLE>
<CAPTION>
CONTROL
NO. PROPERTY NAME PROPERTY TYPE
- ---------- --------------------------------- ---------------
<S> <C> <C>
MLMI-001 1 Beach Office
MLMI-003 1700 Broadway Office
MLMI-004 2 Northpoint Office
MLMI-005 3737 Hillcroft Apartments Multifamily
MLMI-007 6900 Lindbergh Blvd Industrial
MLMI-010 Bassett Furniture Retail
MLMI-011 Bentworth Apartments Multifamily
MLMI-012 Beverly-Brighton Shops Retail
MLMI-019 Corr-Pro (Mystic) Warehouse Industrial
MLMI-021 Crown Gardens Apartments Multifamily
MLMI-022 Deane Hill Apartments Multifamily
MLMI-023 Deerfield Apartments Multifamily
MLMI-024 East 61st Street Brownstone Multifamily
MLMI-028 Gazebo Inn Hospitality
MLMI-030 Heritage Apartments Multifamily
MLMI-031 Holcomb Woods Shopping Center Retail
MLMI-032 Kingsley Plaza Apartments Multifamily
MLMI-033 MeadowCrest Apartments Multifamily
MLMI-035 O'Neill Industrial Center Industrial
MLMI-038 Pippin-Good Samaritan Center Mixed Use
MLMI-041 Ramada Inn Airport Hospitality
MLMI-042 Reeve - Wildcreek Apartments Multifamily
MLMI-045 Sommerset Apartments Multifamily
MLMI-048 The Ansonia Commercial Retail
MLMI-050 The Shelton Multifamily
MLMI-051 The Wic Building Industrial
MLMI-052 Tiffany Apartments Multifamily
MLMI-053 Village at Brookside Apartments Multifamily
MLMI-056 Willowbrook Apartments Multifamily
MLMI-060 Woodhollow Apartments Multifamily
MLMI-062 Cerritos Village Retail
MLMI-064 Mercer Mall Retail
MLMI-067 Phelan Village Shopping Center Retail
MLMI-069 Argonne Avenue Apts Multifamily
MLMI-070 Sundown Apartments Multifamily
MLMI-071 Woodsdale Apartments Multifamily
MLMI-072 11707 Otsego Street Multifamily
MLMI-073 12460 Gladstone Industrial
MLMI-074 2019 North Main Street Multifamily
<PAGE>
<CAPTION>
CONTROL
NO. ADDRESS CITY STATE ZIP CODE
- ---------- ------------------------------------------------------ --------------- ------- ---------
<S> <C> <C> <C> <C>
MLMI-001 1 Beach Street San Francisco CA 94133
MLMI-003 1700 Broadway New York NY 10019
MLMI-004 2 Northpoint Street San Francisco CA 94133
MLMI-005 3737 Hillcroft Houston TX 77057
MLMI-007 6900 Lindbergh Blvd and 3125 South 70th Street Philadelphia PA 19142
MLMI-010 1915 S. Stemmons Freeway Lewisville TX 75067
MLMI-011 11655 Briar Forest Drive Houston TX 77077
MLMI-012 362-370 N. Beverly Drive Beverly Hills CA 90210
MLMI-019 301 SW 27th Street Renton WA 98055
MLMI-021 7001 Hillcroft Houston TX 77057
MLMI-022 7700 Gleason Drive Knoxville TN 37830
MLMI-023 640 Windsor Avenue Windsor CT 06095
MLMI-024 156 East 61st Street New York NY 10021
MLMI-028 2424 West Highway 76 Branson MO 65616
MLMI-030 2522-2532 Columbia Avenue Swissvale PA 15218
MLMI-031 1570 Holcomb Bridge Road Roswell GA 30076
MLMI-032 444 S. Kingsley Drive Los Angeles CA 90020
MLMI-033 9525 Lorene Lane San Antonio TX 78216
MLMI-035 1210 Stanbridge Street Norristown PA 19401
MLMI-038 2475 West Galbraith Road Cincinnati OH 45239
MLMI-041 76 Industrial Highway Essington PA 19029
MLMI-042 1511 Faro Drive Austin TX 78741
MLMI-045 830 S. Rancho Santa Fe Rd. San Marcos CA 92069
MLMI-048 2109 Broadway New York NY 10023
MLMI-050 5909 Luther Lane Dallas TX 75225
MLMI-051 4700 Wissahickson Ave Philadelphia PA 19129
MLMI-052 9600 McCombs Street El Paso TX 79924
MLMI-053 1404 East 41st Street Tulsa OK 74105
MLMI-056 14095 S. W. Walker Road Beaverton OR 97005
MLMI-060 480 Highway 332 Lake Jackson TX 77566
MLMI-062 19101-19151 Bloomfield Avenue & 12506-12544South St. Cerritos CA 90703
MLMI-064 3371 Brunswick Pike Lawrence NJ 08648
MLMI-067 4013-4083 Phelan Road Phelan CA 92371
MLMI-069 711 Argonne Avenue Atlanta GA 30308
MLMI-070 Cecil Lane Montgomery AL 36109
MLMI-071 100 Eastland Drive Woodruff SC 29388
MLMI-072 11707 Otsego Street Los Angeles CA 91607
MLMI-073 12460 Gladstone Sylmar CA 91342
MLMI-074 2019 North Main Street Royal Oak MI 48073
</TABLE>
A-1
<PAGE>
MORTGAGE LOAN SCHEDULE
<TABLE>
<CAPTION>
CONTROL
NO. PROPERTY NAME PROPERTY TYPE
- ---------- ----------------------------------- ---------------
<S> <C> <C>
MLMI-075 8245 Florin Road Mixed Use
MLMI-076 Ashikita Retail
MLMI-077 Balboa Plaza Retail
MLMI-078 BHB Properties LLC Retail
MLMI-079 Cherry Hills Apartments Multifamily
MLMI-080 Clifford Family Trust Retail
MLMI-081 Gabela Partners Industrial
MLMI-082 Hotton Retail
MLMI-083 Marie Cook Trustee Industrial
MLMI-084 Parkside Plaza, LLC Mixed Use
MLMI-085 Patio World Retail
MLMI-086 Rainbow Center Retail
MLMI-087 Rita A. Quam Family Trust Industrial
MLMI-088 Rivard Industrial
MLMI-089 Spring Valley Plaza Retail
MLMI-090 Stuart Sackley Retail
MLMI-100 Hastings Entertainment Retail
MLMI-101 2333 Walton Boulevard Industrial
MLMI-102 Embassy Suites - Oklahoma City Hospitality
MLMI-104 BJ's Wholesale Club Retail
MLMI-105 Country Club Care Center Healthcare
MLMI-106 Crown Care Center Healthcare
MLMI-107 1401 Morehead St. - Coca Cola Office
MLMI-108 Beacon Square Office
MLMI-109 Quadrangle Square Retail
MLMI-110 Station Plaza Shopping Center Retail
MLMI-111 Shenandoah Square Shopping Center Retail
MLMI-112 Holt and Eleanor Center Retail
MLMI-114 Oak Lawn Promenade Retail
MLMI-115 Santa Monica Sav-On Retail
MLMI-116 Seneca Park Plaza Shopping Center Retail
MLMI-117 Willowbrook Court Shopping Center Retail
MLMI-118 Waterbury Crossing Retail
MLMI-119 The LeConte Building Retail
MLMI-120 Office Max Retail
MLMI-124 Fairfield Inn - Beaverton Hospitality
MLMI-125 Courtyard by Marriott - Newburgh Hospitality
MLMI-126 Albany Thruway Courtyard Hospitality
MLMI-127 Fairfield Inn - Henrietta Hospitality
<CAPTION>
CONTROL
NO. ADDRESS CITY STATE ZIP CODE
- ---------- ------------------------------------------ ----------------- ------- ---------
<S> <C> <C> <C> <C>
MLMI-075 8245 Florin Road Sacramento CA 95828
MLMI-076 1331 7th Street Santa Monica CA 90401
MLMI-077 16844 Sherman Way Van Nuys CA 91406
MLMI-078 865 West Avenue I Lancaster CA 93534
MLMI-079 1536 E 3rd Street Newberg OR 97132
MLMI-080 501 E. Holt Ave Pomona CA 91767
MLMI-081 26860 Jefferson Avenue Murrietta CA 92590
MLMI-082 1528-1532 Locust Street Walnut Creek CA 94596
MLMI-083 2398 Railroad Street Corona CA 91720
MLMI-084 6683-6687 Bells Ferry Road Woodstock GA 30189
MLMI-085 23855 Hawthorne Blvd Torrance CA 90505
MLMI-086 2051 S. Rainbow Blvd. Las Vegas NV 89102
MLMI-087 3065-3069 Sheridan Street Las Vegas NV 89102
MLMI-088 3890 E. Craig Road Las Vegas NV 89030
MLMI-089 1551 E.Spring Valley Rd Richardson TX 75080
MLMI-090 909 N. Aviation Blvd Manhattan Beach CA 90266
MLMI-100 1630 Rio Rancho Blvd. Rio Rancho NM 87124
MLMI-101 2333 Walton Boulevard Auburn Hills MI 48326
MLMI-102 1815 S. Meridian Avenue Oklahoma City OK 73108
MLMI-104 2044 Red Lion Road Philadelphia PA 19115
MLMI-105 503 Regent Drive Warrensburg MO 64093
MLMI-106 3001 East Elm Street Harrisonville MO 64701
MLMI-107 1401 W. Morehead St Charlotte NC 28208
MLMI-108 140-169 West 6th Street San Pedro CA 90731
MLMI-109 630 Skylark Road Charleston SC 29202
MLMI-110 13408 - 13450 Jefferson Davis Highway an Woodbridge VA 22191
MLMI-111 932-958 Edwards Ferry Road Leesburg VA 20176
MLMI-112 416 East Holt Avenue Pomona CA 91767
MLMI-114 6310-6356 West 95th Street Oak Lawn IL 60453
MLMI-115 8491 West Santa Monica Boulevard West Hollywood CA 90036
MLMI-116 13501-13541 Clopper Road Germantown MD 20874
MLMI-117 17776 Tomball Parkway Houston TX 77064
MLMI-118 425 Bank Street Waterbury CT 06708
MLMI-119 10966 Le Conte Ave Los Angeles CA 90024
MLMI-120 5895 Katella Ave. Cypress CA 90630
MLMI-124 15583 N.W. Gateway Court Beaverton OR 97005
MLMI-125 One Govenor Drive Newburgh NY 12550
MLMI-126 1455 Washington Avenue Albany NY 12206
MLMI-127 4695 West Henrietta Road Henrietta NY 14467
</TABLE>
A-2
<PAGE>
MORTGAGE LOAN SCHEDULE
<TABLE>
<CAPTION>
CONTROL
NO. PROPERTY NAME PROPERTY TYPE
- ---------- ---------------------------------------------- ---------------
<S> <C> <C>
MLMI-128 Quality Inn City Center Hospitality
MLMI-133 Sammamish Ridge Multifamily
MLMI-134 Kenmore Estates Multifamily
MLMI-135 Independence Green Apartments Multifamily
MLMI-139 Walkers Ridge Multifamily
MLMI-140 Colonial House Multifamily
MLMI-141 Chapelcroft Multifamily
MLMI-142 Aspen Shadows Multifamily
MLMI-143 Antelope Manor Apartments Multifamily
MLMI-144 AAAABCO Gibson Mini Storage Mini Storage
MLMI-146 49er Mini Storage Mini Storage
MLMI-152 Chateau Brickyard Healthcare
MLMI-153 Holiday on the Bay Multifamily
MLMI-160 PetsMart, Inc. CTL
MLMI-162 Rite Aid CTL
MLMI-161 Heilig Meyers CTL
MLMI-163 Heilig Meyers CTL
MLMI-164 Kings Court Shopping Center Retail
MLMI-091 11307 Morrison Multifamily
MLMI-092 11660 Chenault Avenue Multifamily
MLMI-093 1346 Pine Street Multifamily
MLMI-094 1850 Williams Street Multifamily
MLMI-095 2790 Pine Street Multifamily
MLMI-096 Pine Valley Court (Colony Greene) Apartments Multifamily
MLMI-097 Doheny Drive Apartments Multifamily
MLMI-098 Hacienda de Camarillo Multifamily
MLMI-099 Peachtree & Willow Lake Apartments Multifamily
MLMI-008 Alexander House Apartments Multifamily
MLMI-020 Crosspointe Vista Apartments Multifamily
MLMI-034 Myrtle Cove Apartments Multifamily
MLMI-047 Tara Hall Apartments Multifamily
MLMI-049 The Atrium Cellini Apartments Multifamily
MLMI-055 Westcliff Apartments Multifamily
MLMI-057 Wilshire Village Shopping Center Retail
MLMI-058 Windsor Court Apartments Multifamily
MLMI-002 124 West 34th Street Retail
MLMI-006 502 West Office Center Office
MLMI-009 Arlington Park I Multifamily
MLMI-013 Bishops Landing Apartments Multifamily
<CAPTION>
CONTROL
NO. ADDRESS CITY STATE ZIP CODE
- ---------- ----------------------------------------- ------------------ ------- ---------
<S> <C> <C> <C> <C>
MLMI-128 154 West 600 South Salt Lake City UT 84101
MLMI-133 14820 Redmond Way Redmond WA 98052
MLMI-134 18810 68th Avenue NE Bothell WA 98011
MLMI-135 36700 Grand River Avenue Farmington Hills MI 48335
MLMI-139 Nifong Blvd. Old Mill Creek Road Columbia MO 65205
MLMI-140 818 2nd Street, PL NE Hickory NC 28601
MLMI-141 9629 Buselton Avenue Philadelphia PA 19115
MLMI-142 4025 Lake Mary Road Flagstaff AZ 86001
MLMI-143 7764 Poplar Avenue Citrus Heights CA 95610
MLMI-144 975 Suffelbeam Henderson NV 89014
MLMI-146 527 Truck Street Placerville CA 95667
MLMI-152 3080 South 1300 East Salt Lake City UT 84106
MLMI-153 Kettle Creek Road Toms River NJ 08753
MLMI-160 8210 Plaza Drive West Madison WI 53719
MLMI-162 1109 Benns Church Blvd. Smithfield VA 23430
MLMI-161 1406 E. 53rd Street Anderson IN 46013
MLMI-163 3521 Park Plaza Road Paducah KY 42001
MLMI-164 9530 Philadelphia Road Rossville MD 21237
MLMI-091 11307 Morrison Street North Hollywood CA 91601
MLMI-092 11660 Chenault Avenue Los Angeles CA 90049
MLMI-093 1346 Pine Street San Francisco CA 94109
MLMI-094 1850 Williams Street Simi Valley CA 93065
MLMI-095 2790 Pine Street San Francisco CA 94109
MLMI-096 116 Blackwood Clementon Rd Clementon NJ 08021
MLMI-097 215-217 South Doheny Drive Beverly Hills CA 90211
MLMI-098 831 Paseo Camarillo Camarillo CA 93010
MLMI-099 211 College Street & 106 Briarhill Road Florence MS 39073
MLMI-008 6060 Gulfton Houston TX 77081
MLMI-020 620 Comstock Street Seattle WA 98109
MLMI-034 9760 & 9860 Scyene Road Dallas TX 75227
MLMI-047 1601-1717 College Street Houston TX 77057
MLMI-049 6303 Gulfton Drive Houston TX 77081
MLMI-055 1404 Moore Avenue Portland TX 78374
MLMI-057 6102 E. Mockingbird Lane Dallas TX 75214
MLMI-058 219 S. 156th Street Burien WA 98148
MLMI-002 124 West 34th Street New York NY 10001
MLMI-006 502 West Office Center Fort Washington PA 19034
MLMI-009 3121 East Park Row Drive Arlington TX 76010
MLMI-013 333 East Brooks Street Norman OK 73069
</TABLE>
A-3
<PAGE>
MORTGAGE LOAN SCHEDULE
<TABLE>
<CAPTION>
CONTROL
NO. PROPERTY NAME PROPERTY TYPE ADDRESS CITY STATE ZIP CODE
- ---------- -------------------------------- ------------------ ------------------------------ -------------- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
MLMI-014 Cedar Village Mobile Home Park Mobile Home Park County Routes 224 & 214 Lincoln DE 19960
MLMI-015 Charleston Apartments Multifamily 2073 West Lindsay Street Norman OK 73069
MLMI-016 Childs Instant Homes Mobile Home Park 861 East Butler Ave Doylestown PA 18901
MLMI-017 City Villas Multifamily 837 16th Street San Diego CA 92101
MLMI-018 Clarendon Apartments Multifamily 1214 Crown Point Norman OK 73069
MLMI-025 Eastgate Apartments Multifamily 847 Dryden Road Dryden NY 14850
MLMI-026 Federal Express Building Industrial 528 West 34th Street New York NY 10001
MLMI-027 Foxmoor Apartments Multifamily 10843 N. Central Expwy. Dallas TX 75231
MLMI-029 Hartford Apartments Multifamily 4301 Hartford Drive Dallas TX 75219
MLMI-036 Pep Boys Plaza Retail 511-581 N. Main Steet Corona CA 91720
MLMI-037 Peppertree Apartments Multifamily 1850 Pepper Valley Lane El Cajon CA 92021
MLMI-039 Pond Plaza Retail 1160 Post Road Warwick RI 02888
MLMI-040 Quarters Apartments Multifamily 6415 Melody Lane Dallas TX 75231
MLMI-043 Republic Beverage Building Industrial 1010 Isuzu Parkway Grand Prarie TX 75050
MLMI-044 Royal Knight Apartments Multifamily 2610 Knight Street Dallas TX 75219
MLMI-046 Super 8 Rockwall Hospitality 1130 E 1-30 Rockwall TX 75087
MLMI-054 Village Square Apartments Multifamily 2612 Throckmorton Drive Dallas TX 75219
MLMI-059 Wong Family Trust Apartments Multifamily 1102-1106 W. St. Georges Ave Linden NJ 07036
MLMI-061 332 East 95th Street Multifamily 332 East 95th Street New York NY 10128
MLMI-065 Springfield Apartments Multifamily 1000 E. Lindsey Street Norman OK 73071
MLMI-066 Orleans East Apartments Multifamily 1541 East Larned Street Detroit MI 48207
MLMI-068 Redwood Village Apartments Multifamily 253-349 Redwood Avenue Paterson NJ 07055
</TABLE>
A-4
<PAGE>
MORTGAGE LOAN SCHEDULE
<TABLE>
<CAPTION>
CUT-OFF DATE P&I PAYMENT
CONTROL NO. PROPERTY NAME BALANCE (MONTHLY)
- ------------- --------------------------------- ------------------ -------------
<S> <C> <C> <C>
MLMI-001 1 Beach 10,480,964.30 66,367.14
MLMI-003 1700 Broadway 59,845,380.00 395,528.60
MLMI-004 2 Northpoint 10,480,964.30 66,367.14
MLMI-005 3737 Hillcroft Apartments 7,574,169.54 54,331.05
MLMI-007 6900 Lindbergh Blvd 4,982,001.30 36,380.78
MLMI-010 Bassett Furniture 2,391,059.53 17,118.19
MLMI-011 Bentworth Apartments 17,878,406.55 128,070.05
MLMI-012 Beverly-Brighton Shops 5,311,133.67 34,890.94
MLMI-019 Corr-Pro (Mystic) Warehouse 6,455,558.23 44,817.70
MLMI-021 Crown Gardens Apartments 1,860,739.63 14,276.03
MLMI-022 Deane Hill Apartments 4,830,724.36 32,340.20
MLMI-023 Deerfield Apartments 5,980,327.35 39,799.80
MLMI-024 East 61st Street Brownstone 1,680,709.04 12,473.26
MLMI-028 Gazebo Inn 1,789,201.13 13,922.12
MLMI-030 Heritage Apartments 830,420.89 6,506.56
MLMI-031 Holcomb Woods Shopping Center 8,157,431.60 59,458.64
MLMI-032 Kingsley Plaza Apartments 5,063,420.71 34,357.41
MLMI-033 MeadowCrest Apartments 3,472,280.72 24,460.06
MLMI-035 O'Neill Industrial Center 2,895,584.91 19,891.81
MLMI-038 Pippin-Good Samaritan Center 1,428,497.67 10,336.25
MLMI-041 Ramada Inn Airport 10,735,274.85 74,074.11
MLMI-042 Reeve - Wildcreek Apartments 4,860,271.99 34,440.63
MLMI-045 Sommerset Apartments 6,369,214.37 43,065.71
MLMI-048 The Ansonia Commercial 28,781,905.22 190,817.69
MLMI-050 The Shelton 13,509,336.59 90,031.84
MLMI-051 The Wic Building 15,514,008.20 113,460.13
MLMI-052 Tiffany Apartments 2,535,860.92 17,143.40
MLMI-053 Village at Brookside Apartments 1,485,634.68 10,857.04
MLMI-056 Willowbrook Apartments 2,889,196.94 20,684.48
MLMI-060 Woodhollow Apartments 2,512,045.07 17,385.23
MLMI-062 Cerritos Village 5,617,946.38 41,038.00
MLMI-064 Mercer Mall 23,979,568.42 165,431.58
MLMI-067 Phelan Village Shopping Center 3,621,867.09 24,762.08
MLMI-069 Argonne Avenue Apts 269,387.86 1,992.25
MLMI-070 Sundown Apartments 806,453.24 6,111.12
MLMI-071 Woodsdale Apartments 821,461.94 6,293.11
MLMI-072 11707 Otsego Street 477,427.74 3,563.99
MLMI-073 12460 Gladstone 1,471,867.72 10,859.72
MLMI-074 2019 North Main Street 702,479.74 5,050.71
<PAGE>
<CAPTION>
REMAINING REMAINING MATURITY DATE GROUND BALLOON/HYPERAM/
CONTROL NO. GROSS RATE TERM (MOS) AMORT (MOS) ARD DATE LEASE FULLY AMORT
- ------------- ------------ ------------ ------------- --------------- -------- -----------------
<S> <C> <C> <C> <C> <C> <C>
MLMI-001 6.500 130 358 10/01/2009 No Balloon
MLMI-003 6.810 177 357 09/01/2013 Yes Hyperam
MLMI-004 6.500 130 358 10/01/2009 Yes Balloon
MLMI-005 7.544 70 346 10/01/2004 No Balloon
MLMI-007 7.220 117 297 09/01/2008 No Balloon
MLMI-010 7.000 117 297 09/01/2008 No Hyperam
MLMI-011 7.538 107 347 11/01/2007 No Balloon
MLMI-012 6.760 142 358 10/01/2010 No Balloon
MLMI-019 7.250 111 351 03/01/2008 No Hyperam
MLMI-021 7.647 107 287 11/01/2007 No Balloon
MLMI-022 6.920 115 355 07/01/2008 No Balloon
MLMI-023 6.870 116 356 08/01/2008 No Balloon
MLMI-024 8.000 104 344 08/01/2007 No Balloon
MLMI-028 7.375 116 260 08/01/2008 No Balloon
MLMI-030 8.580 102 342 06/01/2007 No Balloon
MLMI-031 7.320 238 298 10/01/2018 No Balloon
MLMI-032 7.020 111 351 03/01/2008 No Balloon
MLMI-033 7.390 170 350 02/01/2013 No Balloon
MLMI-035 7.200 118 358 10/01/2008 No Balloon
MLMI-038 7.770 109 349 01/01/2008 No Balloon
MLMI-041 6.625 119 299 11/01/2008 No Balloon
MLMI-042 7.125 112 316 04/01/2008 No Balloon
MLMI-045 7.010 174 354 06/01/2013 No Balloon
MLMI-048 6.790 75 351 03/01/2005 No Hyperam
MLMI-050 6.850 112 352 04/01/2008 No Balloon
MLMI-051 7.250 118 298 10/01/2008 No Balloon
MLMI-052 7.000 113 353 05/01/2008 No Balloon
MLMI-053 7.160 76 292 04/01/2005 No Balloon
MLMI-056 7.000 297 297 09/01/2023 No Fully Amort
MLMI-060 7.210 110 350 02/01/2008 No Balloon
MLMI-062 7.250 119 299 11/01/2008 No Balloon
MLMI-064 7.250 119 359 11/01/2008 Yes Balloon
MLMI-067 7.160 119 359 11/01/2008 No Balloon
MLMI-069 7.375 118 298 10/01/2008 No Balloon
MLMI-070 7.625 176 296 08/01/2013 No Balloon
MLMI-071 7.750 116 296 08/01/2008 No Balloon
MLMI-072 8.125 112 352 04/01/2008 No Balloon
MLMI-073 8.000 52 352 04/01/2003 No Balloon
MLMI-074 7.750 115 355 07/01/2008 No Balloon
</TABLE>
A-5
<PAGE>
MORTGAGE LOAN SCHEDULE
<TABLE>
<CAPTION>
CUT-OFF DATE P&I PAYMENT
CONTROL NO. PROPERTY NAME BALANCE (MONTHLY)
- ------------- ----------------------------------- ---------------- -------------
<S> <C> <C> <C>
MLMI-075 8245 Florin Road 238,421.39 1,803.04
MLMI-076 Ashikita 573,045.02 4,219.15
MLMI-077 Balboa Plaza 622,567.27 4,695.42
MLMI-078 BHB Properties LLC 732,139.11 5,521.81
MLMI-079 Cherry Hills Apartments 593,125.00 4,522.43
MLMI-080 Clifford Family Trust 775,193.60 6,149.91
MLMI-081 Gabela Partners 1,255,095.62 9,465.96
MLMI-082 Hotton 772,430.68 5,754.35
MLMI-083 Marie Cook Trustee 894,454.14 7,096.05
MLMI-084 Parkside Plaza, LLC 560,569.49 4,709.44
MLMI-085 Patio World 695,765.53 5,197.48
MLMI-086 Rainbow Center 1,474,920.68 12,898.92
MLMI-087 Rita A. Quam Family Trust 736,289.13 5,896.48
MLMI-088 Rivard 535,602.43 4,589.94
MLMI-089 Spring Valley Plaza 906,991.66 6,766.01
MLMI-090 Stuart Sackley 376,808.77 2,873.07
MLMI-100 Hastings Entertainment 1,348,157.32 9,323.93
MLMI-101 2333 Walton Boulevard 4,659,887.00 36,276.46
MLMI-102 Embassy Suites - Oklahoma City 17,214,166.00 127,475.98
MLMI-104 BJ's Wholesale Club 7,189,570.00 47,901.78
MLMI-105 Country Club Care Center 3,854,142.75 30,744.57
MLMI-106 Crown Care Center 4,102,797.50 32,728.09
MLMI-107 1401 Morehead St. - Coca Cola 2,295,108.00 16,810.23
MLMI-108 Beacon Square 1,915,086.75 13,760.75
MLMI-109 Quadrangle Square 4,848,613.50 31,926.74
MLMI-110 Station Plaza Shopping Center 9,186,673.00 61,207.83
MLMI-111 Shenandoah Square Shopping Center 2,264,133.25 16,217.81
MLMI-112 Holt and Eleanor Center 423,509.72 4,668.90
MLMI-114 Oak Lawn Promenade 2,786,199.25 19,032.72
MLMI-115 Santa Monica Sav-On 4,831,808.50 35,348.51
MLMI-116 Seneca Park Plaza Shopping Center 2,341,734.25 16,639.31
MLMI-117 Willowbrook Court Shopping Center 7,988,270.00 52,955.83
MLMI-118 Waterbury Crossing 6,277,956.00 44,728.24
MLMI-119 The LeConte Building 1,469,972.88 10,613.93
MLMI-120 Office Max 3,010,956.25 20,695.58
MLMI-124 Fairfield Inn - Beaverton 4,894,634.50 37,011.11
MLMI-125 Courtyard by Marriott - Newburgh 4,619,728.00 34,178.34
MLMI-126 Albany Thruway Courtyard 4,519,842.00 33,439.35
MLMI-127 Fairfield Inn - Henrietta 2,846,751.25 21,061.25
<CAPTION>
REMAINING REMAINING MATURITY DATE GROUND BALLOON/HYPERAM/
CONTROL NO. GROSS RATE TERM (MOS) AMORT (MOS) ARD DATE LEASE FULLY AMORT
- ------------- ------------ ------------ ------------- --------------- -------- -----------------
<S> <C> <C> <C> <C> <C> <C>
MLMI-075 8.250 110 350 02/01/2008 No Balloon
MLMI-076 8.000 115 355 07/01/2008 No Balloon
MLMI-077 8.250 114 354 06/01/2008 No Balloon
MLMI-078 8.250 114 354 06/01/2008 No Balloon
MLMI-079 8.375 115 355 07/01/2008 No Balloon
MLMI-080 8.250 114 294 06/01/2008 No Balloon
MLMI-081 8.250 114 354 06/01/2008 No Balloon
MLMI-082 8.125 115 355 07/01/2008 No Balloon
MLMI-083 8.250 114 294 06/01/2008 No Balloon
MLMI-084 7.875 117 237 09/01/2008 No Balloon
MLMI-085 8.125 111 351 03/01/2008 No Balloon
MLMI-086 8.375 110 230 02/01/2008 No Balloon
MLMI-087 8.375 115 295 07/01/2008 No Balloon
MLMI-088 9.625 104 344 08/01/2007 No Balloon
MLMI-089 8.125 53 353 05/01/2003 No Balloon
MLMI-090 8.375 115 355 07/01/2008 No Balloon
MLMI-100 6.650 119 299 11/01/2008 No Balloon
MLMI-101 7.510 177 261 09/01/2013 No Balloon
MLMI-102 7.500 118 298 10/01/2008 No Balloon
MLMI-104 7.000 178 358 10/01/2013 No Balloon
MLMI-105 7.300 237 237 09/01/2018 No Fully Amort
MLMI-106 7.300 237 237 09/01/2018 No Fully Amort
MLMI-107 7.375 118 298 10/01/2008 No Balloon
MLMI-108 7.500 117 327 09/01/2008 No Balloon
MLMI-109 6.875 117 357 09/01/2008 No Balloon
MLMI-110 7.000 118 358 10/01/2008 No Balloon
MLMI-111 7.110 117 297 09/01/2008 No Balloon
MLMI-112 6.950 129 129 09/01/2009 No Fully Amort
MLMI-114 7.250 118 358 10/01/2008 No Balloon
MLMI-115 7.175 285 285 09/01/2022 No Fully Amort
MLMI-116 7.020 117 297 09/01/2008 No Balloon
MLMI-117 6.950 118 358 10/01/2008 No Balloon
MLMI-118 7.050 117 297 09/01/2008 No Balloon
MLMI-119 7.200 117 297 09/01/2008 No Balloon
MLMI-120 7.313 176 358 08/01/2013 No Balloon
MLMI-124 7.750 119 299 11/01/2008 No Balloon
MLMI-125 7.500 119 299 11/01/2008 Yes Balloon
MLMI-126 7.500 119 299 11/01/2008 Yes Balloon
MLMI-127 7.500 119 299 11/01/2008 Yes Balloon
</TABLE>
A-6
<PAGE>
MORTGAGE LOAN SCHEDULE
<TABLE>
<CAPTION>
CUT-OFF DATE P&I PAYMENT
CONTROL NO. PROPERTY NAME BALANCE (MONTHLY)
- ------------- ---------------------------------------------- ------------------ -------------
<S> <C> <C> <C>
MLMI-128 Quality Inn City Center 13,683,354.00 97,704.46
MLMI-133 Sammamish Ridge 5,000,000.00 28,708.33
MLMI-134 Kenmore Estates 6,765,511.00 45,149.27
MLMI-135 Independence Green Apartments 34,890,416.00 225,847.29
MLMI-139 Walkers Ridge 1,988,790.63 15,493.98
MLMI-140 Colonial House 2,092,587.75 14,842.36
MLMI-141 Chapelcroft 2,221,969.00 15,178.42
MLMI-142 Aspen Shadows 3,991,292.75 27,151.53
MLMI-143 Antelope Manor Apartments 1,825,736.38 12,052.38
MLMI-144 AAAABCO Gibson Mini Storage 3,587,622.00 25,789.57
MLMI-146 49er Mini Storage 1,568,913.25 11,631.72
MLMI-152 Chateau Brickyard 6,295,085.50 42,977.11
MLMI-153 Holiday on the Bay 12,000,000.00 78,631.11
MLMI-160 PetsMart, Inc. 3,737,476.25 29,055.89
MLMI-162 Rite Aid 1,738,277.63 12,225.38
MLMI-161 Heilig Meyers 3,204,461.50 23,054.91
MLMI-163 Heilig Meyers 1,409,963.13 10,144.16
MLMI-164 Kings Court Shopping Center 3,090,855.57 20,520.39
MLMI-091 11307 Morrison 1,116,673.03 8,052.47
MLMI-092 11660 Chenault Avenue 2,042,949.14 13,364.47
MLMI-093 1346 Pine Street 1,196,502.71 7,983.63
MLMI-094 1850 Williams Street 1,057,001.41 7,993.48
MLMI-095 2790 Pine Street 1,196,502.71 7,983.63
MLMI-096 Pine Valley Court (Colony Greene) Apartments 2,581,589.98 19,761.88
MLMI-097 Doheny Drive Apartments 2,086,310.72 15,044.66
MLMI-098 Hacienda de Camarillo 2,040,495.73 14,158.84
MLMI-099 Peachtree & Willow Lake Apartments 1,640,704.15 11,963.64
MLMI-008 Alexander House Apartments 2,776,993.52 19,540.37
MLMI-020 Crosspointe Vista Apartments 3,567,479.57 24,515.13
MLMI-034 Myrtle Cove Apartments 9,452,863.65 61,620.03
MLMI-047 Tara Hall Apartments 2,252,315.35 15,751.09
MLMI-049 The Atrium Cellini Apartments 2,702,444.67 18,303.34
MLMI-055 Westcliff Apartments 1,431,187.06 10,151.77
MLMI-057 Wilshire Village Shopping Center 2,589,399.25 18,584.42
MLMI-058 Windsor Court Apartments 2,497,769.30 16,751.53
MLMI-002 124 West 34th Street 2,192,712.38 16,779.60
MLMI-006 502 West Office Center 4,839,003.98 35,786.77
MLMI-009 Arlington Park I 1,990,111.74 13,273.71
MLMI-013 Bishops Landing Apartments 3,682,407.16 26,694.78
<CAPTION>
REMAINING REMAINING MATURITY DATE GROUND BALLOON/HYPERAM/
CONTROL NO. GROSS RATE TERM (MOS) AMORT (MOS) ARD DATE LEASE FULLY AMORT
- ------------- ------------ ------------ ------------- --------------- -------- -----------------
<S> <C> <C> <C> <C> <C> <C>
MLMI-128 7.100 119 299 11/01/2008 No Balloon
MLMI-133 6.890 116 IO 08/01/2008 No Balloon
MLMI-134 6.980 77 353 05/01/2005 No Balloon
MLMI-135 6.700 116 356 08/01/2008 No Balloon
MLMI-139 6.990 237 237 09/01/2018 No Fully Amort
MLMI-140 7.000 177 297 09/01/2013 No Balloon
MLMI-141 7.250 178 358 10/01/2013 No Balloon
MLMI-142 7.200 117 357 09/01/2008 No Balloon
MLMI-143 6.900 117 357 09/01/2008 No Balloon
MLMI-144 7.150 117 297 09/01/2008 No Balloon
MLMI-146 7.500 117 297 09/01/2008 No Balloon
MLMI-152 7.250 119 359 11/01/2008 No Balloon
MLMI-153 6.850 180 360 12/01/2013 No Hyperam
MLMI-160 8.580 114 354 06/01/2008 No Balloon
MLMI-162 6.875 237 295 09/01/2018 No Balloon
MLMI-161 7.420 152 318 08/01/2011 No Balloon
MLMI-163 7.420 152 318 08/01/2011 No Balloon
MLMI-164 6.950 116 356 08/01/2008 No Balloon
MLMI-091 7.750 111 351 03/01/2008 No Balloon
MLMI-092 6.800 116 356 08/01/2008 No Balloon
MLMI-093 7.000 116 356 08/01/2008 No Balloon
MLMI-094 8.250 110 350 02/01/2008 No Balloon
MLMI-095 7.000 116 356 08/01/2008 No Balloon
MLMI-096 8.375 109 349 01/01/2008 No Balloon
MLMI-097 7.750 111 351 03/01/2008 No Balloon
MLMI-098 7.375 114 354 06/01/2008 No Balloon
MLMI-099 7.875 112 352 04/01/2008 No Balloon
MLMI-008 7.050 112 316 04/01/2008 No Balloon
MLMI-020 7.130 73 349 01/01/2005 No Balloon
MLMI-034 6.730 112 352 04/01/2008 No Balloon
MLMI-047 7.340 113 353 05/01/2008 No Balloon
MLMI-049 7.010 112 352 04/01/2008 No Balloon
MLMI-055 6.870 115 295 07/01/2008 No Balloon
MLMI-057 7.000 115 295 07/01/2008 No Balloon
MLMI-058 6.970 119 359 11/01/2008 No Balloon
MLMI-002 7.750 117 297 09/01/2008 No Balloon
MLMI-006 7.375 142 298 10/01/2010 No Balloon
MLMI-009 6.875 114 354 06/01/2008 No Balloon
MLMI-013 7.125 176 296 08/01/2013 No Balloon
</TABLE>
A-7
<PAGE>
MORTGAGE LOAN SCHEDULE
<TABLE>
<CAPTION>
CUT-OFF DATE P&I PAYMENT
CONTROL NO. PROPERTY NAME BALANCE (MONTHLY)
- ------------- -------------------------------- ----------------- -------------
<S> <C> <C> <C>
MLMI-014 Cedar Village Mobile Home Park 1,165,188.06 9,121.32
MLMI-015 Charleston Apartments 2,041,446.91 14,799.01
MLMI-016 Childs Instant Homes 1,992,560.40 15,782.29
MLMI-017 City Villas 2,495,307.01 15,409.43
MLMI-018 Clarendon Apartments 2,929,752.96 21,238.59
MLMI-025 Eastgate Apartments 1,648,535.15 11,089.85
MLMI-026 Federal Express Building 7,948,039.63 71,358.12
MLMI-027 Foxmoor Apartments 5,607,995.75 44,777.19
MLMI-029 Hartford Apartments 2,484,317.51 17,063.20
MLMI-036 Pep Boys Plaza 2,391,400.98 17,510.00
MLMI-037 Peppertree Apartments 1,226,935.15 8,614.59
MLMI-039 Pond Plaza 1,420,966.00 12,833.74
MLMI-040 Quarters Apartments 3,329,450.94 23,807.00
MLMI-043 Republic Beverage Building 10,658,301.05 79,815.95
MLMI-044 Royal Knight Apartments 1,348,603.67 9,425.51
MLMI-046 Super 8 Rockwall 1,193,655.84 9,926.98
MLMI-054 Village Square Apartments 1,689,182.79 11,521.17
MLMI-059 Wong Family Trust Apartments 1,992,972.85 14,756.12
MLMI-061 332 East 95th Street 2,347,999.41 16,198.51
MLMI-065 Springfield Apartments 2,997,102.15 19,147.85
MLMI-066 Orleans East Apartments 2,297,914.66 15,262.42
MLMI-068 Redwood Village Apartments 6,191,945.76 44,220.91
<CAPTION>
REMAINING REMAINING MATURITY DATE GROUND BALLOON/HYPERAM/
CONTROL NO. GROSS RATE TERM (MOS) AMORT (MOS) ARD DATE LEASE FULLY AMORT
- ------------- ------------ ------------ ------------- --------------- -------- -----------------
<S> <C> <C> <C> <C> <C> <C>
MLMI-014 8.000 80 296 08/01/2005 No Balloon
MLMI-015 7.125 176 296 08/01/2013 No Balloon
MLMI-016 7.125 238 238 10/01/2018 No Fully Amort
MLMI-017 6.170 118 358 10/01/2008 No Balloon
MLMI-018 7.125 176 296 08/01/2013 No Balloon
MLMI-025 7.000 239 359 11/01/2018 No Balloon
MLMI-026 6.780 178 178 10/01/2013 No Fully Amort
MLMI-027 7.180 236 236 08/01/2018 No Fully Amort
MLMI-029 7.150 112 352 04/01/2008 No Balloon
MLMI-036 7.250 81 297 09/01/2005 Yes Balloon
MLMI-037 6.800 118 298 10/01/2008 No Balloon
MLMI-039 6.875 178 178 10/01/2013 No Fully Amort
MLMI-040 7.000 118 298 10/01/2008 No Balloon
MLMI-043 6.530 239 239 11/01/2018 No Fully Amort
MLMI-044 6.750 118 298 10/01/2008 No Balloon
MLMI-046 7.740 237 237 09/01/2018 No Fully Amort
MLMI-054 7.080 112 352 04/01/2008 No Balloon
MLMI-059 7.375 177 297 09/01/2013 No Balloon
MLMI-061 7.250 119 359 11/01/2008 No Balloon
MLMI-065 6.500 179 359 11/01/2013 No Balloon
MLMI-066 6.875 119 359 11/01/2008 No Balloon
MLMI-068 7.000 119 299 11/01/2008 No Balloon
</TABLE>
A-8
<PAGE>
MORTGAGE LOAN SCHEDULE
<TABLE>
<CAPTION>
SUB MASTER
CONTROL NO. PROPERTY NAME SERVICING FEES SERVICING FEES
- ------------- --------------------------------- ---------------- ----------------
<S> <C> <C> <C>
MLMI-001 1 Beach 0.0700 0.0350
MLMI-003 1700 Broadway 0.0700 0.0350
MLMI-004 2 Northpoint 0.0700 0.0350
MLMI-005 3737 Hillcroft Apartments 0.0700 0.0350
MLMI-007 6900 Lindbergh Blvd 0.0700 0.0350
MLMI-010 Bassett Furniture 0.0700 0.0350
MLMI-011 Bentworth Apartments 0.0700 0.0350
MLMI-012 Beverly-Brighton Shops 0.0700 0.0350
MLMI-019 Corr-Pro (Mystic) Warehouse 0.0700 0.0350
MLMI-021 Crown Gardens Apartments 0.0700 0.0350
MLMI-022 Deane Hill Apartments 0.0700 0.0350
MLMI-023 Deerfield Apartments 0.0700 0.0350
MLMI-024 East 61st Street Brownstone 0.0700 0.0350
MLMI-028 Gazebo Inn 0.0700 0.0350
MLMI-030 Heritage Apartments 0.0700 0.0350
MLMI-031 Holcomb Woods Shopping Center 0.0700 0.0350
MLMI-032 Kingsley Plaza Apartments 0.0700 0.0350
MLMI-033 MeadowCrest Apartments 0.0700 0.0350
MLMI-035 O'Neill Industrial Center 0.0700 0.0350
MLMI-038 Pippin-Good Samaritan Center 0.0700 0.0350
MLMI-041 Ramada Inn Airport 0.0700 0.0350
MLMI-042 Reeve - Wildcreek Apartments 0.0700 0.0350
MLMI-045 Sommerset Apartments 0.0700 0.0350
MLMI-048 The Ansonia Commercial 0.0700 0.0350
MLMI-050 The Shelton 0.0700 0.0350
MLMI-051 The Wic Building 0.0700 0.0350
MLMI-052 Tiffany Apartments 0.0700 0.0350
MLMI-053 Village at Brookside Apartments 0.0700 0.0350
MLMI-056 Willowbrook Apartments 0.0700 0.0350
MLMI-060 Woodhollow Apartments 0.0700 0.0350
MLMI-062 Cerritos Village 0.0700 0.0350
MLMI-064 Mercer Mall 0.0700 0.0350
MLMI-067 Phelan Village Shopping Center 0.0700 0.0350
MLMI-069 Argonne Avenue Apts 0.0700 0.0350
MLMI-070 Sundown Apartments 0.0700 0.0350
MLMI-071 Woodsdale Apartments 0.0700 0.0350
MLMI-072 11707 Otsego Street 0.0700 0.0350
MLMI-073 12460 Gladstone 0.0700 0.0350
MLMI-074 2019 North Main Street 0.0700 0.0350
<PAGE>
<CAPTION>
MORTGAGE INTEREST
CONTROL NO. LOAN SELLER SUBSERVICER DEFEASANCE ACCRUAL CROSS DEFAULTED
- ------------- ------------- -------------------------- ------------ ----------- ----------------
<S> <C> <C> <C> <C> <C>
MLMI-001 MLMI GE Capital Loan Services Y 30/360
MLMI-003 MLMI GE Capital Loan Services Y Actual/360
MLMI-004 MLMI GE Capital Loan Services Y 30/360
MLMI-005 MLMI GE Capital Loan Services Actual/360
MLMI-007 MLMI GE Capital Loan Services Y Actual/360
MLMI-010 MLMI GE Capital Loan Services Actual/360
MLMI-011 MLMI GE Capital Loan Services Actual/360
MLMI-012 MLMI GE Capital Loan Services Actual/360
MLMI-019 MLMI GE Capital Loan Services Actual/360
MLMI-021 MLMI GE Capital Loan Services Actual/360
MLMI-022 MLMI GE Capital Loan Services Actual/360
MLMI-023 MLMI GE Capital Loan Services Y Actual/360
MLMI-024 MLMI GE Capital Loan Services 30/360
MLMI-028 MLMI GE Capital Loan Services Y Actual/360
MLMI-030 MLMI GE Capital Loan Services Y 30/360
MLMI-031 MLMI GE Capital Loan Services Y Actual/360
MLMI-032 MLMI GE Capital Loan Services Actual/360
MLMI-033 MLMI GE Capital Loan Services Actual/360
MLMI-035 MLMI GE Capital Loan Services Y Actual/360
MLMI-038 MLMI GE Capital Loan Services 30/360
MLMI-041 MLMI GE Capital Loan Services Y Actual/360
MLMI-042 MLMI GE Capital Loan Services Actual/360
MLMI-045 MLMI GE Capital Loan Services Actual/360
MLMI-048 MLMI GE Capital Loan Services Actual/360
MLMI-050 MLMI GE Capital Loan Services Actual/360
MLMI-051 MLMI GE Capital Loan Services Y Actual/360
MLMI-052 MLMI GE Capital Loan Services Actual/360
MLMI-053 MLMI GE Capital Loan Services Actual/360
MLMI-056 MLMI GE Capital Loan Services Y Actual/360
MLMI-060 MLMI GE Capital Loan Services Actual/360
MLMI-062 MLMI GE Capital Loan Services Y Actual/360
MLMI-064 MLMI GE Capital Loan Services Y Actual/360
MLMI-067 MLMI GE Capital Loan Services Y Actual/360
MLMI-069 MLMI GE Capital Loan Services Y Actual/360
MLMI-070 MLMI GE Capital Loan Services Y Actual/360
MLMI-071 MLMI GE Capital Loan Services Y Actual/360
MLMI-072 MLMI GE Capital Loan Services 30/360
MLMI-073 MLMI GE Capital Loan Services 30/360
MLMI-074 MLMI GE Capital Loan Services 30/360
</TABLE>
A-9
<PAGE>
MORTGAGE LOAN SCHEDULE
<TABLE>
<CAPTION>
SUB MASTER
CONTROL NO. PROPERTY NAME SERVICING FEES SERVICING FEES
- ------------- ----------------------------------- ---------------- ----------------
<S> <C> <C> <C>
MLMI-075 8245 Florin Road 0.0700 0.0350
MLMI-076 Ashikita 0.0700 0.0350
MLMI-077 Balboa Plaza 0.0700 0.0350
MLMI-078 BHB Properties LLC 0.0700 0.0350
MLMI-079 Cherry Hills Apartments 0.0700 0.0350
MLMI-080 Clifford Family Trust 0.0700 0.0350
MLMI-081 Gabela Partners 0.0700 0.0350
MLMI-082 Hotton 0.0700 0.0350
MLMI-083 Marie Cook Trustee 0.0700 0.0350
MLMI-084 Parkside Plaza, LLC 0.0700 0.0350
MLMI-085 Patio World 0.0700 0.0350
MLMI-086 Rainbow Center 0.0700 0.0350
MLMI-087 Rita A. Quam Family Trust 0.0700 0.0350
MLMI-088 Rivard 0.0700 0.0350
MLMI-089 Spring Valley Plaza 0.0700 0.0350
MLMI-090 Stuart Sackley 0.0700 0.0350
MLMI-100 Hastings Entertainment 0.0700 0.0350
MLMI-101 2333 Walton Boulevard 0.0700 0.0350
MLMI-102 Embassy Suites - Oklahoma City 0.0700 0.0350
MLMI-104 BJ's Wholesale Club 0.0700 0.0350
MLMI-105 Country Club Care Center 0.0700 0.0350
MLMI-106 Crown Care Center 0.0700 0.0350
MLMI-107 1401 Morehead St. - Coca Cola 0.0700 0.0350
MLMI-108 Beacon Square 0.0700 0.0350
MLMI-109 Quadrangle Square 0.0700 0.0350
MLMI-110 Station Plaza Shopping Center 0.0700 0.0350
MLMI-111 Shenandoah Square Shopping Center 0.0700 0.0350
MLMI-112 Holt and Eleanor Center 0.0700 0.0350
MLMI-114 Oak Lawn Promenade 0.0700 0.0350
MLMI-115 Santa Monica Sav-On 0.0700 0.0350
MLMI-116 Seneca Park Plaza Shopping Center 0.0700 0.0350
MLMI-117 Willowbrook Court Shopping Center 0.0700 0.0350
MLMI-118 Waterbury Crossing 0.0700 0.0350
MLMI-119 The LeConte Building 0.0700 0.0350
MLMI-120 Office Max 0.0700 0.0350
MLMI-124 Fairfield Inn - Beaverton 0.0700 0.0350
MLMI-125 Courtyard by Marriott - Newburgh 0.0700 0.0350
MLMI-126 Albany Thruway Courtyard 0.0700 0.0350
MLMI-127 Fairfield Inn - Henrietta 0.0700 0.0350
<CAPTION>
MORTGAGE INTEREST
CONTROL NO. LOAN SELLER SUBSERVICER DEFEASANCE ACCRUAL CROSS DEFAULTED
- ------------- ------------- -------------------------- ------------ ------------ -------------------
<S> <C> <C> <C> <C> <C>
MLMI-075 MLMI GE Capital Loan Services 30/360
MLMI-076 MLMI GE Capital Loan Services 30/360
MLMI-077 MLMI GE Capital Loan Services 30/360
MLMI-078 MLMI GE Capital Loan Services 30/360
MLMI-079 MLMI GE Capital Loan Services 30/360
MLMI-080 MLMI GE Capital Loan Services 30/360
MLMI-081 MLMI GE Capital Loan Services 30/360
MLMI-082 MLMI GE Capital Loan Services 30/360
MLMI-083 MLMI GE Capital Loan Services 30/360
MLMI-084 MLMI GE Capital Loan Services Y Actual/360
MLMI-085 MLMI GE Capital Loan Services 30/360
MLMI-086 MLMI GE Capital Loan Services 30/360
MLMI-087 MLMI GE Capital Loan Services 30/360
MLMI-088 MLMI GE Capital Loan Services 30/360
MLMI-089 MLMI GE Capital Loan Services 30/360
MLMI-090 MLMI GE Capital Loan Services 30/360
MLMI-100 MLMI GE Capital Loan Services Y Actual/360
MLMI-101 MLMI GE Capital Loan Services Y Actual/360
MLMI-102 MLMI GE Capital Loan Services Y Actual/360
MLMI-104 MLMI GE Capital Loan Services Y Actual/360
MLMI-105 MLMI GE Capital Loan Services Y Actual/360 MLMI-106
MLMI-106 MLMI GE Capital Loan Services Y Actual/360 MLMI-105
MLMI-107 MLMI GE Capital Loan Services Y Actual/360
MLMI-108 MLMI GE Capital Loan Services Y Actual/360
MLMI-109 MLMI GE Capital Loan Services Y Actual/360
MLMI-110 MLMI GE Capital Loan Services Y Actual/360
MLMI-111 MLMI GE Capital Loan Services Y Actual/360
MLMI-112 MLMI GE Capital Loan Services Y Actual/360
MLMI-114 MLMI GE Capital Loan Services Y Actual/360
MLMI-115 MLMI GE Capital Loan Services Y Actual/360
MLMI-116 MLMI GE Capital Loan Services Y Actual/360
MLMI-117 MLMI GE Capital Loan Services Y Actual/360
MLMI-118 MLMI GE Capital Loan Services Y Actual/360
MLMI-119 MLMI GE Capital Loan Services Y Actual/360
MLMI-120 MLMI GE Capital Loan Services Y Actual/360
MLMI-124 MLMI GE Capital Loan Services Y Actual/360
MLMI-125 MLMI GE Capital Loan Services Y Actual/360 MLMI-127; MLMI-126
MLMI-126 MLMI GE Capital Loan Services Y Actual/360 MLMI-127; MLMI-125
MLMI-127 MLMI GE Capital Loan Services Y Actual/360 MLMI-125; MLMI-126
</TABLE>
A-10
<PAGE>
MORTGAGE LOAN SCHEDULE
<TABLE>
<CAPTION>
SUB MASTER
CONTROL NO. PROPERTY NAME SERVICING FEES SERVICING FEES
- ------------- ---------------------------------------------- ---------------- ----------------
<S> <C> <C> <C>
MLMI-128 Quality Inn City Center 0.0700 0.0350
MLMI-133 Sammamish Ridge 0.0700 0.0350
MLMI-134 Kenmore Estates 0.0700 0.0350
MLMI-135 Independence Green Apartments 0.0700 0.0350
MLMI-139 Walkers Ridge 0.0700 0.0350
MLMI-140 Colonial House 0.0700 0.0350
MLMI-141 Chapelcroft 0.0700 0.0350
MLMI-142 Aspen Shadows 0.0700 0.0350
MLMI-143 Antelope Manor Apartments 0.0700 0.0350
MLMI-144 AAAABCO Gibson Mini Storage 0.0700 0.0350
MLMI-146 49er Mini Storage 0.0700 0.0350
MLMI-152 Chateau Brickyard 0.0700 0.0350
MLMI-153 Holiday on the Bay 0.0700 0.0350
MLMI-160 PetsMart, Inc. 0.0700 0.0350
MLMI-162 Rite Aid 0.0700 0.0350
MLMI-161 Heilig Meyers 0.0700 0.0350
MLMI-163 Heilig Meyers 0.0700 0.0350
MLMI-164 Kings Court Shopping Center 0.0700 0.0350
MLMI-091 11307 Morrison 0.0700 0.0350
MLMI-092 11660 Chenault Avenue 0.0700 0.0350
MLMI-093 1346 Pine Street 0.0700 0.0350
MLMI-094 1850 Williams Street 0.0700 0.0350
MLMI-095 2790 Pine Street 0.0700 0.0350
MLMI-096 Pine Valley Court (Colony Greene) Apartments 0.0700 0.0350
MLMI-097 Doheny Drive Apartments 0.0700 0.0350
MLMI-098 Hacienda de Camarillo 0.0700 0.0350
MLMI-099 Peachtree & Willow Lake Apartments 0.0700 0.0350
MLMI-008 Alexander House Apartments 0.0600 0.0350
MLMI-020 Crosspointe Vista Apartments 0.0600 0.0350
MLMI-034 Myrtle Cove Apartments 0.0600 0.0350
MLMI-047 Tara Hall Apartments 0.0600 0.0350
MLMI-049 The Atrium Cellini Apartments 0.0600 0.0350
MLMI-055 Westcliff Apartments 0.0600 0.0350
MLMI-057 Wilshire Village Shopping Center 0.0600 0.0350
MLMI-058 Windsor Court Apartments 0.0600 0.0350
MLMI-002 124 West 34th Street 0.0900 0.0350
MLMI-006 502 West Office Center 0.0900 0.0350
MLMI-009 Arlington Park I 0.0900 0.0350
MLMI-013 Bishops Landing Apartments 0.0900 0.0350
<CAPTION>
MORTGAGE INTEREST
CONTROL NO. LOAN SELLER SUBSERVICER DEFEASANCE ACCRUAL CROSS DEFAULTED
- ------------- ------------- -------------------------- ------------ ----------- ----------------
<S> <C> <C> <C> <C> <C>
MLMI-128 MLMI GE Capital Loan Services Actual/360
MLMI-133 MLMI GE Capital Loan Services Y 30/360
MLMI-134 MLMI GE Capital Loan Services Actual/360
MLMI-135 MLMI GE Capital Loan Services Y Actual/360
MLMI-139 MLMI GE Capital Loan Services Y Actual/360
MLMI-140 MLMI GE Capital Loan Services Y Actual/360
MLMI-141 MLMI GE Capital Loan Services Y Actual/360
MLMI-142 MLMI GE Capital Loan Services Y Actual/360
MLMI-143 MLMI GE Capital Loan Services Y Actual/360
MLMI-144 MLMI GE Capital Loan Services Y Actual/360
MLMI-146 MLMI GE Capital Loan Services Y Actual/360
MLMI-152 MLMI GE Capital Loan Services Y Actual/360
MLMI-153 MLMI GE Capital Loan Services Y Actual/360
MLMI-160 MLMI GE Capital Loan Services Y 30/360
MLMI-162 MLMI GE Capital Loan Services Y 30/360
MLMI-161 MLMI GE Capital Loan Services Y 30/360
MLMI-163 MLMI GE Capital Loan Services Y 30/360
MLMI-164 MLMI GE Capital Loan Services Y Actual/360
MLMI-091 MLMI GE Capital Loan Services 30/360
MLMI-092 MLMI GE Capital Loan Services 30/360
MLMI-093 MLMI GE Capital Loan Services Actual/360
MLMI-094 MLMI GE Capital Loan Services 30/360
MLMI-095 MLMI GE Capital Loan Services Actual/360
MLMI-096 MLMI GE Capital Loan Services 30/360
MLMI-097 MLMI GE Capital Loan Services 30/360
MLMI-098 MLMI GE Capital Loan Services 30/360
MLMI-099 MLMI GE Capital Loan Services 30/360
MLMI-008 MLMI L.J. Melody & Co. Actual/360
MLMI-020 MLMI L.J. Melody & Co. Actual/360
MLMI-034 MLMI L.J. Melody & Co. Y 30/360
MLMI-047 MLMI L.J. Melody & Co. Actual/360
MLMI-049 MLMI L.J. Melody & Co. Actual/360
MLMI-055 MLMI L.J. Melody & Co. Actual/360
MLMI-057 MLMI L.J. Melody & Co. Actual/360
MLMI-058 MLMI L.J. Melody & Co. Y Actual/360
MLMI-002 MLMI MLCC Actual/360
MLMI-006 MLMI MLCC Y Actual/360
MLMI-009 MLMI MLCC Y Actual/360
MLMI-013 MLMI MLCC Actual/360
</TABLE>
A-11
<PAGE>
MORTGAGE LOAN SCHEDULE
<TABLE>
<CAPTION>
SUB MASTER
CONTROL NO. PROPERTY NAME SERVICING FEES SERVICING FEES
- ------------- -------------------------------- ---------------- ----------------
<S> <C> <C> <C>
MLMI-014 Cedar Village Mobile Home Park 0.0900 0.0350
MLMI-015 Charleston Apartments 0.0900 0.0350
MLMI-016 Childs Instant Homes 0.0900 0.0350
MLMI-017 City Villas 0.0900 0.0350
MLMI-018 Clarendon Apartments 0.0900 0.0350
MLMI-025 Eastgate Apartments 0.0900 0.0350
MLMI-026 Federal Express Building 0.0900 0.0350
MLMI-027 Foxmoor Apartments 0.0900 0.0350
MLMI-029 Hartford Apartments 0.0900 0.0350
MLMI-036 Pep Boys Plaza 0.0900 0.0350
MLMI-037 Peppertree Apartments 0.0900 0.0350
MLMI-039 Pond Plaza 0.0900 0.0350
MLMI-040 Quarters Apartments 0.0900 0.0350
MLMI-043 Republic Beverage Building 0.0900 0.0350
MLMI-044 Royal Knight Apartments 0.0900 0.0350
MLMI-046 Super 8 Rockwall 0.0900 0.0350
MLMI-054 Village Square Apartments 0.0900 0.0350
MLMI-059 Wong Family Trust Apartments 0.0900 0.0350
MLMI-061 332 East 95th Street 0.0900 0.0350
MLMI-065 Springfield Apartments 0.0900 0.0350
MLMI-066 Orleans East Apartments 0.0900 0.0350
MLMI-068 Redwood Village Apartments 0.0900 0.0350
<CAPTION>
MORTGAGE INTEREST
CONTROL NO. LOAN SELLER SUBSERVICER DEFEASANCE ACCRUAL CROSS DEFAULTED
- ------------- ------------- ------------- ------------ ----------- ----------------
<S> <C> <C> <C> <C> <C>
MLMI-014 MLMI MLCC Actual/360
MLMI-015 MLMI MLCC Actual/360
MLMI-016 MLMI MLCC Actual/360
MLMI-017 MLMI MLCC Y Actual/360
MLMI-018 MLMI MLCC Actual/360
MLMI-025 MLMI MLCC Y Actual/360
MLMI-026 MLMI MLCC Y Actual/360
MLMI-027 MLMI MLCC Y Actual/360
MLMI-029 MLMI MLCC Y Actual/360
MLMI-036 MLMI MLCC Actual/360
MLMI-037 MLMI MLCC Actual/360
MLMI-039 MLMI MLCC Actual/360
MLMI-040 MLMI MLCC Y Actual/360
MLMI-043 MLMI MLCC Y 30/360
MLMI-044 MLMI MLCC Y Actual/360
MLMI-046 MLMI MLCC Y Actual/360
MLMI-054 MLMI MLCC Y Actual/360
MLMI-059 MLMI MLCC Actual/360
MLMI-061 MLMI MLCC Y Actual/360
MLMI-065 MLMI MLCC Actual/360
MLMI-066 MLMI MLCC Y Actual/360
MLMI-068 MLMI MLCC Y Actual/360
</TABLE>
A-12
<PAGE>
EXHIBIT B
FORM OF CERTIFICATE OF AN OFFICER OF
[SELLER]
I, ______________________, hereby certify that I am an
authorized signatory of [SELLER], a [STATE] corporation (the "Seller"), and
that, based upon information provided to me by appropriate officers and other
representatives of the Seller, certify further as follows, to the best of my
knowledge:
1. The representations and warranties of
the Seller in the Mortgage Loan Purchase Agreement, dated as
of [DATE], 1998, between the Seller and Commercial Mortgage
Acceptance Corp. (the "Company") (the "MLPA") are true and
correct in all material respects at and as of the Closing
Date with the same effect as if made on such date subject,
with respect to the representations and warranties made under
Section 2(b) of the MLPA, to the exceptions to such
representations and warranties set forth in the MLPA.
2. The Seller has, in all material aspects,
complied with all the agreements and satisfied all the
conditions on its part that are required under the MLPA to be
performed or satisfied at or prior to the date hereof.
This Certificate is made to the Company and to the Trustee
(for the benefit of the Certificateholders) as the transferee of the Company.
Capitalized terms used herein, but not otherwise defined, shall have the
meanings given such terms in the MLPA.
IN WITNESS WHEREOF, I have executed this Certificate as of
[DATE], 1998.
[SELLER]
By:
--------------------
Name:
Title:
I, [___], a [___] of the Seller, hereby certify that [___] is
an authorized signatory of the Seller and that the signature appearing above is
his genuine signature.
IN WITNESS WHEREOF, I have executed this Certificate as of
[DATE], 1998.
By:
--------------------
Name:
Title:
B-1
<PAGE>
EXHIBIT C
FORM OF LEGAL OPINION
1. The Mortgage Loan Seller is a [STATE] corporation duly
organized, validly existing and in good standing under the laws of the State of
[STATE], with full corporate power and authority to own the Mortgage Loans, and
enter into and perform its obligations under the Mortgage Loan Purchase
Agreement.
2. The Mortgage Loan Purchase Agreement has been duly
authorized, executed and delivered by the Mortgage Loan Seller and constitutes
the legal, valid and binding obligation of the Mortgage Loan Seller,
enforceable against the Mortgage Loan Seller in accordance with the terms of
the Mortgage Loan Purchase Agreement, except as such enforcement may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally, and by general
principles of equity (regardless of whether such enforceability is considered
in a proceeding in equity or at law), and except to the extent rights to
indemnity and contribution may be limited by applicable law [provided, however,
that the foregoing exceptions may be stated in a form customarily given by the
opinion giver for opinions of this type as long as such form is reasonably
acceptable to the Company and the other parties to the Pooling and Servicing
Agreement].
3. The execution and delivery of the Mortgage Loan Purchase
Agreement by the Mortgage Loan Seller and the performance of its obligations
under the Mortgage Loan Purchase Agreement does not conflict with or violate
any provision of any federal or State of New York statutory law or regulation
to which the Mortgage Loan Seller is subject, the conflict with which or the
violation of which would have a material and adverse effect on the validity of
the Mortgage Loans or the ability of the Mortgage Loan Seller to carry out the
transactions contemplated by this Agreement, or conflict with, result in a
breach of, or constitute a default under, any of the terms, conditions or
provisions of any of the Mortgage Loan Seller's organizational documents, or,
to our knowledge, (i) any agreement or instrument to which the Mortgage Loan
Seller is a party or by which it is bound, or (ii) any order, judgment or
decree of a federal or State of New York court, regulatory body, administrative
agency or government body having jurisdiction over the Mortgage Loan Seller the
conflict with which or the breach or default of which (in the case of either
(i) or (ii)) would have a material and adverse effect on the validity of the
Mortgage Loans or the ability of the Mortgage Loan Seller to carry out the
transactions contemplated by this Agreement.
4. To our knowledge, there is no action, suit or proceeding
pending or overtly threatened in writing, against the Mortgage Loan Seller in
any court or by or before any other governmental agency or instrumentality
which (either by itself or in combination with any other such actions, suits or
proceedings)
C-1
<PAGE>
would materially and adversely affect the validity of the Mortgage Loans or the
ability of the Mortgage Loan Seller to carry out the transactions of the
Mortgage Loan Seller contemplated by this Agreement.
No consent, approval, authorization or order of any federal
or State of New York court or governmental agency or body is required for the
execution, delivery and performance by the Mortgage Loan Seller of or
compliance by the Mortgage Loan Seller with the Mortgage Loan Purchase
Agreement or the consummation of the transactions of the Mortgage Loan Seller
contemplated by the Mortgage Loan Purchase Agreement, other than those which
have been obtained by the Mortgage Loan Seller.
C-2
<PAGE>
MERRILL LYNCH MORTGAGE INVESTORS, INC., SERIES 1998-C3
SCHEDULE I
(i) Immediately prior to the sale, transfer and assignment of
the Mortgage Loans to the Company, the Mortgage Loan Seller had good and
marketable title to, and was the sole owner of, each Mortgage Loan, and had
full right and authority to sell, transfer and assign such Mortgage Loan;
(ii) The Mortgage Loan Seller is transferring such Mortgage
Loan free and clear of any and all liens, pledges, charges or security
interests of any nature encumbering such Mortgage Loan, and none of the
Mortgage Note, the Mortgage or any other related loan document prohibits or
restricts such transfer;
(iii) Each related Mortgage Note, Mortgage, Assignment of
Leases (if any) and other agreement executed in connection with such Mortgage
Loan is, the legal, valid and binding obligation of the related Mortgagor
(subject to any non-recourse provisions therein and any state anti-deficiency
or market deficiency legislation), enforceable in accordance with its terms,
except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, liquidation, receivership, moratorium or other laws affecting
the enforcement of creditors' rights and by general principles of equity
(regardless of whether such enforcement is considered in a proceeding in
equity or at law), and any lost note affidavit included in the Mortgage File
in lieu of a Mortgage Note does not impair the ability of the holder thereof
to enforce the terms of such Mortgage Note;
(iv) Each related Assignment of Leases, or, if none, the
assignment of leases and rents contained in the related Mortgage creates a
valid, first priority assignment of, or a valid first priority security
interest in, the related leases and rents, and no other person owns any
interest therein superior to or of equal priority with the interest created
under such assignment, subject to applicable bankruptcy, insolvency,
reorganization, moratorium, and other laws affecting the enforcement of
creditors' rights and to general principles of equity (regardless of whether
such enforcement is considered in a proceeding in equity or at law); and
either each Mortgage Loan includes an Assignment of Leases or the related
Mortgage contains an assignment of leases and rents;
(v) Each related assignment of Mortgage from the Mortgage
Loan Seller to the assignee named therein is in recordable form and any
related assignment of Assignment of Leases, if any, is in recordable form and
any related assignment of any other agreement executed in connection with
such Mortgage
-1-
<PAGE>
Loan, from the Mortgage Loan Seller to the assignee named therein is in
recordable form (if the recording thereof is appropriate) and each constitutes
the legal, valid, binding and enforceable assignment from the Mortgage Loan
Seller to the assignee named therein, except as such enforcement may be
limited by bankruptcy, insolvency, reorganization, liquidation, receivership,
moratorium or other laws relating to or affecting creditors' rights or by
general principles of equity (regardless of whether such enforcement is
considered in a proceeding in equity or at law);
(vi) Since origination, (a) neither such Mortgage Loan nor
any related Mortgage Loan documents have been modified, altered, satisfied,
canceled, subordinated or rescinded, and (b) no material portion of the
related Mortgaged Property has been released from the lien of the related
Mortgage, in any manner (in the case of either subclause (a) or subclause (b)
of this clause (vi)) which materially and adversely affects the value of the
Mortgage Loan or materially interferes with the security intended to be
provided by such Mortgage, with the exception of any modification,
alteration, satisfaction, cancellation, subordination, recission or release
evidenced by a written instrument which was entered into prior to the Cut-Off
Date, has been recorded in the applicable public recording office if
necessary to maintain the priority of the lien of the related Mortgage and
related security agreements, if any, and is being delivered to the Company as
part of the related Mortgage File; and none of the related Mortgages contain
terms which provide for release of any portion of the Mortgaged Property from
the lien of the Mortgage in any manner which materially and adversely affects
the adequacy of the security provided by the Mortgaged Property;
(vii) (a) Each related Mortgage is a valid and enforceable
first lien on the related Mortgaged Property (subject to the matters
described in clause (viii) below), and (b) such Mortgaged Property is free
and clear of any liens or encumbrances (including any mechanics' and
materialmen's liens) which are prior to or equal with the lien of the related
Mortgage, except those which are described in a lender's title insurance
policy (as described in clause (viii) below), subject, in the case of either
subclause (a) or subclause (b) above, to any security interests in personal
property which, individually or in the aggregate, do not materially interfere
with the security intended to be provided for such Mortgage Loan;
(viii) The lien of each related Mortgage is a first priority
lien in the outstanding principal amount of such Mortgage Loan (as set forth
on the Mortgage Loan Schedule) after all advances of principal and is insured
by an ALTA lender's title insurance policy (or a pro forma or specimen
policy, escrow letter or a marked up title insurance commitment on which the
required premium has been paid and which evidences that such title insurance
policy will be issued) in an amount equal to at
-2-
<PAGE>
least the outstanding principal amount of such Mortgage Loan from a title
insurer which, to the Mortgage Loan Seller's knowledge, after due diligence
customarily performed by commercial mortgage lenders, is qualified and
licensed in the applicable jurisdiction, (except in Iowa) or its equivalent
as adopted in the applicable jurisdiction, insuring the Mortgage Loan Seller,
its successors and assigns, subject only to (a) the lien of real property
taxes, ground rents, water charges, sewer rents and assessments not yet
delinquent or accruing interest or penalties, (b) covenants, conditions and
restrictions, rights of way, easements and other matters of public record,
none of which, individually or in the aggregate, materially interferes with
the current use or operation of the Mortgaged Property or the security
intended to be provided by such Mortgage or with the Mortgagor's ability to
pay its obligations under the Mortgage Loan when they become due, or
materially and adversely affects the value of the Mortgaged Property, (c) the
exclusions and exceptions (general and specific) set forth in such policy,
(A) none of which, individually or in the aggregate, materially interferes
with the security intended to be provided by such Mortgage or with the
Mortgagor's ability to pay its obligations under the Mortgage Loan when they
become due or materially and adversely affects the use or operation of the
Mortgaged Property and (B) with respect to those Mortgage Loans, the Mortgage
Files of which do not contain a survey on the Closing Date, none of which
constitute exceptions or exclusions for the absence of a survey; the original
holder of the Mortgage, and/or its successor or assigns, are the sole named
insureds under such policy; such policy is assignable to the Company and the
Trustee without the consent of or any notification to the insurer, and is now
or, when issued, will be in full force and effect and will remain so upon the
consummation of the transactions contemplated by this Agreement; no claims
have been made under such policy, and the Mortgage Loan Seller has not done
anything, by act or omission, and the Mortgage Loan Seller has no knowledge of
any matter, which would impair or diminish the coverage of such policy;
(ix) The proceeds of such Mortgage Loan have been fully
disbursed and there is no requirement for future advances thereunder and the
Mortgage Loan Seller covenants that it will not make any future advances
under the Mortgage Loan to the related Mortgagor;
(x) As of the date of its origination, there was no
proceeding pending or to the Mortgage Loan Seller's knowledge, threatened,
for the total or partial condemnation of any material portion of the
Mortgaged Property, and, as of the Cut-Off Date the Mortgage Loan Seller has
no knowledge and has received no notice of any proceeding pending, nor to the
Mortgage Loan Seller's knowledge, is any proceeding threatened, for the total
or partial condemnation of all or any material portion of such Mortgaged
Property, and, to the Mortgage Loan Seller's knowledge, based upon a site
inspection conducted in
-3-
<PAGE>
connection with origination of the Mortgage Loan and a review of the related
engineering report, each related Mortgaged Property is free and clear of any
material damage, except for which funds have been escrowed, that would affect
materially and adversely the value of such Mortgaged Property as security for
the Mortgage Loan;
(xi) The related Mortgagor has represented to the Mortgagee
or the Tenant under the related Credit Lease has covenanted that, as of the
date of origination of such Mortgage Loan, and, to the Mortgage Loan Seller's
knowledge, based on customary due diligence performed by prudent commercial
mortgage lenders, such Mortgagor and the lessee and/or operator of the
related Mortgaged Property was in possession of all material licenses,
permits and other authorizations necessary and required by all applicable
laws for the conduct of its business on the related Mortgaged Property and
all such licenses, permits and authorizations were valid and in full force
and effect;
(xii) Except with respect to the Mortgage Loans listed on
Exhibit I-XII, the Mortgage Loan contains no equity participation by the
lender and does not have a shared appreciation feature, other contingent or
additional interest feature, a negative amortization feature, or any negative
amortization which is continuing as of or arises after the Cut-Off Date;
(xiii) Each of the Mortgage Loan is a whole loan and no other
party holds a participation interest in such Mortgage Loan;
(xiv) The Mortgage Rate (exclusive of any default interest,
late charges, prepayment premiums or defeasance deposits) of each Mortgage
Loan complied as of the date of origination with, or such Mortgage Loan is
exempt from, applicable state or federal laws, regulations and other
requirements pertaining to usury; any and all other requirements of any
federal, state or local laws, including, without limitation,
truth-in-lending, real estate settlement procedures, equal credit opportunity
or disclosure laws, applicable to each Mortgage Loan have been complied with
in all material respects as of the date of origination of such Mortgage Loan;
(xv) All taxes (including taxes payable in future
installments) and governmental assessments which would be a lien on the
Mortgaged Property and that prior to the Cut-Off Date have become delinquent
in respect of each related Mortgaged Property have been paid, or an escrow of
funds in an amount sufficient to cover such payments has been established or
the Tenant under the Credit Lease is required to pay all such taxes,
assessments or other charges. For purposes of this representation and
warranty, taxes and assessments and installments thereof shall not be
considered delinquent until the earlier of (a) the date on which interest
and/or penalties
-4-
<PAGE>
would first be payable thereon and (b) the date on which enforcement action
is entitled to be taken by the related taxing authority;
(xvi) All escrow deposits and payments required pursuant to
the Mortgage Loan (except for escrow deposits and payments which have been
applied in accordance with the applicable Mortgage Loan documents) are in the
possession, or under the control, of the Mortgage Loan Seller or its agent
and all amounts required to be deposited by the Mortgagor under the Mortgage
Loan documents (inclusive of any applicable grace or cure period) as of the
date hereof have been deposited and all such escrows and deposits (except for
escrow deposits and payments which have been applied in accordance with the
applicable Mortgage Loan documents) have been conveyed by the Mortgage Loan
Seller to the Company and identified as such with appropriate detail;
(xvii) Each related Mortgaged Property is insured by a fire
and extended perils insurance policy (and the Seller has not received a
notice of termination thereof) in an amount not less than the lesser of (A)
the outstanding principal balance of the Mortgage Loan and (B) the full
replacement cost of the improvements located on the related Mortgaged
Property, and in all events the amount necessary to avoid the operation of
any co-insurance provisions with respect to the Mortgaged Property; with
respect to each related Mortgaged Property (except where the Tenant in a
Credit Lease Loan has no offset or abatement rights in the event of any
casualty), the Mortgagor has and is required under the terms of the related
Mortgage to maintain business interruption insurance (or loss of rents
insurance providing coverage of at least twelve months) and comprehensive
general liability insurance in amounts generally required by commercial
mortgage lenders for similar properties and in all events, an amount of at
least $1 million per occurrence and such other insurance of such amounts and
types as would be required by prudent mortgage lenders for Mortgaged
Properties of the same types in similar locations; all premiums on such
insurance policies required to be paid as of the date hereof have been paid;
such insurance policies contain a standard "New York" mortgagee clause for
the benefit of the holder of the related Mortgage and its successors and
assigns, and require prior notice to the insured and to the mortgagee of
termination or cancellation, and no such notice has been received; each
related Mortgage or loan agreement obligates the related Mortgagor to
maintain insurance as described above and, at such Mortgagor's failure to do
so, authorizes the Mortgagee to maintain such insurance at the Mortgagor's
cost and expense and to seek reimbursement therefor from such Mortgagor,
provided, however, the obligation of the Mortgagor pursuant to the Mortgage
or loan agreement to maintain such insurances is waived so long as the Tenant
under the related Credit Lease is complying with such requirements through a
program of Tenant self-insurance;
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(xviii) Each Mortgage provides that any insurance proceeds in
respect of a casualty, other than business interruption/rental income
insurance, and any condemnation awards (or condemnation proceeds) or
insurance proceeds, will be applied either to the repair or restoration of
the Mortgaged Property or to the repayment of the outstanding principal
balance of the Mortgage Loan, except in the instance of any claims paid
pursuant to any special risk casualty/condemnation insurance policies under
which the lender is the named insured (as opposed to merely loss payee), in
which case such proceeds may be applied at the discretion of the holder of
the related Mortgage Note;
(xix) (A) To the best of the Mortgage Loan Seller's
knowledge, there is no material default, breach, violation or event of
acceleration existing under the related Mortgage or the related Mortgage
Note, and no event (other than payments due but not yet delinquent) which,
with the passage of time or with notice and the expiration of any grace or
cure period, would constitute a material default, breach, violation or event
of acceleration, provided, however, that this representation and warranty
does not address or otherwise cover any default, breach, violation or event
of acceleration that specifically pertains to any matter otherwise covered by
any other representation and warranty made by the Mortgage Loan Seller in any
of clauses (x), (xv), (xx), (xxii) and (xxvii) of this Schedule I or in any
clause of Schedule 2, and (B) the Mortgage Loan Seller has not waived any
material default, breach, violation or event of acceleration under such
Mortgage or Mortgage Note, except for a written waiver contained in the
related Mortgage File being delivered to the Company, and pursuant to the
terms of the related Mortgage or the related Mortgage Note, no person or
party other than the holder of such Mortgage Note may declare any event of
default or accelerate the related indebtedness under either of such Mortgage
or Mortgage Note;
(xx) Except for the Mortgage Loans listed on Exhibit I-XX, no
Monthly Payment on such Mortgage Loan has been more than 30 days delinquent
beyond the related Due Date from the later of one year prior to the Cut-Off
Date, or the date of origination of such Mortgage Loan, through the Cut-Off
Date;
(xxi) Each related Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the
holder thereof adequate for the practical realization against the Mortgaged
Property of the principal benefits of the security, including realization by
judicial or, if applicable, non-judicial foreclosure, subject to the effects
of bankruptcy, insolvency, reorganization, moratorium, and state laws
affecting the enforcement of creditors' rights and to general principles of
equity (regardless of whether such enforcement is considered in a proceeding
in equity or at law);
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(xxii) One or more environmental site assessments were
performed by an environmental consulting firm independent of the Mortgage Loan
Seller and the Mortgage Loan Seller's affiliates with respect to the related
Mortgaged Property during the 14 months prior to the origination date and the
Mortgage Loan Seller, having made no independent inquiry other than to review
the report(s) prepared in connection with the assessments referred to herein,
has no knowledge of any material and adverse environmental condition or
circumstance affecting such Mortgaged Property that was not disclosed in such
report(s); in each case where the report disclosed an adverse environmental
condition or circumstance, either (a) the action recommended in such report(s)
has been taken, including implementation of an operations and maintenance
agreement, (b) funds sufficient to pay for such recommended action have been
escrowed, or (c) the Tenant under a Credit Lease Loan has the obligation to
remedy such condition or circumstance;
(xxiii) Each related Mortgage, Mortgage Note or loan
agreement contains provisions for the acceleration of the payment of the
unpaid principal balance of such Mortgage Loan if, without consent of the
mortgagee, the related Mortgaged Property, or any majority interest therein,
is directly or indirectly transferred or sold (other than certain transfers
to affiliated persons or other transfers which are permitted as specified
therein) or is encumbered in connection with subordinate financing (other
than subordinate financing permitted thereunder upon the satisfaction of debt
service coverage or similar criteria specified therein;
(xxiv) Each Mortgage Loan constitutes a "qualified mortgage"
within the meaning of Section 860G(a)(3) of the Internal Revenue Code of
1986, as amended (the "Code"). For this purpose, Section 860G(a)(3) of the
Code shall be applied without regard to the rule contained in Treasury
Regulations Section 1.860G-2(f)(2) which treats a defective mortgage loan as
a "qualified mortgage" under certain circumstances. Accordingly, the Mortgage
Loan Seller represents and warrants that each Mortgage Loan is directly
secured by a Mortgage on a commercial property or a multifamily residential
property, and either (1) substantially all of the proceeds of such Mortgage
Loan were used to acquire, improve or protect the portion of such commercial
or multifamily residential property that consists of an interest in real
property (within the meaning of Treasury Regulations Sections 1.856-3(c) and
1.856-3(d)) and such interest in real property was the only security for such
Mortgage Loan as of the Testing Date (as defined below), or (2) the fair
market value of the interest in real property which secures such Mortgage
Loan was at least equal to 80% of the principal amount of the Mortgage Loan
(a) as of the Testing Date, or (b) as of the Closing Date. For purposes of
the previous sentence, (1) the fair market value of the referenced interest
in real property shall first be reduced by (a) the
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amount of any lien on such interest in real property that is senior to the
Mortgage Loan, and (b) a proportionate amount of any lien on such interest in
real property that is on a parity with the Mortgage Loan, and (2) the
"Testing Date" shall be the date on which the referenced Mortgage Loan was
originated unless (a) such Mortgage Loan was modified after the date of its
origination in a manner that would cause a "significant modification" of such
Mortgage Loan within the meaning of Treasury Regulations Section 1.1001-3(b),
and (b) such "significant modification" did not occur at a time when such
Mortgage Loan was in default or when default with respect to such Mortgage
Loan was reasonably foreseeable. However, if the referenced Mortgage Loan has
been subjected to a "significant modification" after the date of its
origination and at a time when such Mortgage Loan was not in default or when
default with respect to such Mortgage Loan was not reasonably foreseeable,
the Testing Date shall be the date upon which the latest such "significant
modification" occurred;
(xxv) As of the Cut-Off Date, the Mortgage Loan Schedule is
true and correct in all material respects;
(xxvi) Prepayment Premiums and Yield Maintenance Charges
payable with respect to the Mortgage Loan, if any, constitute "customary
prepayment penalties" within the meaning of Treasury Regulations Section
1.860G-1(b)(2);
(xxvii) The Mortgage File contains an appraisal or market
value study of the related Mortgaged Property, which appraisal is signed by a
qualified appraiser or applicable consultant who, to the Mortgage Loan
Seller's knowledge, had no interest, direct or indirect, in the Mortgaged
Property or in any loan made on the security thereof, and whose compensation
is not affected by the approval or disapproval of the Mortgage Loan;
(xxviii) After such inquiry that is customary for a prudent
commercial mortgage lender to make, to the Mortgage Loan Seller's knowledge,
at the time of the origination of the related Mortgage Loan, (a) none of the
material improvements which were included for the purposes of determining the
appraised value of the related Mortgaged Property lay outside of the
boundaries and building restriction lines of such property (except those
improvements which are legal non-conforming uses and/or except for immaterial
encroachments or where the same is covered by a title insurance endorsement
or affirmative title insurance coverage), and (b) no improvements on
adjoining properties materially encroach upon such Mortgaged Property, or the
same is covered by title insurance endorsement or affirmative title insurance
coverage and (c) the Mortgaged Property is accessible from a public road;
(xxix) The related Mortgagor has covenanted in the Mortgage
Loan documents or the related Tenant has covenanted
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in the related Credit Lease to maintain the related Mortgaged Property in
compliance with all applicable laws, zoning ordinances, rules, covenants and
restrictions affecting the construction, occupancy, use and operation of such
Mortgaged Property, and the related originator performed the type of due
diligence in connection with the origination of such Mortgage Loan customarily
performed by prudent commercial mortgage lenders or lenders on credit leased
properties with respect to the foregoing matters; the Mortgage Loan Seller has
received no notice of any violation of (and, to the Mortgage Loan Seller's
knowledge, based on customary due diligence, the related Mortgaged Property
does not violate) any applicable laws, zoning ordinances, rules, covenants or
restrictions where such violation or noncompliance would materially and
adversely affect the construction, occupancy, use or operation of such
Mortgaged Property;
(xxx) With respect to each Mortgage Loan which as of the
Cut-Off Date has a principal balance of at least $15 million, except with
respect to the Mortgage Loan listed on Exhibit I-xxx, the related Mortgagor
is an entity which has represented and covenanted in connection with the
origination of the Mortgage Loan, and whose organizational documents provide,
that so long as the Mortgage Loan is outstanding it will be a single-purpose
entity. For this purpose, "single-purpose entity" shall mean a person, other
than an individual, which does not and is not permitted to engage in any
business unrelated to the related Mortgaged Property and its (or their)
financing, does not have any material assets other than those related to its
interest in such Mortgaged Property (or Mortgaged Properties) or its (or
their) financing, or any indebtedness other than as permitted by the related
Mortgage or the other documents in the Mortgage Loan File, and such Mortgagor
has covenanted under the Mortgage that it will maintain its own books and
records separate and apart from any other person, and holds itself out as
being a legal entity, separate and apart from any other person;
(xxxi) [Reserved];
(xxxii) To the best knowledge of the Mortgage Loan Seller no
Mortgagor is a debtor in any state or federal bankruptcy or insolvency
proceeding;
(xxxiii) To the best of Mortgage Loan Seller's knowledge,
there is no right of rescission, offset, abatement, diminution, defense or
counterclaim to the Mortgage Loan (including the defense of usury), nor will
the operation of any of the terms of the Mortgage Note or the Mortgage, or
the exercise of any rights thereunder, render the Mortgage Note or the
Mortgage unenforceable, in whole or in part (excluding provisions relating to
default interest, yield maintenance charges, prepayment premiums or
defeasance deposits), or subject to any right of rescission, offset,
abatement, diminution, valid defense or counterclaim (including the defense
of usury or the
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violation of any applicable disclosure or consumer credit laws), except in
any such case as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws affecting the enforcement of
creditors' rights and by general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law), and
to the Mortgage Loan Seller's knowledge, no such right of rescission, offset,
abatement, diminution, defense or counterclaim has been asserted with respect
thereto;
(xxxiv) In the case of any Mortgage which is a deed of trust,
a trustee, duly qualified under applicable law to serve as such, has been
properly designated and currently so serves and is named in the deed of trust
or has been substituted in accordance with applicable law, and no fees or
expenses are, or will become, payable to the trustee under the deed of trust,
except in connection with a trustee's sale after default by the Mortgagor or
in connection with any full or partial release of the Mortgaged Property or
related security for the Mortgage Loan following the payment of the Mortgage
Loan in full;
(xxxv) Either the improvements located on the Mortgaged
Property are not located in a federally designated special flood hazard area
or the Mortgagor or Tenant is required under the terms of the related
Mortgage to maintain, or the mortgagee maintains, flood insurance with
respect to such improvements in an amount equal to the lesser of (a) the full
insurable value of the Mortgaged Property or (b) the amount available under
the National Flood Insurance Act or the Tenant under the related Credit Lease
has no right to abate or offset rent or terminate such Credit Lease in the
event of flood;
(xxxvi) If the Mortgaged Property is subject to any leases,
the Mortgagor is the owner and holder of the landlord's interest under any
leases and the related Mortgage or Assignment of Leases provides for the
appointment of a receiver for rents (in accordance with applicable law) or
allows the Mortgagee (in accordance with applicable law) to enter into
possession to collect rent or provides for rents to be paid directly to
Mortgagee;
(xxxvii) The Mortgage Note is not secured by a security
interest in any collateral that is not being transferred hereunder;
(xxxviii) Each Mortgage Loan, if any, that is
cross-collateralized is cross-collateralized only with one or more other
Mortgage Loans being transferred hereunder;
(xxxix) The origination (or acquisition, as the case may be),
servicing and collection practices used with respect to the Mortgage Loan by
the Mortgage Loan Seller and, to the Mortgage Loan Seller's knowledge, by any
prior holder of the
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Mortgage Loan, have been legal, proper and prudent in all material respects
and have met customary industry standards;
(xl) No advance of funds has been made other than pursuant
to the loan documents, directly or indirectly, by the Mortgage Loan Seller to
the Mortgagor and, to the Mortgage Loan Seller's knowledge, no funds have
been received from any person other than the Mortgagor, for or on account of
payments due on the Mortgage Note or the Mortgage, provided, however, rental
payments or similar payments made by the Tenant under the related Credit
Lease directly to the Mortgage Loan Seller (or its loan servicer or agent)
shall not be deemed a breach of this representation;
(xli) UCC Financing Statements have been filed and/or recorded
in all places necessary to perfect a valid security interest in all material
furniture, fixtures and equipment and other personal property owned by a
Mortgagor and located on each Mortgaged Property and for which perfection is
accomplished by the filing or recording of a UCC financing statement, 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 lien and first priority
security interest on such material furniture, fixtures and equipment except
as enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors' rights or by the application of
general principles of equity (regardless of whether such enforcement is
considered in a proceeding in equity or at law), and subject to any security
interests in such personal property which, individually or the aggregate, do
not materially interfere with the security intended to be provided for the
related Mortgage Loan; and
(xlii) The Mortgage Loan documents do not provide for or
permit, without the consent of the mortgagee, and to the Mortgage Loan
Seller's knowledge, the Mortgagor does not have, any indebtedness for borrowed
money secured by a mortgage encumbering the Mortgaged Property other than the
Mortgage Loan. The creditor (the "Subordinate Lender") under such secured
indebtedness for borrowed money ("Other Debt") of the Mortgagor has entered
into a subordination agreement with the Mortgage Loan Seller (or the Mortgage
Loan originator) pursuant to which (A) the Subordinate Lender has agreed to
fully subordinate the Other Debt to the Mortgage Loan (collectively, the
"Senior Debt"), (B) the Subordinate Lender has agreed not to declare a
default or exercise any remedies with respect to the Other Debt until the
Senior Debt has been indefeasibly satisfied other than to realize upon
certain ownership interests in the Mortgagor
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pledged as security for the Other Debt, (C) the Subordinate Lender has agreed
not to invoke any bankruptcy proceeding and has agreed to assign to the
mortgagee any of its rights in a bankruptcy proceeding, and (D) such
subordination agreement is assignable to the Company and its successors and
assigns and is being assigned hereunder and is part of the Mortgage File;
(xliii) To the Mortgage Loan Seller's knowledge based on
information obtained from the related Mortgagors at the time of origination,
a list of borrowers or groups of affiliated borrowers with multiple Mortgage
Loans is attached hereto as Exhibit I-XLIII(A) and, as of the Cut-Off Date,
the aggregate principal amount of any Mortgage Loan or group of Mortgage
Loans made to one borrower or group of affiliated borrowers does not exceed
the applicable amount set forth in Exhibit I-XLIII(B) attached hereto;
(xliv) The Mortgage Loan has a Mortgage Rate of at least
6.170% per annum;
(xlv) The related Mortgage Loan documents contain provisions
providing for recourse against the related Mortgagor (or its principals) for
damages sustained in connection with certain circumstances including fraud,
misappropriation, material misrepresentation and other matters expressly set
forth in the related Mortgage Loan documents;
(xlvi) The Mortgage Loan Seller (or Mortgage Loan originator)
has inspected or caused to be inspected each related Mortgage Property within
twelve months prior to origination;
(xlvii) Except as set forth in Schedule II, the Mortgage Loan
is secured by a fee interest and is not secured in whole or in part by a
ground lease;
(xlviii) To the Mortgage Loan Seller's actual knowledge, there
are no pending actions, suits or proceedings by or before any court or
governmental authority against or affecting the related Mortgagor or
Mortgaged Property that are reasonably likely to materially and adversely
affect the ability of the Mortgagor to pay principal, interest or any other
amount due under such Mortgage Loan or the value of the Mortgaged Property;
(xlix) Each Mortgaged Property constitutes one or more
complete separate tax lots or parcels; and
(l) Each Mortgage Loan containing provisions for defeasance
of mortgage collateral either (i) requires the prior written consent of, and
compliance with the conditions set by, the holder of the Mortgage Loan, or
(ii) requires that (A) defeasance may not occur prior to the time permitted
by applicable REMIC Provisions (if applicable), (B) the replacement
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collateral consist of U.S. government securities in an amount sufficient to
make all scheduled payments under the Mortgage Note when due, (C) the loan be
assumed by a Single Purpose Entity designated by the holder (or the borrower
or the mortgagor and approved by the holder) of the Mortgage Loan and (D)
counsel provide an opinion that the Trustee has a perfected security interest
in such collateral prior to any other claim or interest.
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SCHEDULE II
For each Mortgage Loan identified on the Mortgage Loan
Schedule as being secured by a leasehold interest under a ground lease, the
Mortgage Loan Seller hereby represents and warrants:
(A)(i) the Mortgage Loan is also secured by the related fee
interest or (ii) the ground lease represents a non-essential portion of the
Mortgaged Property, and the ground lease has an original term (or an original
term plus one or more optional renewal terms, which, under all circumstances,
may be exercised, and will be enforceable, by the Mortgagor, or the mortgagee
if the mortgagee acquires the related Mortgaged Property upon foreclosure,
assignment-in-lieu of foreclosure or otherwise) that extends not less than 10
years beyond the stated maturity of the related Mortgage Loan, and the
Mortgage is not and will not be subject to any other Mortgage on the fee
interest; or
(B) if the Mortgage Loan in whole or material part is secured
by a Mortgage constituting a valid first lien on the interest of the
Mortgagor as lessee under a ground lease with respect to a portion or all of
the related Mortgaged Property, and is not secured by the related fee
interest, then the Mortgage Loan Seller represents and warrants the
following:
(i) The ground lease (which shall mean such ground lease, all
amendments and modifications thereof and any related estoppels or agreements
from ground lessor) or a memorandum regarding it has been duly recorded. The
ground lease permits the interest of the lessee 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
adversely affect the security provided by the related Mortgage. There has
been no material change, satisfaction or termination in the terms of such
ground lease since its recordation, except by written instruments, all of
which are included in the related Mortgage File;
(ii) The lessor under such ground lease has agreed in a
writing included in the related Mortgage File that the ground lease may not
be amended, modified, canceled or terminated without the prior written
consent of the Mortgagee and that any such action without such consent is not
binding on the mortgagee, its successors or assigns, except if an event of
default occurs under the Ground Lease and notice is provided to the mortgagee
and such default is curable by the mortgagee, but remains uncured beyond the
applicable cure period;
(iii) The ground lease has an original term (or an original
term plus one or more optional renewal terms, which, under all circumstances,
may be exercised, and will be enforceable, by the mortgagee) that extends not
less than 10 years beyond the stated maturity of the related Mortgage Loan;
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(iv) The ground lessee's interest in the ground lease is not
subject to any liens or encumbrances superior to, or of equal priority with,
the Mortgage (including without limitation, the rights of any fee-mortgage,
if any) other than the related ground lessor's related fee interest and any
exceptions set forth in the related title insurance policy which exceptions
do not, and are not reasonably likely to, materially and adversely interfere
with (1) the ability of the related Mortgagor timely to pay in full the
principal and interest on the related Mortgage Note or (2) the use of such
Mortgaged Property for the use currently being made thereof;
(v) The ground lease is assignable to the Trustee and its
assigns without the consent of the lessor thereunder (or, if any such consent
is required, it has been obtained prior to the Closing Date);
(vi) As of the date of origination of the Mortgage Loan and
to the Mortgage Loan Seller's knowledge, as of the Cut-Off Date, the ground
lease is in full force and effect and no default has occurred, and to the
Mortgage Loan Seller's knowledge, there is no existing condition which, but
for the passage of time or giving of notice, would result in a default under
the terms of the ground lease;
(vii) The ground lease or other written agreement signed by
the lessor included in the Mortgage File requires the lessor to give notice
of any default by the lessee to the mortgagee. The ground lease or other
written agreement further provides that no notice given is effective against
the mortgagee unless a copy has been given to the mortgagee in a manner
described in the ground lease or ancillary agreement;
(viii) The mortgagee is permitted a reasonable opportunity,
which may be concurrent and coterminous with the Mortgagor's rights
thereunder (including, where necessary, sufficient time to gain possession of
the interest of the lessee under the ground lease through legal proceedings,
or to take other action so long as the mortgagee is proceeding) to cure any
default under the ground lease which is curable after the receipt of notice
of any default before the lessor may terminate the ground lease;
(ix) The ground lease does not impose any restrictions on
subletting by the mortgagee that would be viewed as commercially unreasonable
by a prudent commercial mortgage lender;
(x) The ground lease or the related Mortgage provides that
any related insurance proceeds or condemnation award (other than in respect
of a total or substantially total loss or taking in which case such amounts
shall be paid to the mortgagee) will be applied either to the repair or
restoration of all or part of the related Mortgaged Property, with the
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mortgagee or a trustee appointed by it having the right to hold and disburse
such proceeds as repair or restoration progresses, or, to the payment of the
outstanding principal balance of the Mortgage Loan, together with any accrued
interest (except in cases where a different allocation would not be viewed as
commercially unreasonable by a prudent commercial mortgage lender, taking
into account the relative duration of the ground lease and the related
Mortgage and the ratio of the market value of the related Mortgaged Property
to the outstanding principal balance of such Mortgage Loan);
(xi) Until the principal balance and accrued interest are
paid in full, neither the lessee nor the lessor under the ground lease will
have the option to terminate or modify the ground lease without prior written
consent of the mortgagee as a result of any casualty or partial condemnation,
except to provide for an abatement of the rent;
(xii) Except as set forth on Exhibit II-XII, under the terms
of the related ground lease or other written agreement with the ground
lessor, upon request, the ground lessor is required to enter into a new lease
with mortgagee upon termination of the Ground Lease for any reason, on
substantially similar terms and conditions as the old lease; and
(xiii) Except as set forth on Exhibit II-XIII, the ground
lease does not provide for an increase in rental payments during the term of
the related Mortgage Loan except for scheduled increases which are the
responsibility of the related Tenant under the Credit Lease.
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SCHEDULE III
For each Mortgage Loan identified on the Mortgage Loan Schedule as a
Credit Lease Loan, the Mortgage Loan Seller hereby represents and warrants
that, except as otherwise disclosed on the exhibits attached hereto, the
following:
(i) The base lease payments due under the related Credit
Lease are equal to or greater than the payments due with respect to the
related Mortgage Loan, and, as to the Bondable Leases, are payable without
setoff, counterclaim, recoupment, abatement, reduction or defense;
(ii) The Mortgagor does not have monetary obligations under
the related Credit Lease, and every monetary obligation associated with
managing, owning, developing and operating the leased property, including,
but not limited to, the costs associated with utilities, taxes, insurance,
maintenance, payments under ground leases, and repairs is an obligation of
the related Tenant, except for those repair or other items for which the
Mortgagee has required regular deposits into an escrow account maintained by
the Mortgagee or its designee;
(iii) The Mortgagor does not have any material non-monetary
obligations under the related Credit Lease, except for the delivery of
possession of the leased property;
(iv) The Mortgagor has not made any representation or
warranty in the related Credit Lease, a breach of which would result in the
termination of, or an offset or abatement with respect to, such Credit Lease;
(v) (A) Except as with respect to the Mortgage Loans listed
on Exhibit III-V(A), other than due to a default by the Mortgagor under a
related Credit Lease which is not a Bondable Lease, the Tenant cannot
terminate such Credit Lease for any reason other than in certain events of
casualty or condemnation, which events are insured under a Lease Enhancement
Policy, and (B), except with respect to the Mortgage Loan listed on Exhibit
III-V(B), in each case where the term of the Credit Lease is shorter than the
amortized Mortgage term, the balloon amount of such related Mortgage Loan
due at the scheduled maturity thereof is insured by a Lease Enhancement
Policy;
(vi) In the event the related Tenant assigns or sublets the
related leased property, such Tenant (and if applicable, the related
guarantor) remains obligated under the related Credit Lease;
(vii) Each property related to a Credit Lease Loan is one or
more separate tax lots;
(viii) The related Tenant has agreed to indemnify the
Mortgagor from
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any claims of any nature (a) to which the Mortgagor is subject because of such
Mortgagor's estate in the leased property, or (b) arising from (i) injury to
or death of any person or damage to or loss of property on the leased property
or connected with the use, condition or occupancy of the leased property,
(ii) Tenant's violation of the related Credit Lease, or (iii) any act or
omission of the Tenant;
(ix) The related Tenant has agreed to indemnify the Mortgagor
from any claims of any nature arising as a result of any hazardous material
affecting the leased property and due to such Tenant's use of the leased
property;
(x) In connection with Credit Lease Loans with respect to
which a lease guarantee exists, the related guarantor (which is the rated
entity affiliated with the Tenant) guarantees the payment due under the
related Credit Lease and such guarantee, on its face, contains no conditions
to such payment, other than a notice and right to cure; the lease guarantee
is the legal, valid and binding obligation of the related guarantor, and the
lease guarantee is assignable together with the Credit Lease without further
consent of the related guarantor; and the guaranty provides that it is
unconditional, irrevocable and absolute, and is the guaranty of both the
performance and payment of the financial obligations of the Tenant under the
related Credit Lease, and does not provide for offset, counterclaim or
defense;
(xi) Each Credit Lease Loan, except for those Mortgage Loans
listed on Exhibit III-XI, which has a Balloon Payment due at maturity which
is not covered by a corresponding lease payment from the Tenant, has the
benefit of a residual value insurance policy, such policy has been obtained,
and with respect to the Credit Leases other than Bondable Leases, the
required premiums have been paid;
(xii) Each Credit Lease Loan, except for those Mortgage Loans
listed on Exhibit III-XII, which gives the Tenant a right to terminate such
Credit Lease in certain events of casualty or condemnation has been insured
pursuant to a special risk insurance policy (insuring lease termination in
the event of casualty, condemnation, or both, as may be applicable) and the
required premiums have been paid;
(xiii) The list of lease guarantors or Tenants of the related
Credit Lease, attached as Exhibit III-XIII hereto, is accurate in all
material respects;
(xiv) Any obligation or liability imposed by any easement or
reciprocal easement agreement is an obligation of the Tenant and is without
recourse or liability to the Mortgagor;
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(xv) Except for Double Net Leases and Triple Net Leases, and
except for those Bondable Leases which afford the related Tenant the right to
terminate the Credit Lease upon the occurrence of certain casualty and/or
condemnation events upon payment of an amount sufficient to defease or pay
off the related Mortgage Loan, the obligations of the Tenant under the
related Credit Lease, including, but not limited to, the obligation to pay
fixed and additional rent, are not affected by reason of any damage to or
destruction of any portion of the leased property, any taking of the leased
property or any part thereof by condemnation or otherwise, or any
prohibition, limitation, interruption, cessation, restriction, prevention or
interference of the Tenant's use, occupancy or enjoyment of the leased
property;
(xvi) (a) Based on an Estoppel Letter from the Tenant as of
the Mortgage Loan's origination date, no default by the Mortgagor or the
Tenant has occurred under the related Credit Lease and there is no existing
condition which, but for the passage of time or the giving of notice, or both
would result in a default under the terms of such Credit Lease; (b) none of
the terms of the Credit Lease have been impaired, waived, altered or modified
in any respect (except as described in the related tenant estoppel, (c) no
Tenant has been released, in whole or in part, from its obligations under the
Credit Leases, (d) there is no right of rescission, offset, abatement,
diminution, defense or counterclaim to any Credit Lease, nor will the
operation of any of the terms of the Credit Leases, or the exercise of any
rights thereunder, render the Credit Lease unenforceable, in whole or in
part, or subject to any right of rescission, offset, abatement, diminution,
defense or counterclaim, and no such right of rescission, offset, abatement,
diminution, defense or counterclaim has been asserted with respect thereto
and (e) each Credit Lease has a term ending on or after the final maturity of
the related Credit Lease Loan;
(xvii) The Credit Lease is in full force and effect and is a
legal, valid, binding and enforceable agreement of the related Tenant subject
to applicable bankruptcy, insolvency, reorganization, moratorium and state
laws affecting the enforcement of creditors' rights and to general principles
of equity (regardless of whether such enforcement is considered in a
proceeding in equity or at law);
(xviii) In the event that the Trustee acquires title to a
Mortgaged Property by foreclosure or otherwise, the Mortgagor's interest
under the related Credit Lease is freely assignable by the Trustee and its
successors and assigns to any person without the consent of the Tenant (but
with notice), and in the event the Mortgagor's interest is so assigned, the
Tenant will be obligated to recognize the assignee as Mortgagor under such
Credit Lease;
3
<PAGE>
(xix) The Tenant has delivered a subordination,
non-disturbance and attornment agreement, and an Estoppel Letter with respect
to the related Credit Lease;
(xx) The Tenant has agreed to notify the Mortgagee of any
default under the related Credit Lease and to provide the Mortgagee with an
opportunity to cure;
(xxi) The terms of the Credit Lease may not be modified in
any material respect including, without limitation, its economic terms,
without the consent of the mortgagee thereunder; and to the knowledge of the
Mortgage Loan Seller, no Tenant has been released, in whole or in part, from
its obligations under its Credit Lease;
(xxii) Each Tenant is required to make all rental payments
directly to the Mortgagee;
(xxiii) No Mortgage Loan is secured by a Mortgaged Property
that is under construction or substantial rehabilitation;
(xxiv) The Mortgaged Property is not subject to any lease
other than the related Credit Lease, no person has any possessory interest
in, or right to occupy, the Mortgaged Property except under and pursuant to
such Credit Lease and the related Tenant is in occupancy of the Mortgaged
Property; and
(xxv) Each borrower is organized as a bankruptcy remote -
special purpose entity.
4
<PAGE>
SCHEDULE IV
To the Mortgage Loan Sellers' knowledge, based upon
due diligence performed in the origination of the related Mortgage Loan, and to
their knowledge as of the Cut-Off Date, with respect to any Mortgage Loan that
is secured in whole or in part by a Mortgaged Property which is operated as a
residential health care facility (a "Facility"), if any:
(i) All governmental licenses, permits, regulatory
agreements or other approvals or agreements necessary or desirable for the use
and operation of each Facility as intended were as of the related date of
origination held by the related Mortgagor or the operator of the Facility, and
were in full force and effect, including, without limitation, a valid
Certificate of Need ("CON") or similar certificate, license, or approval issued
by the applicable department of health for the requisite number of beds, and
approved provider status in any approved provider payment program (collectively,
the "Licenses"); and
(ii) In connection with the most recent governmental
inspection of the Facility, as of the Cut-Off Date (a) the Facility had not
received a "Level A" (or equivalent) violation which has not been cured to the
satisfaction of the applicable governmental agency, and (b) no statement of
charges or deficiencies had been made or penalty enforcement action has been
undertaken against the Facility, its operator or the Mortgagor or against any
officer, director or stockholder of such operator or the Mortgagor by such
governmental agency, and (c) there were no violations which threatened the
Facility's, the operator's or the Mortgagor's certification for participation in
Medicare or Medicaid or the other third-party payors' programs and (d) to the
Mortgage Loan Seller's knowledge, the Mortgagor and Facility complies with all
federal, state and local laws, regulations, quality and safety standards,
accreditation standards and requirements of the applicable state department of
health and (e) there was no threatened or pending revocation, suspension,
termination, probation, restriction, limitation, or nonrenewal affecting
Mortgagor or the Facility or any participation or provider agreement with any
third-party payor to which the Mortgagor is subject.
1
<PAGE>
EXHIBIT I-XII
-------------
MLMI-003 - 1700 Broadway
MLMI-010 - Bassett Furniture-Lewisville
MLMI-019 - Corr-Pro (Mystic) Warehouse
MLMI-048 - The Ansonia Commercial
MLMI-153 - Holiday on the Bay
<PAGE>
EXHIBIT I-XX
------------
MLMI-024 - East 61st Street Brownstone
<PAGE>
EXHIBIT I-XXX
-------------
MLMI-064 - Mercer Mall
<PAGE>
EXHIBIT I-XLIII(A)
------------------
Group
MLMI-001 - 1 Beach
MLMI-004 - 2 Northpoint
Group
MLMI-017 - City Villas
MLMI-037 - Peppertree Apts
Group
MLMI-013 - Bishops Landing Apartments
MLMI-015 - Charleston Apartments
MLMI-018 - Clarendon Apartments
Group
MLMI-029 - Hartford Apartments
MLMI-044 - Royal Knight Apartments
MLMI-054 - Village Square Apartments
Group
MLMI-105 - Country Club Care Center
MLMI-106 - Crown Care Center
Group
MLMI-112 - Holt and Eleanor Center
MLMI-115 - Santa Monica Sav-On
Group
MLMI-125 - Courtyard by Marriot - Newburgh
MLMI-126 - Albany Thruway Courtyard
MLMI-127 - Fairfield Inn Henrietta
Group
MLMI-160 - PetsMart, Inc.
MLMI-161 - Heilig Meyers
MLMI-163 - Heilig Meyers
EXHIBIT I-XLIII(B)
------------------
$59,845,380
<PAGE>
EXHIBIT II-XII
--------------
MLMI-064 - Mercer Mall
<PAGE>
EXHIBIT II-XIII
---------------
MLMI-003 - 1700 Broadway
MLMI-004 - 2 Northpoint
MLMI-036 - Pep Boys Plaza
MLMI-064 - Mercer Mall
MLMI-125 - Courtyard by Marriott - Newburgh
MLMI-126 - Albany Thruway Courtyard
MLMI-127 - Fairfield Inn - Henrietta
<PAGE>
EXHIBIT III-V(A)
----------------
MLMI-160 - PetsMart, Inc.
MLMI-161 - Heilig Meyers
MLMI-163 - Heilig Meyers
<PAGE>
EXHIBIT III-V(B)
----------------
MLMI-162 - Rite Aid
<PAGE>
EXHIBIT III-XI
--------------
MLMI-160 - PetsMart, Inc.
MLMI-161 - Heilig Meyers
MLMI-163 - Heilig Meyers
<PAGE>
EXHIBIT III-XII
---------------
MLMI-160 - PetsMart, Inc.
MLMI-161 - Heilig Meyers
MLMI-163 - Heilig Meyers
<PAGE>
EXHIBIT III-XIII
----------------
<TABLE>
<CAPTION>
Property Tenant Guarantor
- -------- ------ ---------
<S> <C> <C>
MLMI-162 Rite Aid Rite Aid
Corporation
</TABLE>
