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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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 23, 1997
MERRILL LYNCH MORTGAGE INVESTORS, INC.
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(Exact name of registrant as specified in its governing instruments)
Delaware 333-1704 13-3416059
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(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
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(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (212) 449-0336
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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 23, 1997, a single series of mortgage pass-through
certificates, entitled Merrill Lynch Mortgage Investors, Inc., Mortgage
Pass-Through Certificates, Series 1997-C2 (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, 1997, among Merrill Lynch
Mortgage Investors, Inc. as depositor (the "Registrant"), GE Capital Loan
Services, Inc. as master servicer, CRIIMI MAE Services Limited Partnership as
special servicer, and State Street Bank and Trust Company as trustee. The
Certificates consist of sixteen classes (each, a "Class") of Certificates, seven
of which Classes are designated as the "Class A-1 Certificates", the "Class A-2
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 147 multifamily and commercial mortgage loans
(the "Mortgage Loans") having an aggregate principal balance as of December 1,
1997 (the "Cut-off Date") of $686,342,931. Each Mortgage Loan is secured by a
first mortgage lien on a fee simple estate in an income producing property with
the exception of five Mortgage Loans which are fully secured by a leasehold
estate in income-producing real property, one Mortgage Loan which is secured by
a leasehold estate and a fee simple estate in income-producing real property and
two Mortgage Loans which are secured by a fee simple estate in a portion of the
related income producing property and a leasehold estate in the remainder of
such property.
Fifty-three (53) of the Mortgage Loans (the "MLMC Loans") showing an
aggregate principal balance of $182,318,920.66 (the "MLMC Balance"), were
acquired by the Registrant from Merrill Lynch Mortgage Capital Inc. ("MLMC") and
ninety-four (94) of the Mortgage Loans (the "GECA Loans"), having an aggregate
principal balance of $504,024,010.25 (the "GECA Balance"), were acquired by the
Registrant from GE Capital Access, Inc. ("GECA" or the "Seller") pursuant to two
Mortgage Loan Purchase Agreements, each dated as of December 1, 1997 (the
"Purchase Agreements"), between the Registrant and MLCM or the Seller, as
applicable. The purchase prices (collectively the "Purchase Price") for (A) the
MLMC Loans paid by the Registrant to MLMC consisted of a cash amount equal to
(i) 100% of the MLMC Balance plus (ii) interest accrued on the MLMC Loans at the
related Mortgage Rate, and (B) the GECA Loans paid by the Registrant to GECA
consisted of an amount determined in accordance with the letter agreement, dated
as of December 23, 1997, between the Registrant and GECA. 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 18, 1997 (the "Underwriting Agreement"), between the Registrant and
MLPF&S (pertaining to the Offered Certificates) and a Certificate Purchase
Agreement, dated as of December 18, 1997, between the Registrant and MLPF&S
(pertaining to the Private Certificates). The Registrant is a wholly-owned
limited purpose finance subsidiary of MLMC. On December 23, 1997, the Registrant
transferred the Mortgage Loans to the Trust Fund pursuant to the Pooling
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Agreement. The consideration received by the Registrant in exchange for such
transfer consisted of the Certificates.
The Certificates have the following initial Certificate Balances and initial
Pass-Through Rates:
Initial Pass-Through
Class Initial Certificate Balance Rate
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A-1............................ $121,657,000 6.46%
A-2............................ $372,509,000 6.54%
B ............................. $27,454,000 (1)
C ............................. $41,181,000 (1)
D ............................. $34,317,000 (1)
E ............................ $12,011,000 (1)
IO ........................... (2) (3)
F ............................ $37,749,000 6.25%
G ............................ $6,863,000 6.25%
H ............................. $12,011,000 6.25%
J ............................. $6,864,000 6.25%
K ............................. $13,726,931 6.25%
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)
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(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 1.14%, 1.11%, 0.77% and 0.57%, 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.
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(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 more
particularly described in the Prospectus, dated December 9, 1997, and the
Prospectus Supplement, dated December 18, 1997, 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 18,
1997, between Merrill Lynch Mortgage Investors, Inc.
and Merrill Lynch, Pierce, Fenner & Smith Incorporated.
4.1 Pooling and Servicing Agreement, dated as of December 1,
1997, among Merrill Lynch Mortgage Investors, Inc. as
depositor, GE Capital Loan Services, Inc. as master
servicer, CRIIMI MAE Services Limited Partnership as
special servicer, and State Street Bank and Trust
Company as trustee.
99.1 Mortgage Loan Purchase Agreement, dated as of
December 1, 1997, between Merrill Lynch Mortgage
Investors, Inc. and Merrill Lynch Mortgage Capital Inc.
99.2 Mortgage Loan Purchase Agreement, dated as of
December 1, 1997, between Merrill Lynch Mortgage
Investors, Inc. and GE Capital Access, 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
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Name: Michael M. McGovern
Title: Secretary and Director
Dated: January 7, 1998
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EXHIBIT INDEX
The following exhibits are being filed herewith:
Exhibit No. Description
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1.1 Underwriting Agreement, dated as of December 18, 1997,
between Merrill Lynch Mortgage Investors, Inc. and Merrill
Lynch, Pierce, Fenner & Smith.....................................
4.1 Pooling and Servicing Agreement, dated as of December 1,
1997, among Merrill Lynch Mortgage Investors, Inc. as
depositor, GE Capital Loan Services, Inc. as master
servicer, CRIIMI MAE Services Limited Partnership as
special servicer, and State Street Bank and Trust Company
as trustee........................................................
99.1 Mortgage Loan Purchase Agreement, dated as of December 1,
1997, between Merrill Lynch Mortgage Investors, Inc. and
Merrill Lynch Mortgage Capital Inc................................
99.2 Mortgage Loan Purchase Agreement, dated as of December 1,
1997, between Merrill Lynch Mortgage Investors, Inc. and GE
Capital Access, Inc...............................................
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MERRILL LYNCH MORTGAGE INVESTORS, INC.
UNDERWRITING AGREEMENT
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As of December 18, 1997
Merrill Lynch, Pierce, Fenner & Smith Incorporated
World Financial Center, North Tower
New York, New York 10281
Ladies and Gentlemen:
Merrill Lynch Mortgage Investors, Inc., a Delaware corporation (the
"Company"), proposes to sell to Merrill Lynch, Pierce, Fenner & Smith
Incorporated (the "Underwriter") the mortgage pass-through certificates
identified in Schedule I hereto (the "Certificates"), pursuant to this
Underwriting Agreement (this "Agreement").
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. and GE Capital Access, Inc. (collectively, the
"Mortgage Loan Sellers"). The Certificates will be issued pursuant to a Pooling
and Servicing Agreement (the "Pooling and Servicing Agreement"), dated as of
December 1, 1997 (the "Cut-off Date"), among the Company, as depositor, State
Street Bank and Trust Company, as trustee (the "Trustee"), GE Capital Asset
Management Corporation, as master servicer (the "Master Servicer"), and CRIIMI
MAE Services Limited Partnership, as special servicer (the "Special Servicer").
The Certificates and the Mortgage Loans are described more fully in the
Prospectus (as hereinafter defined) which the Company has furnished to the
Underwriter.
The Company has filed with the Securities and Exchange Commission
(the "Commission") registration statement (No. 333-1704, the "Registration
Statement") on Form S-3 for the registration of the Certificates under the
Securities Act of 1933, as amended (the "1933 Act"), which registration
statement has become effective and copies of which have heretofore been
delivered to the Underwriter. The Company proposes to file with the Commission
pursuant to Rule 424(b) under the 1933 Act a supplement to the form of
prospectus included in such registration statement relating to the Certificates
and the plan of distribution thereof. Such registration statement, including the
exhibits thereto, as amended at the date hereof, is hereinafter called the
"Registration Statement"; the prospectus included in the Registration Statement,
at the time the Registration Statement, as amended, became effective, or as
subsequently filed with the Commission pursuant to Rule 424(b) under the 1933
Act, is hereinafter called the "Basic Prospectus"; such supplement, dated
December 18, 1997 to the form of prospectus relating to the Certificates, in the
form in which it shall be
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filed with the Commission pursuant to Rule 424 is hereinafter called the
"Prospectus Supplement"; and the Basic Prospectus and the Prospectus Supplement,
together, are hereinafter called the "Prospectus". Any preliminary form of the
Prospectus that has heretofore been filed pursuant to Rule 424(b) is hereinafter
called a "Preliminary Prospectus".
SECTION 1. Representations and Warranties.
(a) The Company represents and warrants to the Underwriter as follows:
(i) The Registration Statement has become effective, and the
Registration Statement as of the effective date thereof (the "Effective
Date"), and the Prospectus as of the date of the Prospectus Supplement,
complied in all material respects with the applicable requirements of the
1933 Act and the rules and regulations thereunder; and the information in
the Registration Statement concerning the Company, as of the Effective
Date, did not contain any untrue statement of a material fact and did not
omit to state any material fact required to be stated therein or necessary
to make the statements therein not misleading. The information in the
Prospectus concerning the Company, as of the date of the Prospectus
Supplement, did not, and as of the Closing Date (as hereinafter defined)
will not, contain an untrue statement of a material fact and did not and
will not omit to state a material fact necessary in order to make the
information therein concerning the Company, in the light of the
circumstances under which they were made, not misleading. The parties agree
that the only information concerning the Company in the Registration
Statement is on page 30 of the Basic Prospectus under the caption "The
Depositor" and on page S-6 of the Prospectus Supplement under the caption
"Summary of Prospectus Supplement--Depositor."
(ii) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware with
corporate power and authority to own its properties and to conduct its
business as now conducted by it and to enter into and perform its
obligations under this Agreement and the Pooling and Servicing Agreement.
(iii) The Company is not in violation of its charter and by-laws or in
default in the performance or observance of any material obligation,
agreement, covenant or condition contained in any contract, indenture,
mortgage, loan agreement, note, lease or other instrument to which the
Company is a party or by which it may be bound, or to which any of the
property of the Company is subject. The execution, delivery and performance
of this Agreement and the Pooling and Servicing Agreement and the
consummation of the transactions contemplated herein and therein and
compliance by the Company with its obligations hereunder and thereunder
have been duly authorized by all the necessary corporate action and will
not conflict with or constitute a breach of, or default under, or result in
the creation or imposition of any lien, charge or encumbrance upon any
property of the Company pursuant to any contract, indenture, mortgage, loan
agreement, note, lease or other 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.
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(iv) The Certificates have been duly authorized 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,
when issued, authenticated and delivered pursuant to the provisions of this
Agreement and of the Pooling and Servicing Agreement against payment of the
consideration therefor in accordance with this Agreement, the Certificates
will be duly and validly issued and outstanding and entitled to the
benefits provided by the Pooling and Servicing Agreement, except as
enforcement thereof may be limited by bankruptcy, insolvency or other laws
relating to or affecting enforcement of creditors' rights or by general
equity principles.
(v) No authorization, approval or consent of any court or governmental
authority or agency is necessary in connection with the offering, issuance
or sale of the Certificates hereunder, except such as have been, or as of
the Closing Date will have been, obtained or such as may otherwise be
required under applicable state securities laws in connection with the
purchase and offer and sale of the Certificates by the Underwriter and any
recordation of the respective assignments of the Mortgage Loans to the
Trustee pursuant to the Pooling and Servicing Agreement that have not yet
been completed.
(vi) This Agreement has been, and as of the Closing Date the Pooling
and Servicing Agreement will be, duly authorized, executed and delivered by
the Company. This Agreement constitutes, and as of the Closing Date the
Pooling and Servicing Agreement will constitute, a legal, valid and binding
agreement of the Company, enforceable against the Company in accordance
with its terms, except as enforceability may be limited by (A) bankruptcy,
insolvency, reorganization, receivership, moratorium or other similar laws
affecting the enforcement of the rights of creditors generally, (B) general
principles of equity, whether enforcement is sought in a proceeding in
equity or at law, and (C) public policy considerations underlying the
securities laws, to the extent that such public policy considerations limit
the enforceability of the provisions of this Agreement that purport to
provide indemnification from securities law liabilities.
(vii) 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 interest in and
to the Mortgage Loans that are transferred by it to the Trustee, 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 Underwriter, and upon delivery to the Underwriter of the Certificates,
the Underwriter will have good title to the Certificates purchased by it,
free of Liens.
<PAGE>
(viii) Neither the Company nor the Trust Fund is required to be
registered as an "investment company" under the Investment Company Act of
1940, as amended (the "1940 Act").
(ix) 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 Underwriter 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 Underwriter 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 Underwriter. The Company is not selling the
Certificates to the Underwriter with any intent to hinder, delay or defraud
any of the creditors of the Company.
(x) At the Closing Date, the respective classes of Certificates shall
have been assigned ratings no lower than those set forth in Schedule I
hereto by the nationally recognized statistical rating organizations
identified in Schedule I hereto (the "Rating Agencies").
(xi) Any taxes, fees and other governmental charges in connection with
the execution, delivery and issuance of this Agreement, the Pooling and
Servicing Agreement and the Certificates payable by the Company (other than
income taxes) have been paid or will be paid at or prior to the Closing
Date.
(xii) There are no actions, proceedings or investigations pending
before or threatened by any court, administrative agency or other tribunal
to which the Company is a party or of which any of its properties is the
subject (a) which if determined adversely to the Company would have a
material adverse effect on the business or financial condition of the
Company, (b) asserting the invalidity of this Agreement, the Pooling and
Servicing Agreement or the Certificates, (c) seeking to prevent the
issuance of the Certificates or the consummation by the Company of any of
the transactions contemplated by the Pooling and Servicing Agreement or
this Agreement, as the case may be, or (d) which might materially and
adversely affect the performance by the Company of its obligations under,
or the validity or enforceability of, the Pooling and Servicing Agreement,
this Agreement or the Certificates.
(xiii) The Company possesses all material licenses, certificates,
authorities or permits issued by appropriate state, federal, or foreign
regulatory agencies and bodies necessary to conduct the business now
conducted by it and as described in the Prospectus, and the Company has not
received notice of any proceedings relating to the revocation or
modification of any such license, certificate, authority or permit which if
decided adversely to the Company would singly, or in the aggregate,
materially and adversely affect the conduct of its business, operations or
financial condition.
<PAGE>
At the Closing Date, each of the representations and warranties of
the Company set forth in the Pooling and Servicing Agreement will be true and
correct in all material respects.
(b) The Underwriter represents and warrants to the Company that (i)
the Underwriter, as of the date hereof, complied and, as of the Closing Date,
will comply with all of its obligations hereunder and (ii) with respect to all
Computational Materials and ABS Term Sheets, if any, provided by the Underwriter
to the Company pursuant to Section 4(b)(iv), such Computational Materials and
ABS Term Sheets, as of the date hereof, are, and as of the Closing Date, will be
accurate in all material respects (taking into account the assumptions
explicitly set forth in the Computational Materials or ABS Term Sheets) and
constitutes, as of the date hereof, and will constitute, as of the Closing Date,
the complete set of all Computational Materials and ABS Term Sheets that are
required to be filed with the Commission pursuant to Section 5(i).
SECTION 2. Purchase and Sale.
Subject to the terms and conditions herein set forth and in reliance
upon the representations and warranties herein contained, the Company agrees to
sell to the Underwriter, and the Underwriter agrees to purchase from the
Company, at the related purchase price set forth on Schedule I hereto,
Certificates of each class thereof having an actual amount as set forth on
Schedule I hereto. There will be added to the purchase price of the Certificates
an amount equal to interest accrued thereon pursuant to the terms thereof from
the Cut-off Date to but excluding the Closing Date.
SECTION 3. Delivery and Payment.
Payment of the aggregate purchase price for, and delivery of, the
Certificates shall be made at 10:00 A.M. New York City time on December 23,
1997, which date and time may be postponed by agreement between the Underwriter
and the Company (such time and date of payment and delivery, the "Closing
Date"). Payment shall be made to the Company in immediately available funds
wired to such bank as may be designated by the Company, against delivery of the
Certificates. The Certificates shall be in such authorized denominations and
registered in such names as the Underwriter may request in writing at least two
business days before the Closing Date. The Certificates will be made available
for examination by the Underwriter not later than 10:00 A.M. New York City time
on the last business day prior to the Closing Date. Except as otherwise set
forth in Schedule I, delivery of the Certificates shall be made at the office of
Willkie Farr & Gallagher, One Citicorp Center, 153 East 53rd Street, New York,
New York 10022, or at such other place as shall be agreed upon by the
Underwriter and the Company.
SECTION 4. Offering by Underwriter.
(a) It is understood that the Underwriter proposes to offer the
Certificates for sale as set forth in the Prospectus. It is further understood
that the Company, in reliance upon an exemption from the Attorney General of the
State of New York granted pursuant to Policy Statement 105, has not and will not
file an offering statement pursuant to Section 352-c of the
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General Business Law of the State of New York with respect to the Certificates.
The Underwriter therefore agrees that sales of the Certificates made by the
Underwriter in and from the State of New York will be made only to institutional
investors within the meaning of Policy Statement 105.
(b) The Underwriter may prepare and provide to prospective investors
certain Computational Materials, Structural Term Sheets and Collateral Term
Sheets in connection with its offering of the Certificates, subject to the
following conditions:
(i) The Underwriter shall have complied with the requirements of the
no-action letter, dated May 20, 1994, issued by the Commission to Kidder,
Peabody Acceptance Corporation 1, 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, dated 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").
(ii) For purposes hereof, "Computational Materials" shall have the
meaning given such term in the No-Action Letters, but shall include only
those Computational Materials that have been prepared or delivered to
prospective investors by or at the direction of the Underwriter. For
purposes hereof, "ABS Term Sheets", "Structural 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, Structural Term
Sheets or Collateral Term Sheets that have been prepared or delivered to
prospective investors by or at the direction of the Underwriter.
(iii) All Computational Materials and ABS Term Sheets provided to
prospective investors that are required to be filed pursuant to the
No-Action Letters shall bear a legend substantially in the form attached
hereto as Exhibit A-1 and, in the case of Collateral Term Sheets, such
legend shall also include the statement substantially in the form set forth
on Exhibit A-2. The Company shall have the right to require specific
legends or notations to appear on any Computational Materials or ABS Term
Sheets, the right to require changes regarding the use of terminology and
the right to determine the types of information appearing therein.
Notwithstanding the foregoing, this subsection (iii) will be satisfied if
all Computational Materials and ABS Term Sheets referred to herein bear a
legend in a form previously approved in writing by the Company.
(iv) The Underwriter shall have provided the Company with
representative forms of all Computational Materials and ABS Term Sheets
prior to their first use, to the extent such forms have not previously been
approved by the Company for use by the Underwriter. The Underwriter shall
have provided to the Company, for filing on Form 8-K as provided in Section
5(i), copies (in such format as required by the Company) of all
Computational Materials and ABS Term Sheets that are required to be
<PAGE>
filed with the Commission pursuant to the No-Action Letters. The
Underwriter may have provided copies of the foregoing in a consolidated or
aggregated form including all information required to be filed. All
Computational Materials and ABS Term Sheets described in this subsection
(iv) shall have been provided to the Company not later than 10:00 a.m. (New
York City time) not less than one business day before filing thereof is
required pursuant to the terms of this Agreement. The Underwriter shall
have not provided to any investor or prospective investor in the
Certificates any Computational Materials or ABS Term Sheets on or after the
day on which Computational Materials and ABS Term Sheets are required to be
provided to the Company pursuant to this subsection (iv) (other than copies
of Computational Materials or ABS Term Sheets previously submitted to the
Company in accordance with this subsection (iv) for filing pursuant to
Section 5(i)), unless such Computational Materials or ABS Term Sheets are
preceded or accompanied by the delivery of a Prospectus to such investor or
prospective investor.
(v) All information included in the Computational Materials and ABS
Term Sheets shall have been generated based on substantially the same
methodology and assumptions that are used to generate the information in
the Prospectus Supplement as set forth therein; provided that the
Computational Materials and ABS Term Sheets may have included information
based on alternative methodologies or assumptions if specified therein. If
any Computational Materials or ABS Term Sheets that are required to be
filed were based on assumptions with respect to the Mortgage Pool that
differ from the final Pool Information in any material respect or on
Certificate structuring assumptions that were revised in any material
respect prior to the printing of the Prospectus, the Underwriter shall have
prepared revised Computational Materials or ABS Term Sheets, as the case
may be, based on the final Pool Information and structuring assumptions,
shall have circulated such revised Computational Materials and ABS Term
Sheets to all recipients of the preliminary versions thereof that indicated
orally to the Underwriter they would purchase all or any portion of the
Certificates, and shall have included such revised Computational Materials
and ABS Term Sheets (marked, "as revised") in the materials delivered to
the Company pursuant to subsection (iv) above.
(vi) The Company shall not be obligated to file any Computational
Materials or ABS Term Sheets that have been determined to contain any
material error or omission, provided that, at the request of the
Underwriter, the Company will file Computational Materials or ABS Term
Sheets that contain a material error or omission if clearly marked
"superseded by materials dated ______________" and accompanied by corrected
Computational Materials or ABS Term Sheets that are marked, "material
previously dated ______________, as corrected." If, within the period
during which the Prospectus relating to the Certificates is required to be
delivered under the 1933 Act, any Computational Materials or ABS Term
Sheets are determined, in the reasonable judgment of the Company or the
Underwriter, to contain a material error or omission, the Underwriter shall
prepare a corrected version of such Computational Materials or ABS Term
Sheets, shall circulate such corrected Computational Materials or ABS Term
Sheets to all recipients of the prior versions thereof that either
indicated
<PAGE>
orally to the Underwriter they would purchase all or any portion of the
Certificates, or actually purchased all or any portion thereof, and shall
deliver copies of such corrected Computational Materials or ABS Term Sheets
(marked, "as corrected") to the Company for filing with the Commission in a
subsequent Form 8-K submission (subject to the Company's obtaining an
accountant's comfort letter in respect of such corrected Computational
Materials and ABS Term Sheets, which shall be at the expense of the
Underwriter).
(vii) The Underwriter shall be deemed to have represented, as of the
Closing Date, that, except for Computational Materials and/or ABS Term
Sheets provided to the Company pursuant to subsection (iv) above, the
Underwriter did not provide any prospective investors with any information
in written or electronic form in connection with the offering of the
Certificates that is required to be filed with the Commission in accordance
with the No-Action Letters, and the Underwriter shall provide the Company
with a certification to that effect on the Closing Date.
(viii) In the event of any delay in the delivery by the Underwriter
to the Company of all Computational Materials and ABS Term Sheets required
to be delivered in accordance with subsection (iv) above, or in the
delivery of the accountant's comfort letter in respect thereof pursuant to
Section 5(i), the Company shall have the right to delay the release of the
Prospectus to investors or to the Underwriter, to delay the Closing Date
and to take other appropriate actions in each case as necessary in order
to allow the Company to comply with its agreement set forth in Section
5(i) to file the Computational Materials and ABS Term Sheets by the time
specified therein.
(ix) The Underwriter represents that it has in place, and covenants
that it shall maintain, internal controls and procedures which it
reasonably believes to be sufficient to ensure full compliance with all
applicable legal requirements of the No-Action Letters with respect to the
generation and use of Computational Materials and ABS Term Sheets in
connection with the offering of the Certificates.
(c) The Underwriter further agrees that it shall promptly provide the
Company with such information as to matters of fact as the Company may
reasonably request to enable it to comply with its reporting requirements with
respect to each class of Certificates to the extent such information can in the
good faith judgment of the Underwriter be determined by it.
SECTION 5. Covenants of the Company.
The Company covenants with the Underwriter as follows:
(a) The Company will give the Underwriter notice of its intention to
file or prepare any amendment to the Registration Statement at any time prior to
the Closing Date or any amendment or supplement to the Prospectus at any time
hereafter, and will furnish the Underwriter with copies of any such amendment or
supplement a reasonable amount of time prior to such proposed filing or use, as
the case may be.
<PAGE>
(b) The Company will cause the Prospectus to be transmitted to the
Commission for filing pursuant to Rule 424(b) under the 1933 Act by means
reasonably calculated to result in filing with the Commission pursuant to said
rule.
(c) The Company will deliver to the Underwriter a copy of the
Registration Statement as originally filed and of each amendment thereto
(including exhibits filed therewith or incorporated by reference therein).
(d) The Company will furnish to the Underwriter, from time to time
during the period when the Prospectus is required to be delivered under the 1933
Act or the Securities Exchange Act of 1934, as amended (the "1934 Act"), such
number of copies of the Prospectus (as amended or supplemented) as the
Underwriter may reasonably request for the purposes contemplated by the 1933 Act
or the 1934 Act or the respective applicable rules and regulations of the
Commission thereunder.
(e) If, during the period after the first date of the public offering of
the Certificates in which a prospectus relating to the Certificates is required
to be delivered under the 1933 Act, any event shall occur as a result of which
it is necessary to amend or supplement the Prospectus in order to make the
Prospectus not misleading in the light of the circumstances existing at the time
it is delivered to a purchaser, the Company will forthwith amend or supplement
the Prospectus so that, as so amended or supplemented, the Prospectus will not
include an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances existing, at the time it is delivered to a purchaser, not
misleading, and the Company will furnish to the Underwriter a reasonable number
of copies of such amendment or supplement.
(f) The Company will endeavor to arrange for the qualification of the
Certificates for sale under the applicable securities laws of such states and
other jurisdictions of the United States as the Underwriter may reasonably
designate and will maintain such qualification in effect so long as required for
the initial distribution of Certificates; provided, however, that the Company
shall not be obligated to qualify as a foreign corporation in any jurisdiction
in which it is not so qualified.
(g) The Company will pay or cause to be paid all fees and. expenses of
its counsel. The Underwriter shall be responsible for the payment of all other
costs and expenses incurred in connection with the transactions.
(h) If, during the period after the Closing Date in which a prospectus
relating to the Certificates is required to be delivered under the 1933 Act, the
Company receives notice that a stop order suspending the effectiveness of the
Registration Statement or preventing the offer and sale of the Certificates is
in effect, the Company will immediately advise the Underwriter of the issuance
of such stop order.
(i) The Company will file with the Commission within fifteen days of the
issuance of the Certificates a report on Form 8-K setting forth specific
information concerning the Certificates and the Mortgage Pool to the extent that
such information is not set forth in the
<PAGE>
Prospectus. The Company will also file with the Commission a report on Form 8-K
setting forth all Computational Materials and ABS Term Sheets provided to the
Company by the Underwriter and identified by it as such within the time period
allotted for such filing pursuant to the No-Action Letters; provided, however,
that prior to such filing of the Computational Materials and ABS Term Sheets
(other than any ABS Term Sheets that are not based on the Pool Information) by
the Company (A) the Underwriter must comply with its obligations pursuant to
Section 4 and (B) if the Company determines that the methodology on which all or
any part of such Computational Materials and ABS Term Sheets were prepared is
not substantially the same as (x) the methodology on which information in the
Prospectus Supplement (or Preliminary Prospectus Supplement) was prepared or (y)
a methodology acceptable to the Company and as to the accuracy of which the
Company was otherwise given comfort satisfactory to the Company, the Company
must receive a letter from Deloitte & Touche LLP ("Deloitte"), certified public
accountants, satisfactory in form and substance to the Company, to the effect
that such accountants have performed certain specified procedures, all of which
have been agreed to by the Company, as a result of which they have determined
that the information included in the Computational Materials and ABS Term Sheets
(if any) as to which the Company has made such a determination and which they
have examined in accordance with such specified procedures is accurate except as
to such matters that are not deemed by the Company to be material. The foregoing
letter shall be at the expense of the Underwriter that provided the
Computational Materials to the Company. The Company shall file any corrected
Computational Materials described in Section 4(b)(vi) as soon as practicable
following receipt thereof.
SECTION Conditions of Underwriter's Obligations.
The Underwriter's obligation to purchase the Certificates allocated
to it as set forth on Schedule I hereto shall be subject to the accuracy of the
representations and warranties on the part of the Company contained herein as of
the date hereof and as of the Closing Date, to the performance by the Company of
its obligations hereunder and to the following conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall be in effect, and no proceedings for that purpose shall be
pending or, to the Company's knowledge, threatened by the Commission.
(b) On the Closing Date, the Underwriter shall have received:
(i) One or more opinions, dated the Closing Date, of counsel to
the Company, in form and substance satisfactory to the Underwriter,
substantially to the effect that:
A. The Company is a corporation in good standing under the laws of
the State of Delaware and has the corporate power and authority to enter
into and perform its obligations under each of the Pooling and Servicing
Agreement and this Agreement.
B. Each of the Pooling and Servicing Agreement and this Agreement
has been duly authorized, executed and delivered by the Company.
<PAGE>
C. Each of the Pooling and Servicing Agreement and this Agreement,
upon due authorization, execution and delivery by the other parties
thereto, will constitute a valid, legal and binding agreement of the
Company, enforceable against the Company in accordance with its terms,
except as enforceability may be limited by (a) bankruptcy, insolvency,
liquidation, receivership, moratorium, reorganization or other similar
laws affecting the enforcement of the rights of creditors generally, (b)
general principles of equity, whether enforcement is sought in a
proceeding in equity or at law and (c) public policy considerations
underlying the securities laws, to the extent that such public policy
considerations limit the enforceability of provisions which purport to
provide indemnification from securities law liabilities.
D. The Certificates, when duly and validly executed, authenticated
and delivered in accordance with the Pooling and Servicing Agreement and
paid for in accordance with this Agreement and the Certificate Purchase
Agreement, will be entitled to the benefits of the Pooling and Servicing
Agreement.
E. The Registration Statement is effective under the 1933 Act and,
to such counsel's knowledge, no stop order suspending the effectiveness of
the Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or threatened under
Section 8(d) of the 1933 Act.
F. At the time it became effective, the Registration Statement
(other than any financial statements and supporting schedules included
therein, as to which such counsel renders no opinion) complied as to form
in all material respects with the requirements of the 1933 Act and the
applicable rules and regulations thereunder.
G. To such counsel's knowledge, there are no material contracts,
indentures or other documents of the Company required to be described or
referred to in the Registration Statement or to be filed as exhibits
thereto other than those described or referred to therein or filed or
incorporated by reference as exhibits thereto.
H. The offer and sale of the Privately Offered Certificates by the
Company to the Purchasers (as defined in the Certificate Purchase
Agreement) in the manner contemplated by the Certificate Purchase
Agreement do not require registration of the Privately Offered
Certificates under the 1933 Act.
I. The Pooling and Servicing Agreement is not required to be
qualified under the Trust Indenture Act of 1939, as amended. Neither the
Company nor the Trust Fund is required to be registered under the
Investment Company Act of 1940, as amended.
J. No consent, approval, authorization or order of any State of New
York or federal court or governmental agency or body is required for the
consummation by the Company of the transactions contemplated by the
Pooling and Servicing Agreement and this Agreement, except (i) such as
have been obtained under the 1933 Act, (ii) such as may be required under
the securities laws of any jurisdiction in connection with the
<PAGE>
purchase and the offer and sale of the Certificates by the Underwriter, as
to which such counsel express no opinion and (iii) any recordation of the
assignments of the Mortgage Loans pursuant to the Pooling and Servicing
Agreement that has not yet been completed.
K. Neither the offer and sale of the Certificates nor the
consummation of any other of the transactions contemplated in or the
fulfillment of the terms of the Pooling and Servicing Agreement and this
Agreement, will conflict with or result in a breach or violation of any
term or provision of, or constitute a default (or an event which with the
passing of time or notification, or both, would constitute a default)
under, the certificate of incorporation or by-laws of the Company or, to
the knowledge of such counsel, any indenture or other agreement or
instrument to which the Company is a party or by which it is bound, or any
State of New York or federal statute or regulation applicable to the
Company or, to the knowledge of such counsel, any order of any State of
New York or federal court, regulatory body, administrative agency or
governmental body having jurisdiction over the Company.
L. There are no actions, proceedings or investigations pending,
before or, to such counsel's knowledge, threatened by any court,
administrative agency or other tribunal to which the Company is a party or
of which any of its properties is the subject (a) which, if determined
adversely to the Company, would have a material adverse effect on the
business or financial condition of the Company, (b) asserting the
invalidity of the Pooling and Servicing Agreement, this Agreement or the
Certificates, (c) seeking to prevent the issuance of the Certificates or
the consummation by the Company of any of the transactions contemplated by
the Pooling and Servicing Agreement and this Agreement or (d) which might
materially and adversely affect the performance by the Company of its
obligations under, or the validity or enforceability of the Pooling and
Servicing Agreement and this Agreement.
(ii) An opinion, dated the Closing Date, of counsel to the
Underwriter, acceptable to the Underwriter.
In giving their opinions required by subsection (b)(i) of this
Section, counsel to the Company shall additionally state (A) that nothing
has come to such counsel's attention that would lead it to believe that
the Prospectus (other than the financial statements and supporting
schedules and statistical information included therein, as to which no
opinion need be rendered), at the date of the Basic Prospectus, at the
date of the Prospectus Supplement or at the Closing Date, included or
includes an untrue statement of a material fact or omitted or omits 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 and (B) that nothing has come to such counsel's attention that
would lead it to believe the Registration Statement (other than any
financial statements and supporting schedules and statistical information
included therein, as to which no opinion need be rendered), at the
Effective Date, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading.
<PAGE>
(c) On the Closing Date, the Underwriter shall have received a
favorable opinion, dated the Closing Date, 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 86OG 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 "Certain 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, are correct in all material respects with respect to those
consequences or matters that are discussed therein.
(d) The Company shall have delivered to the Underwriter a certificate,
dated the Closing Date, of the President, a Senior Vice President or a Vice
President of the Company to the effect that the signer of such certificate has
examined, or has relied upon an examination conducted by appropriate persons
authorized by him, of this Agreement, the Prospectus, the Pooling and Servicing
Agreement and various other closing documents, and that, to the best of his or
her knowledge after reasonable investigation:
(i) the representations and warranties of the Company in this
Agreement are true and correct in all material respects;
(ii) the Company has, in all material respects, complied with all
the agreements and satisfied all the conditions on its part to be
performed or satisfied hereunder at or prior to the Closing Date; and
(iii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been initiated or threatened by the Commission.
(e) The Company and the Underwriter shall have received from Deloitte,
certified public accountants, a letter dated the Closing Date, in form and
substance satisfactory to the Underwriter, stating in effect that:
(i) they have performed certain specified procedures as a result
of which they have determined that the information of an accounting,
financial or statistical nature set forth in the Prospectus Supplement
under the captions "Summary of the Prospectus Supplement," "Description of
the Mortgage Pool" and "Yield and Maturity Considerations" and on Annex A
agrees with the data sheet or computer tape prepared by or on behalf of
the Mortgage Loan Sellers, unless otherwise noted in such letter; and
(ii) they have compared the data contained in the data sheet or
computer tape referred to in the immediately preceding clause (i) to
information contained in an agreed upon sampling of the Mortgage Loan
files and in such other sources as shall be
<PAGE>
specified by them, and found such data and information to be in agreement,
unless otherwise noted in such letter.
(f) On or before the Closing Date, the Underwriter shall have received
confirmation satisfactory to it that the Certificates have received the ratings
set forth in Schedule I.
(g) On or before the Closing Date, the Underwriter and counsel to the
Underwriter shall have been furnished with such other documents and opinions as
they may reasonably require, including, without limitation, opinions of counsel
to the Trustee, the Master Servicer and the Special Servicer, for the purpose of
enabling them to pass upon the issuance and sale of the Certificates as herein
contemplated and related proceedings, 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 to
the Underwriter.
SECTION 7. Indemnification.
(a) The Company shall indemnify and hold the Underwriter and each
person, if any, who controls the Underwriter, within the meaning of either
Section 15 of the 1933 Act or Section 20 of the 1934 Act from and against any
and all losses, liabilities, claims and damages caused by any untrue statements
or omissions, or alleged untrue statements or omissions; in the information
concerning the Company included in the Registration Statement (or any amendment
thereto) or any Preliminary Prospectus or the Prospectus (or any amendment or
supplement thereto). The parties agree that the only information concerning the
Company in the Registration Statement is on page 30 of the Basic Prospectus
under the caption "The Depositor" and on page S-6 of the Prospectus Supplement
under the caption "Summary of the Prospectus Supplement--Depositor".
(b) The Underwriter shall indemnify and hold harmless the Company, its
directors, each of its officers who signed the Registration Statement and each
person, if any, who controls the Company within the meaning of either Section 15
of the 1933 Act or Section 20 of the 1934 Act, against any and all losses,
liabilities, claims and damages as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, (i) jointly
and severally if made in any Preliminary Prospectus or the Prospectus (or any
amendment or supplement thereto) and (ii) severally and not jointly if made in
the Computational Materials or ABS Term Sheets prepared or distributed by the
Underwriter and incorporated by reference in the Registration Statement or the
Prospectus as a result of any filing pursuant to Section 5(i).
(c) 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
which it may have otherwise than on account of this indemnity agreement. In case
any action is brought against any indemnified party and it
<PAGE>
notifies the indemnifying party of the commencement thereof, the indemnifying
party may participate at its own expense in the defense of any such action and,
to the extent that it may elect by written notice delivered to the indemnified
party promptly after receiving the aforesaid notice from the indemnified party,
to assume the defense thereof, with counsel satisfactory to such indemnified
party. In any such proceeding, any indemnified party shall have the right to
retain its own counsel, but the fees and expenses of such counsel shall be at
the expense of such indemnified party unless (i) the indemnifying party and the
indemnified party shall have agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. In no event shall the indemnifying parties be
liable for fees and 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.
Unless it shall assume the defense of any proceeding, an indemnifying party
shall not be liable for any settlement of any proceeding, effected without its
written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party shall indemnify the
indemnified party from and against any loss or liability by reason of such
settlement or judgment. If an indemnifying party assumes the defense of any
proceeding, it shall be entitled to settle such proceeding with the consent of
the indemnified party or, if such settlement provides for release of the
indemnified party in connection with all matters relating to the proceeding that
have been asserted against the indemnified party in such proceeding by the other
parties to such settlement, without the consent of the indemnified party.
(d) If the indemnification provided for in this Section 7 is
unavailable to an indemnified party under subsection (a) or (b) or insufficient
in respect of any losses, liabilities, claims or damages referred to therein,
then the indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company on the
one hand and the Underwriter on the other from the offering of the Certificates
or (ii) if the allocation provided by clause (i) above 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 in connection
with the statements or omissions which resulted in such losses, claims, damages
or liabilities, as well as any other relevant equitable considerations. The
relative fault of the Company on the one hand and of the Underwriter on the
other 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 Company
or by the Underwriter, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
(e) The parties hereto agree that it would not be just and equitable
if contribution were determined by pro rata allocation or by any other method of
allocation that does not take account of the considerations referred to in
subsection (d) above. The amount paid or payable
<PAGE>
by an indemnified party as a result of the losses, liabilities, claims or
damages referred to in this Section 7 shall be deemed to include any legal fees
and disbursements or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such claim except where
the indemnified party is required to bear such expenses, which expenses the
indemnifying party shall pay as and when incurred, at the request of the
indemnified party, to the extent that the indemnifying party believes that it
will be ultimately obligated to pay such expenses. In the event that any
expenses so paid by the indemnifying party are subsequently determined to not be
required to be borne by the indemnifying party hereunder, the party which
received such payment shall promptly refund the amount so paid to the party
which made such payment. No person guilty of fraudulent misrepresentation
(within the meaning of Section II (f) of the 1933 Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 7 are not exclusive
and shall not limit any rights or remedies that may otherwise be available to
any indemnified party at law or in equity.
(f) The indemnity and contribution agreements contained in this
Section 7 shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by the Company,
the Underwriter, any of their respective directors or officers, or any person
controlling the Company or an Underwriter, and (iii) acceptance of and payment
for any of the Certificates.
SECTION 8. Representations and Warranties to Survive Delivery.
All representations and warranties of the Company contained in this
Agreement shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of the Underwriter or any controlling person
in respect of the Underwriter, and shall survive delivery of the Certificates to
the Underwriter.
SECTION 9. Default by the Underwriter.
If the Underwriter shall fail or refuse to purchase the Certificates
that it has agreed to purchase hereunder, this Agreement will terminate without
liability on the part of the Company; provided, however, the Company shall have
the right to postpone the Closing Date, but in no event for longer than seven
days, in order that the required changes, if any, in the Registration Statement
and the Prospectus or any other documents or arrangements may be effected. Any
action taken under this paragraph shall not relieve the Underwriter from
liability in respect of any such default of the Underwriter under this
Agreement. The term "Underwriter" as used in this Agreement shall also include,
for all purposes of this Agreement, any party not initially party to this
Agreement who, with the approval of the Underwriter and the Company, purchases
the Certificates that the Underwriter agreed, but failed or refused, to
purchase.
SECTION 10. Termination of Agreement.
(a) The Underwriter may terminate its obligations under this
Agreement, by notice to the Company, at any time at or prior to the Closing Date
if the sale of the Certificates
<PAGE>
provided for herein is not consummated because of any failure or refusal on the
part of the Company to comply with the terms or to fulfill any of the conditions
of this Agreement, or if for any reason the Company shall be unable to perform
its obligations under this Agreement.
(b) This Agreement shall be subject to termination in the absolute
discretion of the Underwriter, by notice given to the Company, if (A) after the
execution and delivery of this Agreement and prior to the Closing Date (i)
trading generally shall have been suspended or materially limited on or by, as
the case may be, any of the New York Stock Exchange, the American Stock
Exchange, the National Association of Securities Dealers, Inc., the Chicago
Board of Options Exchange, the Chicago Mercantile Exchange or the Chicago Board
of Trade, (ii) trading of any securities of the Company shall have been
suspended on any exchange or in any over-the-counter market, (iii) a general
moratorium on commercial banking activities in New York shall have been declared
by either Federal or New York State authorities, or (iv) there shall have
occurred any outbreak or escalation of hostilities or any change in financial
markets or any calamity or crisis that, in the judgment of the Underwriter, is
material and adverse and (B) in the case of any of the events specified in
clauses (A)(i) through (iv) above, such event singly or together with any other
such event, makes it, in the judgment of the Underwriter, impracticable to
market the Certificates on the terms and in the manner contemplated in the
Prospectus.
(c) If the obligations of the Underwriter under this Agreement are
terminated pursuant to this Section and arrangements satisfactory to the Company
for the purchase of the Certificates originally allocated to the Underwriter as
set forth on Schedule I hereto are not made within 36 hours after such default,
this Agreement shall terminate without liability on the part of any of the
parties hereto.
SECTION 11. Notices.
All notices and other communications hereunder shall be in writing
and shall be deemed duly given if mailed or transmitted by any standard form of
communication. Notices to the Underwriter shall be directed to Merrill Lynch,
Pierce, Fenner & Smith Incorporated, World Financial Center, North Tower, New
York, New York 10281, Attention: Real Estate Investment Banking and notices to
the Company shall be directed to Merrill Lynch Mortgage Investors, Inc., World
Financial Center, North Tower, New York, New York 10028-1315, 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.
SECTION 12. Parties.
This Agreement shall inure to the benefit of and be binding upon the
Underwriter and 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 and the Company and
their respective successors and the controlling persons and officers and
directors referred to in Sections 7 and 8 and their respective successors, 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
<PAGE>
conditions and provisions hereof are intended to be for the
sole and exclusive benefit of the Underwriter and the Company and their
respective successors, and said controlling persons and officers and directors
and their respective successors, heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Certificates
from an Underwriter shall be deemed to be a successor by reason merely of such
purchase.
SECTION 13. Governing Law and Time.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York applicable to agreements made and to be
performed in said State.
SECTION 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.
<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
between the Underwriter and the Company in accordance with its terms.
Very truly yours,
MERRILL LYNCH MORTGAGE
INVESTORS, INC.
By: /s/ BRUCE L. ACKERMAN
----------------------------------
Name: Bruce L. Ackerman
Title: Vice President
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
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE I
Underwriting Agreement, dated as of December 18, 1997
Cut-off Date: December 1, 1997
Certificates: Merrill Lynch Mortgage Investors, Inc., Mortgage Pass-Through Certificates, Series 1997-C2
Initial
Aggregate
Certificate
Initial Balance or
Aggregate Notional
Certificate Amount to be
Balance or Purchased by Initial
Class Notional the Pass-Through Purchase
Designation Amount of Class Underwriter Rate Price(2) Rating(3)
- ----------- --------------- ----------- ------------ --------- ---------
<S> <C> <C> <C> <C> <C>
A-1 $121,657,000 $121,657,000 6.46% 100.718750 Aaa/AAA/AAA
A-2 $372,509,000 $372,509,000 6.54% 100.734375 Aaa/AAA/AAA
B $27,454,000 $27,454,000 6.70% 100.484375 Aa2/AA/AA
C $41,181,000 $41,181,000 6.73% 100.000000 A2/A/A
D $34,317,000 $34,317,000 7.07% 99.937045 Baa2/BBB/BBB
E $12,011,000 $12,011,000 7.27% 100.000000 Baa3/BBB-/NR
IO(1) $686,342,931 $686,342,931 1.27% 8.281250 Aaa/NR/AAA
</TABLE>
(1) The Class IO Certificates will not have a Certificate Balance nor will
they entitle the holders thereof to receive distributions of principal, but will
represent the right to receive the sum of the interest accrued on the notional
amount of each of its Components. Each Component of the Class IO Certificates
with respect to any Distribution Date will have a notional amount equal to the
Class Principal Balance of its corresponding Class of Sequential Pay
Certificates as of such Distribution Date. The Class IO Certificates will accrue
Interest on the notional amount of each of its Components as set forth in the
Pooling and Servicing Agreement.
(2) Expressed as a percentage of the initial aggregate Certificate Balance
or Notional Amount 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 or notional
amount, as applicable, thereof to be purchased from the Cut-off Date to but not
including the Closing Date.
(3) By each of Moody's Investors Service, Inc., Standard & Poor's Ratings
Services and Fitch IBCA, Inc. "NR" denotes no rating will be assigned to such
Class of Certificates by the indicated Rating Agency.
<PAGE>
EXHIBIT A-1
(a) For Structural Term Sheets:
Investors should read the Underwriter's Statement which accompanies this
Structural Term Sheet.
Prospective investors are advised to read carefully, and should rely solely
on, the prospectus and prospectus supplement (the "Final Prospectus") relating
to the securities referred to herein in making their investment decision. This
Structural Term Sheet does not include all relevant information relating to the
Securities described herein (the "Securities"), particularly with respect to the
risks and special considerations associated with an investment in the
Securities. All structural information contained herein is preliminary and it is
anticipated that such information will change. Any information contained herein
will be more fully described in, and will be fully superseded by, the
descriptions of the collateral and structure in the preliminary prospectus
supplement and Final Prospectus. Although the information contained in this
Structural Term Sheet is based on sources which the Underwriter believes to be
reliable, the Underwriter makes no representation or warranty that such
information is accurate or complete. Such information should not be viewed as
projections, forecast, predictions or opinions with respect to value. Prior to
making any investment decision, a prospective investor shall receive and fully
review the Final Prospectus. NOTHING SHOULD BE CONSIDERED AN OFFER TO SELL OR
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES.
(b) For Computational Materials:
Investors should read the Underwriter's Statement which accompanies these
Computational Materials. If the Statement is not attached please contact
your account representative. Do not use or rely on this information if you have
not received and reviewed the Statement.
These Computational Materials have been based upon the assumptions
described above. These assumptions will most likely not represent the actual
experience of the Mortgage Pool in the future. The Computational Materials are
intended to illustrate variations in yield on the Offered Certificates under
such assumptions. No representation is made herein as to the actual rate or
timing of principal payments or prepayments on any of the underlying Mortgage
Loans in the Mortgage Pool or the actual performance characteristics of the
Offered Certificates.
<PAGE>
EXHIBIT A-2
For Collateral Term Sheets:
Investors should read the Underwriter's Statement which accompanies this
Collateral Term Sheet.
Prospective investors are advised to carefully read, and should rely solely
on, the final prospectus and prospectus supplement (the "Final Prospectus")
relating to the securities referred to herein (the "Securities") in making their
investment decision. This Collateral Term Sheet does not include all relevant
information relating to the collateral described herein, particularly with
respect to the risks and special considerations associated therewith. All
collateral information contained herein is preliminary and such information may
change. Although the information contained in this Collateral Term Sheet is
based on sources which the Underwriter believes to be reliable, the Underwriter
makes no representation or warranty that such information is accurate or
complete. Such information should not be viewed as projections, forecasts,
predictions or opinions with respect to value. Prior to making any investment
decision, a prospective investor should receive and fully review the Final
Prospectus. NOTHING HEREIN SHOULD BE CONSIDERED AN OFFER TO SELL OR SOLICITATION
OF AN OFFER TO BUY ANY SECURITIES.
This Collateral Term Sheet and the information contained herein will be
superseded by the description of the collateral contained in the Prospectus
Supplement for any Collateral Term Sheet following the initial Collateral Term
Sheet; and supersedes all prior Collateral Term Sheets and the information
contained herein.
================================================================================
MERRILL LYNCH MORTGAGE INVESTORS, INC.
Depositor
and
GE CAPITAL LOAN SERVICES, INC.
Master Servicer
and
CRIIMI MAE SERVICES LIMITED PARTNERSHIP
Special Servicer
and
STATE STREET BANK AND TRUST COMPANY
Trustee
POOLING AND SERVICING AGREEMENT
Dated as of December 1, 1997
Mortgage Pass-Through Certificates
Series 1997-C2
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS
SECTION 1.01. Defined Terms...................................................2
Accrued Certificate Interest..............................................2
Accrued Component Interest................................................3
Acquisition Date..........................................................3
Additional Interest Distribution Account..................................3
Additional Interest.......................................................3
Additional Interest Rate..................................................3
Additional Master Servicer Reporting......................................3
Additional Servicing Fee..................................................4
Additional Servicing Fee Rate.............................................4
Additional Trust Fund Expense.............................................4
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......................................................6
Available Distribution Amount.............................................6
Balloon Mortgage Loan.....................................................6
Balloon Payment...........................................................6
Bankruptcy Code...........................................................6
Book-Entry Certificate....................................................6
Breach....................................................................6
Business Day..............................................................7
CERCLA....................................................................7
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
i
<PAGE>
Certificateholder......................................................... 7
Class..................................................................... 8
Class A-1 Certificate..................................................... 8
Class A-2 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
Collection Report.........................................................10
Component.................................................................10
Component Notional Amount.................................................10
Controlling Class.........................................................10
Corporate Trust Office....................................................11
Corrected Mortgage Loan...................................................11
Custodian.................................................................11
Cut-off Date..............................................................11
Cut-off Date Balance......................................................11
Debt Service Coverage Ratio...............................................11
Default Interest..........................................................11
Defaulted Mortgage Loan...................................................11
Defeasance Collateral.....................................................12
Defeasance Loan...........................................................12
Definitive Certificate....................................................12
Depositor.................................................................12
Depository................................................................12
Depository Participant....................................................12
Determination Date........................................................12
Directly Operate..........................................................12
Disqualified Organization.................................................12
Distributable Certificate Interest........................................13
ii
<PAGE>
Distribution Account......................................................13
Distribution Date.........................................................13
Distribution Date Statement...............................................13
Document Defect...........................................................13
Due Date..................................................................13
Eligible Account..........................................................13
Environmental Assessment..................................................14
ERISA.....................................................................14
Escrow Payment............................................................14
Event of Default..........................................................14
Exchange Act..............................................................14
FDIC......................................................................14
FHLMC.....................................................................14
Final Recovery Determination..............................................15
Fitch.....................................................................15
FNMA......................................................................15
GECLS.....................................................................15
Hazardous Materials.......................................................15
Holder....................................................................15
HUD-Approved Servicer.....................................................15
Impound Reserve...........................................................15
Independent...............................................................15
Independent Appraiser.....................................................16
Independent Contractor....................................................16
Insurance Policy..........................................................16
Insurance Proceeds........................................................16
Interested Person.........................................................16
Investment Account........................................................16
Issue Price...............................................................16
Late Collections..........................................................17
Liquidation Event.........................................................17
Liquidation Proceeds......................................................17
Loan-to-Value Ratio.......................................................17
Majority Subordinate Certificateholder....................................18
Master Servicer...........................................................18
Master Servicing Fee......................................................18
Master Servicing Fee Rate.................................................18
Merrill Lynch.............................................................18
Monthly Payment...........................................................18
Moody's...................................................................18
Mortgage..................................................................18
Mortgage File.............................................................18
Mortgage Loan.............................................................20
Mortgage Loan Purchase Agreements.........................................20
Mortgage Loan Schedule....................................................20
iii
<PAGE>
Mortgage Loan Seller......................................................21
Mortgage Note.............................................................21
Mortgage Pool.............................................................21
Mortgage Rate.............................................................21
Mortgaged Property........................................................21
Mortgagor.................................................................21
Net Aggregate Prepayment Interest Shortfall...............................21
Net Default Interest......................................................21
Net Investment Earnings...................................................21
Net Investment Loss.......................................................22
Net Mortgage Rate.........................................................22
Net Operating Income......................................................22
New Lease.................................................................22
Nonrecoverable Advance....................................................22
Nonrecoverable P&I Advance................................................22
Nonrecoverable Servicing Advance..........................................22
Non-Registered Certificate................................................23
Non-United States Person..................................................23
Officers' Certificate.....................................................23
Opinion of Counsel........................................................23
Original Component Notional Amount........................................23
Original Class Principal Balance..........................................23
OTS.......................................................................23
Ownership Interest........................................................23
Pass-Through Rate.........................................................23
Paying Agent..............................................................24
Percentage Interest.......................................................24
Percentage Premium........................................................24
Permitted Investments.....................................................24
Permitted Transferee......................................................26
Person....................................................................26
Phase I Environmental Assessment..........................................26
P&I Advance...............................................................26
P&I Advance Date..........................................................26
P&I Advance Date..........................................................26
Plurality Residual Certificateholder......................................26
Prepayment Assumption.....................................................26
Prepayment Interest Excess................................................26
Prepayment Interest Shortfall.............................................26
Prepayment Premium........................................................27
Prime Rate................................................................27
Principal Distribution Amount.............................................27
Principal Prepayment......................................................27
Principal Recovery Fee....................................................28
Prospectus................................................................28
iv
<PAGE>
Prospectus Supplement.....................................................28
Purchase Price............................................................28
Qualified Insurer.........................................................29
Rated Final Distribution Date.............................................29
Rating Agency.............................................................29
Realized Loss.............................................................29
Record Date...............................................................30
Registered Certificate....................................................30
Regular Certificate.......................................................30
Reimbursement Rate........................................................30
Remaining Cash Flow.......................................................30
REMIC.....................................................................30
REMIC I...................................................................30
REMIC I Regular Interest..................................................30
REMIC I Remittance Rate...................................................30
REMIC II..................................................................30
REMIC II Regular Interest.................................................31
REMIC II Remittance Rate..................................................31
REMIC III.................................................................31
REMIC III Certificate.....................................................31
REMIC Administrator.......................................................31
REMIC Provisions..........................................................31
Rents from Real Property..................................................31
REO Account...............................................................31
REO Acquisition...........................................................31
REO Disposition...........................................................31
REO Extension.............................................................32
REO Loan..................................................................32
REO Property..............................................................32
REO Revenues..............................................................32
REO Tax...................................................................32
Request for Release.......................................................32
Required Appraisal........................................................33
Required Appraisal Mortgage Loan..........................................33
Required Appraisal Value..................................................33
Reserve Account...........................................................33
Reserve Funds.............................................................33
Residual Certificate......................................................33
Responsible Officer.......................................................33
Revised Rate..............................................................33
Scheduled Payment.........................................................33
Securities Act............................................................34
Senior Certificate........................................................34
Sequential Pay Certificate................................................34
Servicing Account.........................................................34
v
<PAGE>
Servicing Advances........................................................34
Servicing Fee.............................................................34
Servicing File............................................................34
Servicing Officer.........................................................35
Servicing Standard........................................................35
Servicing Transfer Event..................................................35
Single Certificate........................................................35
Special Servicer..........................................................35
Special Servicing Fee.....................................................35
Special Servicing Fee Rate................................................35
Specially Serviced Mortgage Loan..........................................35
Standard & Poor's.........................................................38
Startup Day...............................................................38
State and Local Taxes.....................................................38
Stated Maturity Date......................................................38
Stated Principal Balance..................................................38
Subordinated Certificate..................................................39
Sub-Servicer..............................................................39
Sub-Servicing Agreement...................................................39
Tax Matters Person........................................................39
Tax Returns...............................................................39
Transaction Screen Process................................................39
Transfer..................................................................39
Transferee................................................................39
Transferor................................................................39
Trust Fund................................................................40
Trustee...................................................................40
Trustee Fee Rate..........................................................40
Trustee Liability.........................................................40
Trustee's Fee.............................................................40
UCC.......................................................................40
UCC Financing Statement...................................................40
Uncertificated Accrued Interest...........................................40
Uncertificated Distributable Interest.....................................40
Uncertificated Principal Balance..........................................41
Underwriter...............................................................41
United States Person......................................................41
Updated Mortgage Loan Schedule............................................41
USAP......................................................................41
Voting Rights.............................................................41
Weighted Average Effective REMIC I Remittance Rate........................42
Yield Maintenance Charge..................................................42
vi
<PAGE>
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES;
ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.01. Conveyance of Mortgage Loans....................................43
SECTION 2.02. Acceptance of the Trust Fund by Trustee.........................44
SECTION 2.03. Mortgage Loan Seller's Repurchase of Mortgage Loans
for Document Defects and Breaches of
Representations and Warranties...............................45
SECTION 2.04. Representations and Warranties of Depositor.....................47
SECTION 2.05. Execution, Authentication and Delivery of Class R-I
Certificates; Creation of REMIC I Regular
Interests....................................................49
SECTION 2.06. Conveyance of REMIC I Regular Interests; Acceptance
of REMIC II by Trustee.......................................49
SECTION 2.07. Execution, Authentication and Delivery of Class R-II
Certificates.................................................49
SECTION 2.08. Conveyance of REMIC II Regular Interests; Acceptance
of REMIC III by Trustee......................................50
SECTION 2.09. Execution, Authentication and Delivery of REMIC III
Certificates.................................................50
SECTION 2.10. Execution, Authentication and Delivery of Class L
Certificates.................................................50
ARTICLE III ADMINISTRATION AND SERVICING OF THE TRUST FUND
SECTION 3.01. Administration of the Mortgage Loans............................50
SECTION 3.02. Collection of Mortgage Loan Payments............................52
SECTION 3.03. Collection of Taxes, Assessments and Similar Items;
Servicing Accounts; Reserve Accounts.........................53
SECTION 3.04. Certificate Account, Distribution Account and
Additional and Default Interest Distribution
Account......................................................56
SECTION 3.05. Permitted Withdrawals From the Certificate Account
and the Distribution Account.................................59
SECTION 3.06. Investment of Funds in the Certificate Account, the
Distribution Account, the Additional and Default
Interest Distribution Account and the REO Account............63
SECTION 3.07. Maintenance of Insurance Policies; Errors and
Omissions and Fidelity Coverage..............................65
SECTION 3.08. Enforcement of Alienation Clauses...............................67
SECTION 3.09. Realization Upon Defaulted Mortgage Loans; Required
Appraisals...................................................68
SECTION 3.10. Trustee and Custodian to Cooperate; Release of
Mortgage Files...............................................71
SECTION 3.11. Servicing Compensation..........................................72
SECTION 3.12. Property Inspections; Collection of Financial
Statements; Delivery of Certain Reports......................75
SECTION 3.13. Annual Statement as to Compliance...............................77
SECTION 3.14. Reports by Independent Public Accountants.......................78
SECTION 3.15. Access to Certain Information...................................78
vii
<PAGE>
SECTION 3.16. Title to REO Property; REO Account..............................80
SECTION 3.17. Management of REO Property......................................81
SECTION 3.18. Sale of Mortgage Loans and REO Properties.......................84
SECTION 3.19. Additional Obligations of Master Servicer.......................87
SECTION 3.20. Modifications, Waivers, Amendments and Consents.................87
SECTION 3.21. Transfer of Servicing Between Master Servicer and
Special Servicer; Record Keeping.............................90
SECTION 3.22. Sub-Servicing Agreements........................................91
SECTION 3.23. Representations and Warranties of Master Servicer
and Special Servicer.........................................93
ARTICLE IV PAYMENTS TO CERTIFICATEHOLDERS
SECTION 4.01. Distributions...................................................97
SECTION 4.02. Statements to Certificateholders; Collection Reports...........105
SECTION 4.03. P&I Advances...................................................113
SECTION 4.04. Allocation of Realized Losses and Additional Trust
Fund Expenses...............................................116
SECTION 4.05. Calculations...................................................117
SECTION 4.06. Use of Agents..................................................117
ARTICLE V THE CERTIFICATES
SECTION 5.01. The Certificates...............................................118
SECTION 5.02. Registration of Transfer and Exchange of Certificates..........118
SECTION 5.03. Book-Entry Certificates........................................124
SECTION 5.04. Mutilated, Destroyed, Lost or Stolen Certificates..............125
SECTION 5.05. Persons Deemed Owners..........................................125
ARTICLE VI THE DEPOSITOR, THE MASTER SERVICER AND THE SPECIAL SERVICER
SECTION 6.01. Liability of Depositor, Master Servicer and Special
Servicer....................................................126
SECTION 6.02. Merger, Consolidation or Conversion of Depositor or
Master Servicer or Special Servicer.........................126
SECTION 6.03. Limitation on Liability of Depositor, Master
Servicer and Special Servicer...............................126
SECTION 6.04. Resignation of Master Servicer and the Special
Servicer; Assignment of Rights and Obligations..............127
SECTION 6.05. Rights of Depositor and Trustee in Respect of Master
Servicer and the Special Servicer...........................128
SECTION 6.06. Depositor, Master Servicer and Special Servicer to
Cooperate with Trustee......................................129
SECTION 6.07. Depositor, Special Servicer and Trustee to Cooperate
with Master Servicer........................................129
viii
<PAGE>
SECTION 6.08. Depositor, Master Servicer and Trustee to Cooperate
with Special Servicer.......................................129
SECTION 6.09. Designation of Special Servicer by the Controlling
Class.......................................................129
SECTION 6.10. Master Servicer or Special Servicer as Owner of a
Certificate.................................................130
ARTICLE VII DEFAULT
SECTION 7.01. Events of Default..............................................132
SECTION 7.02. Trustee to Act; Appointment of Successor.......................135
SECTION 7.03. Notification to Certificateholders.............................136
SECTION 7.04. Waiver of Events of Default....................................137
SECTION 7.05. Additional Remedies of Trustee Upon Event of Default...........137
ARTICLE VIII CONCERNING THE TRUSTEE
SECTION 8.01. Duties of Trustee..............................................138
SECTION 8.02. Certain Matters Affecting Trustee..............................139
SECTION 8.03. Trustee Not Liable for Validity or Sufficiency of
Certificates or Mortgage Loans..............................140
SECTION 8.04. Trustee May Own Certificates...................................141
SECTION 8.05. Fees and Expenses of Trustee; Indemnification of
Trustee.....................................................141
SECTION 8.06. Eligibility Requirements for Trustee...........................142
SECTION 8.07. Resignation and Removal of Trustee.............................142
SECTION 8.08. Successor Trustee..............................................143
SECTION 8.09. Merger or Consolidation of Trustee.............................144
SECTION 8.10. Appointment of Co-Trustee or Separate Trustee..................144
SECTION 8.11. Appointment of Custodians......................................145
SECTION 8.12. Appointment of Authenticating Agents...........................146
SECTION 8.13. Appointment of Paying Agent....................................147
SECTION 8.14. Appointment of REMIC Administrators............................148
SECTION 8.15. Access to Certain Information..................................148
SECTION 8.16. Representations and Warranties of Trustee......................149
SECTION 8.17. Reports to the Securities and Exchange Commission;
Available Information.......................................150
SECTION 8.18. Massachusetts Filings..........................................150
ARTICLE IX TERMINATION
SECTION 9.01. Termination Upon Repurchase or Liquidation of All
Mortgage Loans..............................................151
SECTION 9.02. Additional Termination Requirements............................157
ARTICLE X ADDITIONAL REMIC PROVISIONS
SECTION 10.01. REMIC Administration..........................................158
ix
<PAGE>
ARTICLE XI MISCELLANEOUS PROVISIONS
SECTION 11.01. Amendment.....................................................162
SECTION 11.02. Recordation of Agreement; Counterparts........................164
SECTION 11.03. Limitation on Rights of Certificateholders....................164
SECTION 11.04. Governing Law.................................................165
SECTION 11.05. Notices.......................................................165
SECTION 11.06. Severability of Provisions....................................166
SECTION 11.07. Grant of a Security Interest..................................166
SECTION 11.08. Successors and Assigns; Beneficiaries.........................166
SECTION 11.09. Article and Section Headings..................................166
SECTION 11.10. Notices to Rating Agencies....................................167
SECTION 11.11. Complete Agreement............................................168
x
<PAGE>
EXHIBITS
Exhibit Description Exhibit No. Section Reference
------------------- ----------- -----------------
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 IO Certificate A-3 Section 1.01 Definition
of "Class IO Certificate"
Form of Class B Certificate A-4 Section 1.01 Definition
of "Class B Certificate"
Form of Class C Certificate A-5 Section 1.01 Definition
of "Class C Certificate"
Form of Class D Certificate A-6 Section 1.01 Definition
of "Class D Certificate"
Form of Class E Certificate A-7 Section 1.01 Definition
of "Class E Certificate"
Form of Class F Certificate A-8 Section 1.01 Definition
of "Class F Certificate"
Form of Class G Certificate A-9 Section 1.01 Definition
of "Class G Certificate"
Form of Class H Certificate A-10 Section 1.01 Definition
of "Class H Certificate"
Form of Class J Certificate A-11 Section 1.01 Definition
of "Class J Certificate"
Form of Class K Certificate A-12 Section 1.01 Definition
of "Class K Certificate"
Form of Class L Certificate A-13 Section 1.01 Definition
of "Class L Certificate"
Form of Class R-I Certificate A-14 Section 1.01 Definition
of "Class R-I
Certificate"
xi
<PAGE>
Exhibit Description Exhibit No. Section Reference
------------------- ----------- -----------------
Form of Class R-II Certificate A-15 Section 1.01 Definition
of "Class R-II
Certificate"
Form of Class R-III Certificate A-16 Section 1.01 Definition
of "Class R-III
Certificate"
Mortgage Loan Schedule B Section 1.01 Definition
of "Mortgage Loan
Schedule"
Form of C Section 2.02(a)
Schedule of Exceptions to
Mortgage File Delivery
Form of Master Servicer D-1 Section 1.01 Definition
Request for Release of "Request for
Release";
Section 2.03(b); Section
3.10(a); and Section
3.10(b)
Form of Special Servicer D-2 Section 1.01 Definition
Request for Release of "Request for
Release"; Section 3.10(b)
Calculation of NOI/Debt E-1 Section 1.01 Definition
Service Coverage Ratios of "Net Operating
Income"; Section 3.12(b)
Form of Updated Mortgage Loan E-2 Section 3.12(c); and
Schedule Section 4.02(b)
Form of Additional Master E-3 Section 3.12(c); and
Servicer Reporting Section 4.02(b)
Form of Transferor Certificate F-1 Section 5.02(b)
Form of Transferee Certificate F-2 Section 5.02(b)
for QIBs
Form of Transferee Certificate F-3 Section 5.02(b)
for Non-QIBs
Form of Transferee Letter for G Section 5.02(c)
Transfers of Subordinated
Certificates to Non-Plan
Entities
xii
<PAGE>
Exhibit Description Exhibit No. Section Reference
------------------- ----------- -----------------
Form of Transfer Affidavit and H-1 Section 5.02(d)(i)(B)
Agreement regarding Class R-I,
R-II and R-III Certificates
Form of Transferor Certificate H-2 Section 5.02(d)(i)(D)
regarding Class R-I, R-II and
R-III Certificates
Form of Notice and I-1 Section 6.09
Acknowledgment
Form of Acknowledgment of I-2 Section 6.09
Proposed Special Servicer
Form of UCC-1 Financing J Section 11.07
Statement
Form of Schedule of K Section 4.02(a)
Certificateholders
Form of Master Servicer L Section 4.02(b)
Collection Report
xii
<PAGE>
This Pooling and Servicing Agreement (this "Agreement") is dated and
effective as of December 1, 1997, among MERRILL LYNCH MORTGAGE INVESTORS, INC.,
as Depositor, GE CAPITAL LOAN SERVICES, INC., as Master Servicer, CRIIMI MAE
SERVICES LIMITED PARTNERSHIP, as Special Servicer, and STATE STREET BANK AND
TRUST COMPANY, 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 and Default 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
<PAGE>
-2-
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.
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.
Corresponding
Class of
REMIC II
Class Regular Corresponding Original Class
Designation Interests IO Component Principal Balance
----------- ------------- ------------- ------------------
Class A-1 P IO-A1 $121,657,000
Class A-2 Q IO-A2 $372,509,000
Class B R IO-B $ 27,454,000
Class C S IO-C $ 41,181,000
Class D T IO-D $ 34,317,000
Class E U IO-E $ 12,011,000
Class F V IO-F $ 37,749,000
Class G W IO-G $ 6,863,000
Class H X IO-H $ 12,011,000
Class J Y IO-J $ 6,864,000
Class K Z IO-K $ 13,726,931
The Class L Certificates will not constitute an interest in REMIC I, REMIC
II or 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
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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 and Default 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 "State Street
Bank and Trust Company, in trust for Holders of Merrill Lynch Mortgage
Investors, Inc., Mortgage Pass-Through Certificates, Series 1997-C2, Additional
and Default Interest Distribution Account" and which must be an Eligible
Account. The Additional and Default Interest Distribution Account shall not be
an asset of REMIC I, REMIC II or REMIC III.
"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 Rate": With respect to each of the ARD Mortgage Loans,
the excess of (i) the applicable Revised Rate over (ii) the applicable Mortgage
Rate, each as set forth in the Mortgage Loan Schedule.
"Additional Master Servicer Reporting": The monthly reports as to
Delinquent Loan Status, REO Status, Servicer Watch List, Historical Loan
Modification, Historical Loss, Comparative Financial Status, Operating Statement
Analysis, and NOI Adjustments, substantially as presented in Annex "C" to the
Prospectus Supplement, pp. C-8 through C-21, and substantially in the form of
Exhibit E-3.
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"Additional Servicing Fee": With respect to each Mortgage Loan and REO
Loan, the fee payable to the Special Servicer pursuant to Section 3.11(c).
"Additional Servicing Fee Rate": With respect to any Distribution Date,
0.015% per annum.
"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, 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) 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
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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 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 prior
to the completion of the required appraisal of the related Mortgage Property,
the Appraisal Reduction Amount shall be deemed to be the product of (x) the
value of such Mortgaged Property, as indicated in the appraisal included in the
related Mortgage File and (y) 0.30; and provided, further, that if the 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
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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.
"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, (v) Net Default Interest, and (vi) 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).
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"Business Day": Any day other than a Saturday, a Sunday or a day on which
banking institutions in New York, New York, Rockville, Maryland or the city in
which the Corporate Trust Office of the Trustee is 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.
"Certificate": Any one of the Depositor's Mortgage Pass-Through
Certificates, Series 1997-C2, 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 State Street Bank and Trust Company,
as Trustee, on behalf of and in trust for the registered holders of Merrill
Lynch Mortgage Investors, Inc., Mortgage Pass-Through Certificates, Series
1997-C2."
"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, any
Mortgage Loan Seller, the Master Servicer, the Special
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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, any
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 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 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.
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"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-3
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 and Net Default
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 23, 1997.
"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.
"Collection Report": The monthly report, to be prepared by the Master
Servicer and the Special Servicer, to be delivered to the Trustee and the
Depositor pursuant to Section 4.02(b).
"Component": Each of the eleven 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.
"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
each of (i) 20% of the Original Class Principal Balance thereof and (ii) 1% of
the aggregate Class Principal Balance of all Sequential Pay Certificates;
provided, however, that if no such Class of Certificates has a Class Principal
Balance greater than each of (i) 20% of its Original Class Balance and (ii) 1%
of the aggregate Class Principal Balance of all Sequential Pay Certificates, the
Controlling Class shall be the
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Class of Sequential Pay Certificates bearing the latest alphabetical Class
designation. With respect to determining the Controlling Class, the Class A-1
and Class A-2 Certificates shall be deemed a single Class of Certificates.
"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 Two International Place, 5th Floor,
Boston, Massachusetts 02110, Attn: Corporate Trust Department, Ref: Merrill
Lynch Series 1997-C2.
"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".
"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, a Mortgage Loan Seller or an Affiliate of the
Depositor or a 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.
"Cut-Off Date": December 1, 1997.
"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
related 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.
"Default Interest": With respect to any Mortgage Loan (or successor REO
Loan), any amounts collected thereon, other than late payment charges,
Additional Interest or Prepayment Premiums, that represent penalty interest in
excess of interest on the Stated Principal Balance of such Mortgage Loan (or
successor REO Loan) accrued at the related Mortgage Rate.
"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
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the related Mortgage and Mortgage Note, or (ii) as to which 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, the United
States Treasury obligations required or permitted to be pledged in lieu of
prepayment pursuant to the terms thereof.
"Defeasance Loan": Any Mortgage Loan 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).
"Depositor": Merrill Lynch Mortgage Investors, Inc. or its successor in
interest.
"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 fifth day
of the month in which such Distribution Date occurs, or if such fifth day is not
a Business Day, the next 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 Trustee (or the Special Servicer or any
Sub-Servicer on behalf of the Trustee) shall not be considered to Directly
Operate an REO Property solely because the Trustee (or the Special Servicer or
any Sub-Servicer on behalf of the Trustee) 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,
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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.
"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 "State Street Bank and Trust Company, as
Trustee, in trust for the registered holders of Merrill Lynch Mortgage
Investors, Inc., Mortgage Pass-Through Certificates, Series 1997-C2."
"Distribution Date": The latter of (a) 10th day of any month, or if such
10th 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 12, 1998.
"Distribution Date Statement": As defined in Section 4.02(a).
"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
<PAGE>
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to deposits held for 30 days or more in such account, the long-term deposit or
unsecured debt obligations of which (or of such institution's parent holding
company) are rated "AA" by Fitch (if then rated by Fitch), "AA-" by Standard &
Poor's, and "A2" 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 (or of such institution's parent holding company) are rated
F-1+ by Fitch (if then rated by Fitch), 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, for a period of 90 days after the Closing Date,
"Eligible Account" shall include deposits held at The Chase Manhattan Bank or
(ii) a segregated trust account or accounts maintained with a federal or state
chartered depository institution or trust company (including the Trustee) 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.
"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.
<PAGE>
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"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 a
Mortgage Loan Seller pursuant to the related 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 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.
"Fitch": Fitch IBCA, Inc. or its successor in interest. If neither such
rating organization nor any successor remains in existence, "Fitch" shall be
deemed to refer to such other nationally recognized statistical rating
organization or other comparable Person designated by the Depositor, notice of
which designation shall be given to the Trustee, the Master Servicer and the
Special Servicer, and specific ratings of Fitch herein referenced shall be
deemed to refer to the equivalent ratings of the party so designated.
"FNMA": Federal National Mortgage Association or any successor.
"GECLS": GE Capital Loan Services, Inc., the initial Master Servicer
hereunder, or any successor to GECLS.
"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.
"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
Sellers, 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 Master Servicer, the
Special Servicer or any Affiliate thereof, and (iii) is not connected with the
Depositor, 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 Master Servicer, the Special
Servicer or any Affiliate thereof merely because such Person
<PAGE>
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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.
"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 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 Sellers, 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.
<PAGE>
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"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 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.
"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 a Mortgage Loan Seller pursuant to the related 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 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
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 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 a Mortgage Loan Seller pursuant to the related Mortgage Loan Purchase
Agreement; or (vi) the purchase of a Mortgage Loan or REO Property by the
Depositor, 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.
<PAGE>
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"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 Class of outstanding Sequential Pay Certificates with
the latest alphabetical Class designation; 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 and Class A-2 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": GECLS, 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 in 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).
"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 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
State
<PAGE>
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Street Bank and Trust Company, as trustee for the registered
holders of Merrill Lynch Mortgage Investors, Inc., Mortgage
Pass-Through Certificates, Series 1997-C2;
(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, (b) any
related Assignment of Leases (if such item is a document separate
from the Mortgage) and (c) any other recorded document relating
to the Mortgage Loan otherwise included in the Mortgage File, in
favor of State Street Bank and Trust Company as trustee for the
registered holders of Merrill Lynch Mortgage Investors, Inc.,
Mortgage Pass-Through Certificates, Series 1997-C2, in recordable
form;
(v) an original assignment of all unrecorded documents relating to
the Mortgage Loan, in favor of State Street Bank and Trust
Company, as trustee for the registered holders of Merrill Lynch
Mortgage Investors, Inc., Mortgage Pass-Through Certificates,
Series 1997-C2;
(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;
(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 related
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 related
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 State Street Bank and
Trust Company, as trustee for the registered holders of Merrill
Lynch Mortgage Investors, Inc., Mortgage Pass-Through
Certificates, Series 1997-C2;
<PAGE>
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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 the Trustee or Custodian has actual knowledge of their existence.
"Mortgage Loan": Each of the mortgage loans listed on the Mortgage Loan
Schedule and 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 Agreements": Those certain Mortgage Loan Purchase
Agreements, each dated as of December 1, 1997, between the Depositor and the
respective Mortgage Loan Sellers 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;
(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) in the case of an ARD Mortgage Loan, the Anticipated Repayment
Date and the Revised Rate;
(x) the Master Servicing Fee Rate;
(xi) the related Mortgage Loan Seller; and
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(xii) the related Sub-Servicer.
"Mortgage Loan Seller": Each of Merrill Lynch Mortgage Capital Inc. or its
successor in interest and GE Capital Access, 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.
"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 Default Interest": With respect to any Mortgage Loan (or successor REO
Loan) and any Distribution Date, the excess, if any, of the Default Interest
with respect to such Mortgage Loan (or successor REO Loan) over the
reimbursement to the Trustee, the Master Servicer or the Special Servicer
pursuant to Section 3.05(a)(viii) related to such Mortgage Loan (or successor
REO Loan). With respect to any Mortgage Loan (or successor REO Loan), the Net
Default Interest prior to such reimbursement shall be zero. The Net Default
Interest shall not be an asset of REMIC I, REMIC II or REMIC III.
"Net Investment Earnings": With respect to the Certificate Account, the
Distribution 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
<PAGE>
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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, the
Distribution 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, the applicable Master Servicing Fee
Rate and the Additional 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 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.
"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 that, as determined by
the Master Servicer or the Trustee with respect to any P&I Advance it
respectively is obligated to make in accordance with this Agreement, 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 that, as
determined by the Master Servicer or the Special Servicer 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.
<PAGE>
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"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.
"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 and Class A-2 Certificates, 6.46% and 6.54%,
respectively;
(ii) the Class B, C, D and E Certificates, the REMIC II
Remittance Rate for such Distribution Date minus 1.14%,
1.11%, 0.77% and 0.57%, respectively;
(iii) each of the Class F, G, H, J and K Certificates, 6.25%;
(iv) Components IO-A1 and IO A-2, the REMIC II Remittance Rate
for such Distribution Date minus 6.46% and 6.54%,
respectively;
(v) Components IO-B, IO-C, IO-D and IO-E, 1.14%, 1.11%, 0.77%
and 0.57%, respectively; and
(vi) Component IO-F, IO-G, IO-H, IO-J and IO-K, the REMIC II
Remittance Rate for such Distribution Date minus 6.25%.
<PAGE>
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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 by 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 rating
category of each of Fitch, if rated by Fitch, 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 very
or change. Interest may either by fixed or variable, and
should be tied to a single interest rate index plus a single
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fixed spread (if any), and move proportionately with that
index. Such investments should not be relied upon for a
fixed yield;
(iii) 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 Fitch, if rated by Fitch, 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
very 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 rating category
of each of Fitch, if rated by Fitch, 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 very or change.
Interest may either by 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 Fitch, if rated by Fitch, and 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;
(vi) any other obligation or security acceptable to each Rating
Agency, evidence of which acceptability shall be provided in
writing by each
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Rating Agency to the Master Servicer, the Special Servicer
and the Trustee;
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.
"Phase I Environmental Assessment": A "Phase I assessment" as
described in and meeting the criteria of Chapter 5 of the FNMA Multifamily
Guide, as amended from time to time.
"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, Master Servicing Fee and Additional 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
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
prior to such Mortgage Loan's Due Date in such
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Collection Period, the amount of 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 (i)
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) 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 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
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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 December 9, 1997, as supplemented
by the Prospectus Supplement, relating to the Registered Certificates.
"Prospectus Supplement": The prospectus supplement dated December
18, 1997 relating to the Registered Certificates.
"Purchase Price": With respect to any Mortgage Loan to be purchased
by a Mortgage Loan Seller pursuant to the related 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 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,
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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, (c) any
reasonable costs and expenses incurred by the Trust Fund in connection with any
such purchase by a 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)); 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.
"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 10, 2029.
"Rating Agency": Each of Fitch, 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 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 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 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.
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"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 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 per annum 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 per annum 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
(X) payments of principal and interest due, and principal prepayments received,
on or before the Cut-Off Date, (Y) the Additional Interest, Default Interest and
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 each of the Mortgage Loan Purchase Agreements.
"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
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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 Certificate": Any Class A-1, Class A-2, 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.
"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 "CRIIMI MAE
Services Limited Partnership, as Special Servicer, in trust for Holders of
Merrill Lynch Mortgage Investors, Inc., Mortgage Pass-Through Certificates,
Series 1997-C2.".
"REO Acquisition": 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).
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"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 Master
Servicer or the Special Servicer for the payment of, the costs of operating,
managing and maintaining the related REO Property) 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 Special 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 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 and 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).
"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.
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"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) to which a
receiver is appointed and continues in such capacity in respect of the related
Mortgage Property, (v) 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 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
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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 or Class IO
Certificate.
"Sequential Pay Certificate": Any Class A-1, Class A-2, Class B,
Class C, Class D, Class E, Class F, Class G, Class H, Class J or Class K
Certificates.
"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 or
Special 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 and (f) the
operation, management, maintenance and liquidation of any REO Property,
including, without limitation, appraisals. 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, the Special Servicing Fee
and the Additional 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.
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"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 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; (v) the ownership, servicing or management for others of any
other mortgage loans or mortgaged property; and (vi) any obligation of the
Master Servicer or Special Servicer, as the case may be, or of any Affiliate
thereof, as a Mortgage Loan Seller, to pay any indemnity with respect to or
repurchase any Mortgage Loan.
"Servicing Transfer Event": With respect to any Mortgage Loan, the
occurrence of any of the events described in clauses (a) through (h) 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": CRIIMI MAE Services Limited Partnership, 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, 0.235% per annum.
"Specially Serviced Mortgage Loan": Any Mortgage Loan as to which
any of the following events have occurred:
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(a) the related Mortgagor shall have (x) 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 (y) if the Master Servicer or any of its Affiliate owns an
economic interest in such Mortgage Loan or such Mortgagor,
failed to make any Monthly Payment on or before the related
P&I Advance Date; 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
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 or (h) below) 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
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(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;
(g) the Master Servicer shall have received notice of the
commencement of foreclosure or similar proceedings with
respect to the related Mortgaged Property; or
(h) there shall have occurred a default with respect to payment of
insurance premiums or property taxes, including making escrow
payments for the payment of real estate taxes and insurance
premiums with respect to such Mortgage Loan that in the good
faith reasonable judgment of the Master Servicer materially
impairs (without regard to any Servicing Advance) 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 the lesser of thirty
(30) days or ten (10) days prior to the date the insurance
becomes cancelable or the taxes become delinquent) with
respect to payment of insurance premiums or property taxes
(except to the extent that the related Mortgagor is contesting
in good faith the payment of such taxes in accordance with the
terms of the Mortgage Loan);
provided, however, that a Mortgage Loan will cease to be a Specially Serviced
Mortgage Loan:
(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
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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 clauses (c) or
(h) 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 (h)
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 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,
Maryland, Massachusetts 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 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, 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
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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.
"Subordinated Certificate": Any Class B, Class C, Class D, Class E,
Class F, Class G, Class H, Class J or Class K 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.
"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.
"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,
Default Interest and any other portion of the Trust Fund that does not consist
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.
"Transaction Screen Process": An environmental assessment conducted
in accordance with the Standard Practice for Environmental Site Assessments:
Transaction Screen Process E 1528-93 (American Society for Testing and Materials
1993).
"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.
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"Trust Fund": Collectively, (i) all of the assets of REMIC I, REMIC
II and REMIC III, and (ii) the Additional Interest, Default 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.
"Trustee": State Street Bank and Trust Company, its successor in
interest, or any successor trustee appointed as herein provided.
"Trustee Fee Rate": 0.005% per annum.
"Trustee Liability": As defined in Section 8.05(b).
"Trustee Fee": The fee designated as such and payable to the Trustee
pursuant to Section 8.05.
"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 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
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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(i), 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(j), 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).
"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.
"Updated Mortgage Loan Schedule": The monthly loan schedule to be
prepared by the Master Servicer and delivered to the Trustee and the Depositor
pursuant to Section 3.12(c), which monthly loan schedule shall be substantially
in the form of Exhibit E-2.
"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
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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.
"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.
"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 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, 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
Trustee, 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) each of the Mortgage Loan Purchase Agreements 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 Sellers pursuant to the
applicable 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), 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 any Mortgage Loan Seller or the Depositor to comply with the
document delivery requirements of the respective 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 clauses (iv) and (v) 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; provided, that in those instances where the public
recording office retains the original assignment of Mortgage or assignment of
Assignment of Leases the 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 appropriate Mortgage Loan Seller pursuant to
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the applicable 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 Sellers 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 applicable Mortgage Loan Seller) 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 each 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 each 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 and the Mortgage Loan Sellers, 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 and the Mortgage Loan Sellers, 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 and the Mortgage Loan Sellers 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 (i) through (v) and (vii), and to the extent provided in
the related Mortgage File actually known by 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 Sellers
constituting the related Mortgage File have been reviewed by it and appear
regular on their face and relate to such Mortgage Loan, and (iii) based on such
examination and only as to the foregoing documents, the information
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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 45 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 and each 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 (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 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 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 warranty relating to the
Mortgage Loans set forth in the applicable 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 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 respective Mortgage Loan Seller, not later than 90 days from
such 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
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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, 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; 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 such
Mortgage Loan Seller has commenced and is diligently proceeding with the cure of
such Document Defect or Breach within such 90-day period, such Mortgage Loan
Seller shall have an additional 90 days to complete such cure (or, failing such
cure, to repurchase the related Mortgage Loan); and provided, further, that with
respect to such additional 90-day period such 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 such Mortgage Loan Seller is pursuing in
connection with the cure thereof and stating that such Mortgage Loan Seller
anticipates that such Document Defect or Breach will be cured within the
additional 90-day period. For a period of two years from the Closing Date, so
long as there remains any Mortgage File as to which there is any uncured
Document Defect and so long as the related Mortgage Loan Seller shall provide
the Officer's Certificate described above as to the reasons such Document Defect
remains uncured and as to the actions being taken to pursue cure, the Trustee
shall on a quarterly basis prepare and deliver to the other parties a written
report as to the status of such uncured Document Defects; provided, however,
that if such Document Defect shall materially and adversely affect the value of
such Mortgage Loan or the interests of the holders of the Certificate therein,
the Mortgage Loan Seller shall in all cases on or prior to the second
anniversary of the Closing Date either cause such Document Defect to be cured or
repurchase the affected Mortgage Loan. If the affected Mortgage Loan is to be
repurchased, the Master Servicer shall designate the Certificate Account as the
account to which funds in the amount of the Purchase Price are to be wired. Any
such repurchase 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 out its duties pursuant
to this Section 2.03(a) 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 related
Mortgage Loan Seller.
(b) In connection with any repurchase of a Mortgage Loan
contemplated by this Section 2.03, the Trustee, the Custodian, the Master
Servicer and the Special Servicer
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shall each tender to the appropriate Mortgage Loan Seller, upon delivery to each
of them of a receipt executed by such Mortgage Loan Seller, all portions of the
Mortgage File and other documents pertaining to such Mortgage Loan possessed by
it, and each document that constitutes a part of the Mortgage File shall be
endorsed or assigned to the extent necessary or appropriate to such Mortgage
Loan Seller or its designee in the same manner, and pursuant to appropriate
forms of assignment, substantially similar to the manner and forms pursuant to
which documents were previously assigned to the Trustee; provided, that such
tender by the Trustee shall be conditioned upon its receipt from the Master
Servicer of a Request for Release. 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 and deliver any powers of attorney necessary to permit the
Master Servicer to do so. The Master Servicer shall indemnify the Trustee for
any costs, 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) Each Mortgage Loan Purchase Agreement provides the sole remedies
available to the Certificateholders, or the Trustee on behalf of the
Certificateholders, 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.
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(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 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 Trustee 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.
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(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 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 and Default 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 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 Trustee 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 order of the Depositor, the Class R-II Certificates in authorized
denominations.
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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 Trustee 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 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 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.
The Certificate Registrar has executed, and the Trustee, as the
Authenticating Agent, has authenticated and delivered to or upon the order of
the Depositor, the Class L Certificates evidencing the entire beneficial
ownership of the Additional Interest and Net Default Interest. The rights of the
holders of the Class L Certificates to receive distributions from the proceeds
of the Additional Interest and Net Default 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 Trustee, for the benefit
of the Certificateholders, in accordance with any and all applicable laws, the
terms of this Agreement and 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
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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) each REO Property; provided,
however, that the Master Servicer shall continue to collect information and
prepare all reports to the Trustee required 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 (including any
interest accrued and payable thereon in accordance with Section 3.03(d)) 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. No
more frequently than once a month, 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 but not previously reimbursed or to be incurred
by the Special Servicer with respect to any Specially Serviced Mortgage Loan,
REO Loan or REO Property. Upon receipt of such Officer's Certificate, 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, if the Master Servicer is then unable to so reimburse such Servicing Advance
out of the Certificate Account and the Master Servicer determines such Servicing
Advance is not a Nonrecoverable Servicing Advance, no more frequently than once
each month, 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. The Master Servicer shall notify the Special Servicer that the Master
Servicer has determined that any Servicing Advance made by the Special Servicer
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. 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), 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, but in any event within five
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Business Days of such request, furnish, or cause to be so furnished, to the
Master Servicer and the Special Servicer any limited powers of attorney and
other documents necessary or appropriate to enable them to carry out their
servicing and administrative duties hereunder; provided, however, that the
Trustee shall not be held liable for any misuse of any such power of attorney by
the Master Servicer or the Special Servicer and shall be indemnified by each of
the Master Servicer and the Special Servicer for any costs, liabilities and
expenses incurred by the Trustee in connection with the negligent or willful
misuse of such powers of attorney by the Master Servicer or the Special
Servicer.
(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.
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. If,
with respect to any Mortgage Loan, the terms of the related Mortgage Note
require that the holder of such Mortgage Note give notice to the related
Mortgagor in order that a grace period with respect to any overdue Monthly
Payment on such Mortgage Loan will terminate prior to the P&I Advance Date
occurring in such month, such notice shall be given so as to effect the
termination of such grace period prior to such date. 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,
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including, without limitation, Prepayment Premiums and Default Interest; and
fifth, as a recovery of any remaining principal of such Mortgage Loan to the
extent of its entire remaining unpaid principal balance. All amounts collected
on any Mortgage Loan in the form of Liquidation Proceeds of the nature described
in clauses (iv) and (v) 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; and 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. No such amounts shall be applied to the
items constituting additional servicing compensation as described in the first
sentence of Section 3.11(b) 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 shall not alter in any way the right of the Master Servicer or
the Special Servicer to receive payments from the Certificate Account as set
forth in clauses (ii) through (xv) of Section 3.05(a) from amounts so applied.
(c) With respect to an ARD Mortgage Loan:
(i) 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; and
(ii) in the event that the Master Servicer or Special Servicer
receives, or receives notice from the related Mortgagor that the Master
Servicer or Special Servicer will be receiving, Additional Interest in
any Collection Period, the Master Servicer or Special Servicer, as
applicable, shall promptly notify the Trustee no later than the third
Business Day prior to the next Distribution Date, as practicable.
SECTION 3.03. Collection of Taxes, Assessments and Similar
Items; Servicing Accounts; Reserve Accounts.
(a) The Master Servicer shall, as to all of the 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
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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 comparable items; (ii)
reimburse the Master Servicer for any Servicing Advances plus interest accrued
thereon; (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; or (v) clear and terminate the Servicing
Account at the termination of this Agreement in accordance with Section 9.01.
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 shall, as to each Mortgaged Property (other
than an REO Property), and the Special Servicer shall, as to any REO Property,
(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 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, the Master Servicer or the Special Servicer, as the
case may be, shall apply Escrow Payments as allowed under the terms of the
related Mortgage Loan (in the case of a Mortgaged Property other than an REO
Property) or amounts on deposit in the applicable REO Account (in the case of an
REO Property) or, if any 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, consistent with the
Servicing Standard, 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 as they first become due 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
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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 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 in respect of any REO Property are insufficient to pay
any of the items referred to in the first sentence of this paragraph, with
respect to such REO Property, the Special Servicer shall advise the Master
Servicer, by delivery of an Officer's Certificate no later than seven (7) days
prior to the date the Master Servicer is required to fund such Servicing Advance
in accordance with the Servicing Standard, 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.
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(d) As and to the extent contemplated by Section 3.01(a), 3.09(a)
and/or Section 3.05(a), each of the Master Servicer and the Special Servicer
shall be entitled to receive interest at the Reimbursement Rate in effect from
time to time, accrued on the amount of any Servicing Advance made by it from the
date made to but not including the date of reimbursement. The Master Servicer
shall reimburse itself and, if applicable, the Special Servicer for any
Servicing Advance as soon as practicable after funds available for such purpose
are deposited in the Certificate Account.
(e) The determination by the Master Servicer or 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, performed pursuant to Section 3.09(a) at the request of 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.
(f) The Master Servicer shall, as to all of the 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 to pay for, or to
reimburse the related Mortgagor in connection with, the related repairs and/or
capital improvements at the related Mortgaged Property if the repairs and/or
capital improvements have been completed, 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. All Reserve Accounts shall be Eligible Accounts.
SECTION 3.04. Certificate Account, Distribution Account and
Additional and Default Interest Distributio 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
(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 appropriate Mortgage Loan
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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 and Default 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; and
(vii) any amounts required to be transferred from an REO
Account pursuant to Section 3.16(c).
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, and amounts that the Master
Servicer or Special Servicer is entitled to retain as additional servicing
compensation pursuant to Section 3.11(b) or 3.11(d), as applicable, 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 Section 3.11(d) assumption fees, modification
fees, late charges and other transaction fees received by the Master Servicer
with respect to Specially Serviced Mortgage Loans 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
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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; provided, that 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. Any 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).
(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.
In addition, the Master Servicer (or the Trustee, as applicable,
with respect to clause (i) below) 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 by the Master Servicer in
connection with any purchase 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.
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(c) Prior to the P&I Advance Date relating to any Collection Period
in which Additional Interest or Default Interest is received, the Trustee shall
establish and maintain the Additional and Default Interest Distribution Account
in the name of the Trustee in trust for the benefit of the Holders of the Class
L Certificates or their assignees. The Additional and Default 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 and Default Interest Distribution Account an amount
equal to the Additional Interest and Net Default Interest received during the
related Collection Period. Following the distribution of any Additional Interest
and Net Default Interest to the Holders of the Class L Certificates on the first
Distribution Date after which there are no longer any Mortgage Loans
outstanding, the Trustee shall terminate the Additional and Default Interest
Distribution Account.
(d) Funds in the Certificate Account, the Distribution Account and
the Additional and Default Interest Distribution Account may be invested 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 Distribution Account, the Additional and Default Interest Distribution
Account and Certificate Account as of the Closing Date and of the new location
of the Certificate Account, the Distribution Account or the Additional and
Default Interest Distribution Account, prior to any change thereof.
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 (i) in the
Distribution Account the amounts required to be so deposited
pursuant to the first paragraph of Section 3.04(b) and (ii) in the
Additional and Default 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
and to pay to the Special Servicer earned and unpaid Additional
Servicing Fees in
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respect of each Mortgage Loan and REO Loan, the Master Servicer's
and Special 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 Mortgage
Loan or REO Property by the applicable Mortgage Loan Seller pursuant
to the respective Mortgage Loan Purchase Agreement, by the Majority
Subordinate Certificateholder pursuant to Section 3.18(b) or by the
Master Servicer, Special Servicer or Depositor pursuant to Section
9.01);
(vi) to reimburse itself or the Special Servicer for any
unreimbursed Servicing Advances, 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, and Additional Servicing Fee to the
Special Servicer, that remained unpaid in accordance with clause
(iii) above;
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(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 Sections 3.01 or 3.09 for any unreimbursed Servicing
Advance, to pay the Trustee first, and then itself and the Special
Servicer on a pari passu basis, 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);
(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);
(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 appropriate
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
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(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 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 a P&I 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 P&I Advances or interest thereon.
(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;
(iii) to pay the Master Servicer, as additional servicing
compensation in accordance with Section 3.11(b), interest and
investment income earned in respect of amounts held in the
Distribution Account as provided in Section 3.06(b) (but only to the
extent of the Net Investment Earnings with respect to the
Distribution Account for any Collection Period);
(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;
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(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 Certificate Account,
the Distribution Account, the Additional and
Default Interest Distribution Account and the
REO Account.
(a) The Master Servicer may direct in writing any depository
institution maintaining the Certificate Account or the Additional and Default
Interest Distribution Account and may direct in writing the Paying Agent with
respect to the 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 therein in one or more Permitted
Investments bearing interest or sold at a discount, and maturing, 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 Certificate Account, Additional and Default Interest
Distribution Account or Distribution Account 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 shall
be invested in securities described in clause (i) of the definition of the term
"Permitted Investments." 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
Certificate Account, the Additional and Default Interest Distribution Account
and the 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 Trustee hereby designates the Master Servicer and the Special
Servicer, as applicable, 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
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shall constitute possession by a Person designated by the Trustee 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 or Additional and Default Interest Distribution Account),
the Paying Agent (in the case of the Distribution Account) 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 the Certificate Account, the Additional and Default Interest
Distribution Account or the 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, shall be for the sole and
exclusive benefit of the Master Servicer and shall be subject to its withdrawal
in accordance with Section 3.05(a) or withdrawal by the Paying Agent at its
direction in accordance with Section 3.05(b), 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 and Default Interest Distribution Account and the Distribution
Account) 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 applicable Net Investment Loss, if any, for such Collection
Period.
(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, the Trustee may and, subject to Section 8.02, upon the 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.
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(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 shall 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 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 obtain the
required insurance coverage from Qualified Insurers that have a general policy
rating of at least A-X in A.M. Best's Key Rating Guide. The Majority Subordinate
Certificateholder may request that earthquake insurance be secured for one or
more Mortgaged Properties at the expense of the Majority Subordinate
Certificateholder, unless required or permitted to be required under the related
Mortgage Loan, in which case the Master Servicer or Special Servicer, as
applicable, shall use reasonable efforts to enforce such obligation, so long as
such enforcement is consistent with the Servicing Standard. 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," "A2" and "A" from
Standard & Poor's, Moody's (if then rated by Moody's) and Fitch (if then rated
by Fitch), respectively, 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 Trustee; in
each case such insurance shall be issued by an insurer authorized under
applicable law to issue such insurance. The cost of any such insurance in
respect of an REO Property shall be payable out of amounts on deposit in the
related REO Account, or, if the amount on deposit therein is insufficient, the
Special Servicer shall follow the procedures set forth in Sections 3.01 and
3.03(c) to request the Master Servicer to make a Servicing Advance with respect
to such costs (and the Special Servicer shall in no way be in default hereunder
to the extent that any failure to perform hereunder is a result of the Master
Servicer not making the requested Servicing Advance). 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 the terms of the related Mortgage and in each case in accordance
with the Servicing Standard) shall be deposited in the Certificate Account,
subject to withdrawal
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pursuant to Section 3.05(a), in the case of amounts received in respect of a
Mortgage Loan, or in the REO 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," "A2" and "A" or better from Standard & Poor's,
Moody's (if then rated by Moody's) and Fitch (if then rated by Fitch),
respectively, or such lower rating of any Rating Agency or rating from any
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 (taking account of any usual and
customary deductible therein), promptly deposit into the Certificate Account
from its own funds the amount not otherwise payable under the blanket policy
because of such deductible clause that would have been covered under an
individual policy (taking account of any usual and customary deductible
therein). 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.
(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 insurer having a
claims-paying rating of "A," "A2" and "A" or better from Standard & Poor's,
Moody's (if then rated by Moody's) and Fitch (if then rated by Fitch),
respectively, or such lower rating of any Rating Agency or rating from a
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, 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 either Rating
Agency to the Certificates (as evidenced in writing from each Rating Agency).
Each of the Master Servicer and the Special Servicer shall
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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,"
"A2" and "A" or better from Standard & Poor's, Moody's (if then rated by
Moody's) and Fitch (if then rated by Fitch), respectively, 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, 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, or 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 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 (or in the case of the initial Master
Servicer and Special Servicer, their respective direct or indirect parent), are
rated "A" (or its equivalent) or better 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.
SECTION 3.08. Enforcement of Alienation Clauses.
With respect to the respective Mortgage Loans it is obligated to
service hereunder, each of the Master Servicer and the Special Servicer, 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 Special Servicer or
the Master Servicer, as the case may be, has determined, consistent with the
Servicing Standard, that waiver of such restrictions would be in accordance with
the Servicing Standard; provided, however, with respect to any such
determination to be made by the Master Servicer, the Master Servicer will notify
the Special Servicer of, and confer with the Special Servicer regarding, its
intent to waive such restrictions no less than five Business
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Days prior to taking such action; and, provided, further, that the Special
Servicer shall have no right to veto the Master Servicer's determination.
Notwithstanding the foregoing, the Master Servicer may take any action prior to
the expiration of such five Business Day period if, in the Master Servicer's
sole reasonable judgment, a delay in taking such action would be inconsistent
with the Servicing Standard. Promptly after the Special Servicer or the Master
Servicer has made any such determination, the Special Servicer or the Master
Servicer, as the case may be, shall deliver to the other such party, the Trustee
and the Rating Agencies an Officers' Certificate setting forth the basis for
such determination.
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 Special Servicer, 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 Special Servicer 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 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. With respect to each Required
Appraisal Mortgage Loan, the Master Servicer will be required to obtain a
Required Appraisal within 60 days of a Mortgage Loan becoming a Required
Appraisal Mortgage Loan 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 Master Servicer shall advance the cost of such
Required Appraisal pursuant to Section 3.01; 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.
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(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
Trustee, 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 Special Servicer
exercised 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 performed within twelve months prior to
any such acquisition of title or other action (a copy of which Environmental
Assessment shall be delivered to the Trustee), that:
(i) the Mortgaged Property is in compliance with applicable
environmental laws and regulations or, if not, 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 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
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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.
At the Special Servicer's request, pursuant to the procedures and
limitations set forth in Section 3.01, the Master Servicer shall advance the
cost of any Environmental Assessment, as well as the cost of any remedial,
corrective or other further action contemplated by clause (i) and/or clause (ii)
of the preceding paragraph pursuant to the procedures set forth in Section 3.01,
which costs may be reimbursed to the Master Servicer from the Certificate
Account as a Servicing Advance. In addition, if any Environmental Assessment so
warrants, the Special Servicer shall 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. The Master Servicer shall also make a Servicing Advance, subject to
the limitations set forth in Section 3.01, of the cost of such additional
testing to the extent the Master Servicer is requested to make such Servicing
Advance by the Special Servicer pursuant to Section 3.01.
(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)
has not been satisfied with respect to any Mortgaged Property securing a
defaulted Mortgage Loan, the Special Servicer 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, then prior to the
release of all or a substantial portion of the related Mortgaged Property from
the lien of the related Mortgage, (i) the Special Servicer shall have notified
the Rating Agencies, Trustee and the Master Servicer in writing of its intention
to so release all or a substantial portion of such Mortgaged Property and the
bases for such intention, (ii) the Trustee shall have notified the
Certificateholders in writing of the Special Servicer's intention to so release
all or a substantial 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 Majority Subordinate Certificateholder 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 (A)(i) and (A)(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
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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 and the Master Servicer 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 necessary for the
Master Servicer to perform its duties hereunder.
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, 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
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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
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 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 for the same period 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
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allocable as recoveries of interest, to the extent permitted by Section
3.05(a)(iii) and otherwise as permitted pursuant to Section 3.05(a)(vii). 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 assumption
fees, modification fees, late charges, exit fees or 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); (ii) interest or other income earned on deposits in the
Certificate Account, the Additional and Default Interest Distribution Account
and the Distribution Account, 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), and (iii) 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 thereby. 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)), 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 basis of the same
principal amount and for the same period respecting which any related interest
payment due on such Specially Serviced 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) and
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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 in respect of each Specially Serviced Mortgage Loan
and REO Loan, 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 Loan by the applicable
Mortgage Loan Seller pursuant to the respective 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 Master Servicer, the Special Servicer or the Depositor
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
(notwithstanding 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.
As compensation for its activities set forth in Section 3.12, the
Special Servicer shall be entitled to receive the Additional Servicing Fee with
respect to each Mortgage Loan and REO Loan. As to each such Mortgage Loan and
REO Loan, the Additional Servicing Fee shall accrue at the Additional Servicing
Fee Rate and on the same principal amount and for the same period respecting
which the related interest payment due on such Mortgage Loan or deemed to be due
on such REO Loan is computed. The Additional 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 Additional 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 Special
Servicer shall be entitled to recover unpaid Additional 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) or otherwise pursuant to Section
3.05(a)(vii).
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The Special Servicer's right to receive the Special Servicing Fee,
Additional Servicing Fee and 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,
assumption fees, modification fees, exit fees or repayment fees received on or
with respect to Specially Serviced Mortgage Loans (which charges and fees shall
be subordinate to the regularly scheduled principal and interest payments in
respect of such Specially Serviced Mortgage Loans) shall be promptly paid by the
Master Servicer to, or retained by, as the case may be, the Special 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.
Except as otherwise expressly set forth herein, 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 (other than
compensation) and the premiums for any blanket policy 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 Sections
3.01(a), 3.05(a) and 3.09(a) if and to the extent such expenses are not payable
directly out of the Certificate Account or the REO Account.
SECTION 3.12. Property Inspections; Collection of Financial
Statements; Delivery of Certain Reports.
(a) The Special Servicer shall at its expense (subject to its right
to do so pursuant to the related Mortgage) 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. The Master
Servicer shall at its expense perform or cause to be performed an inspection of
each Mortgaged Property at least once per calendar year, if the Special Servicer
has not already done so in that calendar year pursuant to the preceding
sentence. The Master Servicer or 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 Special Servicer or Master 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. Any such reports prepared by the Master Servicer or the
Special Servicer shall be promptly forwarded by it to the other party, the
Trustee and the Majority Subordinate Certificateholder. The Master Servicer and
the Special Servicer shall make copies of the inspection report of such
Specially Serviced Mortgage Loan or REO Property or non-Specially Serviced
Mortgage Loan, as applicable, available for review by Certificateholders during
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normal business hours at the offices of the Master Servicer within 30 days of
the completion of such inspection report (or within 30 days of the Master
Servicer's receipt of reports prepared by the Special Servicer) but in no event
later than 60 days after such physical inspection and shall, if so requested by
a Rating Agency, provide a copy of such inspection report to such Rating Agency.
The Special Servicer will, promptly after a Mortgage Loan becomes a
Specially Serviced Mortgage Loan, give written notice to the Master Servicer and
the Trustee 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, a copy of which notice will be provided by the
Trustee to each Certificateholder, each Rating Agency, the Depositor and the
Underwriter.
(b) The Special Servicer in the case of any Specially Serviced
Mortgage Loan, and the Master Servicer, in the case of all other Mortgage Loans,
shall make reasonable efforts to collect promptly from each related Mortgagor
annual, quarterly and monthly operating statements, budgets and rent rolls of
the related Mortgaged Property, and financial statements of such Mortgagor, to
the extent delivery of such items is required pursuant to the terms of the
related Mortgage. In addition, the Special Servicer shall cause annual operating
statements, budgets and rent rolls to be regularly prepared in respect of each
REO Property and shall collect all such items promptly following their
preparation. The Master Servicer and Special Servicer each shall deliver copies
of all of the foregoing items so collected thereby to each other, the Trustee
and any Sub-Servicers by the fifth Business Day of the next calendar month, and
the Trustee shall deliver the same to the Rating Agencies (by electronic
transmission, if available), and upon request, to the Depositor and the Majority
Subordinate Certificateholder (if such Person is not then the Special Servicer).
Promptly following its receipt of the annual reports (but in no event later than
45 days), each of the Master Servicer and the Special Servicer shall review all
such items as may be collected by it in respect of each Mortgage Loan and REO
Property and, in the absence of actual knowledge that any such item contains
erroneous information, shall be entitled to rely upon such information and,
based upon such information, shall promptly calculate (and report such
calculations to each other and the Trustee): (i) the occupancy percentage for
the related Mortgaged Property or REO Property, as the case may be (such
occupancy percentage shall represent a ratio of the number of rooms occupied per
day (summed over a specified period of time) to the number of rooms available
for occupancy per day (summed over such specified period of time) in the case of
a Mortgaged Property that is a hotel, shall be calculated on a per unit basis in
the case of a Mortgaged Property that is a multifamily or manufactured housing
rental property and on a net square footage basis in all other cases or on any
other basis that the Master Servicer or the Special Servicer deems appropriate
in accordance with the Servicing Standard and identifies to the Trustee, the
Master Servicer and the Depositor); (ii) in accordance with Exhibit E-1, the Net
Operating Income for the related Mortgaged Property or REO Property, as the case
may be; and (iii) the Debt Service Coverage Ratio for the related Mortgage Loan
or REO Loan, as the case may be. The Updated Mortgage Loan Schedule to be
prepared each month by the Master Servicer pursuant to Section 3.12(c) shall
reflect the most recent calculations made by the Master Servicer or Special
Servicer pursuant to the preceding sentence with respect to each Mortgage Loan
and REO Loan and shall identify the period covered by the financial
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statements and/or the date of the rent roll from which such calculations were
made. All information to be provided by the Special Servicer to the Master
Servicer under this Section shall be provided not later than five Business Days
prior to the date that the Master Servicer is required to deliver such
information to the Special Servicer, the Trustee, the Depositor and the Rating
Agencies pursuant to Section 3.12(c).
(c) Not later than 5:00 p.m., New York time, on the second Business
Day prior to such Distribution Date, the Master Servicer shall deliver to the
Special Servicer, the Trustee, the Depositor, the Mortgage Loan Sellers and the
Rating Agencies (for receipt by such Persons not later than such time), by
electronic transmission (or in such other form to which the Trustee, the
Depositor, the Master Servicer, the Special Servicer, the Mortgage Loan Sellers
and the Rating Agencies may agree), with a hard copy of such transmitted
information to follow on the next Business Day, an accurate and complete Updated
Mortgage Loan Schedule, substantially in the form of Exhibit E-2 and the
Additional Master Servicer Reporting substantially in the form of Exhibit E-3,
prepared as if the Determination Date were the Cut-Off Date and setting forth,
among other things, the items referred to in the definition of "Mortgage Loan
Schedule," as well as the items referred to in Section 3.12(b), further
identifying on such schedule each Mortgage Loan (i) that has become an REO Loan,
and the date of the related REO Acquisition, (ii) in respect of which any
modification, waiver, or amendment was agreed pursuant to Section 3.20 and the
substance of such modification, waiver or amendment, (iii) in respect of which a
material event has occurred and the nature of such material event, and (iv) that
matured, prepaid in full or (whether before or after an REO Acquisition) was
otherwise liquidated during the Collection Period ending on such Determination
Date and, in each case, specifying the date of the related maturity, prepayment
or Liquidation Event, the amount collected in connection therewith and the
amount of any Realized Loss and Additional Trust Fund Expenses incurred in
connection therewith. The Master Servicer and the Special Servicer shall be
entitled to indicate the source of any information it provides pursuant to
Section 3.12 and to affix any disclaimer it deems appropriate in its discretion
with respect to any information provided to the Master Servicer or the Special
Servicer by such source.
(d) With respect to any Mortgage Loan which has been inspected by
the Master Servicer and the related financial statements collected by the Master
Servicer, if the Special Servicer, in its capacity as Special Servicer, requests
additional information regarding such inspection or financial statements, the
Master Servicer shall make reasonable due inquiry of the related Mortgagor to
ascertain such additional information, subject to the terms of the Mortgage Loan
and the Servicing Standard and inform the Special Servicer of the results of
such inquiry.
SECTION 3.13. Annual Statement as to Compliance.
Each of the Master Servicer and the Special Servicer shall deliver
to each other, the Trustee and the Rating Agencies on or before the 88th day
following the last Friday in December of each year, beginning March 24, 1998, 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
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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 the 88th day following the last Friday in December of
each year, beginning March 24, 1998, 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 to the other such party, the Trustee, the Rating Agencies
and the Depositor a statement 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 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.
Upon five Business Days prior written notice, the Trustee shall make
available at its offices, during normal business hours, for review by any
Certificateholder or any Person identified to the Trustee, as the case may be,
as owning or being a prospective transferee of an interest in any Certificate,
the Rating Agencies, the Depositor, the Mortgage Loan Sellers or any other party
hereto originals or copies of the following items, to the extent such items are
in the Trustee's possession: (a) this Agreement and any amendments thereto, (b)
all Distribution Date Statements and other reports, statements and information
delivered to holders of the relevant Class of Certificates since the Closing
Date, (c) all Officer's Certificates delivered by the Master Servicer and the
Special Servicer since the Closing Date, (d) all accountants' reports delivered
with respect to the Master Servicer and the Special 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 (and, if available, quarterly and
monthly) operating statements,
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financial statements and rent rolls, if any, collected by or on behalf of the
Special Servicer or the Master Servicer pursuant to Section 3.12(b) hereof,
together with the accompanying written reports to be prepared by the Master
Servicer or the Special Servicer, as the case may be, (g) the Mortgage Files,
including, without limitation, any and all modifications, waivers and amendments
of the terms of a Mortgage Loan entered into by the Special Servicer or the
Master Servicer, (h) any and all Officers' Certificates and other evidence
delivered by the Master Servicer, the Special Servicer or the Trustee, as the
case may be, to support its determination that any Advance was or, if made,
would be a Nonrecoverable Advance, (i) any and all notices and reports with
respect to any Mortgaged Property as to which the environmental testing
contemplated by Section 3.09(c) revealed that any of the conditions set forth in
clauses (A) (i) and (A) (ii) of the first sentence thereof was not satisfied,
(j) all Updated Mortgage Loan Schedules and Collection Reports since the Closing
Date, and (k) in the case of a Holder, beneficial owner, or prospective
transferee of a Non-Registered Certificate or an interest therein, any private
placement memorandum or other disclosure document relating to the Certificates
of such Class, in the form most recently provided to the Trustee by the
Depositor or by any Person designated by the Depositor. Copies of any and all of
the foregoing items will be available from the Trustee upon request at a
reasonable charge therefor and shall be provided to any of the Rating Agencies,
the Depositor and the Mortgage Loan Sellers at no cost pursuant to any of their
requests.
Each of the Master Servicer and the Special Servicer shall afford to
the Trustee, 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, license or contract or to the extent
such information is subject to a privilege under applicable law to be asserted
on behalf of the Certificateholders or the Mortgagors. 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 Master Servicer, the Special Servicer or the Trustee, as
applicable may require payment from the requesting party (other than the Rating
Agencies and the Depositor) 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.
A Certificateholder or Certificate Owner may obtain certain
information contained in each Distribution Date Statement by calling the
Trustee's Street Fax System at (617) 664-5600 and requesting an account
application through the system. A Certificateholder or Certificate Owner may
also receive such information via the Trustee's home page on the world wide web.
To visit the web page, a Certificateholder or Certificate Owner should access
"corporatetrust.statestreet.com" using any java-enabled web browser, click on
the "Investor Information & Reporting" button and then select the appropriate
transaction. In addition, if the Depositor so directs the Trustee and on terms
acceptable to the Trustee, the Trustee will make certain information related to
the mortgage loans available through its Corporate Trust web site
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and through its Trade Winds electronic bulletin board. To register for the Trade
Winds bulletin board, a Certificateholder or Certificate Owner should call the
Trustee at (617) 664-5443.
Upon written request of any Certificateholder of record made for
purposes of communicating with other Certificateholders with respect to their
rights under this Agreement, the Certificate Registrar will furnish such
Certificateholder with a list of the other Certificateholders then of record.
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 for the benefit of the
Certificateholders. The Special Servicer, on behalf of the Trust Fund, shall
sell any REO Property prior to the close of the third taxable year following the
taxable year of acquisition by REMIC I of 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 expiration of such three year
period, 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
for more than three years after the end of the taxable year of such acquisition
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).
(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 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
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Investment Earnings with respect to the REO Account for any Collection Period).
The Special Servicer shall give 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, ground
rents 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.
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 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
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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, 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 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 possible) advise the
Special Servicer 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 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. The Special Servicer's decision as to how each REO
Property shall be managed and operated shall be based in either case
on the good faith judgment of the Special Servicer as to which means
would maximize (to the extent commercially reasonable) the net
after-tax REO Revenues received by the Trust Fund with respect to
such property and, to the extent consistent with the foregoing,
shall be in accordance with the Servicing Standard. 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 with respect to the determinations required under this
Section 3.17(a). Neither the Special Servicer nor the REMIC
Administrator shall be liable to the Certificateholders, the Trust
Fund, the Trustee, the Master Servicer or each other for errors in
judgment made in good faith in the exercise of their discretion
while performing their respective responsibilities under this
Section 3.17(a). Nothing in this Section 3.17(a) is intended to
prevent the sale of a Defaulted Mortgage Loan pursuant to the terms
and subject to the conditions of Section 3.18.
(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
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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,
except as contemplated by Section 3.17(a), or 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 limitations set forth in Sections 3.01 and 3.03, 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 determines, in accordance with the Servicing Standard, that
such payment would be a Nonrecoverable Advance; provided, however, that the
Master 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
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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 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) and 9.01.
(b) Subject to Section 2.03(a), 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 and the Master Servicer, and the Trustee, following its
receipt of such notice, shall, within 10 days after receipt of such notice,
deliver a copy of such notice to the Majority Subordinate Certificateholder. 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,
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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 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 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 Trust
Fund. Such offer shall be made in a commercially reasonable manner (which, for
purposes hereof, includes an 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. Subject to Section 3.18(h), 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 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, subject to Section 3.18(h), the highest) 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, subject to Section 3.18(h), 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
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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. 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, the Special Servicer or any Affiliate
of either) 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 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, 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 (other than limited warranty of title and condition)
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and without representations and warranties, 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 or the Trustee.
(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.
In addition, the Special Servicer may accept a lower bid if it determines, in
accordance with the Servicing Standard, that acceptance of such bid would be in
the best interests of the Certificateholders (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 lesser of (i) the excess, if any,
of (A) aggregate amount of Prepayment Interest Shortfalls incurred in connection
with Principal Prepayments received during the most recently ended Collection
Period over (B) the aggregate amount of Prepayment Interest Excesses collected
in connection with Principal Prepayments received during such Collection Period,
and (ii) the total amount of servicing compensation received by the Master
Servicer during such Collection Period.
SECTION 3.20. Modifications, Waivers, Amendments and Consents.
(a) Subject to Sections 3.20(b) through 3.20(h) below, the Master
Servicer or Special Servicer may, on behalf of the Trustee, agree to any
modification, waiver or amendment of any term of any Mortgage Loan without the
consent of the Trustee or any Certificateholder; provided, however, with respect
to any such determination to be made by the Master Servicer, the Master Servicer
will notify the Special Servicer of, and confer with the Special Servicer
regarding, its intent to modify, waive or amend any term of any Mortgage Loan no
less than five Business Days prior to taking such action; and, provided,
further, that the Special Servicer shall have no right to veto the Master
Servicer's determination. Notwithstanding the foregoing, the Master Servicer may
take any action prior to the expiration of such five Business Day period if, in
the Maser Servicer's sole reasonable judgment, a delay in taking such action
would be inconsistent with the Servicing Standard.
(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.
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(c) With respect to Mortgage Loans which are not Specially Serviced
Mortgage Loans, the Master Servicer, on behalf of the Trustee, shall not agree
or consent to any modification, waiver or amendment of any term of any such
Mortgage Loan if such modification, waiver or amendment 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 other amounts payable as
additional servicing compensation to the Master Servicer) 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 Master Servicer at the
expense of the related Mortgagor and upon which the Master Servicer
may conclusively rely) of the property to be released; or
(iv) in the judgment of the Master Servicer, otherwise
materially impair the security for such Mortgage Loan or reduce the
likelihood of timely payment of amounts due thereon.
(d) Notwithstanding any provision of this Agreement to the contrary,
neither the Master Servicer nor the Special Servicer shall consent to, make or
permit (i) any modification with respect to any Mortgage Loan that would change
the Mortgage Rate or Additional Interest Rate, reduce or increase the principal
balance (except for reductions resulting from actual payments of principal) or
change the final maturity date of such Mortgage Loan unless, with respect to a
Specially Serviced Mortgage Loan, both (A) the related Mortgagor is in default
with respect to the Mortgage Loan or, in the sole good faith judgment of the
Special Servicer, such default is reasonably foreseeable and (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 present value basis
(the relevant discounting of amounts that will be distributable to
Certificateholders to be performed at the related Mortgage Rate) or (ii) any
modification, waiver or amendment of any term of any Mortgage Loan that would
(A) effect an exchange or reissuance of such Mortgage Loan under Section 1001 of
the Code (and the Treasury Regulations promulgated thereunder with an effective
date or proposed effective date that applies or would apply to such waiver,
modification or amendment) and (B) 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.
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However, the Special Servicer will not be permitted to extend the
date on which any Balloon Payment is scheduled to be due unless the Special
Servicer has obtained an Appraisal of the related Mortgaged Property, which
Appraisal supports the determination of the Special Servicer contemplated by
clause (i)(B) of the immediately preceding paragraph. In no event shall the
Special Servicer be permitted to extend the date on which any Balloon Payment is
due beyond a date which is two years prior to the Rated Final Distribution Date.
The determination of the Special Servicer contemplated by clause
(i)(B) of the first paragraph of this Section 3.20(d) shall be evidenced by an
Officer's Certificate to such effect delivered to the Trustee, the Majority
Subordinate Certificateholder and the Master Servicer and describing in
reasonable detail the basis for the Special Servicer's 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 Master Servicer's
or Special Servicer's ability to charge and collect from the Mortgagor such
deferred interest 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 Master Servicer or 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, the
Majority Subordinate Certificateholder, any related Sub-Servicers and the
Trustee, 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 made
available for review upon reasonable prior written request during normal
business hours at the offices of the Trustee 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 prepay 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
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pledge Defeasance Collateral in lieu of such prepayment pursuant to the terms of
the related Mortgage Note, (b) notify each Rating Agency, the Trustee and the
Underwriters 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 1997-C2.
Notwithstanding the above, 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 on the Defeasance Loan (unless such new
Mortgagor is acquiring the Mortgaged Property that was the initial security for
the Mortgage 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.
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 immediately give notice thereof, 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 with the preceding sentence within five
Business Days of the occurrence of each related Servicing Transfer Event;
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 immediately give notice thereof, 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
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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) Within one Business Day following the Determination Date, the
Special Servicer shall deliver to the Master Servicer (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 (xiv) of Section 4.02(a) and,
insofar as it relates to the Special Servicer, the information described in
clauses (xxv) and (xxvi) 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 Master 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 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) will be examined by the Master Servicer or the
Special Servicer, as the case may be, and 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; (iii) provides that the Trustee, for the benefit of the
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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 (except to
the extent that the Master Servicer or Special Servicer, as the case may be,
would have been entitled to such indemnification under similar circumstances).
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
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.
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(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 retained by it
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 in accordance with its terms. Any termination fee
payable to any Sub-Servicer pursuant to any Sub-Servicing Agreement shall be the
obligation of the Master Servicer or Special Servicer, as applicable, and 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
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 and Warranties 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:
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(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. The Master Servicer is duly qualified to
do business and is in good standing in each jurisdiction where such
qualification is necessary to perform its obligations under this Agreement
except for those jurisdictions where failure to be so qualified would not,
individually or in the aggregate, have a material adverse effect on the
Master Servicer's ability 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, 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
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ability of the Master Servicer to perform its obligations under this
Agreement or the financial condition of the Master Servicer.
(vii) Each officer, director or employee 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 by the Master Servicer of the
transactions contemplated by this Agreement has been obtained and is
effective.
(x) 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 limited partnership, duly organized,
validly existing and in good standing under the laws of the State of
Maryland, 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 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 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
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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.
(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 by the Special Servicer of
the transactions contemplated by this Agreement has been obtained and is
effective.
(ix) 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.
(x) The Special Servicer has examined each existing Sub-Servicing
Agreement, if any, to which it is a party 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.
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(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 and to the Rating
Agencies.
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 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 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) to distributions to the Holders of the Class A-1 Certificates and
the Class A-2 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
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Expenses, if any, previously allocated to such Classes of Certificates and
not previously reimbursed;
(v) 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;
(vi) after the Class Principal Balances of the Class A-1 Certificates
and the Class A-2 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 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));
(vii) 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;
(viii) 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;
(ix) 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));
(x) 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;
(xi) 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;
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(xii) 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 any other Class of Certificates
pursuant to any prior clause of this Section 4.01(a));
(xiii) 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;
(xiv) 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;
(xv) 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));
(xvi) 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;
(xvii) 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;
(xviii) 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 any other Class of Certificates
pursuant to any prior clause of this Section 4.01(a));
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(xix) 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;
(xx) 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;
(xxi) 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));
(xxii) 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;
(xxiii) 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;
(xxiv) 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 any other Class of Certificates
pursuant to any prior clause of this Section 4.01(a));
(xxv) 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;
(xxvi) to distributions of interest to the Holders of Class J
Certificates, in an amount equal to all Distributable Certificate Interest
in respect of the
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Class J Certificates for such Distribution Date and, to the extent not
previously paid, for all prior Distribution Dates;
(xxvii) 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));
(xxviii) 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;
(xxix) 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;
(xxx) 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 any other Class of Certificates
pursuant to any prior clauses of this Section 4.01(a));
(xxxi) 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; and
(xxxii) 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 (xxxi)
above.
(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, as additional
interest, as follows: Until the aggregate Certificate Principal Balance of the
Sequential Pay Certificates has been reduced to zero, to
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the Holders of the Sequential Pay Certificates, 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 Sequential Pay 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. In
the event that there are two such U.S. Treasury issues (a) with the 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, (i) any Additional Interest collected during
the related Collection Period and (ii) any Net Default Interest available in the
Additional and Default 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
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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 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.
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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(g) 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 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. 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) 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 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 REMIC II Regular Interests in respect
of interest which has accrued on each Component, such amounts 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.
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(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;
(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; Collection Reports.
(a) On each Distribution Date, the Trustee shall forward by electronic
medium to any Rating Agency or those Holders of any Class of Regular
Certificates who so request and shall provide or make available to the
Depositor, the Master Servicer and all of the Holders of each Class of Regular
Certificates, the initial beneficial owners of each Class of Regular
Certificates and subsequent beneficial owners of the Regular Certificates (a
list of which shall be provided to the Trustee on the Closing Date substantially
in the form set forth on Exhibit K hereto or, in the case of subsequent
beneficial owners, as identified to the reasonable satisfaction of the Trustee)
and any other interested parties upon their written request to the Trustee, a
statement (a "Distribution Date Statement") as to the distributions made on such
Distribution Date, based on information provided to it by the Master Servicer
and the Special Servicer (upon which information the Trustee may conclusively
rely), setting forth:
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(i) the amount of the distribution on such Distribution Date to the
Holders of each Class of Sequential Pay Certificates in reduction of the
Class Principal Balance thereof;
(ii) the amount of the distribution on such Distribution Date to the
Holders of such Class of Regular Certificates allocable to Distributable
Certificate Interest;
(iii) the amount of the distribution on such Distribution Date to the
Holders of such Class of Regular Certificates allocable to Prepayment
Premiums;
(iv) the amount of the distribution on such Distribution Date to the
Holders of such 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;
(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 and Nonrecoverable 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 one month, (B) delinquent two months, (C) delinquent three or
more months, (D) as to which foreclosure proceedings have been commenced
and (E) any Specially Serviced Mortgage Loans.
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(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 (A)(i) and (A)(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 nature of the Liquidation
Event and, in the case of a Final Recovery Determination, a brief
description of the basis for such Final Recovery Determination, (C) the
aggregate of all Liquidation Proceeds and other amounts received in
connection with such Liquidation Event (separately identifying the portion
thereof allocable to distributions on the Certificates), and (D) 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;
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(xv) the Accrued Certificate Interest and Distributable Certificate
Interest in respect of such Class of Regular Certificates for such
Distribution Date;
(xvi) any unpaid Distributable Certificate Interest in respect of such
Class of Regular Certificates after giving effect to the distributions made
on such Distribution Date;
(xvii) the Pass-Through Rate for such 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);
(xix) the aggregate of all Realized Losses incurred during the related
Collection Period and, aggregated by type, all Additional Trust Fund
Expenses incurred during the related Collection Period;
(xx) the aggregate of all Realized Losses and Additional Trust Fund
Expenses that remain unallocated immediately following such Distribution
Date;
(xxi) the Class Principal Balance of each Class of Sequential Pay
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;
(xxiii) the aggregate amount of interest on P&I Advances paid to the
Master Servicer or the Trustee during the related Collection Period in
accordance with Section 4.03(d) paid out of (x) Default Interest and (y)
otherwise out of amounts on deposit in the Collection Account;
(xxiv) the aggregate amount of interest on Servicing Advances paid to
the Master Servicer and the Special Servicer during the related Collection
Period in accordance with Section 3.03(d) paid out of (x) Default Interest
and (y) otherwise out of amounts on deposit in the Collection Account;
(xxv) (A) the aggregate amount of servicing compensation (separately
identifying the amount of each category of compensation) paid to the Master
Servicer, the Special Servicer and, if payable directly out of the Trust
Fund without a reduction in the servicing compensation otherwise payable to
the
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Master Servicer or the Special Servicer, to each Sub-Servicer, during the
related Collection Period, and (B) such other information as the Trustee is
required by the Code or other applicable law to furnish to enable
Certificateholders to prepare their tax returns;
(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; and
(xxvii) the amount of the distribution on such Distribution Date to
the Holders of the Class L Certificates allocable to Additional Interest
and Net Default Interest.
Each Distribution Date Statement shall be accompanied by the corresponding
Updated Mortgage Loan Schedule. The corresponding Collection Report will be
provided by electronic medium (including, without limitation, computer diskette)
to those Holders of any Classes of Regular Certificates who so request and each
of the Rating Agencies. Insofar as any of the information to be provided
pursuant to clauses (i) through (xxvii) above is adequately reflected in the
Updated Mortgage Loan Schedule, such information need not be repeated in the
Distribution Date Statement provided that the Trustee shall only be obligated to
deliver the Updated Mortgage Loan Schedule to the extent such document is
delivered to it by the Master Servicer in accordance with Section 3.12(c); and
provided further that notwithstanding the fact that any of the Registered
Certificates are held in the name of the Depository or its nominee, the Trustee
shall be required on each Distribution Date to deliver the related Distribution
Date Statement and corresponding Updated Mortgage Loan Schedule to each holder
of Registered Certificates set forth on Exhibit K hereto. In addition, each such
Distribution Date Statement and Updated Mortgage Loan Schedule, as applicable,
shall refer to the Mortgage Loan Number for each Mortgage Loan set forth on
Exhibit B hereto.
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 by the Master Servicer as a basis
for information to be furnished pursuant to clauses (x) through (xiv), (xxv) and
(xxvi) above, insofar as the underlying information is solely within the control
of the Special Servicer, the Master Servicer may, absent manifest error,
conclusively rely on the reports to be provided by the Special Servicer.
Within a reasonable period of time after the end of each calendar year, the
Trustee shall furnish to each Person who at any time during the calendar year
was a Holder of a Regular Certificate a statement containing the information set
forth in clauses (i) through (iv) and (xxvii) above as to the applicable Class,
aggregated for the portion of such calendar year that such Person was a Holder.
Such obligation of the Trustee shall be deemed to have been satisfied to the
extent that substantially comparable information shall be provided by the REMIC
Administrator pursuant to any requirements of the Code as from time to time are
in force.
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On each Distribution Date, the Trustee shall forward to the Depositor, to
the Special Servicer, to the Master Servicer, to each Mortgage Loan Seller, to
each Rating Agency, to each Holder of a Residual Certificate, to Merrill Lynch &
Co. (at 101 Hudson Street, 12th Floor, Jersey City, New Jersey 07302-3997,
Attention: P&I Dept., or such other address as Merrill Lynch & Co. may hereafter
designate), to GE Capital Corporation (at 125 Park Avenue, 10th Floor, New York,
New York 10017, Attention: Capital Markets) and, in the case of reports
regarding the respective Classes of Book-Entry Certificates, if any, 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, Class R-II and Class R-III
Certificates on such Distribution Date.
Within a reasonable period of time after the end of each calendar year, the
Trustee shall furnish to each Person who at any time during the calendar year
was a Holder of a Residual Certificate a statement containing the information
provided pursuant to the previous paragraph in respect of distributions on each
Class of Residual Certificates and pursuant to clauses (i) through (iv) and
(xxvii) above in respect of distributions on each Class of Regular Certificates,
aggregated for the portion of such calendar year that such Person was a Holder.
Such obligation of the Trustee shall be deemed to have been satisfied to the
extent that substantially comparable information shall be provided by the
Trustee pursuant to any requirements of the Code as from time to time are in
force.
Upon written request of any of the Rating Agencies, the Depositor, the
Mortgage Loan Sellers or the Underwriter, without payment of any fee, and upon
written request of any Certificateholders or any other Person, together with
payment of a reasonable fee specified by the Trustee, the Trustee shall provide
any statements, reports and/or information contemplated by this Section 4.02(a)
on computer diskette to such party (such computer diskette and such statements,
reports, and/or information thereon to bear such appropriate disclaimers and
qualifications as the Depositor and the Trustee shall determine in their
reasonable discretion).
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 Master Servicer and the Special
Servicer 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 the Trustee, the Special
Servicer or the Master Servicer to violate any applicable law prohibiting
disclosure of information with respect to any Mortgagor or to breach any
confidentiality provision in a Mortgage Loan document or lease with respect to
any Mortgaged Property and the failure of the Trustee, Master Servicer or the
Special Servicer to disseminate information for such reason shall not be a
breach hereof. Either of the Master Servicer and Special Servicer shall be
permitted to attach any disclaimer, with respect to any information provided to
it, to any statement it delivers that it deems appropriate.
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The information to be furnished by the Trustee to the Certificateholders
pursuant to Sections 4.02(a) and (b) shall not limit the Trustee in furnishing
any such information to other Persons to whom it determines such disclosure to
be appropriate and shall not limit the Trustee in furnishing to
Certificateholders or to any Person any other information with respect to the
Mortgage Loans, the Mortgaged Properties or the Trust Fund as may be provided to
it by the Depositor, the Master Servicer or the Special Servicer or gathered by
it in any investigation or other manner from time to time (such information,
other than as described in Sections 4.02(a) and (b), is referred to herein as
"Additional Information") as it may reasonably deem necessary or appropriate
from time to time (provided, however, that it shall have no obligation to do
so), provided that (A) the Trustee shall give the Depositor three Business Days'
advance notice before doing so, (B) prior to any Event of Default, any such
Additional Information shall only be furnished with the consent or at the
request of the Depositor (except pursuant to clause (E) below), (C) the Trustee
shall be entitled to indicate the source of all information furnished by it, and
the Trustee may affix thereto any disclaimer it deems appropriate in its
discretion, (D) the Trustee shall notify Certificateholders of the availability
of any such information in any manner as it, in its sole discretion, may
determine and (E) this provision shall not prevent the Trustee, whether with or
without the consent of the Depositor, from furnishing information with respect
to the Trust Fund and its administration thereof to any Person, if it reasonably
determines that the furnishing of such information is required by applicable
law. Prior to an Event of Default, the Trustee shall forward to the Depositor
any requests for Additional Information which, for their fulfillment, require
the consent of the Depositor. Nothing herein shall be construed to impose upon
the Trustee any obligation or duty to furnish or distribute any Additional
Information to any Person in any instance.
If the Depositor so directs the Trustee, and on terms acceptable to the
Trustee, the Trustee will make available the monthly Reports to
Certificateholders and all associated reporting information via its Corporate
Trust home page on the world wide web and/or via facsimile through its Street
Fax automated fax-back system. The web page is located at
"corporatetrust.statestreet.com." CMBS information is available by clicking the
"Investor Information & Reporting" button, and selecting the appropriate
transaction. Interested parties can register for Street Fax by calling (617)
664-5600 and requesting an account application by following the instructions
provided by the system.
For those who have obtained an account and PIN on the Trustee's Street Fax
system, the foregoing reports may be obtained from the Trustee via automated
facsimile by calling (617) 664-5600 and requesting the report code associated
with Merrill Lynch Mortgage Investors, Inc., Mortgage Pass-Through Certificates,
Series 1997-C2. Report codes can be obtained by calling the same telephone
number and requesting a report listing. In addition, if the Depositor so directs
the Trustee and on terms acceptable to the Trustee, the Trustee will make
certain information related to the Mortgage Loans available through its
Corporate Trust web site and through its Trade Winds electronic bulletin board.
To register for the Trade Winds bulletin board, Certificateholders should call
the Trustee at (617) 664-5443.
(b) Not later than 5:00 p.m., New York time, on the second Business Day
prior to the related Distribution Date, the Master Servicer (with respect to
that information on
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Exhibit L hereto) shall furnish to the Trustee and the Depositor, by electronic
transmission (or in such other form to which the Trustee, the Depositor and the
Master Servicer may agree), with a hard copy of such transmitted information to
follow on the next Business Day, an accurate and complete Collection Report
(substantially in the form of CSSA Loan Periodic File Update Format) with
respect to the related Distribution Date containing the following information
(but only if and to the extent such information is not already adequately
reflected in the corresponding Updated Mortgage Loan Schedule and Additional
Master Servicer Reporting delivered by the Master Servicer to the Trustee
pursuant to Section 3.12(c)):
(i) with respect to each Mortgage Loan (and any successor REO Loan)
that was included in the Trust Fund as of the commencement of the
Collection Period ending on such Determination Date, (A) the Master
Servicer loan number thereof, (B) the Mortgage Rate and Net Mortgage Rate
in effect as of the commencement of such Collection Period, (C) the Stated
Principal Balance outstanding immediately before and expected to be
outstanding immediately after the related Distribution Date, (D) the date
on which the final payment is scheduled to be due, (E) the amount of the
Monthly Payment due on the Due Date in such Collection Period, (F) all
related payment and/or collection activity since the preceding Collection
Report (or, in the case of the initial Collection Report, since the Closing
Date) relevant to the Paying Agent's calculations of amounts to be
distributed on the Certificates on the related Distribution Date and the
application of such amounts in accordance with Section 3.02(b) (or the
definition of "REO Loan"), (G) the delinquency status as of the end of such
Collection Period, (H) in the case of an REO Loan, the date of acquisition
of the related REO Property by the Trust Fund and the book value (within
the meaning of 12 C.F.R. ss.571.13) of such REO Property, (I) whether a
Liquidation Event occurred during such Collection Period and, if so, a
brief description thereof, and (J) the amount of any Realized Loss incurred
during such Collection Period;
(ii) the information to be provided to Certificateholders on the
related Distribution Date pursuant to clauses (v), (vi), (x)-(xiv),
(xxv)(A), and (xxvi) of Section 4.02(a);
(iii) the aggregate amount of the Prepayment Premiums received during
such Collection Period;
(iv) such other information regarding the Mortgage Loan or related
Mortgage Property and any REO Properties as the Trustee may reasonably
request to perform its duties hereunder; and
(v) to the extent the Depositor or any Certificateholder reasonably
requests additional information not required pursuant to the terms of this
Agreement, the Trustee may, subject to the provisions of Section 4.02(a),
request such information in order to deliver the same to the Depositor or
such Certificateholder on the Distribution Date following the Depositor's
or such
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Certificateholder's reasonable request therefor (or if such request is made
after the fifth 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.
In the performance of its obligations set forth in Section 4.05 and its
other duties hereunder, the Trustee may conclusively rely on the Collection
Reports and Updated Mortgage Loan Schedules provided to it by the Master
Servicer or the Special Servicer, and the Trustee shall not be responsible to
recompute, recalculate or verify the information provided to it by the Master
Servicer or the Special 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 and may, absent manifest
error, conclusively rely on the reports to be provided by the Special Servicer.
The Special Servicer shall provide to the Master Servicer the information set
forth in Section 4.02(b)(i), Section 4.02(b)(iv) and Section 4.02(a)(x-xiv) and
(xxvi) with respect to any Specially Serviced Mortgage Loan and REO Loan
serviced by it as of the Due Date for the related Collection Report within one
Business Days after the related Determination Date. The Master Servicer and the
Special Servicer shall be entitled to rely on information received from third
parties in providing information to the Trustee, unless it has knowledge that
such information is incorrect or would have had such knowledge if it were acting
in accordance with the Servicing Standard.
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 (or an Alternate Advancer pursuant to Section 4.03(f)) 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 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 2:00 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
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the Master Servicer by facsimile transmission sent to telecopy (281) 405-7153
(or such alternative number provided by the Master Servicer to the Trustee in
writing) and by telephone at telephone (281) 405-7007 (or such alternative
number provided by the Master Servicer to the Trustee in writing) as soon as
possible, but in any event before 3:00 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 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 (including, without limitation, Balloon
Mortgage Loans delinquent as to their respective Balloon Payments) 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 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 the product of (A) the amount of the P&I Advance 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.
(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
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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 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.
(d) Except as set forth herein, 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), 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, 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 and the Trustee for
any outstanding P&I Advance in accordance with Section 3.05(a) as soon as
practicable. 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.
(e) With respect to any Mortgage Loan which the Master Servicer or an
Affiliate thereof owns an equity interest in the related Mortgagor, if the
Master Servicer makes a P&I Advance with respect to such Mortgage Loan, it shall
only be entitled to interest on such P&I Advance at the Reimbursement Rate, and
only to the extent of (i) any Default Interest received with respect to such
Mortgage Loan and (ii) any Liquidation Proceeds received with respect to such
Mortgage Loan in excess of (a) the outstanding principal balance of such
Mortgage Loan, (b) all accrued and unpaid interest on such Mortgage Loan at the
related Mortgage Rate, (c) all other related and unreimbursed Servicing Advances
plus any accrued interest thereon, (d) any reasonable costs and expenses
incurred by the Trust Fund in
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connection with the liquidation of such Mortgage Loan and (e) any Additional
Trust Fund Expenses in respect of such Mortgage Loan.
(f) With respect to any Mortgage Loan which the Master Servicer or an
Affiliate thereof owns an equity interest in the related Mortgagor, the Master
Servicer may appoint another Person (which is not an Affiliate of the Master
Servicer) satisfactory to the Trustee to make P&I Advances with respect to such
Mortgage Loans (such Person, an "Alternate Advancer"), provided that the Master
Servicer gives prior notice specifying the terms of such appointment (which
shall also be satisfactory to the Trustee) to the Special Servicer, the Trustee
and the Rating Agencies and that the Trustee shall have received from each
Rating Agency written assurance that such appointment will not cause the
qualification, downgrading or withdrawal of the then current rating on any Class
of Certificates. Such Alternate Advancer shall be entitled to receive
reimbursement on any P&I Advances made by it, together with interest thereon, as
and to the same extent as the Master Servicer is entitled with respect to other
Mortgage Loans and the Master Servicer shall be authorized to withdraw funds
from the Certificate Account in order to effect such reimbursement (with
interest). The appointment of an Alternate Advancer shall not relieve the Master
Servicer of its ultimate responsibility to make any required Advance, and the
failure to make any required Advance by either the Master Servicer or its
Alternate Advancer shall be an Event of Default by the Master Servicer.
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 and Class A-2 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
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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 Uncertified Principal Balance of each REMIC I Regular Interest (after taking
account of 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 powers-of-attorney delivered by the Trustee to the Master Servicer of
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 any 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 may
prescribe, the Certificate Registrar shall provide for the registration of
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
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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.
(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
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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 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
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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, 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.
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(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 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.
(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
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(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.
(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.
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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 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.
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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 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 AND THE SPECIAL SERVICER
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, 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; provided, however, that this
provision shall not protect the Depositor, the Master Servicer or
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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 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
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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, 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 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
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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.
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
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,
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and such Holder or Holders shall give 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 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
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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, and if the Master Servicer or the
Special Servicer shall act as proposed in the written notice within fifteen (15)
days, 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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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 and Default 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; 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; 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 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
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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) the Trustee shall have received a written notice from a
Rating Agency 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 such Rating Agency (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, 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.
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) - (viii) 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,
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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 GECLS is
terminated as initial Master Servicer hereunder, such termination shall not
preclude (nor entitle) GECLS from serving, subject to Section 3.22, as a
Sub-Servicer in respect of any Mortgage Loan. If an Event of Default described
in clause (ix) or (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.
(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 and Default 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,
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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 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 assigned to and working in the
Asset Backed Securities Group of the Trustee's Corporate Trust Division 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 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 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. The Trustee shall not be liable
for any of the representations and warranties of the resigning or terminated
party or for any losses incurred by the 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
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shall, subject to paragraph (b) of this Section 7.02, 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 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 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.
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(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 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.
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.
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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;
(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; and
(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.
(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 Trustee assumes no
responsibility for their correctness. The Trustee makes no representations
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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, 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 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. 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.
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(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 "Aa2" 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 Special Servicer and to all Certificateholders. 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,
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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 current or revised Distribution Date Statement, Collection Report or Updated
Mortgage Loan Schedule required by 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).
(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
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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 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
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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 die, 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.
(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
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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 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
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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" (or its equivalent) by each of Fitch, 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. The initial Paying
Agent shall be
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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 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
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charge but only upon reasonable prior written request and during normal business
hours at the offices of the Trustee designated by it.
SECTION 8.16. Representations and Warranties of Trustee.
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:
(i) The Trustee is a state chartered trust company duly organized,
validly existing and in good standing under the laws of the Commonwealth of
Massachusetts.
(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 articles of incorporation and 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) 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 (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, including, but not limited to, its responsibility to make P&I
Advances if the Master Servicer fails to make a P&I Advance pursuant to Section
7.02, 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
affect 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
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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.
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. The Depositor shall pay the Trustee a fee determined by
the Depositor and the Trustee for each filing that the Depositor directs the
Trustee to make through the EDGAR System, as compensation to the Trustee in
addition to the Trustee Fee hereunder. Upon such filing with the Securities and
Exchange Commission, the Trustee shall promptly deliver to the Depositor and the
Master Servicer 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 fault. 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.
SECTION 8.18. Massachusetts Filings.
The Trustee shall make any filings required under Massachusetts
General Laws, Chapter 182, Section 2 and 12.
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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
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 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 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 Master Servicer's or the Depositor's purchase
of all of the
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Mortgage Loans and each REO Property remaining in REMIC I, the Master 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 confirmation
that such final deposit has been made, the Trustee shall release or cause to be
released to the Master 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 Master Servicer or the
Depositor, as applicable, as shall be necessary to effectuate transfer of the
Mortgage Loans and REO Properties to the Master Servicer (or its designee) 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.
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 Master 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 Master Servicer, the Special Servicer and the Depositor at the
time such notice is given to Certificateholders.
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
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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) to distributions to the Holders of the Class A-1 and Class A-2
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;
(v) 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;
(vi) after the Class Principal Balance of the Class A-1 Certificates
and the Class A-2 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;
(vii) 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;
(viii) 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;
(ix) 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;
(x) 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
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Expenses, if any, previously allocated to the Class C Certificates and not
previously reimbursed;
(xi) 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;
(xii) 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;
(xiii) 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;
(xiv) 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;
(xv) 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;
(xvi) 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;
(xvii) 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;
(xviii) 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;
(xix) 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;
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(xx) 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;
(xxi) 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 equal to the Class Principal
Balance of the Class G Certificates outstanding immediately prior to such
Distribution Date;
(xxii) 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;
(xxiii) 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;
(xxiv) 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;
(xxv) 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;
(xxvi) 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;
(xxvii) 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;
(xxviii) 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;
(xxix) 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;
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(xxx) 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;
(xxxi) 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; and
(xxxii) 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 (xxxi) above.
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 and Net Default Interest on
deposit in the Additional and Default 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.
Anything in this Section 9.01 to the contrary notwithstanding, the Holders of
Class L Certificates shall receive that portion of the Additional Interest on
deposit in the Additional and Default Interest Distribution Account, as its
interest may appear. 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 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(j).
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SECTION 9.02. Additional Termination Requirements.
(a) If 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, in
the case of the Depositor, to the Trustee and the Master Servicer, an Opinion of
Counsel, addressed to the Trustee 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 Trustee 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 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.
(b) By their acceptance of Certificates, the Holders thereof hereby
agree to authorize the Trustee 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 (including 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 10, 2029, has been designated the "latest possible
maturity date" of each REMIC I Regular Interest, REMIC II Regular Interest and
each Class of Regular Certificates.
(f) The Trustee shall pay any and all ordinary tax-related expenses
of any of REMIC I, REMIC II or REMIC III. 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, REMIC II or REMIC III that involve the Internal
Revenue Service or state or local taxing authorities will (to the
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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 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,
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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 permitted by this Agreement, but in no
event at the cost or expense of the Trust Fund 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
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
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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.
(1) 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 a Mortgaged Property acquired through
foreclosure, deed in lieu of foreclosure or otherwise in respect of a defaulted
Mortgage Loan and other than 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 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.
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(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.
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
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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, 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
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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.
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
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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, 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.
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 E., 12th
Floor, Houston, Texas 77060, Attention: Legal Department MLMI 1997 C-1,
facsimile number: 281-405-7153; (iii) in the case of the Special Servicer,
CRIIMI MAE Services Limited Partnership, 11200 Rockville Pike, Rockville,
Maryland 20852, Attention: Legal Department - Merrill Lynch Mortgage Investors,
Inc., Mortgage Pass-Through Certificates, Series 1997-C2; (iv) in the case of
the Trustee, State Street Bank and Trust Company, Corporate Trust Department,
Two International Place - 5th Floor, Boston, Massachusetts 02110, Attention:
Merrill Lynch Series 1997-C2, facsimile number 617-664-5367; and (v) in the case
of the Rating Agencies, (A) Fitch Investors Service, L.P., One State Street
Plaza, New York, New York 10004, Attention: Commercial Mortgage Surveillance,
facsimile number: 212-635-0295; (B) Moody's Investors Service, Inc., 99 Church
Street, New York, New York 10007, Attention: CMBS Monitoring; facsimile number:
212-553-1350; and (C) 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
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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.
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. The Depositor shall file or cause to be filed, as a
precautionary filing, a Form UCC-1 substantially in the form attached as Exhibit
J hereto in all appropriate locations in the State of New York promptly
following the initial issuance of the Certificates, and the Master Servicer
shall prepare and file at each such office, and the Trustee shall execute,
continuation statements with respect thereto, in each case within six months
prior to the fifth anniversary of the immediately preceding filing. The
Depositor shall cooperate in a reasonable manner with the Trustee and the Master
Servicer in preparing and filing such continuation statements. 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 11.9. 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.
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SECTION 11.10. Notices to 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;
(iv) the repurchase of Mortgage Loans by any of the Mortgage
Loan Sellers pursuant to either of the Mortgage Loan Purchase
Agreements;
(v) any change in the location of the Distribution Account;
and
(vi) the final payment to any Class of Certificateholders.
(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 or
the Additional and Default Interest Distribution 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;
(iii) any Officers' Certificate delivered by it to the Trustee
pursuant to Section 4.03(c) or 3.08;
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(iv) each of its inspection reports described in Section
3.12(a) and the statements and reports described in Section 3.12(b);
and
(v) each Updated Mortgage Loan Schedule described in Section
3.12(c).
(e) The Trustee shall (i) make available to each Rating Agency, upon
reasonable notice, 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 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.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
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/ BRUCE L. ACKERMAN
---------------------------
Name: Bruce L. Ackerman
Title: Vice President
GE CAPITAL LOAN SERVICES, INC.
Master Servicer
By: /s/ BETHANN C. ROBERTS
---------------------------
Name: Bethann C. Roberts
Title: President & CEO
CRIIMI MAE SERVICES LIMITED PARTNERSHIP
Special Servicer
By: CRIIMI MAE MANAGEMENT, INC.
Its general Partner
By: /s/ DAVID B. IANNARONE
---------------------------
Name: David B. Iannarone
Title: Vice President/General Partner
STATE STREET BANK AND TRUST COMPANY
Trustee
By: /s/ WILLIAM G. SWAN
---------------------------
Name: William G. Swan
Title: Vice President
<PAGE>
EXHIBIT A-1
FORM OF CLASS A-1 CERTIFICATE
CLASS A-1 MORTGAGE PASS-THROUGH CERTIFICATE,
SERIES 1997-C2
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.
Pass-Through Class Principal Balance of the Class
Rate: _____% per annum A-1 Certificates as of the Closing
Date: $___________
Date of Pooling and Servicing Initial Certificate Principal
Agreement: December 1, 1997 Balance of this Class A-1
Certificate as of the Closing Date:
$___________
Closing Date: December 23, 1997 Aggregate Stated Principal
Balance of the Mortgage Loans
as of the Cut-Off Date:
$____________
First Distribution Date:
January 12, 1998
Master Servicer: Trustee:
GE Capital Loan Services, Inc. State Street Bank and Trust Company
Special Servicer:
CRIIMI MAE Services Limited Partnership
Certificate No. 1 CUSIP No. ______________
<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 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.
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 THIS CERTIFICATE 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-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. (in such capacity, hereinafter called the
-2-
<PAGE>
"Master Servicer", which term includes any successor entity under the
Agreement), CRIIMI MAE Services Limited Partnership (in such capacity,
hereinafter called the "Special Servicer", which term includes any successor
entity under the Agreement) and State Street Bank and Trust Company (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 10th day of each month or, if such 10th 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 State Street Bank and Trust Company, 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
-3-
<PAGE>
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.
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
-4-
<PAGE>
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 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 A-1 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.
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.
-6-
<PAGE>
IN WITNESS WHEREOF, the Certificate Registrar has caused this
Certificate to be duly executed.
Dated: December __, 1997
STATE STREET BANK AND TRUST COMPANY,
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.
STATE STREET BANK AND TRUST COMPANY
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 MORTGAGE PASS-THROUGH CERTIFICATE,
SERIES 1997-C2
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.
Pass-Through Class Principal Balance of the Class
Rate: _____% per annum A-2 Certificates as of the Closing
Date: $___________
Date of Pooling and Servicing Initial Certificate Principal
Agreement: December 1, 1997 Balance of this Class A-2
Certificate as of the Closing Date:
$___________
Closing Date: December 23, 1997 Aggregate Stated Principal
Balance of the Mortgage Loans
as of the Cut-Off Date:
$___________
First Distribution Date:
January 12, 1998
Master Servicer: Trustee:
GE Capital Loan Services, Inc. State Street Bank and Trust Company
Special Servicer:
CRIIMI MAE Services Limited Partnership
Certificate No. 1 CUSIP No. ____________
<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 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.
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 THIS CERTIFICATE AND THE CLASS A-1
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 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
-2-
<PAGE>
"Master Servicer", which term includes any successor entity under the
Agreement), CRIIMI MAE Services Limited Partnership (in such capacity,
hereinafter called the "Special Servicer", which term includes any successor
entity under the Agreement) and State Street Bank and Trust Company (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 10th day of each month or, if such 10th 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 State Street Bank and Trust Company, 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
-3-
<PAGE>
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 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
-4-
<PAGE>
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 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 A-2 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.
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.
-6-
<PAGE>
IN WITNESS WHEREOF, the Certificate Registrar has caused this
Certificate to be duly executed.
Dated: December __, 1997
STATE STREET BANK AND TRUST COMPANY,
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.
STATE STREET BANK AND TRUST COMPANY
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 IO CERTIFICATES
CLASS IO MORTGAGE PASS-THROUGH CERTIFICATE,
SERIES 1997-C2
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.
Pass-Through Rate: Variable
Date of Pooling and Servicing Aggregate Certificate Notional
Agreement: December 1, 1997 Amount of the Class IO Certificates
as of the Closing Date:
$_____________
Closing Date: December 23, 1997 Certificate Notional Amount of this
Class IO Certificate as of the
Closing Date:
$_____________
First Distribution Date: Aggregate Stated Principal Balance
January 12, 1998 of the Mortgage loans as of the
Cut-Off Date $_____________
Master Servicer: Trustee:
GE Capital Loan Services, Inc. State Street Bank and Trust Company
Special Servicer:
CRIIMI MAE Services Limited Partnership
Certificate No. 1 CUSIP No. _______________
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 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.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE EVIDENCES A
BENEFICIAL OWENERSHIP INTEREST IN ELEVEN "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 23,
1997. 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 DECEMBER 9, 1997 AND THE PROSPECTUS
SUPPLEMENT DATED DECEMBER 18, 1997 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. (in such capacity,
hereinafter called the "Master Servicer", which term includes any successor
entity under the Agreement), CRIIMI MAE Services Limited Partnership (in such
capacity, hereinafter called the "Special Servicer", which term includes any
successor entity under the Agreement), and State Street Bank and Trust Company
(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 10th day of each month or, if such 10th 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 State Street Bank and Trust Company 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
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<PAGE>
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.
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.
-4-
<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 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 IO 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.
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.
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.
-5-
<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.
-6-
<PAGE>
IN WITNESS WHEREOF, the Certificate Registrar has caused this
Certificate to be duly executed.
Dated: December 23, 1997
STATE STREET BANK AND TRUST
COMPANY,
as Certificate Registrar
By: _______________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class IO Certificates referred to in the
within-mentioned Agreement.
STATE STREET BANK AND TRUST COMPANY,
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 B CERTIFICATE
CLASS B MORTGAGE PASS-THROUGH CERTIFICATE,
SERIES 1997-C2
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.
Pass-Through Class Principal Balance of the Class
Rate: Variable B Certificates as of the Closing
Date: $__________
Date of Pooling and Servicing Initial Certificate Principal Balance
Agreement: December 1, 1997 of this Class B
Certificate as of the Closing Date:
$_________
Closing Date: December 23, 1997 Aggregate Stated Principal
Balance of the Mortgage Loans
as of the Cut-Off Date:
$_________
First Distribution Date:
January 12, 1998
Master Servicer: Trustee:
GE Capital Loan Services, Inc. State Street Bank and Trust Company
Special Servicer:
CRIIMI MAE Services Limited Partnership
Certificate No. 1 CUSIP No. ______________
<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 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 IS SUBORDINATE TO THE CLASS A-1 CERTIFICATES, THE CLASS A-2
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 (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 TO EXECUTE A CERTIFICATION
SUBSTANTIALLY IN THE FORM OF EXHIBIT G TO THE AGREEMENT.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
-2-
<PAGE>
CONDUIT" (A "REMIC") AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G
AND 860D OF 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 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. (in such capacity, hereinafter called the "Master Servicer", which term
includes any successor entity under the Agreement), CRIIMI MAE Services Limited
Partnership (in such capacity, hereinafter called the "Special Servicer", which
term includes any successor entity under the Agreement), and State Street Bank
and Trust Company (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
10th day of each month or, if such 10th 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
-3-
<PAGE>
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 State Street
Bank and Trust Company, 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 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 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
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 B 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.
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.
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
-6-
<PAGE>
obligations, rights and remedies of the Holder hereof shall be determined in
accordance with such laws.
-7-
<PAGE>
IN WITNESS WHEREOF, the Certificate Registrar has caused this Certificate
to be duly executed.
Dated: December __, 1997
STATE STREET BANK AND TRUST
COMPANY,
as Certificate Registrar
By:
------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class B Certificates referred to in the within-mentioned
Agreement.
STATE STREET BANK AND TRUST
COMPANY,
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
-9-
<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.
-10-
<PAGE>
EXHIBIT A-5
FORM OF CLASS C CERTIFICATE
CLASS C MORTGAGE PASS-THROUGH CERTIFICATE,
SERIES 1997-C2
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.
Pass-Through Class Principal Balance of the Class
Rate: Variable C Certificates as of the Closing
Date: $____________
Date of Pooling and Servicing Initial Certificate Principal Balance
Agreement: December 1, 1997 of this Class C
Certificate as of the Closing Date:
$______________
Closing Date: December 23, 1997 Aggregate Stated Principal
Balance of the Mortgage Loans
as of the Cut-Off Date:
$____________
First Distribution Date:
January 12, 1998
Master Servicer: Trustee:
GE Capital Loan Services, Inc. State Street Bank and Trust Company
Special Servicer:
CRIIMI MAE Services Limited Partnership
Certificate No. 1 CUSIP No. _______________
<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 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 IS SUBORDINATE TO THE CLASS A-1, CLASS A-2, CLASS IO AND 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 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.
IF THE AGGREGATE CERTIFICATE PRINCIPAL BALANCE OF THE CLASS A-1, CLASS A-2 AND
CLASS B 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 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. (in such capacity, hereinafter called the "Master Servicer", which term
includes any successor entity under the Agreement), CRIIMI MAE Services Limited
Partnership (in such capacity, hereinafter called the "Special Servicer", which
term includes any successor entity under the Agreement), and State Street Bank
and Trust Company (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
10th day of each month or, if such 10th 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
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<PAGE>
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 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 State Street Bank and Trust Company, 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
-4-
<PAGE>
herefor or in lieu hereof whether or not notation of such distribution is made
upon this Certificate.
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 transfer of
a Class C 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 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, 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,
-5-
<PAGE>
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 C 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.
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.
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.
-7-
<PAGE>
IN WITNESS WHEREOF, the Certificate Registrar has caused this Certificate
to be duly executed.
Dated: December 23, 1997
STATE STREET BANK AND TRUST
COMPANY,
as Certificate Registrar
By: _____________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class C Certificates referred to in the within-mentioned
Agreement.
STATE STREET BANK AND TRUST
COMPANY,
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
-9-
<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.
-10-
<PAGE>
EXHIBIT A-6
FORM OF CLASS D CERTIFICATE
CLASS D MORTGAGE PASS-THROUGH CERTIFICATE,
SERIES 1997-C2
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.
Pass-Through Class Principal Balance of the Class
Rate: Variable D Certificates as of the Closing
Date: $__________
Date of Pooling and Servicing Initial Certificate Principal
Agreement: December 1, 1997 Balance of this Class D
Certificate as of the Closing Date:
$____________
Closing Date: December 23, 1997 Aggregate Stated Principal
Balance of the Mortgage Loans
as of the Cut-Off Date:
$____________
First Distribution Date:
January 12, 1998
Master Servicer: Trustee:
GE Capital Loan Services, Inc. State Street Bank and Trust Company
Special Servicer:
CRIIMI MAE Services Limited Partnership
Certificate No. 1 CUSIP No. ______________
<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 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 IS SUBORDINATE TO THE CLASS A-1, CLASS A-2, 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.
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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, CLASS A-2,
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. (in such capacity, hereinafter called the "Master Servicer", which term
includes any successor entity under the Agreement), CRIIMI MAE Services Limited
Partnership (in such capacity, hereinafter called the "Special Servicer", which
term includes any successor entity under the Agreement), and State Street Bank
and Trust Company (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
10th day of each month or, if such 10th 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
-3-
<PAGE>
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 State Street Bank and Trust Company, 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 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 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 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
-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
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 D 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.
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.
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
-6-
<PAGE>
obligations, rights and remedies of the Holder hereof shall be determined in
accordance with such laws.
-7-
<PAGE>
IN WITNESS WHEREOF, the Certificate Registrar has caused this Certificate
to be duly executed.
Dated: December 23, 1997
STATE STREET BANK AND TRUST COMPANY,
as Certificate Registrar
By: ________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class D Certificates referred to in the within-mentioned
Agreement.
STATE STREET BANK AND TRUST COMPANY,
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
-9-
<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.
-10-
<PAGE>
EXHIBIT A-7
FORM OF CLASS E CERTIFICATE
CLASS E MORTGAGE PASS-THROUGH CERTIFICATE,
SERIES 1997-C2
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.
Pass-Through Class Principal Balance of the Class
Rate: Variable E Certificates as of the Closing
Date: $_____________
Date of Pooling and Servicing Initial Certificate Principal
Agreement: December 1, 1997 Balance of this Class E
Certificate as of the Closing
Date: $_____________
Closing Date: December 23, 1997 Aggregate Stated Principal
Balance of the Mortgage Loans
as of the Cut-Off Date:
$_____________
First Distribution Date:
January 12, 1998
Master Servicer: Trustee:
GE Capital Loan Services, Inc. State Street Bank and Trust Company
Special Servicer: CUSIP No. ______________
CRIIMI MAE Services Limited Partnership
Certificate No. 1
<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 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 IS SUBORDINATE TO THE CLASS A-1, CLASS A-2, 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.
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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. 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 23, 1997. 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 DECEMBER 9, 1997 AND THE PROSPECTUS SUPPLEMENT
DATED DECEMBER 18, 1997 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 BALANCE 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 BALANCE 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.
IF THE AGGREGATE CERTIFICATE PRINCIPAL BALANCE OF THE CLASS A-1, CLASS A-2,
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. (in such capacity, hereinafter called the "Master Servicer", which term
includes any successor entity under the Agreement), CRIIMI MAE Services Limited
Partnership (in such capacity,
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<PAGE>
hereinafter called the "Special Servicer", which term includes any successor
entity under the Agreement), and State Street Bank and Trust Company
(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 10th day of each month or, if such 10th 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 State Street Bank and Trust Company, 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 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
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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 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 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 E 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.
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
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<PAGE>
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.
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.
-7-
<PAGE>
IN WITNESS WHEREOF, the Certificate Registrar has caused this
Certificate to be duly executed.
Dated: December 23, 1997
STATE STREET BANK AND TRUST COMPANY,
as Certificate Registrar
By: _______________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class E Certificates referred to in the
within-mentioned Agreement.
STATE STREET BANK AND TRUST COMPANY,
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 F CERTIFICATE
CLASS F MORTGAGE PASS-THROUGH CERTIFICATE,
SERIES 1997-C2
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.
Pass-Through Class Principal Balance of the Class
Rate: _____% per annum F Certificates as of the Closing
Date: $__________
Date of Pooling and Servicing Initial Certificate Principal
Agreement: December 1, 1997 Balance of this Class F
Certificate as of the Closing
Date: $_________
Closing Date: December 23, 1997 Aggregate Stated Principal
Balance of the Mortgage Loans
as of the Cut-Off Date:
$__________
First Distribution Date:
January 12, 1998
Master Servicer: Trustee:
GE Capital Loan Services, Inc. State Street Bank and Trust Company
Special Servicer: CUSIP No. ______________
CRIIMI MAE Services Limited Partnership
Certificate No. 1
<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 IS SUBORDINATE TO THE CLASS A-1, CLASS A-2, 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 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.
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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. 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 23, 1997. 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 DECEMBER 9, 1997 AND THE PROSPECTUS SUPPLEMENT
DATED DECEMBER 18, 1997 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 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.
This certifies that Merrill Lynch, Pierce, Fenner & Smith 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. (in such capacity, hereinafter called the "Master
Servicer", which term includes any successor entity under the Agreement), CRIIMI
MAE
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<PAGE>
Services Limited Partnership (in such capacity, hereinafter called the
"Special Servicer", which term includes any successor entity under the
Agreement), and State Street Bank and Trust Company (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 10th day of each month or, if such 10th 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 State Street Bank and Trust Company, 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
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<PAGE>
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.
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
-5-
<PAGE>
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.
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
-6-
<PAGE>
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 F 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.
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.
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.
-7-
<PAGE>
IN WITNESS WHEREOF, the Certificate Registrar has caused this
Certificate to be duly executed.
Dated: December 23, 1997
STATE STREET BANK AND TRUST COMPANY,
as Certificate Registrar
By: ____________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class F Certificates referred to in the
within-mentioned Agreement.
STATE STREET BANK AND TRUST COMPANY,
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
-9-
<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.
-10-
<PAGE>
EXHIBIT A-9
FORM OF CLASS G CERTIFICATE
CLASS G MORTGAGE PASS-THROUGH CERTIFICATE,
SERIES 1997-C2
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.
Pass-Through Class Principal Balance of the Class
Rate: _____% per annum G Certificates as of the Closing
Date: $_________
Date of Pooling and Servicing Initial Certificate Principal
Agreement: December 1, 1997 Balance of this Class G
Certificate as of the Closing
Date: $_________
Closing Date: December 23, 1997 Aggregate Stated Principal
Balance of the Mortgage Loans
as of the Cut-0ff Date:
$_________
First Distribution Date:
January 12, 1998
Master Servicer: Trustee:
GE Capital Loan Services, Inc. State Street Bank and Trust Company
Special Servicer: CUSIP No. ______________
CRIIMI MAE Services Limited Partnership
Certificate No. 1
<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 IS SUBORDINATE TO THE CLASS A-1, CLASS A-2, 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 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.
-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 23, 1997. 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 DECEMBER 9, 1997 AND THE PROSPECTUS SUPPLEMENT
DATED DECEMBER 18, 1997 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 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.
This certifies that Merrill Lynch, Pierce, Fenner & Smith 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. (in such capacity, hereinafter called the "Master
Servicer", which term includes any successor entity under the Agreement), CRIIMI
MAE
-3-
<PAGE>
Services Limited Partnership (in such capacity, hereinafter called the
"Special Servicer", which term includes any successor entity under the
Agreement), and State Street Bank and Trust Company (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 10th day of each month or, if such 10th 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 State Street Bank and Trust Company, 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
-4-
<PAGE>
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.
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
-5-
<PAGE>
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.
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.
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
-6-
<PAGE>
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 G 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.
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.
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.
-7-
<PAGE>
IN WITNESS WHEREOF, the Certificate Registrar has caused this
Certificate to be duly executed.
Dated: December __, 1997
STATE STREET BANK AND TRUST COMPANY,
as Certificate Registrar
By: ______________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class G Certificates referred to in the
within-mentioned Agreement.
STATE STREET BANK AND TRUST COMPANY,
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
-9-
<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.
-10-
<PAGE>
EXHIBIT A-10
FORM OF CLASS H CERTIFICATE
CLASS H MORTGAGE PASS-THROUGH CERTIFICATE,
SERIES 1997-C2
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.
Pass-Through Class Principal Balance of the Class
Rate: _____% per annum H Certificates as of the Closing
Date: $___________
Date of Pooling and Servicing Initial Certificate Principal
Agreement: December 1, 1997 Balance of this Class H
Certificate as of the Closing
Date: $___________
Closing Date: December 23, 1997 Aggregate Stated Principal
Balance of the Mortgage Loans
as of the Cut-Off Date:
$___________
First Distribution Date:
January 12, 1998
Master Servicer: Trustee:
GE Capital Loan Services, Inc. State Street Bank and Trust Company
Special Servicer: CUSIP No. ______________
CRIIMI MAE Services Limited Partnership
Certificate No. 1
<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 IS SUBORDINATE TO THE CLASS A-1, CLASS A-2, 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 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.
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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 23, 1997. 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 DECEMBER 9, 1997 AND THE PROSPECTUS SUPPLEMENT
DATED DECEMBER 18, 1997 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 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.
This certifies that Merrill Lynch, Pierce, Fenner & Smith 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. (in such capacity, hereinafter called the "Master
Servicer", which term
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includes any successor entity under the Agreement), CRIIMI MAE Services Limited
Partnership (in such capacity, hereinafter called the "Special Servicer", which
term includes any successor entity under the Agreement), and State Street Bank
and Trust Company (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 10th day of each month or, if such 10th 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 State Street Bank and Trust Company, 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
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<PAGE>
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.
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
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<PAGE>
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.
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.
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
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<PAGE>
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 H 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.
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.
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 23, 1997
STATE STREET BANK AND TRUST COMPANY,
as Certificate Registrar
By: ______________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class H Certificates referred to in the
within-mentioned Agreement.
STATE STREET BANK AND TRUST COMPANY,
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-11
FORM OF CLASS J CERTIFICATE
CLASS J MORTGAGE PASS-THROUGH CERTIFICATE,
SERIES 1997-C2
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.
Pass-Through Class Principal Balance of the Class
Rate: _____% per annum J Certificates as of the Closing
Date: $_________
Date of Pooling and Servicing Initial Certificate Principal
Agreement: December 1, 1997 Balance of this Class J
Certificate as of the Closing
Date: $_________
Closing Date: December 23, 1997 Aggregate Stated Principal
Balance of the Mortgage Loans
as of the Cut-Off Date:
$_________
First Distribution Date:
January 12, 1998
Master Servicer: Trustee:
GE Capital Loan Services, Inc. State Street Bank and Trust Company
Special Servicer: CUSIP No. _______________
CRIIMI MAE Services Limited Partnership
Certificate No. 1
<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 IS SUBORDINATE TO THE CLASS A-1, CLASS A-2, 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 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
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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 23, 1997. 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 DECEMBER 9, 1997 AND THE PROSPECTUS SUPPLEMENT
DATED DECEMBER 18, 1997 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 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.
This certifies that Merrill Lynch, Pierce, Fenner & Smith 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
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<PAGE>
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), CRIIMI
MAE Services Limited Partnership (in such capacity, hereinafter called the
"Special Servicer", which term includes any successor entity under the
Agreement), and State Street Bank and Trust Company (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 10th day of each month or, if such 10th 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 State Street Bank and Trust Company, 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
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<PAGE>
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.
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
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<PAGE>
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.
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.
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
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<PAGE>
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 J 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.
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.
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 23, 1997
STATE STREET BANK AND TRUST COMPANY,
as Certificate Registrar
By: ______________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class J Certificates referred to in the
within-mentioned Agreement.
STATE STREET BANK AND TRUST COMPANY,
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-12
FORM OF CLASS K CERTIFICATE
CLASS K MORTGAGE PASS-THROUGH CERTIFICATE,
SERIES 1997-C2
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.
Pass-Through Class Principal Balance of the Class
Rate: _____% per annum K Certificates as of the Closing
Date: $_________
Date of Pooling and Servicing Initial Certificate Principal
Agreement: December 1, 1997 Balance of this Class K
Certificate as of the Closing
Date: $_________
Closing Date: December 23, 1997 Aggregate Stated Principal
Balance of the Mortgage Loans
as of the Cut-Off Date:
$_________
First Distribution Date:
January 12, 1998
Master Servicer: Trustee:
GE Capital Loan Services, Inc. State Street Bank and Trust Company
Special Servicer: CUSIP No. _______________
CRIIMI MAE Services Limited Partnership
Certificate No. 1
<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 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 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 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
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<PAGE>
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 23, 1997. 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 DECEMBER 9, 1997 AND THE PROSPECTUS SUPPLEMENT
DATED DECEMBER 18, 1997 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 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.
This certifies that Merrill Lynch, Pierce, Fenner & Smith 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. (in such
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<PAGE>
capacity, hereinafter called the "Master Servicer", which term includes any
successor entity under the Agreement), CRIIMI MAE Services Limited Partnership
(in such capacity, hereinafter called the "Special Servicer", which term
includes any successor entity under the Agreement), and State Street Bank and
Trust Company (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 10th day of each month or, if such 10th 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 State Street Bank and Trust Company, 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
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<PAGE>
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.
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
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<PAGE>
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.
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.
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
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<PAGE>
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 K
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.
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.
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 __, 1997
STATE STREET BANK AND TRUST COMPANY,
as Certificate Registrar
By: ______________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class K Certificates referred to in the
within-mentioned Agreement.
STATE STREET BANK AND TRUST COMPANY,
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-13
FORM OF CLASS L CERTIFICATE
CLASS L MORTGAGE PASS-THROUGH CERTIFICATE,
SERIES 1997-C2
evidencing a beneficial ownership interest in the Additional Interest and Net
Default 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.
Percentage Interest evidenced by
this Class L Certificate: _____%
Date of Pooling and Servicing
Agreement: December 1, 1997
Closing Date: December 23, 1997 Aggregate Stated Principal
Balance of the Mortgage Loans
as of the Cut-Off Date:
$________
First Distribution Date:
January 12, 1998
Master Servicer: Trustee:
GE Capital Loan Services, Inc. State Street Bank and Trust Company
Special Servicer:
CRIIMI MAE Services Limited Partnership
Certificate No. 1
<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 AND THE NET DEFAULT 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).
This certifies that _________________ 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), CRIIMI MAE Services Limited Partnership (in such
capacity, hereinafter called the "Special Servicer", which term includes any
successor entity under the Agreement), and State Street Bank and Trust Company
(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
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<PAGE>
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
10th day of each month or, if such 10th 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 State
Street Bank and Trust Company, 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 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 (1) Additional Interest paid on certain of the
Mortgage Loans, and (2) Net Default Interest paid on the Mortgage Loans, all 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,
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<PAGE>
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 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.
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<PAGE>
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.
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.
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<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.
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<PAGE>
IN WITNESS WHEREOF, the Certificate Registrar has caused this
Certificate to be duly executed.
Dated: December 23, 1997
STATE STREET BANK AND TRUST COMPANY,
as Certificate Registrar
By: ______________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class L Certificates referred to in the within-mentioned
Agreement.
STATE STREET BANK AND TRUST COMPANY,
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 R-I CERTIFICATE
CLASS R-I MORTGAGE PASS-THROUGH CERTIFICATE,
SERIES 1997-C2
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.
Date of Pooling and Servicing Percentage Interest evidenced by
Agreement: December 1, 1997 this Class R-I Certificate: _____%
Closing Date: December 23, 1997 Aggregate Stated Principal
Balance of the Mortgage Loans
as of the Cut-Off Date: $____________
First Distribution Date:
January 12, 1998
Master Servicer: Trustee:
GE Capital Loan Services, Inc. State Street Bank and Trust Company
Special Servicer:
CRIIMI MAE Services Limited Partnership
Certificate No. 1
<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 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,
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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-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. (in such capacity, hereinafter called the "Master Servicer", which term
includes any successor entity under the Agreement), CRIIMI MAE Services Limited
Partnership (in such capacity, hereinafter called the "Special Servicer", which
term includes any successor entity under the Agreement), and State Street Bank
and Trust Company (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
10th day of each month or, if such 10th 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
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<PAGE>
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-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 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
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<PAGE>
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 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 State Street Bank and Trust Company, 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
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<PAGE>
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 ithas 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
the Trust Fund 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
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<PAGE>
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-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
-7-
<PAGE>
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 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 specified on the
face hereof.
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.
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.
-8-
<PAGE>
IN WITNESS WHEREOF, the Certificate Registrar has caused this Certificate
to be duly executed.
Dated: December 23, 1997
STATE STREET BANK AND TRUST COMPANY,
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.
STATE STREET BANK AND TRUST COMPANY,
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 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.
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<PAGE>
EXHIBIT A-15
FORM OF CLASS R-II CERTIFICATE
CLASS R-II MORTGAGE PASS-THROUGH CERTIFICATE,
SERIES 1997-C2
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.
Date of Pooling and Servicing Percentage Interest evidenced by
Agreement: December 1, 1997 this Class R-II Certificate: _____%
Closing Date: December 23, 1997 Aggregate Stated Principal
Balance of the Mortgage Loans
as of the Cut-Off Date: $___________
First Distribution Date:
January 12, 1998
Master Servicer: Trustee:
GE Capital Loan Services, Inc. State Street Bank and Trust Company
Special Servicer:
CRIIMI MAE Services Limited Partnership
Certificate No. 1
<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 IS SUBORDINATE TO ALL OF THE REMIC II 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,
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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-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. (in such capacity, hereinafter called the "Master Servicer", which term
includes any successor entity under the Agreement), CRIIMI MAE Services Limited
Partnership (in such capacity, hereinafter called the "Special Servicer", which
term includes any successor entity under the Agreement), and State Street Bank
and Trust Company (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
10th day of each month or, if such 10th 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
-3-
<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-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 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
-4-
<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-II 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-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 State Street Bank and Trust Company, 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
-5-
<PAGE>
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 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
the Trust Fund 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
-6-
<PAGE>
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-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
-7-
<PAGE>
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 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 specified on the face hereof.
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.
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.
-8-
<PAGE>
IN WITNESS WHEREOF, the Certificate Registrar has caused this
Certificate to be duly executed.
Dated: December 23, 1997
STATE STREET BANK AND TRUST COMPANY,
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.
STATE STREET BANK AND TRUST COMPANY,
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 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.
-11-
<PAGE>
EXHIBIT A-16
FORM OF CLASS R-III CERTIFICATE
CLASS R-III MORTGAGE PASS-THROUGH CERTIFICATE,
SERIES 1997-C2
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.
Date of Pooling and Servicing Percentage Interest evidenced by
Agreement: December 1, 1997 this Class R-III Certificate: _____%
Closing Date: December 23, 1997 Aggregate Stated Principal
Balance of the Mortgage Loans as of
the Cut-Off Date:
$_____________
First Distribution Date:
January 12, 1998
Master Servicer: Trustee:
GE Capital Loan Services, Inc. State Street Bank and Trust Company
Special Servicer:
CRIIMI MAE Services Limited
Partnership
Certificate No. 1
<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 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 AND CLASS K
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
-2-
<PAGE>
UNDER THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN, 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. (in such capacity, hereinafter called the "Master
Servicer", which term includes any successor entity under the Agreement), CRIIMI
MAE Services Limited Partnership (in such capacity, hereinafter called the
"Special Servicer", which term includes any successor entity under the
Agreement), and State Street Bank and Trust Company (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 10th day of each month or, if such 10th 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.
-3-
<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.
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 R-II 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
-4-
<PAGE>
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-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 State Street Bank and Trust Company, 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
-5-
<PAGE>
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 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
the Trust Fund 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
-6-
<PAGE>
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 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 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 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 specified on the face hereof.
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, 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.
-8-
<PAGE>
IN WITNESS WHEREOF, the Certificate Registrar has caused this
Certificate to be duly executed.
Dated: December 23, 1997
STATE STREET BANK AND TRUST COMPANY,
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.
STATE STREET BANK AND TRUST COMPANY,
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 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.
-11-
<PAGE>
EXHIBIT B
MLMI 1997-C2
Mortgage Loan Schedule
<TABLE>
<CAPTION>
CONTROL
NUMBER PROPERTY NAME ADDRESS CITY STATE ZIP CODE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
101 Wallingford Industrial 69 North Plains Highway Wallingford CT 06492
102 Lake Forest Business Center 22511 - 22515 Aspan Street Lake Forest CA 92630
104 South Madison Apartments 215 South Madison Pasadena CA 91109
105 Establishment Apartments 4411 Dickason Avenue Dallas TX 75219
106 Longmire Self Storage 3400 Longmire Drive College Station TX 77845
107 Midway Plaza Shopping Center 12801 Midway Road Dallas TX 75244
108 Moulin Rouge Apartments 1250 &1251 Moulin Rouge Drive Dallas TX 75211
109 AAAAA Rent-A-Space-San Leandro 2000 Doolittle Dr. San Leandro CA 94577
111 Lamar Springs Court Apartments 9146 Lamar Spring Valley CA 91977
112 Spring Rose Apartments 10000 Club Creek Houston TX 77036
114 Crossview Courts Apartments 2929 Crossview Houston TX 77063
115 Graycliff Apartments 2235 Graycliff Drive Dallas TX 75228
116 Town & Country Business Park 4060, 4110 - 4190 East Bijou Street Colorado Springs CO 80909
117 Autumn Sunrise Apartments 1825 Airline Dr. Corpus Christi TX 78412
119 Fountains of Jupiter Apartments 12993 Jupiter Road Dallas TX 75238
120 Fountains of Woodmeadow Apartments 10950 Woodmeadow Parkway Dallas TX 75228
121 Comfort Inn - San Antonio 4 Piano Place San Antonio TX 78228
122 Brynn Marr Shopping Center 106 Western Boulevard Jacksonville NC 28540
123 Tanglewood Place Apartments 5920 Beverly Hills Houston TX 77057
124 Comfort Inn & Suites - Las Colinas 1223 Greenway Circle Irving TX 75038
125 Days Inn - Orange 4301 27th Street Orange TX 77632
126 Entrada Apartments 1325 Garfield Denver CO 80206
127 Oaks at Centreport 14300 Statler Court Fort Worth TX 76156
128 Seabreeze Apartments 2401 Manor Road Austin TX 78722
129 Shoney's Inn 234 Lobdell Highway Port Allen LA 70767
130 Days Inn - Augusta 3654 Wheeler Road Augusta GA 30909
131 Days Inn Defiance 1835 North Clinton Street Defiance OH 43512
132 Days Inn Downtown - Indianapolis 401 East Washington Street Indianapolis IN 46204
133 Food Circus - Wall 18th Avenue & Highway 35 Wall NJ 07719
134 Food Circus - Red Bank 362 Broad Street Red Bank NJ 07701
135 Franklin Township Shopping Center 83 and 87 Veronica Avenue Franklin Township NJ 08873
136 Comfort Inn Suites - Hattiesburg 122 Plaza Drive Hattiesburg MS 39402
137 Comfort Inn - Rochester 289 McDonalds Drive Rochester IN 46975
138 Days Inn - Woodlawn 118 East Woodlawn Road Charlotte NC 28217
139 Holiday Inn Express-Carowinds 3560 Lakemont Blvd. Fort Mill SC 29715
140 Super 8 - Raleigh 3804 New Bern Avenue Raleigh NC 27610
142 Westpoint Commons Shopping Ctr. 8202-58 Rockville Road Indianapolis IN 46214
144 Serra Mesa Shopping Center 3202-3340 Greyling Drive San Diego CA 92123
145 Frelinghuysen Industrial 640 Frelinghuysen Avenue Newark NJ 07114
146 Rancho Bernardo Plaza 16759-16707 Bernardo Center Drive Rancho Bernardo CA 92128
148 Lima Plaza 2154 Elida Road Lima OH 45805
149 Archways Apartments 2504-2506 Manor Road Austin TX 78722
150 Britain Way Apartments 1954 Shoaf Drive Irving TX 75061
151 Tiffanywood/Harmonyrick
Apartments 1301 S. Maddox Dumas TX 79029
152 Brandywine Apartments 4020 South 130th East Ave. Tulsa OK 74134
153 Country Hollow Apartments 4605 East 80th Street Tulsa OK 74136
154 Windsail Apartments 9808 East 73rd Street South Tulsa OK 74133
155 91-61 193rd Street Apts. 91-61 193rd Street Queens NY 11423
156 Rolling Ridge Apartments 100 Rollling Ridge Way Bloomington IN 47403
157 Stonywood Terrace Apartments 2525 Welsh Road Philadelphia PA 01607
158 Village at Lakeside 9703 Winter Gardens Blvd. Lakeside CA 92040
159 Tidwell Park Apartments 9400 Bauman Road Houston TX 77076
160 Bucks County Industrial Progress & Marshall Drives Bensalem PA 19020
(95 Expressway)
1 1601 Bronxdale Avenue 1601 Bronxdale Avenue Bronx NY 10462
2 A-1 Self Storage 345 10th Street Jersey City NJ 07302
3 All Aboard - San Francisco 1700 Egbert Avenue San Francisco CA 94124
4 All Aboard - San Ramon 9180 Alcosta Blvd. San Ramon CA 94583
5 All Aboard - Sunnyvale 106 Lawrence Station Road Sunnyvale CA 94086
6 All Aboard Self Storage
- Anaheim I 155 South Adams Street Anaheim CA 92801
7 All Aboard-Northridge/Concord/
N. Hollywood Various Various CA Various
8 Amber Ridge 2421 Foothill Blvd. La Verne CA 91750
9 American Self Storage 1150 N. Hamilton Street Chandler AZ 85225
10 Bay Pointe North Apartments 14003 Saulk Court Tampa FL 33613
11 Bonaventure MHP 19401 N. 7th Street Phoenix AZ 85024
12 Bristol Plaza Self Storage 2900 Ford Road Bristol PA 19007
13 Calumet Square 2213-2233 Calumet Drive Sheboygan WI 53083
14 Canyon Point Apartments 16550 Henderson Pass San Antonio TX 78232
16 Cheron Village 13202 SW 9th Court Davie FL 33325
17 Cherry Creek Plaza 5700 Manchaca Road Austin TX 78745
18 Citrus Creek Apartments 5301 Citrus Blvd. Harahan LA 70123
19 Columbia Junction Center 8610 Baltimore Washington Bivd. Jessup MD 20794
20 Courtyard - Waterbury 63 Grand Street Waterbury CT 06702
21 CVS Pharmacy 1008 Lake Murray Blvd Irmo (Columbia) SC 29212
22 Cypress Pointe Apartments 1227 Pin Oak Drive Flowood MS 39208
23 Decatur Pines 3920 S. Decatur Blvd. Las Vegas NV 89103
24 Del Pine Terrace 4301 Belle Terrace Bakersfield CA 93309
<CAPTION>
CONTROL ORIGINAL CUT-OFF DATE MONTHLY GROSS REMAINING MATURITY GROUND UNDERWRITING
NUMBER BALANCE BALANCE PAYMENT RATE TERM AMORT DATE LEASE RESERVES
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
101 2,400,000 2,393,133.60 19,552.40 8.640 117 297 09/01/2007 No 0.16 per sq. ft.
102 2,000,000 1,995,955.41 14,689.24 8.010 117 357 09/01/2007 No 0.16 per sq. ft.
104 1,500,000 1,495,252.04 11,597.12 8.020 57 297 09/01/2002 No 250 per unit
105 1,450,000 1,445,281.29 11,165.55 7.860 81 297 09/01/2004 No 225 per unit
106 1,600,000 1,595,202.09 12,878.80 8.375 117 297 09/01/2007 No 0.15 per sq. ft.
107 5,100,000 5,068,265.45 44,932.10 8.100 213 213 09/01/2015 No 0.28 per sq. ft.
108 2,250,000 2,242,758.50 17,431.72 7.930 177 297 09/01/2012 No 263 per unit
109 5,330,000 5,311,640.92 45,755.54 9.280 296 296 08/01/2022 No 0.15 per sq. ft.
111 1,650,000 1,646,427.21 12,560.58 7.840 118 298 10/01/2007 No 250 per unit
112 1,375,000 1,372,145.46 10,703.72 8.100 118 298 10/01/2007 No 261 per unit
114 2,700,000 2,693,920.78 18,841.83 7.480 117 357 09/01/2007 No 250 per unit
115 1,000,000 997,950.81 7,837.78 8.180 178 298 10/01/2012 No 250 per unit
116 5,475,000 5,456,045.25 41,761.14 8.125 116 320 08/01/2007 No 0.17 per sq. ft.
117 2,550,000 2,538,559.20 19,110.46 7.660 116 296 08/01/2007 No 250 per unit
119 2,500,000 2,494,799.36 18,118.06 7.870 177 357 09/01/2012 No 220 per unit
120 5,600,000 5,588,350.57 40,584.45 7.870 177 357 09/01/2012 No 235 per unit
121 1,500,000 1,490,771.10 13,375.54 8.875 236 236 08/01/2017 No 4% of revenue
122 3,000,000 2,989,409.99 23,558.17 8.730 234 354 06/01/2017 No 0.16 per sq. ft.
123 2,000,000 1,997,327.95 14,582.95 7.820 118 358 10/01/2007 No 225 per unit
124 2,500,000 2,485,309.53 22,880.47 9.240 236 236 08/01/2017 No 4% of revenue
125 1,450,000 1,444,594.52 12,512.53 8.875 261 261 09/01/2019 No 4% of revenue
126 1,840,000 1,829,403.74 15,027.52 8.670 114 294 06/01/2007 No 250 per unit
127 15,540,000 15,494,443.57 109,830.84 7.610 116 356 08/01/2007 No 250 per unit
128 1,550,000 1,543,468.16 12,014.54 8.050 116 296 08/01/2007 No 260 per unit
129 3,250,000 3,235,974.46 30,029.47 9.375 237 237 09/01/2017 No 4% of revenue
130 1,050,000 1,042,545.82 9,814.82 9.540 235 235 07/01/2017 No 4% of revenue
131 1,900,000 1,884,155.58 18,009.32 9.740 234 234 06/01/2017 No 4% of revenue
132 2,891,000 2,872,305.40 26,351.00 9.410 247 247 07/01/2018 No 4% of revenue
133 3,800,000 3,785,163.47 30,649.86 8.520 176 296 08/01/2012 No 0.24 per sq. ft.
134 4,800,000 4,781,259.13 38,715.62 8.520 176 296 08/01/2012 No 0.27 per sq. ft.
135 3,600,000 3,583,452.82 28,253.87 8.330 79 307 07/01/2004 No 0.15 per sq. ft.
136 3,010,000 2,985,524.34 30,172.35 8.800 177 177 09/01/2012 No 4% of revenue
137 1,925,000 1,899,970.50 19,927.46 9.350 175 175 07/01/2012 No 4% of revenue
138 2,500,000 2,492,701.82 22,864.27 9.230 238 238 10/01/2017 No 4% of revenue
139 2,680,000 2,672,176.36 24,510.50 9.230 238 238 10/01/2017 No 4% of revenue
140 2,560,000 2,552,526.67 23,413.02 9.230 238 238 10/01/2017 No 4% of revenue
142 2,650,000 2,889,343.38 22,745.99 8.492 115 325 07/01/2007 No 0.21 per sq. ft.
144 3,862,500 3,830,058.24 30,847.01 8.700 109 319 01/01/2007 No 0.15 per sq. ft.
145 4,300,000 4,286,477.00 33,359.19 8.060 117 297 09/01/2007 No 0.17 per sq. ft.
146 16,500,000 16,463,424.83 132,003.56 8.720 75 321 03/01/2004 No 0.17 per sq. ft.
148 4,200,000 4,176,294.10 34,644.25 8.790 234 294 06/01/2017 No 0.15 per sq. ft.
149 1,650,000 1,639,411.13 13,812.86 8.970 113 293 05/01/2007 No 228 per unit
150 1,840,000 1,834,315.72 14,409.25 8.170 117 297 09/01/2007 No 225 per unit
151 2,100,000 2,098,685.34 15,909.66 8.340 119 359 11/01/2007 No 250 per unit
152 5,350,000 5,343,242.53 37,591.33 7.550 118 358 10/01/2007 No 200 per unit
153 4,600,000 4,594,189.84 32,321.51 7.550 118 358 10/01/2007 No 225 per unit
154 7,125,000 7,116,115.23 50,307.83 7.600 118 358 10/01/2007 No 225 per unit
155 1,512,000 1,507,974.94 11,189.53 8.090 116 356 08/01/2007 No 225 per unit
156 5,040,000 5,026,825.40 37,616.10 8.180 116 356 08/01/2007 No 150 per unit
157 1,680,000 1,674,124.65 13,246.58 8.775 114 354 06/01/2007 No 225 per unit
158 2,500,000 2,498,288.20 18,170.14 7.900 119 359 11/01/2007 No 250 per unit
159 1,500,000 1,498,919.79 10,642.71 7.650 119 359 11/01/2007 No 278 per unit
160 8,450,000 8,443,057.48 59,473.36 7.460 119 359 11/01/2007 No 0.17 per sq. ft.
1 9,400,000 9,353,356.91 75,311.65 8.440 127 295 07/01/2008 No 0.15 per sq. ft.
2 3,000,000 2,988,683.02 24,623.56 8.730 116 296 08/01/2007 No 0.15 per sq. ft.
3 4,218,000 4,218,000.00 32,109.41 7.840 120 300 12/01/2007 No 0.10 per sq. ft.
4 3,386,000 3,386,000.00 25,775.83 7.840 120 300 12/01/2007 No 0.10 per sq. ft.
5 6,088,000 6,075,278.73 47,230.41 8.060 118 298 10/01/2007 No 0.15 per sq. ft.
6 1,795,000 1,791,369.36 14,164.68 8.260 118 298 10/01/2007 No 0.10 per sq. ft.
7 8,745,000 8,726,874.59 68,133.81 8.110 118 298 10/01/2007 No 0.10 per sq. ft.
8 6,280,000 6,272,148.77 44,298.34 7.590 118 358 10/01/2007 No 298 per unit
9 1,950,000 1,947,966.19 15,115.06 8.050 119 299 11/01/2007 No 0.15 per sq. ft.
10 4,550,000 4,544,238.25 31,939.00 7.540 298 358 10/01/2022 No 200 per unit
11 2,765,000 2,761,454.36 20,753.09 8.240 118 358 10/01/2007 No 35 per pad
12 1,850,000 1,848,153.70 14,673.00 8.320 119 299 11/01/2007 No 0.15 per sq. ft.
13 3,040,000 3,040,000.00 21,778.93 7.750 156 360 12/01/2010 No 0.15 per sq. ft.
14 5,328,000 5,320,035.24 37,181.21 7.480 118 358 10/01/2007 No 291 per unit
16 5,150,000 5,146,131.80 35,798.20 7.440 119 359 11/01/2007 No 25 per pad
17 2,010,000 2,007,917.22 15,633.53 8.090 83 299 11/01/2004 No 0.16 per sq. ft.
18 15,000,000 14,987,631.66 99,493.34 6.970 119 359 11/01/2007 No 200 per unit
19 3,400,000 3,400,000.00 26,174.22 7.970 120 300 12/01/2007 No 0.19 per sq. ft.
20 8,808,000 8,808,000.00 66,240.49 7.700 120 300 12/01/2007 Partial 4% of revenue
21 1,464,000 1,461,359.36 11,802.84 7.510 239 239 11/01/2017 No 0.26 per sq. ft.
22 7,200,000 7,189,555.06 50,985.92 7.630 118 358 10/01/2007 No 200 per unit
23 1,583,000 1,577,377.57 12,396.98 8.700 114 354 06/01/2007 No 306 per unit
24 2,880,000 2,876,604.89 20,891.11 7.290 119 299 11/01/2007 No 340 per unit
<CAPTION>
CONTROL NET SUBSERVICING (1)SERVICING FEE
NUMBER RATE FEES FEES SUBSERVICER
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
101 8.535 0.060 0.105 L.J. Melody
102 7.905 0.060 0.105 L.J. Melody
104 7.915 0.060 0.105 L.J. Melody
105 7.755 0.060 0.105 L.J. Melody
106 8.270 0.060 0.105 L.J. Melody
107 7.995 0.060 0.105 L.J. Melody
108 7.825 0.060 0.105 L.J. Melody
109 9.175 0.060 0.105 L.J. Melody
111 7.735 0.060 0.105 L.J. Melody
112 7.995 0.060 0.105 L.J. Melody
114 7.375 0.060 0.105 L.J. Melody
115 8.075 0.060 0.105 L.J. Melody
116 8.020 0.060 0.105 L.J. Melody
117 7.555 0.060 0.105 L.J. Melody
119 7.765 0.060 0.105 L.J. Melody
120 7.765 0.060 0.105 L.J. Melody
121 8.770 0.060 0.105 L.J. Melody
122 8.625 0.060 0.105 L.J. Melody
123 7.715 0.060 0.105 L.J. Melody
124 9.135 0.060 0.105 L.J. Melody
125 8.770 0.060 0.105 L.J. Melody
126 8.565 0.060 0.105 L.J. Melody
127 7.505 0.060 0.105 L.J. Melody
128 7.945 0.060 0.105 L.J. Melody
129 9.270 0.060 0.105 L.J. Melody
130 9.435 0.060 0.105 L.J. Melody
131 9.635 0.060 0.105 L.J. Melody
132 9.305 0.060 0.105 L.J. Melody
133 8.415 0.060 0.105 L.J. Melody
134 8.415 0.060 0.105 L.J. Melody
135 8.225 0.060 0.105 L.J. Melody
136 8.695 0.060 0.105 L.J. Melody
137 9.245 0.060 0.105 L.J. Melody
138 9.125 0.060 0.105 L.J. Melody
139 9.125 0.060 0.105 L.J. Melody
140 9.125 0.060 0.105 L.J. Melody
142 8.387 0.060 0.105 L.J. Melody
144 8.595 0.060 0.105 L.J. Melody
145 7.955 0.060 0.105 L.J. Melody
146 8.615 0.060 0.105 L.J. Melody
148 8.685 0.060 0.105 L.J. Melody
149 7.762 1.163 1.208 Arbor National
150 7.755 0.370 0.415 Arbor National
151 8.235 0.060 0.105 L.J. Melody
152 7.405 0.100 0.145 Midland
153 7.405 0.100 0.145 Midland
154 7.455 0.100 0.145 Midland
155 7.745 0.300 0.345 Arbor National
156 7.745 0.390 0.435 Arbor National
157 7.748 0.982 1.027 Arbor National
158 7.795 0.060 0.105 L.J. Melody
159 7.545 0.060 0.105 L.J. Melody
160 7.355 0.060 0.105 L.J. Melody
1 8.365 0.030 0.075 GCAM
2 8.655 0.030 0.075 GCAM
3 7.765 0.030 0.075 GCAM
4 7.765 0.030 0.075 GCAM
5 7.985 0.030 0.075 GCAM
6 8.185 0.030 0.075 GCAM
7 8.035 0.030 0.075 GCAM
8 7.515 0.030 0.075 GCAM
9 7.975 0.030 0.075 GCAM
10 7.465 0.030 0.075 GCAM
11 8.165 0.030 0.075 GCAM
12 8.245 0.030 0.075 GCAM
13 7.675 0.030 0.075 GCAM
14 7.405 0.030 0.075 GCAM
16 7.365 0.030 0.075 GCAM
17 8.015 0.030 0.075 GCAM
18 6.895 0.030 0.075 GCAM
19 7.895 0.030 0.075 GCAM
20 7.625 0.030 0.075 GCAM
21 7.435 0.030 0.075 GCAM
22 7.555 0.030 0.075 GCAM
23 8.625 0.030 0.075 GCAM
24 7.215 0.030 0.075 GCAM
</TABLE>
- ----------------
(1) Servicing Fees consist of Master Servicing, Sub-Servicing, Special and
Trustee Fees
-1-
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT B
MLMI 1997-C2
Mortgage Loan Schedule
CONTROL
NUMBER PROPERTY NAME ADDRESS CITY STATE ZIP CODE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
26 Dip N Donut Plaza 2060 N. University Drive Pembroke Pines FL 33024
27 Dogwood Lakes Apartments 1907 Highway 5 North Benton AR 72015
28 Dover Farms Apartments 8290 Royalton Road North Royalton OH 44133
29 Doylestown Shpg Cntr 400 North Main Street Doylestown PA 18901
30 Eugene Mini Storage 3550 W. 11th Avenue Eugene OR 97402
31 Fairfield Inn - Jacksonville 8050 Baymeadows Circle West Jacksonville FL 32256
32 Federal Express Building 12600 Prairie Avenue Hawthorne CA 90250
33 Forrest Apartments 4265 S. Bruce St. and
1880 E. Rochelle Ave. Las Vegas NV 89119
34 Fountain Park Shopping Center 4231 Macon Rd @ Reese Rd. Columbus GA 31907
35 Free State Mall 15528 Annapolis Road Bowie MD 20715
36 G.T. Henderson Center
(aka El Camino Real) 1053 - 1063 El Camino Real Sunnyvale CA 94086
37 Gateway Medical Center 995 Gateway Center Way San Diego CA 92102
38 Gazebo Apartments 2434 W. 24th Terrace Lawrence KS 66046
39 Glasgow Mobile Home Park 268 Cornell Drive Newark DE 19702
40 Grandview Shopping Center 11902-11906 S. Blue Ridge Blvd. Grandview MO 64030
41 Halcyon Village Shopping Center 7825 Vaughn Road Montgomery AL 36117
42 Hampton Inn - Allentown 7471 Keebler Way Allentown PA 18106
46 Harbor Pointe Apartments 331 Harbor Pointe Dr. Mt. Pleasant
(Charleston) SC 29464
47 Haymarket Square 1690 - 1750 Boston Road Springfield MA 01129
48 Hidden Lake Apartments 5419 110th Street SW Lakewood WA 98499
49 Hunt Club 1500 Sparkman Drive Huntsville AL 35816
50 Kroger Woodforest Shopping Center 11037 IH 10 East Houston TX 77029
51 La Casita Mobile Home Park 425 East McKellips Road Mesa AZ 85203
52 Lake West Medical Cntr 36100 Euclid Avenue Willoughby OH 44094
54 Lexington Park Self Storage 448 Great Mills Road Lexington Park MD 21323
56 Lockbourne Lodge 10610 Ashville Pike Rd. Lockbourne OH 43137
57 Maplewood Village 3609 Westerville Road Columbus OH 43224
58 Mason Place 430 South Mason Road Houston TX 77450
59 Melody Lakes 1045 N West End Blvd. Quakertown PA 18951
60 Metro Center II 555 Metro Place South Dublin OH 43017
61 Mid-Oak Plaza 147th and Cicero Midlothian IL 60452
62 Midtown Mini Storage 3808 Cedar Street San Diego CA 92105
63 Northlake Tower Festival 3983-4073 LaVista Road Tucker GA 30084
64 Old Hill Offices 120 Post Road West &
19 Ludlow Road Westport CT 06880
65 Pack Rat Charleston 616 Johnnie Dodds Blvd. Mt. Pleasant SC 29464
66 Pack Rat North 2170 Green Ridge Road North Charleston SC 29406
67 Pack Rat Summerville 1713 Old Trolley Road Summerville SC 29485
68 Park Chateau 515 Chateau Drive, SW Huntsville AL 35801
69 Pine Trail Shopping Center 4576 Okeechobee Blvd. West Palm Beach FL 33401
70 Polo Club Apartments 39352 Polo Club Drive Farmington Hills MI 48334
71 Pueblo Del Sol 3751 Nellis Blvd. Las Vegas NV 89121
72 Raintree Apartments 3300 Rollingbrook Drive Baytown TX 77521
73 Regal Gardens 8625 King George Drive Dallas TX 75235
74 Rivergate Plaza 758 Two Mile Pkwy Goodlettsville
(Nashville) TN 37072
75 Save & Lock 3210 W. 11th Avenue Eugene OR 97402
76 Security Portfolio IIB Various Various TX Various
77 Security Portfolio IIA Various Various Various
78 Sentry Self Storage - Chula Vista 3885 Main Street Chula Vista CA 91911
79 Sentry Self Storage - Eastgate 8440 Eastgate Court San Diego CA 92121
80 Sentry Self Storage - Lakeside 13542 Business Highway 8 Lakeside CA 92040
81 Shoppes at Taylor Ranch 4801 Montano Rd. NW Albuquerque NM 87120
82 Shoppes of Deer Creek Hillsboro Blvd. & Powerline Rd. Deerfield Beach FL 33073
83 Sports Authority 7800 Rivers Avenue N. Charleston
(Charleston) SC 29418
84 Stadium MHP 6700 E Russell Road Las Vegas NV 89122
85 Stone Creek Apts and Plaza Various Anaheim CA 92801
87 Summer Lake 4929 Tuckasseegee Road Charlotte NC 28208
88 Superior Industrial Center 4116-4202 East Superior Avenue Phoenix AZ 85040
89 The Atriums 1900 Lake Atriums Circle Orlando FL 32839
90 The Bluffs at Northwoods 1850 Yellowstone Court Gastonia NC 28054
91 The Links at Joneboro 1424 Links Circle Jonesboro AR 72404
92 Town Center Shopping Center Route 202 & Lenape Drive New Britain PA 18901
93 Twin Rivers Mall 3100 Claredon Blvd. New Bern NC 28562
94 University Creek Shopping Center 5905-5983 S. University Drive Davie FL 33328
95 Waldorf Self Storage 3150 Leonardtown Road (Route 5) Waldorf MD 20601
96 West Goshen Shopping Center 997 Paoli Pike @ Route 202 West Chester PA 19380
97 West Shore Estates 3201 South Euclid Bay City MI 48706
98 Westover Plaza Shopping Center 2920 Highway 127 South Hickory NC 28602
99 Westwood Village 6777 Rasberry Lane Shreveport LA 71129
200 Willow Pond Apartments 8402 Waterford Avenue Tampa FL 33604
201 Willow Spring Apartments 3402 Preston Road Pasadena TX 77505
202 Yorba Ranch Village 4905 Yorba Ranch Road Yorba Linda CA 92887
<CAPTION>
CONTROL ORIGINAL CUT-OFF DATE MONTHLY GROSS REMAINING MATURITY GROUND
NUMBER BALANCE BALANCE PAYMENT RATE TERM AMORT DATE LEASE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
26 1,200,000 1,197,560.93 9,445.37 8.230 118 298 10/01/2007 No
27 9,000,000 8,981,410.39 66,684.93 7.530 298 298 10/01/2022 No
28 11,800,000 11,783,982.91 86,255.41 7.960 118 358 10/01/2007 No
29 14,000,000 13,982,690.20 98,859.80 6.990 119 299 11/01/2007 Yes/will convert to both in '98
30 1,250,000 1,250,000.00 9,343.35 7.630 120 300 12/01/2007 No
31 3,250,000 3,250,000.00 24,441.60 7.700 120 300 12/01/2007 No
32 8,300,000 8,290,749.24 62,094.09 7.640 143 299 11/01/2009 No
33 1,800,000 1,796,418.35 13,320.87 8.090 81 357 09/01/2004 No
34 6,000,000 6,000,000.00 41,338.33 7.350 120 360 12/01/2007 No
35 15,550,000 15,516,994.68 111,617.09 7.770 117 357 09/01/2007 Yes
36 1,600,000 1,595,323.74 12,894.42 8.510 117 297 09/01/2007 No
37 2,725,000 2,717,701.82 20,109.18 8.060 116 356 08/01/2007 No
38 965,000 964,329.83 6,966.80 7.830 119 359 11/01/2007 No
39 15,200,000 15,200,000.00 113,658.68 8.200 120 360 12/01/2007 No
40 1,481,500 1,475,327.06 11,552.48 8.120 116 296 08/01/2007 No
41 1,650,000 1,646,873.19 12,488.82 8.330 117 357 09/01/2007 No
42 5,325,000 5,325,000.00 40,046.62 7.700 120 300 12/01/2007 No
46 14,874,000 14,874,000.00 107,989.90 7.300 300 300 12/01/2022 No
47 12,550,000 12,509,596.67 94,460.47 8.270 115 355 07/01/2007 No
48 3,300,000 3,295,047.13 22,983.76 7.460 118 358 10/01/2007 No
49 6,450,000 6,445,126.24 44,702.51 7.410 119 359 11/01/2007 No
50 4,400,000 4,393,743.88 31,461.35 7.730 118 358 10/01/2007 No
51 1,600,000 1,595,817.67 11,941.62 8.180 116 356 08/01/2007 No
52 3,900,000 3,900,000.00 29,304.36 7.690 120 300 12/01/2007 No
54 800,000 800,000.00 6,227.62 8.100 120 300 12/01/2007 No
56 1,600,000 1,600,000.00 11,573.36 7.850 84 360 12/01/2004 No
57 800,000 800,000.00 5,786.68 7.850 84 360 12/01/2004 No
58 2,000,000 1,994,337.31 15,117.86 8.230 116 344 08/01/2007 No
59 8,800,000 8,800,000.00 64,081.19 7.920 120 360 12/01/2007 No
60 7,150,000 7,150,000.00 50,976.65 7.700 120 360 12/01/2007 No
61 4,558,000 4,543,619.14 35,300.25 8.040 81 297 09/01/2004 No
62 4,070,000 4,057,935.74 32,563.87 8.424 117 297 09/01/2007 No
63 17,600,000 17,600,000.00 124,753.36 7.640 144 360 12/01/2009 Yes
64 2,025,000 2,020,970.52 16,115.25 8.360 118 298 10/01/2007 No
65 2,800,000 2,800,000.00 20,855.95 7.590 120 300 12/01/2007 No
66 1,242,000 1,242,000.00 9,251.10 7.590 120 300 12/01/2007 No
67 1,600,000 1,600,000.00 11,917.68 7.590 120 300 12/01/2007 No
68 3,120,000 3,117,527.13 21,114.87 7.170 119 359 11/01/2007 No
69 13,900,000 13,861,085.35 100,447.17 7.840 164 356 08/01/2011 Partial
70 14,875,000 14,875,000.00 102,890.04 7.390 120 360 12/01/2007 No
71 13,600,000 13,561,075.89 97,244.17 7.730 80 356 08/01/2004 No
72 5,200,000 5,200,000.00 36,359.15 7.500 120 360 12/01/2007 No
73 2,175,000 2,175,000.00 15,551.92 7.730 132 360 12/01/2008 No
74 2,250,000 2,250,000.00 17,113.24 7.830 120 300 12/01/2007 No
75 1,400,000 1,400,000.00 10,464.55 7.630 120 300 12/01/2007 No
76 3,200,000 3,196,509.20 24,344.13 7.820 118 298 10/01/2007 No
77 8,175,000 8,157,241.22 62,124.00 7.820 118 298 10/01/2007 No
78 3,450,000 3,446,348.69 26,536.31 7.960 119 299 11/01/2007 No
79 3,030,000 3,026,767.08 23,205.67 7.910 119 299 11/01/2007 No
80 945,000 944,015.99 7,331.26 8.060 119 299 11/01/2007 No
81 3,040,000 3,037,922.66 22,116.01 7.910 119 359 11/01/2007 No
82 8,700,000 8,687,226.40 61,249.22 7.570 178 358 10/01/2012 No
83 2,400,000 2,392,623.98 19,735.71 8.030 250 250 10/01/2018 No
84 8,050,000 8,024,604.92 61,157.41 8.370 79 355 07/01/2004 No
85 5,250,000 5,250,000.00 39,173.45 7.610 120 300 12/01/2007 Yes
87 6,600,000 6,600,000.00 47,420.11 7.780 120 360 12/01/2007 No
88 2,000,000 1,997,664.76 14,585.24 7.350 119 299 11/01/2007 No
89 4,900,000 4,894,137.94 35,138.07 7.760 118 358 10/01/2007 No
90 5,650,000 5,641,570.73 39,466.94 7.490 118 358 10/01/2007 No
91 15,750,000 15,750,000.00 112,728.29 7.140 300 300 12/01/2022 No
92 5,500,000 5,493,359.56 39,365.44 7.140 119 299 11/01/2007 Both
93 10,500,000 10,479,568.36 78,514.22 8.200 117 357 09/01/2007 No
94 2,300,000 2,300,000.00 17,041.70 7.530 120 300 12/01/2007 No
95 880,000 880,000.00 6,850.38 8.100 120 300 12/01/2007 No
96 11,000,000 10,986,719.13 78,730.87 7.140 119 299 11/01/2007 Yes/will convert to both in '98
97 1,200,000 1,198,725.85 9,214.15 7.940 119 299 11/01/2007 No
98 2,350,000 2,348,377.83 17,014.67 7.860 119 359 11/01/2007 No
99 5,440,000 5,440,000.00 38,037.27 7.500 300 360 12/01/2022 No
200 6,500,000 6,490,475.59 45,806.00 7.580 118 358 10/01/2007 No
201 5,200,000 5,200,000.00 36,359.15 7.500 120 360 12/01/2007 No
202 3,000,000 2,995,768.66 21,533.84 7.770 118 358 10/01/2007 No
<CAPTION>
CONTROL UNDERWRITING NET SUBSERVICING (1) SERVICING FEE
NUMBER RESERVES RATE FEES FEES SUBSERVICER
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
26 0.15 per sq. ft. 8.155 0.030 0.075 GCAM
27 252 per unit 7.455 0.030 0.075 GCAM
28 250 per unit 7.885 0.030 0.075 GCAM
29 0.15 per sq. ft. 6.915 0.030 0.075 GCAM
30 0.34 per sq. ft. 7.555 0.030 0.075 GCAM
31 4% of revenue 7.625 0.030 0.075 GCAM
32 0.10 per sq. ft. 7.565 0.030 0.075 GCAM
33 301 per unit 8.015 0.030 0.075 GCAM
34 0.21 per sq. ft. 7.275 0.030 0.075 GCAM
35 0.20 per sq. ft. 7.695 0.030 0.075 GCAM
36 0.23 per sq. ft. 8.435 0.030 0.075 GCAM
37 0.21 per sq. ft. 7.985 0.030 0.075 GCAM
38 257 per unit 7.755 0.030 0.075 GCAM
39 50 per pad 8.125 0.030 0.075 GCAM
40 0.20 per sq. ft. 8.045 0.030 0.075 GCAM
41 0.19 per sq. ft. 8.255 0.030 0.075 GCAM
42 4% of revenue 7.625 0.030 0.075 GCAM
46 174 per unit 7.225 0.030 0.075 GCAM
47 0.15 per sq. ft. 8.195 0.030 0.075 GCAM
48 262 per unit 7.385 0.030 0.075 GCAM
49 250 per unit 7.335 0.030 0.075 GCAM
50 0.20 per sq. ft. 7.655 0.030 0.075 GCAM
51 44 per pad 8.105 0.030 0.075 GCAM
52 0.15 per sq. ft. 7.615 0.030 0.075 GCAM
54 0.15 per sq. ft. 8.025 0.030 0.075 GCAM
56 46 per pad 7.775 0.030 0.075 GCAM
57 45 per pad 7.775 0.030 0.075 GCAM
58 0.20 per sq. ft. 8.155 0.030 0.075 GCAM
59 51 per pad 7.845 0.030 0.075 GCAM
60 0.18 per sq. ft. 7.625 0.030 0.075 GCAM
61 0.15 per sq. ft. 7.965 0.030 0.075 GCAM
62 0.10 per sq. ft. 8.349 0.030 0.075 GCAM
63 0.15 per sq. ft. 7.565 0.030 0.075 GCAM
64 0.18 per sq. ft. 8.285 0.030 0.075 GCAM
65 0.15 per sq. ft. 7.515 0.030 0.075 GCAM
66 0.15 per sq. ft. 7.515 0.030 0.075 GCAM
67 0.15 per sq. ft. 7.515 0.030 0.075 GCAM
68 225 per unit 7.095 0.030 0.075 GCAM
69 0.15 per sq. ft. 7.765 0.030 0.075 GCAM
70 200 per unit 7.315 0.030 0.075 GCAM
71 25 per pad 7.655 0.030 0.075 GCAM
72 232 per unit 7.425 0.030 0.075 GCAM
73 0.20 per sq. ft. 7.655 0.030 0.075 GCAM
74 0.36 per sq. ft. 7.755 0.030 0.075 GCAM
75 0.22 per sq. ft. 7.555 0.030 0.075 GCAM
76 0.05 per sq. ft. 7.745 0.030 0.075 GCAM
77 0.06 per sq. ft. 7.745 0.030 0.075 GCAM
78 0.10 per sq. ft. 7.885 0.030 0.075 GCAM
79 0.10 per sq. ft. 7.835 0.030 0.075 GCAM
80 0.16 per sq. ft. 7.985 0.030 0.075 GCAM
81 0.26 per sq. ft. 7.835 0.030 0.075 GCAM
82 0.17 per sq. ft. 7.495 0.030 0.075 GCAM
83 0.12 per sq. ft. 7.955 0.030 0.075 GCAM
84 25 per pad 8.295 0.030 0.075 GCAM
85 229 per unit 7.535 0.030 0.075 GCAM
87 250 per unit 7.705 0.030 0.075 GCAM
88 0.16 per sq. ft. 7.275 0.030 0.075 GCAM
89 274 per unit 7.685 0.030 0.075 GCAM
90 374 per unit 7.415 0.030 0.075 GCAM
91 304 per unit 7.065 0.030 0.075 GCAM
92 0.28 per sq. ft. 7.065 0.030 0.075 GCAM
93 0.15 per sq. ft. 8.125 0.030 0.075 GCAM
94 0.24 per sq. ft. 7.455 0.030 0.075 GCAM
95 0.15 per sq. ft. 8.025 0.030 0.075 GCAM
96 0.15 per sq. ft. 7.065 0.030 0.075 GCAM
97 25 per pad 7.865 0.030 0.075 GCAM
98 0.15 per sq. ft. 7.785 0.030 0.075 GCAM
99 250 per unit 7.425 0.030 0.075 GCAM
200 259 per unit 7.505 0.030 0.075 GCAM
201 200 per unit 7.425 0.030 0.075 GCAM
202 0.20 per sq. ft. 7.695 0.030 0.075 GCAM
</TABLE>
(1) Servicing Fees consist of Master Servicing, Sub-Servicing, Special and
Trustee Fees
-2-
<PAGE>
EXHIBIT C
FORM OF SCHEDULE OF EXCEPTIONS TO MORTGAGE FILE DELIVERY
MLMI 1997-C2
Control Borrower Document Document Exception
No. Name ID Status Description
------- -------- -------- -------- -----------
C-1
<PAGE>
EXHIBIT D-1
FORM OF MASTER SERVICER REQUEST FOR RELEASE
__________, 199_
State Street Bank and Trust Company
Two International Place
Boston, Massachusetts 02110-2804
(Attention: MLMI Series 1997-C2)
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, 1997 (the "Pooling and Servicing Agreement"), by and among Merrill Lynch
Mortgage Investors, Inc., as Depositor, GE Capital Loan Services, Inc., as
Master Servicer, CRIIMI MAE Services Limited Partnership, 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):
___________ 1. Mortgage Loan paid in full.
D-1-1
<PAGE>
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 returned to you or
your designee within ten (10) days of our receipt thereof, unless the Mortgage
Loan has been paid in full, in which case the Mortgage File (or such portion
thereof) will be retained by us permanently.
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_
State Street Bank and Trust Company
Two International Place
Boston, Massachusetts 02110
(Attention: MLMI Series 1997-C2)
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, 1997 (the "Pooling and Servicing Agreement"), by and among Merrill Lynch
Mortgage Investors, Inc., as depositor, GE Capital Loan Services, Inc., as
Master Servicer and CRIIMI MAE Services Limited Partnership, 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):
___________ 1. The Mortgage Loan is being foreclosed.
D-2-1
<PAGE>
___________ 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 returned to you or
your designee within ten (10) days of our receipt thereof, unless the Mortgage
Loan is being foreclosed, in which case 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.
CRIIMI MAE Services Limited Partnership,
as Special Servicer
By: _______________________________
Name:
Title:
D-2-2
<PAGE>
EXHIBIT E-1
CALCULATION OF NOI/DEBT SERVICE COVERAGE RATIOS
"Net Operating Income" shall mean the revenue derived from the use and
operation of a Mortgaged Property less operating expenses (such as utilities,
administrative expenses, repairs and maintenance, tenant improvement costs,
leasing commissions, management fees and advertising), fixed expenses (such as
insurance, real estate taxes and, if applicable, ground lease payments) and
reserves (as determined in accordance with the reserve requirements for such
Mortgaged Property set forth in Annex A to the Prospectus Supplement). Net
Operating Income 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 Net Operating Income for each
rental property, the Special Servicer shall rely on the most recent rent roll
supplied by the related borrower and where the actual vacancy shown thereon and
the market vacancy is less than 5%, the Special Servicer shall assume a 5%
vacancy in determining revenue from rents, except that in the case of certain
anchored shopping centers, space occupied by anchor tenants shall be disregarded
in performing the vacancy adjustment due to the length of the related leases or
creditworthiness of such tenants, in accordance with the respective Mortgage
Loan Seller's underwriting standards. In determining rental revenue for
multifamily properties, the Special Servicer shall either review rental revenue
shown on the rolling 12-month operating statements or annualize the rental
revenue shown on rent rolls or operating statements with respect to the prior
three to twelve month periods. For the other rental properties, the Special
Servicer shall annualize rental revenue shown on the most recent rent roll,
after applying the vacancy factor, without further regard to the terms
(including expiration dates) of the leases shown thereon. In the case of
hospitality properties, gross receipts shall be determined on the basis of
adjusted average daily occupancy shown on the borrower-supplied operating
statements. Private occupancy rates shall be within current market ranges and
vacancy levels shall be at a minimum of __%. In general, any non-recurring items
and non-property related revenue shall be eliminated from the calculation except
in the case of residential health care facilities.
In determining the "expense" component of Net Operating Income for each
Mortgaged Property, the Special Servicer shall rely on the most recent financial
statements supplied by the related borrower, except that (a) if tax or insurance
expense information more current than that reflected in the financial statements
is available, the newer information shall be annualized and used, (b) with
respect to each Mortgaged Property,
E-1-1
<PAGE>
property management fees shall be assumed to be 4% to 5% of effective gross
revenue (except with respect to hospitality properties, where a minimum of 5% of
gross receipts shall be assumed, single tenant properties, where a minimum of 4%
of gross receipts shall be assumed and self-storage properties, where a minimum
of 5% of gross receipts shall be assumed) unless actual management fees are
higher, in which case actual management fees shall be assumed, (c) assumptions
shall be made with respect to reserves (as determined in accordance with the
reserve requirements for such Mortgaged Property set forth in Annex A to the
Prospectus Supplement) and (d) expenses shall be assumed to include annual
replacement reserves equal to (1) in the case of retail, office, and industrial
properties, not less than $0.15 and not more than $0.46 per square foot net
rentable commercial area (except with respect to two Mortgage Loans, or 2%,
where $0.12 and $0.10 was assumed, respectively, (2) in the case of multifamily
and one mixed use multifamily retail properties, not less than $150 or more than
$374 per residential unit per year, depending on the condition of the property,
(3) in the case of hospitality properties, 4% of the gross revenues received by
the property owner on a ongoing basis, (4) in the case of the manufactured
housing communities, not less than $25 or more than $51 per pad per year and (5)
in the case of self-storage facilities, not less than $0.05 or more than $0.34
per square foot. In addition, in some instances, the Special Servicer may
recharacterize as capital expenditures those items reported by borrowers as
operating expenses (thus increasing "net cash flow") where determined
appropriate.
E-1-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT E-2
MLMI 1997-C2
Form of Updated Mortgage Loan Schedule
- -----------------------------------------------------------------------------------------------------------------------------------
Control Original Cut-off Date Monthly
Number Property-Name Address City State Zip Code Balance Balance Payment
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Control Gross Remaining Maturity Ground Underwriting Net Subservicing (1) Servicing Fee
Number Rate Term Amort Date Lease Reserves Rate Fees Fees Subservicer
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
(1) Servicing Fees consist of Master Servicing, Sub-Servicing, Special and Trusttee Fees
</TABLE>
<PAGE>
EXHIBIT E-3
FORM OF ADDITIONAL MASTER SERVICER REPORTING
E-3-1
<PAGE>
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1997-C2
[LOGO STATE STREET]
REPORT TO CERTIFICATEHOLDERS FOR PAYMENT DATE:
<TABLE>
<CAPTION>
ADDITIONAL REPORTING INFORMATION
MORTGAGE LOAN ACTIVITY FOR RELATED PAYMENT DATE:
- ------------------------------------------------------------------------------------------------------------------------------------
Beginning
Agg Stated
# of Mortgage Weighted Average Re- Weighted Average Principal Ending Agg Stated Ending Unpaid Available
Loans Outs maining Term to Maturity Mortgage Rate Balance Principal Balance Principal Balance Distribution Amt
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- --------------------------------------------------------------------------
Current Current Additional Principal
Realized Losses Trust Fund Exp # of Payoffs Prepayments
- --------------------------------------------------------------------------
<S> <C> <C> <C>
</TABLE>
<TABLE>
<CAPTION>
APPRAISAL REDUCTION INFORMATION:
- --------------------------------------------------------------------------------------------------
Loan # SPB of Apr Red Loan All Unpd Int & Fees Appraised Val P&I Advance on Loan
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
</TABLE>
<TABLE>
<CAPTION>
AGGREGATE DELINQUENCY INFORMATION FOR RELATED PAYMENT DATE:
----------------------------------------------------------------------
One Month Two Months 3 Months + Foreclosures
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
# of Loans
- -----------------------------------------------------------------------------------------------
Agg Prin Balance
- -----------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
REO PROPERTY WITH FINAL RECOVERY DETERMINATION:
- -----------------------------------------------------------------------------------------------
Mortgage Basis for Final All Proceeds Portion Proceeds Amount of
Loan # Recovery Determination Received to Certificat Realized Loss
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
</TABLE>
<TABLE>
<CAPTION>
LIQUIDATED MORTGAGE LOANS: (OTHER THAN PREPAYMENTS IN FULL)
- -----------------------------------------------------------------------------------------------
Loan Nature of Liquidation Portion of Proceeds Amount of
# Liquidation Event Proceeds Payable to Certificate Realized Loss
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
</TABLE>
P&I ADVANCE & FEE INFORMATION:
ADVANCES:
------------------------------
- Current P&I
- Outstanding P&I
- Servicing
- Nonrecoverable P&I
Interest on:
- P&I Advances
- Servicing Advances
Servicing Compensation:
- to Master Servicer
- to Special Servicer
------------------------------
LOAN PREPAYMENT INFORMATION:
------------------------------
Loan # Amount of Prepayment
------------------------------
Total 0.00
------------------------------
E-3-2
<PAGE>
EXHIBIT F-1
FORM OF TRANSFEROR CERTIFICATE
______ __, 199_
State Street Bank and Trust Company
Two International Place, Fifth Floor
Boston, Massachusetts 02110
Re: Merrill Lynch Mortgage Investors, Inc., Mortgage
Pass-Through Certificates, Series 1997-C2
(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 __, 1997 (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, 1997,
among Merrill Lynch Mortgage Investors, Inc., as depositor, GE Capital Loan
Services, Inc., as master servicer, CRIIMI MAE Services Limited Partnership, as
special servicer, and State Street Bank and Trust Company, 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
F-1-1
<PAGE>
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 Securities Act of 1933, as amended (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_
State Street Bank and Trust Company
Corporate Trust Department
Two International Place - 5th Floor
Boston, Massachusetts 02110
Re: Merrill Lynch Mortgage Investors, Inc., Mortgage
Pass-Through Certificates, Series 1997-C2
(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 __, 1997 (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, 1997,
among Merrill Lynch Mortgage Investors, Inc., as depositor, GE Capital Loan
Services, Inc., as master servicer, CRIIMI MAE Services Limited Partnership, as
special servicer, and State Street Bank and Trust Company, 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, as
amended (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
F-2-1
<PAGE>
transfer is being made in reliance on Rule 144A, or (ii) pursuant to
another exemption from registration under the Securities Act.
2. The Transferee has been furnished with all information regarding
(a) the Certificates and distributions thereon, (b) the nature, performance
and servicing of the Mortgage Loans, (c) the Pooling and Servicing
Agreement, and (d) any credit enhancement mechanism associated with the
Certificates, that it has requested.
3. If the Transferee is proposing that the Certificates being
acquired should be registered in the name of a nominee, such nominee's
name is specified hereafter and the Transferee has caused the execution of
the Nominee Acknowledgment below.
Nominee (if any): _____________________________
Very truly yours,
------------------------------
(Transferee)
By:___________________________
Name:_________________________
Title:________________________
Nominee Acknowledgment
The undersigned hereby acknowledges and confirms that the Certificate
referred to in this Transferee Certificate that are to be registered in its name
are and shall be held solely for the benefit of the above Transferee.
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 to [name of Transferor] (the "Transferor")
and State Street Bank and Trust Company, 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 as follows:
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 ("Rule 144A") under the Securities Act of 1933, as amended
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) [The
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, the Transferee
must own and/or invest on, a discretionary basis at least $10,000,000 in
securities or is acting in a riskless principal transaction on behalf of a
qualified institutional investor.] 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, as amended.
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
F-2-3
<PAGE>
preceding such date of sale for a foreign bank or equivalent
institution.
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, as amended.
o Investment Advisor. The Transferee is an investment advisor registered
under the Investment Advisers Act of 1940, as amended.
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.)_______________________________________________________
_____________________________________________________________________
_____________________________________________________________________
______________________________________________________________________
F-2-4
<PAGE>
3. The term "securities" as used herein does not include (i) securities of
issuers that are affiliated with the 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
Yes No Transferred Certificate only for the
Transferee's own account?
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
F-2-5
<PAGE>
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 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: _____________________________________
Date: _____________________________________
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 to [name of Transferor] (the "Transferor")
and State Street Bank and Trust Company, 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 as follows:
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, as amended ("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, as amended, 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.
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.
6. 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
Yes No Transferred Certificate only for the
Transferee's own account?
7. 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
F-2-8
<PAGE>
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 INTENTIONALLY LEFT BLANK]
F-2-9
<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-2-10
<PAGE>
EXHIBIT F-3
FORM OF TRANSFEREE CERTIFICATE
FOR non-QIBs
______ __, 199_
State Street Bank and Trust Company
Two International Place
Boston, Massachusetts 02110
Re: Merrill Lynch Mortgage Investors, Inc., Mortgage
Pass-Through Certificate, Series 1997-C2,
(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 __, 1997 (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, 1997,
among Merrill Lynch Mortgage Investors, Inc., as depositor (the "Depositor"), GE
Capital Loan Services, Inc., as master servicer, CRIIMI MAE Services Limited
Partnership, as special servicer, and State Street Bank and Trust Company. 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 THAT IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (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), (7) or (8) 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.
7. If the Transferee is proposing that the Certificates being acquired
should be registered in the name of a nominee, such nominee's name is specified
hereafter and the Transferee has caused the execution of the Nominee
Acknowledgment below.
Nominee (if any): _____________________________
Very truly yours,
------------------------------
(Transferee)
By:___________________________
Name:_________________________
Title:________________________
Nominee Acknowledgment
The undersigned hereby acknowledges and confirms that the Certificate
referred to in this Transferee Certificate that are to be registered in its name
are and shall be held solely for the benefit of the above Transferee.
By: _________________________
Name:
Title:
F-3-3
<PAGE>
EXHIBIT G
FORM OF TRANSFEREE LETTER
FOR TRANSFERS OF SUBORDINATED CERTIFICATES
TO NON-PLAN ENTITIES
_____ __, 199_
State Street Bank and Trust Company
Two International Place, Fifth Floor
Boston, Massachusetts 02110
Re: Merrill Lynch Mortgage Investors, Inc., Mortgage
Pass-Through Certificates, Series 1997-C2
(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 __, 1997 (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, 1997 (the "Pooling and Servicing Agreement"),
among Merrill Lynch Mortgage Investors, Inc., as depositor, GE Capital Loan
Services, Inc., as master servicer, CRIIMI MAE Services Limited Partnership, as
special servicer, and State Street Bank and Trust Company, as trustee (the
"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 (i) 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 (ii) the Transferee is an
insurance company general account, the Certificates are eligible for exemptive
relief under Section III of the Prohibited Transaction Class Exemption 95-60
("PTE 95-90"), and the conditions of Sections I, III and IV of PTE 95-60 will be
satisfied with respect to the transfer of the Certificates.
G-1-1
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this certificate as
of the date first written above.
[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
1997-C2, 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, 1997, among Merrill Lynch
Mortgage Investors, Inc., as Depositor, GE Capital Loan Services, Inc., as
Master Servicer, CRIIMI MAE Services Limited Partnership, as Special
Servicer, and State Street Bank and Trust Company, 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
H-1-1
<PAGE>
unrelated business taxable income), (iv) rural electric and 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
H-1-2
<PAGE>
holder of an interest in such entity. For this purpose, a "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
H-1-3
<PAGE>
taxes owed by it so long as any of the Certificates remain 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_
State Street Bank and Trust Company
Two International Place
Boston, Massachusetts 02110
(Attention: MLMI Series 1997-C2)
Re: Merrill Lynch Mortgage Investors, Inc., Mortgage
Pass-Through Certificates, Series 1997-C2, 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, 1997, among
Merrill Lynch Mortgage Investors, Inc., as depositor, GE Capital Loan Services,
Inc., as master servicer, CRIIMI MAE Services Limited Partnership, as special
servicer, and State Street Bank and Trust Company, 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.
H-2-1
<PAGE>
2. The Transferor understands that the Transferee has delivered to
you a Transfer Affidavit and Agreement in the 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, Inc.
99 Church Street
New York, New York 10007
Fitch IBCA, Inc.
One State Street Plaza
New York, New York 10004
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, 1997 relating to Merrill Lynch
Mortgage Investors Inc., Mortgage Pass-Through Certificates, Series 1997-C2 (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 State
Street Bank and Trust Company, 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, in the
enclosed stamped self-addressed envelope.
Very truly yours,
STATE STREET BANK AND TRUST COMPANY
By: ______________________________
Title: ____________________________
I-1-2
<PAGE>
Receipt acknowledged:
Standard & Poor's Moody's Investors
Fitch IBCA, Inc. Ratings Agency Service, Inc.
By:_________________ By:_________________ By:_________________
Title:______________ Title:______________ Title:______________
Date:_______________ Date:_______________ Date:_______________
I-1-3
<PAGE>
EXHIBIT I-2
FORM OF ACKNOWLEDGMENT OF PROPOSED SPECIAL SERVICER
_________, 199_
State Street Bank and Trust Company
Two International Place
Boston, Massachusetts 02110
Attention: MLMI Series 1997-C2
Ladies & Gentlemen:
Pursuant to Section 6.09 of the Pooling and Servicing Agreement dated as
of December 1, 1997 relating to Merrill Lynch Mortgage Investors Inc., Mortgage
Pass-Through Certificates, Series 1997-C2 (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
FORM OF UCC-1 FINANCING STATEMENT
Uniform Commercial Code - FINANCING STATEMENT - Form UCC-1
Important - Read instructions on back before filling out form
This FINANCING STATEMENT is presented No. of 3.[ ] The Debtor is a
to a Filing Officer for filing pursuant Additional transmitting
to the Uniform Commercial Code Sheet utility.
Prepared:
- --------------------------------------------------------------------------------
1. Debtor(s) (Last Name 2. Secured Party(ies) 4.[ ] For Filing
First) and Address(es): Name(s) and Officer: Date,
Address(es) Time, No. Filing
Off
- --------------------------------------------------------------------------------
5. This Financing Statement covers the following 6.[ ] Assignee(s) of
types (or items) of property: Secured Party an
Address(es)
7.[ ] The described crops
are growing or to
be grown on:*
[ ] The described
goods are or are to
be affixed to:*
[ ] The lumber to be
cut or minerals or
the like (including
oil and gas) is on:*
*(Describe Real
Estate Below)
[ ] Products of the Collateral are also covered.
See attached Exhibit A
- -------------------------------------------------------
8. Describe Real [ ] This statement 9. Name of a
Estate Here: is to be Record
indexed in the Owner
Real Estate
Records:
No. & Street Town or City County Section Block Lot
- --------------------------------------------------------------------------------
10. This statement is filed without the debtor's signature to perfect a
security interest in collateral (check appropriate box)
[ ] under a security agreement signed by debtor authorizing secured party to
file this statement, or
[ ] which is proceeds of the original collateral described above in which a
security interest was perfected, or
[ ] acquired after a change of name, identity of corporate structure of the
debtor, or
[ ] as to which the filing has lapsed, or already subject to a security
interest in another jurisdiction:
[ ] when the collateral was brought into the state, or [ ] when the debtor's
location was changed to this state.
- --------------------------------------------------------------------------------
By ________________________________ By _________________________________
Signature(s) of Debtor(s) Signature(s) of Secured Party(ies)
(1) Filing Officer Copy-Numerical
J-1-1
<PAGE>
Standard Form - Form UCC-1 - Approved by Secretary of State of New York
J-1-2
<PAGE>
EXHIBIT A
This Exhibit A is attached to and incorporated in a financing statement
pertaining to MERRILL LYNCH MORTGAGE INVESTORS, INC., as Depositor (referred to
as the "Debtor" for the purpose of this financing statement only), and State
Street Bank and Trust Company, as trustee for the holders of the Series 1997-C2
Certificates (referred to as the "Secured Party" for purposes of this financing
statement only), under that certain Pooling and Servicing Agreement dated as of
December 1, 1997 (the "Pooling and Servicing Agreement"), among the Debtor, GE
Capital Loan Services, Inc., as master servicer (in such capacity, the "Master
Servicer"), CRIIMI MAE Services Limited Partnership, as special servicer (in
such capacity, the "Special Servicer"), and the Secured Party, relating to the
issuance of the Debtor's Mortgage Pass-Through Certificates Series 1997-C2,
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, Class L, Class R-I, Class R-II and Class
R-III (collectively, the "Series 1997-C2 Certificates"). Capitalized terms used
herein and not defined shall have the respective meanings given to them in the
Pooling and Servicing Agreement. The attached financing statement covers all of
the Debtor's right (including the power to convey title thereto), title and
interest in and to the assets constituting the Trust Fund created by the Pooling
and Servicing Agreement, consisting of the following:
1. The mortgage notes or other evidence of indebtedness of a
borrower (the "Mortgage Notes") with respect to the mortgage loans (the
"Mortgage Loans") listed on the Mortgage Loan Schedule to the Pooling and
Servicing Agreement, which Mortgage Loan Schedule is attached hereto as
Exhibit C, other than the Mortgage Loans repurchased by any Mortgage Loan
Seller or purchased by the Master Servicer, the Special Servicer of the
Depositor;
2. The related mortgages, deeds of trust or other similar
instruments securing such Mortgage Notes (the "Mortgages");
3. With respect to each Mortgage Note and each Mortgage, each other
document in the related Mortgage File;
4. (a) the Certificate Account created by the Master Servicer
pursuant to the Pooling and Servicing Agreement, (b) all funds from time
to time on deposit in the Certificate Account, (c) the investments of any
such funds consisting of securities, instruments or other obligations
(including the Permitted Investments described on Exhibit B hereto), and
(d) the general intangibles consisting of the contractual right to
payment, including the right to payments of principal and interest and the
right to enforce the related payment obligations, arising from or under
any such investments;
J-1-3
<PAGE>
5. All REO Property;
6. (a) the REO Account required to be maintained by the Special
Servicer pursuant to the Pooling and Servicing Agreement, (b) all funds
from time to time on deposit in the REO Account, (c) the investments of
any such funds consisting of securities, instruments or other obligations
(including the Permitted Investments described on Exhibit B hereto), and
(d) the general intangibles consisting of the contractual right to
payment, including the right to payments of principal and interest and the
right to enforce the related payment obligations, arising from or under
any such investments;
7. (a) the Debtor's rights in the Reserve Account(s) and the
Servicing Accounts maintained by the Master Servicer or Special Servicer
pursuant to the Pooling and Servicing Agreement, (b) all funds from time
to time on deposit in the Reserve Account(s) or the Servicing Accounts,
(c) the investments of any such funds consisting of securities,
instruments or other obligations (including the Permitted Investments
described on Exhibit B hereto), and (d) the general intangibles consisting
of the contractual right to payment, including the right to payments of
principal and interest and the right to enforce the related payment
obligations, arising from or under any such investments;
8. (a) the Distribution Account and the Additional and Default
Interest Distribution Account created by the Trustee pursuant to the
Pooling and Servicing Agreement, (b) all funds from time to time on
deposit in the Distribution Account and the Additional and Default
Interest Distribution Account, (c) the investments of any such funds
consisting of securities, instruments or other obligations (including the
Permitted Investments described on Exhibit B hereto), and (d) the general
intangibles consisting of the contractual right to payment, including the
right to payments of principal and interest and the right to enforce the
related payment obligations, arising from or under any such investments;
9. All insurance policies, including the right to payments
thereunder, with respect to the Mortgage Loans required to be maintained
pursuant to the Pooling and Servicing Agreements, transferred to the Trust
Fund and to be serviced by the Master Servicer or Special Servicer; and
10. All income, payments, products and proceeds of any of the
foregoing, together with any additions thereto or substitutions therefor.
THE DEBTOR AND THE SECURED PARTY INTEND THE TRANSACTIONS CONTEMPLATED BY
THE POOLING AND SERVICING AGREEMENT TO CONSTITUTE A SALE OF THE DEBTOR'S RIGHTS,
TITLE AND INTEREST IN THE MORTGAGE
J-1-4
<PAGE>
NOTES, THE RELATED MORTGAGES AND THE OTHER DOCUMENTS IN THE RELATED MORTGAGE
FILES TO THE SECURED PARTY FOR THE BENEFIT OF THE HOLDERS OF THE SERIES 1997-C2
CERTIFICATES, AND THIS FILING SHOULD NOT BE CONSTRUED AS A CONCLUSION THAT A
SALE HAS NOT OCCURRED. THE REFERENCES HEREIN TO MORTGAGE NOTES SHOULD NOT BE
CONSTRUED AS A CONCLUSION THAT ANY MORTGAGE NOTE IS NOT AN INSTRUMENT WITHIN THE
MEANING OF THE UNIFORM COMMERCIAL CODE OR THAT A FILING IS NECESSARY TO PERFECT
THE OWNERSHIP OR SECURITY INTEREST OF THE SECURED PARTY IN ANY MORTGAGE NOTE,
MORTGAGE OR OTHER DOCUMENT IN A MORTGAGE FILE. IN ADDITION, THE REFERENCES
HEREIN TO SECURITIES, INSTRUMENTS AND OTHER OBLIGATIONS (INCLUDING, WITHOUT
LIMITATION, PERMITTED INVESTMENTS) SHOULD NOT BE CONSTRUED AS A CONCLUSION THAT
ANY SECURITY, INSTRUMENT OR OTHER OBLIGATION (INCLUDING, WITHOUT LIMITATION, ANY
PERMITTED INVESTMENT) IS NOT AN INSTRUMENT, A CERTIFICATED SECURITY OR AN
UNCERTIFICATED SECURITY WITHIN THE MEANING OF THE UNIFORM COMMERCIAL CODE, AS IN
EFFECT IN ANY APPLICABLE JURISDICTION, NOR SHOULD THIS FINANCING STATEMENT BE
CONSTRUED AS A CONCLUSION THAT A FILING IS NECESSARY TO PERFECT THE OWNERSHIP OR
SECURITY INTEREST OF THE SECURED PARTY IN THE CONTRACTUAL RIGHT TO PAYMENT,
INCLUDING THE RIGHT TO PAYMENTS OF PRINCIPAL AND INTEREST AND THE RIGHT TO
ENFORCE THE RELATED PAYMENT OBLIGATIONS, ARISING FROM OR UNDER ANY SECURITY,
INSTRUMENT OR OTHER OBLIGATION (INCLUDING, WITHOUT LIMITATION, ANY PERMITTED
INVESTMENT). WITH RESPECT TO THE FOREGOING, THIS FILING IS MADE ONLY IN THE
EVENT OF CONTRARY ASSERTIONS BY THIRD PARTIES.
J-1-5
<PAGE>
EXHIBIT B
The term "Permitted Investments" shall include any of the following
securities or obligations:
(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 by 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 rating category of each
of Fitch, if rated by Fitch, 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 by 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;
(iii) 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 Fitch, if rated by Fitch, Moody's
and Standard & Poor's or
J-1-6
<PAGE>
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 by 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 rating category of each of
Fitch, if rated by Fitch, Moody's and Standard & Poor's. 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 by 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 Fitch, if rated by Fitch, 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 maintain a constant
net asset value;
(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;
J-1-7
<PAGE>
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.
J-1-8
<PAGE>
EXHIBIT K
Form of Schedule of Certificateholders
Initial
Class Certificate Balance Name of Holder Address
----- ------------------- -------------- --------
K-1-1
<PAGE>
EXHIBIT L
FORM OF MASTER SERVICER COLLECTION REPORT
L-1-1
<PAGE>
<TABLE>
<CAPTION>
STATE STREET CORPORATE TRUST
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES WEB: CORPORATETRUST.STATESTREET.COM
SERIES 1997-C2 PAYMENT DATE:
UNDERWRITER: REPORT
DISTRIBUTION OF CURRENT SCHEDULED PRINCIPAL BALANCES
- ------------------------------------------------------------------------------------------------------------------------------------
Current Weighted Averages
Scheduled # of Aggregate % Tot -----------------------------------------------
Principal Mtg Sched Prin Sched Mnths Mort
Balance Loans Balance Bal DSCR to Mat Rate
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
less than $1,000,000.00
$1,000,000.00+
$2,000,000.00+
$3,000,000.00+
$4,000,000.00+
$5,000,000.00+
$6,000,000.00+
$7,000,000.00+
$8,000,000.00+
$10,000,000.00+
$15,000,000.00+
$20,000,000.00+
- ------------------------------------------------------------------------------------------------------------------------------------
Total
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
DISTRIBUTION OF CURRENT MORTGAGE INTEREST RATES
- ------------------------------------------------------------------------------------------------------------------------------------
Current Weighted Averages
Mortgage # of Aggregate % Tot -----------------------------------------------
Interest Mtg Sched Prin Sched Mnths Mort
Rate Loans Balance Bal DSCR to Mat Rate
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
less than 8.000%
8.000% +
8.250% +
8.500% +
8.750% +
9.000% +
9.250% +
9.500% +
10.000% +
- ------------------------------------------------------------------------------------------------------------------------------------
Total
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
DISTRIBUTION OF REMAINING STATED TERM (BALLOON LOANS ONLY)
- ------------------------------------------------------------------------------------------------------------------------------------
Remaining Weighted Averages
Stated # of Aggregate % Tot ---------------------------------------------
Term Mtg Sched Prin Sched Mnths Mort
(Months) Loans Balance Bal DSCR to Mat Rate
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
less than 13
13-24
25-36
37-48
49-60
61-72
73+
- ------------------------------------------------------------------------------------------------------------------------------------
Total
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
DISTRIBUTION OF REMAINING STATED TERM (FULLY AMORTIZING LOANS ONLY)
- ------------------------------------------------------------------------------------------------------------------------------------
Remaining Weighted Averages
Stated # of Aggregate % Tot ------------------------------------------------
Term Mtg Sched Prin Sched Mnths Mort
(Months) Loans Balance Bal DSCR to Mat Rate
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
less than 13
13-24
25-36
37-60
61-120
121-180
181-240
241+
- ------------------------------------------------------------------------------------------------------------------------------------
Total
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
L-1-2
<PAGE>
<TABLE>
<CAPTION>
STATE STREET CORPORATE TRUST
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES WEB: CORPORATETRUST.STATESTREET.COM
SERIES 1997-C2 PAYMENT DATE:
UNDERWRITER: REPORT
DISTRIBUTION BY STATE
- ------------------------------------------------------------------------------------------------------------------------------------
Weighted Averages
# of Aggregate % Tot -------------------------------------------------
Mtg Sched Prin Sched Mnths Mort
States Loans Balance Bal DSCR to Mat Rate
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Texas
Florida
California
Pennsylvania
Maryland
Arizona
Georgia
New Jersey
Illinois
Massachusetts
Other
- ------------------------------------------------------------------------------------------------------------------------------------
Total
- ------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTION OF PROPERTY TYPE
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Weighted Averages
# of Aggregate % Tot ----------------------------------------------------
Property Mtg Sched Prin Sched Mnths Mort
Types Loans Balance Bal DSCR to Mat Rate
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Multifamily
Retail
Hotel
Office
Industrial
Self-Storage
Health Care
Mobile Home Park
- ------------------------------------------------------------------------------------------------------------------------------------
Total
- ------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTION OF SEASONING
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Weighted Averages
# of Aggregate % Tot -----------------------------------------------------
Seasoning Mtg Sched Prin Sched Mnths Mort
(months) Loans Balance Bal DSCR to Mat Rate
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
less than 13
13-24
25-36
37-48
49-60
61-72
73+
- ------------------------------------------------------------------------------------------------------------------------------------
Total
- ------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTION OF MOST RECENT DEBT SERVICE COVERAGE RATIO
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Weighted Averages
# of Aggregate % Tot -----------------------------------------------------
Mtg Sched Prin Sched Mnths Mort
DSCR Loans Balance Bal DSCR to Mat Rate
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
0
less than 1.01
1.01 - 1.109
1.11-1.209
1.21-1.309
1.31-1.409
1.41-1.509
1.51-2.009
2.01+
- ------------------------------------------------------------------------------------------------------------------------------------
Total
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
L-1-3
<PAGE>
<TABLE>
<CAPTION>
STATE STREET CORPORATE TRUST
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES WEB: CORPORATETRUST.STATESTREET.COM
SERIES 1997-C2 PAYMENT DATE:
UNDERWRITER: REPORT
DISTRIBUTION OF LOAN TO VALUE RATIO
- ------------------------------------------------------------------------------------------------------------------------------------
Weighted Averages
Most # of Aggregate % Tot ------------------------------------------
Recent Mtg Sched Prin Sched Mnths Mort
LTV Loans Balance Bal DSCR to Mat Rate
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
0
less than 50.00
50.00+
60.00+
70.00+
80.00+
90.00+
100.00+
- ------------------------------------------------------------------------------------------------------------------------------------
Total
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
DISTRIBUTION OF AMORTIZATION TYPE
- ------------------------------------------------------------------------------------------------------------------------------------
Weighted Averages
# of Aggregate % Tot ------------------------------------------
Amortization Mtg Sched Prin Sched Mnths Mort
Type Loans Balance Bal DSCR to Mat Rate
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Amortizing Balloon
Fully Amortizing
Other
- ------------------------------------------------------------------------------------------------------------------------------------
Total
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
DISTRIBUTION OF REMAINING AMORTIZATION TERM
- ------------------------------------------------------------------------------------------------------------------------------------
Weighted Averages
Original # of Aggregate % Tot ------------------------------------------
Amortization Mtg Sched Prin Sched Mnths Mort
Term Loans Balance Bal DSCR to Mat Rate
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
0+
120+
240+
270+
300+
330+
370+
- ------------------------------------------------------------------------------------------------------------------------------------
Total
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
DISTRIBUTION OF ORIGINAL TERM TO STATED MATURITY
- ------------------------------------------------------------------------------------------------------------------------------------
Weighted Averages
Original # of Aggregate % Tot ------------------------------------------
Term to Mtg Sched Prin Sched Mnths Mort
Maturity Loans Balance Bal DSCR to Mat Rate
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
0+
72+
89+
109+
121+
241+
275+
- ------------------------------------------------------------------------------------------------------------------------------------
Total
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
L-1-4
<PAGE>
<TABLE>
<CAPTION>
STATE STREET CORPORATE TRUST
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES WEB: CORPORATETRUST.STATESTREET.COM
SERIES 1997-C2 PAYMENT DATE:
UNDERWRITER: REPORT ID
LOAN LEVEL DETAIL
- ------------------------------------------------------------------------------------------------------------------------------------
Offer Property Transfer Maturity Neg Am Beg Note Sched Prepay/ Prepay Paid Thru Prepmt Loan
Control# Type Date State Date (Y/N) Sched Bal Rate P&I Liquid Date Date Premium Status
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Totals
- ------------------------------------------------------------------------------------------------------------------------------------
If state field is blank loan has properties in multiple states.
- ------------------------------------------------------------------------------------------------------------------------------------
Loan Status:
A= Payment not rec'd. but still in grace period, B= Late payment, but less than 1mo., 0= Current, 1= 1 mo. delinquent,
2= 2mo. delinquent, 3= Three or more mo. delinquent 4= Assumed scheduled payment (performing matured balloon), 7= Foreclosure, 9=REO
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
L-1-5
<PAGE>
CSSA
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 1997-C2
DELINQUENT LOAN STATUS REPORT
AS OF ___________________
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
S4 S55 S61 S57 S58 S62 or S63 P8 P7 P37
(a) (b)
- ------------------------------------------------------------------------------------------------------------------------------------
Short Name Scheduled Total P&I
(When Property Sq. Ft or Paid Thru Loan Advances to
Prospectus ID Appropriate) Type City State Units Date Balance Date
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
90 + DAYS DELINQUENT
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
60 DAYS DELINQUENT
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
30 DAYS DELINQUENT
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Current & at Special Servicer
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
S4 P39 P38 P25 P10 P11 P58 P54
(c) (d) (e)=a+b+c+d
- ------------------------------------------------------------------------------------------------------------------------------------
Total Other Advances
Expenses To (Taxes & Total Current Current Monthly LTM NOI
Prospectus ID Date Escrow) Exposure Monthly P&I Interest Date Date LTM NOI
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C>
90 + DAYS DELINQUENT
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
60 DAYS DELINQUENT
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
30 DAYS DELINQUENT
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Current & at Special Servicer
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
FCL - Foreclosure
LTM - Latest 12 Months either Last Annual or Trailing 12 months
*Workout Strategy should match the CSSA Loan file using abreviated words in
place of a code number such as (FCL - In Foreclosure, MOD - Modification, DPO -
Discount Payoff, NS - Note Sale, BK - Bankrupcy, 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. (i.e. 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 a third party.
L-1-6
<PAGE>
CSSA
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 1997-C2
DELINQUENT LOAN STATUS REPORT
AS OF ___________________
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
S4 S55 S61 S57 S58 P55 P81 P74
(f)=P38/P81
- ------------------------------------------------------------------------------------------------------------------------------------
Short Name Value using
(When Property LTM ***Cap Rate NOI & Cap Valuation
Prospectus ID Appropriate) Type City State DSCR Assigned Rate Date
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
90 + DAYS DELINQUENT
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
60 DAYS DELINQUENT
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
30 DAYS DELINQUENT
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Current & at Special Servicer
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
S4 P75 P35 P77 P79 P42 P82
(g)=(.92*f)-e (h)=(g/e)
- ------------------------------------------------------------------------------------------------------------------------------------
Appraisal Total
BPO or Loss using Appraisal Expected
Internal 90% Appr. or Estimated Reduction Transfer Resolution FCL Start FCL Sale
Prospectus ID Value** BPO (f) Recover % Realized Date Date Date Date
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
90 + DAYS DELINQUENT
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
60 DAYS DELINQUENT
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
30 DAYS DELINQUENT
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Current & at Special Servicer
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
FCL - Foreclosure
LTM - Latest 12 Months either Last Annual or Trailing 12 months
*Workout Strategy should match the CSSA Loan file using abreviated words in
place of a code number such as (FCL - In Foreclosure, MOD - Modification, DPO -
Discount Payoff, NS - Note Sale, BK - Bankrupcy, 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. (i.e. 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 a third party.
L-1-7
<PAGE>
CSSA
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 1997-C2
DELINQUENT LOAN STATUS REPORT
AS OF ___________________
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
S4 S55 S61 S57 S58 P76
- ------------------------------------------------------------------------------------------------------------------------------------
Short Name
(When Property Workout
Prospectus ID Appropriate) Type City State Strategy Comments
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
90 + DAYS DELINQUENT
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
60 DAYS DELINQUENT
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
30 DAYS DELINQUENT
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Current & at Special Servicer
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
FCL - Foreclosure
LTM - Latest 12 Months either Last Annual or Trailing 12 months
*Workout Strategy should match the CSSA Loan file using abreviated words in
place of a code number such as (FCL - In Foreclosure, MOD - Modification, DPO -
Discount Payoff, NS - Note Sale, BK - Bankrupcy, 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. (i.e. 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 a third party.
L-1-8
<PAGE>
CSSA
COMMERICIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 1997-C2
REO STATUS REPORT
AS OF _______________
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
S4 S55 S61 S57 S58 S62 or S63 P8 P7 P37 P39 P38
(a) (b) (c) (d) (e)=a+b+c+d
Other
Pro- Short Name Proper- Paid Scheduled Total P&I Total Advances
spectus (When ty City State Sq. Ft. or Thru Loan Advances Expenses (Taxes & Total
ID Appropriate) Type Unit Date Balance To Date To Date Escrow) Exposure
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
S4 P25 P11 P58 P54 P81 P74 P75 P35
(k) (j) (f)=(k (g) (h)=(.92*g) (i)=(g/e)
- -----------------------------------------------------------------------------------------------------------------------------------
Value Appraisal Total
Pro- Current LTM LTM Cap Rate using NOI BPO or Loss using Appraisal
spectus Monthly Maturity NOI NOI/ Assign Valuation As Cap Internal 92% Appr. or Estimated Reduction
ID P&I Date Date DSC *** Date Rate Value** BFO (f) Recovery % Realized
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
- --------------------------------------------------------------------------------
(1) Use the following codes; App. - Appraisal, BPO - Brokers Opinion, Int -
Internal Value
- --------------------------------------------------------------------------------
*** How to determine the cap rate is agreed upon by Underwriter and servicers -
to be provided by a third party.
- --------------------------------------------------------------------------------
L-1-9
<PAGE>
CSSA
COMMERICIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 1997-C2
REO STATUS REPORT
AS OF _______________
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
S4 S55 S61 S57 S58 S77 P82 P79
Pro- Short Name Proper- REO Pending
spectus (When ty City State Tranfer Acquisition Resolu-
ID Appropriate) Type Date Date tion Date Comments
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
- --------------------------------------------------------------------------------
(1) Use the following codes; App. - Appraisal, BPO - Brokers Opinion, Int -
Internal Value
- --------------------------------------------------------------------------------
*** How to determine the cap rate is agreed upon by Underwriter and servicers -
to be provided by a third party.
- --------------------------------------------------------------------------------
L-1-10
<PAGE>
CSSA
Commercial Mortgage Pass-Through Certificates, Series 1997-C2
Servicer Watch List
as of _________________________
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
S4 S55 S61 S58 P7 P8 P10 P11 P54
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Prospectus Short Name Property Type State Scheduled Paid Thru Current Maturity LTM* DSCR
ID (When Appropriate) Loan Balance Date Interest Rate Date
- ------------------------------------------------------------------------------------------------------------------------------------
List all loans on watch list and reason sorted in decending balance order.
- ------------------------------------------------------------------------------------------------------------------------------------
Total: $
*LTM - Last 12 months either trailing or last annual
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
L-1-11
<PAGE>
CSSA
Commercial Mortgage Pass-Through Certificates, Series 1997-C2
Servicer Watch List
as of _________________________
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Comment / Reason on Watch List
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
L-1-12
<PAGE>
CSSA
Commercial Mortgage Pass-Through Certificates, Series 1997-C2
Historical Loan Modification Report
as of _________________________
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
S4 S57 S58 P49 P48 P7* P7* P50* P50* P25* P25*
- ------------------------------------------------------------------------------------------------------------------------------------
Balance
Balance at the
Mod/ When Sent Effective # Mths
Prospectus Extension Effect to Special Date of for Rate
ID City State Flag Date Servicer Rehabilitation Old Rate Change New Rate Old P&I New P&I
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
THIS REPORT IS HISTORICAL
Information is as of modification. Each line it should not change in the future. Only new modifications should be added.
- ------------------------------------------------------------------------------------------------------------------------------------
Total For All Loans:
Total For Loans in Current Month:
# of Loans $ Balance
Modifications:
Maturity Date Extentions: _____________________________
Total:
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- --------------------------------------------------------------------------------
S4 P11* P11* P47
- --------------------------------------------------------------------------------
Total #
Mths for (1) Realized
Prospectus Change of Loss to
ID Old Maturity New Maturity Mod Trust $
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
THIS REPORT IS HISTORICAL
Information is as of modification. Each line it should not change in the future.
Only new modifications should be added.
- -------------------------------------------------------------------------------
Total For All Loans:
Total For Loans in Current Month:
# of Loans $ Balance
Modifications:
Maturity Date Extentions:
Total:
* The information in these columns is from a particular point in time and should
not change on this report once assigned.
(1) Actual principal loss taken by bonds
(2) Expected future loss due to a rate reduction. This is just an estimate
calculated at the time of the modification.
- --------------------------------------------------------------------------------
</TABLE>
L-1-13
<PAGE>
CSSA
Commercial Mortgage Pass-Through Certificates, Series 1997-C2
Loan Payment Modification Report
as of _________________________
- ------------------------------------------------------------------------
S4 S57
- ------------------------------------------------------------------------
(2) Est.
Future
Interest Loss
Prospectus to Trust $
ID City (Rate Reduction) COMMENT
- ------------------------------------------------------------------------
THIS REPORT IS HISTORICAL
Information is as of modification. Each line it should not change in the
future. Only new modifications should be added.
- ------------------------------------------------------------------------
Total For All Loans:
Total For Loans in Current Month:
# of Loans $ Balance
Modifications:
Maturity Date Extentions:
Total:
* The information in these columns is from a particular point in time and should
not change on this report once assigned.
(1) Actual principal loss taken by bonds
(2) Expected future loss due to a rate reduction. This is just an estimate
calculated at the time of the modification.
L-1-14
<PAGE>
<TABLE>
CSSA
Commercial Mortgage Pass-Through Certificates
Series 1997-C2
Historical Loss Estimate Report (REO-Sold or
Discounted Payoff)
as of _________________________
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
S4 S55 S61 S57 S58 P45/P7 P75 P45
- -----------------------------------------------------------------------------------------------------------------------------------
(c)=b/a (a) (b) (d)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Latest
Short Name % Appraisal or Effect Net Amt
Prospectus (When Property Received Brokers Date of Sales Received
ID Appropriate Type City State From Sale Opinion Sale Price from Sale
- -----------------------------------------------------------------------------------------------------------------------------------
THIS REPORT IS HISTORICAL
- -----------------------------------------------------------------------------------------------------------------------------------
All information is from the liquidation date and does not need to be updated.
- -----------------------------------------------------------------------------------------------------------------------------------
Total all Loans:
- -----------------------------------------------------------------------------------------------------------------------------------
Current Month Only:
- -----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
S4 P7 P37 P39+P38
- -------------------------------------------------------------------------------------------------------------------------
(e) (f) (g) (h) (i)=d-(f+g+h) (k)=i-e (m)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Date
Loss
Prospectus Scheduled Total P&I Total Servicing Fees Actual Losses Passed Minor Adj to
ID Balance Advanced Expenses Expense Net Proceeds Passed thru thru Trust
- --------------------------------------------------------------------------------------------------------------------------
THIS REPORT IS HISTORICAL
- -----------------------------------------------------------------------------------------------------------------------------------
All information is from the liquidation date and does not need to be updated.
- -----------------------------------------------------------------------------------------------------------------------------------
Total all Loans:
- -----------------------------------------------------------------------------------------------------------------------------------
Current Month Only:
- -----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- --------------------------------------------------
S4
- --------------------------------------------------
(n)=k+m (o)=n/e
- --------------------------------------------------
<S> <C> <C> <C>
Minor
Adj Total Loss % of
Prospectus Passed Loss with Scheduled
ID thru Adjustment Balance
- --------------------------------------------------
THIS REPORT IS HISTORICAL
- -----------------------------------------------------------------------------------------------------------------------------------
All information is from the liquidation date and does not need to be updated.
- -----------------------------------------------------------------------------------------------------------------------------------
Total all Loans:
- -----------------------------------------------------------------------------------------------------------------------------------
Current Month Only:
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
L-1-15
<PAGE>
<TABLE>
<CAPTION>
CSSA
Commercial Mortgage Pass-Through Certificates, Series 1997-C2
Comparative Financial Status Report
as of _________________
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
S4 S57 S58 P7 P8 S72 S69 S70 S65 S66
- ------------------------------------------------------------------------------------------------------------------------------------
ORIGINAL UNDERWRITING
INFORMATION
BASIS YEAR
- ------------------------------------------------------------------------------------------------------------------------------------
Last
Property Paid Annual Financial
Prospectus Inspect Scheduled Thru Debt Info as of % Total $ (1)
ID City State Date Loan Balance Date Service Date Occ Revenue NOI DSCR
- ------------------------------------------------------------------------------------------------------------------------------------
yy/mm yy/mm
- ------------------------------------------------------------------------------------------------------------------------------------
List all properties currently in deal with or without information largest to smallest loan
- ------------------------------------------------------------------------------------------------------------------------------------
Total: $ $ WA $ $ WA
====================================================================================================================================
RECEIVED
FINANCIAL INFORMATION: LOANS BALANCE
# % $ %
CURRENT FULL YEAR:
CURRENT FULL YR. RECEIVED WITH DSC <1:
PRIOR FULL YEAR:
PRIOR FULL YR. RECEIVED WITH DSC <1:
====================================================================================================================================
(1) DSCR should match to Operating Statement and is normally calculated using NOI/Debt Service.
(2) Net change should compare the latest year to the underwriting year
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
P65 P64 P59 P61 P63 P58 P57 P52 P54 P56
- ------------------------------------------------------------------------------------------------------------------------------------
2ND PRECEDING ANNUAL OPERATING PRECEDING ANNUAL OPERATING
INFORMATION INFORMATION
AS OF _______ NORMALIZED AS OF _______ NORMALIZED
- ------------------------------------------------------------------------------------------------------------------------------------
Financial Financial
Info as of % Total $ (1) Info as of % Total $ (1)
Date Occ Revenue NOI DSCR Date Occ Revenue NOI DSCR
- ------------------------------------------------------------------------------------------------------------------------------------
yy/mm yy/mm
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
WA $ $ WA WA $ $ WA
====================================================================================================================================
REQUIRED
LOANS BALANCE
# % $ %
========================================================
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
P72 P73 P66 P68 P70 (2)
- ------------------------------------------------------------------------------------------------------------------------------------
TRAILING FINANCIAL OR YTD NET CHANGE
INFORMATION
MONTH REPORTED ACTUAL PRECEDING & BASIS
- ------------------------------------------------------------------------------------------------------------------------------------
%
FS Start FS End Total $ % % Total (1)
Date Date Revenue NOI DSC Occ Revenue DSCR
- ------------------------------------------------------------------------------------------------------------------------------------
yy/mm yy/mm
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
WA $ $ WA WA $ WA
====================================================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
L-1-16
MORTGAGE LOAN PURCHASE AND SALE AGREEMENT
This Mortgage Loan Purchase and Sale Agreement, dated as of December 1,
1997 (the "Agreement"), is between Merrill Lynch Mortgage Investors, Inc., a
Delaware corporation (the "Company"), and Merrill Lynch Mortgage Capital, Inc.
(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., Mortgage Pass-Through Certificates, Series 1997-C2 (the
"Certificates"), evidencing beneficial ownership interests in the Mortgage Loans
and other assets (including, without limitation, other mortgage loans), under a
Pooling and Servicing Agreement, to be dated as of December 1, 1997 (the
"Pooling and Servicing Agreement"), among the Company, as depositor, GE Capital
Loan Services, Inc., as master servicer (the "Servicer"), CRIIMI MAE Services
Limited Partnership, as special servicer (the "Special Servicer"), and State
Street Bank and Trust Company, as trustee (the "Trustee"). 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. The purchase price (the "Purchase
Price") for the Mortgage Loans shall consist of a cash amount equal to (i) 100%
of the outstanding principal balance of the Mortgage Loans as of the Cut-Off
Date plus (ii) interest accrued on the Mortgage Loans at the related Mortgage
Rate. The Purchase Price amount shall be payable by the Company to the Mortgage
Loan Seller on December 23, 1997 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, 153 East 53rd Street, New
York, New York 10022, at 10:00 a.m. (New York time), on the Closing Date.
On the Closing Date, the Mortgage Loan Seller shall sell, transfer, assign,
set over and convey to the Company, without recourse, and the Company shall
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 the proceeds of any
related title, hazard, primary mortgage or other insurance policies. The Company
hereby directs the Mortgage Loan Seller, and the Mortgage Loan Seller hereby
agrees, to deliver to the Trustee all documents, instruments and agreements
required to be delivered by the Company to the Trustee under Section 2.01 of the
Pooling and Servicing Agreement, and meeting all the requirements of such
Section 2.01 and such other documents, instruments and agreements as the Company
or the Trustee shall reasonably request. The Mortgage Loan Schedule may be
amended to reflect the actual Mortgage Loans.
2. Representations and Warranties. (a) The Mortgage Loan Seller hereby
<PAGE>
represents and warrants to the Company as of the date hereof and as of Closing
Date 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 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 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 corporate
power and authority to execute, deliver and perform this Agreement and all
the transactions 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 its 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 the terms of this 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), 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
-2-
<PAGE>
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 investigation pending or,
to the knowledge of the Mortgage Loan Seller, 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, and 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
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 condition (financial or
other) or operations of the Mortgage Loan Seller or its properties 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
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; and
(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.
-3-
<PAGE>
(a) The Mortgage Loan Seller hereby represents and warrants with respect to
each Mortgage Loan that, as of the date specified below or, if no such date is
specified, as of the Closing Date:
(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;
(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 such transfer;
(iii) Each related Mortgage Note, Mortgage, Assignment of Leases (if
any) and other agreement executed in connection with such Mortgage Loan is,
a valid and binding obligation of the related Mortgagor, enforceable in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
the enforcement of creditors' rights generally, or 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,
collateral or first priority assignment of, or a valid first priority
security interest in, the right to receive all payments due under the
related leases, and no other person owns any interest therein superior to
or of equal priority with the interest created under such assignment;
(v) Each related assignment of Mortgage from the Mortgage Loan Seller
to the Trustee and any related assignment of Assignment of Leases, if any,
and assignment of any other agreement executed in connection with such
Mortgage Loan, from the Mortgage Loan Seller to the Trustee constitutes the
legal, valid and binding assignment from the Mortgage Loan Seller to the
Trustee, except as such enforcement may be limited by bankruptcy,
insolvency, reorganization, liquidation, receivership, moratorium or other
laws relating to or affecting creditors' rights generally or by general
principles of equity (regardless of whether such enforcement is considered
in a proceeding in equity or at law);
(vi) Since origination, such Mortgage Loan has not been modified,
altered, satisfied, canceled, subordinated or rescinded, except,
-4-
<PAGE>
in each of the foregoing instances, by written instruments that are a part
of the related Mortgage File, recorded in the applicable public recording
office if necessary to maintain the priority of the lien of the related
Mortgage and security agreements and delivered to the Company, and no
material portion of the related Mortgaged Property has been released from
the lien of the related Mortgage, in each case, in any manner which
materially and adversely affects the value of the Mortgage Loan or
materially interferes with the security intended to be provided by such
Mortgage, and, except with respect to those Mortgage Loans listed on
Schedule 1 attached hereto which permit defeasance, the terms of the
related Mortgage do not 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 security provided by the Mortgaged Property;
(vii) Each related Mortgage is a valid first lien on the related
Mortgaged Property (subject to the matters described in clause (viii)
below), and such Mortgaged Property is free and clear of any mechanics' and
materialmen's liens which are prior to or equal with the lien of the
related Mortgage, except those which are insured against by a lender's
title insurance policy (as described in clause (viii) below);
(viii) The lien of each related Mortgage as 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 is insured by an
ALTA lender's title insurance policy (or a binding commitment therefor), 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 current real property taxes, ground rents, water charges, sewer
rents and assessments not yet due and payable, (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 of the Mortgaged Property or the security
intended to be provided by such Mortgage or with the Mortgagor's ability to
pay its obligations when they become due or materially and adversely
affects the value of the Mortgaged Property and (c) the exceptions (general
and specific) set forth in such policy, 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 when they become due or materially and adversely affects the
value of the Mortgaged Property; the original holder of the Mortgage,
and/or its successor or assigns is the sole named insured of such policy;
such policy is assignable to the Company and the Trustee without the
consent of or any notification to the insurer, and is in full force and
effect upon the consummation of the transactions contemplated by this
Agreement; no claims have been made
-5-
<PAGE>
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) There is no proceeding pending, or to our knowledge, 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, each
related Mortgaged Property is free and clear of any material damage 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 that, as
of the date of origination of such Mortgage Loan, and, to the Mortgage Loan
Seller's knowledge, 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 and all such licenses, permits and
authorizations were valid and in full force and effect;
(xii) Each Mortgage Loan does not have a shared appreciation feature,
other contingent interest feature or, except with respect to those Mortgage
Loans listed on Schedule 2 attached hereto (the "ARD Loans") which provide
for hyper-amortization, a negative amortization feature;
(xiii) Each Mortgage Loan is a whole loan and no other party holds a
participation interest in the Mortgage Loan;
(xiv) The Mortgage Rate (exclusive of any default interest, late
charges or prepayment premiums) 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 as of the date of origination of such
Mortgage Loan;
(xv) All taxes and governmental assessments which would be a lien on
the Property and that prior to the Cut-off Date became due and
-6-
<PAGE>
owing 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;
(xvi) All escrow deposits and payments required pursuant to the
Mortgage Loan 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
Borrower under the Loan Documents as of the date hereof have been deposited
and all such escrows and deposits 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 in an amount not less than the lesser of
(A) the outstanding principal balance of the Mortgage Loan and (B) the
replacement cost, and in all events the amount necessary to avoid the
operation of any co-insurance provisions with respect to the Mortgaged
Property; each related Mortgaged Property is also covered by business
interruption insurance (or loss of rents insurance) and comprehensive
general liability insurance in amounts generally required by institutional
lenders for similar properties; all premiums on such insurance policies
required to be paid as of the date hereof have been paid; such insurance
policies 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 a fire and extended perils insurance 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;
(xviii) Each Mortgage provides that any insurance proceeds in respect
of a casualty, other than business interruption/rental income insurance,
and any condemnation awards, 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;
(xix) To 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 and does
constitute a material default, breach, violation or event of acceleration;
(xx) No Monthly Payment on such Mortgage Loan has been more than 30
days delinquent from the later of one year prior to the Cut-off
-7-
<PAGE>
Date, the date of origination of such Mortgage Loan or, if applicable, the
date of acquisition by the Mortgage Loan Seller 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 realization against the Mortgaged Property of the benefits
of the security, including realization by judicial or, if applicable,
non-judicial foreclosure, subject to the effects of bankruptcy or other law
affecting the right of creditors generally and the application of
principles of equity, and there is no exemption available to the Mortgagor
which would interfere with such right to foreclose;
(xxii) A Phase I Environmental Site Assessment was performed with
respect to the related Mortgaged Property. Such Phase I Environmental Site
Assessment was performed within twelve (12) months prior to the respective
dates of origination of the related Mortgage Loan. A report of such Phase I
Environmental Site Assessment has been delivered to the Company, and the
Mortgage Loan Seller (or its affiliate that originated the Mortgage Loan),
having made no independent inquiry other than reviewing such report, has no
knowledge of any material and adverse environmental condition or
circumstance affecting the related Mortgaged Property that was not
disclosed in such report. To the extent any such condition or circumstance
was disclosed, either (a) there has been escrowed an amount of money
considered sufficient by the Mortgage Loan Seller, based upon the related
environmental reports, to cure and remedy such condition or circumstance as
recommended in the Phase I or, where applicable, Phase II Environmental
Site Assessment or (b) an operating and maintenance program has been
required of Mortgagor or (c) such condition has been cured or remedied. The
Mortgage Loan Seller has received no notice of any other such condition or
circumstance. In each Mortgage, the related Mortgagor represented and
warranted that it will not use or cause or permit to exist on the related
Mortgaged Property any hazardous materials in any manner that violates
federal, state or local laws, ordinances, regulations, orders or directives
relating to hazardous materials. In each Mortgage, the Mortgagor
represented and warranted that no hazardous materials exist on the related
Mortgaged Property in any manner that violates federal, state or local
laws, ordinances, regulations, orders or directives relating to hazardous
materials; provided, however, that in certain instances this representation
is limited to the best of Mortgagor's knowledge. The Mortgage Loan
generally requires (subject to exceptions which would not be viewed as
commercially unreasonable by a prudent institutional lender) that the
Mortgagor will defend and hold the holder of the Mortgage and its
successors and/or assigns harmless from and against
-8-
<PAGE>
any and all losses, liabilities, damages, injuries, penalties, fines,
expenses, and claims of any kind whatsoever (including attorney's fees and
costs) paid, incurred, or suffered by, or asserted against, any such party
resulting from a breach of any representation, warranty or covenant
relating to environmental matters given by the Mortgagor under the related
Mortgage except for those resulting from gross negligence or willful
misconduct by the holder of the Mortgage or those which are initially
placed on, in or under the Mortgaged Property after foreclosure or other
taking of title to the Mortgaged Property by the holder of the Mortgage;
(xxiii) Each related Mortgage or loan agreement contains provisions
for the acceleration of the payment of the unpaid principal balance of such
Mortgage Loan if, without complying with the requirements of the Mortgage
or loan agreement, as applicable, the related Mortgaged Property, or any
controlling interest therein, is directly or indirectly transferred or
sold, or encumbered in connection with subordinate financing (other than
any existing subordinate debt) and each related Mortgage or loan agreement
prohibits the pledge or encumbrance of the Mortgaged Property without the
consent of the holder of the Mortgage Loan;
(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 and such interest in real property was the sole
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
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
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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 complete
and accurate in all material respects;
(xxvi) The Mortgage Loan provides that the Mortgagor is required to
provide to the Mortgagee at least annually an operating statement and such
other information as is reasonably requested by the Mortgagee;
(xxvii) 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);
(xxviii) The Mortgage File contains an appraisal of the related
Mortgaged Property which appraisal is signed by a qualified appraiser, 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, and the appraisal and appraiser both
satisfy the requirements of Title XI of the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989 and the regulations promulgated
thereunder, all as in effect on the date the Mortgage Loan was originated;
(xxix) None of the material improvements which were included for the
purposes of determining the appraised value of the related Mortgaged
Property at the time of the origination of the Mortgage Loan lies outside
of the boundaries and building restriction lines of such property (except
Mortgaged Properties which are legal non-conforming uses and except for
immaterial encroachment or where the same is covered by a title insurance
endorsement), and no improvements on adjoining properties materially
encroach upon such Mortgaged Property, or the requisite title insurance has
been obtained with respect to the foregoing;
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(xxx) To the Mortgage Loan Seller's knowledge, based on the type of
due diligence customarily provided by prudent institutional commercial and
multifamily mortgage lenders, as of the date of origination of such
Mortgage Loan, and as of the Cut-off Date, each Mortgaged Property was in
material compliance with all applicable laws, zoning ordinances (including
legal non-conforming uses), rules, covenants and restrictions affecting the
construction, occupancy, use and operation of such Mortgaged Property or,
if such Mortgaged Property is not in compliance with the representations
made in this clause (xxx), such non-compliance does not materially and
adversely affect the value or operation of the Mortgaged Property;
(xxxi) With respect to the Mortgage Loans which as of the Cut-off Date
have a principal balance of at least $15 million, the related Mortgagor is
an entity which has represented and covenanted in connection with the
origination of the Mortgage Loan, or 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 engage in any
business unrelated to the related Mortgaged Property (which may include
multiple Mortgaged Properties owned by the same Borrower and securing only
Mortgage Loans conveyed hereunder as listed on Exhibit D 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, has 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);
(xxxii) The Mortgage Loan complied, in all material respects, with all
of the terms, conditions and requirements of the Mortgage Loan Seller's
underwriting standards in effect at the time of the origination or
acquisition of such Mortgage Loan;
(xxxiii) Except as set forth on Schedule 1, to the Mortgage Loan
Seller's knowledge, no Mortgagor is a debtor in any state or federal
bankruptcy or insolvency proceeding;
(xxxiv) To the best of Mortgage Loan Seller's knowledge, as of the
Closing Date, 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,
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in whole or in part (excluding provisions relating to default interest,
yield maintenance charges or prepayment premiums), or subject to any right
of rescission, offset, abatement, diminution, valid defense or counterclaim
(including the defense of usury or the 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 generally or by
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law), and no such right of
rescission, offset, abatement, diminution, defense or counterclaim has been
asserted with respect thereto;
(xxxv) 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 the release of the Mortgaged Property or
related security for the Mortgage Loan following the payment of the
Mortgage Loan in full;
(xxxvi) The improvements located on the Mortgaged Property are either
not located in a federally designated special flood hazard area or the
Mortgagor is required to maintain or the Mortgagee maintains, flood
insurance with respect to such improvements;
(xxxvii) 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 or allows the Mortgagee to enter into
possession to collect rent or provides for rents to be paid directly to
Mortgagee in the event of a default;
(xxxviii) The Mortgage Note is not secured by any collateral that is
not being transferred hereunder;
(xxxix) Each Mortgage Loan, if any, that is cross-collateralized is
cross-collateralized only with one or more other Mortgage Loans being
transferred hereunder;
(xl) 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 Mortgage Loan, have been in all respects legal, proper
and prudent and have met customary industry standards;
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(xli) 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;
(xlii) 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 owned by a Mortgagor and located on each
Mortgaged Property and for which perfection is accomplished by the filing
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 Loans 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 or other laws affecting creditor's rights generally
or by the application of the rules of equity;
(xliii) Except with respect to the Mortgage Loans identified on
Schedule 1 as being subject to secured subordinate debt (the "Subordinate
Debt Mortgage Loans"), as of the date of the Prospectus, to the Mortgage
Loan Seller's knowledge, the Mortgagor has no indebtedness for borrowed
money secured by the Mortgaged Property other than the Mortgage Loan. With
respect to the Subordinate Debt Mortgage Loans, 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 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 paid in full, and (C) 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;
(xliv) Based on information obtained from the related Mortgagor at the
time of origination, a list of borrowers or groups of affiliated borrowers
with multiple Mortgage Loans is attached hereto as Exhibit D 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 $33,927,602;
(xlv) No Mortgage Loan has an interest rate lower than 6.97% per
annum; and
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(xlvi) Each Mortgage Loan is nonrecourse except for certain
circumstances including fraud, misappropriation, misrepresentation and
waste.
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 from the Mortgage Loan Seller's receipt of notice
of such Breach or Document Defect, 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 hereinafter
set forth, repurchase the affected Mortgage Loan at the applicable Repurchase
Price (as defined below); 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 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 complete such repurchase); 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, Mortgage Loan Seller shall
remit the Repurchase Price in immediately available funds to the Trustee. The
delivery of a binding 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.
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.
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(c) Upon any repurchase of a Mortgage Loan contemplated by Section 3(b)
above, the Trustee, the Servicer and the Special Servicer shall each tender to
the Mortgage Loan Seller, all portions of the Mortgage 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.
(d) This Section 3 of this Agreement provides the sole and exclusive remedy
available to the Company, the Trustee, the Certificateholders, or 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, 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 repurchase a Mortgage Loan pursuant to this Section. The
Trustee or its designee may enforce such obligations as provided in Section 8
hereof.
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
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, moratorium and other similar laws affecting the enforcement of
creditors' rights generally and to general principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or
at law);
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<PAGE>
(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 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 investigation pending or
to the knowledge of the Company, 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 condition (financial or
other) or operations of the Company or its properties 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 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 shall be subject to the
satisfaction, on the Closing Date, or such other date specified herein, of the
following conditions:
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(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
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,
which Mortgage Files shall be delivered to and held by the Trustee on
behalf of the Company;
(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
customary exceptions and carve-outs, 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, in
addition, an opinion delivered on the date of the Prospectus as to the
matters set forth in the last paragraph of 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
theconditions on its part to be performed or satisfied pursuant to the
Underwriting Agreement, the Pooling and Servicing Agreement or this Agreement.
6. Indemnification and Contribution.
(a) The Mortgage Loan Seller shall indemnify and hold harmless the Company,
the Underwriter, their respective officers and directors, and eachperson, if
any, who controls the Company or the Underwriter within the meaning of either
Section 15 of the
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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 f 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 Prospectus Supplement and the Memorandum under the headings
"Summary of the Prospectus Supplement-The Mortgage Pool" or "Summary of the
Memorandum-The Mortgage Pool", as applicable, "Risk Factors-The Mortgage Loans"
and "Description of the Mortgage Pool" and on Annex A to the Prospectus
Supplement, the Diskette or, insofar as they are required to be filed as part of
the Registration Statement pursuant to the No-Action Letters, any Computational
Materials or ABS Term Sheets with respect to the Registered Certificates, or in
any revision or amendment of or supplement to any of the foregoing or (B) any
items similar to Computational Materials and ABS 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;
but, in the case of (i) and (ii), 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 (it being herein acknowledged that the Master Tape
was used to prepare the Prospectus Supplement including without limitation Annex
A thereto, the Memorandum, the Diskette, the Computational Materials and ABS
Term Sheets with respect to the Registered Certificates and any items similar to
Computational Materials and ABS Term Sheets forwarded to prospective investors
in the Non-Registered Certificates), (II) is contained in the information
regarding the Mortgage Loans, the related Mortgagor, the related Mortgaged
Property or the Mortgage Loan Seller set forth in the Prospectus Supplement and
the Memorandum under the headings "Summary of the Prospectus Supplement-The
Mortgage Pool" or "Summary of the Memorandum-The Mortgage Pool", as applicable,
"Risk Factors-The Mortgage Loans" and "Description of the Mortgage Pool" or on
Annex A 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 the representations and warranties of the Mortgage Loan Seller
set forth in or made pursuant to Section 2 (such representations and warranties,
together with the information described in the preceding clauses I and II, the
"Mortgage Loan Seller Information"); 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 Property or the
Mortgage Loan Seller set forth in the Master Tape and Annex A to the Prospectus
Supplement, including without limitation the aggregation of such information
with comparable information relating to the mortgage loans conveyed to the Trust
Fund by Merrill Lynch Mortgage Capital Inc. (the "MLMC Mortgage
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Loans"). 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. 333-01704 filed by the Purchaser on Form S-3,
including without limitation exhibits thereto and information incorporated
therein by reference; "Prospectus" shall mean the prospectus dated December 9,
1997, as supplemented by the prospectus supplement dated December 18, 1997 (the
"Prospectus Supplement"), relating to the Registered Certificates, including all
annexes thereto; "Memorandum" shall mean the private placement memorandum dated
December 18, 1997, relating to the Non-Registered Certificates; "Registered
Certificates" shall mean the Class A-1, Class A-2, Class B, Class C, Class D,
Class E and Class IO 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 27, 1994 issued by the Division of
Corporation Finance of the Commission to the Public Securities Association
(together, the "Kidder Letters"); "ABS Term Sheets" shall have the meaning
assigned thereto in the no-action letter dated February 17, 1995 issued by the
Division of Corporation Finance of the Commission to the Public Securities
Association (the "PSA Letter" and, together with the Kidder letters, the
"No-Action Letters"); "Diskette" shall mean the diskette attached to each of the
Prospectus and the Memorandum; and "Master Tape" shall mean the compilation of
information and data regarding the MLMC Mortgage Loans and the Mortgage Loans
covered by the Independent Accountants' Report on Applying Agreed-Upon
Procedures dated December 18, 1997 and rendered by Deloitte & Touche LLP (a
"hard copy" of which Master Tape was initialed on behalf of the Mortgage Loan
Seller and the Purchaser).
(b) The Company shall indemnify and hold harmless the Mortgage Loan Seller,
its directors, officers, employees and agents, and each person, if any, who
controls the Mortgage Loan Seller within the meaning of either the 1933 Act or
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) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the Prospectus, the
Memorandum, the Diskette, any Computational Materials or ABS Term Sheets with
respect to the Registered Certificates or any items similar to Computational
Materials or ABS Term Sheets forwarded to the prospective investors in the
Non-Registered Certificates, or in any revision or amendment thereof or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of the
circumstances under which they were made, except to the extent such untrue
statement, alleged untrue statement, omission or alleged omission is contained
in the Mortgage Loan Seller Information. This indemnity agreement will be in
addition to any liability which the Company may otherwise have.
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(c) 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 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 and the indemnified party or parties shall have
reasonably concluded that there may be legal defenses available to it or them
and/or other indemnified parties which are different from or additional to those
available to the indemnifying party, the indemnified party or parties shall have
the right to select separate counsel to assert such legal defenses and to
otherwise participate in the defense of such action on behalf of such
indemnified party or parties. Upon receipt of notice from the indemnifying party
to such indemnified party of its election so to assume the defense of such
action and approval by the indemnified party of counsel, 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
(i) the indemnified party shall have employed separate counsel in connection
with the assertion of legal defenses in accordance with the proviso to the next
preceding sentence (it being understood, however, that the indemnifying party
shall not be liable for the expenses of more than one separate counsel (together
with one local counsel, if applicable), approved by the Company in the case of
subsection (a), representing the indemnified parties under subsection (a) of
this Section 6 who are parties to such action), (ii) the indemnifying party
shall not have employed counsel reasonably satisfactory to the indemnified party
to represent the indemnified party within a reasonable time after notice of
commencement of the action or (iii) the indemnifying party has authorized in
writing the employment of counsel for the indemnified party at the expense of
the indemnifying party; and except that, if clause (i) or (iii) is applicable,
such liability shall be only in respect of the counsel referred to in such
clause (i) or (iii).
(d) If the indemnification provided for in this Section 6 shall for any
reason be unavailable in accordance with its terms to an indemnified party under
this Section 6, then the Mortgage Loan Seller and the Company shall contribute
to the amount paid or payable by such indemnified party as a result of the
losses, claims, damages or liabilities referred to in subsection (a) or (b)
above, in such proportion as is appropriate to reflect the relative fault of the
Mortgage Loan Seller on the one hand and the Company on the other in connection
with the statement or omission that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. 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
-20-
<PAGE>
by the Mortgage Loan Seller or the Company 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 (d) 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 or liabilities referred to in the first
sentence of this subsection (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending against any action or claim which is the subject of
this subsection (d) subject to the limitations therein provided under subsection
(c). No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any person who
was not also guilty of such fraudulent misrepresentation.
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 to it at World Financial Center, New
York, New York 10281, attention: Bruce L. Ackerman fax number: (212) 449-7684,
or, if sent to the Mortgage Loan Seller, will be mailed, hand delivered,
couriered or sent by facsimile transmission to it at 100 Church Street, 18th
Floor, New York, New York 10080-6518, attention: Robert J. Fitzpatrick fax
number: (212) 602-7552.
8. Trust as Beneficiary. The representations, warranties and agreements
made by the Mortgage Loan Seller in this Agreement are made for the benefit of,
and, to the extent they are assigned by the Company to the Trustee under the
Pooling and Servicing Agreement, may be enforced by or on behalf of, the
Trustee, the Servicer or the Special Servicer, as provided in the Pooling and
Servicing Agreement, to the same extent that the Company has rights against the
Mortgage Loan Seller under this Agreement in respect of representations,
warranties and agreements made by the Mortgage Loan Seller herein.
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 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 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.
-21-
<PAGE>
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. 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 adverse effect on
Certificateholders without the prior written consent of the Trustee.
[Signature page follows]
-22-
<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: Vice President
MERRILL LYNCH MORTGAGE INVESTORS, INC.
By: /s/ BRUCE L. ACKERMAN
----------------------------------
Name: Bruce L. Ackerman
Title: Vice President
<PAGE>
EXHIBIT A
MORTGAGE LOAN SCHEDULE
A-1
<PAGE>
<TABLE>
EXHIBIT A
MLMI 1997-C2
Mortgage Loan Schedule--Merrill Lynch
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Control
Number Property Name Address City State Zip Code
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
101 Wallingford Industrial 69 North Plains Highway Wallingford CT 06492
102 Lake Forest Business Center 22511 - 22515 Aspan Street Lake Forest CA 92630
104 South Madison Apartments 215 South Madison Pasadena CA 91109
105 Establishment Apartments 4411 Dickason Avenue Dallas TX 75219
106 Longmire Self Storage 3400 Longmire Drive College Station TX 77845
107 Midway Plaza Shopping Center 12801 Midway Road Dallas TX 75244
108 Moulin Rouge Apartments 1250 & 1251 Moulin Rouge Drive Dallas TX 75211
109 AAAAA Rent-A-Space-San Leandro 2000 Doolittle Dr San Leandro CA 94577
111 Lamar Springs Court Apartments 9146 Lamar Spring Valley CA 91977
112 Spring Rose Apartments 10000 Club Creek Houston TX 77036
114 Crossview Courts Apartments 2929 Crossview Houston TX 77063
115 Graycliff Apartments 2235 Graycliff Drive Dallas TX 75228
116 Town & Country Business Park 4060, 4110 - 4190 East Bijou Street Colorado Springs CO 80909
117 Autumn Sunrise Apartments 1825 Airline Dr. Corpus Christi TX 78412
119 Fountains of Jupiter Apartments 12993 Jupiter Road Dallas TX 75238
120 Fountains of Woodmeadow Apartments 10950 Woodmeadow Parkway Dallas TX 75228
121 Comfort Inn - San Antonio 4 Piano Place San Antonio TX 78228
122 Brynn Marr Shopping Center 106 Western Boulevard Jacksonville NC 28540
123 Tanglewood Place Apartments 5920 Beverly Hills Houston TX 77057
124 Comfort Inn & Suites - Las Colinas 1223 Greenway Circle Irving TX 75038
125 Days Inn - Orange 4301 27th Street Orange TX 77632
126 Entrada Apartments 1325 Garfield Denver CO 80206
127 Oaks at Centreport 14300 Statler Court Fort Worth TX 76156
128 Seabreeze Apartments 2401 Manor Road Austin TX 78722
129 Shoney's Inn 234 Lobdell Highway Port Allen LA 70767
130 Days Inn - Augusta 3654 Wheeler Road Augusta GA 30909
131 Days Inn Defiance 1835 North Clinton Street Defiance OH 43512
132 Days Inn Downtown - Indianapolis 401 East Washington Street Indianapolis IN 46204
133 Food Circus - Wall 18th Avenue & Highway 35 Wall NJ 07719
134 Food Circus - Red Bank 362 Broad Street Red Bank NJ 07701
135 Franklin Township Shopping Center 83 and 87 Veronica Avenue Franklin Township NJ 08873
136 Comfort Inn Suites - Hattiesburg 122 Plaza Drive Hattiesburg MS 39402
137 Comfort Inn - Rochester 289 McDonalds Drive Rochester IN 46975
138 Days Inn - Woodlawn 118 East Woodlawn Road Charlotte NC 28217
139 Holiday Inn Express-Carowinds 3560 Lakemont Blvd. Fort Mill SC 29715
140 Super 8 - Raleigh 3804 New Bern Avenue Raleigh NC 27610
142 Westpoint Commons Shopping Ctr. 8202-58 Rockville Road Indianapolis IN 46214
144 Serra Mesa Shopping Center 3202-3340 Greyling Drive San Diego CA 92123
145 Frelinghuysen Industrial 640 Frelinghuysen Avenue Newark NJ 07114
146 Rancho Bernardo Plaza 16759-16707 Bernardo Center Drive Rancho Bernardo CA 92128
148 Lima Plaza 2154 Elida Road Lima OH 45805
149 Archways Apartments 2504-2506 Manor Road Austin TX 78722
150 Britain Way Apartments 1954 Shoaf Drive Irving TX 75061
151 Tiffanywood/Harmonyrick Apartments 1301 S. Maddox Dumas TX 79029
152 Brandywine Apartments 4020 South 130th East Ave. Tulsa OK 74134
153 Country Hollow Apartments 4605 East 80th Street Tulsa OK 74136
154 Windsail Apartments 9808 East 73rd Street South Tulsa OK 74133
155 91-61 193rd Street Apts. 91-61 193rd Street Queens NY 11423
156 Rolling Ridge Apartments 100 Rollling Ridge Way Bloomington IN 47403
157 Stonywood Terrace Apartments 2525 Welsh Road Philadelphia PA 01607
158 Village at Lakeside 9703 Winter Gardens Blvd Lakeside CA 92040
159 Tidwell Park Apartments 9400 Bauman Road Houston TX 77076
160 Bucks County Industrial (95 Expressway) Progress & Marshall Drives Bensalem PA 19020
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Control Original Cut-off Date Monthly Gross Remaining Maturity Ground
Number Balance Balance Payment Rate Term Amort Date Lease
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
101 2,400,000 2,393,133.60 19,552.40 8.640 117 297 09/01/2007 No
102 2,000,000 1,995,955.41 14,689.24 8.010 117 357 09/01/2007 No
104 1,500,000 1,495,252.04 11,597.12 8.020 57 297 09/01/2002 No
105 1,450,000 1,445,281.29 11,165.55 7.860 81 297 09/01/2004 No
106 1,600,000 1,595,202.09 12,878.80 8.375 117 297 09/01/2007 No
107 5,100,000 5,068,265.45 44,932.10 8.100 213 213 09/01/2015 No
108 2,250,000 2,242,758.50 17,431.72 7.930 177 297 09/01/2012 No
109 5,330,000 5,311,640.92 45,755.54 9.280 296 296 08/01/2022 No
111 1,650,000 1,646,427.21 12,560.58 7.840 118 298 10/01/2007 No
112 1,375,000 1,372,145.46 10,703.72 8.100 118 298 10/01/2007 No
114 2,700,000 2,693,920.78 18,841.83 7.480 117 357 09/01/2007 No
115 1,000,000 997,950.81 7,837.78 8.180 178 298 10/01/2012 No
116 5,475,000 5,456,045.25 41,761.14 8.125 116 320 08/01/2007 No
117 2,550,000 2,538,559.20 19,110.46 7.660 116 296 08/01/2007 No
119 2,500,000 2,494,799.36 18,118.06 7.870 177 357 09/01/2012 No
120 5,600,000 5,588,350.57 40,584.45 7.870 177 357 09/01/2012 No
121 1,500,000 1,490,771.10 13,375.54 8.875 236 236 08/01/2017 No
122 3,000,000 2,989,409.99 23,558.17 8.730 234 354 06/01/2017 No
123 2,000,000 1,997,327.95 14,582.95 7.820 118 358 10/01/2007 No
124 2,500,000 2,485,309.53 22,880.47 9.240 236 236 08/01/2017 No
125 1,450,000 1,444,594.52 12,512.53 8.875 261 261 09/01/2019 No
126 1,840,000 1,829,403.74 15,027.52 8.670 114 294 06/01/2007 No
127 15,540,000 15,494,443.57 109,830.84 7.610 116 356 08/01/2007 No
128 1,550,000 1,543,468.16 12,014.54 8.050 116 296 08/01/2007 No
129 3,250,000 3,235,974.46 30,029.47 9.375 237 237 09/01/2017 No
130 1,050,000 1,042,545.82 9,814.82 9.540 235 235 07/01/2017 No
131 1,900,000 1,884,155.58 18,009.32 9.740 234 234 06/01/2017 No
132 2,891,000 2,872,305.40 26,351.00 9.410 247 247 07/01/2018 No
133 3,800,000 3,785,163.47 30,649.86 8.520 176 296 08/01/2012 No
134 4,800,000 4,781,259.13 38,715.62 8.520 176 296 08/01/2012 No
135 3,600,000 3,583,452.82 28,253.87 8.330 79 307 07/01/2004 No
136 3,010,000 2,985,524.34 30,172.35 8.800 177 177 09/01/2012 No
137 1,925,000 1,899,970.50 19,927.46 9.350 175 175 07/01/2012 No
138 2,500,000 2,492,701.82 22,864.27 9.230 238 238 10/01/2017 No
139 2,680,000 2,672,176.36 24,510.50 9.230 238 238 10/01/2017 No
140 2,560,000 2,552,526.67 23,413.02 9.230 238 238 10/01/2017 No
142 2,650,000 2,889,343.38 22,745.99 8.492 115 325 07/01/2007 No
144 3,862,500 3,830,058.24 30,847.01 8.700 109 319 01/01/2007 No
145 4,300,000 4,286,477.00 33,359.19 8.060 117 297 09/01/2007 No
146 16,500,000 16,463,424.83 132,003.56 8.720 75 321 03/01/2004 No
148 4,200,000 4,176,294.10 34,644.25 8.790 234 294 06/01/2017 No
149 1,650,000 1,639,411.13 13,812.86 8.970 113 293 05/01/2007 No
150 1,840,000 1,834,315.72 14,409.25 8.170 117 297 09/01/2007 No
151 2,100,000 2,098,685.34 15,909.66 8.340 119 359 11/01/2007 No
152 5,350,000 5,343,242.53 37,591.33 7.550 118 358 10/01/2007 No
153 4,600,000 4,594,189.84 32,321.51 7.550 118 358 10/01/2007 No
154 7,125,000 7,116,115.23 50,307.83 7.600 118 358 10/01/2007 No
155 1,512,000 1,507,974.94 11,189.53 8.090 116 356 08/01/2007 No
156 5,040,000 5,026,825.40 37,616.10 8.180 116 356 08/01/2007 No
157 1,680,000 1,674,124.65 13,246.58 8.775 114 354 06/01/2007 No
158 2,500,000 2,498,288.20 18,170.14 7.900 119 359 11/01/2007 No
159 1,500,000 1,498,919.79 10,642.71 7.650 119 359 11/01/2007 No
160 8,450,000 8,443,057.48 59,473.36 7.460 119 359 11/01/2007 No
<CAPTION>
- -------------------------------------------------------------------------------------------
Control Underwriting Net Subservicing (1) Servicing Fee
Number Reserves Rate Fees Fees Subservicer
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
101 0.16 per sq. ft. 8.535 0.060 0.105 L.J. Melody
102 0.16 per sq. ft. 7.905 0.060 0.105 L.J. Melody
104 250 per unit 7.915 0.060 0.105 L.J. Melody
105 225 per unit 7.755 0.060 0.105 L.J. Melody
106 0.15 per sq. ft. 8.270 0.060 0.105 L.J. Melody
107 0.28 per sq. ft. 7.995 0.060 0.105 L.J. Melody
108 263 per unit 7.825 0.060 0.105 L.J. Melody
109 0.15 per sq. ft. 9.175 0.060 0.105 L.J. Melody
111 250 per unit 7.735 0.060 0.105 L.J. Melody
112 261 per unit 7.995 0.060 0.105 L.J. Melody
114 250 per unit 7.375 0.060 0.105 L.J. Melody
115 250 per unit 8.075 0.060 0.105 L.J. Melody
116 0.17 per sq. ft. 8.020 0.060 0.105 L.J. Melody
117 250 per unit 7.555 0.060 0.105 L.J. Melody
119 220 per unit 7.765 0.060 0.105 L.J. Melody
120 235 per unit 7.765 0.060 0.105 L.J. Melody
121 4% of revenue 8.770 0.060 0.105 L.J. Melody
122 0.16 per sq. ft. 8.625 0.060 0.105 L.J. Melody
123 225 per unit 7.715 0.060 0.105 L.J. Melody
124 4% of revenue 9.135 0.060 0.105 L.J. Melody
125 4% of revenue 8.770 0.060 0.105 L.J. Melody
126 250 per unit 8.565 0.060 0.105 L.J. Melody
127 250 per unit 7.505 0.060 0.105 L.J. Melody
128 260 per unit 7.945 0.060 0.105 L.J. Melody
129 4% of revenue 9.270 0.060 0.105 L.J. Melody
130 4% of revenue 9.435 0.060 0.105 L.J. Melody
131 4% of revenue 9.635 0.060 0.105 L.J. Melody
132 4% of revenue 9.305 0.060 0.105 L.J. Melody
133 0.24 per sq. ft. 8.415 0.060 0.105 L.J. Melody
134 0.27 per sq. ft. 8.415 0.060 0.105 L.J. Melody
135 0.15 per sq. ft. 8.225 0.060 0.105 L.J. Melody
136 4% of revenue 8.695 0.060 0.105 L.J. Melody
137 4% of revenue 9.245 0.060 0.105 L.J. Melody
138 4% of revenue 9.125 0.060 0.105 L.J. Melody
139 4% of revenue 9.125 0.060 0.105 L.J. Melody
140 4% of revenue 9.125 0.060 0.105 L.J. Melody
142 0.21 per sq. ft. 8.387 0.060 0.105 L.J. Melody
144 0.15 per sq. ft. 8.595 0.060 0.105 L.J. Melody
145 0.17 per sq. ft. 7.955 0.060 0.105 L.J. Melody
146 0.17 per sq. ft. 8.615 0.060 0.105 L.J. Melody
148 0.15 per sq. ft. 8.685 0.060 0.105 L.J. Melody
149 228 per unit 7.762 1.163 1.208 Arbor National
150 225 per unit 7.755 0.370 0.415 Arbor National
151 250 per unit 8.235 0.060 0.105 L.J. Melody
152 200 per unit 7.405 0.100 0.145 Midland
153 225 per unit 7.405 0.100 0.145 Midland
154 225 per unit 7.455 0.100 0.145 Midland
155 225 per unit 7.745 0.300 0.345 Arbor National
156 150 per unit 7.745 0.390 0.435 Arbor National
157 225 per unit 7.748 0.982 1.027 Arbor National
158 250 per unit 7.795 0.060 0.105 L.J. Melody
159 278 per unit 7.545 0.060 0.105 L.J. Melody
160 0.17 per sq. ft. 7.355 0.060 0.105 L.J. Melody
- -------------------------------------------------------------------------------------------
(1) Servicing Fees consist of Master Servicing, Sub-Servicing, Special and Trustee Fees
</TABLE>
<PAGE>
EXHIBIT B
FORM OF CERTIFICATE OF AN OFFICER OF
MERRILL LYNCH MORTGAGE CAPITAL, INC.
I, ______________________, hereby certify that I am an authorized signatory
of Merrill Lynch Mortgage Capital, Inc., a Delaware Corporation (the "Seller"),
and that, based upon information provided to me by appropriate officers, 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 __________, 1997 (the "Purchase
Agreement") 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.
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 Purchase Agreement to be performed or satisfied at or prior to
the date hereof.
IN WITNESS WHEREOF, I have executed this Certificate as of __________,
1997.
MERRILL LYNCH MORTGAGE CAPITAL, INC.
By: ________________________________
Name:
Title: Authorized Signatory
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 __________,
1997.
By: ________________________________
Name:
Title:
B-1
<PAGE>
EXHIBIT C
FORM OF LEGAL OPINION
1. 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 full corporate power and authority to own its assets and conduct its
business as presently conducted by it and to own the Mortgage Loans, is duly
qualified as a foreign corporation in good standing in the State of New York,
and the Mortgage Loan Seller has taken all necessary action to authorize the
execution, delivery and performance of the Mortgage Loan Purchase and Sale
Agreement by it, and has the power and authority to execute, deliver and perform
the Mortgage Loan Purchase and Sale Agreement and all the transactions
contemplated hereby, including, but not limited to, the power and authority to
sell, assign and transfer the Mortgage Loans in accordance with, and perform its
obligations under, the Mortgage Loan Purchase and Sale Agreement.
2. The Mortgage Loan Purchase and Sale Agreement has been duly authorized,
executed and delivered by the Mortgage Loan Seller and constitutes the legal,
valid and binding obligations of the Mortgage Loan Seller, enforceable against
the Mortgage Loan Seller in accordance with the terms of the Mortgage Loan
Purchase and Sale 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.
3. The execution and delivery of the Mortgage Loan Purchase and Sale
Agreement by the Mortgage Loan Seller and the performance of its obligations
under the Mortgage Loan Purchase and Sale Agreement 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, to our knowledge, 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 the Mortgage
Loan Purchase and Sale Agreement.
4. There is no action, suit, proceeding or investigation pending or
threatened, against the Mortgage Loan Seller in any court or by or before any
other governmental agency or instrumentality which would materially and
adversely affect the validity of the Mortgage Loans or the ability of the
Mortgage Loan Seller to carry out the transactions contemplated by this
Agreement.
5. To our knowledge, 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 federal,
C-1
<PAGE>
state, municipal or governmental agency, which default might have consequences
that would materially and adversely affect the condition (financial or other) or
operations of the Mortgage Loan Seller or its properties or might have
consequences that would materially and adversely affect its performance under
the Mortgage Loan Purchase and Sale Agreement.
6. 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 the Mortgage Loan Purchase and Sale Agreement or the consummation of
the transactions contemplated by the Mortgage Loan Purchase and Sale Agreement,
other than those which have been obtained by the Mortgage Loan Seller.
In addition, counsel shall state (which statement shall be in form and
substance reasonably acceptable to the Company) their view as to the accuracy of
the information regarding the Mortgage Loans in the Prospectus Supplement and
the Private Placement Memorandum.
C-2
<PAGE>
EXHIBIT D
SCHEDULE OF MORTGAGE LOANS TO ONE BORROWER
OR GROUP OF AFFILIATED BORROWERS
D-1
<PAGE>
<TABLE>
<CAPTION>
MERRILL LYNCH BORROWER CONCENTRATION
MLMI 1997-C2
- ------------------------------------------------------------------------------------------------------------------------------------
CONTROL # PROPERTY NAME PROPERTY TYPE COMMON PRINCIPAL ORIG. BALANCE CUT-OFF BALANCE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
152 Brandywine Apartments Multifamily Mike Case & Duane Roberts 5,350,000.00 5,343,242.53
153 Country Hollow Apartments Multifamily Mike Case & Duane Roberts 4,600,000.00 4,594,189.84
154 Windsail Apartments Multifamily Mike Case & Duane Roberts 7,125,000.00 7,116,115.23
--------------------------------------
17,075,000.00 17,053,547.60
133 Food Circus - Wall Anchored Retail Joseph & John Azzolina 3,800,000.00 3,785,163.47
134 Food Circus - Red Bank Anchored Retail Joseph & John Azzolina 4,800,000.00 4,781,259.13
--------------------------------------
8,600,000.00 8,566,422.60
119 Suss-Fountains of Jupiter Apartments Multifamily Ari Sussman 2,500,000.00 2,494,799.36
120 Suss-Fountains of Woodmeadow Multifamily Ari Sussman 5,600,000.00 5,588,350.57
Apartments
--------------------------------------
8,100,000.00 8,083,149.94
138 Days Inn - Woodlawn Hospitality Shashin Patel & Nalin Patel 2,500,000.00 2,492,701.82
139 Holiday Inn Express-Carowinds Hospitality Shashin Patel & Nalin Patel 2,680,000.00 2,672,176.36
140 Super 8 - Raleigh Hospitality Shashin Patel & Nalin Patel 2,560,000.00 2,552,526.67
--------------------------------------
7,740,000.00 7,717,404.85
122 Brynn Marr Shopping Center Anchored Retail Daniel G. Kamin 3,000,000.00 2,989,409.99
148 Lima Plaza Anchored Retail Daniel G. Kamin 4,200,000.00 4,176,294.10
--------------------------------------
7,200,000.00 7,165,704.09
136 Comfort Inn Suites - Hattiesburg Hospitality Bharnt Patel 3,010,000.00 2,985,524.34
137 Comfort Inn - Rochester Hospitality Bharnt Patel 1,925,000.00 1,899,970.50
--------------------------------------
4,935,000.00 4,885,494.84
</TABLE>
D-2
<PAGE>
SCHEDULE 1
EXCEPTIONS TO REPRESENTATIONS AND WARRANTIES
UNDER SECTION 3(b)
NONE
S-1-1
<PAGE>
SCHEDULE 2
LIST OF MORTGAGE LOANS WHICH ARE EXCEPTIONS TO SECTION 2(b)(xii)
NONE
S-2-1
MORTGAGE LOAN PURCHASE AND SALE AGREEMENT
This Mortgage Loan Purchase and Sale Agreement, dated as of December 1,
1997 (the "Agreement"), is between Merrill Lynch Mortgage Investors, Inc., a
Delaware corporation (the "Company"), and GE Capital Access, Inc. (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.,
Mortgage Pass-Through Certificates, Series 1997-C2 (the "Certificates"),
evidencing beneficial ownership interests in the Mortgage Loans and other assets
(including, without limitation, other mortgage loans), under a Pooling and
Servicing Agreement, to be dated as of December 1, 1997 (the "Pooling and
Servicing Agreement"), among the Company, as depositor, GE Capital Loan
Services, Inc., as master servicer (the "Servicer"), CRIIMI MAE Services Limited
Partnership, as special servicer (the "Special Servicer"), and State Street Bank
and Trust Company, as trustee (the "Trustee"). 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. The purchase price (the "Purchase
Price") for the Mortgage Loans shall be determined in accordance with the letter
agreement, dated as of December 23, 1997, between the Company and the Mortgage
Loan Seller. The Purchase Price amount shall be payable by the Company to the
Mortgage Loan Seller on December 23, 1997 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, 153 East 53rd
Street, New York, New York 10022, at 10:00 a.m. (New York time), on the Closing
Date.
On the Closing Date, the Mortgage Loan Seller shall sell, transfer, assign,
set over and convey to the Company, without recourse, and the Company shall
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 the proceeds of any
related title, hazard, primary mortgage or other insurance policies. The Company
hereby directs the Mortgage Loan Seller, and the Mortgage Loan Seller hereby
agrees, to deliver to the Trustee all documents, instruments and agreements
required to be delivered by the Company to the Trustee under Section 2.01 of the
Pooling and Servicing Agreement, and meeting all the requirements of such
Section 2.01 and such other documents, instruments and agreements as the Company
or the Trustee shall reasonably request. The Mortgage Loan Schedule may be
amended to reflect the actual Mortgage Loans.
<PAGE>
2. Representations and Warranties. (a) The Mortgage Loan Seller hereby
represents and warrants to the Company as of the date hereof and as of Closing
Date 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 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 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 corporate
power and authority to execute, deliver and perform this Agreement and all
the transactions 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 its 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 the terms of this 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), 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
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<PAGE>
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 investigation pending or,
to the knowledge of the Mortgage Loan Seller, 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, and 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
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 condition (financial or
other) or operations of the Mortgage Loan Seller or its properties 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
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; and
(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
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<PAGE>
to hinder, delay or defraud any of the creditors of the Mortgage Loan
Seller.
(b) The Mortgage Loan Seller hereby represents and warrants with respect to
each Mortgage Loan that, as of the date specified below or, if no such date is
specified, as of the Closing Date:
(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;
(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 such transfer;
(iii) Each related Mortgage Note, Mortgage, Assignment of Leases (if
any) and other agreement executed in connection with such Mortgage Loan is,
a valid and binding obligation of the related Mortgagor, enforceable in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
the enforcement of creditors' rights generally, or 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,
collateral or first priority assignment of, or a valid first priority
security interest in, the right to receive all payments due under the
related leases, and no other person owns any interest therein superior to
or of equal priority with the interest created under such assignment;
(v) Each related assignment of Mortgage from the Mortgage Loan Seller
to the Trustee and any related assignment of Assignment of Leases, if any,
and assignment of any other agreement executed in connection with such
Mortgage Loan, from the Mortgage Loan Seller to the Trustee constitutes the
legal, valid and binding assignment from the Mortgage Loan Seller to the
Trustee, except as such enforcement may be limited by bankruptcy,
insolvency, reorganization, liquidation, receivership, moratorium or other
laws relating to or affecting creditors' rights generally or by general
principles of equity (regardless of whether such enforcement is considered
in a proceeding in equity or at law);
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<PAGE>
(vi) Since origination, such Mortgage Loan has not been modified,
altered, satisfied, canceled, subordinated or rescinded, except, in each of
the foregoing instances, by written instruments that are a part of the
related Mortgage File, recorded in the applicable public recording office
if necessary to maintain the priority of the lien of the related Mortgage
and security agreements and delivered to the Company, and no material
portion of the related Mortgaged Property has been released from the lien
of the related Mortgage, in each case, in any manner which materially and
adversely affects the value of the Mortgage Loan or materially interferes
with the security intended to be provided by such Mortgage, and, except
with respect to those Mortgage Loans listed on Schedule 1 attached hereto
which permit defeasance, the terms of the related Mortgage do not 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 security
provided by the Mortgaged Property;
(vii) Each related Mortgage is a valid first lien on the related
Mortgaged Property (subject to the matters described in clause (viii)
below), and such Mortgaged Property is free and clear of any mechanics' and
materialmen's liens which are prior to or equal with the lien of the
related Mortgage, except those which are insured against by a lender's
title insurance policy (as described in clause (viii) below);
(viii) The lien of each related Mortgage as 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 is insured by an
ALTA lender's title insurance policy (or a binding commitment therefor), 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 current real property taxes, ground rents, water charges, sewer
rents and assessments not yet due and payable, (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 of the Mortgaged Property or the security
intended to be provided by such Mortgage or with the Mortgagor's ability to
pay its obligations when they become due or materially and adversely
affects the value of the Mortgaged Property and (c) the exceptions (general
and specific) set forth in such policy, 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 when they become due or materially and adversely affects the
value of the Mortgaged Property; the original holder of the Mortgage and/or
its successor or assigns is the sole named insured of such policy; such
policy is assignable to the Company and the Trustee without the consent of
or any notification to
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<PAGE>
the insurer, and is in full force and effect 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) There is no proceeding pending, or to our knowledge, 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, each
related Mortgaged Property is free and clear of any material damage 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 that, as
of the date of origination of such Mortgage Loan, and, to the Mortgage Loan
Seller's knowledge, 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 and all such licenses, permits and
authorizations were valid and in full force and effect;
(xii) Each Mortgage Loan does not have a shared appreciation feature,
other contingent interest feature or, except with respect to those Mortgage
Loans listed on Schedule 2 attached hereto (the "ARD Loans") which provide
for hyper-amortization, a negative amortization feature;
(xiii) Each Mortgage Loan is a whole loan and no other party holds a
participation interest in the Mortgage Loan;
(xiv) The Mortgage Rate (exclusive of any default interest, late
charges or prepayment premiums) 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 as of the date of origination of such
Mortgage Loan;
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<PAGE>
(xv) All taxes and governmental assessments which would be a lien on
the Property and that prior to the Cut-off Date became due and owing 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;
(xvi) All escrow deposits and payments required pursuant to the
Mortgage Loan 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
Borrower under the Loan Documents as of the date hereof have been deposited
and all such escrows and deposits 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 in an amount not less than the lesser of
(A) the outstanding principal balance of the Mortgage Loan and (B) the
replacement cost, and in all events the amount necessary to avoid the
operation of any co-insurance provisions with respect to the Mortgaged
Property; each related Mortgaged Property is also covered by business
interruption insurance (or loss of rents insurance) and comprehensive
general liability insurance in amounts generally required by institutional
lenders for similar properties; all premiums on such insurance policies
required to be paid as of the date hereof have been paid; such insurance
policies 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 a fire and extended perils insurance 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;
(xviii) Each Mortgage provides that any insurance proceeds in respect
of a casualty, other than business interruption/rental income insurance,
and any condemnation awards, 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;
(xix) To 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 and does
constitute a material default, breach, violation or event of acceleration;
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<PAGE>
(xx) No Monthly Payment on such Mortgage Loan has been more than 30
days delinquent from the later of one year prior to the Cut-off Date, the
date of origination of such Mortgage Loan or, if applicable, the date of
acquisition by the Mortgage Loan Seller 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 realization against the Mortgaged Property of the benefits
of the security, including realization by judicial or, if applicable,
non-judicial foreclosure, subject to the effects of bankruptcy or other law
affecting the right of creditors generally and the application of
principles of equity, and there is no exemption available to the Mortgagor
which would interfere with such right to foreclose;
(xxii) A Phase I Environmental Site Assessment was performed with
respect to the related Mortgaged Property. Such Phase I Environmental Site
Assessment was performed within twelve (12) months prior to the respective
dates of origination of the related Mortgage Loan. A report of such Phase I
Environmental Site Assessment has been delivered to the Company, and the
Mortgage Loan Seller (or its affiliate that originated the Mortgage Loan),
having made no independent inquiry other than reviewing such report, has no
knowledge of any material and adverse environmental condition or
circumstance affecting the related Mortgaged Property that was not
disclosed in such report. To the extent any such condition or circumstance
was disclosed, either (a) there has been escrowed an amount of money
considered sufficient by the Mortgage Loan Seller, based upon the related
environmental reports, to cure and remedy such condition or circumstance as
recommended in the Phase I or, where applicable, Phase II Environmental
Site Assessment or (b) an operating and maintenance program has been
required of Mortgagor or (c) such condition has been cured or remedied. The
Mortgage Loan Seller has received no notice of any other such condition or
circumstance. In each Mortgage, the related Mortgagor represented and
warranted that it will not use or cause or permit to exist on the related
Mortgaged Property any hazardous materials in any manner that violates
federal, state or local laws, ordinances, regulations, orders or directives
relating to hazardous materials. In each Mortgage, the Mortgagor
represented and warranted that no hazardous materials exist on the related
Mortgaged Property in any manner that violates federal, state or local
laws, ordinances, regulations, orders or directives relating to hazardous
materials; provided, however, that in certain instances this representation
is limited to the best of Mortgagor's knowledge. The Mortgage Loan
generally requires (subject to exceptions which would not be viewed as
commercially unreasonable by a prudent institutional lender) that the
Mortgagor will defend and hold the holder of the
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<PAGE>
Mortgage and its successors and/or assigns harmless from and against any
and all losses, liabilities, damages, injuries, penalties, fines, expenses,
and claims of any kind whatsoever (including attorney's fees and costs)
paid, incurred, or suffered by, or asserted against, any such party
resulting from a breach of any representation, warranty or covenant
relating to environmental matters given by the Mortgagor under the related
Mortgage except for those resulting from gross negligence or willful
misconduct by the holder of the Mortgage or those which are initially
placed on, in or under the Mortgaged Property after foreclosure or other
taking of title to the Mortgaged Property by the holder of the Mortgage;
(xxiii) Each related Mortgage or loan agreement contains provisions
for the acceleration of the payment of the unpaid principal balance of such
Mortgage Loan if, without complying with the requirements of the Mortgage
or loan agreement, as applicable, the related Mortgaged Property, or any
controlling interest therein, is directly or indirectly transferred or
sold, or encumbered in connection with subordinate financing (other than
any existing subordinate debt) and each related Mortgage or loan agreement
prohibits the pledge or encumbrance of the Mortgaged Property without the
consent of the holder of the Mortgage Loan;
(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 and such interest in real property was the sole
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
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
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<PAGE>
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.
For this purpose the ARD Loans shall be deemed to have undergone a
"significant modification" on December 23, 1997;
(xxv) As of the Cut-off Date the Mortgage Loan Schedule is complete
and accurate in all material respects;
(xxvi) The Mortgage Loan provides that the Mortgagor is required to
provide to the Mortgagee at least annually an operating statement and such
other information as is reasonably requested by the Mortgagee;
(xxvii) 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);
(xxviii) The Mortgage File contains an appraisal of the related
Mortgaged Property which appraisal is signed by a qualified appraiser, 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, and the appraisal and appraiser both
satisfy the requirements of Title XI of the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989 and the regulations promulgated
thereunder, all as in effect on the date the Mortgage Loan was originated;
(xxix) None of the material improvements which were included for the
purposes of determining the appraised value of the related Mortgaged
Property at the time of the origination of the Mortgage Loan lies outside
of the boundaries and building restriction lines of such property (except
Mortgaged Properties which are legal non-conforming uses and except for
immaterial encroachment or where the same is covered by a title insurance
endorsement), and no improvements on adjoining properties materially
encroach upon such Mortgaged Property,
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<PAGE>
or the requisite title insurance has been obtained with respect to the
foregoing;
(xxx) To the Mortgage Loan Seller's knowledge, based on the type of
due diligence customarily provided by prudent institutional commercial and
multifamily mortgage lenders, as of the date of origination of such
Mortgage Loan, and as of the Cut-off Date, each Mortgaged Property was in
material compliance with all applicable laws, zoning ordinances (including
legal non-conforming uses), rules, covenants and restrictions affecting the
construction, occupancy, use and operation of such Mortgaged Property or,
if such Mortgaged Property is not in compliance with the representations
made in this clause (xxx), such non-compliance does not materially and
adversely affect the value or operation of the Mortgaged Property;
(xxxi) With respect to the Mortgage Loans which as of the Cut-off Date
have a principal balance of at least $6 million, the related Mortgagor is
an entity which has represented and covenanted in connection with the
origination of the Mortgage Loan, or 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 engage in any
business unrelated to the related Mortgaged Property (which may include
multiple Mortgaged Properties owned by the same Borrower and securing only
Mortgage Loans conveyed hereunder as listed on Exhibit D 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, has 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);
(xxxii) The Mortgage Loan complied, in all material respects, with all
of the terms, conditions and requirements of the Mortgage Loan Seller's
underwriting standards in effect at the time of the origination or
acquisition of such Mortgage Loan;
(xxxiii) Except as set forth on Schedule 1, to the Mortgage Loan
Seller's knowledge, no Mortgagor is a debtor in any state or federal
bankruptcy or insolvency proceeding;
(xxxiv) To the best of Mortgage Loan Seller's knowledge, as of the
Closing Date, there is no right of rescission, offset, abatement,
diminution, defense or counterclaim to the Mortgage Loan (including the
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<PAGE>
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 or prepayment premiums), or subject to any right of rescission,
offset, abatement, diminution, valid defense or counterclaim (including the
defense of usury or the 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 generally or by general principles of
equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law), and no such right of rescission, offset,
abatement, diminution, defense or counterclaim has been asserted with
respect thereto;
(xxxv) 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 the release of the Mortgaged Property or
related security for the Mortgage Loan following the payment of the
Mortgage Loan in full;
(xxxvi) The improvements located on the Mortgaged Property are either
not located in a federally designated special flood hazard area or the
Mortgagor is required to maintain or the Mortgagee maintains, flood
insurance with respect to such improvements;
(xxxvii) 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 or allows the Mortgagee to enter into
possession to collect rent or provides for rents to be paid directly to
Mortgagee in the event of a default;
(xxxviii) The Mortgage Note is not secured by any collateral that is
not being transferred hereunder;
(xxxix) Each Mortgage Loan, if any, that is cross-collateralized is
cross-collateralized only with one or more other Mortgage Loans being
transferred hereunder;
(xl) The origination (or acquisition, as the case may be), servicing
and collection practices used with respect to the Mortgage Loan by the
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Mortgage Loan Seller and, to the Mortgage Loan Seller's knowledge, by any
prior holder of the Mortgage Loan, have been in all respects legal, proper
and prudent and have met customary industry standards;
(xli) 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;
(xlii) 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 owned by a Mortgagor and located on each
Mortgaged Property and for which perfection is accomplished by the filing
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 Loans 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 or other laws affecting creditor's rights generally
or by the application of the rules of equity;
(xliii) Except with respect to the Mortgage Loans identified on
Schedule 1 as being subject to secured subordinate debt (the "Subordinate
Debt Mortgage Loans"), as of the date of the Prospectus, to the Mortgage
Loan Seller's knowledge, the Mortgagor has no indebtedness for borrowed
money secured by the Mortgaged Property other than the Mortgage Loan. With
respect to the Subordinate Debt Mortgage Loans, 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 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 paid in full, and (C) 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;
(xliv) Except to the extent otherwise set forth on Schedule 1, no
Mortgage Loan is secured in whole or in part by the interest of a Borrower
as lessee under a ground lease underlying the related Mortgaged Property
unless (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
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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 or (B) if the Mortgage Loan is secured by a Mortgage
constituting a valid first lien on an unencumbered interest of the Borrower
as lessee under a ground lease underlying the related Mortgaged Property,
then the Mortgage Loan Seller represents and warrants that:
(A) The ground lease (with respect to this section (xliv), the term
"ground lease" 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 in the terms of
such ground lease since its recordation, except by written
instruments, all of which are included in the related Mortgage File;
(B) 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;
(C) 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;
(D) The ground lease is not subject to any liens or encumbrances superior
to, or of equal priority with, the Mortgage other than the related
ground lessor's related fee interest and any exceptions set forth in
the related title insurance policy or opinion of title;
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(E) The ground lease is assignable to the Mortgagee 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);
(F) 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, nor is
there any 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;
(G) The ground lease or ancillary agreement between the lessor and the
lessee requires the lessor to give notice of any default by the lessee
to the Mortgagee. The ground lease or ancillary 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;
(H) Mortgagee is permitted a reasonable opportunity (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 diligently) to
cure any default under the ground lease which is curable after the
receipt of notice thereof before the lessor may terminate the ground
lease;
(I) The ground lease does not impose any restrictions on subletting that
would be viewed as commercially unreasonable by a prudent commercial
mortgage lender;
(J) Any related insurance proceeds or condemnation award (other than in
respect of a total or substantially total loss or taking) will be
applied either to the repair or restoration of all or part of the
related Mortgaged Property, with the Mortgagee or a trustee appointed
by it having the right to hold and disburse such proceeds as repair or
restoration progresses, or to the payment of the outstanding principal
balance of the Mortgage Loan, together with any accrued interest
(except, with respect to condemnation awards, in cases where a
different allocation would not be viewed as commercially unreasonable
by any institutional investor, taking into account the relative
duration of the ground lease and the related Mortgage and the ratio of
the outstanding principal balance of such Mortgage Loan to the market
value of the related Mortgaged Property);
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(K) Under the terms of the ground lease and the related Mortgage, any
related insurance proceeds, or condemnation award in respect of a
total or substantially total loss or taking of the related Mortgaged
Property will be applied first to the payment of the outstanding
principal balance of the Mortgage Loan, together with any accrued
interest if such proceeds have not been used to restore the premises
(except, with respect to condemnation awards, in cases where a
different allocation would not be viewed as commercially unreasonable
by any institutional investor, taking into account the relative
duration of the ground lease and the related Mortgage and the ratio of
the outstanding principal balance of such Mortgage Loan to the market
value of the related Mortgaged Property). 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;
(L) Upon request, the ground lessor is required to enter into a new lease
upon termination of the Ground Lease for any reason, on substantially
similar terms and conditions as the old lease, including upon the
rejection of the lease in bankruptcy;
(M) Except as set forth on Schedule 1, the ground lease does not provide
for an increase in rental payments; and
(N) To the best of the Mortgage Loan Seller's (or its affiliates which
originated the Mortgage Loan) knowledge, the terms of the related
Ground Lease have not been waived, modified, altered, satisfied,
impaired, canceled, subordinated or rescinded in any manner which
materially interferes with the security intended to be provided by
such Mortgage.
(xlv) Based on information obtained from the related Mortgagor at the
time of origination, a list of borrowers or groups of affiliated borrowers
with multiple Mortgage Loans is attached hereto as Exhibit D 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 $34 million;
(xlvi) No Mortgage Loan has an interest rate lower than 6.970% per
annum;
(xlvii) With respect to each Mortgage Loan listed on Schedule 1
attached hereto, which provide for hyper-amortization after the
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respective anticipated repayment date ("ARD"): (a) no Mortgage Loan
provides for payment of interest only, (b) the ARD in each case is not less
than seven (7) years from the date of origination, (c) each Mortgage Loan
provides for creation of a lockbox account pursuant to which all rents and
other income from the Property from and after the ARD shall be deposited,
which generally must become effective not later than three (3) months prior
to the ARD and in all cases must become effective by the ARD unless the
Borrower provides evidence satisfactory to the holder of the Mortgage that
a refinancing of the Mortgage Loan will occur on or about the ARD, (d)
after the ARD, excess cash flow (after payment of principal and interest at
the pre-ARD rate, escrows, budgeted operating expenses, and other expenses
approved by the holder of the Mortgage) is applied to reduction of the
principal balance of the Mortgage Loan, (e) the unavailability of
additional principal amounts in excess of the regularly scheduled principal
and interest payments (at the applicable rate prior to the ARD) is not a
default under the Mortgage Loan, and (f) the Mortgage Loan does not provide
for the removal of the property manager solely because of the occurrence of
the ARD and, if the removal of the property manager is permitted based on
debt service coverage ratio tests, the calculation of the debt service
coverage ratio is based on the initial interest rate in effect prior to the
ARD;
(xlviii) Each Mortgage Loan is nonrecourse except for certain
circumstances including fraud, misappropriation, misrepresentation and
waste; and
(xlix) Except as otherwise set forth on Schedule 1 hereto, with
respect to Mortgage Loans secured in whole or in part by the interest of
the related mortgagor under a Ground Lease and by the related fee interest,
such fee interest is subject, and subordinated of record, to the related
Mortgage, and such Mortgage does not by its terms provide that it will be
subordinated to the lien of any other mortgage or other lien upon such fee
interest.
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 90 days from the Mortgage Loan Seller's receipt of notice of
such Breach or Document Defect, 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 hereinafter
set
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forth, repurchase the affected Mortgage Loan at the applicable Repurchase Price
(as defined below); 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 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 complete
such repurchase); 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, Mortgage Loan Seller shall remit the Repurchase Price in
immediately available funds to the Trustee. The delivery of a binding 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.
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 repurchase of a Mortgage Loan contemplated by Section 3(b)
above, the Trustee, the Servicer and the Special Servicer shall each tender to
the Mortgage Loan Seller, all portions of the Mortgage 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.
(d) This Section 3 of this Agreement provides the sole and exclusive remedy
available to the Company, the Trustee, the Certificateholders, or 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, 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 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
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, moratorium and other similar laws affecting the enforcement of
creditors' rights generally and to 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 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 investigation pending or
to the knowledge of the Company, 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
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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 condition (financial or
other) or operations of the Company or its properties 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 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 shall be subject to the
satisfaction, on 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
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,
which Mortgage Files shall be delivered to and held by the Trustee on
behalf of the Company;
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(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
customary exceptions and carve-outs, 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, in
addition, an opinion delivered on the date of the Prospectus as to the
matters set forth in the last paragraph of 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 Pooling and Servicing Agreement or this Agreement.
6. Indemnification and Contribution: (a) The Mortgage Loan Seller shall
indemnify and hold harmless the Company, the Underwriter, their respective
officers and directors, and each person, if any, who controls the Company or the
Underwriter 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 Prospectus
Supplement and the Memorandum under the headings "Summary of the Prospectus
Supplement--The Mortgage Pool" or "Summary of the Memorandum--The Mortgage
Pool", as applicable, "Risk Factors--The Mortgage Loans" and "Description of the
Mortgage Pool" and on Annex A and Annex B to the Prospectus Supplement, the
Diskette or, insofar as they are required to be filed as part of the
Registration Statement pursuant to the No-Action Letters, any Computational
Materials or ABS Term Sheets with respect to the Registered Certificates, or in
any revision or amendment of or supplement to any of the foregoing or (B) any
items similar to Computational Materials and ABS 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;
but, in the case of (i) and (ii), only if and to the
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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 (it being herein
acknowledged that the Master Tape was used to prepare the Prospectus Supplement
including without limitation Annex A thereto, the Memorandum, the Diskette, the
Computational Materials and ABS Term Sheets with respect to the Registered
Certificates and any items similar to Computational Materials and ABS Term
Sheets forwarded to prospective investors in the Non-Registered Certificates),
(II) is contained in the information regarding the Mortgage Loans, the related
Mortgagor, the related Mortgaged Property or the Mortgage Loan Seller set forth
in the Prospectus Supplement and the Memorandum under the headings "Summary of
the Prospectus Supplement--The Mortgage Pool" or "Summary of the Memorandum--The
Mortgage Pool", as applicable, "Risk Factors--The Mortgage Loans" and
"Description of the Mortgage Pool" or on Annex A 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 the representations
and warranties of the Mortgage Loan Seller set forth in or made pursuant to
Section 2 (such representations and warranties, together with the information
described in the preceding clauses I and II, the "Mortgage Loan Seller
Information"); 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 Property or the Mortgage Loan
Seller set forth in the Master Tape and Annex A to the Prospectus Supplement,
including without limitation the aggregation of such information with comparable
information relating to the mortgage loans conveyed to the Trust Fund by Merrill
Lynch Mortgage Capital Inc. (the "MLMC Mortgage Loans"). 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. 333-01704 filed by the Purchaser on Form S-3,
including without limitation exhibits thereto and information incorporated
therein by reference; "Prospectus" shall mean the prospectus dated December 9,
1997, as supplemented by the prospectus supplement dated December 18, 1997 (the
"Prospectus Supplement"), relating to the Registered Certificates, including all
annexes thereto; "Memorandum" shall mean the private placement memorandum dated
December 18, 1997, relating to the Non-Registered Certificates; "Registered
Certificates" shall mean the Class A-1, Class A-2, Class B, Class C, Class D,
Class E and Class IO 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 27, 1994 issued by the Division of
Corporation Finance of the Commission to the Public Securities Association
(together, the "Kidder Letters"); "ABS Term Sheets" shall have the meaning
assigned thereto
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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 the diskette attached to each of the Prospectus and the
Memorandum; and "Master Tape" shall mean the compilation of information and data
regarding the MLMC Mortgage Loans and the Mortgage Loans covered by the
Independent Accountants' Report on Applying Agreed-Upon Procedures dated
December 18, 1997 and rendered by Deloitte & Touche LLP (a "hard copy" of which
Master Tape was initialed on behalf of the Mortgage Loan Seller and the
Purchaser).
(b) The Company shall indemnify and hold harmless the Mortgage Loan Seller,
its directors, officers, employees and agents, and each person, if any, who
controls the Mortgage Loan Seller within the meaning of either the 1933 Act or
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) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the Prospectus, the
Memorandum, the Diskette, any Computational Materials or ABS Term Sheets with
respect to the Registered Certificates or any items similar to Computational
Materials or ABS Term Sheets forwarded to the prospective investors in the
Non-Registered Certificates, or in any revision or amendment thereof or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of the
circumstances under which they were made, except to the extent such untrue
statement, alleged untrue statement, omission or alleged omission is contained
in the Mortgage Loan Seller Information. This indemnity agreement will be in
addition to any liability which the Company may otherwise have.
(c) 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 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 and the indemnified party or parties shall have
reasonably concluded that there may be legal defenses available to it or them
and/or other indemnified parties which are different from or additional to those
available to the indemnifying party, the indemnified party or parties shall have
the right to select separate counsel to assert such legal defenses and to
otherwise participate in the defense of such action on behalf of such
indemnified party or parties. Upon receipt of notice from the indemnifying party
to such indemnified party of its
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election so to assume the defense of such action and approval by the indemnified
party of counsel, 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 (i) the indemnified party shall have
employed separate counsel in connection with the assertion of legal defenses in
accordance with the proviso to the next preceding sentence (it being understood,
however, that the indemnifying party shall not be liable for the expenses of
more than one separate counsel (together with one local counsel, if applicable),
approved by the Company in the case of subsection (a), representing the
indemnified parties under subsection (a) of this Section 6 who are parties to
such action), (ii) the indemnifying party shall not have employed counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after notice of commencement of the action or
(iii) the indemnifying party has authorized in writing the employment of counsel
for the indemnified party at the expense of the indemnifying party; and except
that, if clause (i) or (iii) is applicable, such liability shall be only in
respect of the counsel referred to in such clause (i) or (iii).
(d) If the indemnification provided for in this Section 6 shall for any
reason be unavailable in accordance with its terms to an indemnified party under
this Section 6, then the Mortgage Loan Seller and the Company shall contribute
to the amount paid or payable by such indemnified party as a result of the
losses, claims, damages or liabilities referred to in subsection (a) or (b)
above, in such proportion as is appropriate to reflect the relative fault of the
Mortgage Loan Seller on the one hand and the Company on the other in connection
with the statement or omission that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. 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 the Company 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 (d)
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 or liabilities referred to in the first sentence of this
subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
against any action or claim which is the subject of this subsection (d) subject
to the limitations therein provided under subsection (c). No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not also guilty of
such fraudulent misrepresentation.
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 to it at World Financial Center, New
York, New York 10281, attention: Bruce L. Ackerman, fax number: (212) 449-7684,
or, if sent to the Mortgage Loan Seller, will be mailed, hand delivered,
couriered or sent by facsimile transmission to it at 292
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Long Ridge Road, Stamford, Connecticut 06927, attention: Kathryn A. Cassidy, fax
number: (203) 357-6364.
8. Trust as Beneficiary. The representations, warranties and agreements
made by the Mortgage Loan Seller in this Agreement are made for the benefit of,
and, to the extent they are assigned by the Company to the Trustee under the
Pooling and Servicing Agreement, may be enforced by or on behalf of, the
Trustee, the Servicer or the Special Servicer, as provided in the Pooling and
Servicing Agreement, to the same extent that the Company has rights against the
Mortgage Loan Seller under this Agreement in respect of representations,
warranties and agreements made by the Mortgage Loan Seller herein.
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 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 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.
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. 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 adverse effect on
Certificateholders without the prior written consent of the Trustee.
[Signature page follows]
-25
<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.
GE CAPITAL ACCESS, INC.
By: /s/ DANIEL VINSON
-------------------------------------------
Name: Daniel Vinson
Title: Authorized Signatory
MERRILL LYNCH MORTGAGE INVESTORS, INC.
By: /s/ BRUCE L. ACKERMAN
-------------------------------------------
Name: Bruce L. Ackerman
Title: Vice President
-26-
<PAGE>
<TABLE>
EXHIBIT A
MLMI 1997-C2
Mortgage Loan Schedule--GE Capital
<CAPTION>
Control
Number Property Name Address City State
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 1601 Bronxdale Avenue 1601 Bronxdale Avenue Bronx NY
2 A-1 Self Storage 345 10th Street Jersey City NJ
3 All Aboard - San Francisco 1700 Egbert Avenue San Francisco CA
4 All Aboard - San Ramon 9180 Alcosta Blvd. San Ramon CA
5 All Aboard - Sunnyvale 106 Lawrence Station Road Sunnyvale CA
6 All Aboard Self Storage - Anaheim I 155 South Adams Street Anaheim CA
7 All Aboard-Northridge/Concord/N.Hollywood Various Various CA
8 Amber Ridge 2421 Foothill Blvd. La Verne CA
9 American Self Storage 1150 N. Hamilton Street Chandler AZ
10 Bay Pointe North Apartments 14003 Saulk Court Tampa FL
11 Bonaventure MHP 19401 N. 7th Street Phoenix AZ
12 Bristol Plaza Self Storage 2900 Ford Road Bristol PA
13 Calumet Square 2213-2233 Calumet Drive Sheboygan WI
14 Canyon Point Apartments 16550 Henderson Pass San Antonio TX
16 Cheron Village 13202 SW 9th Court Davie FL
17 Cherry Creek Plaza 5700 Manchaca Road Austin TX
18 Citrus Creek Apartments 5301 Citrus Blvd. Harahan LA
19 Columbia Junction Center 8610 Baltimore Washington Bivd. Jessup MD
20 Courtyard - Waterbury 63 Grand Street Waterbury CT
21 CVS Pharmacy 1008 Lake Murray Blvd Irmo (Columbia) SC
22 Cypress Pointe Apartments 1227 Pin Oak Drive Flowood MS
23 Decatur Pines 3920 S. Decatur Blvd. Las Vegas NV
24 Del Pine Terrace 4301 Belle Terrace Bakersfield CA
26 Dip N Donut Plaza 2060 N. University Drive Pembroke Pines FL
27 Dogwood Lakes Apartments 1907 Highway 5 North Benton AR
28 Dover Farms Apartments 8290 Royalton Road North Royalton OH
29 Doylestown Shpg Cntr 400 North Main Street Doylestown PA
30 Eugene Mini Storage 3550 W. 11th Avenue Eugene OR
31 Fairfield Inn - Jacksonville 8050 Baymeadows Circle West Jacksonville FL
32 Federal Express Building 12600 Prairie Avenue Hawthorne CA
33 Forrest Apartments 4265 S. Bruce St. and 1880 E. Rochelle Ave. Las Vegas NV
34 Fountain Park Shopping Center 4231 Macon Rd @ Reese Rd. Columbus GA
35 Free State Mall 15528 Annapolis Road Bowie MD
36 G.T. Henderson Center (aka El Camino Real) 1053 - 1063 El Camino Real Sunnyvale CA
37 Gateway Medical Center 995 Gateway Center Way San Diego CA
38 Gazebo Apartments 2434 W. 24th Terrace Lawrence KS
39 Glasgow Mobile Home Park 268 Cornell Drive Newark DE
40 Grandview Shopping Center 11902-11906 S. Blue Ridge Blvd. Grandview MO
41 Halcyon Village Shopping Center 7825 Vaughn Road Montgomery AL
42 Hampton Inn - Allentown 7471 Keebler Way Allentown PA
46 Harbor Pointe Apartments 331 Harbor Pointe Dr. Mt. Pleasant (Charleston) SC
47 Haymarket Square 1690 - 1750 Boston Road Springfield MA
48 Hidden Lake Apartments 5419 110th Street SW Lakewood WA
49 Hunt Club 1500 Sparkman Drive Huntsville AL
50 Kroger Woodforest Shopping Center 11037 IH 10 East Houston TX
51 La Casita Mobile Home Park 425 East McKellips Road Mesa AZ
52 Lake West Medical Cntr 36100 Euclid Avenue Willoughby OH
54 Lexington Park Self Storage 448 Great Mills Road Lexington Park MD
56 Lockbourne Lodge 10610 Ashville Pike Rd. Lockbourne OH
57 Maplewood Village 3609 Westerville Road Columbus OH
58 Mason Place 430 South Mason Road Houston TX
59 Melody Lakes 1045 N West End Blvd. Quakertown PA
60 Metro Center II 555 Metro Place South Dublin OH
61 Mid-Oak Plaza 147th and Cicero Midlothian IL
62 Midtown Mini Storage 3808 Cedar Street San Diego CA
63 Northlake Tower Festival 3983-4073 LaVista Road Tucker GA
64 Old Hill Offices 120 Post Road West & 19 Ludlow Road Westport CT
65 Pack Rat Charleston 616 Johnnie Dodds Blvd. Mt. Pleasant SC
66 Pack Rat North 2170 Green Ridge Road North Charleston SC
67 Pack Rat Summerville 1713 Old Trolley Road Summerville SC
68 Park Chateau 515 Chateau Drive, SW Huntsville AL
69 Pine Trail Shopping Center 4576 Okeechobee Blvd. West Palm Beach FL
70 Polo Club Apartments 39352 Polo Club Drive Farmington Hills MI
71 Pueblo Del Sol 3751 Nellis Blvd. Las Vegas NV
72 Raintree Apartments 3300 Rollingbrook Drive Baytown TX
73 Regal Gardens 8625 King George Drive Dallas TX
74 Rivergate Plaza 758 Two Mile Pkwy Goodlettsville (Nashville) TN
75 Save & Lock 3210 W. 11th Avenue Eugene OR
76 Security Portfolio IIB Various Various TX
77 Security Portfolio IIA Various Various O
78 Sentry Self Storage - Chula Vista 3885 Main Street Chula Vista CA
79 Sentry Self Storage - Eastgate 8440 Eastgate Court San Diego CA
80 Sentry Self Storage - Lakeside 13542 Business Highway 8 Lakeside CA
81 Shoppes at Taylor Ranch 4801 Montano Rd NW Albuquerque NM
82 Shoppes of Deer Creek Hillsboro Blvd & Powerline Rd. Deerfield Beach FL
83 Sports Authority 7800 Rivers Avenue N. Charleston (Charleston) SC
84 Stadium MHP 6700 E Russell Road Las Vegas NV
85 Stone Creek Apts and Plaza Various Anaheim CA
87 Summer Lake 4929 Tuckasseegee Road Charlotte NC
88 Superior Industrial Center 4116-4202 East Superior Avenue Phoenix AZ
89 The Atriums 1900 Lake Atriums Circle Orlando FL
90 The Bluffs at Northwoods 1850 Yellowstone Court Gastonia NC
91 The Links at Joneboro 1424 Links Circle Jonesboro AR
92 Town Center Shopping Center Route 202 & Lenape Drive New Britain PA
93 Twin Rivers Mall 3100 Claredon Blvd New Bern NC
94 University Creek Shopping Center 5905-5983 S. University Drive Davie FL
95 Waldorf Self Storage 3150 Leonardtown Road (Route 5) Waldorf MD
96 West Goshen Shopping Center 997 Paoli Pike @ Route 202 West Chester PA
97 West Shore Estates 3201 South Euclid Bay City MI
98 Westover Plaza Shopping Center 2920 Highway 127 South Hickory NC
99 Westwood Village 6777 Rasberry Lane Shreveport LA
200 Willow Pond Apartments 8402 Waterford Avenue Tampa FL
201 Willow Spring Apartments 3402 Preston Road Pasadena TX
202 Yorba Ranch Village 4905 Yorba Ranch Road Yorba Linda CA
<CAPTION>
Control Original Cut-off Date Monthly Gross Remaining Maturity
Number Zip Code Balance Balance Payment Rate Term Amort Date
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 10462 9,400,000 9,353,356.91 75,311.65 8.440 127 295 07/01/2008
2 07302 3,000,000 2,988,683.02 24,623.56 8.730 116 296 08/01/2007
3 94124 4,218,000 4,218,000.00 32,109.41 7.840 120 300 12/01/2007
4 94583 3,386,000 3,386,000.00 25,775.83 7.840 120 300 12/01/2007
5 94086 6,088,000 6,075,278.73 47,230.41 8.060 118 298 10/01/2007
6 92801 1,795,000 1,791,369.36 14,164.68 8.260 118 298 10/01/2007
7 Various 8,745,000 8,726,874.59 68,133.81 8.110 118 298 10/01/2007
8 91750 6,280,000 6,272,148.77 44,298.34 7.590 118 358 10/01/2007
9 85225 1,950,000 1,947,966.19 15,115.06 8.050 119 299 11/01/2007
10 33613 4,550,000 4,544,238.25 31,939.00 7.540 298 358 10/01/2022
11 85024 2,765,000 2,761,454.36 20,753.09 8.240 118 358 10/01/2007
12 19007 1,850,000 1,848,153.70 14,673.00 8.320 119 299 11/01/2007
13 53083 3,040,000 3,040,000.00 21,778.93 7.750 156 360 12/01/2010
14 78232 5,328,000 5,320,035.24 37,181.21 7.480 118 358 10/01/2007
16 33325 5,150,000 5,146,131.80 35,798.20 7.440 119 359 11/01/2007
17 78745 2,010,000 2,007,917.22 15,633.53 8.090 83 299 11/01/2004
18 70123 15,000,000 14,987,631.66 99,493.34 6.970 119 359 11/01/2007
19 20794 3,400,000 3,400,000.00 26,174.22 7.970 120 300 12/01/2007
20 06702 8,808,000 8,808,000.00 66,240.49 7.700 120 300 12/01/2007
21 29212 1,464,000 1,461,359.36 11,802.84 7.510 239 239 11/01/2017
22 39208 7,200,000 7,189,555.06 50,985.92 7.630 118 358 10/01/2007
23 89103 1,583,000 1,577,377.57 12,396.98 8.700 114 354 06/01/2007
24 93309 2,880,000 2,876,604.89 20,891.11 7.290 119 299 11/01/2007
26 33024 1,200,000 1,197,560.93 9,445.37 8.230 118 298 10/01/2007
27 72015 9,000,000 8,981,410.39 66,684.93 7.530 298 298 10/01/2022
28 44133 11,800,000 11,783,982.91 86,255.41 7.960 118 358 10/01/2007
29 18901 14,000,000 13,982,690.20 98,859.80 6.990 119 299 11/01/2007
30 97402 1,250,000 1,250,000.00 9,343.35 7.630 120 300 12/01/2007
31 32256 3,250,000 3,250,000.00 24,441.60 7.700 120 300 12/01/2007
32 90250 8,300,000 8,290,749.24 62,094.09 7.640 143 299 11/01/2009
33 89119 1,800,000 1,796,418.35 13,320.87 8.090 81 357 09/01/2004
34 31907 6,000,000 6,000,000.00 41,338.33 7.350 120 360 12/01/2007
35 20715 15,550,000 15,516,994.68 111,617.09 7.770 117 357 09/01/2007
36 94086 1,600,000 1,595,323.74 12,894.42 8.510 117 297 09/01/2007
37 92102 2,725,000 2,717,701.82 20,109.18 8.060 116 356 08/01/2007
38 66046 965,000 964,329.83 6,966.80 7.830 119 359 11/01/2007
39 19702 15,200,000 15,200,000.00 113,658.68 8.200 120 360 12/01/2007
40 64030 1,481,500 1,475,327.06 11,552.48 8.120 116 296 08/01/2007
41 36117 1,650,000 1,646,873.19 12,488.82 8.330 117 357 09/01/2007
42 18106 5,325,000 5,325,000.00 40,046.62 7.700 120 300 12/01/2007
46 29464 14,874,000 14,874,000.00 107,989.90 7.300 300 300 12/01/2022
47 01129 12,550,000 12,509,596.67 94,460.47 8.270 115 355 07/01/2007
48 98499 3,300,000 3,295,047.13 22,983.76 7.460 118 358 10/01/2007
49 35816 6,450,000 6,445,126.24 44,702.51 7.410 119 359 11/01/2007
50 77029 4,400,000 4,393,743.88 31,461.35 7.730 118 358 10/01/2007
51 85203 1,600,000 1,595,817.67 11,941.62 8.180 116 356 08/01/2007
52 44094 3,900,000 3,900,000.00 29,304.36 7.690 120 300 12/01/2007
54 21323 800,000 800,000.00 6,227.62 8.100 120 300 12/01/2007
56 43137 1,600,000 1,600,000.00 11,573.36 7.850 84 360 12/01/2004
57 43224 800,000 800,000.00 5,786.68 7.850 84 360 12/01/2004
58 77450 2,000,000 1,994,337.31 15,117.86 8.230 116 344 08/01/2007
59 18951 8,800,000 8,800,000.00 64,081.19 7.920 120 360 12/01/2007
60 43017 7,150,000 7,150,000.00 50,976.65 7.700 120 360 12/01/2007
61 60452 4,558,000 4,543,619.14 35,300.25 8.040 81 297 09/01/2004
62 92105 4,070,000 4,057,935.74 32,563.87 8.424 117 297 09/01/2007
63 30084 17,600,000 17,600,000.00 124,753.36 7.640 144 360 12/01/2009
64 06880 2,025,000 2,020,970.52 16,115.25 8.360 118 298 10/01/2007
65 29464 2,800,000 2,800,000.00 20,855.95 7.590 120 300 12/01/2007
66 29406 1,242,000 1,242,000.00 9,251.10 7.590 120 300 12/01/2007
67 29485 1,600,000 1,600,000.00 11,917.68 7.590 120 300 12/01/2007
68 35801 3,120,000 3,117,527.13 21,114.87 7.170 119 359 11/01/2007
69 33401 13,900,000 13,861,085.35 100,447.17 7.840 164 356 08/01/2011
70 48334 14,875,000 14,875,000.00 102,890.04 7.390 120 360 12/01/2007
71 89121 13,600,000 13,561,075.89 97,244.17 7.730 80 356 08/01/2004
72 77521 5,200,000 5,200,000.00 36,359.15 7.500 120 360 12/01/2007
73 75235 2,175,000 2,175,000.00 15,551.92 7.730 132 360 12/01/2008
74 37072 2,250,000 2,250,000.00 17,113.24 7.830 120 300 12/01/2007
75 97402 1,400,000 1,400,000.00 10,464.55 7.630 120 300 12/01/2007
76 Various 3,200,000 3,196,509.20 24,344.13 7.820 118 298 10/01/2007
77 Various 8,175,000 8,157,241.22 62,124.00 7.820 118 298 10/01/2007
78 91911 3,450,000 3,446,348.69 26,536.31 7.960 119 299 11/01/2007
79 92121 3,030,000 3,026,767.08 23,205.67 7.910 119 299 11/01/2007
80 92040 945,000 944,015.99 7,331.26 8.060 119 299 11/01/2007
81 87120 3,040,000 3,037,922.66 22,116.01 7.910 119 359 11/01/2007
82 33073 8,700,000 8,687,226.40 61,249.22 7.570 178 358 10/01/2012
83 29418 2,400,000 2,392,623.98 19,735.71 8.030 250 250 10/01/2018
84 89122 8,050,000 8,024,604.92 61,157.41 8.370 79 355 07/01/2004
85 92801 5,250,000 5,250,000.00 39,173.45 7.610 120 300 12/01/2007
87 28208 6,600,000 6,600,000.00 47,420.11 7.780 120 360 12/01/2007
88 85040 2,000,000 1,997,664.76 14,585.24 7.350 119 299 11/01/2007
89 32839 4,900,000 4,894,137.94 35,138.07 7.760 118 358 10/01/2007
90 28054 5,650,000 5,641,570.73 39,466.94 7.490 118 358 10/01/2007
91 72404 15,750,000 15,750,000.00 112,728.29 7.140 300 300 12/01/2022
92 18901 5,500,000 5,493,359.56 39,365.44 7.140 119 299 11/01/2007
93 28562 10,500,000 10,479,568.36 78,514.22 8.200 117 357 09/01/2007
94 33328 2,300,000 2,300,000.00 17,041.70 7.530 120 300 12/01/2007
95 20601 880,000 880,000.00 6,850.38 8.100 120 300 12/01/2007
96 19380 11,000,000 10,986,719.13 78,730.87 7.140 119 299 11/01/2007
97 48706 1,200,000 1,198,725.85 9,214.15 7.940 119 299 11/01/2007
98 28602 2,350,000 2,348,377.83 17,014.67 7.860 119 359 11/01/2007
99 71129 5,440,000 5,440,000.00 38,037.27 7.500 300 360 12/01/2022
200 33604 6,500,000 6,490,475.59 45,806.00 7.580 118 358 10/01/2007
201 77505 5,200,000 5,200,000.00 36,359.15 7.500 120 360 12/01/2007
202 92887 3,000,000 2,995,768.66 21,533.84 7.770 118 358 10/01/2007
<CAPTION>
Control Ground Underwriting Net Subservicing (1) Servicing Fee
Number Lease Reserves Rate Fees Fees Subservicer
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 No 0.15 per sq. ft. 8.365 0.030 0.075 GCAM
2 No 0.15 per sq. ft. 8.655 0.030 0.075 GCAM
3 No 0.10 per sq. ft. 7.765 0.030 0.075 GCAM
4 No 0.10 per sq. ft. 7.765 0.030 0.075 GCAM
5 No 0.15 per sq. ft. 7.985 0.030 0.075 GCAM
6 No 0.10 per sq. ft. 8.185 0.030 0.075 GCAM
7 No 0.10 per sq. ft. 8.035 0.030 0.075 GCAM
8 No 298 per unit 7.515 0.030 0.075 GCAM
9 No 0.15 per sq. ft. 7.975 0.030 0.075 GCAM
10 No 200 per unit 7.465 0.030 0.075 GCAM
11 No 35 per pad 8.165 0.030 0.075 GCAM
12 No 0.15 per sq. ft. 8.245 0.030 0.075 GCAM
13 No 0.15 per sq. ft. 7.675 0.030 0.075 GCAM
14 No 291 per unit 7.405 0.030 0.075 GCAM
16 No 25 per pad 7.365 0.030 0.075 GCAM
17 No 0.16 per sq. ft. 8.015 0.030 0.075 GCAM
18 No 200 per unit 6.895 0.030 0.075 GCAM
19 No 0.19 per sq. ft. 7.895 0.030 0.075 GCAM
20 Partial 4% of revenue 7.625 0.030 0.075 GCAM
21 No 0.26 per sq. ft. 7.435 0.030 0.075 GCAM
22 No 200 per unit 7.555 0.030 0.075 GCAM
23 No 306 per unit 8.625 0.030 0.075 GCAM
24 No 340 per unit 7.215 0.030 0.075 GCAM
26 No 0.15 per sq. ft. 8.155 0.030 0.075 GCAM
27 No 252 per unit 7.455 0.030 0.075 GCAM
28 No 250 per unit 7.885 0.030 0.075 GCAM
29 Yes/will convert to both in '98 0.15 per sq. ft. 6.915 0.030 0.075 GCAM
30 No 0.34 per sq. ft. 7.555 0.030 0.075 GCAM
31 No 4% of revenue 7.625 0.030 0.075 GCAM
32 No 0.10 per sq. ft. 7.565 0.030 0.075 GCAM
33 No 301 per unit 8.015 0.030 0.075 GCAM
34 No 0.21 per sq. ft. 7.275 0.030 0.075 GCAM
35 Yes 0.20 per sq. ft. 7.695 0.030 0.075 GCAM
36 No 0.23 per sq. ft. 8.435 0.030 0.075 GCAM
37 No 0.21 per sq. ft. 7.985 0.030 0.075 GCAM
38 No 257 per unit 7.755 0.030 0.075 GCAM
39 No 50 per pad 8.125 0.030 0.075 GCAM
40 No 0.20 per sq. ft. 8.045 0.030 0.075 GCAM
41 No 0.19 per sq. ft. 8.255 0.030 0.075 GCAM
42 No 4% of revenue 7.625 0.030 0.075 GCAM
46 No 174 per unit 7.225 0.030 0.075 GCAM
47 No 0.15 per sq. ft. 8.195 0.030 0.075 GCAM
48 No 262 per unit 7.385 0.030 0.075 GCAM
49 No 250 per unit 7.335 0.030 0.075 GCAM
50 No 0.20 per sq. ft. 7.655 0.030 0.075 GCAM
51 No 44 per pad 8.105 0.030 0.075 GCAM
52 No 0.15 per sq. ft. 7.615 0.030 0.075 GCAM
54 No 0.15 per sq. ft. 8.025 0.030 0.075 GCAM
56 No 46 per pad 7.775 0.030 0.075 GCAM
57 No 45 per pad 7.775 0.030 0.075 GCAM
58 No 0.20 per sq. ft. 8.155 0.030 0.075 GCAM
59 No 51 per pad 7.845 0.030 0.075 GCAM
60 No 0.18 per sq. ft. 7.625 0.030 0.075 GCAM
61 No 0.15 per sq. ft. 7.965 0.030 0.075 GCAM
62 No 0.10 per sq. ft. 8.349 0.030 0.075 GCAM
63 Yes 0.15 per sq. ft. 7.565 0.030 0.075 GCAM
64 No 0.18 per sq. ft. 8.285 0.030 0.075 GCAM
65 No 0.15 per sq. ft. 7.515 0.030 0.075 GCAM
66 No 0.15 per sq. ft. 7.515 0.030 0.075 GCAM
67 No 0.15 per sq. ft. 7.515 0.030 0.075 GCAM
68 No 225 per unit 7.095 0.030 0.075 GCAM
69 Partial 0.15 per sq. ft. 7.765 0.030 0.075 GCAM
70 No 200 per unit 7.315 0.030 0.075 GCAM
71 No 25 per pad 7.655 0.030 0.075 GCAM
72 No 232 per unit 7.425 0.030 0.075 GCAM
73 No 0.20 per sq. ft. 7.655 0.030 0.075 GCAM
74 No 0.36 per sq. ft. 7.755 0.030 0.075 GCAM
75 No 0.22 per sq. ft. 7.555 0.030 0.075 GCAM
76 No 0.05 per sq. ft. 7.745 0.030 0.075 GCAM
77 No 0.06 per sq. ft. 7.745 0.030 0.075 GCAM
78 No 0.10 per sq. ft. 7.885 0.030 0.075 GCAM
79 No 0.10 per sq. ft. 7.835 0.030 0.075 GCAM
80 No 0.16 per sq. ft. 7.985 0.030 0.075 GCAM
81 No 0.26 per sq. ft. 7.835 0.030 0.075 GCAM
82 No 0.17 per sq. ft. 7.495 0.030 0.075 GCAM
83 No 0.12 per sq. ft. 7.955 0.030 0.075 GCAM
84 No 25 per pad 8.295 0.030 0.075 GCAM
85 Yes 229 per unit 7.535 0.030 0.075 GCAM
87 No 250 per unit 7.705 0.030 0.075 GCAM
88 No 0.16 per sq. ft. 7.275 0.030 0.075 GCAM
89 No 274 per unit 7.685 0.030 0.075 GCAM
90 No 374 per unit 7.415 0.030 0.075 GCAM
91 No 304 per unit 7.065 0.030 0.075 GCAM
92 Both 0.28 per sq. ft. 7.065 0.030 0.075 GCAM
93 No 0.15 per sq. ft. 8.125 0.030 0.075 GCAM
94 No 0.24 per sq. ft. 7.455 0.030 0.075 GCAM
95 No 0.15 per sq. ft. 8.025 0.030 0.075 GCAM
96 Yes/will convert to both in '98 0.15 per sq. ft. 7.065 0.030 0.075 GCAM
97 No 25 per pad 7.865 0.030 0.075 GCAM
98 No 0.15 per sq. ft. 7.785 0.030 0.075 GCAM
99 No 250 per unit 7.425 0.030 0.075 GCAM
200 No 259 per unit 7.505 0.030 0.075 GCAM
201 No 200 per unit 7.425 0.030 0.075 GCAM
202 No 0.20 per sq. ft. 7.695 0.030 0.075 GCAM
</TABLE>
(1) Servicing Fees consist of Master Servicing, Sub-Servicing, Special and
Trustee Fees
A-1
<PAGE>
EXHIBIT B
FORM OF CERTIFICATE OF AN OFFICER OF
GE CAPITAL ACCESS, INC.
I, ______________________, hereby certify that I am an authorized signatory
of GE Capital Access, Inc., a Delaware Corporation (the "Seller"), and that,
based upon information provided to me by appropriate officers, 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 __________, 1997 (the "Purchase Agreement")
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.
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 Purchase Agreement to be performed or satisfied at or prior to
the date hereof.
IN WITNESS WHEREOF, I have executed this Certificate as of __________,
1997.
GE CAPITAL ACCESS, INC.
By: ___________________________
Name:
Title: Authorized Signatory
I, ______________________, an Assistant Secretary 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 __________,
1997.
By: ___________________________
Name:
Title:
B-1
<PAGE>
EXHIBIT C
FORM OF LEGAL OPINION
1. 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 full corporate power and authority to own its assets and conduct its
business as presently conducted by it and to own the Mortgage Loans, is duly
qualified as a foreign corporation in good standing in the State of New York,
and the Mortgage Loan Seller has taken all necessary action to authorize the
execution, delivery and performance of the Mortgage Loan Purchase and Sale
Agreement by it, and has the power and authority to execute, deliver and perform
the Mortgage Loan Purchase and Sale Agreement and all the transactions
contemplated hereby, including, but not limited to, the power and authority to
sell, assign and transfer the Mortgage Loans in accordance with, and perform its
obligations under, the Mortgage Loan Purchase and Sale Agreement.
2. The Mortgage Loan Purchase and Sale Agreement has been duly authorized,
executed and delivered by the Mortgage Loan Seller and constitutes the legal,
valid and binding obligations of the Mortgage Loan Seller, enforceable against
the Mortgage Loan Seller in accordance with the terms of the Mortgage Loan
Purchase and Sale 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.
3. The execution and delivery of the Mortgage Loan Purchase and Sale
Agreement by the Mortgage Loan Seller and the performance of its obligations
under the Mortgage Loan Purchase and Sale Agreement 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, to our knowledge, 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 the Mortgage
Loan Purchase and Sale Agreement.
4. There is no action, suit, proceeding or investigation pending or
threatened, against the Mortgage Loan Seller in any court or by or before any
other governmental agency or instrumentality which would materially and
adversely affect the validity of the Mortgage Loans or the ability of the
Mortgage Loan Seller to carry out the transactions contemplated by this
Agreement.
C-1
<PAGE>
5. To our knowledge, 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 federal, state, municipal or governmental agency, which default might
have consequences that would materially and adversely affect the condition
(financial or other) or operations of the Mortgage Loan Seller or its properties
or might have consequences that would materially and adversely affect its
performance under the Mortgage Loan Purchase and Sale Agreement.
6. 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 the Mortgage Loan Purchase and Sale Agreement or the consummation of
the transactions contemplated by the Mortgage Loan Purchase and Sale Agreement,
other than those which have been obtained by the Mortgage Loan Seller.
In addition, counsel shall state (which statement shall be in form and
substance reasonably acceptable to the Company) their view as to the accuracy of
the information regarding the Mortgage Loans in the Prospectus Supplement and
the Private Placement Memorandum.
C-2
<PAGE>
EXHIBIT D
SCHEDULE OF MORTGAGE LOANS TO ONE BORROWER
OR GROUP OF AFFILIATED BORROWERS
D-1
<PAGE>
0383070.01
Exhibit D
Schedule of Mortgage Loans to One Borrower or Group of Affiliated Borrowers.
================================================================================
Loan Group Closing Date
________________________________________________________________________________
1. J.A. Robbins Company Affiliates Loans:
________________________________________________________________________________
(a) West Goshen (10/31/97)
________________________________________________________________________________
(b) Doylestown (10/31/97)
________________________________________________________________________________
(c) Town Center (10/31/97)
________________________________________________________________________________
2. All Aboard Mini-Storage Group Loans:
________________________________________________________________________________
(a) Mid-Town Mini Storage, Ltd.-San Diego, CA (08/13/97)
________________________________________________________________________________
(b) Hyrail Partners IA LLC- Concord, Northridge & Hollywood, CA (09/15/97)
________________________________________________________________________________
(c) Hyrail Partners IIIA LLC
________________________________________________________________________________
(i) Anaheim, CA (09/11/97)
________________________________________________________________________________
(ii) Sunnyvale, CA (09/15/97)
________________________________________________________________________________
(iii) San Ramon, CA (11/14/97)
________________________________________________________________________________
(iv) San Francisco, CA (11/14/97)
________________________________________________________________________________
3. 12400 LLC Affiliate Loans:
________________________________________________________________________________
(a) Rolling Brooks Associates, Ltd./Raintree Apartments (11/10/97)
________________________________________________________________________________
(b) Willow Springs Asso., Ltd./Willow Springs Apartments (11/10/97)
________________________________________________________________________________
4. Lindsey Affiliate Loans:
________________________________________________________________________________
(a) The Links at Jonesboro (11/06/97)
________________________________________________________________________________
(b) Dogwood Lakes Apartments (09/26/97)
________________________________________________________________________________
5. McKenzie Daniel Affiliate Loans:
________________________________________________________________________________
(a) Sports Authority (09/11/97)
________________________________________________________________________________
(b) CVS Pharmacy (10/31/97)
________________________________________________________________________________
6. Laport/Moyar Affiliate Loans:
________________________________________________________________________________
(a) Fairfield Inn/Concord Jacksonville L.P. (11/14/97)
________________________________________________________________________________
(b) Hampton Inn/TwoHotel Partnership, L.P. (11/17/97)
________________________________________________________________________________
(c) Courtyard by Marriott/TwoHotel Partnership, L.P. (11/14/97)
================================================================================
D-2
<PAGE>
================================================================================
Loan Group Closing Date
________________________________________________________________________________
7. Security Portfolio II, L.P. Loans:
________________________________________________________________________________
(a) Security Storage Plano, Austin & Colorado Facilities (09/26/97)
________________________________________________________________________________
(b) Security Storage Dallas, Fort Worth Facilities (09/29/97)
________________________________________________________________________________
8. Humphrey/Margolis Affiliate Loans:
________________________________________________________________________________
(a) Lexington Park Self Storage (11/14/97)
________________________________________________________________________________
(b) Waldorf Mini-Storage (11/17/97)
________________________________________________________________________________
9. Pack Rat Group Loans:
________________________________________________________________________________
(a) Pack Rat North (11/04/97)
________________________________________________________________________________
(b) Pack Rat Summerville (11/04/97)
________________________________________________________________________________
(c) Pack Rat Charleston (11/04/97)
________________________________________________________________________________
10. Tandum/QCA Income Partners Loans:
________________________________________________________________________________
(a) Maplewood Mobile Home (11/06/97)
________________________________________________________________________________
(b) Lockburne Lodge (11/06/97)
________________________________________________________________________________
11. Sentry Self Storage, L.L.C. Loans:
________________________________________________________________________________
(a) Eastgate (11/24/97)
________________________________________________________________________________
(b) Lakeside (10/24/97)
________________________________________________________________________________
(c) Chula Vista (10/24/97)
________________________________________________________________________________
12. Fischer Affiliate Loans:
________________________________________________________________________________
(a) La Casita/Kelmesa, L.L.C. (07/02/97)
________________________________________________________________________________
(b) Duck Creek L.P./Stadium Mobile Home Park (06/04/97)
________________________________________________________________________________
13. Eugene Storage Partners, Ltd. Loans:
________________________________________________________________________________
(a) Eugene Mini Warehouses (11/04/97)
________________________________________________________________________________
(b) Sav-N-Lock (11/04/97)
________________________________________________________________________________
14. M & J Affiliate Loans:
________________________________________________________________________________
(a) M&J Dover Farms, LP (09/26/97)
________________________________________________________________________________
(b) Mid Oak Plaza, LLC (08/26/97)
________________________________________________________________________________
(c) Northlake Tower (11/12/97)
________________________________________________________________________________
15. GE Affiliate Loans (an affiliate of the Mortgage Loan Seller,
directly or indirectly, owns a majority interest in each Borrower):
________________________________________________________________________________
(a) Mid Oak Plaza, LLC (08/26/97)
________________________________________________________________________________
(b) Free State Mall (08/29/97)
================================================================================
D-3
<PAGE>
================================================================================
Loan Group Closing Date
________________________________________________________________________________
16. Brookside Affiliate Loans:
________________________________________________________________________________
(a) Hunt Club Apartments (10/29/97)
________________________________________________________________________________
(b) Willow Pond Apartments (09/18/97)
________________________________________________________________________________
(c) Park at Chateau (10/30/97)
================================================================================
D-4
<PAGE>
SCHEDULE 1
----------
EXCEPTIONS TO REPRESENTATIONS AND WARRANTIES
UNDER SECTION 3(b)
S-1-1
<PAGE>
GECC MLPA
Schedule 1
Exceptions to Representations and Warranties under Section 3(b)
REP NO.
- -------
(vi): Defeasance: Metro Center II (11/17/97).
(xii): Hyper-amortization loans: See attached Schedule 2.
(xxxiii): The Bluffs at Northwoods (9/18/97). The Mortgagor has been the
subject of a bankruptcy proceeding for which the reorganization plan
was confirmed on 6/6/97 and the applicable appeal period has
expired. The Mortgagor has paid or provided for all expenses and
fees associated with the plan, and the plan has been substantially
consummated, although the final order closing the case has not yet
been filed.
(xliii): Secured Subordinate Debt:
(a) Melody Lakes MHP (11/06/97). Two subordinate loans were made
to the Mortgagor by affiliates of the Mortgagor in the
aggregate amount of $700,000.00, secured by subordinate liens
on the property, and subject to a Subordination and Standstill
Agreement.
(xliv): Ground Lease Exceptions:
(a) Pine Trail Shopping Center (8/1/97). The Mortgage Property is
subject to five ground leases along the eastern boundary of
the shopping center tract and relate to a fast food
restaurant, drive-in banking facility, and parking areas. (See
attached matrix for exceptions to related representation.)
(b) Courtyard by Marriott (11/14/97). The Mortgaged Property is
secured by a fee simple interest, except with respect to the
parking garage, which is subject to a ground lease. The rent
schedule for the parking garage ground lease provides for
payment of net profits from the operation of the parking
garage.
S-1-2
<PAGE>
(c) Northlake Tower (11/12/97). Rent is not fixed. Rent Schedule:
a. Annual Rent:
10/4/1982 - 10/3/1983: $150,000
10/4/1983 - 10/3/1984: $300,000
10/4/1984 - 10/3/2007: $600,000
10/4/2007 - 10/3/2032: 12% of appraised
value of Land, not
to be less than
$600,000, nor more
than $1,200,000
10/4/2033 - 10/3/2057: 12% of the
appraised value of
the Land, not to
be less than the
rental for the
previous 25 year
period, nor more
than twice the
amount thereof.
b. Plus 7% of Gross Rental Income for every year of the
term.
(d) Free State Mall (8/29/97). Rent is not fixed. CPI adjustments
every 5 years subject to 5% limit. The lease expiration date is
10/31/2022 with a 42-year extension option.
(e) Stone Creek Plaza (10/31/97). In addition to the base rent of
$103,600 per year, the Mortgagor is required to pay annually as
additional adjustment rent (i) 25% of rents received by Mortgagor
with respect to the commercial portion of the property in excess
of a base determined for calendar year 1980 (which base is
$233,180), and (ii) 25% of rents received by Mortgagor with
respect to the multifamily portion of the property in excess of a
base determined for calendar year 1980 (which base is $336,423).
For 1996, the total ground lease rent was $219,840, of which
$116,240 was additional adjustment rent.
(f) West Goshen and Doylestown Shopping Center Properties (10/31/97).
The Mortgage Loans are secured by either a fee or leasehold
interest in the Mortgaged Properties. The fee interest owned by
affiliates of the Mortgagors are in all cases expressly subject
to the Mortgages. The fee interests underlying two ground leases
are not subject to the Mortgages and are described as follows:
(a) Freedom Ground Lease: At closing of the
S-1-3
<PAGE>
Mortgage Loans, a ground lease covering an aggregate of
21.337 acres at the West Goshen and Doylestown properties
between Freedom Properties, L.P. ("Freedom"), as ground
lessor, and the Mortgagor, as ground lessee (the "Freedom
Ground Lease") was not subject or subordinate to the
Mortgage. Freedom is not an affiliate of the Mortgagor. The
loan documents provide that at the time the Mortgagor
becomes the fee estate owner under the Freedom Ground Lease,
the Mortgage lien on each property automatically spreads to
encumber the fee estate. The Mortgage Loan Seller holds in
escrow an aggregate of $6.5 million for the purpose of the
acquisition by the Mortgagors of the fee estate from Freedom
pursuant to an exercised purchase option. The Mortgagor
contemplates closing on the acquisition of the fee in
January 1998.
(b) Regency Ground Lease: A ground lease covering a small
portion along the northwest boundary representing .361 acres
at the Doylestown property between Regency Woods Associates
("Regency"), as ground lessor, and Pullman Associates, as
ground lessee (the "Regency Ground Lease"), existed at
closing and is not subject or subordinate to the Mortgage.
The Mortgagor has entered into a sublease of the Regency
Ground Lease from Pullman Associates with an original term
expiring in 2006, and options to renew the sublease for one
period of fifteen years followed by four successive periods
of five years each, provided Pullman Associates has
purchased the Land. Pullman has both an option and an
obligation to purchase the Land by 2006. Pursuant to Section
13(c) of the sublease, the Mortgagor's lender may exercise
any of the Mortgagor's rights and powers under the sublease.
S-l-4
<PAGE>
Pine Trail Ground Lease Exceptions
- -------------------------------------------------------------------------------
Taplin Groot Swanger Mobley
Leases
(2)
- -------------------------------------------------------------------------------
Recorded? Yes Yes Yes Yes
- -------------------------------------------------------------------------------
Permits encumbrance? Yes Yes(1) Yes Yes
- -------------------------------------------------------------------------------
Use/Subletting restrictions? No No No No(2)
- -------------------------------------------------------------------------------
Attornment by lender upon Yes No Yes Yes
foreclosure?
- -------------------------------------------------------------------------------
Assignable upon foreclosure Yes No Yes Yes
without consent?
- -------------------------------------------------------------------------------
Notice and cure rights for Yes Yes Yes Yes
Lender?
- -------------------------------------------------------------------------------
Original term must extend Yes Yes(3) Yes Yes
more than 10 years beyond
stated maturity:
- -------------------------------------------------------------------------------
Casualty insurance proceeds Yes No No No
disbursed under lender's
control?
- -------------------------------------------------------------------------------
Lender may participate in No No No No
condemnation proceeds?
- -------------------------------------------------------------------------------
Prohibits mortgage on fee, (4) No No No
or fee is subordinate to
ground lease?
- -------------------------------------------------------------------------------
No amendment or termination Yes No Yes Yes
without consent of Lender?
- -------------------------------------------------------------------------------
Landlord will enter into new No No Yes Yes
lease with Lender or assigns
upon foreclosure?
- --------------
(1) implied in Estoppel by agreeing to notify Lender of default
(2) provided lessor is notified of any subleases
(3) original term expires January 31, 2015, but Maker has two 20 year
extension options
(4) Upon request of Maker, any mortgagee of the ground lessor's fee interest
will subordinate its mortgage to Maker's mortgage.
S-1-5
<PAGE>
- -------------------------------------------------------------------------------
Fixed rental obligation (5) Yes(6) No No
during mortgage term?
- -------------------------------------------------------------------------------
- ---------------
(5) One lease has a fixed rental obligation, and one does not.
(6) but Maker will also pay percentage rent
S-1-6
<PAGE>
SCHEDULE 2
----------
LIST OF HYPER-AMORTIZATION LOANS
S-2-1
<PAGE>
GE ARD LOANS
MLMI 1997-C2
(INCL. 12/1/97
PYMT)
HYPERAM CONTROL # PROPERTY NAME CURRENT BALANCE
- -------------------------------------------------------------------------------
Yes 1 1601 Bronxdale Avenue 9,353,356.91
Yes 2 A-1 Self Storage 2,988,683.02
Yes 3 All Aboard - San Francisco 4,218,000.00
Yes 4 All Aboard - San Ramon 3,386,000.00
Yes 5 All Aboard - Sunnyvale 6,075,278.73
Yes 6 All Aboard Self Storage - Anaheim I 1,791,369.36
Yes 7 All Aboard- 8,726,874.59
Northridge/Concord/N. Hollywood
Yes 8 Amber Ridge 6,272,148.77
Yes 9 American Self Storage 1,947,966.19
Yes 12 Bristol Plaza Self Storage 1,848,153.70
Yes 13 Calumet Square 3,040,000.00
Yes 14 Canyon Point Apartments 5,320,035.24
Yes 16 Cheron Village 5,146,131.80
Yes 17 Cherry Creek Plaza 2,007,917.22
Yes 18 Citrus Creek Apartments 14,987,631.66
Yes 19 Columbia Junction Center 3,400,000.00
Yes 20 Courtyard - Waterbury 8,808,000.00
Yes 22 Cypress Pointe Apartments 7,189,555.06
Yes 23 Decatur Pines 1,577,377.57
Yes 24 Del Pine Terrace 2,876,604.89
Yes 28 Dover Farms Apartments 11,783,982.91
Yes 30 Eugene Mini Storage 1,250,000.00
Yes 31 Fairfield Inn - Jacksonville 3,250,000.00
Yes 32 Federal Express Building 8,290,749.24
Yes 33 Forrest Apartments 1,796,418.35
Yes 34 Fountain Park Shopping Center 6,000,000.00
Yes 35 Free State Mall 15,516,994.68
Yes 36 G.T. Henderson Center (aka El 1,595,323.74
Camino Real)
Yes 37 Gateway Medical Center 2,717,701.82
Yes 38 Gazebo Apartments 964,329.83
Yes 39 Glasgow Mobile Home Park 15,200,000.00
Yes 40 Grandview Shopping Center 1,475,327.06
Yes 41 Halcyon Village Shopping Center 1,646,873.19
Yes 42 Hampton Inn - Allentown 5,325,000.00
Yes 47 Haymarket Square 12,509,596.67
S-2-2
<PAGE>
Yes 48 Hidden Lake Apartments 3,295,047.13
Yes 49 Hunt Club 6,445,126.24
Yes 50 Kroger Woodforest Shopping Center 4,393,743.88
Yes 51 La Casita Mobile Home Park 1,595,817.67
Yes 52 Lake West Medical Cntr 3,900,000.00
Yes 54 Lexington Park Self Storage 800,000.00
Yes 58 Mason Place 1,994,337.31
Yes 59 Melody Lakes 8,800,000.00
Yes 60 Metro Center II 7,150,000.00
Yes 61 Mid-Oak Plaza 4,543,619.14
Yes 62 Midtown Mini Storage 4,057,935.74
Yes 63 Northlake Tower Festival 17,600,000.00
Yes 65 Pack Rat Charleston 2,800,000.00
Yes 66 Pack Rat North 1,242,000.00
Yes 67 Pack Rat Summerville 1,600,000.00
Yes 68 Park Chateau 3,117,527.13
Yes 70 Polo Club Apartments 14,875,000.00
Yes 71 Pueblo Del Sol 13,561,075.89
Yes 72 Raintree Apartments 5,200,000.00
Yes 73 Regal Gardens 2,175,000.00
Yes 74 Rivergate Plaza 2,250,000.00
Yes 75 Save & Lock 1,400,000.00
Yes 76 Security Portfolio IIB 3,196,509.20
Yes 77 Security Portfolio IIA 8,157,241.22
Yes 78 Sentry Self Storage - Chula Vista 3,446,348.69
Yes 79 Sentry Self Storage - Eastgate 3,026,767.08
Yes 80 Sentry Self Storage - Lakeside 944,015.99
Yes 81 Shoppes at Taylor Ranch 3,037,922.66
Yes 82 Shoppes of Deer Creek 8,687,226.40
Yes 84 Stadium MHP 8,024,604.92
Yes 85 Stone Creek Apts and Plaza 5,250,000.00
Yes 87 Summer Lake 6,600,000.00
Yes 88 Superior Industrial Center 1,997,664.76
Yes 89 The Atriums 4,894,137.94
Yes 90 The Bluffs at Northwoods 5,641,570.73
Yes 92 Town Center Shopping Center 5,493,359.56
Yes 93 Twin Rivers Mall 10,479,568.36
Yes 94 University Creek Shopping Center 2,300,000.00
Yes 95 Waldorf Self Storage 880,000.00
Yes 98 Westover Plaza Shopping Center 2,348,377.83
Yes 200 Willow Pond Apartments 6,490,475.59
Yes 201 Willow Spring Apartments 5,200,000.00
Yes 202 Yorba Ranch Village 2,995,768.66
S-2-3
