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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported) August 27, 1998
---------------------------
Gmac Commercial Mortgage Securities, Inc.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Delaware
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(STATE OR OTHER JURISDICTION OF INCORPORATION)
333-37717 23-2811925
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(COMMISSION FILE NUMBER) (I.R.S. EMPLOYER IDENTIFICATION NO.)
650 Dresher Road, Horsham, Pennsylvania 19044
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(215) 328-3164
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(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
Not Applicable
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(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On August 27, 1998, a single series of certificates, entitled GMAC
Commercial Mortgage Securities, Inc., Mortgage Pass-Through Certificates, Series
1999-C2 (the "Certificates"), was issued pursuant to a Pooling and Servicing
Agreement (the "Pooling and Servicing Agreement") attached hereto as Exhibit
4.1, dated as of August 1, 1998, among GMAC Commercial Mortgage Securities, Inc.
as depositor (the "Depositor"), GMAC Commercial Mortgage Corporation as master
servicer and special servicer, LaSalle National Bank as trustee, and ABN AMRO
Bank N.V. as fiscal agent. The Certificates consist of eighteen classes
identified as the "Class X Certificates", 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", 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 M Certificates", the "Class N Certificates", the
"Class R-I Certificates", the "Class R-II Certificates" and the "Class R-III
Certificates", respectively, and were issued in exchange for, and evidence the
entire beneficial ownership interest in, the assets of a trust fund (the "Trust
Fund") consisting primarily of a pool (the "Mortgage Pool") of commercial and
multifamily mortgage loans (the "Mortgage Loans"), having as of their respective
cut-off dates (the "Cut-off Dates"), an aggregate principal balance of
$2,530,361,727 (the "Initial Pool Balance"), after taking into account all
payments of principal due on the Mortgage Loans on or before such date, whether
or not received. The Cut-off Date with respect to each of the Mortgage Loans is
its Due Date in August 1998. The Depositor acquired certain of the Trust Fund
assets from GMAC Commercial Mortgage Corporation ("GMACCM") pursuant to a
mortgage loan purchase agreement dated August 1, 1998, attached hereto as
Exhibit 99.1, between GMACCM as seller and the Depositor as purchaser. The
Depositor acquired certain of the Trust Fund assets from German American Capital
Corporation ("GACC") pursuant to a mortgage loan purchase agreement dated August
1, 1998, attached hereto as Exhibit 99.2, between GACC as seller and the
Depositor as purchaser. The Depositor acquired certain of the Trust Fund assets
from Restructured Asset Certificates With Enhanced Returns, Series 1998-ML Trust
("ML Trust") pursuant to a mortgage loan purchase agreement dated August 1,
1998, attached hereto as Exhibit 99.3, between ML Trust as seller and the
Depositor as purchaser. The Depositor acquired certain of the Trust Fund assets
from Lehman Brothers Holdings Inc., doing business as Lehman Capital, a Division
of Lehman Brothers Holdings Inc., ("LB Holdings") pursuant to a mortgage loan
purchase agreement dated August 1, 1998, attached hereto as Exhibit 99.4,
between LB Holdings as seller and the Depositor as purchaser. The Depositor sold
the Class X, Class A-1, Class A-2, Class B, Class C, Class D and Class E
Certificates to Lehman Brothers Inc. ("Lehman") and Deutsche Bank Securities
Inc. ("DBS") as the underwriters, pursuant to an underwriting agreement dated
August 21, 1998 (the "Underwriting Agreement"), attached hereto as Exhibit 1.1,
between Lehman and DBS as the underwriters, and the Depositor. The Depositor
sold the Class F, Class G, Class H, Class J, Class K, Class L, Class M, Class N,
Class R-I, Class R-II and Class R-III Certificates to Lehman pursuant to a
certificate purchase agreement dated August 21, 1998 (the "Certificate Purchase
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Agreement"), between Lehman as initial purchaser and the Depositor. The
proceeds received by the Depositor from the sale of the Certificates pursuant to
the Underwriting Agreement and the Certificate Purchase Agreement, less the
expenses payable by the Depositor in connection with the offering of the
Certificates (which expenses are estimated at $4,500,000), were used by the
Depositor to acquire the Mortgage Loans.
The Class X Certificates do not have an initial certificate balance
("Certificate Balance"), but represent the right to receive distributions of
interest accrued as provided in the Pooling and Servicing Agreement on a
hypothetical or notional amount (a "Notional Amount") equal to $2,530,361,727.
The Class A-1 Certificates have an initial Certificate Balance of $465,000,000.
The Class A-2 Certificates have an initial Certificate Balance of
$1,369,512,000. The Class B Certificates have an initial Certificate Balance of
$126,518,000. The Class C Certificates have an initial Certificate Balance of
$113,866,000. The Class D Certificates have an initial Certificate Balance of
$164,474,000. The Class E Certificates have an initial Certificate Balance of
$37,955,000. The Class F Certificates have an initial Certificate Balance of
$88,563,000. The Class G Certificates have an initial Certificate Balance of
$44,281,000. The Class H Certificates have an initial Certificate Balance of
$18,978,000. The Class J Certificates have an initial Certificate Balance of
$18,977,000. The Class K Certificates have an initial Certificate Balance of
$18,978,000. The Class L Certificates have an initial Certificate Balance of
$25,304,000. The Class M Certificates have an initial Certificate Balance of
$18,978,000. The Class N Certificates have an initial Certificate Balance of
$18,977,727. The Class R-I, Class R-II and Class R-III Certificates each have
an initial Certificate Balance of $0.
Capitalized terms used herein and not otherwise defined shall have the
meanings assigned to them in the Pooling and Servicing Agreement.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
List below the financial statements, PRO FORMA financial information and
exhibits, if any, filed as part of this report.
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED.
Not applicable
(b) PRO FORMA FINANCIAL INFORMATION.
Not applicable
(c) EXHIBITS.
EXHIBIT
NO. DOCUMENT DESCRIPTION
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1.1 Underwriting Agreement, dated as of August 21, 1998, between GMAC
Commercial Mortgage Securities, Inc. as seller, and Lehman Brothers
Inc. and Deutsche Bank Securities Inc. as underwriters.
4.1 Pooling and Servicing Agreement, dated as of August 1, 1998, among
GMAC Commercial Mortgage Securities, Inc. as depositor, GMAC
Commercial Mortgage Corporation as master servicer and special
servicer, LaSalle National Bank as trustee, and ABN AMRO Bank N.V. as
fiscal agent.
99.1 Mortgage Loan Purchase Agreement, dated as of August 1, 1998, between
GMAC Commercial Mortgage Corporation as seller and GMAC Commercial
Mortgage Securities, Inc. as purchaser.
99.2 Mortgage Loan Purchase Agreement, dated as of August 1, 1998, between
German American Capital Corporation as seller and GMAC Commercial
Mortgage Securities, Inc. as purchaser.
99.3 Mortgage Loan Purchase Agreement, dated as of August 1, 1998 between
Restructured Asset Certificates With Enhanced Returns, Series 1998-ML
Trust as seller and GMAC Commercial Mortgage Securities, Inc. as
purchaser.
99.4 Mortgage Loan Purchase Agreement, dated as of August 1, 1998 between
Lehman Brothers Holdings Inc. as seller and GMAC Commercial Mortgage
Securities, Inc. as purchaser.
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99.5 Supplemental Agreement dated as of August 21, 1998, between GMAC
Commercial Mortgage Corporation as seller and Restructured Asset
Certificates with Enhanced Returns, Series 1998-ML Trust as purchaser.
99.6 Supplemental Agreement dated as of August 21, 1998, between GMAC
Commercial Mortgage Corporation as seller and German American Capital
Corporation as purchaser.
99.7 Assignment Agreement dated as of August 21, 1998 by Restructured Asset
Certificates with Enhanced Returns, Series 1998-ML Trust, a New York
trust, to GMAC Commercial Mortgage Securities, Inc., a Delaware
corporation.
99.8 Assignment Agreement dated as of August 21, 1998 by German American
Capital Corporation, a Maryland corporation, to GMAC Commercial
Mortgage Securities, Inc., a Delaware corporation.
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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.
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
(Registrant)
Dated: September 10, 1998 By: /s/ David Lazarus
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Name: David Lazarus
Title: Vice President
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INDEX TO EXHIBITS
EXHIBIT
NO. DOCUMENT DESCRIPTION
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1.1 Underwriting Agreement, dated as of August 21, 1998, between GMAC
Commercial Mortgage Securities, Inc. as seller, and Lehman Brothers
Inc. and Deutsche Bank Securities Inc. as underwriters.
4.1 Pooling and Servicing Agreement, dated as of August 1, 1998, among
GMAC Commercial Mortgage Securities, Inc. as depositor, GMAC
Commercial Mortgage Corporation as master servicer and special
servicer, LaSalle National Bank as trustee, and ABN AMRO Bank N.V. as
fiscal agent.
99.1 Mortgage Loan Purchase Agreement, dated as of August 1, 1998, between
GMAC Commercial Mortgage Corporation as seller and GMAC Commercial
Mortgage Securities, Inc. as purchaser.
99.2 Mortgage Loan Purchase Agreement, dated as of August 1, 1998, between
German American Capital Corporation as seller and GMAC Commercial
Mortgage Securities, Inc. as purchaser.
99.3 Mortgage Loan Purchase Agreement, dated as of August 1, 1998 between
Restructured Asset Certificates With Enhanced Returns, Series 1998-ML
Trust as seller and GMAC Commercial Mortgage Securities, Inc. as
purchaser.
99.4 Mortgage Loan Purchase Agreement, dated as of August 1, 1998 between
Lehman Brothers Holdings Inc. as seller and GMAC Commercial Mortgage
Securities, Inc. as purchaser.
99.5 Supplemental Agreement dated as of August 21, 1998, between GMAC
Commercial Mortgage Corporation as seller and Restructured Asset
Certificates with Enhanced Returns, Series 1998-ML Trust as purchaser.
99.6 Supplemental Agreement dated as of August 21, 1998, between GMAC
Commercial Mortgage Corporation as seller and German American Capital
Corporation as purchaser.
99.7 Assignment Agreement dated as of August 21, 1998 by Restructured Asset
Certificates with Enhanced Returns, Series 1998-ML Trust, a New York
trust, to GMAC Commercial Mortgage Securities, Inc., a Delaware
corporation.
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99.8 Assignment Agreement dated as of August 21, 1998 by German American
Capital Corporation, a Maryland corporation, to GMAC Commercial
Mortgage Securities, Inc., a Delaware corporation.
<PAGE>
Exhibit 1.1
EXECUTION COPY
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
$2,277,325,000
MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 1998-C2
CLASS X, CLASS A-1, CLASS A-2, CLASS B,
CLASS C, CLASS D AND CLASS E
UNDERWRITING AGREEMENT
----------------------
as of August 21, 1998
Lehman Brothers Inc.
Three World Financial Center, 20th Floor
New York , NY 10285
and
Deutsche Bank Securities Inc.
31 West 52nd Street
New York, New York 10019
Ladies and Gentlemen:
GMAC Commercial Mortgage Securities, Inc., a Delaware corporation (the
"Company"), proposes to sell to the Underwriters named in Schedule I hereto (the
"Underwriters"), the respective classes of Mortgage Pass-Through Certificates,
Series 1998-C2, that are identified on Schedule I, in each case, having the
initial aggregate stated principal amount (a "Class Principal Balance") or
initial aggregate notional principal amount (a "Class Notional Amount") and
initial pass-through rate set forth on Schedule I. The Class X, Class A-1,
Class A-2, Class B, Class C, Class D and Class E Certificates (collectively, the
"Certificates"), together with the Class F, Class G, Class H, Class J, Class K,
Class L, Class M and Class N Certificates issued therewith, will evidence the
entire interest in the Trust Fund (as defined in the Pooling and Servicing
Agreement referred to below) consisting primarily of a pool (the "Pool") of
multifamily and commercial mortgage loans (the "Mortgage Loans") as described in
the Prospectus Supplement (as hereinafter defined) to be sold by the Company.
The Certificates will be issued under a pooling and servicing agreement
(the "Pooling and Servicing Agreement") to be dated as of August 1, 1998 (the
"Cut-off Date") among the Company, as depositor, GMAC Commercial Mortgage
Corporation ("GMACCM"), as master
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servicer (in such capacity, the "Master Servicer") and special servicer (in such
capacity, the "Special Servicer"), LaSalle National Bank, as trustee (the
"Trustee") and ABN AMRO Bank N.V., as fiscal agent. The Certificates are
described in the Basic Prospectus and the Prospectus Supplement (each as
hereinafter defined) which the Company has furnished to the Underwriters.
Certain of the Mortgage Loans (the "GACC Mortgage Loans") will be acquired
by the Company from German American Capital Corporation ("GACC") pursuant to a
mortgage loan purchase agreement, dated as of August 21, 1998 (the "GACC
Purchase Agreement"), between the Company and GACC. Certain of the Mortgage
Loans (the "LB Holdings Mortgage Loans") will be acquired by the Company from
Lehman Brothers Holdings Inc. ("LB Holdings") pursuant to a mortgage loan
purchase agreement, dated as of August 21, 1998 (the "LB Holdings Purchase
Agreement"), between the Company and LB Holdings. Certain of the Mortgage Loans
(the "ML Trust Mortgage Loans") will be acquired by the Company from
Restructured Asset Certificates With Enhanced Returns, Series 1998-ML Trust ("ML
Trust") pursuant to a mortgage loan purchase agreement, dated as of August 21,
1998 (the "ML Trust Purchase Agreement"), between the Company and ML Trust.
Certain of the Mortgage Loans (the "GMACCM Mortgage Loans") will be acquired by
the Company from GMACCM pursuant to a mortgage loan purchase agreement, dated as
of August 21, 1998 (the "GMACCM Purchase Agreement"), between the Company and
GMACCM (the GMACCM Mortgage Loans, together with the GACC Mortgage Loans, the LB
Holdings Mortgage Loans and the ML Trust Mortgage Loans, the "Mortgage Loans").
GACC, LB Holdings, ML Trust and GMACCM together constitute the "Mortgage Loan
Sellers" and the GACC Purchase Agreement, LB Holdings Purchase Agreement, ML
Trust Purchase Agreement and the GMACCM Purchase Agreement together constitute
the "Purchase Agreements."
1. Representations, Warranties and Covenants.
1.1 The Company represents and warrants to, and agrees with the
Underwriters that:
(a) The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement (No. 333-37717) on
Form S-3 for the registration under the Securities Act of 1933, as amended
(the "Act"), of Mortgage Pass-Through Certificates (issuable in series),
including the Certificates, which registration statement has become
effective, and a copy of which, as amended to the date hereof, has
heretofore been delivered to the Underwriters. The Company proposes to
file with the Commission pursuant to Rule 424(b) under the rules and
regulations of the Commission under the Act (the "1933 Act Regulations") a
supplement dated August 21, 1998 (the "Prospectus Supplement"), to the
prospectus dated December 17, 1997 (the "Basic Prospectus"), relating to
the Certificates and the method of distribution thereof. Such registration
statement (No. 333-37717) including exhibits thereto and any information
incorporated therein by reference, as amended at the date hereof, is
hereinafter called the "Registration Statement;" the Basic Prospectus and
the Prospectus
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Supplement and any information incorporated therein by reference
(including, without limitation, and only for purposes of clarification, any
information filed with the Commission pursuant to a Current Report on Form
8-K), together with any amendment thereof or supplement thereto authorized
by the Company on or prior to the Closing Date for use in connection with
the offering of the Certificates, are hereinafter called the "Prospectus"
and any diskette attached to the Prospectus is hereinafter called the
"Diskette." Any preliminary form of the Prospectus Supplement which has
heretofore been filed pursuant to Rule 424, or prior to the effective date
of the Registration Statement pursuant to Rule 402(a), or 424(a) is
hereinafter called a "Preliminary Prospectus Supplement;" and any diskette
attached to the Preliminary Prospectus Supplement is hereinafter referred
to as the "Preliminary Diskette." As used herein, "Pool Information" means
the compilation of information and data regarding the Mortgage Loans
covered by the Agreed Upon Procedures Letter dated August 27, 1998 and
rendered by Deloitte & Touche, L.L.P. (a "hard copy" of which Pool
Information was initialed on behalf of each Mortgage Loan Seller and the
Company).
(b) The Registration Statement has become effective, and
the Registration Statement as of its effective date (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 Act and
the 1933 Act Regulations; and the Registration Statement, 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 and the Prospectus
and any Diskette, as of the date of the Prospectus Supplement, did not, and
as of the Closing Date 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 statements therein, in the light of the circumstances
under which they were made, not misleading; PROVIDED, HOWEVER, that neither
the Company nor GMACCM makes any representations or warranties as to the
information contained in or omitted from the Registration Statement or the
Prospectus or any amendment thereof or supplement thereto relating to the
information identified by underlining or other highlighting as shown in
EXHIBIT C (the "Excluded Information"); and PROVIDED, FURTHER, that neither
the Company nor GMACCM makes any representations or warranties as to either
(i) any information in any Computational Materials or ABS Term Sheets (each
as hereinafter defined) required to be provided by the Underwriters to the
Company pursuant to Section 4.2, or (ii) as to any information contained in
or omitted from the portions of the Prospectus identified by underlining or
other highlighting as shown in EXHIBIT D (the "Underwriter Information");
and PROVIDED, FURTHER, that neither the Company nor, except as contemplated
by Section 1.2(a), GMACCM makes any representations or warranties as to any
information regarding the Mortgage Loans or the Mortgage Loan Sellers
contained in or omitted from the portions of the Prospectus Supplement
under the headings "Summary of the Prospectus Supplement--The Mortgage
Asset Pool," "Risk Factors--The Mortgage Loans" and
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"Description of the Mortgage Asset Pool" or contained in or omitted from
Annex A to the Prospectus Supplement or contained in or omitted from the
Diskette (the "Mortgage Loan Seller Information"), other than that any
Mortgage Loan Seller Information (exclusive of the information set forth on
pages A-1-21 through A-1-28, inclusive, of Annex A to the Prospectus
Supplement (the "Loan Detail") and the information on the Diskette) that
represents a restatement or aggregation of the information on the Loan
Detail, accurately reflects the information contained in the Loan Detail;
and PROVIDED, FURTHER, that neither the Company nor GMACCM makes any
representations or warranties with respect to the Diskette to the extent
that the information set forth in the Diskette is different than the
information set forth in the Loan Detail. Neither the Company nor, except
as contemplated by Section 1.2(a), GMACCM makes any representations or
warranties, however, as to the accuracy or completeness of any information
in the Loan Detail. The Company acknowledges that, except for any
Computational Materials and ABS Term Sheets, the Underwriter Information
constitutes the only information furnished in writing by or on behalf of
any Underwriter for use in connection with the preparation of the
Registration Statement, any preliminary prospectus or the Prospectus, and
the Underwriters confirm that the Underwriter Information is correct.
(c) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware and has the requisite corporate power to own its properties and to
conduct its business as presently conducted by it.
(d) This Agreement has been duly authorized, executed and
delivered by the Company and, assuming due authorization, execution and
delivery by the Underwriters, constitutes a valid, legal and binding
obligation of the Company, enforceable against the Company in accordance
with the terms hereof, subject to (i) applicable bankruptcy, insolvency,
reorganization, moratorium and other laws affecting the enforcement of
creditors' rights generally, (ii) generally principles of equity,
regardless of whether such enforcement is considered in a proceeding in
equity or at law, and (iii) public policy considerations underlying the
securities laws, to the extent that such public policy considerations limit
the enforceability of the provisions of this Agreement that purport to
provide indemnification for securities laws liabilities.
(e) As of the Closing Date (as defined herein), the
Certificates will conform in all material respects to the description
thereof contained in the Prospectus and the representations and warranties
of the Company in the Pooling and Servicing Agreement will be true and
correct in all material respects.
1.2 GMACCM represents and warrants to and agrees with you that:
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(a) As of the Closing Date, the representations and
warranties of GMACCM in the Pooling and Servicing Agreement, in Section
2(b) of each Supplemental Agreement and in Section 4(b) of the GMACCM
Purchase Agreement will be true and correct in all material respects.
(b) This Agreement has been duly authorized, executed and
delivered by GMACCM and, assuming the due authorization, execution and
delivery by the Underwriters, constitutes a valid, legal and binding
obligation of GMACCM, enforceable against GMACCM in accordance with the
terms hereof, subject to (i) applicable bankruptcy, insolvency,
reorganization, moratorium and other laws affecting the enforcement of
creditors' rights generally, (ii) general principles of equity, regardless
of whether such enforcement is considered in a proceeding in equity or at
law, and (iii) public policy considerations underlying the securities laws
to the extent that such public policy considerations limit the
enforceability of the provisions of this Agreement that purport to provide
indemnification for securities laws liabilities.
1.3 Each Underwriter represents and warrants to and agrees with
the Company and GMACCM that:
(a) With respect to each class of Certificates, if any, to
be issued in authorized denominations of $25,000 or less initial principal
balance or evidencing percentage interests in such class of less than 20%,
as the case may be, the fair market value of all such Certificates sold to
any single Person on the date of initial sale thereof by such Underwriter
will not be less than $100,000.
(b) As of the date hereof and as of the Closing Date, such
Underwriter has complied with all of its obligations hereunder, including,
without limitation, Section 4.2, and, with respect to all Computational
Materials and ABS Term Sheets provided by such Underwriter to the Company
pursuant to Section 4.2, if any, such Computational Materials and ABS Term
Sheets are accurate in all material respects (taking into account the
assumptions explicitly set forth in the Computational Materials or ABS Term
Sheets, except to the extent of any errors therein that are caused by
errors in the Pool Information) and include all assumptions material to the
preparation thereof. The Computational Materials and ABS Term Sheets
provided by such Underwriter to the Company constitute a complete set of
all Computational Materials and ABS Term Sheets delivered by such
Underwriter to prospective investors that are required to be filed with the
Commission.
1.4 Reserved.
2. PURCHASE AND SALE. Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the Company
agrees to sell to each of the
5
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Underwriters, and each of the Underwriters agrees, severally and not jointly, to
purchase from the Company, the actual or notional, as the case may be, principal
amounts or percentage interests set forth in Schedule I hereto in the respective
classes of Certificates at a price for each such class set forth in Schedule I
hereto. There will be added to the purchase prices of the Certificates an
amount equal to interest accrued thereon from the Cut-off Date to but not
including the Closing Date.
3. DELIVERY AND PAYMENT. Delivery of and payment for the Certificates
shall be made at the office of Mayer, Brown & Platt at 10:00 a.m., New York City
time, on August 27, 1998 or such later date as the Underwriters shall designate,
which date and time may be postponed by agreement between the Underwriters and
the Company (such date and time of delivery and payment for the Certificates
being herein called the "Closing Date"). Delivery of the Certificates (also
referred to herein as the "DTC Registered Certificates") shall be made to the
respective accounts of the Underwriters through DTC, in each case against
payment by the Underwriters to or upon the order of each Mortgage Loan Seller by
wire transfer in immediately available funds of the amount to which such
Mortgage Loan Seller is entitled in accordance with a term sheet (the
"Allocation Agreement"), that has been agreed to by each such Mortgage Loan
Seller and the Company. As a further condition to the delivery of the DTC
Registered Certificates, each Underwriter shall have furnished by telephonic
notice to the applicable Mortgage Loan Seller the federal reference number for
the related wire transfer to such Mortgage Loan Seller and shall have furnished
to the Company each such federal reference number as soon as practicable after
such federal reference number becomes available.
4. Offering by Underwriters.
4.1 It is understood that the Underwriters propose to offer the
Certificates for sale to the public as set forth in the Prospectus, and the
Underwriters agree that all such offers and sales by the Underwriters shall be
made in compliance with all applicable laws and regulations. It is further
understood that the Company, in reliance upon a no-filing letter 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-e
of the General Business Law of the State of New York with respect to the
Certificates. As required by Policy Statement 105, each Underwriter therefore
covenants and agrees with the Company that sales of the Certificates made by
such Underwriter in and from the State of New York will be made only to
institutional investors within the meaning of Policy Statement 105.
4.2 It is understood that each Underwriter may prepare and
provide to prospective investors certain Computational Materials and ABS Term
Sheets (each as defined below) in connection with its offering of the
Certificates, subject to the following conditions to be satisfied by such
Underwriter:
6
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(a) In connection with the use of Computational Materials,
such Underwriter shall comply with all applicable requirements of the
No-Action Letter of May 20, 1994 issued by the Commission to Kidder,
Peabody Acceptance Corporation I, Kidder, Peabody & Co. Incorporated and
Kidder Structured Asset Corporation, as made applicable to other issuers
and underwriters by the Commission in response to the request of the Public
Securities Association dated May 24, 1994 (collectively, the "Kidder/PSA
Letter"), as well as the PSA Letter referred to below. In connection with
the use of ABS Term Sheets, such Underwriter shall comply with all
applicable requirements of the No-Action Letter of February 17, 1995 issued
by the Commission to the Public Securities Association (the "PSA Letter"
and, together with the Kidder/PSA Letter, the "No-Action Letters").
(b) For purposes hereof, "Computational Materials" as used
herein 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 such
Underwriter. For purposes hereof, "ABS Term Sheets" and "Collateral Term
Sheets" as used herein shall have the meanings given such terms in the PSA
Letter but shall include only those ABS Term Sheets or Collateral Term
Sheets that have been prepared or delivered to prospective investors by or
at the direction of such Underwriter.
(c) (i) 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 on each page including the
following statement:
"THE INFORMATION HEREIN HAS BEEN PROVIDED SOLELY BY
[NAME OF [APPLICABLE] UNDERWRITER]. NEITHER THE ISSUER
OF THE CERTIFICATES NOR ANY OF ITS AFFILIATES MAKES ANY
REPRESENTATION AS TO THE ACCURACY OR COMPLETENESS OF THE
INFORMATION HEREIN. THE INFORMATION HEREIN IS
PRELIMINARY AND WILL BE SUPERSEDED BY THE APPLICABLE
PROSPECTUS SUPPLEMENT AND BY ANY OTHER INFORMATION
SUBSEQUENTLY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION."
(ii) In the case of Collateral Term Sheets, such legend
shall also include the following statement:
"THE INFORMATION CONTAINED HEREIN WILL BE SUPERSEDED BY
THE DESCRIPTION OF THE MORTGAGE POOL CONTAINED IN THE
PROSPECTUS SUPPLEMENT
7
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RELATING TO THE CERTIFICATES AND [, EXCEPT WITH RESPECT TO THE
INITIAL COLLATERAL TERM SHEET PREPARED BY THE UNDERWRITERS,]
SUPERSEDES ALL INFORMATION CONTAINED IN ANY COLLATERAL TERM SHEETS
RELATING TO THE MORTGAGE POOL PREVIOUSLY PROVIDED BY [NAME OF
[APPLICABLE] UNDERWRITER]."
The Company shall have the right to require additional 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, subsections (c)(i) and (c)(ii) will be satisfied if all
Computational Materials and ABS Term Sheets referred to therein bear a
legend in a form previously approved in writing by the Company.
(d) Such Underwriter shall provide 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 Underwriters. Such Underwriter
shall provide to the Company, for filing on Form 8-K as provided in Section
5.9, copies (in such format as required by the Company) of all
Computational Materials and ABS Term Sheets that are required to be filed
with the Commission pursuant to the No-Action Letters. Such Underwriter
may provide 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 (d) must be
provided to the Company not later than 10:00 a.m. New York time one
business day before filing thereof is required pursuant to the terms of
this Agreement. Such Underwriter agrees that it will not provide 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 Section 4.2(d) (other than copies of Computational
Materials or ABS Term Sheets previously submitted to the Company in
accordance with this Section 4.2(d) for filing pursuant to Section 5.9),
unless such Computational Materials or ABS Term Sheets are preceded or
accompanied by the delivery of a Prospectus to such investor or prospective
investor.
(e) All information included in the Computational Materials
and ABS Term Sheets shall be 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, HOWEVER, that the
Computational Materials and ABS Term Sheets may include information based
on alternative methodologies or assumptions if specified therein. If any
Computational Materials or ABS Term Sheets delivered by such Underwriter
that are required to be filed were based on assumptions with respect to the
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Pool that differ from the final Pool Information in any material respect or
on Certificate structuring terms that were revised in any material respect
prior to the printing of the Prospectus, such Underwriter shall prepare
revised Computational Materials or ABS Term Sheets, as the case may be,
based on the final Pool Information and final structuring assumptions,
circulate such revised Computational Materials and ABS Term Sheets to all
recipients of the preliminary versions thereof that indicated orally to
such Underwriter they would purchase all or any portion of the
Certificates, and include such revised Computational Materials and ABS Term
Sheets (marked, "as revised") in the materials delivered to the Company
pursuant to subsection (d) above.
(f) 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 applicable 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." In the event that
within the period during which the Prospectus relating to the Certificates
is required to be delivered under the Act, any Computational Materials or
ABS Term Sheets delivered by an Underwriter are determined, in the
reasonable judgment of the Company or such Underwriter, to contain a
material error or omission, such Underwriter shall prepare a corrected
version of such Computational Materials or ABS Term Sheets, shall circulate
such corrected Computational Materials and ABS Term Sheets to all
recipients of the prior versions thereof that either indicated orally to
such 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 and 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 such Underwriter).
(g) If an Underwriter does not provide any Computational
Materials or ABS Term Sheets to the Company pursuant to subsection (d)
above, such Underwriter shall be deemed to have represented, as of the
Closing Date, that it 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 such Underwriter shall provide
the Company with a certification to that effect on the Closing Date.
(h) In the event of any delay in the delivery by such
Underwriter to the Company of all Computational Materials and ABS Term
Sheets required to be delivered in accordance with subsection (d) above, or
in the delivery of the accountant's comfort
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letter in respect thereof pursuant to Section 5.9, the Company shall have
the right to delay the release of the Prospectus to investors or to the
Underwriters, 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 5.9 to file the Computational
Materials and ABS Term Sheets by the time specified therein.
(i) Notwithstanding anything herein to the contrary, for
purposes of this Agreement, neither the Preliminary Diskette nor the
Diskette shall be deemed to be Computational Materials or ABS Term Sheets.
Each Underwriter represents and warrants that, if and to the extent
it provided any prospective investors with any Computational Materials or ABS
Terms Sheets prior to the date hereof in connection with the offering of the
Certificates, all of the conditions set forth in clauses (a) through (h) above
have been or, to the extent the relevant condition requires action to be taken
after the date hereof, will be, satisfied with respect thereto.
4.3 Each Underwriter further agrees that, on or prior to the
sixth day after the Closing Date, it shall provide the Company with a
certificate, substantially in the form of EXHIBIT E attached hereto, setting
forth (i) in the case of each class of Certificates, (a) if less than 10% of the
aggregate actual or notional, as the case may be, principal balance of such
class of Certificates has been sold to the public as of such date, the value
calculated pursuant to clause (b)(iii) of EXHIBIT E hereto, or, (b) if 10% or
more of such class of Certificates has been sold to the public as of such date
but no single price is paid for at least 10% of the aggregate actual or
notional, as the case may be, principal balance of such class of Certificates,
then the weighted average price at which the Certificates of such class were
sold expressed as a percentage of the aggregate actual or notional, as the case
may be, principal balance of such class of Certificates sold, or (c) the first
single price at which at least 10% of the aggregate actual or notional, as the
case may be, principal balance of such class of Certificates was sold to the
public, (ii) the prepayment assumption used in pricing each class of
Certificates, and (iii) such other 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 such Underwriter be determined by
it.
5. AGREEMENTS. The Company agrees with the several Underwriters that:
5.1 Before amending or supplementing the Registration Statement
or the Prospectus with respect to the Certificates, the Company will furnish the
Underwriters with a copy of each such proposed amendment or supplement.
5.2 The Company will cause the Prospectus Supplement to be
transmitted to the Commission for filing pursuant to Rule 424(b) under the Act
by means reasonably calculated to result in filing with the Commission pursuant
to said rule.
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5.3 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 Act, any event occurs as a result of which
it is necessary to amend or supplement the Prospectus, as then amended or
supplemented, in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not misleading,
or if it shall be necessary to amend or supplement the Prospectus to comply with
the Act or the 1933 Act Regulations, the Company promptly will prepare and
furnish, at its own expense, to the Underwriters, either amendments or
supplements to the Prospectus so that the statements in the Prospectus as so
amended or supplemented will not, in the light of the circumstances when the
Prospectus is delivered to a purchaser, be misleading or so that the Prospectus
will comply with law.
5.4 The Company will furnish to the Underwriters, without
charge, a copy of the Registration Statement (including exhibits thereto) and,
so long as delivery of a prospectus by an underwriter or dealer may be required
by the Act, as many copies of the Prospectus, any documents incorporated by
reference therein and any amendments and supplements thereto as the Underwriters
may reasonably request.
5.5 The Company agrees, so long as the Certificates shall be
outstanding, or until such time as the several Underwriters shall cease to
maintain a secondary market in the Certificates, whichever first occurs, to
deliver to the Underwriters the annual statement as to compliance delivered to
the Trustee pursuant to Section 3.13 of the Pooling and Servicing Agreement and
the annual statement of a firm of independent public accountants furnished to
the Trustee pursuant to Section 3.14 of the Pooling and Servicing Agreement, as
soon as such statements are furnished to the Company.
5.6 The Company will endeavor to arrange for the qualification
of the Certificates for sale under the laws of such jurisdictions as the
Underwriters may reasonably designate and will maintain such qualification in
effect so long as required for the initial distribution of the Certificates;
PROVIDED, HOWEVER, that the Company shall not be required to qualify to do
business in any jurisdiction where it is not now so qualified or to take any
action that would subject it to general or unlimited service of process in any
jurisdiction where it is not now so subject.
5.7 Except as herein provided, the several Underwriters shall be
responsible only for paying all costs and expenses incurred by them, including
the fees and disbursements of their counsel, in connection with the purchase and
sale of the Certificates.
5.8 If, during the period after the Closing Date in which a
prospectus relating to the Certificates is required to be delivered under the
Act, the Company receives notice that a stop order suspending the effectiveness
of the Registration Statement or preventing the offer and
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sale of the Certificates is in effect, the Company will advise the Underwriters
of the issuance of such stop order.
5.9 The Company shall file the Computational Materials and ABS
Term Sheets (if any) provided to it by the Underwriters under Section 4.2(d)
hereof with the Commission pursuant to a Current Report on Form 8-K by 10:00
a.m. on the morning the Prospectus is delivered to the Underwriters or, in the
case of any Collateral Term Sheet required to be filed prior to such date, by
10:00 a.m. on the second business day following the first day on which such
Collateral Term Sheet has been sent to a prospective investor; PROVIDED,
HOWEVER, that prior to such filing of the Computational Materials and ABS Term
Sheets (other than any Collateral Term Sheets that are not based on the Pool
Information) by the Company, each Underwriter must comply with its obligations
pursuant to Section 4.2 and the Company must receive a letter from Deloitte &
Touche, L.L.P., certified public accountants, satisfactory in form and substance
to the Company, GMACCM and their respective counsels, 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 determined that all
information that is included in the Computational Materials and ABS Term Sheets
(if any) provided by the Underwriters to the Company for filing on Form 8-K, as
provided in Section 4.2 and this Section 5.9, is accurate except as to such
matters that are not deemed by the Company to be material. The Company shall
file any corrected Computational Materials described in Section 4.2(f) as soon
as practicable following receipt thereof. The Company also will file with the
Commission within fifteen days of the issuance of the Certificates a Current
Report on Form 8-K (for purposes of filing the Pooling and Servicing Agreement).
6. CONDITIONS TO THE OBLIGATIONS OF THE UNDERWRITERS. The
Underwriters' obligation to purchase the Certificates shall be subject to the
following conditions:
6.1 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 knowledge of the Company, threatened by the
Commission; and the Prospectus Supplement shall have been filed or transmitted
for filing, by means reasonably calculated to result in a filing with the
Commission pursuant to Rule 424(b) under the Act.
6.2 Since December 31, 1997, there shall have been no material
adverse change (not in the ordinary course of business) in the condition of the
Company or GMACCM.
6.3 The Company shall have delivered to the Underwriters 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 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:
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(a) the representations and warranties of the Company in this
Agreement and in the Pooling and Servicing Agreement are true and correct
in all material respects; and
(b) 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.
6.4 GMACCM shall have delivered to the Underwriters a certificate,
dated the Closing Date, of the President, a Senior Vice President or a Vice
President of GMACCM to the effect that the signer of such certificate has
examined the Pooling and Servicing Agreement and this Agreement and that, to the
best of his or her knowledge after reasonable investigation, the representations
and warranties of GMACCM contained in the Pooling and Servicing Agreement and in
this Agreement are true and correct in all material respects.
6.5 The Underwriters shall have received the opinions of Mayer, Brown
& Platt, special counsel for the Company and GMACCM, dated the Closing Date and
substantially to the effect set forth in EXHIBITS A-1 AND A-2, the opinion of
Maria Corpora-Buck, Esq., general counsel for the Company and GMACCM, dated the
Closing Date and substantially to the effect set forth in EXHIBIT B-1 and the
opinion of Severson & Werson, special California counsel for the GMACCM, dated
the Closing Date that GMACCM is duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of California, and has
the requisite power and authority, corporate or other, to own its properties and
conduct its business, as presently conducted by it.
6.6 The Underwriters shall have received from their counsel an
opinion dated the Closing Date in form and substance reasonably satisfactory to
the Underwriters.
6.7 The Underwriters shall have received from Deloitte & Touche,
L.L.P., certified public accountants, (a) a letter dated the date hereof and
reasonably satisfactory in form and substance to the Underwriters and their
counsel, to the effect that they have performed certain specified procedures,
all of which have been agreed to by you, as a result of which they determined
that certain information of an accounting, financial or statistical nature set
forth in the Prospectus Supplement under the captions "Description of the
Mortgage Pool," "Description of the Certificates" and "Yield and Maturity
Considerations" agrees with the records of the Company and the Mortgage Loan
Sellers excluding any questions of legal interpretation and (b) the letter
prepared pursuant to Section 5.9 hereof.
6.8 The respective classes of Certificates shall have been rated as
set forth on Schedule I.
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6.9 The Underwriters shall have received, with respect to the
Trustee, a favorable opinion of counsel, dated the Closing Date, addressing the
valid existence of such party under the laws of the jurisdiction of its
organization, the due authorization, execution and delivery of the Pooling and
Servicing Agreement by such party and, subject to standard limitations regarding
laws affecting creditors' rights and general principles of equity, the
enforceability of the Pooling and Servicing Agreement against such party. Such
opinion may express its reliance as to factual matters on representations and
warranties made by, and on certificates or other documents furnished by officers
and/or authorized representatives of, parties to this Agreement and the Pooling
and Servicing Agreement and on certificates furnished by public officials. Such
opinion may assume the due authorization, execution and delivery of the
instruments and documents referred to therein by the parties thereto other than
the party on behalf of which such opinion is being rendered. Such opinion may be
qualified as an opinion only on the laws of each state in which the writer of
the opinion is admitted to practice law and the federal law of the United
States.
6.10 The Underwriters shall have received from Mayer, Brown & Platt,
special counsel to the Company, and from Maria Corpora-Buck, Esq., general
counsel to the Company, reliance letters with respect to any opinions delivered
to the rating agencies identified on Schedule I hereto.
6.11 The Underwriters shall have received from counsel to each
Mortgage Loan Seller, the opinions substantially to the effect set forth in
EXHIBIT D-3A and D-3B of the respective Purchase Agreements.
The Company will furnish the Underwriters with conformed copies of the above
opinions, certificates, letters and documents as they reasonably request.
7. INDEMNIFICATION AND CONTRIBUTION.
7.1 The Company and GMACCM, jointly and severally, agree to indemnify
and hold harmless each Underwriter and each person, if any, who controls such
Underwriter within the meaning of either Section 15 of the Act or Section 20 of
the Securities Exchange Act of 1934 (the "Exchange Act"), from and against any
and all losses, claims, damages and liabilities caused by any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement for the registration of the Certificates as originally filed or in any
amendment thereof or other filing incorporated by reference therein, or in the
Prospectus or incorporated by reference therein (if used within the period set
forth in Section 5.3 hereof and as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto), or in the Diskette, or
caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, except
insofar as such losses, claims, damages, or liabilities are caused by any such
untrue statement or omission or alleged
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untrue statement or omission based upon any information with respect to which
the Underwriters have agreed to indemnify the Company pursuant to Section 7.2;
provided that the Company and GMACCM will be liable for any such loss, claim,
damage or liability that arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein relating to the Mortgage Loan Seller Information or Pool Information
only if and to the extent that (i) any such untrue statement is with respect to
information regarding the GACC Mortgage Loans, GMACCM Mortgage Loans or ML Trust
Mortgage Loans contained in the Loan Detail or, to the extent consistent with
Annex A to the Prospectus Supplement, the Diskette, or (ii) any such untrue
statement or alleged untrue statement or omission or alleged omission is with
respect to information regarding any or all of the Mortgage Loan Sellers or any
or all of the Mortgage Loans contained in the Prospectus Supplement under the
headings "Summary of Prospectus Supplement - The Mortgage Asset Pool," "Risk
Factors - The Mortgage Loans" and/or "Description of the Mortgage Asset Pool" or
on Annex A to the Prospectus Supplement (exclusive of the Loan Detail) and such
information represents a restatement or aggregation of information contained in
the Loan Detail, or (iii) any such untrue statement or alleged untrue statement
or omission or alleged omission is with respect to information regarding GMACCM
or the GACC Mortgage Loans, GMACCM Mortgage Loans or ML Trust Mortgage Loans
contained in the Prospectus Supplement under the headings "Summary of Prospectus
Supplement - The Mortgage Asset Pool," "Risk Factors - The Mortgage Loans"
and/or "Description of the Mortgage Asset Pool" or on Annex A to the Prospectus
Supplement (exclusive of the Loan Detail), and such information does not
represent a restatement or aggregation of information contained in the Loan
Detail; and provided that none of the Company, GMACCM or any Underwriter will be
liable in any case to the extent that any such loss, claim, damage or liability
arises out of or is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made therein relating to the Excluded
Information, except that each of the Company and GMACCM will be liable to the
extent any such loss, claim, damage or liability is caused by errors in the
portion of the Pool Information relating to the GACC Mortgage Loans, GMACCM
Mortgage Loans or ML Trust Mortgage Loans.
7.2 Each Underwriter agrees, severally and not jointly to indemnify
and hold harmless the Company, GMACCM, their respective directors or officers
and any person who controls the Company or GMACCM within the meaning of either
Section 15 of the Act or Section 20 of the Exchange Act to the same extent as
the indemnity set forth in clause 7.1 above from the Company and GMACCM to the
Underwriters, but only with respect to (i) the Underwriter Information relating
to such Underwriter or supplied by such Underwriter to the Company for inclusion
in the Prospectus Supplement and (ii) the Computational Materials and ABS Term
Sheets delivered to investors in the Certificates by such Underwriter, except to
the extent of any errors in the Computational Materials or ABS Term Sheets that
are caused by errors in the Pool Information. In addition, the Underwriter
agrees to indemnify and hold harmless the Company, GMACCM, their respective
directors or officers and any person who controls the Company or GMACCM within
the meaning of either Section 15 of the Act or
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Section 20 of the Exchange Act against any and all losses, claims, damages,
liabilities and expenses (including, without limitation, reasonable attorneys'
fees) caused by, resulting from, relating to, or based upon any legend regarding
original issue discount on any Certificate resulting from incorrect information
provided by such Underwriter in the certificates described in Section 4.3
hereof.
7.3 In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to either Section 7.1 or 7.2, such person (the "indemnified
party") shall promptly notify the person against whom such indemnity may be
sought (the "indemnifying party") in writing and the indemnifying party, upon
request of the indemnified party, shall retain counsel reasonably satisfactory
to the indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the reasonable
fees and disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the reasonable 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 mutually 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. It is understood that the
indemnifying party shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the reasonable fees and
expenses of more than one separate firm for all such indemnified parties. Such
firm shall be designated in writing by the Underwriters, in the case of parties
indemnified pursuant to Section 7.1, and by the Company or GMACCM, in the case
of parties indemnified pursuant to Section 7.2. The indemnifying party may, at
its option, at any time upon written notice to the indemnified party, assume the
defense of any proceeding and may designate counsel reasonably satisfactory to
the indemnified party in connection therewith provided that the counsel so
designated would have no actual or potential conflict of interest in connection
with such representation. Unless it shall assume the defense of any proceeding
the 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 agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment. If the 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
which have been asserted against the indemnified party in such proceeding by the
other parties to such settlement, without the consent of the indemnified party.
7.4 If the indemnification provided for in this Section 7 is
unavailable to an indemnified party under Section 7.1 or 7.2 hereof or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein, then the indemnifying party, in lieu of indemnifying
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such indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities, in
such proportion as is appropriate to reflect not only the relative benefits
received by the Company and GMACCM on the one hand and the Underwriters on the
other from the offering of the Certificates but also the relative fault of the
Company and GMACCM on the one hand and of the Underwriters 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 and GMACCM on the one hand
and of any of the Underwriters 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 GMACCM or by an Underwriter, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
7.5 The Company, GMACCM and the Underwriters agree that it would not
be just and equitable if contribution pursuant to this Section 7 were determined
by PRO RATA allocation or by any other method of allocation which does not take
account of the considerations referred to in Section 7.4 above. The amount paid
or payable by an indemnified party as a result of the losses, claims, damages
and liabilities referred to in this Section 7 shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim except where the indemnified party is
required to bear such expenses pursuant to Section 7.4; 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 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
7.6 The indemnity and contribution agreements contained in this
Section 7 and the representations and warranties of the Company and GMACCM in
this Agreement shall remain operative and in full force and effect regardless of
(i) any termination of this Agreement, (ii) any investigation made by or on
behalf of an Underwriter or any person controlling an Underwriter or by or on
behalf of the Company or GMACCM and their respective directors or officers or
any person controlling the Company or GMACCM and (iii) acceptance of and payment
for any of the Certificates.
8. TERMINATION. This Agreement shall be subject to termination by notice
given to the Company and GMACCM, if the sale of the Certificates provided for
herein is not consummated because of any failure or refusal on the part of the
Company or GMACCM to
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comply with the terms or to fulfill any of the conditions of this Agreement, or
if for any reason the Company or GMACCM shall be unable to perform their
respective obligations under this Agreement. If the Underwriters terminate this
Agreement in accordance with this Section 8, the Company or GMACCM will
reimburse the Underwriters for all reasonable out-of-pocket expenses (including
reasonable fees and disbursements of counsel) that shall have been reasonably
incurred by the Underwriters in connection with the proposed purchase and sale
of the Certificates.
9. DEFAULT BY AN UNDERWRITER. If any Underwriter shall fail to purchase
and pay for any of the Certificates agreed to be purchased by such Underwriter
hereunder and such failure to purchase shall constitute a default in the
performance of its obligations under this Agreement, the remaining Underwriters
shall be obligated to take up and pay for the Certificates that the defaulting
Underwriter agreed but failed to purchase; PROVIDED, HOWEVER, that in the event
that the initial principal amount of Certificates that the defaulting
Underwriter agreed but failed to purchase shall exceed 10% of the aggregate
principal balance of all of the Certificates set forth in Schedule I hereto, the
remaining Underwriters shall have the right to purchase all, but shall not be
under any obligation to purchase any, of the Certificates, and if such
nondefaulting Underwriters do not purchase all of the Certificates, this
Agreement will terminate without liability to the nondefaulting Underwriters,
the Company or GMACCM. In the event of a default by any Underwriter as set
forth in this Section 9, the Closing Date for the Certificates shall be
postponed for such period, not exceeding seven days, as the nondefaulting
Underwriters shall determine in order that the required changes in the
Registration Statement, the Prospectus or in any other documents or arrangements
may be effected. Nothing contained in this Agreement shall relieve any
defaulting Underwriter of its liability, if any, to the Company and to any
nondefaulting Underwriter for damages occasioned by its default hereunder.
10. CERTAIN REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The respective
agreements, representations, warranties, indemnities and other statements of the
Company, GMACCM, the Underwriters or the officers of any of the Company, GMACCM
and the Underwriters set forth in or made pursuant to this Agreement, will
remain in full force and effect, regardless of any investigation, or statement
as to the results thereof, made by or on behalf of any Underwriter or made by or
on behalf of the Company or GMACCM or any of their respective officers,
directors or controlling persons, and will survive delivery of and payment for
the Certificates.
11. NOTICES. All communications hereunder will be in writing and
effective only on receipt, and, if sent to any of the Underwriters, will be
mailed, delivered or telegraphed and confirmed to the each Representative at the
following address: Deutsche Bank Securities Inc., 31 West 52nd Street, New York,
New York 10019, Attention: Steven Stuart and Lehman Brothers Inc. Three World
Financial Center, 20th Floor, New York, NY 10285, Attention: Paul Hughson; or,
if sent to the Company, will be mailed, delivered or telegraphed and confirmed
to it at 650 Dresher Road, P.O. Box 1015, Horsham, Pennsylvania 19044-8015,
Attention: Structured Finance Manager with a copy to the General Counsel, GMAC
Commercial Mortgage
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Corporation; or, if sent to GMACCM, will be mailed, delivered or telegraphed and
confirmed to it at 650 Dresher Road, P.O. Box 1015, Horsham, Pennsylvania
19044-8015, Attention: Structured Finance Manager with a copy to the General
Counsel, GMAC Commercial Mortgage Corporation.
12. SUCCESSORS. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 7 hereof, and their
successors and assigns, and no other person will have any right or obligation
hereunder.
13. APPLICABLE LAW. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS AND DECISIONS OF THE STATE OF NEW YORK.
14. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, which taken together
shall constitute one and the same instrument.
19
<PAGE>
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us a counterpart hereof, whereupon this letter and
your acceptance shall represent a binding agreement among the Company, GMACCM
and the Underwriters.
Very truly yours,
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
By: /s/ David Lazarus
----------------------------------
Name: David Lazarus
-----------------------------
Title: Vice President
----------------------------
GMAC COMMERCIAL MORTGAGE CORPORATION
By: /s/ David Lazarus
----------------------------------
Name: David Lazarus
-----------------------------
Title: Vice President
----------------------------
The foregoing Underwriting Agreement
is hereby confirmed and accepted as of
the date first above written.
LEHMAN BROTHERS INC.
By: /s/ Mike Mazzei
----------------------------------
Name: Mike Mazzei
-----------------------------
Title: Authorized Signatory
----------------------------
DEUTSCHE BANK SECURITIES INC.
By: /s/ Gregory B. Hartch
----------------------------------
Name: Gregory B. Hartch
-----------------------------
Title: Vice President
----------------------------
By: /s/ Jon Vaccaro
----------------------------------
Name: Jon Vaccaro
-----------------------------
Title: Director
----------------------------
S-1
<PAGE>
SCHEDULE I
----------
As used in this Agreement, the term "Registration Statement" refers to the
registration statement No. 333-37717 filed by GMAC Commercial Mortgage
Securities, Inc. on Form S-3 and declared effective by the Commission.
TITLE AND DESCRIPTION OF THE REGISTERED CERTIFICATES:
Mortgage Pass-Through Certificates, Series 1998-C2, Class X-1, Class A-1, Class
A-2, Class B, Class C, Class D and Class E
Underwriters: Lehman Brothers Inc. ("Lehman") and Deutsche Bank Securities Inc.
("DBS")
Underwriting Agreement, dated as of August 21, 1998
Cutoff Date: August 1, 1998
Allocations: Subject to the terms and conditions of the Underwriting Agreement,
each Underwriter has agreed to purchase the percentage of each class of
Certificates as set forth below:
ALLOCATION TABLE
- ----------- ------- --------- --------- ------- ------- ------- -------
UNDERWRITER CLASS X CLASS A-1 CLASS A-2 CLASS B CLASS C CLASS D CLASS E
- ----------- ------- --------- --------- ------- ------- ------- -------
Lehman 95% 100% 100% 100% 100% 100% 100%
- ----------- ------- --------- --------- ------- ------- ------- -------
DBS 5% 0% 0% 0% 0% 0% 0%
- ----------- ------- --------- --------- ------- ------- ------- -------
Total 100% 100% 100% 100% 100% 100% 100%
==== ==== ==== ==== ==== ==== ====
- ----------- ------- --------- --------- ------- ------- ------- -------
<PAGE>
<TABLE>
<CAPTION>
Initial Class Principal
Balance (or in the case Initial
Class of Class X, Class Pass-Through Purchase Fitch/Moody's/S&P
Designation Notional Amount)(1) Rate Price(2) Rating
- ----------- ----------------------- ------------ ---------- -----------------
<S> <C> <C> <C> <C>
X 2,530,361,727 0.823% 4.62744 AAA/Aaa/AAAr
A-1 465,000,000 6.150% 100.47608 AAA/Aaa/AAA
A-2 1,369,512,000 6.420% 101.07823 AAA/Aaa/AAA
B 126,518,000 6.420% 100.22708 AA/Aa2/AA
C 113,866,000 6.500% 99.31094 A/A2/A
D 164,474,000 6.500% 96.35573 BBB/Baa2/BBB
E 37,955,000 6.500% 92.35896 BBB-/Baa3/BBB-
</TABLE>
- ----------------------
(1) Subject to a variance of plus or minus 5.0%.
(2) Expressed as a percentage of the Class Principal Balance or Class Notional
Amount, as applicable, of the relevant class of Certificates to be
purchased. In addition, as to each such class of Certificates, the
Underwriters will pay GMAC Commercial Mortgage Securities, Inc. accrued
interest at the initial Pass-Through Rate therefor from the Cut-off Date to
but not including the Closing Date.
Closing Time, Date and Location: 10:00 a.m. New York City time on August 27,
1998 at the offices of Mayer, Brown & Platt.
Issuance and delivery of Registered Certificates: Each class of Registered
Certificates will be issued as one or more Certificates registered in the name
of Cede & Co., as nominee of The Depository Trust Company. Beneficial owners
will hold interests in such Certificates through the book-entry facilities of
The Depository Trust Company in minimum denominations of initial principal
balance or notional amount, as the case may be, of $25,000 in the case of the
Class A-1 and Class A-2 Certificates, Class B, Class C, Class D and Class E
Certificates and $1,000,000 in the case of the Class X Certificates, and
integral multiples of $1 in excess thereof.
<PAGE>
EXHIBIT A-1
[Letterhead of Mayer, Brown & Platt]
August ___, 1998
To: Persons listed on Annex A hereto
GMAC Commercial Mortgage Securities, Inc., Mortgage
Pass-Through Certificates, Series 1998-C2
---------------------------------------------------
Ladies and Gentlemen:
We have acted as special counsel to GMAC Commercial Mortgage Securities,
Inc. (the "Company") and GMAC Commercial Mortgage Corporation ("GMACCM") in
connection with the issuance by the Company of Mortgage Pass-Through
Certificates, Series 1998-C2 (the "Certificates"), evidencing undivided
interests in a trust fund (the "Trust Fund") consisting primarily of certain
mortgage loans (the "Mortgage Loans"), pursuant to the Pooling and Servicing
Agreement, dated as of August 1, 1998 (the "Pooling and Servicing Agreement"),
among the Company as depositor, GMACCM as master servicer and special servicer,
LaSalle National Bank as trustee (the "Trustee") and ABN AMRO Bank N.V., as
fiscal agent (the "Fiscal Agent").
Certain of the Mortgage Loans (the "GMACCM Mortgage Loans") were purchased
by the Company from GMACCM pursuant to, and for the consideration described in,
the Mortgage Loan Purchase Agreement, dated as of August 21, 1998 the ("GMACCM
Mortgage Loan Purchase Agreement"), between GMACCM and the Company. Certain of
the Mortgage Loans (the "LB Holdings Mortgage Loans") were purchased by the
Company from Lehman Brothers Holdings Inc. ("LB Holdings") pursuant to the
Mortgage Loan Purchase Agreement, dated as of August 21, 1998 (the "LB Holdings
Mortgage Loan Purchase Agreement"), between LB Holdings and the Company.
Certain of the Mortgage Loans (the "GACC Mortgage Loans") were purchased by the
Company from German American Capital Corporation ("GACC") pursuant to the
Mortgage Loan Purchase Agreement, dated as of August 21, 1998 (the "GACC
Mortgage Loan Purchase Agreement"), between GACC and the Company. Certain of
the Mortgage Loans (the "ML Trust Mortgage Loans") were purchased by the Company
from German American Capital Corporation ("GACC") pursuant to the Mortgage Loan
Purchase Agreement, dated as of August 21, 1998 (the "ML Trust Mortgage Loan
Purchase Agreement"), between ML Trust and the Company.
The Company sold the Class X, Class A-1, Class A-2, Class A-3, Class B,
Class C, Class D and Class E Certificates (collectively, the "Publicly Offered
Certificates") to Lehman Brothers Inc.
A-1-1
<PAGE>
and Deutsche Bank Securities Inc. as the underwriters (the "Underwriters")
named in the Underwriting Agreement, dated August 21, 1998 (the "Underwriting
Agreement"), among the Company, GMACCM and the Underwriters, and sold the Class
F, Class G, Class H, Class J, Class K, Class L, Class M, Class N, Class R-I,
Class R-II and R-III Certificates (collectively, the "Privately Offered
Certificates") to Lehman Brothers Inc. as initial purchaser (the "Initial
Purchaser") pursuant to the Certificate Purchase Agreement, dated August 21,
1998 (the "Certificate Purchase Agreement"), among the Company, GMACCM and the
Initial Purchaser (the Certificate Purchase Agreement, the Underwriting
Agreement, the GMACCM Mortgage Loan Purchase Agreement, the LB Holdings Mortgage
Loan Purchase Agreement, the GACC Mortgage Loan Purchase Agreement, the ML Trust
Mortgage Loan Purchase Agreement and the Pooling and Servicing Agreement,
collectively, the "Agreements"). Capitalized terms not defined herein have the
meanings set forth in the Agreements.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement (No. 333-37717) on Form S-3 for the
registration under the Securities Act of 1933, as amended (the "Act"), of
Mortgage Pass-Through Certificates (issuable in series), including the
Certificates, which registration statement has become effective, and a copy of
which, as amended to the date hereof, has heretofore been delivered to the
Underwriters. The Company has filed with the Commission pursuant to Rule 424(b)
under the rules and regulations of the Commission under the Act (the "1933 Act
Regulations") a supplement dated August 21, 1998 (the "Prospectus Supplement"),
to the prospectus dated December 17, 1997 (the "Basic Prospectus"), relating to
the Certificates and the method of distribution thereof. Such registration
statement (no. 333-37717) including exhibits thereto and any information
incorporated therein by reference, as amended at the date hereof, is hereinafter
called the "Registration Statement"; the Basic Prospectus and the Prospectus
Supplement and any information incorporated therein by reference (including,
without limitation, and only for purposes of clarification, any information
filed with the Commission pursuant to a Current Report on Form 8-K), together
with any amendment thereof or supplement thereto authorized by the Company on or
prior to the Closing Date for use in connection with the offering of the
Certificates, are hereinafter called the "Prospectus."
In connection with rendering this opinion letter, we have examined the
Agreements and such other documents as we have deemed necessary. As to matters
of fact, we have examined and relied upon the accuracy of the representations of
parties to the Agreements contained therein and, where we have deemed
appropriate, separate additional representations or certifications of parties to
the Agreements, their respective officers and representatives or public
officials. In rendering this opinion letter, we have also assumed (i) the
authenticity of all documents submitted to us as originals, the genuineness of
all signatures, the legal capacity of natural persons and the conformity to the
originals of all documents submitted to us as copies, (ii) except as expressly
addressed below, the due authorization, execution and delivery, and the
necessary power with respect thereto, and the enforceability of such documents,
(iii) the conformity to the requirements of the Agreements, of the Mortgage
Notes, the Mortgages and other documents delivered or caused to be delivered to
the Trustee by or on behalf of the Company, (iv) the performance by all parties
to the Agreements in
A-1-2
<PAGE>
accordance with their covenants and agreements made therein, and (v) that there
is not any other agreement that materially supplements or otherwise modifies the
agreements expressed in the Agreements.
In rendering this opinion letter, we do not express any opinion concerning
any law other than the law of the State of New York, the corporate law of the
State of Delaware and the federal law of the United States, nor do we express
any opinion concerning the application of the "doing business" laws or the
securities laws of any jurisdiction other than the federal securities laws of
the United States and, in each case, as in existence on the date hereof. In
rendering the opinions set forth below, as to matters governed by the laws of
the Commonwealth of Pennsylvania or other laws that may be applicable to the
Company and GMACCM, we have relied without independent investigation on the
opinion letter of Maria Corpora-Buck, Esq., general counsel to the Company and
GMACCM, dated the date hereof, a copy of which is annexed hereto. In addition,
in rendering the opinions set forth below, as to matters governed by the laws of
the State of California that may be applicable to GMACCM, we have relied on the
opinion letter of Severson & Werson, special California counsel to GMACCM, dated
the date hereof, a copy of which is annexed hereto. To the extent that we have
relied on the foregoing opinion letters, the opinions set forth below are
subject to the same assumptions, qualifications, exceptions and other
limitations set forth therein. We do not express any opinion on any issue not
expressly addressed below.
Based upon the foregoing, it is our opinion that:
1. The Registration Statement has become effective under the Securities
Act of 1933, as amended (the "Act"), and, to the best of our knowledge, no stop
order suspending the effectiveness of the Registration Statement has been issued
or threatened under Section 8(d) of the Act.
2. The Registration Statement, at the Effective Date, and the Prospectus,
as of the date of the Prospectus Supplement, other than financial or statistical
information or Computational Materials or ABS Term Sheets contained or
incorporated by reference therein, complied as to form in all material respects
with the requirements of the Act and the applicable rules and regulations
thereunder.
3. To our knowledge, there are no material contracts, indentures, or
other documents (not including Computational Materials and ABS Term Sheets) of a
character required to be described or referred to under either the Registration
Statement or the Prospectus or to be filed as exhibits to the Registration
Statement other than those described or referred to therein or filed or
incorporated by reference as exhibits thereto.
4. The Certificates, when duly and validly executed, authenticated and
delivered in accordance
A-1-3
<PAGE>
with the Pooling and Servicing Agreement, and paid for in and delivered in
accordance with the Underwriting Agreement and Certificate Purchase Agreement,
will be entitled to the benefits of the Pooling and Servicing Agreement.
5. The statements contained in the Prospectus and the Private Placement
Memorandum under the headings "ERISA Considerations" and "Certain Federal Income
Tax Consequences", to the extent that they constitute matters of 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.
6. The Pooling and Servicing Agreement is not required to be qualified
under the Trust Indenture Act of 1939, as amended, and the Trust Fund created by
the Pooling and Servicing Agreement is not required to be registered under the
Investment Company Act of 1940, as amended.
7. No consent, approval, authorization or order of any federal or State
of New York court or governmental agency or body is required for the
consummation by the Company or GMACCM of the transactions contemplated by the
terms of the Agreements, except (a) such as have been obtained under the Act and
(b) such as may be required under the blue sky laws of any jurisdiction in
connection with the purchase and the offer and sale of the Publicly Offered
Certificates by the Underwriters, as to which we express no opinion.
8. Neither the issuance and the sale of the Certificates pursuant to the
Agreements, nor the consummation of any other of the transactions contemplated
by, or the fulfillment by the Company or GMACCM of the terms of the Agreements,
will result in a breach of any term or provision of any federal or State of New
York statute or regulation or, to the best of our knowledge, conflict with,
result in a breach, violation or acceleration of or constitute a default under
any order of any federal or State of New York court, regulatory body,
administrative agency or governmental body having jurisdiction over the Company
or GMACCM.
9. Each of the Agreements has been duly and validly authorized, executed
and delivered by the Company and GMACCM and, upon due authorization, execution
and delivery by all other parties thereto, each of the Agreements will
constitute a valid, legal and binding agreement of the Company and GMACCM,
enforceable against the Company and GMACCM in accordance with its terms, except
as enforceability may be limited by (i) bankruptcy, insolvency, liquidation,
receivership, moratorium, reorganization or other similar laws affecting the
rights of creditors, (ii) general principles of equity, whether enforcement is
sought in a proceeding in equity or at law, and (iii) public policy
considerations underlying the securities laws, to the extent that such public
policy considerations limit the enforceability of the provisions of any of the
Agreements which purport to provide indemnification with respect to securities
law violations.
10. As described in the Prospectus and the Private Placement Memorandum,
and assuming (i) the making of appropriate elections and (ii) compliance with
all the provisions of the
A-1-4
<PAGE>
Agreements, for federal income tax purposes, each of REMIC I, REMIC II and REMIC
III will qualify as a real estate mortgage investment conduit (a "REMIC") within
the meaning of Sections 860A through 860G (the "REMIC Provisions") of the
Internal Revenue Code of 1986 (the "Code") in effect on the date hereof, and (i)
the Class R-I Certificates will be the sole class of "residual interests" in
REMIC I, (ii) the Class R-II Certificates will be the sole class of "residual
interests" in REMIC II, (iii) the REMIC III Regular Certificates will be
"regular interests" in REMIC III, and (iv) the Class R-III Certificates will be
the sole class of "residual interests" in REMIC III.
11. For purposes of City and State of New York income and corporation
franchise tax as in effect on the date hereof, each of REMIC I, REMIC II and
REMIC III will be classified as a REMIC and not a corporation, partnership or
trust, in conformity with the federal income tax treatment of each such REMIC.
Accordingly, each of REMIC I, REMIC II and REMIC III will be exempt from all
City and State of New York taxation imposed on its income, franchise or capital
stock, and its assets will not be included in the calculation of any franchise
tax liability.
In rendering the opinions expressed above we express no opinion regarding
any severability provision in the Agreements or regarding the legal, valid and
binding effect or the enforceability of any indemnification provision in the
Agreements to the extent that any such provisions may be deemed to cover matters
under the federal securities laws. The opinions expressed in paragraph 9 above
are subject to the further qualification that certain of the remedial provisions
in the Agreements may be limited or rendered ineffective or unenforceable in
whole or in part under the laws of the State of New York (but the inclusion of
such provisions does not make the remedies provided by the Agreements inadequate
for the practical realization of the rights and benefits purported to be
provided thereby, except for the economic consequences of procedural or other
delay).
Whenever our opinion with respect to the existence or absence of facts is
indicated to be based on our knowledge or awareness, we are referring to the
actual knowledge of the Mayer, Brown & Platt attorneys who have represented you
in connection with the transactions contemplated by the Agreements. Except as
expressly set forth herein, we have not undertaken any independent investigation
to determine the existence or absence of such facts and no inference as to our
knowledge concerning such facts should be drawn from the fact that such
representation has been undertaken by us.
This opinion letter is rendered for the sole benefit of each addressee
hereof, and no other person or entity is entitled to rely hereon. Copies of
this opinion letter may not be furnished to any other person or entity, nor may
any portion of this opinion letter be quoted, circulated or referred to in any
other document.
Very truly yours,
MAYER, BROWN & PLATT
A-1-5
<PAGE>
Annex A
GMAC Commercial Mortgage Securities, Inc.
GMAC Commercial Mortgage Corporation
Lehman Brothers Inc.
Deutsche Bank Securities Inc.
LaSalle National Bank
ABN AMRO Bank N.V.
FITCH IBCA, INC.
Moody's Investors Service, Inc.
Standard & Poor's Ratings Services
A-1-6
<PAGE>
EXHIBIT A-2
[Letterhead of Mayer, Brown & Platt]
August ___, 1998
To: Persons Listed on Annex A hereto
GMAC Commercial Mortgage Securities, Inc., Mortgage
Pass-Through Certificates, Series 1998-C2
---------------------------------------------------
Ladies and Gentlemen:
We have acted as special counsel to GMAC Commercial Mortgage Securities,
Inc. (the "Company") and GMAC Commercial Mortgage Corporation ("GMACCM") in
connection with the issuance by the Company of Mortgage Pass-Through
Certificates, Series 1998-C2 (the "Certificates"), evidencing undivided
interests in a trust fund (the "Trust Fund") consisting primarily of certain
mortgage loans (the "Mortgage Loans"), pursuant to the Pooling and Servicing
Agreement, dated as of August 1, 1998 (the "Pooling and Servicing Agreement"),
among the Company as depositor, GMACCM as master servicer and special servicer,
LaSalle National Bank as trustee (the "Trustee") and ABN AMRO Bank N.V., as
fiscal agent (the "Fiscal Agent").
Certain of the Mortgage Loans (the "GMACCM Mortgage Loans") were purchased
by the Company from GMACCM pursuant to, and for the consideration described in,
the Mortgage Loan Purchase Agreement, dated as of August 21, 1998 the ("GMACCM
Mortgage Loan Purchase Agreement"), between GMACCM and the Company. Certain of
the Mortgage Loans (the "LB Holdings Mortgage Loans") were purchased by the
Company from Lehman Brothers Holdings Inc. ("LB Holdings") pursuant to the
Mortgage Loan Purchase Agreement, dated as of August 21, 1998 (the "LB Holdings
Mortgage Loan Purchase Agreement"), between LB Holdings and the Company.
Certain of the Mortgage Loans (the "GACC Mortgage Loans") were purchased by the
Company from German American Capital Corporation ("GACC") pursuant to the
Mortgage Loan Purchase Agreement, dated as of August 21, 1998 (the "GACC
Mortgage Loan Purchase Agreement"), between GACC and the Company. Certain of
the Mortgage Loans (the "ML Trust Mortgage Loans") were purchased by the Company
from German American Capital Corporation ("GACC") pursuant to the Mortgage Loan
Purchase Agreement, dated as of August 21, 1998 (the "ML Trust Mortgage Loan
Purchase Agreement"), between ML Trust and the Company.
A-2-1
<PAGE>
The Company sold the Class X, Class A-1, Class A-2, Class A-3, Class B,
Class C, Class D and Class E Certificates (collectively, the "Publicly Offered
Certificates") to Lehman Brothers Inc. and Deutsche Bank Securities Inc. as the
underwriters (the "Underwriters") named in the Underwriting Agreement, dated
August 21, 1998 (the "Underwriting Agreement"), among the Company, GMACCM and
the Underwriters, and sold the Class F, Class G, Class H, Class J, Class K,
Class L, Class M, Class N, Class R-I, Class R-II and R-III Certificates
(collectively, the "Privately Offered Certificates") to Lehman Brothers Inc. as
initial purchaser (the "Initial Purchaser") pursuant to the Certificate Purchase
Agreement, dated August 21, 1997 (the "Certificate Purchase Agreement"), among
the Company, GMACCM and the Initial Purchaser (the Certificate Purchase
Agreement, the Underwriting Agreement, the GMACCM Mortgage Loan Purchase
Agreement, the LB Holdings Mortgage Loan Purchase Agreement, the GACC Mortgage
Loan Purchase Agreement, the ML Trust Mortgage Loan Purchase Agreement and the
Pooling and Servicing Agreement, collectively, the "Agreements"). Capitalized
terms not defined herein have the meanings set forth in the Agreements.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement (No. 333-37717) on Form S-3 for the
registration under the Securities Act of 1933, as amended (the "Act"), of
Mortgage Pass-Through Certificates (issuable in series), including the
Certificates, which registration statement has become effective, and a copy of
which, as amended to the date hereof, has heretofore been delivered to the
Underwriters. The Company has filed with the Commission pursuant to Rule 424(b)
under the rules and regulations of the Commission under the Act (the "1933 Act
Regulations") a supplement dated August 21, 1998 (the "Prospectus Supplement"),
to the prospectus dated December 17, 1997 (the "Basic Prospectus"), relating to
the Certificates and the method of distribution thereof. Such registration
statement (no. 333-37717) including exhibits thereto and any information
incorporated therein by reference, as amended at the date hereof, is hereinafter
called the "Registration Statement"; the Basic Prospectus and the Prospectus
Supplement and any information incorporated therein by reference (including,
without limitation, and only for purposes of clarification, any information
filed with the Commission pursuant to a Current Report on Form 8-K), together
with any amendment thereof or supplement thereto authorized by the Company on or
prior to the Closing Date for use in connection with the offering of the
Certificates, are hereinafter called the "Prospectus."
Because of the wholly or partially non-legal character of many
determinations involved in the preparation of the Registration Statement, the
Prospectus and the Private Placement Memorandum, we are not advising herein with
respect to and do not assume any responsibility herein for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement, the Prospectus or the Private Placement Memorandum and make no
representation herein that we have otherwise independently verified the
accuracy, completeness or fairness of such statements. In particular and
without limiting the foregoing, we express no advice as to any such accounting,
financial or statistical information contained in the Registration Statement,
the Prospectus or the Private Placement Memorandum, or as to any Computational
Materials or ABS
A-2-2
<PAGE>
Term Sheets, and we have not examined any accounting, financial or statistical
records from which the information and statements included therein were
derived. In addition, with limited exception, we have not reviewed any of the
Mortgage Notes, Mortgages or other documents in the Mortgage Files or made any
inquiry of any originator of any Mortgage Loan other than the Mortgage Loan
Sellers.
We do not act as general counsel to the Company or GMACCM. In our
representation of the Company and GMACCM in connection with the transactions
contemplated by the Agreements, however, we met in conferences and participated
in telephone conversations with representatives of parties to the Agreements,
Deutsche Bank Securities Inc. and Lehman Brothers Inc. and their respective
counsel in addition to us. During those conferences and telephone
conversations, the contents of the Registration Statement, the Prospectus and
the Private Placement Memorandum and related matters were discussed. With
respect to the accuracy, completeness and fairness of the information relating
to GMACCM, the other Mortgage Loan Sellers, and the Trustee and the Fiscal Agent
contained in the Prospectus and the Private Placement Memorandum under the
captions "Description of the Mortgage Asset Pool--The Mortgage Loan Sellers,"
"Servicing of the Mortgage Loans--The Servicer" and "Description of the
Certificates--The Trustee and Fiscal Agent", we have relied exclusively on those
conferences and telephone conversations and that no information inconsistent
therewith has come to our attention. In addition, we have examined the
Agreements and reviewed various opinions rendered and certificates delivered in
connection with the issuance of the Certificates. We have not otherwise
undertaken any procedures that were intended or likely to elicit information
concerning the accuracy, completeness or fairness of the statements made in the
Registration Statement, the Prospectus or the Private Placement Memorandum. We
have assumed that there is not and will not be any other agreement that
materially supplements or otherwise modifies the agreements expressed in the
Agreements.
Based upon and subject to the foregoing, and further based upon our
understanding of applicable law and the experience we have gained in our
practice thereunder, we hereby advise you that no information has come to our
attention that causes us to believe that (i) the Registration Statement as of
the date it became effective, contained or contains any untrue statement of a
material fact or omitted or omits to state a material fact necessary in order to
make the statements therein not misleading and (ii) the Prospectus or the
Private Placement Memorandum as of the date thereof or hereof, contained or
contains any 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.
Whenever our opinion with respect to the existence or absence of facts is
indicated to be based on our knowledge or awareness, we are referring to the
actual knowledge of the Mayer, Brown & Platt attorneys who have represented the
Company and GMACCM in connection with the transactions contemplated by the
Agreements. Except as expressly set forth herein, we have not undertaken any
independent investigation to determine the existence or absence or such facts
A-2-3
<PAGE>
and no inference as to our knowledge concerning such facts should be drawn from
the fact that such representation has been undertaken by us.
This letter is provided for the sole benefit of each addressee hereof, and
no other person or entity is entitled to rely hereon. Copies of this letter may
not be furnished to any other person or entity, nor may any portion of this
letter be quoted, circulated or referred to in any other document.
Very truly yours,
MAYER, BROWN & PLATT
A-2-4
<PAGE>
Annex A
GMAC Commercial Mortgage Securities, Inc.
GMAC Commercial Mortgage Corporation
Lehman Brothers Inc.
Deutsche Bank Securities Inc.
A-2-5
<PAGE>
EXHIBIT B-1
[GMAC Commercial Mortgage Corporation Letterhead]
August ___, 1998
To: Persons Listed on Annex A hereto
GMAC Commercial Mortgage Securities, Inc.,
Mortgage Pass-Through Certificates, Series 1998-C2
--------------------------------------------------
Ladies and Gentlemen:
I am General Counsel to GMAC Commercial Mortgage Securities, Inc. (the
"Company") and GMAC Commercial Mortgage Corporation ("GMACCM"). In that
capacity, I am familiar with the issuance of certain Mortgage Pass-Through
Certificates, Series 1998-C2 (the "Certificates"), evidencing undivided
interests in a trust fund (the "Trust Fund") consisting primarily of certain
mortgage loans (the "Mortgage Loans"), pursuant to a Pooling and Servicing
Agreement, dated as of August 1, 1998 (the "Pooling and Servicing Agreement"),
among the Company as depositor, GMACCM as master servicer and special servicer,
LaSalle National Bank as trustee (the "Trustee") and ABN AMRO Bank N.V. as
fiscal agent.
Certain of the Mortgage Loans (the "GMACCM Mortgage Loans") were purchased
by the Company from GMACCM pursuant to, and for the consideration described in,
the Mortgage Loan Purchase Agreement, dated as of August 21, 1998 the ("GMACCM
Mortgage Loan Purchase Agreement"), between GMACCM and the Company. Certain of
the Mortgage Loans (the "LB Holdings Mortgage Loans") were purchased by the
Company from Lehman Brothers Holdings Inc. ("LB Holdings") pursuant to the
Mortgage Loan Purchase Agreement, dated as of August 21, 1998 (the "LB Holdings
Mortgage Loan Purchase Agreement"), between LB Holdings and the Company.
Certain of the Mortgage Loans (the "GACC Mortgage Loans") were purchased by the
Company from German American Capital Corporation ("GACC") pursuant to the
Mortgage Loan Purchase Agreement, dated as of August 21, 1998 (the "GACC
Mortgage Loan Purchase Agreement"), between GACC and the Company. Certain of
the Mortgage Loans (the "ML Trust Mortgage Loans") were purchased by the Company
from German American Capital Corporation ("GACC") pursuant to the Mortgage Loan
Purchase Agreement, dated as of August 21, 1998 (the "ML Trust Mortgage Loan
Purchase Agreement"), between ML Trust and the Company.
The Company sold the Class X, Class A-1, Class A-2, Class B, Class C, Class
D and Class E Certificates (collectively, the "Publicly Offered Certificates")
to Lehman Brothers Inc. and Deutsche Bank Securities Inc. as the underwriters
(the "Underwriters") named in the
B-1-1
<PAGE>
Underwriting Agreement, dated as of August 24, 1998 (the "Underwriting
Agreement"), among the Company, GMACCM and the Underwriters, and sold the Class
F, Class G, Class H, Class J, Class K, Class L, Class M, Class N, Class R-I,
Class R-II and R-III Certificates (collectively, the "Privately Offered
Certificates") to Lehman Brothers Inc. as initial purchaser (the "Initial
Purchaser") pursuant to the Certificate Purchase Agreement, dated as of August
21, 1998 (the "Certificate Purchase Agreement"), among the Company, GMACCM and
the Initial Purchaser (the Certificate Purchase Agreement, the Underwriting
Agreement, the GMACCM Mortgage Loan Purchase Agreement, the LB Holdings Mortgage
Loan Purchase Agreement, the GACC Mortgage Loan Purchase Agreement and the ML
Trust Mortgage Loan Purchase Agreement and the Pooling and Servicing Agreement,
collectively, the "Agreements"). Capitalized terms not defined herein have the
meanings set forth in the Agreements.
In connection with rendering this opinion letter, I have examined the
Agreements and such other records and other documents as I have deemed
necessary. I have further assumed that there is not and will not be any other
agreement that materially supplements or otherwise modifies the agreements
expressed in the Agreements. As to matters of fact, I have examined and relied
upon representations of parties contained in the Agreements and, where I have
deemed appropriate, representations and certifications of officers of the
Company, GMACCM, the Trustee, other transaction participants or public
officials. I have assumed the authenticity of all documents submitted to me as
originals, the genuineness of all signatures other than officers of the Company
and GMACCM, the legal capacity of natural persons other than officers of the
Company and GMACCM and the conformity to the originals of all documents
submitted to me as copies. I have assumed that all parties, except for the
Company and GMACCM, had the corporate power and authority to enter into and
perform all obligations thereunder. As to such parties, I also have assumed the
due authorization by all requisite corporate action, the due execution and
delivery and the enforceability of such documents. I have further assumed the
conformity of the Mortgage Loans and related documents to the requirements of
the Agreements.
In rendering this opinion letter, I do not express any opinion concerning
any law other than the law of the Commonwealth of Pennsylvania, the General
Corporation Law of the State of Delaware and the federal law of the United
States, and I do not express any opinion concerning the application of the
"doing business" laws or the securities laws of any jurisdiction other than the
federal securities laws of the United States. To the extent that any of the
matters upon which I am opining herein are governed by laws ("Other Laws") other
than the laws identified in the preceding sentence, I have assumed with your
permission and without independent verification or investigation as to the
reasonableness of such assumption, that such Other Laws and judicial
interpretation thereof do not vary in any respect material to this opinion from
the corresponding laws of the Commonwealth of Pennsylvania and judicial
interpretations thereof. I do not express any opinion on any issue not
expressly addressed below.
Based upon the foregoing, I am of the opinion that:
B-1-2
<PAGE>
1. The Company is duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware, and has
the requisite power and authority, corporate or other, to own its properties and
conduct its business, as presently conducted by it, and to enter into and
perform its obligations under the Agreements.
2. GMACCM has the requisite power and authority, corporate or other, to
enter into and perform its obligations under the Agreements.
3. Each of the Agreements has been duly and validly authorized, executed
and delivered by the Company and GMACCM and, upon due authorization, execution
and delivery by the other parties thereto, will constitute the valid, legal and
binding agreements of GMACCM and the Company, enforceable against GMACCM and
the Company in accordance with their terms, except as enforceability may be
limited by (i) bankruptcy, insolvency, liquidation, receivership, moratorium,
reorganization or other similar laws affecting the rights of creditors, (ii)
general principles of equity, whether enforcement is sought in a proceeding in
equity or at law, and (iii) public policy considerations underlying the
securities laws, to the extent that such public policy considerations limit the
enforceability of the provisions of the Agreements which purport to provide
indemnification with respect to securities law violations.
4. No consent, approval, authorization or order of the Commonwealth of
Pennsylvania, State of Delaware, State of California or federal court or
governmental agency or body is required for the consummation by GMACCM or the
Company of the transactions contemplated by the terms of the Agreements, except
for those consents, approvals, authorizations or orders which previously have
been obtained.
5. Neither the sale, issuance and delivery of the Certificates as
provided in the Agreements nor the consummation of any other of the transactions
contemplated by, or the fulfillment by the Company or GMACCM of any other of
the terms of, the Agreements, will result in a breach of any term or provision
of the charter or bylaws of GMACCM or the Company or any Commonwealth of
Pennsylvania, State of Delaware, or federal statute or regulation or conflict
with, result in a breach, violation or acceleration of or constitute a default
under the terms of any indenture or other material agreement or instrument to
which GMACCM or the Company is a party or by which it is bound or any order or
regulation of any Commonwealth of Pennsylvania or federal court, regulatory
body, administrative agency or governmental body having jurisdiction over
GMACCM or the Company.
This opinion letter is rendered for the sole benefit of each addressee
hereof, and no other person or entity, except Mayer, Brown & Platt, is entitled
to rely hereon without my prior written consent. Copies of this opinion letter
may not be furnished to any other person or entity, nor may any portion of this
opinion letter be quoted, circulated or referred to in any other document
without my prior written consent.
Very truly yours,
Maria Corpora-Buck
General Counsel
B-1-3
<PAGE>
Annex A
GMAC Commercial Mortgage Securities, Inc.
GMAC Commercial Mortgage Corporation
Lehman Brothers Inc.
Deutsche Bank Securities Inc.
LaSalle National Bank
ABN AMRO Bank N.V.
FITCH IBCA, INC.
Moody's Investors Service, Inc.
Standard & Poor's Ratings Services
B-1-4
<PAGE>
EXHIBIT C
Excluded Information of Prospectus Supplement
(All circled text and tables are excluded)
<PAGE>
EXHIBIT D
Underwriter Information
(All circled text and tables are excluded)
<PAGE>
EXHIBIT E
August [__], 1998
GMAC Commercial Mortgage Securities, Inc.
GMAC Commercial Mortgage Corporation
650 Dresher Road
Horsham, Pennsylvania 19044
Re: GMAC Commercial Mortgage Securities, Inc., Mortgage
Pass-Through Certificates, Series 1998-C2
-----------------------------------------
Pursuant to Section 4.3 of the Underwriting Agreement, dated August 21,
1998 (the "Underwriting Agreement"), among GMAC Commercial Mortgage Securities,
Inc., GMAC Commercial Mortgage Corporation, Lehman Brothers Inc. and Deutsche
Bank Securities Inc., each as representative on behalf of itself and the
underwriters set forth therein (the "Underwriters") relating to the Certificates
referenced above, the undersigned does hereby certify that:
(a) The prepayment assumption used in pricing the Certificates was [__]%
CPR.
(b) With respect to each class of Certificates, set forth below is (i),
the first price at which 10% of the aggregate actual or notional, as the case
may be, principal balance of each such class of Certificates was sold to the
public at a single price, if applicable, or (ii) if more than 10% of a class of
Certificates have been sold to the public but no single price is paid for at
least 10% of the aggregate actual or notional, as the case may be, principal
balance of such class of Certificates, then the weighted average price at which
the Certificates of such class were sold expressed as a percentage of the actual
or notional, as the case may be, principal balance of such class of
Certificates, or (iii) if less than 10% of the aggregate actual or notional, as
the case may be, principal balance of a class of Certificates has been sold to
the public, the purchase price for each such class of Certificates paid by the
Underwriters expressed as a percentage of the actual or notional, as the case
may be, principal balance of such class of Certificates calculated by: (1)
estimating the fair market value of each such class of Certificates as of August
__, 1998; (2) adding such estimated fair market value to the aggregate purchase
price of each class of Certificates described in clause (i) or (ii) above; (3)
dividing each of the fair market values determined in clause (1) by the sum
obtained in clause (2); (4) multiplying the quotient obtained for each class of
Certificates in clause (3) by the purchase price paid by the Purchaser for all
the Certificates; and (5) for each class of Certificates, dividing the product
obtained from such class of Certificates in clause (4) by the original actual or
notional, as the case may be, principal balance of such class of Certificates:
Class X: ______________
Class A-1: ______________
Class A-2: ______________
E-1
<PAGE>
Class B: _____________
Class C: _____________
Class D: _____________
Class E: _____________
* less than 10% has been sold to the public
The prices set forth above do not include accrued interest with respect to
periods before closing.
LEHMAN BROTHERS INC.
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
DEUTSCHE BANK SECURITIES INC.
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
E-2
<PAGE>
Exhibit 4.1
EXECUTION COPY
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.,
DEPOSITOR,
GMAC COMMERCIAL MORTGAGE CORPORATION,
MASTER SERVICER,
GMAC COMMERCIAL MORTGAGE CORPORATION,
SPECIAL SERVICER,
LASALLE NATIONAL BANK,
TRUSTEE
and
ABN AMRO BANK N.V.,
FISCAL AGENT
--------------------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of August 1, 1998
--------------------------------------------
$2,530,361,727
Mortgage Pass-Through Certificates
Series 1998-C2
<PAGE>
TABLE OF CONTENTS
Section Page
- ------- ----
ARTICLE I DEFINITIONS
SECTION 1.01 Defined Terms. . . . . . . . . . . . . . . . . . . . . . 4
Accrued Certificate Interest. . . . . . . . . . . . . . . . . . 4
Acquisition Date. . . . . . . . . . . . . . . . . . . . . . . . 4
Additional Information. . . . . . . . . . . . . . . . . . . . . 4
Additional Trust Fund Expense . . . . . . . . . . . . . . . . . 4
Adjustable Rate Mortgage Loan . . . . . . . . . . . . . . . . . 4
Advance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Advance Interest. . . . . . . . . . . . . . . . . . . . . . . . 4
Adverse Grantor Trust Event . . . . . . . . . . . . . . . . . . 4
Adverse REMIC Event . . . . . . . . . . . . . . . . . . . . . . 5
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Anticipated Repayment Date. . . . . . . . . . . . . . . . . . . 5
Applicable State Law. . . . . . . . . . . . . . . . . . . . . . 5
Appraisal . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Appraisal Reduction Amount. . . . . . . . . . . . . . . . . . . 5
Appraised Value . . . . . . . . . . . . . . . . . . . . . . . . 6
ARD Loan. . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Assignment of Leases. . . . . . . . . . . . . . . . . . . . . . 6
Assumed Monthly Payment . . . . . . . . . . . . . . . . . . . . 6
Available Distribution Amount . . . . . . . . . . . . . . . . . 7
Balloon Mortgage Loan . . . . . . . . . . . . . . . . . . . . . 8
Balloon Payment . . . . . . . . . . . . . . . . . . . . . . . . 8
Balloon Payment Interest Excess . . . . . . . . . . . . . . . . 8
Balloon Payment Interest Shortfall. . . . . . . . . . . . . . . 8
Bankruptcy Code . . . . . . . . . . . . . . . . . . . . . . . . 8
Bloomberg . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Breach. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Book-Entry Certificate. . . . . . . . . . . . . . . . . . . . . 8
Business Day. . . . . . . . . . . . . . . . . . . . . . . . . . 9
Cash Collateral Account . . . . . . . . . . . . . . . . . . . . 9
Cash Collateral Account Agreement . . . . . . . . . . . . . . . 9
CERCLA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Certificate Account . . . . . . . . . . . . . . . . . . . . . . 9
Certificate Factor. . . . . . . . . . . . . . . . . . . . . . . 9
Certificateholder . . . . . . . . . . . . . . . . . . . . . . . 10
Holder. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
i
<PAGE>
Certificate Notional Amount . . . . . . . . . . . . . . . . . . 10
Certificate Owner . . . . . . . . . . . . . . . . . . . . . . . 10
Certificate Principal Balance . . . . . . . . . . . . . . . . . 10
Certificate Register. . . . . . . . . . . . . . . . . . . . . . 10
Certificate Registrar . . . . . . . . . . . . . . . . . . . . . 10
Class . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Class A Certificate . . . . . . . . . . . . . . . . . . . . . . 10
Class A-1 Certificate . . . . . . . . . . . . . . . . . . . . . 10
Class A-2 Certificate . . . . . . . . . . . . . . . . . . . . . 11
Class B Certificate . . . . . . . . . . . . . . . . . . . . . . 11
Class C Certificate . . . . . . . . . . . . . . . . . . . . . . 11
Class D Certificate . . . . . . . . . . . . . . . . . . . . . . 11
Class E Certificate . . . . . . . . . . . . . . . . . . . . . . 11
Class F Certificate . . . . . . . . . . . . . . . . . . . . . . 11
Class G Certificate . . . . . . . . . . . . . . . . . . . . . . 11
Class H Certificate . . . . . . . . . . . . . . . . . . . . . . 11
Class J Certificate . . . . . . . . . . . . . . . . . . . . . . 11
Class K Certificate . . . . . . . . . . . . . . . . . . . . . . 11
Class L Certificate . . . . . . . . . . . . . . . . . . . . . . 11
Class M Certificate . . . . . . . . . . . . . . . . . . . . . . 12
Class N Certificate . . . . . . . . . . . . . . . . . . . . . . 12
Class LA-1 Component. . . . . . . . . . . . . . . . . . . . . . 12
Class LA-2 Component. . . . . . . . . . . . . . . . . . . . . . 12
Class LB Component. . . . . . . . . . . . . . . . . . . . . . . 12
Class LC Component. . . . . . . . . . . . . . . . . . . . . . . 12
Class LD Component. . . . . . . . . . . . . . . . . . . . . . . 12
Class LE Component. . . . . . . . . . . . . . . . . . . . . . . 12
Class LF Component. . . . . . . . . . . . . . . . . . . . . . . 13
Class LG Component. . . . . . . . . . . . . . . . . . . . . . . 13
Class LH Component. . . . . . . . . . . . . . . . . . . . . . . 13
Class LJ Component. . . . . . . . . . . . . . . . . . . . . . . 13
Class LK Component. . . . . . . . . . . . . . . . . . . . . . . 13
Class LL Component. . . . . . . . . . . . . . . . . . . . . . . 13
Class LM Component. . . . . . . . . . . . . . . . . . . . . . . 13
Class LN Component. . . . . . . . . . . . . . . . . . . . . . . 14
Class LA-1 Component Rate . . . . . . . . . . . . . . . . . . . 14
Class LA-2 Component Rate . . . . . . . . . . . . . . . . . . . 14
Class LB Component. . . . . . . . . . . . . . . . . . . . . . . 14
Class LC Component. . . . . . . . . . . . . . . . . . . . . . . 14
Class LD Component. . . . . . . . . . . . . . . . . . . . . . . 14
Class LE Component. . . . . . . . . . . . . . . . . . . . . . . 14
Class LF Component Rate . . . . . . . . . . . . . . . . . . . . 14
Class LG Component Rate . . . . . . . . . . . . . . . . . . . . 14
Class LH Component Rate . . . . . . . . . . . . . . . . . . . . 14
ii
<PAGE>
Class LJ Component Rate . . . . . . . . . . . . . . . . . . . . 14
Class LK Component Rate . . . . . . . . . . . . . . . . . . . . 15
Class LL Component Rate . . . . . . . . . . . . . . . . . . . . 15
Class LM Component Rate . . . . . . . . . . . . . . . . . . . . 15
Class LN Component Rate . . . . . . . . . . . . . . . . . . . . 15
Class Notional Amount . . . . . . . . . . . . . . . . . . . . . 15
Class Principal Balance . . . . . . . . . . . . . . . . . . . . 15
Class R-I Certificate . . . . . . . . . . . . . . . . . . . . . 15
Class R-I Distribution Amount . . . . . . . . . . . . . . . . . 15
Class R-II Certificate. . . . . . . . . . . . . . . . . . . . . 15
Class R-II Distribution Amount. . . . . . . . . . . . . . . . . 16
Class R-III Certificate . . . . . . . . . . . . . . . . . . . . 16
Class R-III Distribution Amount . . . . . . . . . . . . . . . . 16
Class X Certificate . . . . . . . . . . . . . . . . . . . . . . 16
Class X Component . . . . . . . . . . . . . . . . . . . . . . . 16
Closing Date. . . . . . . . . . . . . . . . . . . . . . . . . . 16
Code. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Collection Period . . . . . . . . . . . . . . . . . . . . . . . 16
Collection Report . . . . . . . . . . . . . . . . . . . . . . . 16
Commission. . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Compensating Interest Payments. . . . . . . . . . . . . . . . . 16
Component Rate. . . . . . . . . . . . . . . . . . . . . . . . . 16
Controlling Class . . . . . . . . . . . . . . . . . . . . . . . 17
Corporate Trust Office. . . . . . . . . . . . . . . . . . . . . 17
Corrected Mortgage Loan . . . . . . . . . . . . . . . . . . . . 17
CPR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Credit File . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Credit Lease. . . . . . . . . . . . . . . . . . . . . . . . . . 17
Credit Lease Loan . . . . . . . . . . . . . . . . . . . . . . . 17
Cross-Collateralized Mortgage Loans . . . . . . . . . . . . . . 17
CSSA Loan File Report . . . . . . . . . . . . . . . . . . . . . 17
CSSA Property File Report . . . . . . . . . . . . . . . . . . . 18
Current Principal Distribution Amount . . . . . . . . . . . . . 18
Custodian . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Cut-off Date. . . . . . . . . . . . . . . . . . . . . . . . . . 19
Cut-off Date Principal Balance. . . . . . . . . . . . . . . . . 19
Debt Service Coverage Ratio . . . . . . . . . . . . . . . . . . 19
Debt Service Reduction. . . . . . . . . . . . . . . . . . . . . 19
Defaulted Mortgage Loan . . . . . . . . . . . . . . . . . . . . 19
Default Interest. . . . . . . . . . . . . . . . . . . . . . . . 19
Defaulting Party. . . . . . . . . . . . . . . . . . . . . . . . 19
Defeasance Collateral . . . . . . . . . . . . . . . . . . . . . 19
Defeasance Loan . . . . . . . . . . . . . . . . . . . . . . . . 19
Defeasance Option . . . . . . . . . . . . . . . . . . . . . . . 20
iii
<PAGE>
Defect. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Deficient Valuation . . . . . . . . . . . . . . . . . . . . . . 20
Definitive Certificate. . . . . . . . . . . . . . . . . . . . . 20
Deleted Mortgage Loan . . . . . . . . . . . . . . . . . . . . . 20
Delinquency Advance . . . . . . . . . . . . . . . . . . . . . . 20
Delinquency Advance Date. . . . . . . . . . . . . . . . . . . . 20
Delinquent Loan Status Report . . . . . . . . . . . . . . . . . 20
Depositor . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Depository. . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Depository Participant. . . . . . . . . . . . . . . . . . . . . 21
Determination Date. . . . . . . . . . . . . . . . . . . . . . . 21
Directly Operate. . . . . . . . . . . . . . . . . . . . . . . . 21
Discount Rate . . . . . . . . . . . . . . . . . . . . . . . . . 21
Discount Rate Fraction. . . . . . . . . . . . . . . . . . . . . 21
Distributable Certificate Interest. . . . . . . . . . . . . . . 22
Distribution Account. . . . . . . . . . . . . . . . . . . . . . 22
Distribution Date . . . . . . . . . . . . . . . . . . . . . . . 22
Distribution Date Statement . . . . . . . . . . . . . . . . . . 22
Due Date. . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Eligible Account. . . . . . . . . . . . . . . . . . . . . . . . 22
Emergency Advance . . . . . . . . . . . . . . . . . . . . . . . 23
Environmental Assessment. . . . . . . . . . . . . . . . . . . . 23
ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Escrow Payment. . . . . . . . . . . . . . . . . . . . . . . . . 23
Event of Default. . . . . . . . . . . . . . . . . . . . . . . . 23
Excess Interest . . . . . . . . . . . . . . . . . . . . . . . . 23
Excess Rate . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Exchange Act. . . . . . . . . . . . . . . . . . . . . . . . . . 23
Extraordinary Prepayment Interest Shortfall . . . . . . . . . . 23
FDIC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
FHLMC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Final Distribution Date . . . . . . . . . . . . . . . . . . . . 24
Final Recovery Determination. . . . . . . . . . . . . . . . . . 24
Fiscal Agent. . . . . . . . . . . . . . . . . . . . . . . . . . 24
Fiscal Agent Termination Event. . . . . . . . . . . . . . . . . 24
FITCH IBCA. . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Fixed Rate Mortgage Loan. . . . . . . . . . . . . . . . . . . . 24
FNMA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
GMACCM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Grantor Trust . . . . . . . . . . . . . . . . . . . . . . . . . 25
Grantor Trust Assets. . . . . . . . . . . . . . . . . . . . . . 25
Grantor Trust Provisions. . . . . . . . . . . . . . . . . . . . 25
Gross Margin. . . . . . . . . . . . . . . . . . . . . . . . . . 25
Ground Lease. . . . . . . . . . . . . . . . . . . . . . . . . . 25
iv
<PAGE>
Guaranty. . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Hazardous Materials . . . . . . . . . . . . . . . . . . . . . . 25
Historical Loan Modification Report . . . . . . . . . . . . . . 25
Historical Loss Report. . . . . . . . . . . . . . . . . . . . . 25
Independent . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Independent Contractor. . . . . . . . . . . . . . . . . . . . . 26
Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Initial Balance . . . . . . . . . . . . . . . . . . . . . . . . 27
Initial Class Notional Amount . . . . . . . . . . . . . . . . . 27
Initial Class Principal Balance . . . . . . . . . . . . . . . . 27
Insurance Policy. . . . . . . . . . . . . . . . . . . . . . . . 27
Insurance Proceeds. . . . . . . . . . . . . . . . . . . . . . . 27
Interest Accrual Period . . . . . . . . . . . . . . . . . . . . 27
Interest Rate Adjustment Date . . . . . . . . . . . . . . . . . 27
Interest Reserve Account. . . . . . . . . . . . . . . . . . . . 27
Interest Reserve Loans. . . . . . . . . . . . . . . . . . . . . 27
Interested Person . . . . . . . . . . . . . . . . . . . . . . . 28
Investment Account. . . . . . . . . . . . . . . . . . . . . . . 28
Issue Price . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Late Collections. . . . . . . . . . . . . . . . . . . . . . . . 28
Late Due Date Mortgage Loan . . . . . . . . . . . . . . . . . . 28
LB Holdings . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Liquidation Event . . . . . . . . . . . . . . . . . . . . . . . 28
Liquidation Expenses. . . . . . . . . . . . . . . . . . . . . . 29
Liquidation Fee . . . . . . . . . . . . . . . . . . . . . . . . 29
Liquidation Fee Rate. . . . . . . . . . . . . . . . . . . . . . 29
Liquidation Proceeds. . . . . . . . . . . . . . . . . . . . . . 29
Loan Prepayment Request Report. . . . . . . . . . . . . . . . . 29
Loan-to-Value Ratio . . . . . . . . . . . . . . . . . . . . . . 29
Lock-Box Account. . . . . . . . . . . . . . . . . . . . . . . . 30
Lock-Box Agreement. . . . . . . . . . . . . . . . . . . . . . . 30
Loss Reimbursement Amount . . . . . . . . . . . . . . . . . . . 30
MAI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Majority Certificateholder. . . . . . . . . . . . . . . . . . . 30
Master Servicer . . . . . . . . . . . . . . . . . . . . . . . . 30
Master Servicer Remittance Date . . . . . . . . . . . . . . . . 30
Master Servicer Remittance Report . . . . . . . . . . . . . . . 30
Master Servicing Fee. . . . . . . . . . . . . . . . . . . . . . 31
Master Servicing Fee Rate . . . . . . . . . . . . . . . . . . . 31
Maturity Date . . . . . . . . . . . . . . . . . . . . . . . . . 31
Modified Mortgage Loan. . . . . . . . . . . . . . . . . . . . . 31
Monthly Payment . . . . . . . . . . . . . . . . . . . . . . . . 32
Moody's . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Mortgage. . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
v
<PAGE>
Mortgage File . . . . . . . . . . . . . . . . . . . . . . . . . 32
Mortgage Loan . . . . . . . . . . . . . . . . . . . . . . . . . 34
Mortgage Loan Purchase Agreement. . . . . . . . . . . . . . . . 34
Mortgage Loan Schedule. . . . . . . . . . . . . . . . . . . . . 35
Mortgage Loan Seller. . . . . . . . . . . . . . . . . . . . . . 35
Mortgage Note . . . . . . . . . . . . . . . . . . . . . . . . . 36
Mortgage Pool . . . . . . . . . . . . . . . . . . . . . . . . . 36
Mortgage Rate . . . . . . . . . . . . . . . . . . . . . . . . . 36
Mortgaged Property. . . . . . . . . . . . . . . . . . . . . . . 36
Mortgagor . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Net Aggregate Prepayment Interest Shortfall . . . . . . . . . . 36
Net Investment Earnings . . . . . . . . . . . . . . . . . . . . 36
Net Investment Loss . . . . . . . . . . . . . . . . . . . . . . 36
Net Mortgage Rate . . . . . . . . . . . . . . . . . . . . . . . 37
Net Operating Income. . . . . . . . . . . . . . . . . . . . . . 37
Nonrecoverable Advance. . . . . . . . . . . . . . . . . . . . . 37
Nonrecoverable Delinquency Advance. . . . . . . . . . . . . . . 37
Nonrecoverable Servicing Advance. . . . . . . . . . . . . . . . 38
Non-Registered Certificate. . . . . . . . . . . . . . . . . . . 38
Officer's Certificate . . . . . . . . . . . . . . . . . . . . . 38
Opinion of Counsel. . . . . . . . . . . . . . . . . . . . . . . 38
OTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Ownership Interest. . . . . . . . . . . . . . . . . . . . . . . 38
Pass-Through Rate . . . . . . . . . . . . . . . . . . . . . . . 38
Pass Through Trust Agreement. . . . . . . . . . . . . . . . . . 39
Payment Adjustment Date . . . . . . . . . . . . . . . . . . . . 39
Payment Priority. . . . . . . . . . . . . . . . . . . . . . . . 39
Penalty Charges . . . . . . . . . . . . . . . . . . . . . . . . 39
Percentage Interest . . . . . . . . . . . . . . . . . . . . . . 39
Permitted Investments . . . . . . . . . . . . . . . . . . . . . 39
Permitted Transferee. . . . . . . . . . . . . . . . . . . . . . 42
Person. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Preliminary Statement . . . . . . . . . . . . . . . . . . . . . 42
Prepayment Assumption . . . . . . . . . . . . . . . . . . . . . 42
Prepayment Interest Excess. . . . . . . . . . . . . . . . . . . 42
Prepayment Interest Shortfall . . . . . . . . . . . . . . . . . 43
Prepayment Premium. . . . . . . . . . . . . . . . . . . . . . . 43
Primary Servicing Office. . . . . . . . . . . . . . . . . . . . 43
Principal Allocation Fraction . . . . . . . . . . . . . . . . . 43
Principal Balance Certificate . . . . . . . . . . . . . . . . . 43
Principal Distribution Amount . . . . . . . . . . . . . . . . . 43
Principal Prepayment. . . . . . . . . . . . . . . . . . . . . . 43
Private Book-Entry Certificate. . . . . . . . . . . . . . . . . 43
vi
<PAGE>
Proposed Plan . . . . . . . . . . . . . . . . . . . . . . . . . 44
Prospectus. . . . . . . . . . . . . . . . . . . . . . . . . . . 44
PTCE 95-60. . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Purchase Price. . . . . . . . . . . . . . . . . . . . . . . . . 44
Qualified Appraiser . . . . . . . . . . . . . . . . . . . . . . 44
Qualified Insurer . . . . . . . . . . . . . . . . . . . . . . . 44
Qualifying Substitute Mortgage Loan . . . . . . . . . . . . . . 44
Rated Final Distribution Date . . . . . . . . . . . . . . . . . 45
Rating Agency . . . . . . . . . . . . . . . . . . . . . . . . . 45
Rating Agency Confirmation. . . . . . . . . . . . . . . . . . . 45
Realized Loss . . . . . . . . . . . . . . . . . . . . . . . . . 45
Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Registered Certificates . . . . . . . . . . . . . . . . . . . . 46
Release Date. . . . . . . . . . . . . . . . . . . . . . . . . . 46
Reimbursement Rate. . . . . . . . . . . . . . . . . . . . . . . 46
REMIC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
REMIC I . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
REMIC I Regular Interest. . . . . . . . . . . . . . . . . . . . 47
REMIC I Remittance Rate . . . . . . . . . . . . . . . . . . . . 47
REMIC II. . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
REMIC II Distribution Amount. . . . . . . . . . . . . . . . . . 47
REMIC II Regular Interest . . . . . . . . . . . . . . . . . . . 47
REMIC II Remittance Rate. . . . . . . . . . . . . . . . . . . . 48
REMIC III . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
REMIC III Certificate . . . . . . . . . . . . . . . . . . . . . 48
REMIC III Regular Certificate . . . . . . . . . . . . . . . . . 48
REMIC Provisions. . . . . . . . . . . . . . . . . . . . . . . . 49
Rents from Real Property. . . . . . . . . . . . . . . . . . . . 49
REO Account . . . . . . . . . . . . . . . . . . . . . . . . . . 49
REO Acquisition . . . . . . . . . . . . . . . . . . . . . . . . 50
REO Disposition . . . . . . . . . . . . . . . . . . . . . . . . 50
REO Extension . . . . . . . . . . . . . . . . . . . . . . . . . 50
REO Loan. . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
REO Property. . . . . . . . . . . . . . . . . . . . . . . . . . 50
REO Revenues. . . . . . . . . . . . . . . . . . . . . . . . . . 50
REO Status Report . . . . . . . . . . . . . . . . . . . . . . . 50
REO Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Replacement Mortgage Loan . . . . . . . . . . . . . . . . . . . 51
Request for Release . . . . . . . . . . . . . . . . . . . . . . 51
Required Appraisal Loan . . . . . . . . . . . . . . . . . . . . 51
Reserve Account . . . . . . . . . . . . . . . . . . . . . . . . 51
Reserve Funds . . . . . . . . . . . . . . . . . . . . . . . . . 51
Residual Certificate. . . . . . . . . . . . . . . . . . . . . . 51
Responsible Officer . . . . . . . . . . . . . . . . . . . . . . 51
vii
<PAGE>
Revised Rate. . . . . . . . . . . . . . . . . . . . . . . . . . 51
Securities Act. . . . . . . . . . . . . . . . . . . . . . . . . 51
Security Agreement. . . . . . . . . . . . . . . . . . . . . . . 51
Senior Certificate. . . . . . . . . . . . . . . . . . . . . . . 52
Servicer Watch List . . . . . . . . . . . . . . . . . . . . . . 52
Servicing Account . . . . . . . . . . . . . . . . . . . . . . . 52
Servicing Advances. . . . . . . . . . . . . . . . . . . . . . . 52
Servicing Fee Rate. . . . . . . . . . . . . . . . . . . . . . . 52
Servicing Fees. . . . . . . . . . . . . . . . . . . . . . . . . 52
Servicing Officer . . . . . . . . . . . . . . . . . . . . . . . 52
Servicing Return Date . . . . . . . . . . . . . . . . . . . . . 53
Servicing Standard. . . . . . . . . . . . . . . . . . . . . . . 53
Servicing Transfer Event. . . . . . . . . . . . . . . . . . . . 53
Special Servicer. . . . . . . . . . . . . . . . . . . . . . . . 53
Special Servicing Fee . . . . . . . . . . . . . . . . . . . . . 53
Special Servicing Fee Rate. . . . . . . . . . . . . . . . . . . 53
Specially Serviced Mortgage Loan. . . . . . . . . . . . . . . . 53
Standard & Poor's . . . . . . . . . . . . . . . . . . . . . . . 55
Startup Day . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Stated Maturity Date. . . . . . . . . . . . . . . . . . . . . . 55
Stated Principal Balance. . . . . . . . . . . . . . . . . . . . 55
Subordinated Certificate. . . . . . . . . . . . . . . . . . . . 55
Substitution Shortfall Amount . . . . . . . . . . . . . . . . . 55
Sub-Servicer. . . . . . . . . . . . . . . . . . . . . . . . . . 56
Sub-Servicing Agreement . . . . . . . . . . . . . . . . . . . . 56
Supplemental Agreement. . . . . . . . . . . . . . . . . . . . . 56
Tax Returns . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Tenant. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Transfer. . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Transfer Affidavit and Agreement. . . . . . . . . . . . . . . . 56
Transferee. . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Transferor. . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Trust Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Trustee Fee . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Trustee Fee Rate. . . . . . . . . . . . . . . . . . . . . . . . 57
UCC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
UCC Financing Statement . . . . . . . . . . . . . . . . . . . . 57
Uncertificated Accrued Interest . . . . . . . . . . . . . . . . 57
Uncertificated Distributable Interest . . . . . . . . . . . . . 57
Uncertificated Principal Balance. . . . . . . . . . . . . . . . 58
Underwriter . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Uninsured Cause . . . . . . . . . . . . . . . . . . . . . . . . 58
United States Person. . . . . . . . . . . . . . . . . . . . . . 58
viii
<PAGE>
USPAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .58
Voting Rights . . . . . . . . . . . . . . . . . . . . . . . . . .58
Weighted Average Net Mortgage Rate. . . . . . . . . . . . . . . .59
Withheld Amount . . . . . . . . . . . . . . . . . . . . . . . . .59
Workout Fee . . . . . . . . . . . . . . . . . . . . . . . . . . .59
Workout Fee Rate. . . . . . . . . . . . . . . . . . . . . . . . .59
SECTION 1.02 Certain Calculations in Respect of the Mortgage Pool . . .59
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF
CERTIFICATES
SECTION 2.01 Establishment of Trust; Conveyance of Mortgage Loans . . .60
SECTION 2.02 Acceptance by Trustee. . . . . . . . . . . . . . . . . . .63
SECTION 2.03 Mortgage Loan Sellers' Repurchase of Mortgage Loans for
Defects in Mortgage Files and Breaches of Representations
and Warranties . . . . . . . . . . . . . . . . . . . . . .65
SECTION 2.04 Issuance of Class R-I Certificates; Creation of REMIC I
Regular Interests. . . . . . . . . . . . . . . . . . . . .68
SECTION 2.05 Conveyance of REMIC I Regular Interests; Acceptance of
REMIC II by the Trustee. . . . . . . . . . . . . . . . . .68
SECTION 2.06 Issuance of Class R-II Certificates; Creation of REMIC II
Regular Interest . . . . . . . . . . . . . . . . . . . . .68
SECTION 2.07 Conveyance of REMIC II Regular Interests; Acceptance of
REMIC III by Trustee . . . . . . . . . . . . . . . . . . .69
SECTION 2.08 Issuance of REMIC III Certificates . . . . . . . . . . . .69
ARTICLE III ADMINISTRATION AND SERVICING OF THE TRUST FUND
SECTION 3.01 Servicing and Administration of the Mortgage Loans . . . .69
SECTION 3.02 Collection of Mortgage Loan Payments . . . . . . . . . . .71
SECTION 3.03 Collection of Taxes, Assessments and Similar Items;
Servicing Accounts and Reserve Accounts. . . . . . . . . .71
SECTION 3.04 Certificate Account, Distribution Account and Interest
Reserve Account. . . . . . . . . . . . . . . . . . . . . .73
SECTION 3.05 Permitted Withdrawals From the Certificate Account, the
Distribution Account and the Interest Reserve Account. . .77
SECTION 3.06 Investment of Funds in the Certificate Account, the
Distribution Account, the Interest Reserve Account and
the REO Account. . . . . . . . . . . . . . . . . . . . . .81
SECTION 3.07 Maintenance of Insurance Policies; Errors and Omissions
and Fidelity Coverage. . . . . . . . . . . . . . . . . . .83
SECTION 3.08 Enforcement of Due-On-Sale Clauses; Assumption
Agreements; Subordinate Financing; Defeasance. . . . . . .86
SECTION 3.09 Realization Upon Defaulted Mortgage Loans. . . . . . . . .89
ix
<PAGE>
SECTION 3.10 Trustee to Cooperate; Release of Mortgage Files. . . . . 92
SECTION 3.11 Servicing Compensation; Nonrecoverable Servicing
Advances . . . . . . . . . . . . . . . . . . . . . . . . 93
SECTION 3.12 Inspections; Collection of Financial Statements. . . . . 97
SECTION 3.13 Annual Statement as to Compliance. . . . . . . . . . . . 98
SECTION 3.14 Reports by Independent Public Accountants. . . . . . . . 99
SECTION 3.15 Access to Certain Information. . . . . . . . . . . . . . 99
SECTION 3.16 Title to REO Property; REO Account . . . . . . . . . . . 100
SECTION 3.17 Management of REO Property; Independent Contractors. . . 101
SECTION 3.18 Sale of Defaulted Mortgage Loans and REO Properties. . . 104
SECTION 3.19 Additional Obligations of the Master Servicer and the
Special Servicer . . . . . . . . . . . . . . . . . . . . 107
SECTION 3.20 Modifications, Waivers, Amendments and Consents. . . . . 111
SECTION 3.21 Transfer of Servicing Between Master Servicer and
Special Servicer; Record Keeping . . . . . . . . . . . . 113
SECTION 3.22 Sub-Servicing Agreements . . . . . . . . . . . . . . . . 114
SECTION 3.23 Designation of Special Servicer by the Majority
Certificateholder of the Controlling Class . . . . . . . 116
SECTION 3.24 Lock-Box Accounts and Servicing Accounts . . . . . . . . 117
SECTION 3.25 Representations and Warranties of the Master Servicer
and the Special Servicer . . . . . . . . . . . . . . . . 117
ARTICLE IV PAYMENTS TO CERTIFICATEHOLDERS
AND RELATED MATTERS
SECTION 4.01 Distributions. . . . . . . . . . . . . . . . . . . . . . 119
SECTION 4.02 Statements to Certificateholders; Certain Reports by
the Master Servicer and the Special Servicer . . . . . . 129
SECTION 4.03 Delinquency Advances . . . . . . . . . . . . . . . . . . 138
SECTION 4.04 Allocation of Realized Losses and Additional Trust Fund
Expenses . . . . . . . . . . . . . . . . . . . . . . . . 140
ARTICLE V THE CERTIFICATES
SECTION 5.01 The Certificates . . . . . . . . . . . . . . . . . . . . 141
SECTION 5.02 Registration of Transfer and Exchange of Certificates. . 142
SECTION 5.03 Book-Entry Certificates. . . . . . . . . . . . . . . . . 148
SECTION 5.04 Mutilated, Destroyed, Lost or Stolen Certificates. . . . 149
SECTION 5.05 Persons Deemed Owners. . . . . . . . . . . . . . . . . . 150
ARTICLE VI THE DEPOSITOR, THE MASTER SERVICER AND THE SPECIAL SERVICER
x
<PAGE>
SECTION 6.01 Liability of the Depositor, the Master Servicer and the
Special Servicer . . . . . . . . . . . . . . . . . . . . 150
SECTION 6.02 Merger, Consolidation or Conversion of the Depositor,
the Master Servicer and the Special Servicer;
Assignment of Rights and Delegation of Duties by the
Master Servicer and the Special Servicer . . . . . . . . 150
SECTION 6.03 Limitation on Liability of the Depositor, the Master
Servicer, the Special Servicer and Others. . . . . . . . 151
SECTION 6.04 Depositor, Master Servicer and Special Servicer Not to
Resign . . . . . . . . . . . . . . . . . . . . . . . . . 152
SECTION 6.05 Rights of the Depositor in Respect of the Master
Servicer and the Special Servicer. . . . . . . . . . . . 153
ARTICLE VII DEFAULT
SECTION 7.01 Events of Default. . . . . . . . . . . . . . . . . . . . 153
SECTION 7.02 Trustee to Act; Appointment of Successor . . . . . . . . 156
SECTION 7.03 Notification to Certificateholders . . . . . . . . . . . 157
SECTION 7.04 Waiver of Events of Default. . . . . . . . . . . . . . . 157
ARTICLE VIII CONCERNING THE TRUSTEE AND THE FISCAL AGENT
SECTION 8.01 Duties of Trustee and Fiscal Agent . . . . . . . . . . . 157
SECTION 8.02 Certain Matters Affecting the Trustee and the Fiscal
Agent. . . . . . . . . . . . . . . . . . . . . . . . . . 159
SECTION 8.03 Trustee and Fiscal Agent not Liable for Validity or
Sufficiency of Certificates or Mortgage Loans. . . . . . 160
SECTION 8.04 Trustee and the Fiscal Agent May Own Certificates. . . . 161
SECTION 8.05 Fees and Expenses of Trustee; Indemnification of Trustee 161
SECTION 8.06 Eligibility Requirements for Trustee and Fiscal Agent. . 162
SECTION 8.07 Resignation and Removal of the Trustee and the Fiscal
Agent. . . . . . . . . . . . . . . . . . . . . . . . . . 162
SECTION 8.08 Successor Trustee and the Fiscal Agent . . . . . . . . . 164
SECTION 8.09 Merger or Consolidation of Trustee and the Fiscal Agent. 164
SECTION 8.10 Appointment of Co-Trustee or Separate Trustee. . . . . . 164
SECTION 8.11 Appointment of Custodians. . . . . . . . . . . . . . . . 166
SECTION 8.12 Access to Certain Information. . . . . . . . . . . . . . 166
SECTION 8.13 Representations and Warranties of the Trustee and the
Fiscal Agent . . . . . . . . . . . . . . . . . . . . . . 168
SECTION 8.14 Filings with the Securities and Exchange Commission. . . 170
SECTION 8.15 Fiscal Agent Termination Event . . . . . . . . . . . . . 170
SECTION 8.16 Procedure Upon Termination Event . . . . . . . . . . . . 171
xi
<PAGE>
ARTICLE IX TERMINATION
SECTION 9.01 Termination Upon Repurchase or Liquidation of All
Mortgage Loans . . . . . . . . . . . . . . . . . . . . . 171
SECTION 9.02 Additional Termination Requirements. . . . . . . . . . . 173
ARTICLE X ADDITIONAL REMIC PROVISIONS
SECTION 10.01 REMIC Administration . . . . . . . . . . . . . . . . . . 174
SECTION 10.02 Depositor, Master Servicer, Special Servicer, Fiscal
Agent, Trustee to Cooperate. . . . . . . . . . . . . . . 178
SECTION 10.03 Grantor Trust Administration . . . . . . . . . . . . . . 178
ARTICLE XI MISCELLANEOUS PROVISIONS
SECTION 11.01 Amendment. . . . . . . . . . . . . . . . . . . . . . . . 180
SECTION 11.02 Recordation of Agreement; Counterparts . . . . . . . . . 182
SECTION 11.03 Limitation on Rights of Certificateholders . . . . . . . 182
SECTION 11.04 GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . 183
SECTION 11.05 Notices. . . . . . . . . . . . . . . . . . . . . . . . . 183
SECTION 11.06 Severability of Provisions . . . . . . . . . . . . . . . 184
SECTION 11.07 Grant of a Security Interest . . . . . . . . . . . . . . 184
SECTION 11.08 Successors and Assigns; Beneficiaries. . . . . . . . . . 185
SECTION 11.09 Article and Section Headings . . . . . . . . . . . . . . 185
SECTION 11.10 Notices to the Rating Agencies . . . . . . . . . . . . . 185
EXHIBITS
Exhibit A-1. . . . . . . . . . . . . . . . . . . Form of Class X Certificate
Exhibit A-2. . . . . . . . . . . . . . . . . . . Form of Class A-1 Certificate
Exhibit A-3. . . . . . . . . . . . . . . . . . . Form of Class A-2 Certificate
Exhibit A-4. . . . . . . . . . . . . . . . . . . Form of Class B Certificate
Exhibit A-5. . . . . . . . . . . . . . . . . . . Form of Class C Certificate
Exhibit A-6. . . . . . . . . . . . . . . . . . . Form of Class D Certificate
Exhibit A-7. . . . . . . . . . . . . . . . . . . Form of Class E Certificate
Exhibit A-8. . . . . . . . . . . . . . . . . . . Form of Class F Certificate
Exhibit A-9. . . . . . . . . . . . . . . . . . . Form of Class G Certificate
Exhibit A-10 . . . . . . . . . . . . . . . . . . Form of Class H Certificate
Exhibit A-11 . . . . . . . . . . . . . . . . . . Form of Class J Certificate
Exhibit A-12 . . . . . . . . . . . . . . . . . . Form of Class K Certificate
Exhibit A-13 . . . . . . . . . . . . . . . . . . Form of Class L Certificate
Exhibit A-14 . . . . . . . . . . . . . . . . . . Form of Class M Certificate
Exhibit A-15 . . . . . . . . . . . . . . . . . . Form of Class N Certificate
Exhibit A-16 . . . . . . . . . . . . . . . . . . Form of Class R-I Certificate
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Exhibit A-17 . . . . . . . . . . . . . . . . . . Form of Class R-II Certificate
Exhibit A-18 . . . . . . . . . . . . . . . . . .Form of Class R-III Certificate
Exhibit B-1. . . . . . . . . . . . . . . . . . . Form of Transferor Certificate
Exhibit B-2. . . . . . . . . . . . . . . . . . . Form of Transferee Certificate
Exhibit B-3. . . . . . . . . . . . . . . . . . . Form of Transferee Certificate
Exhibit C-1. . . . . . . . . . . . . . Form of Transfer Affidavit and Agreement
Exhibit C-2. . . . . . . . . . . . . . . . . . . Form of Transferor Certificate
Exhibit D. . . . . . . . . . . . . . . . . . . . . .Form of Request for Release
Exhibit E. . . . . . . . . . . . . . . . . . .Form of UCC-1 Financing Statement
Exhibit F. . . . . . . . . . . . . . . .Methodology to Normalize Net Operating
Income and Debt Service Coverage
Exhibit G. . . . . . . . . . . . . . . . . .Form of Distribution Date Statement
Exhibit H. . . . . . . . . . . . . . . . . . . . Form of Master Servicer Report
Exhibit I. . . . . . . . . . . . . . . . . . . . . . . . . . . .Certain Reports
Exhibit J. . . . . . . . . . . . . . . . . . . . .Form of CSSA Loan File Report
Exhibit K. . . . . . . . . . . . . . . . . . .Form of CSSA Property File Report
SCHEDULES
Schedule I . . . . . . . . . . . . . . . . . . . . . . . Mortgage Loan Schedule
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This Pooling and Servicing Agreement (this "Agreement"), is dated and
effective as of August 1, 1998, among GMAC COMMERCIAL MORTGAGE SECURITIES, INC.,
as Depositor, GMAC COMMERCIAL MORTGAGE CORPORATION, as Master Servicer, GMAC
COMMERCIAL MORTGAGE CORPORATION, as Special Servicer, LASALLE NATIONAL BANK, as
Trustee and ABN AMRO BANK N.V., as Fiscal Agent.
PRELIMINARY STATEMENT:
The Depositor intends to sell the Certificates, to be issued hereunder in
multiple Classes, which in the aggregate will evidence the entire beneficial
ownership interest in the Trust Fund to be created hereunder, the primary assets
of which will be the Mortgage Loans. The aggregate of the initial Cut-off Date
Principal Balances of the Mortgage Loans is approximately $2,530,361,727.
As provided herein, the Trustee will elect to treat the segregated pool of
assets consisting of the Mortgage Loans (exclusive of that portion of interest
payments thereon that constitute Excess Interest) and 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 federal income tax law. With respect
to each Mortgage Loan, there shall be a corresponding REMIC I Regular Interest.
The designation for each such REMIC I Regular Interest shall be the loan number
for the related Mortgage Loan set forth on the schedule of Mortgage Loans
attached hereto as Schedule I. The REMIC I Remittance Rate (as defined herein)
and the initial Uncertificated Principal Balance of each such REMIC I Regular
Interest shall be based on the Net Mortgage Rate as of the Cut-off Date and the
Cut-off Date Principal Balance, respectively, for the related Mortgage Loan.
Determined solely for purposes of satisfying Treasury regulation Section
1.860G-1(a)(4)(iii), the "latest possible maturity date" for each such REMIC I
Regular Interest shall be the first Distribution Date that follows the Stated
Maturity Date for the related Mortgage Loan. 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 following table irrevocably sets forth the designation, REMIC II
Remittance Rate and the initial Uncertificated Principal Balance for each of the
REMIC II Regular Interests. Determined solely for purposes of satisfying
Treasury regulation Section 1.860G-1(a)(4)(iii), the "latest possible maturity
date" for each REMIC II Regular Interest shall be the first Distribution Date
that is at least two years after the end of the remaining amortization schedule
of the Mortgage Loan that has, as of the
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Closing Date, the longest remaining amortization schedule, irrespective of its
scheduled maturity. None of the REMIC II Regular Interests will be
certificated.
DESIGNATION REMIC II Initial Uncertificated
REMITTANCE RATE PRINCIPAL BALANCE
LA-1. . . . . . . Variable (*) $ 465,000,000
LA-2. . . . . . . Variable (*) 1,369,512,000
LB. . . . . . . . Variable (*) 126,518,000
LC. . . . . . . . Variable (*) 113,866,000
LD. . . . . . . . Variable (*) 164,474,000
LE. . . . . . . . Variable (*) 37,955,000
LF. . . . . . . . Variable (*) 88,563,000
LG. . . . . . . . Variable (*) 44,281,000
LH. . . . . . . . Variable (*) 18,978,000
LJ. . . . . . . . Variable (*) 18,977,000
LK. . . . . . . . Variable (*) 18,978,000
LL. . . . . . . . Variable (*) 25,304,000
LM. . . . . . . . Variable (*) 18,978,000
LN. . . . . . . . Variable (*) 18,977,727
* Calculated in accordance with the definition of "REMIC II Remittance Rate."
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 represent the sole
class of "residual interests" in REMIC III for purposes of the REMIC Provisions
under federal income tax law. The following table irrevocably sets forth the
designation, the Pass-Through Rate and initial Class Principal Balance for each
of the Classes of REMIC III Regular Certificates. Determined solely for
purposes of satisfying Treasury regulation section 1.860G-1(a)(4)(iii), the
"latest possible maturity date" for each Class of REMIC III Regular Certificates
shall be the first Distribution Date that is at least two years after the end of
the remaining amortization schedule of the Mortgage Loan that has, as of the
Closing Date, the longest remaining amortization schedule, irrespective of its
scheduled maturity.
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DESIGNATION Certificate Initial Class
PASS-THROUGH RATE PRINCIPAL BALANCE
Class X. . . . N/A(1) N/A(2)
Class A-1. . . 6.150% $ 465,000,000
Class A-2. . . 6.420% 1,369,512,000
Class B. . . . 6.420% 126,518,000
Class C. . . . 6.500% 113,866,000
Class D. . . . 6.500% 164,474,000
Class E. . . . 6.500% 37,955,000
Class F. . . . 6.500% 88,563,000
Class G. . . . 6.050% 44,281,000
Class H. . . . 6.050% 18,978,000
Class J. . . . 6.050% 18,977,000
Class K. . . . 6.050% 18,978,000
Class L. . . . 6.050% 25,304,000
Class M. . . . 6.050% 18,978,000
Class N. . . . 6.050% 18,977,727
(1) The Pass-Through Rate for the Class X Certificates as described
herein.
(2) The Class X Certificate will have an original Notional Amount of
$2,530,361,727. The Class X Certificates will not have a Certificate Principal
Balance and will not be entitled to any distribution of certificate principal.
As provided herein, the Trustee shall take all actions necessary to ensure
that the portion of the Trust Fund consisting of the Grantor Trust Assets
maintains its status as a "grantor trust" under federal income tax law and not
be treated as part of REMIC I, REMIC II or REMIC III.
Capitalized terms used in this Preliminary Statement are defined in Article
I hereof.
In consideration of the mutual agreements herein contained, the Depositor,
the Master Servicer, the Special Servicer, the Trustee and the Fiscal Agent
agree as follows:
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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 REMIC
III Regular Certificates for any Distribution Date, one month's interest
(calculated on the basis of a 360-day year consisting of twelve 30-day months)
at the Pass-Through Rate applicable to such Class of Certificates for such
Distribution Date, accrued on the Class Principal Balance or Class Notional
Amount, as the case may be, of such Class of Certificates outstanding
immediately prior to such Distribution Date. The Accrued Certificate Interest
in respect of any Class of REMIC III Regular Certificates for any Distribution
Date shall be deemed to have accrued during the applicable Interest Accrual
Period.
"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 Regulation Section 1.856-6(b)(1), which is the first day
on which the Trust Fund is treated as the owner of such REO Property for federal
income tax purposes.
"Additional Information": As defined in Section 4.02(a).
"Additional Trust Fund Expense": Any unanticipated expense within the
meaning of Treasury Regulation Section 1.860G-1(b)(3)(iii) experienced with
respect to the Trust Fund and not otherwise included in the calculation of a
Realized Loss, that would result in the REMIC III Regular Certificateholders'
receiving less than the full amount of principal and/or interest to which they
are entitled on any Distribution Date.
"Adjustable Rate Mortgage Loan": A Mortgage Loan as to which the
related Mortgage Note provides, as of the Closing Date, for periodic adjustments
to the Mortgage Rate thereon based on changes in the related Index.
"Advance": Any Delinquency Advance or Servicing Advance.
"Advance Interest": Interest accrued on any Advance at the
Reimbursement Rate and payable to the Master Servicer, the Special Servicer, the
Trustee or the Fiscal Agent, as the case may be, all in accordance with Section
3.11(f) or Section 4.03(d), as applicable.
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"Adverse Grantor Trust Event": As defined in Section 10.03(e).
"Adverse REMIC Event": As defined in Section 10.01(f).
"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 any ARD Loan, the date
upon which such ARD Loan starts to accrue interest at its Revised Rate.
"Applicable State Law": For purposes of Article X, the Applicable
State Law shall be (a) the laws of the State and City of New York, (b) the laws
of the states in which the Corporate Trust Office of the Trustee and the Primary
Servicing Offices of the Master Servicer and the Special Servicer are located,
(c) other state or local law as to which the Trustee as the REMIC administrator
has actual knowledge of applicability and (d) such other state or local law
whose applicability shall have been brought to the attention of the Trustee as
REMIC administrator by either (i) an opinion of counsel delivered to it, or (ii)
written notice from the appropriate taxing authority as to the applicability of
such state law.
"Appraisal": With respect to any Mortgaged Property or REO Property
as to which an appraisal is required or permitted to be performed pursuant to
the terms of this Agreement, either: (i) a narrative appraisal complying with
USPAP conducted by a Qualified Appraiser in the case of Mortgage Loans and REO
Loans with a Stated Principal Balance as of the date of such appraisal of
greater than $1,000,000; or (ii) a limited appraisal and a summary report of the
"market value" of the Mortgaged Property conducted by a Qualified Appraiser in
the case of Mortgage Loans and REO Loans with a Stated Principal Balance as of
the date of such appraisal of $1,000,000 or less.
"Appraisal Reduction Amount": With respect to any Required Appraisal
Loan, an amount (as calculated on the Determination Date immediately succeeding
the date on which the most recent relevant Appraisal was obtained by the Master
Servicer or the Special Servicer, as the case may be, pursuant to this
Agreement) equal to the excess, if any, of (a) the sum of (i) the Stated
Principal Balance of such Required Appraisal Loan, (ii) to the extent not
previously advanced by or on behalf of the Master Servicer, the Trustee or the
Fiscal Agent, all accrued and unpaid interest on such Required Appraisal Loan
through the most recent Due Date prior to such
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Determination Date at a per annum rate equal to the related Mortgage Rate, (iii)
all related unreimbursed Advances made by or on behalf of the Master Servicer,
the Special Servicer, the Trustee or the Fiscal Agent in respect of such
Required Appraisal Loan, together with all unpaid Advance Interest accrued on
such Advances, and (iv) all currently due but unpaid real estate taxes and
assessments, insurance premiums and, if applicable, ground rents in respect of
the related Mortgaged Property or REO Property, net of any Escrow Payments or
other reserves held by the Master Servicer or the Special Servicer with respect
to any such item, over (b) 90% of an amount equal to (i) the Appraised Value of
the related Mortgaged Property or REO Property, as applicable, as determined by
such Appraisal referred to in the parenthetical above, net of (ii) the amount of
any liens on such property (not accounted for in clause (a)(iv) of this
definition or taken into account in determining such Appraised Value) that are
prior to the lien of the Required Appraisal Loan. Notwithstanding the
foregoing, if an Appraisal is not obtained within 120 days following the
earliest of the dates described in Section 3.19(d), then until such Appraisal is
obtained the Appraisal Reduction Amount will equal 25% of the Stated Principal
Balance of the related Required Appraisal Loan; provided that, upon receipt of
an Appraisal, however, the Appraisal Reduction Amount for such Required
Appraisal Loan will be recalculated in accordance with this definition without
regard to this sentence.
"Appraised Value": As of any date of determination, the appraised
value of a Mortgaged Property based upon the most recent Appraisal obtained
pursuant to this Agreement.
"ARD Loan": Any Mortgage Loan that is designated as such in the
Mortgage Loan Schedule.
"Assignment of Leases": With respect to any Mortgaged Property, any
assignment of leases, rents, security deposits and profits or similar instrument
executed by the Mortgagor, assigning to the mortgagee all of the income, rents
and profits derived from the ownership, operation, leasing or disposition of all
or a portion of such Mortgaged Property, in the form which was duly executed,
acknowledged and delivered, as amended, modified, renewed or extended through
the date hereof and from time to time hereafter.
"Assumed Monthly Payment": With respect to any Balloon Mortgage Loan
for its Stated Maturity Date (provided that such Mortgage Loan has not been paid
in full, and no other Liquidation Event has occurred in respect thereof, on or
before the end of the Collection Period in which such Stated Maturity Date
occurs (or in the case of a Late Due Date Mortgage Loan, on or before the end of
the Collection Period next preceding the Collection Period in which such Stated
Maturity Date occurs)) and for any subsequent Due Date therefor as of which such
Mortgage Loan remains outstanding and part of the Trust Fund (or, in the case of
a Late Due Date Mortgage Loan, for any subsequent Due Date therefor which
follows in the same month a Determination Date as of which such Mortgage Loan
remains outstanding and part of the Trust Fund), if no Monthly Payment (other
than the related Balloon Payment) is due for such Due Date, the scheduled
monthly payment of principal and/or interest deemed to be due in respect thereof
6
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for the Stated Maturity Date and each such subsequent Due Date equal to the
Monthly Payment (exclusive of any Excess Interest) that would have been due in
respect of such Mortgage Loan on such Due Date if it had been required to
continue to accrue interest in accordance with its terms, and to pay principal
in accordance with the amortization schedule (if any), in effect immediately
prior to, and without regard to the occurrence of, its most recent scheduled
maturity date. With respect to any REO Loan, for any Due Date therefor as of
which (or, in the case of a Late Due Date Mortgage Loan, for any Due Date
therefor which follows in the same month a Determination Date as of which) the
related REO Property remains part of the Trust Fund, the scheduled monthly
payment of principal and/or interest deemed to be due in respect thereof on such
Due Date equal to the Monthly Payment (or, in the case of a Balloon Mortgage
Loan described in the preceding sentence of this definition, the Assumed Monthly
Payment) exclusive of any Excess Interest that was due (or deemed due) in
respect of the related Mortgage Loan for the last Due Date prior to its becoming
an REO Loan.
"Available Distribution Amount": With respect to any Distribution
Date, an amount equal to (a) the sum of (i) the aggregate amount relating to the
Trust Fund on deposit in the Certificate Account and the Distribution Account as
of the close of business on the related Determination Date, (ii) the aggregate
amount of any Delinquency Advances made by the Master Servicer, Trustee or
Fiscal Agent for such Distribution Date pursuant to Section 4.03, (iii) the
aggregate of any Compensating Interest Payments made by the Master Servicer for
such Distribution Date pursuant to Section 3.19, (iv) in the case of the Final
Distribution Date, the aggregate of any Liquidation Proceeds paid by the Master
Servicer, the Depositor or LB Holdings in connection with a purchase of all the
Mortgage Loans and any REO Properties pursuant to Section 9.01, (v) with respect
to the Distribution Date occurring in March of each calendar year, the Withheld
Amounts with respect to the Interest Reserve Loans deposited in the Interest
Reserve Account by the Trustee in January and/or February of such calendar year
in accordance with Section 3.04(c), and (vi) with respect to any Mortgage Loan
with a Due Date after the related Determination Date, the Monthly Payment (other
than any Balloon Payment) due in the same calendar month as such Distribution
Date and received on or before its Due Date, NET of (b) the aggregate portion of
the amount described in clause (a) hereof that represents one or more of the
following: (i) Monthly Payments (except those referred to in clause (a)(vi)
above) paid by the Mortgagors 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 Certificate Account pursuant to clauses (ii) - (xvii),
inclusive, of Section 3.05(a), (iii) any amounts payable or reimbursable to any
Person from the Distribution Account pursuant to clauses (ii) - (vii),
inclusive, of Section 3.05(b), (iv) Prepayment Premiums and Excess Interest, (v)
any amounts deposited in the Certificate Account or the Distribution Account, as
the case may be, in error, and (vi) with respect to the Distribution Date
occurring in (A) January of each calendar year that is not a leap year and
(B) February of each calendar year, the Withheld Amounts with respect to the
Interest Reserve Loans deposited in the Interest Reserve Account by the Trustee
with respect to such Distribution Date in accordance with Section 3.04(c).
Notwithstanding the investment of funds held in the Certificate Account or the
Distribution Account pursuant to Section 3.06, for purposes of
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calculating the Available Distribution Amount, the amounts so invested shall be
deemed to remain on deposit in such account.
"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 Maturity Date.
"Balloon Payment": With respect to any Balloon Mortgage Loan as of
any date of determination, the Monthly Payment payable on the Maturity Date of
such Mortgage Loan.
"Balloon Payment Interest Excess": With respect to any Balloon
Mortgage Loan (other than a Late Due Date Mortgage Loan) as to which the Stated
Maturity Date occurs in the same Collection Period as the prior Due Date for
such Mortgage Loan, and as to which the related Balloon Payment is paid during
such Collection Period after such prior Due Date, the amount of interest (net of
related Servicing Fees and, if applicable, Excess Interest) accrued on such
Mortgage Loan from such prior Due Date to, but not including, the date the
related Balloon Payment is paid, to the extent such interest is actually paid by
the related Mortgagor in connection with the payment of the related Balloon
Payment on or before such Stated Maturity Date.
"Balloon Payment Interest Shortfall": With respect to any Balloon
Mortgage Loan (other than a Late Due Date Mortgage Loan) as to which the Stated
Maturity Date occurs after the Determination Date in any calendar month, and as
to which the related Balloon Payment was made during the Collection Period in
which such Stated Maturity Date occurs, the amount of interest that would have
accrued on such Mortgage Loan at the related Net Mortgage Rate from such Stated
Maturity Date to but not including the date that (but for the occurrence of such
Stated Maturity Date) would otherwise have been the next succeeding scheduled
Due Date, to the extent not paid by the related Mortgagor. With respect to any
Late Due Date Mortgage Loan that is a Balloon Mortgage Loan as to which the
related Balloon Payment is paid during the Collection Period in which the
related Stated Maturity Date occurs, the amount of interest that would have
accrued on such Late Due Date Mortgage Loan at the related Net Mortgage Rate
from such Stated Maturity Date to the date that (but for the occurrence of such
Stated Maturity Date) would have been the Due Date in the next calendar month,
to the extent not paid by the related Mortgagor.
"Bankruptcy Code": The federal Bankruptcy Code, as amended from time
to time (Title 11 of the United States Code).
"Bloomberg": As defined in Section 4.02(a).
"Breach": As defined in Section 2.03(a).
"Book-Entry Certificate": Any Certificate registered in the name of
the Depository or its nominee.
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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, and the cities in which the
Primary Servicing Offices of the Master Servicer and the Special Servicer and
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.
"Cash Collateral Account": With respect to any Mortgage Loan that has
a Lock-Box Account, any account or accounts created pursuant to the related
Mortgage Loan, Cash Collateral Account Agreement or other loan document, into
which account or accounts the Lock-Box Account monies are swept on a regular
basis for the benefit of the Trustee as successor to the Mortgage Loan Seller's
interest in the Mortgage Loans. Any Cash Collateral Account shall be
beneficially owned for federal income tax purposes by the Person who is entitled
to receive all reinvestment income or gain thereon in accordance with the terms
and provisions of the related Mortgage Loan and Section 3.06, which Person shall
be taxed on all reinvestment income or gain thereon. The Master Servicer shall
be permitted to make withdrawals therefrom solely for deposit into the
Certificate Account. To the extent not inconsistent with the terms of the
related Mortgage Loan, each such Cash Collateral Account shall be an Eligible
Account.
"Cash Collateral Account Agreement": With respect to any Mortgage
Loan, the cash collateral account agreement, if any, between the originator of
such Mortgage Loan and the related Mortgagor, pursuant to which the related Cash
Collateral Account, if any, may have been established.
"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 1998-C2, as executed by the Trustee and authenticated and
delivered hereunder by the Certificate Registrar.
"Certificate Account": The custodial account or accounts created and
maintained pursuant to Section 3.04(a) in the name of a depository institution,
as custodian for the Holders of the Certificates, for the holders of certain
other interests in mortgage loans serviced or sold by the Master Servicer and
for the Master Servicer, into which the amounts set forth in Section 3.04(a)
shall be deposited directly. Any such account or accounts shall be an Eligible
Account.
"Certificate Factor": With respect to any Class of REMIC III Regular
Certificates, as of any date of determination, a fraction, expressed as a
decimal carried to eight places, the numerator of which is the then related
Class Principal Balance or the Class Notional Amount, as the case may be, and
the denominator of which is the related Initial Class Principal Balance or the
Initial Class Notional Amount, as the case may be.
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"Certificateholder" or "Holder": The Person in whose name a
Certificate is registered in the Certificate Register, except that, solely for
the purposes of giving any consent, approval or waiver pursuant to this
Agreement, any Certificate registered in the name of the Master Servicer, the
Special Servicer, the Trustee, the Fiscal Agent, the Depositor or any Affiliate
of either 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 has been obtained, except as otherwise provided in Sections
7.04 and 11.01. The Trustee shall be entitled to request and rely upon a
certificate of the Master Servicer, the Special Servicer or the Depositor 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.
"Certificate Notional Amount": With respect to any Class X
Certificate, as of any date of determination, the then notional principal amount
on which such Certificate accrues interest equal to the product of (a) the
Percentage Interest evidenced by such Certificate, multiplied by (b) the then
Class Notional Amount of the Class X Certificates.
"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 Principal
Balance 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 registrar appointed pursuant to Section 5.02.
"Class": Collectively, all of the Certificates bearing the same
alphabetical and, if applicable, numerical class designation.
"Class A Certificate": Any one of the Class A-1 or Class A-2
Certificates.
"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-2
attached hereto, and evidencing a "regular interest" in REMIC III for purposes
of the REMIC Provisions.
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"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-3
attached hereto, and evidencing 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 "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 "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 "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 "regular interest" in REMIC III for purposes
of the REMIC Provisions.
"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 "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 "regular interest" in REMIC III for purposes
of the REMIC Provisions.
"Class H Certificate": Any one 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 "regular interest" in REMIC III for purposes
of the REMIC Provisions.
"Class J Certificate": Any one 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 "regular interest" in REMIC III for purposes
of the REMIC Provisions.
"Class K Certificate": Any one 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 "regular interest" in REMIC III for purposes
of the REMIC Provisions.
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"Class L Certificate": Any one of the Certificates with a "Class L"
designation on the face thereof, substantially in the form of Exhibit A-13
attached hereto, and evidencing a "regular interest" in REMIC III for purposes
of the REMIC Provisions.
"Class M Certificate": Any one of the Certificates with a "Class M"
designation on the face thereof, substantially in the form of Exhibit A-14
attached hereto, and evidencing a "regular interest" in REMIC III for purposes
of the REMIC Provisions.
"Class N Certificate": Any one of the Certificates with a "Class N"
designation on the face thereof, substantially in the form of Exhibit A-15
attached hereto, and evidencing a "regular interest" in REMIC III for purposes
of the REMIC Provisions.
"Class LA-1 Component": A non-certificated beneficial ownership
interest in REMIC III, designated as a "regular interest" therein and entitled
to distributions of interest, subject to the terms and conditions hereof, in an
amount based upon the Class LA-1 Component Rate and the Uncertificated Principal
Balance of REMIC II Regular Interest LA-1 outstanding from time to time.
"Class LA-2 Component": A non-certificated beneficial ownership
interest in REMIC III, designated as a "regular interest" therein and entitled
to distributions of interest, subject to the terms and conditions hereof, in an
amount based upon the Class LA-2 Component Rate and the Uncertificated Principal
Balance of REMIC II Regular Interest LA-2 outstanding from time to time.
"Class LB Component": A non-certificated beneficial ownership
interest in REMIC III, designated as a "regular interest" therein and entitled
to distributions of interest, subject to the terms and conditions hereof, in an
amount based upon the Class LB Component Rate and the Uncertificated Principal
Balance of REMIC II Regular Interest LB outstanding from time to time.
"Class LC Component": A non-certificated beneficial ownership
interest in REMIC III, designated as a "regular interest" therein and entitled
to distributions of interest, subject to the terms and conditions hereof, in an
amount based upon the Class LC Component Rate and the Uncertificated Principal
Balance of REMIC II Regular Interest LC outstanding from time to time.
"Class LD Component": A non-certificated beneficial ownership
interest in REMIC III, designated as a "regular interest" therein and entitled
to distributions of interest, subject to the terms and conditions hereof, in an
amount based upon the Class LD Component Rate and the Uncertificated Principal
Balance of REMIC II Regular Interest LD outstanding from time to time.
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"Class LE Component": A non-certificated beneficial ownership
interest in REMIC III, designated as a "regular interest" therein and entitled
to distributions of interest, subject to the terms and conditions hereof, in an
amount based upon the Class LE Component Rate and the Uncertificated Principal
Balance of REMIC II Regular Interest LE outstanding from time to time.
"Class LF Component": A non-certificated beneficial ownership
interest in REMIC III, designated as a "regular interest" therein and entitled
to distributions of interest, subject to the terms and conditions hereof, in an
amount based upon the Class LF Component Rate and the Uncertificated Principal
Balance of REMIC II Regular Interest LF outstanding from time to time.
"Class LG Component": A non-certificated beneficial ownership
interest in REMIC III, designated as a "regular interest" therein and entitled
to distributions of interest, subject to the terms and conditions hereof, in an
amount based upon the Class LG Component Rate and the Uncertificated Principal
Balance of REMIC II Regular Interest LG outstanding from time to time.
"Class LH Component": A non-certificated beneficial ownership
interest in REMIC III, designated as a "regular interest" therein and entitled
to distributions of interest, subject to the terms and conditions hereof, in an
amount based upon the Class LH Component Rate and the Uncertificated Principal
Balance of REMIC II Regular Interest LH outstanding from time to time.
"Class LJ Component": A non-certificated beneficial ownership
interest in REMIC III, designated as a "regular interest" therein and entitled
to distributions of interest, subject to the terms and conditions hereof, in an
amount based upon the Class LJ Component Rate and the Uncertificated Principal
Balance of REMIC II Regular Interest LJ outstanding from time to time.
"Class LK Component": A non-certificated beneficial ownership
interest in REMIC III, designated as a "regular interest" therein and entitled
to distributions of interest, subject to the terms and conditions hereof, in an
amount based upon the Class LK Component Rate and the Uncertificated Principal
Balance of REMIC II Regular Interest LK outstanding from time to time.
"Class LL Component": A non-certificated beneficial ownership
interest in REMIC III, designated as a "regular interest" therein and entitled
to distributions of interest, subject to the terms and conditions hereof, in an
amount based upon the Class LL Component Rate and the Uncertificated Principal
Balance of REMIC II Regular Interest LL outstanding from time to time.
"Class LM Component": A non-certificated beneficial ownership
interest in REMIC III, designated as a "regular interest" therein and entitled
to distributions of interest, subject to the terms and conditions hereof, in an
amount based upon the Class LM Component
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Rate and the Uncertificated Principal Balance of REMIC II Regular Interest LM
outstanding from time to time.
"Class LN Component": A non-certificated beneficial ownership
interest in REMIC III, designated as a "regular interest" therein and entitled
to distributions of interest, subject to the terms and conditions hereof, in an
amount based upon the Class LN Component Rate and the Uncertificated Principal
Balance of REMIC II Regular Interest LN outstanding from time to time.
"Class LA-1 Component Rate": The amount, if any, by which the
Weighted Average Net Mortgage Rate for such Distribution Date exceeds the Class
A-1 Pass-Through Rate.
"Class LA-2 Component Rate": The amount, if any, by which the
Weighted Average Net Mortgage Rate for such Distribution Date exceeds the Class
A-2 Pass-Through Rate.
"Class LB Component Rate": The amount, if any, by which the Weighted
Average Net Mortgage Rate for such Distribution Date exceeds the Class B
Pass-Through Rate.
"Class LC Component Rate": The amount, if any, by which the Weighted
Average Net Mortgage Rate for such Distribution Date exceeds the Class C
Pass-Through Rate.
"Class LD Component Rate": The amount, if any, by which the Weighted
Average Net Mortgage Rate for such Distribution Date exceeds the Class D
Pass-Through Rate for such Distribution Date.
"Class LE Component Rate": The amount, if any, by which the Weighted
Average Net Mortgage Rate for such Distribution Date exceeds the Class E
Pass-Through Rate for such Distribution Date.
"Class LF Component Rate": The amount, if any, by which the Weighted
Average Net Mortgage Rate for such Distribution Date exceeds the Class F
Pass-Through Rate for such Distribution Date.
"Class LG Component Rate": The amount, if any, by which the Weighted
Average Net Mortgage Rate for such Distribution Date exceeds the Class G
Pass-Through Rate for such Distribution Date.
"Class LH Component Rate": The amount, if any, by which the Weighted
Average Net Mortgage Rate for such Distribution Date exceeds the Class H
Pass-Through Rate for such Distribution Date.
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"Class LJ Component Rate": The amount, if any, by which the Weighted
Average Net Mortgage Rate for such Distribution Date exceeds the Class J
Pass-Through Rate for such Distribution Date.
"Class LK Component Rate": The amount, if any, by which the Weighted
Average Net Mortgage Rate for such Distribution Date exceeds the Class K
Pass-Through Rate for such Distribution Date.
"Class LL Component Rate": The amount, if any, by which the Weighted
Average Net Mortgage Rate for such Distribution Date exceeds the Class L
Pass-Through Rate for such Distribution Date.
"Class LM Component Rate": The amount, if any, by which the Weighted
Average Net Mortgage Rate for such Distribution Date exceeds the Class M
Pass-Through Rate for such Distribution Date.
"Class LN Component Rate": The amount, if any, by which the Weighted
Average Net Mortgage Rate for such Distribution Date exceeds the Class N
Pass-Through Rate for such Distribution Date.
"Class Notional Amount": The aggregate notional principal amount on
which the Class X Certificates accrue interest from time to time which, as of
any date of determination, is equal to the then aggregate of the Uncertificated
Principal Balances of REMIC II Regular Interests LA-1, LA-2, LB, LC, LD, LE, LF,
LG, LH, LJ, LK, LL, LM and LN.
"Class Principal Balance": The aggregate principal amount of any
Class of Principal Balance Certificates outstanding as of any date of
determination. On each Distribution Date, the Class Principal Balance of each
Class of the Principal Balance Certificates shall be reduced by the amount of
any distributions of principal made thereon on such Distribution Date pursuant
to Section 4.01(c) and, if and to the extent appropriate, shall be further
reduced on such Distribution Date as provided in Section 4.04(c).
"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-16
attached hereto, and evidencing the sole class of "residual interests" in REMIC
I for purposes of the REMIC Provisions.
"Class R-I Distribution Amount": With respect to any Distribution
Date, any amounts available to be paid to the holders of the Class R-I
Certificates on such date after all REMIC I Regular Interests have been paid in
full.
"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-17
attached hereto, and
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evidencing the sole class of "residual interests" in REMIC II for purposes of
the REMIC Provisions.
"Class R-II Distribution Amount": With respect to any Distribution
Date, any amounts available to be paid to the holders of the Class R-II
Certificates on such date after all REMIC II Regular Interests have been paid in
full.
"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-18 attached hereto, and evidencing the sole class of "residual interests" in
REMIC III for purposes of the REMIC Provisions.
"Class R-III Distribution Amount": With respect to any Distribution
Date, any amounts available to be paid to the holders of the Class R-III
Certificates on such date after all REMIC III Regular Certificates have been
paid in full.
"Class X Certificate": Any one of the Certificates with a "Class X"
designation on the face thereof, substantially in the form of Exhibit A-1,
evidencing "regular interests" in REMIC III for purposes of the REMIC
Provisions.
"Class X Component": Any of the 14 components constituting "regular
interests" in REMIC III for purposes of the REMIC Provisions and comprising the
Class X Certificates. Such components are identified as Class LA-1, LA-2, LB,
LC, LD, LE, LF, LG, LH, LJ, LK, LL, LM and LN Components.
"Closing Date": August 27, 1998.
"Code": The Internal Revenue Code of 1986, as amended.
"Collection Period": With respect to any Distribution Date, the period
commencing immediately following the prior such period (or, in the case of the
initial Collection Period, 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 delivered to the Trustee and the Depositor pursuant to Section
4.02(b).
"Commission": The Securities and Exchange Commission.
"Compensating Interest Payments": Any payment required to be made by
the Master Servicer pursuant to Section 3.19(f) to cover Prepayment Interest
Shortfalls or Section 3.19(e) to cover Balloon Payment Interest Shortfalls.
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"Component Rate": As to each of the Class X Components, the rate
reflected in the definition for such component herein.
"Controlling Class": As of any date of determination, the outstanding
Class of Principal Balance Certificates with the lowest Payment Priority (the
Class A Certificates being treated as a single Class for this purpose) that has
a then outstanding Class Principal Balance at least equal to 25% of the Initial
Class Principal Balance thereof (or, if no Class of Principal Balance
Certificates outstanding has a Class Principal Balance at least equal to 25% of
the Initial Class Principal Balance thereof, then the "Controlling Class" shall
be the outstanding Class of Principal Balance Certificates with the then largest
remaining Class Principal Balance, and if two or more classes of Principal
Balance Certificates have the largest remaining Class Principal Balances, the
outstanding class of Principal Balance Certificates with the lowest Payment
Priority). Initially, the Controlling Class will consist of the Class N
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 135 South LaSalle Street, Suite 1625,
Chicago, Illinois 60674-4107, Attention: Asset-Backed Securities Trust Services
Group - GMAC Commercial Mortgage Securities, Inc. Series 1998-C2.
"Corrected Mortgage Loan": Any Mortgage Loan (and each related
Cross-Collateralized 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" (other than by reason of a Liquidation Event occurring
in respect of such Mortgage Loan or a related Mortgaged Property becoming an REO
Property).
"CPR": An assumed constant rate of prepayment each month (which is
quoted on a per annum basis) relative to the then outstanding principal balance
of a pool of mortgage loans for the life of such mortgage loans.
"Credit File": Any documents, other than documents required to be
part of the related Mortgage File, in the possession of the Master Servicer or
Special Servicer and relating to the origination and servicing of any Mortgage
Loan.
"Credit Lease": With respect to each Credit Lease Loan, the lease
agreement between the Mortgagor as lessor and the Tenant as lessee of the
related Mortgage Property.
"Credit Lease Loan": Each Mortgage Loan that is identified as a
"Credit Lease Loan" on the Mortgage Loan Schedule.
"Cross-Collateralized Mortgage Loans": Any two or more Mortgage Loans
listed on the Mortgage Loan Schedule that are cross-collateralized with each
other.
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"CSSA Loan File Report": The monthly report in the "CSSA loan file"
format containing such information for the Mortgage Loans as may be reasonably
requested by the Depositor, which report shall be substantially in the form
attached hereto as Exhibit J.
"CSSA Property File Report": The monthly report in the "CSSA property
file" format containing such information for each Mortgaged Property as may be
reasonably requested by the Depositor, which report shall be substantially in
the form attached hereto as Exhibit K.
"Current Principal Distribution Amount": With respect to any
Distribution Date, an amount equal to the aggregate of the following (without
duplication):
(a) the principal portions of all Monthly Payments (other than
Balloon Payments) and any Assumed Monthly Payments due or deemed due, as
the case may be, in respect of the Mortgage Loans and any REO Loans for
their respective Due Dates occurring during the same calendar month as such
Distribution Date;
(b) all Principal Prepayments received on the Mortgage Loans during
the related Collection Period;
(c) with respect to any Balloon Mortgage Loan as to which the related
Stated Maturity Date occurred or any ARD Loan as to which the related
Anticipated Repayment Date occurred, during or prior to the related
Collection Period, any payment of principal (exclusive of any Principal
Prepayment and any amount described in subclause (d) below) that was made
by or on behalf of the related Mortgagor during the related Collection
Period, net of any portion of such payment that represents a recovery of
the principal portion of any Monthly Payment (other than a Balloon Payment)
due, or the principal portion of any Assumed Monthly Payment deemed due, in
respect of such Mortgage Loan on a Due Date during or prior to the same
calendar month as such Distribution Date and not previously recovered;
(d) that portion of all Liquidation Proceeds and Insurance Proceeds
received on or in respect of the Mortgage Loans during the related
Collection Period that were identified and applied by the Master Servicer
as recoveries of principal thereof, in each case net of any portion of such
amounts that represents a recovery of the principal portion of any Monthly
Payment (other than a Balloon Payment) due, or of the principal portion of
any Assumed Monthly Payment deemed due, in respect of any such Mortgage
Loan on a Due Date during or prior to the same calendar month as such
Distribution Date and not previously recovered; and
(e) that portion of all Liquidation Proceeds, Insurance Proceeds and
REO Revenues received on or in respect of any REO Properties during the
related Collection Period that were identified and applied by the Master
Servicer as recoveries of principal
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of the REO Loans, in each case net of any portion of such amounts that
represents a recovery of the principal portion of any Monthly Payment
(other than a Balloon Payment) due, or of the principal portion of any
Assumed Monthly Payment deemed due, in respect of any such REO Loan or the
related Mortgage Loan on a Due Date during or prior to same calendar month
as such Distribution Date and not previously recovered.
"Custodian": A Person who is at any time appointed by the Trustee
pursuant to Section 8.11 as a document custodian for the Mortgage Files, which
Person shall not be the Depositor, the Mortgage Loan Seller or an Affiliate of
either of them.
"Cut-off Date": With respect to any Mortgage Loan, the Due Date for
such Mortgage Loan in August, 1998.
"Cut-off Date Principal 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 payments of principal due on or before such date,
whether or not received.
"Debt Service Coverage Ratio": With respect to any Mortgage Loan (or
group of Cross-Collateralized Mortgage Loans) for any specified period, the debt
service coverage ratio calculated in accordance with Exhibit I using the
methodologies set forth in Exhibit F.
"Debt Service Reduction": With respect to any Mortgage Loan, a
reduction in the scheduled Monthly Payment for such Mortgage Loan by a court of
competent jurisdiction in a proceeding under the Bankruptcy Code, other than a
reduction resulting from a Deficient Valuation.
"Defaulted Mortgage Loan": A Mortgage Loan that is delinquent in an
amount equal to at least two Monthly Payments or is delinquent thirty days or
more in respect of its Balloon Payment, if any, in either case such delinquency
to be determined without giving effect to any grace period permitted by the
related Mortgage or Mortgage Note and without regard to any acceleration of
payments under the related Mortgage and Mortgage Note.
"Default Interest": With respect to any Mortgage Loan (or related REO
Loan), any amounts collected thereon, other than interest at the Revised Rate
accrued on any ARD Loan after its Anticipated Repayment Date, late payment
charges and Prepayment Premiums, that represent penalty interest in excess of
interest on the principal balance of such Mortgage Loan (or REO Loan) accrued at
the related Mortgage Rate.
"Defaulting Party": As defined in Section 7.01(b).
"Defeasance Collateral": Noncallable government obligations of (or
non-callable obligations, fully guaranteed as to timely payment by) the United
States of America, as are
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permitted under the terms of a Mortgage Note or related Mortgage Loan Documents,
but only if such obligations or assets constitute "government securities" under
the defeasance rule of the REMIC Provisions.
"Defeasance Loan": A Mortgage Loan that is designated as such on the
Mortgage Loan Schedule.
"Defeasance Option": The right of a Mortgagor, pursuant to the terms
of the related Mortgage Note or related Mortgage Loan Documents, to obtain a
release of the related Mortgaged Property from the lien of the related Mortgages
upon the pledge to the Trustee of Defeasance Collateral.
"Defect": As defined in Section 2.02(e).
"Deficient Valuation": With respect to any Mortgage Loan, a valuation
by a court of competent jurisdiction of the Mortgaged Property in an amount less
than the then outstanding principal balance of the Mortgage Loan, which
valuation results from a proceeding initiated under the Bankruptcy Code.
"Definitive Certificate": As defined in Section 5.03(a).
"Deleted Mortgage Loan": A Mortgage Loan which is repurchased from the
Trust pursuant to the terms hereof or as to which one or more Qualifying
Substitute Mortgage Loans are substituted.
"Delinquency Advance": As to any Mortgage Loan or REO Loan, any
advance made by the Master Servicer, the Trustee or the Fiscal Agent pursuant to
Section 4.03.
"Delinquency Advance Date": The Business Day preceding each
Distribution Date.
"Delinquent Loan Status Report": A report or reports setting forth,
among other things, those Mortgage Loans which, as of the close of business on
the immediately preceding Determination Date, were (i) delinquent 30-59 days,
(ii) delinquent 60-89 days, (iii) delinquent 90 days or more, (iv) current but
specially serviced, (v) in foreclosure but as to which the related Mortgaged
Property had not become REO Property, or (vi) related to Mortgaged Property
which had become REO Property, together with such additional information in
respect of each such Mortgage Loan as is contemplated on Exhibit H hereto.
"Depositor": GMAC Commercial Mortgage Securities, Inc. or its
successor in interest.
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"Depository": The Depository Trust Company, or any successor
Depository hereafter named. 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 5th
day of the month in which such Distribution Date occurs, or if such 5th day is
not a Business Day, the Business Day immediately preceding.
"Directly Operate": With respect to any REO Property, the furnishing
or rendering of services to the tenants thereof that are not (within the meaning
of Treasury Regulations Section 1.512(b)-1(c)(5)) customarily provided to
tenants in connection with the rental of space for occupancy, the management or
operation of such REO Property, the holding of such REO Property primarily for
sale to customers in the ordinary course of a trade or business, the performance
of any construction work thereon or any use of such REO Property in a trade or
business conducted by REMIC I, in each case other than through an Independent
Contractor; provided, however, that the Trustee (or the Special Servicer on
behalf of the Trustee) shall not be considered to Directly Operate an REO
Property solely because the Trustee (or the Special 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 (of the
type that would be deductible under Code Section 162) or capital expenditures
with respect to such REO Property.
"Discount Rate": With respect to each Mortgage Loan as to which there
has been a prepayment during a Collection Period and for which a Prepayment
Premium is collected, the yield (compounded monthly) for "This Week" as reported
by the Federal Reserve Board in Federal Reserve Statistical Release H.15(519)
for the constant maturity treasury having a maturity coterminous with the
Anticipated Repayment Date, in the case of an ARD Loan, or the Maturity Date, in
the case of each other Mortgage Loan, of such Mortgage Loan as of the related
Determination Date. If there is no Discount Rate for instruments having a
maturity coterminous with the Maturity Date or Anticipated Repayment Date, as
applicable, of the applicable Mortgage Loan, then the Discount Rate will be
equal to the linear interpolation of the yields of the constant maturity
treasuries with maturities next longer and shorter than such Maturity Date or
Anticipated Repayment Date, as the case may be.
"Discount Rate Fraction": With respect to the distribution of any
Prepayment Premium received with respect to any Mortgage Loan to the Holders of
any Class of Principal
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Balance Certificates on any Distribution Date, a fraction (not greater than 1.0
or less than zero), (a) the numerator of which is equal to the excess, if any,
of (x) the Pass-Through Rate for such Class of Certificates over (y) the
relevant Discount Rate and (b) the denominator of which is equal to the excess,
if any, of (x) the Mortgage Rate of the related Mortgage Loan over (y) the
relevant Discount Rate.
"Distributable Certificate Interest": With respect to any Class of
REMIC III 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 that portion, if any, of
the Net Aggregate Prepayment Interest Shortfall, if any, for such Distribution
Date allocated to such Class of Certificates as set forth below. The Net
Aggregate Prepayment Interest Shortfall, if any, for each Distribution Date
shall be allocated on such Distribution Date: FIRST, to the respective Classes
of Principal Balance Certificates (other than the Class A Certificates),
sequentially in reverse alphabetical order of Class designation, in each case up
to the amount of any Accrued Certificate Interest in respect of such Class of
Certificates for such Distribution Date; and THEREAFTER, among the respective
Classes of Senior Certificates, PRO RATA, in accordance with the respective
amounts of Accrued Certificate Interest for such Classes of Certificates for
such Distribution Date. The Net Aggregate Prepayment Interest Shortfall, if
any, allocated to the Class X Certificate for each Distribution Date shall be
allocated to each Class X Component PRO RATA, in accordance with the respective
amount of Accrued Certificate Interest attributable to such Class X Component.
"Distribution Account": The segregated account or accounts created
and maintained by the Trustee pursuant to Section 3.04(b) in trust for the
Certificateholders, which shall be entitled "LaSalle National Bank, as Trustee,
in trust for the registered holders of GMAC Commercial Mortgage Securities,
Inc., Mortgage Pass-Through Certificates, Series 1998-C2". Any such account or
accounts shall be an Eligible Account.
"Distribution Date": The 15th day of any month, or if such 15th day
is not a Business Day, the Business Day immediately following, commencing in
September 1998.
"Distribution Date Statement": As defined in Section 4.02(a).
"Due Date": With respect to (i) any Mortgage Loan on or prior to its
Maturity Date, the day of the month set forth in the related Mortgage Note on
which each Monthly Payment thereon is scheduled to be first due; (ii) any
Balloon Mortgage Loan after the Maturity Date therefor, 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.
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"Eligible Account": An account that is any of the following: (i)
maintained with a depository institution or trust company whose (A) commercial
paper, short-term unsecured debt obligations or other short-term deposits are
rated by any two of the Rating Agencies at least A-1 in the case of Standard &
Poor's, P-1 in the case of Moody's and if rated by FITCH IBCA, F-1+ (or its
equivalent), if the deposits are to be held in the account for 30 days or less,
or (B) long-term unsecured debt obligations are rated by any two of the Rating
Agencies at least AA- in the case of Standard & Poor's, Aa3 in the case of
Moody's and if rated by FITCH IBCA, AA, (or its equivalent) if the deposits are
to be held in the account more than 30 days, or (ii) a segregated trust account
or accounts maintained in the trust department of the Trustee or other financial
institution subject to regulations regarding fiduciary funds on deposit similar
to Title 12 of the Code of Federal Regulations Section 9.10(b), or (iii) an
account or accounts of a depository institution acceptable to each Rating
Agency, as evidenced by written confirmation from such Rating Agency to the
effect that use of any such account as the Certificate Account or the
Distribution Account would not result in the downgrade, qualification or
withdrawal of the rating then assigned to any Class of Certificates by such
Rating Agency.
"Emergency Advance": Any Servicing Advance that must be made within
five Business Days by the Special Servicer in order to avoid any material
penalty, any material harm to a Mortgaged Property or any other material adverse
consequence to the Trust Fund.
"Environmental Assessment": A "Phase I assessment" conducted in
accordance with ASTM Standard E 1527-93 or any successor thereto published by
ASTM.
"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 similar items in respect of the related Mortgaged Property.
"Event of Default": One or more of the events described in Section
7.01(a).
"Excess Interest": With respect to each of the ARD Loans, interest
accrued on such ARD Loan and allocable to the Excess Rate and, except to the
extent limited by applicable law, interest accrued at the Revised Rate on any
such accrued interest that is unpaid. The Excess Interest is an asset of the
Trust Fund which is a Grantor Trust Asset not held in REMIC I, REMIC II or REMIC
III.
"Excess Rate": With respect to each ARD Loan after the related
Anticipated Repayment Date, the excess of (i) the applicable Revised Rate over
(ii) the applicable initial Mortgage Rate, each as set forth in the Mortgage
Loan Schedule.
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"Exchange Act": The Securities Exchange Act of 1934, as amended.
"Extraordinary Prepayment Interest Shortfall": With respect to any
Late Due Date Mortgage Loan that was subject to a Principal Prepayment in full
or in part (including, without limitation, an early Balloon Payment) during any
Collection Period, which Principal Prepayment was applied to such Late Due Date
Mortgage Loan prior to such Mortgage Loan's Due Date in the next succeeding
Collection Period, the amount of interest that would have accrued at the related
Net Mortgage Rate on the amount of such Principal Prepayment from the date as of
which such Principal Prepayment was received to but not including the Due Date
of such Mortgage Loan in the next succeeding Collection Period, to the extent
not collected from the related Mortgagor (without regard to any Prepayment
Premium or Excess Interest that may have been collected) and to the extent that
any portion thereof does not represent a Balloon Payment Interest Shortfall.
"FDIC": Federal Deposit Insurance Corporation or any successor.
"FHLMC": Federal Home Loan Mortgage Corporation or any successor.
"Final Distribution Date": The final Distribution Date on which any
distributions are to be made on the Certificates as contemplated by Section
9.01.
"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 Section 6 of the related Mortgage Loan Purchase
Agreement, by the Majority Certificateholder of a Controlling Class pursuant to
Section 3.18(b) or by the Master Servicer or the Special Servicer pursuant to
Section 3.18(c) or by the Master Servicer, the Depositor, or LB Holdings
pursuant to Section 9.01) that, in the reasonable and good faith judgment of the
Special Servicer, there has been a recovery of all Insurance Proceeds,
Liquidation Proceeds and other payments or recoveries that, in the Special
Servicer's judgment, exercised without regard to any obligation of the Master
Servicer or the Special Servicer to make payments from its own funds pursuant to
Section 3.07(b), will ultimately be recoverable.
"Fiscal Agent": ABN AMRO Bank N.V., a banking organization organized
under the laws of the Netherlands, its successor in interest, or any successor
Fiscal Agent appointed as provided herein.
"Fiscal Agent Termination Event": As defined in Section 8.15.
"FITCH IBCA": FITCH IBCA, Inc. or its successor in interest. If
neither such rating agency nor any successor remains in existence, "FITCH IBCA"
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
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and the Special Servicer and specific ratings of FITCH IBCA, Inc. herein
referenced shall be deemed to refer to the equivalent ratings of the party so
designated.
"Fixed Rate Mortgage Loan": A Mortgage Loan as to which the related
Mortgage Note provides, as of the Closing Date, for a Mortgage Rate that remains
fixed through the remaining term thereof (without regard to any extension at the
Mortgagor's or the mortgagee's option under the terms of the related Mortgage
Loan documents).
"FNMA": Federal National Mortgage Association or any successor.
"GMACCM": GMAC Commercial Mortgage Corporation or its successor in
interest.
"Grantor Trust": That certain "grantor trust" (within the meaning of
the Grantor Trust Provisions), the assets of which include the Grantor Trust
Assets.
"Grantor Trust Assets": Any Excess Interest.
"Grantor Trust Provisions": Subpart E of Subchapter J and section
7701 of the Code, and final Treasury Regulations, published rulings, notices and
announcements, promulgated thereunder, as the foregoing may be in effect from
time to time.
"Gross Margin": With respect to each Adjustable Rate Mortgage Loan
(and any successor REO Loan), the fixed number of percentage points set forth in
the Mortgage Loan Schedule that is added to the applicable value of the related
Index on each Interest Rate Adjustment Date in accordance with the terms of the
related Mortgage Note to determine, subject to any applicable periodic and
lifetime limitations on adjustments thereto, the related Mortgage Rate.
"Ground Lease": The ground lease pursuant to which any Mortgagor
holds a leasehold interest in the related Mortgaged Property.
"Guaranty": With respect to any Credit Lease Loan, a guaranty
agreement executed by an affiliate of the related Tenant that guarantees the
Tenant's obligations under the related Credit Lease.
"Hazardous Materials": Any dangerous, toxic or hazardous pollutants,
chemicals, wastes, or substances, including, without limitation, those so
identified pursuant to CERCLA or any other federal, state or local environmental
related laws and regulations, and specifically including, without limitation,
asbestos and asbestos-containing materials, polychlorinated biphenyls ("PCBs"),
radon gas, petroleum and petroleum products, urea formaldehyde and any
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substances classified as being "in inventory", "usable work in process" or
similar classification which would, if classified as unusable, be included in
the foregoing definition.
"Historical Loan Modification Report": A report or reports setting
forth, among other things, those Mortgage Loans which, as of the close of
business on the immediately preceding Determination Date, have been modified
pursuant to this Agreement (i) during the Collection Period ending on such
Determination Date and (ii) since the Cut-off Date, showing the original and the
revised terms thereof, together with such additional information in respect of
each such Mortgage Loan as is contemplated by Exhibit H hereto.
"Historical Loss Report": A report or reports setting forth, among
other things, as of the close of business on the immediately preceding
Determination Date, (i) the amount of Liquidation Proceeds and Liquidation
Expenses, both for the Collection Period ending on such Determination Date and
for all prior Collection Periods, and (ii) the amount of Realized Losses
occurring during such Collection Period and historically, set forth on a
Mortgage Loan-by-Mortgage Loan and REO Property-by-REO Property basis, together
with such additional information in respect of each Mortgage Loan and REO
Property as to which a Final Recovery Determination has been made as is
contemplated by Exhibit H hereto.
"Independent": When used with respect to any specified Person, any
such Person who (i) is in fact independent of the Depositor, the Master
Servicer, the Special Servicer, the Trustee, the Fiscal Agent 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, the Trustee, the Fiscal Agent or any Affiliate
thereof, and (iii) is not connected with the Depositor, the Master Servicer, the
Special Servicer, the Trustee, the Fiscal Agent 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 is the beneficial owner of 1%
or less of any class of securities issued by the Depositor, the Master Servicer
or any Affiliate thereof, as the case may be.
"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 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
Regulation 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 Trustee or
the Trust Fund, to the effect that the taking of any action in respect of any
REO Property by such Person, subject
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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 (determined without regard to the exception applicable for purposes of
Section 860D(a) of the Code), or cause any income realized in respect of such
REO Property to fail to qualify as Rents from Real Property.
"Index": With respect to each Adjustable Rate Mortgage Loan (and any
successor REO Loan), for each Interest Rate Adjustment Date, the base index used
to determine the new Mortgage Rate in effect thereon as specified in the related
Mortgage Note. If the Index currently in effect for any Adjustable Rate
Mortgage Loan (or successor REO Loan) ceases to be available, the Master
Servicer shall, subject to Section 3.19(a) and the terms of the related Mortgage
Note, select a comparable alternative index.
"Initial Balance": The aggregate Cut-off Date Principal Balance of
the Mortgage Loans.
"Initial Class Notional Amount": With respect to the Class X
Certificates, the initial Class Notional Amount thereof as of the Closing Date,
equal to $2,530,361,727.
"Initial Class Principal Balance": With respect to any Class of
Principal Balance Certificates, the initial Class Principal Balance thereof as
of the Closing Date, in each case as set forth in the Preliminary Statement.
"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 or released to the Mortgagor, in either case, in accordance
with the Servicing Standard (including any amounts paid by the Master Servicer
or Special Servicer pursuant to Section 3.07).
"Interest Accrual Period": With respect to any Distribution Date, the
calendar month immediately preceding the month in which such Distribution Date
occurs.
"Interest Rate Adjustment Date": With respect to each Adjustable Rate
Mortgage Loan (and any successor REO Loan), any date on which the related
Mortgage Rate is subject to adjustment pursuant to the related Mortgage Note.
The first Interest Rate Adjustment Date subsequent to the Cut-off Date for each
Adjustable Rate Mortgage Loan is specified in the Mortgage Loan Schedule, and
successive Interest Rate Adjustment Dates for such Mortgage Loan (and any
successor REO Loan) shall thereafter periodically occur with the frequency
specified in the Mortgage Loan Schedule.
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"Interest Reserve Account": The segregated account created and
maintained by the Trustee pursuant to Section 3.04(c) in trust for the
Certificateholders, which shall be entitled "LaSalle National Bank, as Trustee,
in trust for the registered holders of GMAC Commercial Mortgage Securities,
Inc., Mortgage Pass-Through Certificates, Series 1998-C2 -- Interest Reserve
Account." Any such account shall be an Eligible Account.
"Interest Reserve Loans": Any Mortgage Loan bearing interest computed
on an actual/360 basis.
"Interested Person": The Depositor, the Master Servicer, the Special
Servicer, 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 REMIC Provisions.
"Late Collections": With respect to any Mortgage Loan, all amounts
received thereon during any Collection Period, whether as payments, Insurance
Proceeds, Liquidation Proceeds, payments of Substitution Shortfall Amounts, or
otherwise, which represent late payments or collections of principal or interest
due in respect of such Mortgage Loan (without regard to any acceleration of
amounts due thereunder by reason of default) on a Due Date in a previous
Collection Period (or, in the case of a Late Due Date Mortgage Loan, on any Due
Date prior to the date of receipt) and not previously recovered. With respect
to any Distribution Date and 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 principal or interest due or deemed due in respect of such REO
Loan or the predecessor Mortgage Loan (without regard to any acceleration of
amounts due under the predecessor Mortgage Loan by reason of default) on a Due
Date in a previous Collection Period (or, in the case of a Late Due Date
Mortgage Loan, on any Due Date prior to the date of receipt) and not previously
recovered. The term "Late Collections" shall specifically exclude Penalty
Charges.
"Late Due Date Mortgage Loan": Any Mortgage Loan (or successor REO
Loan) with a Due Date which occurs after the Determination Date related to such
Distribution Date.
"LB Holdings": Lehman Brothers Holdings Inc. or its successor in
interest.
"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 or replaced by a Mortgage Loan Seller pursuant to Section 6
of the related Mortgage Loan Purchase Agreement
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or by GMACCM pursuant to Section 4 of either Supplemental Agreement; (iv) such
Mortgage Loan is purchased by the Majority Certificateholder of the Controlling
Class pursuant to Section 3.18(b); (v) such Mortgage Loan is purchased by the
Master Servicer or the Special Servicer pursuant to Section 3.18(c); or (vi)
such Mortgage Loan is purchased by the Master Servicer, the Depositor or LB
Holdings 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 Master Servicer, the Depositor or LB Holdings
pursuant to Section 9.01.
"Liquidation Expenses": All customary, reasonable and necessary "out
of pocket" costs and expenses incurred by the Special Servicer in connection
with the liquidation of any Specially Serviced Mortgage Loan or REO Property
pursuant to Section 3.09 or 3.18 (including, without limitation, legal fees and
expenses, committee or referee fees and, if applicable, brokerage commissions
and conveyance taxes).
"Liquidation Fee": With respect to each Specially Serviced Mortgage
Loan or REO Property (other than any Specially Serviced Mortgage Loan or REO
Property purchased by the Majority Certificateholder of the Controlling Class,
the Master Servicer or the Special Servicer pursuant to Section 3.18 or by the
Master Servicer, the Depositor or LB Holdings pursuant to Section 9.01), the fee
designated as such and payable to the Special Servicer pursuant to Section
3.11(c).
"Liquidation Fee Rate": With respect to each Specially Serviced
Mortgaged Loan or REO Property as to which a Liquidation Fee is payable, 1.00%.
"Liquidation Proceeds": Cash amounts (other than Insurance Proceeds
and REO Revenues) received or paid 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; (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 Certificateholder of the
Controlling Class 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 Section 6 of the related Mortgage Loan Purchase Agreement or
by GMACCM pursuant to Section 4 of either Supplemental Agreement; (vi) the
payment of any Substitution Shortfall Amount by a Mortgage Loan Seller pursuant
to Section 6 of the related Mortgage Loan Purchase Agreement or by GMACCM
pursuant to Section 4 of either Supplemental Agreement; or (vii) the purchase of
a Mortgage Loan or REO Property by the Master Servicer, the Depositor or LB
Holdings pursuant to Section 9.01.
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"Loan Prepayment Request Report": A report (included in Exhibit I)
that sets forth those Mortgage Loans for which the related Mortgagor has
requested a pay off balance.
"Loan-to-Value Ratio": With respect to any Mortgage Loan, as of any
date of determination, the fraction, expressed as a percentage, the numerator of
which is the then unpaid principal balance of such Mortgage Loan, and the
denominator of which is the Appraised Value of the related Mortgaged Property as
determined by an Appraisal thereof.
"Lock-Box Account": With respect to any Mortgaged Property, if
applicable, any account created pursuant to any documents relating to a Mortgage
Loan to receive revenues therefrom. Any Lock-Box Account shall be beneficially
owned for federal income tax purposes by the Person who is entitled to receive
the reinvestment income or gain thereon in accordance with the terms and
provisions of the related Mortgage Loan and Section 3.06, which Person shall be
taxed on all reinvestment income or gain thereon. The Master Servicer shall be
permitted to make withdrawals therefrom for deposit into the related Cash
Collateral Accounts.
"Lock-Box Agreement": With respect to any Mortgage Loan, the lock-box
agreement, if any, between the originator of such Mortgage Loan and the
Mortgagor, pursuant to which the related Lock-Box Account, if any, is to be
established.
"Loss Reimbursement Amount": With respect to any REMIC I Regular
Interest and any Distribution Date (except the initial Distribution Date, with
respect to which the Loss Reimbursement Amount for such REMIC I Regular Interest
will be zero), an amount equal to (a)(i) the Loss Reimbursement Amount with
respect to such REMIC I Regular Interest for the immediately preceding
Distribution Date, minus (ii) the aggregate of all reimbursements deemed made to
REMIC II on the immediately preceding Distribution Date pursuant to Section
4.01(a)(iii) with respect to such REMIC I Regular Interest, plus (iii) the
aggregate of all reductions made to the Uncertificated Principal Balance of
(and, accordingly, the aggregate of all Realized Losses and Additional Trust
Fund Expenses deemed allocated to) such REMIC I Regular Interest on the
immediately preceding Distribution Date pursuant to Section 4.04(a), plus (b)
one month's interest (calculated on the basis of a 360-day year consisting of
twelve 30-day months) on the amount described in clause (a) at the REMIC I
Remittance Rate applicable to such REMIC I Regular Interest for the current
Distribution Date.
"MAI": Member of Appraisal Institute.
"Majority Certificateholder": With respect to any specified Class or
Classes of Certificates, as of any date of determination, any Holder or
particular group of Holders of Certificates of such Class or Classes, as the
case may be, entitled to a majority of the Voting Rights allocated to such Class
or Classes, as the case may be.
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"Master Servicer": GMACCM, or any successor master servicer appointed
as herein provided.
"Master Servicer Remittance Date": The Business Day preceding each
Distribution Date.
"Master Servicer Remittance Report": A data file prepared by the
Master Servicer and in such media as may be agreed upon by the Master Servicer
and the Trustee containing such information regarding the Mortgage Loans as will
permit the Trustee to calculate the amounts to be distributed to the
Certificateholders pursuant to this Agreement and to furnish the Distribution
Date Statement to Certificateholders required to be delivered hereunder and
containing such additional information as the Master Servicer, the Trustee and
the Depositor may from time to time mutually agree.
"Master Servicing Fee": With respect to any Distribution Date and
each Mortgage Loan and REO Loan, the Servicing Fee payable to the Master
Servicer pursuant to Section 3.11(a).
"Master Servicing Fee Rate": With respect to each Mortgage Loan and
REO Loan acquired by the Depositor, the rate set forth for such Mortgage Loan on
the Mortgage Loan Schedule.
"Maturity Date": With respect to any Mortgage Loan as of any date of
determination, the date on which the last payment of principal is due and
payable under the related Mortgage Note, after taking into account all Principal
Prepayments received prior to such date of determination and any extension
permitted at the Mortgagor's option under the terms of the related Mortgage Note
(as in effect on the Closing Date) and this Agreement, but without giving effect
to (i) any acceleration of the principal of such Mortgage Loan by reason of
default thereunder, (ii) any grace period permitted by the related Mortgage
Note, (iii) any modification, waiver or amendment of such Mortgage Loan granted
or agreed to by the Master Servicer or Special Servicer pursuant to Section 3.20
or (iv) in the case of an ARD Loan, the Anticipated Repayment Date for such
Mortgage Loan.
"Modified Mortgage Loan": Any Mortgage Loan as to which any Servicing
Transfer Event has occurred and which has been modified by the Special Servicer
pursuant to Section 3.20 in a manner that:
(A) affects the amount or timing of any payment of principal or
interest due thereon (other than, or in addition to, bringing current
Monthly Payments with respect to such Mortgage Loan);
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(B) except as expressly contemplated by the related Mortgage, results
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 is), as determined by an
Appraisal delivered to the Special Servicer (at the expense of the related
Mortgagor and upon which the Special Servicer may conclusively rely), of
the property to be released; or
(C) in the good faith and reasonable judgment of the Special
Servicer, otherwise materially impairs the security for such Mortgage Loan
or reduces the likelihood of timely payment of amounts due thereon.
"Monthly Payment": With respect to any Mortgage Loan, the scheduled
monthly payment of principal and/or interest on such Mortgage Loan, including
any Balloon Payment, which is payable by a Mortgagor from time to time under the
terms of the related Mortgage Note (as such may be modified at any time
following the Closing Date) and applicable law, without regard to the accrual of
Excess Interest on or the application of any excess cash flow to pay principal
on any ARD Loan.
"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, separately and
collectively, as the context may require, each mortgage, deed of trust or other
instrument securing a Mortgage Note and creating a lien on the related Mortgaged
Property.
"Mortgage File": Either: (a) with respect to any Mortgage Loan (except
any Mortgage Loan subject to a Pass Through Trust Agreement), subject to Section
2.01(b), collectively the following documents:
(1) the original Mortgage Note, endorsed by the most recent endorsee prior
to the Trustee or, if none, by the originator, without recourse, in blank
or to the order of the Trustee in the following form: "Pay to the order of
LaSalle National Bank, as trustee for the registered holders of GMAC
Commercial Mortgage Securities, Inc., Mortgage Pass-Through Certificates,
Series 1998-C2, without recourse";
(2) the original or a copy of the Mortgage and, if applicable, the
originals or copies of any intervening assignments thereof showing a
complete chain of assignment from the
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originator of the Mortgage Loan to the most recent assignee of record
thereof prior to the Trustee, if any, in each case with evidence of
recording indicated thereon;
(3) an original assignment of the Mortgage, in recordable form, executed
by the most recent assignee of record thereof prior to the Trustee, or if
none by the originator, either in blank or in favor of the Trustee (in such
capacity);
(4) an original or copy of any related Assignment of Leases (if such item
is a document separate from the Mortgage) and, if applicable, the originals
or copies of any intervening assignments thereof showing a complete chain
of assignment from the originator of the Mortgage Loan to the most recent
assignee of record thereof prior to the Trustee, if any, in each case with
evidence of recording thereon;
(5) an original assignment of any related Assignment of Leases (if such
item is a document separate from the Mortgage), in recordable form,
executed by the most recent assignee of record thereof prior to the
Trustee, or, if none, by the originator, either in blank or in favor of the
Trustee (in such capacity), which assignment may be included as part of the
corresponding assignment of Mortgage, referred to in clause (3) above;
(6) an original or a copy of any related Security Agreement (if such item
is a document separate from the Mortgage) and, if applicable, the originals
or copies of any intervening assignments thereof showing a complete chain
of assignment from the originator of the Mortgage Loan to the most recent
assignee of record thereof prior to the Trustee, if any;
(7) an original assignment of any related Security Agreement (if such item
is a document separate from the Mortgage) executed by the most recent
assignee of record thereof prior to the Trustee or, if none, by the
originator, either in blank or in favor of the Trustee (in such capacity),
which assignment may be included as part of the corresponding assignment of
Mortgage referred to in clause (3) above;
(8) originals or copies of all assumption, modification, written assurance
and substitution agreements, with evidence of recording thereon, where
appropriate, in those instances where the terms or provisions of the
Mortgage, Mortgage Note or any related security document have been modified
or the Mortgage Loan has been assumed;
(9) the original or a copy of the lender's title insurance policy issued
as of the date of the origination of the Mortgage Loan, together with all
endorsements or riders (or copies thereof) that were issued with or
subsequent to the issuance of such policy, insuring the priority of the
Mortgage as a first lien on the Mortgaged Property;
(10) the original or a copy of any guaranty of the obligations of the
Mortgagor under the Mortgage Loan which was in the possession of the
Mortgage Loan Seller at the time
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the Mortgage Files were delivered to the Trustee together with (A) if
applicable, the original or copies of any intervening assignments of such
guaranty showing a complete chain of assignment from the originator of the
Mortgage Loan to the most recent assignee thereof prior to the Trustee, if
any, and (B) an original assignment of such guaranty executed by the most
recent assignee thereof prior to the Trustee or, if none, by the
originator;
(11) (A) file or certified copies of any UCC financing statements and
continuation statements which were filed in order to perfect (and maintain
the perfection of) any security interest held by the originator of the
Mortgage Loan (and each assignee of record prior to the Trustee) in and to
the personalty of the Mortgagor at the Mortgaged Property (in each case
with evidence of filing thereon) and which were in the possession of the
Seller (or its agent) at the time the Mortgage Files were delivered and (B)
if any such security interest is perfected and the earlier UCC financing
statements and continuation statements were in the possession of the
Seller, a UCC financing statement executed by the most recent assignee of
record prior to the Trustee or, if none, by the originator, evidencing the
transfer of such security interest, either in blank or in favor of the
Trustee;
(12) the original or a copy of the power of attorney (with evidence of
recording thereon, if appropriate) granted by the Mortgagor if the
Mortgage, Mortgage Note or other document or instrument referred to above
was not signed by the Mortgagor;
(13) the related Ground Lease or a copy thereof, if any;
(14) if the Mortgage Loan is a Credit Lease Loan, an original of the credit
lease enhancement insurance policy, if any, obtained with respect to such
Mortgage Loan and an original of the residual value insurance policy, if
any, obtained with respect to such Mortgage Loan; and
(15) any additional documents required to be added to the Mortgage File
pursuant to this Agreement; or
(b) with respect to each Mortgage Loan subject to a Pass Through Trust
Agreement, the original pass-through certificate representing 100% of the
beneficial ownership interest in such Mortgage Loan assigned by the related
Mortgage Loan Seller to the Trustee for the benefit of the Certificateholders;
provided that, in the case of either clause (a) or clause (b), whenever the term
"Mortgage File" is used to refer to documents actually received by the Trustee
or a Custodian appointed thereby, such term shall not be deemed to include such
documents and instruments required to be included therein unless they are
actually so received.
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"Mortgage Loan": Each of the mortgage loans or interests therein
transferred and assigned to the Trustee pursuant to Section 2.01 and from time
to time held in the Trust Fund (including, without limitation, all Replacement
Mortgage Loans). As used herein, the term "Mortgage Loan" includes the related
Mortgage Note, Mortgage, participation certificate and/or other security
documents contained in the related Mortgage File.
"Mortgage Loan Purchase Agreement": With respect to any Mortgage Loan
Seller, the agreement between the Depositor and such Mortgage Loan Seller,
relating to the transfer of all of such Mortgage Loan Seller's right, title and
interest in and to the Mortgage Loans.
"Mortgage Loan Schedule": The list of Mortgage Loans transferred on
the Closing Date to the Trustee as part of the Trust Fund, attached hereto as
Schedule I, which list sets forth the following information with respect to each
Mortgage Loan:
(i) the loan number;
(ii) the street address (including city, state and zip code) of the
related Mortgaged Property;
(iii) the (A) Mortgage Rate in effect as of the Cut-off Date and (B)
whether such Mortgage Loan is an Adjustable Rate Mortgage Loan or a Fixed
Rate Loan;
(iv) the original principal balance;
(v) the Cut-off Date Principal Balance;
(vi) the (A) remaining term to stated maturity, (B) with respect to each
ARD Loan, the Anticipated Repayment Date and (C) Stated Maturity Date;
(vii) the Due Date;
(viii) the amount of the Monthly Payment due on the first Due Date
following the Cut-off Date;
(ix) in the case of an Adjustable Rate Mortgage Loan, the (A) Index, (B)
Gross Margin, (C) first Mortgage Rate adjustment date following the Cut off
Date and the frequency of Mortgage Rate adjustments, and (D) maximum and
minimum lifetime Mortgage Rate.
(x) whether such Mortgage Loan is an ARD Loan, a Credit Lease Loan or a
Defeasance Loan;
(xi) the Servicing Fee Rate; and
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(xii) the Master Servicing Fee Rate.
Such schedule shall also set forth the aggregate Cut-off Date Principal Balance
for all of the Mortgage Loans. Such list may be in the form of more than one
list, collectively setting forth all of the information required.
"Mortgage Loan Seller": Each of GMACCM, and LB Holdings and any other
Person (other than the Depositor) that is a party to a Mortgage Loan Purchase
Agreement.
"Mortgage Note": The original executed note evidencing the
indebtedness of a Mortgagor under a Mortgage Loan, together with any rider,
addendum or amendment thereto.
"Mortgage Pool": Collectively, all of the Mortgage Loans (including
any REO Loans and Replacement Loans, but excluding Deleted Mortgage Loans).
"Mortgage Rate": With respect to: (i) any Mortgage Loan on or prior
to its Maturity Date, the fixed or adjustable annualized rate (not including, in
the case of any ARD Loan, any increase in the rate of interest to the Revised
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 terms of the related
Mortgage Note (as such may be modified at any time following the Closing Date)
and applicable law or, in the case of Loan No. 980127004C, 7.84628% per annum;
(ii) any Mortgage Loan after its Maturity Date, the annualized rate described in
clause (i) above determined without regard to the passage of such Maturity Date;
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": Individually and collectively, as the context
may require, the real property interest subject to the lien of a Mortgage and
constituting collateral for a Mortgage Loan. With respect to any
Cross-Collateralized Mortgage Loan, as the context may require, "Mortgaged
Property" may mean, collectively, all the Mortgaged Properties securing such
Cross-Collateralized Mortgage Loan.
"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
Distribution Account for such Distribution Date pursuant to Section 3.19(f) in
connection with such Prepayment Interest Shortfalls.
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"Net Investment Earnings": With respect to any Investment Account 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
relating to the Trust Fund held in such account, exceeds the aggregate of all
losses, if any, incurred during such Collection Period in connection with the
investment of such funds in accordance with Section 3.06.
"Net Investment Loss": With respect to any Investment Account for any
Collection Period, the amount by which the aggregate of all losses, if any,
incurred during such Collection Period in connection with the investment of
funds relating to the Trust Fund 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 REO Loan,
as of any date of determination, a rate per annum equal to the related Mortgage
Rate then in effect, minus the Servicing Fee Rate, but, for purposes of
calculating the REMIC I Remittance Rate, the REMIC II Remittance Rate and
Weighted Average Net Mortgage Rate, determined without regard to any
modification, waiver or amendment of the terms of such Mortgage Loan, whether
agreed to by the Master Servicer or Special Servicer or resulting from (i) the
bankruptcy, insolvency or similar proceeding involving the related Mortgagor or
(ii) the increase in the interest rate attributable to the Revised Rate to any
ARD Loan and, with respect to any Mortgage Loan that does not accrue interest on
the basis of a 360-day year consisting of twelve 30-day months, the Net Mortgage
Rate of such Mortgage Loan for such purposes for any one-month preceding a
related Due Date will be the annualized rate at which interest would have to
accrue in respect of such loan on the basis of a 360-day year consisting of
twelve 30-day months in order to produce the aggregate amount of interest
actually accrued in respect of such loan during such one-month period at the
related Mortgage Rate (net of the related Servicing Fee Rate); provided,
however, that with respect to the Interest Reserve Loans, (i) the Net Mortgage
Rate for the one-month period preceding the Due Dates in (a) January of each
calendar year that is not a leap year and (b) February of each calendar year,
will be determined net of the Withheld Amounts and (ii) the Net Mortgage Rate
for the one-month period preceding the Due Dates in March of each calendar year
will be determined after taking into account the addition of the Withheld
Amounts.
"Net Operating Income": With respect to any Mortgaged Property, for
any specified period, the net operating income calculated in accordance with
Exhibit G using the methodologies set forth in Exhibit F.
"Nonrecoverable Advance": Any Nonrecoverable Delinquency Advance or
Nonrecoverable Servicing Advance.
"Nonrecoverable Delinquency Advance": Any Delinquency Advance
previously made or proposed to be made in respect of a Mortgage Loan or REO Loan
which, in the judgment of the Master Servicer or, if applicable, the Trustee or
the Fiscal Agent, will not be ultimately
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recoverable (together with Advance Interest thereon) from late payments,
Insurance Proceeds or Liquidation Proceeds, or any other recovery on or in
respect of such Mortgage Loan or REO Loan. The determination by the Master
Servicer or, if applicable, the Trustee or the Fiscal Agent, that it has made a
Nonrecoverable Delinquency Advance or that any proposed Delinquency Advance, if
made, would constitute a Nonrecoverable Delinquency Advance, shall be evidenced
by an Officer's Certificate delivered to the Depositor and delivered to or
retained by the Trustee, detailing a reasonable basis for such determination.
The Trustee and the Fiscal Agent shall be entitled to rely conclusively upon any
such Officer's Certificate of the Master Servicer.
"Nonrecoverable Servicing Advance": Any Servicing Advance previously
made or proposed to be made in respect of a Mortgage Loan or REO Property which,
in the judgment of the Master Servicer, the Special Servicer or, if applicable,
the Trustee or the Fiscal Agent, will not be ultimately recoverable (together
with Advance Interest thereon) from late payments, Insurance Proceeds,
Liquidation Proceeds, or any other recovery on or in respect of such Mortgage
Loan or REO Property. The determination by the Master Servicer, the Special
Servicer or, if applicable, the Trustee or the Fiscal Agent that it has made a
Nonrecoverable Servicing Advance or that any proposed Servicing Advance, if
made, would constitute a Nonrecoverable Servicing Advance, shall be evidenced by
an Officers' Certificate delivered to the Depositor and delivered to or retained
by the Trustee, detailing a reasonable basis for such determination. The
Trustee and Fiscal Agent shall be entitled to rely conclusively upon any such
Officer's Certificate of the Master Servicer or the Special Servicer, and the
Master Servicer shall be entitled to rely conclusively upon such Officer's
Certificate of the Special Servicer.
"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
M, Class N or Residual Certificate.
"Officer's Certificate": A certificate signed, as applicable, by a
Servicing Officer of the Master Servicer or the Special Servicer or by a
Responsible Officer of the Trustee.
"Opinion of Counsel": A written opinion of counsel, who may, without
limitation, be salaried counsel for the Depositor, the Master Servicer or the
Special Servicer, acceptable and delivered to the Trustee, except that any
opinion of counsel relating to (a) the qualification of REMIC I, REMIC II or
REMIC III as a REMIC or (b) compliance with the REMIC Provisions, must be an
opinion of counsel who is in fact Independent of the Depositor, the Master
Servicer and the Special Servicer.
"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 may have and any
other interest therein, whether direct or indirect, legal or beneficial, as
owner or as pledgee.
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"Pass-Through Rate": With respect to:
(1) the Class X Certificates, (a) for the initial Distribution Date 0.823%
per annum, and (b) for any subsequent Distribution Date, the per annum
rate, expressed as a percentage, obtained by dividing (i) the sum of the
products of (a) the Uncertificated Principal Balance of each Class of REMIC
II Regular Interest immediately prior to such Distribution Date and (b) the
related Component Rate for such Distribution Date by (ii) the Class
Notional Amount; and
(2) each Class of Principal Balance Certificates for any Distribution
Date, the respective fixed rates per annum specified for such Class in the
Preliminary Statement.
"Pass Through Trust Agreement": Each Pass Through Trust Agreement or
similar arrangement referred to in the definition of "Mortgage File" under which
a pass through certificate has been issued in respect of one or more Mortgage
Loans.
"Payment Adjustment Date": With respect to each Adjustable Rate
Mortgage Loan, any date on which the related Monthly Payment is subject to
adjustment pursuant to the related Mortgage Note. The first Payment Adjustment
Date subsequent to the Cut-off Date for each Adjustable Rate Mortgage Loan is
specified in the Mortgage Loan Schedule, and successive Payment Adjustment Dates
for such Mortgage Loan shall thereafter periodically occur with the frequency
specified in the Mortgage Loan Schedule.
"Payment Priority": With respect to any Class of Certificates, the
priority of the Holders thereof in respect of the Holders of the other Classes
of Certificates to receive distributions out of the Available Distribution
Amount for any Distribution Date, as set forth in Section 4.01(c) hereof.
"Penalty Charges": With respect to any Mortgage Loan (or successor
REO Loan), any amounts collected thereon that represent late payment charges or
Default Interest.
"Percentage Interest": With respect to any REMIC III Regular
Certificate, the portion of the relevant Class evidenced by such Certificate,
expressed as a percentage, the numerator of which is the Certificate Principal
Balance or the Certificate Notional Amount of such Certificate as of the Closing
Date, as specified on the face thereof, and the denominator of which is the
Initial Class Principal Balance or Initial Class Notional Amount of the relevant
Class. With respect to 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.
"Permitted Investments": Securities, instruments, or security
entitlements with respect to one or more of the following:
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(1) obligations of or guaranteed as to principal and interest by the
United States or any agency or instrumentality thereof when such
obligations are backed by the full faith and credit of the United States;
(2) repurchase agreements on obligations specified in clause (i) maturing
not more than 30 days from the date of acquisition thereof, provided that
the unsecured obligations of the party agreeing to repurchase such
obligations are at the time rated by each Rating Agency in its highest
short-term rating available;
(3) federal funds, unsecured certificates of deposit, time deposits and
bankers' acceptances (which shall each have an original maturity of not
more than 90 days and, in the case of bankers' acceptances, shall in no
event have an original maturity of more than 365 days or a remaining
maturity of more than 30 days) denominated in United States dollars of any
U.S. depository institution or trust company incorporated under the laws of
the United States or any state thereof or of any domestic branch of a
foreign depository institution or trust company; provided that the
short-term debt obligations of such depository institution or trust company
(or, if the Rating Agency is Standard & Poor's, in the case of the
principal depository institution in a depository institution holding
company and in the case of LaSalle National Bank, the short-term debt
obligations of the depository institution holding company) at all times
since the date of acquisition thereof have been rated by each Rating Agency
in its highest short-term rating available (or, if not rated by FITCH IBCA,
otherwise acceptable to FITCH IBCA as confirmed in writing that such
investment would not, in and of itself, result in a downgrade,
qualification or withdrawal of the then current rating assigned to any
Class of Certificates by such Rating Agency); and provided further that, if
the Rating Agency is Standard & Poor's and if the depository or trust
company is LaSalle National Bank or a principal subsidiary of a bank
holding company and the debt obligations of such subsidiary are not
separately rated, the applicable rating shall be that of the bank holding
company; and, provided further that, if the original maturity of such short
term obligations of a domestic branch of a foreign depository institution
or trust company shall exceed 30 days, the short term rating of such
institution shall be A-1+ in the case of Standard & Poor's;
(4) 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 which on the date of acquisition has been rated by
each Rating Agency in its highest short-term rating available (or, if not
rated by FITCH IBCA, otherwise acceptable to FITCH IBCA as confirmed in
writing that such investment would not, in and of itself, result in a
downgrade, qualification or withdrawal of the then current rating assigned
to any Class of Certificates by such Rating Agency); provided that such
commercial paper shall have a remaining maturity of not more than 30 days;
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(5) a money market fund or a qualified investment fund rated by each
Rating Agency in its highest rating category;
(6) commercial paper of issuers rated by each Rating Agency in its highest
short-term rating available (or, if not rated by FITCH IBCA, otherwise
acceptable to FITCH IBCA as confirmed in writing that such investment would
not, in and of itself, result in a downgrade, qualification or withdrawal
of the then current rating assigned to any Class of Certificates by such
Rating Agency); provided that such obligations shall have a remaining
maturity of not more than 30 days and such obligations are limited to the
right to receive only monthly principal and interest payments;
(7) short-term debt obligations of issuers rated A-1 (or the equivalent)
by each Rating Agency (or, if not rated by FITCH IBCA, otherwise acceptable
to FITCH IBCA as confirmed in writing that such investment would not, in
and of itself, result in a downgrade, qualification or withdrawal of the
then current rating assigned to any Class of Certificates by such Rating
Agency) having a maturity of not more than 30 days; provided that the total
amount of such investment does not exceed the greater of (A) 20% of the
then outstanding principal balance of the Certificates, and (B) the amount
of monthly principal and interest payments (other than Balloon Payments)
payable on the Mortgage Loans during the preceding Collection Period;
provided, further, and notwithstanding the preceding proviso, that if all
of the Mortgage Loans are fully amortizing, then the amount of such
investment shall not exceed the amount of monthly principal and interest
payments (other than Balloon Payments) payable on the Mortgage Loans during
the preceding Collection Period;
(8) fully Federal Deposit Insurance Corporation-insured demand and time
deposits in, or certificates of deposit of, or bankers' acceptances issued
by, any bank or trust company, savings and loan association or savings
bank, the short term obligations of which are rated in the highest short
term rating category by each Rating Agency (or, if not rated by FITCH IBCA,
otherwise acceptable to FITCH IBCA as confirmed in writing that such
investment would not, in and of itself, result in a downgrade,
qualification or withdrawal of the then current rating assigned to any
Class of Certificates by such Rating Agency); and
(9) other obligations or securities that are acceptable to each Rating
Agency as a Permitted Investment hereunder and which would not result in
the downgrade, qualification or withdrawal of the then-current rating
assigned to any Class of Certificates by the Rating Agency, as evidenced in
writing;
provided, however, that no instrument shall be a Permitted Investment if it
represents, (1) the right to receive only interest payments with respect to the
underlying debt instrument, (2) the right to receive both principal and interest
payments derived from obligations underlying such instrument and the principal
and interest payments with respect to such instrument provide a yield
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to maturity greater than 120% of the yield to maturity at par of such underlying
obligations, (3) an obligation that has a remaining maturity of greater than 365
days from the date of acquisition thereof. If an obligation is rated by Standard
& Poor's, then such obligation must be limited to those instruments that have a
predetermined fixed dollar of principal due at maturity that cannot vary or
change or, if rated, the obligation should not have an "r" highlighter affixed
to its rating, and interest thereon may either be fixed or variable and should
be tied to a single interest rate index plus a single interest rate index plus a
single fixed spread (if any) and move proportionately with that index.
References herein to the highest rating available on money market funds shall
mean AAAm in the case of Standard & Poor's and Aaa in the case of Moody's and
AAA in the case of FITCH IBCA, and references herein to the highest rating
available on unsecured commercial paper and short-term debt obligations shall
mean A 1+ in the case of Standard & Poor's and P-1 in the case of Moody's and
F-1+ in the case of FITCH IBCA.
"Permitted Transferee": Any Transferee other than (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 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 1 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(a)(2)(C) of the Code, (v) any electing large partnership under
Section 775 of the Code and (vi) any other Person so designated by the Trustee
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 an Ownership Interest in
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.
"Person": Any legal person, including, without limitation, any
individual, corporation, partnership, limited liability company, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Plan": As defined in Section 5.02(c)(i).
"Preliminary Statement": The introductory section in this Agreement
found on pages 1 through 3 hereof.
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"Prepayment Assumption": A CPR of 0%, used for determining the
accrual of original issue discount, market discount and premium, if any, on the
REMIC I Regular Interests, the REMIC II Regular Interests and the Certificates
for federal income tax purposes.
"Prepayment Interest Excess": With respect to any Mortgage Loan
(other than a Late Due Date Mortgage Loan) that was subject to a Principal
Prepayment in full or in part during any Collection Period, which Principal
Prepayment was received following such Mortgage Loan's Due Date in such
Collection Period, the amount of interest (net of related Servicing Fees and, if
applicable, Excess Interest) accrued on the amount of such Principal Prepayment
during the period from and after such Due Date, to the extent collected (without
regard to any Prepayment Premium that may have been collected).
"Prepayment Interest Shortfall": With respect to any Mortgage Loan
(other than a Late Due Date Mortgage Loan) that was subject to a Principal
Prepayment in full or in part (including, without limitation, an early Balloon
Payment) during any Collection Period, which Principal Prepayment was received
prior to such Mortgage Loan's Due Date in such Collection Period, the amount of
interest that would have accrued at the related Net Mortgage Rate on the amount
of such Principal Prepayment during the period from the date as of which such
Principal Prepayment was applied to such Mortgage Loan to but not including such
Due Date, to the extent not collected from the related Mortgagor (without regard
to any Prepayment Premium or Excess Interest that may have been collected).
"Prepayment Premium": Any premium, penalty or fee paid or payable, as
the context requires, by a Mortgagor in connection with a Principal Prepayment
on, or other early collection of principal of, a Mortgage Loan or REO Loan.
"Primary Servicing Office": With respect to each of the Master
Servicer and the Special Servicer, the office thereof primarily responsible for
performing its respective duties under this Agreement; initially located in
Illinois, in the case of the Master Servicer, and California, in the case of the
Special Servicer.
"Principal Allocation Fraction": With respect to any Distribution
Date and each of Class A-1, Class A-2, Class B, Class C, Class D, Class E, Class
F and Class G Certificates, a fraction the numerator of which is the portion of
the Principal Distribution Amount allocable to such Class of Certificates for
such Distribution Date and the denominator of which is the Principal
Distribution Amount for all Classes of Certificates as of such Distribution
Date.
"Principal Balance Certificate": Any REMIC III Regular Certificate
other than a Class X Certificate.
"Principal Distribution Amount": With respect to any Distribution
Date, the aggregate of (i) the Current Principal Distribution Amount for such
Distribution Date and (ii) if
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such Distribution Date is after the initial Distribution Date, the excess, if
any, of the Principal Distribution Amount for the preceding Distribution Date,
over the aggregate distributions of principal made on the Principal Balance
Certificates in respect of such Principal Distribution Amount on the preceding
Distribution Date.
"Principal Prepayment": Any payment of principal made by the
Mortgagor on a Mortgage Loan which is received in advance of its scheduled Due
Date and which is not 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.
"Private Book-Entry Certificate": Any Class F and Class G Certificate
registered in the name of the Depository or its nominee.
"Proposed Plan": As defined in Section 3.17(a)(iii).
"Prospectus": The Prospectus dated December 17, 1997, as supplemented
by the Prospectus Supplement dated August 21, 1998, relating to the offering of
the Certificates.
"PTCE 95-60": As defined in Section 5.02(c)(ii).
"Purchase Price": With respect to any Mortgage Loan, a price equal to
the outstanding principal balance of such Mortgage Loan as of the date of
purchase, together with (a) all accrued and unpaid interest on such Mortgage
Loan at the related Mortgage Rate in effect from time to time to but not
including the Due Date in the Collection Period of purchase, (b) all related
unreimbursed Servicing Advances, and (c) if such Mortgage Loan is being
purchased by a Mortgage Loan Seller pursuant to Section 6 of the related
Mortgage Loan Purchase Agreement or by GMACCM pursuant to Section 4 of either
Supplemental Agreement, all expenses reasonably incurred or to be incurred by
the Master Servicer (unless such Mortgage Loan Seller is acting as Master
Servicer), the Depositor and the Trustee in respect of the Breach or Defect
giving rise to the repurchase obligation. With respect to any REO Property, the
amount calculated in accordance with the preceding sentence in respect of the
related REO Loan.
"Qualified Appraiser": In connection with the appraisal of any
Mortgaged Property or REO Property, an Independent MAI-designated appraiser or
state certified appraiser.
"Qualified Insurer": An insurance company or security or bonding
company qualified to write the related Insurance Policy in the relevant
jurisdiction.
"Qualifying Substitute Mortgage Loan" means, in the case of a Deleted
Mortgage Loan, a Mortgage Loan which, on the date of substitution, (i) has a
principal balance, after deduction of the principal portion of the Monthly
Payment due in the month of substitution, not in excess of the Stated Principal
Balance of the Deleted Mortgage Loan; (ii) is accruing interest
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at a rate of interest at least equal to that of the Deleted Mortgage Loan; (iii)
has a fixed Mortgage Rate if the Deleted Mortgage Loan is a Fixed Rate Mortgage
Loan and an adjustable Mortgage Rate (with the same Index, Gross Margin and
frequency of Interest Rate Adjustment Dates and Payment Adjustment Dates as the
Deleted Mortgage Loan) if the Deleted Mortgage Loan is an Adjustable Rate
Mortgage Loan; (iv) is accruing interest on the same basis (for example, a
360-day year consisting of twelve 30-day months) as the Deleted Mortgage Loan;
(v) has a remaining term to stated maturity or Anticipated Repayment Date, in
the case of an ARD Loan, not greater than, and not more than two years less
than, that of the Deleted Mortgage Loan; (vi) has an original Loan-to-Value
Ratio not higher than that of the Deleted Mortgage Loan and a current
Loan-to-Value Ratio (equal to the principal balance on the date of substitution
divided by its Appraised Value as determined by an Appraisal dated not more than
twelve months prior to the date of substitution) not higher than the then
current Loan-to-Value Ratio of the Deleted Mortgage Loan; (vii) will comply with
all of the representations and warranties relating to Mortgage Loans set forth
in the related Mortgage Loan Purchase Agreement, as of the date of substitution;
(viii) has an Environmental Assessment relating to the related Mortgaged
Property in its Servicing File; and (ix) as to which the Trustee has received an
Opinion of Counsel, at the related Seller's expense, that such Mortgage Loan is
a "qualified replacement mortgage" within the meaning of Section 860G(a)(4) of
the Code; provided that no Mortgage Loan may have a Maturity Date after the date
three years prior to the Rated Final Distribution Date, and provided, further,
that no such Mortgage Loan shall be substituted for a Deleted Mortgage Loan
unless Rating Agency Confirmation is obtained. In the event that either one
mortgage loan is substituted for more than one Deleted Mortgage Loan or more
than one mortgage loan is substituted for one or more Deleted Mortgage Loans,
then (a) the principal balance referred to in clause (i) above shall be
determined on the basis of aggregate principal balances and (b) the rates
referred to in clauses (ii) and (iii) above and the remaining term to stated
maturity referred to in clause (v) above shall be determined on a weighted
average basis. Whenever a Qualifying Substitute Mortgage Loan is substituted
for a Deleted Mortgage Loan pursuant to this Agreement, the party effecting such
substitution shall certify that such Mortgage Loan meets all of the requirements
of this definition and shall send such certification to the Trustee.
"Rated Final Distribution Date": The Distribution Date in May 2035.
"Rating Agency": Each of Standard & Poor's, Moody's and FITCH IBCA.
"Rating Agency Confirmation": With respect to any matter and any
Rating Agency, where required under this Agreement, confirmation in writing by
such Rating Agency that a proposed action, failure to act, or other event
specified herein will not in and of itself result in the withdrawal, downgrade,
or qualification of the rating assigned by such Rating Agency to any Class of
Certificates then rated by such Rating Agency.
"Realized Loss": With respect to each defaulted Mortgage Loan as to
which a Final Recovery Determination has been made, or with respect to any REO
Loan as to which a
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Final Recovery Determination has been made as to the related REO Property, an
amount (not less than zero) equal to (i) the unpaid principal balance of such
Mortgage Loan or REO Loan, as the case may be, as of the Due Date immediately
preceding the date the Final Recovery Determination was made, plus (ii) all
accrued but unpaid interest on such Mortgage Loan or REO Loan, as the case may
be (without taking into account the amounts described in subclause (iv) of this
sentence), at the related Mortgage Rate to but not including the Due Date in the
Collection Period in which (or, in the case of a Late Due Date Mortgage Loan,
the Due Date in the Collection Period next following the Collection Period) in
which the Final Recovery Determination was made, plus (iii) 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 (iv) 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 (net of any related Liquidation Expenses paid
therefrom).
With respect to any Mortgage Loan as to which any portion of the
outstanding principal or accrued interest (other than Excess Interest) owed
thereunder was forgiven 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 Master Servicer or Special Servicer
pursuant to Section 3.20, the amount of such principal or interest so forgiven.
With respect to any Mortgage Loan as to which the Mortgage Rate
thereon has been permanently reduced 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 Master Servicer or 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 shall be deemed to have been
incurred on the Due Date for each affected Monthly Payment.
"Record Date": With respect to any Distribution Date, the last
Business Day of the calendar month immediately preceding the month in which such
Distribution Date occurs.
"Registered Certificates": The Class X, Class A-1, Class A-2, Class
B, Class C, Class D, and Class E Certificates.
"Release Date": As defined in Section 3.08(c).
"Reimbursement Rate": The rate per annum applicable to the accrual of
Advance Interest, which rate per annum shall be equal to the "prime rate" as
published in the "Money Rates" section of THE WALL STREET JOURNAL, as such
"prime rate" may change from time to time.
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"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 REMIC election is to be made, 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 or receivable after the Cut-off Date
(other than (a) Excess Interest and (b) payments of principal, interest and
other amounts due and payable on the Mortgage Loans on or before the Cut-off
Date), together with all documents delivered or caused to be delivered under the
Mortgage Loan Purchase Agreements with respect to the Mortgage Loans by the
Mortgage Loan Sellers; (ii) any REO Properties acquired in respect of the
Mortgage Loans; (iii) such funds or assets (other than Excess Interest) as from
time to time are deposited in the Distribution Account, the Certificate Account
and the REO Account (if established); and (iv) the rights of the Depositor under
Sections 2, 4(a) and 6 of each Mortgage Loan Purchase Agreement and the rights
of the Depositor under Sections 2 and 4 of each Supplemental Agreement, assigned
by the Depositor to the Trustee.
"REMIC I Regular Interest": With respect to each Mortgage Loan (and
any successor REO Loan), the separate non-certificated beneficial ownership
interest in REMIC I issued hereunder and designated as a "regular interest" in
REMIC I. Each REMIC I Regular Interest shall accrue interest at the related
REMIC I Remittance Rate 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 (which shall equal the Cut-off Date
Principal Balance of the related Mortgage Loan). The designation for each REMIC
I Regular Interest shall be the loan number for the initial related Mortgage
Loan set forth in the Mortgage Loan Schedule. If a Replacement Mortgage Loan or
Loans are substituted for any Deleted Mortgage Loan, the REMIC I Regular
Interest that related to the Deleted Mortgage Loan shall thereafter relate to
such Replacement Mortgage Loan(s).
"REMIC I Remittance Rate": With respect to any REMIC I Regular
Interest for any Distribution Date, a rate per annum equal to the Net Mortgage
Rate in effect for the related Mortgage Loan or REO Loan, as the case may be.
If any Mortgage Loan included in the Trust Fund as of the Closing Date is
replaced by a Replacement Mortgage Loan or Loans, the REMIC I Remittance Rate
for the related REMIC I Regular Interest shall still be calculated in accordance
with the preceding sentence based on the Net Mortgage Rate for the Deleted
Mortgage Loan.
"REMIC II": The segregated pool of assets consisting of all of the
REMIC I Regular Interests, with respect to which a separate REMIC election is to
be made.
"REMIC II Distribution Amount": As defined in Section 4.01(a).
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"REMIC II Regular Interest": Any of the 14 separate non-certificated
beneficial ownership interests in REMIC II issued hereunder designated as a
"regular interest" in REMIC II and identified individually as REMIC II Regular
Interests LA-1, LA-2, LB, LC, LD, LE, LF, LG, LH, LJ, LK, LL, LM and LN. Each
REMIC II Regular Interest shall accrue interest at the related 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.
Each REMIC II Regular Interest corresponds to a Class of Principal
Balance Certificates and a Class X Component as follows:
REMIC II Class of Principal Class X
Regular Interest Balance Certificates Component
- ---------------- -------------------- ---------
Class LA-1 Class A-1 Class LA-1 Component
Class LA-2 Class A-2 Class LA-2 Component
Class LB Class B Class LB Component
Class LC Class C Class LC Component
Class LD Class D Class LD Component
Class LE Class E Class LE Component
Class LF Class F Class LF Component
Class LG Class G Class LG Component
Class LH Class H Class LH Component
Class LJ Class J Class LJ Component
Class LK Class K Class LK Component
Class LL Class L Class LL Component
Class LM Class M Class LM Component
Class LN Class N Class LN Component
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"REMIC II Remittance Rate": With respect to each REMIC II Regular
Interest, for any Distribution Date, the weighted average of the respective
REMIC I Remittance Rates for all REMIC I Regular Interests for such Distribution
Date (weighted on the basis of the respective Uncertificated Principal Balances
of the related REMIC I Regular Interests immediately prior to such Distribution
Date).
"REMIC III": The segregated pool of assets consisting of all of the
REMIC II Regular Interests, with respect to which a separate REMIC election is
to be made.
"REMIC III Certificate": Any Certificate, other than a Class R-I or
Class R-II Certificate.
"REMIC III Regular Certificate": Any REMIC III Certificate, other
than a Class R-III Certificate.
"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 temporary and final Treasury regulations (and, to the extent not
inconsistent with such temporary and final regulations, proposed 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, which income,
subject to the terms and conditions of that Section of the Code in its present
form, does not include:
(i) except as provided in Section 856(d)(4) or (6) of the Code, any
amount received or accrued, directly or indirectly, with respect to such
REO Property, if the determination of such amount depends in whole or in
part on the income or profits derived by any Person from such property
(unless such amount is a fixed percentage or percentages of receipts or
sales and otherwise constitutes Rents from Real Property);
(ii) any amount received or accrued, directly or indirectly, from any
Person if the Trust Fund owns directly or indirectly (including by
attribution) a ten percent or greater interest in such Person determined in
accordance with Sections 856(d)(2)(B) and (d)(5) of the Code;
(iii) any amount received or accrued, directly or indirectly, with
respect to such REO Property if any Person Directly Operates such REO
Property;
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(iv) any amount charged for services that are not customarily
furnished in connection with the rental of property to tenants in buildings
of a similar class in the same geographic market as such REO Property
within the meaning of Treasury Regulations Section 1.856-4(b)(1) (whether
or not such charges are separately stated); and
(v) rent attributable to personal property unless such personal
property is leased under, or in connection with, the lease of such REO
Property and, for any taxable year of the Trust Fund, such rent is no
greater than 15 percent of the total rent received or accrued under, or in
connection with, the lease.
"REO Account": A segregated account or accounts created and
maintained by the Special Servicer pursuant to Section 3.16(b) on behalf of the
Trustee in trust for the Certificateholders, which shall be entitled "GMAC
Commercial Mortgage Corporation, as Special Servicer, in trust for registered
holders of GMAC Commercial Mortgage Securities, Inc., Mortgage Pass-Through
Certificates, Series 1998-C2.
"REO Acquisition": The acquisition of any REO Property pursuant to
Section 3.09.
"REO Disposition": The sale or other disposition of the REO Property
pursuant to Section 3.18.
"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 the
applicable Assumed Monthly Payment and otherwise to have the same terms and
conditions as its predecessor Mortgage Loan, including, without limitation, with
respect to the calculation of the Mortgage Rate in effect from time to time
(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
outstanding principal balance and Stated Principal Balance equal to the
outstanding principal balance and Stated Principal Balance, respectively, of its
predecessor Mortgage Loan as of the date of the related REO Acquisition. All
Monthly Payments (other than a Balloon Payment), Assumed Monthly Payments and
other amounts 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. All amounts payable or reimbursable to the
Master Servicer, the Special Servicer, the Trustee or the Fiscal Agent in
respect of the predecessor Mortgage Loan as of the date of the related REO
Acquisition, including, without limitation, any unreimbursed Advances, together
with any Advance Interest accrued and payable in respect of such Advances, shall
continue to be payable or reimbursable to the Master Servicer, the Special
Servicer, the Trustee or the Fiscal Agent, as the case may be, in respect of an
REO Loan.
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"REO Property": A Mortgaged Property acquired by the Special Servicer
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 and profits derived from the
ownership, operation or leasing of any REO Property.
"REO Status Report": A report or reports substantially in the form of
Exhibit H attached hereto setting forth, among other things, with respect to
each REO Property that was included in the Trust Fund as of the close of
business on the immediately preceding Determination Date, (i) the Acquisition
Date of such REO Property, (ii) the amount of income collected with respect to
such REO Property (net of related expenses) and other amounts, if any, received
on such REO Property during the Collection Period ending on such Determination
Date and (iii) the value of the REO Property based on the most recent Appraisal
or other valuation thereof available to the Master Servicer as of such date of
determination (including any valuation prepared internally by the Special
Servicer).
"REO Tax": As defined in Section 3.17(a)(i).
"Replacement Mortgage Loan": Any Qualifying Substitute Mortgage Loan
that is substituted for one or more Deleted Mortgage Loans.
"Request for Release": A release signed by a Servicing Officer, in
the form of Exhibit D attached hereto.
"Required Appraisal Loan": As defined in Section 3.19(d).
"Reserve Account": The account or accounts created and maintained
pursuant to Section 3.03(d).
"Reserve Funds": With respect to any Mortgage Loan, any cash amounts
or instruments convertible into cash delivered by the related Mortgagor to be
held in escrow by or on behalf of the mortgagee representing reserves for items
such as repairs, replacements, capital improvements and/or environmental testing
and remediation with respect to the related Mortgaged Property.
"Residual Certificate": Any Class R-I, Class R-II or Class R-III
Certificate.
"Responsible Officer": When used with respect to the initial Trustee,
any officer of its Asset-Backed Securities Trust Services Group with direct
responsibility for the transaction contemplated by this Agreement and with
respect to any successor Trustee, any vice president,
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any assistant vice president, any assistant secretary, any assistant treasurer,
any trust officer or assistant trust officer, or any assistant controller in its
corporate trust department or any other 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 each ARD Loan, the increased interest
rate after the Anticipated Repayment Date (in the absence of a default) for such
ARD Loan, as calculated and as set forth in the related Mortgage Note or
Mortgage and further modification by the Master Servicer pursuant to Section
3.19(h) or (k) (relating to certain Mortgage Loans modified within 90 days of
the Start-up Day).
"Securities Act": The Securities Act of 1933, as amended.
"Security Agreement": With respect to any Mortgage Loan, any security
agreement or equivalent instrument, whether contained in the related Mortgage or
executed separately, creating in favor of the holder of such Mortgage a security
interest in the personal property constituting security for repayment of such
Mortgage Loan.
"Senior Certificate": Any Class X, Class A-1 or Class A-2
Certificate.
"Servicer Watch List": A report or reports setting forth, among other
things, certain Mortgage Loans that (i) have experienced a decrease of at least
10% in debt service coverage from the previous reporting period (unless the
Master Servicer shall have reasonably determined that such decrease is due to
the seasonal nature or use of the related Mortgaged Property), (ii) have
experienced a loss of or bankruptcy of the largest tenant (to the extent the
Servicer has actual knowledge of such loss or bankruptcy) or (iii) are within
six months of maturity.
"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 (including attorneys' fees and expenses and fees of
real estate brokers) incurred by the Master Servicer, the Special Servicer or,
if applicable, the Trustee or the Fiscal Agent in connection with the servicing
and administering of (a) a Mortgage Loan in respect of which a default,
delinquency or other unanticipated event has occurred or as to which a default
is imminent or (b) an REO Property, including, but not limited to, the cost of
(i) compliance with the obligations of the Master Servicer and/or the Special
Servicer set forth in Section 3.03(c) and 3.09(c), (ii) the preservation,
restoration and protection of a Mortgaged Property, (iii) obtaining any
Insurance Proceeds or any Liquidation Proceeds in respect of any Mortgage Loan
or REO Property, (iv) any enforcement or judicial proceedings with respect to a
Mortgaged Property,
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including foreclosures, and (v) the operation, management, maintenance and
liquidation of any REO Property. All Emergency Advances made by the Special
Servicer hereunder shall be considered "Servicing Advances" for the purposes
hereof.
"Servicing Fee Rate": With respect to any Mortgage Loan, the
percentage rate per annum set forth with respect to such Mortgage Loan on the
Mortgage Loan Schedule.
"Servicing Fees": With respect to each Mortgage Loan and REO Loan,
the Master Servicing Fee and the Trustee Fee.
"Servicing Officer": Any officer 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 the Master Servicer or the Special
Servicer to the Trustee and the Depositor on the Closing Date as such list may
be amended from time to time thereafter.
"Servicing Return Date": With respect to any Corrected Mortgage Loan,
the date that servicing thereof is returned by the Special Servicer to the
Master Servicer pursuant to Section 3.21(a).
"Servicing Standard": As defined in Section 3.01(a).
"Servicing Transfer Event": With respect to any Mortgage Loan, the
occurrence of any of the events described in clauses (1) through (8) of the
definition of "Specially Serviced Mortgage Loan".
"Special Servicer": GMACCM, or any successor special servicer
appointed as herein provided.
"Special Servicing Fee": With respect to each Specially Serviced
Mortgage Loan and REO Loan, the fee designated as such and payable to the
Special Servicer pursuant to Section 3.11(c).
"Special Servicing Fee Rate": With respect to each Specially Serviced
Mortgage Loan and REO Loan, 0.250% per annum.
"Specially Serviced Mortgage Loan": Any Mortgage Loan (and each
related Cross-Collateralized Mortgage Loan) as to which any of the following
events has occurred:
(1) the related Mortgagor has failed to make when due any Balloon Payment,
which failure has continued unremedied for 30 days; or
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(2) the related Mortgagor has failed to make when due any Monthly Payment
(other than a Balloon Payment) or any other payment required under the
related Mortgage Note or the related Mortgage, which failure continues
unremedied for 60 days; or
(3) the Master Servicer has determined in its good faith and reasonable
judgment, that a default in the making of a Monthly Payment or any other
payment required under the related Mortgage Note or the related Mortgage 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, for at least 30 days;
or
(4) there shall have occurred a default, other than as described in clause
(1) or (2) above, that materially impairs the value of the related
Mortgaged Property as security for the Mortgage Loan or otherwise
materially and adversely affects the interests of Certificateholders, which
default has continued unremedied for the applicable grace period under the
terms of the Mortgage Loan (or, if no grace period is specified, 60 days);
or
(5) 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, marshalling 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
(6) the related Mortgagor shall have consented to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of
debt, marshalling 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
(7) the related Mortgagor shall have admitted in writing its inability to
pay its debts generally as they become due, filed a petition to take
advantage of any applicable insolvency or reorganization statute, made an
assignment for the benefit of its creditors, or voluntarily suspended
payment of its obligations; or
(8) the Master Servicer shall have received notice of the commencement of
foreclosure or similar proceedings with respect to the related Mortgaged
Property;
provided that a Mortgage Loan will cease to be a Specially Serviced Mortgage
Loan, when a Liquidation Event has occurred in respect of such Mortgage Loan,
when the related Mortgaged Property or Properties become REO Property or
Properties, or at such time as such of the following as are applicable occur
with respect to the circumstances identified above that caused the Mortgage Loan
to be characterized as a Specially Serviced Mortgage Loan (and provided that
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no other Servicing Transfer Event then exists with respect to the particular
Mortgage Loan or any related Cross-Collateralized Mortgage Loan):
(w) with respect to the circumstances described in clauses (1) and
(2) above, 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 (3), (5),
(6) and (7) above, such circumstances cease to exist in the good faith and
reasonable judgment of the Special Servicer;
(y) with respect to the circumstances described in clause (4) above,
such default is cured; and
(z) with respect to the circumstances described in clause (8) above,
such proceedings are terminated.
"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 Fiscal Agent, the Master
Servicer, and the Special Servicer, and specific ratings of Standard & Poor's
Rating Services, a Division of the McGraw Hill Companies, Inc. 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(b).
"Stated Maturity Date": With respect to any Mortgage Loan, the Due
Date on which the last payment of principal is due and payable under the terms
of the related 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 Master Servicer or
Special Servicer pursuant to Section 3.20 or, in the case of any ARD Loan, the
Anticipated Repayment Date for such Mortgage Loan.
"Stated Principal Balance": With respect to any Mortgage Loan (and
any related REO Loan), the Cut-off Date Principal Balance of such Mortgage Loan
(or in the case of a
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Replacement Mortgage Loan, as of the related date of substitution), as reduced
on each Distribution Date (to not less than zero) by (i) all payments (or
Delinquency Advances in lieu thereof) of, and all other collections allocated as
provided in Section 1.02 to, principal of or with respect to such Mortgage Loan
(or related REO Loan) that are (or, if they had not been applied to cover any
Additional Trust Fund Expense, would have been) distributed to
Certificateholders on such Distribution Date, and (ii) the principal portion of
any Realized Loss incurred in respect of such Mortgage Loan (or related REO
Loan) during the related Collection Period. Notwithstanding the foregoing, if a
Liquidation Event occurs in respect of any Mortgage Loan or REO Property, then
the "Stated Principal Balance" of such Mortgage Loan or of the related REO Loan,
as the case may be, shall be zero commencing as of the Distribution Date in the
Collection Period next following the Collection Period in which such Liquidation
Event occurred.
"Subordinated Certificate": Any Class B, Class C, Class D, Class E,
Class F, Class G, Class H, Class J, Class K, Class L, Class M, Class N or
Residual Certificate.
"Substitution Shortfall Amount": In connection with the substitution
of one or more Replacement Mortgage Loans for one or more Deleted Mortgage
Loans, the amount, if any, by which the Purchase Price or aggregate Purchase
Price, as the case may be, for such Deleted Mortgage Loan(s) exceeds the initial
Stated Principal Balance or aggregate Stated Principal Balance, as the case may
be, of such Replacement Mortgage Loan(s).
"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 and any Sub-Servicer relating to servicing and
administration of Mortgage Loans as provided in Section 3.22.
"Supplemental Agreement": Each of (i) the Supplemental Agreement dated
as of August 21, 1998 between GMACCM and Restructured Asset Certificates with
Enhanced Returns, Series 1998-ML Trust and (ii) the Supplemental Agreement dated
as of August 21, 1998 between GMACCM and German American Capital Corporation, in
each case, as amended, restated or otherwise supplemented from time to time.
"Tax Returns": 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 the federal income tax
return to be filed on behalf of the Grantor Trust due to its classification as a
grantor trust under the Grantor Trust Provisions, together with any and all
other information, reports or returns that may be required to be furnished to
the Certificateholders or filed with the Internal
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Revenue Service or any other governmental taxing authority under any applicable
provisions of federal, or Applicable State Law.
"Tenant": With respect to each Credit Lease Loan, the lessee
thereunder.
"Transfer": Any direct or indirect transfer, sale, pledge,
hypothecation, or other form of assignment of any Ownership Interest in a
Certificate.
"Transfer Affidavit and Agreement": As defined in Section
5.02(d)(i)(B).
"Transferee": Any Person who is acquiring by Transfer any Ownership
Interest in a Certificate.
"Transferor": Any Person who is disposing by Transfer any Ownership
Interest in a Certificate.
"Trust Fund": Collectively, the Excess Interest and all of the assets
of REMIC I, REMIC II and REMIC III.
"Trustee": LaSalle National Bank, in its capacity as Trustee under
this Agreement, its successor in interest, or any successor trustee appointed as
herein provided.
"Trustee Fee": With respect to any Distribution Date and each
Mortgage Loan and REO Loan, an amount equal to one-twelfth of the product of the
Trustee Fee Rate and the aggregate Stated Principal Balance of such Mortgage
Loan or REO Loan immediately following the prior Distribution Date.
"Trustee Fee Rate": 0.00220%.
"UCC": The Uniform Commercial Code of any applicable jurisdiction.
"UCC Financing Statement": A financing statement executed and filed
pursuant to the Uniform Commercial Code, as in effect in the relevant
jurisdiction, or, in the case of Louisiana, the comparable provisions of
Louisiana law.
"Uncertificated Accrued Interest": With respect to any REMIC I
Regular Interest, for any Distribution Date, one month's interest (calculated on
the basis of a 360 day year consisting of twelve 30-day months) at the REMIC I
Remittance Rate applicable to such REMIC I Regular Interest for such
Distribution Date, accrued on the Uncertificated Principal Balance of such
REMIC I Regular Interest outstanding immediately prior to such Distribution
Date. With respect to any REMIC II Regular Interest, for any Distribution Date,
one month's interest (calculated on the basis of a 360-day year consisting of
twelve 30-day months) at the REMIC II
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Remittance Rate applicable to such REMIC II Regular Interest for such
Distribution Date, accrued on the Uncertificated Principal Balance of such REMIC
II Regular Interest outstanding immediately prior to such Distribution Date.
The Uncertificated Accrued Interest in respect of any REMIC I Regular Interest
or REMIC II Regular Interest for any Distribution Date shall be deemed to accrue
during the applicable Interest Accrual Period.
"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,
expressed as a percentage, 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 Interests for such Distribution Date. With
respect to any REMIC II Regular Interest for any Distribution Date, an amount
equal to: (a) the Uncertificated Accrued Interest in respect of such REMIC II
Regular Interest for such Distribution Date; reduced (to not less than zero) by
(b) the portion, if any, of the Net Aggregate Prepayment Interest Shortfall, if
any, for such Distribution Date allocated to such REMIC II Regular Interest
which shall be allocated in the same manner as such Net Aggregate Prepayment
Interest Shortfall is allocated amongst the corresponding REMIC III Regular
Certificates.
"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 Principal Balance of
the related Mortgage Loan. 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 thereon on such Distribution
Date pursuant to Section 4.01(a) and, if and to the extent appropriate, shall be
further reduced on such Distribution Date as provided in Section 4.04(a). As of
the Closing Date, the Uncertificated Principal Balance of each REMIC II Regular
Interest shall equal the amount set forth in the Preliminary Statement hereto as
its initial Uncertificated Principal Balance. On each Distribution Date, the
Uncertificated Principal Balance of each such 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(b) and, if and to the extent
appropriate, shall be further reduced on such Distribution Date as provided in
Section 4.04(b).
"Underwriter": Each of Deutsche Bank Securities Inc. and Lehman
Brothers Inc.
"Uninsured Cause": Any cause of damage to property subject to a
Mortgage such that the complete restoration of such property is not fully
reimbursable by the hazard insurance policies or flood insurance policies
required to be maintained pursuant to Section 3.07.
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"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 (except, in the
case of a partnership, to the extent provided in Treasury regulations), an
estate whose income from sources without the United States is includible in
gross income for United States federal income tax purposes regardless of its
connection with the conduct of a trade or business within the United States, or
a trust for which a court within the United States is able to exercise primary
supervision over its administration and for which one or more United States
Persons have the authority to control all substantial decisions of the trust.
"USPAP": The Uniform Standards of Professional Appraisal Practices.
"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, 98% of the Voting Rights shall be allocated among the
Holders of the various outstanding Classes of Principal Balance Certificates in
proportion to the respective Class Principal Balances of their Certificates, 1%
of the Voting Rights shall be allocated among the Holders of the Class X
Certificates in proportion to the respective Class Notional Amount of such
Certificates, and the remaining Voting Rights shall be allocated equally among
the Holders of the respective Classes of the Residual 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. Appraisal Reduction Amounts will be allocated in
reduction of the respective Certificate Balances of the Class N, Class M, Class
L, Class K, Class J, Class H, Class G, Class F, Class E, Class D, Class C, Class
B and Class A Certificates (pro rata between the Class A-1 and Class A-2
Certificates), in that order, for purposes of calculating Voting Rights.
"Weighted Average Net Mortgage Rate": With respect to any
Distribution Date, the REMIC II Remittance Rate for each REMIC II Regular
Interest for such Determination Date.
"Withheld Amount": With respect to (a) each Interest Reserve Loan and
(b) each Distribution Date occurring in (i) January of each calendar year that
is not a leap year and (ii) February of each calendar year, an amount equal to
one day's interest at the related Mortgage Rate (less any Servicing Fee payable
therefrom) on the respective Stated Principal Balance as of the Due Date in the
month in which such Distribution Date occurs, to the extent that a Monthly
Payment or Delinquency Advance is made in respect thereof.
"Workout Fee": With respect to each Corrected Mortgage Loan, the fee
designated as such and payable to the Special Servicer pursuant to the third
paragraph of Section 3.11(c).
"Workout Fee Rate": With respect to each Corrected Mortgage Loan as
to which a Workout Fee is payable, 1.00%.
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SECTION 1.02 Certain Calculations in Respect of the
Mortgage Pool.
(a) All amounts collected in respect of any group of related
Cross-Collateralized Mortgage Loans in the form of payments from Mortgagors,
Insurance Proceeds and Liquidation Proceeds, shall be applied by the Master
Servicer among such Mortgage Loans in accordance with the express provisions of
the related loan documents and, in the absence of such express provisions, on a
PRO RATA basis in accordance with the respective amounts then "due and owing" as
to each such Mortgage Loan. All amounts collected in respect of any Mortgage
Loan (whether or not such Mortgage Loan is a Cross-Collateralized Mortgage Loan)
in the form of payments from Mortgagors, Liquidation Proceeds or Insurance
Proceeds shall be applied to 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 and, in the absence of such express provisions, shall
be applied for purposes of this Agreement: FIRST, as a recovery of any related
unreimbursed Servicing Advances and, if applicable, unpaid Liquidation Expenses;
SECOND, as a recovery of accrued and unpaid interest at the related Mortgage
Rate on such Mortgage Loan to but not including, as appropriate, the date of
receipt or, in the case of a full Monthly Payment from any Mortgagor, the
related Due Date; THIRD, as a recovery of principal of such Mortgage Loan then
due and owing, including, without limitation, by reason of acceleration of the
Mortgage Loan following a default thereunder (or, if a Liquidation Event has
occurred in respect of such Mortgage Loan, as a recovery of principal to the
extent of its entire remaining unpaid principal balance); FOURTH, as a recovery
of amounts to be currently applied to the payment of, or escrowed for the future
payment of, real estate taxes, assessments, insurance premiums, ground rents (if
applicable) and similar items; FIFTH, as a recovery of Reserve Funds to the
extent then required to be held in escrow; SIXTH, as a recovery of any
Prepayment Premium then due and owing under such Mortgage Loan; SEVENTH, as a
recovery of any Penalty Charges then due and owing under such Mortgage Loan;
EIGHTH, as a recovery of any other amounts (other than Excess Interest) then due
and owing under such Mortgage Loan; NINTH, as a recovery of any remaining
principal of such Mortgage Loan to the extent of its entire remaining unpaid
principal balance; and TENTH, if such Mortgage Loan is an ARD Loan, as a
recovery of any Excess Interest then due and owing on such Mortgage Loan.
(b) Collections in respect of each REO Property (exclusive of amounts
to be applied to the payment of the costs of operating, managing, maintaining
and disposing of such REO Property) shall be treated: FIRST, as a recovery of
any related unreimbursed Servicing Advances; SECOND, as a recovery of accrued
and unpaid interest on the related REO Loan at the related Mortgage Rate to but
not including the Due Date in the month of receipt; THIRD, as a recovery of
principal of the related REO Loan to the extent of its entire unpaid principal
balance; and FOURTH, as a recovery of any other amounts deemed to be due and
owing in respect of the related REO Loan.
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(c) The foregoing applications of amounts received in respect of any
Mortgage Loan or REO Property shall be determined by the Master Servicer in its
good faith judgment.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.01 Establishment of Trust; Conveyance of Mortgage Loans.
(a) The Depositor, concurrently with the execution and delivery
hereof, does hereby establish a trust, appoint the Trustee to serve as trustee
of such trust and assign to the Trustee without recourse for the benefit of the
Certificateholders all the right, title and interest of the Depositor, including
any security interest therein for the benefit of the Depositor, in, to and under
(i) the Mortgage Loans identified on the Mortgage Loan Schedule, (ii) Sections
2, 4(a) and 6 of each Mortgage Loan Purchase Agreement and Sections 2 and 4 of
each Supplemental Agreement and (iii) all other assets included or to be
included in REMIC I. Such assignment includes all interest and principal
received or receivable on or with respect to the Mortgage Loans (other than
payments of principal and interest due and payable on the Mortgage Loans on or
before 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
subsection (a) above, the Depositor shall direct, and hereby represents and
warrants that it has directed, each Mortgage Loan Seller pursuant to the related
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 of such Mortgage Loan Seller's Mortgage Loans so
assigned. If the related Mortgage Loan Seller cannot deliver, or cause to be
delivered as to any Mortgage Loan, the original Mortgage Note, the Mortgage Loan
Seller shall deliver a copy or duplicate original of such Mortgage Note,
together with an affidavit certifying that the original thereof has been lost or
destroyed. If the related Mortgage Loan Seller cannot deliver, or cause to be
delivered, as to any Mortgage Loan, any of the documents and/or instruments
referred to in clauses (a)(2), (a)(4), (a)(11) and (a)(12) of the definition of
"Mortgage File", with evidence of recording or filing, as the case may be,
thereon, because of a delay caused by the public recording or filing office
where such document or instrument has been delivered for recordation or filing,
or because such original recorded document has been lost or returned from the
recording or filing office and subsequently lost, as the case may be, the
delivery requirements of the related Mortgage Loan Purchase Agreement and this
Section 2.01(b) shall be deemed to have been satisfied as to such missing
document or instrument, and such missing document or instrument shall be deemed
to have been included in the Mortgage File, provided that a photocopy of such
missing document or instrument
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(certified by the related Mortgage Loan Seller to be a true and complete copy of
the original thereof submitted for recording or filing, as the case may be) is
delivered to the Trustee or a Custodian appointed thereby on or before the
Closing Date and either the original of such missing document or instrument, or
a copy thereof, with evidence of recording or filing, as the case may be,
thereon, is delivered to or at the direction of the Trustee within 180 days of
the Closing Date (or within such longer period after the Closing Date as the
Trustee may consent to, which consent shall not be unreasonably withheld so long
as the related Mortgage Loan Seller has provided the Trustee with evidence of
such recording or filing, as the case may be, or has certified to the Trustee as
to the occurrence of such recording or filing, as the case may be, and is, as
certified to the Trustee no less often than quarterly, in good faith attempting
to obtain from the appropriate county recorder's or filing office such original
or copy). If the related Mortgage Loan Seller cannot deliver, or cause to be
delivered, as to any Mortgage Loan, the original or a copy of the related
lender's title insurance policy referred to in clause (a)(9) of the definition
of "Mortgage File" solely because such policy has not yet been issued, the
delivery requirements of this Section 2.01(b) shall be deemed to be satisfied as
to such missing item, and such missing item shall be deemed to have been
included in the related Mortgage File, provided that the related Mortgage Loan
Seller shall have delivered to the Trustee or a Custodian appointed thereby, on
or before the Closing Date, a commitment for title insurance "marked-up" at the
closing of such Mortgage Loan, and the related Mortgage Loan Seller shall
deliver to the Trustee or such Custodian, promptly following the receipt
thereof, the original related lender's title insurance policy (or a copy
thereof). In addition, notwithstanding anything to the contrary contained
herein, if there exists with respect to any group of related
Cross-Collateralized Mortgage Loans only one original of any document referred
to in the definition of "Mortgage File" covering all the Mortgage Loans in such
group, then the inclusion of the original of such document in the Mortgage File
for any of the Mortgage Loans in such group shall be deemed an inclusion of such
original in the Mortgage File for each such Mortgage Loan. Also notwithstanding
the foregoing, the Mortgage File for any Mortgage Loan subject to a Pass Through
Trust Agreement will consist solely of the related pass-through certificate, and
if more than one Mortgage Loan is subject to the same Pass Through Trust
Agreement, the related Mortgage Loan Seller may, to the extent appropriate,
deliver to the Trustee or such Custodian one pass-through certificate covering
all such Mortgage Loans. Neither the Trustee nor any Custodian shall in any way
be liable for any failure by the Mortgage Loan Seller or the Depositor to comply
with the delivery requirements of the Mortgage Loan Purchase Agreement and this
Section 2.01(b).
If any of the endorsements referred to in clause (a)(1) of the
definition of "Mortgage File", or any of the assignments referred to in clauses
(a)(3), (a)(5) and (a)(7) of the definition of "Mortgage File", are delivered to
the Trustee in blank, the Trustee shall be responsible for completing the
related endorsement or assignment in the name of the Trustee (in such capacity).
(c) Except under the circumstances provided for in the last sentence
of this subsection (c), the Trustee shall, as to each Mortgage Loan (other than
a Mortgage Loan subject
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to a Pass Through Trust Agreement), at the expense of the related Mortgage Loan
Seller, promptly (and in any event within 45 days of the Closing Date) 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, each assignment referred to in clauses (a)(3) and (a)(5) of the
definition of "Mortgage File" and each UCC-2 and UCC-3 referred to in clause
(a)(11)(B) of the definition of "Mortgage File"; provided, however, that each
Mortgage Loan Seller shall have the right to direct the Trustee, in writing, to
cause the aforementioned recording and filing requirements to be completed
(within the specified time period) by a Person other than the Trustee, in which
case the Trustee shall (i) promptly deliver the referenced documents to such
Person for recording and filing and (ii) notify the related Mortgage Loan Seller
with respect to each Mortgage Loan for which the related assignment or file copy
of any UCC-2 and UCC-3 has not been received within the time period specified in
Section 2.02(c). Each such assignment shall reflect that it should be returned
by the public recording office to the Trustee or its designee following
recording, and each such UCC-2 and UCC-3 shall reflect that the file copy
thereof should be returned to the Trustee or its designee following filing.
Promptly following receipt, the Trustee shall, at the expense of the respective
Mortgage Loan Seller, deliver a copy of any such document or instrument to the
Master Servicer. 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 related Mortgage Loan Seller pursuant to the related
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 Depositor's or any Mortgage Loan
Seller's possession relating to the Mortgage Loans 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 on or before the Closing Date and shall be held
by the Master Servicer (or a Sub-Servicer retained thereby) on behalf of the
Trustee in trust for the benefit of the Certificateholders. If the Sub-Servicer
shall hold any original documents and records delivered to it pursuant to this
clause (d) then the Sub-Servicer shall deliver copies thereof to the Master
Servicer.
(e) In connection with the Depositor's assignment pursuant to
subsection (a) above, the Depositor shall deliver, and hereby represents and
warrants that it has delivered, to the Trustee and the Master Servicer, on or
before the Closing Date, a fully executed original counterpart of each Mortgage
Loan Purchase Agreement, as in full force and effect, without amendment or
modification, on the Closing Date.
(f) Upon any amendment of a Pass Through Trust Agreement to effect a
direct ownership in the related Mortgage Loan or Mortgage Loans, as contemplated
by Section 2(f) of the Mortgage Loan Purchase Agreement to which LB Holdings is
a party, at the direction of the Master Servicer and to the extent permitted by
the Pass through Trust Agreement as so amended, the Trustee shall obtain, or
cause to be delivered to and deposited with, the Trustee or a Custodian
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appointed thereby, as soon as reasonably practicable thereafter, the Mortgage
File (determined in accordance with clause (a) of the definition thereof) for
each such Mortgage Loan. The provisions of Section 2.01(b) that address the
inability of a Mortgage Loan Seller to timely deliver or cause the delivery of a
Mortgage File on the Closing Date shall apply to the delivery of Mortgage Files
by the Trustee under this clause (f) from the date of the effectiveness of such
amendment with such changes as are appropriate to give effect to such provision
with respect to the Trustee's delivery on a date other than the Closing Date.
In the event any Pass Through Trust Agreement is not so amended, the Trustee
shall, at the direction of the Master Servicer, exercise its rights thereunder
to modify such Pass Through Trust Agreement to the fullest extent reasonably
practicable to effectuate the treatment by the Trustee and the Master Servicer
of the Mortgage Loans subject to such Pass Through Trust Agreement in a manner
similar to the Mortgage Loans not subject to any Pass Through Trust Agreement.
(g) Promptly following the Closing Date, the Trustee shall cause any
pass through certificate or other certificate issued under any Pass Through
Trust Agreement and delivered by the related Mortgage Loan Seller in respect of
any Mortgage Loan, to be registered in the name of the Trustee.
SECTION 2.02 Acceptance by Trustee.
(a) The Trustee, by the execution and delivery of this Agreement,
acknowledges receipt by it or a Custodian on its behalf, subject to the
provisions of Section 2.01 and the further review provided for in this
Section 2.02, and further subject to any exceptions noted on any exception
report prepared by the Trustee or such Custodian and attached hereto as Schedule
II, of the documents specified in clauses (a)(1), (a)(2), (a)(3), (a)(9) and
(a)(12) (or, in the case of each Mortgage Loan subject to a Pass Through Trust
Agreement, clause (b)) of the definition of "Mortgage File", of a fully executed
original counterpart of each Mortgage Loan Purchase Agreement and of all other
assets included in REMIC I and delivered to it, 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 delivered or caused to be
delivered by the Mortgage Loan Sellers constituting the Mortgage Files, and that
it holds and will hold such other assets included in REMIC I, in trust for the
exclusive use and benefit of all present and future Certificateholders.
(b) Within 60 days of the Closing Date, the Trustee or a Custodian on
its behalf shall review each of the Mortgage Loan documents delivered or caused
to be delivered by the Mortgage Loan Sellers constituting the Mortgage Files;
and, promptly following such review, the Trustee 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 in the Mortgage Loan
Schedule (other than any Mortgage Loan paid in full 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 (a)(1),
(a)(2), (a)(3), (a)(9) and (a)(12) (or, in the case of each
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Mortgage Loan subject to a Pass Through Trust Agreement, clause (b)) of the
definition of "Mortgage File" are in its possession or the related Mortgage Loan
Seller has otherwise satisfied the delivery requirements in accordance with
Section 2.01(b), (ii) all documents delivered or caused to be delivered by the
related Mortgage Loan Seller constituting the related Mortgage File have been
reviewed by it or by a Custodian on its behalf 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 set forth in the Mortgage Loan
Schedule with respect to the items specified in clauses (i), (ii), (iii), (iv)
and (vii) of the definition of "Mortgage Loan Schedule", is correct.
(c) The Trustee or a Custodian on its behalf shall review each of the
Mortgage Loan documents received thereby subsequent to the Closing Date; and, on
or about the first anniversary of the Closing Date, the Trustee 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) and except as specifically identified in any exception report annexed
to such certification), (i) all documents specified in clauses (a)(1), (a)(2),
(a)(9) and (a)(12) (or, in the case of each Mortgage Loan subject to a Pass
Through Trust Agreement, clause (b)) of the definition of "Mortgage File" are in
its possession or the related Mortgage Loan Seller has otherwise satisfied the
delivery requirements in accordance with Section 2.01(b), (ii) it or a Custodian
on its behalf has received either a recorded original of each of the assignments
specified in clauses (a)(3) and, insofar as an unrecorded original thereof had
been delivered or caused to be delivered by the related Mortgage Loan Seller,
(a)(5) of the definition of "Mortgage File" or a copy of such recorded original
certified by the applicable public recording office to be true and complete,
(iii) all Mortgage Loan documents received by it or any Custodian have been
reviewed by it or by such Custodian on its behalf and appear regular on their
face and relate to such Mortgage Loan, and (iv) based on the examinations
referred to in subsection (b) above and this subsection (c) and only as to the
foregoing documents, the information set forth in the Mortgage Loan Schedule
with respect to the items specified in clauses (i), (ii), (iii), (iv) and (vii)
of the definition of "Mortgage Loan Schedule", is correct.
(d) It is acknowledged that neither the Trustee nor any Custodian is
under any duty or obligation (i) to determine whether any of the documents
specified in clauses (a)(4) -(a)(8), (a)(10), (a)(11), (a)(13) and (a)(14) of
the definition of "Mortgage File" exist or are required to be delivered by the
Depositor, any Mortgage Loan Seller or any other Person or (ii) 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 genuine, enforceable, in recordable form or appropriate for the represented
purpose or that they are other than what they purport to be on their face.
(e) If, in the process of reviewing the Mortgage Files or at any time
thereafter, the Trustee or any Custodian finds (or, if at any time, any other
party hereto finds) any document
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or documents constituting a part of a Mortgage File to have not been properly
executed or, subject to Section 2.01(b), to have not been delivered, to contain
information that does not conform in any material respect with the corresponding
information set forth in the Mortgage Loan Schedule, or to be defective on its
face (each, a "Defect" in the related Mortgage File) the Trustee (or such other
party) shall promptly so notify each of the other parties hereto and the related
Mortgage Loan Seller. If and when notified of any error in the Mortgage Loan
Schedule, the Depositor shall promptly correct such error and distribute a new,
corrected Mortgage Loan Schedule to each of the other parties hereto, and upon
receipt by the Trustee of such a corrected Mortgage Loan Schedule so identified,
such new, corrected Mortgage Loan Schedule shall be deemed to amend and replace
the existing Mortgage Loan Schedule for all purposes.
SECTION 2.03 Mortgage Loan Sellers' Repurchase of Mortgage Loans for
Defects in Mortgage Files and Breaches of
Representations and Warranties.
(a) If the Trustee discovers or receives notice of a Defect in any
Mortgage File or a breach of any representation or warranty set forth in or made
pursuant to Section 4(a) of each Mortgage Loan Purchase Agreement or Section
2(a) of either Supplemental Agreement (a "Breach"), which Defect or Breach, as
the case may be, materially and adversely affects the value of any Mortgage Loan
or the interests of the Certificateholders therein, or if the Trustee discovers
or receives notice of any event that would give rise to the repurchase of a
Mortgage Loan pursuant to Section 6(b) of any Mortgage Loan Purchase Agreement
or Section 4(b) of either Supplemental Agreement, the Trustee shall give prompt
written notice of such Defect, Breach or event, as the case may be, to the
Depositor, the Master Servicer, the Special Servicer and the Rating Agencies and
the related Mortgage Loan Seller (and GMACCM, in the case of such a Defect,
Breach or event under a Supplemental Agreement) and shall request that the
related Mortgage Loan Seller (or GMACCM, in the case of such a Defect, Breach or
event under the Supplemental Agreement), within the time period provided for in
the related Mortgage Loan Purchase Agreement or Supplemental Agreement, as
applicable, cure such Defect, Breach or event, as the case may be, in all
material respects or repurchase the affected Mortgage Loan at the applicable
Purchase Price in conformity with the related Mortgage Loan Purchase Agreement
or Supplemental Agreement, as applicable, provided, however, that in lieu of
effecting any such repurchase, a Mortgage Loan Seller (or GMACCM, in the case of
such a Defect, Breach or event under the Supplemental Agreement) will be
permitted until the second anniversary of the Closing Date to deliver a
Qualifying Substitute Mortgage Loan and to pay a cash amount equal to the
applicable Substitution Shortfall Amount, subject to the terms and conditions of
the related Mortgage Loan Purchase Agreement or Supplemental Agreement, as
applicable and this Agreement; provided, further, that if such Breach would
cause the Mortgage Loan to be other than a "qualified mortgage" under Section
860G(a)(3) of the Code, such Breach shall be cured or the related Mortgage Loan
shall be repurchased or replaced with a Qualifying Substitute Mortgage Loan
within 90 days of discovery.
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As to any Qualifying Substitute Mortgage Loan or Loans, the Trustee
shall direct the related Mortgage Loan Seller (or GMACCM, in the case of such a
Defect, Breach or event under the Supplemental Agreement) to deliver to the
Trustee for such Qualifying Substitute Mortgage Loan or Loans (with a copy to
the Master Servicer), the related Mortgage File(s) with the related Mortgage
Note(s) endorsed as required by clause (1) of the definition of "Mortgage File".
No substitution may be made in any calendar month after the Determination Date
for such month. Monthly Payments due with respect to Qualifying Substitute
Mortgage Loans in the month of substitution shall not be part of the Trust Fund
and will be retained by Master Servicer and remitted by the Master Servicer to
the related Mortgage Loan Seller (or GMACCM, in the case of such a Defect,
Breach or event under the Supplemental Agreement) on the next succeeding
Distribution Date. For the month of substitution, distributions to
Certificateholders will include the Monthly Payment due on the related Deleted
Mortgage Loan for such month and thereafter the related Mortgage Loan Seller (or
GMACCM, in the case of such a Defect, Breach or event under the Supplemental
Agreement) shall be entitled to retain all amounts received in respect of such
Deleted Mortgage Loan.
In any month in which the related Mortgage Loan Seller (or GMACCM
under a Supplemental Agreement) substitutes one or more Qualifying Substitute
Mortgage Loans for one or more Deleted Mortgage Loans, the Master Servicer will
determine the applicable Substitution Shortfall Amount. The Trustee shall
direct the related Mortgage Loan Seller (or GMACCM, as applicable) to deposit
cash equal to such amount into the Distribution Account concurrently with the
delivery of the Mortgage File(s) for the Qualifying Substitute Mortgage Loan(s),
without any reimbursement thereof. The Trustee shall also direct the related
Mortgage Loan Seller (or GMACCM, as applicable) to give written notice to the
Trustee and the Master Servicer of such deposit, accompanied by an Officers'
Certificate as to the calculation the applicable Substitution Shortfall Amount.
The Trustee shall direct the related Mortgage Loan Seller (or GMACCM, as
applicable) to amend the Mortgage Loan Schedule to reflect the removal of each
Deleted Mortgage Loan and, if applicable, the substitution of the Qualifying
Substitute Mortgage Loan(s); and, upon such amendment, the Trustee shall deliver
or cause the delivery of such amended Mortgage Loan Schedule to the other
parties hereto. Upon any such substitution, the Qualifying Substitute Mortgage
Loan(s) shall be subject to the terms of this Agreement in all respects.
(b) In connection with any repurchase of or substitution for a
Mortgage Loan contemplated by this Section 2.03, the Trustee, the Master
Servicer and the Special Servicer shall each tender promptly to the related
Mortgage Loan Seller (or GMACCM, as applicable), upon delivery to each of the
Trustee, the Master Servicer and the Special Servicer of a trust receipt
executed by the related Mortgage Loan Seller (or GMACCM, as applicable), 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 related
Mortgage File that was endorsed or assigned to the Trustee shall be endorsed or
assigned, as the case may be, to the related Mortgage Loan Seller (or GMACCM, as
applicable) in the same manner as provided in Section 2 of each Mortgage Loan
Purchase Agreement. Additionally, in connection with any repurchase of or
substitution for
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a Mortgage Loan pursuant to this Section 2.03, the Master Servicer shall release
or cause to be released to the related Mortgage Loan Seller (or GMACCM, as
applicable) any Reserve Funds or Escrow Payments with respect to the related
Mortgage Loan. If the affected Mortgage Loan is to be repurchased, the Trustee
shall designate the Certificate Account as the account to which funds in the
amount of the Purchase Price are to be wired.
(c) Section 6 of the related Mortgage Loan Purchase Agreement and
Section 4 of each Supplemental Agreement provides the sole remedy available to
the Certificateholders, or the Trustee on behalf of the Certificateholders,
respecting any Defect in a Mortgage File or any Breach of any representation or
warranty set forth in or required to be made pursuant to Section 4(a) of such
Mortgage Loan Purchase Agreement or Section 2(a) of such Supplemental Agreement
or any of the circumstances described in Section 6(b) of such Mortgage Loan
Purchase Agreement or in Section 4(b) of such Supplemental Agreement.
(d) The Trustee shall, for the benefit of the Certificateholders,
enforce the obligations of each Mortgage Loan Seller under Section 6 of the
related Mortgage Loan Purchase Agreement and the obligations of GMACCM under
Section 4 of each Supplemental Agreement. Such enforcement, including, without
limitation, the legal prosecution of claims, shall be carried out in such form,
to such extent and at such time as the Trustee would require were it, in its
individual capacity, the owner of the affected Mortgage Loan(s). The Trustee
shall be reimbursed for the reasonable costs of such enforcement, together with
interest thereon at the Reimbursement Rate: FIRST, from a specific recovery of
costs, expenses or attorneys' fees against the related Mortgage Loan Seller (or
GMACCM, in the case of enforcement under a Supplemental Agreement); SECOND,
pursuant to Section 3.05(a)(ix) out of the related Purchase Price, to the extent
that such expenses are a specific component thereof; and THIRD, if at the
conclusion of such enforcement action it is determined that the amounts
described in clauses FIRST and SECOND are insufficient, then pursuant to Section
3.05(a)(x) out of general collections on the Mortgage Loans on deposit in the
Certificate Account.
SECTION 2.04 Issuance of Class R-I Certificates; Creation of REMIC I
Regular Interests.
Concurrently with the assignment to the Trustee of the assets included
in REMIC I, and in exchange therefor, at the direction of the Depositor, the
REMIC I Regular Interests have been issued hereunder and the Trustee has
executed, and caused the Certificate Registrar to authenticate and deliver, 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 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 of the Class R-I Certificateholders and REMIC II in and to such
distributions, shall be as set forth in this Agreement.
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SECTION 2.05 Conveyance of REMIC I Regular Interests; Acceptance of
REMIC II by the Trustee.
The Depositor, as of the Closing Date, and concurrently with the
execution and delivery hereof, 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 Class R-II Certificateholders
and REMIC III as holder of the REMIC II Regular Interests. The Trustee
acknowledges the assignment to it of 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 Class R-II Certificateholders and REMIC III as the
holder of the REMIC II Regular Interests.
SECTION 2.06 Issuance of Class R-II Certificates; Creation of REMIC
II Regular Interest.
Concurrently with the assignment to the Trustee of the REMIC I Regular
Interests, and in exchange therefor, at the direction of the Depositor, the
REMIC II Regular Interests have been issued hereunder and the Trustee has
executed, and caused the Certificate Registrar to authenticate and deliver, to
or upon the order of the Depositor, the Class R-II Certificates in authorized
denominations. The interests evidenced by the Class R-II Certificates, together
with the REMIC II Regular Interests, constitute the entire beneficial ownership
of REMIC II. The rights of the Class R-II Certificateholders and REMIC III to
receive distributions from the proceeds of REMIC II in respect of the Class R-II
Certificates and the REMIC II Regular Interests, respectively, and all ownership
interests of the Class R-II Certificateholders and REMIC III in and to such
distributions, shall be as set forth in this Agreement.
SECTION 2.07 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 hereof, 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 REMIC III Certificateholders.
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 REMIC III Certificateholders.
SECTION 2.08 Issuance of REMIC III Certificates.
Concurrently with the assignment to the Trustee of the REMIC II
Regular Interests, and in exchange therefor, at the direction of the Depositor,
the Trustee has executed, and caused the Certificate Registrar to authenticate
and deliver, 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 respective Classes of REMIC III Certificateholders to
receive
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distributions from the proceeds of REMIC III in respect of their REMIC III
Certificates, and all ownership interests of the respective Classes of REMIC III
Certificateholders in and to such distributions, shall be as set forth in this
Agreement.
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE TRUST FUND
SECTION 3.01 Servicing and Administration of the Mortgage Loans.
(a) Each of the Master Servicer and the Special Servicer shall
service and administer the Mortgage Loans that it is obligated to service and
administer pursuant to this Agreement on behalf of the Trustee and in the best
interests of and for the benefit of the Certificateholders (as determined by the
Master Servicer or the Special Servicer, as the case may be, in its good faith
and reasonable judgment), in accordance with applicable law, the terms of this
Agreement and the terms of the respective Mortgage Loans and, to the extent
consistent with the foregoing, further as follows: (i) with the same care,
skill and diligence as is normal and usual in its general mortgage servicing and
REO property management activities on behalf of third parties or on behalf of
itself, whichever is higher, with respect to mortgage loans and REO properties
that are comparable to those for which it is responsible hereunder; (ii) with a
view to the timely collection of all scheduled payments of principal and
interest under the Mortgage Loans or, if a Mortgage Loan comes into and
continues in default and if, in the good faith and reasonable judgment of the
Special Servicer, no satisfactory arrangements can be made for the collection of
the delinquent payments, the maximization of the recovery on such Mortgage Loan
to the Certificateholders (as a collective whole) on a present value basis (the
relevant discounting of anticipated collections that will be distributable to
Certificateholders to be performed at the related Net Mortgage Rate); and (iii)
without regard to (A) 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, (B) the ownership of any Certificate by the Master Servicer or the
Special Servicer, as the case may be, or by any Affiliate thereof, (C) the
Master Servicer's obligation to make Advances, (D) the Special Servicer's
obligation to make (or to direct the Master Servicer to make) Servicing Advances
and (E) the right of the Master Servicer (or any Affiliate thereof) or the
Special Servicer (or any Affiliate thereof), as the case may be, to receive
reimbursement of costs, or the sufficiency of any compensation payable to it,
hereunder or with respect to any particular transaction (the conditions set
forth in the immediately foregoing clauses (i), (ii) and (iii), the "Servicing
Standard"). Consistent with the Servicing Standard and the terms and
conditions of this Agreement, on behalf of the Trust Fund, the Master Servicer
shall exercise the rights and remedies of a certificateholder under each of the
Pass Through Trust Agreements, and shall take all reasonable steps to cause the
servicing and administration of the Mortgage Loans subject thereto to be
conducted in accordance with, or in a manner similar with that provided under,
this Agreement. Without limiting the generality of the foregoing, each of the
Master Servicer and the
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Special Servicer, in its own name, in connection with its servicing and
administrative duties hereunder is hereby authorized and empowered by the
Trustee to exercise efforts consistent with the foregoing standard and to
execute and deliver, on behalf of the Certificateholders and the Trustee or any
of them, 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; 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 any and all instruments of
satisfaction or cancellation, or of full release or discharge, and all other
comparable instruments, with respect to the Mortgage Loans and the Mortgaged
Properties. Each of the Master Servicer and the Special Servicer is also
authorized to approve a request by a Mortgagor under a Mortgage Loan that it is
obligated to service and administer pursuant to this Agreement, for an easement,
consent to alteration or demolition, and for other similar matters, provided
that the Master Servicer or the Special Servicer, as the case may be,
determines, exercising its good faith business judgment and in accordance with
the Servicing Standard, that such approval will not affect the security for, or
the timely and full collectability of, the related Mortgage Loan. Subject to
Section 3.10, the Trustee shall furnish, or cause to be furnished, to the Master
Servicer and the Special Servicer any powers of attorney and other documents
necessary or appropriate to enable the Master Servicer or the Special Servicer,
as the case may be, to carry out its servicing and administrative duties
hereunder; provided, however, that the Trustee shall not be held liable, and
shall be indemnified by the Master Servicer or the Special Servicer, as
applicable, for any negligence with respect to, or misuse of, any such power of
attorney by the Master Servicer or the Special Servicer, as the case may be.
(b) Subject to Section 3.01(a), the Master Servicer and the Special
Servicer each shall have full power and authority, acting alone or, subject to
Section 3.22, through Sub-Servicers, 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.
(c) The relationship of the Master Servicer and the Special Servicer
to the Trustee and, unless the same Person acts in both capacities, to each
other under this Agreement is intended by the parties to be that of an
independent contractor and not that of a joint venturer, partner or agent.
Unless the same Person acts in both capacities, the Master Servicer shall have
no responsibility for the performance by the Special Servicer of its duties
under this Agreement, and the Special Servicer shall have no responsibility for
the performance of the Master Servicer under this Agreement.
(d) Subject to Section 3.01(a), each of the Master Servicer and
Special Servicer shall service and administer each Mortgage Loan that is a
Cross-Collateralized Mortgage Loan as a single Mortgage Loan as and when it
deems such treatment necessary and appropriate.
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SECTION 3.02 Collection of Mortgage Loan Payments.
The Master Servicer (or the Special Servicer with respect to the
Specially Serviced Mortgage Loans) shall make reasonable efforts to collect all
payments called for under the terms and provisions of the Mortgage Loans, and
shall, to the extent such procedures shall be consistent with this Agreement and
the terms and conditions of the Mortgage Loans, follow such collection
procedures as are consistent with the Servicing Standard; provided, however,
that nothing herein contained shall be construed as an express or implied
guarantee by the Master Servicer or the Special Servicer of the collectability
of the Mortgage Loans. Consistent with the foregoing, the Master Servicer may
in its discretion waive any Penalty Charge in connection with any delinquent
payment on a Mortgage Loan (other than a Specially Serviced Mortgage Loan) and
the Special Servicer may in its discretion waive any Penalty Charge in
connection with any delinquent payment on a Specially Serviced Mortgage Loan.
SECTION 3.03 Collection of Taxes, Assessments and Similar Items;
Servicing Accounts and Reserve Accounts.
(a) Each of the Master Servicer (or the Special Servicer with respect
to the Specially Serviced Mortgage Loans) shall establish and maintain one or
more accounts (the "Servicing Accounts"), into which all Escrow Payments shall
be deposited and retained. Servicing Accounts shall be Eligible Accounts.
Withdrawals of amounts so collected in respect of any Mortgage Loan (and
interest earned thereon) from a Servicing Account may be made only to: (i)
effect payment of real estate taxes, assessments, insurance premiums, ground
rents (if applicable) and comparable items in respect of the related Mortgaged
Property; (ii) reimburse the Fiscal Agent, the Trustee, the Master Servicer and
the Special Servicer, in that order, as applicable, for any unreimbursed
Servicing Advances made thereby to cover any of the items described in the
immediately preceding clause (i); (iii) refund to the related Mortgagor any sums
as may be determined to be overages; (iv) pay interest, if required and as
described below, to the related Mortgagor on balances in the Servicing Account
(or, if and to the extent not payable to the related Mortgagor, to pay such
interest to the Master Servicer or Special Servicer, as applicable); (v)
disburse Insurance Proceeds if required to be applied to the repair or
restoration of the related Mortgaged Property; or (vi) clear and terminate the
Servicing Account at the termination of this Agreement in accordance with
Section 9.01. As part of its servicing duties, the Master Servicer and the
Special Servicer shall pay or cause to be paid to the Mortgagors interest on
funds in Servicing Accounts maintained thereby, to the extent required by law or
the terms of the related Mortgage Loan. The Servicing Accounts shall not be
considered part of the segregated pool of assets constituting REMIC I, REMIC II,
REMIC III or the Grantor Trust.
(b) Each of the Master Servicer (with respect to Mortgage Loans other
than Specially Serviced Mortgage Loans) and the Special Servicer (with respect
to the Specially Serviced Mortgage Loans) shall (i) maintain accurate records
with respect to each related Mortgaged Property reflecting the status of real
estate taxes, assessments and other similar items
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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) for Mortgage Loans which require the related Mortgagor to
escrow for the payment of such items and shall effect payment thereof prior to
the applicable penalty or termination date, employing for such purpose Escrow
Payments as allowed under the terms of the related Mortgage Loan. To the extent
that a Mortgage Loan does not require a Mortgagor to escrow for the payment of
real estate taxes, assessments, insurance premiums, ground rents (if applicable)
and similar items, the Master Servicer (or the Special Servicer with respect to
the Specially Serviced Mortgaged Loans) shall use reasonable efforts consistent
with the Servicing Standard to cause the related Mortgagor to comply with the
requirements of the related Mortgage for payments in respect of such items at
the time they first become due.
(c) In accordance with the Servicing Standard, the Master Servicer
(at the direction of the Special Servicer in the case of Specially Serviced
Mortgage Loans) shall advance with respect to each related Mortgaged Property
all such funds as are necessary for the purpose of effecting the payment of (i)
real estate taxes, assessments and other similar items that are or may become a
lien thereon, (ii) ground rents (if applicable), and (iii) premiums on Insurance
Policies, in each instance if and to the extent Escrow Payments 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 advance would not, if made, constitute a Nonrecoverable Servicing
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. No costs incurred by the Master Servicer or the Special
Servicer in effecting the payment of real estate taxes, assessments, ground
rents (if applicable) and other similar items on or in respect of the Mortgaged
Properties shall, for purposes hereof, including, without limitation,
calculating monthly distributions to Certificateholders, be added to the unpaid
principal balances of the related Mortgage Loans, notwithstanding that the terms
of such Mortgage Loans so permit.
(d) The Master Servicer (or the Special Servicer with respect to
Specially Serviced Mortgage Loans) shall, 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, environmental remediation, replacements and/or capital
improvements at the related Mortgaged Property if such repairs, environmental
remediation, replacements 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. Subject to the terms of the related
Mortgage Note and Mortgage, all Reserve Accounts shall be Eligible Accounts. As
part of its servicing duties, the Master Servicer and the Special Servicer shall
pay or cause to be paid to the Mortgagors interest on funds in the Reserve
Accounts
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maintained thereby, to the extent required by law or the terms of the related
Mortgage Loan. The Reserve Accounts shall not be considered part of the
segregated pool of assets comprising REMIC I, REMIC II, REMIC III or the Grantor
Trust.
SECTION 3.04 Certificate Account, Distribution Account and Interest
Reserve Account.
(a) The Master Servicer shall establish and maintain a Certificate
Account in which the Master Servicer shall deposit or cause to be deposited on a
daily basis, except as otherwise specifically provided herein, the following
payments and collections received or made by or on behalf of it 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), and 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, including Principal
Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest (including, without
limitation, Default Interest and Excess Interest) on the Mortgage Loans, late
payment charges and Prepayment Premiums;
(iii) any amounts received from the Special Servicer which are
required to be transferred from the REO Account pursuant to Section 3.16(c) and
amounts of interest and investment income earned in respect of amounts relating
to the Trust Fund held in any Lock-Box Account or Cash Collateral Account, if
any, and only to the extent not required to be paid to the applicable Mortgagor
under the terms of the related Mortgage Loan documents or applicable law;
(iv) all Insurance Proceeds and Liquidation Proceeds received in
respect of any Mortgage Loan or REO Property (other than Liquidation Proceeds
that are received in connection with the Master Servicer's, Depositor's or LB
Holding's purchase of all the Mortgage Loans and any REO Properties in the Trust
Fund and that are to be deposited in the Distribution Account pursuant to
Section 9.01);
(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 relating to the Trust Fund held in the
Certificate Account;
(vi) that portion of each Delinquency Advance that represents (without
duplication) the Master Servicing Fee and, if applicable, the Special Servicing
Fee; and
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(vii) 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.
The foregoing requirements for deposit in the Certificate Account
shall be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, actual payments from Mortgagors in the nature of
Escrow Payments, Reserve Funds, charges for beneficiary statements or demands,
assumption fees, amounts collected for mortgagor checks returned for
insufficient funds, ancillary fees and any other amounts that the Master
Servicer and the Special Servicer are entitled to as additional servicing
compensation pursuant to Section 3.11 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, ancillary
fees and other transaction fees due to and received by the Master Servicer with
respect to Specially Serviced Mortgage Loans. 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 serviced and the other
accounts of the Master Servicer.
Upon receipt of any of the amounts described in clauses (i), (ii) and
(iv) above with respect to any Mortgage Loan which is not an REO Loan, the
Special Servicer shall promptly, but in no event later than two Business Days
after receipt, remit such amounts to the Master Servicer for deposit into the
Certificate Account in accordance with the second preceding paragraph, unless
the Special Servicer determines, consistent with the Servicing Standard, that a
particular item should not be deposited because of a restrictive endorsement or
other appropriate reason. Any such amounts received by the Special Servicer
with respect to an REO Property shall be deposited by the Special Servicer into
the REO Account and remitted to the Master Servicer for deposit into the
Certificate Account pursuant to Section 3.16 (c). With respect to any such
amounts paid by check to the order of the Special Servicer, the Special Servicer
shall endorse such check to the order of the Master Servicer and shall deliver
promptly, but in no event later than two 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.
Funds in the Certificate Account may be invested in Permitted
Investments in accordance with the provisions of Section 3.06. The Master
Servicer shall give notice to the Trustee, the Special Servicer and the
Depositor of the location of the Certificate Account as of the Closing Date and
of the new location of the Certificate Account prior to any change thereof.
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(b) The Trustee shall establish and maintain the Distribution Account
in trust for the benefit of the Certificateholders. The Distribution Account
shall be maintained as a segregated account, separate and apart from trust funds
for mortgage pass-through certificates of other series administered by the
Trustee and other accounts of the Trustee.
The Master Servicer shall deliver to the Trustee each month on or
before the Master Servicer Remittance Date therein, for deposit in the
Distribution Account, that portion of the Available Distribution Amount
(calculated without regard to clause (a)(v), (b)(iii), (b)(iv) or (b)(vi) of the
definition thereof) for the related Distribution Date then on deposit in the
Certificate Account.
In addition, the Master Servicer shall, as and when required
hereunder, deliver to the Trustee for deposit in the Distribution Account:
(i) 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 relating to the Trust Fund held in the
Distribution Account;
(ii) any Delinquency Advances required to be made by the Master
Servicer in accordance with Section 4.03 (in each case, net of the portion
thereof that represents Master Servicing Fees and/or Special Servicing Fees,
which is to be deposited in the Certificate Account);
(iii) any Compensating Interest Payments required to be made by
the Master Servicer pursuant to Section 3.19;
(iv) any Liquidation Proceeds paid by the Master Servicer, the
Depositor or LB Holdings in connection with the purchase of all of the Mortgage
Loans and any REO Properties in the Trust Fund pursuant to Section 9.01
(exclusive of that portion thereof required to be deposited in the Certificate
Account pursuant to Section 9.01); and
(v) any other amounts required to be so delivered for deposit in the
Distribution Account pursuant to any provision of this Agreement.
The Trustee shall, upon receipt, deposit in the Distribution Account
any and all amounts received by the Trustee that are required by the terms of
this Agreement to be deposited therein. If, as of 3:00 p.m., New York City
time, on any Master Servicer Remittance Date or on such other date as any amount
referred to in the foregoing clauses (i) through (v) is required to be delivered
hereunder, the Master Servicer shall not have delivered to the Trustee for
deposit in the Distribution Account the relevant portion of the Available
Distribution Amount or any of the amounts referred to in the foregoing clauses
(i) through (v), then the Trustee shall provide notice of such failure to a
Servicing Officer of the Master Servicer by facsimile transmission sent to
telecopy no. (312) 845-8617 (or such alternative number provided by the Master
Servicer to
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the Trustee in writing) and by telephone at telephone no. (312) 845-8585 (or
such alternative number provided by the Master Servicer to the Trustee in
writing) as soon as possible, but in any event before 5:00 p.m., New York City
time, on such day.
Funds in the Distribution Account may be invested in Permitted
Investments in accordance with the provisions of Section 3.06. The Trustee shall
give notice to the Master Servicer, the Special Servicer and the Depositor of
the location of the Distribution Account as of the Closing Date and of the new
location of the Distribution Account prior to any change thereof.
(c) The Trustee shall establish and maintain the Interest Reserve
Account in trust for the benefit of the Certificateholders. The Interest
Reserve Account shall be maintained as a segregated account, separate and apart
from trust funds for mortgage pass-through certificates of other series
administered by the Trustee and other accounts of the Trustee. Funds in the
Interest Reserve Account may be invested in Permitted Investments in accordance
with the provisions of Section 3.06.
On each Master Servicer Remittance Date occurring in (i) January of
each calendar year that is not a leap year and (ii) February of each calendar
year, the Trustee shall calculate the Withheld Amount with respect to each
Interest Reserve Loan. On each such Master Servicer Remittance Date, the
Trustee shall withdraw from the Distribution Account and deposit in the Interest
Reserve Account an amount equal to the aggregate of the Withheld Amounts
calculated in accordance with the previous sentence. If the Trustee shall
deposit in the Interest Reserve Account any amount not required to be deposited
therein, it may at any time withdraw such amount from the Interest Reserve
Account, any provision herein to the contrary notwithstanding. On or prior to
the Master Servicer Remittance Date in March of each calendar year, the Trustee
shall transfer to the Distribution Account the aggregate of all Withheld Amounts
on deposit in the Interest Reserve Account.
SECTION 3.05 Permitted Withdrawals From the Certificate Account, the
Distribution Account and the Interest Reserve Account.
(a) The Master Servicer may, from time to time, make withdrawals from
the Certificate Account for any of the following purposes:
(i) to remit to the Trustee for deposit in the Distribution Account
the amounts required to be remitted pursuant to the second paragraph of Section
3.04(b) or that may be applied to make Delinquency Advances pursuant to Section
4.03(a);
(ii) to pay itself unpaid Servicing Fees payable to itself earned
thereby in respect of each Mortgage Loan and REO Loan, the Master Servicer's
rights to payment pursuant to this clause (ii) being limited to amounts received
or advanced on or in respect of such Mortgage Loan or such REO Loan that are
allocable as a recovery or advance of interest thereon;
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(iii) to pay to the Special Servicer, out of general collections
on the Mortgage Loans and any REO Properties, earned and unpaid Special
Servicing Fees in respect of each Specially Serviced Mortgage Loan and REO Loan;
(iv) to pay to the Special Servicer earned and unpaid Workout Fees and
Liquidation Fees to which it is entitled pursuant to, and from the sources
contemplated by, Section 3.11(c);
(v) to reimburse the Fiscal Agent, the Trustee and itself, in that
order, as applicable, for unreimbursed Delinquency Advances made thereby, the
Master Servicer's, the Trustee's or the Fiscal Agent's respective rights to be
reimbursed pursuant to this clause (v) being limited to amounts received that
represent Late Collections of interest on and principal of the particular
Mortgage Loans and REO Loans with respect to which such Delinquency Advances
were made (in each case, net of related Workout Fees);
(vi) to reimburse the Fiscal Agent, the Trustee, itself and the
Special Servicer, in that order, as applicable, for unreimbursed Servicing
Advances made thereby, the Master Servicer's, the Special Servicer's, the
Trustee's or the Fiscal Agent's respective rights to be reimbursed pursuant to
this clause (vi) with respect to any Mortgage Loan or REO Property being limited
to, as applicable, related payments, Liquidation Proceeds, Insurance Proceeds
and REO Revenues;
(vii) to reimburse the Fiscal Agent, the Trustee, itself and the
Special Servicer, in that order, as applicable, out of general collections on
the Mortgage Loans and REO Properties, for Nonrecoverable Advances made thereby;
(viii) to pay the Fiscal Agent, the Trustee, itself or the Special
Servicer, in that order as the case may be, any related Advance Interest accrued
and payable on any unreimbursed Advance in accordance with Section 3.11(f) and
4.03(d), FIRST out of Penalty Charges received on the Mortgage Loan or REO Loan
as to which such Advance was made and THEN, at or following such time as it
reimburses the Fiscal Agent, the Trustee, itself and the Special Servicer, in
that order, as applicable, for such Advance pursuant to clause (v), (vi) or
(vii) above or Section 3.03, out of general collections on the Mortgage Loans
and REO Properties;
(ix) to reimburse itself (if it is not the affected Mortgage Loan
Seller) or the Trustee, as the case may be, for any unreimbursed expenses
reasonably incurred by such Person in respect of any Breach or Defect giving
rise to a repurchase obligation of a Mortgage Loan Seller under Section 6 of the
related Mortgage Loan Purchase Agreement (or Section 4 of either Supplemental
Agreement), including, without limitation, any expenses arising out of the
enforcement of the repurchase obligation, together with interest thereon at the
Reimbursement Rate, each such Person's right to reimbursement pursuant to this
clause (ix) with respect to any
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Mortgage Loan being limited to that portion of the Purchase Price paid for such
Mortgage Loan that represents such expense in accordance with clause (c) of the
definition of Purchase Price;
(x) in accordance with Section 2.03(d), to reimburse the Trustee, out
of general collections on the Mortgage Loans and REO Properties for any
unreimbursed expense reasonably incurred by the Trustee in connection with the
enforcement of a Mortgage Loan Seller's obligations under Section 6(a) of the
related Mortgage Loan Purchase Agreement (or Section 4 of either Supplemental
Agreement), together with interest thereon at the Reimbursement Rate, but only
to the extent that such expenses are not reimbursable pursuant to clause (ix)
above or otherwise;
(xi) to pay out of general collections on the Mortgage Loans and REO
Properties, for costs and expenses incurred by the Trust Fund pursuant to
Section 3.09(c) and to pay Liquidation Expenses out of related Liquidation
Proceeds pursuant to Section 3.09;
(xii) to pay itself, as additional servicing compensation in
accordance with Section 3.11(b), (A) interest and investment income earned in
respect of amounts relating to the Trust Fund held in the Certificate Account,
any Lock-box Account and Cash Collateral Account as provided in Section 3.06(b)
(but only to the extent of the Net Investment Earnings with respect to the
Certificate Account, any Lock-box Account and Cash Collateral Account for any
Collection Period), (B) Prepayment Interest Excesses and Balloon Payment
Interest Excess received on the Mortgage Loans and (C) Penalty Charges received
on Mortgage Loans that are not Specially Serviced Mortgage Loans (but only to
the extent not otherwise allocable to cover Advance Interest in respect of the
related Mortgage Loan);
(xiii) to pay to the Special Servicer, as additional servicing
compensation, all Penalty Charges received on any Specially Serviced Mortgage
Loan (but only to the extent not otherwise allocable to pay Advance Interest in
respect of the related Specially Serviced Mortgage Loan);
(xiv) to pay itself, the Depositor, or any of their respective
directors, officers, employees and agents, as the case may be, out of general
collections on the Mortgage Loans and REO Properties, any amounts payable to any
such Person pursuant to Section 6.03;
(xv) to pay, out of general collections on the Mortgage Loans and REO
Properties, for (A) the cost of the Opinions of Counsel contemplated by Sections
3.09(b)(ii) and 3.16(a), (B) the cost of the advice of counsel contemplated by
Section 3.17(a), (C) the cost of any Opinion of Counsel contemplated by Section
11.01(a) in connection with an amendment to this Agreement requested by the
Master Servicer, which amendment is in furtherance of the rights and interests
of Certificateholders, (D) the cost of obtaining the REO Extension contemplated
by Section 3.16(a), (E) the cost of recording this Agreement in accordance with
Section 11.02(a), and (F) the cost of an Appraisal obtained pursuant to Section
3.11(g) or Section 4.03(c);
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(xvi) to pay itself, the Special Servicer, any Mortgage Loan
Seller, GMACCM or the Majority Certificateholder of the Controlling Class, as
the case may be, with respect to each Mortgage Loan, if any, previously
purchased by such Person pursuant to or as contemplated by this Agreement, all
amounts received on such Mortgage Loan subsequent to the date of purchase;
(xvii) to withdraw funds deposited into the Certificate Account in
error; and
(xviii) to clear and terminate the Certificate Account at the
termination of this Agreement pursuant to Section 9.01.
For each Mortgage Loan, the Master Servicer shall keep and maintain
separate accounting records, on a loan-by-loan basis (and for each REO Loan, on
a property-by-property basis) when appropriate, for the purpose of justifying
any withdrawal from the Certificate Account.
The Master Servicer shall pay to the Special Servicer (or to third
party contractors at the direction of the Special Servicer) from the Certificate
Account amounts permitted to be paid to it (or to such third party contractors)
therefrom promptly upon receipt of a certificate of a Servicing Officer of the
Special Servicer describing the item and amount to which the Special Servicer
(or such third party contractors) 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.
(b) The Trustee may, from time to time, make withdrawals from the
Distribution Account for any of the following purposes:
(i) to make distributions to Certificateholders on each Distribution
Date pursuant to Section 4.01 and to deposit the Withheld Amounts in the
Interest Reserve Account pursuant to Section 3.04(c);
(ii) to pay the Master Servicer, as additional servicing compensation
in accordance with the second paragraph of Section 3.11(b), interest and
investment income earned in respect of amounts relating to the Trust Fund 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);
(iii) to pay itself unpaid Trustee Fees pursuant to Section
8.05(a) and any amounts described in Section 3.19(m);
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(iv) to pay itself or any of its directors, officers, employees and
agents, as the case may be, any amounts payable or reimbursable to any such
Person pursuant to Section 8.05(b);
(v) to pay for (A) the cost of the Opinion of Counsel contemplated by
Section 11.01(a) or (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, (B) the cost of the Opinion of Counsel
contemplated by Section 11.02(a) in connection with any recordation of this
Agreement and (C) to the extent payable out of the Trust Fund, the cost of the
Opinion of Counsel contemplated by Section 10.01(f);
(vi) to (A) pay any and all federal, state and local taxes imposed on
REMIC I, REMIC II or REMIC III or on the assets or transactions of any such
REMIC, together with all incidental costs and expenses, and any and all
reasonable expenses relating to tax audits, if and to the extent that either (1)
none of the Trustee, the Master Servicer or the Special Servicer is liable
therefor pursuant to Section 10.01(g) or (2) any such Person that may be so
liable has failed to make the required payment, and (B) reimburse the Trustee
for reasonable expenses incurred by and reimbursable to it by the Trust Fund
pursuant to Section 10.01(c);
(vii) to withdraw funds deposited into the Distribution Account in
error; and
(viii) to clear and terminate the Distribution Account at the
termination of this Agreement pursuant to Section 9.01.
(c) The Master Servicer may, from time to time, request the Trustee
to make withdrawals from the Interest Reserve Account 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 relating to
the Trust Fund held in the Interest Reserve Account (but only to the extent of
Net Investment Earnings with respect to the Interest Reserve Account for any
Collection Period).
SECTION 3.06 Investment of Funds in the Certificate Account, the
Distribution Account, the Interest Reserve Account and
the REO Account.
(a) (i) The Master Servicer may direct any depository institution
maintaining the Certificate Account, the Distribution Account, any Lock-Box
Account, any Cash Collateral Account or the Interest Reserve Account, and (ii)
the Special Servicer may direct any depository institution maintaining the REO
Account (each 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, unless payable
on demand, (i) no later than the Business Day immediately preceding the next
succeeding date on which such
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funds are required to be withdrawn from such account pursuant to this Agreement,
if a Person other than the depository institution maintaining such account is
the obligor thereon, and (ii) no later than the next succeeding date on which
such funds are required to be withdrawn from such account pursuant to this
Agreement, if the depository institution maintaining such account is the obligor
thereon. 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 Distribution Account, any Lock-Box Account and any Cash Collateral Account)
and the Special Servicer (with respect to Permitted Investments of amounts in
the REO Account) on behalf of the Trustee, and the Trustee (with respect to
Permitted Investment of amounts in the Interest Reserve Account), shall (and
Trustee hereby designates the Master Servicer and the Special Servicer, as
applicable, as the Person that shall) (i) be the "entitlement holder" of any
Permitted Investment that is a "security entitlement" and (ii) maintain
"control" of any Permitted Investment that is either a "certificated security"
or an "uncertificated security". For purposes of this SECTION 3.06(A), the
terms "entitlement holder", "security entitlement", "control", "certificated
security" and "uncertificated security" shall have the meanings given such terms
in Revised Article 8 (1994 Revision) of the UCC, and "control" of any Permitted
Investment by the Master Servicer or the Special Servicer shall constitute
"control" by a Person designated by, and acting on behalf of the Trustee for
purposes of Revised Article 8 (1994 Revision) of the UCC. In the event 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, any Lock-Box Account or any Cash Collateral Account), the
Special Servicer (in the case of the REO Account) and the Trustee (in the case
of the Interest Reserve 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, the Special Servicer or the Trustee,
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 Distribution Account, or the Interest
Reserve Account and, to the extent the Master Servicer directs the investment of
funds in any Lock-Box Account or any Cash Collateral Account, interest and
investment income realized on funds deposited in each such Investment Account,
to the extent of the Net Investment Earnings, if any, with respect to such
account for each Collection Period, shall be for the sole and exclusive benefit
of the Master Servicer and shall be subject to its withdrawal, or withdrawal at
its direction, in accordance with
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Section 3.05(a), (b) or (c), as the case may be. 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 such Investment Account 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 shall be incurred in respect of any Permitted Investment on deposit in the
Certificate Account, the Distribution Account or the Interest Reserve Account,
and to the extent the Master Servicer has discretion to direct the investment of
funds in any Lock-Box Account or any Cash Collateral Account for its sole and
exclusive benefit, the Master Servicer shall deposit therein, no later than the
end of the Collection Period during which such loss was incurred, without right
of reimbursement, the amount of the Net Investment Loss, if any, with respect to
such account for such Collection Period. If any loss shall be incurred in
respect of any Permitted Investment on deposit in the REO Account, the Special
Servicer shall promptly deposit therein from its own funds, without right of
reimbursement, no later than the end of the Collection Period during which such
loss was incurred, the amount of the Net Investment Loss, if any, for such
Collection Period. If the Master Servicer fails to direct the Trustee to invest
funds on deposit in the Distribution Account in a specific Permitted Investment,
the Trustee shall invest such funds in the instruments in clause (5) of the
definition of "Permitted Investments."
(c) Except as otherwise expressly provided in this Agreement, if any
default occurs in the making of a payment due under any Permitted Investment, or
if a default occurs in any other performance required under any Permitted
Investment, the Trustee may and, subject to Section 8.02, upon the request of
Holders of Certificates entitled to a majority 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.
SECTION 3.07 Maintenance of Insurance Policies; Errors and Omissions
and Fidelity Coverage.
(a) Each of the Master Servicer (in the case of Mortgage Loans other
than Specially Serviced Mortgage Loans) and the Special Servicer (in the case of
Specially Serviced Mortgage Loans) shall use reasonable efforts to cause each
Mortgagor to maintain in respect of the related Mortgaged Property all insurance
coverage as is required under the related Mortgage; provided that if any
Mortgage permits the holder thereof to dictate to the Mortgagor the insurance
coverage to be maintained on such Mortgaged Property, the Master Servicer or the
Special Servicer, as appropriate, shall impose such insurance requirements as
are consistent with the Servicing Standard. If a Mortgagor fails to maintain
such insurance, the Master Servicer (at the direction of the Special Servicer in
the case of a Specially Serviced Loan) shall (to the extent available at
commercially reasonable terms) obtain such insurance (which may be through a
master or single interest policy) and the cost (including any deductible
relating to such insurance) of such insurance (or in the case of a master or
single interest policy, the incremental cost (including any deductible relating
to such insurance) of such insurance relating to the specific Mortgaged
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Property), shall be a Servicing Advance and shall be recoverable by the Master
Servicer pursuant to Section 3.05(a). If at any time a Mortgaged Property is
located in an area identified in the Flood Hazard Boundary Map or Flood
Insurance Rate Map issued by the Federal Emergency Management Agency as having
special flood hazards or it becomes located in such area by virtue of remapping
conducted by such agency (and flood insurance has been made available), the
Master Servicer (or in the case of a Specially Serviced Loan, the Special
Servicer) shall, if and to the extent that the Mortgage Loan requires the
Mortgagor or permits the mortgagee to require the Mortgagor to do so, use
reasonable efforts to cause the related Mortgagor to maintain a flood insurance
policy meeting the requirements of the current guidelines of the Federal
Insurance Administration in the maximum amount of insurance coverage available
under the National Flood Insurance Act or 1968, the Flood Disaster Protection
Act of 1973 or the National Flood Insurance Reform Act of 1994, as amended,
unless otherwise specified by the related Mortgage Loan. If (i) the Mortgagor
is required by the terms of the Mortgage Loan to maintain such insurance (or
becomes obligated by virtue of the related Mortgaged Property becoming located
in such area by virtue of such remapping) or (ii) the terms of the Mortgage Loan
permit the mortgagee to require the Mortgagor to obtain such insurance, the
Master Servicer (or in the case of a Specially Serviced Loan, the Special
Servicer), shall promptly notify the Mortgagor of its obligation to obtain such
insurance. If the Mortgagor fails to obtain such flood insurance within 120
days of such notification, the Master Servicer (or in the case of a Specially
Serviced Loan, the Special Servicer) shall obtain such insurance, the cost of
which shall be a Servicing Advance and shall be recoverable by the Master
Servicer or Special Servicer pursuant to Section 3.05(a); provided that the
Master Servicer or Special Servicer shall not be required to incur any such cost
if such Advance would constitute a Nonrecoverable Servicing Advance. Subject to
Section 3.17(a), the Special Servicer shall also use reasonable efforts to cause
to be maintained for each REO Property (to the extent available at commercially
reasonable terms) no less insurance coverage than was previously required of the
Mortgagor under the related Mortgage or as is consistent with the Servicing
Standard. All such insurance policies shall contain a "standard" mortgagee
clause, with loss payable to the Master Servicer (in the case of Mortgaged
Properties) or the Special Servicer (in the case of REO Properties) on behalf of
the Trustee, and shall be issued by an insurer authorized under applicable law
to issue such insurance. Any amounts collected by the Master Servicer or the
Special Servicer under any such policies (other than amounts to be applied to
the restoration or repair of the related Mortgaged Property or REO Property or
amounts to be released to the related Mortgagor, in each case in accordance with
applicable law, the terms of the related Mortgage Loan documents and the
Servicing Standard) shall be deposited in the Certificate Account, subject to
withdrawal pursuant to Section 3.05(a), in the case of amounts received in
respect of a Mortgage Loan, or in the REO 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 the outstanding principal balance of the related Mortgage Loan,
notwithstanding that the terms of such Mortgage Loan so permit, but shall be
recoverable by the Master Servicer as a Servicing Advance pursuant to Section
3.05(a).
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(b)(I) If the Master Servicer or the Special Servicer obtains and
maintains a blanket policy insuring against hazard losses on all of the
Mortgaged Properties and/or REO Properties for which it is responsible to cause
the maintenance of insurance hereunder, then, to the extent such policy 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 such Mortgaged Properties and/or REO Properties. Such 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 a Mortgaged Property or an REO Property a
hazard insurance policy complying with the requirements of Section 3.07(a), and
there shall have been one or more losses which would have been covered by such
policy, promptly deposit into the Certificate Account (or into the Servicing
Account if insurance proceeds are to be applied to the repair or restoration of
the applicable Mortgaged Property or disbursed to the related Mortgagor) from
its own funds the amount not otherwise payable under the blanket policy because
of such deductible clause to the extent that any such deductible exceeds the
deductible limitation that pertained to the related Mortgage Loan, or, in the
absence of any such deductible limitation, the deductible limitation which is
consistent with the Servicing Standard. The Master Servicer and the Special
Servicer each agrees to prepare and present, on behalf of itself, the Trustee
and Certificateholders, claims under any such blanket policy maintained by it in
a timely fashion in accordance with the terms of such policy.
(II) If the Master Servicer or the Special Servicer, as
applicable, causes any Mortgaged Property or REO Property to be covered by a
master force placed insurance policy, which provides protection equivalent to
the individual policies otherwise required, the Master Servicer or Special
Servicer shall conclusively be deemed to have satisfied its respective
obligations to cause hazard insurance to be maintained on such Mortgaged
Properties and/or REO Properties. Such policy may contain a deductible clause,
in which case the Master Servicer or the Special Servicer, as applicable, shall
in the event that (i) there shall not have been maintained on the related
Mortgaged Property or REO Property a policy otherwise complying with the
provisions of Section 3.07(a), and (ii) there shall have been one or more losses
which would have been covered by such a policy had it been maintained,
immediately deposit into the Certificate Account (or into the Servicing Account
if insurance proceeds are to be applied to the repair or restoration of the
applicable Mortgaged Property or disbursed to the related Mortgagor) from its
own funds the amount not otherwise payable under such policy because of such
deductible to the extent that any such deductible exceeds the deductible
limitation that pertained to the related Mortgage Loan, or, in the absence of
any such deductible limitation, the deductible limitation which is consistent
with the Servicing Standard. The Master Servicer and the Special Servicer each
agrees to prepare and present, on behalf of itself, the Trustee and
Certificateholders, claims under any such master force placed insurance policy
maintained by it in a timely fashion in accordance with the terms of such
policy.
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(c) Each of the Master Servicer and the Special Servicer shall obtain
and maintain at its own expense and keep in full force and effect throughout the
term of this Agreement a blanket fidelity bond and an errors and omissions
insurance policy covering its officers and employees and other persons acting on
behalf of it in connection with its activities under this Agreement. The amount
of coverage shall be at least equal to the coverage that would be required by
FNMA or FHLMC, whichever is greater, with respect to the Master Servicer or
Special Servicer, as the case may be, if the Master Servicer or Special
Servicer, as the case may be, were servicing and administering the Mortgage
Loans and/or REO Properties for which it is responsible hereunder for FNMA or
FHLMC. Coverage of the Master Servicer or the Special Servicer under a policy
or bond obtained by an Affiliate of such Person and providing the coverage
required by this Section 3.07(c) shall satisfy the requirements of this Section
3.07(c).
(d) All insurance coverage required to be maintained by the Master
Servicer or Special Servicer, as applicable, under this Section 3.07 shall be
obtained from Qualified Insurers having a claims paying ability rating (or the
obligations of which are guaranteed or backed by a company having such claims
paying ability rating or insurance financial strength rating, as applicable) not
less than (w) two increments (but not less than BBB) below the rating of the
highest rated Certificate from Standard & Poor's (x) A2 by Moody's and (y) if
rated by FITCH IBCA, "A" by FITCH IBCA (or, if not rated by FITCH IBCA, rated
A-IX or better by A.M. Best); provided, however, that the requirements of
clauses (w), (x) and (y) shall not be applicable with respect to Moody's,
Standard & Poor's or FITCH IBCA, as applicable, if the related Rating Agency
shall have confirmed in writing that an insurance company with a lower claims
paying ability rating shall not result, in and of itself, in a downgrade,
qualification on withdrawal of the then current ratings by such Rating Agency of
any class of Certificates.
SECTION 3.08 Enforcement of Due-On-Sale Clauses; Assumption
Agreements; Subordinate Financing; Defeasance.
(a) As to each Mortgage Loan which contains a provision in the nature
of a "due-on-sale" clause, which by its terms:
(i) provides that such Mortgage Loan shall (or may at the mortgagee's
option) become due and payable upon the sale or other transfer of an interest in
the related Mortgaged Property; or
(ii) provides that such Mortgage Loan may not be assumed without the
consent of the mortgagee in connection with any such sale or other transfer,
then, for so long as such Mortgage Loan is included in the Trust Fund, the
Master Servicer or, in the case of a Specially Serviced Mortgage Loan, the
Special Servicer, on behalf of the Trustee as the mortgagee of record, shall
exercise (or, subject to Section 3.20(a)(iii), waive its right to exercise) any
right it may have with respect to such Mortgage Loan (x) to accelerate the
payments
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thereon, or (y) to withhold its consent to any such sale or other transfer, in a
manner consistent with the Servicing Standard. In the event that the Master
Servicer or Special Servicer intends or is required, in accordance with the
preceding sentence, the Mortgage Loan documents or applicable law, to permit the
transfer of any Mortgaged Property, the Master Servicer or the Special Servicer,
as the case may be, if consistent with the Servicing Standard, may enter into an
assumption and modification agreement with the Person to whom the related
Mortgaged Property has been or is intended to be conveyed or may enter into
substitution of liability agreement, pursuant to which the original Mortgagor
and any original guarantors are released from liability, and the transferee and
any new guarantors are substituted therefor and become liable under the Mortgage
Note and any related guaranties and, in connection therewith, may require from
the related Mortgagor a reasonable and customary fee for the additional services
performed by it, together with reimbursement for any related costs and expenses
incurred by it (but only to the extent that charging such fee and entering into
such assumption and modification agreement will not be a significant
modification of the Mortgage Loan for purposes of the REMIC Provisions). The
Master Servicer or the Special Servicer, as the case may be, shall promptly
notify the Trustee of any such agreement and forward the original thereof to the
Trustee for inclusion in the related Mortgage File. If the Master Servicer or
Special Servicer intends or is required to permit the transfer of any Mortgaged
Property and enter into an assumption agreement or a substitution of liability
agreement, as the case may be, in accordance with the foregoing with respect to
a Mortgage Loan having one of the then-ten highest outstanding principal
balances in the Mortgage Pool, the Master Servicer or the Special Servicer, as
the case may be, prior to entering into such agreement, shall submit to each
Rating Agency a copy of such agreement together with such other information with
respect to such action as the Master Servicer or Special Servicer, as
applicable, deems appropriate or as each Rating Agency may reasonably request,
and shall request that each Rating Agency deliver to the Master Servicer or
Special Servicer, as applicable, Rating Agency Confirmation with respect to the
execution of such agreement within five (5) Business Days of receipt of a copy
of such agreement and any information such Rating Agency so reasonably requests;
provided, however, if the Master Servicer or Special Servicer shall not have
received such written confirmation within five (5) Business Days of such Rating
Agency's receipt of a copy of such agreement and such information, such written
confirmation shall be (except in the case of Moody's) deemed to have been
delivered to the Master Servicer or Special Servicer by such Rating Agency.
(b) As to each Mortgage Loan which contains a provision in the nature
of a "due-on-encumbrance" clause, which by its terms:
(i) provides that such Mortgage Loan shall (or may at the mortgagee's
option) become due and payable upon the creation of any additional lien or other
encumbrance on the related Mortgaged Property; or
(ii) requires the consent of the mortgagee to the creation of any such
additional lien or other encumbrance on the related Mortgaged Property, then,
for so long as such Mortgage
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Loan is included in the Trust Fund, the Master Servicer or, in the case of a
Specially Serviced Mortgage Loan, the Special Servicer, on behalf of the Trustee
as the mortgagee of record, shall exercise (or, subject to Section 3.20(a)(iii),
waive its right to exercise) any right it may have with respect to such Mortgage
Loan (x) to accelerate the payments thereon, or (y) to withhold its consent to
the creation of any such additional lien or other encumbrance, in a manner
consistent with the Servicing Standard; provided, however that the Master
Servicer or, in the case of a Specially Serviced Mortgage Loan, the Special
Servicer, shall not waive its right to exercise any such right when such right
arises as a result of the imposition of a lien against a Mortgaged Property
which lien secures additional indebtedness or a mechanic's or similar lien, not
permitted under the related Mortgage Loan documents unless with respect to any
Mortgage Loan having one of the then-ten highest outstanding principal balances
in the Mortgage Pool the Master Servicer or the Special Servicer, as the case
may be, prior to waiving any such right, shall submit to each Rating Agency a
copy of the documentation under which any such lien would arise together with
such other information with respect to such proposed waiver as the Master
Servicer or Special Servicer, as applicable, deems appropriate or as each Rating
Agency may reasonably request, and shall request that each Rating Agency deliver
to the Master Servicer or Special Servicer, as applicable, Rating Agency
Confirmation with respect to such proposed waiver within five (5) Business Days
of receipt of a copy of such documentation and any information each Rating
Agency so reasonably requests; provided, however, if the Master Servicer or
Special Servicer shall not have received such written confirmation within five
(5) Business Days of each Rating Agency's receipt of a copy of such
documentation and such information, such written confirmation shall be (except
in the case of Moody's) deemed to have been delivered to the Master Servicer or
Special Servicer by such Rating Agency.
(c) With respect to any Mortgage Loan which permits release of
Mortgaged Properties through a Defeasance Option, the Master Servicer shall, to
the extent consistent with and permitted by the applicable Mortgage Loan
documents, permit (or, if the terms of such Mortgage Loan permit the lender to
require defeasance, the Master Servicer shall require) the exercise of such
Defeasance Option on any Due Date occurring more than two years after the
Startup Day (the "Release Date") subject to the following conditions:
(i) No event of default exists under the related Mortgage Note;
(ii) The Mortgagor pays on such Release Date (A) all interest
accrued and unpaid on the Principal Balance of the Mortgage Note to and
including the Release Date; (B) all other sums, excluding scheduled interest or
principal payments due under the Mortgage Note and (C) any costs and expenses
incurred in connection with such release;
(iii) The Mortgagor has delivered Defeasance Collateral providing
payments on or prior to all successive scheduled payment dates from the Release
Date to the related Maturity Date, and in an amount equal to or greater than the
scheduled payments due on such dates under the Mortgage Loan;
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(iv) The Mortgagor shall have delivered a security agreement granting
the Trust Fund a first priority security interest in the Defeasance Collateral;
(v) The Master Servicer shall have received an Opinion of Counsel
from the related Mortgagor (which shall be an expense of the related Mortgagor)
to the effect that the Trust Fund has a first priority security interest in the
Defeasance Collateral and that the assignment thereof is valid and enforceable;
(vi) The Master Servicer shall have obtained at the related
Mortgagor's expense a certificate from an Independent certified public
accountant certifying that the Defeasance Collateral complies with the
requirements of the related Mortgage Note;
(vii) If the related Mortgage Loan so requires and provides for
the related Mortgagor to pay the cost thereof, the Master Servicer shall have
obtained an Opinion of Counsel from the related Mortgagor to the effect that
such release will not 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 or cause a
tax to be imposed on the Trust Fund under the REMIC Provisions;
(viii) The Borrower shall have provided evidence to the Master
Servicer demonstrating that the lien of the related Mortgage is being released
to facilitate the disposition of the Mortgaged Property or another customary
commercial transaction, and not as part of an arrangement to collateralize the
Certificates issued by the related REMIC with obligations that are not real
estate mortgages; and
(ix) If required by the terms of such Mortgage Loan, the Master
Servicer shall have received Rating Agency Confirmation from each of Fitch IBCA
and Standard & Poor's with respect to the exercise of such Defeasance Option.
(d) Nothing in this Section 3.08 shall constitute a waiver of the
Trustee's right, as the mortgagee of record, to receive notice of any assumption
of a Mortgage Loan, any sale or other transfer of the related Mortgaged Property
or the creation of any additional lien or other encumbrance with respect to such
Mortgaged Property.
(e) Except as otherwise permitted by Section 3.20, neither the Master
Servicer nor the Special Servicer shall agree to modify, waive or amend any term
of any Mortgage Loan in connection with the taking of, or the failure to take,
any action pursuant to this Section 3.08.
SECTION 3.09 Realization Upon Defaulted Mortgage Loans.
(a) The Master Servicer shall notify the Special Servicer of the
occurrence of a Servicing Transfer Event in respect of any Mortgage Loan. The
Special Servicer shall monitor such Specially Serviced Mortgage Loan, evaluate
whether the causes of the default can be
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corrected over a reasonable period without significant impairment of the value
of the related Mortgaged Property, initiate corrective action in cooperation
with the Mortgagor if, in the Special Servicer's judgment, cure is likely, and
take such other actions (including without limitation, negotiating and accepting
a discounted payoff of a Mortgage Loan) as are consistent with the Servicing
Standard. If, in the Special Servicer's judgment, such corrective action has
been unsuccessful, no satisfactory arrangement can be made for collection of
delinquent payments, and the Defaulted Mortgage Loan has not been released from
the Trust Fund pursuant to any provision hereof, then the Special Servicer
shall, subject to subsections (b) through (d) of this Section 3.09, exercise
reasonable efforts, consistent with the Servicing Standard, to foreclose upon
or otherwise comparably convert (which may include an REO Acquisition) the
ownership of property securing such Mortgage Loan. The foregoing is subject to
the provision that, in any case in which a Mortgaged Property shall have
suffered damage from an Uninsured Cause, the Master Servicer and the Special
Servicer shall have the right but not the obligation to expend its own funds
toward the restoration of such property if it shall determine in its reasonable
discretion (i) that such restoration will increase the net proceeds of
liquidation of such Mortgaged Property to Certificateholders after reimbursement
to itself for such expenses, and (ii) that such expenses will be recoverable by
the Master Servicer or Special Servicer, as the case may be, out of the proceeds
of liquidation of such Mortgaged Property, as contemplated in Section 3.05(a).
The Special Servicer (or, subject to Section 3.19(c), the Master Servicer) shall
advance all other costs and expenses incurred by it in any such proceedings,
subject to its being entitled to reimbursement therefor as a Servicing Advance
as provided in Section 3.05(a) and further subject to its being entitled to pay
out of the related Liquidation Proceeds any Liquidation Expenses incurred in
respect of any Mortgage Loan, which Liquidation Expenses were outstanding at the
time such proceeds are received. When applicable state law permits the Special
Servicer to select between judicial and non-judicial foreclosure in respect of
any Mortgaged Property, the Special Servicer shall make such selection in a
manner consistent with the Servicing Standard. 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 sole judgment taking into
account the factors described in Section 3.18(e) and the results of any
Appraisal obtained pursuant to this Agreement, 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, the Master Servicer or the Special Servicer, as the case may be, is
authorized to have an Appraisal performed with respect to such property (the
cost of which Appraisal shall be covered by, and reimbursable as, an Additional
Trust Fund Expense).
(b) The Special Servicer shall not acquire any personal property
pursuant to this Section 3.09 (with the exception of cash or cash equivalents
pledged as collateral for a Mortgage Loan) unless either:
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(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 by the
Trust Fund will not (subject to Section 10.01(f)) cause the imposition of a tax
on the Trust Fund 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,
the Special Servicer shall not, on behalf of the Trustee, initiate foreclosure
proceedings, obtain title to a Mortgaged Property in lieu of foreclosure or
otherwise, have a receiver of rents appointed with respect to any Mortgaged
Property, 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, would 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, unless
(as evidenced by an Officer's Certificate to such effect delivered to the
Trustee) the Special Servicer has previously received an Environmental
Assessment in respect of such Mortgaged Property prepared within the twelve
months preceding such determination by a Person who regularly conducts
Environmental Assessments and the Special Servicer, based solely (as to
environmental matters and related costs) on the information set forth in such
Environmental Assessment, determines that:
(i) the Mortgaged Property is in compliance with applicable
environmental laws and regulations or, if not, that acquiring such Mortgaged
Property and taking such actions as are necessary to bring the Mortgaged
Property in compliance therewith is reasonably likely to produce a greater
recovery to Certificateholders on a present value basis than not acquiring such
Mortgaged Property and not taking such actions; 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 investigations, 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 be
required, that acquiring such Mortgaged Property and taking such actions with
respect to such Mortgaged Property is reasonably likely to produce a greater
recovery to Certificateholders on a present value basis than not acquiring such
Mortgaged Property and not taking such actions.
The cost of any such 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 sentence, may be withdrawn from the Certificate
Account by the Master Servicer at the direction of the Special
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Servicer as an expense of the Trust Fund pursuant to Section 3.05(a); and if any
such Environmental Assessment so warrants, the Special Servicer shall, at the
expense of the Trust Fund, perform such additional environmental testing as are
consistent with the Servicing Standard to determine whether the conditions
described in clauses (i) and (ii) of the preceding sentence have been satisfied.
(d) If the environmental testing contemplated by subsection (c) above
establishes that either of the conditions set forth in clauses (i) and (ii) of
the first sentence thereof has not been satisfied with respect to any Mortgaged
Property securing a Defaulted Mortgage Loan, then the Special Servicer shall
take such action as it deems to be in the best economic interest of the Trust
Fund (other than proceeding to acquire title to the Mortgaged Property) and is
hereby authorized at such time as it deems appropriate to release all or a
portion of such Mortgaged Property from the lien of the related Mortgage.
(e) The Special Servicer shall provide written reports monthly to the
Master Servicer, (who shall forward such reports to the Trustee, who shall
forward such reports to the Certificateholders) regarding any actions taken by
the Special Servicer with respect to any Mortgaged Property securing a Defaulted
Mortgage Loan as to which the environmental testing contemplated in subsection
(c) above has revealed that either of the conditions set forth in clauses (i)
and (ii) of the first sentence thereof has not been satisfied, in each case
until the earliest to occur of satisfaction of both such conditions, removal of
the related Mortgage Loan from the Trust Fund and release of the lien of the
related Mortgage on such Mortgaged Property.
(f) The Special Servicer shall report to the Internal Revenue Service
and the related Mortgagor, in the manner required by applicable law, the
information required to be reported regarding any Mortgaged Property which is
abandoned or foreclosed, information returns with respect to the receipt of
mortgage interests received in a trade or business and the information returns
relating to cancellation of indebtedness income with respect to any Mortgaged
Property required by Sections 6050J, 6050H and 6050P, respectively, of the Code.
Such reports shall be in form and substance sufficient to meet the reporting
requirements imposed by Sections 6050J, 6050H and 6050P of the Code. The
Special Servicer shall deliver a copy of any such report upon request to the
Trustee.
(g) The Special Servicer shall have the right to determine, in
accordance with the Servicing Standard, the advisability of the maintenance of
an action to obtain a deficiency judgment if the state in which the Mortgaged
Property is located and the terms of the Mortgage Loan permit such an action.
(h) The Special Servicer shall maintain accurate records of each
Final Recovery Determination in respect of a Defaulted Mortgage Loan or REO
Property and the basis thereof. Each Final Recovery Determination shall be
evidenced by an Officer's Certificate delivered to the Trustee no later than the
10th Business Day following such Final Recovery Determination.
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SECTION 3.10 Trustee to Cooperate; Release of Mortgage Files.
(a) Upon the payment in full of any Mortgage Loan, or the receipt by
the Master Servicer or the Special Servicer of a notification that payment in
full shall be escrowed in a manner customary for such purposes, the Master
Servicer or the Special Servicer, as the case may be, will immediately notify
the Trustee and request delivery of the related Mortgage File. Any such notice
and request shall be in the form of a Request for Release signed by a Servicing
Officer 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. Within seven Business Days (or within such shorter period
as release can reasonably be accomplished if the Master Servicer or the Special
Servicer notifies the Trustee of an exigency) of receipt of such notice and
request, the Trustee shall release, or cause any related Custodian to release,
the related Mortgage File to the Master Servicer or the Special Servicer,
whichever requested it. No expenses incurred in connection with any instrument
of satisfaction or deed of reconveyance shall be chargeable to the Certificate
Account.
(b) From time to time as is appropriate for servicing or foreclosure
of any Mortgage Loan, the Master Servicer or the Special Servicer may deliver to
the Trustee a Request for Release signed by a Servicing Officer thereof. Upon
receipt of the foregoing, the Trustee shall deliver or cause the related
Custodian to deliver, the Mortgage File or any document therein to the Master
Servicer or the Special Servicer, as the case may be. Upon return of such
Mortgage File or such document to the Trustee or the related Custodian, or the
delivery to the Trustee of a certificate of a Servicing Officer stating that
such Mortgage Loan was liquidated and that all amounts received or to be
received in connection with such liquidation which 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, the Request
for Release shall be released by the Trustee to the Master Servicer or the
Special Servicer, as applicable.
(c) Within three Business Days (or within such shorter period as
delivery can reasonably be accomplished if the Special Servicer notifies the
Trustee of an exigency) of receipt thereof, the Trustee shall execute and
deliver to the Special Servicer any court pleadings, requests for trustee's sale
or other documents necessary to the foreclosure or trustee's sale in respect of
a Mortgaged 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. The Special
Servicer shall be responsible for the preparation of all such documents and
pleadings. When submitted to the Trustee for signature, such documents or
pleadings shall be accompanied by 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
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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; Nonrecoverable Servicing
Advances.
(a) As compensation for its activities hereunder, the Master Servicer
shall be entitled to receive the Servicing Fee with respect to each Mortgage
Loan and REO Loan. As to each Mortgage Loan and REO Loan, the Servicing Fee
shall accrue from time to time at the Servicing Fee Rate and shall be computed
on the basis of a 360-day year consisting of twelve 30-day months on the same
principal amount respecting which any related interest payment due on such
Mortgage Loan or deemed to be due on such REO Loan is computed. The Servicing
Fee with respect to any Mortgage Loan or REO Loan shall cease to accrue if a
Liquidation Event occurs in respect thereof. The Servicing Fee shall be payable
monthly, on a loan-by-loan basis, from payments of interest on each Mortgage
Loan, REO Revenues allocable as interest on each REO Loan and the interest
portion of Delinquency Advances on each Mortgage Loan and REO Loan. The Master
Servicer shall be entitled to recover unpaid 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). The right to receive the 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, charges for beneficiary statements or demands, amounts
collected for checks returned for insufficient funds and any similar or
ancillary fees (excluding any other amounts relating to 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) any Prepayment Interest Excesses, Balloon Payment Interest
Excesses, and further to the extent received on Mortgage Loans other than
Specially Serviced Mortgage Loans, any Penalty Charges not allocable to pay
Advance Interest collected on the Mortgage Loans; (ii) interest or other income
earned on deposits in the Investment Accounts (other than the REO 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 Investment Account for each
Collection Period), and (iii) to the extent not required to be paid to any
Mortgagor under applicable law or under the related Mortgage, any interest or
other income earned on deposits in the Servicing Accounts and Reserve Accounts
maintained thereby. The Master Servicer shall be required to pay out of its own
funds all overhead and general and administrative expenses incurred by it in
connection with its servicing activities hereunder (including, without
limitation, payment of any amounts due and owing to any of Sub-Servicers
retained by it 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
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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 each REO Loan, the Special Servicing Fee shall accrue
from time to time at the Special Servicing Fee Rate on the basis of a 360-day
year consisting of twelve 30-day months on the same principal amount 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 each Specially Serviced Mortgage Loan and each REO Loan shall
cease to accrue as of the date a Liquidation Event occurs in respect thereof.
As to each Specially Serviced Mortgage Loan and each REO 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).
As further compensation for its activities hereunder, the Special
Servicer shall be entitled to receive the Workout Fee with respect to each
Corrected Mortgage Loan. As to each Corrected Mortgage Loan, the Workout Fee
shall be payable from, and shall be calculated by application of the Workout Fee
Rate to, each collection of interest and principal received on such Mortgage
Loan for so long as it remains a Corrected Mortgage Loan. The Workout Fee with
respect to any Corrected Mortgage Loan will cease to be payable if a Servicing
Transfer Event occurs with respect thereto or if the related Mortgaged Property
becomes an REO Property; provided that a new Workout Fee will become payable if
and when such Mortgage Loan again becomes a Corrected Mortgage Loan. If the
Special Servicer is terminated other than for cause or resigns in accordance
with Section 6.04, it shall retain the right to receive any and all Workout Fees
payable in respect of Mortgage Loans that became Corrected Mortgage Loans during
the period that it acted as Special Servicer and were still such at the time of
such termination or resignation (and the successor Special Servicer shall not be
entitled to any portion of such Workout Fees), in each case until the Workout
Fee for any such loan ceases to be payable in accordance with the preceding
sentence.
As further compensation for its activities hereunder, the Special
Servicer shall also be entitled to receive a Liquidation Fee with respect to
each Specially Serviced Mortgage Loan or REO Property as to which it receives
any full or discounted payoff or any Liquidation Proceeds (other than in
connection with the purchase of any such Specially Serviced Mortgage Loan or REO
Property by the Special Servicer or the Majority Certificateholder of the
Controlling Class pursuant to Section 3.18 or by the Master Servicer or the
Depositor pursuant to Section 3.18 or by the Master Servicer, the Depositor, or
LB Holdings pursuant to Section 9.01). As to each such Specially Serviced
Mortgage Loan or REO Property, the Liquidation Fee shall be payable from, and
shall be calculated by application of the Liquidation Fee Rate to, such full or
discounted payoff and/or such Liquidation Proceeds. No Liquidation Fee will be
payable with respect to any
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Specially Serviced Mortgage Loan solely by virtue of such Mortgage Loan becoming
a Corrected Mortgage Loan. Notwithstanding anything herein to the contrary, no
Liquidation Fee will be payable from, or based upon the receipt of, Liquidation
Proceeds collected as a result of any purchase of a Specially Serviced Mortgage
Loan or REO Property described in the parenthetical to the first sentence of
this paragraph; provided, however, that if any such Liquidation Proceeds are
received with respect to any Corrected Mortgaged Loan, and the Special Servicer
is properly entitled to a Workout Fee therefrom, such Workout Fee will be
payable based on and from the portion of such Liquidation Proceeds that
constitute principal and/or interest.
Notwithstanding anything to the contrary herein, a Liquidation Fee and
a Workout Fee relating to the same Mortgage Loan shall not be paid from the same
proceeds on or with respect to such Mortgage Loan.
Subject to the Special Servicer's right to employ Sub-Servicers, the
Special Servicer's right to receive the Special Servicing Fee, the Workout Fee
and/or the Liquidation 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 this Agreement.
(d) Additional servicing compensation in the form of assumption fees
and modification fees received on or with respect to Specially Serviced Mortgage
Loans shall be promptly paid to the Special Servicer by the Master Servicer and
shall not be required to be deposited in the Certificate Account pursuant to
Section 3.04(a). Additional servicing compensation in the form of assumption
fees and modification fees that the Master Servicer is entitled to and that are
collected by the Special Servicer, shall be paid promptly to the Master Servicer
by the Special Servicer. The Special Servicer shall also be entitled to
additional servicing compensation in the form of: (i) to the extent not required
to be paid to any Mortgagor under applicable law, any interest or other income
earned on deposits in the REO Account, any Servicing Accounts and any Reserve
Accounts maintained thereby; and (ii) to the extent not required to be paid to
the Master Servicer as additional servicing compensation pursuant to Section
3.11(b), any Penalty Charges (to the extent not allocable to pay Advance
Interest) collected on the Specially Serviced Mortgage Loans and REO Loans. The
Special Servicer shall be required to pay out of its own funds all overhead and
general and administrative expenses incurred by it in connection with its
servicing activities hereunder (including, without limitation, payment of any
amounts due and owing to any Sub-Servicers retained by it and the premiums for
any blanket policy obtained by it 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 or the REO Account, and the Special Servicer
shall not be entitled to reimbursement except as expressly provided in this
Agreement.
(e) If the Master Servicer or Special Servicer is required under this
Agreement to make a Servicing Advance, but neither does so within 15 days after
such Advance is required to be made, the Trustee shall, to the extent a
Responsible Officer of the Trustee has actual
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knowledge of such failure by the Master Servicer or the Special Servicer to make
such Advance (subject to Section 3.11(g) below), make such Advance. If the
Trustee fails to make a Servicing Advance required to be made by it, the Fiscal
Agent shall make such advance (subject to Section 3.11(g) below) within one (1)
Business Day of such failure by the Trustee. The making of such Advance by the
Fiscal Agent shall cure the failure by the Trustee to make such Advance.
(f) The Master Servicer, the Special Servicer, the Trustee and the
Fiscal Agent shall each be entitled to receive interest at the Reimbursement
Rate in effect from time to time, accrued on the amount of each Servicing
Advance made thereby for so long as such Servicing Advance is outstanding,
payable, FIRST, out of Penalty Charges received on the Mortgage Loan or REO Loan
as to which such Servicing Advance was made and, THEN, once such Servicing
Advance has been reimbursed pursuant to Section 3.05, out of general collections
on the Mortgage Loans and REO Properties.
(g) Notwithstanding anything to the contrary set forth herein, none
of the Master Servicer, the Special Servicer, the Trustee or the Fiscal Agent
shall be required to make any Servicing Advance that it determines in its
reasonable, good faith judgment would constitute a Nonrecoverable Servicing
Advance; provided, however, that the Special Servicer may make an Emergency
Advance notwithstanding that, at the time such Advance is made, the Special
Servicer may not have adequate information available in order to make a
determination whether or not such advance would, if made, be a Nonrecoverable
Servicing Advance. In addition, Nonrecoverable Servicing Advances (including
any Emergency Advances made pursuant to the proviso of the preceding sentence
which are ultimately determined to be Nonrecoverable Servicing Advances) shall
be reimbursable pursuant to Section 3.05 out of general collections on the
Mortgage Loans and REO Properties on deposit in the Certificate Account. The
determination by the Master Servicer, the Special Servicer or, if applicable,
the Trustee or the Fiscal Agent, that it has made a Nonrecoverable Servicing
Advance or that any proposed Servicing Advance, if made, would constitute a
Nonrecoverable Servicing Advance, shall be evidenced by an Officer's Certificate
delivered promptly to the Trustee (or, if applicable, retained thereby) and the
Depositor, setting forth the basis for such determination, together with (if
such determination is prior to the liquidation of the related Mortgage Loan or
REO Property) a copy of an Appraisal of the related Mortgaged Property or REO
Property, as the case may be, which shall have been performed within the twelve
months preceding such determination, and further accompanied by any other
information, including, without limitation, engineers' reports, environmental
surveys, inspection reports, rent rolls, income and expense statements or
similar reports, that the Master Servicer or the Special Servicer may have
obtained and that supports such determination. If such an Appraisal shall not
have been required and performed pursuant to the terms of this Agreement, the
Master Servicer, the Special Servicer, the Trustee or the Fiscal Agent, as the
case may be, may, subject to its reasonable and good faith determination that
such Appraisal will demonstrate the nonrecoverability of the related Advance,
obtain an Appraisal for such purpose at the expense of the Trust Fund. The
Trustee or the Fiscal Agent shall be entitled to rely on any determination of
nonrecoverability that may have been made by the Master Servicer or the Special
Servicer with
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respect to a particular Servicing Advance, and the Master Servicer shall be
entitled to rely on any determination of nonrecoverability that may have been
made by the Special Servicer with respect to a particular Servicing Advance.
SECTION 3.12 Inspections; Collection of Financial Statements.
(a) The Master Servicer shall perform (or cause to be performed) a
physical inspection of each Mortgaged Property (other than Mortgaged Properties
constituting collateral for Specially Serviced Mortgaged Loans) at such times
and in such manner as are consistent with the Servicing Standard, but in any
event at least once every two years (or, if the related Mortgage Loan has a
current balance of greater than $2,000,000, at least once every year except, in
the case of a Credit Lease Loan, at least once every three years). The Master
Servicer shall prepare (or cause to be prepared) a written report of each such
inspection detailing the condition of the Mortgaged Property and specifying the
existence of (i) any vacancy in the Mortgaged Property evident from such
inspection that the Master Servicer deems material, (ii) any sale, transfer or
abandonment of the Mortgaged Property evident from such inspection, (iii) any
adverse change in the condition or value of the Mortgaged Property evident from
such inspection that the Master Servicer deems material, or (iv) any waste
committed on the Mortgaged Property evident from such inspection. The Master
Servicer, upon request, shall deliver to the Trustee a copy of each such written
report. In the event the published rating for any Tenant or Guarantor is
downgraded by any of Standard & Poor's, Moody's or Fitch IBCA by one or more
rating increments (e.g. AA/Aa to A/A) and no inspection has been performed due
to a ratings downgrade in the preceding twelve months for the related Mortgaged
Property, then in each such instance, the Master Servicer or Special Servicer,
as applicable, shall cause all Mortgaged Properties leased to such Tenant to be
inspected as soon as reasonably practical and, thereafter, in accordance with
the first sentence of this clause (a).
(b) The Special Servicer shall perform (or cause to be performed) a
physical inspection of each Mortgaged Property constituting collateral for a
Specially Serviced Mortgage Loan at such times and in such manner as are
consistent with the Servicing Standard. If any Mortgage Loan becomes a
Specially Serviced Mortgage Loan, then as soon as practicable (and in any event
within 90 days thereafter) the Special Servicer shall perform (or cause to be
performed) a physical inspection of each Mortgaged Property constituting
collateral for such Mortgage Loan. The Special Servicer shall prepare (or cause
to be prepared) a written report of each such inspection detailing the condition
of the Mortgaged Property and specifying the existence of (i) any vacancy in the
Mortgaged Property evident from such inspection that the Special Servicer deems
material, (ii) any sale, transfer or abandonment of the Mortgaged Property
evident from such inspection, (iii) any adverse change in the condition or value
of the Mortgaged Property evident from such inspection that the Special Servicer
deems material, or (iv) any waste committed on the Mortgaged Property evident
from such inspection. The Special Servicer, upon request, shall deliver to the
Trustee and the Master Servicer a copy of each such written report.
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(c) The Master Servicer (or, in the case of Specially Serviced
Mortgage Loans, the Special Servicer) shall make reasonable efforts to collect
promptly from each Mortgagor (other than a Mortgagor on a Credit Lease Loan)
quarterly and annual operating statements and rent rolls of the related
Mortgaged Property, and financial statements of such Mortgagor, if delivery of
such items is required pursuant to the terms of the related Mortgage. In
addition, the Special Servicer shall make reasonable efforts to obtain quarterly
and annual operating statements and rent rolls with respect to each REO
Property. The Master Servicer and Special Servicer, upon request, shall each
deliver copies of the collected items to the other such party and the Trustee in
each case within 10 days of its receipt of such request.
SECTION 3.13 Annual Statement as to Compliance.
Each of the Master Servicer and the Special Servicer will deliver to
the Trustee, with a copy to the Depositor, on or before April 30th of each year,
beginning in 1999, an Officer's Certificate stating, as to the signer thereof,
that (i) a review of the activities of the Master Servicer or the Special
Servicer, as the case may be, during the preceding calendar year and of its
performance under this Agreement has been made under such officer's supervision,
(ii) to the best of such officer's knowledge, based on such review, the Master
Servicer or the Special Servicer, as the case may be, has fulfilled in all
material respects its obligations under this Agreement 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 the Trust Fund as a REMIC or of the Grantor Trust as a "grantor trust" under
the Grantor Trust Provisions from the Internal Revenue Service or any other
governmental agency or body or, if it has received any such notice, specifying
the details thereof. A copy of such Officer's Certificate may be obtained by
Certificateholders upon written request to the Trustee pursuant to Section 8.12
hereof.
SECTION 3.14 Reports by Independent Public Accountants.
On or before April 30th of each year, beginning in 1999, the Master
Servicer at its expense shall cause a firm of independent public accountants
(which may also render other services to the Master Servicer) and that is a
member of the American Institute of Certified Public Accountants to furnish a
statement to the Trustee and to the Depositor to the effect that (i) it has
obtained a letter of representation regarding certain matters from the
management of the Master Servicer, which includes an assertion that the Master
Servicer has complied with certain minimum mortgage loan servicing standards (to
the extent applicable to commercial and multifamily mortgage loans), identified
in the Uniform Single Attestation Program for Mortgage Bankers established by
the Mortgage Bankers Association of America, with respect to the servicing of
commercial and multifamily mortgage loans during the most recently completed
calendar year and (ii) on the basis of an examination conducted by such firm in
accordance with standards established by the American Institute of Certified
Public Accountants, such representation is fairly
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stated in all material respects, subject to such exceptions and other
qualifications that may be appropriate. In rendering its report such firm may
rely, as to matters relating to the direct servicing of commercial and
multifamily mortgage loans by Sub-Servicers, upon comparable reports of firms of
independent certified public accountants rendered on the basis of examinations
conducted in accordance with the same standards (rendered within one year of
such report) with respect to those Sub-Servicers.
The Special Servicer will deliver an annual accountants' report only
if, and in such form as may be, requested by the Rating Agencies.
The Master Servicer and the Special Servicer, to the extent
applicable, will use reasonable efforts to cause the accountants referred to
above to cooperate with the Depositor in conforming any reports delivered
pursuant to this Section 3.14 to requirements imposed by the Commission on the
Depositor in connection with the Commission's issuance of a no-action letter
relating to the Depositor's reporting requirements in respect of the Trust Fund
pursuant to the Exchange Act.
SECTION 3.15 Access to Certain Information.
Each of the Master Servicer and the Special Servicer shall provide or
cause to be provided to the Trustee, and to the OTS, the FDIC, and any other
federal or state banking or insurance regulatory authority that may exercise
authority over any Certificateholder, access to any documentation regarding the
Mortgage Loans and the Trust Fund within its control which may be required by
this Agreement or by applicable law. Such access shall be afforded without
charge but only upon reasonable prior written request and during normal business
hours at the offices of the Master Servicer or the Special Servicer, as the case
may be, designated by it.
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 on behalf of the Certificateholders. The
Special Servicer, on behalf of the Trust Fund, shall attempt to sell any REO
Property prior to the close of the third taxable year of the Trust Fund
following the taxable year in which the Trust Fund acquires ownership of such
REO Property for purposes of Section 860G(a)(8) of the Code, unless the Special
Servicer either (i) 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 and the Special
Servicer, to the effect that the holding by the Trust Fund of such REO Property
subsequent to the close of such period will not (subject to Section 10.01(f))
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 (for federal (or any applicable
state or local) income tax purposes) at any time that any Certificates are
outstanding. If the Special Servicer is granted the REO Extension contemplated
by clause (i) of
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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 longer liquidation 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 being
granted 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 cause all funds collected and received
in connection with any REO Property to be held separate and apart from its own
funds and general assets. If any REO Acquisition shall occur, the Special
Servicer shall establish and maintain (or cause to be established and
maintained) one or more accounts (collectively, the "REO Account"), to be 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 and may consist of one account for
some or all the REO Properties. The Special Servicer shall deposit, or cause to
be deposited, in the REO Account, within two Business Days of receipt, all REO
Revenues, Liquidation Proceeds (net of all Liquidation Expenses paid therefrom)
and Insurance Proceeds received in respect of an REO Property. The Special
Servicer is authorized to pay out of related Liquidation Proceeds any
Liquidation Expenses incurred in respect of an REO Property and outstanding at
the time such proceeds are received. 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 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 any REO Account when first established and of the new location of
such REO Account prior to any change thereof.
(c) The Special Servicer shall cause all funds necessary for the
proper operation, management, maintenance, disposition and liquidation of any
REO Property to be withdrawn from the REO Account, but only to the extent of
amounts on deposit in the REO Account relating to such REO Property. Within one
Business Day following the end of each Collection Period, 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 such Collection Period, net of any withdrawals made out of
such amounts pursuant to Section 3.16 (b) or this Section 3.16(c); provided that
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, maintenance and disposition of the related REO
Property (including without limitation the creation of a reasonable reserve for
repairs,
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replacements and necessary capital improvements and other related expenses),
such reserve not to exceed an amount sufficient to cover such items to be
incurred during the following twelve-month period.
(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).
SECTION 3.17 Management of REO Property; Independent Contractors.
(a) Prior to the acquisition of title to any Mortgaged Property
securing a Defaulted Mortgage Loan, the Special Servicer shall review the
operation of such Mortgaged Property and determine the nature of the income that
would be derived from such property if it were acquired by the Trust Fund. If
the Special Servicer determines from such review, in its good faith and
reasonable judgment, that:
(i) None of the income from Directly Operating such Mortgaged
Property would be subject to tax as "net income from foreclosure property"
within the meaning of the REMIC Provisions or would be subject to the tax
imposed on "prohibited transactions" under Section 860F of the Code (either such
tax referred to herein as an "REO Tax"), such Mortgaged Property may be Directly
Operated by the Special Servicer as REO Property;
(ii) Directly Operating such Mortgaged Property as an REO Property
could result in income from such property that would be subject to an REO Tax,
but that a lease of such property to another party to operate such property, or
the performance of some services by an Independent Contractor with respect to
such property, or another method of operating such property would not result in
income subject to an REO Tax, then the Special Servicer may (provided, that in
the good faith and reasonable judgment of the Special Servicer, it is
commercially feasible) acquire such Mortgaged Property as REO Property and so
lease or operate such REO Property; or
(iii) Directly Operating such property as REO Property could
result in income subject to an REO Tax and, in the good faith and reasonable
judgment of the Special Servicer, that no commercially feasible 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 Trustee, 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 feasible, estimates of the
amount of income from each such source. Within a reasonable period of time
after receipt of such plan, the Trustee shall consult with the Special Servicer
and shall advise the Special Servicer of the Trust Fund'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 Trustee shall (to
the maximum extent possible) advise the Special
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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 Trustee, 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 in any event be based on the good faith and
reasonable judgment of the Special Servicer as to which means would (to the
extent commercially feasible) maximize the net after-tax REO Revenues received
by the Trust Fund with respect to such property without materially and adversely
affecting the Special Servicer's ability to sell such REO Property in accordance
with this Agreement and, to the extent consistent with the foregoing, in
accordance with the Servicing Standard. Both the Special Servicer and the
Trustee may consult with counsel knowledgeable in such matters at the expense of
the Trust Fund in connection with determinations required under this Section
3.17(a). Neither the Special Servicer nor the Trustee shall be liable to the
Certificateholders, the Trust Fund, the other parties hereto or each other for
errors in judgment made in good faith in the reasonable exercise of their
discretion while performing their respective responsibilities under this Section
3.17(a) or, to the extent it relates to federal income tax consequences for the
Trust Fund, Section 3.17(b) below. Nothing in this Section 3.17(a) is intended
to prevent the sale of a Defaulted Mortgage Loan or REO Property pursuant to the
terms and subject to the conditions of Section 3.18.
(b) If title to any REO Property is acquired, the Special Servicer
shall manage, conserve, protect and operate such REO Property for the benefit of
the Certificateholders solely for the purpose of its prompt disposition and sale
in a manner that does not cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code or,
except as permitted by Section 3.17(a), result in the receipt by the Trust Fund
of any "income from non-permitted assets" within the meaning of Section
860F(a)(2)(B) of the Code or any "net income from foreclosure property" which is
subject to taxation under the REMIC Provisions. 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 in the best interests of and for the
benefit of the Certificateholders (as determined by the Special Servicer in its
good faith and reasonable judgment) and, consistent therewith, shall withdraw
from the REO Account, to the extent of amounts on deposit therein with respect
to each 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;
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(iii) any ground rents in respect of such REO Property; and
(iv) all costs and expenses necessary to maintain 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 the prior sentence with
respect to such REO Property, the Special Servicer shall advance such amount as
is necessary for such purposes (which advances shall be Servicing Advances)
unless (as evidenced by an Officer's Certificate delivered to the Trustee) such
advances would, if made, constitute Nonrecoverable Servicing Advances; provided,
however, that the Special Servicer shall make any such Servicing Advance if it
is a necessary fee or expense incurred in connection with the defense or
prosecution of legal proceedings and such advance will be deemed to constitute a
recoverable Servicing Advance.
(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 an
expense of the Trust Fund) shall be reasonable and customary in light of the
nature and locality of the REO Property;
(iii) any such contract shall require, or shall be administered to
require, that the Independent Contractor (A) pay, out of related REO Revenues,
all costs and expenses incurred in connection with the operation and management
of such REO Property, including, without limitation, those listed in subsection
(b) hereof, and (B) remit all related REO Revenues (net of its fees and such
costs and expenses) to the Special Servicer;
(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.
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SECTION 3.18 Sale of Defaulted Mortgage Loans and REO Properties.
(a) The parties hereto 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) In the event that any Mortgage Loan becomes a Defaulted Mortgage
Loan and the Special Servicer has determined in good faith that such Defaulted
Mortgage Loan will become subject to foreclosure proceedings, the Special
Servicer shall promptly so notify, in writing, the Master Servicer and the
Trustee, and the Trustee shall so notify, in writing, within 10 days after
receipt of its notice, the Holders of the Controlling Class. The Majority
Certificateholder of the Controlling Class may at its (or their) option purchase
from the Trust Fund, at a price equal to the Purchase Price, any such Defaulted
Mortgage Loan. The Purchase Price for any Defaulted Mortgage Loan purchased
hereunder shall be deposited into the Certificate Account, and the Trustee, upon
receipt of an Officer's Certificate from the Master Servicer to the effect that
such deposit has been made, shall release or cause to be released to the
Majority Certificateholder of the Controlling Class (or any designee thereof)
the related Mortgage File, and shall execute and deliver such instruments of
transfer or assignment, in each case without recourse, as shall be necessary to
vest in the Majority Certificateholder of the Controlling Class (or any designee
thereof) ownership of such Defaulted Mortgage Loan. In connection with any such
purchase, the Special Servicer shall deliver the related Credit File to such
Certificateholder(s).
(c) If the Majority Certificateholder of the Controlling Class has
not purchased any Defaulted Mortgage Loan within 15 days of its having received
notice in respect thereof pursuant to the immediately preceding subsection (b),
either the Special Servicer or, subject to the Special Servicer's prior rights
in such regard, the Master Servicer may at its option, within 15 days after
receipt of such notice, purchase such Defaulted Mortgage Loan from the Trust
Fund, at a price equal to the Purchase Price. The Purchase Price for any
Defaulted Mortgage Loan purchased hereunder shall be deposited into the
Certificate Account, and the Trustee, upon receipt of an Officer's 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,
representation or warranty, as shall be necessary to vest in the Master Servicer
or the Special Servicer, as applicable, such Defaulted Mortgage Loan. In
connection with any such purchase by the Master Servicer, the Special Servicer
shall deliver the related Credit File to the Master Servicer.
(d) The Special Servicer may offer to sell any Defaulted Mortgage
Loan not otherwise purchased by the Majority Certificateholder of the
Controlling Class, the Master Servicer or the Special Servicer pursuant to
subsection (b) or (c) above, if and when the Special Servicer determines,
consistent with the Servicing Standard, that such a sale would produce a
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greater recovery to Certificateholders on a present value basis than would
liquidation of the related Mortgaged Property. Such offering 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, loan status, condition and similar customary matters, if liability for
breach thereof is limited to recourse against the Trust Fund) for a period of
not less than 10 days or more than 90 days. Unless the Special Servicer
determines that acceptance of any offer would not be in the best economic
interests of the Trust Fund, the Special Servicer shall accept the highest cash
offer received from any Person that constitutes a fair price for such Mortgage
Loan. In the absence of any offer 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 and, otherwise, in accordance with the Servicing
Standard.
The Special Servicer shall use reasonable efforts to solicit offers
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 contemporaneously
received, highest) cash bid received from any Person that constitutes a fair
price for such REO Property. If the Special Servicer determines, in its good
faith and reasonable judgment, that it will be unable to realize a fair price
for any REO Property within the time constraints imposed by Section 3.16(a),
then the Special Servicer shall dispose of such REO Property upon such terms and
conditions as the Special Servicer shall deem necessary and desirable to
maximize the recovery thereon under the circumstances and, in connection
therewith, shall accept the highest outstanding cash bid, regardless of from
whom received.
The Special Servicer shall give the Trustee and the Master Servicer
not less than three Business Days' prior written notice of its intention to sell
any Defaulted Mortgage Loan or REO Property. No Interested Person shall be
obligated to submit a bid to purchase any Defaulted Mortgage Loan or REO
Property, and notwithstanding anything to the contrary herein, neither the
Trustee, in its individual capacity, nor any of its Affiliates may bid for or
purchase any Defaulted Mortgage Loan or any REO Property pursuant hereto.
(e) Whether any cash bid constitutes a fair price for any Defaulted
Mortgage Loan or REO Property, as the case may be, for purposes of Section
3.18(d), shall be determined by the Special Servicer, if the highest bidder is a
Person other than an Interested Person, and by the Trustee, if the highest
bidder is an Interested Person; provided, however, that no bid from an
Interested Person shall constitute a fair price unless (i) it is the highest bid
received and (ii) at least two other bids are received from independent third
parties. In determining whether any offer received from an Interested Person
represents a fair price for any such Mortgage Loan or REO Property, the Trustee
shall be supplied with and shall rely on the most recent Appraisal or updated
Appraisal conducted in accordance with this Agreement within the preceding
12-month period or, in the absence of any such Appraisal, on a narrative
appraisal prepared by a Qualified Appraiser, retained by the Special Servicer.
Such appraiser shall be selected by the Special Servicer if the Special Servicer
is not making an offer with respect to a Defaulted Mortgage Loan or REO
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Property and shall be selected by the Master Servicer if the Special Servicer is
making such an offer. The cost of any such narrative appraisal shall be covered
by, and shall be reimbursable as, a Servicing Advance. In determining whether
any offer from a Person other than an Interested Person 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, updated Appraisal or
narrative Appraisal that it may have obtained pursuant to this Agreement within
the prior 12 months), and in determining whether any offer from an Interested
Person constitutes a fair price for any such Mortgage Loan or REO Property, any
appraiser shall be instructed to take into account, as applicable, among other
factors, the period and amount of any delinquency on the affected Defaulted
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 Defaulted Mortgage Loan or REO Property shall in all
cases be deemed a fair price.
(f) Subject to subsections (a) through (e) above, the Special
Servicer shall act on behalf of the Trust Fund in negotiating and taking any
other action necessary or appropriate in connection with the sale of any
Defaulted Mortgage Loan or REO Property, and the collection of all amounts
payable in connection therewith. In connection therewith, the Special Servicer
may charge prospective offerors, and may retain, fees that approximate the
Special Servicer's actual costs in the preparation and delivery of information
pertaining to such sales or exchanging offers without obligation to deposit such
amounts into the Certificate Account. Any sale of a Defaulted Mortgage Loan or
any REO Property shall be final and without recourse to the Trustee or the Trust
Fund (except such recourse to the Trust Fund imposed by those representations
and warranties typically given in such transactions, any prorations applied
thereto and any customary closing matters), and if such sale is consummated in
accordance with the terms of this Agreement, none of the Special Servicer, the
Master Servicer, the Depositor, the Fiscal Agent or 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, as evidenced by an Opinion of Counsel, a sale for
other consideration will not cause an Adverse REMIC Event).
(h) Notwithstanding any of the foregoing paragraphs of this Section
3.18, the Special Servicer shall not be obligated to accept the highest cash
offer if the Special Servicer determines, in its reasonable and good faith
judgment, that rejection of such offer would be in the best interests of the
Certificateholders, and the Special Servicer may accept a lower cash offer (from
any Person other than itself or an Affiliate) if it determines, in its
reasonable and good faith judgment, that acceptance of such offer would be in
the best interests of the Certificateholders (for example, if the prospective
buyer making the lower offer is more likely to perform its obligations or the
terms offered by the prospective buyer making the lower offer are more
favorable).
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SECTION 3.19 Additional Obligations of the Master Servicer and the
Special Servicer.
(a) In connection with each Adjustable Rate Mortgage Loan (and, if
and to the extent applicable, any successor REO Loan), the Master Servicer shall
calculate adjustments in the Mortgage Rate and the Monthly Payment and shall
notify the Mortgagor of such adjustments, all in accordance with the Mortgage
Note and applicable law. In the event the Index for any Adjustable Rate
Mortgage Loan (or successor REO Loan) is not published or is otherwise
unavailable, the Master Servicer shall select a comparable alternative index
with respect to such Mortgage Loan (or successor REO Loan) over which it has no
direct control, which is readily verifiable and which is acceptable under the
terms of the related Mortgage Note.
(b) The Master Servicer and the Special Servicer, as applicable,
shall each deliver to the other and to the Trustee (for inclusion in the
Mortgage File) copies of all Appraisals, environmental reports and engineering
reports (or, in each case, updates thereof) obtained with respect to any
Mortgaged Property or REO Property.
(c) No more frequently than once per calendar month, the Special
Servicer may require the Master Servicer, and the Master Servicer shall be
obligated, subject to the second following paragraph, to reimburse the Special
Servicer for any Servicing Advances made by but not previously reimbursed to the
Special Servicer, and to pay the Special Servicer interest thereon at the
Reimbursement Rate from the date made to, but not including, the date of
reimbursement. Such reimbursement and any accompanying payment of Advance
Interest shall be made within ten (10) days of the request therefor by wire
transfer of immediately available funds to an account designated by the Special
Servicer. Upon the Master Servicer's reimbursement to the Special Servicer of
any Servicing Advance and payment to the Special Servicer of interest thereon,
all in accordance with this Section 3.19(c), the Master Servicer shall for all
purposes of this Agreement be deemed to have made such Servicing Advance at the
same time as the Special Servicer originally made such Advance, and accordingly,
the Master Servicer shall be entitled to reimbursement for such Advance,
together with interest thereon, at the same time, in the same manner and to the
same extent as the Master Servicer would otherwise have been entitled if it had
actually made such Servicing Advance.
Notwithstanding anything to the contrary contained in this Agreement,
if the Special Servicer is required under this Agreement to make any Servicing
Advance but does not desire to do so, the Special Servicer may, in its sole
discretion, request that the Master Servicer make such Advance, such request to
be made in writing and in a timely manner that does not materially and adversely
affect the interests of any Certificateholder. Subject to the following
paragraph, the Master Servicer shall have the obligation to make any such
Servicing Advance that it is requested by the Special Servicer to make within
ten days of the Master Servicer's receipt of such request. The Special Servicer
shall be relieved of any obligations with respect to an Advance that it requests
the Master Servicer to make (regardless of whether or not the Master Servicer
shall
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make such Advance). The Master Servicer shall be entitled to reimbursement for
any Servicing Advance made by it at the direction of the Special Servicer,
together with Advance Interest thereon, at the same time, in the same manner and
to the same extent as the Master Servicer is entitled with respect to any other
Servicing Advance made thereby. If the Special Servicer makes any Servicing
Advances in accordance with the terms of this Agreement, the Special Servicer
shall notify the Master Servicer in writing within one Business Day of any such
Servicing Advance.
Notwithstanding the foregoing provisions of this Section 3.19(c), the
Master Servicer shall not be required to make at the Special Servicer's
direction, or to reimburse the Special Servicer for, any Servicing Advance if
the Master Servicer determines in its reasonable, good faith judgment that the
Servicing Advance which the Special Servicer is directing the Master Servicer to
make or to reimburse to the Special Servicer hereunder either (y) although not
characterized by the Special Servicer as a Nonrecoverable Servicing Advance, is
or would be, if made, a Nonrecoverable Servicing Advance, or (z) the making of
such advance was or would be in violation of the Servicing Standard or the terms
and conditions of this Agreement. The Master Servicer shall notify the Special
Servicer in writing of such determination. Such notice shall not obligate the
Special Servicer to make any such proposed Servicing Advance.
(d) Upon the earliest of (i) the date on which any Mortgage Loan
becomes a Modified Mortgage Loan, (ii) the 90th day following the occurrence of
any uncured delinquency in Monthly Payments with respect to any Mortgage Loan,
(iii) the date on which a receiver is appointed and continues in such capacity
in respect of the Mortgaged Property securing any Mortgage Loan and (iv) the
date on which the Mortgaged Property securing any Mortgage Loan becomes an REO
Property (each such Mortgage Loan and any related REO Loan, a "Required
Appraisal Loan"), the Special Servicer, shall request and, within 30 days of the
occurrence of such event (or such longer period as the Special Servicer is (as
certified thereby to the Trustee in writing) diligently and in good faith
proceeding to obtain such) obtain an Appraisal of the related Mortgaged
Property; unless an Appraisal thereof had previously been obtained within the
prior twelve months. The cost of such Appraisal shall be covered by, and
reimbursable as, a Servicing Advance.
With respect to each Required Appraisal Loan (unless such loan has
become a Corrected Mortgage Loan and has remained current for twelve consecutive
Monthly Payments, and no other Servicing Transfer Event has occurred with
respect thereto during the preceding twelve months), the Special Servicer shall,
within 30 days of each anniversary of such loan's becoming a Required Appraisal
Loan, order an update of the prior Appraisal (the cost of which will be covered
by, and reimbursable as, a Servicing Advance). Based upon such Appraisal, the
Special Servicer shall determine and report to the Trustee the Appraisal
Reduction Amount, if any, with respect to such loan. The Special Servicer shall
deliver a copy of any such Appraisal to the Master Servicer.
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(e) The Master Servicer shall deliver to the Trustee for deposit in
the Distribution Account on each Master Servicer Remittance Date, without any
right of reimbursement therefor, an amount equal to the aggregate of all Balloon
Payment Interest Shortfalls incurred in connection with Balloon Payments
received in respect of the Mortgage Pool during the most recently ended
Collection Period.
(f) The Master Servicer shall deliver to the Trustee for deposit in
the Distribution Account on each Master Servicer Remittance Date, without any
right of reimbursement therefor, an amount equal to the sum of (A) the lesser of
(i) the aggregate of all Prepayment Interest Shortfalls incurred in connection
with Principal Prepayments received in respect of the Mortgage Loans (other than
Late Due Date Mortgage Loans) during the most recently ended Collection Period,
and (ii) the aggregate Master Servicing Fees received by the Master Servicer
during such Collection Period and (B) the aggregate of all Extraordinary
Prepayment Interest Shortfalls, if any, incurred in connection with Principal
Prepayments received in respect of Late Due Date Mortgage Loans during the most
recently ended Collection Period.
(g) With respect to all ARD Loans, the Master Servicer shall apply
all Monthly Payments and any other sums due, in accordance with the terms of the
related ARD Loan.
(h) Subject to Section 3.20(a)(iv), with respect to all ARD Loans,
the Master Servicer and the Special Servicer shall not take any enforcement
action with respect to the payment of Excess Interest or principal in excess of
the principal component of the constant Monthly Payment, other than request for
collection, until the maturity date of the related Mortgage Loan. The foregoing
shall not limit the Servicer and Special Servicer's obligation to establish or
direct the related Mortgagor to establish a Lock-Box Account pursuant to Section
3.24. The Master Servicer shall, within 90 days of the Startup Day (except in
the case of the Boykin Loan (LG980424002), the Arden Loan (LG980424001) and the
South Towne Loan (LG97121503)) provide a legally effective waiver to any such
Mortgagor such that the Revised Rate for such Mortgage Loan shall not exceed the
related initial Mortgage Rate plus 2.00%.
(i) The Master Servicer or the Special Servicer, as the case may be,
shall, to the extent permitted under the terms of the Ground Lease and the
Mortgage Loan secured by such Ground Lease related to GMACCM Loan Number 1250,
exercise on behalf of the Trust Fund any right to renew or extend such Ground
Lease in the event the related Mortgagor fails to do so.
(j) The Master Servicer or the Special Servicer, as the case may be,
shall, at the earliest date permitted under the terms of the Mortgage Loan
identified as GMACCM Loan Number 3030 on the Mortgage Loan Schedule exercise any
right to cause the Mortgagor thereunder to make a Principal Prepayment of all
outstanding principal of and accrued interest on such Mortgage Loan.
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(k) The Master Servicer shall, within 90 days of the Startup Day,
consummate a legally effective waiver of any right that may arise pursuant to
the terms of the Mortgage Loan identified as GMACCM Loan Number 3030 on the
Mortgage Loan Schedule to collect interest at a rate 0.125% per annum greater
than the Mortgage Rate in effect on the Cut-off Date, including provision of
notice of such waiver within 90 days of the Closing Date to the related
Mortgagor.
(l) The Master Servicer shall be entitled to waive the application of
any provision in any ARD Loan that requires that the property manager of the
related Mortgaged Property be discharged if such Mortgage Loan is not paid in
full on its Anticipated Repayment Date.
(m) With respect to Loan No. 980127004C, the Trustee shall be
entitled to receive any amounts representing capitalized interest resulting from
the excess of the rate at which interest accrues under the terms of such
Mortgage over the Mortgage Rate for such Mortgage Loan, to the extent such
amounts are actually paid by the Mortgagor after all other amounts due in
respect of such Mortgage Loan have been paid by the related Mortgagor.
(n) With respect to the Hallmark Suites Mortgage Loan (Loan Number
GMAC1250) the Master Servicer shall, in connection with any request by the
related Mortgagor to exercise a Defeasance Option, require as a condition
precedent the delivery of an Opinion of Counsel to the effect that the release
of any Mortgaged Property will not 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
or cause a tax to be imposed on the Trust Fund under the REMIC Provisions.
SECTION 3.20 Modifications, Waivers, Amendments and Consents.
(a) The Master Servicer and the Special Servicer each may agree to
any modification, waiver or amendment of any term of, forgive interest on and
principal of, capitalize interest on, permit the release, addition or
substitution of collateral securing, and/or permit the release of the Mortgagor
on or any guarantor of any Mortgage Loan it is required to service and
administer hereunder, without the consent of the Trustee or any
Certificateholder, subject, however, to each of the following limitations,
conditions and restrictions:
(i) other than as provided in Sections 3.02 and 3.08, the Master
Servicer (in such capacity) shall not agree to any modification, waiver or
amendment of any term of, or take any of the other acts referenced in this
Section 3.20(a) with respect to, any Mortgage Loan that would (A) affect the
amount or timing of any related payment of principal, interest or other amount
payable thereunder, (B) affect the obligation of the related Mortgagor to pay
any Prepayment Premium or permit a Principal Prepayment during any period when
the terms of the Mortgage Loan prohibit the making of Principal Prepayments or,
(C) in the Master Servicer's good faith and reasonable judgment, materially
impair the security for such Mortgage Loan or
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reduce the likelihood of timely payment of amounts due thereon; the Special
Servicer (in such capacity) may, however, agree to any modification, waiver or
amendment of any term of, or take any of the other acts referenced in this
Section 3.20(a) with respect to, a Specially Serviced Mortgage Loan that would
have any such effect, but only if, in the Special Servicer's reasonable and good
faith judgment, a material default on such Mortgage Loan has occurred or a
default in respect of payment on such Mortgage Loan is reasonably foreseeable,
and such modification, waiver, amendment or other action is reasonably likely to
produce a greater recovery to Certificateholders on a present value basis, than
would liquidation;
(ii) any such action taken by the Special Servicer shall be
accompanied by an Officer's Certificate to such effect and to which is attached
the present value calculation which establishes the basis for such
determination, a copy of which shall be delivered to the Trustee for delivery to
the Rating Agencies;
(iii) neither the Master Servicer nor the Special Servicer may
extend the Stated Maturity Date of any Mortgage Loan beyond the date that is two
years prior to the Rated Final Distribution Date;
(iv) neither the Master Servicer nor the Special Servicer shall make
or permit any modification, waiver or amendment of any term of, or take any of
the other acts referenced in this Section 3.20(a) or clause (h) of Section 3.19
with respect to, any Mortgage Loan that would (A) cause REMIC I, REMIC II or
REMIC III to fail to qualify as a REMIC under the Code or (subject to Section
10.01(f)) result in the imposition of any tax on "prohibited transactions" or
"contributions" after the Startup Day of any such REMIC under the REMIC
Provisions or (B) cause any Mortgage Loan to cease to be a "qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code (neither the Master
Servicer nor the Special Servicer shall be liable for judgments as regards
decisions made under this subsection which were made in good faith and, unless
it would constitute bad faith or negligence to do so, each of the Master
Servicer and the Special Servicer may rely on opinions of counsel in making such
decisions);
(v) neither the Master Servicer nor the Special Servicer shall permit
any Mortgagor to add or substitute any collateral for an outstanding Mortgage
Loan, which collateral constitutes real property, unless the Master Servicer or
the Special Servicer, as the case may be, shall have first determined, in its
reasonable and good faith judgment, based upon an Environmental Assessment
performed within the twelve months prior to such determination (and such
additional environmental testing as the Master Servicer or Special Servicer, as
the case may be, deems necessary and appropriate) prepared by an Independent
Person who regularly conducts Environmental Assessments (and such additional
environmental testing), at the expense of the Mortgagor, that such additional or
substitute collateral is in compliance with applicable environmental laws and
regulations and that there are no circumstances or conditions present with
respect to such new collateral relating to the use, management or disposal of
any Hazardous
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Materials for which investigation, testing, monitoring, containment, clean-up or
remediation would be required under any then applicable environmental laws
and/or regulations; and
(vi) neither the Master Servicer nor the Special Servicer shall
release or substitute any collateral securing an outstanding Mortgage Loan
except as provided in Section 3.09(d) and except in the case of a release where
(A) the use of the collateral to be released will not, in the Master Servicer's
or Special Servicer's, as the case may be, good faith and reasonable judgment,
materially and adversely affect the Net Operating Income being generated by or
the use of the related Mortgaged Property, (B) there is a corresponding
principal paydown of such Mortgage Loan in an amount at least equal to, or a
delivery of substitute collateral with an appraised value at least equal to, the
appraised value of the collateral to be released, (C) the remaining Mortgaged
Property and any substitute collateral is, in the Master Servicer's or Special
Servicer's, as the case may be, good faith and reasonable judgment, adequate
security for the remaining Mortgage Loan and (D) such release and/or
substitution would not result in the downgrade, qualification or withdrawal of
the rating then assigned by any Rating Agency to any Class of Certificates (as
confirmed in writing by each Rating Agency);
provided that (x) the limitations, conditions and restrictions set forth in
clauses (i) through (vi) above shall not apply to any modification of any term
of any Mortgage Loan or any other acts referenced in this Section 3.20(a) that
is required under the terms of such Mortgage Loan in effect on the Closing Date
and that is solely within the control of the related Mortgagor, and
(y) notwithstanding clauses (i) through (vi) above, neither the Master Servicer
nor the Special Servicer shall be required to oppose the confirmation of a plan
in any bankruptcy or similar proceeding involving a Mortgagor if in their
reasonable and good faith judgment such opposition would not ultimately prevent
the confirmation of such plan or one substantially similar. Neither the Master
Servicer nor the Special Servicer may extend the Maturity Date on any Mortgage
Loan except pursuant to this Section 3.20(a) or as otherwise required under the
related loan documents.
(b) Neither the Master Servicer nor the Special Servicer shall have
any liability to the Trust Fund, the Certificateholders or any other Person if
its analysis and determination that the modification, waiver, amendment or other
action contemplated by Section 3.20(a) is reasonably likely to produce a greater
recovery to Certificateholders on a present value basis than would liquidation,
should prove to be wrong or incorrect, so long as the analysis and determination
were made on a reasonable basis in good faith by the Master Servicer or Special
Servicer and the Master Servicer or Special Servicer was not negligent in
ascertaining the pertinent facts.
(c) Any payment of interest, which 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 Mortgage Loan or such
modification, waiver or amendment so permit.
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(d) The Master Servicer and, with respect to a Specially Serviced
Mortgaged Loan, the Special Servicer each may, as a condition to its granting
any request by a Mortgagor for consent, modification, waiver or indulgence or
any other matter or thing, the granting of which is within the Master Servicer's
or the Special Servicer's 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, as additional
servicing compensation, a reasonable or customary fee (not to exceed 1.0% of the
unpaid principal balance of the related Mortgage Loan) for the additional
services performed in connection with such request, together with any related
costs and expenses incurred by it.
(e) Except for waivers of Penalty Charges and notice periods, all
material modifications, waivers and amendments of the Mortgage Loans entered
into pursuant to this Section 3.20 shall be in writing.
(f) Each of the Master Servicer and the Special Servicer shall notify
the Trustee and such other party, in writing, of any modification, waiver or
amendment of any term of any Mortgage Loan and the date thereof, and shall
deliver to the Trustee or the related 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 10 Business
Days) following the execution thereof.
SECTION 3.21 Transfer of Servicing Between Master Servicer and
Special Servicer; Record Keeping.
(a) Upon determining that a Servicing Transfer Event has occurred
with respect to any Mortgage Loan and if the Master Servicer is not also the
Special Servicer, the Master Servicer shall promptly give notice thereof, and
deliver 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 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. The Special Servicer may, as to any
delinquent Mortgage Loan, prior to the occurrence of a Servicing Transfer Event
with respect thereto, request and obtain the foregoing documents and
information.
Upon determining that a Specially Serviced Mortgage Loan has become a
Corrected Mortgage Loan and if the Master Servicer is not also the Special
Servicer, the Special Servicer shall promptly give notice thereof, and return
the related Servicing File, to the Master Servicer and upon giving such notice,
and returning such Servicing File, to the Master Servicer, the Special
Servicer's obligation to service such Mortgage Loan, and the Special Servicer's
right to receive
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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 in accordance with this Agreement shall resume.
Notwithstanding other provisions in this Agreement to the contrary,
the Master Servicer shall remain responsible for the billing and collection,
accounting, data collection, reporting and other basic Master Servicer
administrative functions with respect to Specially Serviced Mortgage Loans,
provided that the Special Servicer shall establish procedures for the Master
Servicer as to the application of receipts and tendered payments and shall have
the exclusive responsibility for and authority over all contacts with and
notices to Mortgagors and similar matters relating to each Specially Serviced
Mortgage Loan and the related Mortgaged Property.
(b) In servicing any Specially Serviced Mortgage Loans, the Special
Servicer shall provide to the Trustee 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) Notwithstanding anything in this Agreement to the contrary, in
the event that the Master Servicer and the Special Servicer are the same Person,
all notices, certificates, information and consents required to be given by the
Master Servicer to the Special Servicer or vice versa shall be deemed to be
given without the necessity of any action on such Person's part.
SECTION 3.22 Sub-Servicing Agreements.
(a) The Master Servicer and the Special Servicer may each enter into
Sub-Servicing Agreements for the servicing and administration of all or a part
of the Mortgage Loans for which it is responsible hereunder, provided that, in
each case, the Sub-Servicing Agreement: (i) is not inconsistent with this
Agreement and shall provide that the Sub-Servicer will maintain errors and
omissions insurance and fidelity bond coverage as required of the Master
Servicer or the Special Servicer (whichever retained it) under Section 3.07
hereof; (ii) provides that if the Master Servicer or the Special Servicer, as
the case may be, shall for any reason no longer be the Master Servicer or
Special Servicer, as applicable, hereunder (including, without limitation, by
reason of an Event of Default or their termination hereunder), the Trustee, its
designee or any successor Master Servicer or Special Servicer 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) in the case of a Sub-Servicing
Agreement entered into by the Master Servicer, expressly or effectively provides
that (if the Master Servicer and the Special Servicer are not the same Person)
such agreement shall terminate with respect to any Mortgage Loan serviced
thereunder at the time such Mortgage Loan becomes a Specially Serviced Mortgage
Loan; (iv) requires that the Master Servicer consent to any
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modification to the terms of a Mortgage Loan pursuant to Section 3.20; and
(v) in the case of a Sub-Servicing Agreement entered into by the Special
Servicer, relates only to Specially Serviced Mortgage Loans or REO Properties
and expressly or effectively provides that (if the Master Servicer and the
Special Servicer are not the same Person) such agreement shall terminate with
respect to any such Mortgage Loan that becomes a Corrected Mortgage Loan.
References in this Agreement to actions taken or to be taken by the Master
Servicer or the Special Servicer, as the case may be, 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, as the case may be, hereunder to make Servicing Advances and
Delinquency 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 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, and, for so long as they
are outstanding, such Advances shall accrue interest in accordance with Section
3.11(f) or Section 4.03(d), as applicable, 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 the Sub-Servicer receives such payment.
(b) Each Sub-Servicer 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.
(c) As part of its servicing activities hereunder, 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 each
Sub-Servicer retained by it under the related Sub-Servicing Agreement. 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 by the Master Servicer and the
Special Servicer in accordance with the Servicing Standard.
(d) In the event the Trustee, its designee or any successor Master
Servicer or Special Servicer assumes the rights and obligations of the Master
Servicer or the Special Servicer under any Sub-Servicing Agreement, the Master
Servicer or the Special Servicer, as the case may be, 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 reasonable efforts to effect the orderly and
efficient transfer of the Sub-Servicing Agreement to the assuming party.
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(e) Notwithstanding any Sub-Servicing Agreement, the Master Servicer
and the Special Servicer each shall remain obligated and liable to the Trustee
and the Certificateholders for the servicing and administration of the Mortgage
Loans in accordance with the provisions of this Agreement to the same extent and
under the same terms and conditions as if it alone were servicing and
administering the Mortgage Loans for which it is responsible.
SECTION 3.23 Designation of Special Servicer by the Majority
Certificateholder of the Controlling Class.
The Certificateholders entitled to more than 50% of the Voting Rights
allocated to the Controlling Class, may at any time and from time to time
replace any existing Special Servicer or any Special Servicer that has resigned
or otherwise ceased to serve as Special Servicer. Such Holders shall so
designate a Person to so serve by the delivery to the Trustee of a written
notice stating such designation, subject to the confirmation of the Rating
Agencies. The Trustee shall, promptly after receiving any such notice, so
notify the Rating Agencies. The designated Person shall become the Special
Servicer as of the date the Trustee shall have received: (i) written
confirmation from the Rating Agencies stating that if the designated Person were
to serve as Special Servicer hereunder, none of the then-current ratings of the
outstanding Classes of the Certificates would be qualified, downgraded or
withdrawn; (ii) a written acceptance of all obligations of the Special Servicer
under this Agreement, executed by the designated Person; and (iii) an Opinion of
Counsel (at the expense of the Person designated to become the Special Servicer
or the Holders that made the designation) to the effect that the designation of
such Person to serve as Special Servicer is in compliance with this Section 3.23
and all other applicable provisions of this Agreement, that upon the execution
and delivery of the written acceptance referred to in the immediately preceding
clause (ii), 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. The existing Special Servicer shall be deemed to
have resigned simultaneously with such designated Person's becoming the Special
Servicer hereunder; provided, however, that (i) the resigning 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, and (ii) it and its
directors, officers, employees and agents 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 deposited in the REO Account or delivered by the Special Servicer to
the Master Servicer or that are thereafter received with respect to Specially
Serviced Mortgage Loans and REO Properties.
SECTION 3.24 Lock-Box Accounts and Servicing Accounts.
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(a) The Master Servicer shall administer each Lock-Box Account, Cash
Collateral Account and Servicing Account in accordance with the related Mortgage
Loan, Cash Collateral Account Agreement or Lock-Box Agreement, if any.
(b) For any Mortgage Loan that provides that a Lock-Box Account or
Cash Collateral Account will be established upon the occurrence of certain
events specified in such Mortgage Loan, the Master Servicer (or, with respect to
any Specially Serviced Loan, the Special Servicer) shall use reasonable efforts
to establish or cause to be established such Lock-Box Account upon the
occurrence of such events unless the Master Servicer (or the Special Servicer,
as applicable) determines, in accordance with the Servicing Standards, that such
Lock-Box Account should not be established. Notwithstanding the foregoing, the
Master Servicer (or the Special Servicer, as applicable) shall use reasonable
efforts to establish or cause to be established a Lock-Box Account for each ARD
Loan no later than its Anticipated Repayment Date.
SECTION 3.25 Representations and Warranties of the Master Servicer
and the Special Servicer.
GMACCM, in its capacity as both Master Servicer and Special Servicer
hereunder hereby represents and warrants to the Trustee, for its own benefit and
the benefit of the Certificateholders, and to the Depositor, as of the Closing
Date, that:
(i) GMACCM is a corporation, duly organized, validly existing and in
good standing under the laws of the State of California, and GMACCM 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 GMACCM, and the
performance and compliance with the terms of this Agreement by GMACCM, will not
violate GMACCM's organizational documents or constitute a default (or an event
which, with notice or lapse of time, or both, would constitute a default) under,
or result in the breach of, any material agreement or other instrument to which
it is a party or which is applicable to it or any of its assets.
(iii) GMACCM has the full power and authority to enter into and
consummate all transactions contemplated by this Agreement, has duly authorized
the execution, delivery and performance of this Agreement, and has duly executed
and delivered this Agreement.
(iv) This Agreement, assuming due authorization, execution and
delivery by the other parties hereto, constitutes a valid, legal and binding
obligation of GMACCM, enforceable against GMACCM in accordance with the terms
hereof, subject to (A) applicable bankruptcy, insolvency, reorganization,
moratorium and other laws affecting the enforcement of creditors'
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rights generally, and (B) general principles of equity, regardless of whether
such enforcement is considered in a proceeding in equity or at law.
(v) GMACCM 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, 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 GMACCM's good
faith and reasonable judgment, is likely to affect materially and adversely
either the ability of GMACCM to perform its obligations under this Agreement or
the financial condition of GMACCM.
(vi) No litigation is pending or, to the best of GMACCM's knowledge,
threatened against GMACCM the outcome of which, in GMACCM's good faith and
reasonable judgment, could reasonably be expected to prohibit GMACCM from
entering into this Agreement or materially and adversely affect the ability of
GMACCM to perform its obligations under this Agreement.
(vii) GMACCM has errors and omissions insurance coverage which is
in full force and effect and complies with the requirements of Section 3.07
hereof.
(viii) No consent, approval, authorization or order, registration
or filing with or notice to, any governmental authority or court is required,
under federal or state law, for the execution, delivery and performance of or
compliance by GMACCM with this Agreement, or the consummation by GMACCM of any
transaction contemplated hereby, other than (1) such consents, approvals,
authorizations, qualifications, registrations, filings, or notices as have been
obtained or made and (2) where the lack of such consent, approval,
authorization, qualification, registration, filing or notice would not have a
material adverse effect on the performance by GMACCM under this Agreement.
ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS
AND RELATED MATTERS
SECTION 4.01 Distributions.
(a) On each Distribution Date, the Trustee shall be deemed to apply
the Available Distribution Amount for such date for the following purposes and
in the following order of priority:
(i) to pay interest to REMIC II in respect of the various REMIC I
Regular Interests, up to an amount equal to, and PRO RATA in accordance with,
all Uncertificated
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Distributable Interest for each such REMIC I Regular Interest for such
Distribution Date and, to the extent not previously deemed paid, for all prior
Distribution Dates;
(ii) to pay principal to REMIC II in respect of the various REMIC I
Regular Interests, up to an amount equal to, and PRO RATA in accordance with, in
the case of each such REMIC I Regular Interest for such Distribution Date, 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, REO Loan or, if
applicable, Replacement Mortgage Loan(s), as the case may be, that will be
outstanding immediately following such Distribution Date; and
(iii) to reimburse REMIC II for any Realized Losses and Additional
Trust Fund Expenses previously deemed allocated to the various REMIC I Regular
Interests, up to an amount equal to, and PRO RATA in accordance with, the Loss
Reimbursement Amount for each such REMIC I Regular Interest immediately prior to
such Distribution Date.
On each Distribution Date, the Trustee shall pay to the Holders of the
Class R-I Certificates, in accordance with Section 4.01(c), that portion, if
any, of the Available Distribution Amount for such date that has not otherwise
been deemed paid to REMIC II in respect of the REMIC I Regular Interests
pursuant to the foregoing provisions of this Section 4.01(a) (such portion, the
"Class R-I Distribution Amount" for such Distribution Date).
On each Distribution Date, the Trustee shall be deemed to apply
amounts relating to each Prepayment Premium then on deposit in the Distribution
Account and received during or prior to the related Collection Period, to pay
additional interest to REMIC II in respect of the REMIC I Regular Interest that
relates to the Mortgage Loan or REO Loan, as the case may be, as to which such
Prepayment Premium was received.
All amounts (other than additional interest in the form of amounts
relating to Prepayment Premiums) deemed paid to REMIC II in respect of the REMIC
I Regular Interests pursuant to this Section 4.01(a) on any Distribution Date is
hereinafter referred to as the "REMIC II Distribution Amount" for such date.
(b) On each Distribution Date, the Trustee shall be deemed to apply
the REMIC II Distribution Amount for such date for the following purposes and in
the following order of priority:
(i) to pay interest to REMIC III in respect of all REMIC II Regular
Interests up to an amount equal to all Uncertificated Distributable Interest in
respect of such REMIC II Regular Interests for such Distribution Date and, to
the extent not previously deemed paid, for all prior Distribution Dates with
such payments allocated among the REMIC II Regular Interests such that remaining
amounts, if any, of unpaid interest on each such REMIC II Regular Interest
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will equate to the remaining unpaid accrued interest on the corresponding Class
of Principal Balance Certificates or Class X Component outstanding after all
subsequent adjustments made on such Distribution Date under Section 4.01(c)
below;
(ii) to pay principal to REMIC III in respect of all REMIC II Regular
Interests apportioned as payment of Uncertificated Principal Balance among REMIC
II Regular Interests such that the remaining Uncertificated Principal Balance of
each such class will equal the then outstanding Class Principal Balance of the
corresponding Principal Balance Certificate after all subsequent adjustments
made on such Distribution Date under Section 4.01(c) below (other than payments
thereunder in reimbursement of any Realized Losses and Additional Trust Fund
Expenses); and
(iii) to reimburse REMIC III for any Realized Losses and
Additional Trust Fund Expenses previously deemed allocated to REMIC II Regular
Interests, apportioned among the REMIC II Regular Interests consistent with the
reimbursement payments made on the corresponding Classes of Principal Balance
Certificates on such Distribution Date under Section 4.01(c) below.
On each Distribution Date, the Trustee shall pay to the Holders of the
Class R-II Certificates, in accordance with Section 4.01(c), that portion, if
any, of the REMIC II Distribution Amount for such date that has not otherwise
been deemed paid to REMIC III in respect of the REMIC II Regular Interests
pursuant to the foregoing provisions of this Section 4.01(b) (such portion, the
"Class R-II Distribution Amount" for such Distribution Date).
On each Distribution Date, the Trustee shall be deemed to apply all
amounts relating to Prepayment Premiums then on deposit in the Distribution
Account and received during or prior to the related Collection Period, to pay
additional interest to REMIC III in respect of REMIC II Regular Interests
allocable among the REMIC II Regular Interests in an amount with respect to each
REMIC II Regular Interest equal to the amount allocable to the corresponding
Class of Principal Balance Certificates and Class X Component outstanding after
all subsequent adjustments made on such Distribution Date under Section 4.01(c)
below.
(c) On each Distribution Date, following the deemed payments to
REMIC III in respect of the REMIC II Regular Interests on such date pursuant to
Section 4.01(b), the Trustee shall withdraw from the Distribution Account the
Available Distribution Amount for such Distribution Date and shall apply such
amount for the following purposes and in the following order of priority:
(i) to pay interest to the Holders of the respective Classes of
Senior Certificates, in an amount equal to, and PRO RATA in accordance
with, all Distributable Certificate Interest in respect of each such
Class of Certificates for
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such Distribution Date and, to the extent not previously paid, for all
prior Distribution Dates;
(ii) to pay principal FIRST to the Holders of the Class A-1
Certificates and SECOND to the Holders of the Class A-2 Certificates,
in each case, up to an amount equal to the lesser of (1) the then
outstanding Class Principal Balance of such Class of Certificates and
(2) the remaining portion, if any, of such Principal Distribution
Amount;
(iii) to reimburse the Holders of the respective Classes of
Class A Certificates, up to an amount equal to and PRO RATA as among
such Classes in accordance with, the respective amounts of Realized
Losses and Additional Trust Fund Expenses, if any, previously deemed
allocated to such Classes of Certificates and for which no
reimbursement has previously been paid; and
(iv) to make payments on the Subordinated Certificates pursuant
to the following paragraph;
provided that, on each Distribution Date after the aggregate of the Class
Principal Balances of the Subordinated Certificates has been reduced to zero,
and in any event on the Final Distribution Date, the payments of principal to be
made pursuant to clause (ii) above, will be so made to the Holders of the
respective Classes of Class A Certificates, up to an amount equal to, and PRO
RATA as among such Classes in accordance with, the respective then outstanding
Class Principal Balances of such Classes of Certificates. References to
"remaining Principal Distribution Amount" shall be to the Principal Distribution
Amount net of any distributions of principal made in respect thereof to the
Holders of each Class of Class A Certificates that, pursuant to clause (ii)
above, have a prior right to payment with respect thereto.
On each Distribution Date, following the foregoing series of payments
on the Senior Certificates, the Trustee shall apply the remaining portion, if
any, of the Available Distribution Amount for such date for the following
purposes and in the following order of priority:
(i) to pay interest to the Holders of the Class B Certificates, up to
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;
(ii) if the Class Principal Balances of the Class A Certificates have
been reduced to zero, to pay principal to the Holders of the Class B
Certificates, up to an amount equal to the lesser of (A) the then outstanding
Class Principal Balance of such Class of Certificates and (B) the remaining
Principal Distribution Amount for such Distribution Date;
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(iii) to reimburse the Holders of the Class B Certificates, up to
an amount equal to all Realized Losses and Additional Trust Fund Expenses, if
any, previously deemed allocated to such Class of Certificates and for which no
reimbursement has previously been paid;
(iv) to pay interest to the Holders of the Class C Certificates, up to
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;
(v) if the Class Principal Balances of the Class A and Class B
Certificates have been reduced to zero, to pay principal to the Holders of the
Class C Certificates, up to an amount equal to the lesser of (A) the then
outstanding Class Principal Balance of such Class of Certificates and (B) the
remaining Principal Distribution Amount for such Distribution Date;
(vi) to reimburse the Holders of the Class C Certificates, up to an
amount equal to all Realized Losses and Additional Trust Fund Expenses, if any,
previously deemed allocated to such Class of Certificates and for which no
reimbursement has previously been received;
(vii) to pay interest to the Holders of the Class D Certificates, up
to 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;
(viii) if the Class Principal Balances of the Class A, Class B and
Class C Certificates have been reduced to zero, to pay principal to the Holders
of the Class D Certificates, up to an amount equal to the lesser of (A) the then
outstanding Class Principal Balance of such Class of Certificates and (B) the
remaining Principal Distribution Amount for such Distribution Date;
(ix) to reimburse the Holders of the Class D Certificates, up to an
amount equal to all Realized Losses and Additional Trust Fund Expenses, if any,
previously deemed allocated to such Class of Certificates and for which no
reimbursement has previously been received;
(x) to pay interest to the Holders of the Class E Certificates, up to
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;
(xi) if the Class Principal Balances of the Class A, Class B, Class C
and Class D Certificates have been reduced to zero, to pay principal to the
Holders of the Class E Certificates, up to an amount equal to the lesser of
(A) the then outstanding Class Principal Balance of such Class of Certificates
and (B) the remaining Principal Distribution Amount for such Distribution Date;
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(xii) to reimburse the Holders of the Class E Certificates, up to
an amount equal to all Realized Losses and Additional Trust Fund Expenses, if
any, previously deemed allocated to such Class of Certificates and for which no
reimbursement has previously been received;
(xiii) to pay interest to the Holders of the Class F Certificates,
up to 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;
(xiv) if the Class Principal Balances of the Class A, Class B,
Class C, Class D and Class E Certificates have been reduced to zero, to pay
principal to the Holders of the Class F Certificates, up to an amount equal to
the lesser of (A) the then outstanding Class Principal Balance of such Class of
Certificates and (B) the remaining Principal Distribution Amount for such
Distribution Date;
(xv) to reimburse the Holders of the Class F Certificates, up to an
amount equal to all Realized Losses and Additional Trust Fund Expenses, if any,
previously deemed allocated to such Class of Certificates and for which no
reimbursement has previously been received;
(xvi) to pay interest to the Holders of the Class G Certificates,
up to 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;
(xvii) if the Class Principal Balances of the Class A, Class B,
Class C, Class D, Class E and Class F Certificates have been reduced to zero, to
pay principal to the Holders of the Class G Certificates, up to an amount equal
to the lesser of (A) the then outstanding Class Principal Balance of such Class
of Certificates and (B) the remaining Principal Distribution Amount for such
Distribution Date;
(xviii) to reimburse the Holders of the Class G Certificates, up to
an amount equal to all Realized Losses and Additional Trust Fund Expenses, if
any, previously deemed allocated to such Class of Certificates and for which no
reimbursement has previously been received;
(xix) to pay interest to the Holders of the Class H Certificates,
up to 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;
(xx) if the Class Principal Balances of the Class A, Class B, Class C,
Class D, Class E, Class F and Class G Certificates have been reduced to zero, to
pay principal to the Holders of the Class H Certificates, up to an amount equal
to the lesser of (A) the then outstanding Class Principal Balance of such Class
of Certificates and (B) the remaining Principal Distribution Amount for such
Distribution Date;
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(xxi) to reimburse the Holders of the Class H Certificates, up to
an amount equal to all Realized Losses and Additional Trust Fund Expenses, if
any, previously deemed allocated to such Class of Certificates and for which no
reimbursement has previously been received;
(xxii) to pay interest to the Holders of the Class J Certificates,
up to 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;
(xxiii) if the Class Principal Balances of the Class A, Class B,
Class C, Class D, Class E, Class F, Class G and Class H Certificates have been
reduced to zero, to pay principal to the Holders of the Class J Certificates, up
to an amount equal to the lesser of (A) the then outstanding Class Principal
Balance of such Class of Certificates and (B) the remaining Principal
Distribution Amount for such Distribution Date;
(xxiv) to reimburse the Holders of the Class J Certificates, up to
an amount equal to all Realized Losses and Additional Trust Fund Expenses, if
any, previously deemed allocated to such Class of Certificates and for which no
reimbursement has previously been received;
(xxv) to pay interest to the Holders of the Class K Certificates,
up to 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;
(xxvi) if the Class Principal Balances of the Class A, Class B,
Class C, Class D, Class E, Class F, Class G, Class H and Class J Certificates
have been reduced to zero, to pay principal to the Holders of the Class K
Certificates, up to an amount equal to the lesser of (A) the then outstanding
Class Principal Balance of such Class of Certificates and (B) the remaining
Principal Distribution Amount for such Distribution Dates;
(xxvii) to reimburse the Holders of the Class K Certificates, up to an
amount equal to all Realized Losses and Additional Trust Fund Expenses, if any,
previously deemed allocated to such Class of Certificates and for which no
reimbursement has previously been received;
(xxviii) to pay interest to the Holders of the Class L Certificates,
up to 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;
(xxix) if the Class Principal Balances of the Class A, Class B,
Class C, Class D, Class E, Class F, Class G, Class H, Class J and Class K
Certificates have been reduced to zero, to pay principal to the Holders of the
Class L Certificates, up to an amount equal to the lesser of (A) the then
outstanding Class Principal Balance of such Class of Certificates and (B) the
remaining Principal Distribution Amount for such Distribution Date;
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(xxx) to reimburse the Holders of the Class L Certificates, up to
an amount equal to all Realized Losses and Additional Trust Fund Expenses, if
any, previously deemed allocated to such Class of Certificates and for which no
reimbursement has previously been received;
(xxxi) to pay interest to the Holders of the Class M Certificates,
up to 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;
(xxxii) if the Class Principal Balances of the Class A, Class B, Class
C, Class D, Class E, Class F, Class G, Class H, Class J, Class K and Class L
Certificates have been reduced to zero, to pay principal to the Holders of the
Class M Certificates, up to an amount equal to the lesser of (A) the then
outstanding Class Principal Balance of such Class of Certificates and (B) the
remaining Principal Distribution Amount for such Distribution Date;
(xxxiii) to reimburse the Holders of the Class M Certificates, up to
an amount equal to all Realized Losses and Additional Trust Fund Expenses, if
any, previously deemed allocated to such Class of Certificates and for which no
reimbursement has previously been received;
(xxxiv) to pay interest to the Holders of the Class N Certificates, up
to 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;
(xxxv) if the Class Principal Balances of the Class A, Class B, Class
C, Class D, Class E, Class F, Class G, Class H, Class J, Class K, Class L and
Class M Certificates have been reduced to zero, to pay principal to the Holders
of the Class N Certificates, up to an amount equal to the lesser of (A) the then
outstanding Class Principal Balance of such Class of Certificates and (B) the
remaining Principal Distribution Amount for such Distribution Date;
(xxxvi) to reimburse the Holders of the Class N Certificates, up to an
amount equal to all Realized Losses and Additional Trust Fund Expenses, if any,
previously deemed allocated to such Class of Certificates and for which no
reimbursement has previously been received;
(xxxvii) to make payments to the Holders of the Class R-I Certificates
up to the amount of the Class R-I Distribution Amount for such Distribution
Date;
(xxxviii) to make payments to the Holders of the Class R-II
Certificates up to the amount of the Class R-II Distribution Amount for such
Distribution Date; and
(xxxix) to pay to the Holders of the Class R-III Certificates the
balance, if any, of the Available Distribution Amount for such Distribution
Date;
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provided that, on the Final Distribution Date, the payments of principal to be
made pursuant to any of clauses (ii), (v), (viii), (xi), (xiv), (xvii), (xx),
(xxiii), (xxvi), (xxix), (xxxii) and (xxxv) above with respect to any Class of
Principal Balance Certificates, will be so made to the Holders thereof, up to an
amount equal to the entire then outstanding Class Principal Balance of such
Class of Certificates. References to "remaining Principal Distribution Amount"
in any of clauses (ii), (v), (viii), (xi), (xiv), (xvii), (xx), (xxiii), (xxvi),
(xxix), (xxxii) and (xxxv) above, in connection with the payments of principal
to be made to the Holders of any Class of Principal Balance Certificates, shall
be to the Principal Distribution Amount for such Distribution Date, net of any
payments of principal made in respect thereof to the Holders of each Class of
Principal Balance Certificates that have a higher Payment Priority.
On each Distribution Date, the Trustee shall withdraw any amounts then
on deposit in the Distribution Account that represent Prepayment Premiums
collected during or prior to the related Collection Period and shall distribute
such amounts, in each case, subject to available funds, as additional interest,
as follows:
(i) to the Holders of the Class A, Class B, Class C, Class D,
Class E, Class F and Class G Certificates up to an amount equal to, in
the case of each such Class, the product of (a) such Prepayment
Premiums, (b) the applicable Discount Rate Fraction and (c) the
Principal Allocation Fraction of such Class; and
(ii) then, to the Holders of the Class X Certificates.
All of the foregoing distributions to be made from the Distribution
Account on any Distribution Date with respect to the REMIC III Certificates
shall be deemed made from the payments deemed made to REMIC II in respect of the
REMIC II Regular Interests on such Distribution Date pursuant to
Section 4.01(b).
On each Distribution Date, the Trustee shall withdraw from the
Distribution Account, as Grantor Trust Assets, any amounts that represent
Excess Interest actually collected on the ARD Loans and any related REO Loans
during the related Collection Period and shall distribute with respect to their
interests in the Grantor Trust, 5% of such amounts to the Class X Certificates
and 95% of such amounts among the Class A-2 Certificates, the Class B
Certificates, the Class C Certificates, the Class D Certificates, the Class E
Certificates, 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 M Certificates and the Class N Certificates on a PRO
RATA basis in accordance with the respective initial Class Principal Balances of
such Classes of Certificates, without regard to whether any such Class is
entitled to distributions of principal on such Distribution Date (whether by
reason of its Class Principal Balance having been reduced to zero, by reason of
it not yet being entitled to distributions of principal, or for any other
reason).
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(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 in the last paragraph of Section 4.01(c) or as 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 Trustee 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. 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 Registrar or to any other address of
which the Trustee was subsequently notified in writing.
(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 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 Certificate Owners that it represents. None of the Trustee, the
Certificate Registrar, the Depositor, the Master Servicer or the Special
Servicer shall have any responsibility therefor except as otherwise provided by
this Agreement or applicable law.
(f) The rights of the Certificateholders to receive distributions
from the proceeds of the Trust Fund in respect of their 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. Distributions in reimbursement of
Realized Losses and Additional Trust Fund Expenses previously allocated to a
Class of Certificates shall not constitute distributions of principal and shall
not result in a reduction of the related Class Principal Balance.
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(g) Except as otherwise provided in Section 9.01, whenever the
Trustee 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 Trustee
shall, as soon as practicable in the month in which such Distribution Date
occurs, mail to each Holder of such Class of Certificates as of the date of
mailing a notice to the effect that:
(i) the Trustee 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 offices of the
Certificate Registrar or such other location therein specified, and
(ii) no interest shall accrue on such Certificates from and after the
applicable Interest Accrual Period for such Distribution Date.
Any funds not distributed to any Holder or Holders of Certificates of such Class
on such Distribution Date because of the failure of such Holder or Holders to
tender their Certificates, shall, on such date, be set aside and held uninvested
in trust and credited to the account or accounts of the appropriate
non-tendering Holder or Holders. If any Certificates as to which notice has
been given pursuant to this Section 4.01(g) shall not have been surrendered for
cancellation within six months after the time specified in such notice, the
Trustee 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 Trustee, directly or through an agent, shall take such steps
to contact the remaining nontendering 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 Certificateholder on any
amount held in trust hereunder by the Trustee as a result of such
Certificateholder's failure to surrender its Certificate(s) for final payment
thereof in accordance with this Section 4.01(g). If all of the Certificates
shall not have been surrendered for cancellation by the second anniversary of
the delivery of the second notice, the Trustee shall distribute all unclaimed
funds and other assets which remain subject hereto in accordance with applicable
laws.
(h) Notwithstanding any other provision of this Agreement, the
Trustee shall comply with all federal withholding requirements respecting
payments to Certificateholders of interest or original issue discount that the
Trustee reasonably believes are applicable under the Code. The consent of
Certificateholders shall not be required for such withholding. In the event the
Trustee does withhold any amount from interest or original issue discount
payments or advances thereof to any Certificateholder pursuant to federal
withholding requirements, the
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Trustee shall indicate the amount withheld to such Certificateholders. All
amounts withheld shall be deemed to have been paid to such Certificateholders.
SECTION 4.02 Statements to Certificateholders; Certain Reports by
the Master Servicer and the Special Servicer.
(a) Subject to Section 8.02(v), based on information received from
the Master Servicer, on each Distribution Date, the Trustee shall forward by
mail or other means as provided herein to all of the Holders of each Class of
Certificates (and, in the case of a Class of Book-Entry Certificates, to each
related Certificate Owner that makes a written request therefor and certifies as
to its Ownership Interest in such Class) and to the Rating Agencies written
reports, including reports in substantially the form attached hereto as Exhibit
G (the "Distribution Date Statement"), setting forth, among other things, the
following information:
(i) the amount of distributions, if any, made on such Distribution
Date to the holders of each Class of Principal Balance Certificates and applied
to reduce the respective Class Principal Balances thereof;
(ii) the amount of distributions, if any, made on such Distribution
Date to the Holders of each Class of REMIC III Regular Certificates allocable to
(A) Distributable Certificate Interest, (B) Prepayment Premiums and (C) Excess
Interest;
(iii) the amount of any distributions made on such Distribution
Date to the Holders of each Class of Residual Certificates;
(iv) the aggregate amount of outstanding Delinquency Advances as of
the end of the prior calendar month;
(v) the aggregate amount of servicing compensation retained by or
paid to the Master Servicer and the Special Servicer in respect of the related
Collection Period;
(vi) the aggregate Stated Principal Balance of the Mortgage Pool
immediately before and after such Distribution Date and the percentage of the
Cut-off Date Principal Balance of the Mortgage Pool which remains outstanding
immediately after such Distribution Date;
(vii) the number, aggregate principal balance, weighted average
remaining term to maturity and weighted average Mortgage Rate of the outstanding
Mortgage Loans in the Mortgage Pool at the close of business on the related
Determination Date;
(viii) as of the end of the prior calendar month, the number and
aggregate unpaid principal balance of Mortgage Loans in the Mortgage Pool
(A) delinquent one month, (B) delinquent two months, (C) delinquent three or
more months, (D) that are Specially Serviced
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Mortgage Loans but are not delinquent or (E) as to which foreclosure proceedings
have been commenced;
(ix) with respect to any Mortgage Loan as to which the related
Mortgaged Property became an REO Property during the related Collection Period,
the Stated Principal Balance and unpaid principal balance of such Mortgage Loan
as of the date such Mortgaged Property became an REO Property;
(x) as to any Mortgage Loan repurchased or otherwise liquidated or
disposed of during the related Collection Period, the loan number thereof and
the amount of any Liquidation Proceeds and/or other amounts, if any, received
thereon during the related Collection Period and the portion thereof included in
the Available Distribution Amount for such Distribution Date;
(xi) with respect to any REO Property included in the Trust Fund as of
the close of business on the last day of the related Collection Period, the loan
number of the related Mortgage Loan, the book value of such REO Property and the
amount of any income collected with respect to such REO Property (net of related
expenses) and other amounts, if any, received on such REO Property during the
related Collection Period and the portion thereof included in the Available
Distribution Amount for such Distribution Date;
(xii) with respect to any REO Property sold or otherwise disposed
of during the related Collection Period, the loan number of the related Mortgage
Loan, and the amount of Liquidation Proceeds and other amounts, if any, received
in respect of such REO Property during the related Collection Period and the
portion thereof included in the Available Distribution Amount for such
Distribution Date;
(xiii) the Distributable Certificate Interest in respect of each
Class of REMIC III Regular Certificates for such Distribution Date;
(xiv) any unpaid Distributable Certificate Interest in respect of
each Class of REMIC III Regular Certificates after giving effect to the
distributions made on such Distribution Date;
(xv) the Pass-Through Rate for each Class of REMIC III Regular
Certificates for such Distribution Date and the next Distribution Date;
(xvi) the Class Principal Balance or Class Notional Amount, as the
case may be, of each Class of REMIC III Regular Certificates immediately before
and immediately after such Distribution Date, separately identifying any
reduction in the Class Principal Balance or Class Notional Amount, as the case
may be, of each such Class due to Realized Losses and Additional Trust Fund
Expenses;
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(xvii) the Certificate Factor for each Class of REMIC III Regular
Certificates immediately following such Distribution Date;
(xviii) the Principal Distribution Amount for such Distribution
Date;
(xix) the aggregate amount of Principal Prepayments made during
the related Collection Period, and the aggregate amount of any Prepayment
Interest Excesses received and Prepayment Interest Shortfalls incurred in
connection therewith;
(xx) the aggregate amount of Realized Losses and Additional Trust Fund
Expenses, if any, incurred with respect to the Trust Fund during the related
Collection Period;
(xxi) on a cumulative basis from the Cut-off Date, the number,
aggregate Stated Principal Balance immediately after such Distribution Date (in
the case of subclauses (A), (B) and (E)), aggregate Cut-off Date Balance (in the
case of subclauses (C) and (D)), weighted average extension period (except in
the case of subclause (B) and which shall be zero in the case of subclause (C)),
and weighted average anticipated extension period (in the case of subclause (B))
of Mortgage Loans
(A) as to which the Maturity Dates have been extended;
(B) as to which the Maturity Dates are in the process of being
extended;
(C) that have paid off and were never extended;
(D) as to which the Maturity Dates had previously been extended and
have paid off; and
(E) as to which the Maturity Dates had been previously extended and
are in the process of being further extended;
(xxii) any Appraisal Reduction Amounts on a loan-by-loan basis, and
the total Appraisal Reduction Amounts, as of the related Determination Date;
(xxiii) the aggregate amount of any Balloon Payment Interest
Excesses and Balloon Payment Interest Shortfalls for the related Collection
Period; and
(xxiv) such additional information as contemplated by Exhibit G
hereto.
In the case of information furnished pursuant to subclauses (i), (ii), (iii) and
(xvi) above, the amounts shall be expressed as a dollar amount in the aggregate
for all Certificates of each
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applicable Class and per single Certificate of a specified minimum denomination.
The form of any Distribution Date Statement may change over time.
The Trustee shall make available to Certificateholders and other
interested parties certain information via electronic transmission as may be
agreed upon by the Depositor and the Trustee, including the information and
reports described in clauses (1) through (7) of clause (b) below and the CSSA
Loan File and CSSA Property File delivered for each Distribution Date. In
addition, the Trustee shall make available to each Certificateholder, to each
Certificate Owner that makes a written request therefor and certifies as to its
Ownership Interest in any Class of Book-Entry Certificates, to each Underwriter
and to the Rating Agencies, a report (based on information received from the
Master Servicer and in a format mutually acceptable to the Trustee and the
Master Servicer) containing, information regarding the Mortgage Pool as of the
close of business on the related Determination Date, which report shall contain
substantially the categories of information regarding the Mortgage Loans set
forth in Exhibit G hereto (calculated, where applicable, on the basis of the
most recent relevant information provided by the Mortgagors to the Master
Servicer or the Special Servicer and by the Master Servicer or the Special
Servicer, as the case may be, to the Trustee) and such information shall be
presented in a tabular format substantially similar to the formats utilized in
Exhibit G hereto. On each Distribution Date, the Trustee shall make (x)
certain information contained in the monthly Distribution Date Statement
available through its ASAP System to Certificateholders and Certificate Owners
calling (312) 904-2200 and requesting statement No. 354 and (y) certain
information regarding the Mortgage Loans available in electronic format through
its dial up bulletin board service, to Certificateholders and Certificate
Owners dialing telephone number (714) 282-3990. Additionally, certain
information regarding the Mortgage Loans will be made accessible at the website
maintained by LaSalle National Bank at www.lnbabs.com. At any time after
November 27, 1998, the Trustee may provide such information through means other
than (and in lieu of) its ASAP System, dial up bulletin board service or
website provided that (i) Lehman Brothers Inc. and the GMACCM shall have
consented to such alternative means and (ii) Certificateholders shall have
received notice of such alternative means.
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 Certificate a statement containing the
information as to the applicable Class set forth in clauses (i), (ii)
and (iii) of the description of Distribution Date Statements above aggregated
for such calendar year or applicable portion thereof during which such person
was a Certificateholder, together with such other information as the Trustee
determines to be necessary to enable Certificateholders to prepare their tax
returns for such calendar year. 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 filing with the Internal Revenue Service, the Trustee shall
furnish to the Holders of the Residual Certificates the Form 1066 and shall
furnish their respective Schedules Q thereto at the times required by the Code
or the Internal Revenue Service, and shall provide from
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time to time such information and computations with respect to the entries on
such forms as any Holder of the Residual Certificates may reasonably request.
The specification of information to be furnished by the Trustee to the
Certificateholders in this Section 4.02 (and any other terms of this Agreement
requiring or calling for delivery or reporting of information by the Trustee to
Certificateholders and Certificate Owners) shall not limit the Trustee in
furnishing, and the Trustee is hereby authorized to furnish, to
Certificateholders, Certificate Owners and/or to the public any other
information (such other information, collectively, "Additional 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, provided that (A) while there exists 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), (B) 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 sole
discretion (together with any warnings as to the confidential nature and/or the
uses of such information as it may, in its sole discretion, determine
appropriate), (C) the Trustee may notify Certificateholders and Certificate
Owners of the availability of any such information in any manner as it, in its
sole discretion, may determine, (D) the Trustee shall be entitled (but not
obligated) to require payment from each recipient of a reasonable fee for, and
its out-of-pocket expenses incurred in connection with, the collection,
assembly, reproduction or delivery of any such Additional Information, (E)
without the consent of the Depositor, the Trustee may, in its sole discretion,
furnish Additional Information to a Rating Agency in any instance, and to the
Certificateholders, Certificate Owners and/or the public-at-large if it
determines that the furnishing of such information would assist in the
evaluation of the investment characteristics or valuation of the Certificates or
would be in the best interests of the Certificateholders or is required by
applicable law and (F) the Trustee shall be entitled to distribute or make
available such Additional Information in accordance with such reasonable rules
and procedures as it may deem necessary or appropriate (which may include the
requirement that an agreement that provides such information shall be used
solely for purposes of evaluating the investment characteristics or valuation of
the Certificates be executed by the recipient, if and to the extent the Trustee
deems the same to be necessary or appropriate). 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, and the
Trustee shall neither have any liability for furnishing nor for refraining from
furnishing Additional Information in any instance. The Trustee shall be entitled
(but not required) to request and receive direction from the Depositor as to the
manner of delivery of any such Additional Information, if and to the extent the
Trustee deems necessary or advisable, and to require that any consent, direction
or request given to it pursuant to this Section be made in writing.
Upon the authorization of the Depositor, the Trustee shall make
available to Bloomberg Financial Markets, L.P. ("Bloomberg") all the reports
delivered or made available
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pursuant to this Section 4.02(a) to the Certificateholders and Certificate
Owners using a format and media mutually acceptable to the Trustee and
Bloomberg.
(b) At or before 11:00 a.m. (New York City time) on the third
Business Day prior to each Distribution Date, subject to the last paragraph of
this subsection (b), the Master Servicer shall deliver or cause to be delivered
to the Trustee (and, if the Master Servicer is not the Special Servicer, the
Trustee shall deliver to the Special Servicer) in form mutually acceptable to
the Trustee and the Master Servicer the following reports or information: (1) a
Delinquent Loan Status Report, (2) an REO Status Report, (3) a Historical Loan
Modification Report, (4) a Historical Loss Report, (5) the Servicer Watch List,
(6) a Loan Prepayment Request Report, and (7) a single report (the "Collection
Report") setting forth, among other things, the information specified in
clauses (i) through (vii) below (the amounts and allocations of payments,
collections, fees and expenses with respect to Specially Serviced Mortgage Loans
and REO Properties to be based upon the report to be delivered by the Special
Servicer to the Master Servicer on the second Business Day after the related
Determination Date, in the form required by Section 4.02(c) below):
(i) the aggregate amount that is to be transferred from the
Certificate Account to the Distribution Account in respect of such Distribution
Date that is allocable to principal on or in respect of the Mortgage Loans and
any REO Loans, separately identifying the aggregate amount of any Principal
Prepayments included therein, and (if different) the Principal Distribution
Amount for the immediately succeeding Distribution Date;
(ii) the aggregate amount that is to be transferred from the
Certificate Account to the Distribution Account in respect of such Distribution
Date that is allocable to (A) interest on or in respect of the Mortgage Loans
and any REO Loans, (B) Prepayment Premiums and (C) Excess Interest;
(iii) the aggregate amount of any Delinquency Advances (specifying
the principal and interest portions thereof separately) to made pursuant to
Section 4.03 of this Agreement as of the end of the prior calendar month that
were included in amounts deposited in the Distribution Account;
(iv) the information required to be included in the Distribution Date
Statement for the next succeeding Distribution Date and described in clauses (v)
- - (xii) and (xviii) - (xxiii) of the description of the Distribution Date
Statement in Section 4.02(a);
(v) the loan number and the unpaid principal balance as of the close
of business on such Determination Date of each Specially Serviced Mortgage Loan
and each other Defaulted Mortgage Loan;
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(vi) such other information on a Mortgage Loan-by-Mortgage Loan or REO
Property-by-REO Property basis as the Trustee or the Depositor shall reasonably
request in writing (including, without limitation, information with respect to
any modifications of any Mortgage Loan, any Mortgage Loans in default or
foreclosure, the operation and disposition of REO Property and the assumption of
any Mortgage Loan); and
(vii) such additional information as is contemplated by the Master
Servicer Remittance Report.
On the date on which the report described above is delivered to the
Trustee, the Master Servicer shall also deliver or cause to be delivered to the
Trustee a report, in form reasonably acceptable to the Trustee, containing the
information with respect to the Mortgage Pool necessary for the Trustee to
prepare with respect to the Mortgage Pool any additional schedules and tables
required to be made available by the Trustee pursuant to Section 4.02(a), as
well as to prepare an updated Mortgage Loan Schedule, in each case reflecting
the changes in the Mortgage Pool during the related Collection Period.
Prior to each Distribution Date, the Master Servicer will deliver to
the Trustee (by electronic means) (i) a "Comparative Financial Status Report"
containing substantially the content set forth in Exhibit I setting forth, among
other things, the occupancy, revenue, net operating income and debt service
coverage ratio for each Mortgage Loan (other than the Credit Lease Loans) or
related Mortgaged Property as of the Determination Date immediately preceding
the preparation of such report for each of the following three periods (but only
to the extent the related borrower is required by the Mortgage to deliver and
does deliver, or otherwise agrees to provide and does provide, such
information): (a) the most current available year-to-date; (b) each of the
previous two full fiscal years stated separately (to the extent such information
is in the Master Servicer's possession); and (c) the "base year" (representing
the original analysis of information used as of the Cut-Off Date); and (ii) a
"CSSA Loan File" and a "CSSA Property File" setting forth certain information
with respect to the Mortgage Loans and Mortgaged Properties, respectively.
In addition, the Master Servicer is also required to perform with respect
to each Mortgaged Property and REO Property (except any Mortgaged Property
securing a Credit Lease Loan):
(i) Within 30 days after receipt of a quarterly operating statement,
if any, commencing with the calendar quarter ended September 30, 1998, an
"Operating Statement Analysis" containing revenue, expense, and net
operating income information substantially in accordance with Exhibit I
presenting the computation made in accordance with the methodology set
forth in Exhibit F (but only to the extent the related borrower is required
by the Mortgage to deliver and does deliver, or otherwise agrees to provide
and does provide, such information) for such Mortgaged Property or REO
Property as of the
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end of such calendar quarter. The Master Servicer will deliver to the
Trustee by electronic means the Operating Statement Analysis upon request;
and
(ii) Within 30 days after receipt by the Master Servicer of an annual
operating statement, an NOI adjustment analysis containing substantially
the content set forth in Exhibit I (the "NOI Adjustment Worksheet") (but
only to the extent the related borrower is required by the Mortgage to
deliver and does deliver, or otherwise agrees to provide and does provide,
such information), presenting the computation made in accordance with the
methodology described in Exhibit F to "normalize" the full year net
operating income and debt service coverage numbers used by the Master
Servicer in preparing the Comparative Financial Status Report above. The
Master Servicer will deliver to the Trustee by electronic means the "NOI
Adjustment Worksheet" upon request.
Upon request, the Trustee shall deliver or shall cause to be delivered to each
Certificateholder, to any Underwriter, to the Rating Agencies, and to each
Certificate Owner that makes a written request therefor and certifies as to its
Ownership Interest in any Class of Book-Entry Certificates a copy of the
Operating Statement Analysis and NOI Adjustment Worksheet most recently
performed by the Master Servicer with respect to any Mortgage Loan and delivered
to the Trustee.
Not later than the first day of the calendar month following each
Master Servicer Remittance Date, the Master Servicer shall forward to the
Trustee a statement, setting forth the status of the Certificate Account as of
the close of business on such Master Servicer Remittance Date, stating that all
remittances to the Trustee required by this Agreement to be made by the Master
Servicer have been made (or, in the case of any such required remittance that
has not been made by the Master Servicer, specifying the nature and status
thereof) and showing, for the period from the preceding Master Servicer
Remittance Date (or, in the case of the first Master Servicer Remittance Date,
from the Cut-off Date) to such Master Servicer Remittance Date, the aggregate of
deposits into and withdrawals from the Certificate Account for each category of
deposit specified in Section 3.04(a) and each category of withdrawal specified
in Section 3.05(a). The Master Servicer shall also deliver to the Trustee, upon
reasonable request of the Trustee, any and all additional information relating
to the Mortgage Pool in the possession of the Master Servicer (which information
shall be based upon reports delivered to the Master Servicer by the Special
Servicer with respect to Specially Serviced Mortgage Loans and REO Properties).
The Master Servicer, on the first Business Day following each
Determination Date, shall forward to the Special Servicer all information
collected by the Master Servicer which the Special Servicer is required to
include in the reports delivered by the Special Servicer pursuant to Section
4.02(c) below. Further, the Master Servicer shall cooperate with the Special
Servicer and provide the Special Servicer with the information in the possession
of the Master Servicer reasonably requested by the Special Servicer, in writing,
to the extent required to allow the
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Special Servicer to perform its obligations under this Agreement with respect to
those Mortgage Loans serviced by the Master Servicer.
The obligation of the Master Servicer to deliver the reports required
to be delivered by it pursuant to this subsection (b) is subject to the Master
Servicer having received from the Special Servicer in a timely manner the
related reports and information necessary or required to enable the Master
Servicer to prepare and deliver such reports. The Master Servicer shall not be
responsible for the accuracy or content of any report, document or information
furnished by the Special Servicer to the Master Servicer pursuant to this
Agreement and accepted by the Master Servicer in good faith pursuant to this
Agreement.
(c) On the second Business Day after each Determination Date, the
Special Servicer shall forward to the Master Servicer, for each Specially
Serviced Mortgage Loan and REO Property, reports containing all information the
Master Servicer will be required to include in the other reports that the Master
Servicer is obligated to deliver to the Trustee pursuant to Section 4.02(b), to
the extent such information relates to any Specially Serviced Mortgage Loan or
any REO Property. The Special Servicer shall also deliver to the Trustee, upon
the reasonable written request of the Trustee, any and all additional
information in the possession of the Special Servicer relating to the Specially
Serviced Mortgage Loans and the REO Properties.
The Special Servicer shall cooperate with the Master Servicer and
provide the Master Servicer with the information in the possession of the
Special Servicer reasonably requested by the Master Servicer, in writing, to the
extent required to allow the Master Servicer to perform its obligations under
this Agreement with respect to the Specially Serviced Mortgage Loans and REO
Properties. Additional information regarding the Specially Serviced Mortgage
Loans and REO Properties, including, without limitation, any financial or
occupancy information (including lease summaries) provided to the Special
Servicer by the Mortgagors or otherwise obtained, shall be delivered to the
Master Servicer, within ten days of receipt.
(d) Each of the Master Servicer and Special Servicer may make
information concerning the Mortgage Loans available on any website that it has
established.
SECTION 4.03 Delinquency Advances.
(a) On each Delinquency Advance Date, the Master Servicer shall
either (i) deposit into the Certificate Account from its own funds an amount
equal to the aggregate amount of Delinquency Advances, if any, to be made in
respect of the related Distribution Date, (ii) apply amounts held in the
Certificate Account for future distribution to Certificateholders in subsequent
months in discharge of any such obligation to make Delinquency Advances, or
(iii) make Delinquency Advances in the form of any combination of (i) and (ii)
aggregating the total amount of Delinquency Advances to be made; provided that,
if Late Collections (net of related Workout Fees) of the delinquent Monthly
Payments for which Delinquency Advances are
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to be made for the related Distribution Date, are on deposit in the Certificate
Account and available to make such Advances, the Master Servicer shall utilize
such Late Collections to make such Advances pursuant to clause (ii) above. Any
amounts held in the Certificate Account for future distribution and so used to
make Delinquency 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 Delinquency Advances
were made). If, as of 3:00 p.m., New York City time, on any Master Servicer
Remittance Date, the Trustee shall not have received any Delinquency Advance
required to be made by the Master Servicer pursuant to this Section 4.03(a) (and
the Master Servicer shall not have delivered to the Trustee the requisite
Officer's Certificate and documentation related to a determination of
nonrecoverability of a Delinquency Advance), then the Trustee shall provide
notice of such failure to a Servicing Officer of the Master Servicer by
facsimile transmission sent to telecopy no. (215) 328-3478 (or such alternative
number provided by the Master Servicer to the Trustee in writing) and by
telephone at telephone no. (215) 328-1790 (Attention: Master Servicing Manager)
(or such alternative number provided by the Master Servicer to the Trustee in
writing) as soon as possible, but in any event before 5:00 p.m., New York City
time, on such day. If after such notice the Trustee does not receive the full
amount of such Delinquency Advances by 11:00 a.m., New York City time, on the
Business Day immediately following such Master Servicer Remittance Date, then
the Trustee shall make the portion of such Delinquency Advances that was
required to be, but was not, made by the Master Servicer pursuant to this
Section 4.03(a). If the Trustee fails to make a Delinquency Advance required to
be made by it hereunder, the Fiscal Agent shall make such advance no later than
1:00 p.m. New York City time on the Business Day immediately following such
Master Servicer Remittance Date. The making of such Advance by the Fiscal Agent
shall cure the failure by the Trustee to make such Advance.
(b) The aggregate amount of Delinquency Advances to be made by the
Master Servicer in respect of the Mortgage Loans (including, without limitation,
Assumed Monthly Payments for Balloon Mortgage Loans delinquent as to their
respective Balloon Payments) and any REO Loans for any Distribution Date shall
equal, subject to subsection (c) below, the aggregate of all Monthly Payments
(other than Balloon Payments) and any Assumed Monthly Payments, in each case net
of related Workout Fees payable hereunder, that were due or deemed due, as the
case may be, in respect thereof on their respective Due Dates during the same
month as such Distribution Date and that were not paid by or on behalf of the
related Mortgagors or otherwise collected as of the close of business on the
later of the related Due Date or the last day of the related Collection Period;
provided that, if an Appraisal Reduction Amount exists with respect to any
Required Appraisal Loan, then, in the event of subsequent delinquencies thereon,
the interest portion of the Delinquency Advance in respect of such Required
Appraisal Loan for the related Distribution Date shall be reduced (it being
herein acknowledged that there shall be no reduction in the principal portion of
such Delinquency Advance) to equal the product of (i) the amount of the interest
portion of such Delinquency Advance for such Required Appraisal Loan
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for such Distribution Date without regard to this proviso, multiplied by (ii) a
fraction, expressed as a percentage, the numerator of which is equal to the
Stated Principal Balance of such Required Appraisal Loan immediately prior to
such Distribution Date, net of the related Appraisal Reduction Amount, if any,
and the denominator of which is equal to the Stated Principal Balance of such
Required Appraisal Loan immediately prior to such Distribution Date.
(c) Notwithstanding anything herein to the contrary, no Delinquency
Advance shall be required to be made hereunder if such Delinquency Advance
would, if made, constitute a Nonrecoverable Delinquency Advance. In addition,
Nonrecoverable Delinquency Advances shall be reimbursable pursuant to Section
3.05(a) out of general collections on the Mortgage Loans and REO Properties on
deposit in the Certificate Account. The determination by the Master Servicer or,
if applicable, the Trustee or the Fiscal Agent, that it has made a
Nonrecoverable Delinquency Advance or that any proposed Delinquency Advance, if
made, would constitute a Nonrecoverable Delinquency Advance, shall be evidenced
by an Officer's Certificate delivered promptly (and, in any event, in the case
of a proposed Delinquency Advance to be made by the Master Servicer, no less
than two Business Days prior to the related Delinquency Advance Date) by the
Master Servicer to the Trustee (or, if applicable, retained thereby) and the
Depositor, setting forth the basis for such determination, together with (if
such determination is prior to the liquidation of the related Mortgage Loan or
REO Property) a copy of an Appraisal of the related Mortgaged Property or REO
Property, as the case may be, which shall have been performed within the twelve
months preceding such determination, and further accompanied by any other
information that the Master Servicer or the Special Servicer may have obtained
and that supports such determination. If such an Appraisal shall not have been
required and performed pursuant to the terms of this Agreement, the Master
Servicer, the Special Servicer, the Trustee or the Fiscal Agent, as the case may
be, may, subject to its reasonable and good faith determination that such
Appraisal will demonstrate the nonrecoverability of the related Advance, obtain
an Appraisal for such purpose at the expense of the Trust Fund. The Trustee and
the Fiscal Agent shall be entitled to rely on any determination of
nonrecoverability that may have been made by the Master Servicer or the Special
Servicer with respect to a particular Delinquency Advance, and the Master
Servicer shall be entitled to rely on any determination of nonrecoverability
that may have been made by the Special Servicer with respect to a particular
Delinquency Advance.
(d) The Master Servicer, the Trustee and the Fiscal Agent shall each
be entitled to receive interest at the Reimbursement Rate in effect from time to
time, accrued on the amount of each Delinquency Advance made thereby (out of its
own funds) for so long as such Delinquency Advance is outstanding (or, if any
Delinquency Advance is required to be made in respect of a delinquent Monthly
Payment on any Mortgage Loan prior to the end of the grace period for such
Monthly Payment, for so long as such Delinquency Advance is outstanding
following the end of such grace period), payable FIRST, out of Penalty Charges
received on the Mortgage Loan or REO Loan as to which such Delinquency Advance
was made and, THEN, once such Delinquency Advance has been reimbursed, out of
general collections on the Mortgage Loans and REO Properties pursuant to Section
3.05(a).
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SECTION 4.04 Allocation of Realized Losses and Additional Trust Fund
Expenses.
(a) On each Distribution Date, following the deemed distributions to
be made in respect of the REMIC I Regular Interests pursuant to Section 4.01(a),
the Uncertificated 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 or, if
applicable, Replacement Mortgage Loan(s), 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.
(b) On each Distribution Date, following the payments deemed to be
made to REMIC III in respect of the REMIC II Regular Interests on such date
pursuant to Section 4.01(b), the Trustee shall determine the amount, if any, by
which (i) the then aggregate Uncertificated Principal Balance of REMIC II
Regular Interests LA-1, LA-2, LB, LC, LD, LE, LF, LG, LH, LJ, LK, LL, LM and LN
exceeds (ii) an amount equal to the aggregate Stated Principal Balance of the
Mortgage Pool that will be outstanding immediately following such Distribution
Date. If such excess does exist, then the respective Uncertificated Principal
Balances of such REMIC II Regular Interests shall be reduced such that the
Uncertificated Principal Balance of each REMIC II Regular Interest corresponds
with the Certificate Principal Balance of the corresponding Class of Principal
Balance Certificates outstanding after the subsequent adjustments made on such
Distribution Date under Section 4.04(c) below.
(c) On each Distribution Date, following the distributions to be made
to the Certificateholders on such date pursuant to Section 4.01(c), the Trustee
shall determine the amount, if any, by which (i) the then aggregate Certificate
Principal Balance of the Principal Balance Certificates, exceeds (ii) the
aggregate Stated Principal Balance of the Mortgage Pool that will be outstanding
immediately following such Distribution Date. If such excess does exist, then
the Class Principal Balances of the Class N, Class M, Class L, Class K, Class J,
Class H, Class G, Class F, Class E, Class D, Class C and Class B Certificates
shall be reduced sequentially, in that order, in each case, until the first to
occur of such excess being reduced to zero or the related Class Principal
Balance being reduced to zero. If, after the foregoing reductions, the amount
described in clause (i) of the second preceding sentence still exceeds the
amount described in clause (ii) of the second preceding sentence, then the
respective Class Principal Balances of the Class A-1 and Class A-2 Certificates
shall be reduced, PRO RATA in accordance with the relative sizes of the then
outstanding Class Principal Balances of such Classes of Certificates, until the
first to occur of such excess being reduced to zero or each such Class Principal
Balance being reduced to zero. Such reductions in the Class Principal Balances
of the respective Classes of Principal Balance Certificates shall be deemed to
be allocations of Realized Losses and Additional Trust Fund Expenses.
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ARTICLE V
THE CERTIFICATES
SECTION 5.01 The Certificates.
(a) The Certificates will be substantially in the respective forms
annexed hereto as Exhibits A-1 through A-18. 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
REMIC III Regular Certificates will be issuable in denominations corresponding
to initial Certificate Principal Balances or Certificate Notional Amounts, as
the case may be, as of the Closing Date of not less than $25,000 in the case of
the Class A-1, Class A-2, Class B, Class C, Class D, Class E and Class F
Certificates, $100,000 in the case of the Class G, Class H, Class J, Class K,
Class L, Class M and Class N Certificates, and $1,000,000 in the case of the
Class X Certificates, and in each such case in any whole dollar denomination in
excess thereof; provided, however, that a single Certificate of each Class
thereof may be issued in a different denomination. The Residual Certificates
will be issuable only in denominations representing Percentage Interests of not
less than 20% in the related Class.
(b) The Certificates shall be executed by manual or facsimile
signature on behalf of the Trustee in its capacity as trustee hereunder by an
authorized officer. Certificates bearing the manual or facsimile signatures of
individuals who were at any time the authorized officers of the Trustee 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
Certificate Registrar 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
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exchanges of Certificates as herein provided. The Certificate Registrar may
appoint, by a written instrument delivered to the Depositor, the Master Servicer
and the Special 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 predecessor's
duties as Certificate Registrar. The Depositor, 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.
(b) (i) No transfer of any Non-Registered Certificate shall be made
unless such 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 a transfer by the
Depositor or an Affiliate thereof, then the Trustee shall require, in order to
assure compliance with such laws, receipt by it and the Depositor of:
(A) if such transfer is purportedly being made in reliance upon Rule 144A
under the Securities Act, a certificate from the Certificateholder desiring
to effect such transfer substantially in the form attached as Exhibit B-1
hereto and a certificate from such Certificateholder's prospective
transferee substantially in the form attached as Exhibit B-2 hereto; and
(B) in all other cases, (1) a certificate from the Certificateholder
desiring to effect such transfer substantially in the form attached hereto
as Exhibit B-1 and a certificate from such Certificateholder's prospective
transferee substantially in the form attached hereto as Exhibit B-3, and
(2) unless the Depositor directs otherwise, an Opinion of Counsel
satisfactory to the Trustee and the Depositor to the effect that such
transfer may be made without such registration (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, the Fiscal Agent or the
Certificate Registrar in their respective capacities as such).
(ii) Notwithstanding the foregoing, transfers of a beneficial
interest in any Class (or portion thereof) of Private Book-Entry Certificates in
accordance with the rules and procedures of the Depository applicable to
transfers by its respective participants will be permitted if such transfer is
made in accordance with Rule 144A promulgated under the Securities Act. Any
transfer of a beneficial interest in any Class (or portion thereof) of Private
Book-Entry Certificates other than pursuant to Rule 144A, or to a transferee
that wishes to take delivery of such interest in definitive form, will be
permitted upon:
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(A) receipt by the Trustee and the Depositor of the documentation required
by Section 5.02(b)(i)(A) or (B);
(B) the execution by the Trustee, and the authentication and delivery by
the Certificate Registrar to the transferee, of a Definitive Certificate
representing such beneficial interest; and
(C) to the extent that the beneficial interest being transferred does not
represent the entire Certificate Principal Balance of the related Class,
either (1) the execution by the Trustee, and the authentication and
delivery by the Certificate Registrar to the Depository (upon surrender by
the Depository of the prior Book-Entry Certificate) of, a new Private
Book-Entry Certificate representing the remaining beneficial interest of
such Class of Private Book-Entry Certificates or (2) the appropriate
notation by the Trustee on the Private Book-Entry Certificate or otherwise
in its books and records as custodian for the Depository evidencing the
date of such exchange or transfer and a decrease in the denomination of
such Private Book-Entry Certificate equal to the denomination of the
Definitive Certificate issued in exchange therefor or upon transfer
thereof.
(iii) None of the Depositor, the Trustee, the Fiscal Agent 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 does hereby agree to, indemnify the Depositor, the
Trustee, the Fiscal Agent and the Certificate Registrar 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) (i) No transfer of a Senior Certificate or any interest therein
shall be made (A) to any employee benefit plan or other retirement arrangement,
including individual retirement accounts and annuities, Keogh plans and
collective investment funds and separate accounts in which such plans, accounts
or arrangements are invested, that is subject to ERISA or Section 4975 of the
Code (each, a "Plan"), or (B) to any Person who is directly or indirectly
purchasing such Certificate or interest therein on behalf of, as named fiduciary
of, as trustee of, or with assets of a Plan, unless: (1) such Plan qualifies for
the exemptive relief available under the terms of Prohibited Transaction
Exemption 94-29 (granted to certain affiliates of the Depositor) or Prohibited
Transaction Exemption 91-14 or D-10433 granted to the underwriters of the
Certificates and (2) at the time of such transfer, the Senior Certificates
continue to be rated in one of the top three rating categories by at least one
Rating Agency.
(ii) No transfer of a Non-Registered Certificate that is not a Private
Book-Entry Certificate or any interest therein shall be made (A) to any Plan or
(B) to any Person who is directly or indirectly purchasing such Certificate or
interest therein on behalf of, as named
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fiduciary of, as trustee of, or with assets of a Plan, unless the prospective
transferee provides the Depositor, the Trustee, the Fiscal Agent and the Master
Servicer with an opinion of counsel satisfactory to the Depositor, the Trustee,
the Fiscal Agent and the Master Servicer that such transfer is permissible under
applicable law, will not constitute or result in any non-exempt prohibited
transaction under ERISA or Section 4975 of the Code and will not subject the
Depositor, the Trustee, the Fiscal Agent or the Master Servicer to any
obligation in addition to those undertaken herein. In lieu of such opinion of
counsel, the prospective transferee of a Non-Registered Certificate that is not
a Private Book-Entry Certificate may provide a certification of facts
substantially to the effect that the purchase of such Certificate by or on
behalf of, or with assets of, any Plan is permissible under applicable law, will
not constitute or result in any non-exempt prohibited transaction under ERISA or
Section 4975 of the Code, will not subject the Depositor, the Trustee, the
Fiscal Agent or the Master Servicer to any obligation in addition to those
undertaken herein, and the following conditions are met: (a) the source of funds
used to purchase such Certificate is an "insurance company general account" (as
such term is defined in United States Department of Labor Prohibited Transaction
Class Exemption 95-60 ("PTCE 95-60")) and (b) the conditions set forth in
Sections I and III of PTCE 95-60 have been satisfied as of the date of the
acquisition of such Certificates and the condition set forth in Section I(a) of
PTCE 95-60 will be satisfied throughout the prospective transferees' holding of
such Certificates. Any purchaser of a Class B, Class C, Class D, Class E, Class
F (so long as a portion of such Class is a Private Book-Entry Certificate), and
Class G (so long as a portion of such Class is a Private Book-Entry Certificate)
Certificates will be deemed to have represented by such purchase that either (a)
such purchaser is not a Plan and is not purchasing such Certificates by or on
behalf of, or with "plan assets" of, any Plan or (b) the purchase of any such
Certificate by or on behalf of, or with "plan assets" of, any Plan is
permissible under applicable law, will not result in any non-exempt prohibited
transaction under ERISA or Section 4975 of the Code, and will not subject the
Depositor, the Trustee, the Fiscal Agent or the Master Servicer to any
obligation in addition to those undertaken herein, and the following conditions
are met: (a) the source of funds used to purchase such Certificate is an
"insurance company general account" (as such term is defined in PTCE 95-60) and
(b) the conditions set forth in Sections I and III of PTCE 95-60 have been
satisfied as of the date of the acquisition of such Certificates and the
condition set forth in Section I(a) of PTCE 95-60 will be satisfied throughout
the prospective transferees' holding of such Certificates. The Trustee may
require that any prospective transferee of a Subordinated Certificate that is
held as a Definitive Certificate, provide such certifications as the Trustee may
deem desirable or necessary in order to establish that such transferee or the
Person in whose name such registration is requested is not a Plan or a Person
who is directly or indirectly purchasing such Certificate on behalf of, as named
fiduciary of, as trustee of, or with assets of a Plan. The Trustee shall not
have any responsibility to monitor or restrict the transfer of Ownership
Interests in any Certificates that are in the form of a Book-Entry Certificate.
(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
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Trustee under clause (ii)(A) below to deliver payments to a Person other than
such Person and to have irrevocably authorized the Trustee 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 a United
States Person and shall promptly notify the Trustee of any change or
impending change in its status as a Permitted Transferee.
(B) In connection with any proposed Transfer of any Ownership
Interest in a Residual Certificate, the Trustee shall require delivery
to it, and no Transfer of any Residual Certificate shall be registered
until the Trustee receives, an affidavit and agreement substantially
in the form attached hereto as Exhibit C-1 (a "Transfer Affidavit and
Agreement") from the proposed Transferee, in form and substance
satisfactory to the Trustee, representing and warranting, among other
things, that such Transferee is a Permitted Transferee, that it is not
acquiring its Ownership Interest in the Residual Certificate that is
the subject of the proposed Transfer as a nominee, trustee or agent
for any Person that is not a Permitted Transferee, that for so long as
it retains its Ownership Interest in a Residual Certificate, it will
endeavor to remain a Permitted Transferee, that it is a United States
Person, 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 the
Trustee has actual knowledge that the proposed Transferee is not a
Permitted Transferee or is not a United States Person, no Transfer of
an Ownership Interest in 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 Trustee a certificate
substantially in the form attached hereto as Exhibit C-2 stating that,
among other things, it has no actual knowledge that such prospective
Transferee is not a Permitted Transferee or is not a United States
Person.
(E) Each Person holding or acquiring an Ownership Interest in a
Residual Certificate, by purchasing an Ownership Interest in such
Certificate,
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agrees to give the Trustee written notice that it is a "pass-through
interest holder" within the meaning of temporary Treasury regulation
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) or
if any Holder of a Residual Certificate shall lose its status as a Permitted
Transferee or a United States Person, 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, the Special
Servicer or the Certificate Registrar shall be under any liability to any Person
for any registration of Transfer of a Residual Certificate that is in fact not
permitted by this Section 5.02(d) or for making any payments due on such
Certificate to the Holder thereof or for taking any other action with respect to
such Holder under the provisions of this Agreement.
(B) If any purported Transferee shall become a Holder of a
Residual Certificate in violation of the restrictions in this Section
5.02(d), or if any Holder of a Residual Certificate shall lose its
status as a Permitted Transferee or a United States Person, and to the
extent that the retroactive restoration of the rights of the prior
Holder of such Residual Certificate as described in clause (ii)(A)
above shall be invalid, illegal or unenforceable, then the Trustee
shall have the right, without notice to the Holder or any prior Holder
of such Residual Certificate, to sell such Residual Certificate to a
purchaser selected by the Trustee on such terms as the Trustee may
choose. Such non-complying Holder shall promptly endorse and deliver
such Residual Certificate in accordance with the instructions of the
Trustee. Such purchaser may be the Trustee itself or any Affiliate of
the Trustee. The proceeds of such sale, net of the commissions (which
may include commissions payable to the Trustee or its Affiliates),
expenses and taxes due, if any, will be remitted by the Trustee to
such non-complying Holder. The terms and conditions of any sale under
this clause (ii)(B) shall be determined in the sole discretion of the
Trustee, and the Trustee 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 Trustee shall make available to the Internal Revenue
Service and those Persons specified by the REMIC Provisions, all information
necessary to compute any tax imposed (A) as a result of the Transfer of an
Ownership Interest in a Residual Certificate to any Person who is not a
Permitted Transferee, 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
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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 not a Permitted Transferee. The Person holding
such Ownership Interest shall be responsible for the reasonable compensation of
the Trustee for providing such information.
(iv) The provisions of this Section 5.02(d) set forth prior to this
subsection (iv) may be modified, added to or eliminated, provided that there
shall have been delivered to the Trustee and the Depositor the following:
(A) written notification 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 qualify,
downgrade or withdraw its then-current rating of any Class of
Certificates; and
(B) an Opinion of Counsel, in form and substance
satisfactory to the Trustee and the Depositor, to the effect that
such modification of, addition to or elimination of such
provisions 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 which is not a Permitted
Transferee.
(e) Subject to the preceding subsections, upon surrender for
registration of transfer of any Certificate at the offices of the Certificate
Registrar maintained for such purpose, the Trustee shall execute and the
Certificate Registrar 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 Trustee
shall execute and the Certificate Registrar 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 Trustee or the Certificate Registrar) be
duly endorsed by, or be accompanied
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by a written instrument of transfer in the form satisfactory to the Trustee and
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 Trustee or 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 hold such canceled Certificates in accordance with its standard
procedures.
(j) The Certificate Registrar shall be required to provide notice to
the Master Servicer, the Special Servicer and the Depositor of each transfer of
a Certificate and to provide each such Person with an updated copy of the
Certificate Register on or about January 1 and July 1 of each year, commencing
January 1, 1999.
SECTION 5.03 Book-Entry Certificates.
(a) Each Class of Registered Certificates and the Private Book-Entry
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 subsection
(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 subsection
(c) below (and, with respect to the Private Book-Entry Certificates, except as
provided in Section 5.02(b)(ii)), shall not be entitled to definitive, fully
registered Certificates ("Definitive Certificates") in respect of such Ownership
Interests. The Trustee shall not have any responsibility to monitor or restrict
the transfer of Ownership Interests in any Book-Entry Certificate. 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 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
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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 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, the Trustee shall notify all Certificate Owners, through the
Depository, of the occurrence of any such event and of the availability of
Definitive Certificates to Certificate Owners requesting the same. Upon
surrender to the Certificate Registrar of the Book-Entry Certificates by the
Depository, accompanied by registration instructions from the Depository for
registration of transfer and any other documents necessary to satisfy the
requirements of any applicable transfer restrictions, the Trustee shall execute,
and the Certificate Registrar shall authenticate and deliver, the applicable
Definitive Certificates to the Certificate Owners identified in such
instructions. None of the Depositor, the Master Servicer, the Special Servicer,
the Trustee, the Fiscal Agent or the Certificate Registrar shall be liable for
any delay in delivery of such instructions, and each 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 the Registered
Certificates held in book-entry form, 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 Trustee shall execute, and the
Certificate Registrar 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
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Registrar) connected therewith. Any replacement Certificate issued pursuant to
this Section shall constitute complete and indefeasible evidence of ownership in
the applicable REMIC, 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 presentation of a Certificate for registration of
transfer, the Depositor, the Master Servicer, the Special Servicer, the Trustee,
the Fiscal Agent, the Certificate Registrar and any agents of any of them may
treat the person in whose name such 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, except as and to the extent provided
in the definition of "Certificateholder", 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 except as
provided in Section 5.02(d).
ARTICLE VI
THE DEPOSITOR, THE MASTER SERVICER AND THE SPECIAL SERVICER
SECTION 6.01 Liability of the Depositor, the Master Servicer and the
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 the Depositor,
the Master Servicer and the Special Servicer;
Assignment of Rights and Delegation of Duties by the
Master Servicer and the Special Servicer.
(a) Subject to subsection (b) below, the Depositor, the Master
Servicer and the Special Servicer each will 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.
(b) The Depositor, the Master Servicer and the Special Servicer may
be merged or consolidated with or into any Person, or transfer all or
substantially all of its assets to any
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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 and the Special Servicer, shall be the successor of the Depositor, the
Master Servicer and 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
that (i) such Person is qualified to service multifamily mortgage loans on
behalf of FNMA or FHLMC and (ii) such merger, consolidation or succession will
not result in the downgrade, qualification or withdrawal of the then-current
ratings of the Classes of Certificates that have been so rated (as evidenced by
a letter to such effect from each Rating Agency).
(c) Notwithstanding anything else in this Section 6.02 and Section
6.04 to the contrary, the Master Servicer and the Special Servicer may assign
all of its rights and delegate all of its duties and obligations under this
Agreement; provided that the Person accepting such assignment or delegation
shall be a Person that is qualified to service multifamily mortgage loans on
behalf of FNMA or FHLMC, is reasonably satisfactory to the Trustee and the
Depositor, is willing to service the Mortgage Loans and executes and delivers to
the Depositor and the Trustee an agreement, in form and substance reasonably
satisfactory to the Depositor and the Trustee, which contains an assumption by
such Person of the due and punctual performance and observance of each covenant
and condition to be performed or observed by the Master Servicer or the Special
Servicer, as the case may be, under this Agreement; provided further that such
assignment or delegation will not result in the downgrade, qualification or
withdrawal of the then-current ratings of the Classes of Certificates that have
been rated (as evidenced by a letter to such effect from each Rating Agency).
In the case of any such assignment and delegation, the Master Servicer or the
Special Servicer, as the case may be, shall be released from its obligations
under this Agreement, except that the Master Servicer or the Special Servicer,
as the case may be, shall remain liable for all liabilities and obligations
incurred by it, or arising from its conduct, hereunder prior to the satisfaction
of the conditions to such assignment and delegation set forth in the preceding
sentence. Notwithstanding anything above to the contrary, each of the Master
Servicer and the Special Servicer may, in its sole discretion, appoint
Sub-Servicers in accordance with Section 3.22 hereof and independent contractors
or agents to perform select duties thereof, provided that the Master Servicer or
the Special Servicer shall not be relieved from such duties solely by virtue of
such appointment.
SECTION 6.03 Limitation on Liability of the Depositor, the Master
Servicer, the Special Servicer and Others.
None of the Depositor, the Master Servicer, the Special Servicer or
any of the directors, officers, employees or agents of the Depositor, the Master
Servicer or the Special Servicer shall be under any liability to the Trust Fund
or the Certificateholders for any action taken or for refraining from the taking
of any action in good faith pursuant to this Agreement or for errors in
judgment; provided, however, that this provision shall not protect the
Depositor, the
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Master Servicer, the Special Servicer or any such Person against any breach of
warranties or representations made herein or any liability which would otherwise
be imposed by reason of willful misfeasance, bad faith or negligence in the
performance of duties or by reason of reckless disregard of obligations and
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 prima
facie properly executed and submitted by any Person respecting any matters
arising hereunder. The Depositor, the Master Servicer and the Special Servicer
and any director, officer, employee or agent of the Depositor, the Master
Servicer or the Special Servicer shall be indemnified by the Trust Fund and held
harmless against any loss, liability or expense incurred in connection with any
legal action relating to this Agreement or the Certificates or any asset of the
Trust Fund, other than any loss, liability or expense specifically required to
be borne by such Person pursuant to the terms hereof, or which constitutes a
Servicing Advance (and is otherwise specifically reimbursable hereunder), or
which is incurred by such Person by reason of such Person's willful misfeasance,
bad faith or negligence in the performance of such Person's duties hereunder or
by reason of such Person's reckless disregard of obligations and 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 or
administrative action, proceeding, hearing or examination that is not incidental
to its respective duties under this Agreement and which in its opinion may
involve it in any expense or liability; provided, however, that the Depositor,
the Master Servicer or the Special Servicer may in its discretion undertake any
such action, proceeding, hearing or examination that it may deem necessary or
desirable in respect to this Agreement and 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, proceeding, hearing or examination
and any liability resulting therefrom shall be expenses, costs and liabilities
of the Trust Fund, and the Depositor, the Master Servicer and the Special
Servicer shall be entitled to be reimbursed therefor out of amounts attributable
to the Mortgage Loans on deposit in the Certificate Account as provided by
Section 3.05(a).
SECTION 6.04 Depositor, Master Servicer and Special Servicer Not to
Resign.
Subject to the provisions of Section 6.02, none of the Depositor, the
Master Servicer or the Special Servicer shall resign from its respective
obligations and duties hereby imposed on it except upon determination that its
duties hereunder are no longer permissible under applicable law. Any such
determination permitting the resignation of the Depositor, the Master Servicer
or the Special Servicer shall be evidenced by an Opinion of Counsel to such
effect delivered to the Trustee. No such resignation by the Master Servicer or
the Special Servicer shall become effective until the Trustee or a successor
servicer shall have assumed the responsibilities and obligations of the Master
Servicer or the Special Servicer, as the case may be, in accordance with Section
7.02.
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SECTION 6.05 Rights of the Depositor in Respect of the Master
Servicer and the Special Servicer.
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 the Special Servicer hereunder or exercise the rights
of the Master Servicer or 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. 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.
ARTICLE VII
DEFAULT
SECTION 7.01 Events of Default.
(a) "Event of Default", wherever used herein, means any one of the
following events:
(i) (A) any failure by the Master Servicer to make a required deposit
to the Certificate Account which continues unremedied for one Business Day
following the date on which such deposit was first required to be made, or
(B) any failure by the Master Servicer to deposit into, or to remit to the
Trustee for deposit into, the Distribution Account any amount required to
be so deposited or remitted, which failure is not remedied by 11:00 a.m.
(New York City time) on the relevant Distribution Date; or
(ii) any failure by the Special Servicer 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 which failure
continues unremedied for one Business Day following the date on which such
deposit or remittance was first required to be made; or
(iii) any failure by the Master Servicer or the Special Servicer
to timely make any Servicing Advance required to be made by it pursuant to
this Agreement which continues unremedied for a period ending on the
earlier of (A) 15 days following the date such Servicing Advance was first
required to be made, and (B) either, if applicable, (1) in the case of a
Servicing Advance relating to the payment of insurance premiums, the day on
which such insurance coverage terminates if such premiums are not paid or
(2) in the case of a Servicing Advance relating to the payment of real
estate taxes, the date of the
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commencement of a foreclosure action with respect to the failure to make
such payment; or
(iv) 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 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 or the Special Servicer, as the case may be, by the Trustee or the
Depositor, or to the Master Servicer or the Special Servicer, as the case
may be by the Holders of Certificates entitled to not less than 25% of the
Voting Rights; provided, however, that if such covenant or agreement is
capable of being cured and the Master Servicer or Special Servicer, as
applicable, is diligently pursuing such cure, such 30 day period shall be
extended for an additional 30 days; or
(v) any breach on the part of the Master Servicer or the Special
Servicer of any representation or warranty contained in this Agreement
which 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 by the Trustee or the Depositor, or to the Master Servicer or the
Special Servicer, as the case may be by the Holders of Certificates
entitled to not less than 25% of the Voting Rights; provided, however, if
such breach is capable of being cured and the Master Servicer or Special
Servicer, as applicable, such 30 day period shall be extended for an
additional 30 days; or
(vi) 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,
marshalling of assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been entered against
the Master Servicer or the Special Servicer and such decree or order shall
have remained in force undischarged or unstayed for a period of 60 days; or
(vii) 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, marshalling
of assets and liabilities or similar proceedings of or relating to it or of
or relating to all or substantially all of its property;
(viii) 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
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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
(ix) the Trustee shall have received written notice from either Rating
Agency that the continuation of the Master Servicer or the Special Servicer
in such capacity would result in the downgrade, qualification or withdrawal
of any rating then assigned by such Rating Agency to any Class of
Certificates.
(b) If any Event of Default with respect to the Master Servicer or
the Special Servicer (in either case for purposes of this Section 7.01(b), the
"Defaulting Party") shall occur and be continuing, then, and in each and every
such case, so long as such Event of Default shall not have been remedied, the
Depositor or the Trustee may, and at the written direction of the Holders of
Certificates entitled to at least 51% of the Voting Rights, the Trustee shall
terminate, by notice in writing to the Defaulting Party, with a copy of such
notice to the Depositor (if the termination is effected by the Trustee) or to
the Trustee (if the termination is effected by the Depositor), all of the rights
and obligations of the Defaulting Party under this Agreement and in and to the
Mortgage Loans and the proceeds thereof (other than any rights of the Defaulting
Party as Certificateholder). From and after the receipt by the Defaulting Party
of such written notice, 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. The Master Servicer and the Special Servicer each agrees that if it
is terminated pursuant to this 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 or any other Successor Master Servicer or
Special Servicer with all documents and records requested by it to enable it to
assume the Master Servicer's or Special Servicer's, as the case may be,
functions hereunder, and shall cooperate with the Trustee or any other Successor
Master Servicer or Special Servicer 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, the transfer within two
Business Days to the Trustee or any other Successor Master Servicer or Special
Servicer for administration by it of all cash amounts which shall at the time be
or should have been credited by the Master Servicer or the Special Servicer to
the Certificate Account, the Distribution Account, the REO Account or any
Servicing Account or thereafter be received with respect to the Mortgage Loans
or any REO Property (provided, however, that the Master Servicer and the Special
Servicer each shall 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 made by it or otherwise, and it and its
directors,
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officers, employees and agents shall continue to be entitled to the benefits of
Section 6.03 notwithstanding any such termination).
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 be subject to all the responsibilities, duties and liabilities relating
thereto and arising thereafter placed on the Master Servicer or the Special
Servicer, as the case may be, by the terms and provisions hereof, including,
without limitation, the Master Servicer's obligation to make Delinquency
Advances; provided that any failure to perform such duties or responsibilities
caused by the Master Servicer's or the Special Servicer's 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 Master Servicer or the Special Servicer or
for any losses incurred by the Master Servicer or the Special Servicer pursuant
to Section 3.06 hereunder nor shall the Trustee be required to purchase any
Mortgage Loan hereunder. As compensation therefor, the Trustee shall be
entitled to the applicable Master Servicing Fee and Special Servicing Fee and
all funds relating to the Mortgage Loans which the Master Servicer or the
Special Servicer would have been entitled to charge to the Certificate Account
or the Distribution Account if the Master Servicer or the Special Servicer had
continued to act hereunder. Notwithstanding the above, the Trustee may, if it
shall be unwilling to so act, or shall, if it is unable to so act or if the
Holders of Certificates entitled to at least 51% of the Voting Rights so request
in writing to the Trustee or if the Trustee is not approved as a master servicer
or special servicer, as the case may be, by each Rating Agency, promptly appoint
any FNMA or FHLMC-approved mortgage loan servicing institution that has a net
worth of not less than $10,000,000 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 result in the downgrade, qualification
or withdrawal of its rating then assigned to any Class of Certificates), as the
successor to the Master Servicer hereunder or the Special Servicer, as the case
may be, in the assumption of all or any part of the responsibilities, duties or
liabilities of the Master Servicer or the Special Servicer, as the case may be,
hereunder. No appointment of a successor to the Master Servicer or the Special
Servicer, as the case may be, hereunder shall be effective until the assumption
of the successor to the Master Servicer or the Special Servicer, as the case may
be, of all the responsibilities, duties and liabilities of the Master Servicer
or the Special Servicer, as the case may be, hereunder. Pending appointment of
a successor to the Master Servicer or the Special Servicer, as the case may be,
hereunder, the Trustee shall act in such capacity as hereinabove provided. 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 Mortgage Loans or otherwise 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
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hereunder. The Depositor, the Trustee and such successor 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 or any appointment of a successor to
the Master Servicer or the Special Servicer pursuant to Section 7.02, the
Trustee shall give prompt written notice thereof to Certificateholders at their
respective addresses appearing in the Certificate Register.
(b) Not later than the later of (i) 60 days after the occurrence of
any event which constitutes or, with notice or lapse of time or both, would
constitute an Event of Default and (ii) five days after the Trustee would be
deemed to have notice of the occurrence of such an event in accordance with
Section 8.02(vii), the Trustee shall transmit by mail to the Depositor and all
Certificateholders notice of such occurrence, unless such default shall have
been cured.
SECTION 7.04 Waiver of Events of Default.
The Holders of Certificates 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 clause (i) or (ii) of Section 7.01 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 the same
Voting Rights with respect to the matters described above as they would if any
other Person held such Certificates.
ARTICLE VIII
CONCERNING THE TRUSTEE AND THE FISCAL AGENT
SECTION 8.01 Duties of Trustee and Fiscal Agent.
(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 (other than as successor Master Servicer or Special Servicer) shall
exercise such of the rights and powers vested in it by this Agreement, and use
the same
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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), shall examine them to
determine whether they conform to the requirements of this Agreement. 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. Neither the Trustee nor the Fiscal Agent shall
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 or any other person and
accepted by the Trustee or the Fiscal Agent in good faith, pursuant to this
Agreement.
(c) No provision of this Agreement shall be construed to relieve the
Trustee or the Fiscal Agent from liability for its own negligent action, its own
negligent failure to act or its own willful 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 and the Fiscal Agent shall be
determined solely by the express provisions of this Agreement, the
Trustee and the Fiscal Agent 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 or the Fiscal Agent and,
in the absence of bad faith on the part of the Trustee or the Fiscal
Agent, the Trustee and the Fiscal Agent 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 or the Fiscal Agent and conforming to the requirements of this
Agreement;
(ii) Neither the Trustee nor the Fiscal Agent shall be personally
liable for an error of judgment made in good faith by a Responsible
Officer or Responsible Officers of the Trustee or the Fiscal Agent,
unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts; and
(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
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remedy available to the Trustee, or exercising any trust or power
conferred upon the Trustee, under this Agreement.
SECTION 8.02 Certain Matters Affecting the Trustee and the Fiscal
Agent.
Except as otherwise provided in Section 8.01:
(i) The Trustee and the Fiscal Agent may rely upon and shall be
protected in acting or refraining from acting upon any resolution,
Officer's 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 and the Fiscal Agent 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) Neither the Trustee nor the Fiscal Agent (in their
respective capacities as such) shall be under any 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 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 or
the Fiscal Agent, as applicable, reasonable security or indemnity
against the costs, expenses and liabilities which may be incurred
therein or thereby; neither the Trustee nor the Fiscal Agent shall 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; nothing contained herein shall, however, 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;
(iv) Neither the Trustee nor the Fiscal Agent shall 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;
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(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 50% 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, provided that the Trustee shall not be relieved from
such duties, and the Trustee shall remain responsible for all acts and
omissions of any such agent;
(vii) For all purposes under this Agreement, the Trustee
shall not be deemed to have notice of any Event of Default unless a
Responsible Officer of the Trustee has actual knowledge thereof or
unless written notice of any event which is in fact such a default is
received by the Trustee at the Corporate Trust Office, and such notice
references the Certificates or this Agreement; and
(viii) Neither the Trustee nor the Fiscal Agent shall 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, as the case may be) or of the Depositor or any
other person.
SECTION 8.03 Trustee and Fiscal Agent not Liable for Validity or
Sufficiency of Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates, other than the
representations and warranties of, and the other statements attributed to the
Trustee in Sections 2.02, 2.05, 2.07 and 8.13 and the signature of the Trustee
set forth on each outstanding Certificate, shall be taken as the statements of
the Depositor, the Master Servicer or the Special Servicer, as the case may be,
and neither the Trustee nor the Fiscal Agent assume responsibility for their
correctness. Neither the Trustee nor the Fiscal Agent make any representations
as to the validity or sufficiency of this Agreement (except to the extent set
forth in Section 8.13) or of any Certificate (other than as to the signature of
the Trustee set forth thereon) or of any Mortgage Loan or related document.
Neither the Trustee nor the Fiscal Agent shall 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
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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. Neither the Trustee
nor the Fiscal Agent shall 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 or the Fiscal Agent in good faith,
pursuant to this Agreement.
SECTION 8.04 Trustee and the Fiscal Agent May Own Certificates.
Each of the Trustee and the Fiscal Agent, in their individual or any
other capacity, may become the owner or pledgee of Certificates with the same
rights it would have if it were not Trustee or the Fiscal Agent.
SECTION 8.05 Fees and Expenses of Trustee; Indemnification of
Trustee and the Fiscal Agent.
(a) Monthly, the Trustee shall be entitled to withdraw the Trustee
Fee from the Distribution Account pursuant to Section 3.05(b) for all services
rendered by it in the execution of the trusts hereby created and in the exercise
and performance of any of the powers and duties hereunder of the Trustee. On or
prior to the Distribution Date in each month, the Trustee shall be entitled to
withdraw and pay itself from amounts then on deposit in the Distribution Account
an amount equal to the then unpaid Trustee Fees.
(b) The Trustee, Fiscal Agent and any director, officer, employee or
agent of the Trustee and the Fiscal Agent shall be indemnified and held harmless
by the Trust Fund (to the extent of amounts on deposit in the Distribution
Account from time to time) against any loss, liability or 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, any act or omission of the Trustee and the
Fiscal Agent relating to the exercise and performance of any of the powers and
duties of the Trustee and the Fiscal Agent hereunder; provided that neither the
Trustee, Fiscal Agent nor any of the other above specified Persons shall be
entitled to indemnification pursuant to this Section 8.05(b) for (i) allocable
overhead, (ii) expenses or disbursements incurred or made by or on behalf of the
Trustee in the normal course of the Trustee's and the Fiscal Agent's performing
their routine duties in accordance with any of the provisions hereof, (iii) any
expense or liability specifically required to be borne thereby pursuant to the
terms hereof, or (iv) any loss, liability or expense incurred by reason of
willful misfeasance, bad faith or negligence in the performance of the Trustee's
or Fiscal Agent's obligations and duties hereunder, or by reason of reckless
disregard of such obligations or duties, or as may arise from a breach of any
representation, warranty or covenant of the Trustee or Fiscal Agent made herein.
The provisions of this Section 8.05(b) shall survive any resignation or removal
of the Trustee and appointment of a successor trustee or fiscal agent.
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SECTION 8.06 Eligibility Requirements for Trustee and Fiscal Agent.
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
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 long-term unsecured debt obligations of the Trustee
shall at all times be rated not less than "Aa2" by Moody's and "AA" by FITCH
IBCA (or, if not rated by FITCH IBCA, otherwise acceptable to FITCH IBCA as
would not result in a qualification, downgrade or withdrawal of the rating
assigned by FITCH IBCA to any Class of Certificates) or if and for so long as a
Fiscal Agent is appointed and acting hereunder, at least investment grade by
each Rating Agency (or, if not rated by FITCH IBCA, otherwise acceptable to
FITCH IBCA as would not result in a qualification, downgrade or withdrawal of
the rating assigned by FITCH IBCA to any Class of Certificates); provided, that
either the Trustee or the Fiscal Agent shall at all times be an institution
whose long term senior unsecured debt is rated not less than "AA" by Standard &
Poor's, "Aa2" by Moody and "AA" by FITCH IBCA or such other rating as shall not
result in the qualification, downgrade or withdrawal of any of the ratings then
assigned to the respective Classes of Certificates, as confirmed in writing by
each Rating Agency. In case at any time the Trustee or the Fiscal Agent shall
cease to be eligible in accordance with the provisions of this Section, the
Trustee or the Fiscal Agent 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 the Trustee and the Fiscal
Agent.
(a) The Trustee or the Fiscal Agent may at any time resign and be
discharged from the trusts hereby created by giving written notice thereof to
the Depositor, the Master
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Servicer, the Special Servicer and to all Certificateholders. Upon receiving
such notice of resignation, the Depositor shall promptly appoint a successor
trustee or fiscal agent acceptable to the Master Servicer by written instrument,
in duplicate, which instrument shall be delivered to the resigning Trustee or
the Fiscal Agent and to the successor trustee or fiscal agent. A copy of such
instrument shall be delivered to the Master Servicer, the Special Servicer and
the Certificateholders by the Depositor. If no successor trustee or fiscal agent
shall have been so appointed and have accepted appointment within 30 days after
the giving of such notice of resignation, the resigning Trustee or the Fiscal
Agent may petition any court of competent jurisdiction for the appointment of a
successor trustee.
(b) If at any time the Trustee or Fiscal Agent 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 or Fiscal Agent shall become incapable of acting,
or shall be adjudged bankrupt or insolvent, or a receiver of the Trustee or
Fiscal Agent or of its property shall be appointed, or any public officer shall
take charge or control of the Trustee or Fiscal Agent or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then the
Depositor may remove the Trustee or Fiscal Agent and appoint a successor trustee
or fiscal agent acceptable to the Master Servicer by written instrument, in
duplicate, which instrument shall be delivered to the Trustee or Fiscal Agent so
removed and to the successor trustee or fiscal agent. 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 or the Fiscal Agent and appoint
a successor trustee or fiscal agent 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
so appointed. A copy of such instrument shall be delivered to the Depositor, the
Special Servicer and the remaining Certificateholders by the Master Servicer.
(d) Any resignation or removal of the Trustee or the Fiscal Agent and
appointment of a successor trustee or fiscal agent pursuant to any of the
provisions of this Section 8.07 shall not become effective until acceptance of
appointment by the successor trustee or fiscal agent as provided in Section
8.08. Upon any succession of the Trustee or the Fiscal Agent under this
Agreement, the predecessor Trustee or the Fiscal Agent shall be entitled to the
payment of compensation and reimbursement for services rendered and expenses
incurred (including without limitation unreimbursed Advances and interest
thereon made thereby) accrued or payable up to and including the effective date
of such termination, at such times and from such sources as if the predecessor
Trustee or the Fiscal Agent had not resigned or been removed. Any resignation
or removal of the Trustee shall be deemed to be a simultaneous removal of the
Fiscal Agent hereunder.
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SECTION 8.08 Successor Trustee and the Fiscal Agent.
(a) Any successor trustee or fiscal agent appointed as provided in
Section 8.07 shall execute, acknowledge and deliver to the Depositor, the Master
Servicer, the Special Servicer and to its predecessor trustee an instrument
accepting such appointment hereunder, and thereupon the resignation or removal
of the predecessor trustee or fiscal agent shall become effective and such
successor trustee or fiscal agent, 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 or fiscal agent herein. The predecessor trustee or fiscal agent shall
deliver to the successor trustee or fiscal agent 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 or fiscal agent 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 or fiscal
agent all such rights, powers, duties and obligations, and to enable the
successor trustee and fiscal agent, if applicable, to perform its obligations
hereunder.
(b) No successor trustee or fiscal agent shall accept appointment as
provided in this Section 8.08 unless at the time of such acceptance such
successor trustee or fiscal agent shall be eligible under the provisions of
Section 8.06.
(c) Upon acceptance of appointment by a successor trustee or fiscal
agent as provided in this Section 8.08, the successor trustee or fiscal agent
shall mail notice of such appointment to the Depositor and the
Certificateholders.
SECTION 8.09 Merger or Consolidation of Trustee and the Fiscal
Agent.
Any entity into which the Trustee or the Fiscal Agent 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 or the Fiscal Agent
shall be a party, or any entity succeeding to the corporate trust business of
the Trustee or the Fiscal Agent, shall be the successor of the Trustee or the
Fiscal Agent 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
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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 fifteen days after the receipt by it of a request to do so, or in case an
Event of Default in respect of the Master Servicer shall have occurred and be
continuing, the Trustee alone shall have the power to make such appointment. No
co-trustee or separate trustee hereunder shall be required to meet the terms of
eligibility as a successor trustee under Section 8.06 hereunder and no notice to
Holders of Certificates of the appointment of co-trustee(s) or separate
trustee(s) shall be required under Section 8.08 hereof.
(b) In the case of any appointment of a co-trustee or separate
trustee pursuant to this Section 8.10 all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or co-trustee
jointly, except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed (whether as Trustee hereunder or
as successor to the Master Servicer or the Special Servicer hereunder), the
Trustee shall be incompetent or unqualified to perform such act or acts, in
which event such rights, powers, duties and obligations (including the holding
of title to the Trust Fund or any portion thereof in any such jurisdiction)
shall be exercised and performed by such separate trustee or co-trustee at the
direction of the Trustee.
(c) Any notice, request or other writing given to the Trustee shall
be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article VIII. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Trustee. Every such instrument shall be filed with the Trustee.
(d) Any separate trustee or co-trustee may, at any time, constitute
the Trustee, its agent or attorney-in-fact, with full power and authority, to
the extent not prohibited by law, to do any lawful act under or in respect of
this Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall 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.
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SECTION 8.11 Appointment of Custodians.
The Trustee may, with the consent of the Master Servicer, appoint 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 subject to
supervision by federal or state authority, shall itself (or together with an
affiliate guaranteeing its financial performance) have a combined capital and
surplus of at least $15,000,000, shall be qualified to do business in the
jurisdiction in which it holds any Mortgage File shall maintain and keep in full
force and effect throughout the term of this Agreement a fidelity bond and an
errors and omissions insurance policy covering its officers and employees and
other persons acting on its behalf in connection with its activities under the
Agreement in the amount of coverage customary for custodians acting in such
capacity and shall not be the Depositor, a Mortgage Loan Seller or any Affiliate
of the Depositor or a Mortgage Loan Seller. Each Custodian shall be subject to
the same obligations and standard of care as would be imposed on the Trustee
hereunder in connection with the retention of Mortgage Files directly by the
Trustee. 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.
SECTION 8.12 Access to Certain Information.
(a) On or prior to the date of the first sale of any Non-Registered
Certificate to an Independent third party, the Depositor shall provide to the
Trustee ten copies of any private placement memorandum or other disclosure
document used by the Depositor or its Affiliate in connection with the offer and
sale of the Class of Certificates to which such Non-Registered Certificate
belongs. In addition, if any such private placement memorandum or disclosure
document is revised, amended or supplemented at any time following the delivery
thereof to the Trustee, the Depositor promptly shall inform the Trustee of such
event and shall deliver to the Trustee ten copies of the private placement
memorandum or disclosure document, as revised, amended or supplemented. The
Trustee shall maintain at its offices primarily responsible for administering
the Trust Fund (or at the Primary Servicing Office of the Master Servicer) and
shall, upon reasonable advance notice, make available during normal business
hours for review by any Holder, Certificate Owner or prospective transferee of a
Certificate or interest therein, originals or copies of the following items: (i)
in the case of a Holder, Certificate Owner or prospective transferee of a
Non-Registered Certificate or interest therein, any private placement memorandum
or other disclosure document relating to the Class of Certificates to which such
Non-Registered Certificate belongs, in the form most recently provided to the
Trustee; and (ii) in all cases, (A) this Agreement and any amendments hereto
entered into pursuant to Section 11.01, (B) all reports required to be delivered
to Certificateholders of the relevant Class pursuant to Section 4.02 since the
Closing Date, (C) all Officer's Certificates delivered to the Trustee since the
Closing Date pursuant to Section 3.13, (D) all accountants' reports delivered to
the Trustee since the Closing Date pursuant to Section 3.14, (E) the most recent
inspection report prepared by the Master Servicer or Special Servicer and
delivered to the Trustee in respect of each
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Mortgaged Property pursuant to Section 3.12, (F) as to each Mortgage Loan
pursuant to which the related Mortgagor is required to deliver such items or the
Master Servicer or Special Servicer has otherwise acquired such items, the most
recent annual operating statement and rent roll of the related Mortgaged
Property and financial statements of the related Mortgagor collected by the
Master Servicer or the Special Servicer and delivered to the Trustee pursuant to
Section 3.12(b), (G) any and all notices and reports delivered to the Trustee
with respect to any Mortgaged Property securing a defaulted Mortgage Loan as to
which the environmental testing contemplated by Section 3.09(c) revealed that
either of the conditions set forth in clauses (i) and (ii) of the first sentence
thereof was not satisfied (but only for so long as such Mortgaged Property or
the related Mortgage Loan are part of the Trust Fund), (H) the respective
Mortgage Files, including, without limitation, any and all modifications,
waivers and amendments of the terms of a Mortgage Loan entered into by the
Master Servicer or the Special Servicer and delivered to the Trustee pursuant to
Section 3.20 (but only for so long as the affected Mortgage Loan is part of the
Trust Fund) and (I) any and all Officer's Certificates and other evidence
delivered to or retained by the Trustee to support the Master Servicer's,
Special Servicer's, or Trustee's or Fiscal Agent's determination that any
Advance was or, if made, would be a Nonrecoverable Advance. Copies of any and
all of the foregoing items will be available from the Trustee upon written
request; however, the Trustee shall be permitted to require from the requesting
Certificateholder payment of a sum sufficient to cover the reasonable costs and
expenses of providing such copies.
In connection with providing access to or copies of the items
described in the preceding paragraph, the Trustee may require (a) in the case of
Certificate Owners, a written confirmation executed by the requesting Person, in
form reasonably satisfactory to the Trustee, generally to the effect that such
Person is a beneficial holder of Certificates, is requesting the information
solely for use in evaluating such Person's investment in the Certificates and
will otherwise keep such information confidential and (b) in the case of a
prospective purchaser, a written confirmation executed by the requesting Person,
in form reasonably satisfactory to the Trustee, generally to the effect that
such Person is a prospective purchaser of a Certificate or an interest therein,
is requesting the information solely for use in evaluating a possible investment
in Certificates and will otherwise keep such information confidential. All
Certificateholders, by the acceptance of their Certificates, shall be deemed to
have agreed to keep such information confidential. Notwithstanding the
foregoing provisions of this Section 8.12(a), the Trustee shall have no
responsibility for the accuracy, completeness or sufficiency for any purpose of
any information so made available or furnished by it pursuant to this Section
8.12(a).
(b) The Trustee shall provide or cause to be provided to the
Depositor, the Master Servicer, and the Special Servicer, and to the Office of
Thrift Supervision, the Federal Deposit Insurance Corporation, and any other
federal or state banking or insurance regulatory authority that may exercise
authority over any Certificateholder, access to the Mortgage Files and any other
documentation regarding the Mortgage Loans and the Trust Fund within its control
which may be required by this Agreement or by applicable law. Such access shall
be afforded
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without charge but only upon reasonable prior written request and during normal
business hours at the offices of the Trustee designated by it.
SECTION 8.13 Representations and Warranties of the Trustee and the
Fiscal Agent.
(a) The Trustee hereby represents and warrants to the Master
Servicer, for its own benefit and the benefit of the Certificateholders, and to
the Special Servicer and the Depositor, as of the Closing Date, that:
(i) The Trustee is a national banking association duly
organized, validly existing and in good standing under the laws of the
United States of America.
(ii) The execution and delivery of this Agreement by the Trustee,
and the performance and compliance with the terms of this Agreement by
the Trustee, will not violate the Trustee's organizational documents
or constitute a default (or an event which, with notice or lapse of
time, or both, would constitute a default) under, or result in 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) This Agreement, assuming due authorization, execution
and delivery by the Special Servicer, the Master Servicer, the Fiscal
Agent and the Depositor, constitutes a valid, legal and binding
obligation of the Trustee, enforceable against the Trustee in
accordance with the terms hereof, subject to applicable bankruptcy,
insolvency, reorganization, moratorium and other laws affecting the
enforcement of creditor's rights generally, and general principles of
equity, regardless of whether such enforcement is considered in a
proceeding in equity or at law.
(iv) The Trustee 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 having jurisdiction,
which default, in the Trustee's good faith and reasonable judgment, is
likely to affect materially and adversely the ability of the Trustee
to perform its obligations or the financial condition or operations of
the Trustee or its properties.
(v) No litigation is pending or, to the best of the Trustee's
knowledge, threatened against the Trustee which would prohibit the
Trustee from entering into this Agreement or, in the Trustee's good
faith and reasonable judgment, is likely to materially and adversely
affect the ability of the Trustee to perform its obligations under
this Agreement.
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(vi) No consent, approval, authorization or order of,
registration or filing with or notice to, any governmental authority
or court is required, under federal or state law, for the execution,
delivery and performance of or compliance by the Trustee with this
Agreement, or the consummation by the Trustee of any transaction
contemplated hereby, other than (1) such consents, approvals,
authorization, qualifications, registrations, filings or notices as
have been obtained or made and (2) where the lack of such consent,
approval, authorization, qualification, registration, filing or notice
would not have a material adverse effect on performance by the Trustee
under this Agreement.
(b) The Fiscal Agent hereby represents and warrants to the Master
Servicer, for its own benefit and the benefit of the Certificateholders, and to
the Special Servicer and the Depositor, as of the Closing Date, that:
(i) The Fiscal Agent is an organization organized under the laws of
the Netherlands, duly organized, validly existing and in good standing
under the laws governing its creation and existence.
(ii) The execution and delivery of this Agreement by the Fiscal Agent,
and the performance and compliance with the terms of this Agreement by the
Fiscal Agent, will not violate the Fiscal Agent's organizational documents
or constitute a default (or an event which, with notice or lapse of time,
or both, would constitute a default) under, or result in the breach of, any
material agreement or other instrument to which it is a party or which is
applicable to it or any of its assets.
(iii) This Agreement, assuming due authorization, execution and
delivery by the Special Servicer, the Master Servicer, the Trustee and the
Depositor, constitutes a valid, legal and binding obligation of the Fiscal
Agent, enforceable against the Fiscal Agent in accordance with the terms
hereof, subject to applicable bankruptcy, insolvency, reorganization,
moratorium and other laws affecting the enforcement of creditors' rights
generally, and general principles of equity, regardless of whether such
enforcement is considered in a proceeding in equity or at law.
(iv) The Fiscal Agent 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, in the Fiscal
Agent's good faith and reasonable judgment, is likely to affect materially
and adversely either the ability of the Fiscal Agent to perform its
obligations or the financial condition or operations of the Fiscal Agent or
its properties.
(v) No litigation is pending or, to the best of the Fiscal Agent's
knowledge, threatened against the Fiscal Agent which would prohibit the
Fiscal Agent from entering into this Agreement or, in the Fiscal Agent's
good faith and reasonable judgment, is likely
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to materially and adversely affect the ability of the Fiscal Agent to
perform its obligations under this Agreement.
(vi) No consent, approval, authorization or order of, registration or
filing with or notice to, any governmental authority or court is required,
under federal or state law for the execution, delivery and performance of
or compliance by the Fiscal Agent with this Agreement, or the consummation
by the Fiscal Agent of any transaction contemplated hereby, other than (1)
such consents, approvals, authorizations, qualifications, registrations,
filings or notices as have been obtained or made and (2) where the lack of
such consent, approval, authorization, qualification, registration, filing
or notice would not have a material adverse effect on the performance by
the Fiscal Agent under this Agreement.
SECTION 8.14 Filings with the Securities and Exchange Commission.
Based on information furnished to it by the Master Servicer and the
Depositor (in an 80 column unformatted electronic format acceptable to the
Trustee), the Trustee will prepare and file with the Securities and Exchange
Commission on Form 8-K (including EDGAR filings), on behalf of the Trust Fund
the Distribution Date Statement. The Trustee shall have no responsibility to
file any items other than those specified in this Section 8.14. Prior to
January 2, 1999 (and each anniversary thereafter until directed by the Depositor
to file a Form 15, delisting the transaction) the Trustee shall hire counsel
selected by the Depositor to file Form 10-K's on behalf of the Trust Fund for
the preceding fiscal year. Any fees and expenses accrued and incurred by the
Trustee in connection with this Section 8.14 (including reasonable attorneys'
fees) shall be reimbursed to it by the Depositor. Prior to filing any such
reports, the Trustee shall submit reports to the Depositor for review and
approval.
SECTION 8.15 Fiscal Agent Termination Event.
"Fiscal Agent Termination Event," wherever used herein, means any one
of the following events:
(i) Any failure by the Fiscal Agent to remit to the Trustee when due
any required Advances; or
(ii) A decree or order of a court or agency or supervisory authority
having jurisdiction in the premises in an involuntary case under any
present or future federal or state bankruptcy, insolvency or similar law
for the appointment of a conservator, receiver, liquidator, trustee or
similar official in any bankruptcy, insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been entered against
the Fiscal Agent and such decree
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or order shall have remained in force undischarged or unstayed for a period
of 60 days; or
(iii) The Fiscal Agent 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 or relating to the Fiscal Agent or of or
relating to all or substantially all of its property; or
(iv) The Fiscal Agent 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
(v) Any Rating Agency shall indicate its intent to reduce, qualify or
withdraw the outstanding rating of any Class of Certificates because the
prospective financial condition or capacity to make Advances of the Fiscal
Agent is insufficient to maintain such rating; or
(vi) The long-term unsecured debt of the Fiscal Agent is rated below
"AA" or "Aa2", as applicable, by any Rating Agency.
SECTION 8.16 Procedure Upon Termination Event.
On the date specified in a written notice of termination given to the
Fiscal Agent pursuant to Section 8.07, all authority, power and rights of the
Fiscal Agent under this Agreement, whether with respect to the Mortgage Loans or
otherwise, shall terminate and a successor Fiscal Agent shall be appointed by
the Trustee, with the consent of the Depositor; provided that in no event shall
the termination of the Fiscal Agent be effective until Rating Agency
Confirmation shall have been obtained with respect to a successor fiscal agent.
The Fiscal Agent agrees to cooperate with the Trustee in effecting the
termination of the Fiscal Agent's responsibilities and rights hereunder as
Fiscal Agent.
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,
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the Fiscal Agent and the Trustee (other than the obligations of the Trustee to
provide for and make payments to Certificateholders as hereafter set forth)
shall terminate upon payment (or provision for payment) 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 (i) the purchase by the Master Servicer, the Depositor or LB
Holdings of all Mortgage Loans and each REO Property remaining in REMIC I at a
price (to be determined as of the end of the Collection Period for the
anticipated Final Distribution Date) equal to (A) the aggregate Purchase Price
of all the Mortgage Loans included in REMIC I, plus (B) the appraised value of
each REO Property, if any, included in REMIC I (such appraisal to be conducted
by an Independent MAI-designated appraiser selected by the Master Servicer and
approved by the Trustee), minus (C) solely in the case where the Master Servicer
is effecting such purchase, the aggregate amount of unreimbursed Advances,
together with any Advance Interest accrued and payable to the Master Servicer in
respect of such Advances and any unpaid Servicing Fees, remaining outstanding
(which items shall be deemed to have been paid or reimbursed to the Master
Servicer in connection with such purchase), and (ii) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan or
REO Property remaining in REMIC I; provided, however, that in no event shall the
trust created hereby continue beyond 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.
The Master Servicer, the Depositor and LB Holdings each may, at its
option, elect to purchase all of the Mortgage Loans and each REO Property
remaining in the Trust Fund 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 the
Master Servicer, the Depositor or LB Holdings may so elect to purchase all of
the Mortgage Loans and each REO Property remaining in REMIC I only if the
aggregate Stated Principal Balance of the Mortgage Loans and any REO Loans
remaining in the Trust Fund at the time of such election is less than 1% of the
aggregate Cut-off Date Principal Balance of the Mortgage Loans set forth in the
Preliminary Statement. Such option shall be exercisable by each such Person in
the priority in which such Person is listed in the immediately foregoing
sentence. In the event that the Master Servicer, the Depositor or LB Holdings
purchases all of the Mortgage Loans and each REO Property remaining in REMIC I
in accordance with the preceding sentence, the Master Servicer, the Depositor or
LB Holdings, as applicable, shall deposit in the Distribution Account not later
than the Master Servicer Remittance 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
(exclusive of any portion thereof would be payable to any Person other than the
Certificateholders pursuant to Section 3.05(a) if on deposit in the Certificate
Account, which portion shall be deposited in the Certificate Account). In
addition, the Master Servicer shall transfer to the Distribution Account all
amounts required to be transferred thereto on such Master Servicer Remittance
Date from the Certificate Account pursuant to the second 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
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that such final deposits have been made, the Trustee shall release or cause to
be released to the Master Servicer, the Depositor or LB Holdings, as applicable,
the Mortgage Files for the remaining Mortgage Loans and any Reserve Funds and
Escrow Payments in any Reserve Accounts or Servicing Account, as applicable, and
shall execute all assignments, endorsements and other instruments furnished to
it by the Master Servicer, the Depositor or LB Holdings, as applicable, as shall
be necessary to effectuate transfer of the Mortgage Loans and REO Properties
remaining in REMIC I. All Credit Files for the remaining Mortgage Loans and REO
Properties shall be delivered to the purchasing entity.
Notice of any termination shall be given promptly by the Trustee by
letter to Certificateholders and, if not previously notified pursuant to the
preceding paragraph, to the other parties hereto mailed (a) in the event such
notice is given in connection with the Master Servicer's, the Depositor's or LB
Holdings' purchase of all 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, 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.
Upon presentation and surrender of the Certificates by the
Certificateholders on the final Distribution Date, the Trustee 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
to which the Certificates so presented and surrendered belong. Amounts on
deposit in the Distribution Account as of the final Distribution Date (exclusive
of any portion of such amounts payable or reimbursable to any Person pursuant to
clauses (ii)-(vii) of Section 3.05(b)) shall be allocated for the purposes, in
the amounts and in accordance with the priority set forth in Section 4.01. Any
funds not distributed on such Distribution Date shall be set aside and held
uninvested in trust for the benefit of Certificateholders not presenting and
surrendering their Certificates in the aforesaid manner, and shall be disposed
of in accordance with the last paragraph of Section 4.01(g).
SECTION 9.02 Additional Termination Requirements.
(a) In the event the Master Servicer, the Depositor or LB Holdings
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 Depositor or LB Holdings, as the
case may be, obtains at its own expense and delivers to the
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Trustee an Opinion of Counsel, addressed to the Depositor, the Master Servicer,
LB Holdings and the Trustee, to the effect that the failure of the Trust Fund to
comply with the requirements of this Section 9.02 will not (subject to Section
10.01(f)) 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 regulation Section
1.860F-1 and shall satisfy all requirements of a qualified liquidation
under Section 860F of the Code and any regulations thereunder;
(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, the Depositor or
LB Holdings, as applicable, for cash; and
(iii) immediately following the making of the final payment
on the Certificates, the Trustee shall distribute or credit, or cause to be
distributed or credited, to the Holders of the related Class of Residual
Certificates all cash on hand in the related REMIC (other than cash
retained to meet claims), and 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 adopt a plan of complete liquidation of REMIC
I, REMIC II and REMIC III, which authorization shall be binding upon all
successor Certificateholders.
ARTICLE X
ADDITIONAL REMIC PROVISIONS
SECTION 10.01 REMIC Administration.
(a) The Trustee shall make an election 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 tax or information return (including Form 8811) or any
appropriate state return for the taxable year ending on the last day of the
calendar year in which the Certificates are issued. The REMIC I Regular
Interests are hereby designated as the "regular interests" (within the meaning
of Section 860G(a)(1) of the Code), and the Class R-I Certificates are hereby
designated as the sole class of "residual interests" (within the meaning of
Section 860G(a)(2) of the Code), in REMIC I. The REMIC II Regular
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Interests are hereby designated as the "regular interests" (within the meaning
of Section 860G(a)(1) of the Code), and the Class R-II Certificates are hereby
designated as the sole class of "residual interests" (within the meaning of
Section 860G(a)(2) of the Code), in REMIC II. The REMIC III Regular
Certificates are hereby designated as the "regular interests" (within the
meaning of Section 860G(a)(1) of the Code) and the Class R-III Certificates will
be the sole class of "residual interests" (within the meaning of Section
860G(a)(2) of the Code), in REMIC III. The Master Servicer, the Special Servicer
and the Trustee shall not (to the extent within the control of each) permit the
creation of any "interests" (within the meaning of Section 860G of the Code) in
REMIC I, REMIC II or REMIC III other than the Certificates.
(b) The Closing Date is hereby designated as the "startup day" of
each of REMIC I, REMIC II and REMIC III within the meaning of Section 860G(a)(9)
of the Code.
(c) The Trustee, as agent for the tax matters person of each of REMIC
I, REMIC II and REMIC III, shall (i) act on behalf of the REMIC in relation to
any tax matter or controversy involving the Trust Fund and (ii) represent the
Trust Fund in any administrative or judicial proceeding relating to an
examination or audit by any governmental taxing authority with respect thereto.
The legal expenses, including without limitation attorneys' or accountants'
fees, and costs of any such proceeding and any liability resulting therefrom
shall be expenses of the Trust Fund and the Trustee shall be entitled to
reimbursement therefor out of amounts attributable to the Mortgage Loans and any
REO Properties on deposit in the Certificate Account as provided by Section
3.05(a) unless such legal expenses and costs are incurred by reason of the
Trustee's willful misfeasance, bad faith or negligence. In the case of each of
REMIC I, REMIC II and REMIC III, the Holder of Residual Certificates
representing the largest Percentage Interest in the related Class thereof shall
be designated, in the manner provided under Treasury Regulations section
1.860F-4(d) and temporary Treasury Regulations section 301.6231(a)(7)-1, as the
tax matters person of such REMIC. By its acceptance thereof, the Holder of
Residual Certificates representing the largest Percentage Interest in each Class
thereof hereby agrees to irrevocably appoint the Trustee as its agent to perform
all of the duties of the tax matters person for the related REMIC created
hereunder.
(d) The Trustee shall prepare or cause to be prepared, sign and file,
in a timely manner, all of the Tax Returns that it determines are required with
respect to the Grantor Trust and each REMIC created hereunder. The expenses of
preparing such returns shall be borne by the Trustee without any right of
reimbursement therefor.
(e) The Trustee shall provide (i) to any Transferor of a Residual
Certificate such information as is necessary for the application of any tax
relating to the transfer of such Residual Certificate to any Person who is not a
Permitted Transferee, (ii) to the Certificateholders such information or reports
as are required by the Code or the REMIC Provisions including reports relating
to interest, original issue discount and market discount or premium (using the
Prepayment Assumption) and (iii) to the Internal Revenue Service the name,
title, address and
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telephone number of the person who will serve as the representative of each of
REMIC I, REMIC II and REMIC III.
(f) The Trustee shall take such actions and shall cause each REMIC
created hereunder to take such actions as are reasonably within the Trustee's
control and the scope of its duties more specifically set forth herein as shall
be necessary to maintain the status thereof as a REMIC under the REMIC
Provisions. The Trustee shall not knowingly or intentionally take any action,
cause REMIC I, REMIC II or REMIC III to take any action or fail to take (or fail
to cause to be taken) any action reasonably within its control and the scope of
duties more specifically set forth herein, that, under the REMIC Provisions, if
taken or not taken, as the case may be, could (i) adversely affect the status of
REMIC I, REMIC II or REMIC III as a REMIC or (ii) result (subject to the
following sentence) in the imposition of a tax upon REMIC I, REMIC II or REMIC
III (including but not limited to the tax on prohibited transactions as defined
in Section 860F(a)(2) of the Code and the tax on contributions to a REMIC set
forth in Section 860G(d) of the Code) (either such event, an "Adverse REMIC
Event") unless the Trustee receives an Opinion of Counsel (at the expense of the
party seeking to take such action or, if such party fails to pay such expense,
and the Trustee determines that taking such action is in the best interest of
REMIC I, REMIC II or REMIC III and the Certificateholders, at the expense of the
Trust Fund, but in no event at the expense of the Trustee) to the effect that
the contemplated action will not, with respect to any REMIC created hereunder
adversely affect such status or, unless the Master Servicer, the Trustee, or the
Special Servicer, as applicable (or other Person acceptable to the Trustee),
determine that the monetary exposure to REMIC I, REMIC II and REMIC III is not
material and in its or their sole discretion to indemnify, to the extent
reasonably acceptable to the Trustee, the Trust Fund against the imposition of
such tax. Wherever in this Agreement a contemplated action may not be taken
because the timing of such action might result in the imposition of a tax on the
Trust Fund, or may only be taken pursuant to an Opinion of Counsel that such
action would not impose a tax on the Trust Fund, such action may nonetheless be
taken provided that the indemnity given in the preceding sentence with respect
to any taxes that might be imposed on the Trust Fund has been given and that all
other preconditions to the taking of such action have been satisfied. The
Trustee shall not take or fail to take any action (whether or not authorized
hereunder) as to which the Master Servicer has advised it in writing that it has
received 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 the Trust Fund or its assets, or causing the Trust Fund to take any
action, which is not expressly permitted under the terms of this Agreement, each
of the parties hereto will consult with the Trustee or its designee, in writing,
with respect to whether such action could cause an Adverse REMIC Event to occur
with respect to REMIC I, REMIC II or REMIC III, and such party shall not take
any such action, or cause REMIC I, REMIC II or REMIC III to take any such
action, as to which the Trustee has advised it in writing that an Adverse REMIC
Event could occur. The Trustee may consult with counsel to make such written
advice, and the cost of same shall be borne by the party seeking to take the
action not expressly permitted by this Agreement. At all times as may be
required by the Code, the Trustee will to the extent within its control and the
scope of its duties as specifically set forth herein, maintain
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substantially all of the assets of REMIC I as "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.
(g) In the event that any tax is imposed on "prohibited transactions"
of REMIC I, REMIC II or REMIC III as defined in Section 860F(a)(2) of the Code,
on "net income from foreclosure property" of REMIC I, REMIC II or REMIC III as
defined in Section 860G(c) of the Code, or on any contributions to REMIC I,
REMIC II or REMIC III after the Startup Day therefor pursuant to Section 860G(d)
of the Code, or any other tax is imposed by the Code or any applicable
provisions of state or local laws, such tax shall be charged (i) to the Trustee,
if such tax arises out of or results from a breach by the Trustee of any of its
obligations under this Agreement, (ii) to any other party hereto, if such tax
arises out of or results from a breach by such party of any of its obligations
under this Agreement, or (iii) otherwise (including, without limitation, in the
case of any tax permitted to be incurred pursuant to Section 3.17(a)) against
amounts on deposit in the Distribution Account as provided by Section 3.05(b).
(h) The Trustee 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 or as otherwise may be required by the
REMIC Provisions.
(i) Following the Startup Day, the Trustee shall not accept any
contributions of assets to the Trust Fund unless the Trustee shall have received
an Opinion of Counsel (at the expense of the party seeking to make such
contribution) to the effect that the inclusion of such assets in the Trust Fund
will not cause REMIC I, REMIC II or REMIC III to fail to qualify as a REMIC at
any time that any Certificates are outstanding or subject such REMIC to any tax
under the REMIC Provisions or other applicable provisions of federal, state and
local law or ordinances.
(j) None of the Master Servicer, the Special Servicer, the Fiscal
Agent or the Trustee 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 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.
(k) Within 30 days after the Closing Date, the Trustee 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 each of REMIC I, REMIC II and REMIC III.
(l) None of the Trustee, the Fiscal Agent, the Master Servicer, or
the Special Servicer shall sell, dispose of or substitute for any of the
Mortgage Loans (except in connection with (i) the default, imminent default or
foreclosure of a Mortgage Loan, including but not limited to, the acquisition or
sale of a Mortgaged Property acquired by deed in lieu of foreclosure, (ii)
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the bankruptcy of REMIC I, REMIC II or REMIC III, (iii) the termination of the
Trust Fund pursuant to Article IX of this Agreement or (iv) a purchase of
Mortgage Loans pursuant to or as contemplated by Section 2.03 or 3.18 of this
Agreement) or acquire any assets for the Trust Fund or sell or dispose of any
investments in the Certificate Account, the Distribution Account, or the REO
Account for gain, or accept any contributions to the Trust Fund after the
Closing Date, unless it has received an Opinion of Counsel that such sale,
disposition, substitution or acquisition will not (a) affect adversely the
status of REMIC I, REMIC II or REMIC III as a REMIC or, (b) subject to Section
10.01(f), cause REMIC I, REMIC II or REMIC III to be subject to a tax on
"prohibited transactions" or "contributions" pursuant to the REMIC Provisions.
SECTION 10.02 Depositor, Master Servicer, Special Servicer, Fiscal
Agent, Trustee to Cooperate.
(a) The Depositor shall provide or cause to be provided to the
Trustee, within ten days after the Closing Date, all information or data that
the Trustee reasonably determines to be relevant for tax purposes as to the
valuations and issue prices of the Certificates, including, without limitation,
the price, yield, prepayment assumption and projected cash flow of the
Certificates.
(b) The Master Servicer, the Special Servicer, the Fiscal Agent and
the Depositor shall each furnish such reports, certifications and information,
and access to such books and records maintained thereby, as may relate to the
Certificates or the Trust Fund and as shall be reasonably requested by the
Trustee in order to enable it to perform its duties hereunder.
SECTION 10.03 Grantor Trust Administration.
(a) The Trustee shall treat the Grantor Trust, for tax return
preparation purposes, as a grantor trust under the Code and, if necessary, under
applicable state law and will file appropriate federal or state Tax Returns for
each taxable year ending on or after the last day of the calendar year in which
the Certificates are issued.
(b) The Trustee shall pay out of its own funds any and all routine
tax administration expenses of the Trust Fund incurred with respect to the
Grantor Trust (but not including any professional fees or expenses related to
audits or any administrative or judicial proceedings with respect to the Trust
Fund that involve the Internal Revenue Service or state tax authorities which
extraordinary expenses shall be payable or reimbursable to the Trustee from the
Trust Fund unless otherwise provided in Section 10.02(e) or 10.02(f)).
(c) The Trustee shall prepare, sign and file when due all of the Tax
Returns in respect of the Grantor Trust. The expenses of preparing and filing
such returns shall be borne by the Trustee without any right of reimbursement
therefor. The other parties hereto shall provide on a timely basis to the
Trustee or its designee such information with respect to the Grantor Trust
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as is in its possession and reasonably requested by the Trustee to enable it to
perform its obligations under this Section 10.02. Without limiting the
generality of the foregoing, the Depositor, within ten days following the
Trustee's request therefor, shall provide in writing to the Trustee such
information as is reasonably requested by the Trustee for tax purposes, and the
Trustee's duty to perform its reporting and other tax compliance obligations
under this Section 10.02 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.
(d) The Trustee shall perform on behalf of the Grantor Trust all
reporting and other tax compliance duties that are required in respect thereof
under the Code, the Grantor Trust Provisions or other compliance guidance issued
by the Internal Revenue Service or any state or local taxing authority.
(e) The Trustee shall perform its duties hereunder so as to maintain
the status of the Grantor Trust as a grantor trust under the Grantor Trust
Provisions (and the Master Servicer and the Special Servicer shall assist the
Trustee to the extent reasonably requested by the Trustee 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 Trustee, Master Servicer, the
Special Servicer shall knowingly take (or cause the Grantor Trust to take) any
action or fail to take (or fail to cause to be taken) any action that, under the
Grantor Trust Provisions, if taken or not taken, as the case may be, could
adversely affect the status of the Grantor Trust as a grantor trust under the
Grantor Trust Provisions (any such adverse effect on grantor trust status, an
"Adverse Grantor Trust Event"), unless the Trustee 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 Trustee seeks to take such action or to refrain
from taking any action for the benefit of the Certificateholders) to the effect
that the contemplated action will not result in an Adverse Grantor Trust Event.
None of the other parties hereto shall take any action or fail to take any
action (whether or not authorized hereunder) as to which the Trustee has advised
it in writing that the Trustee has received or obtained an Opinion of Counsel to
the effect that an Adverse Grantor Trust Event could result from such action or
failure to act. In addition, prior to taking any action with respect to the
Grantor Trust, or causing the Trust Fund 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 Trustee or its designee, in writing,
with respect to whether such action could cause an Adverse Grantor Trust Event
to occur. Neither the Master Servicer nor the Special Servicer shall have any
liability hereunder for any action taken by it in accordance with the written
instructions of the Trustee. The Trustee 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.
(f) If any tax is imposed on the Grantor Trust, 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
Special Servicer, if such tax arises out of or results
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from a breach by the Special Servicer of any of its obligations under Article
III or this Section 10.02; (ii) 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 Section 10.02; (iii) the Trustee, if such tax arises out of
or results from a breach by the Trustee of any of its obligations under Article
IV, Article VIII or this Section 10.02; or (iv) the portion of the Trust Fund
constituting the Grantor Trust in all other instances.
(g) The Trustee shall, for federal income tax purposes, maintain
books and records with respect to the Grantor Trust on a calendar year and on an
accrual basis.
ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.01 Amendment.
(a) This Agreement may be amended from time to time by the parties
hereto, without the consent of any of the Certificateholders:
(i) to cure any ambiguity,
(ii) to correct or supplement any provisions herein or therein, which
may be inconsistent with any other provisions herein or therein or to correct
any error,
(iii) to modify, eliminate or add to any of its provisions to such
extent as shall be necessary or desirable to maintain the qualification of REMIC
I, REMIC II or REMIC III as a REMIC at all times that any Certificate is
outstanding or to avoid or minimize the risk of the imposition of any tax on
REMIC I, REMIC II or REMIC III pursuant to the Code that would be a claim
against the Trust Fund, provided that the Trustee has received an Opinion of
Counsel to the effect that (A) such action is necessary or desirable to maintain
such qualification or to avoid or minimize the risk of the imposition of any
such tax and (B) such action will not adversely affect in any material respect
the interests of any Certificateholder,
(iv) to change the timing and/or nature of deposits into the
Certificate Account or the Distribution Account or to change the name in which
the Certificate Account is maintained, provided that (A) the Delinquency Advance
Date or the Master Servicer Remittance Date shall in no event be later than the
related Distribution Date, (B) such change shall not, as evidenced by an Opinion
of Counsel, adversely affect in any material respect the interests of any
Certificateholder and (C) such change shall not result in the downgrade,
qualification or withdrawal of the then-current rating assigned to any Class of
Certificates, as evidenced by a letter from each Rating Agency to such effect,
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(v) to modify, eliminate or add to the provisions of Section 5.02(d)
or any other provision hereof restricting transfer of the Residual Certificates
by virtue of their being the REMIC "residual interests," provided that such
change shall not, as evidenced by an Opinion of Counsel, cause either the Trust
Fund or any of the Certificateholders (other than the transferor) to be subject
to a federal tax caused by a transfer to a Person that is not a United States
Person and a Permitted Transferee, or
(vi) to make any other provisions with respect to matters or questions
arising under this Agreement which shall not be materially inconsistent with the
provisions of this Agreement, provided that such action shall not, as evidenced
by an Opinion of Counsel, adversely affect in any material respect the interests
of any Certificateholder.
(b) This Agreement may also be amended from time to time by the
parties hereto with the consent of the Holders of Certificates evidencing in the
aggregate not less than 66 2/3% of the Percentage Interests of each Class of
Certificates affected thereby for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement or
of modifying in any manner the rights of the Holders of Certificates of such
Class; provided, however, that no such amendment shall:
(i) reduce in any manner the amount of, or delay the timing of,
payments which are required to be distributed on any Certificate without
the consent of the Holder of such Certificate, or
(ii) reduce the aforesaid percentage of Certificates of any Class
the Holders of which are required to consent to any such amendment, in any
such case without the consent of the Holders of all Certificates of such
Class then outstanding.
(c) Notwithstanding the foregoing, the Trustee will not be entitled
to consent to any amendment hereto without having first received an Opinion or
Opinions of Counsel to the effect that (i) such amendment is permitted pursuant
to the terms of this Agreement and (ii) such amendment or the exercise of any
power granted to the Master Servicer, the Special Servicer, the Depositor, the
Trustee or any other specified person in accordance with such amendment will not
result in the imposition of a tax on REMIC I, REMIC II or REMIC III pursuant to
the REMIC Provisions or cause REMIC I, REMIC II or REMIC III to fail to qualify
as a REMIC.
(d) Promptly after the execution of any such amendment, the Trustee
shall furnish a statement describing the amendment 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
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of evidencing the authorization of the execution thereof by Certificateholders
shall be subject to such reasonable regulations as the Trustee may prescribe.
(f) 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) or (c) shall be borne by the Person seeking the related
amendment, except that if the Master Servicer or the Trustee requests any
amendment of this Agreement 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.
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 on direction by
the Trustee, such direction to be given by the Trustee only upon the Trustee's
receipt of an Opinion of Counsel to be obtained by the party requesting such
recordation (the cost of which may be paid out of the Certificate Account) to
the effect that such recordation materially and beneficially affects the
interests of the Certificateholders.
(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
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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 (except in the case of a default by
the Trustee) the Holders of Certificates of any Class evidencing not less than
25% of the related Percentage Interests in such Class 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. The Trustee shall be under no
obligation to exercise any of the trusts or powers vested in it under this
Section 11.03(c) or to institute, conduct or defend any litigation hereunder or
in relation hereto at the request, order or direction of any of the Holders of
Certificates unless such Holders have offered to the Trustee reasonable security
against the costs, expenses and liabilities which may be incurred therein or
hereby. 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 11.03(c), 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.
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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 if personally delivered at or mailed by registered mail, postage
prepaid (except for notices to the Trustee which shall be deemed to have been
duly given only when received), to: (i) in the case of the Depositor, 650
Dresher Road, Horsham, Pennsylvania 19044, Attention: Structured Finance
Manager, telecopy number: (215) 328-1775; (ii) in the case of the Master
Servicer, 650 Dresher Road, Horsham, Pennsylvania 19044, Attention: EVP
Servicing, telecopy number: (215) 328-3478 (with copies to General Counsel
(telecopy number: (215) 328-3620) and to the Master Servicing Manager, 150 South
Wacker, 28th Floor, Chicago, Illinois 60606, telecopy number (312) 845-8617));
(iii) in the case of the Trustee and the Fiscal Agent, the Corporate Trust
Office; (iv) in the case of the Special Servicer, 550 California Street, San
Francisco, California 94101, telecopy number (415) 391-2949, Attention: CMBS
Portfolio Manager (with a copy to General Counsel); (v) in the case of the
Rating Agencies, (A) Standard & Poor's Rating Services, 26 Broadway, New York,
New York 10004, Attention: Commercial Mortgage Surveillance Manager, telecopy
number: (212) 208-0053, (B) Moody's Investors Services, Inc., 99 Church Street,
New York, New York 10007, Attention: CMBS Rating and Monitoring, telecopy
number: (212) 553-1350 and (C) FITCH IBCA, Inc., One State Street Plaza, New
York, New York 10004, Attention: Commercial Mortgage Surveillance Dept.,
telecopy number: (212) 635-0295; and (vi) in the case of the Underwriters,
(A) Deutsche Morgan Grenfell Inc., 31 West 52nd Street, New York, NY 10019,
Attention Steven Stuart, telecopy number: (212) 469-8518 and (B) Lehman Brothers
Inc., Three World Financial Center, New York, New York 10285, Attention Paul
Hughson, telecopy number: (212) 526-3746 or as to each such Person such other
address as may hereafter be furnished by such Person to the parties hereto in
writing. Any communication required or permitted to be delivered to a
Certificateholder shall be deemed to have been duly given when mailed first
class, postage prepaid, to the address of such Holder as shown in the
Certificate Register. Any notice so mailed within the time prescribed in this
Agreement shall be conclusively presumed to have been duly given, whether or not
the Certificateholder receives such notice.
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
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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 comprising the Trust Fund, including without
limitation, the Mortgage Loans (including all Replacement Mortgage Loans), all
principal and interest received or receivable with respect to the Mortgage Loans
(other than principal and interest payments due and payable prior to the Cut-off
Date and Principal Prepayments received prior to the Cut-off Date), all amounts
held from time to time in the Certificate Account and the Distribution Account
and all reinvestment earnings on such amounts, and all of the Depositor's right,
title and interest in and to the proceeds of any title, hazard or other
Insurance Policies related to such Mortgage Loans, 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 E hereto in all appropriate locations in the
Commonwealth of Pennsylvania 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 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 applicable Uniform Commercial Code.
SECTION 11.08 Successors and Assigns; Beneficiaries.
The provisions of this Agreement shall be binding upon and inure to
the benefit of the parties hereto, their respective successors and permitted
assigns and, where expressly referenced herein, LB Holdings and Lehman Brothers
Inc., and all such provisions shall inure to the benefit of the
Certificateholders. No other person, including, without limitation, any
Mortgagor, shall be entitled to any benefit or equitable right, remedy or claim
under this Agreement.
SECTION 11.09 Article and Section Headings.
The article and section headings herein are for convenience of
reference only, and shall not limit or otherwise affect the meaning hereof.
SECTION 11.10 Notices to the Rating Agencies.
(a) The Trustee shall use reasonable efforts promptly to provide
notice or a copy of the listed item to each Rating Agency with respect to each
of the following of which it has actual knowledge:
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(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, termination or merger of the Master
Servicer, the Special Servicer, the Trustee or the Fiscal Agent;
(iv) any change in the location of the Distribution Account;
(v) a copy of the notice given pursuant to Section 2.03(a) and the
repurchase of Mortgage Loans by a Mortgage Loan Seller pursuant to Section 6 of
the related Mortgage Loan Purchase Agreement; and
(vi) the final payment to any Class of Certificateholders.
(b) Each of the Master Servicer and the Special Servicer shall
promptly furnish to each Rating Agency copies of the following:
(i) each of its annual statements as to compliance described in
Section 3.13; and
(ii) each of its annual independent public accountants' servicing
reports described in Section 3.14.
(c) To the extent it is not already required to do so under Section
4.02 hereof, the Trustee shall promptly furnish to each Rating Agency copies of
each report prepared and/or delivered by it pursuant to Section 4.02 hereof.
(d) Each of the Master Servicer, the Special Servicer and the Trustee
shall provide such additional information to each Rating Agency upon request is
in its possession or reasonably available to it.
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IN WITNESS WHEREOF, the parties hereto have caused their names to be
signed hereto by their respective officers thereunto duly authorized, in each
case as of the day and year first above written.
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.,
Depositor
By: /s/ David Lazarus
-------------------------------------
Name: David Lazarus
Title: Vice President
GMAC COMMERCIAL MORTGAGE CORPORATION,
Master Servicer and Special Servicer
By: /s/ David Lazarus
-------------------------------------
Name: David Lazarus
Title: Vice President
LASALLE NATIONAL BANK,
Trustee
By: /s/ Michael B. Evans
-------------------------------------
Name: Michael B. Evans
Title: 1st V.P.
ABN AMRO BANK N.V.,
Fiscal Agent
By: /s/ Mary Casey
-------------------------------------
Name: Mary Casey
-----------------------------------
Title: Vice President
----------------------------------
By: /s/ Robert C. Smolka
-------------------------------------
Name: Robert C. Smolka
-----------------------------------
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Title: Group Vice President
----------------------------------
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STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 27th day of August, 1998, before me, a notary public in and
for said State, personally appeared David Lazarus known to me to be a
Vice President of GMAC COMMERCIAL MORTGAGE SECURITIES, INC., one of the
corporations that executed the within instrument, and also known to me to be the
person who executed it on behalf of such corporation, and acknowledged to me
that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
/s/ Ellen M. Reeman
------------------------------
Notary Public
[Notarial Seal]
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 27th day of August, 1998, before me, a notary public in and
for said State, personally appeared David Lazarus known to me to be a
Vice President of GMAC COMMERCIAL MORTGAGE CORPORATION, one of the corporations
that executed the within instrument, and also known to me to be the person who
executed it on behalf of such corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
/s/ Ellen M. Reeman
------------------------------
Notary Public
[Notarial Seal]
<PAGE>
STATE OF Illinois)
) ss.:
COUNTY OF Cook )
On the 27th day of August, 1998 before me, a notary public in and
for said State, personally appeared Michael B. Evans known to me to be a
First Vice President of LASALLE NATIONAL BANK, a nationally chartered bank
duly organized, validly existing and in good standing under the United States of
America that executed the within instrument, and also known to me to be the
person who executed it on behalf of such nationally chartered bank, and
acknowledged to me that such nationally chartered bank executed the within
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
/s/ Kimberly W. Bell
------------------------------
Notary Public
[Notarial Seal]
<PAGE>
STATE OF Illinois)
) ss.:
COUNTY OF Cook )
On the 27th day of August, 1998 before me Kimberly W. Bell, a
notary public in and for said State, personally appeared Robert C. Smolka, Vice
President, and Mary C. Casey, Vice President, respectively of ABN AMRO BANK
N.V., an organization organized under the laws of the Netherlands, that
executed the within instrument, and also known to me to be the person who
executed it on behalf of such organization, and acknowledged to me that such
organization executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
/s/ Kimberly W. Bell
------------------------------
Notary Public
[Notarial Seal]
<PAGE>
EXHIBIT A-1
FORM OF CLASS X CERTIFICATE
CLASS X MORTGAGE
PASS-THROUGH CERTIFICATE,
SERIES 1998-C2
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool (the "Mortgage Pool") of multifamily and
commercial mortgage loans (the "Mortgage Loans"), such pool being formed and
sold by
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
<TABLE>
<S> <C>
Pass-Through Rate: Certificate Notional Amount of this Class X
Variable Certificate as of the Issue Date: $[ ]
Date of Pooling and Servicing Agreement: Class Notional Amount of all the Class X Certificates
August 1, 1998 as of the Issue Date: $2,530,361,727
Cut-off Date: With respect to any Mortgage Aggregate unpaid principal balance of the Mortgage
Loan, the Due Date for such Mortgage Loan Loans as of their respective Cut-off Dates, after
in August, 1998 deducting payments of principal due on or before such
date, whether or not received: $2,530,361,727
Issue Date: August 27, 1998
Trustee: LaSalle National Bank
First Distribution Date: September 15, 1998
CUSIP No. 361849 DZ 2
Master Servicer and Special Servicer:
GMAC Commercial Mortgage Corporation
</TABLE>
Certificate No. X-
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE DEPOSITOR, THE
TRUSTEE, 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 GMAC
COMMERCIAL MORTGAGE SECURITIES, INC., GMAC COMMERCIAL MORTGAGE CORPORATION,
LASALLE NATIONAL BANK, ABN AMRO BANK N.V. OR ANY OF THEIR RESPECTIVE AFFILIATES.
NEITHER THIS CERTIFICATE NOR THE 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 CODE.
<PAGE>
THIS CERTIFICATE HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT ("OID") FOR
FEDERAL INCOME TAX PURPOSES. FOR INFORMATION REGARDING THE ISSUE PRICE AND
YIELD TO MATURITY OF THIS CERTIFICATE AND THE AMOUNT OF OID PER INITIAL
CERTIFICATE NOTIONAL AMOUNT, CALL LASALLE NATIONAL BANK, ATTENTION: ASSET BACKED
SECURITIES TRUST AT 312-904-1487.
THIS CERTIFICATE DOES NOT HAVE A CERTIFICATE PRINCIPAL BALANCE AND DOES NOT
ENTITLE THE HOLDER HEREOF TO ANY DISTRIBUTIONS OF PRINCIPAL. THE HOLDER HEREOF
WILL BE ENTITLED TO DISTRIBUTIONS OF INTEREST ACCRUED AS PROVIDED IN THE
AGREEMENT ON THE CERTIFICATE NOTIONAL AMOUNT OF THIS CERTIFICATE, WHICH 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 X Certificate (obtained by dividing
the notional principal amount of this Class X Certificate (its "Certificate
Notional Amount") as of the Issue Date by the aggregate notional principal
balance of all the Class X Certificates (their "Class Notional Amount") as of
the Issue Date) in that certain beneficial ownership interest evidenced by all
the Class X Certificates in the Trust Fund created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among GMAC
Commercial Mortgage Securities, Inc., as Depositor, GMAC Commercial Mortgage
Corporation, as Master Servicer and Special Servicer, LaSalle National Bank, as
Trustee and ABN AMRO Bank N.V., as Fiscal Agent. To the extent not defined
herein, the capitalized terms used herein have the respective meanings assigned
in the Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on
the 15th day of each month or, if such 15th day is not a Business Day, the
Business Day immediately following (each, a "Distribution Date"), 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 X Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on any Class X
Certificate will be made by the Trustee by wire transfer in 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 Trustee with wiring instructions no less than five Business
Days prior to the Record Date for such distribution (which wiring instructions
may be in the form of a standing order applicable to all subsequent
distributions as well) and such Certificateholder is the registered owner of all
the Class X Certificates, or otherwise by check mailed to the address of such
Certificateholder appearing in the Certificate Register. Notwithstanding the
above, the final distribution on this Certificate will be made after due notice
by the Trustee of the pendency of such distribution and only upon presentation
and surrender of this Certificate at the offices of the Certificate Registrar
appointed as provided in the Agreement or such other location as may be
specified in such notice.
The Depositor's Mortgage Pass-Through Certificates, Series 1998-C2
(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 and the Distribution 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 X 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 X Certificates are exchangeable for new Class X 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
A-1-2
<PAGE>
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 X Certificates in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
No transfer of a Senior Certificate or any interest therein shall be
made (i) to any employee benefit plan or other retirement arrangement, including
individual retirement accounts and annuities, Keogh plans and collective
investment funds and separate accounts in which such plans, accounts or
arrangements are invested, that is subject to ERISA or Section 4975 of the Code
(each, a "Plan"), or (ii) to any Person who is directly or indirectly purchasing
such Certificate or interest therein on behalf of, as named fiduciary of, as
trustee of, or with assets of a Plan, unless: (1) such Plan qualifies for the
exemptive relief available under the terms of Prohibited Transaction Exemption
94-29 (granted to GMAC and certain of its affiliates) or Prohibited Transaction
Exemption 91-14 or D-10433 granted to the underwriters of the Certificates and
(2) at the time of such transfer, the Senior Certificates continue to be rated
in one of the top three rating categories by at least one Rating Agency.
No service charge will be imposed for any registration of transfer or
exchange of Class X Certificates, but the Trustee or 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
X 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.
Prior to due presentment of this Certificate for registration of
transfer, the Depositor, the Master Servicer, the Special Servicer, the Trustee,
the Fiscal Agent, the Certificate Registrar and any agents of any of them 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 Fiscal 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 Depositor or LB
Holdings at a price determined as provided in the Agreement of all Mortgage
Loans and any REO Properties remaining in the Trust Fund. The Agreement
permits, but does not require, the Depositor, the Master Servicer or LB Holdings
to purchase from the Trust Fund all Mortgage Loans and any REO Properties
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 Cut-off Date Principal Balance of the Mortgage Pool
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 Fiscal
Agent thereunder and the rights of the Certificateholders thereunder, at any
time by the Depositor, the Master Servicer, the Special Servicer, the Trustee
and the Fiscal Agent with the consent of the Holders of Certificates entitled to
at least 662/3% 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 circumstances,
including any amendment necessary to maintain the status of designated portions
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.
A-1-3
<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.
A-1-4
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
LaSalle National Bank,
as Trustee
By:
--------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class X Certificates referred to in the
within-mentioned Agreement.
Dated: August 27, 1998
LaSalle National Bank,
as Certificate Registrar
By:
--------------------------------
Authorized Officer
<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 the above named assignee on the Certificate
Register of the Trust Fund.
I (we) further direct the issuance of a new Mortgage Pass-Through
Certificate of a like Percentage Interest and Class to the above named assignee
and delivery of such Mortgage Pass-Through Certificate to the following address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Dated:
-------------------------------------
Signature by or on behalf of Assignor
-------------------------------------
Signature Guaranteed
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.
<PAGE>
EXHIBIT A-2
FORM OF CLASS A-1 CERTIFICATE
CLASS A-1 MORTGAGE
PASS-THROUGH CERTIFICATE,
SERIES 1998-C2
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool (the "Mortgage Pool") of multifamily and
commercial mortgage loans (the "Mortgage Loans"), such pool being formed and
sold by
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
<TABLE>
<S> <C>
Pass-Through Rate: Certificate Principal Balance of this Class A-1
6.150% per annum Certificate as of the Issue Date: $[ ]
Date of Pooling and Servicing Agreement: Certificate Principal Balance of all the Class A-1
August 1, 1998 Certificates as of the Issue Date: $465,000,000
Cut-off Date: With respect to any Mortgage Aggregate unpaid principal balance of the Mortgage
Loan, the Due Date for such Mortgage Loan in Pool as of the Cut-off Date, after deducting payments
August, 1998 of principal due on or before such date, whether or not
received: $2,530,361,727
Issue Date: August 27, 1998
Trustee: LaSalle National Bank
First Distribution Date: September 15, 1998
CUSIP No. 361849 DX 7
Master Servicer and Special Servicer:
GMAC Commercial Mortgage Corporation
</TABLE>
Certificate No. A-1-
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE DEPOSITOR, THE
TRUSTEE, 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 GMAC
COMMERCIAL MORTGAGE SECURITIES, INC., GMAC COMMERCIAL MORTGAGE CORPORATION,
LASALLE NATIONAL BANK, ABN AMRO BANK N.V. OR ANY OF THEIR RESPECTIVE AFFILIATES.
NEITHER THIS CERTIFICATE NOR THE 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 CODE.
<PAGE>
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. IN ADDITION, FOLLOWING THE
DATE ON WHICH THE AGGREGATE CERTIFICATE PRINCIPAL BALANCE OF THE CLASS B, CLASS
C, CLASS D, CLASS E, CLASS F, CLASS G, CLASS H, CLASS J, CLASS K, CLASS L,
CLASS M AND CLASS N CERTIFICATES OF THE SAME SERIES IS REDUCED TO ZERO, THE
CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE MAY BE REDUCED IN CONNECTION
WITH LOSSES ON THE MORTGAGE LOANS AND CERTAIN UNANTICIPATED EXPENSES.
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 balance of this Class A-1 Certificate (its "Certificate
Principal Balance") as of the Issue Date by the aggregate principal balance of
all the Class A-1 Certificates (their "Class Principal Balance") as of the Issue
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 GMAC Commercial
Mortgage Securities, Inc., as Depositor, GMAC Commercial Mortgage Corporation,
as Master Servicer and Special Servicer, LaSalle National Bank, as Trustee and
ABN AMRO Bank N.V., as Fiscal Agent. To the extent not defined herein, the
capitalized terms used herein have the respective meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on
the 15th day of each month or, if such 15th day is not a Business Day, the
Business Day immediately following (each, a "Distribution Date"), 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 any Class A-1
Certificate will be made by the Trustee by wire transfer in 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 Trustee with wiring instructions no less than five Business
Days prior to the Record Date for such distribution (which wiring instructions
may be in the form of a standing order applicable to all subsequent
distributions as well), or otherwise by check mailed to the address of such
Certificateholder appearing in the Certificate Register. Notwithstanding the
above, 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 after due notice
by the Trustee of the pendency of such distribution and only upon presentation
and surrender of this Certificate at the offices of the Certificate Registrar
appointed as provided in the Agreement or such other location as may be
specified in such notice. 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 appeared in the Certificate Register or to any
such other address of which the Trustee is subsequently notified in writing.
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 Depositor's Mortgage Pass-Through Certificates, Series 1998-C2
(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 and the Distribution Account may be made from time to time
for purposes other than, and, in certain cases, prior to,
A-2-2
<PAGE>
distributions to Certificateholders, such purposes including the reimbursement
of advances made, or certain expenses incurred, with respect to the Mortgage
Loans and the payment of interest on such advances and expenses.
The Class 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 transfer of a Senior Certificate or any interest therein shall be
made (i) to any employee benefit plan or other retirement arrangement, including
individual retirement accounts and annuities, Keogh plans and collective
investment funds and separate accounts in which such plans, accounts or
arrangements are invested, that is subject to ERISA or Section 4975 of the Code
(each, a "Plan"), or (ii) to any Person who is directly or indirectly purchasing
such Certificate or interest therein on behalf of, as named fiduciary of, as
trustee of, or with assets of a Plan, unless: (1) such Plan qualifies for the
exemptive relief available under the terms of Prohibited Transaction Exemption
94-29 (granted to GMAC and certain of its affiliates) or Prohibited Transaction
Exemption 91-14 or D-10433 granted to the underwriters of the Certificates and
(2) at the time of such transfer, the Senior Certificates continue to be rated
in one of the top three rating categories by at least one Rating Agency.
No service charge will be imposed for any registration of transfer or
exchange of Class A-1 Certificates, but the Trustee or the Certificate Registrar
may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of Class
A-1 Certificates.
Notwithstanding the foregoing, for so long as this Certificate is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC, transfers of interests in this Certificate
shall be made through the book-entry facilities of DTC.
Prior to due presentment of this Certificate for registration of
transfer, the Depositor, the Master Servicer, the Special Servicer, the Trustee,
the Fiscal Agent, the Certificate Registrar and any agents of any of them 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 Fiscal 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 Depositor or LB
Holdings at a price determined as provided in the Agreement of all Mortgage
Loans and any REO Properties remaining in the Trust Fund. The Agreement
permits, but does not require, the Depositor, the Master Servicer or LB Holdings
to purchase from the Trust Fund all Mortgage Loans and any REO Properties
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 Cut-off Date Principal Balance of the Mortgage Pool
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 Fiscal
Agent thereunder and the rights of the Certificateholders thereunder, at any
time by the Depositor, the Master Servicer, the Special Servicer, the Trustee
and the Fiscal Agent with the consent of the Holders of Certificates
A-2-3
<PAGE>
entitled to at least 662/3% 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
circumstances, including any amendment necessary to maintain the status of
designated portions of the Trust Fund as a REMIC, without the consent of the
Holders of any of the Certificates.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The registered Holder hereof, by its acceptance hereof, agrees that it
will look solely to the Trust Fund (to the extent of its rights therein) for
distributions hereunder.
This Certificate shall be construed in accordance with the internal
laws of the State of New York applicable to agreements made and to be performed
in said State, and the obligations, rights and remedies of the Holder hereof
shall be determined in accordance with such laws.
A-2-4
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
LaSalle National Bank,
as Trustee
By:
---------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-1 Certificates referred to in the
within-mentioned Agreement.
Dated: August 27, 1998
LaSalle National Bank,
as Certificate Registrar
By:
---------------------------------
Authorized Officer
<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 the above named assignee on the Certificate
Register of the Trust Fund.
I (we) further direct the issuance of a new Mortgage Pass-Through
Certificate of a like Percentage Interest and Class to the above named assignee
and delivery of such Mortgage Pass-Through Certificate to the following address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Dated:
-------------------------------------
Signature by or on behalf of Assignor
-------------------------------------
Signature Guaranteed
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.
<PAGE>
EXHIBIT A-3
FORM OF CLASS A-2 CERTIFICATE
CLASS A-2 MORTGAGE
PASS-THROUGH CERTIFICATE,
SERIES 1998-C2
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool (the "Mortgage Pool") of multifamily and
commercial mortgage loans (the "Mortgage Loans"), such pool being formed and
sold by
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
<TABLE>
<S> <C>
Pass-Through Rate: Certificate Principal Balance of this Class A-2
6.420% per annum Certificate as of the Issue Date: $[ ]
Date of Pooling and Servicing Agreement: Certificate Principal Balance of all the Class A-2
August 1, 1998 Certificates as of the Issue Date: $1,369,512,000
Cut-off Date: With respect to any Mortgage Aggregate unpaid principal balance of the Mortgage
Loan, the Due Date for such Mortgage Loan in Pool as of the Cut-off Date, after deducting payments
August, 1998 of principal due on or before such date, whether or not
received: $2,530,361,727
Issue Date: August 27, 1998
Trustee: LaSalle National Bank
First Distribution Date: September 15, 1998
Master Servicer and Special Servicer: CUSIP No. 361849 DY 5
GMAC Commercial Mortgage Corporation
Certificate No. A-2-
</TABLE>
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE DEPOSITOR, THE
TRUSTEE, 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 GMAC
COMMERCIAL MORTGAGE SECURITIES, INC., GMAC COMMERCIAL MORTGAGE CORPORATION,
LASALLE NATIONAL BANK, ABN AMRO BANK N.V. OR ANY OF THEIR RESPECTIVE AFFILIATES.
NEITHER THIS CERTIFICATE NOR THE 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 CODE.
<PAGE>
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. IN ADDITION, FOLLOWING THE
DATE ON WHICH THE AGGREGATE CERTIFICATE PRINCIPAL BALANCE OF THE CLASS B, CLASS
C, CLASS D, CLASS E, CLASS F, CLASS G, CLASS H, CLASS J, CLASS K, CLASS L, CLASS
M AND CLASS N CERTIFICATES OF THE SAME SERIES IS REDUCED TO ZERO, THE
CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE MAY BE REDUCED IN CONNECTION
WITH LOSSES ON THE MORTGAGE LOANS AND CERTAIN UNANTICIPATED EXPENSES.
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 balance of this Class A-2 Certificate (its "Certificate
Principal Balance") as of the Issue Date by the aggregate principal balance of
all the Class A-2 Certificates (their "Class Principal Balance") as of the Issue
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 GMAC Commercial
Mortgage Securities, Inc., as Depositor, GMAC Commercial Mortgage Corporation,
as Master Servicer and Special Servicer, LaSalle National Bank, as Trustee and
ABN AMRO Bank N.V., as Fiscal Agent. To the extent not defined herein, the
capitalized terms used herein have the respective meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on
the 15th day of each month or, if such 15th day is not a Business Day, the
Business Day immediately following (each, a "Distribution Date"), 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 any Class A-2
Certificate will be made by the Trustee by wire transfer in 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 Trustee with wiring instructions no less than five Business
Days prior to the Record Date for such distribution (which wiring instructions
may be in the form of a standing order applicable to all subsequent
distributions as well), or otherwise by check mailed to the address of such
Certificateholder appearing in the Certificate Register. Notwithstanding the
above, 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 after due notice
by the Trustee of the pendency of such distribution and only upon presentation
and surrender of this Certificate at the offices of the Certificate Registrar
appointed as provided in the Agreement or such other location as may be
specified in such notice. 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 appeared in the Certificate Register or to any
such other address of which the Trustee is subsequently notified in writing.
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 Depositor's Mortgage Pass-Through Certificates, Series 1998-C2
(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 and the Distribution Account may be made from time to time
for purposes other than, and, in certain cases, prior to,
A-3-2
<PAGE>
distributions to Certificateholders, such purposes including the reimbursement
of advances made, or certain expenses incurred, with respect to the Mortgage
Loans and the payment of interest on such advances and expenses.
The Class 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 transfer of a Senior Certificate or any interest therein shall be
made (i) to any employee benefit plan or other retirement arrangement, including
individual retirement accounts and annuities, Keogh plans and collective
investment funds and separate accounts in which such plans, accounts or
arrangements are invested, that is subject to ERISA or Section 4975 of the Code
(each, a "Plan"), or (ii) to any Person who is directly or indirectly purchasing
such Certificate or interest therein on behalf of, as named fiduciary of, as
trustee of, or with assets of a Plan, unless: (1) such Plan qualifies for the
exemptive relief available under the terms of Prohibited Transaction Exemption
94-29 (granted to GMAC and certain of its affiliates) or Prohibited Transaction
Exemption 91-14 or D-10433 granted to the underwriters of the Certificates and
(2) at the time of such transfer, the Senior Certificates continue to be rated
in one of the top three rating categories by at least one Rating Agency.
No service charge will be imposed for any registration of transfer or
exchange of Class A-2 Certificates, but the Trustee or 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 DTC, transfers of interests in this Certificate
shall be made through the book-entry facilities of DTC.
Prior to due presentment of this Certificate for registration of
transfer, the Depositor, the Master Servicer, the Special Servicer, the Trustee,
the Fiscal Agent, the Certificate Registrar and any agents of any of them 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 Fiscal 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 Depositor or LB
Holdings at a price determined as provided in the Agreement of all Mortgage
Loans and any REO Properties remaining in the Trust Fund. The Agreement
permits, but does not require, the Depositor, the Master Servicer or LB Holdings
to purchase from the Trust Fund all Mortgage Loans and any REO Properties
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 Cut-off Date Principal Balance of the Mortgage Pool
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 Fiscal
Agent thereunder and the rights of the Certificateholders thereunder, at any
time by the Depositor, the Master Servicer, the Special Servicer, the Trustee
and the Fiscal Agent with the consent of the Holders of Certificates
A-3-3
<PAGE>
entitled to at least 66 2/3% 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
circumstances, including any amendment necessary to maintain the status of
designated portions of the Trust Fund as a REMIC, without the consent of the
Holders of any of the Certificates.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The registered Holder hereof, by its acceptance hereof, agrees that it
will look solely to the Trust Fund (to the extent of its rights therein) for
distributions hereunder.
This Certificate shall be construed in accordance with the internal
laws of the State of New York applicable to agreements made and to be performed
in said State, and the obligations, rights and remedies of the Holder hereof
shall be determined in accordance with such laws.
A-3-4
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
LaSalle National Bank,
as Trustee
By:
---------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-2 Certificates referred to in the
within-mentioned Agreement.
Dated: August 27, 1998
LaSalle National Bank,
as Certificate Registrar
By:
---------------------------------
Authorized Officer
<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 the above named assignee on the Certificate
Register of the Trust Fund.
I (we) further direct the issuance of a new Mortgage Pass-Through
Certificate of a like Percentage Interest and Class to the above named assignee
and delivery of such Mortgage Pass-Through Certificate to the following address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Dated:
-------------------------------------
Signature by or on behalf of Assignor
-------------------------------------
Signature Guaranteed
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.
<PAGE>
EXHIBIT A-4
FORM OF CLASS B CERTIFICATE
CLASS B MORTGAGE
PASS-THROUGH CERTIFICATE,
SERIES 1998-C2
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool (the "Mortgage Pool") of multifamily and
commercial mortgage loans (the "Mortgage Loans"), such pool being formed and
sold by
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
<TABLE>
<S> <C>
Pass-Through Rate: Certificate Principal Balance of this Class B
6.420% per annum Certificate as of the Issue Date: $[ ]
Date of Pooling and Servicing Agreement: Class Principal Balance of all the Class B Certificates
August 1, 1998 as of the Issue Date: $126,518,000
Cut-off Date: With respect to any Mortgage Loan, Aggregate unpaid principal balance of the Mortgage
the Due Date for such Mortgage Loan in Pool as of the Cut-off Date, after deducting payments
August, 1998 of principal due on or before such date, whether or not
received: $2,530,361,727
Issue Date: August 27, 1998
Trustee: LaSalle National Bank
First Distribution Date: September 15, 1998
CUSIP No. 361849 EA 6
Master Servicer and Special Servicer:
GMAC Commercial Mortgage Corporation
</TABLE>
Certificate No. B-
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE DEPOSITOR, THE
TRUSTEE, 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 GMAC
COMMERCIAL MORTGAGE SECURITIES, INC., GMAC COMMERCIAL MORTGAGE CORPORATION,
LASALLE NATIONAL BANK, ABN AMRO BANK N.V. OR ANY OF THEIR RESPECTIVE AFFILIATES.
NEITHER THIS CERTIFICATE NOR THE 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 AND CLASS X
CERTIFICATES OF THE SAME SERIES, AS AND TO THE EXTENT PROVIDED IN AGREEMENT
REFERRED TO HEREIN.
<PAGE>
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN TO AN EMPLOYEE BENEFIT
PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE INTERNAL REVENUE CODE OF 1986
(THE "CODE"), OR TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS
CERTIFICATE OR ANY INTEREST HEREIN 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 SET
FORTH IN THE AGREEMENT.
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.
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN FOLLOWING RETIREMENT OF THE
CLASS A-1 AND CLASS A-2 CERTIFICATES OF THE SAME SERIES. IN ADDITION, FOLLOWING
THE DATE ON WHICH THE AGGREGATE CERTIFICATE PRINCIPAL BALANCE OF THE CLASS C,
CLASS D, CLASS E, CLASS F, CLASS G, CLASS H, CLASS J, CLASS K, CLASS L, CLASS M
AND CLASS N CERTIFICATES OF THE SAME SERIES IS REDUCED TO ZERO, THE CERTIFICATE
PRINCIPAL BALANCE OF THIS CERTIFICATE MAY BE REDUCED IN CONNECTION WITH LOSSES
ON THE MORTGAGE LOANS AND CERTAIN UNANTICIPATED EXPENSES. 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 balance of this Class B Certificate (its "Certificate Principal
Balance") as of the Issue Date by the aggregate principal balance of all the
Class B Certificates (their "Class Principal Balance") as of the Issue 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 GMAC Commercial
Mortgage Securities, Inc., as Depositor, GMAC Commercial Mortgage Corporation,
as Master Servicer and Special Servicer, LaSalle National Bank, as Trustee and
ABN AMRO Bank N.V., as Fiscal Agent. To the extent not defined herein, the
capitalized terms used herein have the respective meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on
the 15th day of each month or, if such 15th day is not a Business Day, the
Business Day immediately following (each, a "Distribution Date"), 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 B Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on any Class B
Certificate will be made by the Trustee by wire transfer in 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 Trustee with wiring instructions no less than five Business
Days prior to the Record Date for such distribution (which wiring instructions
may be in the form of a standing order applicable to all subsequent
distributions as well), or otherwise by check mailed to the address of such
Certificateholder appearing in the Certificate Register. Notwithstanding the
above, 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 after due notice
by the Trustee of the pendency of such distribution and only upon presentation
and surrender of this Certificate at the offices of the Certificate Registrar
appointed as provided in the Agreement or such other location as may be
specified in such notice. 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
A-4-2
<PAGE>
sentence, will be made by check mailed to the address of the Holder that
surrenders this Certificate as such address last appeared in the Certificate
Register or to any such other address of which the Trustee is subsequently
notified in writing.
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 Depositor's Mortgage Pass-Through Certificates, Series 1998-C2
(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 and the Distribution 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 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.
Any purchaser of a Class B Certificate will be deemed to have
represented by such purchase that either (a) such purchaser is not an employee
benefit plan or other retirement arrangement, including individual retirement
accounts and annuities, Keogh plans and collective investment funds and separate
accounts in which such plans, accounts or arrangements are invested, that is
subject to ERISA or Section 4975 of the Code (each, a "Plan") and is not
purchasing such Certificate by or on behalf of, or with "plan assets" of, any
Plan or (b) the purchase of any such Certificate by or on behalf of, or with
"plan assets" of, any Plan is permissible under applicable law, will not result
in any non-exempt prohibited transaction under ERISA or Section 4975 of the
Code, and will not subject the Depositor, the Trustee, the Fiscal Agent or the
Servicer to any obligation in addition to those undertaken in the Agreement, and
the following conditions are met: (a) the source of funds used to purchase such
Certificate is an "insurance company general account" (as such term is defined
in PTCE 95-60) and (b) the conditions set forth in Sections I and III of PTCE
95-60 have been satisfied as of the date of the acquisition of such Certificate
and the condition set forth in Section I(a) of PTCE 95-60 will be satisfied
throughout the prospective transferees' holding of such Certificate. The
Trustee may require that any prospective transferee of a Class B Certificate
that is held as a Definitive Certificate, provide such certifications as the
Trustee may deem desirable or necessary in order to establish that such
transferee or the Person in whose name such registration is requested is not a
Plan or a Person who is directly or indirectly purchasing such Certificate on
behalf of, as named fiduciary of, as trustee of, or with assets of a Plan.
No service charge will be imposed for any registration of transfer or
exchange of Class B Certificates, but the Trustee or 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.
A-4-3
<PAGE>
Prior to due presentment of this Certificate for registration of
transfer, the Depositor, the Master Servicer, the Special Servicer, the Trustee,
the Fiscal Agent, the Certificate Registrar and any agents of any of them 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 Fiscal 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 Depositor or LB
Holdings at a price determined as provided in the Agreement of all Mortgage
Loans and any REO Properties remaining in the Trust Fund. The Agreement
permits, but does not require, the Depositor, the Master Servicer or LB Holdings
to purchase from the Trust Fund all Mortgage Loans and any REO Properties
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 Cut-off Date Principal Balance of the Mortgage Pool
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 Fiscal
Agent thereunder and the rights of the Certificateholders thereunder, at any
time by the Depositor, the Master Servicer, the Special Servicer, the Trustee
and the Fiscal Agent with the consent of the Holders of Certificates entitled to
at least 662/3% 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 circumstances,
including any amendment necessary to maintain the status of designated portions
of the Trust Fund as a REMIC, without the consent of the Holders of any of the
Certificates.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The registered Holder hereof, by its acceptance hereof, agrees that it
will look solely to the Trust Fund (to the extent of its rights therein) for
distributions hereunder.
This Certificate shall be construed in accordance with the internal
laws of the State of New York applicable to agreements made and to be performed
in said State, and the obligations, rights and remedies of the Holder hereof
shall be determined in accordance with such laws.
A-4-4
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
LaSalle National Bank,
as Trustee
By:
---------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class B Certificates referred to in the
within-mentioned Agreement.
Dated: August 27, 1998
LaSalle National Bank,
as Certificate Registrar
By:
---------------------------------
Authorized Officer
<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 the above named assignee on the Certificate
Register of the Trust Fund.
I (we) further direct the issuance of a new Mortgage Pass-Through
Certificate of a like Percentage Interest and Class to the above named assignee
and delivery of such Mortgage Pass-Through Certificate to the following address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Dated:
-------------------------------------
Signature by or on behalf of Assignor
-------------------------------------
Signature Guaranteed
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.
A-4-6
<PAGE>
EXHIBIT A-5
FORM OF CLASS C CERTIFICATE
CLASS C MORTGAGE
PASS-THROUGH CERTIFICATE,
SERIES 1998-C2
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool (the "Mortgage Pool") of multifamily and
commercial mortgage loans (the "Mortgage Loans"), such pool being formed and
sold by
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
<TABLE>
<S> <C>
Pass-Through Rate: Certificate Principal Balance of this Class C
6.500% per annum Certificate as of the Issue Date: $[ ]
Date of Pooling and Servicing Agreement: Class Principal Balance of all the Class C Certificates
August 1, 1998 as of the Issue Date: $113,866,000
Cut-off Date: With respect to any Mortgage Aggregate unpaid principal balance of the Mortgage
Loan, the Due Date for such Mortgage Loan in Pool as of the Cut-off Date, after deducting payments
August, 1998 of principal due on or before such date, whether or not
received: $2,530,361,727
Issue Date: August 27, 1998
Trustee: LaSalle National Bank
First Distribution Date: September 15, 1998
CUSIP No. 361849 EB 4
Master Servicer and Special Servicer:
GMAC Commercial Mortgage Corporation
Certificate No. C-
</TABLE>
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE DEPOSITOR, THE
TRUSTEE, 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 GMAC
COMMERCIAL MORTGAGE SECURITIES, INC., GMAC COMMERCIAL MORTGAGE CORPORATION,
LASALLE NATIONAL BANK, ABN AMRO BANK N.V. OR ANY OF THEIR RESPECTIVE AFFILIATES.
NEITHER THIS CERTIFICATE NOR THE 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 X AND CLASS B
CERTIFICATES OF THE SAME SERIES, AS AND TO THE EXTENT PROVIDED IN THE AGREEMENT
REFERRED TO HEREIN.
A-5-1
<PAGE>
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN TO AN EMPLOYEE BENEFIT
PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE INTERNAL REVENUE CODE OF 1986
(THE "CODE"), OR TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS
CERTIFICATE OR ANY INTEREST HEREIN 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 SET
FORTH IN THE AGREEMENT.
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.
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN FOLLOWING RETIREMENT OF THE
CLASS A-1, CLASS A-2 AND CLASS B CERTIFICATES OF THE SAME SERIES. IN ADDITION,
FOLLOWING THE DATE ON WHICH THE AGGREGATE CERTIFICATE PRINCIPAL BALANCE OF THE
CLASS D, CLASS E, CLASS F, CLASS G, CLASS H, CLASS J, CLASS K, CLASS L, CLASS M
AND CLASS N CERTIFICATES OF THE SAME SERIES IS REDUCED TO ZERO, THE CERTIFICATE
PRINCIPAL BALANCE OF THIS CERTIFICATE MAY BE REDUCED IN CONNECTION WITH LOSSES
ON THE MORTGAGE LOANS AND CERTAIN UNANTICIPATED EXPENSES. 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 balance of this Class C Certificate (its "Certificate Principal
Balance") as of the Issue Date by the aggregate principal balance of all the
Class C Certificates (their "Class Principal Balance") as of the Issue 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 GMAC Commercial
Mortgage Securities, Inc., as Depositor, GMAC Commercial Mortgage Corporation,
as Master Servicer and Special Servicer, LaSalle National Bank, as Trustee and
ABN AMRO Bank N.V., as Fiscal Agent. To the extent not defined herein, the
capitalized terms used herein have the respective meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on
the 15th day of each month or, if such 15th day is not a Business Day, the
Business Day immediately following (each, a "Distribution Date"), 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 C Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on any Class C
Certificate will be made by the Trustee by wire transfer in 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 Trustee with wiring instructions no less than five Business
Days prior to the Record Date for such distribution (which wiring instructions
may be in the form of a standing order applicable to all subsequent
distributions as well), or otherwise by check mailed to the address of such
Certificateholder appearing in the Certificate Register. Notwithstanding the
above, 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 after due notice
by the Trustee of the pendency of such distribution and only upon presentation
and surrender of this Certificate at the offices of the Certificate Registrar
appointed as provided in the Agreement or such other location as may be
specified in such notice. 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
A-5-2
<PAGE>
sentence, will be made by check mailed to the address of the Holder that
surrenders this Certificate as such address last appeared in the Certificate
Register or to any such other address of which the Trustee is subsequently
notified in writing.
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 Depositor's Mortgage Pass-Through Certificates, Series 1998-C2
(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 and the Distribution 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 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.
Any purchaser of a Class C Certificate will be deemed to have
represented by such purchase that either (a) such purchaser is not an employee
benefit plan or other retirement arrangement, including individual retirement
accounts and annuities, Keogh plans and collective investment funds and separate
accounts in which such plans, accounts or arrangements are invested, that is
subject to ERISA or Section 4975 of the Code (each, a "Plan") and is not
purchasing such Certificate by or on behalf of, or with "plan assets" of, any
Plan or (b) the purchase of any such Certificate by or on behalf of, or with
"plan assets" of, any Plan is permissible under applicable law, will not result
in any non-exempt prohibited transaction under ERISA or Section 4975 of the
Code, and will not subject the Depositor, the Trustee, the Fiscal Agent or the
Servicer to any obligation in addition to those undertaken in the Agreement, and
the following conditions are met: (a) the source of funds used to purchase such
Certificate is an "insurance company general account" (as such term is defined
in PTCE 95-60) and (b) the conditions set forth in Sections I and III of PTCE
95-60 have been satisfied as of the date of the acquisition of such Certificate
and the condition set forth in Section I(a) of PTCE 95-60 will be satisfied
throughout the prospective transferees' holding of such Certificate. The
Trustee may require that any prospective transferee of a Class C Certificate
that is held as a Definitive Certificate, provide such certifications as the
Trustee may deem desirable or necessary in order to establish that such
transferee or the Person in whose name such registration is requested is not a
Plan or a Person who is directly or indirectly purchasing such Certificate on
behalf of, as named fiduciary of, as trustee of, or with assets of a Plan.
No service charge will be imposed for any registration of transfer or
exchange of Class C Certificates, but the Trustee or 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.
A-5-3
<PAGE>
Prior to due presentment of this Certificate for registration of
transfer, the Depositor, the Master Servicer, the Special Servicer, the Trustee,
the Fiscal Agent, the Certificate Registrar and any agents of any of them 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 Fiscal 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 Depositor or LB
Holdings at a price determined as provided in the Agreement of all Mortgage
Loans and any REO Properties remaining in the Trust Fund. The Agreement
permits, but does not require, the Depositor, the Master Servicer or LB Holdings
to purchase from the Trust Fund all Mortgage Loans and any REO Properties
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 Cut-off Date Principal Balance of the Mortgage Pool
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 Fiscal
Agent thereunder and the rights of the Certificateholders thereunder, at any
time by the Depositor, the Master Servicer, the Special Servicer, the Trustee
and the Fiscal Agent with the consent of the Holders of Certificates entitled to
at least 662/3% 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 circumstances,
including any amendment necessary to maintain the status of designated portions
of the Trust Fund as a REMIC, without the consent of the Holders of any of the
Certificates.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The registered Holder hereof, by its acceptance hereof, agrees that it
will look solely to the Trust Fund (to the extent of its rights therein) for
distributions hereunder.
This Certificate shall be construed in accordance with the internal
laws of the State of New York applicable to agreements made and to be performed
in said State, and the obligations, rights and remedies of the Holder hereof
shall be determined in accordance with such laws.
A-5-4
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
LaSalle National Bank,
as Trustee
By:
---------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class C Certificates referred to in the
within-mentioned Agreement.
Dated: August 27, 1998
LaSalle National Bank,
as Certificate Registrar
By:
---------------------------------
Authorized Officer
<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 the above named assignee on the Certificate
Register of the Trust Fund.
I (we) further direct the issuance of a new Mortgage Pass-Through
Certificate of a like Percentage Interest and Class to the above named assignee
and delivery of such Mortgage Pass-Through Certificate to the following address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Dated:
-------------------------------------
Signature by or on behalf of Assignor
-------------------------------------
Signature Guaranteed
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.
A-5-6
<PAGE>
EXHIBIT A-6
FORM OF CLASS D CERTIFICATE
CLASS D MORTGAGE
PASS-THROUGH CERTIFICATE,
SERIES 1998-C2
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool (the "Mortgage Pool") of multifamily and
commercial mortgage loans (the "Mortgage Loans"), such pool being formed and
sold by
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
<TABLE>
<S> <C>
Pass-Through Rate: Certificate Principal Balance of this Class D
6.500% per annum Certificate as of the Issue Date: $[ ]
Date of Pooling and Servicing Agreement: Class Principal Balance of all the Class D Certificates
August 1, 1998 as of the Issue Date: $164,474,000
Cut-off Date: With respect to any Mortgage Aggregate unpaid principal balance of the Mortgage
Loan, the Due Date for such Mortgage Loan in Pool as of the Cut-off Date, after deducting payments
August, 1998 of principal due on or before such date, whether or not
received: $2,530,361,727
Issue Date: August 27, 1998
Trustee: LaSalle National Bank
First Distribution Date: September 15, 1998
CUSIP No. 361849 EC 2
Master Servicer and Special Servicer:
GMAC Commercial Mortgage Corporation
</TABLE>
Certificate No. D-
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE DEPOSITOR, THE
TRUSTEE, 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 GMAC
COMMERCIAL MORTGAGE SECURITIES, INC., GMAC COMMERCIAL MORTGAGE CORPORATION,
LASALLE NATIONAL BANK, ABN AMRO BANK N.V. OR ANY OF THEIR RESPECTIVE AFFILIATES.
NEITHER THIS CERTIFICATE NOR THE 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 X, CLASS B
AND CLASS C CERTIFICATES OF THE SAME SERIES, AS AND TO THE EXTENT PROVIDED IN
THE AGREEMENT REFERRED TO HEREIN.
<PAGE>
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN TO AN EMPLOYEE BENEFIT
PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE INTERNAL REVENUE CODE OF 1986
(THE "CODE"), OR TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS
CERTIFICATE OR ANY INTEREST HEREIN 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 SET
FORTH IN THE AGREEMENT.
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.
THIS CERTIFICATE HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT ("OID") FOR
FEDERAL INCOME TAX PURPOSES. FOR INFORMATION REGARDING THE ISSUE PRICE AND
YIELD TO MATURITY OF THIS CERTIFICATE AND THE AMOUNT OF OID PER INITIAL
CERTIFICATE PRINCIPAL AMOUNT, CALL LASALLE NATIONAL BANK, ATTENTION: ASSET
BACKED SECURITIES TRUST AT 312-904-1487.
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN FOLLOWING RETIREMENT OF THE
CLASS A-1, CLASS A-2, CLASS B AND CLASS C CERTIFICATES OF THE SAME SERIES. IN
ADDITION, FOLLOWING THE DATE ON WHICH THE AGGREGATE CERTIFICATE PRINCIPAL
BALANCE OF THE CLASS E, CLASS F, CLASS G, CLASS H, CLASS J, CLASS K, CLASS L,
CLASS M AND CLASS N CERTIFICATES OF THE SAME SERIES IS REDUCED TO ZERO, THE
CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE MAY BE REDUCED IN CONNECTION
WITH LOSSES ON THE MORTGAGE LOANS AND CERTAIN UNANTICIPATED EXPENSES.
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 balance of this Class D Certificate (its "Certificate Principal
Balance") as of the Issue Date by the aggregate principal balance of all the
Class D Certificates (their "Class Principal Balance") as of the Issue 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 GMAC Commercial
Mortgage Securities, Inc., as Depositor, GMAC Commercial Mortgage Corporation,
as Master Servicer and Special Servicer, LaSalle National Bank, as Trustee and
ABN AMRO Bank N.V., as Fiscal Agent. To the extent not defined herein, the
capitalized terms used herein have the respective meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on
the 15th day of each month or, if such 15th day is not a Business Day, the
Business Day immediately following (each, a "Distribution Date"), 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 (as to the Class
D Certificates, 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 any Class D Certificate will be made by the Trustee by wire
transfer in 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 Trustee with wiring instructions
no less than five Business Days prior to the Record Date for such distribution
(which wiring instructions may be in the form of a standing order applicable to
all subsequent distributions as well), or otherwise by check mailed to the
address of such Certificateholder appearing in the Certificate Register.
Notwithstanding the above, the final distribution on this Certificate
(determined without regard to any possible future
A-6-2
<PAGE>
reimbursement of any Realized Loss or Additional Trust Fund Expense previously
allocated to this Certificate) will be made after due notice by the Trustee of
the pendency of such distribution and only upon presentation and surrender of
this Certificate at the offices of the Certificate Registrar appointed as
provided in the Agreement or such other location as may be specified in such
notice. 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 appeared in the Certificate Register or to any such other address
of which the Trustee is subsequently notified in writing.
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 Depositor's Mortgage Pass-Through Certificates, Series 1998-C2
(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 and the Distribution 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 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.
Any purchaser of a Class D Certificate will be deemed to have
represented by such purchase that either (a) such purchaser is not an employee
benefit plan or other retirement arrangement, including individual retirement
accounts and annuities, Keogh plans and collective investment funds and separate
accounts in which such plans, accounts or arrangements are invested, that is
subject to ERISA or Section 4975 of the Code (each, a "Plan") and is not
purchasing such Certificate by or on behalf of, or with "plan assets" of, any
Plan or (b) the purchase of any such Certificate by or on behalf of, or with
"plan assets" of, any Plan is permissible under applicable law, will not result
in any non-exempt prohibited transaction under ERISA or Section 4975 of the
Code, and will not subject the Depositor, the Trustee, the Fiscal Agent or the
Servicer to any obligation in addition to those undertaken in the Agreement, and
the following conditions are met: (a) the source of funds used to purchase such
Certificate is an "insurance company general account" (as such term is defined
in PTCE 95-60) and (b) the conditions set forth in Sections I and III of PTCE
95-60 have been satisfied as of the date of the acquisition of such Certificate
and the condition set forth in Section I(a) of PTCE 95-60 will be satisfied
throughout the prospective transferees' holding of such Certificate. The
Trustee may require that any prospective transferee of a Class D Certificate
that is held as a Definitive Certificate, provide such certifications as the
Trustee may deem desirable or necessary in order to establish that such
transferee or the Person in whose name such registration is requested is not a
Plan or a Person who is directly or indirectly purchasing such Certificate on
behalf of, as named fiduciary of, as trustee of, or with assets of a Plan.
No service charge will be imposed for any registration of transfer or
exchange of Class D Certificates, but the Trustee or 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.
A-6-3
<PAGE>
Notwithstanding the foregoing, for so long as this Certificate is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC, transfers of interests in this Certificate
shall be made through the book-entry facilities of DTC.
Prior to due presentment of this Certificate for registration of
transfer, the Depositor, the Master Servicer, the Special Servicer, the Trustee,
the Fiscal Agent, the Certificate Registrar and any agents of any of them 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 Fiscal 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 Depositor or LB
Holdings at a price determined as provided in the Agreement of all Mortgage
Loans and any REO Properties remaining in the Trust Fund. The Agreement
permits, but does not require, the Depositor, the Master Servicer or LB Holdings
to purchase from the Trust Fund all Mortgage Loans and any REO Properties
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 Cut-off Date Principal Balance of the Mortgage Pool
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 Fiscal
Agent thereunder and the rights of the Certificateholders thereunder, at any
time by the Depositor, the Master Servicer, the Special Servicer, the Trustee
and the Fiscal Agent with the consent of the Holders of Certificates entitled to
at least 662/3% 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 circumstances,
including any amendment necessary to maintain the status of designated portions
of the Trust Fund as a REMIC, without the consent of the Holders of any of the
Certificates.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The registered Holder hereof, by its acceptance hereof, agrees that it
will look solely to the Trust Fund (to the extent of its rights therein) for
distributions hereunder.
This Certificate shall be construed in accordance with the internal
laws of the State of New York applicable to agreements made and to be performed
in said State, and the obligations, rights and remedies of the Holder hereof
shall be determined in accordance with such laws.
A-6-4
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
LaSalle National Bank,
as Trustee
By:
---------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class D Certificates referred to in the
within-mentioned Agreement.
Dated: August 27, 1998
LaSalle National Bank,
as Certificate Registrar
By:
---------------------------------
Authorized Officer
<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 the above named assignee on the Certificate
Register of the Trust Fund.
I (we) further direct the issuance of a new Mortgage Pass-Through
Certificate of a like Percentage Interest and Class to the above named assignee
and delivery of such Mortgage Pass-Through Certificate to the following address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Dated:
-------------------------------------
Signature by or on behalf of Assignor
-------------------------------------
Signature Guaranteed
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.
A-6-6
<PAGE>
EXHIBIT A-7
FORM OF CLASS E CERTIFICATE
CLASS E MORTGAGE
PASS-THROUGH CERTIFICATE,
SERIES 1998-C2
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool (the "Mortgage Pool") of multifamily and
commercial mortgage loans (the "Mortgage Loans"), such pool being formed and
sold by
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
<TABLE>
<S> <C>
Pass-Through Rate: Certificate Principal Balance of this Class E
6.500% per annum Certificate as of the Issue Date: $[ ]
Date of Pooling and Servicing Agreement: Class Principal Balance of all the Class E Certificates
August 1, 1998 as of the Issue Date: $37,955,000
Cut-off Date: With respect to any Mortgage Aggregate unpaid principal balance of the Mortgage
Loan, the Due Date for such Mortgage Loan Pool as of the Cut-off Date, after deducting payments
in August, 1998 of principal due on or before such date, whether or not
received: $2,530,361,727
Issue Date: August 27, 1998
Trustee: LaSalle National Bank
First Distribution Date: September 15, 1998
CUSIP No. 361849 ED 0
Master Servicer and Special Servicer:
GMAC Commercial Mortgage Corporation
</TABLE>
Certificate No. E-
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE DEPOSITOR, THE
TRUSTEE, 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 GMAC
COMMERCIAL MORTGAGE SECURITIES, INC., GMAC COMMERCIAL MORTGAGE CORPORATION,
LASALLE NATIONAL BANK, ABN AMRO BANK N.V. OR ANY OF THEIR RESPECTIVE AFFILIATES.
NEITHER THIS CERTIFICATE NOR THE 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 X, CLASS B,
CLASS C AND CLASS D CERTIFICATES OF THE SAME SERIES, AS AND TO THE EXTENT
PROVIDED IN THE AGREEMENT REFERRED TO HEREIN.
<PAGE>
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN TO AN EMPLOYEE BENEFIT
PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE INTERNAL REVENUE CODE OF 1986
(THE "CODE"), OR TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS
CERTIFICATE OR ANY INTEREST HEREIN 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 SET
FORTH IN THE AGREEMENT.
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.
THIS CERTIFICATE HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT ("OID") FOR
FEDERAL INCOME TAX PURPOSES. FOR INFORMATION REGARDING THE ISSUE PRICE AND
YIELD TO MATURITY OF THIS CERTIFICATE AND THE AMOUNT OF OID PER INITIAL
CERTIFICATE PRINCIPAL AMOUNT, CALL LASALLE NATIONAL BANK, ATTENTION: ASSET
BACKED SECURITIES TRUST AT 312-904-1487.
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN FOLLOWING RETIREMENT OF THE
CLASS A-1, CLASS A-2, CLASS B, CLASS C AND CLASS D CERTIFICATES OF THE SAME
SERIES. IN ADDITION, FOLLOWING THE DATE ON WHICH THE AGGREGATE CERTIFICATE
PRINCIPAL BALANCE OF THE CLASS F, CLASS G, CLASS H, CLASS J, CLASS K, CLASS L,
CLASS M AND CLASS N CERTIFICATES OF THE SAME SERIES IS REDUCED TO ZERO, THE
CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE MAY BE REDUCED IN CONNECTION
WITH LOSSES ON THE MORTGAGE LOANS AND CERTAIN UNANTICIPATED EXPENSES.
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 balance of this Class E Certificate (its "Certificate Principal
Balance") as of the Issue Date by the aggregate principal balance of all the
Class E Certificates (their "Class Principal Balance") as of the Issue 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 GMAC Commercial
Mortgage Securities, Inc., as Depositor, GMAC Commercial Mortgage Corporation,
as Master Servicer and Special Servicer, LaSalle National Bank, as Trustee and
ABN AMRO Bank N.V., as Fiscal Agent. To the extent not defined herein, the
capitalized terms used herein have the respective meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on
the 15th day of each month or, if such 15th day is not a Business Day, the
Business Day immediately following (each, a "Distribution Date"), 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 any Class E
Certificate will be made by the Trustee by wire transfer in 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 Trustee with wiring instructions no less than five Business
Days prior to the Record Date for such distribution (which wiring instructions
may be in the form of a standing order applicable to all subsequent
distributions as well), or otherwise by check mailed to the address of such
Certificateholder appearing in the Certificate Register. Notwithstanding the
above, the final distribution on this Certificate (determined without regard to
any possible future reimbursement of any Realized Loss
A-7-2
<PAGE>
or Additional Trust Fund Expense previously allocated to this Certificate) will
be made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the offices of the
Certificate Registrar appointed as provided in the Agreement or such other
location as may be specified in such notice. 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 appeared in the Certificate Register or to any
such other address of which the Trustee is subsequently notified in writing.
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 Depositor's Mortgage Pass-Through Certificates, Series 1998-C2
(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 and the Distribution 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 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.
Any purchaser of a Class E Certificate will be deemed to have
represented by such purchase that either (a) such purchaser is not an employee
benefit plan or other retirement arrangement, including individual retirement
accounts and annuities, Keogh plans and collective investment funds and separate
accounts in which such plans, accounts or arrangements are invested, that is
subject to ERISA or Section 4975 of the Code (each, a "Plan") and is not
purchasing such Certificate by or on behalf of, or with "plan assets" of, any
Plan or (b) the purchase of any such Certificate by or on behalf of, or with
"plan assets" of, any Plan is permissible under applicable law, will not result
in any non-exempt prohibited transaction under ERISA or Section 4975 of the
Code, and will not subject the Depositor, the Trustee, the Fiscal Agent or the
Servicer to any obligation in addition to those undertaken in the Agreement, and
the following conditions are met: (a) the source of funds used to purchase such
Certificate is an "insurance company general account" (as such term is defined
in PTCE 95-60) and (b) the conditions set forth in Sections I and III of PTCE
95-60 have been satisfied as of the date of the acquisition of such Certificate
and the condition set forth in Section I(a) of PTCE 95-60 will be satisfied
throughout the prospective transferees' holding of such Certificate. The
Trustee may require that any prospective transferee of a Class E Certificate
that is held as a Definitive Certificate, provide such certifications as the
Trustee may deem desirable or necessary in order to establish that such
transferee or the Person in whose name such registration is requested is not a
Plan or a Person who is directly or indirectly purchasing such Certificate on
behalf of, as named fiduciary of, as trustee of, or with assets of a Plan.
No service charge will be imposed for any registration of transfer or
exchange of Class E Certificates, but the Trustee or 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
E Certificates.
A-7-3
<PAGE>
Notwithstanding the foregoing, for so long as this Certificate is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC, transfers of interests in this Certificate
shall be made through the book-entry facilities of DTC.
Prior to due presentment of this Certificate for registration of
transfer, the Depositor, the Master Servicer, the Special Servicer, the Trustee,
the Fiscal Agent, the Certificate Registrar and any agents of any of them 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 Fiscal 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 Depositor or LB
Holdings at a price determined as provided in the Agreement of all Mortgage
Loans and any REO Properties remaining in the Trust Fund. The Agreement
permits, but does not require, the Depositor, the Master Servicer or LB Holdings
to purchase from the Trust Fund all Mortgage Loans and any REO Properties
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 Cut-off Date Principal Balance of the Mortgage Pool
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 Fiscal
Agent thereunder and the rights of the Certificateholders thereunder, at any
time by the Depositor, the Master Servicer, the Special Servicer, the Trustee
and the Fiscal Agent with the consent of the Holders of Certificates entitled to
at least 662/3% 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 circumstances,
including any amendment necessary to maintain the status of designated portions
of the Trust Fund as a REMIC, without the consent of the Holders of any of the
Certificates.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The registered Holder hereof, by its acceptance hereof, agrees that it
will look solely to the Trust Fund (to the extent of its rights therein) for
distributions hereunder.
This Certificate shall be construed in accordance with the internal
laws of the State of New York applicable to agreements made and to be performed
in said State, and the obligations, rights and remedies of the Holder hereof
shall be determined in accordance with such laws.
A-7-4
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
LaSalle National Bank,
as Trustee
By:
---------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class E Certificates referred to in the
within-mentioned Agreement.
Dated: August 27, 1998
LaSalle National Bank,
as Certificate Registrar
By:
---------------------------------
Authorized Officer
<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 the above named assignee on the Certificate
Register of the Trust Fund.
I (we) further direct the issuance of a new Mortgage Pass-Through
Certificate of a like Percentage Interest and Class to the above named assignee
and delivery of such Mortgage Pass-Through Certificate to the following address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Dated:
-------------------------------------
Signature by or on behalf of Assignor
-------------------------------------
Signature Guaranteed
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.
A-7-6
<PAGE>
EXHIBIT A-8
FORM OF CLASS F CERTIFICATE
CLASS F MORTGAGE
PASS-THROUGH CERTIFICATE,
SERIES 1998-C2
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool (the "Mortgage Pool") of multifamily and
commercial mortgage loans (the "Mortgage Loans"), such pool being formed and
sold by
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
<TABLE>
<S> <C>
Pass-Through Rate: Certificate Principal Balance of this Class F
6.500% per annum Certificate as of the Issue Date: $[ ]
Date of Pooling and Servicing Agreement: Class Principal Balance of all the Class F Certificates
August 1, 1998 as of the Issue Date: $88,563,000
Cut-off Date: With respect to any Mortgage Aggregate unpaid principal balance of the Mortgage
Loan, the Due Date for such Mortgage Loan Pool as of the Cut-off Date, after deducting payments
in August, 1998 of principal due on or before such date, whether or not
received: $2,530,361,727
Issue Date: August 27, 1998
Trustee: LaSalle National Bank
First Distribution Date: September 15, 1998
CUSIP No. 361849 EE 8
Master Servicer and Special Servicer:
GMAC Commercial Mortgage Corporation
</TABLE>
Certificate No. F-
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE DEPOSITOR, THE
TRUSTEE, 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 GMAC
COMMERCIAL MORTGAGE SECURITIES, INC., GMAC COMMERCIAL MORTGAGE CORPORATION,
LASALLE NATIONAL BANK, ABN AMRO BANK N.V. OR ANY OF THEIR RESPECTIVE AFFILIATES.
NEITHER THIS CERTIFICATE NOR THE 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 X, CLASS B,
CLASS C, CLASS D AND CLASS E CERTIFICATES OF THE SAME SERIES, AS AND TO THE
EXTENT PROVIDED IN THE AGREEMENT REFERRED TO HEREIN.
<PAGE>
THIS CERTIFICATE HAS NOT BEEN 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 AGREEMENT.
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN TO AN EMPLOYEE BENEFIT
PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE INTERNAL REVENUE CODE OF 1986
(THE "CODE"), OR TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS
CERTIFICATE OR ANY INTEREST HEREIN 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 SET
FORTH IN THE AGREEMENT.
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.
THIS CERTIFICATE HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT ("OID") FOR
FEDERAL INCOME TAX PURPOSES. FOR INFORMATION REGARDING THE ISSUE PRICE AND
YIELD TO MATURITY OF THIS CERTIFICATE AND THE AMOUNT OF OID PER INITIAL
CERTIFICATE PRINCIPAL AMOUNT, CALL LASALLE NATIONAL BANK, ATTENTION: ASSET
BACKED SECURITIES TRUST AT 312-904-1487.
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN FOLLOWING RETIREMENT OF THE
CLASS A-1, CLASS A-2, CLASS B, CLASS C, CLASS D AND CLASS E CERTIFICATES OF THE
SAME SERIES. IN ADDITION, FOLLOWING THE DATE ON WHICH THE AGGREGATE CERTIFICATE
PRINCIPAL BALANCES OF THE CLASS G, CLASS H, CLASS J, CLASS K, CLASS L, CLASS M
AND CLASS N CERTIFICATES OF THE SAME SERIES ARE REDUCED TO ZERO, THE CERTIFICATE
PRINCIPAL BALANCE OF THIS CERTIFICATE MAY BE REDUCED IN CONNECTION WITH LOSSES
ON THE MORTGAGE LOANS AND CERTAIN UNANTICIPATED EXPENSES. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN
THE AMOUNT SHOWN ABOVE. 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 F Certificate (obtained by dividing
the principal balance of this Class F Certificate (its "Certificate Principal
Balance") as of the Issue Date by the aggregate principal balance of all the
Class F Certificates (their "Class Principal Balance") as of the Issue 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 GMAC Commercial
Mortgage Securities, Inc., as Depositor, GMAC Commercial Mortgage Corporation,
as Master Servicer and Special Servicer, LaSalle National Bank, as Trustee and
ABN AMRO Bank N.V., as Fiscal Agent. To the extent not defined herein, the
capitalized terms used herein have the respective meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on
the 15th day of each month or, if such 15th day is not a Business Day, the
Business Day immediately following (each, a "Distribution Date"), 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
A-8-2
<PAGE>
(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 any
Class F Certificate will be made by the Trustee by wire transfer in 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 Trustee with wiring instructions no less than five Business
Days prior to the Record Date for such distribution (which wiring instructions
may be in the form of a standing order applicable to all subsequent
distributions as well), or otherwise by check mailed to the address of such
Certificateholder appearing in the Certificate Register. Notwithstanding the
above, 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 after due notice
by the Trustee of the pendency of such distribution and only upon presentation
and surrender of this Certificate at the offices of the Certificate Registrar
appointed as provided in the Agreement or such other location as may be
specified in such notice. 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 appeared in the Certificate Register or to any
such other address of which the Trustee is subsequently notified in writing.
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 Depositor's Mortgage Pass-Through Certificates, Series 1998-C2
(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 and the Distribution 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 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 that does not require such
registration or qualification. If such a transfer of any Class F Certificate
(other than a transfer thereof by the Depositor or any Affiliate of the
Depositor) is to be made without registration under the Securities Act, then the
Trustee shall require, in order to assure compliance with such laws, receipt by
it and the Depositor of: (i) if such transfer is purportedly being made in
reliance upon Rule 144A under the Securities Act, a certificate from the
Certificateholder desiring to effect such transfer substantially in the form
attached as Exhibit B-1 to the Agreement and a certificate from such
Certificateholder's prospective transferee substantially in the form attached as
Exhibit B-2 to the Agreement; and (ii) in all other cases, (A) a certificate
from the Certificateholder desiring to effect such transfer substantially in the
form attached to the Agreement as Exhibit B-1 and a certificate from such
Certificateholder's prospective transferee substantially in the form attached to
the Agreement as Exhibit B-3, and (B) unless the Depositor directs otherwise, an
Opinion of Counsel
A-8-3
<PAGE>
satisfactory to the Trustee and the Depositor to the effect that such transfer
may be made without such registration (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, the Fiscal Agent or the Certificate Registrar in their
respective capacities as such). Notwithstanding the foregoing, so long as the
Class F Certificates (or any portion thereof) are registered in the name of Cede
& Co., as nominee of DTC, transfers of a beneficial interest therein in
accordance with the rules and procedures of the Depository applicable to
transfers by its respective participants will be permitted if such transfer is
made in accordance with Rule 144A promulgated under the Securities Act. Any
transfer of a beneficial interest in any Class G Certificate that is registered
in the name of Cede & Co., as nominee of DTC, other than pursuant to Rule 144A,
or to a transferee that wishes to take delivery of such interest in definitive
form, will be permitted upon: (A) receipt by the Trustee and the Depositor of
the documentation required by Section 5.02(b)(i)(A) or (B) of the Agreement; (B)
the execution by the Trustee, and the authentication and delivery by the
Certificate Registrar to the transferee, of a Definitive Certificate
representing such beneficial interest; and (C) to the extent that the beneficial
interest being transferred does not represent the entire Certificate Principal
Balance of the Class F Certificates, the execution by the Trustee, and the
authentication and delivery by the Certificate Registrar to the Depository of, a
Class F Certificate representing the remaining beneficial interest of such Class
F Certificates. None of the Depositor, the Trustee, the Fiscal Agent 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 by the
acceptance of its Class F Certificate agrees to, indemnify the Depositor, the
Trustee, the Fiscal Agent and the Certificate Registrar 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 F Certificate that is not registered in the
name of Cede & Co. or any interest therein shall be made to (A) any employee
benefit plan or other retirement arrangement, including individual retirement
accounts and annuities, Keogh plans and collective investment funds and separate
accounts in which such plans, accounts or arrangements are invested, that is
subject to ERISA or Section 4975 of the Code (each, a "Plan") or (B) any Person
who is directly or indirectly purchasing the Class F Certificate or interest
therein on behalf of, as named fiduciary of, as trustee of, or with assets of a
Plan, unless the prospective transferee provides the Trustee, the Fiscal Agent,
the Master Servicer and the Depositor with a certification of facts and an
Opinion of Counsel which establish to the satisfaction of the Trustee, the
Fiscal Agent, the Master Servicer and the Depositor that such transfer is
permissible under applicable law, will not constitute or result in a violation
of Section 406 of ERISA or Section 4975 of the Code and will not subject the
Depositor, the Trustee, the Fiscal Agent or the Master Servicer to any
obligation in addition to those undertaken in the Agreement. In lieu of such
opinion of counsel, the prospective transferee of a Class F Certificate may
provide a certification of facts substantially to the effect that the purchase
of such Certificate by or on behalf of, or with assets of, any Plan is
permissible under applicable law, will not constitute or result in any
non-exempt prohibited transaction under ERISA or Section 4975 of the Code, will
not subject the Depositor, the Trustee, the Fiscal Agent or the Master Servicer
to any obligation in addition to those undertaken in the Agreement, and the
following conditions are met: (a) the source of funds used to purchase such
Certificate is an "insurance company general account" (as such term is defined
in United States Department of Labor Prohibited Transaction Class Exemption
("PTCE") 95-60) and (b) the conditions set forth in Sections I and III of PTCE
95-60 have been satisfied as of the date of the acquisition of such Certificate
and the condition set forth in Section I(a) of PTCE 95-60 will be satisfied
throughout the prospective transferees' holding of such Certificate. In
addition, so long as the Class F Certificates (or any portion thereof) are
registered in the name of Cede & Co., as nominee of DTC, any purchaser of such
Certificates will be deemed to have represented by such purchase that either (a)
such purchaser is not a Plan and is not purchasing such Certificates by or on
behalf of, or with "plan assets" of, any Plan or (b) the purchase of any such
Certificate by or on behalf of, or with "plan assets" of, any Plan is
permissible under applicable law, will not result in any non-exempt prohibited
transaction under ERISA or Section 4975 of the Code, and will not subject the
Depositor, the Trustee, the Fiscal Agent or the Servicer to any obligation in
addition to those undertaken in the Agreement, and the following conditions are
met: (a) the source of funds used to purchase such Certificates is an "insurance
company general account" (as such term is defined in PTCE 95-60) and (b) the
conditions set forth in Sections I and III of PTCE 95-60 have been satisfied as
of the date of the acquisition of such Certificates and the condition set forth
in Section I(a) of PTCE 95-60 will be satisfied throughout the prospective
transferees' holding of such Certificates. The Trustee may require that any
prospective transferee of a Class F Certificate that is held as a Definitive
Certificate, provide such certifications as the Trustee may deem desirable or
necessary in order to establish that such transferee or the Person in whose name
such registration is requested is not a Plan or a Person who is
A-8-4
<PAGE>
directly or indirectly purchasing such Certificate on behalf of, as named
fiduciary of, as trustee of, or with assets of a Plan.
No service charge will be imposed for any registration of transfer or
exchange of Class F Certificates, but the Trustee or the Certificate Registrar
may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of Class
F Certificates.
Notwithstanding the foregoing, for so long as this Certificate is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC, transfers of interests in this Certificate
shall be made through the book-entry facilities of DTC.
Prior to due presentment of this Certificate for registration of
transfer, the Depositor, the Master Servicer, the Special Servicer, the Trustee,
the Fiscal Agent, the Certificate Registrar and any agents of any of them 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 Fiscal 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 Depositor or LB
Holdings at a price determined as provided in the Agreement of all Mortgage
Loans and any REO Properties remaining in the Trust Fund. The Agreement
permits, but does not require, the Depositor, the Master Servicer or LB Holdings
to purchase from the Trust Fund all Mortgage Loans and any REO Properties
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 Cut-off Date Principal Balance of the Mortgage Pool
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 Fiscal
Agent thereunder and the rights of the Certificateholders thereunder, at any
time by the Depositor, the Master Servicer, the Special Servicer, the Trustee
and the Fiscal Agent with the consent of the Holders of Certificates entitled to
at least 662/3% 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 circumstances,
including any amendment necessary to maintain the status of designated portions
of the Trust Fund as a REMIC, without the consent of the Holders of any of the
Certificates.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The registered Holder hereof, by its acceptance hereof, agrees that it
will look solely to the Trust Fund (to the extent of its rights therein) for
distributions hereunder.
This Certificate shall be construed in accordance with the internal
laws of the State of New York applicable to agreements made and to be performed
in said State, and the obligations, rights and remedies of the Holder hereof
shall be determined in accordance with such laws.
A-8-5
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
LaSalle National Bank,
as Trustee
By:
---------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class F Certificates referred to in the
within-mentioned Agreement.
Dated: August 27, 1998
LaSalle National Bank,
as Certificate Registrar
By:
---------------------------------
Authorized Officer
<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 the above named assignee on the Certificate
Register of the Trust Fund.
I (we) further direct the issuance of a new Mortgage Pass-Through
Certificate of a like Percentage Interest and Class to the above named assignee
and delivery of such Mortgage Pass-Through Certificate to the following address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Dated:
-------------------------------------
Signature by or on behalf of Assignor
-------------------------------------
Signature Guaranteed
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.
A-8-7
<PAGE>
EXHIBIT A-9
FORM OF CLASS G CERTIFICATE
CLASS G MORTGAGE
PASS-THROUGH CERTIFICATE,
SERIES 1998-C2
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool (the "Mortgage Pool") of multifamily and
commercial mortgage loans (the "Mortgage Loans"), such pool being formed and
sold by
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
<TABLE>
<S> <C>
Pass-Through Rate: Certificate Principal Balance of this Class G
6.050% Certificate as of the Issue Date: $[ ]
Date of Pooling and Servicing Agreement: Class Principal Balance of all the Class G Certificates
August 1, 1998 as of the Issue Date: $44,281,000
Cut-off Date: With respect to any Mortgage Aggregate unpaid principal balance of the Mortgage
Loan, the Due Date for such Mortgage Loan Pool as of the Cut-off Date, after deducting payments
in August, 1998 of principal due on or before such date, whether or not
received: $2,530,361,727
Issue Date: August 27, 1998
Trustee: LaSalle National Bank
First Distribution Date: September 15, 1998
CUSIP No. 361849 EF 5
Master Servicer and Special Servicer:
GMAC Commercial Mortgage Corporation
</TABLE>
Certificate No. G-
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE DEPOSITOR, THE
TRUSTEE, 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 GMAC
COMMERCIAL MORTGAGE SECURITIES, INC., GMAC COMMERCIAL MORTGAGE CORPORATION,
LASALLE NATIONAL BANK, ABN AMRO BANK N.V. OR ANY OF THEIR RESPECTIVE AFFILIATES.
NEITHER THIS CERTIFICATE NOR THE 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 X, CLASS B,
CLASS C, CLASS D, CLASS E AND CLASS F CERTIFICATES OF THE SAME SERIES, AS AND TO
THE EXTENT PROVIDED IN THE AGREEMENT REFERRED TO HEREIN.
<PAGE>
THIS CERTIFICATE HAS NOT BEEN 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 AGREEMENT.
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN TO AN EMPLOYEE BENEFIT
PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE INTERNAL REVENUE CODE OF 1986
(THE "CODE"), OR TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS
CERTIFICATE OR ANY INTEREST HEREIN 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 SET
FORTH IN THE AGREEMENT.
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.
THIS CERTIFICATE HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT ("OID") FOR
FEDERAL INCOME TAX PURPOSES. FOR INFORMATION REGARDING THE ISSUE PRICE AND
YIELD TO MATURITY OF THIS CERTIFICATE AND THE AMOUNT OF OID PER INITIAL
CERTIFICATE PRINCIPAL AMOUNT, CALL LASALLE NATIONAL BANK, ATTENTION: ASSET
BACKED SECURITIES TRUST AT 312-904-1487.
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN FOLLOWING RETIREMENT OF THE
CLASS A-1, CLASS A-2, CLASS B, CLASS C, CLASS D, CLASS E AND CLASS F
CERTIFICATES OF THE SAME SERIES. IN ADDITION, FOLLOWING THE DATE ON WHICH THE
AGGREGATE CERTIFICATE PRINCIPAL BALANCES OF THE CLASS H, CLASS J, CLASS K, CLASS
L, CLASS M AND CLASS N CERTIFICATES OF THE SAME SERIES ARE REDUCED TO ZERO, THE
CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE MAY BE REDUCED IN CONNECTION
WITH LOSSES ON THE MORTGAGE LOANS AND CERTAIN UNANTICIPATED EXPENSES.
ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ABOVE. 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 G Certificate (obtained by dividing
the principal balance of this Class G Certificate (its "Certificate Principal
Balance") as of the Issue Date by the aggregate principal balance of all the
Class G Certificates (their "Class Principal Balance") as of the Issue 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 GMAC Commercial
Mortgage Securities, Inc., as Depositor, GMAC Commercial Mortgage Corporation,
as Master Servicer and Special Servicer, LaSalle National Bank, as Trustee and
ABN AMRO Bank N.V., as Fiscal Agent. To the extent not defined herein, the
capitalized terms used herein have the respective meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on
the 15th day of each month or, if such 15th day is not a Business Day, the
Business Day immediately following (each, a "Distribution Date"), 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
A-9-2
<PAGE>
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 any Class G Certificate will be made
by the Trustee by wire transfer in 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 Trustee
with wiring instructions no less than five Business Days prior to the Record
Date for such distribution (which wiring instructions may be in the form of a
standing order applicable to all subsequent distributions as well), or otherwise
by check mailed to the address of such Certificateholder appearing in the
Certificate Register. Notwithstanding the above, 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 after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the offices of the Certificate Registrar appointed as provided in the
Agreement or such other location as may be specified in such notice. 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 appeared in the
Certificate Register or to any such other address of which the Trustee is
subsequently notified in writing.
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 Depositor's Mortgage Pass-Through Certificates, Series 1998-C2
(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 and the Distribution 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 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 that does not require such
registration or qualification. If such a transfer of any Class G Certificate
(other than a transfer thereof by the Depositor or any Affiliate of the
Depositor) is to be made without registration under the Securities Act, then the
Trustee shall require, in order to assure compliance with such laws, receipt by
it and the Depositor of: (i) if such transfer is purportedly being made in
reliance upon Rule 144A under the Securities Act, a certificate from the
Certificateholder desiring to effect such transfer substantially in the form
attached as Exhibit B-1 to the Agreement and a certificate from such
Certificateholder's prospective transferee substantially in the form attached as
Exhibit B-2 to the Agreement; and (ii) in all other cases, (A) a certificate
from the Certificateholder desiring to effect such transfer substantially in the
form attached to the Agreement as Exhibit B-1 and a certificate from such
Certificateholder's prospective transferee substantially in the form attached to
the Agreement as Exhibit B-3, and (B) unless the Depositor directs otherwise, an
Opinion of Counsel satisfactory to the Trustee and the Depositor to the effect
that such transfer may be made without such registration
A-9-3
<PAGE>
(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, the Fiscal
Agent or the Certificate Registrar in their respective capacities as such).
Notwithstanding the foregoing, so long as the Class G Certificates (or any
portion thereof) are registered in the name of Cede & Co., as nominee of DTC,
transfers of a beneficial interest therein in accordance with the rules and
procedures of the Depository applicable to transfers by its respective
participants will be permitted if such transfer is made in accordance with Rule
144A promulgated under the Securities Act. Any transfer of a beneficial
interest in any Class G Certificate that is registered in the name of Cede &
Co., as nominee of DTC, other than pursuant to Rule 144A, or to a transferee
that wishes to take delivery of such interest in definitive form, will be
permitted upon: (A) receipt by the Trustee and the Depositor of the
documentation required by Section 5.02(b)(i)(A) or (B) of the Agreement; (B) the
execution by the Trustee, and the authentication and delivery by the Certificate
Registrar to the transferee, of a Definitive Certificate representing such
beneficial interest; and (C) to the extent that the beneficial interest being
transferred does not represent the entire Certificate Principal Balance of the
Class G Certificates, the execution by the Trustee, and the authentication and
delivery by the Certificate Registrar to the Depository of, a Class G
Certificate representing the remaining beneficial interest of such Class G
Certificates. None of the Depositor, the Trustee, the Fiscal Agent 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 by the
acceptance of its Class G Certificate agrees to, indemnify the Depositor, the
Trustee, the Fiscal Agent and the Certificate Registrar 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 G Certificate that is not registered in the
name of Cede & Co. or any interest therein shall be made to (A) any employee
benefit plan or other retirement arrangement, including individual retirement
accounts and annuities, Keogh plans and collective investment funds and separate
accounts in which such plans, accounts or arrangements are invested, that is
subject to ERISA or Section 4975 of the Code (each, a "Plan") or (B) any Person
who is directly or indirectly purchasing the Class G Certificate or interest
therein on behalf of, as named fiduciary of, as trustee of, or with assets of a
Plan, unless the prospective transferee provides the Trustee, the Fiscal Agent,
the Master Servicer and the Depositor with a certification of facts and an
Opinion of Counsel which establish to the satisfaction of the Trustee, the
Fiscal Agent, the Master Servicer and the Depositor that such transfer is
permissible under applicable law, will not constitute or result in a violation
of Section 406 of ERISA or Section 4975 of the Code and will not subject the
Depositor, the Trustee, the Fiscal Agent or the Master Servicer to any
obligation in addition to those undertaken in the Agreement. In lieu of such
opinion of counsel, the prospective transferee of a Class G Certificate may
provide a certification of facts substantially to the effect that the purchase
of such Certificate by or on behalf of, or with assets of, any Plan is
permissible under applicable law, will not constitute or result in any
non-exempt prohibited transaction under ERISA or Section 4975 of the Code, will
not subject the Depositor, the Trustee, the Fiscal Agent or the Master Servicer
to any obligation in addition to those undertaken in the Agreement, and the
following conditions are met: (a) the source of funds used to purchase such
Certificate is an "insurance company general account" (as such term is defined
in United States Department of Labor Prohibited Transaction Class Exemption
("PTCE") 95-60) and (b) the conditions set forth in Sections I and III of PTCE
95-60 have been satisfied as of the date of the acquisition of such Certificates
and the condition set forth in Section I(a) of PTCE 95-60 will be satisfied
throughout the prospective transferees' holding of such Certificate. In
addition, so long as the Class G Certificates (or any portion thereof) are
registered in the name of Cede & Co., as nominee of DTC, any purchaser of such
Certificates will be deemed to have represented by such purchase that either (a)
such purchaser is not a Plan and is not purchasing such Certificates by or on
behalf of, or with "plan assets" of, any Plan or (b) the purchase of any such
Certificates by or on behalf of, or with "plan assets" of, any Plan is
permissible under applicable law, will not result in any non-exempt prohibited
transaction under ERISA or Section 4975 of the Code, and will not subject the
Depositor, the Trustee, the Fiscal Agent or the Servicer to any obligation in
addition to those undertaken in the Agreement, and the following conditions are
met: (a) the source of funds used to purchase such Certificates is an "insurance
company general account" (as such term is defined in PTCE 95-60) and (b) the
conditions set forth in Sections I and III of PTCE 95-60 have been satisfied as
of the date of the acquisition of such Certificates and the condition set forth
in Section I(a) of PTCE 95-60 will be satisfied throughout the prospective
transferees' holding of such Certificates. The Trustee may require that any
prospective transferee of a Class G Certificate that is held as a Definitive
Certificate, provide such certifications as the Trustee may deem desirable or
necessary in order to establish that such transferee or the Person in whose name
such registration is requested is not a Plan or a Person who is
A-9-4
<PAGE>
directly or indirectly purchasing such Certificate on behalf of, as named
fiduciary of, as trustee of, or with assets of a Plan.
No service charge will be imposed for any registration of transfer or
exchange of Class G Certificates, but the Trustee or 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.
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.
Prior to due presentment of this Certificate for registration of
transfer, the Depositor, the Master Servicer, the Special Servicer, the Trustee,
the Fiscal Agent, the Certificate Registrar and any agents of any of them 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 Fiscal 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 Depositor or LB
Holdings at a price determined as provided in the Agreement of all Mortgage
Loans and any REO Properties remaining in the Trust Fund. The Agreement
permits, but does not require, the Depositor, the Master Servicer or LB Holdings
to purchase from the Trust Fund all Mortgage Loans and any REO Properties
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 Cut-off Date Principal Balance of the Mortgage Pool
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 Fiscal
Agent thereunder and the rights of the Certificateholders thereunder, at any
time by the Depositor, the Master Servicer, the Special Servicer, the Trustee
and the Fiscal Agent with the consent of the Holders of Certificates entitled to
at least 662/3% 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 circumstances,
including any amendment necessary to maintain the status of designated portions
of the Trust Fund as a REMIC, without the consent of the Holders of any of the
Certificates.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The registered Holder hereof, by its acceptance hereof, agrees that it
will look solely to the Trust Fund (to the extent of its rights therein) for
distributions hereunder.
This Certificate shall be construed in accordance with the internal
laws of the State of New York applicable to agreements made and to be performed
in said State, and the obligations, rights and remedies of the Holder hereof
shall be determined in accordance with such laws.
A-9-5
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
LaSalle National Bank,
as Trustee
By:
---------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class G Certificates referred to in the
within-mentioned Agreement.
Dated: August 27, 1998
LaSalle National Bank,
as Certificate Registrar
By:
---------------------------------
Authorized Officer
<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 the above named assignee on the Certificate
Register of the Trust Fund.
I (we) further direct the issuance of a new Mortgage Pass-Through
Certificate of a like Percentage Interest and Class to the above named assignee
and delivery of such Mortgage Pass-Through Certificate to the following address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Dated:
-------------------------------------
Signature by or on behalf of Assignor
-------------------------------------
Signature Guaranteed
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.
A-9-7
<PAGE>
EXHIBIT A-10
FORM OF CLASS H CERTIFICATE
CLASS H MORTGAGE
PASS-THROUGH CERTIFICATE,
SERIES 1998-C2
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool (the "Mortgage Pool") of multifamily and
commercial mortgage loans (the "Mortgage Loans"), such pool being formed and
sold by
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
<TABLE>
<S> <C>
Pass-Through Rate: Certificate Principal Balance of this Class H
6.050% Certificate as of the Issue Date: $[ ]
Date of Pooling and Servicing Agreement: Class Principal Balance of all the Class H Certificates
August 1, 1998 as of the Issue Date: $18,978,000
Cut-off Date: With respect to any Mortgage Aggregate unpaid principal balance of the Mortgage
Loan, the Due Date for such Mortgage Loan in Pool as of the Cut-off Date, after deducting payments
August, 1998 of principal due on or before such date, whether or
not received: $2,530,361,727
Issue Date: August 27, 1998
Trustee: LaSalle National Bank
First Distribution Date: September 15, 1998
CUSIP No. 361849 EG 3
Master Servicer and Special Servicer:
GMAC Commercial Mortgage Corporation
</TABLE>
Certificate No. H-
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN GMAC
COMMERCIAL MORTGAGE SECURITIES, INC., GMAC COMMERCIAL MORTGAGE CORPORATION,
LASALLE NATIONAL BANK, ABN AMRO BANK N.V. OR ANY OF THEIR RESPECTIVE AFFILIATES.
NEITHER THIS CERTIFICATE NOR THE 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 X, CLASS B,
CLASS C, CLASS D, CLASS E, CLASS F AND CLASS G CERTIFICATES OF THE SAME SERIES,
AS AND TO THE EXTENT PROVIDED IN THE AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN 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 AGREEMENT.
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN TO AN EMPLOYEE BENEFIT
PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE INTERNAL REVENUE CODE OF 1986
(THE "CODE"), OR TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING
<PAGE>
THIS CERTIFICATE OR ANY INTEREST HEREIN 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 SET
FORTH IN THE AGREEMENT.
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.
THIS CERTIFICATE HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT ("OID") FOR
FEDERAL INCOME TAX PURPOSES. FOR INFORMATION REGARDING THE ISSUE PRICE AND
YIELD TO MATURITY OF THIS CERTIFICATE AND THE AMOUNT OF OID PER INITIAL
CERTIFICATE PRINCIPAL AMOUNT, CALL LASALLE NATIONAL BANK, ATTENTION: ASSET
BACKED SECURITIES TRUST AT 312-904-1487.
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN FOLLOWING RETIREMENT 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. IN ADDITION, FOLLOWING THE DATE ON WHICH THE
AGGREGATE CERTIFICATE PRINCIPAL BALANCES OF THE CLASS J, CLASS K, CLASS L, CLASS
M AND CLASS N CERTIFICATES OF THE SAME SERIES ARE REDUCED TO ZERO, THE
CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE MAY BE REDUCED IN CONNECTION
WITH LOSSES ON THE MORTGAGE LOANS AND CERTAIN UNANTICIPATED EXPENSES.
ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ABOVE.
This certifies that ______________ is the registered owner of the
Percentage Interest evidenced by this Class H Certificate (obtained by dividing
the principal balance of this Class H Certificate (its "Certificate Principal
Balance") as of the Issue Date by the aggregate principal balance of all the
Class H Certificates (their "Class Principal Balance") as of the Issue 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 GMAC Commercial
Mortgage Securities, Inc., as Depositor, GMAC Commercial Mortgage Corporation,
as Master Servicer and Special Servicer, LaSalle National Bank, as Trustee and
ABN AMRO Bank N.V., as Fiscal Agent. To the extent not defined herein, the
capitalized terms used herein have the respective meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on
the 15th day of each month or, if such 15th day is not a Business Day, the
Business Day immediately following (each, a "Distribution Date"), 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 any Class H
Certificate will be made by the Trustee by wire transfer in 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 Trustee with wiring instructions no less than five Business
Days prior to the Record Date for such distribution (which wiring instructions
may be in the form of a standing order applicable to all subsequent
distributions as well), or otherwise by check mailed to the address of such
Certificateholder appearing in the Certificate Register. Notwithstanding the
above, 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 after due notice
by the Trustee of the pendency of such distribution and only upon presentation
and surrender of this Certificate at the offices of the Certificate Registrar
appointed as provided in the Agreement or such other location as may be
specified in such notice. Also notwithstanding the foregoing, any distribution
that may be made with respect to this Certificate in
A-10-2
<PAGE>
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 appeared in the Certificate Register or to any
such other address of which the Trustee is subsequently notified in writing.
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 Depositor's Mortgage Pass-Through Certificates, Series 1998-C2
(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 and the Distribution 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 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 that does not require such
registration or qualification. If such a transfer of any Class H Certificate
(other than a transfer thereof by the Depositor or any Affiliate of the
Depositor) is to be made without registration under the Securities Act, then the
Trustee shall require, in order to assure compliance with such laws, receipt by
it and the Depositor of: (i) if such transfer is purportedly being made in
reliance upon Rule 144A under the Securities Act, a certificate from the
Certificateholder desiring to effect such transfer substantially in the form
attached as Exhibit B-1 to the Agreement and a certificate from such
Certificateholder's prospective transferee substantially in the form attached as
Exhibit B-2 to the Agreement; and (ii) in all other cases, (A) a certificate
from the Certificateholder desiring to effect such transfer substantially in the
form attached to the Agreement as Exhibit B-1 and a certificate from such
Certificateholder's prospective transferee substantially in the form attached to
the Agreement as Exhibit B-3, and (B) unless the Depositor directs otherwise, an
Opinion of Counsel satisfactory to the Trustee and the Depositor to the effect
that such transfer may be made without such registration (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, the Fiscal Agent or the
Certificate Registrar in their respective capacities as such). None of the
Depositor, the Trustee, the Fiscal Agent or the Certificate Registrar is
obligated to register or qualify the Class H 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 by the acceptance of its Class H Certificate agrees
to, indemnify the Depositor, the Trustee, the Fiscal Agent and the Certificate
Registrar 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 H Certificate or any interest therein shall be
made to (A) 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
A-10-3
<PAGE>
is subject to ERISA or Section 4975 of the Code (each, a "Plan") or (B) any
Person who is directly or indirectly purchasing the Class H Certificate or
interest therein on behalf of, as named fiduciary of, as trustee of, or with
assets of a Plan, unless the prospective transferee provides the Trustee, the
Fiscal Agent, the Master Servicer and the Depositor with a certification of
facts and an Opinion of Counsel which establish to the satisfaction of the
Trustee, the Fiscal Agent, the Master Servicer and the Depositor that such
transfer is permissible under applicable law, will not constitute or result in
any non-exempt prohibited transaction under Section 406 of ERISA or Section 4975
of the Code and will not subject the Depositor, the Trustee, the Fiscal Agent or
the Master Servicer to any obligation in addition to those undertaken in the
Agreement. In lieu of such opinion of counsel, the prospective transferee of a
Class H Certificate may provide a certification of facts substantially to the
effect that the purchase of such Certificate by or on behalf of, or with assets
of, any Plan is permissible under applicable law, will not constitute or result
in any non-exempt prohibited transaction under ERISA or Section 4975 of the
Code, will not subject the Depositor, the Trustee, the Fiscal Agent or the
Master Servicer to any obligation in addition to those undertaken in the
Agreement, and the following conditions are met (a) the source of funds used to
purchase such Certificate is an "insurance company general account" (as such
term is defined in United States Department of Labor Prohibited Transaction
Class Exemption ("PTCE") 95-60) and (b) the conditions set forth in Sections I
and III of PTCE 95-60 have been satisfied as of the date of the acquisition of
such Certificate and the condition set forth in Section I(a) of PTCE 95-60 will
be satisfied throughout the prospective transferees' holding of such
Certificate.
No service charge will be imposed for any registration of transfer or
exchange of Class H Certificates, but the Trustee or 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.
Prior to due presentment of this Certificate for registration of
transfer, the Depositor, the Master Servicer, the Special Servicer, the Trustee,
the Fiscal Agent, the Certificate Registrar and any agents of any of them 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 Fiscal 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 Depositor or LB
Holdings at a price determined as provided in the Agreement of all Mortgage
Loans and any REO Properties remaining in the Trust Fund. The Agreement
permits, but does not require, the Depositor, the Master Servicer or LB Holdings
to purchase from the Trust Fund all Mortgage Loans and any REO Properties
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 Cut-off Date Principal Balance of the Mortgage Pool
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 Fiscal
Agent thereunder and the rights of the Certificateholders thereunder, at any
time by the Depositor, the Master Servicer, the Special Servicer, the Trustee
and the Fiscal Agent with the consent of the Holders of Certificates entitled to
at least 662/3% 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 circumstances,
including any amendment necessary to maintain the status of designated portions
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.
A-10-4
<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.
A-10-5
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
LaSalle National Bank,
as Trustee
By:
---------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class H Certificates referred to in the
within-mentioned Agreement.
Dated: August 27, 1998
LaSalle National Bank,
as Certificate Registrar
By:
---------------------------------
Authorized Officer
<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 the above named assignee on the Certificate
Register of the Trust Fund.
I (we) further direct the issuance of a new Mortgage Pass-Through
Certificate of a like Percentage Interest and Class to the above named assignee
and delivery of such Mortgage Pass-Through Certificate to the following address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Dated:
-------------------------------------
Signature by or on behalf of Assignor
-------------------------------------
Signature Guaranteed
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.
A-10-7
<PAGE>
EXHIBIT A-11
FORM OF CLASS J CERTIFICATE
CLASS J MORTGAGE
PASS-THROUGH CERTIFICATE,
SERIES 1998-C2
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool (the "Mortgage Pool") of multifamily and
commercial mortgage loans (the "Mortgage Loans"), such pool being formed and
sold by
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
<TABLE>
<S> <C>
Pass-Through Rate: Certificate Principal Balance of this Class J
6.050% Certificate as of the Issue Date: $[ ]
Date of Pooling and Servicing Agreement: Class Principal Balance of all the Class J Certificates
August 1, 1998 as of the Issue Date: $18,977,000
Cut-off Date: With respect to any Mortgage Aggregate unpaid principal balance of the Mortgage
Loan, the Due Date for such Mortgage Loan Pool as of the Cut-off Date, after deducting payments
in August, 1998 of principal due on or before such date, whether or not
received: $2,530,361,727
Issue Date: August 27, 1998
Trustee: LaSalle National Bank
First Distribution Date: September 15, 1998
CUSIP No. 361849 EH 1
Master Servicer and Special Servicer:
GMAC Commercial Mortgage Corporation
</TABLE>
Certificate No. J-
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN GMAC
COMMERCIAL MORTGAGE SECURITIES, INC., GMAC COMMERCIAL MORTGAGE CORPORATION,
LASALLE NATIONAL BANK, ABN AMRO BANK N.V. OR ANY OF THEIR RESPECTIVE AFFILIATES.
NEITHER THIS CERTIFICATE NOR THE 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 X, CLASS B,
CLASS C, CLASS D, CLASS E, CLASS F, CLASS G AND CLASS H CERTIFICATES OF THE SAME
SERIES, AS AND TO THE EXTENT PROVIDED IN THE AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN 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 AGREEMENT.
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN TO AN EMPLOYEE BENEFIT
PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE INTERNAL REVENUE CODE OF 1986
(THE "CODE"), OR TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING
<PAGE>
THIS CERTIFICATE OR ANY INTEREST HEREIN 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 SET
FORTH IN THE AGREEMENT.
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.
THIS CERTIFICATE HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT ("OID") FOR
FEDERAL INCOME TAX PURPOSES. FOR INFORMATION REGARDING THE ISSUE PRICE AND
YIELD TO MATURITY OF THIS CERTIFICATE AND THE AMOUNT OF OID PER INITIAL
CERTIFICATE PRINCIPAL AMOUNT, CALL LASALLE NATIONAL BANK, ATTENTION: ASSET
BACKED SECURITIES TRUST AT 312-904-1487.
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN FOLLOWING RETIREMENT 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. IN ADDITION, FOLLOWING THE DATE ON
WHICH THE AGGREGATE CERTIFICATE PRINCIPAL BALANCE OF THE [CLASS K, CLASS L,
CLASS M AND CLASS N CERTIFICATES] OF THE SAME SERIES ARE REDUCED TO ZERO, THE
CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE MAY BE REDUCED IN CONNECTION
WITH LOSSES ON THE MORTGAGE LOANS AND CERTAIN UNANTICIPATED EXPENSES.
ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ABOVE.
This certifies that ______________ is the registered owner of the
Percentage Interest evidenced by this Class J Certificate (obtained by dividing
the principal balance of this Class J Certificate (its "Certificate Principal
Balance") as of the Issue Date by the aggregate principal balance of all the
Class J Certificates (their "Class Principal Balance") as of the Issue 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 GMAC Commercial
Mortgage Securities, Inc., as Depositor, GMAC Commercial Mortgage Corporation,
as Master Servicer and Special Servicer, LaSalle National Bank, as Trustee and
ABN AMRO Bank N.V., as Fiscal Agent. To the extent not defined herein, the
capitalized terms used herein have the respective meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on
the 15th day of each month or, if such 15th day is not a Business Day, the
Business Day immediately following (each, a "Distribution Date"), 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 any Class J
Certificate will be made by the Trustee by wire transfer in 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 Trustee with wiring instructions no less than five Business
Days prior to the Record Date for such distribution (which wiring instructions
may be in the form of a standing order applicable to all subsequent
distributions as well), or otherwise by check mailed to the address of such
Certificateholder appearing in the Certificate Register. Notwithstanding the
above, 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 after due notice
by the Trustee of the pendency of such distribution and only upon presentation
and surrender of this Certificate at the offices of the Certificate Registrar
appointed as provided in the Agreement or such other location as may be
specified in such notice. Also notwithstanding the foregoing, any distribution
that may be made with respect to this Certificate in
A-11-2
<PAGE>
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 appeared in the Certificate Register or to any
such other address of which the Trustee is subsequently notified in writing.
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 Depositor's Mortgage Pass-Through Certificates, Series 1998-C2
(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 and the Distribution 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 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 that does not require such
registration or qualification. If such a transfer of any Class J Certificate
(other than a transfer thereof by the Depositor or any Affiliate of the
Depositor) is to be made without registration under the Securities Act, then the
Trustee shall require, in order to assure compliance with such laws, receipt by
it and the Depositor of: (i) if such transfer is purportedly being made in
reliance upon Rule 144A under the Securities Act, a certificate from the
Certificateholder desiring to effect such transfer substantially in the form
attached as Exhibit B-1 to the Agreement and a certificate from such
Certificateholder's prospective transferee substantially in the form attached as
Exhibit B-2 to the Agreement; and (ii) in all other cases, (A) a certificate
from the Certificateholder desiring to effect such transfer substantially in the
form attached to the Agreement as Exhibit B-1 and a certificate from such
Certificateholder's prospective transferee substantially in the form attached to
the Agreement as Exhibit B-3, and (B) unless the Depositor directs otherwise, an
Opinion of Counsel satisfactory to the Trustee and the Depositor to the effect
that such transfer may be made without such registration (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, the Fiscal Agent or the
Certificate Registrar in their respective capacities as such). None of the
Depositor, the Trustee, the Fiscal Agent 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 by the acceptance of its Class J Certificate agrees
to, indemnify the Depositor, the Trustee, the Fiscal Agent and the Certificate
Registrar 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 J Certificate or any interest therein shall be
made to (A) 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
A-11-3
<PAGE>
is subject to ERISA or Section 4975 of the Code (each, a "Plan") or (B) any
Person who is directly or indirectly purchasing the Class J Certificate or
interest therein on behalf of, as named fiduciary of, as trustee of, or with
assets of a Plan, unless the prospective transferee provides the Trustee, the
Fiscal Agent, the Master Servicer and the Depositor with a certification of
facts and an Opinion of Counsel which establish to the satisfaction of the
Trustee, the Fiscal Agent, the Master Servicer and the Depositor that such
transfer is permissible under applicable law, will not constitute or result in
any non-exempt prohibited transaction under Section 406 of ERISA or Section 4975
of the Code and will not subject the Depositor, the Trustee, the Fiscal Agent or
the Master Servicer to any obligation in addition to those undertaken in the
Agreement. In lieu of such opinion of counsel, the prospective transferee of a
Class J Certificate may provide a certification of facts substantially to the
effect that the purchase of such Certificate by or on behalf of, or with assets
of, any Plan is permissible under applicable law, will not constitute or result
in any non-exempt prohibited transaction under ERISA or Section 4975 of the
Code, will not subject the Depositor, the Trustee, the Fiscal Agent or the
Master Servicer to any obligation in addition to those undertaken in the
Agreement, and the following conditions are met (a) the source of funds used to
purchase such Certificate is an "insurance company general account" (as such
term is defined in United States Department of Labor Prohibited Transaction
Class Exemption ("PTCE") 95-60) and (b) the conditions set forth in Sections I
and III of PTCE 95-60 have been satisfied as of the date of the acquisition of
such Certificate and the condition set forth in Section I(a) of PTCE 95-60 will
be satisfied throughout the prospective transferees' holding of such
Certificate.
No service charge will be imposed for any registration of transfer or
exchange of Class J Certificates, but the Trustee or 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.
Prior to due presentment of this Certificate for registration of
transfer, the Depositor, the Master Servicer, the Special Servicer, the Trustee,
the Fiscal Agent, the Certificate Registrar and any agents of any of them 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 Fiscal 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 Depositor or LB
Holdings at a price determined as provided in the Agreement of all Mortgage
Loans and any REO Properties remaining in the Trust Fund. The Agreement
permits, but does not require, the Depositor, the Master Servicer or LB Holdings
to purchase from the Trust Fund all Mortgage Loans and any REO Properties
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 Cut-off Date Principal Balance of the Mortgage Pool
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 Fiscal
Agent thereunder and the rights of the Certificateholders thereunder, at any
time by the Depositor, the Master Servicer, the Special Servicer, the Trustee
and the Fiscal Agent with the consent of the Holders of Certificates entitled to
at least 662/3% 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 circumstances,
including any amendment necessary to maintain the status of designated portions
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.
A-11-4
<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.
A-11-5
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
LaSalle National Bank,
as Trustee
By:
---------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class J Certificates referred to in the
within-mentioned Agreement.
Dated: August 27, 1998
LaSalle National Bank,
as Certificate Registrar
By:
---------------------------------
Authorized Officer
A-11-6
<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 the above named assignee on the Certificate
Register of the Trust Fund.
I (we) further direct the issuance of a new Mortgage Pass-Through
Certificate of a like Percentage Interest and Class to the above named assignee
and delivery of such Mortgage Pass-Through Certificate to the following address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Dated:
-------------------------------------
Signature by or on behalf of Assignor
-------------------------------------
Signature Guaranteed
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.
<PAGE>
EXHIBIT A-12
FORM OF CLASS K CERTIFICATE
CLASS K MORTGAGE
PASS-THROUGH CERTIFICATE,
SERIES 1998-C2
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool (the "Mortgage Pool") of multifamily and
commercial mortgage loans (the "Mortgage Loans"), such pool being formed and
sold by
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
<TABLE>
<S> <C>
Pass-Through Rate: Certificate Principal Balance of this Class K
6.050% Certificate as of the Issue Date: $[ ]
Date of Pooling and Servicing Agreement: Class Principal Balance of all the Class K Certificates
August 1, 1998 as of the Issue Date: $18,978,000
Cut-off Date: With respect to any Mortgage Aggregate unpaid principal balance of the Mortgage
Loan, the Due Date for such Mortgage Loan Pool as of the Cut-off Date, after deducting payments
in August, 1998 of principal due on or before such date, whether or not
received: $2,530,361,272
Issue Date: August 27, 1998
Trustee: LaSalle National Bank
First Distribution Date: September 15, 1998
CUSIP No. 361849 EJ 7
Master Servicer and Special Servicer:
GMAC Commercial Mortgage Corporation
</TABLE>
Certificate No. K-
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN GMAC
COMMERCIAL MORTGAGE SECURITIES, INC., GMAC COMMERCIAL MORTGAGE CORPORATION,
LASALLE NATIONAL BANK, ABN AMRO BANK N.V. OR ANY OF THEIR RESPECTIVE AFFILIATES.
NEITHER THIS CERTIFICATE NOR THE 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 X, CLASS B,
CLASS C, CLASS D, CLASS E, CLASS F, CLASS G, CLASS H AND CLASS J CERTIFICATES OF
THE SAME SERIES, AS AND TO THE EXTENT PROVIDED IN THE AGREEMENT REFERRED TO
HEREIN.
THIS CERTIFICATE HAS NOT BEEN 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 AGREEMENT.
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN TO AN EMPLOYEE BENEFIT
PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE INTERNAL REVENUE CODE OF 1986
(THE "CODE"), OR TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS
CERTIFICATE OR ANY INTEREST HEREIN ON BEHALF OF, AS NAMED FIDUCIARY OF, AS
<PAGE>
TRUSTEE OF, OR WITH ASSETS OF ANY SUCH EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT, WILL BE REGISTERED EXCEPT IN COMPLIANCE WITH THE PROCEDURES SET
FORTH IN THE AGREEMENT.
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.
THIS CERTIFICATE HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT ("OID") FOR
FEDERAL INCOME TAX PURPOSES. FOR INFORMATION REGARDING THE ISSUE PRICE AND
YIELD TO MATURITY OF THIS CERTIFICATE AND THE AMOUNT OF OID PER INITIAL
CERTIFICATE PRINCIPAL AMOUNT, CALL LASALLE NATIONAL BANK, ATTENTION: ASSET
BACKED SECURITIES TRUST AT 312-904-1487.
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN FOLLOWING RETIREMENT 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. IN ADDITION, FOLLOWING THE
DATE ON WHICH THE AGGREGATE CERTIFICATE PRINCIPAL BALANCE OF THE CLASS L, CLASS
M AND CLASS N CERTIFICATES OF THE SAME SERIES ARE REDUCED TO ZERO, THE
CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE MAY BE REDUCED IN CONNECTION
WITH LOSSES ON THE MORTGAGE LOANS AND CERTAIN UNANTICIPATED EXPENSES.
ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ABOVE.
This certifies that ___________ is the registered owner of the
Percentage Interest evidenced by this Class K Certificate (obtained by dividing
the principal balance of this Class K Certificate (its "Certificate Principal
Balance") as of the Issue Date by the aggregate principal balance of all the
Class K Certificates (their "Class Principal Balance") as of the Issue 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 GMAC Commercial
Mortgage Securities, Inc., as Depositor, GMAC Commercial Mortgage Corporation,
as Master Servicer and Special Servicer, LaSalle National Bank, as Trustee and
ABN AMRO Bank N.V., as Fiscal Agent. To the extent not defined herein, the
capitalized terms used herein have the respective meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on
the 15th day of each month or, if such 15th day is not a Business Day, the
Business Day immediately following (each, a "Distribution Date"), 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 any Class K
Certificate will be made by the Trustee by wire transfer in 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 Trustee with wiring instructions no less than five Business
Days prior to the Record Date for such distribution (which wiring instructions
may be in the form of a standing order applicable to all subsequent
distributions as well), or otherwise by check mailed to the address of such
Certificateholder appearing in the Certificate Register. Notwithstanding the
above, 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 after due notice
by the Trustee of the pendency of such distribution and only upon presentation
and surrender of this Certificate at the offices of the Certificate Registrar
appointed as provided in the Agreement or such other location as may be
specified in such notice. 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
A-12-2
<PAGE>
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 appeared in the Certificate Register or to any such other address
of which the Trustee is subsequently notified in writing.
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 Depositor's Mortgage Pass-Through Certificates, Series 1998-C2
(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 and the Distribution 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 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 that does not require such
registration or qualification. If such a transfer of any Class K Certificate
(other than a transfer thereof by the Depositor or any Affiliate of the
Depositor) is to be made without registration under the Securities Act, then the
Trustee shall require, in order to assure compliance with such laws, receipt by
it and the Depositor of: (i) if such transfer is purportedly being made in
reliance upon Rule 144A under the Securities Act, a certificate from the
Certificateholder desiring to effect such transfer substantially in the form
attached as Exhibit B-1 to the Agreement and a certificate from such
Certificateholder's prospective transferee substantially in the form attached as
Exhibit B-2 to the Agreement; and (ii) in all other cases, (A) a certificate
from the Certificateholder desiring to effect such transfer substantially in the
form attached to the Agreement as Exhibit B-1 and a certificate from such
Certificateholder's prospective transferee substantially in the form attached to
the Agreement as Exhibit B-3, and (B) unless the Depositor directs otherwise, an
Opinion of Counsel satisfactory to the Trustee and the Depositor to the effect
that such transfer may be made without such registration (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, the Fiscal Agent or the
Certificate Registrar in their respective capacities as such). None of the
Depositor, the Trustee, the Fiscal Agent 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 by the acceptance of its Class K Certificate agrees
to, indemnify the Depositor, the Trustee, the Fiscal Agent and the Certificate
Registrar 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 K Certificate or any interest therein shall be
made to (A) any employee benefit plan or other retirement arrangement, including
individual retirement accounts and annuities, Keogh plans and collective
investment funds and separate accounts in which such plans, accounts or
arrangements are invested, that is subject to ERISA or Section 4975 of the Code
(each, a "Plan") or (B) any Person who is directly or indirectly
A-12-3
<PAGE>
purchasing the Class K Certificate or interest therein on behalf of, as named
fiduciary of, as trustee of, or with assets of a Plan, unless the prospective
transferee provides the Trustee, the Fiscal Agent, the Master Servicer and the
Depositor with a certification of facts and an Opinion of Counsel which
establish to the satisfaction of the Trustee, the Fiscal Agent, the Master
Servicer and the Depositor that such transfer is permissible under applicable
law, will not constitute or result in any non-exempt prohibited transaction
under Section 406 of ERISA or Section 4975 of the Code and will not subject the
Depositor, the Trustee, the Fiscal Agent or the Master Servicer to any
obligation in addition to those undertaken in the Agreement. In lieu of such
opinion of counsel, the prospective transferee of a Class K Certificate may
provide a certification of facts substantially to the effect that the purchase
of such Certificate by or on behalf of, or with assets of, any Plan is
permissible under applicable law, will not constitute or result in any
non-exempt prohibited transaction under ERISA or Section 4975 of the Code, will
not subject the Depositor, the Trustee, the Fiscal Agent or the Master Servicer
to any obligation in addition to those undertaken in the Agreement, and the
following conditions are met (a) the source of funds used to purchase such
Certificate is an "insurance company general account" (as such term is defined
in United States Department of Labor Prohibited Transaction Class Exemption
("PTCE") 95-60) and (b) the conditions set forth in Sections I and III of PTCE
95-60 have been satisfied as of the date of the acquisition of such Certificate
and the condition set forth in Section I(a) of PTCE 95-60 will be satisfied
throughout the prospective transferees' holding of such Certificate.
No service charge will be imposed for any registration of transfer or
exchange of Class K Certificates, but the Trustee or 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.
Prior to due presentment of this Certificate for registration of
transfer, the Depositor, the Master Servicer, the Special Servicer, the Trustee,
the Fiscal Agent, the Certificate Registrar and any agents of any of them 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 Fiscal 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 Depositor or LB
Holdings at a price determined as provided in the Agreement of all Mortgage
Loans and any REO Properties remaining in the Trust Fund. The Agreement
permits, but does not require, the Depositor, the Master Servicer or LB Holdings
to purchase from the Trust Fund all Mortgage Loans and any REO Properties
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 Cut-off Date Principal Balance of the Mortgage Pool
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 Fiscal
Agent thereunder and the rights of the Certificateholders thereunder, at any
time by the Depositor, the Master Servicer, the Special Servicer, the Trustee
and the Fiscal Agent with the consent of the Holders of Certificates entitled to
at least 662/3% 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 circumstances,
including any amendment necessary to maintain the status of designated portions
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.
A-12-4
<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.
A-12-5
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
LaSalle National Bank,
as Trustee
By:
---------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class K Certificates referred to in the
within-mentioned Agreement.
Dated: August 27, 1998
LaSalle National Bank,
as Certificate Registrar
By:
---------------------------------
Authorized Officer
<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 the above named assignee on the Certificate
Register of the Trust Fund.
I (we) further direct the issuance of a new Mortgage Pass-Through
Certificate of a like Percentage Interest and Class to the above named assignee
and delivery of such Mortgage Pass-Through Certificate to the following address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Dated:
-------------------------------------
Signature by or on behalf of Assignor
-------------------------------------
Signature Guaranteed
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.
A-12-7
<PAGE>
EXHIBIT A-13
FORM OF CLASS L CERTIFICATE
CLASS L MORTGAGE
PASS-THROUGH CERTIFICATE,
SERIES 1998-C2
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool (the "Mortgage Pool") of multifamily and
commercial mortgage loans (the "Mortgage Loans"), such pool being formed and
sold by
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
<TABLE>
<S> <C>
Pass-Through Rate: Certificate Principal Balance of this Class L
6.050% Certificate as of the Issue Date: $[ ]
Date of Pooling and Servicing Agreement: Class Principal Balance of all the Class L Certificates
August 1, 1998 as of the Issue Date: $25,304,000
Cut-off Date: With respect to any Mortgage Aggregate unpaid principal balance of the Mortgage
Loan, the Due Date for such Mortgage Loan Pool as of the Cut-off Date, after deducting payments
in August, 1998 of principal due on or before such date, whether or not
received: $2,530,361,727,
Issue Date: August 27, 1998
Trustee: LaSalle National Bank
First Distribution Date: September 15, 1998
CUSIP No. 361849 EK 4
Master Servicer and Special Servicer:
GMAC Commercial Mortgage Corporation
</TABLE>
Certificate No. L-
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN GMAC
COMMERCIAL MORTGAGE SECURITIES, INC., GMAC COMMERCIAL MORTGAGE CORPORATION,
LASALLE NATIONAL BANK, ABN AMRO BANK N.V. OR ANY OF THEIR RESPECTIVE AFFILIATES.
NEITHER THIS CERTIFICATE NOR THE 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 X, CLASS B,
CLASS C, CLASS D, CLASS E, CLASS F, CLASS G, CLASS H, CLASS J AND CLASS K
CERTIFICATES OF THE SAME SERIES, AS AND TO THE EXTENT PROVIDED IN THE AGREEMENT
REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN 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 AGREEMENT.
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN TO AN EMPLOYEE BENEFIT
PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE INTERNAL REVENUE CODE OF 1986
(THE "CODE"), OR TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS
CERTIFICATE OR ANY INTEREST HEREIN ON BEHALF OF, AS NAMED FIDUCIARY OF, AS
A-13-1
<PAGE>
TRUSTEE OF, OR WITH ASSETS OF ANY SUCH EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT, WILL BE REGISTERED EXCEPT IN COMPLIANCE WITH THE PROCEDURES SET
FORTH IN THE AGREEMENT.
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.
THIS CERTIFICATE HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT ("OID") FOR
FEDERAL INCOME TAX PURPOSES. FOR INFORMATION REGARDING THE ISSUE PRICE AND
YIELD TO MATURITY OF THIS CERTIFICATE AND THE AMOUNT OF OID PER INITIAL
CERTIFICATE PRINCIPAL AMOUNT, CALL LASALLE NATIONAL BANK, ATTENTION: ASSET
BACKED SECURITIES TRUST AT 312-904-1487.
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN FOLLOWING RETIREMENT OF THE
CLASS A-1, CLASS A-2, CLASS B, CLASS C, CLASS D, CLASS E, CLASS F, CLASS G,
CLASS H, CLASS J AND CLASS K CERTIFICATES OF THE SAME SERIES. IN ADDITION,
FOLLOWING THE DATE ON WHICH THE AGGREGATE CERTIFICATE PRINCIPAL BALANCE OF THE
CLASS M AND CLASS N CERTIFICATES OF THE SAME SERIES ARE REDUCED TO ZERO, THE
CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE MAY BE REDUCED IN CONNECTION
WITH LOSSES ON THE MORTGAGE LOANS AND CERTAIN UNANTICIPATED EXPENSES.
ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ABOVE.
This certifies that ___________ is the registered owner of the
Percentage Interest evidenced by this Class L Certificate (obtained by dividing
the principal balance of this Class L Certificate (its "Certificate Principal
Balance") as of the Issue Date by the aggregate principal balance of all the
Class L Certificates (their "Class Principal Balance") as of the Issue Date) 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 GMAC Commercial
Mortgage Securities, Inc., as Depositor, GMAC Commercial Mortgage Corporation,
as Master Servicer and Special Servicer, LaSalle National Bank, as Trustee and
ABN AMRO Bank N.V., as Fiscal Agent. To the extent not defined herein, the
capitalized terms used herein have the respective meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on
the 15th day of each month or, if such 15th day is not a Business Day, the
Business Day immediately following (each, a "Distribution Date"), 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 any Class L
Certificate will be made by the Trustee by wire transfer in 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 Trustee with wiring instructions no less than five Business
Days prior to the Record Date for such distribution (which wiring instructions
may be in the form of a standing order applicable to all subsequent
distributions as well), or otherwise by check mailed to the address of such
Certificateholder appearing in the Certificate Register. Notwithstanding the
above, 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 after due notice
by the Trustee of the pendency of such distribution and only upon presentation
and surrender of this Certificate at the offices of the Certificate Registrar
appointed as provided in the Agreement or such other location as may be
specified in such notice. 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
A-13-2
<PAGE>
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 appeared in the Certificate Register or to any such other address
of which the Trustee is subsequently notified in writing.
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 Depositor's Mortgage Pass-Through Certificates, Series 1998-C2
(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 and the Distribution 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 L 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 L Certificates are exchangeable for new Class L 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 L Certificates in
authorized denominations 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 that does not require such
registration or qualification. If such a transfer of any Class L Certificate
(other than a transfer thereof by the Depositor or any Affiliate of the
Depositor) is to be made without registration under the Securities Act, then the
Trustee shall require, in order to assure compliance with such laws, receipt by
it and the Depositor of: (i) if such transfer is purportedly being made in
reliance upon Rule 144A under the Securities Act, a certificate from the
Certificateholder desiring to effect such transfer substantially in the form
attached as Exhibit B-1 to the Agreement and a certificate from such
Certificateholder's prospective transferee substantially in the form attached as
Exhibit B-2 to the Agreement; and (ii) in all other cases, (A) a certificate
from the Certificateholder desiring to effect such transfer substantially in the
form attached to the Agreement as Exhibit B-1 and a certificate from such
Certificateholder's prospective transferee substantially in the form attached to
the Agreement as Exhibit B-3, and (B) unless the Depositor directs otherwise, an
Opinion of Counsel satisfactory to the Trustee and the Depositor to the effect
that such transfer may be made without such registration (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, the Fiscal Agent or the
Certificate Registrar in their respective capacities as such). None of the
Depositor, the Trustee, the Fiscal Agent 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 by the acceptance of its Class L Certificate agrees
to, indemnify the Depositor, the Trustee, the Fiscal Agent and the Certificate
Registrar 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 L Certificate or any interest therein shall be
made to (A) any employee benefit plan or other retirement arrangement, including
individual retirement accounts and annuities, Keogh plans and collective
investment funds and separate accounts in which such plans, accounts or
arrangements are invested, that is subject to ERISA or Section 4975 of the Code
(each, a "Plan") or (B) any Person who is directly or indirectly
A-13-3
<PAGE>
purchasing the Class L Certificate or interest therein on behalf of, as named
fiduciary of, as trustee of, or with assets of a Plan, unless the prospective
transferee provides the Trustee, the Fiscal Agent, the Master Servicer and the
Depositor with a certification of facts and an Opinion of Counsel which
establish to the satisfaction of the Trustee, the Fiscal Agent, the Master
Servicer and the Depositor that such transfer is permissible under applicable
law, will not constitute or result in any non-exempt prohibited transaction
under Section 406 of ERISA or Section 4975 of the Code and will not subject the
Depositor, the Trustee, the Fiscal Agent or the Master Servicer to any
obligation in addition to those undertaken in the Agreement. In lieu of such
opinion of counsel, the prospective transferee of a Class L Certificate may
provide a certification of facts substantially to the effect that the purchase
of such Certificate by or on behalf of, or with assets of, any Plan is
permissible under applicable law, will not constitute or result in any
non-exempt prohibited transaction under ERISA or Section 4975 of the Code, will
not subject the Depositor, the Trustee, the Fiscal Agent or the Master Servicer
to any obligation in addition to those undertaken in the Agreement, and the
following conditions are met (a) the source of funds used to purchase such
Certificate is an "insurance company general account" (as such term is defined
in United States Department of Labor Prohibited Transaction Class Exemption
("PTCE") 95-60) and (b) the conditions set forth in Sections I and III of PTCE
95-60 have been satisfied as of the date of the acquisition of such Certificate
and the condition set forth in Section I(a) of PTCE 95-60 will be satisfied
throughout the prospective transferees' holding of such Certificate.
No service charge will be imposed for any registration of transfer or
exchange of Class L Certificates, but the Trustee or 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.
Prior to due presentment of this Certificate for registration of
transfer, the Depositor, the Master Servicer, the Special Servicer, the Trustee,
the Fiscal Agent, the Certificate Registrar and any agents of any of them 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 Fiscal 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 Depositor or LB
Holdings at a price determined as provided in the Agreement of all Mortgage
Loans and any REO Properties remaining in the Trust Fund. The Agreement
permits, but does not require, the Depositor, the Master Servicer or LB Holdings
to purchase from the Trust Fund all Mortgage Loans and any REO Properties
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 Cut-off Date Principal Balance of the Mortgage Pool
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 Fiscal
Agent thereunder and the rights of the Certificateholders thereunder, at any
time by the Depositor, the Master Servicer, the Special Servicer, the Trustee
and the Fiscal Agent with the consent of the Holders of Certificates entitled to
at least 662/3% 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 circumstances,
including any amendment necessary to maintain the status of designated portions
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.
A-13-4
<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.
A-13-5
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
LaSalle National Bank,
as Trustee
By:
---------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class L Certificates referred to in the
within-mentioned Agreement.
Dated: August 27, 1998
LaSalle National Bank,
as Certificate Registrar
By:
---------------------------------
Authorized Officer
<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 the above named assignee on the Certificate
Register of the Trust Fund.
I (we) further direct the issuance of a new Mortgage Pass-Through
Certificate of a like Percentage Interest and Class to the above named assignee
and delivery of such Mortgage Pass-Through Certificate to the following address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Dated:
-------------------------------------
Signature by or on behalf of Assignor
-------------------------------------
Signature Guaranteed
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.
A-13-7
<PAGE>
EXHIBIT A-14
FORM OF CLASS M CERTIFICATE
CLASS M MORTGAGE
PASS-THROUGH CERTIFICATE,
SERIES 1998-C2
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool (the "Mortgage Pool") of multifamily and
commercial mortgage loans (the "Mortgage Loans"), such pool being formed and
sold by
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
<TABLE>
<S> <C>
Pass-Through Rate: Certificate Principal Balance of this Class M
6.050% Certificate as of the Issue Date: $[ ]
Date of Pooling and Servicing Agreement: Class Principal Balance of all the Class M Certificates
August 1, 1998 as of the Issue Date: $18,978,000
Cut-off Date: With respect to any Mortgage Aggregate unpaid principal balance of the Mortgage
Loan, the Due Date for such Mortgage Loan Pool as of the Cut-off Date, after deducting payments
in August, 1998 of principal due on or before such date, whether or not
received: $2,530,361,727
Issue Date: August 27, 1998
Trustee: LaSalle National Bank
First Distribution Date: September 15, 1998
CUSIP No. 36184 EL 2
Master Servicer and Special Servicer:
GMAC Commercial Mortgage Corporation
</TABLE>
Certificate No. M-
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN GMAC
COMMERCIAL MORTGAGE SECURITIES, INC., GMAC COMMERCIAL MORTGAGE CORPORATION,
LASALLE NATIONAL BANK, ABN AMRO BANK N.V. OR ANY OF THEIR RESPECTIVE AFFILIATES.
NEITHER THIS CERTIFICATE NOR THE 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 X, CLASS B,
CLASS C, CLASS D, CLASS E, CLASS F, CLASS G, CLASS H, CLASS J, CLASS K AND CLASS
L CERTIFICATES OF THE SAME SERIES, AS AND TO THE EXTENT PROVIDED IN THE
AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN 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 AGREEMENT.
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN TO AN EMPLOYEE BENEFIT
PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE INTERNAL REVENUE CODE
<PAGE>
OF 1986 (THE "CODE"), OR TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING
THIS CERTIFICATE OR ANY INTEREST HEREIN 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 SET
FORTH IN THE AGREEMENT.
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.
THIS CERTIFICATE HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT ("OID") FOR
FEDERAL INCOME TAX PURPOSES. FOR INFORMATION REGARDING THE ISSUE PRICE AND
YIELD TO MATURITY OF THIS CERTIFICATE AND THE AMOUNT OF OID PER INITIAL
CERTIFICATE PRINCIPAL AMOUNT, CALL LASALLE NATIONAL BANK, ATTENTION: ASSET
BACKED SECURITIES TRUST AT 312-904-1487.
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN FOLLOWING RETIREMENT OF THE
CLASS A-1, CLASS A-2, CLASS B, CLASS C, CLASS D, CLASS E, CLASS F, CLASS G,
CLASS H, CLASS J, CLASS K AND CLASS L CERTIFICATES OF THE SAME SERIES. IN
ADDITION, FOLLOWING THE DATE ON WHICH THE AGGREGATE CERTIFICATE PRINCIPAL
BALANCE OF THE CLASS N CERTIFICATES OF THE SAME SERIES ARE REDUCED TO ZERO, THE
CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE MAY BE REDUCED IN CONNECTION
WITH LOSSES ON THE MORTGAGE LOANS AND CERTAIN UNANTICIPATED EXPENSES.
ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ABOVE.
This certifies that ____________ is the registered owner of the
Percentage Interest evidenced by this Class M Certificate (obtained by dividing
the principal balance of this Class M Certificate (its "Certificate Principal
Balance") as of the Issue Date by the aggregate principal balance of all the
Class M Certificates (their "Class Principal Balance") as of the Issue Date) in
that certain beneficial ownership interest evidenced by all the Class M
Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among GMAC Commercial
Mortgage Securities, Inc., as Depositor, GMAC Commercial Mortgage Corporation,
as Master Servicer and Special Servicer, LaSalle National Bank, as Trustee and
ABN AMRO Bank N.V., as Fiscal Agent. To the extent not defined herein, the
capitalized terms used herein have the respective meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on
the 15th day of each month or, if such 15th day is not a Business Day, the
Business Day immediately following (each, a "Distribution Date"), 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 M Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on any Class M
Certificate will be made by the Trustee by wire transfer in 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 Trustee with wiring instructions no less than five Business
Days prior to the Record Date for such distribution (which wiring instructions
may be in the form of a standing order applicable to all subsequent
distributions as well), or otherwise by check mailed to the address of such
Certificateholder appearing in the Certificate Register. Notwithstanding the
above, 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 after due notice
by the Trustee of the pendency of such distribution and only upon presentation
and surrender of this Certificate at the offices of the Certificate Registrar
appointed as provided in the Agreement or such other location as may be
specified in such notice.
A-14-2
<PAGE>
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
appeared in the Certificate Register or to any such other address of which the
Trustee is subsequently notified in writing.
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 Depositor's Mortgage Pass-Through Certificates, Series 1998-C2
(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 and the Distribution 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 M 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 M Certificates are exchangeable for new Class M 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 M Certificates in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.
No transfer of any Class M 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 of any Class M Certificate
(other than a transfer thereof by the Depositor or any Affiliate of the
Depositor) is to be made without registration under the Securities Act, then the
Trustee shall require, in order to assure compliance with such laws, receipt by
it and the Depositor of: (i) if such transfer is purportedly being made in
reliance upon Rule 144A under the Securities Act, a certificate from the
Certificateholder desiring to effect such transfer substantially in the form
attached as Exhibit B-1 to the Agreement and a certificate from such
Certificateholder's prospective transferee substantially in the form attached as
Exhibit B-2 to the Agreement; and (ii) in all other cases, (A) a certificate
from the Certificateholder desiring to effect such transfer substantially in the
form attached to the Agreement as Exhibit B-1 and a certificate from such
Certificateholder's prospective transferee substantially in the form attached to
the Agreement as Exhibit B-3, and (B) unless the Depositor directs otherwise, an
Opinion of Counsel satisfactory to the Trustee and the Depositor to the effect
that such transfer may be made without such registration (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, the Fiscal Agent or the
Certificate Registrar in their respective capacities as such). None of the
Depositor, the Trustee, the Fiscal Agent or the Certificate Registrar is
obligated to register or qualify the Class M 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 M Certificate without
registration or qualification. Any Class M Certificateholder desiring to effect
such a transfer shall, and by the acceptance of its Class M Certificate agrees
to, indemnify the Depositor, the Trustee, the Fiscal Agent and the Certificate
Registrar 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 M Certificate or any interest therein shall be
made to (A) any employee benefit plan or other retirement arrangement, including
individual retirement accounts and annuities, Keogh plans and
A-14-3
<PAGE>
collective investment funds and separate accounts in which such plans, accounts
or arrangements are invested, that is subject to ERISA or Section 4975 of the
Code (each, a "Plan") or (B) any Person who is directly or indirectly purchasing
the Class M Certificate or interest therein on behalf of, as named fiduciary of,
as trustee of, or with assets of a Plan, unless the prospective transferee
provides the Trustee, the Fiscal Agent, the Master Servicer and the Depositor
with a certification of facts and an Opinion of Counsel which establish to the
satisfaction of the Trustee, the Fiscal Agent, the Master Servicer and the
Depositor that such transfer is permissible under applicable law, will not
constitute or result in any non-exempt prohibited transaction under Section 406
of ERISA or Section 4975 of the Code and will not subject the Depositor, the
Trustee, the Fiscal Agent or the Master Servicer to any obligation in addition
to those undertaken in the Agreement. In lieu of such opinion of counsel, the
prospective transferee of a Class M Certificate may provide a certification of
facts substantially to the effect that the purchase of such Certificate by or on
behalf of, or with assets of, any Plan is permissible under applicable law, will
not constitute or result in any non-exempt prohibited transaction under ERISA or
Section 4975 of the Code, will not subject the Depositor, the Trustee, the
Fiscal Agent or the Master Servicer to any obligation in addition to those
undertaken in the Agreement, and the following conditions are met (a) the source
of funds used to purchase such Certificate is an "insurance company general
account" (as such term is defined in United States Department of Labor
Prohibited Transaction Class Exemption ("PTCE") 95-60) and (b) the conditions
set forth in Sections I and III of PTCE 95-60 have been satisfied as of the date
of the acquisition of such Certificate and the condition set forth in Section
I(a) of PTCE 95-60 will be satisfied throughout the prospective transferees'
holding of such Certificate.
No service charge will be imposed for any registration of transfer or
exchange of Class M Certificates, but the Trustee or 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
M Certificates.
Prior to due presentment of this Certificate for registration of
transfer, the Depositor, the Master Servicer, the Special Servicer, the Trustee,
the Fiscal Agent, the Certificate Registrar and any agents of any of them 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 Fiscal 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 Depositor or LB
Holdings at a price determined as provided in the Agreement of all Mortgage
Loans and any REO Properties remaining in the Trust Fund. The Agreement
permits, but does not require, the Depositor, the Master Servicer or LB Holdings
to purchase from the Trust Fund all Mortgage Loans and any REO Properties
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 Cut-off Date Principal Balance of the Mortgage Pool
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 Fiscal
Agent thereunder and the rights of the Certificateholders thereunder, at any
time by the Depositor, the Master Servicer, the Special Servicer, the Trustee
and the Fiscal Agent with the consent of the Holders of Certificates entitled to
at least 662/3% 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 circumstances,
including any amendment necessary to maintain the status of designated portions
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.
A-14-4
<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.
A-14-5
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
LaSalle National Bank,
as Trustee
By:
---------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class M Certificates referred to in the
within-mentioned Agreement.
Dated: August 27, 1998
LaSalle National Bank,
as Certificate Registrar
By:
---------------------------------
Authorized Officer
<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 the above named assignee on the Certificate
Register of the Trust Fund.
I (we) further direct the issuance of a new Mortgage Pass-Through
Certificate of a like Percentage Interest and Class to the above named assignee
and delivery of such Mortgage Pass-Through Certificate to the following address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Dated:
-------------------------------------
Signature by or on behalf of Assignor
-------------------------------------
Signature Guaranteed
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.
A-14-7
<PAGE>
EXHIBIT A-15
FORM OF CLASS N CERTIFICATE
CLASS N MORTGAGE
PASS-THROUGH CERTIFICATE,
SERIES 1998-C2
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool (the "Mortgage Pool") of multifamily and
commercial mortgage loans (the "Mortgage Loans"), such pool being formed and
sold by
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
<TABLE>
<S> <C>
Pass-Through Rate: Certificate Principal Balance of this Class N
6.050% Certificate as of the Issue Date: $[ ]
Date of Pooling and Servicing Agreement: Class Principal Balance of all the Class N Certificates
August 1, 1998 as of the Issue Date: $18,977,727
Cut-off Date: With respect to any Mortgage Aggregate unpaid principal balance of the Mortgage
Loan, the Due Date for such Mortgage Loan Pool as of the Cut-off Date, after deducting payments
in August, 1998 of principal due on or before such date, whether or not
received: $2,530,361,727
Issue Date: August 27, 1998
Trustee: LaSalle National Bank
First Distribution Date: September 15, 1998
CUSIP No. 361849 EM O
Master Servicer and Special Servicer:
GMAC Commercial Mortgage Corporation
</TABLE>
Certificate No. N-
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN GMAC
COMMERCIAL MORTGAGE SECURITIES, INC., GMAC COMMERCIAL MORTGAGE CORPORATION,
LASALLE NATIONAL BANK, ABN AMRO BANK N.V. OR ANY OF THEIR RESPECTIVE AFFILIATES.
NEITHER THIS CERTIFICATE NOR THE 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 X, CLASS B,
CLASS C, CLASS D, CLASS E, CLASS F, CLASS G, CLASS H, CLASS J, CLASS K, CLASS L
AND CLASS M CERTIFICATES OF THE SAME SERIES, AS AND TO THE EXTENT PROVIDED IN
THE AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN 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 AGREEMENT.
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN TO AN EMPLOYEE BENEFIT
PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE INTERNAL REVENUE CODE
<PAGE>
OF 1986 (THE "CODE"), OR TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING
THIS CERTIFICATE OR ANY INTEREST HEREIN 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 SET
FORTH IN THE AGREEMENT.
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.
THIS CERTIFICATE HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT ("OID") FOR
FEDERAL INCOME TAX PURPOSES. FOR INFORMATION REGARDING THE ISSUE PRICE AND
YIELD TO MATURITY OF THIS CERTIFICATE AND THE AMOUNT OF OID PER INITIAL
CERTIFICATE PRINCIPAL AMOUNT, CALL LASALLE NATIONAL BANK, ATTENTION: ASSET
BACKED SECURITIES TRUST AT 312-904-1487.
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN FOLLOWING RETIREMENT OF THE
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 L AND CLASS M CERTIFICATES OF THE SAME SERIES.
IN ADDITION, THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE MAY BE
REDUCED IN CONNECTION WITH LOSSES ON THE MORTGAGE LOANS AND CERTAIN
UNANTICIPATED EXPENSES. ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL
BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE.
This certifies that ____________ is the registered owner of the
Percentage Interest evidenced by this Class N Certificate (obtained by dividing
the principal balance of this Class N Certificate (its "Certificate Principal
Balance") as of the Issue Date by the aggregate principal balance of all the
Class N Certificates (their "Class Principal Balance") as of the Issue Date) in
that certain beneficial ownership interest evidenced by all the Class N
Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among GMAC Commercial
Mortgage Securities, Inc., as Depositor, GMAC Commercial Mortgage Corporation,
as Master Servicer and Special Servicer, LaSalle National Bank, as Trustee and
ABN AMRO Bank N.V., as Fiscal Agent. To the extent not defined herein, the
capitalized terms used herein have the respective meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on
the 15th day of each month or, if such 15th day is not a Business Day, the
Business Day immediately following (each, a "Distribution Date"), 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 N Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on any Class N
Certificate will be made by the Trustee by wire transfer in 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 Trustee with wiring instructions no less than five Business
Days prior to the Record Date for such distribution (which wiring instructions
may be in the form of a standing order applicable to all subsequent
distributions as well), or otherwise by check mailed to the address of such
Certificateholder appearing in the Certificate Register. Notwithstanding the
above, 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 after due notice
by the Trustee of the pendency of such distribution and only upon presentation
and surrender of this Certificate at the offices of the Certificate Registrar
appointed as provided in the Agreement or such other location as may be
specified in such notice. 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
A-15-2
<PAGE>
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 appeared in the Certificate Register or to any such other address
of which the Trustee is subsequently notified in writing.
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 Depositor's Mortgage Pass-Through Certificates, Series 1998-C2
(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 and the Distribution 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 N 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 N Certificates are exchangeable for new Class N 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 N Certificates in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.
No transfer of any Class N 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 of any Class N Certificate
(other than a transfer thereof by the Depositor or any Affiliate of the
Depositor) is to be made without registration under the Securities Act, then the
Trustee shall require, in order to assure compliance with such laws, receipt by
it and the Depositor of: (i) if such transfer is purportedly being made in
reliance upon Rule 144A under the Securities Act, a certificate from the
Certificateholder desiring to effect such transfer substantially in the form
attached as Exhibit B-1 to the Agreement and a certificate from such
Certificateholder's prospective transferee substantially in the form attached as
Exhibit B-2 to the Agreement; and (ii) in all other cases, (A) a certificate
from the Certificateholder desiring to effect such transfer substantially in the
form attached to the Agreement as Exhibit B-1 and a certificate from such
Certificateholder's prospective transferee substantially in the form attached to
the Agreement as Exhibit B-3, and (B) unless the Depositor directs otherwise, an
Opinion of Counsel satisfactory to the Trustee and the Depositor to the effect
that such transfer may be made without such registration (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, the Fiscal Agent or the
Certificate Registrar in their respective capacities as such). None of the
Depositor, the Trustee, the Fiscal Agent or the Certificate Registrar is
obligated to register or qualify the Class N 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 N Certificate without
registration or qualification. Any Class N Certificateholder desiring to effect
such a transfer shall, and by the acceptance of its Class N Certificate agrees
to, indemnify the Depositor, the Trustee, the Fiscal Agent and the Certificate
Registrar 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 N Certificate or any interest therein shall be
made to (A) any employee benefit plan or other retirement arrangement, including
individual retirement accounts and annuities, Keogh plans and collective
investment funds and separate accounts in which such plans, accounts or
arrangements are invested, that is subject to ERISA or Section 4975 of the Code
(each, a "Plan") or (B) any Person who is directly or indirectly
A-15-3
<PAGE>
purchasing the Class N Certificate or interest therein on behalf of, as named
fiduciary of, as trustee of, or with assets of a Plan, unless the prospective
transferee provides the Trustee, the Fiscal Agent, the Master Servicer and the
Depositor with a certification of facts and an Opinion of Counsel which
establish to the satisfaction of the Trustee, the Fiscal Agent, the Master
Servicer and the Depositor that such transfer is permissible under applicable
law, will not constitute or result in any non-exempt prohibited transaction
under Section 406 of ERISA or Section 4975 of the Code and will not subject the
Depositor, the Trustee, the Fiscal Agent or the Master Servicer to any
obligation in addition to those undertaken in the Agreement. In lieu of such
opinion of counsel, the prospective transferee of a Class N Certificate may
provide a certification of facts substantially to the effect that the purchase
of such Certificate by or on behalf of, or with assets of, any Plan is
permissible under applicable law, will not constitute or result in any
non-exempt prohibited transaction under ERISA or Section 4975 of the Code, will
not subject the Depositor, the Trustee, the Fiscal Agent or the Master Servicer
to any obligation in addition to those undertaken in the Agreement, and the
following conditions are met (a) the source of funds used to purchase such
Certificate is an "insurance company general account" (as such term is defined
in United States Department of Labor Prohibited Transaction Class Exemption
("PTCE") 95-60) and (b) the conditions set forth in Sections I and III of PTCE
95-60 have been satisfied as of the date of the acquisition of such Certificate
and the condition set forth in Section I(a) of PTCE 95-60 will be satisfied
throughout the prospective transferees' holding of such Certificate.
No service charge will be imposed for any registration of transfer or
exchange of Class N Certificates, but the Trustee or 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
N Certificates.
Prior to due presentment of this Certificate for registration of
transfer, the Depositor, the Master Servicer, the Special Servicer, the Trustee,
the Fiscal Agent, the Certificate Registrar and any agents of any of them 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 Fiscal 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 Depositor or LB
Holdings at a price determined as provided in the Agreement of all Mortgage
Loans and any REO Properties remaining in the Trust Fund. The Agreement
permits, but does not require, the Depositor, the Master Servicer or LB Holdings
to purchase from the Trust Fund all Mortgage Loans and any REO Properties
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 Cut-off Date Principal Balance of the Mortgage Pool
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 Fiscal
Agent thereunder and the rights of the Certificateholders thereunder, at any
time by the Depositor, the Master Servicer, the Special Servicer, the Trustee
and the Fiscal Agent with the consent of the Holders of Certificates entitled to
at least 662/3% 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 circumstances,
including any amendment necessary to maintain the status of designated portions
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.
A-15-4
<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.
A-15-4
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
LaSalle National Bank,
as Trustee
By:
---------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class N Certificates referred to in the
within-mentioned Agreement.
Dated: August 27, 1998
LaSalle National Bank,
as Certificate Registrar
By:
---------------------------------
Authorized Officer
<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 the above named assignee on the Certificate
Register of the Trust Fund.
I (we) further direct the issuance of a new Mortgage Pass-Through
Certificate of a like Percentage Interest and Class to the above named assignee
and delivery of such Mortgage Pass-Through Certificate to the following address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Dated:
-------------------------------------
Signature by or on behalf of Assignor
-------------------------------------
Signature Guaranteed
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.
A-15-7
<PAGE>
EXHIBIT A-16
FORM OF CLASS R-I CERTIFICATE
CLASS R-I MORTGAGE
PASS-THROUGH CERTIFICATE,
SERIES 1998-C2
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool (the "Mortgage Pool") of multifamily and
commercial mortgage loans (the "Mortgage Loans"), such pool being formed and
sold by
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
<TABLE>
<S> <C>
Date of Pooling and Servicing Agreement: Percentage Interest evidenced by this Certificate in
August 1, 1998 the related Class: 100%
Cut-off Date: With respect to any Mortgage Aggregate unpaid principal balance of the Mortgage
Loan, the Due Date for such Mortgage Loan Pool as of the Cut-off Date, after deducting payments
in August, 1998 of principal due on or before such date, whether or not
received: $2,530,361,727
Issue Date: August 27, 1998
Trustee: LaSalle National Bank
First Distribution Date: September 15, 1998
CUSIP No. 368149 EN 8
Master Servicer and Special Servicer:
GMAC Commercial Mortgage Corporation
</TABLE>
Certificate No. R-I-
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN GMAC
COMMERCIAL MORTGAGE SECURITIES, INC., GMAC COMMERCIAL MORTGAGE CORPORATION,
LASALLE NATIONAL BANK, ABN AMRO BANK N.V. OR ANY OF THEIR RESPECTIVE AFFILIATES.
NEITHER THIS CERTIFICATE NOR THE 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 X, CLASS B,
CLASS C, CLASS D, CLASS E, CLASS F, CLASS G, CLASS H, CLASS J, CLASS K, CLASS L,
CLASS M AND CLASS N CERTIFICATES OF THE SAME SERIES, AS AND TO THE EXTENT
PROVIDED IN THE AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN 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 AGREEMENT.
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN TO AN EMPLOYEE BENEFIT
PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE INTERNAL REVENUE CODE OF 1986
(THE "CODE"), OR TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS
CERTIFICATE OR ANY INTEREST HEREIN ON BEHALF OF, AS NAMED FIDUCIARY OF, AS
TRUSTEE OF, OR WITH ASSETS OF ANY SUCH EMPLOYEE BENEFIT PLAN OR OTHER
<PAGE>
RETIREMENT ARRANGEMENT, WILL BE REGISTERED EXCEPT IN COMPLIANCE WITH THE
PROCEDURES SET FORTH IN THE AGREEMENT.
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 SET FORTH IN THE AGREEMENT. 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 AGREEMENT REFERRED TO HEREIN, INCLUDING,
BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE.
This certifies that 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 GMAC Commercial
Mortgage Securities, Inc., as Depositor, GMAC Commercial Mortgage Corporation,
as Master Servicer and Special Servicer, LaSalle National Bank, as Trustee and
ABN AMRO Bank N.A., as Fiscal Agent. To the extent not defined herein, the
capitalized terms used herein have the respective meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on
the 15th day of each month or, if such 15th day is not a Business Day, the
Business Day immediately following (each, a "Distribution Date"), commencing
upon 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 R-I Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on any Class R-I
Certificate will be made by the Trustee by check mailed to the address of the
Person entitled thereto, as such name and address appear in the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
offices of the Certificate Registrar appointed as provided in the Agreement or
such other location as may be specified in such notice.
The Depositor's Mortgage Pass-Through Certificates, Series 1998-C2
(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 and Distribution 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 in minimum denominations 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 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,
A-16-2
<PAGE>
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 that does not require such
registration or qualification. If such a transfer of any Class R-I Certificate
(other than a transfer thereof by the Depositor or any Affiliate of the
Depositor) is to be made without registration under the Securities Act, then the
Trustee shall require, in order to assure compliance with such laws, receipt by
it and the Depositor of: (i) if such transfer is purportedly being made in
reliance upon Rule 144A under the Securities Act, a certificate from the
Certificateholder desiring to effect such transfer substantially in the form
attached as Exhibit B-1 to the Agreement and a certificate from such
Certificateholder's prospective transferee substantially in the form attached as
Exhibit B-2 to the Agreement; and (ii) in all other cases, (A) a certificate
from the Certificateholder desiring to effect such transfer substantially in the
form attached to the Agreement as Exhibit B-1 and a certificate from such
Certificateholder's prospective transferee substantially in the form attached to
the Agreement as Exhibit B-3, and (B) unless the Depositor directs otherwise, an
Opinion of Counsel satisfactory to the Trustee and the Depositor to the effect
that such transfer may be made without such registration (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, the Fiscal Agent or the
Certificate Registrar in their respective capacities as such). None of the
Depositor, the Trustee, the Fiscal Agent 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 by the acceptance of its Class R-I Certificate
agrees to, indemnify the Depositor, the Trustee, the Fiscal Agent and the
Certificate Registrar 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) any employee benefit plan or other retirement arrangement,
including individual retirement accounts and annuities, Keogh plans and
collective investment funds and separate accounts in which such plans, accounts
or arrangements are invested, that is subject to ERISA or Section 4975 of the
Code (each, a "Plan") or (B) any Person who is directly or indirectly purchasing
the Class R-I Certificate or interest therein on behalf of, as named fiduciary
of, as trustee of, or with assets of a Plan, unless the prospective transferee
provides the Trustee, the Fiscal Agent, the Master Servicer and the Depositor
with a certification of facts and an Opinion of Counsel which establish to the
satisfaction of the Trustee, the Fiscal Agent, the Master Servicer and the
Depositor that such transfer is permissible under applicable law, will not
constitute or result in a violation of Section 406 of ERISA or Section 4975 of
the Code and will not subject the Depositor, the Trustee, the Fiscal Agent or
the Master Servicer to any obligation in addition to those undertaken in the
Agreement.
Each Person who has or who acquires any Ownership Interest in this
Certificate shall be deemed by the acceptance or acquisition of such Ownership
Interest to have agreed to be bound by the provisions of Section 5.02(d) of the
Agreement and, if any purported Transferee shall become a Holder of this
Certificate in violation of the provisions of such Section 5.02(d), to have
irrevocably authorized the Trustee 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 Trustee 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 a United States Person and shall promptly notify the
Trustee of any change or impending change in its status as a Permitted
Transferee or United States Person. In connection with any proposed Transfer of
any Ownership Interest in this Certificate, the Trustee 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 C-1
to the Agreement (a "Transfer Affidavit and Agreement") from the proposed
Transferee, in form and substance satisfactory to the Trustee, representing and
warranting, among other things, that such Transferee is a Permitted Transferee
and a United States Person, 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 or is not a United States Person, that for so long as it
retains its Ownership Interest in this Certificate, it will endeavor to remain a
Permitted Transferee and a United States Person, 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
A-16-3
<PAGE>
Agreement by a proposed Transferee, if the Trustee has actual knowledge that the
proposed Transferee is not a Permitted Transferee or is not a United States
Person, the Trustee shall not register the Transfer of an Ownership Interest in
this Certificate to such proposed Transferee.
Each Person holding or acquiring any Ownership Interest in this
Certificate shall agree (x) to require a Transfer Affidavit and Agreement from
any prospective Transferee to whom such Person attempts to transfer its
Ownership Interest herein and (y) not to transfer its Ownership Interest unless
it provides to the Trustee a certificate substantially in the form attached as
Exhibit C-2 to the Agreement stating that, among other things, it has no actual
knowledge that such prospective Transferee is not a Permitted Transferee or is
not a United States Person. Each Person holding or acquiring an Ownership
Interest in this Certificate, by purchasing such Ownership Interest herein,
agrees to give the Trustee written notice that it is a "pass-through interest
holder" within the meaning of temporary Treasury regulation 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
Trustee the following: (a) written notification 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 withdraw, qualify or downgrade its
then-current rating of any Class of Certificates; and (b) an Opinion of Counsel,
in form and substance satisfactory to the Trustee and the Depositor, to the
effect that such modification of, addition to or elimination of such provisions
will not cause either 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
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 (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 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 1 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(a)(2)(C) of the Code, and (v) any electing large partnership under
Section 775 of the Code and/or 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 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 "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
(except, in the case of a partnership, to the extent provided in Treasury
regulations), an estate whose income from sources without the United States is
includable in gross income for United States federal income tax purposes
regardless of its connection with the conduct of a trade or business within the
United States, or a trust if a court within the United States is able to
exercise primary supervision over the administration of the trust and one or
more United States Persons 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 Trustee or 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.
Prior to due presentment of this Certificate for registration of
transfer, the Depositor, the Master Servicer, the Special Servicer, the Trustee,
the Fiscal Agent, the Certificate Registrar and any agents of any of them may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of
A-16-4
<PAGE>
the Depositor, the Master Servicer, the Special Servicer, the Trustee, the
Fiscal 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 Depositor or LB
Holdings at a price determined as provided in the Agreement of all Mortgage
Loans and any REO Properties remaining in the Trust Fund. The Agreement
permits, but does not require, the Depositor, the Master Servicer or LB Holdings
to purchase from the Trust Fund all Mortgage Loans and any REO Properties
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 Cut-off Date Principal Balance of the Mortgage
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 Fiscal
Agent thereunder and the rights of the Certificateholders thereunder, at any
time by the Depositor, the Master Servicer, the Special Servicer, the Trustee
and the Fiscal Agent with the consent of the Holders of Certificates entitled to
at least 662/3% 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 circumstances,
including any amendment necessary to maintain the status of REMIC I, REMIC II or
REMIC III 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.
A-16-5
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
LaSalle National Bank,
as Trustee
By:
---------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class R-I Certificates referred to in the
within-mentioned Agreement.
Dated: August 27, 1998
LaSalle National Bank,
as Certificate Registrar
By:
---------------------------------
Authorized Officer
<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 the above named assignee on the Certificate
Register of the Trust Fund.
I (we) further direct the issuance of a new Mortgage Pass-Through
Certificate of a like Percentage Interest and Class to the above named assignee
and delivery of such Mortgage Pass-Through Certificate to the following address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Dated:
-------------------------------------
Signature by or on behalf of Assignor
-------------------------------------
Signature Guaranteed
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.
A-16-7
<PAGE>
EXHIBIT A-17
FORM OF CLASS R-II CERTIFICATE
CLASS R-II MORTGAGE
PASS-THROUGH CERTIFICATE,
SERIES 1998-C2
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool (the "Mortgage Pool") of multifamily and
commercial mortgage loans (the "Mortgage Loans"), such pool being formed and
sold by
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
<TABLE>
<S> <C>
Date of Pooling and Servicing Agreement: Percentage Interest evidenced by this Certificate
August 1, 1998 in the related Class: 100%
Cut-off Date: With respect to any Mortgage Aggregate unpaid principal balance of the Mortgage
Loan, the Due Date for such Mortgage Loan Pool as of the Cut-off Date, after deducting payments
in August, 1998 of principal due on or before such date, whether or not
received: $2,530,361,727
Issue Date: August 27, 1998
Trustee: LaSalle National Bank
First Distribution Date: September 15, 1998
CUSIP No. 368149 EP 3
Master Servicer and Special Servicer:
GMAC Commercial Mortgage Corporation
</TABLE>
Certificate No. R-II-
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN GMAC
COMMERCIAL MORTGAGE SECURITIES, INC., GMAC COMMERCIAL MORTGAGE CORPORATION,
LASALLE NATIONAL BANK, ABN AMRO BANK N.V. OR ANY OF THEIR RESPECTIVE AFFILIATES.
NEITHER THIS CERTIFICATE NOR THE 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 X, CLASS B,
CLASS C, CLASS D, CLASS E, CLASS F, CLASS G, CLASS H, CLASS J, CLASS K, CLASS L,
CLASS M AND CLASS N CERTIFICATES OF THE SAME SERIES, AS AND TO THE EXTENT
PROVIDED IN THE AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN 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 AGREEMENT.
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN TO AN EMPLOYEE BENEFIT
PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE INTERNAL REVENUE CODE OF 1986
(THE "CODE"), OR TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS
CERTIFICATE OR ANY INTEREST HEREIN ON BEHALF OF, AS NAMED FIDUCIARY OF, AS
TRUSTEE OF, OR WITH ASSETS OF ANY SUCH EMPLOYEE BENEFIT PLAN OR OTHER
<PAGE>
RETIREMENT ARRANGEMENT, WILL BE REGISTERED EXCEPT IN COMPLIANCE WITH THE
PROCEDURES SET FORTH IN THE AGREEMENT.
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 SET FORTH IN THE AGREEMENT. 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 AGREEMENT REFERRED TO HEREIN, INCLUDING,
BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE.
This certifies that is the registered owner of
the Percentage Interest evidenced by 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 GMAC Commercial
Mortgage Securities, Inc., as Depositor, GMAC Commercial Mortgage Corporation,
as Master Servicer and Special Servicer, LaSalle National Bank, as Trustee and
ABN AMRO Bank N.V., as Fiscal Agent. To the extent not defined herein, the
capitalized terms used herein have the respective meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on
the 15th day of each month or, if such 15th day is not a Business Day, the
Business Day immediately following (each, a "Distribution Date"), commencing
upon 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 (as to the
Class R-II Certificates, 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 R-II Certificates on the
applicable Distribution Date pursuant to the Agreement. All distributions made
under the Agreement on any Class R-II Certificate will be made by the Trustee by
check mailed to the address of the Person entitled thereto, as such name and
address appear in the Certificate Register. Notwithstanding the above, the
final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the offices of the Certificate Registrar
appointed as provided in the Agreement or such other location as may be
specified in such notice.
The Depositor's Mortgage Pass-Through Certificates, Series 1998-C2
(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 and Distribution 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 in minimum denominations 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 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,
A-17-2
<PAGE>
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 that does not require such
registration or qualification. If such a transfer of any Class R-II Certificate
(other than a transfer thereof by the Depositor or any Affiliate of the
Depositor) is to be made without registration under the Securities Act, then the
Trustee shall require, in order to assure compliance with such laws, receipt by
it and the Depositor of: (i) if such transfer is purportedly being made in
reliance upon Rule 144A under the Securities Act, a certificate from the
Certificateholder desiring to effect such transfer substantially in the form
attached as Exhibit B-1 to the Agreement and a certificate from such
Certificateholder's prospective transferee substantially in the form attached as
Exhibit B-2 to the Agreement; and (ii) in all other cases, (A) a certificate
from the Certificateholder desiring to effect such transfer substantially in the
form attached to the Agreement as Exhibit B-1 and a certificate from such
Certificateholder's prospective transferee substantially in the form attached to
the Agreement as Exhibit B-3, and (B) unless the Depositor directs otherwise, an
Opinion of Counsel satisfactory to the Trustee and the Depositor to the effect
that such transfer may be made without such registration (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, the Fiscal Agent or the
Certificate Registrar in their respective capacities as such). None of the
Depositor, the Trustee, the Fiscal Agent 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 by the
acceptance of its Class R-II Certificate agrees to, indemnify the Depositor, the
Trustee, the Fiscal Agent, and the Certificate Registrar 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) any employee benefit plan or other retirement arrangement,
including individual retirement accounts and annuities, Keogh plans and
collective investment funds and separate accounts in which such plans, accounts
or arrangements are invested, that is subject to ERISA or Section 4975 of the
Code (each, 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, unless the prospective transferee
provides the Trustee, the Fiscal Agent, the Master Servicer and the Depositor
with a certification of facts and an Opinion of Counsel which establish to the
satisfaction of the Trustee, the Fiscal Agent, the Master Servicer and the
Depositor that such transfer is permissible under applicable law, will not
constitute or result in a violation of Section 406 of ERISA or Section 4975 of
the Code and will not subject the Depositor, the Trustee, the Fiscal Agent or
the Master Servicer to any obligation in addition to those undertaken in the
Agreement.
Each Person who has or who acquires any Ownership Interest in this
Certificate shall be deemed by the acceptance or acquisition of such Ownership
Interest to have agreed to be bound by the provisions of Section 5.02(d) of the
Agreement and, if any purported Transferee shall become a Holder of this
Certificate in violation of the provisions of such Section 5.02(d), to have
irrevocably authorized the Trustee 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 Trustee 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 a United States Person and shall promptly notify the
Trustee of any change or impending change in its status as a Permitted
Transferee or United States Person. In connection with any proposed Transfer of
any Ownership Interest in this in this Certificate, the Trustee 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 C-1 to the Agreement (a "Transfer Affidavit and Agreement") from the
proposed Transferee, in form and substance satisfactory to the Trustee,
representing and warranting, among other things, that such Transferee is a
Permitted Transferee and a United States Person, 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 or is not a United States Person, that
for so long as it retains its Ownership Interest in this Certificate, it will
endeavor to remain a Permitted Transferee and a United States Person, 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
A-17-3
<PAGE>
Agreement by a proposed Transferee, if the Trustee has actual knowledge that the
proposed Transferee is not a Permitted Transferee or is not a United States
Person, the Trustee shall not register the Transfer of an Ownership Interest in
this Certificate to such proposed Transferee.
Each Person holding or acquiring any Ownership Interest in this
Certificate shall agree (x) to require a Transfer Affidavit and Agreement from
any prospective Transferee to whom such Person attempts to transfer its
Ownership Interest herein and (y) not to transfer its Ownership Interest unless
it provides to the Trustee a certificate substantially in the form attached as
Exhibit C-2 to the Agreement stating that, among other things, it has no actual
knowledge that such prospective Transferee is not a Permitted Transferee or is
not a United States Person. Each Person holding or acquiring an Ownership
Interest in this Certificate, by purchasing such Ownership Interest herein,
agrees to give the Trustee written notice that it is a "pass-through interest
holder" within the meaning of temporary Treasury regulation 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
Trustee the following: (a) written notification 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 withdraw, qualify or downgrade its
then-current rating of any Class of Certificates; and (b) an Opinion of Counsel,
in form and substance satisfactory to the Trustee and the Depositor, to the
effect that such modification of, addition to or elimination of such provisions
will not cause either 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
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 (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 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 1 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(a)(2)(C) of the Code, and (v) any electing large partnership under
Section 775 of the Code and/or 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-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 "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
(except, in the case of a partnership, to the extent provided in Treasury
regulations), an estate whose income from sources without the United States is
includable in gross income for United States federal income tax purposes
regardless of its connection with the conduct of a trade or business within the
United States, or a trust if a court within the United States is able to
exercise primary supervision over the administration of the trust and one or
more United States Persons 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 Trustee or 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-II Certificates.
Prior to due presentment of this Certificate for registration of
transfer, the Depositor, the Master Servicer, the Special Servicer, the Trustee,
the Fiscal Agent, the Certificate Registrar and any agents of any of them may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of
A-17-4
<PAGE>
the Depositor, the Master Servicer, the Special Servicer, the Trustee, the
Fiscal 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 Depositor or LB
Holdings at a price determined as provided in the Agreement of all Mortgage
Loans and any REO Properties remaining in the Trust Fund. The Agreement
permits, but does not require, the Depositor, the Master Servicer or LB Holdings
to purchase from the Trust Fund all Mortgage Loans and any REO Properties
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 Cut-off Date Principal Balance of the Mortgage Pool
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 Fiscal
Agent thereunder and the rights of the Certificateholders thereunder, at any
time by the Depositor, the Master Servicer, the Special Servicer, the Trustee
and the Fiscal Agent with the consent of the Holders of Certificates entitled to
at least 662/3% 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 circumstances,
including any amendment necessary to maintain the status of REMIC I, REMIC II or
REMIC III 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.
A-17-5
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
LaSalle National Bank,
as Trustee
By:
---------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class R-II Certificates referred to in the
within-mentioned Agreement.
Dated: August 27, 1998
LaSalle National Bank,
as Certificate Registrar
By:
---------------------------------
Authorized Officer
<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 the above named assignee on the Certificate
Register of the Trust Fund.
I (we) further direct the issuance of a new Mortgage Pass-Through
Certificate of a like Percentage Interest and Class to the above named assignee
and delivery of such Mortgage Pass-Through Certificate to the following address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Dated:
-------------------------------------
Signature by or on behalf of Assignor
-------------------------------------
Signature Guaranteed
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.
A-17-7
<PAGE>
EXHIBIT A-18
FORM OF CLASS R-III CERTIFICATE
CLASS R-III MORTGAGE
PASS-THROUGH CERTIFICATE,
SERIES 1998-C2
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of a pool (the "Mortgage Pool") of multifamily and
commercial mortgage loans (the "Mortgage Loans"), such pool being formed and
sold by
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
<TABLE>
<S> <C>
Date of Pooling and Servicing Agreement: Percentage Interest evidenced by this Certificate in the
August 1, 1998 related Class: 100%
Cut-off Date: With respect to any Mortgage Aggregate unpaid principal balance of the Mortgage
Loan, the Due Date for such Mortgage Loan Pool as of the Cut-off Date, after deducting payments
in August, 1998 of principal due on or before such date, whether or not
received: $2,530,361,727
Issue Date: August 27, 1998
Trustee: LaSalle National Bank
First Distribution Date: September 15, 1998
CUSIP No. 368149 EQ 1
Master Servicer and Special Servicer:
GMAC Commercial Mortgage Corporation
</TABLE>
Certificate No. R-III-
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN GMAC
COMMERCIAL MORTGAGE SECURITIES, INC., GMAC COMMERCIAL MORTGAGE CORPORATION,
LASALLE NATIONAL BANK, ABN AMRO BANK N.V. OR ANY OF THEIR RESPECTIVE AFFILIATES.
NEITHER THIS CERTIFICATE NOR THE 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 X, CLASS B,
CLASS C, CLASS D, CLASS E, CLASS F, CLASS G, CLASS H, CLASS J, CLASS K, CLASS L,
CLASS M, AND CLASS N CERTIFICATES OF THE SAME SERIES, AS AND TO THE EXTENT
PROVIDED IN THE AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN 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 AGREEMENT.
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN TO AN EMPLOYEE BENEFIT
PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE INTERNAL REVENUE CODE OF 1986
(THE "CODE"), OR TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING
<PAGE>
THIS CERTIFICATE OR ANY INTEREST HEREIN 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 SET
FORTH IN THE AGREEMENT.
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 SET FORTH IN THE AGREEMENT. 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 AGREEMENT REFERRED TO HEREIN, INCLUDING,
BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE.
This certifies that ___________________ is the registered owner of the
Percentage Interest evidenced by 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 GMAC Commercial
Mortgage Securities, Inc., as Depositor, GMAC Commercial Mortgage Corporation,
as Master Servicer and Special Servicer, LaSalle National Bank, as Trustee and
ABN AMRO Bank N.V., as Fiscal Agent. To the extent not defined herein, the
capitalized terms used herein have the respective meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on
the 15th day of each month or, if such 15th day is not a Business Day, the
Business Day immediately following (each, a "Distribution Date"), commencing
upon 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 (as to the
Class R-III Certificates, 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 R-III Certificates on the
applicable Distribution Date pursuant to the Agreement. All distributions made
under the Agreement on any Class R-III Certificate will be made by the Trustee
by check mailed to the address of the Person entitled thereto, as such name and
address appear in the Certificate Register. Notwithstanding the above, the
final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the offices of the Certificate Registrar
appointed as provided in the Agreement or such other location as may be
specified in such notice.
The Depositor's Mortgage Pass-Through Certificates, Series 1998-C2
(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 and Distribution 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 in minimum denominations 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 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
A-18-2
<PAGE>
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 that does not require such
registration or qualification. If such a transfer of any Class R-III
Certificate (other than a transfer thereof by the Depositor or any Affiliate of
the Depositor) is to be made without registration under the Securities Act, then
the Trustee shall require, in order to assure compliance with such laws, receipt
by it and the Depositor of: (i) if such transfer is purportedly being made in
reliance upon Rule 144A under the Securities Act, a certificate from the
Certificateholder desiring to effect such transfer substantially in the form
attached as Exhibit B-1 to the Agreement and a certificate from such
Certificateholder's prospective transferee substantially in the form attached as
Exhibit B-2 to the Agreement; and (ii) in all other cases, (A) a certificate
from the Certificateholder desiring to effect such transfer substantially in the
form attached to the Agreement as Exhibit B-1 and a certificate from such
Certificateholder's prospective transferee substantially in the form attached to
the Agreement as Exhibit B-3, and (B) unless the Depositor directs otherwise, an
Opinion of Counsel satisfactory to the Trustee and the Depositor to the effect
that such transfer may be made without such registration (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, the Fiscal Agent or the
Certificate Registrar in their respective capacities as such). None of the
Depositor, the Trustee, the Fiscal Agent 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 by the
acceptance of its Class R-III Certificate agrees to, indemnify the Depositor,
the Trustee, the Fiscal Agent and the Certificate Registrar 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) any employee benefit plan or other retirement arrangement,
including individual retirement accounts and annuities, Keogh plans and
collective investment funds and separate accounts in which such plans, accounts
or arrangements are invested, that is subject to ERISA or Section 4975 of the
Code (each, 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, unless the prospective transferee
provides the Trustee, the Fiscal Agent, the Master Servicer and the Depositor
with a certification of facts and an Opinion of Counsel which establish to the
satisfaction of the Trustee, the Fiscal Agent, the Master Servicer and the
Depositor that such transfer is permissible under applicable law, will not
constitute or result in a violation of Section 406 of ERISA or Section 4975 of
the Code and will not subject the Depositor, the Trustee, the Fiscal Agent or
the Master Servicer to any obligation in addition to those undertaken in the
Agreement.
Each Person who has or who acquires any Ownership Interest in this
Certificate shall be deemed by the acceptance or acquisition of such Ownership
Interest to have agreed to be bound by the provisions of Section 5.02(d) of the
Agreement and, if any purported Transferee shall become a Holder of this
Certificate in violation of the provisions of such Section 5.02(d), to have
irrevocably authorized the Trustee 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 Trustee 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 a United States Person and shall promptly notify the
Trustee of any change or impending change in its status as a Permitted
Transferee or United States Person. In connection with any proposed Transfer of
any Ownership Interest in this Certificate, the Trustee 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 C-1
to the Agreement (a "Transfer Affidavit and Agreement") from the proposed
Transferee, in form and substance satisfactory to the Trustee, representing and
warranting, among other things, that such Transferee is a Permitted Transferee
and a United States Person, 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 or is not a United States Person, that for so long as it
retains its Ownership Interest in this Certificate, it will endeavor to
A-18-3
<PAGE>
remain a Permitted Transferee and a United States Person, 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 the Trustee has actual knowledge that the
proposed Transferee is not a Permitted Transferee or is not a United States
Person, the Certificate Registrar shall not register the Transfer of an
Ownership Interest in this Certificate to such proposed Transferee.
Each Person holding or acquiring any Ownership Interest in this
Certificate shall agree (x) to require a Transfer Affidavit and Agreement from
any prospective Transferee to whom such Person attempts to transfer its
Ownership Interest herein and (y) not to transfer its Ownership Interest unless
it provides to the Trustee a certificate substantially in the form attached as
Exhibit C-2 to the Agreement stating that, among other things, it has no actual
knowledge that such prospective Transferee is not a Permitted Transferee or is
not a United States Person. Each Person holding or acquiring an Ownership
Interest in this Certificate, by purchasing such Ownership Interest herein,
agrees to give the Trustee written notice that it is a "pass-through interest
holder" within the meaning of temporary Treasury regulation 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
Trustee the following: (a) written notification 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 withdraw, qualify or downgrade its
then-current rating of any Class of Certificates; and (b) an Opinion of Counsel,
in form and substance satisfactory to the Trustee and the Depositor, to the
effect that such modification of, addition to or elimination of such provisions
will not cause either 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
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 (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 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 1 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(a)(2)(C) of the Code, and (v) any electing large partnership under
Section 775 of the Code and/or 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-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 "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
(except, in the case of a partnership, to the extent provided in Treasury
regulations), an estate whose income from sources without the United States is
includable in gross income for United States federal income tax purposes
regardless of its connection with the conduct of a trade or business within the
United States, or a trust if a court within the United States is able to
exercise primary supervision over the administration of the trust and one or
more United States Persons 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 Trustee or 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-III Certificates.
A-18-4
<PAGE>
Prior to due presentment of this Certificate for registration of
transfer, the Depositor, the Master Servicer, the Special Servicer, the Trustee,
the Fiscal Agent, the Certificate Registrar and any agents of any of them 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 Fiscal 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 Depositor or LB
Holdings at a price determined as provided in the Agreement of all Mortgage
Loans and any REO Properties remaining in the Trust Fund. The Agreement
permits, but does not require, the Depositor, the Master Servicer or LB Holdings
to purchase from the Trust Fund all Mortgage Loans and any REO Properties
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 Cut-off Date Principal Balance of the Mortgage Pool
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, the Fiscal
Agent thereunder and the rights of the Certificateholders thereunder, at any
time by the Depositor, the Master Servicer, the Special Servicer, the Trustee
and the Fiscal Agent with the consent of the Holders of Certificates entitled to
at least 662/3% 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 circumstances,
including any amendment necessary to maintain the status of REMIC I, REMIC II or
REMIC III 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.
A-18-5
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
LaSalle National Bank,
as Trustee
By:
---------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class R-III Certificates referred to in the
within-mentioned Agreement.
Dated: August 27, 1998
LaSalle National Bank,
as Certificate Registrar
By:
---------------------------------
Authorized Officer
<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 the above named assignee on the Certificate
Register of the Trust Fund.
I (we) further direct the issuance of a new Mortgage Pass-Through
Certificate of a like Percentage Interest and Class to the above named assignee
and delivery of such Mortgage Pass-Through Certificate to the following address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Dated:
-------------------------------------
Signature by or on behalf of Assignor
-------------------------------------
Signature Guaranteed
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.
A-18-7
<PAGE>
EXHIBIT B-1
FORM I OF TRANSFEROR CERTIFICATE
[Date]
LaSalle National Bank
135 South LaSalle Street, Suite 1625
Chicago, Illinois 60674-4107
Re: GMAC Commercial Mortgage Securities, Inc., Mortgage Pass-Through
Certificates, Series 1998-C2, [Class F] [Class G] [Class H] [Class J]
[Class K] [Class L] [Class M] [Class N] [Class R-I] [Class R-II] [Class
R-III], [having an initial principal balance as of August 1, 1998 of
$_______________] [evidencing a ____% Percentage Interest in such Class].
Dear Sirs:
This letter is delivered to you in connection with the transfer by
___________________ (the "Transferor") to ___________________ (the "Transferee")
of the captioned Certificates (the "Certificates"), pursuant to Section 5.02 of
the Pooling and Servicing Agreement (the "Pooling and Servicing Agreement"),
dated as of August 1, 1998, among GMAC Commercial Mortgage Securities, Inc. as
Depositor, GMAC Commercial Mortgage Corporation, as Master Servicer and Special
Servicer, LaSalle National Bank, as Trustee, and ABN AMRO Bank N.V., as Fiscal
Agent. All terms used herein and not otherwise defined shall have the respective
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 Certificates with the full
right to transfer the Certificates 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 the Certificates,
any interest in the Certificates or any other similar security to any person in
any manner, (b) solicited any offer to buy or accept a transfer, pledge or other
disposition of the Certificates, any interest in the Certificates or any other
similar security from any person in any manner, (c) otherwise approached or
negotiated with respect to the Certificates, any interest in the Certificates or
any other similar security with any person in any manner, (d) made any general
solicitation with respect to the Certificates, any interest in the Certificates
or any other similar security by means of general advertising or in any other
manner, or (e) taken any other action with respect to the Certificates, any
interest in the Certificates or any other similar security, which (in the case
of any of the acts described in clauses (a) through (e) hereof) would constitute
a distribution under the Securities Act of 1933 (the "Securities Act"), or would
render the disposition of the Certificates a violation of Section 5 of the
Securities Act or any state securities laws, or would require registration or
qualification of the Certificates pursuant to the Securities Act or any state
securities laws.
3. The Transferor and any person acting on behalf of the Transferor in
this matter reasonably believe that the Transferee is either (a) a "qualified
institutional buyer" (as that term is defined in Rule 144A ("Rule 144A") under
the Securities Act) purchasing for its own account or (b) either (i) an
"accredited investor" within the meaning of paragraph (1), (2),
<PAGE>
(3) or (7) of Rule 501(a) under the Securities Act or (ii) an entity in which
all the equity owners are "accredited investors" within the meaning of paragraph
(1), (2), (3) or (7) of Rule 501(a) 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.
4. Unless the Transferee is either (a) an "accredited investor" within
the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act or (b)
an entity in which all the equity owners are "accredited investors" within the
meaning of paragraph (1), (2), (3) or (7) of Rule 501(a) under the Securities
Act that is furnishing a Transferee Certificate in the form of Exhibit B-3 to
the Pooling and Servicing Agreement, the Transferor or a person acting on its
behalf has taken reasonable steps to ensure that the Transferee is aware that
the Transferor is relying on the exemption from the provisions of Section 5 of
the Securities Act provided by Rule 144A.
5. The Transferor or a person acting on its behalf has furnished, or
caused to be furnished, to the Transferee 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 the
Transferee has requested.
Very truly yours,
___________________________________
(Transferor)
By:________________________________
Name:______________________________
Title:_______________________________
B-1-2
<PAGE>
EXHIBIT B-2
FORM I OF TRANSFEREE CERTIFICATE
[Date]
LaSalle National Bank
135 South LaSalle Street, Suite 1625
Chicago, Illinois 60674-4107
Re: GMAC Commercial Mortgage Securities, Inc., Mortgage Pass-Through
Certificates, Series 1998-C2, [Class F] [Class G] [Class H] [Class J]
[Class K] [Class L] [Class M] [Class N], [Class R-I] [Class R-II]
[Class R-III] [having an initial principal balance as of August 1,
1998 of $__________] [evidencing a ____% Percentage Interest in such
Class].
Dear Sirs:
This letter is delivered to you in connection with the transfer by
_______________________ (the "Transferor") to _________________________ (the
"Transferee") of the captioned Certificates (the "Certificates"), pursuant to
Section 5.02 of the Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement"), dated as of August 1, 1998 among GMAC Commercial Mortgage
Securities, Inc., as Depositor, GMAC Commercial Mortgage Corporation, as Master
Servicer and Special Servicer, LaSalle National Bank, as Trustee, and ABN AMRO
Bank N.V., as Fiscal Agent. All terms used herein and not otherwise defined
shall have the respective meanings set forth in the Pooling and Servicing
Agreement. The Transferee hereby certifies, represents and warrants to you, as
Certificate Registrar, that:
1. The Transferee is a "qualified institutional buyer" as that term is
defined in Rule 144A ("Rule 144A") under the Securities Act of 1933 (the
"Securities Act") and has completed one of the forms of certification to that
effect attached hereto as Annex 1 and Annex 2. The Transferee is aware that the
sale to it is being made in reliance on Rule 144A. The Transferee is acquiring
the Certificates for its own account or for the account of a qualified
institutional buyer, and understands that such Certificates may be resold,
pledged or transferred only (a) to a person reasonably believed to be a
qualified institutional buyer that purchases for its own account or for the
account of a qualified institutional buyer to whom notice is given that the
resale, pledge or transfer is being made in reliance on Rule 144A, or (b)
pursuant to another exemption from registration under the Securities Act.
<PAGE>
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 proposes that the Certificates be registered in the
name of a nominee, such nominee has completed the Nominee Acknowledgment below.
4. If any Certificates are held by the Transferor in definitive form (as
opposed to Private Book-Entry Certificates registered in the name of Cede & Co.)
the Transferee hereby certifies to the Trustee, the Depositor and the Master
Servicer that such transfer is permissible under applicable law, and either (a)
such Transferee is not an "employee benefit plan" within the meaning of
Section 3(3) of ERISA, a "plan" within the meaning of Section 4975 of the Code,
or any entity deemed to hold "plan assets" within the meaning of the Regulation
published at 29 C.F.R. 2510.3-101, (b) will not constitute or result in any
non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of
the Code and will not subject the Depositor, the Trustee or the Master Servicer
to any obligation in addition to those undertaken in the Agreement and the
Transferee has attached hereto an opinion of counsel to such effect, or (c) such
transfer will not constitute or result in any non-exempt prohibited transaction
under ERISA or Section 4975 of the Code, will not subject the Depositor, the
Trustee, the Fiscal Agent or the Master Servicer to any obligation in addition
to those undertaken in the Agreement, and the following condition are met: (i)
the source of funds used to purchase the Certificate is an "insurance company
general account" (as such term is defined in United States Department of Labor
Prohibited Transaction Class Exemption ("PTCE 95-60") and (ii) the conditions
set forth in Sections I and III of PTCE 95-60 will apply to the Transferee's
purchase and holding of the Certificate.
Very truly yours,
___________________________________
(Transferee)
By:________________________________
Name:______________________________
Title:_______________________________
B-2-2
<PAGE>
NOMINEE ACKNOWLEDGMENT
The undersigned hereby acknowledges and agrees that as to the Certificate
being registered in its name, the sole beneficial owner thereof is and shall be
______________________________, the Transferee identified above, for whom the
undersigned is acting as nominee.
___________________________________
(Nominee)
By:________________________________
Name:______________________________
Title:_______________________________
B-2-3
<PAGE>
ANNEX 1 TO EXHIBIT B-2
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees Other Than Registered Investment Companies]
The undersigned hereby certifies as follows to [name of Transferor] (the
"Transferor") and [name of Certificate Registrar], as Certificate Registrar,
with respect to the mortgage pass-through certificate (the "Certificate")
described in the Transferee Certificate to which this certification relates and
to which this certification is an Annex:
1. As indicated below, the undersigned is the chief financial officer, a
person fulfilling an equivalent function, or other executive officer of the
entity purchasing the Certificates (the "Transferee").
2. The Transferee is a "qualified institutional buyer" as that term is
defined in Rule 144A under the Securities Act of 1933 ("Rule 144A"), because (i)
the Transferee owned and/or invested on a discretionary basis $________________.
(1) Transferee must own and/or invest on a discretionary basis at least
$100,000,000 in securities unless Transferee is a dealer, and, in that case,
Transferee must own and/or invest on a discretionary basis at least $10,000,000
in securities (1) 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) and (ii) the Transferee satisfies
the criteria in the category marked below.
___ CORPORATION, ETC. The Transferee is a corporation (other than a bank,
savings and loan association or similar institution), Massachusetts or similar
business trust, partnership, or any organization described in Section 501(c)(3)
of the Internal Revenue Code of 1986.
___ 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
- --------------------------
(1) Transferee must own and/or invest on a discretionary basis at least
$100,000,000 in securities unless Transferee is a dealer, and, in that
case, Transferee must own and/or invest on a discretionary basis at least
$10,000,000 in securities.
<PAGE>
months preceding the date of sale of the Certificate in the case of a U.S. bank,
and not more than 18 months preceding such date of sale for a foreign bank or
equivalent institution.
___ 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.
___ BROKER-DEALER. The Transferee is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934.
___ 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.
___ 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.
___ ERISA PLAN. The Transferee is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security Act of 1974.
___ INVESTMENT ADVISOR. The Transferee is an investment advisor registered
under the Investment Advisers Act of 1940.
___ 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).
B-2-5
<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 Transferor and other parties related to the Certificates
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 Certificates only for the
Transferee's own account?
Yes_____ No_____
6. If the answer to the foregoing question is "no," then in each case
where the Transferee is purchasing for an account other than its own, such
account belongs to a third party that is itself a "qualified institutional
buyer" within the meaning of Rule 144A, and the "qualified institutional buyer"
status of such third party has been established by the Transferee through one or
more of the appropriate methods contemplated by Rule 144A.
B-2-6
<PAGE>
7. The Transferee will notify each of the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice is given, the Transferee's purchase of the 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:
B-2-7
<PAGE>
ANNEX 2 TO EXHIBIT B-2
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees That Are Registered Investment Companies]
The undersigned hereby certifies as follows to [name of Transferor] (the
"Transferor") and [name of Certificate Registrar], as Certificate Registrar,
with respect to the mortgage pass-through certificate (the "Certificate")
described in the Transferee Certificate to which this certification relates and
to which this certification is an Annex:
1. As indicated below, the undersigned is the chief financial officer, a
person fulfilling an equivalent function, or other executive officer of the
entity purchasing the Certificates (the "Transferee") or, if the Transferee is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933 ("Rule 144A") because the Transferee is part of a Family
of Investment Companies (as defined below), is an executive officer of the
investment adviser (the "Adviser").
2. The Transferee is a "qualified institutional buyer" as defined in Rule
144A because (i) the Transferee is an investment company registered under the
Investment Company Act of 1940, and (ii) as marked below, the Transferee alone
owned and/or invested on a discretionary basis, or the Transferee's Family of
Investment Companies owned, at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Transferee's most
recent fiscal year. For purposes of determining the amount of securities owned
by the Transferee or the Transferee's Family of Investment Companies, the cost
of such securities was used, unless the Transferee or any member of the
Transferee's Family of Investment Companies, as the case may be, reports its
securities holdings in its financial statements on the basis of their market
value, and no current information with respect to the cost of those securities
has been published, in which case the securities of such entity were valued at
market.
___ 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).
B-2-8
<PAGE>
___ 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).
3. The term "Family of Investment Companies" as used herein means two or
more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i) securities
of issuers that are affiliated with the Transferee or are part of the
Transferee's Family of Investment Companies, (ii) bank deposit notes and
certificates of deposit, (iii) loan participations, (iv) repurchase agreements,
(v) securities owned but subject to a repurchase agreement and (vi) currency,
interest rate and commodity swaps. For purposes of determining the aggregate
amount of securities owned and/or invested on a discretionary basis by the
Transferee, or owned by the Transferee's Family of Investment Companies, the
securities referred to in this paragraph were excluded.
5. The Transferee is familiar with Rule 144A and understands that the
parties to which this certification is being made are relying and will continue
to rely on the statements made herein because one or more sales to the
Transferee will be in reliance on Rule 144A.
Will the Transferee be purchasing the Certificates only for the
Transferee's own account?
Yes_____ No_____
6. If the answer to the foregoing question is "no," then in each case
where the Transferee is purchasing for an account other than its own, such
account belongs to a third party that is itself a "qualified institutional
buyer" within the meaning of Rule 144A, and the "qualified institutional buyer"
status of such third party has been established by the Transferee through one or
more of the appropriate methods contemplated by Rule 144A.
7. The 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 Certificates will constitute a
reaffirmation of this certification by the undersigned as of the date of such
purchase.
B-2-9
<PAGE>
Print Name of Transferee or Adviser
___________________________________
By:________________________________
Name:______________________________
Title:_____________________________
Date:______________________________
IF AN ADVISER:
___________________________________
Print Name of Transferee
Date:______________________________
B-2-10
<PAGE>
EXHIBIT B-3
FORM II OF TRANSFEREE CERTIFICATE
[Date]
LaSalle National Bank
135 South LaSalle Street, Suite 1625
Chicago, IL 60674-4107
Re: GMAC Commercial Mortgage Securities, Inc., Mortgage Pass-Through
Certificates, Series 1998-C2, [Class F] [Class G] [Class H] [Class J]
[Class K] [Class L] [Class M] [Class N] [Class R-I] [Class R-II]
[Class R-III], [having an initial principal balance as of August 1,
1998 of $ ______________________] [evidencing a ____% Percentage
Interest in such Class].
Dear Sirs:
This letter is delivered to you in connection with the transfer by
______________ (the "Transferor") to _____________ (the "Transferee") of the
captioned Certificates (the "Certificates"), pursuant to Section 5.02 of the
Pooling and Servicing Agreement (the "Pooling and Servicing Agreement"), dated
as of August 1, 1998, among GMAC Commercial Mortgage Securities, Inc., as
Depositor, GMAC Commercial Mortgage Corporation, as Master Servicer and as
Special Servicer, LaSalle National Bank, as Trustee, and ABN AMRO Bank N.V., as
Fiscal Agent. All terms used herein and not otherwise defined shall have the
respective 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 Certificates 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 has 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) neither the
Certificates nor any security issued in exchange therefor or in lieu thereof may
be resold or transferred unless it is
<PAGE>
(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 that are exempt from such registration and qualification
requirements and the Trustee and the Depositor have received: (A) if such
transfer is purportedly being made in reliance upon Rule 144A under the
Securities Act, a certificate from the Certificateholder desiring to effect such
transfer substantially in the form attached as Exhibit B-1 hereto and a
certificate from such Certificateholder's prospective transferee substantially
in the form attached as Exhibit B-2 hereto; and (B) in all other cases, a
certificate from the Certificateholder desiring to effect such transfer
substantially in the form attached hereto as Exhibit B-1 and a certificate from
such Certificateholder's prospective transferee substantially in the form
attached hereto as Exhibit B-3, and, unless the Depositor directs otherwise, an
opinion of counsel satisfactory to the Trustee and the Depositor to the effect
that such transfer may be made without registration under the Securities Act.
3. The Transferee understands that it may not sell or otherwise transfer
the Certificate, any security issued in exchange therefor or in lieu thereof or
any interest in the foregoing 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 Certificate will bear legends substantially to
the following effect:
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED OR QUALIFIED UNDER
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 SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986
(THE "CODE"), OR TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS
CERTIFICATE ON BEHALF OF, AS NAMED FIDUCIARY OF, AS TRUSTEE OF, OR WITH ASSETS
OF ANY SUCH EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT, WILL BE
REGISTERED EXCEPT IN COMPLIANCE WITH THE PROCEDURES DESCRIBED IN THE POOLING AND
SERVICING AGREEMENT.
B-3-2
<PAGE>
4. Neither the Transferee nor anyone acting on its behalf has (a)
offered, pledged, sold, disposed of or otherwise transferred the Certificate,
any interest in the 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 the Certificate, any interest in the Certificate or any other
similar security from any person in any manner, (c) otherwise approached or
negotiated with respect to the Certificate, any interest in the 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 the
Certificate under the Securities Act, would render the disposition of the
Certificate a violation of Section 5 of the Securities Act or any state
securities law or would require registration or qualification of the 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 the Certificate, any security issued in exchange therefor or in
lieu thereof or any interest in the foregoing.
5. The Transferee has been furnished with all information regarding (a)
the Depositor, (b) the Certificate and distributions thereon, (c) the Mortgage
Loans, (d) the Pooling and Servicing Agreement, and (e) all related matters,
that it has requested.
6. The Transferee is either (i) an "accredited investor" within the
meaning of paragraph (1), (2), (3) or (7) of Rule 501(a) under the Securities
Act or (ii) an entity in which all the equity owners are "accredited investors"
within the meaning of paragraph (1), (2), (3) or (7) of Rule 501(a) 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. The Transferee hereby certifies to the Trustee, the Depositor and the
Master Servicer that such transfer is permissible under applicable law, and
either (a) such Transferee is not an "employee benefit plan" within the meaning
of Section 3(3) of ERISA, a "plan" within the meaning of Section 4975 of the
Code, or any entity deemed to hold "plan assets" within the meaning of the
Regulation published at 29 C.F.R. 2510.3-101, (b) will not constitute or result
in any non-exempt prohibited transaction under Section 406 of ERISA or Section
4975 of the Code and will not subject the Depositor, the Trustee or the Master
Servicer to any obligation in addition to those undertaken in the Agreement and
the Transferee has attached hereto an opinion of counsel to such effect, or (c)
such transfer will not constitute or result in any non-exempt
B-3-3
<PAGE>
prohibited transaction under ERISA or Section 4975 of the Code, will not subject
the Depositor, the Trustee, the Fiscal Agent or the Master Servicer to any
obligation in addition to those undertaken in the Agreement, and the following
condition are met: (i) the source of funds used to purchase the Certificate is
an "insurance company general account" (as such term is defined in United States
Department of Labor Prohibited Transaction Class Exemption ("PTCE 95-60") and
(ii) the conditions set forth in Sections I and III of PTCE 95-60 will apply to
the Transferee's purchase and holding of the Certificate.
Very truly yours,
___________________________________
(Transferee)
By:________________________________
Name:______________________________
Title:_____________________________
B-3-4
<PAGE>
EXHIBIT C-1
FORM OF TRANSFER AFFIDAVIT AND AGREEMENT
FOR TRANSFERS OF REMIC RESIDUAL CERTIFICATES
STATE OF )
) ss:
COUNTY OF )
________________, being first duly sworn, deposes and says that:
1. He/She is the ____________________ of ____________________ (the
prospective transferee (the "Transferee") of GMAC Commercial Mortgage
Securities, Inc., Mortgage Pass-Through Certificates, Series 1998-C2, Class
[R-I] [R-II] [R-III], evidencing a ____% Percentage Interest in such Class (the
"Residual Certificates"), a duly organized and validly existing
under the laws of , on behalf of which he/she makes this affidavit.
All capitalized terms used but not otherwise defined herein shall have the
respective meanings set forth in the Pooling and Servicing Agreement pursuant to
which the Residual Certificates were issued (the "Pooling and Servicing
Agreement").
2. The Transferee (i) is, and as of the date of transfer will be, a
"Permitted Transferee" and will endeavor to remain a "Permitted Transferee" for
so long as it holds the Residual Certificates, and (ii) is acquiring the
Residual Certificates for its own account or for the account of another
prospective transferee 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 possession of the United States. (For
this purpose, a "disqualified organization" means an electing large partnership
under section 775 of the Code, the United States, any state or political
subdivision thereof, any agency or instrumentality of any of the foregoing
(other than an instrumentality, all of the activities of which are subject to
tax and, except for the Federal Home Loan Mortgage Corporation, a majority of
whose board of directors is not selected by any such governmental entity) or any
foreign government, international organization or any agency or instrumentality
of such foreign government or organization, any rural electric or telephone
cooperative, or any organization (other than certain farmers' cooperatives) that
is generally exempt from federal income tax unless such organization is subject
to the tax on unrelated business taxable income.
3. The Transferee is aware (i) of the tax that would be imposed on
transfers of the Residual Certificates to "disqualified organizations" under the
Code that applies to all transfers of the Residual Certificates; (ii) that such
tax would be on the transferor (or, with respect to transfers to electing large
partnerships, on such partnership) or, if such transfer is through an agent
(which Person includes a broker, nominee or middleman) for a non-Permitted
Transferee, on the agent; (iii) that the Person (other than transfers with
respect to electing large partnerships) otherwise liable for the tax shall be
relieved of liability for the tax if the transferee furnishes to such
<PAGE>
Person an affidavit that the transferee is a Permitted Transferee and, at the
time of transfer, such Person does not have actual knowledge that the affidavit
is false; and (iv) that the Residual Certificates may be a "noneconomic residual
interest" within the meaning of Treasury regulation Section 1.860E-1(c) 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. The Transferee is aware of the tax imposed on a "pass-through
entity" holding the Residual Certificates if at any time during the taxable year
of the pass-through entity a non-Permitted Transferee is the record holder of an
interest in such entity. (For this purpose, a "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. The Transferee is aware that the Certificate Registrar will not
register any transfer of the Residual Certificates by the Transferee unless the
Transferee's transferee, or such transferee's agent, delivers to the Certificate
Registrar, among other things, an affidavit and agreement in substantially the
same form as this affidavit and agreement. The Transferee expressly agrees that
it will not consummate any such transfer if it knows or believes that any
representation contained in such affidavit and agreement is false.
6. The Transferee 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 Residual Certificate will only be
owned, directly or indirectly, by a Permitted Transferee.
7. The Transferee's taxpayer identification number is___________.
8. The Transferee has reviewed the provisions of Section 5.02(d) of
the Pooling and Servicing Agreement, a description of which provisions is set
forth in the Residual Certificates (in particular, clause (ii)(A) of
Section 5.02(d) which authorizes the Trustee to deliver payments on the Residual
Certificate to a Person other than the Transferee and clause (ii)(B) of Section
5.02(d) which authorizes the Trustee to negotiate a mandatory sale of the
Residual Certificates, in either case, in the event that the Transferee holds
such Residual Certificates in violation of Section 5.02(d)); and the Transferee
expressly agrees to be bound by and to comply with such provisions.
9. No purpose of the Transferee relating to its purchase or any sale
of the Residual Certificates is or will be to impede the assessment or
collection of any tax.
10. The Transferee hereby represents to and for the benefit of the
transferor that the Transferee intends to pay any taxes associated with holding
the Residual Certificates as they become due, fully understanding that it may
incur tax liabilities in excess of any cash flows generated by the Residual
Certificates.
C-1-2
<PAGE>
11. The Transferee will, in connection with any transfer that it
makes of the Residual Certificates, deliver to the Certificate Registrar a
representation letter substantially in the form of Exhibit H-2 to the Pooling
and Servicing Agreement in which it will represent and warrant, among other
things, that it is not transferring the Residual Certificates to impede the
assessment or collection of any tax and that it has at the time of such transfer
conducted a reasonable investigation of the financial condition of the proposed
transferee as contemplated by Treasury regulation Section 1.860E-1(c)(4)(i) and
has satisfied the requirements of such provision.
12. The Transferee is a citizen or resident of the United States, a
corporation, a partnership or other entity created or organized in, or under the
laws of, the United States or any political subdivision thereof (except, in the
case of a partnership, to the extent provided in Treasury regulations such
partnership is not a U.S. person), or an estate or trust whose income from
sources without the United States is includible in gross income for United
States federal income tax purposes regardless of its connection with the conduct
of a trade or business within the United States.
13. The Transferee is not (A) an employee benefit plan or other
retirement arrangement, including individual retirement accounts and annuities,
Keogh plans and collective investment funds and separate accounts in which such
plans, accounts or arrangements are invested, that is subject to ERISA or
Section 4975 of the Code (each, a "Plan") or (B) a Person who is directly or
indirectly purchasing the Class Residual Certificates or interest therein on
behalf of, as named fiduciary of, as trustee of, or with assets of a Plan,
unless the prospective transferee provides the Trustee, the Fiscal Agent, the
Master Servicer and the Depositor with a certification of facts and an Opinion
of Counsel which establish to the satisfaction of the Trustee, the Fiscal Agent,
the Master Servicer and the Depositor that such transfer is permissible under
applicable law, will not constitute or result in a violation of Section 406 of
ERISA or Section 4975 of the Code and will not subject the Depositor, the
Trustee, the Fiscal Agent or the Master Servicer to any obligation in addition
to those undertaken in the Pooling and Servicing Agreement.
C-1-3
<PAGE>
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors, by
its ___________________ and its corporate seal to be hereunto attached, attested
by its [Assistant] Secretary, this ____ day of __________, ____.
---------------------------------
[NAME OF TRANSFEREE]
By:
------------------------------
[Name of Officer]
[Title of Officer]
[Corporate Seal]
ATTEST:
- -------------------------------
[Assistant] Secretary
Personally appeared before me the above-named _________________ known
or proved to me to be the same person who executed the foregoing instrument and
to be the _____________ of the Transferee, and acknowledged to me that he/she
executed the same as his/her free act and deed and the free act and deed of the
Transferee
Subscribed and sworn before me this ____ day of _____________.
-------------------------------
NOTARY PUBLIC
COUNTY OF _____________________
STATE OF ______________________
My Commission expires the __ day of _______, 19__.
C-1-4
<PAGE>
EXHIBIT C-2
FORM OF TRANSFEROR CERTIFICATE FOR TRANSFERS
OF REMIC RESIDUAL CERTIFICATES
[Date]
LaSalle National Bank
135 South LaSalle Street, Suite 1625
Chicago, IL 60674-4107
Re: GMAC Commercial Mortgage Securities, Inc., Mortgage Pass-Through
Certificates, Series 1998-C2 (the "Certificates")
Dear Sirs:
This letter is delivered to you in connection with the transfer by
____________ (the "Transferor") to ____________ (the "Transferee") of [Class
R-I] [Class R-II] [Class R-III] Certificates evidencing a ____% Percentage
Interest in such Class (the "Residual Certificates"). The Certificates,
including the Residual Certificates, were issued pursuant to the Pooling and
Servicing Agreement, dated as of August 1, 1998 (the "Pooling and Servicing
Agreement"), among GMAC Commercial Mortgage Securities, Inc., as Depositor, GMAC
Commercial Mortgage Corporation, as Master Servicer and Special Servicer LaSalle
National Bank, as Trustee, and ABN AMRO Bank N.V., as Fiscal Agent. All
capitalized terms used but not otherwise defined herein shall have the
respective meanings set forth in the Pooling and Servicing Agreement. The
Transferor hereby certifies, represents and warrants to you, as Certificate
Registrar, that:
1. No purpose of the Transferor relating to the transfer of the Residual
Certificates by the Transferor to the Transferee is or will be to impede the
assessment or collection of any tax.
2. The Transferor understands that the Transferee has delivered to you a
Transfer Affidavit and Agreement in the form attached to the Pooling and
Servicing Agreement. 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,
<PAGE>
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 Residual 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:_____________________________
C-2-2
<PAGE>
EXHIBIT D
FORM OF REQUEST FOR RELEASE
DATE:
TO:
RE: REQUEST FOR RELEASE OF DOCUMENTS
In connection with the administration of the pool of Mortgage Loans held by you
for the referenced pool, we request the release of the Mortgage Loan File
described below.
Pooling and Servicing Agreement Dated:
Series#:
Account#:
Pool#:
Loan#:
Borrower Name(s):
Reason for Document Request: (indicate one)
[ ] Mortgage Loan Prepaid in Full
[ ] Mortgage Loan Repurchased or Sold
[ ] Other (specify)___________________
_______________________________________
_______________________________________
"We hereby certify that all amounts received or to be received in connection
with such payments which are required to be deposited have been or will be so
deposited as provided in the Pooling and Servicing Agreement."
[GMAC COMMERCIAL MORTGAGE CORPORATION]
Authorized Signature
************************************************************************
TO CUSTODIAN/TRUSTEE: Please acknowledge this request, and check off
documents being enclosed with a copy of this form. You should
retain this form for your files in accordance with the terms of
the Pooling and Servicing Agreement.
Enclosed Documents: [ ] Promissory Note
[ ] Primary Insurance Policy
[ ] Mortgage or Deed of Trust
[ ] Assignment(s) of Mortgage or Deed of Trust
[ ] Title Insurance Policy
[ ] Other:
Name
Title
Date
<PAGE>
EXHIBIT E
FORM OF UCC-1
<PAGE>
SCHEDULE 1 TO UCC-1 FINANCING STATEMENT
All right (including the power to convey title thereto), title and interest of
the Debtor as more particularly described on Exhibit A attached hereto:
<PAGE>
EXHIBIT A OF SCHEDULE 1 TO UCC-1 FINANCING STATEMENT
All right (including the power to convey title thereto), title and interest
of the Debtor, including any security interest therein for the benefit of the
Debtor, in and to the Trust Fund created pursuant to the Pooling and Servicing
Agreement, dated as of August 1, 1998, among the Debtor as Depositor, the
Secured Party as Trustee*, ABN AMRO Bank N.V., as Fiscal Agent and GMAC
Commercial Mortgage Corporation as Master Servicer and Special Servicer with
respect to Mortgage Pass-Through Certificates, Series 1998-C2 (the "Pooling and
Servicing Agreement (Series 1998-C2), including:
(1) the Mortgage Loans listed on the Mortgage Loan Schedule attached
hereto;
(2) all principal and interest received or receivable with respect to the
Mortgage Loans (other than principal and interest payments due and payable prior
to the Cut-off Date and Principal Prepayments received prior to the Cut-off
Date);
(3) all amounts held from time to time in the Certificate Account and the
Distribution Account and all reinvestment earnings on such amounts;
(4) all of the Debtor's right, title and interest in and to the proceeds
of any title, hazard or other Insurance Policies related to such Mortgage Loans;
(5) any and all general intangibles (as defined in the Uniform Commercial
Code) consisting of, arising from or relating to any of the foregoing; and
(6) any and all income, payments, proceeds and products of any of the
foregoing.
Capitalized terms used herein, but not defined, shall have the respective
meanings assigned to such terms in the Pooling and Servicing Agreement (Series
1998-C2).
THE DEBTOR AND THE SECURED PARTY INTEND THE TRANSACTIONS CONTEMPLATED BY
THE POOLING AND SERVICING AGREEMENT TO CONSTITUTE A SALE OF THE INTEREST IN,
WITH RESPECT TO THE MORTGAGE LOANS, THE MORTGAGE NOTES, THE RELATED MORTGAGES
AND THE RELATED MORTGAGE FILES, 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, AS IN EFFECT IN
ANY APPLICABLE JURISDICTION, OR THAT A FILING IS NECESSARY TO PERFECT THE
SECURITY INTEREST OF THE SECURED PARTY*, WITH RESPECT TO THE MORTGAGE LOANS, IN
ANY MORTGAGE NOTE, MORTGAGE OR DOCUMENT IN A MORTGAGE FILE. WITH RESPECT TO THE
FOREGOING, THIS FILING IS MADE ONLY IN THE EVENT OF CONTRARY ASSERTIONS BY THIRD
PARTIES.
*Not in its individual capacity, but solely as Trustee for the benefit of
the Certificateholders pursuant to the Pooling and Servicing Agreement (Series
1998-C2).
<PAGE>
MORTGAGE LOAN SCHEDULE TO UCC-1 FINANCING STATEMENT
<PAGE>
EXHIBIT F
METHODOLOGY TO NORMALIZE NET OPERATING INCOME AND DEBT SERVICE COVERAGE
- - GMAC Commercial Mortgage Corporation ("GMACCM") applies the methodology
presented below to arrive at a servicer adjusted or "Normalized" Net
Operating Income ("NOI"). The items described below highlight some of the
major categories requiring adjustment. There may, however, be others, and
GMACCM will use its market knowledge and discretion in making and
sufficiently footnoting the necessary adjustments.
- - GMACCM chooses to use the actual management fee stated in the financial
statement.
- - Where they are clearly identifiable, GMACCM will remove any capital expense
from any above the line categories (such as extraordinary repairs and
maintenance) and put them below the line in the capital expense comment
section.
- - Replacement reserves, tenant improvement and leasing commission reserves
will be treated as above the line expenses. A determination will be made
whether there have been credits for the disbursements from a reserve and
that expenses are not overstated due to exclusion of credits.
- - Property taxes should be the annual amount due, excluding any delinquent
taxes or credits from prior years which would cause the number to be higher
or lower. The amount for property taxes will be adjusted if the period
under analysis is less than one year.
- - GMAC Commercial Mortgage will exclude non-recurring, extraordinary income.
For example, a tax refund, lease buyout or income received for a period
other than the year in question should be adjusted. If past due rent for a
prior year was paid and recorded in the current year, GMACCM would back it
out and footnote it accordingly. Care will be used when reflecting
percentage/overage rents to ensure that it relates to the appropriate
period and that the numbers are supported by tenant sales information.
- - GMAC Commercial Mortgage will remove any items not pertaining to the
operation of the property such as, fees for closing the loan restructure, a
distribution to owners or a charitable contribution.
- - When necessary, income and expenses will be analyzed by looking at
variances by category. Unusual income and expense items will be
researched. If there are significant variances, inquiries to the borrower
will be made. Appropriate adjustments will be made and footnotes provided
to clearly explain the situation.
- - The debt service should be an actual amount the borrower paid per the
servicing records for the period associated with the operating statement.
If GMACCM does not have a full year of payments, it will use the principal
and interest constant in the case of a fixed rate loan and, in the case of
an adjustable rate loan, will estimate a full year amount from the payment
history information available.
<PAGE>
EXHIBIT G
FORM OF DISTRIBUTION DATE STATEMENT
<PAGE>
EXHIBIT H
FORM OF MASTER SERVICER REPORT
<PAGE>
EXHIBIT I
CERTAIN REPORTS
<PAGE>
SCHEDULE I
MORTGAGE LOAN SCHEDULE
<PAGE>
Exhibit 99.1
EXECUTION COPY
MORTGAGE LOAN PURCHASE AGREEMENT
This Mortgage Loan Purchase Agreement (this "Agreement"), is dated and
effective as of August 21, 1998, between GMAC Commercial Mortgage Corporation as
seller (the "Seller") and GMAC Commercial Mortgage Securities, Inc. as purchaser
(the "Purchaser").
The Seller desires to sell, assign, transfer and otherwise convey to the
Purchaser, and the Purchaser desires to purchase, subject to the terms and
conditions set forth below, the multifamily and commercial mortgage loans (the
"Mortgage Loans") identified on the schedule annexed hereto as EXHIBIT A (the
"Mortgage Loan Schedule"). Certain other multi family and commercial mortgage
loans will be purchased by the Purchaser from (i) LaSalle National Bank as
Trustee for Restructured Asset Certificates With Enhanced Returns, Series
1998-ML Trust ("ML Trust") pursuant to, and for the consideration described in,
the Mortgage Loan Purchase Agreement, dated as of August 21, 1998 (the "ML Trust
Mortgage Loan Purchase Agreement") between the Purchaser and the ML Trust and
(ii) German American Capital Corporation ("GACC"), pursuant to, and for the
consideration described in, the Mortgage Loan Purchase Agreement, dated as of
August 21, 1998 (the "GACC Mortgage Loan Purchase Agreement"), between the
Depositor and GACC (the mortgage loans purchased by the Purchaser under the ML
Trust Mortgage Loan Purchase Agreement and the GACC Mortgage Loan Purchase
Agreement, the "Other Mortgage Loans").
It is expected that the Mortgage Loans will be transferred, together with
other multifamily and commercial mortgage loans to a trust fund (the "Trust
Fund") to be formed by the Purchaser, beneficial ownership of which will be
evidenced by a series of mortgage pass-through certificates (the
"Certificates"). Certain classes of the Certificates will be rated by Standard
& Poor's Ratings Services, Moody's Investors Service, Inc. and FITCH IBCA, Inc.
(together, the "Rating Agencies"). Certain classes of the Certificates (the
"Registered Certificates") will be registered under the Securities Act of 1933,
as amended (the "Securities Act"). The Trust Fund will be created and the
Certificates will be issued pursuant to a pooling and servicing agreement to be
dated as of August 1, 1998 (the "Pooling and Servicing Agreement"), among the
Purchaser as depositor, GMAC Commercial Mortgage Corporation as master servicer
(in such capacity, the "Master Servicer") and special servicer (in such
capacity, the "Special Servicer"), LaSalle National Bank as trustee (in such
capacity, the "Trustee") and ABN AMRO Bank N.V. as fiscal agent. Capitalized
terms not otherwise defined herein have the meanings assigned to them in the
Pooling and Servicing Agreement as in effect on the Closing Date.
The Purchaser intends to sell certain of the Certificates to Lehman
Brothers Inc. and Deutsche Bank Securities Inc. (together, the "Underwriters")
pursuant to an underwriting agreement
<PAGE>
dated the date hereof (the "Underwriting Agreement"). The Purchaser intends to
sell the remaining Certificates (the "Non-Registered Certificates") to Lehman
Brothers Inc. (the "Initial Purchaser"), pursuant to a certificate purchase
agreement dated the date hereof (the "Certificate Purchase Agreement").
Now, therefore, in consideration of the premises and the mutual agreements
set forth herein, the parties agree as follows:
SECTION 1. AGREEMENT TO PURCHASE.
The Seller agrees to sell, assign, transfer and otherwise convey to the
Purchaser, and the Purchaser agrees to purchase, the Mortgage Loans. The
purchase and sale of the Mortgage Loans shall take place on August 27, 1998 or
such other date as shall be mutually acceptable to the parties hereto (the
"Closing Date"). The "Cut-off Date" with respect to any Mortgage Loan is the
Due Date for such Mortgage Loan in August 1998. As of the close of business on
their respective Cut-off Dates, the Mortgage Loans will have an aggregate
principal balance (the "Aggregate Cut-off Date Balance"), after application of
all payments of principal due thereon on or before such date, whether or not
received, of $1,163,291,404, subject to a variance of plus or minus 5%. The
purchase price for the Mortgage Loans shall be determined and paid to the Seller
in accordance with a term sheet (the "Allocation Agreement") that has been
agreed to by the Mortgage Loan Sellers and the Purchaser.
SECTION 2. CONVEYANCE OF MORTGAGE LOANS.
(a) Effective as of the Closing Date, subject only to receipt by the
Seller of the purchase price referred to in Section 1 hereof (exclusive of any
applicable holdback for transaction expenses in accordance with the Allocation
Agreement), the Seller does hereby sell, transfer, assign, set over and
otherwise convey to the Purchaser, without recourse, all the right, title and
interest of the Seller in and to the Mortgage Loans identified on the Mortgage
Loan Schedule as of such date, including all interest and principal received or
receivable by the Seller on or with respect to the Mortgage Loans after the
Cut-off Date for such Mortgage Loan, together with all of the Seller's right,
title and interest in and to the proceeds of any related title, hazard, or other
insurance policies and any escrow, reserve or other comparable accounts related
to the Mortgage Loans. The Purchaser shall be entitled to (and, to the extent
received by or on behalf of the Seller, the Seller shall deliver or cause to be
delivered to or at the direction of the Purchaser) all scheduled payments of
principal and interest due on the Mortgage Loans after the Cut-off Date for each
Mortgage Loan, and all other recoveries of principal and interest collected
thereon after such Cut-off Date. All scheduled payments of principal and
interest due thereon on or before the Cut-off Date for each Mortgage Loan and
collected after such Cut-off Date shall belong to the Seller.
(b) In connection with the Seller's assignment pursuant to
subsection (a) above, the Seller hereby agrees that, at least five (5) Business
Days before the Closing Date, it shall have delivered
-2-
<PAGE>
to and deposited with the Trustee, the Mortgage File (as described on EXHIBIT B
hereto) for each Mortgage Loan so assigned. It is further acknowledged and
agreed by the Seller that the Purchaser intends to cause the Trustee to perform
a limited review of such Mortgage Files to enable the Trustee to confirm to the
Purchaser on or before the Closing Date that the Mortgage Note referred to in
clause (i) of EXHIBIT B has been delivered by the Seller with respect to each
such Mortgage File. In the event Seller fails to so deliver each such Mortgage
File to the Trustee, the Purchaser and its successors and assigns shall be
entitled to pursue any rights or remedies in respect of such failure as may be
available under applicable law. If the Seller cannot deliver, or cause to be
delivered as to any Mortgage Loan, the original Mortgage Note, the Seller shall
deliver a copy or duplicate original of such Mortgage Note, together with an
affidavit certifying that the original thereof has been lost or destroyed. If
the Seller cannot deliver, or cause to be delivered, as to any Mortgage Loan,
the original or a copy of any of the documents and/or instruments referred to in
clauses (ii), (iv), (viii), (xi)(A) and (xii) of EXHIBIT B, with evidence of
recording thereon, solely because of a delay caused by the public recording or
filing office where such document or instrument has been delivered for
recordation or filing, or because such original recorded document has been lost
or returned from the recording or filing office and subsequently lost, as the
case may be, the delivery requirements of this Section 2(b) shall be deemed to
have been satisfied as to such missing item, and such missing item shall be
deemed to have been included in the related Mortgage File, provided that a copy
of such document or instrument (without evidence of recording or filing thereon,
but certified (which certificate may relate to multiple documents and/or
instruments) by the Seller to be a true and complete copy of the original
thereof submitted for recording or filing, as the case may be) has been
delivered to the Trustee, and either the original of such missing document or
instrument, or a copy thereof, with evidence of recording or filing, as the case
may be, thereon, is delivered to or at the direction of the Purchaser (or any
subsequent owner of the affected Mortgage Loan, including without limitation the
Trustee) within 180 days of the Closing Date (or within such longer period after
the Closing Date as the Purchaser (or such subsequent owner) may consent to,
which consent shall not be unreasonably withheld so long as the Seller has
provided the Purchaser (or such subsequent owner) with evidence of such
recording or filing, as the case may be, or has certified to the Purchaser (or
such subsequent owner) as to the occurrence of such recording or filing, as the
case may be, and is, as certified to the Purchaser (or such subsequent owner) no
less often than quarterly, in good faith attempting to obtain from the
appropriate county recorder's or filing office such original or copy). If the
Seller cannot deliver, or cause to be delivered, as to any Mortgage Loan, the
original or a copy of the related lender's title insurance policy referred to in
clause (ix) of EXHIBIT B solely because such policy has not yet been issued, the
delivery requirements of this Section 2(b) shall be deemed to be satisfied as to
such missing item, and such missing item shall be deemed to have been included
in the related Mortgage File, provided that the Seller has delivered to the
Trustee a commitment for title insurance "marked-up" at the closing of such
Mortgage Loan, and the Seller shall deliver to or at the direction of the
Purchaser (or any subsequent owner of the affected Mortgage Loan, including
without limitation the Trustee), promptly following the receipt thereof, the
original related lender's title insurance policy (or a copy thereof). In
addition, notwithstanding anything to the contrary contained herein, if there
exists with respect to any group of related cross-collateralized Mortgage Loans
only one original of any document referred to in EXHIBIT B
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covering all the Mortgage Loans in such group, then the inclusion of the
original of such document in the Mortgage File for any of the Mortgage Loans in
such group shall be deemed an inclusion of such original in the Mortgage File
for each such Mortgage Loan. On the Closing Date, upon notification from the
Seller that the purchase price referred to in Section 1 (exclusive of any
applicable holdback for transaction expenses in accordance with the Allocation
Agreement) has been received by the Seller, the Trustee shall be authorized to
release to the Purchaser or its designee all of the Mortgage Files in the
Trustee's possession relating to the Mortgage Loans.
(c) As to each Mortgage Loan, the Seller shall be responsible for all
costs associated with (i) the recording or filing, as the case may be, of each
assignment referred to in clauses (iii) and (v) of EXHIBIT B and each UCC-2 and
UCC-3, if any, referred to in clause (xi)(B) of EXHIBIT B and (ii) the delivery
of a copy of any such document or instrument to the Master Servicer promptly
following its return to the Trustee or its designee after such recording or
filing; provided that the Seller shall not be responsible for actually recording
or filing any such document or instrument. If any such document or instrument
is lost or returned unrecorded or unfiled, as the case may be, because of a
defect therein, the Seller shall promptly prepare or cause the preparation of a
substitute therefor or cure or cause the curing of such defect, as the case may
be, and shall thereafter deliver the substitute or corrected document to or at
the direction of the Purchaser (or any subsequent owner of the affected Mortgage
Loan, including without limitation the Trustee) for recording or filing, as
appropriate, at the Seller's expense.
(d) All documents and records in the Seller's possession (or under its
control) relating to the Mortgage Loans that are not required to be a part of a
Mortgage File in accordance with EXHIBIT B (all such other documents and
records, as to any Mortgage Loan, the "Servicing File"), together with all
escrow payments, reserve funds and other comparable funds in the possession of
the Seller (or under its control) with respect to the Mortgage Loans, shall
(unless they are held by a sub-servicer that shall, as of the Closing Date,
begin acting on behalf of the Master Servicer pursuant to a written agreement
between such parties) be delivered by the Seller (or its agent) to the Purchaser
(or its designee) no later than the Closing Date. If a sub-servicer shall, as
of the Closing Date, begin acting on behalf of the Master Servicer with respect
to any Mortgage Loan pursuant to a written agreement between such parties, the
Seller shall deliver a copy of the related Servicing File to the Master
Servicer.
(e) The Seller's records will reflect the transfer of the Mortgage
Loans to the Purchaser as a sale.
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SECTION 3. EXAMINATION OF MORTGAGE LOAN FILES AND DUE DILIGENCE REVIEW.
The Seller shall reasonably cooperate with any examination of the Mortgage
Files and Servicing Files that may be undertaken by or on behalf of the
Purchaser. The fact that the Purchaser has conducted or has failed to conduct
any partial or complete examination of the Mortgage Files and/or Servicing Files
shall not affect the Purchaser's right to pursue any remedy available in equity
or at law for a breach of the Seller's representations, warranties and covenants
set forth in or contemplated by Section 4.
SECTION 4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER.
(a) The Seller hereby makes, as of the Closing Date (or as of such
other date specifically provided in the particular representation or warranty),
to and for the benefit of the Purchaser, and its successors and assigns
(including, without limitation, the Trustee and the holders of the
Certificates), each of the representations and warranties set forth in EXHIBIT
C, with such changes or modifications as may be permitted or required by the
Rating Agencies.
(b) In addition, the Seller, as of the date hereof, hereby represents
and warrants to, and covenants with, the Purchaser that:
(i) The Seller is a corporation, duly organized, validly
existing and in good standing under the laws of the State of California,
and is in compliance with the laws of each State in which any Mortgaged
Property is located to the extent necessary to ensure the enforceability of
each Mortgage Loan and to perform its obligations under this Agreement.
(ii) The execution and delivery of this Agreement by the
Seller, and the performance and compliance with the terms of this Agreement
by the Seller, will not violate the Seller's organizational documents or
constitute a default (or an event which, with notice or lapse of time, or
both, would constitute a default) under, or result in the breach of, any
material agreement or other instrument to which it is a party or which is
applicable to it or any of its assets, in each case which materially and
adversely affect the ability of the Seller to carry out the transactions
contemplated by this Agreement.
(iii) The Seller has the full power and authority to enter into
and consummate all transactions contemplated by this Agreement, has duly
authorized the execution, delivery and performance of this Agreement, and
has duly executed and delivered this Agreement.
(iv) This Agreement, assuming due authorization, execution and
delivery by the Purchaser, constitutes a valid, legal and binding
obligation of the Seller, enforceable against the Seller in accordance with
the terms hereof, subject to (A) applicable bankruptcy, insolvency,
reorganization, moratorium and other laws affecting the enforcement of
creditors' rights generally, (B) general principles of equity, regardless
of whether such enforcement is
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considered in a proceeding in equity or at law, and (C) public policy
considerations underlying the securities laws, to the extent that such
public policy considerations limit the enforceability of the provisions of
this Agreement that purport to provide indemnification for securities laws
liabilities.
(v) The Seller is not in violation of, and its execution and
delivery of this Agreement and its performance and compliance with the
terms of this Agreement will not constitute a violation of, any law, any
order or decree of any court or arbiter, or any order, regulation or demand
of any federal, state or local governmental or regulatory authority, which
violation, in the Seller's good faith and reasonable judgment, is likely to
affect materially and adversely either the ability of the Seller to perform
its obligations under this Agreement or the financial condition of the
Seller.
(vi) No litigation is pending with regard to which Seller has
received service of process or, to the best of the Seller's knowledge,
threatened against the Seller the outcome of which, in the Seller's good
faith and reasonable judgment, could reasonably be expected to prohibit the
Seller from entering into this Agreement or materially and adversely affect
the ability of the Seller to perform its obligations under this Agreement.
(vii) The Seller has not dealt with any broker, investment
banker, agent or other person, other than the Purchaser, the Underwriters,
the Initial Purchaser and their respective affiliates, that may be entitled
to any commission or compensation in connection with the sale of the
Mortgage Loans or the consummation of any of the other transactions
contemplated hereby.
(viii) Neither the Seller nor anyone acting on its behalf has (A)
offered, pledged, sold, disposed of or otherwise transferred any
Certificate, any interest in any Certificate or any other similar security
to any person in any manner, (B) solicited any offer to buy or to accept a
pledge, disposition or other transfer of any Certificate, any interest in
any Certificate or any other similar security from any person in any
manner, (C) otherwise approached or negotiated with respect to any
Certificate, any interest in any Certificate or any other similar security
with any person in any manner, (D) made any general solicitation by means
of general advertising or in any other manner with respect to any
Certificate, any interest in any Certificate or any similar security, or
(E) taken any other action, that (in the case of any of the acts described
in clauses (A) through (E) above) would constitute or result in a violation
of the Securities Act or any state securities law relating to or in
connection with the issuance of the Certificates or require registration or
qualification pursuant to the Securities Act or any state securities law of
any Certificate not otherwise intended to be a Registered Certificate. In
addition, the Seller will not act, nor has it authorized or will it
authorize any person to act, in any manner set forth in the foregoing
sentence with respect to any of the Certificates or interests therein. For
purposes of this paragraph 4(b)(viii), the term "similar security" shall be
deemed to include, without limitation, any security evidencing or, upon
issuance, that
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would have evidenced an interest in the Mortgage Loans or the Other
Mortgage Loans or any substantial number thereof.
(ix) Insofar as it relates to the Mortgage Loans and the Other
Mortgage Loans, the information set forth on pages A-1-21 through A-1-28,
inclusive, of Annex A to the Prospectus Supplement (as defined in
Section 9) (the "Loan Detail") and, to the extent consistent therewith, the
information set forth on the diskette attached to the Prospectus Supplement
and the accompanying prospectus (the "Diskette"), is true and correct in
all material respects. Insofar as it relates to the Mortgage Loans and the
Other Mortgage Loans and/or the Seller and does not represent a restatement
or aggregation of the information on the Loan Detail, the information set
forth in the Prospectus Supplement and the Memorandum (as defined in
Section 9) under the headings "Summary of the Prospectus Supplement--The
Mortgage Asset Pool", "Risk Factors--The Mortgage Loans" and "Description
of the Mortgage Asset Pool", set forth on Annex A to the Prospectus
Supplement and (to the extent it contains information consistent with that
on such Annex A) set forth on the Diskette, does not contain any untrue
statement of a material fact or (in the case of the Memorandum, when read
together with the other information specified therein as being available
for review by investors) omit to state any material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading.
(x) No consent, approval, authorization or order of,
registration or filing with, or notice to, any governmental authority or
court is required, under federal or state law (including, with respect to
any bulk sale laws), for the execution, delivery and performance of or
compliance by the Seller with this Agreement, or the consummation by the
Seller of any transaction contemplated hereby, other than (1) the filing or
recording of financing statements, instruments of assignment and other
similar documents necessary in connection with Seller's sale of the
Mortgage Loans to the Purchaser, (2) such consents, approvals,
authorizations, qualifications, registrations, filings or notices as have
been obtained or made and (3) where the lack of such consent, approval,
authorization, qualification, registration, filing or notice would not have
a material adverse effect on the performance by the Seller under this
Agreement.
(c) Upon discovery by any of the parties hereto of a breach of any of
the representations and warranties made pursuant to and set forth in subsection
(b) above which materially and adversely affects the interests of the Purchaser
or a breach of any of the representations and warranties made pursuant to
subsection (a) above and set forth in EXHIBIT C which materially and adversely
affects the value of any Mortgage Loan or the interests therein of the Purchaser
or its successors and assigns (including, without limitation the Trustee and the
holders of the Certificates), the party discovering such breach shall give
prompt written notice to the other party hereto.
SECTION 5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASER.
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(a) The Purchaser, as of the date hereof, hereby represents and
warrants to, and covenants with, the Seller that:
(i) The Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of State of Delaware.
(ii) The execution and delivery of this Agreement by the
Purchaser, and the performance and compliance with the terms of this
Agreement by the Purchaser, will not violate the Purchaser's organizational
documents or constitute a default (or an event which, with notice or lapse
of time, or both, would constitute a default) under, or result in the
breach of, any material agreement or other instrument to which it is a
party or which is applicable to it or any of its assets.
(iii) The Purchaser has the full power and authority to enter
into and consummate all transactions contemplated by this Agreement, has
duly authorized the execution, delivery and performance of this Agreement,
and has duly executed and delivered this Agreement.
(iv) This Agreement, assuming due authorization, execution and
delivery by the Seller, constitutes a valid, legal and binding obligation
of the Purchaser, enforceable against the Purchaser in accordance with the
terms hereof, subject to (A) applicable bankruptcy, insolvency,
reorganization, moratorium and other laws affecting the enforcement of
creditors' rights generally, and (B) general principles of equity,
regardless of whether such enforcement is considered in a proceeding in
equity or at law.
(v) The Purchaser is not in violation of, and its execution
and delivery of this Agreement and its performance and compliance with the
terms of this Agreement will not constitute a violation of, any law, any
order or decree of any court or arbiter, or any order, regulation or demand
of any federal, state or local governmental or regulatory authority, which
violation, in the Purchaser's good faith and reasonable judgment, is likely
to affect materially and adversely either the ability of the Purchaser to
perform its obligations under this Agreement or the financial condition of
the Purchaser.
(vi) No litigation is pending or, to the best of the
Purchaser's knowledge, threatened against the Purchaser which would
prohibit the Purchaser from entering into this Agreement or, in the
Purchaser's good faith and reasonable judgment, is likely to materially and
adversely affect either the ability of the Purchaser to perform its
obligations under this Agreement or the financial condition of the
Purchaser.
(vii) The Purchaser has not dealt with any broker, investment
banker, agent or other person, other than the Seller, the Underwriters, the
Initial Purchaser and their respective affiliates, that may be entitled to
any commission or compensation in connection with the
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sale of the Mortgage Loans or the consummation of any of the transactions
contemplated hereby.
(viii) No consent, approval, authorization or order of,
registration or filing with, or notice to, any governmental authority or
court is required, under federal or state law, for the execution, delivery
and performance of or compliance by the Purchaser with this Agreement, or
the consummation by the Purchaser of any transaction contemplated hereby,
other than (1) such consents, approvals, authorizations, qualifications,
registrations, filings or notices as have been obtained or made and (2)
where the lack of such consent, approval, authorization, qualification,
registration, filing or notice would not have a material adverse effect on
the performance by the Purchaser under this Agreement.
(b) Upon discovery by any of the parties hereto of a breach of any of
the representations and warranties set forth above which materially and
adversely affects the interests of the Seller, the party discovering such breach
shall give prompt written notice to the other party hereto.
SECTION 6. REPURCHASES.
(a) Within 90 days of the earlier of discovery or receipt of notice by
the Seller, from either the Purchaser or any successor or assign thereof, of a
Defect (as defined in the Pooling and Servicing Agreement as in effect on the
Closing Date) in respect of the Mortgage File for any Mortgage Loan or a breach
of any representation or warranty made pursuant to Section 4(a) and set forth in
EXHIBIT C (a "Breach"), which Defect or Breach, as the case may be, materially
and adversely affects the value of any Mortgage Loan or the interests therein of
the Purchaser or its successors and assigns (including, without limitation, the
Trustee and the holders of the Certificates), the Seller shall cure such Defect
or Breach, as the case may be, in all material respects or repurchase the
affected Mortgage Loan from the then owner(s) thereof at the applicable Purchase
Price (as defined in the Pooling and Servicing Agreement as in effect on the
Closing Date) by payment of such Purchase Price by wire transfer of immediately
available funds to the account designated by such owner(s); provided, however,
that in lieu of effecting any such repurchase, the Seller will be permitted to
deliver a Qualifying Substitute Mortgage Loan and to pay a cash amount equal to
the applicable Substitution Shortfall Amount, subject to the terms and
conditions of the Pooling and Servicing Agreement as in effect on the Closing
Date.
If the Seller is notified of a Defect in any Mortgage File that corresponds
to information set forth in the Mortgage Loan Schedule, the Seller shall
promptly correct such Defect and provide a new, corrected Mortgage Loan Schedule
to the Purchaser, which corrected Mortgage Loan Schedule shall be deemed to
amend and replace the existing Mortgage Loan Schedule for all purposes.
(b) Notwithstanding Section 6(a), within 60 days of the earlier of
discovery or receipt of notice by the Seller, from either the Purchaser or any
successor or assign thereof, that any Mortgage Loan does not constitute a
"qualified mortgage" within the meaning of Section 860G(a)(3) of the
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Code, the Seller shall repurchase such Mortgage Loan from the then owner(s)
thereof at the applicable Purchase Price by payment of such Purchase Price by
wire transfer of immediately available funds to the account designated by such
owner(s).
In addition, if, as of the Closing Date, any Mortgage Loan is secured by a
Mortgage that does not constitute a valid first lien upon the related Mortgaged
Property, including all buildings located thereon and all fixtures attached
thereto, or if a Mortgage is subject to something other than (A) the lien of
current real property taxes and assessments not yet due and payable, (B)
covenants, conditions and restrictions, rights of way, easements and other
matters of public record, (C) exceptions and exclusions specifically referred to
in the lender's title insurance policy issued or, as evidenced by a "marked-up"
commitment, to be issued in respect of such Mortgage Loan and (D) those
exceptions set forth on Schedule C-1 to EXHIBIT C hereto (the exceptions set
forth in the foregoing clauses (A), (B), (C) and (D) collectively, "Permitted
Encumbrances"), or if the insurer that issued the Title Policy referred to in
clause (vi) of EXHIBIT C hereto in respect of any Mortgage Loan was not
qualified to do business in the state in which the related Mortgaged Property is
located, and in either case such failure materially and adversely affects the
interests of holders of Certificates, (any such failure that materially and
adversely affects the interests of holders of Certificates, also a "Breach"),
the Seller shall be required, at its option, to either (i) cure such Breach in
all material respects or (ii) repurchase the affected Mortgage Loan, in each
case, within the applicable Permitted Cure Period (as defined below). If any
such Breach is not corrected or cured in all material respects within the
applicable Permitted Cure Period, the Seller shall, not later than the last day
of such Permitted Cure Period, (i) repurchase the affected Mortgage Loan from
the Purchaser or its assignee at the applicable Purchase Price or (ii) if within
the three-month period commencing on the closing date (or within the two-year
period commencing on the Closing Date if the related Mortgage Loan is a
"defective obligation" within the meaning of Section 860(a)(4)(B)(ii) of the
Code and Treasury Regulation Section 1.860G-2(f)), at its option, replace such
Mortgage Loan with a Qualifying Substitute Mortgage Loan and pay any
corresponding Substitution Shortfall Amount. The Seller agrees that any such
repurchase or substitution shall be completed in accordance with and subject to
the terms and conditions of the Pooling and Servicing Agreement.
For purposes of the preceding paragraph only, the "Permitted Cure Period"
applicable to any Breach in respect of any Mortgage Loan shall be the 90-day
period immediately following the earlier of the discovery by the Seller or
receipt by the Seller of notice of such Breach; provided that if such Breach
cannot be corrected or cured in all material respects within such 90-day period,
but is reasonably likely that such Breach could be corrected or cured within 180
days of the earlier of discovery by the Seller and receipt by the Seller of
notice of such Breach and the Seller is diligently attempting to effect such
correction or cure, then the applicable Permitted Cure Period shall, with the
consent of the Purchaser or its assignee (which consent shall not be
unreasonably withheld), be extended for an additional 90 days.
(c) In connection with any repurchase of or substitution for a
Mortgage Loan contemplated by this Section 6, the then owner(s) thereof shall
tender or cause to be tendered
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promptly to the Seller, upon delivery of a receipt executed by the Seller, the
related Mortgage File and Servicing File, and each document that constitutes a
part of the Mortgage File that was endorsed or assigned to the Purchaser or the
Trustee shall be endorsed or assigned, as the case may be, to the Seller or its
designee in the same manner. The form and sufficiency of all such instruments
and certificates shall be the responsibility of the Seller.
(d) Except as provided in Section 2(b), this Section 6 provides the
sole remedies available to the Purchaser, and its successors and assigns
(including, without limitation, the Trustee and the holders of the Certificates)
respecting any Defect in a Mortgage File or any breach of any representation or
warranty made pursuant to Section 4(a) and set forth in EXHIBIT C, or in
connection with the circumstances described in Section 6(b). If the Seller
defaults on its obligations to repurchase any Mortgage Loan in accordance with
Section 6(a) or 6(b) or disputes its obligation to repurchase any Mortgage Loan
in accordance with either such subsection, the Purchaser or its successors and
assigns may take such action as is appropriate to enforce such payment or
performance, including, without limitation, the institution and prosecution of
appropriate proceedings. The Seller shall reimburse the Purchaser for all
necessary and reasonable costs and expenses incurred in connection with such
enforcement.
SECTION 7. CLOSING.
The closing of the sale of the Mortgage Loans (the "Closing") shall be held
at the offices of Mayer, Brown & Platt, 1675 Broadway, New York, New York
10019-5820 at 10:00 a.m., New York City time, on the Closing Date.
The Closing shall be subject to each of the following conditions:
(i) All of the representations and warranties of the Seller
specified herein shall be true and correct as of the Closing Date, and the
Aggregate Cut-off Date Balance shall be within the range permitted by
Section 1 of this Agreement;
(ii) All documents specified in Section 8 (the "Closing
Documents"), in such forms as are agreed upon and acceptable to the
Purchaser, shall be duly executed and delivered by all signatories as
required pursuant to the respective terms thereof;
(iii) The Seller shall have delivered and released to the
Trustee, the Purchaser or the Purchaser's designee, as the case may be, all
documents and funds required to be so delivered pursuant to Section 2;
(iv) The result of any examination of the Mortgage Files and
Servicing Files performed by or on behalf of the Purchaser pursuant to
Section 3 shall be satisfactory to the Purchaser in its sole determination;
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(v) All other terms and conditions of this Agreement required
to be complied with on or before the Closing Date shall have been complied
with, and the Seller shall have the ability to comply with all terms and
conditions and perform all duties and obligations required to be complied
with or performed after the Closing Date;
(vi) The Seller shall have paid or agreed to pay all fees,
costs and expenses payable by it to the Purchaser pursuant to this
Agreement; and
(vii) Neither the Underwriting Agreement nor the Certificate
Purchase Agreement shall have been terminated in accordance with its terms.
Both parties agree to use their best efforts to perform their respective
obligations hereunder in a manner that will enable the Purchaser to purchase the
Mortgage Loans on the Closing Date.
SECTION 8. CLOSING DOCUMENTS.
The Closing Documents shall consist of the following:
(a) This Agreement duly executed and delivered by the Purchaser and
the Seller;
(b) An Officer's Certificate substantially in the form of EXHIBIT D-1
hereto, executed by the Secretary or an assistant secretary of the Seller, and
dated the Closing Date, and upon which the Purchaser and each Underwriter may
rely, attaching thereto as exhibits the organizational documents of the Seller;
(c) A certificate of good standing regarding the Seller from the
Secretary of State for the State of California, dated not earlier than 30 days
prior to the Closing Date;
(d) A certificate of the Seller substantially in the form of EXHIBIT
D-2 hereto, executed by an executive officer or authorized signatory of the
Seller and dated the Closing Date, and upon which the Purchaser and each
Underwriter may rely;
(e) Written opinions of counsel for the Seller, substantially in the
form of EXHIBITS D-3A, D-3B, and D-3C hereto and subject to such reasonable
assumptions and qualifications as may be requested by counsel for the Seller and
acceptable to counsel for the Purchaser, dated the Closing Date and addressed to
the Purchaser and each Underwriter;
(f) Any other opinions of counsel for the Seller reasonably requested
by the Rating Agencies in connection with the issuance of the Certificates, each
of which shall include the Purchaser and each Underwriter as an addressee; and
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(g) Such further certificates, opinions and documents as the Purchaser
may reasonably request.
SECTION 9. INDEMNIFICATION.
(a) The Seller agrees to indemnify and hold harmless the Purchaser,
its officers and directors, and each person, if any, who controls the Purchaser
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), against
any and all losses, claims, damages or liabilities, joint or several, to which
they or any of them may become subject under the Securities Act, the Exchange
Act or other federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in the Prospectus Supplement, the
Memorandum, the Diskette or, insofar as they are required to be filed as part of
the Registration Statement pursuant to the No-Action Letters, any Computational
Materials or ABS Term Sheets with respect to the Registered Certificates, or in
any revision or amendment thereof or supplement thereto, or arise out of or are
based upon the omission or alleged omission (in the case of any such
Computational Materials or ABS Term Sheets, when read in conjunction with the
Prospectus and, in the case of the Memorandum, when read together with the other
information specified therein as being available for review by investors) to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading; but only if and to the extent that (i) any such untrue
statement or alleged untrue statement is with respect to information regarding
the Mortgage Loans or Other Mortgage Loans contained in the Loan Detail or, to
the extent consistent therewith, the Diskette, or (ii) any such untrue statement
or alleged untrue statement or omission or alleged omission is with respect to
information regarding the Seller or the Mortgage Loans or Other Mortgage Loans
contained in the Prospectus Supplement or the Memorandum under the headings
"Summary of Prospectus Supplement -- The Mortgage Asset Pool", "Risk Factors --
The Mortgage Loans" and/or "Description of the Mortgage Asset Pool" or contained
on Annex A to the Prospectus Supplement (exclusive of the Loan Detail), and such
information does not represent a restatement or aggregation of information
contained in the Loan Detail; or (iii) such untrue statement, alleged untrue
statement, omission or alleged omission arises out of or is based upon a breach
of the representations and warranties of the Seller set forth in or made
pursuant to Section 4; provided, that the indemnification provided by this
Section 9 shall not apply to the extent that such untrue statement of a material
fact or omission of a material fact necessary to make the statements made, in
light of the circumstances in which they were made, not misleading, was made as
a result of an error in the manipulation of, or calculations based upon, the
Loan Detail. This indemnity agreement will be in addition to any liability
which the Seller may otherwise have.
For purposes of the foregoing, "Registration Statement" shall mean the
registration statement No. 333-37717 filed by the Purchaser on Form S-3,
including without limitation exhibits thereto and information incorporated
therein by reference; "Prospectus" shall mean the prospectus dated
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December 17, 1997, as supplemented by the prospectus supplement dated August 21,
1998 (the "Prospectus Supplement"), relating to the Registered Certificates;
"Memorandum" shall mean the private placement memorandum dated August 21, 1998,
relating to the Non-Registered Certificates; "Computational Materials" shall
have the meaning assigned thereto in the no-action letter dated May 20, 1994
issued by the Division of Corporation Finance of the Securities and Exchange
Commission (the "Commission") to 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"); and "ABS Term Sheets" shall have the meaning assigned thereto
in the no-action letter dated February 17, 1995 issued by the Division of
Corporation Finance of the Commission to the Public Securities Association (the
"PSA Letter" and, together with the Kidder Letters, the "No-Action Letters").
(b) Promptly after receipt by any person entitled to indemnification
under this Section 9 (each, an "indemnified party") of notice of the
commencement of any action, such indemnified party will, if a claim in respect
thereof is to be made against the Seller (the "indemnifying party") under this
Section 9, notify the indemnifying party in writing of the commencement thereof;
but the omission to notify the indemnifying party will not relieve it from any
liability that it may have to any indemnified party otherwise than under this
Section 9. In case any such action is brought against any indemnified party and
it notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein, and to the extent that it may
elect by written notice delivered to the indemnified party promptly after
receiving the aforesaid notice from such indemnified party, to assume the
defense thereof, with counsel satisfactory to such indemnified party; provided,
however, that if the defendants in any such action include both the indemnified
party and the indemnifying party and the indemnified party or parties shall have
reasonably concluded that there may be legal defenses available to it or them
and/or other indemnified parties that are different from or additional to those
available to the indemnifying party, the indemnified party or parties shall have
the right to select separate counsel to assert such legal defenses and to
otherwise participate in the defense of such action on behalf of such
indemnified party or parties. Upon receipt of notice from the indemnifying party
to such indemnified party of its election to assume the defense of such action
and approval by the indemnified party of counsel, which approval will not be
unreasonably withheld, the indemnifying party will not be liable for any legal
or other expenses subsequently incurred by such indemnified party in connection
with the defense thereof, unless (i) the indemnified party shall have employed
separate counsel in connection with the assertion of legal defenses in
accordance with the proviso to the preceding sentence (it being understood,
however, that the indemnifying party shall not be liable for the expenses of
more than one separate counsel, approved by the Purchaser and the indemnifying
party, representing all the indemnified parties under Section 9(a) who are
parties to such action), (ii) the indemnifying party shall not have employed
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of commencement of the
action or (iii) the indemnifying party has authorized the employment of counsel
for the indemnified party at the expense of the indemnifying party; and except
that, if
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clause (i) or (iii) is applicable, such liability shall only be in respect of
the counsel referred to in such clause (i) or (iii).
(c) If the indemnification provided for in this Section 9 is due in
accordance with its terms but is for any reason held by a court to be
unavailable to an indemnified party on grounds of policy or otherwise, then the
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities, in such proportion as is
appropriate to reflect the relative fault of the indemnified and indemnifying
parties in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative fault of the indemnified and indemnifying parties
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by such parties.
(d) The Purchaser and the Seller agree that it would not be just and
equitable if contribution pursuant to Section 9(c) were determined by PRO RATA
allocation or by any other method of allocation that does not take account of
the considerations referred to in Section 9(c) above. The amount paid or
payable by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in this Section 9 shall be deemed to include, subject to
the limitations set forth above, any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim, except where the indemnified party is required to bear such
expenses pursuant to this Section 9, which expenses the indemnifying party shall
pay as and when incurred, at the request of the indemnified party, to the extent
that the indemnifying party will be ultimately obligated to pay such expenses.
If any expenses so paid by the indemnifying party are subsequently determined to
not be required to be borne by the indemnifying party hereunder, the party that
received such payment shall promptly refund the amount so paid to the party
which made such payment. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(e) The indemnity and contribution agreements contained in this
Section 9 shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by any
indemnified party, and (iii) acceptance of and payment for any of the
Certificates.
SECTION 10. COSTS.
Costs relating to the transactions contemplated hereby shall be borne by
the respective parties hereto in accordance with the Allocation Agreement.
SECTION 11. NOTICES.
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All demands, notices and communications hereunder shall be in writing and
shall be deemed to have been duly given if personally delivered to or mailed, by
registered mail, postage prepaid, by overnight mail or courier service, or
transmitted by facsimile and confirmed by a similar mailed writing, if to the
Purchaser, addressed to GMAC Commercial Mortgage Securities, Inc. at 650 Dresher
Road, P.O. Box 1015, Horsham, Pennsylvania 19044-8015, Attention: Structured
Finance Manager, facsimile no. (215) 328-1775, with a copy to the General
Counsel, GMAC Commercial Mortgage Corporation, or such other address or
facsimile number as may hereafter be furnished to the Seller in writing by the
Purchaser; and if to the Seller, addressed to GMAC Commercial Mortgage
Corporation, at 650 Dresher Road, P.O. Box 1015, Horsham,
Pennsylvania 19044-8015, Attention: Structured Finance Manager, facsimile
no. (215) 328-1775, with a copy to GMAC Commercial Mortgage Corporation, or to
such other address or facsimile number as the Seller may designate in writing to
the Purchaser.
SECTION 12. THIRD PARTY BENEFICIARIES.
Each of the officers, directors and controlling persons referred to in
Section 9 hereof is an intended third party beneficiary of the covenants and
indemnities of the Seller set forth in Section 9 of this Agreement. It is
acknowledged and agreed that such covenants and indemnities may be enforced by
or on behalf of any such person or entity against the Seller to the same extent
as if it was a party hereto.
SECTION 13. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY.
All representations, warranties and agreements contained in this Agreement,
incorporated herein by reference or contained in the certificates of officers of
the Seller submitted pursuant hereto, shall remain operative and in full force
and effect and shall survive delivery of the Mortgage Loans by the Seller to the
Purchaser or its designee.
SECTION 14. SEVERABILITY OF PROVISIONS.
Any part, provision, representation, warranty or covenant of this Agreement
that is prohibited or which is held to be void or unenforceable shall be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any part, provision,
representation, warranty or covenant of this Agreement that is prohibited or
unenforceable or is held to be void or unenforceable in any particular
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
particular jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction. To the extent permitted by applicable law,
the parties hereto waive any provision of law which prohibits or renders void or
unenforceable any provision hereof.
SECTION 15. COUNTERPARTS.
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This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but all of which together shall constitute
one and the same instrument.
SECTION 16. GOVERNING LAW.
THIS AGREEMENT AND THE RIGHTS, DUTIES, OBLIGATIONS AND RESPONSIBILITIES OF
THE PARTIES HERETO SHALL BE GOVERNED IN ACCORDANCE WITH THE INTERNAL LAWS AND
DECISIONS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES
EXCEPT THAT THE PARTIES HERETO INTEND THAT THE PROVISIONS OF SECTION 5-1401 OF
THE NEW YORK GENERAL OBLIGATIONS LAW SHALL APPLY TO THIS AGREEMENT.
SECTION 17. FURTHER ASSURANCES.
The Seller and the Purchaser agree to execute and deliver such instruments
and take such further actions as the other party may, from time to time,
reasonably request in order to effectuate the purposes and to carry out the
terms of this Agreement.
SECTION 18. SUCCESSORS AND ASSIGNS.
The rights and obligations of the Seller under this Agreement shall not be
assigned by the Seller without the prior written consent of the Purchaser,
except that any person into which the Seller may be merged or consolidated, or
any corporation or other entity resulting from any merger, conversion or
consolidation to which the Seller is a party, or any person succeeding to all or
substantially all of the business of the Seller, shall be the successor to the
Seller hereunder. The Purchaser has the right to assign its interest under this
Agreement, in whole or in part, as may be required to effect the purposes of the
Pooling and Servicing Agreement, and the assignee shall, to the extent of such
assignment, succeed to the rights and obligations hereunder of the Purchaser.
Subject to the foregoing, this Agreement shall bind and inure to the benefit of
and be enforceable by the Seller and the Purchaser, and their permitted
successors and assigns, and the indemnified parties referred to in Section 9.
SECTION 19. AMENDMENTS.
No term or provision of this Agreement may be amended, waived, modified or
in any way altered, unless such amendment, waiver, modification or alteration is
in writing and signed by a duly authorized officer of the party against whom
such amendment, waiver, modification or alteration is sought to be enforced. In
addition, this Agreement may not be changed in any manner which would have a
material adverse effect on any third party beneficiary under Section 12 hereof
without the prior consent of that person.
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IN WITNESS WHEREOF, the Seller and the Purchaser have caused their names to
be signed hereto by their respective duly authorized officers as of the date
first above written.
GMAC COMMERCIAL MORTGAGE CORPORATION
By: /s/ David Lazarus
-----------------------------------------------
Name: David Lazarus
---------------------------------------------
Title: Vice President
--------------------------------------------
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
By: /s/ David Lazarus
-----------------------------------------------
Name: David Lazarus
---------------------------------------------
Title: Vice President
--------------------------------------------
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EXHIBIT A
MORTGAGE LOAN SCHEDULE
The Mortgage Loan Schedule shall set forth, among other things, the
following information with respect to each Mortgage Loan:
(i) the loan number;
(ii) the street address (including city, state and zip code) of the
related Mortgaged Property;
(iii) the Mortgage Rate in effect as of the Cut-off Date and whether
such Mortgage Loan is an Adjustable Rate Mortgage Loan or a
Fixed-Rate Loan;
(iv) the original principal balance;
(v) the Cut-off Date Balance;
(vi) the (A) remaining term to stated maturity, (B) with respect to
each ARD Loan, the Anticipated Repayment Date and (C) Stated
Maturity Date;
(vii) the Due Date;
(viii) the amount of the Monthly Payment due on the first Due Date
following the Cut-off Date;
(ix) in the case of an Adjustable Rate Mortgage Loan, the (A) Index,
(B) Gross Margin, (C) first Mortgage Rate adjustment date
following the Cut-off Date and the frequency of Mortgage Rate
adjustments, and (D) maximum and minimum lifetime Mortgage Rate,
if any;
(x) whether such Mortgage Loan is an ARD Loan, a Credit Lease Loan or
a Defeasance Loan;
(xi) the Servicing Fee Rate; and
(xii) the Master Servicing Fee Rate.
The Mortgage Loan Schedule shall also set forth the aggregate Cut-off Date
Balance for all of the Mortgage Loans. Such list may be in the form of more
than one list, collectively setting forth all of the information required.
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EXHIBIT B
THE MORTGAGE FILE
The "Mortgage File" for any Mortgage Loan shall, subject to Section 2(b),
collectively consist of the following documents:
(i) the original Mortgage Note, endorsed by the most recent endorsee
prior to the Trustee or, if none, by the originator, without recourse, either in
blank or to the order of the Trustee in the following form: "Pay to the order
of LaSalle National Bank, as trustee for the registered holders of GMAC
Commercial Mortgage Securities, Inc., Mortgage Pass-Through Certificates, Series
1998-C2, without recourse";
(ii) the original or a copy of the Mortgage and, if applicable, the
originals or copies of any intervening assignments thereof showing a complete
chain of assignment from the originator of the Mortgage Loan to the most recent
assignee of record thereof prior to the Trustee, if any, in each case with
evidence of recording indicated thereon;
(iii) an original assignment of the Mortgage, in recordable form,
executed by the most recent assignee of record thereof prior to the Trustee or,
if none, by the originator, either in blank or in favor of the Trustee (in such
capacity);
(iv) the original or a copy of any related Assignment of Leases (if
such item is a document separate from the Mortgage) and, if applicable, the
originals or copies of any intervening assignments thereof showing a complete
chain of assignment from the originator of the Mortgage Loan to the most recent
assignee of record thereof prior to the Trustee, if any, in each case with
evidence of recording thereon;
(v) an original assignment of any related Assignment of Leases (if
such item is a document separate from the Mortgage), in recordable form,
executed by the most recent assignee of record thereof prior to the Trustee or,
if none, by the originator, either in blank or in favor of the Trustee (in such
capacity), which assignment may be included as part of the corresponding
assignment of Mortgage referred to in clause (iii) above;
(vi) an original or copy of any related Security Agreement (if such
item is a document separate from the Mortgage) and, if applicable, the originals
or copies of any intervening assignments thereof showing a complete chain of
assignment from the originator of the Mortgage Loan to the most recent assignee
of record thereof prior to the Trustee, if any;
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<PAGE>
(vii) an original assignment of any related Security Agreement (if such
item is a document separate from the Mortgage) executed by the most recent
assignee of record thereof prior to the Trustee or, if none, by the originator,
either in blank or in favor of the Trustee (in such capacity), which assignment
may be included as part of the corresponding assignment of Mortgage referred to
in clause (iii) above;
(viii) originals or copies of all assumption, modification, written
assurance and substitution agreements, with evidence of recording thereon if
appropriate, in those instances where the terms or provisions of the Mortgage,
Mortgage Note or any related security document have been modified or the
Mortgage Loan has been assumed;
(ix) the original or a copy of the lender's title insurance policy
issued as of the date of the origination of the Mortgage Loan, together with all
endorsements or riders (or copies thereof) that were issued with or subsequent
to the issuance of such policy, insuring the priority of the Mortgage as a first
lien on the Mortgaged Property;
(x) the original or a copy of any guaranty of the obligations of the
Mortgagor under the Mortgage Loan together with (A) if applicable, the original
or copies of any intervening assignments of such guaranty showing a complete
chain of assignment from the originator of the Mortgage Loan to the most recent
assignee thereof prior to the Trustee, if any, and (B) an original assignment of
such guaranty executed by the most recent assignee thereof prior to the Trustee
or, if none, by the originator;
(xi) (A) file or certified copies of any UCC financing statements and
continuation statements which were filed in order to perfect (and maintain the
perfection of) any security interest held by the originator of the Mortgage Loan
(and each assignee of record prior to the Trustee) in and to the personalty of
the mortgagor at the Mortgaged Property (in each case with evidence of filing
thereon) and which were in the possession of the Seller (or its agent) at the
time the Mortgage Files were delivered to the Trustee and (B) if any such
security interest is perfected and the earlier UCC financing statements and
continuation statements were in the possession of the Seller, a UCC financing
statement executed by the most recent assignee of record prior to the Trustee
or, if none, by the originator, evidencing the transfer of such security
interest, either in blank or in favor of the Trustee;
(xii) the original or a copy of the power of attorney (with evidence of
recording thereon, if appropriate) granted by the Mortgagor if the Mortgage,
Mortgage Note or other document or instrument referred to above was signed on
behalf of the Mortgagor;
(xiii) if the Mortgagor has a leasehold interest in the related Mortgaged
Property, the original ground lease or a copy thereof;
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<PAGE>
(xiv) if the Mortgage Loan is a Credit Lease Loan, an original of the
credit lease enhancement insurance policy, if any, obtained with respect to such
Mortgage Loan and an original of the residual value insurance policy, if any,
obtained with respect to such Mortgage Loan.
provided that whenever the term "Mortgage File" is used to refer to documents
actually received by the Purchaser or the Trustee, such term shall not be deemed
to include such documents and instruments required to be included therein unless
they are actually so received. The original assignments referred to in clauses
(iii), (v), (vii) and (x)(B), may be in the form of one or more instruments in
recordable form in any applicable filing offices.
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<PAGE>
EXHIBIT C
REPRESENTATIONS AND WARRANTIES OF THE SELLER
REGARDING THE INDIVIDUAL MORTGAGE LOANS
With respect to each Mortgage Loan, the Seller hereby represents and
warrants, as of the date hereinbelow specified or, if no such date is specified,
as of the Closing Date, except as set forth on Schedule C-1 hereto, that:
(i) OWNERSHIP OF MORTGAGE LOANS. Immediately prior to the transfer
thereof to the Purchaser, the Seller had good and marketable title to, and was
the sole owner and holder of, such Mortgage Loan, free and clear of any and all
liens, encumbrances and other interests on, in or to such Mortgage Loan (other
than, in certain cases, the right of a subservicer to directly service such
Mortgage Loan). Such transfer validly assigns ownership of such Mortgage Loan to
the Purchaser free and clear of any pledge, lien, encumbrance or security
interest.
(ii) AUTHORITY TO TRANSFER MORTGAGE LOANS. The Seller has full right
and authority to sell, assign and transfer such Mortgage Loan. No provision of
the Mortgage Note, Mortgage or other loan document relating to such Mortgage
Loan prohibits or restricts the Seller's right to assign or transfer such
Mortgage Loan.
(iii) MORTGAGE LOAN SCHEDULE. The information pertaining to such
Mortgage Loan set forth in the Mortgage Loan Schedule was true and correct in
all material respects as of the Cut-off Date.
(iv) PAYMENT RECORD. Such Mortgage Loan was not as of the Cut-off Date
for such Mortgage Loan, and has not been during the twelve-month period prior
thereto, 30 days or more delinquent in respect of any debt service payment
required thereunder, without giving effect to any applicable grace period.
(v) PERMITTED ENCUMBRANCES. The Permitted Encumbrances (as defined in
the Mortgage Loan Purchase Agreement of which this EXHIBIT C forms a part) do
not materially interfere with the security intended to be provided by the
related Mortgage, the current use or operation of the related Mortgaged Property
or the current ability of the Mortgaged Property to generate net operating
income sufficient to service the Mortgage Loan. If the Mortgaged Property is
operated as a nursing facility, a hospitality property or a multifamily
property, the Mortgage, together with any separate security agreement, similar
agreement and UCC financing statement, if any, establishes and creates a first
priority, perfected security interest (subject only to any prior purchase money
security interest), to the extent such security interest can be perfected by the
recordation of a Mortgage or the filing of a UCC financing statement, in all
personal property owned by the Mortgagor that is used in, and is reasonably
necessary to, the operation of the related Mortgaged Property.
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<PAGE>
(vi) TITLE INSURANCE. The lien of the related Mortgage is insured by
an ALTA lender's title insurance policy ("Title Policy"), or its equivalent as
adopted in the applicable jurisdiction, issued by a nationally recognized title
insurance company, insuring the originator of such Mortgage Loan, its successors
and assigns, as to the first priority lien of the Mortgage in the original
principal amount of the Mortgage Loan after all advances of principal, subject
only to Permitted Encumbrances (or, if a title insurance policy has not yet been
issued in respect of the Mortgage Loan, a policy meeting the foregoing
description is evidenced by a commitment for title insurance "marked-up" at the
closing of such loan). Each Title Policy (or, if it has yet to be issued, the
coverage to be provided thereby) is in full force and effect, all premiums
thereon have been paid and, to the Seller's knowledge, no material claims have
been made thereunder and no claims have been paid thereunder. The Seller has
not, by act or omission, done anything that would materially impair the coverage
under such Title Policy. Immediately following the transfer and assignment of
the related Mortgage Loan to the Trustee, such Title Policy (or, if it has yet
to be issued, the coverage to be provided thereby) will inure to the benefit of
the Trustee without the consent of or notice to the insurer.
(vii) NO WAIVERS BY SELLER OF MATERIAL DEFAULTS. The Seller has not
waived any material default, breach, violation or event of acceleration existing
under the related Mortgage or Mortgage Note.
(viii) NO OFFSETS, DEFENSES OR COUNTERCLAIMS. There is no valid offset,
defense or counterclaim to such Mortgage Loan.
(ix) CONDITION OF PROPERTY; CONDEMNATION. Except as set forth in any
engineering report prepared in connection with the origination of (or obtained
in connection with or otherwise following the Seller's acquisition of) such
Mortgage Loan, the related Mortgaged Property is, to the Seller's knowledge,
free and clear of any damage that would materially and adversely affect its
value as security for such Mortgage Loan. The Seller has no actual notice of
the commencement of a proceeding for the condemnation of all or any material
portion of the related Mortgaged Property.
(x) COMPLIANCE WITH USURY LAWS. Such Mortgage Loan complied with all
applicable usury laws in effect at its date of origination.
(xi) FULL DISBURSEMENT OF MORTGAGE LOAN PROCEEDS. The proceeds of such
Mortgage Loan have been fully disbursed and there is no requirement for future
advances thereunder.
(xii) ENFORCEABILITY. The related Mortgage Note and Mortgage and all
other documents and instruments evidencing, guaranteeing, insuring or otherwise
securing such Mortgage Loan have been duly and properly executed by the parties
thereto, and each is the legal, valid and binding obligation of the maker
thereof (subject to any non-recourse provisions contained in any of the
foregoing agreements and any applicable state anti-deficiency legislation),
enforceable in accordance with its terms, except as such enforcement may be
limited by bankruptcy, insolvency, reorganization,
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<PAGE>
receivership, moratorium or other laws relating to or affecting the rights of
creditors generally and by general principles of equity (regardless of whether
such enforcement is considered in a proceeding in equity or at law).
(xiii) INSURANCE. All improvements upon the related Mortgaged Property
are insured against loss by hazards of extended coverage in an amount (subject
to a customary deductible) at least equal to the lesser of the outstanding
principal balance of such Mortgage Loan and 100% of the full replacement cost of
the improvements located on such Mortgaged Property, and the related hazard
insurance policy contains appropriate endorsements to avoid the application of
co-insurance provisions and does not permit reduction in insurance proceeds for
depreciation. If any portion of the related Mortgaged Property was, at the time
of the origination of such Mortgage Loan, in an area identified in the Federal
Register by the Federal Emergency Management Agency as having special flood
hazards, and flood insurance was available, a flood insurance policy meeting any
requirements of the then current guidelines of the Federal Insurance
Administration is in effect with a generally acceptable insurance carrier, in an
amount representing coverage not less than the least of (1) the outstanding
principal balance of such Mortgage Loan, (2) the full insurable value of such
Mortgaged Property, (3) the maximum amount of insurance available under the
National Flood Insurance Act of 1968, as amended, and (4) 100% of the
replacement cost of the improvements located on such Mortgaged Property. In
addition, the Mortgage requires the Mortgagor to maintain in respect of the
Mortgaged Property comprehensive general liability insurance in amounts
generally required by the Seller, and at least six months rental or business
interruption insurance, and all such insurance required by the Mortgage to be
maintained is in full force and effect. Each such insurance policy requires
prior notice to the holder of the Mortgage of termination or cancellation, and
no such notice has been received, including any notice of nonpayment of
premiums, that has not been cured.
(xiv) ENVIRONMENTAL CONDITION. The related Mortgaged Property was
subject to one or more environmental site assessments (or an update of a
previously conducted assessment), which was (were) performed on behalf of the
Seller, or as to which the related report was delivered to the Seller in
connection with its origination or acquisition of such Mortgage Loan; and the
Seller, having made no independent inquiry other than reviewing the resulting
report(s) and/or employing an environmental consultant to perform the
assessment(s) referenced herein, has no knowledge of any material and adverse
environmental conditions or circumstance affecting such Mortgaged Property that
was not disclosed in the related report(s). The Seller has not taken any action
with respect to such Mortgage Loan or the related Mortgaged Property that could
subject the Purchaser, or its successors and assigns in respect of the Mortgage
Loan, to any liability under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended ("CERCLA") or any other
applicable federal, state or local environmental law, and the Seller has not
received any actual notice of a material violation of CERCLA or any applicable
federal, state or local environmental law with respect to the related Mortgaged
Property that was not disclosed in the related report. The related Mortgage or
loan documents in the related Mortgage File requires the Mortgagor to comply
with all applicable federal, state and local environmental laws and regulations.
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(xv) NO CROSS-COLLATERALIZATION WITH OTHER MORTGAGE LOANS. Such
Mortgage Loan is not cross-collateralized with any mortgage loan that will not
be included in the Trust Fund.
(xvi) WAIVERS AND MODIFICATIONS. The terms of the related Mortgage and
the Mortgage Note have not been impaired, waived, altered or modified in any
material respect, except as specifically set forth in the related Mortgage File.
(xvii) TAXES AND ASSESSMENTS. There are no delinquent taxes, ground
rents, assessments for improvements or other similar outstanding charges
affecting the related Mortgaged Property which are or may become a lien of
priority equal to or higher than the lien of the related Mortgage. For purposes
of this representation and warranty, real property taxes and assessments shall
not be considered unpaid until the date on which interest and/or penalties would
be payable thereon.
(xviii) MORTGAGOR'S INTEREST IN MORTGAGED PROPERTY. Except in the case of
two Mortgage Loans as to which the interest of the related Mortgagor in the
related Mortgaged Property is in whole or in part a leasehold estate, the
interest of the related Mortgagor in the related Mortgaged Property consists of
a fee simple estate in real property.
(xix) WHOLE LOAN. Each Mortgage Loan is a whole loan and not a
participation interest.
(xx) VALID ASSIGNMENT. The assignment of the related Mortgage referred
to in clause (iii) of EXHIBIT B constitutes the legal, valid and binding
assignment of such Mortgage from the relevant assignor to the Trustee. The
Assignment of Leases set forth in the Mortgage or separate from the related
Mortgage and related to and delivered in connection with each Mortgage Loan
establishes and creates a valid, subsisting and, subject only to Permitted
Encumbrances, enforceable first priority lien and first priority security
interest in the related Mortgagor's interest in all leases, subleases, licenses
or other agreements pursuant to which any person is entitled to occupy, use or
possess all or any portion of the real property subject to the related Mortgage,
and each assignor thereunder has the full right to assign the same. The related
assignment of any Assignment of Leases, not included in a Mortgage, executed and
delivered in favor of the Trustee is in recordable form and constitutes a legal,
valid and binding assignment, sufficient to convey to the assignee named therein
all of the assignor's right, title and interest in, to and under such Assignment
of Leases.
(xxi) ESCROWS. All escrow deposits relating to such Mortgage Loan that
are, as of the Closing Date, required to be deposited with the mortgagee or its
agent have been so deposited.
(xxii) NO MECHANICS' OR MATERIALMEN'S LIENS. As of the date of
origination of such Mortgage Loan and, to the actual knowledge of the Seller, as
of the Closing Date, the related Mortgaged Property was and is free and clear of
any mechanics' and materialmen's liens or liens in the nature thereof which
create a lien prior to that created by the related Mortgage, except those which
are insured against by the Title Policy referred to in (vi) above.
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(xxiii) NO MATERIAL ENCROACHMENTS. To the Seller's knowledge (based on
surveys and/or title insurance obtained in connection with the origination of
such Mortgage Loan), as of the date of such origination, no improvement that was
included for the purpose of determining the appraised value of the related
Mortgaged Property at the time of origination of such Mortgage Loan lay outside
the boundaries and building restriction lines of such property to any material
extent (unless affirmatively covered by the title insurance referred to in
paragraph (vi) above), and no improvements on adjoining properties encroached
upon such Mortgaged Property to any material extent. To the Seller's knowledge,
based upon opinions of counsel and/or other due diligence customarily performed
by the Seller, the improvements located on or forming part of such Mortgaged
Property comply in all material respects with applicable zoning laws and
ordinances (except to the extent that they may constitute legal non-conforming
uses).
(xxiv) ORIGINATOR AUTHORIZED. To the extent required under applicable
law as of the Closing Date, the originator of such Mortgage Loan was authorized
to do business in the jurisdiction in which the related Mortgaged Property is
located at all times when it held the Mortgage Loan to the extent necessary to
ensure the enforceability of such Mortgage Loan.
(xxv) NO MATERIAL DEFAULT. (A) To the Seller's knowledge, there exists
no material default, breach or event of acceleration under the related Mortgage
or Mortgage Note, and (B) the Seller has not received actual notice of any event
(other than payments due but not yet delinquent) that, with the passage of time
or with notice and the expiration of any grace or cure period, would constitute
such a material default, breach or event of acceleration; provided, however,
that this representation and warranty does not cover any default, breach or
event of acceleration that specifically pertains to any matter otherwise covered
or addressed by any other representation and warranty made by the Seller herein.
(xxvi) INSPECTION. In connection with the origination or acquisition of
each Mortgage Loan, the Seller inspected or caused to be inspected the Mortgaged
Property.
(xxvii) NO EQUITY PARTICIPATION OR CONTINGENT INTEREST. The Mortgage Loan
contains no equity participation by the lender, and does not provide for any
contingent or additional interest in the form of participation in the cash flow
of the related Mortgaged Property, or for negative amortization.
(xxviii) NO ADVANCES OF FUNDS. No holder of the Mortgage Loan has, to the
Seller's knowledge, advanced funds or induced, solicited or knowingly received
any advance of funds from a party other than the owner of the related Mortgaged
Property, directly or indirectly, for the payment of any amount required by the
Mortgage Loan.
(xxix) LICENSES, PERMITS, ETC. To the Seller's knowledge, based on due
diligence customarily performed in the origination of comparable mortgage loans
by the Seller, as of the date of origination of the Mortgage Loan, the related
Mortgagor or operator of the related Mortgaged Property was in
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<PAGE>
possession of all material licenses, permits and authorizations required by
applicable laws for the ownership and operation of the related Mortgaged
Property as it was then operated and if a related Mortgaged Property is improved
by a skilled nursing, congregate care or assisted living facility, the most
recent inspection or survey by governmental authorities having jurisdiction in
connection with such licenses, permits and authorizations did not cite such
Mortgaged Property for material violations (which shall include only "Level A"
(or equivalent) violations in the case of skilled nursing facilities) that had
not been cured or as to which a plan of correction had not been submitted to and
accepted by such governmental authorities. To the extent such facility
participates in Medicaid or Medicare, such facility is in compliance in all
material respects with the requirements of such program.
(xxx) SERVICING. The servicing and collection practices used with
respect to the Mortgage Loan have complied with applicable law in all material
respects and are consistent with the servicing standard set forth in
Section 3.01(a) of the Pooling and Servicing Agreement.
(xxxi) CUSTOMARY REMEDIES. The related Mortgage or Mortgage Note,
together with applicable state law, contains customary and enforceable
provisions (subject to the exceptions set forth in paragraph (xii)) such as to
render the rights and remedies of the holders thereof adequate for the practical
realization against the related Mortgaged Property of the principal benefits of
the security intended to be provided thereby.
(xxxii) INSURANCE AND CONDEMNATION PROCEEDS. The related Mortgage
provides that insurance proceeds and condemnation proceeds will be applied for
one of the following purposes: either to restore or repair the Mortgaged
Property, or to repay the principal of the Mortgage Loan, or otherwise at the
option of the holder of the Mortgage.
(xxxiii) LTV. The gross proceeds of such Mortgage Loan to the related
Mortgagor at origination did not exceed the non-contingent principal amount of
the Mortgage Loan and either: (A) such Mortgage Loan is secured by an interest
in real property having a fair market value (1) at the date the Mortgage Loan
was originated at least equal to 80 percent of the original principal balance of
the Mortgage Loan or (2) at the Closing Date at least equal to 80 percent of the
principal balance of the Mortgage Loan on such date; provided that for purposes
hereof, the fair market value of the real property interest must first be
reduced by (X) the amount of any lien on the real property interest that is
senior to the Mortgage Loan and (Y) a proportionate amount of any lien that is
in parity with the Mortgage Loan (unless such other lien secures a Mortgage Loan
that is cross-collateralized with such Mortgage Loan, in which event the
computation described in clauses (1) and (2) of this paragraph (xxxiii) shall be
made on a PRO RATA basis in accordance with the fair market values of the
Mortgaged Properties securing such cross-collateralized Mortgage Loans; or (B)
substantially all the proceeds of such Mortgage Loan were used to acquire,
improve or protect the real property which served as the only security for such
Mortgage Loan (other than a recourse feature or other third party credit
enhancement within the meaning of Treasury Regulations Section
1.860G-2(a)(1)(ii)).
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<PAGE>
(xxxiv) LTV AND SIGNIFICANT MODIFICATIONS. If the Mortgage Loan was
"significantly modified" prior to the Closing Date so as to result in a taxable
exchange under Section 1001 of the Code, it either (A) was modified as a result
of the default or reasonably foreseeable default of such Mortgage Loan or (B)
satisfies the provisions of either clause (A)(1) of paragraph (xxxiii)
(substituting the date of the last such modification for the date the Mortgage
Loan was originated) or clause (A)(2) of paragraph (xxxiii), including the
proviso thereto.
(xxxv) CREDIT LEASE LOANS. With respect to each Mortgage Loan which is a
Credit Lease Loan:
(A) To the Seller's knowledge, each credit lease ("Credit Lease")
contains customary and enforceable provisions which render the
rights and remedies of the lessor thereunder adequate for the
enforcement and satisfaction of the lessor's rights thereunder;
(B) To the Seller's knowledge, in reliance on a tenant estoppel
certificate and representation made by the tenant under the Credit
Lease or representations made by the related borrower under the
Mortgage Loan documents, as of the closing date of each Credit
Lease Loan (1) each Credit Lease was in full force and effect, and
no default by the borrower or the tenant has occurred under the
Credit Lease, nor is there any existing condition which, but for
the passage of time or the giving of notice, or both, would result
in a default under the terms of the Credit Lease, (2) none of the
terms of the Credit Lease have been impaired, waived, altered or
modified in any respect (except as described in the related tenant
estoppel), (3) no tenant has been released, in whole or in part,
from its obligations under the Credit Leases, (4) there is no
right of rescission, offset, abatement, diminution, defense or
counterclaim to any Credit Lease, nor will the operation of any of
the terms of the Credit Leases, or the exercise of any rights
thereunder, render the Credit Lease unenforceable, in whole or in
part, or subject to any right of rescission, offset, abatement,
diminution, defense or counterclaim, and no such right of
rescission, offset, abatement, diminution, defense or counterclaim
has been asserted with respect thereto, and (5) each Credit Lease
has a term ending on or after the final maturity of the related
Credit Lease Loan;
(C) The Mortgaged Property is not subject to any lease other than the
related Credit Lease, no Person has any possessory interest in, or
right to occupy, the Mortgaged Property except under and pursuant
to such Credit Lease and the tenant under the related Credit Lease
is in occupancy of the Mortgaged Property;
(D) The lease payments under the related Credit Lease are sufficient
to pay the entire amount of scheduled interest and principal on
the Credit Lease Loan, subject to the rights of the Tenant to
terminate the Credit Lease or offset, abate, suspend or otherwise
diminish any amounts payable by the tenant under the Credit Lease.
Each
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<PAGE>
Credit Lease Loan fully amortizes over its original term, and,
there is no "balloon" payment of rent due under the Credit Leases;
(E) Under the terms of the Credit Leases, the lessee is not permitted
to assign its interest or obligations under the Credit Lease
unless such lessee remains fully liable thereunder;
(F) The mortgagee is entitled to notice of any event of default from
the tenant under Credit Leases;
(G) Each tenant under a Credit Lease is required to make all rental
payments directly to the mortgagee, its successors and assigns
under the related Credit Lease Loan;
(H) Each Credit Lease Loan provides that the related Credit Lease
cannot be modified without the consent of the mortgagees under the
related Credit Lease Loan; and
(I) Each Credit Lease Loan under which a Credit Lease may be
terminated upon the occurrence of a casualty or condemnation
requires upon such termination the payment in full by the tenant
of: (a) the principal balance of the loan and (b) all accrued and
unpaid interest on the Mortgage Loan. Under the Credit Lease for
each Credit Lease Loan, upon the occurrence of a casualty or
condemnation, the tenant has no right of rent abatement.
(xxxvi) LITIGATION. To the Seller's actual knowledge, there are no
pending actions, suits or proceedings by or before any court or governmental
authority against or affecting the related Mortgagor or the related Mortgaged
Property that, if determined adversely to such Mortgagor or Mortgaged Property,
would materially and adversely affect the value of the Mortgaged Property or the
ability of the Mortgagor to pay principal, interest or any other amounts due
under such Mortgage Loan.
(xxxvii) LEASEHOLD ESTATE. Each Mortgaged Property consists of the
related Mortgagor's fee simple estate in real estate or, if the related Mortgage
Loan is secured in whole or in part by the interest of a Mortgagor as a lessee
under a ground lease of a Mortgaged Property (a "Ground Lease"), by the related
Mortgagor's interest in the Ground Lease but not by the related fee interest in
such Mortgaged Property (the "Fee Interest") or if the Mortgage Loan is secured
in whole or in part by a Ground Lease and a Fee Interest, either (1) the ground
lessor's fee interest is subordinated to the lien of the Mortgage or (2) the
following apply to such Ground Lease:
(A) To the actual knowledge of the Seller, such Ground Lease or a
memorandum thereof has been or will be duly recorded; such Ground
Lease (or the related estoppel letter or lender protection
agreement between the Seller and related lessor) permits the
interest of the lessee thereunder to be encumbered by the related
Mortgage; and there
C-8
<PAGE>
has been no material change in the payment terms of such Ground
Lease since the origination of the related Mortgage Loan, with the
exception of material changes reflected in written instruments
that are a part of the related Mortgage File;
(B) The lessee's interest in such Ground Lease is not subject to any
liens or encumbrances superior to, or of equal priority with, the
related Mortgage, other than the ground lessor's related fee
interest and Permitted Encumbrances;
(C) The Mortgagor's interest in such Ground Lease is assignable to the
Purchaser and its successors and assigns upon notice to, but
without the consent of, the lessor thereunder (or, if such consent
is required, it has been obtained prior to the Closing Date) and,
in the event that it is so assigned, is further assignable by the
Purchaser and its successors and assigns upon notice to, but
without the need to obtain the consent of, such lessor;
(D) Such Ground Lease is in full force and effect, and the Seller has
received no notice that an event of default has occurred
thereunder, and, to the Seller's actual knowledge, there exists no
condition that, but for the passage of time or the giving of
notice, or both, would result in an event of default under the
terms of such Ground Lease;
(E) Such Ground Lease, or an estoppel letter or other agreement,
requires the lessor under such Ground Lease to give notice of any
default by the lessee to the mortgagee under such Mortgage Loan,
provided that the mortgagee has provided the lessor with notice of
its lien in accordance with the provisions of such Ground Lease,
and such Ground Lease, or an estoppel letter or other agreement,
further provides that no notice of termination given under such
Ground Lease is effective against the mortgagee unless a copy has
been delivered to the mortgagee;
(F) The mortgagee under such Mortgage Loan is permitted a reasonable
opportunity (including, where necessary, sufficient time to gain
possession of the interest of the lessee under such Ground Lease)
to cure any default under such Ground Lease, which is curable
after the receipt of notice of any such default, before the lessor
thereunder may terminate such Ground Lease;
(G) Such Ground Lease has an original term (including any extension
options set forth therein) which extends not less than ten years
beyond the Stated Maturity Date of the related Mortgage Loan;
(H) Under the terms of such Ground Lease and the related Mortgage,
taken together, any related insurance proceeds other than in
respect of a total or substantially total loss or taking, will be
applied either to the repair or restoration of all or part of the
related
C-9
<PAGE>
Mortgaged Property, with the mortgagee under such Mortgage Loan or
a trustee appointed by it having the right to hold and disburse
such proceeds as the repair or restoration progresses (except in
such cases where a provision entitling another party to hold and
disburse such proceeds would not be viewed as commercially
unreasonable by a prudent commercial mortgage lender), or to the
payment of the outstanding principal balance of the Mortgage Loan
together with any accrued interest thereon;
(I) Such Ground Lease does not impose any restrictions on subletting
which would be viewed, as of the date of origination of the
related Mortgage Loan, as commercially unreasonable by the Seller;
and such Ground Lease contains a covenant that the lessor
thereunder is not permitted, in the absence of an uncured default,
to disturb the possession, interest or quiet enjoyment of any
subtenant of the lessee, or in any manner, which would materially
adversely affect the security provided by the related Mortgage;
and
(J) Such Ground Lease, or an estoppel letter or other agreement,
requires the lessor to enter into a new lease in the event of a
termination of the Ground Lease by reason of a default by the
Mortgagor under the Ground Lease, including, rejection of the
ground lease in a bankruptcy proceeding.
(xxxviii) DEED OF TRUST. If the related Mortgage is a deed of trust, a
trustee, duly qualified under applicable law to serve as such, is properly
designated and serving under such Mortgage.
(xxxix) LIEN RELEASES. Except in cases where either (a) a release of a
portion of the Mortgaged Property was contemplated at origination of the
Mortgage Loan and such portion was not considered material for purposes of
underwriting the Mortgage Loan or (b) release is conditioned upon the
satisfaction of certain underwriting and legal requirements and the payment of a
release price, the related Mortgage Note or Mortgage does not require the holder
thereof to release all or any portion of the Mortgaged Property from the lien of
the related Mortgage except upon payment in full of all amounts due under such
Mortgage Loan.
(xl) JUNIOR LIENS. The Mortgage Loan does not permit the related
Mortgaged Property to be encumbered by any lien junior to or of equal priority
with the lien of the related Mortgage (excluding any lien relating to another
Mortgage Loan that is cross-collateralized with such Mortgage Loan) without the
prior written consent of the holder thereof or the satisfaction of debt service
coverage or similar conditions specified therein.
(xli) MORTGAGOR BANKRUPTCY. To the Seller's knowledge, the Mortgagor is
not a debtor in any state or federal bankruptcy or insolvency proceeding.
C-10
<PAGE>
(xlii) DUE ORGANIZATION OF MORTGAGORS. As of the date of origination of
each Mortgage, each related Mortgagor which is not a natural person was duly
organized and validly existing under the laws of the state of its jurisdiction.
(xliii) DUE-ON-SALE. The Mortgage Loan contains provisions for the
acceleration of the payment of the unpaid principal balance of such Mortgage
Loan if, without complying with the requirements of such Mortgage Loan, the
related Mortgaged Property, or any controlling interest therein, is directly or
indirectly transferred or sold.
(xliv) SINGLE PURPOSE ENTITY. The related Mortgagor is an entity, other
than an individual, whose organizational documents or the related Mortgage Loan
Documents provide substantially to the effect that the Mortgagor: (A) is formed
or organized solely for the purpose of owning and operating one or more of the
Mortgaged Properties securing the Mortgage Loans, (B) may not engage in any
business unrelated to such Mortgaged Property or Mortgaged Properties, (C) does
not have any material assets other than those related to its interest in and
operation of such Mortgage Property or Mortgaged Properties, (D) may not incur
indebtedness other than as permitted by the related Mortgage or other Mortgage
Loan Documents, (E) has its own books and records separate and apart from any
other person, and (F) holds itself out as a legal entity, separate and apart
from any other person.
(xlv) DEFEASANCE PROVISIONS. Any Mortgage Loan which contains a
provision for any defeasance of mortgage collateral either (A) requires the
consent of the holder of the Mortgage Loan to any defeasance, or (B) permits
defeasance (i) no earlier than two years after the Closing Date (as defined in
the Pooling and Servicing Agreement, dated as of August 1, 1998), (ii) only with
substitute collateral constituting "government securities" within the meaning of
Treas. Reg. Section 1.860G-2(a)(8)(i), and (iii) only to facilitate the
disposition of mortgage real property and not as a part of an arrangement to
collateralize a REMIC offering with obligations that are not real estate
mortgages.
It is understood and agreed that the representations and warranties set
forth in this EXHIBIT C shall survive delivery of the respective Mortgage Files
to the Purchaser and/or the Trustee and shall inure to the benefit of the
Purchaser, and its successors and assigns (including without limitation the
Trustee and the holders of the Certificates), notwithstanding any restrictive or
qualified endorsement or assignment.
C-11
<PAGE>
SCHEDULE C-1 TO EXHIBIT C
EXCEPTIONS TO REPRESENTATIONS AND WARRANTIES
v. PERMITTED ENCUMBRANCES
The following Mortgage Loan(s) have encumbrances that materially
affect the security intended to be provided by the related Mortgage,
the current use and operation of the related Mortgaged Property.
Loan Number Property Issue
----------- -------- -----
GMAC2100 Longo Lexus Buildings encroach onto easements
which materially affect the
mortgaged premises.
(xxiii) MATERIAL ENCROACHMENTS
The improvement(s) located on or forming a part of the Mortgaged
Property do not comply in all material respects with applicable zoning
laws and ordinances.
Loan Number Property Issue
----------- -------- -----
GMAC2050 D'AMATO PORTFOLIO:
517-531 New Haven Parking spaces required 78, 26
provided.
(xxxvii) LEASEHOLD ESTATE
The following Mortgage loan(s) are secured in whole or in part by the
interest of the borrower as a lessee under a Ground Lease.
i. The Ground Lease does not contain a covenant that the lessor
thereunder is not permitted, in the absence of an uncured default, to
disturb the possession, interest or quiet enjoyment of any subtenant,
or in a manner, which would adversely affect the security provided by
the mortgage.
Loan Number Property Issue
----------- -------- -----
GMAC3090 K-Mart A small portion of the property
used for rear access is held under
a ground lease to the Borrower.
The lease does not contain a
provision that the lessor is not
permitted to disturb the
possession, interest or enjoyment
of any subtenant.
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<PAGE>
j. The Ground Lease does not require the lessor to enter into a new lease
with the mortgagee upon termination of the Ground Lease for any
reason, including, rejection of the Ground Lease in a bankruptcy or
insolvency proceeding of the lessee.
Loan Number Property Issue
----------- -------- -----
GMAC3090 K-Mart The lease does not require landlord
to enter into a new lease with
mortgagee on termination.
(xliv) SINGLE PURPOSE ENTITY
Borrowers on the following loan(s) are not single purpose entities to
the extent shown on the attached spreadsheet.
Loan Number Property
----------- --------
GMAC3090 K-Mart
GMAC3100 Pear Orchard
GMAC3120 Cedar Apartments
GMAC3130 Montbello
GMAC3030 Builder's Square
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<PAGE>
EXCEPTIONS
TO
SINGLE PURPOSE ENTITY CRITERIA
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
Property Organized May not No other No other Separate Holds itself
solely for engage in assets indebtedness books and out as
owning and any incurred records separate
operating business or to be and apart
mortgaged or activity incurred
premises unrelated to
property
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Greenfield
Retirement Yes Yes No Yes No No
- -----------------------------------------------------------------------------------------------------------------
Peak Medical Yes Yes Yes Yes Yes No
- -----------------------------------------------------------------------------------------------------------------
K-Mart Yes Yes Yes Yes Yes No
- -----------------------------------------------------------------------------------------------------------------
Pear Orchard No No No No No No
- -----------------------------------------------------------------------------------------------------------------
Cedar
Apartments No No No No No No
- -----------------------------------------------------------------------------------------------------------------
Montbello No No No No No No
- -----------------------------------------------------------------------------------------------------------------
Brandywine -
Witing Health Yes Yes No Yes Yes No
- -----------------------------------------------------------------------------------------------------------------
Brandywine -
Bey Lea Yes Yes No Yes Yes No
- -----------------------------------------------------------------------------------------------------------------
Brandywine -
Meadowview
Nursing Yes Yes No Yes Yes No
- -----------------------------------------------------------------------------------------------------------------
Brandywine -
Laurelton
Village Yes Yes No Yes Yes No
- -----------------------------------------------------------------------------------------------------------------
Desert Sky* No No No No No No
- -----------------------------------------------------------------------------------------------------------------
Griffith Office*
Park No No No No No No
- -----------------------------------------------------------------------------------------------------------------
9Commonwealth No No No No No No
- -----------------------------------------------------------------------------------------------------------------
TheParkview
(TORCH) Yes Yes Yes Yes No No
- -----------------------------------------------------------------------------------------------------------------
Builder's Square Yes Yes Yes No No No
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
* Tenants in common.
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<PAGE>
EXHIBIT D-1
FORM OF CERTIFICATE OF AN OFFICER OF THE SELLER
CERTIFICATE OF OFFICER OF GMAC COMMERCIAL MORTGAGE CORPORATION ("GMACCM")
I, _________________, a _________________ of GMACCM (the "Seller"), hereby
certify as follows:
The Seller is a corporation duly organized and validly existing under the
laws of the State of California.
Attached hereto as EXHIBIT I are true and correct copies of the Certificate
of Incorporation and By-Laws of the Seller, which Certificate of Incorporation
and By-Laws are on the date hereof, and have been at all times in full force and
effect.
To the best of my knowledge, no proceedings looking toward liquidation or
dissolution of the Seller are pending or contemplated.
Each person listed below is and has been the duly elected and qualified
officer or authorized signatory of the Seller and his genuine signature is set
forth opposite his name:
Name Office Signature
---- ------ ---------
Each person listed above who signed, either manually or by facsimile
signature, the Mortgage Loan Purchase Agreement, dated as of August 21, 1998
(the "Purchase Agreement"), between the Seller and GMAC Commercial Mortgage
Securities, Inc. providing for the purchase by GMAC Commercial Mortgage
Securities, Inc. from the Seller of the Mortgage Loans, was, at the respective
times of such signing and delivery, duly authorized or appointed to execute such
documents in such capacity, and the signatures of such persons or facsimiles
thereof appearing on such documents are their genuine signatures.
Capitalized terms not otherwise defined herein have the meanings assigned
to them in the Purchase Agreement.
Exhibit D-1 - Page 1
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this certificate as of
August __, 1998.
By:
--------------------------------
Name:
Title:
I, [name], [title], hereby certify that ________________ is a duly elected
or appointed, as the case may be, qualified and acting ______________ of the
Seller and that the signature appearing above is [his] genuine signature.
IN WITNESS WHEREOF, the undersigned has executed this certificate as of
August __, 1998.
By:
--------------------------------
Name:
Title:
Exhibit D-1 - Page 2
<PAGE>
EXHIBIT D-2
FORM OF CERTIFICATE OF THE SELLER
CERTIFICATE OF GMAC COMMERCIAL MORTGAGE CORPORATION
In connection with the execution and delivery by GMAC Commercial Mortgage
Corporation (the "Seller") of, and the consummation of the transaction
contemplated by, that certain Mortgage Loan Purchase Agreement, dated as of
August 21, 1998 (the "Purchase Agreement"), between GMAC Commercial Mortgage
Securities, Inc. and the Seller, the Seller hereby certifies that (i) the
representations and warranties of the Seller in the Purchase Agreement are true
and correct in all material respects at and as of the date hereof with the same
effect as if made on the date hereof, and (ii) the Seller has, in all material
respects, complied with all the agreements and satisfied all the conditions on
its part to be performed or satisfied at or prior to the date hereof.
Capitalized terms not otherwise defined herein have the meanings assigned to
them in the Purchase Agreement.
Certified this _____ day of August, 1998.
GMAC COMMERCIAL MORTGAGE
CORPORATION
By
--------------------------------------
Name:
Title:
Exhibit D-2 - Page 1
<PAGE>
EXHIBIT D-3A
FORM OF OPINION I OF COUNSEL TO THE SELLER
August __, 1998
To: Persons on Annex A
Re: GMAC Commercial Mortgage Securities, Inc.
Mortgage Pass-Through Certificates, Series 1998-C2
--------------------------------------------------
Ladies and Gentlemen:
I am General Counsel to GMAC Commercial Mortgage Corporation (the
"Seller"). In that capacity, I am familiar with the issuance of certain
Mortgage Pass-Through Certificates, Series 1998-C2 (the "Certificates"),
evidencing undivided interests in a trust fund (the "Trust Fund") consisting
primarily of certain mortgage loans (the "Mortgage Loans"), pursuant to a
Pooling and Servicing Agreement, dated as of August 1, 1998 (the "Pooling and
Servicing Agreement"), among GMAC Commercial Mortgage Securities, Inc. (the
"Company") as depositor, the Seller as master servicer and special servicer,
LaSalle National Bank as trustee (the "Trustee") and ABN AMRO Bank N.V. as
fiscal agent.
Certain of the Mortgage Loans were purchased by the Company from the
Seller, pursuant to, and for the consideration described in, the Mortgage Loan
Purchase Agreement, dated as of August 21, 1998 (the "GMACCM Mortgage Loan
Purchase Agreement"), between the Company and the Seller. Certain of the
Mortgage Loans were purchased by the Company from Lehman Brothers Holdings, Inc.
("LB Holdings"), pursuant to, and for the consideration described in, the
Mortgage Loan Purchase Agreement, dated as of August 21, 1998 (the "LB Holdings
Mortgage Loan Purchase Agreement") between the Company and LB Holdings. Certain
of the Mortgage Loans were purchased by the Depositor from LaSalle National Bank
as Trustee for Restructured Asset Certificates With Enhanced Returns, Series
1998-ML Trust ("ML Trust") pursuant to, and for the consideration described in,
the Mortgage Loan Purchase Agreement, dated as of August 21, 1998 (the "ML Trust
Mortgage Loan Purchase Agreement") between the Depositor and the ML Trust.
Certain of the Mortgage Loans were purchased by the Depositor from German
American Capital Corporation ("GACC"), pursuant to, and for the consideration
described in, the Mortgage Loan Purchase Agreement, dated as of August 21, 1998
(the "GACC Mortgage Loan Purchase Agreement"), between the Depositor and GACC.
The Pooling and Servicing Agreement and the GMACCM Mortgage Loan Purchase
Agreement are referred to herein together as the "Agreements." Capitalized
terms not defined herein have the meanings set forth in the
Exhibit D-3A - Page 1
<PAGE>
Agreements. This opinion is rendered pursuant to Section 8(e) of the GMACCM
Mortgage Loan Purchase Agreement.
The Company has sold the Class X, Class A-1, Class A-2, Class B, Class C,
Class D, and Class E Certificates (collectively, the "Publicly Offered
Certificates") to Lehman Brothers Inc. and Deutsche Bank Securities Inc. as the
underwriters (the "Underwriters") named in the Underwriting Agreement, dated as
of August 21, 1998 (the "Underwriting Agreement"), among the Company, the
Seller, and the Representatives, and sold the Class F, Class G, Class H,
Class J, Class K, Class L, Class M, Class N, Class R-I, Class R-II and
Class R-III Certificates (collectively, the "Privately Offered Certificates") to
Lehman Brothers Inc. as initial purchaser (the "Initial Purchaser") pursuant to
the Certificate Purchase Agreement, dated as of August 21, 1998 (the
"Certificate Purchase Agreement"), among the Company, the Seller and the Initial
Purchaser.
In connection with rendering this opinion letter, I have examined or have
caused persons under my supervision to examine the Agreements and such other
records and other documents as I have deemed necessary. I have further assumed
that there is not and will not be any other agreement that materially
supplements or otherwise modifies the agreements expressed in the Agreements.
As to matters of fact, I have examined and relied upon representations of
parties contained in the Agreements and, where I have deemed appropriate,
representations and certifications of officers of the Company, the Seller, the
Trustee, other transaction participants or public officials. I have assumed the
authenticity of all documents submitted to me as originals, the genuineness of
all signatures other than officers of the Seller and the conformity to the
originals of all documents submitted to me as copies. I have assumed that all
parties, except for the Company and the Seller, had the corporate power and
authority to enter into and perform all obligations thereunder. As to such
parties, I also have assumed the due authorization by all requisite corporate
action, the due execution and delivery and the enforceability of such documents.
I have further assumed the conformity of the Mortgage Loans and related
documents to the requirements of the Agreements.
In rendering this opinion letter, I do not express any opinion concerning
any law other than the law of the Commonwealth of Pennsylvania, the General
Corporation Law of the State of Delaware and the federal law of the United
States, and I do not express any opinion concerning the application of the
"doing business" laws or the securities laws of any jurisdiction other than the
federal securities laws of the United States. To the extent that any of the
matters upon which I am opining herein are governed by laws ("Other Laws") other
than the laws identified in the preceding sentence, I have assumed with your
permission and without independent verification or investigation as to the
reasonableness of such assumption, that such Other Laws and judicial
interpretation thereof do not vary in any respect material to this opinion from
the corresponding laws of the Commonwealth of Pennsylvania and judicial
interpretations thereof. I do not express any opinion on any issue not
expressly addressed below.
Exhibit D-3A - Page 2
<PAGE>
Based upon the foregoing, I am of the opinion that:
1. Each of the Agreements has been duly and validly authorized, executed and
delivered by the Seller and, upon due authorization, execution and
delivery by the other parties thereto, will constitute the valid, legal and
binding agreements of the Seller, enforceable against the Seller in
accordance with their terms, except as enforceability may be limited by (i)
bankruptcy, insolvency, liquidation, receivership, moratorium,
reorganization or other similar laws affecting the rights of creditors,
(ii) general principles of equity, whether enforcement is sought in a
proceeding in equity or at law, and (iii) public policy considerations
underlying the securities laws, to the extent that such public policy
considerations limit the enforceability of the provisions of the Agreements
which purport to provide indemnification with respect to securities law
violations.
2. No consent, approval, authorization or order of a Commonwealth of
Pennsylvania or federal court or governmental agency or body is required
for the consummation by the Seller of the transactions contemplated by the
terms of the Agreements, except for those consents, approvals,
authorizations or orders which previously have been obtained.
3. Neither the consummation of any of the transactions contemplated by, nor
the fulfillment by the Seller of any other of the terms of, the Agreements,
will result in a material breach of any term or provision of the charter or
bylaws of the Seller or any Commonwealth of Pennsylvania or federal statute
or regulation or conflict with, result in a material breach, violation or
acceleration of or constitute a material default under the terms of any
indenture or other material agreement or instrument to which the Seller is
a party or by which it is bound or any order or regulation of any
Commonwealth of Pennsylvania or federal court, regulatory body,
administrative agency or governmental body having jurisdiction over the
Seller.
This opinion letter is rendered for the sole benefit of each addressee
hereof, and no other person or entity, except Mayer, Brown & Platt, is
entitled to rely hereon without prior written consent. Copies of this
opinion letter may not be furnished to any other person or entity, nor may
any portion of this opinion letter be quoted, circulated or referred to in
any other document without my prior written consent.
Very truly yours,
Maria Corpora-Buck
General Counsel
Exhibit D-3A - Page 3
<PAGE>
Annex A
GMAC Commercial Mortgage Corporation
GMAC Commercial Mortgage Securities, Inc.
Lehman Brothers Inc.
Deutsche Bank Securities Inc.
FITCH IBCA Inc.
Moody's Investors Service, Inc.
Standard & Poor's Ratings Service
LaSalle National Bank
Annex A-1
<PAGE>
EXHIBIT D-3B
FORM OF OPINION II OF COUNSEL TO THE SELLER
August [__], 1998
GMAC Commercial Mortgage Corporation
GMAC Commercial Mortgage Securities, Inc.
Lehman Brothers Inc.
Deutsche Bank Securities Inc.
Re: GMAC Commercial Mortgage Securities, Inc.,
Mortgage Pass-Through Certificates, Series 1998-C2
--------------------------------------------------
Ladies and Gentlemen:
This opinion is being provided to you by the undersigned, as special
counsel to GMAC Commercial Mortgage Corporation ("GMACCM"), pursuant to Section
8(e) of the Mortgage Loan Purchase Agreement, dated August 21, 1998 (the "GMACCM
Mortgage Loan Purchase Agreement"), between GMAC Commercial Mortgage Securities,
Inc. (the "Purchaser") and GMACCM as the Seller, (in such capacity the
"Seller"), relating to the sale by the Seller of certain mortgage loans (the
"GMACCM Mortgage Loans"), and relating to the Certificates sold pursuant to the
Underwriting Agreement, dated as of August 21, 1998 (the "Underwriting
Agreement"), between the Purchaser and Lehman Brothers Inc. and Deutsche Bank
Securities Inc., and issued under the Pooling and Servicing Agreement, dated as
of August 1, 1998, among GMACCM as special servicer and master servicer (in such
respective capacities, the "Special Servicer" and the "Master Servicer"), the
Purchaser, as depositor, LaSalle National Bank, as trustee and ABN AMRO Bank
N.V. as fiscal agent (the "Pooling and Servicing Agreement" and together with
the GMACCM Mortgage Loan Purchase Agreement, the "Agreements"). Capitalized
terms not otherwise defined herein have the meanings assigned to them in the
Agreements.
In connection with the transactions described above, certain mortgage loans
(the "GACC Mortgage Loans") were sold to the Purchaser by German American
Capital Corporation ("GACC"), pursuant to the Mortgage Loan Purchase Agreement,
dated as of August 24, 1998 (the "GACC Mortgage Loan Purchase Agreement"),
between the Depositor and GACC, and certain other mortgage loans (the "ML Trust
Mortgage Loans") were sold to the Purchaser by LaSalle
Exhibit D-3B - Page 1
<PAGE>
National Bank, as Trustee for Restructured Asset Certificates With Enhanced
Returns, Series 1998-ML Trust ("ML Trust"), pursuant to the Mortgage Loan
Purchase Agreement, dated as of August 24, 1998 (the "ML Trust Mortgage Loan
Purchase Agreement"), between the Purchaser and the ML Trust.
In rendering this opinion, we have examined and relied upon executed copies
of the Agreements and originals or copies, certified or otherwise identified to
our satisfaction, of such certificates and other documents as we have deemed
appropriate for the purposes of rendering this opinion. We have examined and
relied upon, among other things, the documents and opinions delivered to you at
the closing being held today relating to the Certificates, as well as (a) the
Prospectus and the Memorandum, (b) an executed copy of the GACC Mortgage Loan
Purchase Agreement, the GMACCM Mortgage Loan Purchase Agreement and the ML Trust
Mortgage Loan Purchase Agreement and (c) an executed copy of the Pooling and
Servicing Agreement.
In conducting our examination, we have assumed, without investigation, the
legal capacity of all natural persons, the genuineness of all signatures, the
authenticity of all documents submitted to us as originals, the conformity to
original documents of all documents submitted to us as certified or photostatic
copies and the authenticity of the originals of such latter documents. We have,
with your permission, also relied upon the opinions of even date herewith of
Maria Corpora-Buck, Esq., General Counsel to GMACCM, and Severson & Werson,
special California counsel to GMACCM, addressed to you. As to any facts
material to the opinions expressed herein which were not independently
established or verified, we have relied upon oral or written statements and
representations of officers and other representatives of GMACCM and others.
We are members of the bar of the State of New York and do not purport to be
experts on or to express any opinion herein concerning any laws other than the
laws of the State of New York and the federal laws of the United States of
America. We express no opinion herein as to the laws of any other jurisdiction.
Based upon the matters stated herein and upon such investigation as we have
deemed necessary, we are of the opinion that the Agreements have been duly
authorized, executed and delivered by GMACCM and, upon due authorization,
execution and delivery by the Purchaser, will each constitute a valid, legal and
binding agreement of GMACCM, enforceable against GMACCM in accordance with its
respective terms, except as enforceability may be limited by (a) bankruptcy,
insolvency, liquidation, receivership, moratorium, reorganization or other
similar laws relating to or affecting the enforcement of creditors rights
generally and (b) general principles of equity, whether enforcement is sought in
a proceeding in equity or at law.
In rendering the opinions expressed above, we express no opinion regarding
any severability provision in the Agreements or regarding the legal, valid and
binding effect or the enforceability of any indemnification provision in the
Agreements to the extent that any such
Exhibit D-3B - Page 2
<PAGE>
provisions may be deemed to cover matters under the federal securities laws.
The opinions expressed above are subject to the further qualification that
certain of the remedial provisions in the Agreements may be limited or rendered
ineffective or unenforceable in whole or in part under the laws of the State of
New York (but the inclusion of such provisions does not make the remedies
provided by the Agreements inadequate for the practical realization of the
rights and benefits purported to be provided thereby, except for the economic
consequences of procedural or other delay).
We have not ourselves checked the accuracy or completeness of, or otherwise
independently verified, the information furnished with respect to the Prospectus
Supplement or the Memorandum. In addition, as you are aware, with limited
exception, we did not examine or review the Mortgage Files although we did
review the asset summaries (the "GMACCM Asset Summaries") furnished and prepared
by GMACCM with respect to the GMACCM Mortgage Loans sold under the GMACCM
Mortgage Loan Purchase Agreement, the GACC Mortgage Loans sold under the GACC
Mortgage Loan Purchase Agreement and the ML Trust Mortgage Loans sold under the
ML Trust Mortgage Loan Purchase Agreement (collectively, the "Mortgage Loans").
We did not, however, check the accuracy or completeness of or otherwise
independently verify the information contained in the GMACCM Asset Summaries.
Moreover, we note that we were advised by GMACCM in connection with our review
of the GMACCM Asset Summaries that such GMACCM Asset Summaries were summaries
only, and in certain instances being continually updated and corrected and were
not intended to be relied on for a complete legal description of each GMACCM
Mortgage Loan.
In the course of the preparation by the Purchaser of the Prospectus
Supplement and the Memorandum, we have participated in conferences with certain
officers of GMACCM, the Purchaser, counsel to the Purchaser and your
representatives, during which the contents of the Prospectus Supplement and the
Memorandum and related matters were discussed and, at your request we have
reviewed the information contained in the Prospectus Supplement (other than the
information presented in tabular form) under the headings "Summary of Prospectus
Supplement -- The Mortgage Asset Pool," "Risk Factors -- The Mortgage Loans"
and/or "Description of the Mortgage Asset Pool" relating to GMACCM, the
Purchaser and the Mortgage Loans (collectively, the "Selected Information"). On
the basis of the discussions and limited review referred to above, although we
are not passing upon, and do not assume any responsibility for, the accuracy,
completeness or fairness of the statements contained in the Prospectus
Supplement and the Memorandum, and without independent check or verification of
the Selected Information except as stated, no facts have come to our attention
that have caused us to believe that the Selected Information set forth in either
the Prospectus Supplement or the Memorandum (other than financial and
statistical data included or not included therein or incorporated by reference
therein, as to which we express no opinion), as of its issue date, contained any
untrue statement of a material fact or omitted to state a material fact
necessary
Exhibit D-3B - Page 3
<PAGE>
to make the statements therein, in the light of the circumstances under which
they were made, not misleading.
Whenever our opinion with respect to the existence or absence of facts is
indicated to be based on our knowledge or awareness, we are referring to the
actual knowledge of the Mayer, Brown & Platt attorneys who have represented you
in connection with the transactions contemplated by the Agreements. Except as
expressly set forth herein, we have not undertaken any independent investigation
to determine the existence or absence of such facts and no inference as to our
knowledge concerning such facts should be drawn from the fact that such
representation has been undertaken by us.
This letter is limited to the specific issues addressed herein and the
opinion rendered above is limited in all respects to laws and facts existing on
the date hereof. By rendering this opinion, we do not undertake to advise you
with respect to any other matter or of any change in such laws or facts or in
the interpretations of such laws which may occur after the date hereof.
We are furnishing this opinion to you solely for your benefit. This
opinion is not to be used, circulated, quoted or otherwise referred to for any
other purpose, except that the persons listed on EXHIBIT A hereto may rely upon
this opinion in connection with their rating of the Certificates to the same
extent as if this opinion had been addressed to them.
Very truly yours,
Mayer, Brown & Platt
Exhibit D-3B - Page 4
<PAGE>
EXHIBIT A
TO
MAYER, BROWN & PLATT OPINION
PERSONS WHO MAY RELY UPON THE OPINION RENDERED
IN THE FOURTH FULL PARAGRAPH OF PAGE 2 OF THE
OPINION LETTER TO WHICH THIS EXHIBIT IS ATTACHED
------------------------------------------------
Fitch IBCA Inc.
Moody's Investors Service, Inc.
Standard & Poor's Ratings Service
Exhibit D-3B - Page 5
<PAGE>
Exhibit 99.2
EXECUTION COPY
MORTGAGE LOAN PURCHASE AGREEMENT
This Mortgage Loan Purchase Agreement (this "Agreement"), is dated and
effective as of August 21, 1998, between German American Capital Corporation as
seller (the "Seller") and GMAC Commercial Mortgage Securities, Inc. as purchaser
(the "Purchaser").
The Seller desires to sell, assign, transfer and otherwise convey to the
Purchaser, and the Purchaser desires to purchase, subject to the terms and
conditions set forth below, the multifamily and commercial mortgage loans (the
"Mortgage Loans") identified on the schedule annexed hereto as EXHIBIT A (the
"Mortgage Loan Schedule").
It is expected that the Mortgage Loans will be transferred, together with
other multifamily and commercial mortgage loans to a trust fund (the "Trust
Fund") to be formed by the Purchaser, beneficial ownership of which will be
evidenced by a series of mortgage pass-through certificates (the
"Certificates"). Certain classes of the Certificates will be rated by Standard
& Poor's Ratings Services, Moody's Investors Service, Inc. and FITCH IBCA Inc.
(together, the "Rating Agencies"). Certain classes of the Certificates (the
"Registered Certificates") will be registered under the Securities Act of 1933,
as amended (the "Securities Act"). The Trust Fund will be created and the
Certificates will be issued pursuant to a pooling and servicing agreement to be
dated as of August 1, 1998 (the "Pooling and Servicing Agreement"), among the
Purchaser as depositor, GMAC Commercial Mortgage Corporation as master servicer
(in such capacity, the "Master Servicer") and special servicer (in such
capacity, the "Special Servicer"), LaSalle National Bank as trustee (in such
capacity, the "Trustee") and ABN AMRO Bank N.V. as fiscal agent. Capitalized
terms not otherwise defined herein have the meanings assigned to them in the
Pooling and Servicing Agreement as in effect on the Closing Date.
The Purchaser intends to sell certain of the Certificates to Lehman
Brothers Inc. and Deutsche Bank Securities Inc. (together, the "Underwriters")
pursuant to an underwriting agreement dated the date hereof (the "Underwriting
Agreement"). The Purchaser intends to sell the remaining Certificates (the
"Non-Registered Certificates") to Lehman Brothers Inc. (the "Initial
Purchaser"), pursuant to a certificate purchase agreement dated the date hereof
(the "Certificate Purchase Agreement").
Now, therefore, in consideration of the premises and the mutual agreements
set forth herein, the parties agree as follows:
SECTION 1. AGREEMENT TO PURCHASE.
<PAGE>
The Seller agrees to sell, assign, transfer and otherwise convey to the
Purchaser, and the Purchaser agrees to purchase, the Mortgage Loans. The
purchase and sale of the Mortgage Loans shall take place on August 27, 1998 or
such other date as shall be mutually acceptable to the parties hereto (the
"Closing Date"). The "Cut-off Date" with respect to any Mortgage Loan is the
Due Date for such Mortgage Loan in August 1998. As of the close of business on
their respective Cut-off Dates, the Mortgage Loans will have an aggregate
principal balance (the "Aggregate Cut-off Date Balance"), after application of
all payments of principal due thereon on or before such date, whether or not
received, of $53,016,804, subject to a variance of plus or minus 5%. The
purchase price for the Mortgage Loans shall be determined and paid to the Seller
in accordance with a term sheet (the "Allocation Agreement") that has been
agreed to by the Mortgage Loan Sellers and the Purchaser.
SECTION 2. CONVEYANCE OF MORTGAGE LOANS.
(a) Effective as of the Closing Date, subject only to receipt by the
Seller of the purchase price referred to in Section 1 hereof (exclusive of any
applicable holdback for transaction expenses in accordance with the Allocation
Agreement), the Seller does hereby sell, transfer, assign, set over and
otherwise convey to the Purchaser, without recourse, all the right, title and
interest of the Seller in and to the Mortgage Loans identified on the Mortgage
Loan Schedule as of such date, including all interest and principal received or
receivable by the Seller on or with respect to the Mortgage Loans after the
Cut-off Date for such Mortgage Loan, together with all of the Seller's right,
title and interest in and to the proceeds of any related title, hazard, or other
insurance policies and any escrow, reserve or other comparable accounts related
to the Mortgage Loans. The Purchaser shall be entitled to (and, to the extent
received by or on behalf of the Seller, the Seller shall deliver or cause to be
delivered to or at the direction of the Purchaser) all scheduled payments of
principal and interest due on the Mortgage Loans after the Cut-off Date for each
such Mortgage Loan, and all other recoveries of principal and interest collected
thereon after such Cut-off Date. All scheduled payments of principal and
interest due thereon on or before the Cut-off Date for each Mortgage Loan and
collected after such Cut-off Date shall belong to the Seller.
(b) In connection with the Seller's assignment pursuant to subsection (a)
above, the Seller hereby agrees that, at least five (5) Business Days before the
Closing Date, it shall have delivered to and deposited with the Trustee, the
Mortgage File (as described on EXHIBIT B hereto) for each Mortgage Loan so
assigned to the extent that such Mortgage File was delivered to the Seller. On
the Closing Date, upon notification from the Seller that the purchase price
referred to in Section 1 (exclusive of any applicable holdback for transaction
expenses in accordance with the Allocation Agreement) has been received by the
Seller, the Trustee shall be authorized to release to the Purchaser or its
designee all of the Mortgage Files in the Trustee's possession relating to the
Mortgage Loans.
(c) All documents and records in the Seller's possession (or under its
control) relating to the Mortgage Loans that are not required to be a part of a
Mortgage File in accordance with EXHIBIT B (all such other documents and
records, as to any Mortgage Loan, the "Servicing File"), together
2
<PAGE>
with all escrow payments, reserve funds and other comparable funds in the
possession of the Seller (or under its control) with respect to the Mortgage
Loans, shall (unless they are held by a sub-servicer that shall, as of the
Closing Date, begin acting on behalf of the Master Servicer pursuant to a
written agreement between such parties) be delivered by the Seller (or its
agent) to the Purchaser (or its designee) no later than the Closing Date. If a
sub-servicer shall, as of the Closing Date, begin acting on behalf of the Master
Servicer with respect to any Mortgage Loan pursuant to a written agreement
between such parties, the Seller shall deliver a copy of the related Servicing
File to the Master Servicer.
(d) The Seller's records will reflect the transfer of the Mortgage Loans
to the Purchaser as a sale.
SECTION 3. EXAMINATION OF MORTGAGE LOAN FILES AND DUE DILIGENCE REVIEW.
The Seller shall reasonably cooperate with any examination of the Mortgage
Files and Servicing Files that may be undertaken by or on behalf of the
Purchaser. The fact that the Purchaser has conducted or has failed to conduct
any partial or complete examination of the Mortgage Files and/or Servicing Files
shall not affect the Purchaser's right to pursue any remedy available in equity
or at law for a breach of the Seller's representations, warranties and covenants
set forth in or contemplated by Section 4.
SECTION 4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER.
(a) RESERVED.
(b) The Seller, as of the date hereof, hereby represents and warrants to,
and covenants with, the Purchaser that:
(i) The Seller is a corporation, duly organized, validly
existing and in good standing under the laws of the State of Maryland, and
is in compliance with the laws of each State to the extent necessary to
perform its obligations under this Agreement.
(ii) The execution and delivery of this Agreement by the Seller,
and the performance and compliance with the terms of this Agreement by the
Seller, will not violate the Seller's organizational documents or
constitute a default (or an event which, with notice or lapse of time, or
both, would constitute a default) under, or result in the breach of, any
material agreement or other instrument to which it is a party or which is
applicable to it or any of its assets, in each case which materially and
adversely affect the ability of the Seller to carry out the transactions
contemplated by this Agreement.
3
<PAGE>
(iii) The Seller has the full power and authority to enter into
and consummate all transactions contemplated by this Agreement, has duly
authorized the execution, delivery and performance of this Agreement, and
has duly executed and delivered this Agreement.
(iv) This Agreement, assuming due authorization, execution and
delivery by the Purchaser, constitutes a valid, legal and binding
obligation of the Seller, enforceable against the Seller in accordance with
the terms hereof, subject to (A) applicable bankruptcy, insolvency,
reorganization, moratorium and other laws affecting the enforcement of
creditors' rights generally, (B) general principles of equity, regardless
of whether such enforcement is considered in a proceeding in equity or at
law, and (C) public policy considerations underlying the securities laws,
to the extent that such public policy considerations limit the
enforceability of the provisions of this Agreement that purport to provide
indemnification for securities laws liabilities.
(v) The Seller is not in violation of, and its execution and
delivery of this Agreement and its performance and compliance with the
terms of this Agreement will not constitute a violation of, any law, any
order or decree of any court or arbiter, or any order, regulation or demand
of any federal, state or local governmental or regulatory authority, which
violation, in the Seller's good faith and reasonable judgment, is likely to
affect materially and adversely either the ability of the Seller to perform
its obligations under this Agreement or the financial condition of the
Seller.
(vi) No litigation is pending with regard to which Seller has
received service of process or, to the best of the Seller's knowledge,
threatened against the Seller the outcome of which, in the Seller's good
faith and reasonable judgment, could reasonably be expected to prohibit the
Seller from entering into this Agreement or materially and adversely affect
the ability of the Seller to perform its obligations under this Agreement.
(vii) The Seller has not dealt with any broker, investment banker,
agent or other person, other than the Purchaser, the Underwriters, the
Initial Purchaser, and their respective affiliates, that may be entitled to
any commission or compensation in connection with the sale of the Mortgage
Loans by the Seller to the Purchaser or the consummation of any of the
other transactions contemplated hereby.
(viii) Neither the Seller nor anyone acting on its behalf has (A)
offered, pledged, sold, disposed of or otherwise transferred any
Certificate, any interest in any Certificate or any other similar security
to any person in any manner, (B) solicited any offer to buy or to accept a
pledge, disposition or other transfer of any Certificate, any interest in
any Certificate or any other similar security from any person in any
manner, (C) otherwise approached or negotiated with respect to any
Certificate, any interest in any Certificate or any other similar security
with any person in any manner, (D) made any general solicitation by means
of general advertising or in any other manner with respect to any
Certificate, any interest in any
4
<PAGE>
Certificate or any similar security, or (E) taken any other action, that
(in the case of any of the acts described in clauses (A) through (E) above)
would constitute or result in a violation of the Securities Act or any
state securities law relating to or in connection with the issuance of the
Certificates or require registration or qualification pursuant to the
Securities Act or any state securities law of any Certificate not otherwise
intended to be a Registered Certificate. In addition, the Seller will not
act, nor has it authorized or will it authorize any person to act, in any
manner set forth in the foregoing sentence with respect to any of the
Certificates or interests therein. For purposes of this paragraph
4(b)(viii), the term "similar security" shall be deemed to include, without
limitation, any security evidencing or, upon issuance, that would have
evidenced an interest in the Mortgage Loans or any substantial number
thereof.
(ix) No consent, approval, authorization or order of,
registration or filing with, or notice to, any governmental authority or
court is required, under federal or state law (including, with respect to
any bulk sale laws), for the execution, delivery and performance of or
compliance by the Seller with this Agreement, or the consummation by the
Seller of any transaction contemplated hereby, other than (1) the filing or
recording of financing statements, instruments of assignment and other
similar documents necessary in connection with Seller's sale of the
Mortgage Loans to the Purchaser, (2) such consents, approvals,
authorizations, qualifications, registrations, filings or notices as have
been obtained or made and (3) where the lack of such consent, approval,
authorization, qualification, registration, filing or notice would not have
a material adverse effect on the performance by the Seller under this
Agreement.
(c) Upon discovery by any of the parties hereto of a breach of any of the
representations and warranties made pursuant to and set forth in subsection (b)
above which materially and adversely affects the interests of the Purchaser, the
party discovering such breach shall give prompt written notice to the other
party hereto.
SECTION 5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASER.
(a) The Purchaser, as of the date hereof, hereby represents and warrants
to, and covenants with, the Seller that:
(i) The Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of State of Delaware.
(ii) The execution and delivery of this Agreement by the
Purchaser, and the performance and compliance with the terms of this
Agreement by the Purchaser, will not violate the Purchaser's organizational
documents or constitute a default (or an event which, with notice or lapse
of time, or both, would constitute a default) under, or result in the
breach of, any material agreement or other instrument to which it is a
party or which is applicable to it or any of its assets.
5
<PAGE>
(iii) The Purchaser has the full power and authority to enter into
and consummate all transactions contemplated by this Agreement, has duly
authorized the execution, delivery and performance of this Agreement, and
has duly executed and delivered this Agreement.
(iv) This Agreement, assuming due authorization, execution and
delivery by the Seller, constitutes a valid, legal and binding obligation
of the Purchaser, enforceable against the Purchaser in accordance with the
terms hereof, subject to (A) applicable bankruptcy, insolvency,
reorganization, moratorium and other laws affecting the enforcement of
creditors' rights generally, and (B) general principles of equity,
regardless of whether such enforcement is considered in a proceeding in
equity or at law.
(v) The Purchaser is not in violation of, and its execution and
delivery of this Agreement and its performance and compliance with the
terms of this Agreement will not constitute a violation of, any law, any
order or decree of any court or arbiter, or any order, regulation or demand
of any federal, state or local governmental or regulatory authority, which
violation, in the Purchaser's good faith and reasonable judgment, is likely
to affect materially and adversely either the ability of the Purchaser to
perform its obligations under this Agreement or the financial condition of
the Purchaser.
(vi) No litigation is pending or, to the best of the Purchaser's
knowledge, threatened against the Purchaser which would prohibit the
Purchaser from entering into this Agreement or, in the Purchaser's good
faith and reasonable judgment, is likely to materially and adversely affect
either the ability of the Purchaser to perform its obligations under this
Agreement or the financial condition of the Purchaser.
(vii) The Purchaser has not dealt with any broker, investment
banker, agent or other person, other than the Seller, the Underwriters, the
Initial Purchaser and their respective affiliates, that may be entitled to
any commission or compensation in connection with the sale of the Mortgage
Loans or the consummation of any of the transactions contemplated hereby.
(viii) No consent, approval, authorization or order of,
registration or filing with, or notice to, any governmental authority or
court is required, under federal or state law, for the execution, delivery
and performance of or compliance by the Purchaser with this Agreement, or
the consummation by the Purchaser of any transaction contemplated hereby,
other than (1) such consents, approvals, authorizations, qualifications,
registrations, filings or notices as have been obtained or made and (2)
where the lack of such consent, approval, authorization, qualification,
registration, filing or notice would not have a material adverse effect on
the performance by the Purchaser under this Agreement.
6
<PAGE>
(b) Upon discovery by any of the parties hereto of a breach of any of the
representations and warranties set forth above which materially and adversely
affects the interests of the Seller, the party discovering such breach shall
give prompt written notice to the other party hereto.
SECTION 6. RESERVED.
SECTION 7. CLOSING.
The closing of the sale of the Mortgage Loans (the "Closing") shall be held
at the offices of Mayer, Brown & Platt, 1675 Broadway, New York, New York 10019
at 10:00 a.m., New York City time, on the Closing Date.
The Closing shall be subject to each of the following conditions:
(i) All of the representations and warranties of the Seller
specified herein shall be true and correct as of the Closing Date, and the
Aggregate Cut-off Date Balance shall be within the range permitted by
Section 1 of this Agreement;
(ii) All documents specified in Section 8 (the "Closing
Documents"), in such forms as are agreed upon and acceptable to the
Purchaser, shall be duly executed and delivered by all signatories as
required pursuant to the respective terms thereof;
(iii) The Seller shall have delivered and released to the Trustee,
the Purchaser or the Purchaser's designee, as the case may be, all
documents and funds required to be so delivered pursuant to Section 2;
(iv) The result of any examination of the Mortgage Files and
Servicing Files performed by or on behalf of the Purchaser pursuant to
Section 3 shall be satisfactory to the Purchaser in its sole determination;
(v) All other terms and conditions of this Agreement required to
be complied with on or before the Closing Date shall have been complied
with, and the Seller shall have the ability to comply with all terms and
conditions and perform all duties and obligations required to be complied
with or performed after the Closing Date; and
(vi) Neither the Underwriting Agreement nor the Certificate
Purchase Agreement shall have been terminated in accordance with its terms.
Both parties agree to use their best efforts to perform their respective
obligations hereunder in a manner that will enable the Purchaser to purchase the
Mortgage Loans on the Closing Date.
7
<PAGE>
SECTION 8. CLOSING DOCUMENTS.
The Closing Documents shall consist of the following:
(a) This Agreement duly executed and delivered by the Purchaser and the
Seller;
(b) An Officer's Certificate substantially in the form of Exhibit C-1
hereto, executed by the Secretary or an assistant secretary of the Seller, and
dated the Closing Date, and upon which the Purchaser and each Underwriter and
each Initial Purchaser may rely, attaching thereto as exhibits the
organizational documents of the Seller;
(c) A certificate of good standing regarding the Seller from the Secretary
of State for the State of Maryland, dated not earlier than 30 days prior to the
Closing Date;
(d) A certificate of the Seller substantially in the form of Exhibit C-2
hereto, executed by an executive officer or authorized signatory of the Seller
and dated the Closing Date, and upon which the Purchaser and each Underwriter
and each Initial Purchaser may rely;
(e) A written opinion of counsel for the Seller, substantially in the form
of Exhibit C-3 hereto and subject to such reasonable assumptions and
qualifications as may be requested by counsel for the Seller and acceptable to
counsel for the Purchaser, dated the Closing Date and addressed to the Purchaser
and each Underwriter and each Initial Purchaser;
(f) The Supplemental Agreement, substantially in the form of Exhibit D
hereto, dated as of August 21, 1998, between GMAC Commercial Mortgage
Corporation ("GMACCM") and the Seller, duly executed and delivered by GMACCM
and the Seller;
(g) The Assignment Agreement, substantially in the form of Exhibit E
hereto, dated August 21, 1998, between the Seller and the Purchaser, duly
executed and delivered by the Seller and the Purchaser; and
(h) Such further certificates, opinions and documents as the Purchaser may
reasonably request.
SECTION 9. RESERVED.
SECTION 10. RESERVED.
SECTION 11. NOTICES.
All demands, notices and communications hereunder shall be in writing and
shall be deemed to have been duly given if personally delivered to or mailed, by
registered mail, postage prepaid, by
8
<PAGE>
overnight mail or courier service, or transmitted by facsimile and confirmed by
a similar mailed writing, if to the Purchaser, addressed to GMAC Commercial
Mortgage Securities, Inc. at 650 Dresher Road, P.O. Box 1015, Horsham,
Pennsylvania 19044-8015, Attention: Structured Finance Manager, facsimile no.
(215) 328-1775, with a copy to the General Counsel, GMAC Commercial Mortgage
Corporation, or such other address or facsimile number as may hereafter be
furnished to the Seller in writing by the Purchaser; and if to the Seller,
addressed to German American Capital Corporation, at 31 W. 52nd Street, New
York, New York 10019, Attention: Steven S. Stuart, facsimile no. (212) 469-7210,
or to such other address or facsimile number as the Seller may designate in
writing to the Purchaser.
SECTION 12. RESERVED.
SECTION 13. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY.
All representations, warranties and agreements contained in this Agreement,
incorporated herein by reference or contained in the certificates of officers of
the Seller submitted pursuant hereto, shall remain operative and in full force
and effect and shall survive delivery of the Mortgage Loans by the Seller to the
Purchaser or its designee.
SECTION 14. SEVERABILITY OF PROVISIONS.
Any part, provision, representation, warranty or covenant of this Agreement
that is prohibited or which is held to be void or unenforceable shall be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any part, provision,
representation, warranty or covenant of this Agreement that is prohibited or
unenforceable or is held to be void or unenforceable in any particular
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
particular jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction. To the extent permitted by applicable law,
the parties hereto waive any provision of law which prohibits or renders void or
unenforceable any provision hereof.
SECTION 15. COUNTERPARTS.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but all of which together shall constitute
one and the same instrument.
SECTION 16. GOVERNING LAW.
THIS AGREEMENT AND THE RIGHTS, DUTIES, OBLIGATIONS AND RESPONSIBILITIES OF
THE PARTIES HERETO SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS AND DECISIONS OF
9
<PAGE>
THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES EXCEPT THAT
THE PARTIES HERETO INTEND THAT THE PROVISIONS OF SECTION 5-1401 OF THE NEW YORK
GENERAL OBLIGATIONS LAW SHALL APPLY TO THIS AGREEMENT.
SECTION 17. FURTHER ASSURANCES.
The Seller and the Purchaser agree to execute and deliver such instruments
and take such further actions as the other party may, from time to time,
reasonably request in order to effectuate the purposes and to carry out the
terms of this Agreement.
SECTION 18. SUCCESSORS AND ASSIGNS.
The rights and obligations of the Seller under this Agreement shall not be
assigned by the Seller without the prior written consent of the Purchaser,
except that any person into which the Seller may be merged or consolidated, or
any corporation or other entity resulting from any merger, conversion or
consolidation to which the Seller is a party, or any person succeeding to all or
substantially all of the business of the Seller, shall be the successor to the
Seller hereunder. The Purchaser has the right to assign its interest under this
Agreement, in whole or in part, as may be required to effect the purposes of the
Pooling and Servicing Agreement, and the assignee shall, to the extent of such
assignment, succeed to the rights and obligations hereunder of the Purchaser.
Subject to the foregoing, this Agreement shall bind and inure to the benefit of
and be enforceable by the Seller and the Purchaser, and their permitted
successors and assigns.
SECTION 19. AMENDMENTS.
No term or provision of this Agreement may be amended, waived, modified or
in any way altered, unless such amendment, waiver, modification or alteration is
in writing and signed by a duly authorized officer of the party against whom
such amendment, waiver, modification or alteration is sought to be enforced.
10
<PAGE>
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their names to
be signed hereto by their respective duly authorized officers as of the date
first above written.
GERMAN AMERICAN CAPITAL CORPORATION
By: /s/ Scott Waynebern
-------------------------------------
Name: Scott Waynebern
-----------------------------------
Title: Vice President
----------------------------------
By: /s/ Gregory B. Hartch
-------------------------------------
Name: Gregory B. Hartch
-----------------------------------
Title: Authorized Signatory
----------------------------------
GMAC COMMERCIAL MORTGAGE SECURITIES,
INC.
By: /s/ David Lazarus
-------------------------------------
Name: David Lazarus
-----------------------------------
Title: Vice President
----------------------------------
S-1
<PAGE>
EXHIBIT A
MORTGAGE LOAN SCHEDULE
A-1
<PAGE>
EXHIBIT B
THE MORTGAGE FILE
The "Mortgage File" for any Mortgage Loan shall collectively consist of the
following documents:
(i) the original Mortgage Note, endorsed by the most
recent endorsee prior to the Trustee or, if none,
by the originator, without recourse, either in
blank or to the order of the Trustee in the
following form: "Pay to the order of LaSalle
National Bank, as trustee for the registered
holders of GMAC Commercial Mortgage Securities,
Inc., Mortgage Pass-Through Certificates, Series
1998-C2, without recourse";
(ii) the original or a copy of the Mortgage and, if
applicable, the originals or copies of any
intervening assignments thereof showing a complete
chain of assignment from the originator of the
Mortgage Loan to the most recent assignee of
record thereof prior to the Trustee, if any, in
each case with evidence of recording indicated
thereon;
(iii) an original assignment of the Mortgage, in
recordable form, executed by the most recent
assignee of record thereof prior to the Trustee
or, if none, by the originator, either in blank or
in favor of the Trustee (in such capacity);
(iv) the original or a copy of any related Assignment
of Leases (if such item is a document separate
from the Mortgage) and, if applicable, the
originals or copies of any intervening assignments
thereof showing a complete chain of assignment
from the originator of the Mortgage Loan to the
most recent assignee of record thereof prior to
the Trustee, if any, in each case with evidence of
recording thereon;
(v) an original assignment of any related Assignment
of Leases (if such item is a document separate
from the Mortgage), in recordable form, executed
by the most recent assignee of record thereof
prior to the Trustee or, if none, by the
originator, either in blank or in favor of the
Trustee (in such capacity), which assignment may
be included as part of the corresponding
assignment of Mortgage referred to in clause (iii)
above;
B-1
<PAGE>
(vi) an original or copy of any related Security
Agreement (if such item is a document separate
from the Mortgage) and, if applicable, the
originals or copies of any intervening assignments
thereof showing a complete chain of assignment
from the originator of the Mortgage Loan to the
most recent assignee of record thereof prior to
the Trustee, if any;
(vii) an original assignment of any related Security
Agreement (if such item is a document separate
from the Mortgage) executed by the most recent
assignee of record thereof prior to the Trustee
or, if none, by the originator, either in blank or
in favor of the Trustee (in such capacity), which
assignment may be included as part of the
corresponding assignment of Mortgage referred to
in clause (iii) above;
(viii) originals or copies of all assumption,
modification, written assurance and substitution
agreements, with evidence of recording thereon if
appropriate, in those instances where the terms or
provisions of the Mortgage, Mortgage Note or any
related security document have been modified or
the Mortgage Loan has been assumed;
(ix) the original or a copy of the lender's title
insurance policy issued as of the date of the
origination of the Mortgage Loan, together with
all endorsements or riders (or copies thereof)
that were issued with or subsequent to the
issuance of such policy, insuring the priority of
the Mortgage as a first lien on the Mortgaged
Property;
(x) the original or a copy of any guaranty of the
obligations of the Mortgagor under the Mortgage
Loan together with (A) if applicable, the original
or copies of any intervening assignments of such
guaranty showing a complete chain of assignment
from the originator of the Mortgage Loan to the
most recent assignee thereof prior to the Trustee,
if any, and (B) an original assignment of such
guaranty executed by the most recent assignee
thereof prior to the Trustee or, if none, by the
originator;
(xi) (A) file or certified copies of any UCC financing
statements and continuation statements which were
filed in order to perfect (and maintain the
perfection of) any security interest held by the
originator of the Mortgage Loan (and each assignee
of record prior to the Trustee) in and to the
personalty of the mortgagor at the Mortgaged
Property (in each case with evidence of filing
thereon) and which
B-2
<PAGE>
were in the possession of the Seller (or its
agent) at the time the Mortgage Files were
delivered to the Trustee and (B) if any such
security interest is perfected and the earlier UCC
financing statements and continuation statements
were in the possession of the Seller, a UCC
financing statement executed by the most recent
assignee of record prior to the Trustee or, if
none, by the originator, evidencing the transfer
of such security interest, either in blank or in
favor of the Trustee;
(xii) the original or a copy of the power of attorney
(with evidence of recording thereon, if
appropriate) granted by the Mortgagor if the
Mortgage, Mortgage Note or other document or
instrument referred to above was signed on behalf
of the Mortgagor; and
(xiii) if the Mortgagor has a leasehold interest in the
related Mortgaged Property, the original ground
lease or a copy thereof;
provided that whenever the term "Mortgage File" is used to refer to documents
actually received by the Purchaser or the Trustee, such term shall not be deemed
to include such documents and instruments required to be included therein unless
they are actually so received. The original assignments referred to in clauses
(iii), (v), (vii) and (x)(B), may be in the form of one or more instruments in
recordable form in any applicable filing offices.
B-3
<PAGE>
EXHIBIT C-1
FORM OF CERTIFICATE OF AN OFFICER OF
THE SELLER
CERTIFICATE OF OFFICER OF GERMAN AMERICAN CAPITAL CORPORATION ("GACC")
I, _________________, a _________________ of GACC (the "Seller"), hereby
certify as follows:
The Seller is a corporation duly organized and validly existing under the
laws of the State of Maryland.
Attached hereto as EXHIBIT I are true and correct copies of the Certificate
of Incorporation and By-Laws of the Seller, which Certificate of Incorporation
and By-Laws are on the date hereof, and have been at all times in full force and
effect.
To the best of my knowledge, no proceedings looking toward liquidation or
dissolution of the Seller are pending or contemplated.
Each person listed below is and has been the duly elected and qualified
officer or authorized signatory of the Seller and his genuine signature is set
forth opposite his name:
Name Office Signature
---- ------ ---------
Each person listed above who signed, either manually or by facsimile
signature, the Mortgage Loan Purchase Agreement, dated August 21, 1998 (the
"Purchase Agreement"), between the Seller and GMAC Commercial Mortgage
Securities, Inc. providing for the purchase by GMAC Commercial Mortgage
Securities, Inc. from the Seller of the Mortgage Loans, was, at the respective
times of such signing and delivery, duly authorized or appointed to execute such
documents in such capacity, and the signatures of such persons or facsimiles
thereof appearing on such documents are their genuine signatures.
Capitalized terms not otherwise defined herein have the meanings assigned
to them in the Purchase Agreement.
C-1
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this certificate as of
August _ __, 1998.
By:
-------------------------------
Name:
Title:
I, [name], [title], hereby certify that ________________ is a duly elected
or appointed, as the case may be, qualified and acting ______________ of the
Seller and that the signatures appearing above is his or her genuine signatures.
IN WITNESS WHEREOF, the undersigned has executed this certificate as of
August _ __, 1998.
By:
-------------------------------
Name:
Title:
C-2
<PAGE>
EXHIBIT C-2
FORM OF CERTIFICATE OF THE SELLER
CERTIFICATE OF GERMAN AMERICAN CAPITAL CORPORATION
In connection with the execution and delivery by German American Capital
Corporation (the "Seller") of, and the consummation of the transaction
contemplated by, that certain Mortgage Loan Purchase Agreement, dated as of
August 21, 1998 (the "Purchase Agreement"), between GMAC Commercial Mortgage
Securities, Inc. and the Seller, the Seller hereby certifies that (i) the
representations and warranties of the Seller in the Purchase Agreement are true
and correct in all material respects at and as of the date hereof with the same
effect as if made on the date hereof, and (ii) the Seller has, in all material
respects, complied with all the agreements and satisfied all the conditions on
its part to be performed or satisfied at or prior to the date hereof.
Capitalized terms not otherwise defined herein have the meanings assigned to
them in the Purchase Agreement.
Certified this ___th day of August, 1998.
GERMAN AMERICAN CAPITAL CORPORATION
By:
-------------------------------
Name:
Title:
By:
-------------------------------
Name:
Title:
C-3
<PAGE>
EXHIBIT C-3
FORM OF OPINION I OF COUNSEL TO THE SELLER
August [__], 1998
GMAC Commercial Mortgage Corporation
GMAC Commercial Mortgage Securities, Inc.
Lehman Brothers Inc.
Deutsche Bank Securities Inc.
Fitch IBCA Inc.
Moody's Investors Service, Inc.
Standard & Poor's Ratings Service
LaSalle National Bank
Re: GMAC Commercial Mortgage Securities, Inc.,
Mortgage Pass-Through Certificates, Series 1998-C2
--------------------------------------------------
Ladies and Gentlemen:
I am General Counsel to German American Capital Corporation (the "Seller").
In that capacity, I am familiar with the issuance of certain Mortgage
Pass-Through Certificates, Series 1998-C2 (the "Certificates"), evidencing
undivided interests in a trust fund (the "Trust Fund") consisting primarily of
certain mortgage loans (the "Mortgage Loans"), pursuant to a Pooling and
Servicing Agreement, dated as of August 1, 1998 (the "Pooling and Servicing
Agreement"), among GMAC Commercial Mortgage Securities, Inc. as depositor (the
"Depositor"), GMAC Commercial Mortgage Corporation ("GMACCM") as master servicer
and special servicer, LaSalle National Bank as trustee (the "Trustee") and ABN
AMRO Bank N.V. as fiscal agent.
Certain of the Mortgage Loans were purchased by the Depositor from German
American Capital Corporation ("GACC"), pursuant to, and for the consideration
described in, the Mortgage Loan Purchase Agreement, dated as of August 21, 1998
(the "GACC Mortgage Loan Purchase Agreement"), between the Depositor and GACC.
Certain of the Mortgage Loans were purchased by
C-4
<PAGE>
the Depositor from the GMACCM, pursuant to, and for the consideration described
in, the Mortgage Loan Purchase Agreement, dated as of August 21, 1998 (the
"GMACCM Mortgage Loan Purchase Agreement"), between the Depositor and GMACCM.
Certain of the Mortgage Loans were purchased by the Depositor from Lehman
Brothers Holdings, Inc. ("LB Holdings"), pursuant to, and for the consideration
described in, the Mortgage Loan Purchase Agreement, dated as of August 21, 1998
(the "LB Holdings Mortgage Loan Purchase Agreement") between the Depositor and
LB Holdings. Certain of the Mortgage Loans were purchased by the Depositor from
the Structured Asset Certificates With Enhanced Returns, Series 1998-ML Trust
("ML Trust") pursuant to, and for the consideration described in, the Mortgage
Loan Purchase Agreement, dated as of August 21, 1998 (the "ML Trust Mortgage
Loan Purchase Agreement") between the Depositor and the ML Trust. The GACC
Mortgage Loan Purchase Agreement is referred to herein as the "Agreement."
The Depositor has sold the Class X, Class A-1, Class A-2, Class B, Class C,
Class D and Class E Certificates (collectively, the "Publicly Offered
Certificates") to the underwriters pursuant to the Underwriting Agreement, dated
as of August 21, 1998 (the "Underwriting Agreement"), among the Depositor,
GMACCM and the underwriters named therein and sold the Class F, Class G, Class
H, Class J, Class K, Class L, Class M, Class N, Class R-I, Class R-II and Class
R-III Certificates (collectively, the "Privately Offered Certificates") to
Lehman Brothers Inc. as initial purchaser pursuant to the Certificate Purchase
Agreement, dated as of August 21, 1998 (the "Certificate Purchase Agreement"),
among the Depositor, GMACCM and the initial purchaser.
In connection with the transactions described above, the Seller and GMACCM
have entered into a Supplemental Agreement, dated as of August 21, 1998 (the
"Supplemental Agreement") and an Indemnification Agreement (the "Indemnification
Agreement"), dated August 21, 1998, in order to facilitate such transactions and
in contemplation of the assignment by the Purchaser to the Depositor of all of
its right, title and interest in and to the GACC Mortgage Loan Purchase
Agreement. The GACC Mortgage Loan Purchase Agreement, the Supplemental
Agreement and the Indemnification Agreement are referred to herein as the
"Agreements." Capitalized terms not defined herein have the meanings set forth
in the Pooling and Servicing Agreement and the Agreement. This opinion is
rendered pursuant to Section 8(e) of the GACC Trust Mortgage Loan Purchase
Agreement.
In connection with rendering this opinion letter, I have examined or have
caused persons under my supervision to examine the Agreements and such other
records and other documents as I have deemed necessary. I have further assumed
that there is not and will not be any other agreement that materially
supplements or otherwise modifies the agreements expressed in the Agreements.
As to matters of fact, I have examined and relied upon representations of
parties contained in the Agreements and, where I have deemed appropriate,
representations and certifications of officers of GMACCM, the Depositor, the
Seller, the Trustee, other transaction participants or public officials. I have
assumed the authenticity of all documents submitted to me as originals, the
genuineness of all signatures other than officers of the Seller and the
conformity to the originals of all documents submitted to me as copies. I have
assumed that all parties, except for
C-5
<PAGE>
the Seller, had the corporate power and authority to enter into and perform all
obligations thereunder. As to such parties, I also have assumed the due
authorization by all requisite corporate action, the due execution and delivery
and the enforceability of such documents. I have further assumed the conformity
of the Mortgage Loans and related documents to the requirements of the
Agreements.
In rendering this opinion letter, I do not express any opinion concerning
any law other than the law of the State of New York, the General Corporation Law
of the State of Delaware and the federal law of the United States, and I do not
express any opinion concerning the application of the "doing business" laws or
the securities laws of any jurisdiction other than the federal securities laws
of the United States. To the extent that any of the matters upon which I am
opining herein are governed by laws ("Other Laws") other than the laws
identified in the preceding sentence, I have assumed with your permission and
without independent verification or investigation as to the reasonableness of
such assumption, that such Other Laws and judicial interpretation thereof do not
vary in any respect material to this opinion from the corresponding laws of the
State of New York and judicial interpretations thereof. I do not express any
opinion on any issue not expressly addressed below.
Based upon the foregoing, I am of the opinion that:
1. The Seller is duly incorporated and is validly existing as a corporation in
good standing under the laws of the State of Maryland and has the requisite
power and authority, corporate or other, to own its properties and conduct
its business, as presently conducted by it, and to enter into and perform
its obligations under the Agreements.
2. The Agreements have been duly and validly authorized, executed and
delivered by the Seller and, upon due authorization, execution and delivery
by the other parties thereto, will constitute the valid, legal and binding
agreements of the Seller enforceable against the Seller in accordance with
their terms, except as enforceability may be limited by (i) bankruptcy,
insolvency, liquidation, receivership, moratorium, reorganization or other
similar laws affecting the rights of creditors, (ii) general principles of
equity, whether enforcement is sought in a proceeding in equity or at law,
and (iii) public policy considerations underlying the securities laws, to
the extent that such public policy considerations limit the enforceability
of the provisions of the Agreements which purport to provide
indemnification with respect to securities law violations.
3. No consent, approval, authorization or order or federal court or
governmental agency or body is required for the consummation by the Seller
of the transactions contemplated by the terms of the Agreements, except for
those consents, approvals, authorizations or orders which previously have
been obtained.
4. Neither the consummation of any of the transactions contemplated by, nor
the fulfillment by the Seller of any other of the terms of, the Agreements,
will result in a material breach of any
C-6
<PAGE>
term or provision of the charter or bylaws of the Seller or any state or
federal statute or regulation or conflict with, result in a material
breach, violation or acceleration of or constitute a material default under
the terms of any indenture or other material agreement or instrument to
which the Seller is a party or by which it is bound or any order or
regulation of any state or federal court, regulatory body, administrative
agency or governmental body having jurisdiction over the Seller.
This opinion letter is rendered for the sole benefit of each addressee
hereof, and no other person or entity is entitled to rely hereon without my
prior written consent. Copies of this opinion letter may not be furnished to
any other person or entity, nor may any portion of this opinion letter be
quoted, circulated or referred to in any other document without my prior written
consent.
Very truly yours,
C-7
<PAGE>
EXHIBIT D
FORM OF SUPPLEMENTAL AGREEMENT
D-1
<PAGE>
EXHIBIT E
FORM OF ASSIGNMENT
E-1
<PAGE>
Exhibit 99.3
EXECUTION COPY
MORTGAGE LOAN PURCHASE AGREEMENT
--------------------------------
This Mortgage Loan Purchase Agreement (this "Agreement"), is dated and
effective as of August 21, 1998, between Restructured Asset Certificates With
Enhanced Returns, Series 1998-ML Trust as seller (the "Seller"), of which
LaSalle National Bank is the trustee (in such capacity, the "Seller Trustee")
and GMAC Commercial Mortgage Securities, Inc. as purchaser (the "Purchaser").
The Seller desires to sell, assign, transfer and otherwise convey to the
Purchaser, and the Purchaser desires to purchase, subject to the terms and
conditions set forth below, the multifamily and commercial mortgage loans (the
"Mortgage Loans") identified on the schedule annexed hereto as EXHIBIT A (the
"Mortgage Loan Schedule").
It is expected that the Mortgage Loans will be transferred, together with
other multifamily and commercial mortgage loans to a trust fund (the "Trust
Fund") to be formed by the Purchaser, beneficial ownership of which will be
evidenced by a series of mortgage pass-through certificates (the
"Certificates"). Certain classes of the Certificates will be rated by Standard
& Poor's Ratings Services, Moody's Investors Service, Inc. and FITCH IBCA Inc.
(together, the "Rating Agencies"). Certain classes of the Certificates (the
"Registered Certificates") will be registered under the Securities Act of 1933,
as amended (the "Securities Act"). The Trust Fund will be created and the
Certificates will be issued pursuant to a pooling and servicing agreement to be
dated as of August 1, 1998 (the "Pooling and Servicing Agreement"), among the
Purchaser as depositor, GMAC Commercial Mortgage Corporation as master servicer
(in such capacity, the "Master Servicer") and special servicer (in such
capacity, the "Special Servicer"), LaSalle National Bank as trustee (in such
capacity, the "Trustee") and ABN AMRO Bank N.V. as fiscal agent. Capitalized
terms not otherwise defined herein have the meanings assigned to them in the
Pooling and Servicing Agreement as in effect on the Closing Date (as defined
below).
The Purchaser intends to sell certain of the Certificates to Lehman
Brothers Inc. and Deutsche Bank Securities Inc. (together, the "Underwriters")
pursuant to an underwriting agreement dated the date hereof (the "Underwriting
Agreement"). The Purchaser intends to sell the remaining Certificates (the
"Non-Registered Certificates") to Lehman Brothers Inc. (the "Initial
Purchaser"), pursuant to a certificate purchase agreement dated the date hereof
(the "Certificate Purchase Agreement").
Now, therefore, in consideration of the premises and the mutual agreements
set forth herein, the parties agree as follows:
<PAGE>
SECTION 1. AGREEMENT TO PURCHASE.
The Seller agrees to sell, assign, transfer and otherwise convey to the
Purchaser, and the Purchaser agrees to purchase, the Mortgage Loans. The
purchase and sale of the Mortgage Loans shall take place on August 27, 1998 or
such other date as shall be mutually acceptable to the parties hereto (the
"Closing Date"). The "Cut-off Date" with respect to any Mortgage Loan is the
Due Date for such Mortgage Loan in August 1998. As of the close of business on
their respective Cut-off Dates, the Mortgage Loans will have an aggregate
principal balance (the "Aggregate Cut-off Date Balance"), after application of
all payments of principal due thereon on or before such date, whether or not
received, of $653,901,929, subject to a variance of plus or minus 5%. The
purchase price for the Mortgage Loans shall be determined and paid to the Seller
in accordance with a term sheet (the "Allocation Agreement") that has been
agreed to by the Mortgage Loan Sellers and the Purchaser.
SECTION 2. CONVEYANCE OF MORTGAGE LOANS.
(a) Effective as of the Closing Date, subject only to receipt by the
Seller of the purchase price referred to in Section 1 hereof (exclusive of any
applicable holdback for transaction expenses in accordance with the Allocation
Agreement), the Seller does hereby sell, transfer, assign, set over and
otherwise convey to the Purchaser, without recourse, all the right, title and
interest of the Seller in and to the Mortgage Loans identified on the Mortgage
Loan Schedule as of such date, including all interest and principal received or
receivable by the Seller on or with respect to the Mortgage Loans after the
Cut-off Date for each Mortgage Loan, together with all of the Seller's right,
title and interest in and to the proceeds of any related title, hazard, or other
insurance policies and any escrow, reserve or other comparable accounts related
to the Mortgage Loans. The Purchaser shall be entitled to (and, to the extent
received by or on behalf of the Seller, the Seller shall deliver or cause to be
delivered to or at the direction of the Purchaser) all scheduled payments of
principal and interest due on the Mortgage Loans after the Cut-off Date for such
Mortgage Loan, and all other recoveries of principal and interest collected
thereon after such Cut-off Date. All scheduled payments of principal and
interest due thereon on or before the Cut-off Date for each Mortgage Loan and
collected after such Cut-off Date shall belong to the Seller.
(b) In connection with the Seller's assignment pursuant to subsection (a)
above, the Seller hereby agrees that, at least five (5) Business Days before the
Closing Date, it shall have delivered to and deposited with the Trustee, the
Mortgage File (as described on EXHIBIT B hereto) for each Mortgage Loan so
assigned to the extent that such Mortgage File was delivered to the Seller.
(c) All documents and records in the Seller's possession (or under its
control) relating to the Mortgage Loans that are not required to be a part of a
Mortgage File in accordance with EXHIBIT B (all such other documents and
records, as to any Mortgage Loan, the "Servicing File"), together with all
escrow payments, reserve funds and other comparable funds in the possession of
the Seller (or under its control) with respect to the Mortgage Loans, shall
(unless they are held by a sub-servicer that shall, as of the Closing Date,
begin acting on behalf of the Master Servicer
2
<PAGE>
pursuant to a written agreement between such parties) be delivered by the Seller
(or its agent) to the Purchaser (or its designee) no later than the Closing
Date.
(d) The Seller's records will reflect the transfer of the Mortgage Loans
to the Purchaser as a sale.
SECTION 3. EXAMINATION OF MORTGAGE LOAN FILES AND DUE DILIGENCE REVIEW.
The Seller shall reasonably cooperate with any examination of the Mortgage
Files that may be undertaken by or on behalf of the Purchaser. The fact that
the Purchaser has conducted or has failed to conduct any partial or complete
examination of the Mortgage Files and/or Servicing Files shall not affect the
Purchaser's right to pursue any remedy available in equity or at law for a
breach of the Seller's representations, warranties and covenants set forth in or
contemplated by Section 4.
SECTION 4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER.
(a) RESERVED.
(b) The Seller Trustee, as of the date hereof, hereby represents and
warrants to, and covenants with, the Purchaser that:
(i) The Seller Trustee is duly organized, validly existing and
in good standing under the laws of the United States, and is in compliance
with the laws of each State in which any Mortgaged Property is located to
the extent necessary to ensure the enforceability of each Mortgage Loan and
to perform its obligations under this Agreement.
(ii) The execution and delivery of this Agreement by the Seller
Trustee, and the performance and compliance with the terms of this
Agreement by the Seller Trustee, will not violate the Seller Trustee's
organizational documents or constitute a default (or an event which, with
notice or lapse of time, or both, would constitute a default) under, or
result in the breach of, any material agreement or other instrument to
which it is a party or which is applicable to it or any of its assets, in
each case which materially and adversely affect the ability of the Seller
Trustee to carry out the transactions contemplated by this Agreement.
(iii) The Seller Trustee has the full power and authority to enter
into and consummate all transactions contemplated by this Agreement, has
duly authorized the execution, delivery and performance of this Agreement,
and has duly executed and delivered this Agreement.
(iv) This Agreement, assuming due authorization, execution and
delivery by the Purchaser, constitutes a valid, legal and binding
obligation of the Seller Trustee, enforceable against the Seller Trustee in
accordance with the terms hereof, subject to (A) applicable bankruptcy,
insolvency, reorganization, moratorium and other laws affecting the
enforcement
3
<PAGE>
of creditors' rights generally, (B) general principles of equity,
regardless of whether such enforcement is considered in a proceeding in
equity or at law, and (C) public policy considerations underlying the
securities laws, to the extent that such public policy considerations limit
the enforceability of the provisions of this Agreement that purport to
provide indemnification for securities laws liabilities.
(v) The Seller Trustee is not in violation of, and its execution
and delivery of this Agreement and its performance and compliance with the
terms of this Agreement will not constitute a violation of, any law, any
order or decree of any court or arbiter, or any order, regulation or demand
of any federal, state or local governmental or regulatory authority, which
violation, in the Seller Trustee's good faith and reasonable judgment, is
likely to affect materially and adversely either the ability of the Seller
Trustee to perform its obligations under this Agreement or the financial
condition of the Seller Trustee.
(vi) No litigation is pending with regard to which Seller Trustee
has received service of process or, to the best of the Seller Trustee's
knowledge, threatened against the Seller Trustee or the Seller the outcome
of which, in the Seller Trustee's good faith and reasonable judgment, could
reasonably be expected to prohibit the Seller Trustee or the Seller from
entering into this Agreement or materially and adversely affect the ability
of the Seller Trustee or the Seller to perform its obligations under this
Agreement.
(vii) The Seller Trustee has not dealt with any broker, investment
banker, agent or other person, other than the Purchaser, the Underwriters,
the Initial Purchaser, and their respective affiliates, that may be
entitled to any commission or compensation in connection with the sale of
the Mortgage Loans by the Seller to the Purchaser or the consummation of
any of the other transactions contemplated hereby.
(viii) Neither the Seller Trustee nor anyone acting on its behalf
has (A) offered, pledged, sold, disposed of or otherwise transferred any
Mortgage Loan, any interest in any Mortgage Loan or any other similar
security to any person in any manner, (B) solicited any offer to buy or to
accept a pledge, disposition or other transfer of any Mortgage Loan, any
interest in any Mortgage Loan or any other similar security from any person
in any manner, (C) otherwise approached or negotiated with respect to any
Mortgage Loan, any interest in any Mortgage Loan or any other similar
security with any person in any manner, (D) made any general solicitation
by means of general advertising or in any other manner with respect to any
Mortgage Loan, any interest in any Mortgage Loan or any similar security,
or (E) taken any other action, that (in the case of any of the acts
described in clauses (A) through (E) above) would constitute or result in a
violation of the Securities Act or any state securities law relating to or
in connection with the issuance of the Mortgage Loans or require
registration or qualification pursuant to the Securities Act or any state
securities law of any Mortgage Loan. In addition, the Seller Trustee will
not act, nor has it authorized or will it authorize any person to act, in
any manner set forth in the foregoing sentence with respect to any of the
Certificates or interests therein.
4
<PAGE>
(ix) No consent, approval, authorization or order of,
registration or filing with, or notice to, any governmental authority or
court is required, under federal or state law (including, with respect to
any bulk sale laws), for the execution, delivery and performance of or
compliance by the Seller Trustee with this Agreement, or the consummation
by the Seller Trustee of any transaction contemplated hereby, other than
(1) the filing or recording of financing statements, instruments of
assignment and other similar documents necessary in connection with
Seller's sale of the Mortgage Loans to the Purchaser, (2) such consents,
approvals, authorizations, qualifications, registrations, filings or
notices as have been obtained or made and (3) where the lack of such
consent, approval, authorization, qualification, registration, filing or
notice would not have a material adverse effect on the performance by the
Seller Trustee under this Agreement.
(c) Upon discovery by any of the parties hereto of a breach of any of the
representations and warranties made pursuant to and set forth in subsection (b)
above which materially and adversely affects the interests of the Purchaser, the
party discovering such breach shall give prompt written notice to the other
party hereto.
SECTION 5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASER.
(a) The Purchaser, as of the date hereof, hereby represents and warrants
to, and covenants with, the Seller that:
(i) The Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of State of Delaware.
(ii) The execution and delivery of this Agreement by the
Purchaser, and the performance and compliance with the terms of this
Agreement by the Purchaser, will not violate the Purchaser's organizational
documents or constitute a default (or an event which, with notice or lapse
of time, or both, would constitute a default) under, or result in the
breach of, any material agreement or other instrument to which it is a
party or which is applicable to it or any of its assets.
(iii) The Purchaser has the full power and authority to enter into
and consummate all transactions contemplated by this Agreement, has duly
authorized the execution, delivery and performance of this Agreement, and
has duly executed and delivered this Agreement.
(iv) This Agreement, assuming due authorization, execution and
delivery by the Seller, constitutes a valid, legal and binding obligation
of the Purchaser, enforceable against the Purchaser in accordance with the
terms hereof, subject to (A) applicable bankruptcy, insolvency,
reorganization, moratorium and other laws affecting the enforcement of
creditors' rights generally, and (B) general principles of equity,
regardless of whether such enforcement is considered in a proceeding in
equity or at law.
5
<PAGE>
(v) The Purchaser is not in violation of, and its execution and
delivery of this Agreement and its performance and compliance with the
terms of this Agreement will not constitute a violation of, any law, any
order or decree of any court or arbiter, or any order, regulation or demand
of any federal, state or local governmental or regulatory authority, which
violation, in the Purchaser's good faith and reasonable judgment, is likely
to affect materially and adversely either the ability of the Purchaser to
perform its obligations under this Agreement or the financial condition of
the Purchaser.
(vi) No litigation is pending or, to the best of the Purchaser's
knowledge, threatened against the Purchaser which would prohibit the
Purchaser from entering into this Agreement or, in the Purchaser's good
faith and reasonable judgment, is likely to materially and adversely affect
either the ability of the Purchaser to perform its obligations under this
Agreement or the financial condition of the Purchaser.
(vii) The Purchaser has not dealt with any broker, investment
banker, agent or other person, other than the Seller, the Underwriters, the
Initial Purchaser and their respective affiliates, that may be entitled to
any commission or compensation in connection with the sale of the Mortgage
Loans or the consummation of any of the transactions contemplated hereby.
(viii) No consent, approval, authorization or order of,
registration or filing with, or notice to, any governmental authority or
court is required, under federal or state law, for the execution, delivery
and performance of or compliance by the Purchaser with this Agreement, or
the consummation by the Purchaser of any transaction contemplated hereby,
other than (1) such consents, approvals, authorizations, qualifications,
registrations, filings or notices as have been obtained or made and (2)
where the lack of such consent, approval, authorization, qualification,
registration, filing or notice would not have a material adverse effect on
the performance by the Purchaser under this Agreement.
(b) Upon discovery by any of the parties hereto of a breach of any of the
representations and warranties set forth above which materially and adversely
affects the interests of the Seller, the party discovering such breach shall
give prompt written notice to the other party hereto.
SECTION 6. RESERVED.
SECTION 7. CLOSING.
The closing of the sale of the Mortgage Loans (the "Closing") shall be held
at the offices of Mayer, Brown & Platt, 1675 Broadway, New York, New York 10019
at 10:00 a.m., New York City time, on the Closing Date.
The Closing shall be subject to each of the following conditions:
6
<PAGE>
(i) All of the representations and warranties of the Seller
Trustee specified herein shall be true and correct as of the Closing Date,
and the Aggregate Cut-off Date Balance shall be within the range permitted
by Section 1 of this Agreement;
(ii) All documents specified in Section 8 (the "Closing
Documents"), in such forms as are agreed upon and acceptable to the
Purchaser, shall be duly executed and delivered by all signatories as
required pursuant to the respective terms thereof;
(iii) The Seller shall have delivered and released to the Trustee,
the Purchaser or the Purchaser's designee, as the case may be, all
documents and funds required to be so delivered pursuant to Section 2;
(iv) The result of any examination of the Mortgage Files and
Servicing Files performed by or on behalf of the Purchaser pursuant to
Section 3 shall be satisfactory to the Purchaser in its sole determination;
(v) All other terms and conditions of this Agreement required to
be complied with on or before the Closing Date shall have been complied
with, and the Seller shall have the ability to comply with all terms and
conditions and perform all duties and obligations required to be complied
with or performed after the Closing Date; and
(vi) Neither the Underwriting Agreement nor the Certificate
Purchase Agreement shall have been terminated in accordance with its terms.
Both parties agree to use their best efforts to perform their respective
obligations hereunder in a manner that will enable the Purchaser to purchase the
Mortgage Loans on the Closing Date.
SECTION 8. CLOSING DOCUMENTS.
The Closing Documents shall consist of the following:
(a) This Agreement duly executed and delivered by the Purchaser and the
Seller;
(b) An Officer's Certificate substantially in the form of Exhibit C-1
hereto, executed by the Secretary or an assistant secretary of the Seller
Trustee, and dated the Closing Date, and upon which the Purchaser and each
Underwriter and the Initial Purchaser may rely, attaching thereto as exhibits
the organizational documents of the Seller;
(c) A certificate of the Seller substantially in the form of Exhibit C-2
hereto, executed by an executive officer or authorized signatory of the Seller
and dated the Closing Date, and upon which the Purchaser and each Underwriter
and each Initial Purchaser may rely;
7
<PAGE>
(d) Written opinions of counsel for the Seller Trustee and counsel for the
Seller, in such form and substance and subject to such reasonable assumptions
and qualifications as may be requested by counsel for the Seller and acceptable
to counsel for the Purchaser, dated the Closing Date and addressed to the
Purchaser and each Underwriter and each Initial Purchaser;
(e) The Supplemental Agreement, substantially in the form of Exhibit D
hereto, dated as of August 21, 1998, between GMAC Commercial Mortgage
Corporation ("GMACCM" and the Seller, duly executed and delivered by GMACCM and
the Seller;
(f) The Assignment Agreement, substantially in the form of Exhibit E
hereto, dated August 21, 1998, between the Seller and the Purchaser, duly
executed and delivered by the Seller and the Purchaser;
(g) The Indemnification Agreement, substantially in the form of Exhibit F
hereto, dated as of August 21, 1998, between GMACCM and Lehman Ali, Inc., duly
executed and delivered by GMACCM and Lehman Ali, Inc.; and
(h) Such further certificates, opinions and documents as the Purchaser may
reasonably request.
SECTION 9. RESERVED.
SECTION 10. RESERVED.
SECTION 11. NOTICES.
All demands, notices and communications hereunder shall be in writing and
shall be deemed to have been duly given if personally delivered to or mailed, by
registered mail, postage prepaid, by overnight mail or courier service, or
transmitted by facsimile and confirmed by a similar mailed writing, if to the
Purchaser, addressed to GMAC Commercial Mortgage Securities, Inc. at 650 Dresher
Road, P.O. Box 1015, Horsham, Pennsylvania 19044-8015, Attention: Structured
Finance Manager, facsimile no. (215) 328-1775, with a copy to the General
Counsel, GMAC Commercial Mortgage Corporation, or such other address or
facsimile number as may hereafter be furnished to the Seller in writing by the
Purchaser; and if to the Seller, addressed to Lehman ALI Inc. as Sponsor and
LaSalle National Bank as Trustee for Restructured Asset Certificates With
Enhanced Returns, Series 1998-ML Trust, at 135 South LaSalle Street, Suite 1625,
Chicago, Illinois 60674-4107 Attention: RACERS Series 1998-ML, facsimile no.
(312) 904-2084, or to such other address or facsimile number as the Seller may
designate in writing to the Purchaser.
SECTION 12. RESERVED.
SECTION 13. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY.
8
<PAGE>
All representations, warranties and agreements contained in this Agreement,
incorporated herein by reference or contained in the certificates of the Seller
submitted pursuant hereto, shall remain operative and in full force and effect
and shall survive delivery of the Mortgage Loans by the Seller to the Purchaser
or its designee.
SECTION 14. SEVERABILITY OF PROVISIONS.
Any part, provision, representation, warranty or covenant of this Agreement
that is prohibited or which is held to be void or unenforceable shall be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any part, provision,
representation, warranty or covenant of this Agreement that is prohibited or
unenforceable or is held to be void or unenforceable in any particular
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
particular jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction. To the extent permitted by applicable law,
the parties hereto waive any provision of law which prohibits or renders void or
unenforceable any provision hereof.
SECTION 15. COUNTERPARTS.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but all of which together shall constitute
one and the same instrument.
SECTION 16. GOVERNING LAW.
THIS AGREEMENT AND THE RIGHTS, DUTIES, OBLIGATIONS AND RESPONSIBILITIES OF
THE PARTIES HERETO SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS AND DECISIONS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS
OF LAW PRINCIPLES EXCEPT THAT THE PARTIES HERETO INTEND THAT THE PROVISIONS OF
SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW SHALL APPLY TO THIS
AGREEMENT.
SECTION 17. FURTHER ASSURANCES.
The Seller and the Purchaser agree to execute and deliver such instruments
and take such further actions as the other party may, from time to time,
reasonably request in order to effectuate the purposes and to carry out the
terms of this Agreement.
SECTION 18. SUCCESSORS AND ASSIGNS.
The rights and obligations of the Seller under this Agreement shall not be
assigned by the Seller without the prior written consent of the Purchaser,
except that any person into which the Seller
9
<PAGE>
may be merged or consolidated, or any corporation or other entity resulting from
any merger, conversion or consolidation to which the Seller is a party, or any
person succeeding to all or substantially all of the business of the Seller,
shall be the successor to the Seller hereunder. The Purchaser has the right to
assign its interest under this Agreement, in whole or in part, as may be
required to effect the purposes of the Pooling and Servicing Agreement, and the
assignee shall, to the extent of such assignment, succeed to the rights and
obligations hereunder of the Purchaser. Subject to the foregoing, this
Agreement shall bind and inure to the benefit of and be enforceable by the
Seller and the Purchaser, and their permitted successors and assigns.
SECTION 19. AMENDMENTS.
No term or provision of this Agreement may be amended, waived, modified or
in any way altered, unless such amendment, waiver, modification or alteration is
in writing and signed by a duly authorized officer of the party against whom
such amendment, waiver, modification or alteration is sought to be enforced.
10
<PAGE>
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their names to
be signed hereto by their respective duly authorized officers as of the date
first above written.
RESTRUCTURED ASSET CERTIFICATES WITH ENHANCED
RETURNS, SERIES 1998-ML TRUST
By: LaSalle National Bank, not in its
individual capacity, but solely as
trustee under the Trust Agreement, dated
as of June 26, 1998, as amended and
restated, between Lehman Ali Inc., as
sponsor, and LaSalle National Bank, as
trustee.
By: /s/ Michael Evans
-------------------------------------
Name: Michael Evans
-----------------------------------
Title: First Vice President
----------------------------------
GMAC COMMERCIAL MORTGAGE SECURITIES,
INC.
By: /s/ David Lazarus
-------------------------------------
Name: David Lazarus
-----------------------------------
Title: Vice President
----------------------------------
S-1
<PAGE>
EXHIBIT A
MORTGAGE LOAN SCHEDULE
A-1
<PAGE>
EXHIBIT B
THE MORTGAGE FILE
The "Mortgage File" for any Mortgage Loan shall collectively consist of the
following documents:
(i) the original Mortgage Note, endorsed by the most
recent endorsee prior to the Trustee or, if none,
by the originator, without recourse, either in
blank or to the order of the Trustee in the
following form: "Pay to the order of LaSalle
National Bank, as trustee for the registered
holders of GMAC Commercial Mortgage Securities,
Inc., Mortgage Pass-Through Certificates, Series
1998-C2, without recourse";
(ii) the original or a copy of the Mortgage and, if
applicable, the originals or copies of any
intervening assignments thereof showing a complete
chain of assignment from the originator of the
Mortgage Loan to the most recent assignee of
record thereof prior to the Trustee, if any, in
each case with evidence of recording indicated
thereon;
(iii) an original assignment of the Mortgage, in
recordable form, executed by the most recent
assignee of record thereof prior to the Trustee
or, if none, by the originator, either in blank or
in favor of the Trustee (in such capacity);
(iv) the original or a copy of any related Assignment
of Leases (if such item is a document separate
from the Mortgage) and, if applicable, the
originals or copies of any intervening assignments
thereof showing a complete chain of assignment
from the originator of the Mortgage Loan to the
most recent assignee of record thereof prior to
the Trustee, if any, in each case with evidence of
recording thereon;
(v) an original assignment of any related Assignment
of Leases (if such item is a document separate
from the Mortgage), in recordable form, executed
by the most recent assignee of record thereof
prior to the Trustee or, if none, by the
originator, either in blank or in favor of the
Trustee (in such capacity), which assignment may
be included as part of the corresponding
assignment of Mortgage referred to in clause (iii)
above;
(vi) an original or copy of any related Security
Agreement (if such item is a document separate
from the Mortgage) and, if applicable, the
B-1
<PAGE>
originals or copies of any intervening assignments
thereof showing a complete chain of assignment
from the originator of the Mortgage Loan to the
most recent assignee of record thereof prior to
the Trustee, if any;
(vii) an original assignment of any related Security
Agreement (if such item is a document separate
from the Mortgage) executed by the most recent
assignee of record thereof prior to the Trustee
or, if none, by the originator, either in blank or
in favor of the Trustee (in such capacity), which
assignment may be included as part of the
corresponding assignment of Mortgage referred to
in clause (iii) above;
(viii) originals or copies of all assumption,
modification, written assurance and substitution
agreements, with evidence of recording thereon if
appropriate, in those instances where the terms or
provisions of the Mortgage, Mortgage Note or any
related security document have been modified or
the Mortgage Loan has been assumed;
(ix) the original or a copy of the lender's title
insurance policy issued as of the date of the
origination of the Mortgage Loan, together with
all endorsements or riders (or copies thereof)
that were issued with or subsequent to the
issuance of such policy, insuring the priority of
the Mortgage as a first lien on the Mortgaged
Property;
(x) the original or a copy of any guaranty of the
obligations of the Mortgagor under the Mortgage
Loan together with (A) if applicable, the original
or copies of any intervening assignments of such
guaranty showing a complete chain of assignment
from the originator of the Mortgage Loan to the
most recent assignee thereof prior to the Trustee,
if any, and (B) an original assignment of such
guaranty executed by the most recent assignee
thereof prior to the Trustee or, if none, by the
originator;
(xi) (A) file or certified copies of any UCC financing
statements and continuation statements which were
filed in order to perfect (and maintain the
perfection of) any security interest held by the
originator of the Mortgage Loan (and each assignee
of record prior to the Trustee) in and to the
personalty of the mortgagor at the Mortgaged
Property (in each case with evidence of filing
thereon) and which were in the possession of the
Seller (or its agent) at the time the Mortgage
Files were delivered to the Trustee and (B) if any
such security interest is perfected and the
earlier UCC financing statements
B-2
<PAGE>
and continuation statements were in the possession
of the Seller, a UCC financing statement executed
by the most recent assignee of record prior to the
Trustee or, if none, by the originator, evidencing
the transfer of such security interest, either in
blank or in favor of the Trustee;
(xii) the original or a copy of the power of attorney
(with evidence of recording thereon, if
appropriate) granted by the Mortgagor if the
Mortgage, Mortgage Note or other document or
instrument referred to above was not signed by the
Mortgagor; and
(xiii) if the Mortgagor has a leasehold interest in the
related Mortgaged Property, the original ground
lease or a copy thereof;
provided that whenever the term "Mortgage File" is used to refer to documents
actually received by the Purchaser or the Trustee, such term shall not be deemed
to include such documents and instruments required to be included therein unless
they are actually so received. The original assignments referred to in clauses
(iii), (v), (vii) and (x)(B), may be in the form of one or more instruments in
recordable form in any applicable filing offices.
B-3
<PAGE>
EXHIBIT C-1
FORM OF CERTIFICATE OF AN OFFICER OF
THE SELLER TRUSTEE
CERTIFICATE OF LASALLE NATIONAL BANK
I, Anne M. Geraghty, a Trust Administrator of LaSalle National Bank, not in
its individual capacity but solely as trustee (in such capacity, the "Seller
Trustee") for the Restructured Asset Certificates With Enhanced Returns, Series
1998-ML Trust (the "Seller"), hereby certify as follows:
The Seller Trustee is duly organized and validly existing under the laws of
the United States.
Attached hereto as EXHIBIT I are true and correct copies of the Amended and
Restated Trust Agreement of the Seller, which Certificate of Incorporation and
By-Laws are on the date hereof, and have been at all times in full force and
effect.
To the best of my knowledge, no proceedings looking toward liquidation or
dissolution of the Seller are pending or contemplated.
Each person listed below is and has been the duly elected and qualified
officer or authorized signatory of LaSalle National Bank, in its capacity as
Seller Trustee of the Seller, and his genuine signature is set forth opposite
his name:
Name Office Signature
---- ------ ---------
Michael B. Evans First Vice President _________________________
Each person listed above who signed, either manually or by facsimile
signature, the Mortgage Loan Purchase Agreement, dated August 21, 1998 (the
"Purchase Agreement"), between the Seller and GMAC Commercial Mortgage
Securities, Inc. providing for the purchase by GMAC Commercial Mortgage
Securities, Inc. from the Seller of the Mortgage Loans, was, at the respective
times of such signing and delivery, duly authorized or appointed to execute such
documents in such capacity, and the signatures of such persons or facsimiles
thereof appearing on such documents are their genuine signatures.
Capitalized terms not otherwise defined herein have the meanings assigned
to them in the Purchase Agreement.
C-1
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this certificate as of
August __, 1998.
By:
-------------------------------
Name:
Title:
I, ________________________, hereby certify that ________________ is a duly
elected or appointed, as the case may be, qualified and acting ______________ of
LaSalle National Bank and that the signatures appearing above is his or her
genuine signatures.
IN WITNESS WHEREOF, the undersigned has executed this certificate as of
August _ __, 1998.
By:
-------------------------------
Name:
Title:
C-2
<PAGE>
EXHIBIT C-2
FORM OF CERTIFICATE OF THE SELLER TRUSTEE
CERTIFICATE OF LASALLE NATIONAL BANK
In connection with the execution and delivery by Restructured Asset
Certificates With Enhanced Returns, Series 1998-ML Trust (the "Seller") of, and
the consummation of the transaction contemplated by, that certain Mortgage Loan
Purchase Agreement, dated as of August 21, 1998 (the "Purchase Agreement"),
between GMAC Commercial Mortgage Securities, Inc. and the Seller, the Seller
Trustee hereby certifies that (i) the representations and warranties of the
Seller Trustee in the Purchase Agreement are true and correct in all material
respects at and as of the date hereof with the same effect as if made on the
date hereof, and (ii) the Seller has, in all material respects, complied with
all the agreements and satisfied all the conditions on its part to be performed
or satisfied at or prior to the date hereof. Capitalized terms not otherwise
defined herein have the meanings assigned to them in the Purchase Agreement.
Certified this ___th day of August, 1998.
By: LASALLE NATIONAL BANK, not in its
individual capacity, but solely as
trustee of the Restructured Asset
Certificates With Enhanced Returns,
Series 1998-ML Trust.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
C-3
<PAGE>
EXHIBIT D
FORM OF SUPPLEMENTAL AGREEMENT
D-1
<PAGE>
EXHIBIT E
FORM OF ASSIGNMENT
E-1
<PAGE>
EXHIBIT F
FORM OF INDEMNIFICATION AGREEMENT
F-1
<PAGE>
Exhibit 99.4
EXECUTION COPY
MORTGAGE LOAN PURCHASE AGREEMENT
--------------------------------
This Mortgage Loan Purchase Agreement (this "Agreement"), is dated and
effective as of August 21, 1998, between Lehman Brothers Holdings Inc., doing
business as Lehman Capital, a Division of Lehman Brothers Holdings Inc., as
seller (the "Seller") and GMAC Commercial Mortgage Securities, Inc. as purchaser
(the "Purchaser").
The Seller desires to sell, assign, transfer and otherwise convey to the
Purchaser, and the Purchaser desires to purchase, subject to the terms and
conditions set forth below, the multifamily and commercial mortgage loans or
interests therein (the "Mortgage Loans") identified on the schedule annexed
hereto as EXHIBIT A (the "Mortgage Loan Schedule"). It is hereby acknowledged
and agreed that certain of the Mortgage Loans (the "Pass Through Loans") are, in
each such case, subject to a pass through trust agreement (a "Pass Through Trust
Agreement") and represented by a pass-through certificate (a "Loan
Certificate").
It is expected that the Mortgage Loans will be transferred, together with
other multifamily and commercial mortgage loans to a trust fund (the "Trust
Fund") to be formed by the Purchaser, beneficial ownership of which will be
evidenced by a series of mortgage pass-through certificates (the
"Certificates"). Certain classes of the Certificates will be rated by Standard
& Poor's Ratings Services, Moody's Investors Service, Inc. and FITCH IBCA Inc.
(together, the "Rating Agencies"). Certain classes of the Certificates (the
"Registered Certificates") will be registered under the Securities Act of 1933,
as amended (the "Securities Act"). The Trust Fund will be created and the
Certificates will be issued pursuant to a pooling and servicing agreement to be
dated as of August 1, 1998 (the "Pooling and Servicing Agreement"), among the
Purchaser as depositor, GMAC Commercial Mortgage Corporation as master servicer
(in such capacity, the "Master Servicer") and special servicer (in such
capacity, the "Special Servicer"), LaSalle National Bank as trustee (in such
capacity, the "Trustee") and ABN AMRO Bank N.V. as fiscal agent. Capitalized
terms not otherwise defined herein have the meanings assigned to them in the
Pooling and Servicing Agreement as in effect on the Closing Date.
The Purchaser intends to sell certain of the Certificates to Lehman
Brothers Inc. and Deutsche Bank Securities Inc. (together, the "Underwriters")
pursuant to an underwriting agreement dated the date hereof (the "Underwriting
Agreement"). The Purchaser intends to sell the remaining Certificates (the
"Non-Registered Certificates") to Lehman Brothers Inc. (the "Initial
Purchaser"), pursuant to a certificate purchase agreement dated the date hereof
(the "Certificate Purchase Agreement").
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Now, therefore, in consideration of the premises and the mutual agreements
set forth herein, the parties agree as follows:
SECTION 1. AGREEMENT TO PURCHASE.
The Seller agrees to sell, assign, transfer and otherwise convey to the
Purchaser, and the Purchaser agrees to purchase, the Mortgage Loans. The
purchase and sale of the Mortgage Loans shall take place on August 27, 1998 or
such other date as shall be mutually acceptable to the parties hereto (the
"Closing Date"). The "Cut-off Date" with respect to any Mortgage Loan is the
Due Date for such Mortgage Loan in August 1998. As of the close of business on
their respective Cut-off Dates, the Mortgage Loans will have an aggregate
principal balance (the "Aggregate Cut-off Date Balance"), after application of
all payments of principal due thereon on or before such date, whether or not
received, of $1,367,070,323, subject to a variance of plus or minus 5%. The
purchase price for the Mortgage Loans shall be determined and paid to the Seller
in accordance with a term sheet (the "Allocation Agreement") that has been
agreed to by the Mortgage Loan Sellers and the Purchaser.
SECTION 2. CONVEYANCE OF MORTGAGE LOANS.
(a) Effective as of the Closing Date, subject only to receipt by the
Seller of the purchase price referred to in Section 1 hereof (exclusive of any
applicable holdback for transaction expenses in accordance with the Allocation
Agreement), the Seller does hereby sell, transfer, assign, set over and
otherwise convey to the Purchaser, without recourse, all the right, title and
interest of the Seller in and to the Mortgage Loans identified on the Mortgage
Loan Schedule as of such date, including all interest and principal received or
receivable by the Seller on or with respect to each Mortgage Loan after the
Cut-Off Date for such Mortgage Loan, together with all of the Seller's right,
title and interest in and to the proceeds of any related title, hazard, or other
insurance policies and any escrow, reserve or other comparable accounts related
to each Mortgage Loan. The Purchaser shall be entitled to (and, to the extent
received by or on behalf of the Seller, the Seller shall deliver or cause to be
delivered to or at the direction of the Purchaser) all scheduled payments of
principal and interest due on each Mortgage Loan after the Cut-Off Date for such
Mortgage Loan, and all other recoveries of principal and interest collected
thereon after such Cut-off Date. All scheduled payments of principal and
interest due on each Mortgage Loan on or before the Cut-off Date for such
Mortgage Loan and collected after such Cut-off Date shall belong to the Seller.
(b) In connection with the Seller's assignment pursuant to subsection (a)
above, the Seller hereby agrees that, at least five (5) Business Days before the
Closing Date, it shall have delivered to and deposited with the Trustee, the
Mortgage File (as described on EXHIBIT B hereto) for each Mortgage Loan so
assigned. It is further acknowledged and agreed by the Seller that the
Purchaser intends to cause the Trustee to perform a limited review of such
Mortgage Files to enable the Trustee to confirm to the Purchaser on or before
the Closing Date that the Mortgage Note referred to in clause (i) of EXHIBIT B
has been delivered by the Seller with respect to each such Mortgage File. In
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the event Seller fails to so deliver each such Mortgage File to the Trustee, the
Purchaser and its successors and assigns shall be entitled to pursue any rights
or remedies in respect of such failure as may be available under applicable law.
If the Seller cannot deliver, or cause to be delivered as to any Mortgage Loan,
the original Mortgage Note, the Seller shall deliver a copy or duplicate
original of such Mortgage Note, together with an affidavit certifying that the
original thereof has been lost or destroyed. If the Seller cannot deliver, or
cause to be delivered, as to any Mortgage Loan, the original or a copy of any of
the documents and/or instruments referred to in subclauses (ii), (iv), (viii),
(xi)(A) and (xii) of clause (a) of EXHIBIT B, with evidence of recording
thereon, solely because of a delay caused by the public recording or filing
office where such document or instrument has been delivered for recordation or
filing, or because such original recorded document has been lost or returned
from the recording or filing office and subsequently lost, as the case may be,
the delivery requirements of this Section 2(b) shall be deemed to have been
satisfied as to such missing item, and such missing item shall be deemed to have
been included in the related Mortgage File, provided that a copy of such
document or instrument (without evidence of recording or filing thereon, but
certified (which certificate may relate to multiple documents and/or
instruments) by the Seller to be a true and complete copy of the original
thereof submitted for recording or filing, as the case may be) has been
delivered to the Trustee, and either the original of such missing document or
instrument, or a copy thereof, with evidence of recording or filing, as the case
may be, thereon, is delivered to or at the direction of the Purchaser (or any
subsequent owner of the affected Mortgage Loan, including without limitation the
Trustee) within 180 days of the Closing Date (or within such longer period after
the Closing Date as the Purchaser (or such subsequent owner) may consent to,
which consent shall not be unreasonably withheld so long as the Seller has
provided the Purchaser (or such subsequent owner) with evidence of such
recording or filing, as the case may be, or has certified to the Purchaser (or
such subsequent owner) as to the occurrence of such recording or filing, as the
case may be, and is, as certified to the Purchaser (or such subsequent owner) no
less often than quarterly, in good faith attempting to obtain from the
appropriate county recorder's or filing office such original or copy). If the
Seller cannot deliver, or cause to be delivered, as to any Mortgage Loan, the
original or a copy of the related lender's title insurance policy referred to in
subclause (ix) of subclause (a) of EXHIBIT B solely because such policy has not
yet been issued, the delivery requirements of this Section 2(b) shall be deemed
to be satisfied as to such missing item, and such missing item shall be deemed
to have been included in the related Mortgage File, provided that the Seller has
delivered to the Trustee a commitment for title insurance "marked-up" at the
closing of such Mortgage Loan, and the Seller shall deliver to or at the
direction of the Purchaser (or any subsequent owner of the affected Mortgage
Loan, including without limitation the Trustee), promptly following the receipt
thereof, the original related lender's title insurance policy (or a copy
thereof). In addition, notwithstanding anything to the contrary contained
herein, if there exists with respect to any group of related
cross-collateralized Mortgage Loans only one original of any document referred
to in clause (a) of EXHIBIT B covering all the Mortgage Loans in such group,
then the inclusion of the original of such document in the Mortgage File for any
of the Mortgage Loans in such group shall be deemed an inclusion of such
original in the Mortgage File for each such Mortgage Loan. Also notwithstanding
the foregoing, the Mortgage File for any Pass Through Loan will consist solely
of the related Loan Certificate; and, if more than one Pass Through Loan is
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subject to the same Pass Through Trust Agreement, the Seller may, to the extent
appropriate, deliver to the Trustee one Loan Certificate covering all such
Mortgage Loans. On the Closing Date, upon notification from the Seller that the
purchase price referred to in Section 1 (exclusive of any applicable holdback
for transaction expenses in accordance with the Allocation Agreement) has been
received by the Seller, the Trustee shall be authorized to release to the
Purchaser or its designee all of the Mortgage Files in the Trustee's possession
relating to the Mortgage Loans.
(c) As to each Mortgage Loan, the Seller shall be responsible for all
costs associated with the recording or filing, as the case may be, of each
assignment referred to in clauses (a) (iii) and (a) (v) of EXHIBIT B and each
UCC-2 and UCC-3, if any, referred to in clause (a) (xi)(B) of EXHIBIT B and the
re-registration or assignment of the Loan Certificates, if any, referred to in
clause (b) of EXHIBIT B; provided that the Seller shall not be responsible for
actually recording, filing or re-registering any such document or instrument.
If any such document or instrument is lost or returned unrecorded, unfiled or
not re-registered, as the case may be, because of a defect therein, the Seller
shall promptly prepare or cause the preparation of a substitute therefor or cure
or cause the curing of such defect, as the case may be, and shall thereafter
deliver the substitute or corrected document to or at the direction of the
Purchaser (or any subsequent owner of the affected Mortgage Loan, including
without limitation the Trustee) for recording, filing or re-registration, as
appropriate, at the Seller's expense.
(d) All documents and records in the Seller's possession (or under its
control) relating to the Mortgage Loans that are not required to be a part of a
Mortgage File in accordance with EXHIBIT B (all such other documents and
records, as to any Mortgage Loan, the "Servicing File"), together with all
escrow payments, reserve funds and other comparable funds in the possession of
the Seller (or under its control) with respect to the Mortgage Loans, shall
(unless they are held by a sub-servicer that shall, as of the Closing Date,
begin acting on behalf of the Master Servicer pursuant to a written agreement
between such parties) be delivered by the Seller (or its agent) to the Purchaser
(or its designee) no later than the Closing Date. If a sub-servicer shall, as
of the Closing Date, begin acting on behalf of the Master Servicer with respect
to any Mortgage Loan pursuant to a written agreement between such parties, the
Seller shall deliver a copy of the related Servicing File to the Master
Servicer.
(e) The Seller's records will reflect the transfer of the Mortgage Loans
to the Purchaser as a sale.
(f) The Seller further hereby covenants and agrees that with respect to
each of the Pass Through Loans, the Seller will promptly, but no later than 90
days after the Closing Date, take all reasonable steps necessary to amend the
related Pass Through Trust Agreement to effect a direct ownership interest in
each such Mortgage Loans by the Trustee and to dissolve the Pass Through Trust
Agreement in its entirety. In the event any Pass Through Agreement is not so
amended, the Seller hereby agrees and covenants to take all reasonable steps
necessary to modify such Pass Through Agreement to the fullest extent reasonably
practicable to effectuate the servicing and administration by the
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Trustee and the Master Servicer of each of the Pass Through Loans in a manner
similar to the Mortgage Loans not subject to any Pass Through Agreement.
SECTION 3. EXAMINATION OF MORTGAGE LOAN FILES AND DUE DILIGENCE REVIEW.
The Seller shall reasonably cooperate with any examination of the Mortgage
Files and Servicing Files that may be undertaken by or on behalf of the
Purchaser. The fact that the Purchaser has conducted or has failed to conduct
any partial or complete examination of the Mortgage Files and/or Servicing Files
shall not affect the Purchaser's right to pursue any remedy available in equity
or at law for a breach of the Seller's representations, warranties and covenants
set forth in or contemplated by Section 4.
SECTION 4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER.
(a) The Seller hereby makes, as of the Closing Date (or as of such other
date specifically provided in the particular representation or warranty), to and
for the benefit of the Purchaser, and its successors and assigns (including,
without limitation, the Trustee and the holders of the Certificates), each of
the representations and warranties set forth in EXHIBIT C, with such changes or
modifications as may be permitted or required by the Rating Agencies.
(b) In addition, the Seller, as of the date hereof, hereby represents and
warrants to, and covenants with, the Purchaser that:
(i) The Seller is a corporation, duly organized, validly existing
and in good standing under the laws of the State of Delaware, and is in
compliance with the laws of each State in which any Mortgaged Property is
located to the extent necessary to ensure the enforceability of each
Mortgage Loan and to perform its obligations under this Agreement.
(ii) The execution and delivery of this Agreement by the Seller, and
the performance and compliance with the terms of this Agreement by the
Seller, will not violate the Seller's organizational documents or
constitute a default (or an event which, with notice or lapse of time, or
both, would constitute a default) under, or result in the breach of, any
material agreement or other instrument to which it is a party or which is
applicable to it or any of its assets, in each case which materially and
adversely affect the ability of the Seller to carry out the transactions
contemplated by this Agreement.
(iii) The Seller has the full power and authority to enter into and
consummate all transactions contemplated by this Agreement, has duly
authorized the execution, delivery and performance of this Agreement, and
has duly executed and delivered this Agreement.
(iv) This Agreement, assuming due authorization, execution and
delivery by the Purchaser, constitutes a valid, legal and binding
obligation of the Seller, enforceable against
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the Seller in accordance with the terms hereof, subject to (A) applicable
bankruptcy, insolvency, reorganization, moratorium and other laws affecting
the enforcement of creditors' rights generally, (B) general principles of
equity, regardless of whether such enforcement is considered in a
proceeding in equity or at law, and (C) public policy considerations
underlying the securities laws, to the extent that such public policy
considerations limit the enforceability of the provisions of this Agreement
that purport to provide indemnification for securities laws liabilities.
(v) The Seller is not in violation of, and its execution and
delivery of this Agreement and its performance and compliance with the
terms of this Agreement will not constitute a violation of, any law, any
order or decree of any court or arbiter, or any order, regulation or demand
of any federal, state or local governmental or regulatory authority, which
violation, in the Seller's good faith and reasonable judgment, is likely to
affect materially and adversely either the ability of the Seller to perform
its obligations under this Agreement or the financial condition of the
Seller.
(vi) No litigation is pending with regard to which Seller has
received service of process or, to the best of the Seller's knowledge,
threatened against the Seller the outcome of which, in the Seller's good
faith and reasonable judgment, could reasonably be expected to prohibit the
Seller from entering into this Agreement or materially and adversely affect
the ability of the Seller to perform its obligations under this Agreement.
(vii) The Seller has not dealt with any broker, investment banker,
agent or other person, other than the Purchaser, the Underwriters, the
Initial Purchaser, and their respective affiliates, that may be entitled to
any commission or compensation in connection with the sale of the Mortgage
Loans or the consummation of any of the other transactions contemplated
hereby.
(viii) Neither the Seller nor anyone acting on its behalf has (A)
offered, pledged, sold, disposed of or otherwise transferred any
Certificate, any interest in any Certificate or any other similar security
to any person in any manner, (B) solicited any offer to buy or to accept a
pledge, disposition or other transfer of any Certificate, any interest in
any Certificate or any other similar security from any person in any
manner, (C) otherwise approached or negotiated with respect to any
Certificate, any interest in any Certificate or any other similar security
with any person in any manner, (D) made any general solicitation by means
of general advertising or in any other manner with respect to any
Certificate, any interest in any Certificate or any similar security, or
(E) taken any other action, that (in the case of any of the acts described
in clauses (A) through (E) above) would constitute or result in a violation
of the Securities Act or any state securities law relating to or in
connection with the issuance of the Certificates or require registration or
qualification pursuant to the Securities Act or any state securities law of
any Certificate not otherwise intended to be a Registered Certificate. In
addition, the Seller will not act, nor has it authorized or will it
authorize any person to act,
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in any manner set forth in the foregoing sentence with respect to any of
the Certificates or interests therein. For purposes of this paragraph
4(b)(viii), the term "similar security" shall be deemed to include, without
limitation, any security evidencing or, upon issuance, that would have
evidenced an interest in the Mortgage Loans or any substantial number
thereof.
(ix) Insofar as it relates to the Mortgage Loans, the information
set forth on pages A-1-21 through A-1-28, inclusive, of Annex A to the
Prospectus Supplement (as defined in Section 9) (the "Loan Detail") and, to
the extent consistent therewith, the information set forth on the diskette
attached to the Prospectus Supplement and the accompanying prospectus (the
"Diskette"), is true and correct in all material respects. Insofar as it
relates to the Mortgage Loans and/or the Seller and does not represent a
restatement or aggregation of the information on the Loan Detail, the
information set forth in the Prospectus Supplement and the Memorandum (as
defined in Section 9) under the headings "Summary of the Prospectus
Supplement--The Mortgage Asset Pool", "Risk Factors--The Mortgage Loans"
and "Description of the Mortgage Asset Pool", set forth on Annex A to the
Prospectus Supplement and (to the extent it contains information consistent
with that on such Annex A) set forth on the Diskette, does not contain any
untrue statement of a material fact or (in the case of the Memorandum, when
read together with the other information specified therein as being
available for review by investors) omit to state any material fact
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading.
(x) No consent, approval, authorization or order of, registration
or filing with, or notice to, any governmental authority or court is
required, under federal or state law (including, with respect to any bulk
sale laws), for the execution, delivery and performance of or compliance by
the Seller with this Agreement, or the consummation by the Seller of any
transaction contemplated hereby, other than (1) the filing or recording of
financing statements, instruments of assignment and other similar documents
necessary in connection with Seller's sale of the Mortgage Loans to the
Purchaser, (2) such consents, approvals, authorizations, qualifications,
registrations, filings or notices as have been obtained or made and (3)
where the lack of such consent, approval, authorization, qualification,
registration, filing or notice would not have a material adverse effect on
the performance by the Seller under this Agreement.
(c) Upon discovery by any of the parties hereto of a breach of any of the
representations and warranties made pursuant to and set forth in subsection (b)
above which materially and adversely affects the interests of the Purchaser or a
breach of any of the representations and warranties made pursuant to subsection
(a) above and set forth in EXHIBIT C which materially and adversely affects the
value of any Mortgage Loan or the interests therein of the Purchaser or its
successors and assigns (including, without limitation the Trustee and the
holders of the Certificates), the party discovering such breach shall give
prompt written notice to the other party hereto.
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SECTION 5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASER.
The Purchaser, as of the date hereof, hereby represents and warrants to,
and covenants with, the Seller that:
(i) The Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of State of Delaware.
(ii) The execution and delivery of this Agreement by the Purchaser,
and the performance and compliance with the terms of this Agreement by the
Purchaser, will not violate the Purchaser's organizational documents or
constitute a default (or an event which, with notice or lapse of time, or
both, would constitute a default) under, or result in the breach of, any
material agreement or other instrument to which it is a party or which is
applicable to it or any of its assets.
(iii) The Purchaser has the full power and authority to enter into
and consummate all transactions contemplated by this Agreement, has duly
authorized the execution, delivery and performance of this Agreement, and
has duly executed and delivered this Agreement.
(iv) This Agreement, assuming due authorization, execution and
delivery by the Seller, constitutes a valid, legal and binding obligation
of the Purchaser, enforceable against the Purchaser in accordance with the
terms hereof, subject to (A) applicable bankruptcy, insolvency,
reorganization, moratorium and other laws affecting the enforcement of
creditors' rights generally, and (B) general principles of equity,
regardless of whether such enforcement is considered in a proceeding in
equity or at law.
(v) The Purchaser is not in violation of, and its execution and
delivery of this Agreement and its performance and compliance with the
terms of this Agreement will not constitute a violation of, any law, any
order or decree of any court or arbiter, or any order, regulation or demand
of any federal, state or local governmental or regulatory authority, which
violation, in the Purchaser's good faith and reasonable judgment, is likely
to affect materially and adversely either the ability of the Purchaser to
perform its obligations under this Agreement or the financial condition of
the Purchaser.
(vi) No litigation is pending or, to the best of the Purchaser's
knowledge, threatened against the Purchaser which would prohibit the
Purchaser from entering into this Agreement or, in the Purchaser's good
faith and reasonable judgment, is likely to materially and adversely affect
either the ability of the Purchaser to perform its obligations under this
Agreement or the financial condition of the Purchaser.
(vii) The Purchaser has not dealt with any broker, investment
banker, agent or other person, other than the Seller, the Underwriters, the
Initial Purchaser and their respective
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affiliates, that may be entitled to any commission or compensation in
connection with the sale of the Mortgage Loans or the consummation of any
of the transactions contemplated hereby.
(viii) No consent, approval, authorization or order of, registration
or filing with, or notice to, any governmental authority or court is
required, under federal or state law, for the execution, delivery and
performance of or compliance by the Purchaser with this Agreement, or the
consummation by the Purchaser of any transaction contemplated hereby, other
than (1) such consents, approvals, authorizations, qualifications,
registrations, filings or notices as have been obtained or made and (2)
where the lack of such consent, approval, authorization, qualification,
registration, filing or notice would not have a material adverse effect on
the performance by the Purchaser under this Agreement.
(b) Upon discovery by any of the parties hereto of a breach of any of the
representations and warranties set forth above which materially and adversely
affects the interests of the Seller, the party discovering such breach shall
give prompt written notice to the other party hereto.
SECTION 6. REPURCHASES.
(a) Within 90 days of the earlier of discovery or receipt of notice by the
Seller, from either the Purchaser or any successor or assign thereof, of a
Defect (as defined in the Pooling and Servicing Agreement as in effect on the
Closing Date) in respect of the Mortgage File for any Mortgage Loan or a breach
of any representation or warranty made pursuant to Section 4(a) and set forth in
EXHIBIT C (a "Breach"), which Defect or Breach, as the case may be, materially
and adversely affects the value of any Mortgage Loan or the interests therein of
the Purchaser or its successors and assigns (including, without limitation, the
Trustee and the holders of the Certificates), the Seller shall cure such Defect
or Breach, as the case may be, in all material respects or repurchase the
affected Mortgage Loan from the then owner(s) thereof at the applicable Purchase
Price (as defined in the Pooling and Servicing Agreement as in effect on the
Closing Date) by payment of such Purchase Price by wire transfer of immediately
available funds to the account designated by such owner(s); provided, however,
that in lieu of effecting any such repurchase, the Seller will be permitted
until the second anniversary of the Closing Date to deliver a Qualifying
Substitute Mortgage Loan and to pay a cash amount equal to the applicable
Substitution Shortfall Amount, subject to the terms and conditions of the
Pooling and Servicing Agreement as in effect on the Closing Date; provided that
in the event of any such Breach with respect to the representation and warranty
set forth at clause (v) of EXHIBIT C or in the last sentence of clause (vi) of
EXHIBIT C, which Breach cannot be corrected or cured in all material respects
within such 90-day period, but it is reasonably likely that such Breach could be
corrected or cured within 180 days of the earlier of discovery by the Seller and
receipt by the Seller of notice of such Breach, and the Seller is diligently
attempting to effect such correction or cure, then the applicable cure period
shall, with the consent of the Purchaser or its assignee (which consent shall
not be unreasonably withheld), be extended for an additional 90 days.
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If the Seller is notified of a Defect in any Mortgage File that corresponds
to information set forth in the Mortgage Loan Schedule, the Seller shall
promptly correct such Defect and provide a new, corrected Mortgage Loan Schedule
to the Purchaser, which corrected Mortgage Loan Schedule shall be deemed to
amend and replace the existing Mortgage Loan Schedule for all purposes.
(b) Notwithstanding Section 6(a), within 60 days of the earlier of
discovery or receipt of notice by the Seller, from either the Purchaser or any
successor or assign thereof, that any Mortgage Loan does not constitute a
"qualified mortgage" within the meaning of Section 860G(a)(3) of the Code, the
Seller shall repurchase such Mortgage Loan from the then owner(s) thereof at the
applicable Purchase Price by payment of such Purchase Price by wire transfer of
immediately available funds to the account designated by such owner(s).
(c) In connection with any repurchase of or substitution for a Mortgage
Loan contemplated by this Section 6, the then owner(s) thereof shall tender or
cause to be tendered promptly to the Seller, upon delivery of a receipt executed
by the Seller, the related Mortgage File and Servicing File, and each document
that constitutes a part of the Mortgage File that was endorsed or assigned to
the Purchaser or the Trustee shall be endorsed or assigned, as the case may be,
to the Seller or its designee in the same manner. The form and sufficiency of
all such instruments and certificates shall be the responsibility of the Seller.
(d) Except as provided in Section 2(b), this Section 6 provides the sole
remedies available to the Purchaser, and its successors and assigns (including,
without limitation, the Trustee and the holders of the Certificates) respecting
any Defect in a Mortgage File or any breach of any representation or warranty
made pursuant to Section 4(a) and set forth in EXHIBIT C, or in connection with
the circumstances described in Section 6(b). If the Seller defaults on its
obligations to repurchase any Mortgage Loan in accordance with Section 6(a) or
6(b) or disputes its obligation to repurchase any Mortgage Loan in accordance
with either such subsection, the Purchaser or its successors and assigns may
take such action as is appropriate to enforce such payment or performance,
including, without limitation, the institution and prosecution of appropriate
proceedings. The Seller shall reimburse the Purchaser for all necessary and
reasonable costs and expenses incurred in connection with such enforcement.
SECTION 7. CLOSING.
The closing of the sale of the Mortgage Loans (the "Closing") shall be held
at the offices of Mayer, Brown & Platt, 1675 Broadway, New York, New York 10019
at 10:00 a.m., New York City time, on the Closing Date.
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The Closing shall be subject to each of the following conditions:
(i) All of the representations and warranties of the Seller
specified herein shall be true and correct as of the Closing Date, and the
Aggregate Cut-off Date Balance shall be within the range permitted by
Section 1 of this Agreement;
(ii) All documents specified in Section 8 (the "Closing
Documents"), in such forms as are agreed upon and acceptable to the
Purchaser, shall be duly executed and delivered by all signatories as
required pursuant to the respective terms thereof;
(iii) The Seller shall have delivered and released to the Trustee,
the Purchaser or the Purchaser's designee, as the case may be, all
documents and funds required to be so delivered pursuant to Section 2;
(iv) The result of any examination of the Mortgage Files and
Servicing Files performed by or on behalf of the Purchaser pursuant to
Section 3 shall be satisfactory to the Purchaser in its sole determination;
(v) All other terms and conditions of this Agreement required to
be complied with on or before the Closing Date shall have been complied
with, and the Seller shall have the ability to comply with all terms and
conditions and perform all duties and obligations required to be complied
with or performed after the Closing Date;
(vi) The Seller shall have paid or agreed to pay all fees, costs
and expenses payable by it to the Purchaser pursuant to this Agreement; and
(vii) Neither the Underwriting Agreement nor the Certificate
Purchase Agreement shall have been terminated in accordance with its terms.
Both parties agree to use their best efforts to perform their respective
obligations hereunder in a manner that will enable the Purchaser to purchase the
Mortgage Loans on the Closing Date.
SECTION 8. CLOSING DOCUMENTS.
The Closing Documents shall consist of the following:
(a) This Agreement duly executed and delivered by the Purchaser and the
Seller;
(b) An Officer's Certificate substantially in the form of Exhibit D-1
hereto, executed by the Secretary or an assistant secretary of the Seller, and
dated the Closing Date, and upon which the Purchaser and each Underwriter may
rely, attaching thereto as exhibits the organizational documents of the Seller;
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(c) A certificate of good standing regarding the Seller from the Secretary
of State for the State of Delaware, dated not earlier than 30 days prior to the
Closing Date;
(d) A certificate of the Seller substantially in the form of Exhibit D-2
hereto, executed by an executive officer or authorized signatory of the Seller
and dated the Closing Date, and upon which the Purchaser and each Underwriter
may rely;
(e) Written opinions of counsel for the Seller, substantially in the form
of Exhibits D-3A and D-3B hereto and subject to such reasonable assumptions and
qualifications as may be requested by counsel for the Seller and acceptable to
counsel for the Purchaser, dated the Closing Date and addressed to the Purchaser
and each Underwriter;
(f) Any other opinions of counsel for the Seller reasonably requested by
the Rating Agencies in connection with the issuance of the Certificates, each of
which shall include the Purchaser and each Underwriter as an addressee; and
(g) Such further certificates, opinions and documents as the Purchaser may
reasonably request.
SECTION 9. INDEMNIFICATION.
(a) The Seller agrees to indemnify and hold harmless the Purchaser, its
officers and directors, and each person, if any, who controls the Purchaser
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), against
any and all losses, claims, damages or liabilities, joint or several, to which
they or any of them may become subject under the Securities Act, the Exchange
Act or other federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in the Prospectus Supplement, the
Memorandum, the Diskette or, insofar as they are required to be filed as part of
the Registration Statement pursuant to the No-Action Letters, any Computational
Materials or ABS Term Sheets with respect to the Registered Certificates, or in
any revision or amendment thereof or supplement thereto, or arise out of or are
based upon the omission or alleged omission (in the case of any such
Computational Materials or ABS Term Sheets, when read in conjunction with the
Prospectus and, in the case of the Memorandum, when read together with the other
information specified therein as being available for review by investors) to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading; but only if and to the extent that (i) any such untrue
statement or alleged untrue statement is with respect to information regarding
the Mortgage Loans contained in the Loan Detail or, to the extent consistent
therewith, the Diskette, or (ii) any such untrue statement or alleged untrue
statement or omission or alleged omission is with respect to information
regarding the Seller
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or the Mortgage Loans contained in the Prospectus Supplement or the Memorandum
under the headings "Summary of Prospectus Supplement - The Mortgage Asset Pool",
"Risk Factors - The Mortgage Loans" and/or "Description of the Mortgage Asset
Pool" or contained on Annex A to the Prospectus Supplement (exclusive of the
Loan Detail), and such information does not represent a restatement or
aggregation of information contained in the Loan Detail; or (iii) such untrue
statement, alleged untrue statement, omission or alleged omission arises out of
or is based upon a breach of the representations and warranties of the Seller
set forth in or made pursuant to Section 4; provided, that the indemnification
provided by this Section 9 shall not apply to the extent that such untrue
statement of a material fact or omission of a material fact necessary to make
the statements made, in light of the circumstances in which they were made, not
misleading, was made as a result of an error in the manipulation of, or
calculations based upon, the Loan Detail. This indemnity agreement will be in
addition to any liability which the Seller may otherwise have.
For purposes of the foregoing, "Registration Statement" shall mean the
registration statement No. 333-37717 filed by the Purchaser on Form S-3,
including without limitation exhibits thereto and information incorporated
therein by reference; "Prospectus" shall mean the prospectus dated December 17,
1997, as supplemented by the prospectus supplement dated August 21, 1998 (the
"Prospectus Supplement"), relating to the Registered Certificates; "Memorandum"
shall mean the private placement memorandum dated August 21, 1998, relating to
the Non-Registered Certificates; "Computational Materials" shall have the
meaning assigned thereto in the no-action letter dated May 20, 1994 issued by
the Division of Corporation Finance of the Securities and Exchange Commission
(the "Commission") to 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"); and "ABS Term Sheets" shall have the meaning assigned thereto in the
no-action letter dated February 17, 1995 issued by the Division of Corporation
Finance of the Commission to the Public Securities Association (the "PSA Letter"
and, together with the Kidder Letters, the "No-Action Letters").
(b) Promptly after receipt by any person entitled to indemnification under
this Section 9 (each, an "indemnified party") of notice of the commencement of
any action, such indemnified party will, if a claim in respect thereof is to be
made against the Seller (the "indemnifying party") under this Section 9, notify
the indemnifying party in writing of the commencement thereof; but the omission
to notify the indemnifying party will not relieve it from any liability that it
may have to any indemnified party otherwise than under this Section 9. In case
any such action is brought against any indemnified party and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein, and to the extent that it may elect by written
notice delivered to the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof, with counsel
satisfactory to such indemnified party; provided, however, that if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party or parties shall have reasonably
concluded that there may be legal defenses available to it or them and/or other
indemnified parties that are different
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<PAGE>
from or additional to those available to the indemnifying party, the indemnified
party or parties shall have the right to select separate counsel to assert such
legal defenses and to otherwise participate in the defense of such action on
behalf of such indemnified party or parties. Upon receipt of notice from the
indemnifying party to such indemnified party of its election to assume the
defense of such action and approval by the indemnified party of counsel, which
approval will not be unreasonably withheld, the indemnifying party will not be
liable for any legal or other expenses subsequently incurred by such indemnified
party in connection with the defense thereof, unless (i) the indemnified party
shall have employed separate counsel in connection with the assertion of legal
defenses in accordance with the proviso to the preceding sentence (it being
understood, however, that the indemnifying party shall not be liable for the
expenses of more than one separate counsel, approved by the Purchaser and the
indemnifying party, representing all the indemnified parties under Section 9(a)
who are parties to such action), (ii) the indemnifying party shall not have
employed counsel reasonably satisfactory to the indemnified party to represent
the indemnified party within a reasonable time after notice of commencement of
the action or (iii) the indemnifying party has authorized the employment of
counsel for the indemnified party at the expense of the indemnifying party; and
except that, if clause (i) or (iii) is applicable, such liability shall only be
in respect of the counsel referred to in such clause (i) or (iii).
(c) If the indemnification provided for in this Section 9 is due in
accordance with its terms but is for any reason held by a court to be
unavailable to an indemnified party on grounds of policy or otherwise, then the
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities, in such proportion as is
appropriate to reflect the relative fault of the indemnified and indemnifying
parties in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative fault of the indemnified and indemnifying parties
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by such parties.
(d) The Purchaser and the Seller agree that it would not be just and
equitable if contribution pursuant to Section 9(c) were determined by pro rata
allocation or by any other method of allocation that does not take account of
the considerations referred to in Section 9(c) above. The amount paid or
payable by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in this Section 9 shall be deemed to include, subject to
the limitations set forth above, any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim, except where the indemnified party is required to bear such
expenses pursuant to this Section 9, which expenses the indemnifying party shall
pay as and when incurred, at the request of the indemnified party, to the extent
that the indemnifying party will be ultimately obligated to pay such expenses.
If any expenses so paid by the indemnifying party are subsequently determined to
not be required to be borne by the indemnifying party hereunder, the party that
received such payment shall promptly refund the amount so paid to the party
which made such payment. No person guilty of fraudulent misrepresentation
(within the
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meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(e) The indemnity and contribution agreements contained in this Section 9
shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by any indemnified
party, and (iii) acceptance of and payment for any of the Certificates.
SECTION 10. COSTS.
Costs relating to the transactions contemplated hereby shall be borne by
the respective parties hereto in accordance with the Allocation Agreement.
SECTION 11. NOTICES.
All demands, notices and communications hereunder shall be in writing and
shall be deemed to have been duly given if personally delivered to or mailed, by
registered mail, postage prepaid, by overnight mail or courier service, or
transmitted by facsimile and confirmed by a similar mailed writing, if to the
Purchaser, addressed to GMAC Commercial Mortgage Securities, Inc. at 650 Dresher
Road, P.O. Box 1015, Horsham, Pennsylvania 19044-8015, Attention: Structured
Finance Manager, facsimile no. (215) 328-1775, with a copy to the General
Counsel, GMAC Commercial Mortgage Corporation, or such other address or
facsimile number as may hereafter be furnished to the Seller in writing by the
Purchaser; and if to the Seller, addressed to Lehman Brothers Holdings Inc.,
doing business as Lehman Capital, a Division of Lehman Brothers Holdings Inc.,
at Three World Financial Center, 20th Floor, New York, NY 10288 Attention: Paul
Hughson, facsimile no. (212) 526-3746, or to such other address or facsimile
number as the Seller may designate in writing to the Purchaser.
SECTION 12. THIRD PARTY BENEFICIARIES.
Each of the officers, directors and controlling persons referred to in
Section 9 hereof is an intended third party beneficiary of the covenants and
indemnities of the Seller set forth in Section 9 of this Agreement. It is
acknowledged and agreed that such covenants and indemnities may be enforced by
or on behalf of any such person or entity against the Seller to the same extent
as if it was a party hereto.
SECTION 13. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY.
All representations, warranties and agreements contained in this Agreement,
incorporated herein by reference or contained in the certificates of officers of
the Seller submitted pursuant hereto, shall remain operative and in full force
and effect and shall survive delivery of the Mortgage Loans by the Seller to the
Purchaser or its designee.
15
<PAGE>
SECTION 14. SEVERABILITY OF PROVISIONS.
Any part, provision, representation, warranty or covenant of this Agreement
that is prohibited or which is held to be void or unenforceable shall be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any part, provision,
representation, warranty or covenant of this Agreement that is prohibited or
unenforceable or is held to be void or unenforceable in any particular
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
particular jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction. To the extent permitted by applicable law,
the parties hereto waive any provision of law which prohibits or renders void or
unenforceable any provision hereof.
SECTION 15. COUNTERPARTS.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but all of which together shall constitute
one and the same instrument.
SECTION 16. GOVERNING LAW.
THIS AGREEMENT AND THE RIGHTS, DUTIES, OBLIGATIONS AND RESPONSIBILITIES OF
THE PARTIES HERETO SHALL BE GOVERNED IN ACCORDANCE WITH THE INTERNAL LAWS AND
DECISIONS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES
EXCEPT THAT THE PARTIES HERETO INTEND THAT THE PROVISIONS OF SECTION 5-1401 OF
THE NEW YORK GENERAL OBLIGATIONS LAW SHALL APPLY TO THIS AGREEMENT.
SECTION 17. FURTHER ASSURANCES.
The Seller and the Purchaser agree to execute and deliver such instruments
and take such further actions as the other party may, from time to time,
reasonably request in order to effectuate the purposes and to carry out the
terms of this Agreement.
SECTION 18. SUCCESSORS AND ASSIGNS.
The rights and obligations of the Seller under this Agreement shall not be
assigned by the Seller without the prior written consent of the Purchaser,
except that any person into which the Seller may be merged or consolidated, or
any corporation or other entity resulting from any merger, conversion or
consolidation to which the Seller is a party, or any person succeeding to all or
substantially all of the business of the Seller, shall be the successor to the
Seller hereunder. The Purchaser has the right to assign its interest under this
Agreement, in whole or in part, as may be
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<PAGE>
required to effect the purposes of the Pooling and Servicing Agreement, and the
assignee shall, to the extent of such assignment, succeed to the rights and
obligations hereunder of the Purchaser. Subject to the foregoing, this
Agreement shall bind and inure to the benefit of and be enforceable by the
Seller and the Purchaser, and their permitted successors and assigns, and the
indemnified parties referred to in Section 9.
SECTION 19. AMENDMENTS.
No term or provision of this Agreement may be amended, waived, modified or
in any way altered, unless such amendment, waiver, modification or alteration is
in writing and signed by a duly authorized officer of the party against whom
such amendment, waiver, modification or alteration is sought to be enforced. In
addition, this Agreement may not be changed in any manner which would have a
material adverse effect on any third party beneficiary under Section 12 hereof
without the prior consent of that person.
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IN WITNESS WHEREOF, the Seller and the Purchaser have caused their names to
be signed hereto by their respective duly authorized officers as of the date
first above written.
LEHMAN BROTHERS HOLDINGS, INC.
By: /s/ Mike Mazzei
--------------------------------
Name: Mike Mazzei
------------------------------
Title: Authorized Signatory
-----------------------------
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
By: /s/ David Lazarus
--------------------------------
Name: David Lazarus
------------------------------
Title: Vice President
-----------------------------
S-1
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EXHIBIT A
MORTGAGE LOAN SCHEDULE
The Mortgage Loan Schedule shall set forth, among other things, the
following information with respect to each Mortgage Loan:
(i) the loan number;
(ii) the street address (including city, state and zip code) of the
related Mortgaged Property;
(iii) the Mortgage Rate in effect as of the Cut-off Date and whether
such Mortgage Loan is an Adjustable Rate Mortgage Loan or a
Fixed-Rate Loan;
(iv) the original principal balance;
(v) the Cut-off Date Balance;
(vi) the (A) remaining term to stated maturity (B) with respect to
each ARD Loan, the Anticipated Repayment Date and (C) Stated
Maturity Date;
(vii) the Due Date;
(viii) the amount of the Monthly Payment due on the first Due Date
following the Cut-off Date;
(ix) in the case of an Adjustable Rate Mortgage Loan, the (A)
Index, (B) Gross Margin, (C) first Mortgage Rate adjustment
date following the Cut-off Date and the frequency of Mortgage
Rate adjustments, and (D) maximum and minimum lifetime
Mortgage Rate, if any;
(x) whether such Mortgage Loan is an ARD Loan, a Credit Lease Loan
or a Defeasance Loan;
(xi) the Servicing Fee Rate; and
(xii) the Master Servicing Fee Rate.
A-1
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The Mortgage Loan Schedule shall also set forth the aggregate Cut-off Date
Balance for all of the Mortgage Loans. Such list may be in the form of more
than one list, collectively setting forth all of the information required.
A-2
<PAGE>
EXHIBIT B
THE MORTGAGE FILE
The "Mortgage File" shall consist of either (a) with respect to any
Mortgage Loan (except any Mortgage Loan subject to a Pass Through Trust
Agreement), subject to Section 2(b), collectively the following documents:
(i) the original Mortgage Note, endorsed by the most recent
endorsee prior to the Trustee or, if none, by the originator,
without recourse, either in blank or to the order of the
Trustee in the following form: "Pay to the order of LaSalle
National Bank, as trustee for the registered holders of GMAC
Commercial Mortgage Securities, Inc., Mortgage Pass-Through
Certificates, Series 1998-C2, without recourse";
(ii) the original or a copy of the Mortgage and, if applicable, the
originals or copies of any intervening assignments thereof
showing a complete chain of assignment from the originator of
the Mortgage Loan to the most recent assignee of record
thereof prior to the Trustee, if any, in each case with
evidence of recording indicated thereon;
(iii) an original assignment of the Mortgage, in recordable form,
executed by the most recent assignee of record thereof prior
to the Trustee or, if none, by the originator, either in blank
or in favor of the Trustee (in such capacity);
(iv) the original or a copy of any related Assignment of Leases (if
such item is a document separate from the Mortgage) and, if
applicable, the originals or copies of any intervening
assignments thereof showing a complete chain of assignment
from the originator of the Mortgage Loan to the most recent
assignee of record thereof prior to the Trustee, if any, in
each case with evidence of recording thereon;
(v) an original assignment of any related Assignment of Leases (if
such item is a document separate from the Mortgage), in
recordable form, executed by the most recent assignee of
record thereof prior to the Trustee or, if none, by the
originator, either in blank or in favor of the Trustee (in
such capacity), which assignment may be included as part of
the corresponding assignment of Mortgage referred to in clause
(iii) above;
B-1
<PAGE>
(vi) an original or copy of any related Security Agreement (if such
item is a document separate from the Mortgage) and, if
applicable, the originals or copies of any intervening
assignments thereof showing a complete chain of assignment
from the originator of the Mortgage Loan to the most recent
assignee of record thereof prior to the Trustee, if any;
(vii) an original assignment of any related Security Agreement (if
such item is a document separate from the Mortgage) executed
by the most recent assignee of record thereof prior to the
Trustee or, if none, by the originator, either in blank or in
favor of the Trustee (in such capacity), which assignment may
be included as part of the corresponding assignment of
Mortgage referred to in clause (iii) above;
(viii) originals or copies of all assumption, modification, written
assurance and substitution agreements, with evidence of
recording thereon if appropriate, in those instances where the
terms or provisions of the Mortgage, Mortgage Note or any
related security document have been modified or the Mortgage
Loan has been assumed;
(ix) the original or a copy of the lender's title insurance policy
issued as of the date of the origination of the Mortgage Loan,
together with all endorsements or riders (or copies thereof)
that were issued with or subsequent to the issuance of such
policy, insuring the priority of the Mortgage as a first lien
on the Mortgaged Property;
(x) the original or a copy of any guaranty of the obligations of
the Mortgagor under the Mortgage Loan together with (A) if
applicable, the original or copies of any intervening
assignments of such guaranty showing a complete chain of
assignment from the originator of the Mortgage Loan to the
most recent assignee thereof prior to the Trustee, if any, and
(B) an original assignment of such guaranty executed by the
most recent assignee thereof prior to the Trustee or, if none,
by the originator;
(xi) (A) file or certified copies of any UCC financing statements
and continuation statements which were filed in order to
perfect (and maintain the perfection of) any security interest
held by the originator of the Mortgage Loan (and each assignee
of record prior to the Trustee) in and to the personalty of
the mortgagor at the Mortgaged Property (in each case with
evidence of filing thereon) and which
B-2
<PAGE>
were in the possession of the Seller (or its agent) at the
time the Mortgage Files were delivered to the Trustee and (B)
if any such security interest is perfected and the earlier UCC
financing statements and continuation statements were in the
possession of the Seller, a UCC financing statement executed
by the most recent assignee of record prior to the Trustee or,
if none, by the originator, evidencing the transfer of such
security interest, either in blank or in favor of the Trustee;
(xii) the original or a copy of the power of attorney (with evidence
of recording thereon, if appropriate) granted by the Mortgagor
if the Mortgage, Mortgage Note or other document or instrument
referred to above was signed on behalf of the Mortgagor;
(xiii) if the Mortgagor has a leasehold interest in the related
Mortgaged Property, the original ground lease or a copy
thereof; and
(xiv) if the Mortgage Loan is a Credit Lease Loan, an original of
the credit lease enhancement insurance policy, if any,
obtained with respect to such Mortgage Loan and an original of
the residual value insurance policy, if any, obtained with
respect to such Mortgage Loan; or
(b) with respect to each Mortgage Loan subject to a Pass Through Trust
Agreement, the original pass through certificate representing 100% of
the beneficial ownership interest in such Mortgage Loan assigned by
the Seller to the Trustee for the benefit of the Certificateholders.
provided that, in the case of either clause (a) or clause (b), whenever the term
"Mortgage File" is used to refer to documents actually received by the Purchaser
or the Trustee, such term shall not be deemed to include such documents and
instruments required to be included therein unless they are actually so
received. The original assignments referred to in clauses (a) (iii), (a) (v),
(a) (vii) and (a) (x)(B), may be in the form of one or more instruments in
recordable form in any applicable filing offices.
B-3
<PAGE>
EXHIBIT C
REPRESENTATIONS AND WARRANTIES OF THE SELLER
REGARDING THE INDIVIDUAL MORTGAGE LOANS
With respect to each Mortgage Loan, the Seller hereby represents and
warrants, as of the date hereinbelow specified or, if no such date is specified,
as of the Closing Date, except as set forth on Schedule C-1 hereto, that:
(i) OWNERSHIP OF MORTGAGE LOANS. Immediately prior to the transfer
thereof to the Purchaser, the Seller had good and marketable title to, and was
the sole owner and holder of, such Mortgage Loan (or, in the case of a Mortgage
Loan subject to a Pass Through Trust Agreement, the related Loan Certificate)
free and clear of any and all liens, encumbrances and other interests on, in or
to such Mortgage Loan (or Loan Certificate) (other than, in certain cases, the
right of a subservicer to directly service such Mortgage Loan). Such transfer
validly assigns ownership of such Mortgage Loan (or, in the case of a Mortgage
Loan subject to a Pass Through Trust Agreement, the related Loan Certificate) to
the Purchaser free and clear of any pledge, lien, encumbrance or security
interest.
(ii) AUTHORITY TO TRANSFER MORTGAGE LOANS. The Seller has full right
and authority to sell, assign and transfer such Mortgage Loan. No provision of
the Mortgage Note, Mortgage or other loan document relating to such Mortgage
Loan prohibits or restricts the Seller's right to assign or transfer such
Mortgage Loan.
(iii) MORTGAGE LOAN SCHEDULE. The information pertaining to such
Mortgage Loan set forth in the Mortgage Loan Schedule was true and correct in
all material respects as of the Cut-off Date.
(iv) PAYMENT RECORD. Such Mortgage Loan was not as of the Cut-off
Date for such Mortgage Loan, and has not been during the twelve-month period
prior thereto, 30 days or more delinquent in respect of any debt service payment
required thereunder, without giving effect to any applicable grace period.
(v) PERMITTED ENCUMBRANCES. The related Mortgage constitutes a valid
first lien upon the related Mortgaged Property, including all buildings located
thereon and all fixtures attached thereto, such lien being subject only to (A)
the lien of current real property taxes and assessments not yet due and payable,
(B) covenants, conditions and restrictions, rights of way, easements and other
matters of public record, and (C) exceptions and exclusions specifically
referred to in the lender's title insurance policy issued or, as evidenced by a
"marked-up" commitment, to be issued in respect of such Mortgage Loan (the
exceptions set forth in the foregoing clauses (A), (B) and (C) collectively,
"Permitted Encumbrances"). The Permitted Encumbrances do not materially
interfere with the security intended to be provided by the related Mortgage, the
current use or operation of the
C-1
<PAGE>
related Mortgaged Property or the current ability of the Mortgaged Property to
generate net operating income sufficient to service the Mortgage Loan. If the
Mortgaged Property is operated as a nursing facility, a hospitality property or
a multifamily property, the Mortgage, together with any separate security
agreement, similar agreement and UCC financing statement, if any, establishes
and creates a first priority, perfected security interest (subject only to any
prior purchase money security interest), to the extent such security interest
can be perfected by the recordation of a Mortgage or the filing of a UCC
financing statement, in all personal property owned by the Mortgagor that is
used in, and is reasonably necessary to, the operation of the related Mortgaged
Property.
(vi) TITLE INSURANCE. The lien of the related Mortgage is insured by
an ALTA lender's title insurance policy ("Title Policy"), or its equivalent as
adopted in the applicable jurisdiction, issued by a nationally recognized title
insurance company, insuring the originator of such Mortgage Loan, its successors
and assigns, as to the first priority lien of the Mortgage in the original
principal amount of the Mortgage Loan after all advances of principal, subject
only to Permitted Encumbrances (or, if a title insurance policy has not yet been
issued in respect of the Mortgage Loan, a policy meeting the foregoing
description is evidenced by a commitment for title insurance "marked-up" at the
closing of such loan). Each Title Policy (or, if it has yet to be issued, the
coverage to be provided thereby) is in full force and effect, all premiums
thereon have been paid and, to the Seller's knowledge, no material claims have
been made thereunder and no claims have been paid thereunder. The Seller has
not, by act or omission, done anything that would materially impair the coverage
under such Title Policy. Immediately following the transfer and assignment of
the related Mortgage Loan to the Trustee, such Title Policy (or, if it has yet
to be issued, the coverage to be provided thereby) will inure to the benefit of
the Trustee without the consent of or notice to the insurer. To the Seller's
actual knowledge, the insurer that issued such Title Policy is qualified to do
business in the state in which the related Mortgaged Property is located.
(vii) NO WAIVERS BY SELLER OF MATERIAL DEFAULTS. The Seller has not
waived any material default, breach, violation or event of acceleration existing
under the related Mortgage or Mortgage Note.
(viii) NO OFFSETS, DEFENSES OR COUNTERCLAIMS. There is no valid
offset, defense or counterclaim to such Mortgage Loan.
(ix) CONDITION OF PROPERTY; CONDEMNATION. Except as set forth in any
engineering report prepared in connection with the origination of (or obtained
in connection with or otherwise following the Seller's acquisition of) such
Mortgage Loan, the related Mortgaged Property is, to the Seller's knowledge,
free and clear of any damage that would materially and adversely affect its
value as security for such Mortgage Loan. The Seller has no actual notice of
the commencement of a proceeding for the condemnation of all or any material
portion of the related Mortgaged Property.
(x) COMPLIANCE WITH USURY LAWS. Such Mortgage Loan complied with all
applicable usury laws in effect at its date of origination.
C-2
<PAGE>
(xi) FULL DISBURSEMENT OF MORTGAGE LOAN PROCEEDS. The proceeds of
such Mortgage Loan have been fully disbursed and there is no requirement for
future advances thereunder.
(xii) ENFORCEABILITY. The related Mortgage Note and Mortgage and all
other documents and instruments evidencing, guaranteeing, insuring or otherwise
securing such Mortgage Loan have been duly and properly executed by the parties
thereto, and each is the legal, valid and binding obligation of the maker
thereof (subject to any non-recourse provisions contained in any of the
foregoing agreements and any applicable state anti-deficiency legislation),
enforceable in accordance with its terms, except as such enforcement may be
limited by bankruptcy, insolvency, reorganization, receivership, moratorium or
other laws relating to or affecting the rights of creditors generally and by
general principles of equity (regardless of whether such enforcement is
considered in a proceeding in equity or at law).
(xiii) INSURANCE. Except in the case of a Credit Lease Loan that
permits the related Tenant to self-insure, all improvements upon the related
Mortgaged Property are insured against loss by hazards of extended coverage in
an amount (subject to a customary deductible) at least equal to the lesser of
the outstanding principal balance of such Mortgage Loan and 100% of the full
insurable value of the improvements located on such Mortgaged Property, and the
related hazard insurance policy contains appropriate endorsements to avoid the
application of co-insurance provisions and does not permit reduction in
insurance proceeds for depreciation. If any portion of the related Mortgaged
Property was, at the time of the origination of such Mortgage Loan, in an area
identified in the Federal Register by the Federal Emergency Management Agency as
having special flood hazards, and flood insurance was available, a flood
insurance policy meeting any requirements of the then current guidelines of the
Federal Insurance Administration is in effect with a generally acceptable
insurance carrier, in an amount representing coverage not less than the least of
(1) the outstanding principal balance of such Mortgage Loan, (2) the full
insurable value of such Mortgaged Property, (3) the maximum amount of insurance
available under the National Flood Insurance Act of 1968, as amended, and (4)
100% of the replacement cost of the improvements located on such Mortgaged
Property. In addition, except in the case of a Credit Lease Loan that permits
the related Tenant to self-insure, the Mortgage requires the Mortgagor to
maintain in respect of the Mortgaged Property comprehensive general liability
insurance in amounts generally required by the Seller, and at least six months
rental or business interruption insurance, and all such insurance required by
the Mortgage to be maintained is in full force and effect. Each such insurance
policy requires prior notice to the holder of the Mortgage of termination or
cancellation, and no such notice has been received, including any notice of
nonpayment of premiums, that has not been cured.
(xiv) ENVIRONMENTAL CONDITION. The related Mortgaged Property was
subject to one or more environmental site assessments (or an update of a
previously conducted assessment), which was (were) performed on behalf of the
Seller, or as to which the related report was delivered to the Seller in
connection with its origination or acquisition of such Mortgage Loan; and the
Seller, having made no independent inquiry other than reviewing the resulting
report(s) and/or employing an
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environmental consultant to perform the assessment(s) referenced herein, has no
knowledge of any material and adverse environmental conditions or circumstance
affecting such Mortgaged Property that was not disclosed in the related
report(s). To the Seller's knowledge, the Seller has not taken any action with
respect to such Mortgage Loan or the related Mortgaged Property that could
subject the Purchaser, or its successors and assigns in respect of the Mortgage
Loan, to any liability under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended ("CERCLA") or any other
applicable federal, state or local environmental law, and the Seller has not
received any actual notice of a material violation of CERCLA or any applicable
federal, state or local environmental law with respect to the related Mortgaged
Property that was not disclosed in the related report. The related Mortgage or
loan documents in the related Mortgage File requires the Mortgagor to comply
with all applicable federal, state and local environmental laws and regulations.
(xv) NO CROSS-COLLATERALIZATION WITH OTHER MORTGAGE LOANS. Such
Mortgage Loan is not cross-collateralized with any mortgage loan that will not
be included in the Trust Fund.
(xvi) WAIVERS AND MODIFICATIONS. The terms of the related Mortgage
and the Mortgage Note have not been impaired, waived, altered or modified in any
material respect, except as specifically set forth in the related Mortgage File.
(xvii) TAXES AND ASSESSMENTS. There are no delinquent taxes, ground
rents, assessments for improvements or other similar outstanding charges
affecting the related Mortgaged Property which are or may become a lien of
priority equal to or higher than the lien of the related Mortgage. For purposes
of this representation and warranty, real property taxes and assessments shall
not be considered unpaid until the date on which interest and/or penalties would
be payable thereon.
(xviii) MORTGAGOR'S INTEREST IN MORTGAGED PROPERTY. Except in the
case of four Mortgage Loans as to which the interest of the related Mortgagor
in the related Mortgaged Property is in whole or in part a leasehold estate, the
interest of the related Mortgagor in the related Mortgaged Property consists of
a fee simple estate in real property.
(xix) WHOLE LOAN. Except for the Pass Through Loans, each Mortgage
Loan is a whole loan and not a participation interest.
(xx) VALID ASSIGNMENT. The assignment of the related Mortgage
referred to in clause (iii) of EXHIBIT B constitutes the legal, valid and
binding assignment of such Mortgage from the relevant assignor to the Trustee.
The Assignment of Leases set forth in the Mortgage or separate from the related
Mortgage and related to and delivered in connection with each Mortgage Loan
establishes and creates a valid, subsisting and, subject only to Permitted
Encumbrances, enforceable first priority lien and first priority security
interest in the related Mortgagor's interest in all leases, subleases, licenses
or other agreements pursuant to which any person is entitled to occupy, use or
possess all or any portion of the real property subject to the related Mortgage,
and each assignor
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thereunder has the full right to assign the same. The related assignment of any
Assignment of Leases, not included in a Mortgage, executed and delivered in
favor of the Trustee is in recordable form and constitutes a legal, valid and
binding assignment, sufficient to convey to the assignee named therein all of
the assignor's right, title and interest in, to and under such Assignment of
Leases.
(xxi) ESCROWS. All escrow deposits relating to such Mortgage Loan
that are, as of the Closing Date, required to be deposited with the mortgagee or
its agent have been so deposited.
(xxii) NO MECHANICS' OR MATERIALMEN'S LIENS. As of the date of
origination of such Mortgage Loan and, to the actual knowledge of the Seller, as
of the Closing Date, the related Mortgaged Property was and is free and clear of
any mechanics' and materialmen's liens or liens in the nature thereof which
create a lien prior to that created by the related Mortgage, except those which
are insured against by the Title Policy referred to in (vi) above.
(xxiii) NO MATERIAL ENCROACHMENTS. To the Seller's knowledge (based
on surveys and/or title insurance obtained in connection with the origination of
such Mortgage Loan), as of the date of such origination, no improvement that was
included for the purpose of determining the appraised value of the related
Mortgaged Property at the time of origination of such Mortgage Loan lay outside
the boundaries and building restriction lines of such property to any material
extent (unless affirmatively covered by the title insurance referred to in
paragraph (vi) above), and no improvements on adjoining properties encroached
upon such Mortgaged Property to any material extent. To the Seller's knowledge,
based upon opinions of counsel and/or other due diligence customarily performed
by the Seller, the improvements located on or forming part of such Mortgaged
Property comply in all material respects with applicable zoning laws and
ordinances (except to the extent that they may constitute legal non-conforming
uses).
(xxiv) ORIGINATOR AUTHORIZED. To the extent required under
applicable law as of the Closing Date, the originator of such Mortgage Loan was
authorized to do business in the jurisdiction in which the related Mortgaged
Property is located at all times when it held the Mortgage Loan to the extent
necessary to ensure the enforceability of such Mortgage Loan.
(xxv) NO MATERIAL DEFAULT. (A) To the Seller's knowledge, there
exists no material default, breach or event of acceleration under the related
Mortgage or Mortgage Note, and (B) the Seller has not received actual notice of
any event (other than payments due but not yet delinquent) that, with the
passage of time or with notice and the expiration of any grace or cure period,
would constitute such a material default, breach or event of acceleration;
provided, however, that this representation and warranty does not cover any
default, breach or event of acceleration that specifically pertains to any
matter otherwise covered or addressed by any other representation and warranty
made by the Seller herein.
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(xxvi) INSPECTION. In connection with the origination or acquisition
of each Mortgage Loan, the Seller inspected or caused to be inspected the
Mortgaged Property.
(xxvii) NO EQUITY PARTICIPATION OR CONTINGENT INTEREST. The Mortgage
Loan contains no equity participation by the lender, and does not provide for
any contingent or additional interest in the form of participation in the cash
flow of the related Mortgaged Property, or for negative amortization.
(xxviii) NO ADVANCES OF FUNDS. No holder of the Mortgage Loan has,
to the Seller's knowledge, advanced funds or induced, solicited or knowingly
received any advance of funds from a party other than the owner of the related
Mortgaged Property, directly or indirectly, for the payment of any amount
required by the Mortgage Loan.
(xxix) LICENSES, PERMITS, ETC. To the Seller's knowledge, based on
due diligence customarily performed in the origination of comparable mortgage
loans by the Seller, as of the date of origination of the Mortgage Loan, the
related Mortgagor or operator of the related Mortgaged Property was in
possession of all material licenses, permits and authorizations required by
applicable laws for the ownership and operation of the related Mortgaged
Property as it was then operated and if a related Mortgaged Property is improved
by a skilled nursing, congregate care or assisted living facility, the most
recent inspection or survey by governmental authorities having jurisdiction in
connection with such licenses, permits and authorizations did not cite such
Mortgaged Property for material violations (which shall include only "Level A"
(or equivalent) violations in the case of skilled nursing facilities) that had
not been cured or as to which a plan of correction had not been submitted to and
accepted by such governmental authorities. To the extent such facility
participates in Medicaid or Medicare, such facility is in compliance in all
material respects with the requirements of such program.
(xxx) SERVICING. The servicing and collection practices used with
respect to the Mortgage Loan have complied with applicable law in all material
respects and are consistent with customary servicing practices of institutional
servicers of mortgage loans such as the Mortgage Loans.
(xxxi) CUSTOMARY REMEDIES. The related Mortgage or Mortgage Note,
together with applicable state law, contains customary and enforceable
provisions (subject to the exceptions set forth in paragraph (xii)) such as to
render the rights and remedies of the holders thereof adequate for the practical
realization against the related Mortgaged Property of the principal benefits of
the security intended to be provided thereby.
(xxxii) INSURANCE AND CONDEMNATION PROCEEDS. The related Mortgage
provides that insurance proceeds and condemnation proceeds will be applied for
one of the following purposes: either to restore or repair the Mortgaged
Property, or to repay the principal of the Mortgage Loan, or otherwise at the
option of the holder of the Mortgage.
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(xxxiii) LTV. The gross proceeds of such Mortgage Loan to the related
Mortgagor at origination did not exceed the non-contingent principal amount of
the Mortgage Loan and either: (A) such Mortgage Loan is secured by an interest
in real property having a fair market value (1) at the date the Mortgage Loan
was originated at least equal to 80 percent of the original principal balance of
the Mortgage Loan or (2) at the Closing Date at least equal to 80 percent of the
principal balance of the Mortgage Loan on such date; provided that for purposes
hereof, the fair market value of the real property interest must first be
reduced by (X) the amount of any lien on the real property interest that is
senior to the Mortgage Loan and (Y) a proportionate amount of any lien that is
in parity with the Mortgage Loan (unless such other lien secures a Mortgage Loan
that is cross-collateralized with such Mortgage Loan, in which event the
computation described in clauses (1) and (2) of this paragraph (xxxiii) shall be
made on a PRO RATA basis in accordance with the fair market values of the
Mortgaged Properties securing such cross-collateralized Mortgage Loans; or (B)
substantially all the proceeds of such Mortgage Loan were used to acquire,
improve or protect the real property which served as the only security for such
Mortgage Loan (other than a recourse feature or other third party credit
enhancement within the meaning of Treasury Regulations Section
1.860G-2(a)(1)(ii)).
(xxxiv) LTV AND SIGNIFICANT MODIFICATIONS. If the Mortgage Loan was
"significantly modified" prior to the Closing Date so as to result in a taxable
exchange under Section 1001 of the Code, it either (A) was modified as a result
of the default or reasonably foreseeable default of such Mortgage Loan or (B)
satisfies the provisions of either clause (A)(1) of paragraph (xxxiii)
(substituting the date of the last such modification for the date the Mortgage
Loan was originated) or clause (A)(2) of paragraph (xxxiii), including the
proviso thereto.
(xxxv) CREDIT LEASE LOANS. With respect to each Mortgage Loan that is
a Credit Lease Loan;
(A) To the Seller's knowledge, each credit lease ("Credit Lease")
contains customary and enforceable provisions which render the
rights and remedies of the lessor thereunder adequate for the
enforcement and satisfaction of the lessor's rights
thereunder;
(B) To the Seller's knowledge, in reliance on a tenant estoppel
certificate and representation made by the tenant under the
Credit Lease or representations made by the related borrower
under the Mortgage Loan documents, as of the closing date of
each Credit Lease Loan (1) each Credit Lease was in full force
and effect, and no default by the borrower or the tenant has
occurred under the Credit Lease, nor is there any existing
condition which, but for the passage of time or the giving of
notice, or both, would result in a default under the terms of
the Credit Lease, (2) none of the terms of the Credit Lease
have been impaired, waived, altered or modified in any respect
(except as
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described in the related tenant estoppel), (3) no tenant has
been released, in whole or in part, from its obligations under
the Credit Leases, (4) there is no right of rescission,
offset, abatement, diminution, defense or counterclaim to any
Credit Lease, nor will the operation of any of the terms of
the Credit Leases, or the exercise of any rights thereunder,
render the Credit Lease unenforceable, in whole or in part, or
subject to any right of rescission, offset, abatement,
diminution, defense or counterclaim, and no such right of
rescission, offset, abatement, diminution, defense or
counterclaim has been asserted with respect thereto, and (5)
each Credit Lease has a term ending on or after the final
maturity of the related Credit Lease Loan;
(C) The Mortgaged Property is not subject to any lease other than
the related Credit Lease, no Person has any possessory
interest in, or right to occupy, the Mortgaged Property except
under and pursuant to such Credit Lease and the tenant under
the related Credit Lease is in occupancy of the Mortgaged
Property;
(D) The mortgagee is entitled to notice of any event of default
from the tenant under Credit Leases;
(E) Each tenant under a Credit Lease is required to make all
rental payments directly to the mortgagee, its successors and
assigns under the related Credit Lease Loan;
(F) Each Credit Lease Loan provides that the related Credit Lease
cannot be modified without the consent of the mortgagees under
the related Credit Lease Loan;
(G) Except with respect to the Mortgage Loans listed on Schedule
C-1 hereto, the lease payments due under the related Credit
Lease, together with any escrow payments held by the Seller or
its designee, are equal to or greater than the payments due
with respect to the related Mortgage Loan;
(H) Except with respect to Credit Lease Loans listed on Schedule
C-1 hereto, the Mortgagor does not have monetary obligations
under the related Credit Lease, and every monetary obligation
associated with managing, owning, developing and operating the
leased property, including, but not limited to, the costs
associated with utilities, taxes, insurance, maintenance and
repairs is an obligation of the related Tenant;
(I) The Mortgagor does not have any nonmonetary obligations under
the related Credit Lease, except for the delivery of
possession of the leased property;
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(J) Except with respect to Credit Lease Loans listed on Schedule
C-1 hereto, the Mortgagor has not made any representation or
warranty in the related Credit Lease, a breach of which would
result in the termination of, or an offset or abatement with
respect to, such Credit Lease;
(K) Except with respect to Credit Lease Loans listed on Schedule
C-1 hereto, the related Tenant cannot terminate such Credit
Lease for any reason prior to the payment in full of: (a) the
principal balance of the related Mortgage Loan; (b) all
accrued and unpaid interest on such Mortgage Loan; and (c) any
other sums due and payable under such Mortgage Loan, as of the
termination date, which date is a rent payment date, except
for a default by the related Mortgagor under the Credit Lease
or due to a casualty or condemnation event, in which case, a
lease enhancement policy insures against such risk;
(L) In the event the related Tenant assigns or sublets the related
leased property, such Tenant (and if applicable, the related
guarantor) remains obligated under the related Credit Lease;
(M) Except with respect to Credit Lease Loans listed on Schedule
C-1 hereto, each property related to a Credit Lease Loan is a
separate tax lot;
(N) The related Tenant has agreed to indemnify the Mortgagor from
any claims of any nature (a) to which the Mortgagor is subject
because of such Mortgagor's estate in the leased property, or
(b) arising from (i) injury to or death of any person or
damage to or loss of property on the leased property or
connected with the use, condition or occupancy of the leased
property, (ii) Tenant's violation of the related Credit Lease,
or (iii) any act or omission of the Tenant;
(O) Except with respect to the Mortgage Loans listed on Schedule
C-1 hereto, related Tenant has agreed to indemnify the
Mortgagor from any claims of any nature arising as a result of
any hazardous material affecting the leased property and due
to such Tenant's use of the leased property;
(P) In connection with the Credit Lease Loans with respect to
which a Guaranty exists, the related guarantor guarantees the
payment due under the related Credit Lease and such Guaranty,
on its face, contains no conditions to such payment;
(Q) Except with respect to Credit Lease Loans that have the
benefit of residual value insurance policies and lease
enhancement policies, each such policy has
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been obtained and with respect to the Credit Leases other than
bond-type leases, the required premiums have been paid; and
(R) The list of lease guarantors listed on Schedule C-1 hereto,
is accurate in all material respects.
(xxxvi) LITIGATION. To the Seller's actual knowledge, there are no
pending actions, suits or proceedings by or before any court or governmental
authority against or affecting the related Mortgagor or the related Mortgaged
Property that, if determined adversely to such Mortgagor or Mortgaged Property,
would materially and adversely affect the value of the Mortgaged Property or the
ability of the Mortgagor to pay principal, interest or any other amounts due
under such Mortgage Loan.
(xxxvii) LEASEHOLD ESTATE. Each Mortgaged Property consists of the
related Mortgagor's fee simple estate in real estate or, if the related Mortgage
Loan is secured in whole or in part by the interest of a Mortgagor as a lessee
under a ground lease of a Mortgaged Property (a "Ground Lease"), by the related
Mortgagor's interest in the Ground Lease but not by the related fee interest in
such Mortgaged Property (the "Fee Interest") or if the Mortgage Loan is secured
in whole or in part by a Ground Lease and a Fee Interest, either (1) the ground
lessor's fee interest is subordinated to the lien of the Mortgage or (2) the
following apply to such Ground Lease:
(A) To the actual knowledge of the Seller, such Ground Lease or a
memorandum thereof has been or will be duly recorded; such
Ground Lease (or the related estoppel letter or lender
protection agreement between the Seller and related lessor)
permits the interest of the lessee thereunder to be encumbered
by the related Mortgage; and there has been no material change
in the payment terms of such Ground Lease since the
origination of the related Mortgage Loan, with the exception
of material changes reflected in written instruments that are
a part of the related Mortgage File;
(B) The lessee's interest in such Ground Lease is not subject to
any liens or encumbrances superior to, or of equal priority
with, the related Mortgage, other than the ground lessor's
related fee interest and Permitted Encumbrances;
(C) The Mortgagor's interest in such Ground Lease is assignable to
the Purchaser and its successors and assigns upon notice to,
but without the consent of, the lessor thereunder (or, if such
consent is required, it has been obtained prior to the Closing
Date); and, in the event that it is so assigned, it is further
assignable by the Purchaser and its successors and assigns
upon notice to, but without the need to obtain the consent of,
such lessor (or if such consent is required, it cannot be
unreasonably withheld);
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(D) Such Ground Lease is in full force and effect, and the Seller
has received no notice that an event of default has occurred
thereunder, and, to the Seller's actual knowledge, there
exists no condition that, but for the passage of time or the
giving of notice, or both, would result in an event of default
under the terms of such Ground Lease;
(E) Such Ground Lease, or an estoppel letter or other agreement,
requires the lessor under such Ground Lease to give notice of
any default by the lessee to the mortgagee under such Mortgage
Loan, provided that the mortgagee has provided the lessor with
notice of its lien in accordance with the provisions of such
Ground Lease, and such Ground Lease, or an estoppel letter or
other agreement, further provides that no notice of
termination given under such Ground Lease is effective against
the mortgagee unless a copy has been delivered to the
mortgagee;
(F) The mortgagee under such Mortgage Loan is permitted a
reasonable opportunity (including, where necessary, sufficient
time to gain possession of the interest of the lessee under
such Ground Lease) to cure any default under such Ground
Lease, which is curable after the receipt of notice of any
such default, before the lessor thereunder may terminate such
Ground Lease;
(G) Such Ground Lease has an original term (including any
extension options set forth therein) which extends not less
than ten years beyond the Stated Maturity Date of the related
Mortgage Loan;
(H) Under the terms of such Ground Lease (or an estoppel letter or
other agreement) and the related Mortgage, taken together,
any related insurance proceeds other than in respect of a
total or substantially total loss or taking, will be applied
either to the repair or restoration of all or part of the
related Mortgaged Property, with the mortgagee under such
Mortgage Loan or a trustee appointed by it having the right to
hold and disburse such proceeds (if they are in excess of a
specified amount) as the repair or restoration progresses
(except in such cases where a provision entitling another
party to hold and disburse such proceeds would not be viewed
as commercially unreasonable by a prudent commercial mortgage
lender), or to the payment of the outstanding principal
balance of the Mortgage Loan together with any accrued
interest thereon;
(I) Except for the reasonable consent of the ground lessor, such
Ground Lease does not impose any restrictions on subletting
which would be viewed, as of the date of origination of the
related Mortgage Loan, as commercially
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unreasonable by the Seller (although there may be general
limitations on the use of the Mortgaged Property);
(J) Such Ground Lease contains a covenant that the lessor
thereunder is not permitted, in the absence of an uncured
default, to disturb the possession, interest or quiet
enjoyment of the related Mortgagor, or in any manner, which
would materially adversely affect the security provided by the
related Mortgage; and
(K) Such Ground Lease, or an estoppel letter or other agreement,
requires the lessor to enter into a new lease in the event of
a termination of the Ground Lease by reason of a default by
the Mortgagor under the Ground Lease, including, rejection of
the ground lease in a bankruptcy proceeding.
(xxxviii) DEED OF TRUST. If the related Mortgage is a deed of trust,
a trustee, duly qualified under applicable law to serve as such, is properly
designated and serving under such Mortgage.
(xxxix) LIEN RELEASES. Except in cases where either (a) a release of
a portion of the Mortgaged Property was contemplated at origination of the
Mortgage Loan and such portion was not considered material for purposes of
underwriting the Mortgage Loan or (b) release is conditioned upon the
satisfaction of certain underwriting and legal requirements and the payment of a
release price, the related Mortgage Note or Mortgage does not require the holder
thereof to release all or any portion of the Mortgaged Property from the lien of
the related Mortgage except upon payment in full of all amounts due under such
Mortgage Loan.
(xl) JUNIOR LIENS. The Mortgage Loan does not permit the related
Mortgaged Property to be encumbered by any lien junior to or of equal priority
with the lien of the related Mortgage (excluding any lien relating to another
Mortgage Loan that is cross-collateralized with such Mortgage Loan) without the
prior written consent of the holder thereof or the satisfaction of debt service
coverage or similar conditions specified therein.
(xli) MORTGAGOR BANKRUPTCY. To the Seller's knowledge, the Mortgagor
is not a debtor in any state or federal bankruptcy or insolvency proceeding.
(xlii) DUE ORGANIZATION OF MORTGAGORS. As of the date of origination
of each Mortgage, each related Mortgagor which is not a natural person was duly
organized and validly existing under the laws of the state of its jurisdiction.
(xliii) DUE-ON-SALE. The Mortgage Loan contains provisions for the
acceleration of the payment of the unpaid principal balance of such Mortgage
Loan if, without complying with the requirements of such Mortgage Loan, the
related Mortgaged Property, or any controlling interest therein, is directly or
indirectly transferred or sold.
(xliv) SINGLE PURPOSE ENTITY. Except for Mortgage Loans each of which
represent less than 2.0% of $2,530,361,727, the Mortgagor is an entity, other
than an individual, whose organizational documents or the related Mortgage Loan
Documents provide substantially to the effect that the Mortgagor: (A) is formed
or organized solely for the purpose of owning and operating one or more of the
Mortgaged Properties securing the Mortgage Loans, (B) may not engage in any
business unrelated to such Mortgaged Property or Mortgaged Properties, (C) does
not have any material assets other than those related to its interest in and
operation of such Mortgage Property or Mortgaged Properties, (D) may not incur
indebtedness other than as permitted by the related Mortgage or other Mortgage
Loan Documents, (E) has its own books and records separate and apart from any
other person, and (F) holds itself out as a legal entity, separate and apart
from any other person.
(xlv) DEFEASANCE PROVISIONS. Any Mortgage Loan which contains a
provision for any defeasance of mortgage collateral either (A) requires the
consent of the holder of the Mortgage Loan to any defeasance, or (B) permits
defeasance (i) no earlier than two years after the Closing Date (as defined in
the Pooling and Servicing Agreement, dated as of August 1, 1998), (ii) only with
substitute collateral constituting "government securities" within the meaning of
Treas. Reg. Section 1.860G-2(a)(8)(i), and (iii) only to facilitate the
disposition of mortgage real property and not as a part of an arrangement to
collateralize a REMIC offering with obligations that are not real estate
mortgages.
It is understood and agreed that the representations and warranties set
forth in this EXHIBIT C shall survive delivery of the respective Mortgage Files
to the Purchaser and/or the Trustee and shall inure to the benefit of the
Purchaser, and its successors and assigns (including without limitation the
Trustee and the holders of the Certificates), notwithstanding any restrictive or
qualified endorsement or assignment.
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SCHEDULE C-1 TO EXHIBIT C
REPRESENTATIONS AND WARRANTIES EXCEPTIONS
(vi) TITLE INSURANCE
CONTROL NO. LOAN NUMBER PROPERTY
3j LG980424002J Boykin
(Doubletree-Omaha)
(xxii) NO MECHANICS' OR MATERIALMEN'S LIENS
CONTROL NO. LOAN NUMBER PROPERTY ISSUE
23 970815023 Livingston Retail Lien present,
Center but bonded
(xiv) ENVIRONMENTAL CONDITION
CONTROL NO. LOAN NUMBER PROPERTY
44 980701999 Sam's Wholesale Club
50 980601999C Circuit City
68 980601999D Circuit City
72 980601999B Circuit City
98 9806019991 Circuit City
99 980601999F Circuit City
110 980601999A Circuit City
122 980601999G Circuit City
181 980601999H Circuit City
221 980601999E Circuit City
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(xix) WHOLE LOAN
The following Mortgage Loans are Pass Through Loans represented by a
Loan Certificate.
CONTROL NO. LOAN NUMBER PROPERTY
50 980601999C Circuit City
68 980601999D Circuit City
72 980601999B Circuit City
98 980601999I Circuit City
99 980601999F Circuit City
110 980601999A Circuit City
122 980601999G Circuit City
181 980601999H Circuit City
221 980601999E Circuit City
(xxxv) CREDIT LEASE LOANS
(G)
CONTROL NO. LOAN NUMBER PROPERTY
143 971217004 Walgreen
156 970924009 Eckerd San Antonio
171 970802003 Walgreens - Richmond
187 971107007 Walgreen (Dallas)
245 971222008 Walgreen's (Westmoreland)
257 971030017 Eckerd - Baton Rouge
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(H)
CONTROL NO. LOAN NUMBER PROPERTY
87 980204001 Shop 'N Save
(Hannaford Brothers)
143 971217004 Walgreen
164 970819000 Walgreens
171 970802003 Walgreens - Richmond
187 971107007 Walgreen (Dallas)
244 980127001 Walgreens (Shawnee)
245 971222008 Walgreen's (Westmoreland)
255 980212001 Eckerd Pharmacy
(Corpus Christi)
351 970530002 Rite Aid - Walcott
369 980127004C IHOP
377 971201019 Southland - Lakecity
(J)
CONTROL NO. LOAN NUMBER PROPERTY
44 980701999 Sam's Wholesale Club
87 980204001 Shop 'N Save
(Hannaford Brothers)
143 971217004 Walgreen
164 970819000 Walgreens
171 970802003 Walgreens - Richmond
187 971107007 Walgreen (Dallas)
245 971222008 Walgreen's (Westmoreland)
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CONTROL NO. LOAN NUMBER PROPERTY
255 980212001 Eckerd Pharmacy
(Corpus Christi)
377 971201019 Southland - Lakecity
(K)
CONTROL NO. LOAN NUMBER PROPERTY
44 980701999 Sam's Wholesale Club
(M)
CONTROL NO. LOAN NUMBER PROPERTY
257 971030017 Eckerd - Baton Rouge
(O)
CONTROL NO. LOAN NUMBER PROPERTY
44 980701999 Sam's Wholesale Club
50 980601999C Circuit City
156 970924009 Eckerd San Antonio
171 970802003 Walgreens - Richmond
244 980127001 Walgreens (Shawnee)
255 980212001 Eckerd Pharmacy
(Corpus Christi)
257 971030017 Eckerd - Baton Rouge
377 971201019 Southland - Lakecity
C-17
<PAGE>
(R)
CONTROL NO. LOAN NUMBER PROPERTY LEASE GUARANTOR
44 980701999 Sam's Wholesale Wal-Mart Stores,
Club Inc.
87 980204001 Shop 'N Save Hanaford Bros. Co.
(Hannaford Brothers)
143 971217004 Walgreen Walgreen Co.
164 970819000 Walgreens Walgreen Co.
351 970530002 Rite Aid - Walcott Rite Aid Corp.
369 980127004C IHOP IHOP Corp.
(xxxvii) LEASEHOLD ESTATE
(B)
CONTROL NO. LOAN NUMBER PROPERTY
3j LG980424002J Boykin
(Doubletree - Omaha)
(C)
CONTROL NO. LOAN NUMBER PROPERTY
3j LG980424002J Boykin
(Doubletree - Omaha)
(E)
CONTROL NO. LOAN NUMBER PROPERTY
58 980204038 New Harbour Mall
C-18
<PAGE>
(xl) JUNIOR LIENS
CONTROL NO. LOAN NUMBER PROPERTY
6 971120012 The Bellevue
138 980401012 801 Penn Ave. Dc
294 971223029 Willow Creek Apartments
C-19
<PAGE>
EXHIBIT D-1
FORM OF CERTIFICATE OF AN OFFICER OF
THE SELLER
CERTIFICATE OF OFFICER OF LEHMAN BROTHERS HOLDINGS INC. ("LB HOLDINGS")
I, _________________, a _________________ of Lehman Brothers Holdings Inc.,
doing business as Lehman Capital, a Division of Lehman Brothers Holdings Inc.,
(the "Seller"), hereby certify as follows:
The Seller is a corporation duly organized and validly existing under the
laws of the State of Delaware.
Attached hereto as EXHIBIT I are true and correct copies of the Certificate
of Incorporation and By-Laws of the Seller, which Certificate of Incorporation
and By-Laws are on the date hereof, and have been at all times in full force and
effect.
To the best of my knowledge, no proceedings looking toward liquidation or
dissolution of the Seller are pending or contemplated.
Each person listed below is and has been the duly elected and qualified
officer or authorized signatory of the Seller and his genuine signature is set
forth opposite his name:
Name Office Signature
---- ------ ---------
Each person listed above who signed, either manually or by facsimile
signature, the Mortgage Loan Purchase Agreement, dated as of August 21, 1998
(the "Purchase Agreement"), between the Seller and GMAC Commercial Mortgage
Securities, Inc. providing for the purchase by GMAC Commercial Mortgage
Securities, Inc. from the Seller of the Mortgage Loans, was, at the respective
times of such signing and delivery, duly authorized or appointed to execute such
documents in such capacity, and the signatures of such persons or facsimiles
thereof appearing on such documents are their genuine signatures.
Capitalized terms not otherwise defined herein have the meanings assigned
to them in the Purchase Agreement.
D-1
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this certificate as of
August _ __, 1998.
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
I, [name], [title], hereby certify that ________________ is a duly elected
or appointed, as the case may be, qualified and acting ______________ of the
Seller and that the signature appearing above is [his] genuine signature.
IN WITNESS WHEREOF, the undersigned has executed this certificate as of
August _ __, 1998.
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
D-2
<PAGE>
EXHIBIT D-2
FORM OF CERTIFICATE OF THE SELLER
CERTIFICATE OF LEHMAN BROTHERS HOLDINGS, INC.
In connection with the execution and delivery by Lehman Brothers Holdings,
Inc., doing business as Lehman Capital, a Division of Lehman Brothers Holdings
Inc., (the "Seller") of, and the consummation of the transaction contemplated
by, that certain Mortgage Loan Purchase Agreement, dated as of August 21, 1998
(the "Purchase Agreement"), between GMAC Commercial Mortgage Securities, Inc.
and the Seller, the Seller hereby certifies that (i) the representations and
warranties of the Seller in the Purchase Agreement are true and correct in all
material respects at and as of the date hereof with the same effect as if made
on the date hereof, and (ii) the Seller has, in all material respects, complied
with all the agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to the date hereof. Capitalized terms not
otherwise defined herein have the meanings assigned to them in the Purchase
Agreement.
Certified this ___th day of August, 1998.
LEHMAN BROTHERS HOLDINGS INC.
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
D-3
<PAGE>
EXHIBIT D-3A
FORM OF OPINION I OF COUNSEL TO THE SELLER
August [__], 1998
GMAC Commercial Mortgage Corporation
GMAC Commercial Mortgage Securities, Inc.
Lehman Brothers Inc.
Deutsche Bank Securities Inc.
Fitch IBCA Inc.
Moody's Investors Service, Inc.
Standard & Poor's Ratings Service
LaSalle National Bank
Re: GMAC Commercial Mortgage Securities, Inc.,
Mortgage Pass-Through Certificates, Series 1998-C2
--------------------------------------------------
Ladies and Gentlemen:
I have acted as counsel to Lehman Brothers Holdings Inc., doing business as
Lehman Capital, a Division of Lehman Brothers Holdings Inc. ("Lehman"). GMAC
Commercial Mortgage Securities, Inc. will acquire certain mortgage loans from
Lehman pursuant to the Mortgage Loan Purchase Agreement, dated as of August 21,
1998 (the "Mortgage Loan Purchase Agreement"). Capitalized terms used but not
defined herein shall have the meanings set forth in the Mortgage Loan Purchase
Agreement.
You have asked for my opinion regarding the due authorization of Lehman to
enter into the Mortgage Loan Purchase Agreement.
As to matters of fact material to this opinion, I have relied, without
independent investigation on (i) the representations and warranties of Lehman in
the Mortgage Loan Purchase Agreement, (ii) relevant resolutions of the Board of
Directors of Lehman, (iii) certificates of responsible officers of Lehman and
(iv) certificates of public officials.
D-4
<PAGE>
In this connection, I have examined or have caused to be examined on my
behalf, a copy of the Mortgage Loan Purchase Agreement and such other documents
and instruments which I have deemed necessary or appropriate in connection with
this opinion.
I have relied on originals or copies, certified or otherwise identified to
my satisfaction, of the certificate of incorporation and by-laws of Lehman,
records of proceedings taken by Lehman, and such other corporate documents and
records of Lehman, and have made such other investigations as I have deemed
relevant or necessary for the purpose of this action. I have assumed, without
independent investigation, the genuineness of all signatures (other than those
of officers of Lehman), the authenticity of all documents submitted to me as
originals and the conformity to original documents of all documents submitted to
me as certified, conformed or reproduction copies.
On the basis of and subject to the foregoing, it is my opinion that:
(1) Lehman is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Delaware, with the corporate power
and authority to transact the business contemplated by the Mortgage Loan
Purchase Agreement, and it has the requisite corporate power and authority to
execute and deliver the Mortgage Loan Purchase Agreement and to perform and
observe the terms and conditions thereof.
(2) The Mortgage Loan Purchase Agreement has been duly authorized,
executed and delivered by Lehman.
(3) The execution, delivery and performance by Lehman of the Mortgage Loan
Purchase Agreement will not conflict with, result in a breach of, or constitute
a default under any material term of Lehman's certificate of incorporation by
bylaws, any term or provision of any material contract, agreement or other
instrument known to me to which Lehman is a party or by which it is bound, or,
to the best of my knowledge without independent investigation, any order,
judgment, writ, injunction or decree known to me of any court or governmental
authority having jurisdiction over Lehman.
(4) The Mortgage Loan Purchase Agreement constitutes, assuming due
authorization, execution and delivery by the other party thereto, the valid and
binding obligation of Lehman enforceable against Lehman in accordance with its
terms, except as such enforcement may be limited by (a) bankruptcy, insolvency,
reorganization, moratorium or other laws affecting the enforcement of creditors'
rights generally, (b) general equity principles (regardless of whether such
enforcement is considered in a proceeding in equity or at law) and (c)
limitations of public policy under applicable securities laws as to rights of
indemnity thereunder.
This opinion letter is rendered for the sole benefit of each addressee
hereof, and no other person or entity is entitled to rely hereon without my
prior written consent. Copies of this opinion letter may not be furnished to
any other person or entity, nor may any portion of this opinion letter be
quoted, circulated or referred to in any other document without my prior written
consent.
Very truly yours,
D-5
<PAGE>
EXHIBIT D-3B
FORM OF OPINION II OF COUNSEL TO THE SELLER
August , 1998
Lehman Brothers Inc.
Three World Financial Center
20th Floor
New York, NY 10288
GMAC Commercial Mortgage Securities, Inc.
650 Dresher Road
Horsham, PA 19044-8015
Deutsche Bank Securities, Inc.
31 West 52nd Street
New York, NY 10019
Re: GMAC Commercial Mortgage Securities, Inc., Commercial Mortgage
Pass-Through Certificates Series 1998-C2
--------------------------------------------------------------
Ladies and Gentlemen:
We have acted as special counsel to Lehman Brothers Holdings Inc., doing
business as Lehman Capital, a Division of Lehman Brothers Holdings Inc. (the
"Lehman Seller"), in connection with certain aspects of the sale by the Lehman
Seller, and the purchase by GMAC Commercial Mortgage Securities, Inc. (the
"Depositor"), of certain multifamily and commercial mortgage loans (the
"Mortgage Loans") pursuant to a Mortgage Loan Purchase Agreement dated as of
August 21, 1998 (the "Mortgage Loan Purchase Agreement") between the Lehman
Seller and the Depositor, and further in connection with the preparation and
review of the sections entitled "Summary of Prospectus Supplement - The Mortgage
Asset Pool", "Risk Factors - The Mortgage Loans", "Description of the Mortgage
Asset Pool", and Annex A (collectively the "Specified Sections") of the
Prospectus Supplement dated August 21, 1998 (the "Prospectus Supplement") to the
Depositor's Prospectus dated December 17, 1997 (the "Base Prospectus"; the
Prospectus Supplement and the Base Prospectus are collectively referred to
herein as the "Prospectus"). Capitalized terms used but not defined herein have
the same respective meanings
D-6
<PAGE>
that such terms have in the Mortgage Loan Purchase Agreement (and, if not
defined therein, then in the Prospectus).
For the purposes of this letter, we have examined originals or copies,
certified or otherwise authenticated to our satisfaction, of the Prospectus, the
Mortgage Loan Purchase Agreement and other such documents and records as we have
deemed relevant or necessary as the basis for the views expressed in this
letter. We have obtained such certificates from and made such inquiries of
officers and other representatives of the Lehman Seller as we have deemed
relevant or necessary as the basis of the views expressed in this letter. We
have relied upon, and assumed the accuracy of, such other documents and records,
such certificates and the statements made in response to such inquiries, with
respect to the factual matters upon which the views expressed in this letter are
based. We have also assumed (i) the truthfulness and accuracy of each of the
representations and warranties as to factual matters contained in the Mortgage
Loan Purchase Agreement, (ii) the legal capacity of natural persons, (iii) the
genuineness of all signatures and the authenticity of all documents submitted to
us as originals, (iv) the conformity to the originals of all documents submitted
to us as certified, conformed or photostatic copies, (v) the due authorization
by all necessary action, and the due execution and delivery, of the Mortgage
Loan Purchase Agreement by the parties thereto and the constitution of the
Mortgage Loan Purchase Agreement as the legal, valid and binding obligation of
each party thereto, enforceable against such party in accordance with its terms,
(vi) compliance with the Mortgage Loan Purchase Agreement y the parties thereto,
(vii) the conformity, to the requirements of the Mortgage Loan Purchase
Agreement, of the Mortgage Notes, the Mortgages and the other documents
delivered to the Trustee in respect of the Mortgage Loans by, on behalf of or at
the direction of the Lehman Seller and the Depositor, (viii) the absence of any
agreement that supplements or otherwise modifies the agreements expressed in the
Mortgage Loan Purchase Agreement, and (ix) the conformity of the text of each
document filed with the Securities Exchange Commission through the EDGAR system
to the printed document reviewed by us. In rendering this letter, we do not
express any view concerning the laws of any jurisdiction other than the federal
laws of the United States of America.
In the course of acting as special counsel to the Lehman Seller with
respect to the matters discussed in the first paragraph of this letter, we have
generally reviewed and discussed with certain officers and other representatives
of the Lehman Seller and its affiliates, as well as with counsel and certain
officers and other representatives of the Lehman seller and its affiliates, as
well as with counsel and certain officers and other representatives of the
Depositor, the following items: (i) the Specified Sections; (ii) certain loan
summaries prepared by the Lehman Seller with respect to Mortgage Loans with
Cut-off Date Balances in excess of $10,000,000; (iii) certain summaries relating
to environmental matters in respect of select Mortgaged Properties, which
Mortgaged Properties were chosen by the Lehman Seller based on the nature of
such environmental matters; and (iv) the opinion of Christopher Epes, Esq.,
internal counsel for the Lehman Seller. In addition to the foregoing, we acted
as special counsel to the Lehman Seller in connection with the origination of
the South Towne Loan and, in such capacity, were actively involved in the
preparation and negotiation of the related loan documents. While we have not
otherwise made any independent check or verification of, and do not assume any
responsibility for, the accuracy, completeness or fairness of the statements
contained in the Specified Sections,
D-7
<PAGE>
on the basis of the foregoing, nothing has come to our attention that causes
us to believe that the Specified Sections, as of the date of the Prospectus
Supplement or as of the date hereof, insofar as the information therein
relates to the Mortgage Loans and the Lehman Seller, contained or contains
any untrue statement of a material fact or omitted or omits to state a
material fact necessary to make the statement therein, in the light of the
circumstances under which they were made, not misleading, except that we make
no statement as to any accounting, financial or statistical data or other
information of that nature contained in or omitted from the Specified
Sections. In that connection, we advise you that we have, as to materiality,
relied to the extent we deemed appropriate, upon the judgment of officers and
other representatives of the Lehman Seller and its affiliates. In addition,
in that connection, we call to your attention that, with your knowledge and
consent, we have not, except as described above, examined or otherwise
reviewed any of the Mortgage Files, any particular documents contained in
such files or any other documents with respect to the Mortgage Loans. When
used in this letter, the term "attention" or any other word or phrase of
similar import means the conscious awareness of facts or other information of
attorneys who are currently practicing law with and
have been actively involved in representing the Lehman Seller in connection
with the transactions referred to herein.
The statements set forth herein are being made to you as of the date
hereof, and we assume no obligation to advise you of any changes of law or fact
that may occur after the date hereof, notwithstanding that such changes may
affect the views or belief expressed herein. This letter is being delivered
solely for the benefit of the persons to which it is addressed and may not be
quoted, filed with any governmental authority or other regulatory agency or
otherwise circulated or utilized for any other purpose without our prior written
consent.
Very truly yours,
D-8
<PAGE>
Exhibit 99.5
EXECUTION COPY
SUPPLEMENTAL AGREEMENT
This Supplemental Agreement (this "Agreement"), is dated and effective as
of August 21, 1998, between GMAC Commercial Mortgage Corporation as seller (the
"Seller") and Restructured Asset Certificates with Enhanced Returns, Series
1998-ML Trust as purchaser (the "Purchaser"), of which LaSalle National Bank is
the trustee (in such capacity, the "Purchaser Trustee").
WHEREAS, the Seller sold certain mortgage loans to the Purchaser pursuant
to a certain Mortgage Loan Purchase Agreement (the "ML Trust Purchase
Agreement"), dated as of June 30, 1998.
WHEREAS, the Purchaser intends to sell the mortgage loans as shown on
Exhibit A hereto ("the Mortgage Loans") to GMAC Commercial Mortgage Securities,
Inc. as Depositor, (the "Depositor") pursuant to a certain Mortgage Loan
Purchase Agreement, dated as of August 21, 1998 (the "Mortgage Loan Purchase
Agreement") and the Depositor intends to transfer the Mortgage Loans, together
with other multifamily and commercial mortgage loans to a trust fund (the "Trust
Fund") to be formed by the Depositor, beneficial ownership of which will be
evidenced by a series of mortgage pass-through certificates (the
"Certificates"). Certain classes of the Certificates will be rated by Standard
& Poor's Ratings Services, Moody's Investors Service, Inc. and FITCH IBCA, Inc.
(together, the "Rating Agencies"). Certain classes of the Certificates (the
"Registered Certificates") will be registered under the Securities Act of 1933,
as amended (the "Securities Act"). The Trust Fund will be created and the
Certificates will be issued pursuant to a pooling and servicing agreement to be
dated as of August 1, 1998 (the "Pooling and Servicing Agreement"), among the
Depositor as depositor, GMAC Commercial Mortgage Corporation as master servicer
(in such capacity, the "Master Servicer") and special servicer (in such
capacity, the "Special Servicer"), LaSalle National Bank as trustee (in such
capacity, the "Trustee") and ABN AMRO Bank N.V. as fiscal agent. Capitalized
terms not otherwise defined herein have the meanings assigned to them in the
Pooling and Servicing Agreement as in effect on the Closing Date (as defined
below).
WHEREAS, the Depositor intends to sell certain of the Certificates to
Lehman Brothers Inc. and Deutsche Bank Securities Inc. (together, the
"Underwriters") pursuant to an underwriting agreement dated the date hereof (the
"Underwriting Agreement"). The Depositor intends to sell the remaining
Certificates (the "Non-Registered Certificates") to Lehman Brothers Inc. (the
"Initial Purchaser"), pursuant to a certificate purchase agreement dated the
date hereof (the "Certificate Purchase Agreement").
WHEREAS, each of the Seller and the Purchaser, in connection with the
transactions described above, desires to amend and supplement certain of the
provisions of the ML Trust
1998-C2 ML Trust Supplemental Agreement
<PAGE>
Purchase Agreement as they relate to the Mortgage Loans in order to facilitate
such transactions and in contemplation of the assignment by the Purchaser to the
Depositor of all of its right, title and interest in and to this Agreement.
Now, therefore, in consideration of the premises and the mutual agreements
set forth herein, the parties agree as follows:
SECTION 1. AMENDMENT OF ML TRUST PURCHASE AGREEMENT.
The parties hereto agree that, with respect to the Mortgage Loans
only, the ML Trust Purchase Agreement is hereby amended to the extent that the
provisions of the ML Trust Purchase Agreement are inconsistent with this
Agreement.
SECTION 2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER.
(a) The Seller hereby makes, as of August 27, 1998 (the "Closing Date")
(or as of such other date specifically provided in the particular representation
or warranty), to and for the benefit of the Purchaser, and its successors and
assigns (including, without limitation, the Depositor, the Trustee and the
holders of the Certificates), each of the representations and warranties set
forth in EXHIBIT B, with such changes or modifications as may be permitted or
required by the Rating Agencies.
(b) In addition, the Seller, as of the date hereof, hereby represents
and warrants to, and covenants with, the Purchaser that:
(i) The Seller is a corporation, duly organized, validly
existing and in good standing under the laws of the State of California,
and is in compliance with the laws of each State in which any Mortgaged
Property is located to the extent necessary to ensure the enforceability of
each Mortgage Loan and to perform its obligations under this Agreement.
(ii) The execution and delivery of this Agreement by the Seller,
and the performance and compliance with the terms of this Agreement by the
Seller, will not violate the Seller's organizational documents or
constitute a default (or an event which, with notice or lapse of time, or
both, would constitute a default) under, or result in the breach of, any
material agreement or other instrument to which it is a party or which is
applicable to it or any of its assets, in each case which materially and
adversely affect the ability of the Seller to carry out the transactions
contemplated by this Agreement.
(iii) The Seller has the full power and authority to enter into
and consummate all transactions contemplated by this Agreement, has duly
authorized the execution, delivery and performance of this Agreement, and
has duly executed and delivered this Agreement.
-2- 1998-C2 ML Trust Supplemental Agreement
<PAGE>
(iv) This Agreement, assuming due authorization, execution and
delivery by the Purchaser, constitutes a valid, legal and binding
obligation of the Seller, enforceable against the Seller in accordance with
the terms hereof, subject to (A) applicable bankruptcy, insolvency,
reorganization, moratorium and other laws affecting the enforcement of
creditors' rights generally, (B) general principles of equity, regardless
of whether such enforcement is considered in a proceeding in equity or at
law, and (C) public policy considerations underlying the securities laws,
to the extent that such public policy considerations limit the
enforceability of the provisions of this Agreement that purport to provide
indemnification for securities laws liabilities.
(v) The Seller is not in violation of, and its execution and
delivery of this Agreement and its performance and compliance with the
terms of this Agreement will not constitute a violation of, any law, any
order or decree of any court or arbiter, or any order, regulation or demand
of any federal, state or local governmental or regulatory authority, which
violation, in the Seller's good faith and reasonable judgment, is likely to
affect materially and adversely either the ability of the Seller to perform
its obligations under this Agreement or the financial condition of the
Seller.
(vi) No litigation is pending with regard to which Seller has
received service of process or, to the best of the Seller's knowledge,
threatened against the Seller the outcome of which, in the Seller's good
faith and reasonable judgment, could reasonably be expected to prohibit the
Seller from entering into this Agreement or materially and adversely affect
the ability of the Seller to perform its obligations under this Agreement.
(vii) The Seller has not dealt with any broker, investment banker,
agent or other person, other than the Purchaser, the Underwriters, the
Initial Purchasers and their respective affiliates, that may be entitled to
any commission or compensation in connection with the sale of the Mortgage
Loans or the consummation of any of the other transactions contemplated
hereby.
(viii) No consent, approval, authorization or order of,
registration or filing with, or notice to, any governmental authority or
court is required, under federal or state law (including, with respect to
any bulk sale laws), for the execution, delivery and performance of or
compliance by the Seller with this Agreement, or the consummation by the
Seller of any transaction contemplated hereby, other than (1) such
consents, approvals, authorizations, qualifications, registrations, filings
or notices as have been obtained or made and (2) where the lack of such
consent, approval, authorization, qualification, registration, filing or
notice would not have a material adverse effect on the performance by the
Seller under this Agreement.
(c) Upon discovery by any of the parties hereto of a breach of any of
the representations and warranties made pursuant to and set forth in subsection
(b) above which materially and adversely
-3- 1998-C2 ML Trust Supplemental Agreement
<PAGE>
affects the interests of the Purchaser or its successors or assigns or a breach
of any of the representations and warranties made pursuant to subsection (a)
above and set forth in EXHIBIT B which materially and adversely affects the
value of any Mortgage Loan or the interests therein of the Purchaser or its
successors and assigns (including, without limitation the Depositor, the Trustee
and the holders of the Certificates), the party discovering such breach shall
give prompt written notice to the other party hereto or if this Agreement is
assigned, to such assignee. The representations, warranties and covenants set
forth in this Section 2(a) shall replace and amend and restate in their entirety
the representations, warranties and covenants of the Seller set forth in Section
4.1(a) of the ML Trust Purchase Agreement to the extent they relate to the
Mortgage Loans.
SECTION 3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASER TRUSTEE.
(a) The Purchaser Trustee, as of the date hereof, hereby represents and
warrants to, and covenants with, the Seller that:
(i) The Purchaser Trustee is duly organized, validly existing
and in good standing under the laws of the United States.
(ii) The execution and delivery of this Agreement by the
Purchaser Trustee, and the performance and compliance with the terms of
this Agreement by the Purchaser Trustee, will not violate the Purchaser
Trustee's organizational documents or constitute a default (or an event
which, with notice or lapse of time, or both, would constitute a default)
under, or result in the breach of, any material agreement or other
instrument to which it is a party or which is applicable to it or any of
its assets.
(iii) The Purchaser Trustee has the full power and authority to
enter into and consummate all transactions contemplated by this Agreement,
has duly authorized the execution, delivery and performance of this
Agreement, and has duly executed and delivered this Agreement.
(iv) This Agreement, assuming due authorization, execution and
delivery by the Seller, constitutes a valid, legal and binding obligation
of the Purchaser Trustee, enforceable against the Purchaser 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 Purchaser Trustee is not in violation of, and its
execution and delivery of this Agreement and its performance and compliance
with the terms of this Agreement will not constitute a violation of, any
law, any order or decree of any court or arbiter, or any order, regulation
or demand of any federal, state or local governmental or regulatory
authority, which violation, in the Purchaser Trustee's good faith and
reasonable judgment,
-4- 1998-C2 ML Trust Supplemental Agreement
<PAGE>
is likely to affect materially and adversely either the ability of the
Purchaser Trustee to perform its obligations under this Agreement or the
financial condition of the Purchaser Trustee.
(vi) No litigation is pending or, to the best of the Purchaser
Trustee's knowledge, threatened against the Purchaser Trustee or the
Purchaser which would prohibit the Purchaser Trustee or the Purchaser from
entering into this Agreement or, in the Purchaser Trustee's good faith and
reasonable judgment, is likely to materially and adversely affect either
the ability of the Purchaser Trustee or the Purchaser to perform its
obligations under this Agreement or the financial condition of the
Purchaser Trustee or the Purchaser.
(vii) The Purchaser Trustee has not dealt with any broker,
investment banker, agent or other person, other than the Seller, the
Underwriters, the Initial Purchaser and their respective affiliates, that
may be entitled to any commission or compensation in connection with the
sale of the Mortgage Loans or the consummation of any of the transactions
contemplated hereby.
(viii) No consent, approval, authorization or order of,
registration or filing with, or notice to, any governmental authority or
court is required, under federal or state law, for the execution, delivery
and performance of or compliance by the Purchaser Trustee with this
Agreement, or the consummation by the Purchaser Trustee of any transaction
contemplated hereby, other than (1) such consents, approvals,
authorizations, qualifications, registrations, filings or notices as have
been obtained or made and (2) where the lack of such consent, approval,
authorization, qualification, registration, filing or notice would not have
a material adverse effect on the performance by the Purchaser Trustee under
this Agreement.
(b) The Purchaser hereby makes, as of the Closing Date (or as of such
other date specifically provided in the particular representation or warranty),
to and for the benefit of the Seller, and its successor and assigns, with
respect to each Mortgage Loan each of the representations and warranties set
forth below with such changes or modifications as may be permitted or required
by the Rating Agencies:
(i) Immediately prior to the transfer thereof to the Depositor,
the Purchaser had whatever title to such Mortgage Loan as was conveyed to
it by Seller, free and clear of any and all liens, encumbrances and other
interests on, in or to such Mortgage Loan (other than, in certain cases,
the right of a subservicer to directly service such Mortgage Loan). Such
transfer validly assigns such title to such Mortgage Loan to the Depositor
free and clear of any pledge, lien, encumbrance or security interest
executed by the Purchaser.
(ii) The Purchaser has full right and authority to sell, assign
and transfer its interest in such Mortgage Loan.
-5- 1998-C2 ML Trust Supplemental Agreement
<PAGE>
(iii) The Purchaser has not, by act or omission, done anything
that would materially impair the coverage under the lender's title
insurance policy that insures the lien of the related Mortgage.
(iv) The Purchaser has not waived any material default, breach,
violation or event of acceleration existing under the related Mortgage or
Mortgage Note.
(v) To the best of the Purchaser's knowledge, there is no valid
offset, defense or counterclaim to such Mortgage Loan.
(vi) The terms of the related Mortgage and the Mortgage Note have
not been impaired, waived, altered or modified by the Purchaser in any
material respect, except as specifically set forth in the related Mortgage
File.
(c) Upon discovery by any of the parties hereto of a breach of any of
the representations and warranties set forth above which materially and
adversely affects the interests of the Seller, the party discovering such breach
shall give prompt written notice to the other party hereto.
SECTION 4. REPURCHASES.
(a) Within 90 days of the earlier of discovery or receipt of notice by
the Seller, from either the Purchaser or any successor or assign thereof, of a
Defect (as defined in the Pooling and Servicing Agreement as in effect on the
Closing Date) in respect of the Mortgage File for any Mortgage Loan or a breach
of any representation or warranty made pursuant to Section 2(a) and set forth in
EXHIBIT B (a "Breach"), which Defect or Breach, as the case may be, materially
and adversely affects the value of any Mortgage Loan or the interests therein of
the Purchaser or its successors and assigns (including, without limitation, the
Depositor, the Trustee and the holders of the Certificates), the Seller shall
cure such Defect or Breach, as the case may be, in all material respects or
repurchase the affected Mortgage Loan from the then owner(s) thereof at the
applicable Purchase Price (as defined in the Pooling and Servicing Agreement as
in effect on the Closing Date) by payment of such Purchase Price by wire
transfer of immediately available funds to the account designated by such
owner(s); provided, however, that in lieu of effecting any such repurchase, the
Seller will be permitted to deliver a Qualifying Substitute Mortgage Loan and to
pay a cash amount equal to the applicable Substitution Shortfall Amount, subject
to the terms and conditions of the Pooling and Servicing Agreement as in effect
on the Closing Date.
If the Seller is notified of a Defect in any Mortgage File that corresponds
to information set forth in the Mortgage Loan Schedule, the Seller shall
promptly correct such Defect and provide a new, corrected Mortgage Loan Schedule
to the Purchaser, which corrected Mortgage Loan Schedule shall be deemed to
amend and replace the existing Mortgage Loan Schedule for all purposes.
-6- 1998-C2 ML Trust Supplemental Agreement
<PAGE>
(b) Notwithstanding Section 4(a), within 60 days of the earlier of
discovery or receipt of notice by the Seller, from either the Purchaser or any
successor or assign thereof, that any Mortgage Loan does not constitute a
"qualified mortgage" within the meaning of Section 860G(a)(3) of the Code, the
Seller shall repurchase such Mortgage Loan from the then owner(s) thereof at the
applicable Purchase Price by payment of such Purchase Price by wire transfer of
immediately available funds to the account designated by such owner(s).
In addition, if, as of the Closing Date, any Mortgage Loan is secured by a
Mortgage that does not constitute a valid first lien upon the related Mortgaged
Property, including all buildings located thereon and all fixtures attached
thereto, or if a Mortgage is subject to something other than (A) the lien of
current real property taxes and assessments not yet due and payable, (B)
covenants, conditions and restrictions, rights of way, easements and other
matters of public record, (C) exceptions and exclusions specifically referred to
in the lender's title insurance policy issued or, as evidenced by a "marked-up"
commitment, to be issued in respect of such Mortgage Loan and (D) those
exceptions set forth on Schedule B-1 to EXHIBIT B hereto (the exceptions set
forth in the foregoing clauses (A), (B), (C) and (D) collectively, "Permitted
Encumbrances"), or if the insurer that issued the Title Policy referred to in
clause (vi) of EXHIBIT B hereto in respect of any Mortgage Loan was not
qualified to do business in the state in which the related Mortgaged Property is
located, and in either case such failure materially and adversely affects the
interests of holder of Certificates, (any such failure that materially and
adversely affects the interests of holders of Certificates, also a "Breach"),
the Seller shall be required, at its option, to either (i) cure such Breach in
all material respects or (ii) repurchase the affected Mortgage Loan, in each
case, within the applicable Permitted Cure Period. If any such Breach is not
corrected or cured in all material respects within the applicable Permitted Cure
Period, the Seller shall, not later than the last day of such Permitted Cure
Period, (i) repurchase the affected Mortgage Loan from the Purchaser or its
assignee at the applicable Purchase Price or (ii) if within the three-month
period commencing on the closing date (or within the two-year period commencing
on the Closing Date if the related Mortgage Loan is a "defective obligation"
within the meaning of Section 860(a)(4)(B)(ii) of the Code and Treasury
Regulation Section 1.860G-2(f)), at its option, replace such Mortgage Loan with
a Qualifying Substitute Mortgage Loan and pay any corresponding Substitution
Shortfall Amount. The Seller agrees that any such repurchase or substitution
shall be completed in accordance with and subject to the terms and conditions of
the Pooling and Servicing Agreement.
For purposes of the preceding paragraph only, the "Permitted Cure Period"
applicable to any Defect or Breach in respect of any Mortgage Loan shall be the
90-day period immediately following the earlier of the discovery by the Seller
or receipt by the Seller of notice of such Defect or Breach, as the case may be;
provided that if such Defect or Breach, as the case may be, cannot be corrected
or cured in all material respects within such 90-day period, but is reasonably
likely that such Defect or Breach, as the case may be, could be corrected or
cured within 180 days of the earlier of discovery by the Seller and receipt by
the Seller of notice of such Defect or Breach, as the case may be, and the
Seller is diligently attempting to effect such correction or cure, then the
applicable Permitted
-7- 1998-C2 ML Trust Supplemental Agreement
<PAGE>
Cure Period shall, with the consent of the Purchaser or its assignee (which
consent shall not be unreasonably withheld), be extended for an additional 90
days.
(c) In connection with any repurchase of or substitution for a Mortgage
Loan contemplated by this Section 4, the then owner(s) thereof shall tender or
cause to be tendered promptly to the Seller, upon delivery of a receipt executed
by the Seller, the related Mortgage File and Servicing File, and each document
that constitutes a part of the Mortgage File that was endorsed or assigned to
the Purchaser or the Trustee shall be endorsed or assigned, as the case may be,
to the Seller or its designee in the same manner. The form and sufficiency of
all such instruments and certificates shall be the responsibility of the Seller.
(d) This Section 4 provides the sole remedies available to the
Purchaser, and its successors and assigns (including, without limitation, the
Depositor, the Trustee and the holders of the Certificates) respecting any
Defect in a Mortgage File or any breach of any representation or warranty made
pursuant to Section 2(a) and set forth in EXHIBIT B, or in connection with the
circumstances described in Section 4(b). If the Seller defaults on its
obligations to repurchase any Mortgage Loan in accordance with Section 4(a) or
4(b) or disputes its obligation to repurchase any Mortgage Loan in accordance
with either such subsection, the Purchaser or its successors and assigns may
take such action as is appropriate to enforce such payment or performance,
including, without limitation, the institution and prosecution of appropriate
proceedings. The Seller shall reimburse the Purchaser for all necessary and
reasonable costs and expenses incurred in connection with such enforcement. The
remedies provided in this Section 4 shall replace and amend and restate in their
entirety the provisions of Section 4.3 of the ML Trust Purchase Agreement.
SECTION 5. CONVEYANCE OF MORTGAGE FILES.
(a) In connection with the Purchaser's assignment of the Mortgage Loans
to the Depositor pursuant to the Mortgage Loan Purchase Agreement, the Purchaser
hereby covenants with the Seller that, at least five (5) Business Days before
the Closing Date, it shall have delivered to and deposited with the Trustee, the
Mortgage File (as described on EXHIBIT B to the Mortgage Loan Purchase
Agreement) for each Mortgage Loan so assigned to the extent that such Mortgage
File was delivered to the Purchaser. In the event Purchaser fails to so deliver
each such Mortgage File to the Trustee, the Seller and its successors and
assigns shall be entitled to pursue any rights or remedies in respect of such
failure as may be available under applicable law.
(b) For the benefit of the Purchaser and its successors and assigns,
the Seller acknowledges and agrees that the Depositor intends to cause the
Trustee to perform a limited review of the Mortgage Files relating to the
Mortgage Loans to enable the Trustee to confirm to the Depositor on or before
the Closing Date that the Mortgage Note referred to in clause (i) of EXHIBIT B
of the Mortgage Loan Purchase Agreement has been delivered to the Trustee with
respect to each such Mortgage File. If the Seller cannot deliver, or cause to
be delivered as to any Mortgage Loan, the original Mortgage Note, the Seller
shall deliver a copy or duplicate original of such Mortgage
-8- 1998-C2 ML Trust Supplemental Agreement
<PAGE>
Note, together with an affidavit certifying that the original thereof has been
lost or destroyed. If the Seller cannot deliver, or cause to be delivered, as
to any Mortgage Loan, the original or a copy of any of the documents and/or
instruments referred to in clauses (ii), (iv), (viii), (xi)(A) and (xii) of
EXHIBIT B of the Mortgage Loan Purchase Agreement, with evidence of recording
thereon, solely because of a delay caused by the public recording or filing
office where such document or instrument has been delivered for recordation or
filing, or because such original recorded document has been lost or returned
from the recording or filing office and subsequently lost, as the case may be,
the delivery requirements of this Section 5 shall be deemed to have been
satisfied as to such missing item, and such missing item shall be deemed to have
been included in the related Mortgage File, provided that a copy of such
document or instrument (without evidence of recording or filing thereon, but
certified (which certificate may relate to multiple documents and/or
instruments) by the Seller to be a true and complete copy of the original
thereof submitted for recording or filing, as the case may be) has been
delivered to the Trustee, and either the original of such missing document or
instrument, or a copy thereof, with evidence of recording or filing, as the case
may be, thereon, is delivered to or at the direction of the Depositor or Trustee
within 180 days of the Closing Date (or within such longer period after the
Closing Date as the Trustee (or such subsequent owner) may consent to, which
consent shall not be unreasonably withheld so long as the Seller has provided
the Depositor or Trustee with evidence of such recording or filing, as the case
may be, or has certified to the Depositor or Trustee as to the occurrence of
such recording or filing, as the case may be, and is, as certified to the
Trustee no less often than quarterly, in good faith attempting to obtain from
the appropriate county recorder's or filing office such original or copy).
(c) If the Seller cannot deliver, or cause to be delivered, as to any
Mortgage Loan, the original or a copy of the related lender's title insurance
policy referred to in clause (ix) of EXHIBIT B of the Mortgage Loan Purchase
Agreement solely because such policy has not yet been issued, the delivery
requirements of this Section 5 shall be deemed to be satisfied as to such
missing item, and such missing item shall be deemed to have been included in the
related Mortgage File, provided that the Seller has delivered to the Trustee a
commitment for title insurance "marked-up" at the closing of such Mortgage Loan,
and the Seller shall deliver to or at the direction of the Depositor or Trustee,
promptly following the receipt thereof, the original related lender's title
insurance policy (or a copy thereof). In addition, notwithstanding anything to
the contrary contained herein, if there exists with respect to any group of
related cross-collateralized Mortgage Loans only one original of any document
referred to in EXHIBIT B of the Mortgage Loan Purchase Agreement covering all
the Mortgage Loans in such group, then the inclusion of the original of such
document in the Mortgage File for any of the Mortgage Loans in such group shall
be deemed an inclusion of such original in the Mortgage File for each such
Mortgage Loan.
(d) As to each Mortgage Loan, the Seller shall be responsible for all
costs associated with (i) the recording or filing, as the case may be, of each
assignment referred to in clauses (iii) and (v) of EXHIBIT B to the Mortgage
Loan Agreement and each UCC-2 and UCC-3, if any, referred to in clause (xi)(B)
of EXHIBIT B to the Mortgage Loan Purchase Agreement and (ii) the delivery of a
copy of any such document or instrument to the Master Servicer promptly
following its return to the
-9- 1998-C2 ML Trust Supplemental Agreement
<PAGE>
Trustee or its designee after such recording or filing; provided that the Seller
shall not be responsible for actually recording or filing any such document or
instrument. If any such document or instrument is lost or returned unrecorded
or unfiled, as the case may be, because of a defect therein, the Seller shall
promptly prepare or cause the preparation of a substitute therefor or cure or
cause the curing of such defect, as the case may be, and shall thereafter
deliver the substitute or corrected document to or at the direction of the
Depositor or the Trustee for recording or filing, as appropriate, at the
Seller's expense.
SECTION 6. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY.
All representations, warranties and agreements contained in this Agreement,
incorporated herein by reference or contained in the certificates of officers of
the Seller submitted pursuant hereto, shall remain operative and in full force
and effect and shall survive delivery of the Mortgage Loans by the Seller to the
Purchaser or its designee.
SECTION 7. COSTS.
Costs relating to the transactions contemplated hereby and in the Mortgage
Loan Purchase Agreement shall be borne by the Seller.
SECTION 8. SEVERABILITY OF PROVISIONS.
Any part, provision, representation, warranty or covenant of this Agreement
that is prohibited or which is held to be void or unenforceable shall be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any part, provision,
representation, warranty or covenant of this Agreement that is prohibited or
unenforceable or is held to be void or unenforceable in any particular
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
particular jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction. To the extent permitted by applicable law,
the parties hereto waive any provision of law which prohibits or renders void or
unenforceable any provision hereof.
SECTION 9. COUNTERPARTS.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but all of which together shall constitute
one and the same instrument.
SECTION 10. GOVERNING LAW.
THIS AGREEMENT AND THE RIGHTS, DUTIES, OBLIGATIONS AND RESPONSIBILITIES OF
THE PARTIES HERETO SHALL BE GOVERNED IN
-10- 1998-C2 ML Trust Supplemental Agreement
<PAGE>
ACCORDANCE WITH THE INTERNAL LAWS AND DECISIONS OF THE STATE OF NEW YORK WITHOUT
REGARD TO CONFLICTS OF LAW PRINCIPLES EXCEPT THAT THE PARTIES HERETO INTEND THAT
THE PROVISIONS OF SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW SHALL
APPLY TO THIS AGREEMENT.
SECTION 11. FURTHER ASSURANCES.
The Seller and the Purchaser agree to execute and deliver such instruments
and take such further actions as the other party may, from time to time,
reasonably request in order to effectuate the purposes and to carry out the
terms of this Agreement.
SECTION 12. SUCCESSORS AND ASSIGNS.
The rights and obligations of the Seller under this Agreement shall not be
assigned by the Seller without the prior written consent of the Purchaser,
except that any person into which the Seller may be merged or consolidated, or
any corporation or other entity resulting from any merger, conversion or
consolidation to which the Seller is a party, or any person succeeding to all or
substantially all of the business of the Seller, shall be the successor to the
Seller hereunder. The Purchaser has the right to assign its interest under this
Agreement, in whole or in part, to the Depositor and the Depositor shall, to the
extent of such assignment, succeed to the rights and obligations hereunder of
the Purchaser. Subject to the foregoing, this Agreement shall bind and inure to
the benefit of and be enforceable by the Seller and the Purchaser, and their
permitted successors and assigns.
SECTION 13. AMENDMENTS.
No term or provision of this Agreement may be amended, waived, modified or
in any way altered, unless such amendment, waiver, modification or alteration is
in writing and signed by a duly authorized officer of the party against whom
such amendment, waiver, modification or alteration is sought to be enforced.
-11- 1998-C2 ML Trust Supplemental Agreement
<PAGE>
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their names to
be signed hereto by their respective duly authorized officers as of the date
first above written.
GMAC COMMERCIAL MORTGAGE CORPORATION
By: /s/ David Lazarus
-------------------------------------
Name: David Lazarus
-----------------------------------
Title: Vice President
----------------------------------
RESTRUCTURED ASSET CERTIFICATES WITH
ENHANCED RETURNS, SERIES 1998-ML TRUST
By: LaSalle National Bank, not in its
individual capacity, but solely as
trustee under the Trust Agreement,
as amended and restated, dated as
of June 26, 1998, between Lehman
Ali Inc., as sponsor, and LaSalle
National Bank, as trustee.
By: /s/ Michael Evans
-------------------------------------
Name: Michael Evans
-----------------------------------
Title: First Vice President
----------------------------------
S-11 1998-C2 ML Trust Supplemental Agreement
<PAGE>
EXHIBIT A
MORTGAGE LOAN SCHEDULE
A-1
<PAGE>
EXHIBIT B
REPRESENTATIONS AND WARRANTIES OF THE SELLER
REGARDING THE INDIVIDUAL MORTGAGE LOANS
With respect to each Mortgage Loan, the Seller hereby represents and
warrants, as of the date hereinbelow specified or, if no such date is specified,
as of the Closing Date, except as set forth on Schedule B-1 hereto, that:
(i) OWNERSHIP OF MORTGAGE LOANS. Immediately prior to the transfer
thereof to the Depositor, the Purchaser had good and marketable title to, and
was the sole owner and holder of, such Mortgage Loan, free and clear of any and
all liens, encumbrances and other interests on, in or to such Mortgage Loan
(other than, in certain cases, the right of a subservicer to directly service
such Mortgage Loan). Such transfer validly assigns ownership of such Mortgage
Loan to the Depositor free and clear of any pledge, lien, encumbrance or
security interest.
(ii) AUTHORITY TO TRANSFER MORTGAGE LOANS. The Purchaser has full right
and authority to sell, assign and transfer such Mortgage Loan. No provision of
the Mortgage Note, Mortgage or other loan document relating to such Mortgage
Loan prohibits or restricts the Purchaser's right to assign or transfer such
Mortgage Loan.
(iii) MORTGAGE LOAN SCHEDULE. The information pertaining to such
Mortgage Loan set forth in the Mortgage Loan Schedule attached as Exhibit A
hereto was true and correct in all material respects as of the Cut-off Date.
(iv) PAYMENT RECORD. Such Mortgage Loan was not as of the Cut-off Date
for such Mortgage Loan, and has not been during the twelve-month period prior
thereto, 30 days or more delinquent in respect of any debt service payment
required thereunder, without giving effect to any applicable grace period.
(v) PERMITTED ENCUMBRANCES. The Permitted Encumbrances (as defined in
the Agreement of which this EXHIBIT B forms a part) do not materially interfere
with the security intended to be provided by the related Mortgage, the current
use or operation of the related Mortgaged Property or the current ability of the
Mortgaged Property to generate net operating income sufficient to service the
Mortgage Loan. If the Mortgaged Property is operated as a nursing facility, a
hospitality property or a multifamily property, the Mortgage, together with any
separate security agreement, similar agreement and UCC financing statement, if
any, establishes and creates a first priority, perfected security interest
(subject only to any prior purchase money security interest), to the extent such
security interest can be perfected by the recordation of a Mortgage or the
filing of a UCC financing statement, in all personal property owned by the
Mortgagor that is used in, and is reasonably necessary to, the operation of the
related Mortgaged Property.
B-1
<PAGE>
(vi) TITLE INSURANCE. The lien of the related Mortgage is insured by an
ALTA lender's title insurance policy ("Title Policy"), or its equivalent as
adopted in the applicable jurisdiction, issued by a nationally recognized title
insurance company, insuring the originator of such Mortgage Loan, its successors
and assigns, as to the first priority lien of the Mortgage in the original
principal amount of the Mortgage Loan after all advances of principal, subject
only to Permitted Encumbrances (or, if a title insurance policy has not yet been
issued in respect of the Mortgage Loan, a policy meeting the foregoing
description is evidenced by a commitment for title insurance "marked-up" at the
closing of such loan). Each Title Policy (or, if it has yet to be issued, the
coverage to be provided thereby) is in full force and effect, all premiums
thereon have been paid and, to the Seller's knowledge, no material claims have
been made thereunder and no claims have been paid thereunder. Neither the
Seller nor the Purchaser has, by act or omission, done anything that would
materially impair the coverage under such Title Policy. Immediately following
the transfer and assignment of the related Mortgage Loan to the Trustee, such
Title Policy (or, if it has yet to be issued, the coverage to be provided
thereby) will inure to the benefit of the Trustee without the consent of or
notice to the insurer.
(vii) NO WAIVERS BY SELLER OF MATERIAL DEFAULTS. Neither the Seller nor
the Purchaser has waived any material default, breach, violation or event of
acceleration existing under the related Mortgage or Mortgage Note.
(viii) NO OFFSETS, DEFENSES OR COUNTERCLAIMS. There is no valid offset,
defense or counterclaim to such Mortgage Loan.
(ix) CONDITION OF PROPERTY; CONDEMNATION. Except as set forth in any
engineering report prepared in connection with the origination of (or obtained
in connection with or otherwise following the Seller's acquisition of) such
Mortgage Loan, the related Mortgaged Property is, to the Seller's knowledge,
free and clear of any damage that would materially and adversely affect its
value as security for such Mortgage Loan. The Seller has no actual notice of
the commencement of a proceeding for the condemnation of all or any material
portion of the related Mortgaged Property.
(x) COMPLIANCE WITH USURY LAWS. Such Mortgage Loan complied with all
applicable usury laws in effect at its date of origination.
(xi) FULL DISBURSEMENT OF MORTGAGE LOAN PROCEEDS. The proceeds of such
Mortgage Loan have been fully disbursed and there is no requirement for future
advances thereunder.
(xii) ENFORCEABILITY. The related Mortgage Note and Mortgage and all
other documents and instruments evidencing, guaranteeing, insuring or otherwise
securing such Mortgage Loan have been duly and properly executed by the parties
thereto, and each is the legal, valid and binding obligation of the maker
thereof (subject to any non-recourse provisions contained in any of the
foregoing agreements and any applicable state anti-deficiency legislation),
enforceable in accordance with its
B-2
<PAGE>
terms, except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, receivership, moratorium or other laws relating to or affecting
the rights of creditors generally and by general principles of equity
(regardless of whether such enforcement is considered in a proceeding in equity
or at law).
(xiii) INSURANCE. All improvements upon the related Mortgaged Property
are insured against loss by hazards of extended coverage in an amount (subject
to a customary deductible) at least equal to the lesser of the outstanding
principal balance of such Mortgage Loan and 100% of the full replacement cost of
the improvements located on such Mortgaged Property and the related hazard
insurance policy contains appropriate endorsements to avoid the application of
co-insurance provisions and does not permit reduction in insurance proceeds for
depreciation. If any portion of the related Mortgaged Property was, at the time
of the origination of such Mortgage Loan, in an area identified in the Federal
Register by the Federal Emergency Management Agency as having special flood
hazards, and flood insurance was available, a flood insurance policy meeting any
requirements of the then current guidelines of the Federal Insurance
Administration is in effect with a generally acceptable insurance carrier, in an
amount representing coverage not less than the least of (1) the outstanding
principal balance of such Mortgage Loan, (2) the full insurable value of such
Mortgaged Property, (3) the maximum amount of insurance available under the
National Flood Insurance Act of 1968, as amended, and (4) 100% of the
replacement cost of the improvements located on such Mortgaged Property. In
addition, the Mortgage requires the Mortgagor to maintain in respect of the
Mortgaged Property comprehensive general liability insurance in amounts
generally required by the Seller, and at least six months rental or business
interruption insurance, and all such insurance required by the Mortgage to be
maintained is in full force and effect. Each such insurance policy requires
prior notice to the holder of the Mortgage of termination or cancellation, and
no such notice has been received, including any notice of nonpayment of
premiums, that has not been cured.
(xiv) ENVIRONMENTAL CONDITION. The related Mortgaged Property was
subject to one or more environmental site assessments (or an update of a
previously conducted assessment), which was (were) performed on behalf of the
Seller, or as to which the related report was delivered to the Seller in
connection with its origination or acquisition of such Mortgage Loan; and the
Seller, having made no independent inquiry other than reviewing the resulting
report(s) and/or employing an environmental consultant to perform the
assessment(s) referenced herein, has no knowledge of any material and adverse
environmental conditions or circumstance affecting such Mortgaged Property that
was not disclosed in the related report(s). The Seller has not taken any action
with respect to such Mortgage Loan or the related Mortgaged Property that could
subject the Purchaser, or its successors and assigns in respect of the Mortgage
Loan, to any liability under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended ("CERCLA") or any other
applicable federal, state or local environmental law, and the Seller has not
received any actual notice of a material violation of CERCLA or any applicable
federal, state or local environmental law with respect to the related Mortgaged
Property that was not disclosed in the related report. The related Mortgage or
loan documents in the related Mortgage File requires the Mortgagor to comply
with all applicable federal, state and local environmental laws and regulations.
B-3
<PAGE>
(xv) NO CROSS-COLLATERALIZATION WITH OTHER MORTGAGE LOANS. Such
Mortgage Loan is not cross-collateralized with any mortgage loan that will not
be included in the Trust Fund.
(xvi) WAIVERS AND MODIFICATIONS. The terms of the related Mortgage and
the Mortgage Note have not been impaired, waived, altered or modified in any
material respect, except as specifically set forth in the related Mortgage File.
(xvii) TAXES AND ASSESSMENTS. There are no delinquent taxes, ground rents,
assessments for improvements or other similar outstanding charges affecting the
related Mortgaged Property which are or may become a lien of priority equal to
or higher than the lien of the related Mortgage. For purposes of this
representation and warranty, real property taxes and assessments shall not be
considered unpaid until the date on which interest and/or penalties would be
payable thereon.
(xviii) MORTGAGOR'S INTEREST IN MORTGAGED PROPERTY. Except in the case of
two Mortgage Loans as to which the interest of the related Mortgagor in the
related Mortgaged Property is in whole or in part a leasehold estate, the
interest of the related Mortgagor in the related Mortgaged Property consists of
a fee simple estate in real property.
(xix) WHOLE LOAN. Each Mortgage Loan is a whole loan and not a
participation interest.
(xx) VALID ASSIGNMENT. The original assignment of the Mortgage, in
recordable form, executed by the most recent assignee of record thereof prior to
the Trustee or, if none, by the originator, either in blank or in favor of the
Trustee (in such capacity) included in the Mortgage File constitutes the legal,
valid and binding assignment of such Mortgage from the relevant assignor to the
Trustee. The Assignment of Leases set forth in the Mortgage or separate from the
related Mortgage and related to and delivered in connection with each Mortgage
Loan establishes and creates a valid, subsisting and, subject only to Permitted
Encumbrances, enforceable first priority lien and first priority security
interest in the related Mortgagor's interest in all leases, subleases, licenses
or other agreements pursuant to which any person is entitled to occupy, use or
possess all or any portion of the real property subject to the related Mortgage,
and each assignor thereunder has the full right to assign the same. The related
assignment of any Assignment of Leases, not included in a Mortgage, executed and
delivered in favor of the Trustee is in recordable form and constitutes a legal,
valid and binding assignment, sufficient to convey to the assignee named therein
all of the assignor's right, title and interest in, to and under such Assignment
of Leases.
(xxi) ESCROWS. All escrow deposits relating to such Mortgage Loan that
are, as of the Closing Date, required to be deposited with the mortgagee or its
agent have been so deposited.
(xxii) NO MECHANICS' OR MATERIALMEN'S LIENS. As of the date of
origination of such Mortgage Loan and, to the actual knowledge of the Seller, as
of the Closing Date, the related Mortgaged Property was and is free and clear of
any mechanics' and materialmen's liens or liens
B-4
<PAGE>
in the nature thereof which create a lien prior to that created by the related
Mortgage, except those which are insured against by the Title Policy referred to
in (vi) above.
(xxiii) NO MATERIAL ENCROACHMENTS. To the Seller's knowledge (based on
surveys and/or title insurance obtained in connection with the origination of
such Mortgage Loan), as of the date of such origination, no improvement that was
included for the purpose of determining the appraised value of the related
Mortgaged Property at the time of origination of such Mortgage Loan lay outside
the boundaries and building restriction lines of such property to any material
extent (unless affirmatively covered by the title insurance referred to in
paragraph (vi) above), and no improvements on adjoining properties encroached
upon such Mortgaged Property to any material extent. To the Seller's knowledge,
based upon opinions of counsel and/or other due diligence customarily performed
by the Seller, the improvements located on or forming part of such Mortgaged
Property comply in all material respects with applicable zoning laws and
ordinances (except to the extent that they may constitute legal non-conforming
uses).
(xxiv) ORIGINATOR AUTHORIZED. To the extent required under applicable law
as of the Closing Date, the originator of such Mortgage Loan was authorized to
do business in the jurisdiction in which the related Mortgaged Property is
located at all times when it held the Mortgage Loan to the extent necessary to
ensure the enforceability of such Mortgage Loan.
(xxv) NO MATERIAL DEFAULT. (A) To the Seller's knowledge, there exists no
material default, breach or event of acceleration under the related Mortgage or
Mortgage Note, and (B) the Seller has not received actual notice of any event
(other than payments due but not yet delinquent) that, with the passage of time
or with notice and the expiration of any grace or cure period, would constitute
such a material default, breach or event of acceleration; provided, however,
that this representation and warranty does not cover any default, breach or
event of acceleration that specifically pertains to any matter otherwise covered
or addressed by any other representation and warranty made by the Seller herein.
(xxvi) INSPECTION. In connection with the origination or acquisition of
each Mortgage Loan, the Seller inspected or caused to be inspected the Mortgaged
Property.
(xxvii) NO EQUITY PARTICIPATION OR CONTINGENT INTEREST. The Mortgage Loan
contains no equity participation by the lender, and does not provide for any
contingent or additional interest in the form of participation in the cash flow
of the related Mortgaged Property, or for negative amortization.
(xxviii) NO ADVANCES OF FUNDS. No holder of the Mortgage Loan has, to the
Seller's knowledge, advanced funds or induced, solicited or knowingly received
any advance of funds from a party other than the owner of the related Mortgaged
Property, directly or indirectly, for the payment of any amount required by the
Mortgage Loan.
B-5
<PAGE>
(xxix) LICENSES, PERMITS, ETC. To the Seller's knowledge, based on due
diligence customarily performed in the origination of comparable mortgage loans
by the Seller, as of the date of origination of the Mortgage Loan, the related
Mortgagor or operator of the related Mortgaged Property was in possession of all
material licenses, permits and authorizations required by applicable laws for
the ownership and operation of the related Mortgaged Property as it was then
operated and if a related Mortgaged Property is improved by a skilled nursing,
congregate care or assisted living facility, the most recent inspection or
survey by governmental authorities having jurisdiction in connection with such
licenses, permits and authorizations did not cite such Mortgaged Property for
material violations (which shall include only "Level A" (or equivalent)
violations in the case of skilled nursing facilities) that had not been cured or
as to which a plan of correction had not been submitted to and accepted by such
governmental authorities. To the extent such facility participates in Medicaid
or Medicare, such facility is in compliance in all material respects with the
requirements of such program.
(xxx) SERVICING. The servicing and collection practices used with
respect to the Mortgage Loan have complied with applicable law in all material
respects and are consistent with the servicing standard set forth in
Section 3.01(a) of the Pooling and Servicing Agreement.
(xxxi) CUSTOMARY REMEDIES. The related Mortgage or Mortgage Note,
together with applicable state law, contains customary and enforceable
provisions (subject to the exceptions set forth in paragraph (xii)) such as to
render the rights and remedies of the holders thereof adequate for the practical
realization against the related Mortgaged Property of the principal benefits of
the security intended to be provided thereby.
(xxxii) INSURANCE AND CONDEMNATION PROCEEDS. The related Mortgage provides
that insurance proceeds and condemnation proceeds will be applied for one of the
following purposes: either to restore or repair the Mortgaged Property, or to
repay the principal of the Mortgage Loan, or otherwise at the option of the
holder of the Mortgage.
(xxxiii) LTV. The gross proceeds of such Mortgage Loan to the related
Mortgagor at origination did not exceed the non-contingent principal amount of
the Mortgage Loan and either: (A) such Mortgage Loan is secured by an interest
in real property having a fair market value (1) at the date the Mortgage Loan
was originated at least equal to 80 percent of the original principal balance of
the Mortgage Loan or (2) at the Closing Date at least equal to 80 percent of the
principal balance of the Mortgage Loan on such date; provided that for purposes
hereof, the fair market value of the real property interest must first be
reduced by (X) the amount of any lien on the real property interest that is
senior to the Mortgage Loan and (Y) a proportionate amount of any lien that is
in parity with the Mortgage Loan (unless such other lien secures a Mortgage Loan
that is cross-collateralized with such Mortgage Loan, in which event the
computation described in clauses (1) and (2) of this paragraph (xxxiii) shall be
made on a PRO RATA basis in accordance with the fair market values of the
Mortgaged Properties securing such cross-collateralized Mortgage Loans; or (B)
substantially all the proceeds of such Mortgage Loan were used to acquire,
improve or protect the real property which
B-6
<PAGE>
served as the only security for such Mortgage Loan (other than a recourse
feature or other third party credit enhancement within the meaning of Treasury
Regulations Section 1.860G-2(a)(1)(ii)).
(xxxiv) LTV AND SIGNIFICANT MODIFICATIONS. If the Mortgage Loan was
"significantly modified" prior to the Closing Date so as to result in a taxable
exchange under Section 1001 of the Code, it either (A) was modified as a result
of the default or reasonably foreseeable default of such Mortgage Loan or (B)
satisfies the provisions of either clause (A)(1) of paragraph (xxxiii)
(substituting the date of the last such modification for the date the Mortgage
Loan was originated) or clause (A)(2) of paragraph (xxxiii), including the
proviso thereto.
(xxxv) CREDIT LEASE LOANS. With respect to each Mortgage Loan which is a
Credit Lease Loan:
(A) To the Seller's knowledge, each credit lease ("Credit Lease")
contains customary and enforceable provisions which render the
rights and remedies of the lessor thereunder adequate for the
enforcement and satisfaction of the lessor's rights thereunder;
(B) To the Seller's knowledge, in reliance on a tenant estoppel
certificate and representation made by the tenant under the Credit
Lease or representations made by the related borrower under the
Mortgage Loan documents, as of the closing date of each Credit
Lease Loan (a) each Credit Lease was in full force and effect, and
no default by the borrower or the tenant has occurred under the
Credit Lease, nor is there any existing condition which, but for
the passage of time or the giving of notice, or both, would result
in a default under the terms of the Credit Lease, (b) none of the
terms of the Credit Lease have been impaired, waived, altered or
modified in any respect (except as described in the related tenant
estoppel), (c) no tenant has been released, in whole or in part,
from its obligations under the Credit Leases, (d) there is no right
of rescission, offset, abatement, diminution, defense or
counterclaim to any Credit Lease, nor will the operation of any of
the terms of the Credit Leases, or the exercise of any rights
thereunder, render the Credit Lease unenforceable, in whole or in
part, or subject to any right of rescission, offset, abatement,
diminution, defense or counterclaim, and no such right of
rescission, offset, abatement, diminution, defense or counterclaim
has been asserted with respect thereto, and (e) each Credit Lease
has a term ending on or after the final maturity of the related
Credit Lease Loan;
(C) The Mortgaged Property is not subject to any lease other than the
related Credit Lease, no Person has any possessory interest in, or
right to occupy, the Mortgaged Property except under and pursuant
to such Credit Lease and the tenant under the related Credit Lease
is in occupancy of the Mortgaged Property;
B-7
<PAGE>
(D) The lease payments under the related Credit Lease are sufficient to
pay the entire amount of scheduled interest and principal on the
Credit Lease Loan, subject to the rights of the Tenant to terminate
the Credit Lease or offset, abate, suspend or otherwise diminish
any amounts payable by the tenant under the Credit Lease. Each
Credit Lease Loan fully amortizes over its original term, and,
there is no "balloon" payment of rent due under the Credit Leases;
(E) Under the terms of the Credit Leases, the lessee is not permitted
to assign its interest or obligations under the Credit Lease unless
such lessee remains fully liable thereunder;
(F) The mortgagee is entitled to notice of any event of default from
the tenant under Credit Leases;
(G) Each tenant under a Credit Lease is required to make all rental
payments directly to the mortgagee, its successors and assigns
under the related Credit Lease Loan;
(H) Each Credit Lease Loan provides that the related Credit Lease
cannot be modified without the consent of the mortgagee under the
related Credit Lease Loan; and
(I) Each Credit Lease Loan under which a Credit Lease may be terminated
upon the occurrence of a casualty or condemnation requires upon
such termination the payment in full by the tenant of: (a) the
principal balance of the loan and (b) all accrued and unpaid
interest on the Mortgage Loan. Under the Credit Lease for each
Credit Lease Loan, upon the occurrence of a casualty or
condemnation, the tenant has no right of rent abatement.
(xxxvi) LITIGATION. To the Seller's actual knowledge, there are no pending
actions, suits or proceedings by or before any court or governmental authority
against or affecting the related Mortgagor or the related Mortgaged Property
that, if determined adversely to such Mortgagor or Mortgaged Property, would
materially and adversely affect the value of the Mortgaged Property or the
ability of the Mortgagor to pay principal, interest or any other amounts due
under such Mortgage Loan.
(xxxvii) LEASEHOLD ESTATE. Each Mortgaged Property consists of the
related Mortgagor's fee simple estate in real estate or, if the related Mortgage
Loan is secured in whole or in part by the interest of a Mortgagor as a lessee
under a ground lease of a Mortgaged Property (a "Ground Lease"), by the related
Mortgagor's interest in the Ground Lease but not by the related fee interest in
such Mortgaged Property (the "Fee Interest") or if the Mortgage Loan is secured
in whole or in part by a Ground Lease and a Fee Interest, either (1) the ground
lessor's fee interest is subordinated to the lien of the Mortgage or (2) the
following apply to such Ground Lease:
B-8
<PAGE>
(A) To the actual knowledge of the Seller, such Ground Lease or a
memorandum thereof has been or will be duly recorded; such Ground
Lease (or the related estoppel letter or lender protection
agreement between the Seller and related lessor) permits the
interest of the lessee thereunder to be encumbered by the related
Mortgage; and there has been no material change in the payment
terms of such Ground Lease since the origination of the related
Mortgage Loan, with the exception of material changes reflected in
written instruments that are a part of the related Mortgage File;
(B) The lessee's interest in such Ground Lease is not subject to any
liens or encumbrances superior to, or of equal priority with, the
related Mortgage, other than the ground lessor's related fee
interest and Permitted Encumbrances;
(C) The Mortgagor's interest in such Ground Lease is assignable to the
Purchaser and its successors and assigns upon notice to, but
without the consent of, the lessor thereunder (or, if such consent
is required, it has been obtained prior to the Closing Date) and,
in the event that it is so assigned, is further assignable by the
Purchaser and its successors and assigns upon notice to, but
without the need to obtain the consent of, such lessor;
(D) Such Ground Lease is in full force and effect, and the Seller has
received no notice that an event of default has occurred
thereunder, and, to the Seller's actual knowledge, there exists no
condition that, but for the passage of time or the giving of
notice, or both, would result in an event of default under the
terms of such Ground Lease;
(E) Such Ground Lease, or an estoppel letter or other agreement,
requires the lessor under such Ground Lease to give notice of any
default by the lessee to the mortgagee, provided that the mortgagee
under such Mortgage Loan has provided the lessor with notice of its
lien in accordance with the provisions of such Ground Lease, and
such Ground Lease, or an estoppel letter or other agreement,
further provides that no notice of termination given under such
Ground Lease is effective against the mortgagee unless a copy has
been delivered to the mortgagee;
(F) The mortgagee under such Mortgage Loan is permitted a reasonable
opportunity (including, where necessary, sufficient time to gain
possession of the interest of the lessee under such Ground Lease)
to cure any default under such Ground Lease, which is curable after
the receipt of notice of any such default, before the lessor
thereunder may terminate such Ground Lease;
(G) Such Ground Lease has an original term (including any extension
options set forth therein) which extends not less than ten years
beyond the Stated Maturity Date of the related Mortgage Loan;
B-9
<PAGE>
(H) Under the terms of such Ground Lease and the related Mortgage,
taken together, any related insurance proceeds other than in
respect of a total or substantially total loss or taking, will be
applied either to the repair or restoration of all or part of the
related Mortgaged Property, with the mortgagee under such Mortgage
Loan or a trustee appointed by it having the right to hold and
disburse such proceeds as the repair or restoration progresses
(except in such cases where a provision entitling another party to
hold and disburse such proceeds would not be viewed as commercially
unreasonable by a prudent commercial mortgage lender), or to the
payment of the outstanding principal balance of the Mortgage Loan
together with any accrued interest thereon;
(I) Such Ground Lease does not impose any restrictions on subletting
which would be viewed, as of the date of origination of the related
Mortgage Loan, as commercially unreasonable by the Seller; and such
Ground Lease contains a covenant that the lessor thereunder is not
permitted, in the absence of an uncured default, to disturb the
possession, interest or quiet enjoyment of any subtenant of the
lessee, or in any manner, which would materially adversely affect
the security provided by the related Mortgage; and
(J) Such Ground Lease, or an estoppel letter or other agreement
requires the lessor to enter into a new lease in the event of a
termination of the Ground Lease by reason of a default by the
Mortgagor under the Ground Lease, including, rejection of the
ground lease in a bankruptcy proceeding.
(xxxviii) DEED OF TRUST. If the related Mortgage is a deed of trust, a
trustee, duly qualified under applicable law to serve as such, is properly
designated and serving under such Mortgage.
(xxxix) LIEN RELEASES. Except in cases where either (a) a release of a
portion of the Mortgaged Property was contemplated at origination of the
Mortgage Loan and such portion was not considered material for purposes of
underwriting the Mortgage Loan or (b) release is conditioned upon the
satisfaction of certain underwriting and legal requirements and the payment of a
release price, the related Mortgage Note or Mortgage does not require the holder
thereof to release all or any portion of the Mortgaged Property from the lien of
the related Mortgage except upon payment in full of all amounts due under such
Mortgage Loan.
(xl) JUNIOR LIENS. The Mortgage Loan does not permit the related
Mortgaged Property to be encumbered by any lien junior to or of equal priority
with the lien of the related Mortgage (excluding any lien relating to another
Mortgage Loan that is cross-collateralized with such Mortgage Loan) without the
prior written consent of the holder thereof or the satisfaction of debt service
coverage or similar conditions specified therein.
B-10
<PAGE>
(xli) MORTGAGOR BANKRUPTCY. To the Seller's knowledge, the Mortgagor is
not a debtor in any state or federal bankruptcy or insolvency proceeding.
(xlii) DUE ORGANIZATION OF MORTGAGORS. As of the date of origination of
each Mortgage, each related Mortgagor which is not a natural person was duly
organized and validly existing under the laws of the state of its jurisdiction.
(xliii) DUE-ON-SALE. The Mortgage Loan contains provisions for the
acceleration of the payment of the unpaid principal balance of such Mortgage
Loan if, without complying with the requirements of such Mortgage Loan, the
related Mortgaged Property, or any controlling interest therein, is directly or
indirectly transferred or sold.
(xliv) SINGLE PURPOSE ENTITY. The Mortgagor is an entity, other than an
individual, whose organizational documents or the related Mortgage Loan
Documents provide substantially to the effect that the Mortgagor: (A) is
formed or organized solely for the purpose of owning and operating one or more
of the Mortgaged Properties securing the Mortgage Loans, (B) may not engage in
any business unrelated to such Mortgaged Property or Mortgaged Properties, (C)
does not have any material assets other than those related to its interest in
and operation of such Mortgage Property or Mortgaged Properties, (D) may not
incur indebtedness other than as permitted by the related Mortgage or other
Mortgage Loan Documents, (E) has its own books and records separate and apart
from any other person, and (F) holds itself out as a legal entity, separate and
apart from any other person.
(xlv) DEFEASANCE PROVISIONS. Any Mortgage Loan which contains a
provision for any defeasance of mortgage collateral either (A) requires the
consent of the holder of the Mortgage Loan to any defeasance, or (B) permits
defeasance (i) no earlier than two years after the Closing Date (as defined in
the Pooling and Servicing Agreement, dated as of August 1, 1998), (ii) only with
substitute collateral constituting "government securities" within the meaning of
Treas. Reg. Section 1.860G-2(a)(8)(i), and (iii) only to facilitate the
disposition of mortgage real property and not as a part of an arrangement to
collateralize a REMIC offering with obligations that are not real estate
mortgages.
It is understood and agreed that the representations and warranties set
forth in this EXHIBIT B shall survive delivery of the respective Mortgage Files
to the Purchaser, the Depositor and/or the Trustee and shall inure to the
benefit of the Purchaser, and its successors and assigns (including without
limitation the Depositor, the Trustee and the holders of the Certificates),
notwithstanding any restrictive or qualified endorsement or assignment.
B-11
<PAGE>
SCHEDULE B-1 TO EXHIBIT B
EXCEPTIONS TO REPRESENTATIONS AND WARRANTIES
v. PERMITTED ENCUMBRANCES
A first priority, perfected security interest in accounts receivable can
not be established on the following Mortgage Loan(s).
Loan Number Property Issue
----------- -------- -----
Brandywine Portfolio:
GMAC2990 Whiting Health First priority line of credit for
Accounts Receivable
Financing of $2.5 million w/
Commerce Bank.
GMAC2980 Meadowview Nursing Same as Whiting Health.
GMAC2960 Bey Lea Same as Whiting Health except it is
$1.5 million.
GMAC2970 Laurelton Village Same as Whiting Health except it is
$1.5 million.
GMAC3200 Stratford House Borrower leases property to HPO.
HPO has $3 million working capital
line of credit with DVI secured by
Accounts Receivable. DVI/GMACCM &
HPO have entered into an
Inter-Creditor Agreement with
respect to the Accounts Receivable.
GMAC2840 Corpus Christi First lien security interest in
Nursing Center Accounts Receivable for working
capital, currently no cap limit.
B-12
<PAGE>
xiii. INSURANCE
Loan Number Property Issue
----------- -------- -----
GMAC1250 Circuit City Per the instructions of Circuit
City, the property insurer,
Travelers and St. Paul, will not
disclose the deductible on the
property insurance certificate.
Business income/rental loss
coverage is not required per the
lease agreement. The Seller has
obtained a condemnation and rental
loss policy from Chub Custom.
Policy will cover rent loss from
condemnation by eminent domain plus
loss of rents if building is
damaged 40% or more and tenant
terminates lease.
GMAC1600 Greenfields Retirement The property insurance policy
Community (Cascade) contains 90% coinsurance clause.
GMAC2450 400 Front Street Windstorm policy contains an 80%
coinsurance clause which cannot be
deleted and there are no other
known options where the insurance
can be purchased.
Rental insurance policy contains 30
day waiting period and provides
coverage as follows:
90 days, 100% of loss;
next 90 days, maximum of 75% of
loss;
next 90 days, maximum of 50% of
loss;
B-13
<PAGE>
next 60 days, maximum of 25% of
loss.
xxiii. NO MATERIAL ENCROACHMENTS
The improvement(s) located on or forming a part of the Mortgaged Property
do not comply in all material respects with applicable zoning laws and
ordinances.
Loan Number Property Issue
----------- -------- -----
GMAC1150 Preferred Freezer
Warehouse Thirteen (13) parking spaces
located onto adjacent land. Also
concrete bins, pads and ramp
encroach onto adjacent parcel.
GMAC3230 Cypress Corners No zoning letter. Letter is a
post-closing item. Loan is fully
recourse until received.
xxxvii. LEASEHOLD ESTATE
The following Mortgage loan(s) are secured in whole or in part by the
interest of the borrower as a lessee under a Ground Lease.
e. The Ground Lease does not require the lessor to give notice to the
mortgagee of any default by the lessee.
Loan Number Property Issue
----------- -------- -----
GMAC2090A Peak Medical-
Butte parcel Lease does not require lessor to
notify mortgagee of a default nor
provide that the landlord's
termination of lease is ineffective
without prior notice to the
mortgagee.
i. The Ground Lease does not require the lessor to enter into a new lease
with the mortgagee upon termination of the Ground Lease for any reason,
including, rejection of the Ground Lease in a bankruptcy or insolvency
proceeding of the lessee.
B-14
<PAGE>
Loan Number Property Issue
----------- -------- -----
GMAC2090A Peak Medical-
Butte parcel The lease does not require landlord
to enter into a new lease with
mortgagee on termination.
GMAC2080D OPERS Portfolio-
Rehoboth Outlet I The ground lease does not require
the lessor to enter into a new
lease with the mortgagee upon
termination of the ground lease for
any reason, including rejection of
ground lease in a bankruptcy or
insolvency proceeding of the
lessee.
xliv. SINGLE PURPOSE ENTITY
Borrowers on the following loan(s) are not single purpose entities to the
extent shown on the attached spreadsheet.
Loan Number Property
----------- --------
GMAC1600 Greenfield Retirement
GMAC2090A Peak Medical
GMAC2990 Brandywine-Whiting Health
GMAC2960 Brandywine-Bey Lea
GMAC2970 Brandywine-Laurelton Village
GMAC2980 Brandywine-Meadowview Nursing
GMAC1960 Desert Sky
GMAC2630 Griffith Office Park
GMAC1700 9 Commonwealth
GMAC1360 The Parkview (TORCH)
xlv. CREDIT LEASE LOANS
(b)(v) The following Mortgage Loans have a credit lease term ending prior
to the final maturity date of the related Mortgage.
B-15
<PAGE>
Loan Number Property Issue
----------- -------- -----
GMAC1640 Eckerds-San Antonio Loan matures on 6/1/2018 while the
lease expires on 9/30/2017.
GMAC1670 Eckerd-Benbrook Loan matures on 6/1/2018 while the
lease expires on 11/25/2017.
GMAC1450 Walgreens-Council Bluff Loan matures on 1/1/2018 while the
lease expires on 10/30/2017.
d. The following Mortgage Loan(s) have lease payments under the Credit Lease
which are not sufficient to pay the entire amount of scheduled interest and
principal, subject to the rights of the Tenant to terminate the Credit
Lease or offset, abate, suspend or otherwise diminish any amounts payable
by the tenant under the Credit Lease in which each Credit Lease fully
amortizes over the original term, and, there is no balloon payment of rent
due under the Credit Leases.
Loan Number Property Issue
----------- -------- -----
GMAC1640 Eckerds-San Antonio Loan matures on 6/1/2018 while the
lease expires on 9/30/2017.
GMAC1670 Eckerd-Benbrook Loan matures on 6/1/2018 while the
lease expires on 11/25/2017.
GMAC1450 Walgreens-Council Bluff Loan matures on 1/1/2018 while the
lease expires on 10/30/2017.
i. Each Credit Lease Loan, under which a Credit Lease may be terminated upon
the occurrence of a casualty or condemnation, does not require upon such
termination the payment in full by the Tenant of (a) the principal balance
of the loan and (b) all accrued and unpaid interest on the Mortgage Loan.
Under the Credit Lease for each Credit Lease Loan, upon the occurrence of a
casualty or condemnation the Tenant will not have any rights of rent
abatement.
Loan Number Property Issue
----------- -------- -----
GMAC1640 Eckerd-San Antonio Lease provides for no abatement for
rent or casualty. If during that
last two years of the term of the
lease, the restoration cost is more
than one-third of the replacement
value,
B-16
<PAGE>
then either party has right to
terminate. If so terminated all
insurance proceeds go to landlord.
As to condemnation, in the event of
total taking the lease terminates,
rent is abated. In event of
partial taking there will be a
pro-rata abatement of rent.
Condemnation insurance was
purchased at closing (one-time
premium policy).
GMAC1670 Eckerd-Benbrook Same as Eckerd-San Antonio
GMAC1250 Circuit City In the case of casualty where less
than 40% damage to the property is
sustained, the lease does not
terminate and payment of rent
continues. If 40% or more of the
property sustains damage, the
tenant has the option to terminate
the lease and the proceeds are paid
to Landlord. During the last 2
years of the term of the lease, if
the casualty has material impact on
tenant's business, tenant may
terminate and Lender receives
proceeds. Should condemnation
occur of 25% or more of the
improvements or 25% or more of the
parking spaces, the tenant has the
option to terminate the lease and
rent abates. If less than 25% is
taken, there is a pro-rata
abatement. If the taking is in the
last two years and the tenant's
business is materially impacted,
the tenant has the right to
terminate the lease. Condemnation
insurance is in place (one-time
pre-paid policy).
GMAC1450 Walgreens-Council Bluffs If casualty occurs, then abatement
is proportionate to the damage
during reconstruction. If
restoration not completed within
180 days, the tenant may cancel.
If destruction is
B-17
<PAGE>
at least 25% of the value of the
property during last the two years
of the lease, the tenant or
landlord has the right to terminate
and rent abates. Condemnation is
not addressed in lease. Rental
payments are paid directly to
Borrower.
EXCEPTIONS
TO
SINGLE PURPOSE ENTITY CRITERIA
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
Property Organized solely May not engage in No No other Separate Holds itself
for owning and any business or other indebtedness books and out as
operating activity unrelated to assets incurred records separate
mortgaged premises property or to be and apart
incurred
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Greenfield
Retirement Yes Yes No Yes No No
- --------------------------------------------------------------------------------------------------------------------------
Peak Medical Yes Yes Yes Yes Yes No
- --------------------------------------------------------------------------------------------------------------------------
K-Mart Yes Yes Yes Yes Yes No
- --------------------------------------------------------------------------------------------------------------------------
Pear Orchard No No No No No No
- --------------------------------------------------------------------------------------------------------------------------
Cedar Apartments No No No No No No
- --------------------------------------------------------------------------------------------------------------------------
Montbello No No No No No No
- --------------------------------------------------------------------------------------------------------------------------
Brandywine -
Whiting Health Yes Yes No Yes Yes No
- --------------------------------------------------------------------------------------------------------------------------
Brandywine -
Bey Lea Yes Yes No Yes Yes No
- --------------------------------------------------------------------------------------------------------------------------
Brandywine -
Meadowview
Nursing Yes Yes No Yes Yes No
- --------------------------------------------------------------------------------------------------------------------------
Brandywine -
Laurelton Village Yes Yes No Yes Yes No
- --------------------------------------------------------------------------------------------------------------------------
Desert Sky* No No No No No No
- --------------------------------------------------------------------------------------------------------------------------
Griffith Office*
Park No No No No No No
- --------------------------------------------------------------------------------------------------------------------------
9 Commonwealth No No No No No No
- --------------------------------------------------------------------------------------------------------------------------
The Parkview
(TORCH) Yes Yes Yes Yes No No
- --------------------------------------------------------------------------------------------------------------------------
Builder's Square Yes Yes Yes No No No
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Tenants in common.
B-18
<PAGE>
Exhibit 99.6
EXECUTION COPY
SUPPLEMENTAL AGREEMENT
This Supplemental Agreement (this "Agreement"), is dated and effective as
of August 21, 1998, between GMAC Commercial Mortgage Corporation as seller (the
"Seller") and German American Capital Corporation as purchaser (the
"Purchaser").
WHEREAS, the Seller sold certain mortgage loans (the "GACC Mortgage Loans")
to the Purchaser pursuant to a certain Mortgage Loan Purchase Agreement (the
"GACC Purchase Agreement"), dated as of March 31, 1998.
WHEREAS, the Purchaser intends to sell certain of the GACC Mortgage Loans
as shown on Exhibit A hereto (the "Mortgage Loans") to GMAC Commercial Mortgage
Securities, Inc. as Depositor, (the "Depositor") pursuant to a certain Mortgage
Loan Purchase Agreement, dated as of August 21, 1998 (the "Mortgage Loan
Purchase Agreement") and the Depositor intends to transfer the Mortgage Loans,
together with other multifamily and commercial mortgage loans to a trust fund
(the "Trust Fund") to be formed by the Depositor, beneficial ownership of which
will be evidenced by a series of mortgage pass-through certificates (the
"Certificates"). Certain classes of the Certificates will be rated by Standard
& Poor's Ratings Services, Moody's Investors Service, Inc. and FITCH IBCA, Inc.
(together, the "Rating Agencies"). Certain classes of the Certificates (the
"Registered Certificates") will be registered under the Securities Act of 1933,
as amended (the "Securities Act"). The Trust Fund will be created and the
Certificates will be issued pursuant to a pooling and servicing agreement to be
dated as of August 1, 1998 (the "Pooling and Servicing Agreement"), among the
Depositor as depositor, GMAC Commercial Mortgage Corporation as master servicer
(in such capacity, the "Master Servicer") and special servicer (in such
capacity, the "Special Servicer"), LaSalle National Bank as trustee (in such
capacity, the "Trustee") and ABN AMRO Bank N.V. as fiscal agent. Capitalized
terms not otherwise defined herein have the meanings assigned to them in the
Pooling and Servicing Agreement as in effect on the Closing Date.
WHEREAS, the Depositor intends to sell certain of the Certificates to
Lehman Brothers Inc. and Deutsche Bank Securities Inc. (together, the
"Underwriters") pursuant to an underwriting agreement dated the date hereof (the
"Underwriting Agreement"). The Depositor intends to sell the remaining
Certificates (the "Non-Registered Certificates") to Lehman Brothers Inc. (the
"Initial Purchaser"), pursuant to a certificate purchase agreement dated the
date hereof (the "Certificate Purchase Agreement").
WHEREAS, each of the Seller and the Purchaser, in connection with the
transactions described above, desires to amend and supplement certain of the
provisions of the GACC Purchase Agreement as they relate to the Mortgage Loans
in order to facilitate such transactions and in contemplation of the assignment
by the Purchaser to the Depositor of all of its right, title and interest in and
to this Agreement.
1998-C2 GACC Supplemental Agreement
<PAGE>
Now, therefore, in consideration of the premises and the mutual agreements
set forth herein, the parties agree as follows:
SECTION 1. AMENDMENT OF GACC PURCHASE AGREEMENT.
The parties hereto agree that, with respect to the Mortgage Loans
only, the GACC Purchase Agreement is hereby amended to the extent that the
provisions of the GACC Purchase Agreement are inconsistent with this Agreement.
SECTION 2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER.
(a) The Seller hereby makes, as of August 27, 1998 (the "Closing Date")
(or as of such other date specifically provided in the particular representation
or warranty), to and for the benefit of the Purchaser, and its successors and
assigns (including, without limitation, the Depositor, the Trustee and the
holders of the Certificates), each of the representations and warranties set
forth in EXHIBIT B, with such changes or modifications as may be permitted or
required by the Rating Agencies.
(b) In addition, the Seller, as of the date hereof, hereby represents
and warrants to, and covenants with, the Purchaser that:
(i) The Seller is a corporation, duly organized, validly
existing and in good standing under the laws of the State of California,
and is in compliance with the laws of each State in which any Mortgaged
Property is located to the extent necessary to ensure the enforceability of
each Mortgage Loan and to perform its obligations under this Agreement.
(ii) The execution and delivery of this Agreement by the Seller,
and the performance and compliance with the terms of this Agreement by the
Seller, will not violate the Seller's organizational documents or
constitute a default (or an event which, with notice or lapse of time, or
both, would constitute a default) under, or result in the breach of, any
material agreement or other instrument to which it is a party or which is
applicable to it or any of its assets, in each case which materially and
adversely affect the ability of the Seller to carry out the transactions
contemplated by this Agreement.
(iii) The Seller has the full power and authority to enter into
and consummate all transactions contemplated by this Agreement, has duly
authorized the execution, delivery and performance of this Agreement, and
has duly executed and delivered this Agreement.
(iv) This Agreement, assuming due authorization, execution and
delivery by the Purchaser, constitutes a valid, legal and binding
obligation of the Seller, enforceable against the Seller in accordance with
the terms hereof, subject to (A) applicable bankruptcy, insolvency,
reorganization, moratorium and other laws affecting the enforcement of
-2- 1998-C2 GACC Supplemental Agreement
<PAGE>
creditors' rights generally, (B) general principles of equity, regardless
of whether such enforcement is considered in a proceeding in equity or at
law, and (C) public policy considerations underlying the securities laws,
to the extent that such public policy considerations limit the
enforceability of the provisions of this Agreement that purport to provide
indemnification for securities laws liabilities.
(v) The Seller is not in violation of, and its execution and
delivery of this Agreement and its performance and compliance with the
terms of this Agreement will not constitute a violation of, any law, any
order or decree of any court or arbiter, or any order, regulation or demand
of any federal, state or local governmental or regulatory authority, which
violation, in the Seller's good faith and reasonable judgment, is likely to
affect materially and adversely either the ability of the Seller to perform
its obligations under this Agreement or the financial condition of the
Seller.
(vi) No litigation is pending with regard to which Seller has
received service of process or, to the best of the Seller's knowledge,
threatened against the Seller the outcome of which, in the Seller's good
faith and reasonable judgment, could reasonably be expected to prohibit the
Seller from entering into this Agreement or materially and adversely affect
the ability of the Seller to perform its obligations under this Agreement.
(vii) The Seller has not dealt with any broker, investment banker,
agent or other person, other than the Purchaser, the Underwriters, the
Initial Purchasers and their respective affiliates, that may be entitled to
any commission or compensation in connection with the sale of the Mortgage
Loans or the consummation of any of the other transactions contemplated
hereby.
(viii) No consent, approval, authorization or order of,
registration or filing with, or notice to, any governmental authority or
court is required, under federal or state law (including, with respect to
any bulk sale laws), for the execution, delivery and performance of or
compliance by the Seller with this Agreement, or the consummation by the
Seller of any transaction contemplated hereby, other than (1) such
consents, approvals, authorizations, qualifications, registrations, filings
or notices as have been obtained or made and (2) where the lack of such
consent, approval, authorization, qualification, registration, filing or
notice would not have a material adverse effect on the performance by the
Seller under this Agreement.
(c) Upon discovery by any of the parties hereto of a breach of any of
the representations and warranties made pursuant to and set forth in subsection
(b) above which materially and adversely affects the interests of the Purchaser
or its successors or assigns or a breach of any of the representations and
warranties made pursuant to subsection (a) above and set forth in EXHIBIT B
which materially and adversely affects the value of any Mortgage Loan or the
interests therein of the Purchaser or its successors and assigns (including,
without limitation the Depositor, the Trustee and
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<PAGE>
the holders of the Certificates), the party discovering such breach shall give
prompt written notice to the other party hereto or if this Agreement has been
assigned, to such assignee. The representations, warranties and covenants set
forth in this Section 2(a) shall, as between Seller and Purchaser, supplement,
and as between Seller and any successors or assigns of Purchaser, replace and
amend and restate in their entirety the representations, warranties and
covenants of the Seller set forth in Section 4.1(a) of the GACC Purchase
Agreement to the extent they relate to the Mortgage Loans.
SECTION 3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASER.
(a) The Purchaser, as of the date hereof, hereby represents and warrants
to, and covenants with, the Seller that:
(i) The Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of State of Maryland.
(ii) The execution and delivery of this Agreement by the
Purchaser, and the performance and compliance with the terms of this
Agreement by the Purchaser, will not violate the Purchaser's organizational
documents or constitute a default (or an event which, with notice or lapse
of time, or both, would constitute a default) under, or result in the
breach of, any material agreement or other instrument to which it is a
party or which is applicable to it or any of its assets.
(iii) The Purchaser has the full power and authority to enter into
and consummate all transactions contemplated by this Agreement, has duly
authorized the execution, delivery and performance of this Agreement, and
has duly executed and delivered this Agreement.
(iv) This Agreement, assuming due authorization, execution and
delivery by the Seller, constitutes a valid, legal and binding obligation
of the Purchaser, enforceable against the Purchaser in accordance with the
terms hereof, subject to (A) applicable bankruptcy, insolvency,
reorganization, moratorium and other laws affecting the enforcement of
creditors' rights generally, and (B) general principles of equity,
regardless of whether such enforcement is considered in a proceeding in
equity or at law.
(v) The Purchaser is not in violation of, and its execution and
delivery of this Agreement and its performance and compliance with the
terms of this Agreement will not constitute a violation of, any law, any
order or decree of any court or arbiter, or any order, regulation or demand
of any federal, state or local governmental or regulatory authority, which
violation, in the Purchaser's good faith and reasonable judgment, is likely
to affect materially and adversely either the ability of the Purchaser to
perform its obligations under this Agreement or the financial condition of
the Purchaser.
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<PAGE>
(vi) No litigation is pending or, to the best of the Purchaser's
knowledge, threatened against the Purchaser which would prohibit the
Purchaser from entering into this Agreement or, in the Purchaser's good
faith and reasonable judgment, is likely to materially and adversely affect
either the ability of the Purchaser to perform its obligations under this
Agreement or the financial condition of the Purchaser.
(vii) The Purchaser has not dealt with any broker, investment
banker, agent or other person, other than the Seller, the Underwriters, the
Initial Purchaser and their respective affiliates, that may be entitled to
any commission or compensation in connection with the sale of the Mortgage
Loans or the consummation of any of the transactions contemplated hereby.
(viii) No consent, approval, authorization or order of,
registration or filing with, or notice to, any governmental authority or
court is required, under federal or state law, for the execution, delivery
and performance of or compliance by the Purchaser with this Agreement, or
the consummation by the Purchaser of any transaction contemplated hereby,
other than (1) such consents, approvals, authorizations, qualifications,
registrations, filings or notices as have been obtained or made and (2)
where the lack of such consent, approval, authorization, qualification,
registration, filing or notice would not have a material adverse effect on
the performance by the Purchaser under this Agreement.
(b) The Purchaser hereby makes, as of the Closing Date (or as of such
other date specifically provided in the particular representation or warranty),
to and for the benefit of the Seller, and its successors and assigns, with
respect to each Mortgage Loan each of the representations and warranties set
forth below:
(i) Immediately prior to the transfer thereof to the Depositor,
the Purchaser had whatever title to such Mortgage Loan as was conveyed to
it by Seller, free and clear of any and all liens, encumbrances and other
interests on, in or to such Mortgage Loan (other than, in certain cases,
the right of a subservicer to directly service such Mortgage Loan) created
by Purchaser. Such transfer validly assigns such title to such Mortgage
Loan to the Depositor free and clear of any pledge, lien, encumbrance or
security interest created by the Purchaser.
(ii) Without independent inquiry as to the provisions of the
Mortgage Loans, the Purchaser has full right and authority to sell, assign
and transfer its interest in such Mortgage Loan.
(iii) The Purchaser has not, by act or omission, done anything
that would materially impair the coverage under the lender's title
insurance policy that insures the lien of the related Mortgage.
-5- 1998-C2 GACC Supplemental Agreement
<PAGE>
(iv) The Purchaser has not waived any material default, breach,
violation or event of acceleration existing under the related Mortgage or
Mortgage Note.
(v) To the best of the Purchaser's knowledge, without
independent inquiry as to the provisions of the Mortgage Loans there is no
valid offset, defense or counterclaim to such Mortgage Loan.
(vi) The terms of the related Mortgage and the Mortgage Note have
not been impaired, waived, altered or modified by the Purchaser in any
material respect, except as specifically set forth in the related Mortgage
File.
(c) Upon discovery by any of the parties hereto of a breach of any of
the representations and warranties set forth above which materially and
adversely affects the interests of the Seller, the party discovering such breach
shall give prompt written notice to the other party hereto.
SECTION 4. REPURCHASES.
(a) Within 90 days of the earlier of discovery or receipt of notice by
the Seller, from either the Purchaser or any successor or assign thereof, of a
Defect (as defined in the Pooling and Servicing Agreement as in effect on the
Closing Date) in respect of the Mortgage File for any Mortgage Loan or a breach
of any representation or warranty made pursuant to Section 2(a) and set forth in
EXHIBIT B (a "Breach"), which Defect or Breach, as the case may be, materially
and adversely affects the value of any Mortgage Loan or the interests therein of
the Purchaser or its successors and assigns (including, without limitation, the
Depositor, the Trustee and the holders of the Certificates), the Seller shall
cure such Defect or Breach, as the case may be, in all material respects or
repurchase the affected Mortgage Loan from the then owner(s) thereof at the
applicable Purchase Price (as defined in the Pooling and Servicing Agreement as
in effect on the Closing Date) by payment of such Purchase Price by wire
transfer of immediately available funds to the account designated by such
owner(s); provided, however, that in lieu of effecting any such repurchase, the
Seller will be permitted to deliver a Qualifying Substitute Mortgage Loan and to
pay a cash amount equal to the applicable Substitution Shortfall Amount, subject
to the terms and conditions of the Pooling and Servicing Agreement as in effect
on the Closing Date.
If the Seller is notified of a Defect in any Mortgage File that corresponds
to information set forth in the Mortgage Loan Schedule, the Seller shall
promptly correct such Defect and provide a new, corrected Mortgage Loan Schedule
to the Purchaser or any successor or assign thereof, which corrected Mortgage
Loan Schedule shall be deemed to amend and replace the existing Mortgage Loan
Schedule for all purposes.
(b) Notwithstanding Section 4(a), within 60 days of the earlier of
discovery or receipt of notice by the Seller, from either the Purchaser or any
successor or assign thereof, that any Mortgage Loan does not constitute a
"qualified mortgage" within the meaning of Section 860G(a)(3) of the
-6- 1998-C2 GACC Supplemental Agreement
<PAGE>
Code, the Seller shall repurchase such Mortgage Loan from the then owner(s)
thereof at the applicable Purchase Price by payment of such Purchase Price by
wire transfer of immediately available funds to the account designated by such
owner(s).
In addition, if, as of the Closing Date, any Mortgage Loan is secured by a
Mortgage that does not constitute a valid first lien upon the related Mortgaged
Property, including all buildings located thereon and all fixtures attached
thereto, or if a Mortgage is subject to something other than (A) the lien of
current real property taxes and assessments not yet due and payable, (B)
covenants, conditions and restrictions, rights of way, easements and other
matters of public record, (C) exceptions and exclusions specifically referred to
in the lender's title insurance policy issued or, as evidenced by a "marked-up"
commitment, to be issued in respect of such Mortgage Loan and (D) those
exceptions set forth on Schedule B-1 to EXHIBIT B hereto (the exceptions set
forth in the foregoing clauses (A), (B), (C) and (D) collectively, "Permitted
Encumbrances"), or if the insurer that issued the Title Policy referred to in
clause (vi) of EXHIBIT B hereto in respect of any Mortgage Loan was not
qualified to do business in the state in which the related Mortgaged Property is
located, and in either case such failure materially and adversely affects the
interests of holder of Certificates, (any such failure that materially and
adversely affects the interests of holders of Certificates, also a "Breach"),
the Seller shall be required, at its option, to either (i) cure such Breach in
all material respects or (ii) repurchase the affected Mortgage Loan, in each
case, within the applicable Permitted Cure Period. If any such Breach is not
corrected or cured in all material respects within the applicable Permitted Cure
Period, the Seller shall, not later than the last day of such Permitted Cure
Period, (i) repurchase the affected Mortgage Loan from the Purchaser or its
assignee at the applicable Purchase Price or (ii) if within the three-month
period commencing on the closing date (or within the two-year period commencing
on the Closing Date if the related Mortgage Loan is a "defective obligation"
within the meaning of Section 860(a)(4)(B)(ii) of the Code and Treasury
Regulation Section 1.860G-2(f)), at its option, replace such Mortgage Loan with
a Qualifying Substitute Mortgage Loan and pay any corresponding Substitution
Shortfall Amount. The Seller agrees that any such repurchase or substitution
shall be completed in accordance with and subject to the terms and conditions of
the Pooling and Servicing Agreement.
For purposes of the preceding paragraph only, the "Permitted Cure Period"
applicable to any Defect or Breach in respect of any Mortgage Loan shall be the
90-day period immediately following the earlier of the discovery by the Seller
or receipt by the Seller of notice of such Defect or Breach, as the case may be;
provided that if such Defect or Breach, as the case may be, cannot be corrected
or cured in all material respects within such 90-day period, but is reasonably
likely that such Defect or Breach, as the case may be, could be corrected or
cured within 180 days of the earlier of discovery by the Seller and receipt by
the Seller of notice of such Defect or Breach, as the case may be, and the
Seller is diligently attempting to effect such correction or cure, then the
applicable Permitted Cure Period shall, with the consent of the Purchaser or its
assignee (which consent shall not be unreasonably withheld), be extended for an
additional 90 days.
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<PAGE>
(c) In connection with any repurchase of or substitution for a Mortgage
Loan contemplated by this Section 4, the then owner(s) thereof shall tender or
cause to be tendered promptly to the Seller, upon delivery of a receipt executed
by the Seller, the related Mortgage File and Servicing File, and each document
that constitutes a part of the Mortgage File that was endorsed or assigned to
the Purchaser or the Trustee shall be endorsed or assigned, as the case may be,
to the Seller or its designee in the same manner. The form and sufficiency of
all such instruments and certificates shall be the responsibility of the Seller.
(d) This Section 4 provides the sole remedies available to the
Purchaser, and its successors and assigns (including, without limitation, the
Depositor, the Trustee and the holders of the Certificates) respecting any
Defect in a Mortgage File or any breach of any representation or warranty made
pursuant to Section 2(a) and set forth in EXHIBIT B, or in connection with the
circumstances described in Section 4(b). If the Seller defaults on its
obligations to repurchase any Mortgage Loan in accordance with Section 4(a) or
4(b) or disputes its obligation to repurchase any Mortgage Loan in accordance
with either such subsection, the Purchaser or its successors and assigns may
take such action as is appropriate to enforce such payment or performance,
including, without limitation, the institution and prosecution of appropriate
proceedings. The Seller shall reimburse the Purchaser for all necessary and
reasonable costs and expenses incurred in connection with such enforcement. The
remedies provided in this Section 4 shall replace and amend and restate in their
entirety the provisions of Section 4.3 of the GACC Purchase Agreement with
respect to the Mortgage Loans.
SECTION 5. CONVEYANCE OF MORTGAGE FILES.
(a) In connection with the Purchaser's assignment of the Mortgage Loans
to the Depositor pursuant to the Mortgage Loan Purchase Agreement, the Purchaser
hereby covenants with the Seller that, at least five (5) Business Days before
the Closing Date, it shall have delivered to and deposited with the Trustee, the
Mortgage File (as described on EXHIBIT B to the Mortgage Loan Purchase
Agreement) for each Mortgage Loan so assigned to the extent that such Mortgage
File was delivered to the Purchaser. In the event Purchaser fails to so deliver
each such Mortgage File to the Trustee, the Seller and its successors and
assigns shall be entitled to pursue any rights or remedies in respect of such
failure as may be available under applicable law.
(b) For the benefit of the Purchaser and its successors and assigns, the
Seller acknowledges and agrees that the Depositor intends to cause the Trustee
to perform a limited review of the Mortgage Files relating to the Mortgage Loans
to enable the Trustee to confirm to the Depositor on or before the Closing Date
that the Mortgage Note referred to in clause (i) of EXHIBIT B of the Mortgage
Loan Purchase Agreement has been delivered to the Trustee with respect to each
such Mortgage File. If the Seller cannot deliver, or cause to be delivered as to
any Mortgage Loan, the original Mortgage Note, the Seller shall deliver a copy
or duplicate original of such Mortgage Note, together with an affidavit
certifying that the original thereof has been lost or destroyed. If the Seller
cannot deliver, or cause to be delivered, as to any Mortgage Loan, the original
or a copy of
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<PAGE>
any of the documents and/or instruments referred to in clauses (ii), (iv),
(viii), (xi)(A) and (xii) of EXHIBIT B of the Mortgage Loan Purchase Agreement,
with evidence of recording thereon, solely because of a delay caused by the
public recording or filing office where such document or instrument has been
delivered for recordation or filing, or because such original recorded document
has been lost or returned from the recording or filing office and subsequently
lost, as the case may be, the delivery requirements of this Section 5 shall be
deemed to have been satisfied as to such missing item, and such missing item
shall be deemed to have been included in the related Mortgage File, provided
that a copy of such document or instrument (without evidence of recording or
filing thereon, but certified (which certificate may relate to multiple
documents and/or instruments) by the Seller to be a true and complete copy of
the original thereof submitted for recording or filing, as the case may be) has
been delivered to the Trustee, and either the original of such missing document
or instrument, or a copy thereof, with evidence of recording or filing, as the
case may be, thereon, is delivered to or at the direction of the Depositor or
Trustee within 180 days of the Closing Date (or within such longer period after
the Closing Date as the Trustee (or such subsequent owner) may consent to, which
consent shall not be unreasonably withheld so long as the Seller has provided
the Depositor or Trustee with evidence of such recording or filing, as the case
may be, or has certified to the Depositor or Trustee as to the occurrence of
such recording or filing, as the case may be, and is, as certified to the
Trustee no less often than quarterly, in good faith attempting to obtain from
the appropriate county recorder's or filing office such original or copy).
-9- 1998-C2 GACC Supplemental Agreement
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(c) If the Seller cannot deliver, or cause to be delivered, as to any
Mortgage Loan, the original or a copy of the related lender's title insurance
policy referred to in clause (ix) of EXHIBIT B of the Mortgage Loan Purchase
Agreement solely because such policy has not yet been issued, the delivery
requirements of this Section 5 shall be deemed to be satisfied as to such
missing item, and such missing item shall be deemed to have been included in the
related Mortgage File, provided that the Seller has delivered to the Trustee a
commitment for title insurance "marked-up" at the closing of such Mortgage Loan,
and the Seller shall deliver to or at the direction of the Depositor or Trustee,
promptly following the receipt thereof, the original related lender's title
insurance policy (or a copy thereof). In addition, notwithstanding anything to
the contrary contained herein, if there exists with respect to any group of
related cross-collateralized Mortgage Loans only one original of any document
referred to in EXHIBIT B of the Mortgage Loan Purchase Agreement covering all
the Mortgage Loans in such group, then the inclusion of the original of such
document in the Mortgage File for any of the Mortgage Loans in such group shall
be deemed an inclusion of such original in the Mortgage File for each such
Mortgage Loan.
(d) As to each Mortgage Loan, the Seller shall be responsible for all
costs associated with (i) the recording or filing, as the case may be, of each
assignment referred to in clauses (iii) and (v) of EXHIBIT B to the Mortgage
Loan Agreement and each UCC-2 and UCC-3, if any, referred to in clause (xi)(B)
of EXHIBIT B to the Mortgage Loan Purchase Agreement and (ii) the delivery of a
copy of any such document or instrument to the Master Servicer promptly
following its return to the Trustee or its designee after such recording or
filing; provided that the Seller shall not be responsible for actually recording
or filing any such document or instrument. If any such document or instrument
is lost or returned unrecorded or unfiled, as the case may be, because of a
defect therein, the Seller shall promptly prepare or cause the preparation of a
substitute therefor or cure or cause the curing of such defect, as the case may
be, and shall thereafter deliver the substitute or corrected document to or at
the direction of the Depositor or the Trustee for recording or filing, as
appropriate, at the Seller's expense.
SECTION 6. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY.
All representations, warranties and agreements contained in this Agreement,
incorporated herein by reference or contained in the certificates of officers of
the Seller submitted pursuant hereto, shall remain operative and in full force
and effect and shall survive delivery of the Mortgage Loans by the Seller to the
Purchaser or its designee.
SECTION 7. COSTS.
Costs relating to the transactions contemplated hereby and in the Mortgage
Loan Purchase Agreement shall be borne by the Seller.
SECTION 8. SEVERABILITY OF PROVISIONS.
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<PAGE>
Any part, provision, representation, warranty or covenant of this Agreement
that is prohibited or which is held to be void or unenforceable shall be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any part, provision,
representation, warranty or covenant of this Agreement that is prohibited or
unenforceable or is held to be void or unenforceable in any particular
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
particular jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction. To the extent permitted by applicable law,
the parties hereto waive any provision of law which prohibits or renders void or
unenforceable any provision hereof.
SECTION 9. COUNTERPARTS.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but all of which together shall constitute
one and the same instrument.
SECTION 10. GOVERNING LAW.
THIS AGREEMENT AND THE RIGHTS, DUTIES, OBLIGATIONS AND RESPONSIBILITIES OF
THE PARTIES HERETO SHALL BE GOVERNED IN ACCORDANCE WITH THE INTERNAL LAWS AND
DECISIONS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES
EXCEPT THAT THE PARTIES HERETO INTEND THAT THE PROVISIONS OF SECTION 5-1401 OF
THE NEW YORK GENERAL OBLIGATIONS LAW SHALL APPLY TO THIS AGREEMENT.
SECTION 11. FURTHER ASSURANCES.
The Seller and the Purchaser agree to execute and deliver such instruments
and take such further actions as the other party may, from time to time,
reasonably request in order to effectuate the purposes and to carry out the
terms of this Agreement.
SECTION 12. SUCCESSORS AND ASSIGNS.
The rights and obligations of the Seller under this Agreement shall not be
assigned by the Seller without the prior written consent of the Purchaser,
except that any person into which the Seller may be merged or consolidated, or
any corporation or other entity resulting from any merger, conversion or
consolidation to which the Seller is a party, or any person succeeding to all or
substantially all of the business of the Seller, shall be the successor to the
Seller hereunder. The Purchaser has the right to assign its interest under this
Agreement, in whole or in part, to the Depositor and the Depositor shall, to the
extent of such assignment, succeed to the rights and obligations hereunder of
the Purchaser. Subject to the foregoing, this Agreement shall bind and inure to
the benefit of and be enforceable by the Seller and the Purchaser, and their
permitted successors and assigns.
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<PAGE>
SECTION 13. AMENDMENTS.
No term or provision of this Agreement may be amended, waived, modified or
in any way altered, unless such amendment, waiver, modification or alteration is
in writing and signed by a duly authorized officer of the party against whom
such amendment, waiver, modification or alteration is sought to be enforced.
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<PAGE>
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their names to
be signed hereto by their respective duly authorized officers as of the date
first above written.
GMAC COMMERCIAL MORTGAGE CORPORATION
By: /s/ David Lazarus
-------------------------------------
Name: David Lazarus
-----------------------------------
Title: Vice President
----------------------------------
GERMAN AMERICAN CAPITAL CORPORATION
By: /s/ Scott Waynebern
-------------------------------------
Name: Scott Waynebern
-----------------------------------
Title: Vice President
----------------------------------
By: /s/ Gregory B. Hartch
-------------------------------------
Name: Gregory B. Hartch
-----------------------------------
Title: Authorized Signatory
----------------------------------
S-1 1998-C2 GACC Supplemental Agreement
<PAGE>
EXHIBIT A
MORTGAGE LOAN SCHEDULE
A-1
<PAGE>
EXHIBIT B
REPRESENTATIONS AND WARRANTIES OF THE SELLER
REGARDING THE INDIVIDUAL MORTGAGE LOANS
With respect to each Mortgage Loan, the Seller hereby represents and
warrants, as of the date hereinbelow specified or, if no such date is specified,
as of the Closing Date, except as set forth on Schedule B-1 hereto, that:
(i) OWNERSHIP OF MORTGAGE LOANS. Immediately prior to the transfer
thereof to the Depositor, the Purchaser had good and marketable title to, and
was the sole owner and holder of, such Mortgage Loan, free and clear of any and
all liens, encumbrances and other interests on, in or to such Mortgage Loan
(other than, in certain cases, the right of a subservicer to directly service
such Mortgage Loan). Such transfer validly assigns ownership of such Mortgage
Loan to the Depositor free and clear of any pledge, lien, encumbrance or
security interest.
(ii) AUTHORITY TO TRANSFER MORTGAGE LOANS. The Purchaser has full
right and authority to sell, assign and transfer such Mortgage Loan. No
provision of the Mortgage Note, Mortgage or other loan document relating to such
Mortgage Loan prohibits or restricts the Purchaser's right to assign or transfer
such Mortgage Loan.
(iii) MORTGAGE LOAN SCHEDULE. The information pertaining to such
Mortgage Loan set forth in the Mortgage Loan Schedule attached as Exhibit A
hereto was true and correct in all material respects as of the Cut-off Date.
(iv) PAYMENT RECORD. Such Mortgage Loan was not as of the Cut-off
Date for such Mortgage Loan, and has not been during the twelve-month period
prior thereto, 30 days or more delinquent in respect of any debt service payment
required thereunder, without giving effect to any applicable grace period.
(v) PERMITTED ENCUMBRANCES. The Permitted Encumbrances (as defined
in the Agreement of which this EXHIBIT B forms a part) do not materially
interfere with the security intended to be provided by the related Mortgage, the
current use or operation of the related Mortgaged Property or the current
ability of the Mortgaged Property to generate net operating income sufficient to
service the Mortgage Loan. If the Mortgaged Property is operated as a nursing
facility, a hospitality property or a multifamily property, the Mortgage,
together with any separate security agreement, similar agreement and UCC
financing statement, if any, establishes and creates a first priority, perfected
security interest (subject only to any prior purchase money security interest),
to the extent such security interest can be perfected by the recordation of a
Mortgage or the filing of a UCC financing statement, in all personal property
owned by the Mortgagor that is used in, and is reasonably necessary to, the
operation of the related Mortgaged Property.
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(vi) TITLE INSURANCE. The lien of the related Mortgage is insured by
an ALTA lender's title insurance policy ("Title Policy"), or its equivalent as
adopted in the applicable jurisdiction, issued by a nationally recognized title
insurance company, insuring the originator of such Mortgage Loan, its successors
and assigns, as to the first priority lien of the Mortgage in the original
principal amount of the Mortgage Loan after all advances of principal, subject
only to Permitted Encumbrances (or, if a title insurance policy has not yet been
issued in respect of the Mortgage Loan, a policy meeting the foregoing
description is evidenced by a commitment for title insurance "marked-up" at the
closing of such loan). Each Title Policy (or, if it has yet to be issued, the
coverage to be provided thereby) is in full force and effect, all premiums
thereon have been paid and, to the Seller's knowledge, no material claims have
been made thereunder and no claims have been paid thereunder. Neither the
Seller nor the Purchaser has, by act or omission, done anything that would
materially impair the coverage under such Title Policy. Immediately following
the transfer and assignment of the related Mortgage Loan to the Trustee, such
Title Policy (or, if it has yet to be issued, the coverage to be provided
thereby) will inure to the benefit of the Trustee without the consent of or
notice to the insurer.
(vii) NO WAIVERS BY SELLER OF MATERIAL DEFAULTS. Neither the Seller
nor the Purchaser has waived any material default, breach, violation or event of
acceleration existing under the related Mortgage or Mortgage Note.
(viii) NO OFFSETS, DEFENSES OR COUNTERCLAIMS. There is no valid offset,
defense or counterclaim to such Mortgage Loan.
(ix) CONDITION OF PROPERTY; CONDEMNATION. Except as set forth in any
engineering report prepared in connection with the origination of (or obtained
in connection with or otherwise following the Seller's acquisition of) such
Mortgage Loan, the related Mortgaged Property is, to the Seller's knowledge,
free and clear of any damage that would materially and adversely affect its
value as security for such Mortgage Loan. The Seller has no actual notice of
the commencement of a proceeding for the condemnation of all or any material
portion of the related Mortgaged Property.
(x) COMPLIANCE WITH USURY LAWS. Such Mortgage Loan complied with all
applicable usury laws in effect at its date of origination.
(xi) FULL DISBURSEMENT OF MORTGAGE LOAN PROCEEDS. The proceeds of
such Mortgage Loan have been fully disbursed and there is no requirement for
future advances thereunder.
(xii) ENFORCEABILITY. The related Mortgage Note and Mortgage and all
other documents and instruments evidencing, guaranteeing, insuring or otherwise
securing such Mortgage Loan have been duly and properly executed by the parties
thereto, and each is the legal, valid and binding obligation of the maker
thereof (subject to any non-recourse provisions contained in any of the
foregoing agreements and any applicable state anti-deficiency legislation),
enforceable in accordance with its
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terms, except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, receivership, moratorium or other laws relating to or affecting
the rights of creditors generally and by general principles of equity
(regardless of whether such enforcement is considered in a proceeding in equity
or at law).
(xiii) INSURANCE. All improvements upon the related Mortgaged Property
are insured against loss by hazards of extended coverage in an amount (subject
to a customary deductible) at least equal to the lesser of the outstanding
principal balance of such Mortgage Loan and 100% of the full replacement cost of
the improvements located on such Mortgaged Property and the related hazard
insurance policy contains appropriate endorsements to avoid the application of
co-insurance provisions and does not permit reduction in insurance proceeds for
depreciation. If any portion of the related Mortgaged Property was, at the time
of the origination of such Mortgage Loan, in an area identified in the Federal
Register by the Federal Emergency Management Agency as having special flood
hazards, and flood insurance was available, a flood insurance policy meeting any
requirements of the then current guidelines of the Federal Insurance
Administration is in effect with a generally acceptable insurance carrier, in an
amount representing coverage not less than the least of (1) the outstanding
principal balance of such Mortgage Loan, (2) the full insurable value of such
Mortgaged Property, (3) the maximum amount of insurance available under the
National Flood Insurance Act of 1968, as amended, and (4) 100% of the
replacement cost of the improvements located on such Mortgaged Property. In
addition, the Mortgage requires the Mortgagor to maintain in respect of the
Mortgaged Property comprehensive general liability insurance in amounts
generally required by the Seller, and at least six months rental or business
interruption insurance, and all such insurance required by the Mortgage to be
maintained is in full force and effect. Each such insurance policy requires
prior notice to the holder of the Mortgage of termination or cancellation, and
no such notice has been received, including any notice of nonpayment of
premiums, that has not been cured.
(xiv) ENVIRONMENTAL CONDITION. The related Mortgaged Property was
subject to one or more environmental site assessments (or an update of a
previously conducted assessment), which was (were) performed on behalf of the
Seller, or as to which the related report was delivered to the Seller in
connection with its origination or acquisition of such Mortgage Loan; and the
Seller, having made no independent inquiry other than reviewing the resulting
report(s) and/or employing an environmental consultant to perform the
assessment(s) referenced herein, has no knowledge of any material and adverse
environmental conditions or circumstance affecting such Mortgaged Property that
was not disclosed in the related report(s). The Seller has not taken any action
with respect to such Mortgage Loan or the related Mortgaged Property that could
subject the Purchaser, or its successors and assigns in respect of the Mortgage
Loan, to any liability under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended ("CERCLA") or any other
applicable federal, state or local environmental law, and the Seller has not
received any actual notice of a material violation of CERCLA or any applicable
federal, state or local environmental law with respect to the related Mortgaged
Property that was not disclosed in the related report. The related Mortgage or
loan documents in the related Mortgage File requires the Mortgagor to comply
with all applicable federal, state and local environmental laws and regulations.
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(xv) NO CROSS-COLLATERALIZATION WITH OTHER MORTGAGE LOANS. Such
Mortgage Loan is not cross-collateralized with any mortgage loan that will not
be included in the Trust Fund.
(xvi) WAIVERS AND MODIFICATIONS. The terms of the related Mortgage and
the Mortgage Note have not been impaired, waived, altered or modified in any
material respect, except as specifically set forth in the related Mortgage File.
(xvii) TAXES AND ASSESSMENTS. There are no delinquent taxes, ground
rents, assessments for improvements or other similar outstanding charges
affecting the related Mortgaged Property which are or may become a lien of
priority equal to or higher than the lien of the related Mortgage. For purposes
of this representation and warranty, real property taxes and assessments shall
not be considered unpaid until the date on which interest and/or penalties would
be payable thereon.
(xviii) MORTGAGOR'S INTEREST IN MORTGAGED PROPERTY. The interest of the
related Mortgagor in the related Mortgaged Property consists of a fee simple
estate in real property.
(xix) WHOLE LOAN. Each Mortgage Loan is a whole loan and not a
participation interest.
(xx) VALID ASSIGNMENT. The original assignment of the Mortgage, in
recordable form, executed by the most recent assignee of record thereof prior to
the Trustee or, if none, by the originator, either in blank or in favor of the
Trustee (in such capacity) included in the Mortgage File constitutes the legal,
valid and binding assignment of such Mortgage from the relevant assignor to the
Trustee. The Assignment of Leases set forth in the Mortgage or separate from the
related Mortgage and related to and delivered in connection with each Mortgage
Loan establishes and creates a valid, subsisting and, subject only to Permitted
Encumbrances, enforceable first priority lien and first priority security
interest in the related Mortgagor's interest in all leases, subleases, licenses
or other agreements pursuant to which any person is entitled to occupy, use or
possess all or any portion of the real property subject to the related Mortgage,
and each assignor thereunder has the full right to assign the same. The related
assignment of any Assignment of Leases, not included in a Mortgage, executed and
delivered in favor of the Trustee is in recordable form and constitutes a legal,
valid and binding assignment, sufficient to convey to the assignee named therein
all of the assignor's right, title and interest in, to and under such Assignment
of Leases.
(xxi) ESCROWS. All escrow deposits relating to such Mortgage Loan that
are, as of the Closing Date, required to be deposited with the mortgagee or its
agent have been so deposited.
(xxii) NO MECHANICS' OR MATERIALMEN'S LIENS. As of the date of
origination of such Mortgage Loan and, to the actual knowledge of the Seller, as
of the Closing Date, the related Mortgaged Property was and is free and clear of
any mechanics' and materialmen's liens or liens in the nature thereof which
create a lien prior to that created by the related Mortgage, except those which
are insured against by the Title Policy referred to in (vi) above.
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(xxiii) NO MATERIAL ENCROACHMENTS. To the Seller's knowledge (based on
surveys and/or title insurance obtained in connection with the origination of
such Mortgage Loan), as of the date of such origination, no improvement that was
included for the purpose of determining the appraised value of the related
Mortgaged Property at the time of origination of such Mortgage Loan lay outside
the boundaries and building restriction lines of such property to any material
extent (unless affirmatively covered by the title insurance referred to in
paragraph (vi) above), and no improvements on adjoining properties encroached
upon such Mortgaged Property to any material extent. To the Seller's knowledge,
based upon opinions of counsel and/or other due diligence customarily performed
by the Seller, the improvements located on or forming part of such Mortgaged
Property comply in all material respects with applicable zoning laws and
ordinances (except to the extent that they may constitute legal non-conforming
uses).
(xxiv) ORIGINATOR AUTHORIZED. To the extent required under applicable
law as of the Closing Date, the originator of such Mortgage Loan was authorized
to do business in the jurisdiction in which the related Mortgaged Property is
located at all times when it held the Mortgage Loan to the extent necessary to
ensure the enforceability of such Mortgage Loan.
(xxv) NO MATERIAL DEFAULT. (A) To the Seller's knowledge, there exists
no material default, breach or event of acceleration under the related Mortgage
or Mortgage Note, and (B) the Seller has not received actual notice of any event
(other than payments due but not yet delinquent) that, with the passage of time
or with notice and the expiration of any grace or cure period, would constitute
such a material default, breach or event of acceleration; provided, however,
that this representation and warranty does not cover any default, breach or
event of acceleration that specifically pertains to any matter otherwise covered
or addressed by any other representation and warranty made by the Seller herein.
(xxvi) INSPECTION. In connection with the origination or acquisition of
each Mortgage Loan, the Seller inspected or caused to be inspected the Mortgaged
Property.
(xxvii) NO EQUITY PARTICIPATION OR CONTINGENT INTEREST. The Mortgage
Loan contains no equity participation by the lender, and does not provide for
any contingent or additional interest in the form of participation in the cash
flow of the related Mortgaged Property, or for negative amortization.
(xxviii) NO ADVANCES OF FUNDS. No holder of the Mortgage Loan has, to the
Seller's knowledge, advanced funds or induced, solicited or knowingly received
any advance of funds from a party other than the owner of the related Mortgaged
Property, directly or indirectly, for the payment of any amount required by the
Mortgage Loan.
(xxix) LICENSES, PERMITS, ETC. To the Seller's knowledge, based on due
diligence customarily performed in the origination of comparable mortgage loans
by the Seller, as of the date of origination
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of the Mortgage Loan, the related Mortgagor or operator of the related Mortgaged
Property was in possession of all material licenses, permits and authorizations
required by applicable laws for the ownership and operation of the related
Mortgaged Property as it was then operated and if a related Mortgaged Property
is improved by a skilled nursing, congregate care or assisted living facility,
the most recent inspection or survey by governmental authorities having
jurisdiction in connection with such licenses, permits and authorizations did
not cite such Mortgaged Property for material violations (which shall include
only "Level A" (or equivalent) violations in the case of skilled nursing
facilities) that had not been cured or as to which a plan of correction had not
been submitted to and accepted by such governmental authorities. To the extent
such facility participates in Medicaid or Medicare, such facility is in
compliance in all material respects with the requirements of such program.
(xxx) SERVICING. The servicing and collection practices used with
respect to the Mortgage Loan have complied with applicable law in all material
respects and are consistent with the servicing standard set forth in
Section 3.01(a) of the Pooling and Servicing Agreement.
(xxxi) CUSTOMARY REMEDIES. The related Mortgage or Mortgage Note,
together with applicable state law, contains customary and enforceable
provisions (subject to the exceptions set forth in paragraph (xii)) such as to
render the rights and remedies of the holders thereof adequate for the practical
realization against the related Mortgaged Property of the principal benefits of
the security intended to be provided thereby.
(xxxii) INSURANCE AND CONDEMNATION PROCEEDS. The related Mortgage
provides that insurance proceeds and condemnation proceeds will be applied for
one of the following purposes: either to restore or repair the Mortgaged
Property, or to repay the principal of the Mortgage Loan, or otherwise at the
option of the holder of the Mortgage.
(xxxiii) LTV. The gross proceeds of such Mortgage Loan to the related
Mortgagor at origination did not exceed the non-contingent principal amount of
the Mortgage Loan and either: (A) such Mortgage Loan is secured by an interest
in real property having a fair market value (1) at the date the Mortgage Loan
was originated at least equal to 80 percent of the original principal balance of
the Mortgage Loan or (2) at the Closing Date at least equal to 80 percent of the
principal balance of the Mortgage Loan on such date; provided that for purposes
hereof, the fair market value of the real property interest must first be
reduced by (X) the amount of any lien on the real property interest that is
senior to the Mortgage Loan and (Y) a proportionate amount of any lien that is
in parity with the Mortgage Loan (unless such other lien secures a Mortgage Loan
that is cross-collateralized with such Mortgage Loan, in which event the
computation described in clauses (1) and (2) of this paragraph (xxxiii) shall be
made on a PRO RATA basis in accordance with the fair market values of the
Mortgaged Properties securing such cross-collateralized Mortgage Loans; or (B)
substantially all the proceeds of such Mortgage Loan were used to acquire,
improve or protect the real property which served as the only security for such
Mortgage Loan (other than a recourse feature or other third party credit
enhancement within the meaning of Treasury Regulations Section
1.860G-2(a)(1)(ii)).
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(xxxiv) LTV AND SIGNIFICANT MODIFICATIONS. If the Mortgage Loan was
"significantly modified" prior to the Closing Date so as to result in a taxable
exchange under Section 1001 of the Code, it either (A) was modified as a result
of the default or reasonably foreseeable default of such Mortgage Loan or (B)
satisfies the provisions of either clause (A)(1) of paragraph (xxxiii)
(substituting the date of the last such modification for the date the Mortgage
Loan was originated) or clause (A)(2) of paragraph (xxxiii), including the
proviso thereto.
(xxxv) CREDIT LEASE LOANS. With respect to each Mortgage Loan which is a
Credit Lease Loan:
(A) To the Seller's knowledge, each credit lease ("Credit Lease")
contains customary and enforceable provisions which render the
rights and remedies of the lessor thereunder adequate for the
enforcement and satisfaction of the lessor's rights thereunder;
(B) To the Seller's knowledge, in reliance on a tenant estoppel
certificate and representation made by the tenant under the
Credit Lease or representations made by the related borrower
under the Mortgage Loan documents, as of the closing date of each
Credit Lease Loan (a) each Credit Lease was in full force and
effect, and no default by the borrower or the tenant has occurred
under the Credit Lease, nor is there any existing condition
which, but for the passage of time or the giving of notice, or
both, would result in a default under the terms of the Credit
Lease, (b) none of the terms of the Credit Lease have been
impaired, waived, altered or modified in any respect (except as
described in the related tenant estoppel), (c) no tenant has been
released, in whole or in part, from its obligations under the
Credit Leases, (d) there is no right of rescission, offset,
abatement, diminution, defense or counterclaim to any Credit
Lease, nor will the operation of any of the terms of the Credit
Leases, or the exercise of any rights thereunder, render the
Credit Lease unenforceable, in whole or in part, or subject to
any right of rescission, offset, abatement, diminution, defense
or counterclaim, and no such right of rescission, offset,
abatement, diminution, defense or counterclaim has been asserted
with respect thereto, and (e) each Credit Lease has a term ending
on or after the final maturity of the related Credit Lease Loan;
(C) The Mortgaged Property is not subject to any lease other than the
related Credit Lease, no Person has any possessory interest in,
or right to occupy, the Mortgaged Property except under and
pursuant to such Credit Lease and the tenant under the related
Credit Lease is in occupancy of the Mortgaged Property;
(D) The lease payments under the related Credit Lease are sufficient
to pay the entire amount of scheduled interest and principal on
the Credit Lease Loan, subject to the rights of the Tenant to
terminate the Credit Lease or offset, abate, suspend or
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otherwise diminish any amounts payable by the tenant under the
Credit Lease. Each Credit Lease Loan fully amortizes over its
original term, and, there is no "balloon" payment of rent due
under the Credit Leases;
(E) Under the terms of the Credit Leases, the lessee is not permitted
to assign its interest or obligations under the Credit Lease
unless such lessee remains fully liable thereunder;
(F) The mortgagee is entitled to notice of any event of default from
the tenant under Credit Leases;
(G) Each tenant under a Credit Lease is required to make all rental
payments directly to the mortgagee, its successors and assigns
under the related Credit Lease Loan;
(H) Each Credit Lease Loan provides that the related Credit Lease
cannot be modified without the consent of the mortgagee under the
related Credit Lease Loan; and
(I) Each Credit Lease Loan under which a Credit Lease may be
terminated upon the occurrence of a casualty or condemnation
requires upon such termination the payment in full by the tenant
of: (a) the principal balance of the loan and (b) all accrued and
unpaid interest on the Mortgage Loan. Under the Credit Lease for
each Credit Lease Loan, upon the occurrence of a casualty or
condemnation the tenant has no right of rent abatement.
(xxxvi) LITIGATION. To the Seller's actual knowledge, there are no
pending actions, suits or proceedings by or before any court or governmental
authority against or affecting the related Mortgagor or the related Mortgaged
Property that, if determined adversely to such Mortgagor or Mortgaged Property,
would materially and adversely affect the value of the Mortgaged Property or the
ability of the Mortgagor to pay principal, interest or any other amounts due
under such Mortgage Loan.
(xxxvii) LEASEHOLD ESTATE. Each Mortgaged Property consists of the
related Mortgagor's fee simple estate in real estate or, if the related Mortgage
Loan is secured in whole or in part by the interest of a Mortgagor as a lessee
under a ground lease of a Mortgaged Property (a "Ground Lease"), by the related
Mortgagor's interest in the Ground Lease but not by the related fee interest in
such Mortgaged Property (the "Fee Interest") or if the Mortgage Loan is secured
in whole or in part by a Ground Lease and a Fee Interest, either (1) the ground
lessor's fee interest is subordinated to the lien of the Mortgage or (2) the
following apply to such Ground Lease:
(A) To the actual knowledge of the Seller, such Ground Lease or a
memorandum thereof has been or will be duly recorded; such Ground
Lease (or the related estoppel letter or lender protection
agreement between the Seller and related lessor) permits the
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interest of the lessee thereunder to be encumbered by the related
Mortgage; and there has been no material change in the payment
terms of such Ground Lease since the origination of the related
Mortgage Loan, with the exception of material changes reflected
in written instruments that are a part of the related Mortgage
File;
(B) The lessee's interest in such Ground Lease is not subject to any
liens or encumbrances superior to, or of equal priority with, the
related Mortgage, other than the ground lessor's related fee
interest and Permitted Encumbrances;
(C) The Mortgagor's interest in such Ground Lease is assignable to
the Purchaser and its successors and assigns upon notice to, but
without the consent of, the lessor thereunder (or, if such
consent is required, it has been obtained prior to the Closing
Date) and, in the event that it is so assigned, is further
assignable by the Purchaser and its successors and assigns upon
notice to, but without the need to obtain the consent of, such
lessor;
(D) Such Ground Lease is in full force and effect, and the Seller has
received no notice that an event of default has occurred
thereunder, and, to the Seller's actual knowledge, there exists
no condition that, but for the passage of time or the giving of
notice, or both, would result in an event of default under the
terms of such Ground Lease;
(E) Such Ground Lease, or an estoppel letter or other agreement,
requires the lessor under such Ground Lease to give notice of any
default by the lessee to the mortgagee, provided that the
mortgagee under such Mortgage Loan has provided the lessor with
notice of its lien in accordance with the provisions of such
Ground Lease, and such Ground Lease, or an estoppel letter or
other agreement, further provides that no notice of termination
given under such Ground Lease is effective against the mortgagee
unless a copy has been delivered to the mortgagee;
(F) The mortgagee under such Mortgage Loan is permitted a reasonable
opportunity (including, where necessary, sufficient time to gain
possession of the interest of the lessee under such Ground Lease)
to cure any default under such Ground Lease, which is curable
after the receipt of notice of any such default, before the
lessor thereunder may terminate such Ground Lease;
(G) Such Ground Lease has an original term (including any extension
options set forth therein) which extends not less than ten years
beyond the Stated Maturity Date of the related Mortgage Loan;
(H) Under the terms of such Ground Lease and the related Mortgage,
taken together, any related insurance proceeds other than in
respect of a total or substantially total loss
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or taking, will be applied either to the repair or restoration of
all or part of the related Mortgaged Property, with the mortgagee
under such Mortgage Loan or a trustee appointed by it having the
right to hold and disburse such proceeds as the repair or
restoration progresses (except in such cases where a provision
entitling another party to hold and disburse such proceeds would
not be viewed as commercially unreasonable by a prudent
commercial mortgage lender), or to the payment of the outstanding
principal balance of the Mortgage Loan together with any accrued
interest thereon;
(I) Such Ground Lease does not impose any restrictions on subletting
which would be viewed, as of the date of origination of the
related Mortgage Loan, as commercially unreasonable by the
Seller; and such Ground Lease contains a covenant that the lessor
thereunder is not permitted, in the absence of an uncured
default, to disturb the possession, interest or quiet enjoyment
of any subtenant of the lessee, or in any manner, which would
materially adversely affect the security provided by the related
Mortgage; and
(J) Such Ground Lease, or an estoppel letter or other agreement,
requires the lessor to enter into a new lease in the event of a
termination of the Ground Lease by reason of a default by the
Mortgagor under the Ground Lease, including, rejection of the
ground lease in a bankruptcy proceeding.
(xxxviii) DEED OF TRUST. If the related Mortgage is a deed of trust, a
trustee, duly qualified under applicable law to serve as such, is
properly designated and serving under such Mortgage.
(xxxix) LIEN RELEASES. Except in cases where either (a) a release of a
portion of the Mortgaged Property was contemplated at origination
of the Mortgage Loan and such portion was not considered material
for purposes of underwriting the Mortgage Loan or (b) release is
conditioned upon the satisfaction of certain underwriting and
legal requirements and the payment of a release price, the
related Mortgage Note or Mortgage does not require the holder
thereof to release all or any portion of the Mortgaged Property
from the lien of the related Mortgage except upon payment in full
of all amounts due under such Mortgage Loan.
(xl) JUNIOR LIENS. The Mortgage Loan does not permit the related
Mortgaged Property to be encumbered by any lien junior to or of
equal priority with the lien of the related Mortgage (excluding
any lien relating to another Mortgage Loan that is
cross-collateralized with such Mortgage Loan) without the prior
written consent of the holder thereof or the satisfaction of debt
service coverage or similar conditions specified therein.
(xli) MORTGAGOR BANKRUPTCY. To the Seller's knowledge, the Mortgagor
is not a debtor in any state or federal bankruptcy or insolvency
proceeding.
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(xlii) DUE ORGANIZATION OF MORTGAGORS. As of the date of origination of
each Mortgage, each related Mortgagor which is not a natural
person was duly organized and validly existing under the laws of
the state of its jurisdiction.
(xliii) DUE-ON-SALE. The Mortgage Loan contains provisions for the
acceleration of the payment of the unpaid principal balance of
such Mortgage Loan if, without complying with the requirements of
such Mortgage Loan, the related Mortgaged Property, or any
controlling interest therein, is directly or indirectly
transferred or sold.
(xliv) SINGLE PURPOSE ENTITY. The related Mortgagor is an entity, other
than an individual, whose organizational documents or the related
Mortgage Loan Documents provide substantially to the effect that
the Mortgagor: (A) is formed or organized solely for the purpose
of owning and operating one or more of the Mortgaged Properties
securing the Mortgage Loans, (B) may not engage in any business
unrelated to such Mortgaged Property or Mortgaged Properties, (C)
does not have any material assets other than those related to its
interest in and operation of such Mortgage Property or Mortgaged
Properties, (D) may not incur indebtedness other than as
permitted by the related Mortgage or other Mortgage Loan
Documents, (E) has its own books and records separate and apart
from any other person, and (F) holds itself out as a legal
entity, separate and apart from any other person.
(xlv) DEFEASANCE PROVISIONS. Any Mortgage Loan which contains a
provision for any defeasance of mortgage collateral either (A)
requires the consent of the holder of the Mortgage Loan to any
defeasance, or (B) permits defeasance (i) no earlier than two
years after the Closing Date (as defined in the Pooling and
Servicing Agreement, dated as of August 1, 1998), (ii) only with
substitute collateral constituting "government securities" within
the meaning of Treas. Reg. Section 1.860G-2(a)(8)(i), and (iii)
only to facilitate the disposition of mortgage real property and
not as a part of an arrangement to collateralize a REMIC offering
with obligations that are not real estate mortgages.
It is understood and agreed that the representations and warranties set
forth in this EXHIBIT B shall survive delivery of the respective Mortgage Files
to the Purchaser, the Depositor and/or the Trustee and shall inure to the
benefit of the Purchaser, and its successors and assigns (including without
limitation the Depositor, the Trustee and the holders of the Certificates),
notwithstanding any restrictive or qualified endorsement or assignment.
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SCHEDULE B-1 TO EXHIBIT B
EXCEPTIONS TO REPRESENTATIONS AND WARRANTIES
(xiii) INSURANCE
Loan Number Property Issue
----------- -------- -----
GMAC 1630 Roy's Trailer Park Property insurance coverage
not required because Mortgager
does not own any structures on
the Mortgaged Property.
Three month reserve
established to cover loss of
rental income.
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Exhibit 99.7
ASSIGNMENT AGREEMENT
This ASSIGNMENT AGREEMENT is made on August 21, 1998 by Restructured Asset
Certificates with Enhanced Returns, Series 1998-ML Trust, a New York trust ("ML
Trust"), to GMAC Commercial Mortgage Securities, Inc., a Delaware corporation
(the "Depositor").
WHEREAS, GMAC Commercial Mortgage Corporation ("GMACCM") sold certain
mortgage loans (the "Mortgage Loans") to ML Trust pursuant to a certain Mortgage
Loan Purchase Agreement (the "ML Trust Purchase Agreement"), dated as of June
30, 1998.
WHEREAS, ML Trust intends to sell the Mortgage Loans to the Depositor and
the Depositor intends to transfer the Mortgage Loans, together with other
multifamily and commercial mortgage loans to a trust fund (the "Trust Fund") to
be formed by the Depositor, beneficial ownership of which will be evidenced by a
series of mortgage pass-through certificates (the "Certificates"). The Trust
Fund will be created and the Certificates will be issued pursuant to a pooling
and servicing agreement to be dated as of August 1, 1998 (the "Pooling and
Servicing Agreement"), among the Depositor as depositor, GMACCM as master
servicer and special servicer, LaSalle National Bank as trustee (in such
capacity, the "Trustee") and ABN AMRO Bank N.V. as fiscal agent. Capitalized
terms not otherwise defined herein have the meanings assigned to them in the
Pooling and Servicing Agreement.
WHEREAS, GMACCM and ML Trust, in connection with the transactions described
above, entered into a Supplemental Agreement, dated as of August __, 1998 (the
"Supplemental Agreement"), which amended and supplemented certain of the
provisions of the ML Trust Purchase Agreement as they relate to the Mortgage
Loans in order to facilitate such transactions.
WHEREAS, as a condition precedent to the consummation of the transactions
described above, including, without limitation, the receipt by ML Trust of a
ratable portion of the proceeds of the sale of the Certificates, it is required
that ML Trust assign to the Depositor all of ML Trust's right, title and
interest in and to the Supplemental Agreement.
NOW, THEREFORE, ML Trust, for and in consideration of good and valuable
consideration, does hereby assign to the Depositor all of ML Trust's right,
title and interest in and to the Supplemental Agreement.
<PAGE>
IN WITNESS WHEREOF, ML Trust and the Depositor have caused their names to
be signed hereto by their respective officers thereunto duly authorized as of
the day and year first written above.
RESTRUCTURED ASSET CERTIFICATES WITH
ENHANCED RETURNS, SERIES 1998-ML TRUST
By: LaSalle National Bank, not in its individual
capacity, but solely as trustee under the
trust agreement, dated as of June 26, 1998,
as amended and restated, between Lehman Ali
Inc., as sponsor, and LaSalle National Bank,
as trustee.
By: /s/ Michael Evans
------------------------------------------
Name: Michael Evans
----------------------------------------
Title: First Vice President
---------------------------------------
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
By: /s/ David Lazarus
------------------------------------------
Name: David Lazarus
----------------------------------------
Title: Vice President
---------------------------------------
Acknowledged By:
GMAC COMMERCIAL MORTGAGE CORPORATION
By: /s/ David Lazarus
-------------------------------------
Name: David Lazarus
-----------------------------------
Title: Vice President
----------------------------------
S-1 1998-C2 ML Trust Assignment
<PAGE>
Exhibit 99.8
ASSIGNMENT AGREEMENT
This ASSIGNMENT AGREEMENT is made on August 21, 1998 by German American
Capital Corporation, a Maryland corporation ("GACC"), to GMAC Commercial
Mortgage Securities, Inc., a Delaware corporation (the "Depositor").
WHEREAS, GMAC Commercial Mortgage Corporation ("GMACCM") sold certain
mortgage loans (the "GACC Mortgage Loans") to GACC pursuant to a certain
Mortgage Loan Purchase Agreement (the "GACC Purchase Agreement"), dated as of
March 31, 1998.
WHEREAS, GACC intends to sell certain of the GACC Mortgage Loans (the
"Mortgage Loans") to the Depositor and the Depositor intends to transfer the
Mortgage Loans, together with other multifamily and commercial mortgage loans to
a trust fund (the "Trust Fund") to be formed by the Depositor, beneficial
ownership of which will be evidenced by a series of mortgage pass-through
certificates (the "Certificates"). The Trust Fund will be created and the
Certificates will be issued pursuant to a pooling and servicing agreement to be
dated as of August 1, 1998 (the "Pooling and Servicing Agreement"), among the
Depositor as depositor, GMACCM as master servicer and special servicer, LaSalle
National Bank as trustee (in such capacity, the "Trustee") and ABN AMRO Bank
N.V. as fiscal agent. Capitalized terms not otherwise defined herein have the
meanings assigned to them in the Pooling and Servicing Agreement.
WHEREAS, GMACCM and GACC, in connection with the transactions described
above, entered into a Supplemental Agreement, dated as of August 21, 1998 (the
"Supplemental Agreement"), which amended and supplemented certain of the
provisions of the GACC Purchase Agreement as they relate to the Mortgage Loans
in order to facilitate such transactions.
WHEREAS, as a condition precedent to the consummation of the transactions
described above, including, without limitation, the receipt by GACC of a ratable
portion of the proceeds of the sale of the Certificates, it is required that
GACC assign to the Depositor all of GACC's right, title and interest in and to
the Supplemental Agreement.
NOW, THEREFORE, GACC, for and in consideration of good and valuable
consideration, does hereby assign to the Depositor all of GACC's right, title
and interest in and to the Supplemental Agreement.
<PAGE>
IN WITNESS WHEREOF, GACC and the Depositor have caused their names to be
signed hereto by their respective officers thereunto duly authorized as of the
day and year first written above.
GERMAN AMERICAN CAPITAL CORPORATION
By: /s/ Steven K. Palmer
------------------------------------------
Name: Steven K. Palmer
----------------------------------------
Title: Authorized Signatory
---------------------------------------
By: /s/ John Vaccaro
------------------------------------------
Name: John Vaccaro
----------------------------------------
Title: Vice President
---------------------------------------
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
By: /s/ David Lazarus
------------------------------------------
Name: David Lazarus
----------------------------------------
Title: Vice President
---------------------------------------
Acknowledged By:
GMAC COMMERCIAL MORTGAGE CORPORATION
By: /s/ David Lazarus
-------------------------------------
Name: David Lazarus
-----------------------------------
Title: Vice President
----------------------------------
S-1 1998-C2 GACC Assignment
