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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) July 14, 1997
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J.P. Morgan Commercial Mortgage Finance Corp.
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(Exact Name of Registrant as Specified in Charter)
Delaware 333-4554 13-3789046
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(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
60 Wall Street
New York, New York 10260
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(Address of Principal Executive
Offices and Zip Code)
Registrant's telephone number, including area code (212) 648-3636
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Item 5. Other Events
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Filing of Pooling and Servicing Agreement.
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On June 1, 1997, J.P. Morgan Commercial Mortgage Finance Corp. (the
"Company") entered into a Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement"), by and among the Company, as depositor, Midland Loan
Services, L.P., as master servicer and special servicer, LaSalle National
Bank, as trustee and ABN AMRO, as fiscal agent. The Pooling and Servicing
Agreement is annexed hereto as Exhibit 99.
Incorporation of Certain Documents by Reference
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Exhibit 99 to Report on Form 8-k filed on June 20, 1997 with respect to
event occurring on June 18, 1997 under Registration Statement No. 333-04554
is incorporated herein by reference.
Item 7. Financial Statements, Pro Forma Financial
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Information and Exhibits.
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(a) Not applicable
(b) Not applicable
(c) Exhibits.
The following is filed herewith. The exhibit number corresponds with
Item 601(b) of Regulation S-K.
Exhibit No. Description
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99 Pooling and Servicing Agreement
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.
J.P. MORGAN COMMERCIAL MORTGAGE
FINANCE CORP.
By: /s/ LEONARD VAN DRUNEN
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Name: Leonard Van Drunen
Title: Vice President
Dated: July 14, 1997
Exhibit Index
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Exhibit Page
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99. Pooling and Servicing Agreement 6
EXHIBIT 99
EXECUTION COPY
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J. P. MORGAN COMMERCIAL MORTGAGE FINANCE CORP.,
Depositor,
and
MIDLAND LOAN SERVICES, L.P.,
Master Servicer and Special Servicer
and
LASALLE NATIONAL BANK,
Trustee
and
ABN AMRO BANK N.V.,
Fiscal Agent
________________________________
POOLING AND SERVICING AGREEMENT
Dated as of June 1, 1997
________________________________
$203,075,453
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1997-SPTL-C1
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TABLE OF CONTENTS
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Page
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ARTICLE I
DEFINITIONS
SECTION 1.01 Defined Terms . . . . . . . . . . . . . . . . . . . . 4
Accepted Servicing Practices . . . . . . . . . . . . . . . . . 4
Accepted Special Servicing Practices . . . . . . . . . . . . . 4
Acquisition Date . . . . . . . . . . . . . . . . . . . . . . . 5
Adjustable Rate Mortgage Loan . . . . . . . . . . . . . . . . . 5
Adjusted Available Distribution Amount . . . . . . . . . . . . 5
Adjusted Collateral Value . . . . . . . . . . . . . . . . . . . 6
Advance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Advance Rate . . . . . . . . . . . . . . . . . . . . . . . . . 6
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Asset Strategy Report . . . . . . . . . . . . . . . . . . . . . 6
Assignment of Leases and Rents . . . . . . . . . . . . . . . . 6
Assignment of Mortgage . . . . . . . . . . . . . . . . . . . . 6
Assumed Final Distribution Date . . . . . . . . . . . . . . . . 6
Available Distribution Amount . . . . . . . . . . . . . . . . . 7
Balloon Mortgage Loan . . . . . . . . . . . . . . . . . . . . . 7
Balloon Payment . . . . . . . . . . . . . . . . . . . . . . . . 7
Bankruptcy Code . . . . . . . . . . . . . . . . . . . . . . . . 7
Book-Entry Certificate . . . . . . . . . . . . . . . . . . . . 7
Business Day . . . . . . . . . . . . . . . . . . . . . . . . . 7
Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Certificate Account . . . . . . . . . . . . . . . . . . . . . . 7
Certificate Balance . . . . . . . . . . . . . . . . . . . . . . 7
Certificateholder or Holder . . . . . . . . . . . . . . . . . . 7
Certificate Owner . . . . . . . . . . . . . . . . . . . . . . . 8
Certificate Register and Certificate Registrar . . . . . . . . 8
Class . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Class A1 Certificate . . . . . . . . . . . . . . . . . . . . . 8
Class A1 Pass-Through Rate . . . . . . . . . . . . . . . . . . 8
Class A1X Component . . . . . . . . . . . . . . . . . . . . . . 8
Class A1X Pass-Through Rate . . . . . . . . . . . . . . . . . . 8
Class A2 Certificate . . . . . . . . . . . . . . . . . . . . . 8
Class A2 Pass-Through Rate . . . . . . . . . . . . . . . . . . 8
Class A2X Component . . . . . . . . . . . . . . . . . . . . . . 8
Class A2X Pass-Through Rate . . . . . . . . . . . . . . . . . . 9
Class B Certificate . . . . . . . . . . . . . . . . . . . . . . 9
Class B Pass-Through Rate . . . . . . . . . . . . . . . . . . . 9
Class BX Component . . . . . . . . . . . . . . . . . . . . . . 9
Class BX Pass-Through Rate . . . . . . . . . . . . . . . . . . 9
Class Balance . . . . . . . . . . . . . . . . . . . . . . . . . 9
Class C Certificate . . . . . . . . . . . . . . . . . . . . . . 9
Class C Pass-Through Rate . . . . . . . . . . . . . . . . . . . 9
Class CX Component . . . . . . . . . . . . . . . . . . . . . . 9
Class CX Pass-Through Rate . . . . . . . . . . . . . . . . . . 9
Class D Certificate . . . . . . . . . . . . . . . . . . . . . . 9
Class D Pass-Through Rate . . . . . . . . . . . . . . . . . . . 10
Class DX Component . . . . . . . . . . . . . . . . . . . . . . 10
Class DX Pass-Through Rate . . . . . . . . . . . . . . . . . . 10
Class E Certificate . . . . . . . . . . . . . . . . . . . . . . 10
Class E Pass-Through Rate . . . . . . . . . . . . . . . . . . . 10
Class EX Component . . . . . . . . . . . . . . . . . . . . . . 10
Class EX Pass-Through Rate . . . . . . . . . . . . . . . . . . 10
Class F Certificate . . . . . . . . . . . . . . . . . . . . . . 10
Class F Pass-Through Rate . . . . . . . . . . . . . . . . . . . 10
Class FX Component . . . . . . . . . . . . . . . . . . . . . . 10
Class FX Pass-Through Rate . . . . . . . . . . . . . . . . . . 10
Class G Certificate . . . . . . . . . . . . . . . . . . . . . . 10
Class G Pass-Through Rate . . . . . . . . . . . . . . . . . . . 10
Class GX Component . . . . . . . . . . . . . . . . . . . . . . 11
Class GX Pass-Through Rate . . . . . . . . . . . . . . . . . . 11
Class H Certificate . . . . . . . . . . . . . . . . . . . . . . 11
Class H Pass-Through Rate . . . . . . . . . . . . . . . . . . . 11
Class HX Component . . . . . . . . . . . . . . . . . . . . . . 11
Class HX Pass-Through Rate . . . . . . . . . . . . . . . . . . 11
Class NR Certificate . . . . . . . . . . . . . . . . . . . . . 11
Class NR Pass-Through Rate . . . . . . . . . . . . . . . . . . 11
Class NRX Certificate . . . . . . . . . . . . . . . . . . . . . 11
Class NRX Component . . . . . . . . . . . . . . . . . . . . . . 11
Class NRX Pass-Through Rate . . . . . . . . . . . . . . . . . . 11
Class R-I Certificate . . . . . . . . . . . . . . . . . . . . . 11
Class R-II Certificate . . . . . . . . . . . . . . . . . . . . 11
Class R-III Certificate . . . . . . . . . . . . . . . . . . . . 11
Class X Certificate . . . . . . . . . . . . . . . . . . . . . . 12
Class X Component . . . . . . . . . . . . . . . . . . . . . . . 12
Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Collateral Value Adjustment . . . . . . . . . . . . . . . . . . 12
Collateral Value Adjustment Capitalization Amount . . . . . . . 12
Collateral Value Adjustment Event . . . . . . . . . . . . . . . 12
Collateral Value Adjustment Reduction Amount . . . . . . . . . 13
Collection Account . . . . . . . . . . . . . . . . . . . . . . 13
Condemnation Proceeds . . . . . . . . . . . . . . . . . . . . . 13
Controlling Certificateholder . . . . . . . . . . . . . . . . . 13
Corporate Trust Office . . . . . . . . . . . . . . . . . . . . 13
Custodian . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Cut-off Date . . . . . . . . . . . . . . . . . . . . . . . . . 13
Cut-off Date Balance . . . . . . . . . . . . . . . . . . . . . 14
Defaulted Mortgage Loan . . . . . . . . . . . . . . . . . . . . 14
Deficient Valuation . . . . . . . . . . . . . . . . . . . . . . 14
Definitive Certificate . . . . . . . . . . . . . . . . . . . . 14
Delivery Date . . . . . . . . . . . . . . . . . . . . . . . . . 14
Depositor . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Depository . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Depository Participant . . . . . . . . . . . . . . . . . . . . 14
Determination Date . . . . . . . . . . . . . . . . . . . . . . 14
Directing Certificateholder . . . . . . . . . . . . . . . . . . 14
Directly Operate . . . . . . . . . . . . . . . . . . . . . . . 15
Disposition Fee . . . . . . . . . . . . . . . . . . . . . . . . 15
Disqualified Organization . . . . . . . . . . . . . . . . . . . 15
Distribution Date . . . . . . . . . . . . . . . . . . . . . . . 15
Due Date . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Eligible Account . . . . . . . . . . . . . . . . . . . . . . . 16
Environmental Laws . . . . . . . . . . . . . . . . . . . . . . 16
Event of Default . . . . . . . . . . . . . . . . . . . . . . . 17
Excess Condemnation Proceeds . . . . . . . . . . . . . . . . . 17
Excess Insurance Proceeds . . . . . . . . . . . . . . . . . . . 17
FDIC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Final Recovery Determination . . . . . . . . . . . . . . . . . 17
Fiscal Agent . . . . . . . . . . . . . . . . . . . . . . . . . 18
Hazardous Materials . . . . . . . . . . . . . . . . . . . . . . 18
Independent . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Insurance Policy . . . . . . . . . . . . . . . . . . . . . . . 18
Insurance Proceeds . . . . . . . . . . . . . . . . . . . . . . 18
Interest Accrual Amount . . . . . . . . . . . . . . . . . . . . 19
Interest Distribution Amount . . . . . . . . . . . . . . . . . 19
Interest Rate Adjustment Date . . . . . . . . . . . . . . . . . 20
Interested Person . . . . . . . . . . . . . . . . . . . . . . . 20
Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
LIBOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
LIBOR Business Day . . . . . . . . . . . . . . . . . . . . . . 20
LIBOR Rate Adjustment Date . . . . . . . . . . . . . . . . . . 20
Liquidation Event . . . . . . . . . . . . . . . . . . . . . . . 20
Liquidation Proceeds . . . . . . . . . . . . . . . . . . . . . 20
Loss Mortgage Loan . . . . . . . . . . . . . . . . . . . . . . 20
Master Servicer . . . . . . . . . . . . . . . . . . . . . . . . 21
Master Servicing Fee . . . . . . . . . . . . . . . . . . . . . 21
Master Servicing Fee Rate . . . . . . . . . . . . . . . . . . . 21
Maturity Date . . . . . . . . . . . . . . . . . . . . . . . . . 21
Monitoring Certificateholder . . . . . . . . . . . . . . . . . 21
Monitoring Class . . . . . . . . . . . . . . . . . . . . . . . 21
Monthly Payment . . . . . . . . . . . . . . . . . . . . . . . . 21
Mortgage . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Mortgage Interest Rate . . . . . . . . . . . . . . . . . . . . 21
Mortgage Loan . . . . . . . . . . . . . . . . . . . . . . . . . 21
Mortgage Loan Documents . . . . . . . . . . . . . . . . . . . . 22
Mortgage Loan File . . . . . . . . . . . . . . . . . . . . . . 22
Mortgage Loan Purchase Agreement . . . . . . . . . . . . . . . 22
Mortgage Loan Schedule . . . . . . . . . . . . . . . . . . . . 22
Mortgage Loan Seller . . . . . . . . . . . . . . . . . . . . . 22
Mortgage Note . . . . . . . . . . . . . . . . . . . . . . . . . 22
Mortgaged Property . . . . . . . . . . . . . . . . . . . . . . 22
Mortgagor . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Most Subordinate Class of Certificates . . . . . . . . . . . . 23
Net Prepayment Premium . . . . . . . . . . . . . . . . . . . . 23
Nonrecoverable Advance . . . . . . . . . . . . . . . . . . . . 23
Nonrecoverable Advance Certificate . . . . . . . . . . . . . . 23
Non-United States Person . . . . . . . . . . . . . . . . . . . 23
Note Margin . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Notional Amount . . . . . . . . . . . . . . . . . . . . . . . . 24
Officers' Certificate . . . . . . . . . . . . . . . . . . . . . 24
Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . 24
Original Class Balance . . . . . . . . . . . . . . . . . . . . 24
Ownership Interest . . . . . . . . . . . . . . . . . . . . . . 24
P&I Advance . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Pass-Through Rate . . . . . . . . . . . . . . . . . . . . . . . 25
Payment Reserve . . . . . . . . . . . . . . . . . . . . . . . . 25
Percentage Interest . . . . . . . . . . . . . . . . . . . . . . 25
Permitted Investments . . . . . . . . . . . . . . . . . . . . . 25
Permitted Transferee . . . . . . . . . . . . . . . . . . . . . 26
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Prepayment Assumption . . . . . . . . . . . . . . . . . . . . . 27
Prepayment Interest Excess . . . . . . . . . . . . . . . . . . 27
Prepayment Interest Shortfall . . . . . . . . . . . . . . . . . 27
Prepayment Premium . . . . . . . . . . . . . . . . . . . . . . 27
Prime Rate . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Principal Distribution Amount . . . . . . . . . . . . . . . . . 27
Principal Prepayment . . . . . . . . . . . . . . . . . . . . . 28
Private Certificates . . . . . . . . . . . . . . . . . . . . . 28
Property Protection Expenses . . . . . . . . . . . . . . . . . 28
Prospectus Supplement . . . . . . . . . . . . . . . . . . . . . 29
Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . 29
Qualified Insurer . . . . . . . . . . . . . . . . . . . . . . . 29
Rating Agency . . . . . . . . . . . . . . . . . . . . . . . . . 30
Realized Loss . . . . . . . . . . . . . . . . . . . . . . . . . 30
Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Reference Bank Rate . . . . . . . . . . . . . . . . . . . . . . 30
REMIC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
REMIC I . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
REMIC I Uncertificated Interests . . . . . . . . . . . . . . . 31
REMIC II . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
REMIC II Uncertificated Interests . . . . . . . . . . . . . . . 31
REMIC III . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
REMIC Provisions . . . . . . . . . . . . . . . . . . . . . . . 31
Remittance Date . . . . . . . . . . . . . . . . . . . . . . . . 31
Remittance Period . . . . . . . . . . . . . . . . . . . . . . . 31
Remittance Rate . . . . . . . . . . . . . . . . . . . . . . . . 32
Remittance Report . . . . . . . . . . . . . . . . . . . . . . . 32
Rents from Real Property . . . . . . . . . . . . . . . . . . . 32
REO Account . . . . . . . . . . . . . . . . . . . . . . . . . . 32
REO Account Report . . . . . . . . . . . . . . . . . . . . . . 32
REO Acquisition . . . . . . . . . . . . . . . . . . . . . . . . 32
REO Mortgage Loan . . . . . . . . . . . . . . . . . . . . . . . 32
REO Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . 32
REO Property . . . . . . . . . . . . . . . . . . . . . . . . . 32
Request for Release and Receipt of Documents . . . . . . . . . 32
Required Rating . . . . . . . . . . . . . . . . . . . . . . . . 33
Residual Certificate . . . . . . . . . . . . . . . . . . . . . 33
Responsible Officer . . . . . . . . . . . . . . . . . . . . . . 33
Security Agreement . . . . . . . . . . . . . . . . . . . . . . 33
Senior Certificates . . . . . . . . . . . . . . . . . . . . . . 34
Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Servicing Advance . . . . . . . . . . . . . . . . . . . . . . . 34
Servicing Fee . . . . . . . . . . . . . . . . . . . . . . . . . 34
Servicing Officer . . . . . . . . . . . . . . . . . . . . . . . 34
Servicing Transfer Date . . . . . . . . . . . . . . . . . . . . 34
Servicing Transfer Event . . . . . . . . . . . . . . . . . . . 34
Special Servicer . . . . . . . . . . . . . . . . . . . . . . . 35
Special Servicing Fee . . . . . . . . . . . . . . . . . . . . . 35
Specially Serviced Mortgage Loan . . . . . . . . . . . . . . . 35
Specially Serviced Mortgage Loan Status Report . . . . . . . . 35
Special Servicer . . . . . . . . . . . . . . . . . . . . . . . 35
Special Servicing Fee . . . . . . . . . . . . . . . . . . . . . 35
Startup Day . . . . . . . . . . . . . . . . . . . . . . . . . . 35
State Tax Laws . . . . . . . . . . . . . . . . . . . . . . . . 35
Stated Principal Balance . . . . . . . . . . . . . . . . . . . 35
Tax Matters Person . . . . . . . . . . . . . . . . . . . . . . 36
Tax Returns . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Trust Fund . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Trustee Fee Rate . . . . . . . . . . . . . . . . . . . . . . . 37
UCC Financing Statement . . . . . . . . . . . . . . . . . . . . 37
Uncertificated Interest I . . . . . . . . . . . . . . . . . . . 37
Uncertificated Interest II . . . . . . . . . . . . . . . . . . 37
Uncertificated Interest III . . . . . . . . . . . . . . . . . . 37
Uncertificated Interest IV . . . . . . . . . . . . . . . . . . 37
Uncertificated Interest V . . . . . . . . . . . . . . . . . . . 37
Uncertificated Interest VI . . . . . . . . . . . . . . . . . . 38
Uncertificated Interest VII . . . . . . . . . . . . . . . . . . 38
Uncertificated Interest VIII . . . . . . . . . . . . . . . . . 38
Uncertificated Interest IX . . . . . . . . . . . . . . . . . . 38
Underwriter . . . . . . . . . . . . . . . . . . . . . . . . . . 38
United States Person . . . . . . . . . . . . . . . . . . . . . 38
Voting Rights . . . . . . . . . . . . . . . . . . . . . . . . . 38
Weighted Average Remittance Rate . . . . . . . . . . . . . . . 39
1933 Act . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 1.02 (RESERVED) . . . . . . . . . . . . . . . . . . . . . 39
SECTION 1.03 Determination of LIBOR . . . . . . . . . . . . . . . . 39
SECTION 1.04 General Interpretive Principles . . . . . . . . . . . 40
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.01 Conveyance of Mortgage Loans . . . . . . . . . . . . 42
SECTION 2.02 Acceptance by Trustee . . . . . . . . . . . . . . . . 44
SECTION 2.03 Representations and Warranties of the Depositor, the
Master Servicer, and the Special Servicer;
Assignment of Rights . . . . . . . . . . . . . . . . 45
SECTION 2.04 Repurchase of Mortgage Loans for Breaches of
Representation and Warranty . . . . . . . . . . . . . 49
SECTION 2.05 Execution of Certificates . . . . . . . . . . . . . . 50
ARTICLE III
GENERAL PROVISIONS APPLICABLE TO SERVICERS
SECTION 3.01 Contract for Servicing . . . . . . . . . . . . . . . . 51
SECTION 3.02 Notices to Mortgagors . . . . . . . . . . . . . . . . 51
SECTION 3.03 Subservicing . . . . . . . . . . . . . . . . . . . . . 51
SECTION 3.04 Record Title to Mortgage Loans, Etc. . . . . . . . . . 53
SECTION 3.05 Release of Documents and Instruments of
Satisfaction . . . . . . . . . . . . . . . . . . 53
SECTION 3.06 Access to Certain Documentation Regarding
the Mortgage Loans and This Agreement . . . . . 54
SECTION 3.07 Annual Statement As to Compliance . . . . . . . . . . 54
SECTION 3.08 Annual Independent Public Accountants' Servicing
Report . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 3.09 Merger or Consolidation of Any Servicer . . . . . . . 55
SECTION 3.10 Limitation on Liability of the Servicers
and Others . . . . . . . . . . . . . . . . . . . 56
SECTION 3.11 Resignation of Servicers . . . . . . . . . . . . . . . 56
SECTION 3.12 Maintenance of Errors and Omissions and
Fidelity Coverage . . . . . . . . . . . . . . . 57
SECTION 3.13 Indemnity . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 3.14 Information Systems . . . . . . . . . . . . . . . . . 58
SECTION 3.15 REMIC Administration . . . . . . . . . . . . . . . . 59
ARTICLE IV
OBLIGATIONS OF THE MASTER SERVICER
SECTION 4.01 The Master Servicer . . . . . . . . . . . . . . . . . 64
SECTION 4.02 Collection Account; Collection of
Certain Mortgage Loan Payments . . . . . . . . . 66
SECTION 4.03 Permitted Withdrawals from the Collection Account . . 68
SECTION 4.04 Remittances to the Trustee. . . . . . . . . . . . . . 70
SECTION 4.05 Master Servicer Advances . . . . . . . . . . . . . . 71
SECTION 4.06 Maintenance of Insurance . . . . . . . . . . . . . . 72
SECTION 4.07 Enforcement of "Due-on-Sale" Clauses;
Assumption Agreements . . . . . . . . . . . . . 74
SECTION 4.08 Property Inspections . . . . . . . . . . . . . . . . 75
SECTION 4.09 Reports of Master Servicer . . . . . . . . . . . . . . 76
SECTION 4.10 Confirmation of Balloon Payment . . . . . . . . . . . 76
SECTION 4.11 Master Servicer Compensation . . . . . . . . . . . . . 77
SECTION 4.12 Adjustment of Master Servicer's
Compensation . . . . . . . . . . . . . . . . . . 77
SECTION 4.13 Implementation of Operations and Maintenance Plans . 77
ARTICLE V
(RESERVED)
ARTICLE VI
OBLIGATIONS OF THE SPECIAL SERVICER
SECTION 6.01 The Special Servicer . . . . . . . . . . . . . . . . . 80
SECTION 6.02 Transfer to Special Servicing . . . . . . . . . . . . 80
SECTION 6.03 Servicing of Specially Serviced Mortgage
Loans . . . . . . . . . . . . . . . . . . . . . 81
SECTION 6.04 Management of REO Property. . . . . . . . . . . . . . 85
SECTION 6.05 Sale of REO Property and Specially Serviced Mortgage
Loans . . . . . . . . . . . . . . . . . . . . . . . . 87
SECTION 6.06 REO Account; Collection of REO Proceeds . . . . . . . 88
SECTION 6.07 Remittances to Master Servicer . . . . . . . . . . . 89
SECTION 6.08 Specially Serviced Mortgage Loan Status Reports and
Other Reports . . . . . . . . . . . . . . . . . . . . 90
SECTION 6.09 Environmental Considerations . . . . . . . . . . . . 91
SECTION 6.10 Restoration of Specially Serviced Mortgage Loans . . 94
SECTION 6.11 Removal of Special Servicer. . . . . . . . . . . . . 94
SECTION 6.12 Special Servicer Compensation. . . . . . . . . . . . 95
SECTION 6.13 Collateral Value Adjustments.
ARTICLE VII
PAYMENTS TO CERTIFICATEHOLDERS
SECTION 7.01 Certificate Account; Remittances to the Trustee . . . 97
SECTION 7.02 Distributions . . . . . . . . . . . . . . . . . . . . 97
SECTION 7.03 Statements to Certificateholders . . . . . . . . . . 101
SECTION 7.04 Distribution of Reports to the Trustee and the
Depositor; Advances. . . . . . . . . . . . . . . . . 106
SECTION 7.05 Allocations of Realized Losses and Collateral Value
Adjustments . . . . . . . . . . . . . . . . . . . . . 108
ARTICLE VIII
THE CERTIFICATES
SECTION 8.01 The Certificates . . . . . . . . . . . . . . . . . . 109
SECTION 8.02 Registration of Transfer and Exchange of
Certificates . . . . . . . . . . . . . . . . . . . . 111
SECTION 8.03 Mutilated, Destroyed, Lost or Stolen Certificates . . 114
SECTION 8.04 Persons Deemed Owners . . . . . . . . . . . . . . . . 115
ARTICLE IX
THE DEPOSITOR
SECTION 9.01 Liability of the Depositor . . . . . . . . . . . . . 116
SECTION 9.02 Merger, Consolidation or Conversion of the
Depositor . . . . . . . . . . . . . . . . . . . . . . 116
SECTION 9.03 Limitation on Liability of the Depositor and Others . 116
ARTICLE X
DEFAULT
SECTION 10.01 Events of Default . . . . . . . . . . . . . . . . . . 117
SECTION 10.02 Trustee to Act; Appointment of Successor . . . . . . 119
SECTION 10.03 Notification to Certificateholders . . . . . . . . . 120
SECTION 10.04 Waiver of Events of Default . . . . . . . . . . . . . 120
SECTION 10.05 Additional Remedies of Trustee Upon Event of
Default . . . . . . . . . . . . . . . . . . . . . . . 121
ARTICLE XI
CONCERNING THE TRUSTEE
SECTION 11.01 Duties of Trustee . . . . . . . . . . . . . . . . . . 122
SECTION 11.02 Monitoring Certificateholders and Directing
Certificateholder . . . . . . . . . . . . . . . . . . 124
SECTION 11.03 Powers of Attorney . . . . . . . . . . . . . . . . . 125
SECTION 11.04 Certification by Certificate Owners . . . . . . . . . 126
SECTION 11.05 Certain Matters Affecting the Trustee . . . . . . . . 126
SECTION 11.06 Trustee and Fiscal Agent Not Liable for Certificates
or Mortgage Loans. . . . . . . . . . . . . . . . . . 128
SECTION 11.07 Trustee and Fiscal Agent May Own Certificates . . . . 129
SECTION 11.08 Fees and Expenses of Trustee; Indemnification of
Trustee . . . . . . . . . . . . . . . . . . . . . . . 129
SECTION 11.09 Eligibility Requirements for Trustee . . . . . . . . 131
SECTION 11.10 Resignation and Removal of the Trustee . . . . . . . 132
SECTION 11.11 Successor Trustee . . . . . . . . . . . . . . . . . . 133
SECTION 11.12 Merger or Consolidation of Trustee . . . . . . . . . 133
SECTION 11.13 Appointment of Co-Trustee or Separate Trustee . . . . 134
SECTION 11.14 Appointment of Custodians . . . . . . . . . . . . . . 135
SECTION 11.15 Representations and Warranties of the Trustee . . . . 136
SECTION 11.16 Fiscal Agent Appointed; Concerning the
Fiscal Agent. . . . . . . . . . . . . . . . . . 137
SECTION 11.17 SEC Filings . . . . . . . . . . . . . . . . . . . . . 137
ARTICLE XII
TERMINATION
SECTION 12.01 Termination Upon Repurchase or Liquidation of All
Mortgage Loans . . . . . . . . . . . . . . . . . . . 139
ARTICLE XIII
MISCELLANEOUS PROVISIONS
SECTION 13.01 Amendment . . . . . . . . . . . . . . . . . . . . . . 141
SECTION 13.02 Recordation of Agreement; Counterparts . . . . . . . 143
SECTION 13.03 Limitation on Rights of Certificateholders . . . . . 143
SECTION 13.04 Governing Law . . . . . . . . . . . . . . . . . . . . 144
SECTION 13.05 Notices . . . . . . . . . . . . . . . . . . . . . . . 144
SECTION 13.06 Severability of Provisions . . . . . . . . . . . . . 145
SECTION 13.07 Grant of a Security Interest . . . . . . . . . . . . 145
SECTION 13.08 Successors and Assigns . . . . . . . . . . . . . . . 146
SECTION 13.09 Article and Section Headings . . . . . . . . . . . . 146
SECTION 13.10 Notices and Information to Rating Agencies . . . . . 146
SECTION 13.11 Certificateholders' List . . . . . . . . . . . . . . 147
SECTION 13.12 Successor to a Servicer . . . . . . . . . . . . . . . 147
EXHIBITS
Exhibit A Form of Certificate
Exhibit B Form of Transferor Certificate
Exhibit C (RESERVED)
Exhibit D-1 Form of Investment Letter - Qualified
Institutional Investors
Exhibit D-2 Form of Investment Letter - Regulation S
Exhibit D-3 Form of Investment Letter - Rule 144
Exhibit D-4 Form of Investment Letter - Accredited Investors
Exhibit E-1 Form of Transfer Affidavit
Exhibit E-2 Form of Transferor Certificate
Exhibit F Mortgage Loan Schedule
Exhibit G Form of Acknowledgment
Exhibit H Request for Release and Receipt of Documents
This Pooling and Servicing Agreement, dated and effective as of
June 1, 1997, among J.P. Morgan Commercial Mortgage Finance Corp, a Delaware
corporation, as Depositor, Midland Loan Services, L.P., a Missouri limited
partnership, as Master Servicer and Special Servicer, LaSalle National Bank,
a nationally chartered bank, as Trustee and ABN AMRO Bank N.V., a Netherlands
banking corporation, as Fiscal Agent.
PRELIMINARY STATEMENT:
The Depositor intends to sell mortgage pass-through certificates,
to be issued hereunder in multiple classes, which in the aggregate will
evidence the entire beneficial ownership interest in the Mortgage Loans (as
defined below). The Mortgage Loans will be serviced pursuant to the terms
hereof. The Depositor hereby assigns to the Trustee, acting on behalf of the
Certificateholders, its interests and rights in the Mortgage Loans. As
provided herein, the Trustee will elect that the segregated pool of assets
subject to this Agreement (including, without limitation, the Mortgage Loans)
be treated for federal income tax purposes as a real estate mortgage
investment conduit (a "REMIC") and such segregated pool of assets will be
designated as "REMIC I." Five hundred and forty (540) partial undivided
beneficial ownership interests in each of the Mortgage Loans (the "REMIC I
Uncertificated Classes"), will be designated as the "regular interests" in
REMIC I and the Class R-I Certificates will be the sole class of "residual
interests" in REMIC I, for purposes of the REMIC Provisions (as defined
herein) under federal income tax law. A segregated pool of assets consisting
of the REMIC I Uncertificated Classes will be designated as "REMIC II" and
the Trustee will make a separate REMIC election with respect thereto. Eleven
partial undivided beneficial ownership interests in REMIC II (the "REMIC II
Uncertificated Classes") will be designated as the "regular interests" in
REMIC II and the Class R-II Certificates will be the sole class of "residual
interests" in REMIC II, for purposes of the REMIC Provisions under federal
income tax laws. A segregated pool of assets consisting of the REMIC II
Uncertificated Classes will be designated as "REMIC III" and the Trustee will
make a separate REMIC election with respect thereto. The Class A1, Class A2,
Class B, Class C, Class D, Class E, Class F, Class G and Class H and Class NR
Certificates and each of the Class X Components will be designated as the
"regular interests" in REMIC III, and the Class R-III Certificates will be
the sole class of "residual interests" therein for purposes of the REMIC
Provisions under federal income tax law.
The following table sets forth the designation and Original Class
Balance for each Class of Certificates comprising the interests in the Trust
Fund created hereunder.
Class Original
Designation Class Balance
-------------------------------------------
Class A1 $81,230,000
Class A2 $60,922,000
Class B $10,153,000
Class C $12,184,000
Class D $10,153,000
Class X $0
Class E $10,153,000
Class F $6,092,000
Class G $2,030,000
Class H $3,046,000
Class NR $7,112,453
Class R-I NA
Class R-II NA
Class R-III NA
As of the close of business on the Cut-off Date, the Mortgage Loans
had an aggregate Cut-off Date Balance equal to approximately $203,075,453.
<TABLE>
<CAPTION> Principal Interest Pass-Through
REMIC II Allocation Allocation Balance Rate
<S> <C> <C> <C> <C>
1 A-1 A-1, A-1X $81,230,000 WAC
2 A-2 A-2, A-2X $60,922,000 WAC
3 B B, BX $10,153,000 WAC
4 C C, CX $12,184,000 WAC
5 D D, DX $10,153,000 WAC
6 E E, EX $10,153,000 WAC
7 F F, FX $6,092,000 6.5%
8 G G, GX $2,030,000 6.5%
9 H HX $3,046,000 6.5%
10 NR NRX $7,112,453 WAC
11 R-II N/A N/A
</TABLE>
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:
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.
"Accepted Servicing Practices": The procedures that the Master
Servicer shall follow in the servicing and administration of mortgage loans,
consistent with the higher of (i) the standard of care, skill, prudence and
diligence with which the Master Servicer services and administers, mortgage
loans that are held for other portfolios and are similar to the Mortgage
Loans and (ii) the standard of care, skill, prudence and diligence which the
Master Servicer services and administers mortgage loans that are held for its
own portfolio and are similar to the Mortgage Loans, in either case giving
due consideration to customary and usual standards of practice of prudent
institutional multifamily and commercial mortgage loan servicers but without
regard to:
(i) any relationship that the Master Servicer or any Affiliate of
the Master Servicer may have with any Mortgagor or any
Affiliate of any Mortgagor or any other party to this
Agreement;
(ii) the Master Servicer's obligations to make Advances with
respect to the Mortgage Loans;
(iii) the adequacy of the Master Servicer's compensation for
its services hereunder or with respect to any particular
transaction;
(iv) the ownership, servicing or management for others by the
Master Servicer of any other mortgage loans or property; or
(v) the ownership by the Master Servicer of any Certificates or
other securities.
To the extent consistent with the foregoing and subject to the
express limitations set forth in this Agreement, the procedures followed by
the Master Servicer shall seek to maximize the timely and complete recovery
of principal and interest on the Mortgage Loans.
"Accepted Special Servicing Practices": The procedures that
the Special Servicer shall follow in the servicing, administration and
disposition of distressed mortgage loans and related real property,
consistent with the higher of (i) the standard of care, skill,
prudence and diligence with which the Special Servicer services, administers
and disposes of, distressed mortgage loans and related real property that are
held for other portfolios and are similar to the Mortgage Loans, Mortgaged
Property and REO Property and (ii) the standard of care, skill, prudence and
diligence with which the Special Servicer services, administers and disposes
of, distressed mortgage loans and related real property that is held for its
own portfolio and are similar to the Mortgage Loans, Mortgaged Property and
REO Property, giving due consideration to customary and usual standards of
practice of prudent institutional multifamily and commercial mortgage
lenders, loan servicers and asset managers, so as to maximize the net present
value of recoveries on the Mortgage Loans, but without regard to:
(i) any relationship that Special Servicer or any Affiliate of the
Special Servicer may have with any Mortgagor or any Affiliate
of any Mortgagor or any other party to this Agreement;
(ii) the adequacy of the Special Servicer's compensation for its
services hereunder or with respect to any particular
transaction;
(iii) the ownership, servicing or management for others by the
Special Servicer of any other mortgage loans or property; or
(iv) the ownership by the Special Servicer of any Certificates or
other securities issued in connection with any Securitization.
"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.
"Adjustable Rate Mortgage Loan": A Mortgage Loan as to which the
related Mortgage Note provides for periodic adjustments to the Mortgage
Interest Rate thereon based on changes in the related Index.
"Adjusted Available Distribution Amount": With respect to any
Distribution Date, the Available Distribution Amount net of any Net
Prepayment Premiums.
"Adjusted Collateral Value": With respect to any Distribution Date,
the excess of the Stated Principal Balance of any Mortgage Loan over the
related Collateral Value Adjustment.
"Advance": A P&I Advance or Servicing Advance.
"Advance Rate": An annual rate equal to the Prime Rate in effect
from time to time.
"Affiliate": With respect to any specified Person, any other
Person controlling, 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.
"Asset Strategy Report": The report prepared pursuant to Section
6.03(c).
"Assignment of Leases and Rents": With respect to any Mortgaged
Property, any assignment of leases, rents and profits or similar agreement
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.
"Assignment of Mortgage": An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form, sufficient under the
laws of the jurisdiction wherein the related Mortgaged Property is located to
effect the transfer of the Mortgage to the Trust Fund, which assignment,
notice of transfer or equivalent instrument may be in the form of one or more
blanket assignments covering the Mortgage Loans secured by Mortgaged
Properties located in the same jurisdiction, if permitted by law.
"Assumed Final Distribution Date": July 25, 2029, which is the
first Distribution Date following the second anniversary of the date at which
the Stated Principal Balance of all the Mortgage Loans has been reduced to
zero, assuming no prepayments and that the Balloon Mortgage Loans fully
amortize according to their amortization schedule and no Balloon Payment is
made.
"Available Distribution Amount": With respect to any Distribution
Date, the amount on deposit in the Certificate Account as of the close of
business on the related Determination Date immediately preceding such
Distribution Date, after giving effect to expenses of the Trust Fund pursuant
to this Agreement.
"Balloon Mortgage Loan": Any Mortgage Loan that by its original
terms or by virtue of any modification 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 amount outstanding on the Maturity Date of
such Mortgage Loan in excess of the related Monthly Payment.
"Bankruptcy Code": The federal Bankruptcy Code, as amended from
time to time (Title 11 of the United States Code).
"Book-Entry Certificate": Any Certificate registered in the name
of the Depository or its nominee.
"Business Day": Any day other than a Saturday, a Sunday or a day
on which banking and savings and loan institutions in the states of
California, New York, Illinois or Missouri are authorized or obligated by law
or executive order to remain closed.
"Certificate": Any Class A1, Class A2, Class B, Class C, Class D,
Class X, Class E, Class F, Class G, Class H, Class NR, Class R-I, Class R-II
or Class R-III Certificate.
"Certificate Account": The segregated trust account or accounts
created and maintained by the Trustee pursuant to Section 7.01 in trust for
Certificateholders, which shall be entitled "LaSalle National Bank, as
Trustee, in trust for registered holders of J.P. Morgan Commercial Mortgage
Finance Corp., Commercial Mortgage Pass-Through Certificates, Series 1997-
SPTL-C1."
"Certificate Balance": With respect to any Class A1, Class A2,
Class B, Class C, Class D, Class E, Class F, Class G, Class H or Class NR
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
Balance of the Class of Certificates to which such Certificate belongs. The
Class X and Residual Certificates do not have a Certificate Balance.
"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 Depositor or any Affiliate of either shall be deemed not to be
outstanding with respect to Sections 10.04 and 13.01. The Trustee shall
be entitled to request and rely upon a certificate of the Master Servicer or
the Depositor in determining whether a Certificate is registered in the name
of an Affiliate of such Person.
"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 an indirect participating brokerage firm for which a Depository
Participant acts as agent, if any, and otherwise on the books of a Depository
Participant, if any, and otherwise on the books of the Depository.
"Certificate Register" and "Certificate Registrar": The register
maintained and the registrar appointed pursuant to Section 8.02.
"Class": Collectively, all of the Certificates bearing the same
capital letter designation.
"Class A1 Certificate": Any of the Certificates issued hereunder
and designated as such.
"Class A1 Pass-Through Rate": With respect to any Distribution
Date, the per annum rate equal to the lesser of (a) LIBOR plus 0.24% and (b)
the Weighted Average Remittance Rate.
"Class A1X Component": The component of the Class X Certificates
with a Notional Amount equal to the Class Balance of the Class A1
Certificates and a Pass-Through Rate equal to the Class A1X Pass-Through
Rate.
"Class A1X Pass-Through Rate": With respect to any Distribution
Date, the per annum rate equal to the excess of the Weighted Average
Remittance Rate over the Class A1 Pass-Through Rate.
"Class A2 Certificate": Any of the Certificates issued hereunder
and designated as such.
"Class A2 Pass-Through Rate": With respect to any Distribution
Date, the per annum rate equal to the lesser of (a) LIBOR plus 0.33% and (b)
the Weighted Average Remittance Rate.
"Class A2X Component": The component of the Class X Certificates
with a Notional Amount equal to the Class Balance of the Class A2
Certificates and a Pass-Through Rate equal to the Class A2X Pass-Through
Rate.
"Class A2X Pass-Through Rate": With respect to any Distribution
Date, the per annum rate equal to the excess of the Weighted Average
Remittance Rate over the Class A2 Pass-Through Rate.
"Class B Certificate": Any of the Certificates issued hereunder
and designated as such.
"Class B Pass-Through Rate": With respect to any Distribution
Date, the per annum rate equal to the lesser of (a) LIBOR plus 0.45% and (b)
the Weighted Average Remittance Rate.
"Class BX Component": The component of the Class X Certificates
with a Notional Amount equal to the Class Balance of the Class B Certificates
and a Pass-Through Rate equal to the Class BX Pass-Through Rate.
"Class BX Pass-Through Rate": With respect to any Distribution
Date, the per annum rate equal to the excess of the Weighted Average
Remittance Rate over the Class B Pass-Through Rate.
"Class Balance": With respect to any Class, the aggregate
principal amount of such Class outstanding as of any date of determination
equal to (A) the Original Class Balance thereof plus (B) any Collateral Value
Adjustment Capitalization Amount minus (C) any amounts allocated or
distributed to such Class in reduction of its Class Balance pursuant to the
terms hereof.
"Class C Certificate": Any of the Certificates issued hereunder
and designated as such.
"Class C Pass-Through Rate": With respect to any Distribution
Date, the per annum rate equal to the lesser of (a) LIBOR plus 0.65% and (b)
the Weighted Average Remittance Rate.
"Class CX Component": The component of the Class X Certificates
with a Notional Amount equal to the Class Balance of the Class C Certificates
and a Pass-Through Rate equal to the Class CX Pass-Through Rate.
"Class CX Pass-Through Rate": With respect to any Distribution
Date, the per annum rate equal to the excess of the Weighted Average
Remittance Rate over the Class C Pass-Through Rate.
"Class D Certificate": Any of the Certificates issued hereunder
and designated as such.
"Class D Pass-Through Rate": With respect to any Distribution
Date, the per annum rate equal to the lesser of (a) LIBOR plus 0.98% and (b)
the Weighted Average Remittance Rate.
"Class DX Component": The component of the Class X Certificates
with a Notional Amount equal to the Class Balance of the Class D Certificates
and a Pass-Through Rate equal to the Class DX Pass-Through Rate.
"Class DX Pass-Through Rate": With respect to any Distribution
Date, the per annum rate equal to the excess of the Weighted Average
Remittance Rate over the Class D Pass-Through Rate.
"Class E Certificate": Any of the Certificates issued hereunder
and designated as such.
"Class E Pass-Through Rate": With respect to any Distribution
Date, the per annum rate equal to 6.5% per annum.
"Class EX Component": The component of the Class X Certificates
with a Notional Amount equal to the Class Balance of the Class E Certificates
and a Pass-Through Rate equal to the Class EX Pass-Through Rate.
"Class EX Pass-Through Rate": With respect to any Distribution
Date, the per annum rate equal to the excess of the Weighted Average
Remittance Rate over the Class E Pass-Through Rate.
"Class F Certificate": Any of the Certificates issued hereunder
and designated as such.
"Class F Pass-Through Rate": With respect to any Distribution
Date, the per annum rate equal to 6.5% per annum.
"Class FX Component": The component of the Class X Certificates
with a Notional Amount equal to the Class Balance of the Class F Certificates
and a Pass-Through Rate equal to the Class FX Pass-Through Rate.
"Class FX Pass-Through Rate": With respect to any Distribution
Date, the per annum rate equal to the excess of the Weighted Average
Remittance Rate over the Class F Pass-Through Rate.
"Class G Certificate": Any of the Certificates issued hereunder
and designated as such.
"Class G Pass-Through Rate": With respect to any Distribution
Date, the per annum rate equal to 6.5% per annum.
"Class GX Component": The component of the Class X Certificates
with a Notional Amount equal to the Class Balance of the Class G Certificates
and a Pass-Through Rate equal to the Class GX Pass-Through Rate.
"Class GX Pass-Through Rate": With respect to any Distribution
Date, the per annum rate equal to the excess of the Weighted Average
Remittance Rate over the Class G Pass-Through Rate.
"Class H Certificate": Any of the Certificates issued hereunder
and designated as such.
"Class H Pass-Through Rate": With respect to any Distribution
Date, the per annum rate equal to 0.0% per annum.
"Class HX Component": The component of the Class X Certificates
with a Notional Amount equal to the Class Balance of the Class H Certificates
and a Pass-Through Rate equal to the Class HX Pass-Through Rate.
"Class HX Pass-Through Rate": With respect to any Distribution
Date, the per annum rate equal to the Weighted Average Remittance Rate.
"Class NR Certificate": Any of the Certificates issued hereunder
and designated as such and with a Pass-Through Rate of 0.00%.
"Class NR Pass-Through Rate": With respect to any Distribution
Date, the per annum rate equal to 0.0% per annum.
"Class NRX Certificate": Any of the Certificates issued hereunder
and designated as such.
"Class NRX Component": The component of the Class X Certificates
with a Notional Amount equal to the Class Balance of the Class NR
Certificates and a Pass-Through Rate equal to the Class NRX Pass-Through
Rate.
"Class NRX Pass-Through Rate": With respect to any Distribution
Date, the per annum rate equal to the Weighted Average Remittance Rate.
"Class R-I Certificate": Any of the Certificates issued hereunder
and designated as such.
"Class R-II Certificate": Any of the Certificates issued hereunder
and designated as such.
"Class R-III Certificate": Any of the Certificates issued
hereunder and designated as such.
"Class X Certificate": Any of the Certificates issued hereunder
and designated as such.
"Class X Component": Each of the Class A1X, Class A2X, Class BX,
Class CX, Class DX, Class EX, Class FX, Class GX, Class HX and Class NRX
Components.
"Code": The Internal Revenue Code of 1986, as amended from time to
time.
"Collateral Value Adjustment": With respect to a Mortgage Loan as
to which a Collateral Value Adjustment Event has occurred, an amount equal to
the excess of (a) the Stated Principal Balance of the Mortgage Loan as of the
date of the Collateral Value Adjustment Event over (b) the excess of (i) 90%
of the current appraised value of the related Mortgaged Property as
determined by an Independent MAI appraiser conducted under MAI appraisal
standards prepared in accordance with 12 CFR Section225.62 over (ii) the sum
of (A) to the extent not previously advanced by a Servicer, all unpaid
interest on such Mortgage Loan at a per annum rate equal to the Mortgage
Interest Rate, (B) all unreimbursed Advances and interest thereon at the
Advance Rate, (C) any unpaid Servicing Fees and Trustee Fees and (D) all
currently due and delinquent real estate taxes and assessments, insurance
premiums and, if applicable, ground rents in respect of such Mortgaged
Property (net of any amount escrowed or otherwise available for payment of
any amounts due on the related Mortgage Loans with respect to such Mortgage
Loan or REO Property) and estimated liquidation expenses. Notwithstanding
the foregoing, a Collateral Value Adjustment will be zero with respect to
such Mortgage Loan if (i) the event giving rise to such Collateral Value
Adjustment is the extension of the maturity of such Mortgage Loan, (ii) the
payments on such Mortgage Loan were not delinquent during the twelve months
preceding such extension and (iii) the payments on such Mortgage Loan were
then current, provided that if at any later date there occurs a delinquency
in payment with respect to such Mortgage Loan, the Collateral Value
Adjustment will be recalculated and applied as described above.
"Collateral Value Adjustment Capitalization Amount": With respect
to each class of Certificates to which a Collateral Value Adjustment has been
allocated, and to the extent not reversed, interest accrued at the related
Pass-Through Rate on the portion of the Class Balance of such class equal to
the sum of the aggregate Collateral Value Adjustment allocated to such class
for such Distribution Date and accrued and unpaid interest at the related
Pass-Through Rate on such Collateral Value Adjustment amount for prior
Distribution Dates.
"Collateral Value Adjustment Event": With respect to any Mortgage
Loan the earliest to occur of (i) 90 days after the date on which
an uncured delinquency occurs in respect of such Mortgage Loan,
(ii) immediately after the date on which a receiver is appointed (if such
appointment remains in effect during such 60-day period) in respect of the
related Mortgaged Property, (iii) the date on which the related Mortgaged
Property becomes an REO Property or (iv) the date on which the payment rate,
Mortgage Interest Rate, principal balance, amortization terms or Maturity
Date of such Mortgage Loan has been changed or otherwise materially modified
pursuant to and in accordance with the terms hereof.
"Collateral Value Adjustment Reduction Amount": With respect to
the Class X Certificates, the portion of the Interest Accrual Amount accrued
on the portion of the related Notional Amount corresponding to any Collateral
Value Adjustment or Collateral Value Adjustment Capitalization Amount
allocated, and not reversed, to the Class Balance of any class of
Certificates.
"Collection Account": The separate account, which shall be an
Eligible Account, created and maintained pursuant to Section 4.02 hereof.
"Condemnation Proceeds": With respect to each Mortgage Loan, all
awards or settlements in respect of a Mortgaged Property, whether permanent
or temporary, partial or entire, on account of the exercise of the power of
eminent domain or condemnation, held in an escrow account or a trust account,
which is an Eligible Account, pursuant to the terms of the related Mortgage
Loan Documents and applicable law, related to such Mortgaged Property and
applied or to be applied to the restoration or repair of such Mortgaged
Property or required to be released to a Mortgagor in accordance with the
terms of the related Mortgage Loan Documents or, to the extent not expressly
provided therein, in accordance with Accepted Servicing Practices or Accepted
Special Servicing Practices, as applicable, and applicable law.
"Controlling Certificateholder": As defined in Section 6.11
hereof.
"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 LaSalle National Bank, 135
South LaSalle Street, Chicago, Illinois 60674-4107, Attention: Asset-Backed
Securities Trust Services Group--Southern Pacific 1997-SPTL-C1.
"Custodian": A Person who is at any time appointed by the Trustee
pursuant to Section 11.14.
"Cut-off Date": June 1, 1997.
"Cut-off Date Balance": With respect to any Mortgage Loan, the
outstanding principal balance of such Mortgage Loan as of the Cut-off Date,
net of the principal portion of all unpaid Monthly Payments due on or before
such date.
"Defaulted Mortgage Loan": Any Mortgage Loan which is more than 60
days delinquent in whole or in part in respect of any Monthly Payment or is
delinquent in whole or in part in respect of the related Balloon Payment, if
any; provided that for purposes of this definition, no Monthly Payment (other
than a Balloon Payment) shall be deemed delinquent if less than five dollars
($5.00) of all amounts due and payable on such Mortgage Loan has not been
received as of the most recent Due Date therefor.
"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, or any reduction in the amount of principal to be paid in connection
with any scheduled Monthly Payment that constitutes a permanent forgiveness
of principal, which valuation results from a proceeding initiated under the
Bankruptcy Code or a state court deficiency proceeding.
"Definitive Certificate": Any certificated, fully registered
certificate.
"Delivery Date": June 27, 1997.
"Depositor": J.P. Morgan Commercial Mortgage Finance Corp., or its
successor in interest.
"Depository": 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 Securities Exchange Act of 1934, as amended.
The initial Depository shall be The Depository Trust Company, a nominee of
which is CEDE & Co.
"Depository Participant": A broker, dealer, bank or other
financial institution or other person for whom from time to time a Depository
effects book-entry transfers and pledges of securities deposited by the
Depository.
"Determination Date": With respect to any Distribution Date, the
10th day of the month in which such Distribution Date occurs or, if such day
is not a Business Day, the immediately succeeding Business Day.
"Directing Certificateholder": The Monitoring Certificateholder
selected by a majority of the Monitoring Certificateholders, by Certificate
Balance, as certified to the Trustee by the Certificate Owners from time to
time; provided, that, absent such selection, or (i) until a Directing
Certificateholder is so selected, or (ii) upon receipt of notice from a
majority of the Monitoring Certificateholders, by Certificate Balance, that a
Directing Certificateholder is no longer so designated, the Monitoring
Certificateholder(s) which owns the largest aggregate Certificate Balance of
one or more Monitoring Classes shall be the Directing Certificateholder.
"Directly Operate": With respect to any REO Property, the
furnishing or rendering of services to the tenants thereof, the management or
operation of such REO Property, the holding of such REO Property primarily
for sale to customers, the performance of any construction work thereon or
any use of such REO Property in a trade or business conducted by the Trust
Fund other than through an Independent contractor; provided, however, that
the Trustee (or the Master Servicer or the Special Servicer on behalf of the
Trustee) shall not be considered to Directly Operate a REO Property solely
because the Trustee (or the Master Servicer 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 or capital expenditures with respect to such REO Property.
"Disposition Fee": As defined in Section 6.12 hereof.
"Disqualified Organization": Any of (i) the United States, any
State or political subdivision thereof, any foreign government, any
international organization, or any agency or instrumentality of any of the
foregoing, (ii) any organization (other than a cooperative described in
Section 521 of the Code) which is exempt from the tax imposed by Chapter 1 of
the Code unless such organization is subject to the tax imposed by Section
511 of the Code, or (iii) any organization described in Section 1381(a)(2)(C)
of the Code. A corporation will not be treated as an instrumentality of the
United States or of any State or any political subdivision thereof if all of
its activities are subject to tax and, with the exception of the Federal Home
Loan Mortgage Corporation (a corporate instrumentality of the United States)
a majority of its board of directors is not selected by a governmental unit.
"Distribution Date": The twenty-fifth (25th) day (or if any such
day is not a Business Day, the Business Day immediately succeeding such
twenty-fifth (25th) day) of each month, commencing in July 1997.
"Due Date": With respect to any Mortgage Loan, the day of the
month set forth in the related Mortgage Note on which each Monthly Payment
thereon is scheduled to be due.
"Eligible Account": Any of:
(a) an account or accounts maintained with a federal or state
chartered depository institution or trust company (i) to the extent
funds are on deposit in such account for a period not in excess of
30 days, the commercial paper, short-term debt obligations or other
short-term deposits of which have the Required Rating or (ii) to
the extent funds are on deposit in such account for a period in
excess of 30 days, the long-term unsecured debt obligations of
which have a long term rating of at least "AA-" by the Rating
Agencies (or, if not rated by each Rating Agency, then by Standard
and Poor's Ratings Services and if rated by Fitch Investors
Services, L.P. or Duff & Phelps Credit Rating Co., then "AA-" by
Fitch Investors Services, L.P., or Duff & Phelps Credit, as
applicable, and, if not rated by Fitch Investors Service, L.P., is
acceptable to it;
(b) a segregated trust account or accounts maintained with
the corporate trust department of a federal depository institution
or trust company or state chartered depository institution subject
to regulations regarding fiduciary funds on deposit similar to 12
C.F.R. Section 9.10(b); or
(c) an account or accounts of a depository institution
acceptable to each Rating Agency (as evidenced in writing by each
Rating Agency that use of any such account will not result in a
downgrading, qualification or withdrawal of the ratings then
assigned to the Certificates).
"Environmental Laws": Any present or future federal, state or
local law, statute, regulation or ordinance, and any judicial or
administrative order or judgment thereunder, pertaining to health, industrial
hygiene, Hazardous Materials or the environment, including, but not limited
to, each of the following, as enacted as of the date hereof or as hereafter
amended:
(i) the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, 42 U.S.C. SectionSection 9601-9657;
(ii) the Resource Conservation and Recovery Act of 1976, 42 U.S.C.
SectionSection 6901-6991i;
(iii) the Toxic Substance Control Act, 15 U.S.C.
SectionSection 2601-2629;
(iv) the Water Pollution Control Act (also known as the Clean Water
Act), 33 U.S.C. Section 1251 et seq.;
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(v) the Clean Air Act, 42 U.S.C. Section 7401 et seq.; and
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(vi) the Hazardous Materials Transportation Act, 49 U.S.C.
Section 1801 et seq.
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"Event of Default": One or more of the events described in Section
10.01.
"Excess Condemnation Proceeds": With respect to each Mortgage
Loan, all awards or settlements in respect of a Mortgaged Property, whether
permanent or temporary, partial or entire, on account of the exercise of the
power of eminent domain or condemnation, other than any such awards or
settlements held in an escrow account or a trust account, which shall be an
Eligible Account, pursuant to the terms of the related Mortgage Loan
Documents and applicable law, related to such Mortgaged Property and applied
or to be applied to the restoration or repair of such Mortgaged Property or
required to be released to a Mortgagor in accordance with the terms of the
related Mortgage Loan Documents or, to the extent not expressly provided
therein, in accordance with Accepted Servicing Practices or Accepted Special
Servicing Practices, as applicable, and applicable law.
"Excess Insurance Proceeds": With respect to each Mortgage Loan,
proceeds of any primary hazard insurance policy required to be maintained
pursuant to Section 4.06, title insurance policy or any other Insurance
Policy covering such Mortgage Loan or the related Mortgaged Property, other
than any proceeds to be held in an escrow account or a trust account, which
shall be an Eligible Account, pursuant to the terms of the related Mortgage
Loan Documents and applicable law, related to such Mortgage Loan and applied
or to be applied to the restoration or repair of the related Mortgaged
Property or required to be released to the related Mortgagor in accordance
with the terms of the related Mortgage Loan Documents or, to the extent not
expressly provided therein, in accordance with Accepted Servicing Practices
or Accepted Special Servicing Practices, as applicable, and applicable law.
"FDIC": The Federal Deposit Insurance Corporation, or any
successor thereto.
"Final Certification": As defined in Section 2.02(b).
"Final Recovery Determination": A determination by the Special
Servicer with respect to any Defaulted Mortgage Loan, as certified in writing
by a Servicing Officer setting forth such determination and the procedures
and considerations of the Special Servicer forming the basis of such
determination, that there has been a recovery of all REO Proceeds,
Liquidation Proceeds and other payments or recoveries that the Special
Servicer, in its reasonable good faith judgment, expects to be ultimately
recoverable.
"Fiscal Agent": An organization which will be obligated to make
any P&I Advance required to be made, but which is not made, by the Trustee
under this Agreement. The Fiscal Agent will initially be ABN AMRO Bank N.V.,
a Netherlands banking corporation and the corporate parent of the Trustee.
"Hazardous Materials": All materials subject to any Environmental
Law, including, without limitation, materials listed in 49 C.F.R. Section
172.010, materials defined as hazardous pursuant to Section 101(14) of the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as amended, flammable, explosive or radioactive materials, hazardous or toxic
wastes or substances, lead-based materials, petroleum or petroleum
distillates or asbestos or material containing asbestos, polychlorinated
biphenyls ("PCBs"), radon gas, urea formaldehyde and any substances
classified as being "in inventory", "usable work in process" or similar
classification that would, if classified as unusable, be included in the
foregoing definition.
"ICII Representation and Warranty Agreement": The Representation
and Warranty Agreement between Imperial Credit Industries, Inc. and the
Trustee dated June 1, 1997.
"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 and any and all Affiliates thereof, (ii) does
not have any direct financial interest in or any material indirect financial
interest in any of the Depositor, the Master Servicer, the Special Servicer
or any Affiliate thereof, and (iii) is not connected with the Depositor, the
Master Servicer, the Special Servicer or any Affiliate thereof as an officer,
employee, promoter, underwriter, trustee, partner, director or Person
performing similar functions.
"Index": With respect to each Adjustable Rate Mortgage Loan and
each Interest Rate Adjustment Date, the base index used to determine the new
Mortgage Interest Rate in effect thereon as specified in the related Mortgage
Note.
"Insurance Policy": With respect to any Mortgage Loan, any
insurance policy required to be maintained under this Agreement or the
related Mortgage Loan Documents.
"Insurance Proceeds": With respect to each Mortgage Loan, proceeds
of any primary hazard insurance policy required to be maintained pursuant to
Section 4.06 hereof, or any other Insurance Policy covering such Mortgage
Loan or the related Mortgaged Property, to be held in an escrow account or a
trust account, which is an Eligible Account, pursuant to the terms of the
related Mortgage Loan Documents, related to such Mortgage Loan and applied or
to be applied to the restoration or repair of the related Mortgaged Property
or required to be released to the related Mortgagor in accordance with the
terms of the related Mortgage Loan Documents and applicable law, or, to the
extent not expressly provided therein, in accordance with Accepted Servicing
Practices or Accepted Special Servicing Practices, as applicable, and
applicable Law.
"Interest Accrual Amount": With respect to each Distribution Date
and any Class of Certificates (other than the Residual Certificates) or Class
X Component, interest accrued during the period from and including, in the
case of the Class A1, Class A2, Class B, Class C and Class D Certificates,
the immediately preceding Distribution Date (or the Delivery Date with
respect to the initial Distribution Date) to and including the day
immediately preceding the applicable Distribution Date and, in the case of
the Class E, Class F, Class G, Class H and Class NR Certificates and the
Class X Components, the first day of the month preceding the month of the
Distribution Date (or the Delivery Date with respect to the initial
Distribution Date) to and including the last day of the month preceding the
month of the Distribution Date (calculated on the basis of a 360-day year
consisting of twelve 30-day months or calculated based on the actual number
of days in such period and a 360-day year in the case of the Class A1, Class
A2, Class B, Class C and Class D Certificates) on the Class Balance or
Notional Amount as the case may be, outstanding immediately prior to such
Distribution Date at the then applicable Pass-Through Rate applicable to such
Class of Certificates and Class X Component for such Distribution Date.
"Interest Distribution Amount": With respect to each Distribution
Date and any Class, the Interest Accrual Amount for such Distribution Date
plus (i) any portion of the Interest Distribution Amount for any prior
Distribution Date remaining undistributed, reduced by (ii) the product of (a)
any excess of Prepayment Interest Shortfalls for such Distribution Date over
any Prepayment Interest Excess for such Distribution Date and any interest
not collectible pursuant to the Soldiers' and Sailors' Civil Relief Act of
1940 and (b) the Interest Accrual Amount on such Class divided by the
Interest Accrual Amount for all such Classes of Certificates for such
Distribution Date and (iii)(a) with respect to each Class of
Certificates other than the Class X Certificates, any Collateral Value
Adjustment Capitalization Amount allocated to such Class and (b) with
respect to the Class X Certificates, any Collateral Value Adjustment
Reduction Amount. The Interest Distribution Amount for the Class with
the lowest priority with respect to the order of payment of interest or
principal shall be reduced further by the portion of any interest deferred
with respect to any Mortgage Loans (such reduction will be based on the same
basis as distributions of interest are made to the extent allocated to
Classes which receive distributions concurrently). Such deferred amount,
together with interest at the related Pass-Through Rate, shall be payable
to the extent it is collected after such Distribution Date.
"Interest Rate Adjustment Date": With respect to each Adjustable
Rate Mortgage Loan, any date on which the related Mortgage Interest Rate is
subject to adjustment pursuant to the related Mortgage Note.
"Interested Person": As of any date of determination with respect
to any Mortgage Loan, the Mortgagor, the Mortgage Loan Seller, the Depositor,
the Special Servicer or the Master Servicer.
"Law": Any judgment, order, decree, writ, injunction, award,
statute, rule, regulation or requirement of any federal, state, local or
other agency, commission, instrumentality, tribunal, governmental authority,
arbitrator or court having or asserting jurisdiction over any particular
Person, property or matter applicable to such particular Person, property or
matter.
"LIBOR": With respect to any Distribution Date the per annum rate
for United States deposits for one month determined in accordance with
Section 1.03.
"LIBOR Business Day": Any day other than (i) Saturday or a Sunday
or (ii) a day on which banking institutions in the city of London, England
are required to or authorized by law to be closed.
"LIBOR Rate Adjustment Date": As defined in Section 1.03 hereof.
"Liquidation Event": With respect to any Mortgage Loan, any of the
following events: (i) such Mortgage Loan is paid in full; (ii) a Final
Recovery Determination is made with respect to such Mortgage Loan; (iii) such
Mortgage Loan is repurchased by the Depositor pursuant to Section 2.04 or
Section 12.01; or (iv) such Mortgage Loan is purchased by the Master Servicer
or Special Servicer pursuant to Section 12.01.
"Liquidation Proceeds": Cash (including any Excess Insurance
Proceeds or Excess Condemnation Proceeds, but excluding REO Proceeds)
received in connection with the liquidation of a Mortgage Loan, whether
through the sale or assignment of such Mortgage Loan, trustee's sale,
foreclosure sale or otherwise.
"Loss Mortgage Loan": Any Mortgage Loan (a) as to which a
Liquidation Event has occurred, (b) with respect to which the Master
Servicer, Trustee or the Fiscal Agent, as applicable, has determined that an
Advance previously made or proposed to be made is a Nonrecoverable Advance or
(c) with respect to which a Deficient Valuation has been made or a portion of
the principal balance thereof has been otherwise permanently forgiven.
"Master Servicer": Midland Loan Services, L.P., a Missouri limited
partnership, its successors in interest, or any successor servicer appointed
as such as herein provided.
"Master Servicing Fee": As defined in Section 4.11 hereof.
"Master Servicing Fee Rate": 0.36% per annum calculated on the
basis of twelve 30-day months and a 360-day year.
"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.
"Monitoring Certificateholder": Each Holder (or Certificate Owner,
if applicable) of a Certificate of a Monitoring Class as certified to the
Trustee from time to time by such Holder or Certificate Owner.
"Monitoring Class": As defined in Section 11.02(c).
"Monthly Payment": With respect to any Mortgage Loan and any Due
Date, the scheduled monthly payment with respect to such Mortgage Loan,
excluding any Balloon Payment, which is payable by a Mortgagor under the
related Mortgage Note and applicable Law and, with respect to a Balloon
Mortgage Loan for which a Balloon Payment is due and has not been made, the
monthly payment with respect to such Balloon Mortgage Loan that would be
payable on and after the related Maturity Date based on the full amortization
schedule determined by the Special Servicer.
"Mortgage": The mortgage, deed of trust or other instrument
creating a first lien on an estate in fee simple or leasehold interest in
real property securing a Mortgage Note, including the assignment of leases
and rents related thereto.
"Mortgage Interest Rate": With respect to any Mortgage Loan, the
annual rate at which interest accrues on such Mortgage Loan in accordance
with the terms of the related Mortgage Note.
"Mortgage Loan": Each of the mortgage loans transferred and
assigned to the Trustee pursuant to Section 2.01 and accepted by the Trustee
pursuant to Section 2.02 and from time to time held in the Trust Fund, the
Mortgage Loans so held pursuant to Sections 2.01 and 2.02 being identified on
the Mortgage Loan Schedule (including, any successor REO Mortgage Loan). As
used herein, the term "Mortgage Loan" includes the related Mortgage Note,
Mortgage and other security documents contained in the related Mortgage Loan
File.
"Mortgage Loan Documents": With respect to each Mortgage Loan, to
the extent applicable, the Mortgage, Mortgage Note, Assignment of Mortgage,
Assignment of Leases and Rents (if separate from Mortgage) and assignments
thereof, any security agreements, any UCC Financing Statements, the title
insurance policy, all surveys, all insurance policies, any environmental
liabilities agreements, any escrow agreements for improvements, any
guaranties related to such Mortgage Loan, any prior assignments of mortgage
in the event that the originator is not the originator of record, any
collateral assignments of property management agreements and other services
agreements required by the applicable commitment and other loan documents and
all assumption, modification, consolidation, substitution and extension
agreements, any physical assessment report of the Mortgaged Property, any
environmental site assessment of the Mortgaged Property, any lease
subordination agreements and tenant estoppels, any borrower's counsel
opinions and other agreements, if any, pertaining to such Mortgage Loan.
"Mortgage Loan File": In connection with any Mortgage Loan, all
the documents held or required to be held by the Trustee pertaining to such
Mortgage Loan, including the Mortgage Loan Documents.
"Mortgage Loan Purchase Agreement": The Mortgage Loan Purchase
Agreement, dated June , 1997, between the Mortgage Loan Seller and the
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Depositor regarding the sale, transfer and assignment of the Mortgage Loans
to the Depositor.
"Mortgage Loan Schedule": The list of Mortgage Loans transferred
to the Trustee as part of the Trust Fund, attached hereto as Exhibit F.
"Mortgage Loan Seller": Southern Pacific Thrift and Loan
Association or any successors thereof.
"Mortgage Note": The note or other evidence of indebtedness of a
Mortgagor under a Mortgage Loan, together with all riders thereto and
amendments thereof.
"Mortgaged Property": The underlying property (including any REO
Property) that secures a Mortgage Loan, in each case consisting of a parcel
or parcels of land improved by a commercial and/or multifamily building or
facility, together with any personal property, fixtures, leases and other
property or rights pertaining thereto.
"Mortgagor": The obligor or obligors on a Mortgage Note.
"Most Subordinate Class of Certificates": At the time of
determination, the Class to which any Realized Losses would be first
allocated to as of such time in accordance with Section 7.05.
"Net Prepayment Premium": With respect to any Distribution Date,
the excess (but not less than zero) of (a) any Prepayment Premium received
during the related Remittance Period and not previously distributed or
applied to reimburse to the Master Servicer with respect to its Servicing Fee
over (b) the excess of any Prepayment Interest Shortfall allocated during the
related Remittance Period and not previously allocated over any Prepayment
Interest Excess (but not less than zero).
"Nonrecoverable Advance": Any Advance previously made or proposed
to be made by the Master Servicer, the Trustee or the Fiscal Agent in respect
of a Mortgage Loan which together with interest thereon, in the reasonable
good faith judgment of the Master Servicer, the Trustee or the Fiscal Agent
will not, or, in the case of a proposed Advance, would not, be ultimately
recoverable by the Master Servicer, the Trustee or the Fiscal Agent from net
proceeds and collections received solely with respect to such Mortgage Loan
or the related Mortgaged Property, including related Excess Insurance
Proceeds, Liquidation Proceeds, REO Proceeds, Excess Condemnation Proceeds
and escrowed amounts, which determination shall be in writing accompanied by
an Officer's Certificate filed with the Trustee.
"Nonrecoverable Advance Certificate": A certificate signed by a
Servicing Officer of the Master Servicer or Responsible Officer, as
applicable, setting forth the determination of a Nonrecoverable Advance and
the procedures and considerations of the Master Servicer, the Trustee or the
Fiscal Agent forming the basis of such determination (including but not
limited to information such as related income and expense statements, any
appraisals, rent rolls, occupancy status, property inspections, and other
Servicer inquiries with respect to the value of the related Mortgaged
Property).
"Non-United States Person": Any person other than a United States
Person.
"Note Margin": With respect to each Adjustable Rate Mortgage Loan,
the fixed number of basis points that is added to the related Index on each
Interest Rate Adjustment Date in accordance with the terms of the related
Mortgage Note to determine, subject to any periodic and lifetime limitations
on adjustments thereto, the related Mortgage Interest Rate.
"Notional Amount": With respect to the Class A1X Component and any
Distribution Date, the Class Balance of the Class A1 Certificates immediately
preceding such Distribution Date. With respect to the Class A2X Component
and any Distribution Date, the Class Balance of the Class A2 Certificates
immediately preceding such Distribution Date. With respect to the Class BX
Component and any Distribution Date, the Class Balance of the Class B
Certificates immediately preceding such Distribution Date. With respect to
the Class CX Component and any Distribution Date, the Class Balance of the
Class C Certificates immediately preceding such Distribution Date. With
respect to the Class DX Component and any Distribution Date, the Class
Balance of the Class D Certificates immediately preceding such Distribution
Date. With respect to the Class EX Component and any Distribution Date, the
Class Balance of the Class E Certificates immediately preceding such
Distribution Date. With respect to the Class FX Component and any
Distribution Date, the Class Balance of the Class F Certificates immediately
preceding such Distribution Date. With respect to the Class GX Component and
any Distribution Date, the Class Balance of the Class G Certificates
immediately preceding such Distribution Date. With respect to the Class HX
Component and any Distribution Date, the Class Balance of the Class H
Certificates immediately preceding such Distribution Date. With respect to
the Class NRX Component and any Distribution Date, the Class Balance of the
Class NR Certificates immediately preceding such Distribution Date.
"Officers' Certificate": With respect to any Servicer, a
certificate signed by a Servicing Officer of such Servicer.
"Opinion of Counsel": A written opinion of counsel, who may,
without limitation, be salaried counsel for the Depositor, the Master
Servicer, or Special Servicer, acceptable and delivered to the Trustee,
except that any opinion of counsel relating to (a) the qualification of the
Trust Fund as a REMIC, (b) compliance with the REMIC Provisions, or (c) any
actions or duties which can not be undertaken or are no longer permitted
under applicable law, must be an opinion of counsel who is in fact
Independent.
"Original Class Balance": As to any Class of Certificates with a
Class Balance, the Original Class Balance set forth in the Preliminary
Statement.
"Ownership Interest": As to any Certificate, any ownership or
security interest in such Certificate, including any interest in such
Certificate as the Holder thereof and any other interest therein, whether
direct or indirect, legal or beneficial, as owner or as pledgee.
"P&I Advance": Any amounts identified in this Agreement as a P&I
Advance.
"Pass-Through Rate": With respect to any Distribution Date and the
Class A1, Class A2, Class B, Class C, Class D, Class E, Class F, Class G,
Class H and Class NR and Class A1X, Class A2X, Class BX, Class CX, Class DX,
Class EX, Class FX and Class NRX Components, the Class A1, Class A2, Class B,
Class C, Class D, Class E, Class F, Class NR, Class A1X, Class A2X, Class BX,
Class CX, Class DX, Class EX, Class FX, Class GX, Class HX and Class NRX
Pass-Through Rate, respectively. The Residual Certificates will not have a
Pass-Through Rate.
"Payment Reserve": With respect to a Mortgage Loan, the amount, if
any, of principal and interest payable thereon required, pursuant to the
related Mortgage Loan Documents, to be deposited into an escrow account to
cover a portion of the related Mortgagor's debt service obligations
thereunder.
"Percentage Interest": With respect to any Class of Certificates,
the portion of the relevant Class evidenced by such Certificate, expressed as
a percentage, the numerator of which is the initial Certificate Balance or
initial Notional Amount of such Certificate as of the Delivery Date, as
specified on the face thereof, and the denominator of which is the Original
Class Balance or Notional Amount of the relevant Class.
"Permitted Investments": Any one or more of the obligations and
securities listed below that provide for a date of maturity of not more than
30 days but in any event not later than the date prior to the date such funds
will be required to be distributed:
(i) direct obligations of, and obligations fully guaranteed by,
the United States of America, or any agency or instrumentality
of the United States of America the obligations of which are
backed by the full faith and credit of the United States of
America;
(ii) federal funds, demand and time deposits in, certificates of
deposits of, or bankers' acceptances issued by, any
depository institution or trust company incorporated or
organized under the laws of the United States of America
or any state thereof and subject to supervision and
examination by federal and/or state banking authorities, the
commercial paper or other short-term debt obligations of
such depository institution or trust company (or, in the
case of a depository institution or trust company which is
the principal subsidiary of a holding company, the commercial
paper or other short-term debt obligations of such holding
company) which has the Required Rating;
(iii) commercial or finance company paper (including both non-
interest-bearing discount obligations and interest-bearing
obligations payable on demand or on a specified date not
more than 270 days after the date of issuance thereof) that
has the Required Rating for short-term debt;
(iv) repurchase obligations with respect to any security described
in clause (i) above entered into with a depository institution
or trust company (acting as principal) meeting the rating
standards described in clause (ii) above and having maturities
of not more than 365 days;
(v) units of taxable money market funds, which funds seek to
maintain a constant asset value and have been rated by each
Rating Agency in its highest rating category or which have
been designated in writing by each Rating Agency as Permitted
Investments for purposes of this definition; and
(vi) any other obligation or security acceptable to each Rating
Agency, as indicated in writing that would not result in a
downgrading, qualification or withdrawal of the ratings then
assigned to the Certificates;
provided, however, that no such instrument shall be a Permitted Investment
- -------- -------
if (v) such instrument evidences a right to receive either (A) only interest
payments with respect to the obligations underlying such instrument or (B)
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 to maturity of greater than 120% of the yield to
maturity at par of such underlying obligations; (w) its terms do not have a
predetermined fixed dollar amount of principal due at maturity that cannot
vary or change; (x) to the extent rated, an "r" highlighter is affixed to its
rating; (y) to the extent the related interest rate is variable, interest
thereon is not tied to a single interest rate index plus a single fixed
spread (if any), or does not move proportionately with that index; or (z)
such instrument is purchased at a premium over par.
"Permitted Transferee": Any transferee of a Class R-I, Class R-II
or Class R-III Certificate other than a Disqualified Organization or a Non-
United States Person.
"Person": Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, limited
liability corporation, limited liability company, limited liability
partnership, or government or any agency or political subdivision thereof.
"Prepayment Assumption": It is assumed for purposes of Section
3.15(l) that there are no prepayments on the Mortgage Loans and that the
Balloon Mortgage Loans fully amortize according to their amortization
schedule and no Balloon Payment is made.
"Prepayment Interest Excess": With respect to any Distribution
Date, for each Mortgage Loan that was subject to a Principal Prepayment in
full or in part after the Due Date occurring in the related Remittance
Period, the amount of interest accrued at the Remittance Rate for such
Mortgage Loan on the amount of such Principal Prepayment during the period
from and after such Due Date, to the extent collected.
"Prepayment Interest Shortfall": With respect to any Distribution
Date, for each Mortgage Loan that was subject to a Principal Prepayment in
full or in part prior to the Due Date occurring in the related Remittance
Period, the amount of interest that would have accrued at the Remittance Rate
for such Mortgage Loan on the amount of such Principal Prepayment during the
period commencing on the date as of which such Principal Prepayment was
applied to the unpaid principal balance of the Mortgage Loan and ending on
the day immediately preceding such Due Date, inclusive.
"Prepayment Premium": Any premium, penalty or fee paid or payable,
as set forth in the related Mortgage Note, by a Mortgagor in connection with
a Principal Prepayment.
"Prime Rate": As of any day, the per annum rate reported in The
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Wall Street Journal on the immediately preceding Business Day as the prime
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rate.
"Principal Distribution Amount": With respect to any Distribution
Date an amount equal to the aggregate of (a) all scheduled payments of
principal (other than Balloon Payments) due on the Mortgage Loans on the
related Due Date whether or not received and all scheduled Balloon Payments
received, (b) if the scheduled Balloon Payment is not received, with
respect to any Balloon Loans on and after the Maturity Date thereof, the
principal payment that would need to be received in the related month in
order to fully amortize such Balloon Loan with level monthly payments by
the end of the term used to derive scheduled payments of principal due
prior to the related Maturity Date, (c) to the extent not previously
advanced, any unscheduled principal recoveries received during the related
Remittance Period in respect of the Mortgage Loans, whether in the form
of liquidation proceeds, insurance proceeds, condemnation proceeds, amounts
received as a result of the purchase of any Mortgage Loan out of the Trust
Fund or receipt of overdue payments, (d) any Collateral Value Adjustment
Capitalization Amount allocated in connection with such Distribution Date,
and (e) any other portion of the Adjusted Available Distribution Amount
remaining undistributed after payment of any interest payable on the
Certificates pursuant to clause (iv) of Section 7.02(a) for the related or
any prior Distribution Date, including any Prepayment Interest Excess not
offset by any Prepayment Interest Shortfall occurring during the related
Remittance Period or otherwise required to reimburse the Master Servicer
and interest distributions on the Mortgage Loans, in excess of interest
distributions on the Certificates, resulting from the allocation of amounts
described in this clause (d) to principal distributions on the
Certificates.
"Principal Prepayment": Any payment or other recovery of principal
on a Mortgage Loan that is received in advance of its scheduled Due Date
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 Certificates": The Class E, Class F, Class G, Class H,
Class NR, Class R-I, Class R-II and Class R-III Certificates.
"Property Protection Expenses": The following costs and expenses,
but, with respect to items (b) through (n) below, only to the extent that
they are paid to third persons in arms' length arrangements, which may, to
the extent expressly approved in the related Asset Strategy Report, be
Affiliates, who are generally in the business of providing such goods and
services and that such expenses are reasonable for the types of goods or
services provided in the geographical area in which such goods or services
are provided: (a) real estate taxes, assessments and similar charges; (b)
premiums for insurance; (c) utility costs; (d) payments required under
service contracts, including but not limited to service contracts for
heating, ventilation and air conditioning systems, elevators, landscape
maintenance, pest extermination, security, model furniture, swimming pool
service, trash removal, answering service, credit checks and monitoring the
satisfaction of real estate tax assessments and the designation from
time to time of special flood hazard areas; (e) payroll costs and benefits
for on-site maintenance personnel, including but not limited to housekeeping
employees, porters and general maintenance and security employees; (f)
property management fees; (g) usual and customary leasing and sales
brokerage expenses and commissions and other costs and expenses associated
with marketing, selling or otherwise disposing of Specially Serviced
Mortgage Loans or REO Properties including, without limitation, marketing
brochures, auction services, reasonable legal fees, surveys, title insurance
premiums and other title company costs; (h) permits, licenses and registration
fees and costs; (i) any expense necessary in order to prevent or cure a
breach under a lease, contract or agreement, if the consequences of failure
to prevent or cure could, in the sole judgment of the Special Servicer, have a
material adverse effect with respect to the Mortgage Loan, REO Property or
Mortgaged Property; (j) any expense necessary in order to prevent or cure a
material violation of any applicable law, regulation, code or ordinance with
respect to any Mortgaged Property, including without limitation any
environmental remediation; (k) costs and expenses of appraisals,
valuations, surveys, inspections, environmental assessments, credit reports,
or market studies (including, in each case, review thereof); (l) other such
reasonable marketing, legal, accountants, expert witness fees and other fees
and expenses incurred by the Special Servicer in connection with the
enforcement, collection, foreclosure, management and operation of Specially
Serviced Mortgage Loans or REO Properties, the bankruptcy of any related
Mortgagor, and the performance of their servicing duties under this Agreement;
and (m) such other expenses as are reasonable and immediately necessary
to operate the Mortgaged Property or REO Property.
"Prospectus Supplement": The Prospectus Supplement dated June 24,
1997 prepared in connection with the offering of the Class A1, Class A2,
Class B, Class C, Class D and Class X Certificates.
"Purchase Price": With respect to any Mortgage Loan to be
purchased pursuant to Section 2.02(c), Section 2.04, Section 6.05(a) or
Section 12.01, the Stated Principal Balance thereof as of the date of
purchase, together with (i) all accrued and unpaid interest at the Mortgage
Interest Rate on such Mortgage Loan to but not including the date of
purchase, (ii) all related unreimbursed Advances, (iii) all accrued and
unpaid interest on related Advances, and (iv) any expense arising out of the
enforcement of the repurchase obligation and any costs associated with such
repurchase.
"Qualified Insurer": An insurance company:
(i) duly qualified as such under the laws of the state in
which the related Mortgaged Property is located;
(ii) duly authorized and, if required, licensed in such state to
transact the applicable insurance business and to write the
insurance provided; and
(iii) whose claims paying ability is rated at least "A" by each
Rating Agency (or, if not rated by each of the Rating
Agencies, rated at least "A" by two other nationally
recognized statistical rating organizations, which shall
include Standard & Poor's Ratings Services and any other
Rating Agency which rates the claims paying ability of such
insurance company, and if not rated by Fitch Investors
Services, L.P., acceptable to it); or which is acceptable to
each Rating Agency (as evidenced in writing by each Rating
Agency that use of any such Qualified Insurer will not result
in a downgrading, qualification or withdrawal of the ratings
then assigned to the Certificates).
"Rating Agency": Each of Fitch Investors Service, L.P., Duff &
Phelps Credit Rating Co. and Standard & Poor's Ratings Services.
"Realized Loss": With respect to each Loss Mortgage Loan (or REO
Property) as to which a Liquidation Event has occurred, an amount (not less
than zero) equal to (i) the Stated Principal Balance of the Mortgage Loan (or
REO Property) as of the date of the Liquidation Event, plus (ii) interest at
the Remittance Rate from the Due Date as to which interest was last paid or
advanced to Certificateholders up to the last day of the month in which such
Liquidation Event occurred on the Stated Principal Balance of such Mortgage
Loan (or REO Property) outstanding during each Remittance Period that such
interest was not paid or advanced, plus (iii) any unreimbursed Advances and
interest accrued and payable thereon at the Advance Rate, minus (iv) the
proceeds, if any, received during the month in which such Liquidation Event
occurred, to the extent applied as recoveries of interest at the Remittance
Rate and to principal of the Mortgage Loan. With respect to each Loss
Mortgage Loan with respect to which an Advance previously made or proposed to
be made has been determined to be a Nonrecoverable Advance an amount (not
less than zero) equal to (i) the Stated Principal Balance of the Mortgage
Loan (or REO Property) as of the date of such determination, plus (ii)
interest at the Remittance Rate from the Due Date as to which interest was
last paid or advanced to Certificateholders up to the last day of the month
in which such determination was made on the Stated Principal Balance of such
Mortgage Loan (or REO Property) outstanding during each Remittance Period
that such interest was not paid or advanced, plus (iii) any unreimbursed
Advances and interest accrued and payable thereon at the Advance Rate,
minus (iv) the proceeds, if any, received during the month in which such
determination was made, to the extent applied as recoveries of interest at
the Remittance Rate and to principal of the Mortgage Loan. With respect
to each Mortgage Loan which has become the subject of a Deficient Valuation,
the difference between the principal balance of the Mortgage Loan outstanding
immediately prior to such Deficient Valuation and the principal balance
of the Mortgage Loan as reduced by the Deficient Valuation.
"Record Date": With respect to any Distribution Date, the last
Business Day of the month immediately preceding the month in which such
Distribution Date occurs.
"Reference Bank Rate": As defined in Section 1.03.
"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 trust created hereby and to be administered hereunder,
consisting of: (a) the Mortgage Loans as from time to time are subject to
this Agreement and all payments under and proceeds of the Mortgage Loans
received after the Cut-off Date (other than payments of principal and
interest due and payable on the Mortgage Loans on or before the Cut-off
Date), together with all documents included in the related Mortgage Loan
File; (b) such funds or assets as from time to time are deposited in the
Certificate Account; (c) such funds or assets as from time to time are
deposited in the Collection Account or REO Account; (d) any REO Property; and
(e) all Insurance Policies with respect to the Mortgage Loans listed on the
Mortgage Loan Schedule.
"REMIC I Uncertificated Interests": Each of the five hundred and
forty interests with a principal balance and interest rate equal to that of
one of the Mortgage Loans.
"REMIC II": A segregated pool of assets consisting of five hundred
and forty uncertificated regular interests issued under REMIC I.
"REMIC II Uncertificated Interests": Each of Uncertificated
Interest I, Uncertificated Interest II, Uncertificated Interest III,
Uncertificated Interest IV, Uncertificated Interest V, Uncertificated
Interest VI, Uncertificated Interest VII, Uncertificated Interest VIII,
Uncertificated Interest IX and Uncertificated Interest X.
"REMIC III": A segregated pool of assets consisting of
Uncertificated Interest I, Uncertificated Interest II, Uncertificated
Interest III, Uncertificated Interest IV, Uncertificated Interest V,
Uncertificated Interest VI, Uncertificated Interest VII, Uncertificated
Interest VIII, Uncertificated Interest IX and Uncertificated Interest X.
"REMIC Provisions": Provisions of the federal income tax law
relating to real estate mortgage investment conduits, which appear at
Sections 860A through 860G of Subchapter M of Chapter 1 of the Code, and
related provisions, and proposed, temporary and final Treasury regulations
and any rulings promulgated thereunder, as the foregoing may be in effect
from time to time.
"Remittance Date": With respect to each Distribution Date, one
Business Day preceding such Distribution Date.
"Remittance Period": For any Distribution Date, the period
beginning after a Determination Date in the immediately preceding month (or
the Cut-off Date, in the case of the first Distribution Date) through the
related Determination Date.
"Remittance Rate": With respect to any Mortgage Loan, the per
annum rate equal to the excess (adjusted, if necessary, to reflect the actual
number of days in the related Remittance Period and a 360-day year) of the
related Mortgage Interest Rate (without giving effect to any modification or
other reduction thereof following the Cut-off Date) over the sum of the
related Master Servicing Fee Rate and the Trustee Fee Rate.
"Remittance Report": The report prepared pursuant to Section
4.09(a) hereof.
"Rents from Real Property": With respect to any REO Property,
gross income of the character described in Section 856(d) of the Code.
"REO Account": One or more accounts established pursuant to
Section 6.06.
"REO Account Report": The report prepared pursuant to Section
6.08(b) hereof.
"REO Acquisition": The acquisition by the Special Servicer on
behalf of the Trustee for the benefit of the Certificateholders of any
Mortgaged Property.
"REO Mortgage Loan": Any Mortgage Loan as to which the related
Mortgaged Property has been acquired by the Special Servicer on behalf of the
Trustee through foreclosure or by deed in lieu of foreclosure, until the
Special Servicer has determined that all amounts that it reasonably expects
to recover from or on account of such Mortgage Loan have been recovered,
whether from Excess Condemnation Proceeds, Excess Insurance Proceeds,
Condemnation Proceeds, Insurance Proceeds, Liquidation Proceeds, REO
Proceeds or otherwise (in which case such Mortgage Loan shall no longer be
an REO Mortgage Loan).
"REO Proceeds": Proceeds received in respect of any REO Property
(including, without limitation, proceeds from the rental of the related
Mortgaged Property).
"REO Property": A Mortgaged Property acquired by the Special
Servicer on behalf of the Trustee through foreclosure or by deed in lieu of
foreclosure.
"Request for Release and Receipt of Documents": A written Request
for Release and Receipt of Documents, substantially in the form of Exhibit H
hereto.
"Required Appraisal Date": With respect to any Mortgage Loan
within 30 days of (a) any Collateral Value Adjustment Event or (b) the
occurrence of any event giving rise to a subsequent Collateral Value
Adjustment (including the delinquency referred to in the last sentence of the
definition of "Collateral Value Adjustment Event") more than twelve months
after an appraisal was obtained with respect to a previous Collateral Value
Adjustment.
"Required Rating": For purposes of the definitions of "Eligible
Account" and "Permitted Investments" the following ratings:
(a) with respect to commercial paper, short-term debt obligations
or other short-term deposits, the highest short-term rating
category of each Rating Agency (or, if such obligations are
not rated by Fitch Investors Service, L.P. or Duff & Phelps
Credit Rating Co., any two nationally recognized statistical
rating organization, which shall include Standard & Poor's
Ratings Services and any other Rating Agency which rates such
obligations or deposits and, if not rated by Fitch Investors
Service, L.P., acceptable to it); or
(b) with respect to long-term debt obligations, the highest long-
term rating category of each Rating Agency (or, if such
obligations are not rated by Fitch Investors Service, L.P. or
Duff & Phelps Credit Rating Co., any two nationally recognized
statistical rating organizations, which shall include Standard
& Poor's Ratings Services and any other Rating Agency which
rates such obligations or deposits and, if not rated by
Fitch Investors Service, L.P., acceptable to it).
"Residual Certificate": Any of the Class R-I, Class R-II or Class
R-III Certificates.
"Responsible Officer": When used with respect to the Trustee, any
officer assigned to and working in its Corporate Trust Office with direct
responsibility for the administration of this Agreement and also, with
respect to a particular matter, any other officer to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.
"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 Certificates": The Class A1, Class A2, Class B, Class C,
Class D and Class X Certificates.
"Servicer": The Master Servicer or the Special Servicer, as
applicable.
"Servicing Advance": Any expenses identified in this Agreement as
a Servicing Advance which are incurred by the Master Servicer consistent with
Accepted Servicing Practices or Accepted Special Servicing Practices, as
applicable, or, with respect to any Mortgage Loan.
"Servicing Fee": With respect to any Mortgage Loan and (a) the
Master Servicer, the Master Servicing Fee; and (b) the Special Servicer, the
Special Servicing Fee, as applicable.
"Servicing Officer": With respect to any Servicer, any Assistant
Treasurer, Assistant Secretary, Assistant Vice President, Vice President or
other employee of such Servicer or its general partner, if applicable,
involved in, or responsible for, the administration and servicing of the
Mortgage Loans under this Agreement and authorized to act on behalf of such
Servicer, as designated by inclusion on a list of such Persons furnished to
the Trustee and each other Servicer by the related Servicer, as such list may
from time to time be amended by the related Servicer.
"Servicing Transfer Date": The date after the occurrence of a
Servicing Transfer Event on which the Special Servicer receives the
information, documents and records required to be delivered thereto pursuant
to Section 6.02(c).
"Servicing Transfer Event": The occurrence of any of the following
with respect to a Mortgage Loan: (i) such Mortgage Loan becomes a Defaulted
Mortgage Loan; (ii) the related Mortgagor has entered into or consented to
bankruptcy, appointment of a receiver or conservator or a similar insolvency
or similar proceeding, or the Mortgagor has become the subject of a decree or
order for such proceeding which shall have remained in force undischarged or
unstayed for a period of 60 days; (iii) the Master Servicer shall have
received notice of the foreclosure or proposed foreclosure of any other lien
on the Mortgaged Property; (iv) in the judgment of the Master Servicer, a
payment default has occurred and is not likely to be cured by the related
Mortgagor within 60 days; (v) the related Mortgagor admits in writing its
inability to pay its debts generally as they become due, files a petition to
take advantage of any applicable insolvency or reorganization statute, makes
an assignment for the benefit of its creditors, or voluntarily suspends
payment of its obligations; (vi) any other material default has, in the
Master Servicer's judgment, occurred which is not reasonably susceptible of
cure within the time periods and on the terms and conditions, if any,
provided in the related Mortgage; (vii) the related Mortgaged Property
becomes REO Property; (viii) if for any reason, the Master Servicer cannot
enter into an assumption agreement upon the transfer by the related Mortgagor
of the Mortgage; or (ix) an event has occurred which, in the reasonable
judgment of the Master Servicer, has or will materially and adversely affect
the value of the Mortgaged Property.
"Special Servicer": Midland Loan Services, L.P., a Missouri
limited partnership, or its successors in interest or any successor special
servicer appointed as such as herein provided.
"Special Servicing Fee": The compensation the Special Servicer
shall be entitled to receive pursuant to Section 6.12.
"Specially Serviced Mortgage Loan": Any Mortgage Loan with respect
to which a Servicing Transfer Event has occurred and which has not ceased to
be a Specially Serviced Mortgage Loan pursuant to Section 6.10.
"Specially Serviced Mortgage Loan Status Report": With respect to
any Mortgage Loan, shall have the meaning set forth in Section 6.08.
"Startup Day": The Delivery Date.
"State Tax Laws": The laws of the states of New York, California,
Missouri and Illinois as well as any state the applicability of which to the
Trust or the REMICs shall have been confirmed to the Trustee in writing
either by the delivery to the Trustee of an Opinion of Counsel to such
effect, or by the delivery to the Trustee of a written notification to such
effect by the taxing authority of such state.
"Stated Principal Balance": With respect to any Mortgage Loan
(other than an REO Mortgage Loan), as of any date of determination, (a) the
Cut-off Date Balance, minus (b) the sum, without duplication, of:
(i) the principal portion of each Monthly Payment and Balloon
Payment due on such Mortgage Loan after the Cut-off Date, to
the extent received from the Mortgagor or advanced (in the
case of any delinquent Monthly Payment) and distributed to
Certificateholders before such date of determination;
(ii) all Principal Prepayments received with respect to such
Mortgage Loan after the Cut-off Date, to the extent
distributed to Certificateholders before such date of
determination;
(iii) the principal portion of all Insurance Proceeds and
Liquidation Proceeds received with respect to such
Mortgage Loan after the Cut-off Date, to the extent
distributed to Certificateholders before such date of
determination; and
(iv) any reduction in the outstanding principal balance of such
Mortgage Loan resulting from a Deficient Valuation that
occurred prior to the end of the Remittance Period for the
most recently ended Distribution Date.
With respect to any REO Mortgage Loan, as of any date of determination, an
amount (not less than zero) equal to (x) the Stated Principal Balance of the
related Mortgage Loan as of the date of the related REO Acquisition, minus
(y) the sum of:
(i) the principal portion of each P&I Advance made with respect to
such REO Mortgage Loan that was distributed to
Certificateholders before such date of determination; and
(ii) the principal portion of all Insurance Proceeds, Liquidation
Proceeds and REO Proceeds received with respect to such REO
Mortgage Loan, to the extent distributed to Certificateholders
before such date of determination.
A Mortgage Loan shall be deemed to be part of the Trust Fund and to have an
outstanding Stated Principal Balance through and including the Distribution
Date on which the proceeds, if any, received in connection with a Liquidation
Event in respect thereof are to be distributed to Certificateholders.
"Tax Matters Person": The "tax matters person" (as defined in the
REMIC Provisions) of the REMIC created hereunder.
"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 the Trust Fund due to its classification as a
REMIC under the REMIC 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 Revenue Service or any other
governmental taxing authority under any applicable provisions of federal or
State Tax Laws.
"Trust Fund": REMIC I, REMIC II and REMIC III.
"Trustee": LaSalle National Bank, a nationally chartered bank, or
its successor in interest in its capacity as Trustee hereunder, or any
successor trustee appointed as herein provided.
"Trustee Fee Rate": 0.0175% per annum calculated on the basis of
twelve 30-day months and a 360-day year.
"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 or the Commonwealth of Puerto
Rico, the comparable provisions of Louisiana or Puerto Rico law, as
applicable.
"Uncertificated Interest I": An interest in REMIC II with a
principal balance equal to the Class Balance of the Class A1 Certificates
which accrues interest at the Weighted Average Remittance Rate.
"Uncertificated Interest II": An interest in REMIC II with a
principal balance equal to the Class Balance of the Class A2 Certificates
which accrues interest at the Weighted Average Remittance Rate.
"Uncertificated Interest III": An interest in REMIC II with a
principal balance equal to the Class Balance of the Class B Certificates
which accrues interest at the Weighted Average Remittance Rate.
"Uncertificated Interest IV": An interest in REMIC II with a
principal balance equal to the Class Balance of the Class C Certificates
which accrues interest at the Weighted Average Remittance Rate.
"Uncertificated Interest V": An interest in REMIC II with a
principal balance equal to the Class Balance of the Class D Certificates
which accrues interest at the Weighted Average Remittance Rate.
"Uncertificated Interest VI": An interest in REMIC II with a
principal balance equal to the Class Balance of the Class E Certificates
which accrues interest at the Weighted Average Remittance Rate.
"Uncertificated Interest VII": An interest in REMIC II with a
principal balance equal to the Class Balance of the Class F Certificates
which accrues interest at the Weighted Average Remittance Rate.
"Uncertificated Interest VIII": An interest in REMIC II with a
principal balance equal to the Class Balance of the Class G Certificates
which accrues interest at the Weighted Average Remittance Rate.
"Uncertificated Interest IX": An interest in REMIC II with a
principal balance equal to the Class Balance of the Class H Certificates
which accrues interest at the Weighted Average Remittance Rate.
"Uncertificated Interest X": An interest in REMIC II with a
principal balance equal to the Class Balance of the Class NR Certificates
which accrues interest at the Weighted Average Remittance Rate.
"Underwriter": Any of J.P. Morgan Securities Inc Morgan Stanley &
Co. Incorporated or Dabney/Resnick/Imperial.
"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,
or 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 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 trustees have authority to control all substantial
decisions of the trust.
"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, 98.0% of all the Voting
Rights shall be allocated among the Class A1, Class A2, Class B, Class C,
Class D, Class E, Class F, Class G, Class H and Class NR Certificates in
proportion to the respective Class Balances, 1.00% of all Voting Rights shall
be allocated to the Class X Certificates, and 0.331/3% of all Voting Rights
shall be allocated to each of the Class R-I, Class R-II and Class R-III
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. Allocation of Realized
Losses and Collateral Value Adjustments to a Class of Certificates and any
other event which changes such Class Balance will result in a corresponding
change to such Class' Voting Rights.
"Weighted Average Remittance Rate": With respect to any
Distribution Date, the rate per annum equal to the weighted average, by
Stated Principal Balance, expressed as a percentage and rounded to eight
decimal places, of the Remittance Rates on the Mortgage Loans prior to giving
effect to distributions thereon in the Remittance Period immediately
preceding such Distribution Date; provided that for purposes of calculating
the Class X, Class E, Class F, Class G, Class H and Class NR Pass-Through
Rates, the Weighted Average Remittance Rate will be calculated as the rate,
based on a 360-day year of twelve 30-day months.
"1933 Act": The Securities Act of 1933, as amended.
SECTION 1.02 (RESERVED)
SECTION 1.03 Determination of LIBOR.
LIBOR applicable to the calculation of the Pass-Through Rates on the
Class A1, Class A2, Class B, Class C and Class D Certificates for any
Interest Accrual Period will be determined on each LIBOR Rate Adjustment Date
as follows:
For any Interest Accrual Period, the rate for United States dollar
deposits for one month which appears on the Telerate Screen Page 3750 as of
11:00 A.M., London, England time, on the second LIBOR Business Day prior to
the first day of such Interest Accrual Period (a "LIBOR Rate Adjustment
Date"). If such rate does not appear on such page (or such other page as may
replace that page on that service, or if such service is no longer offered,
such other service for displaying LIBOR or comparable rates as may be
reasonably selected by the Trustee after consultation with the Master
Servicer), the rate will be the Reference Bank Rate. The "Reference Bank
Rate" will be determined on the basis of the rates at which deposits in the
U.S. dollars are offered by the reference banks (which shall be three major
banks that are engaged in transactions in the London interbank market,
selected by the Trustee after consultation with the Master Servicer) as
of 11:00 A.M., London time, on the day that is two LIBOR Business Days
prior to the immediately preceding Distribution Date to prime banks in the
London interbank market for a period of one month in amounts approximately
equal to the aggregate Class Balance of the Class Balance of the Certificates
then outstanding. The Trustee will request the principal London office of
each of the reference banks to provide a quotation of its rate. If at least
two such quotations are provided, the rate will be the arithmetic mean of the
quotations. If on such date fewer than two quotations are provided, as
requested, the rate will be the arithmetic mean of the rates quoted by one or
more major banks in New York City, selected by the Trustee after consultation
with the Master Servicer, as of 11:00 A.M., New York City time, on such date
for loans in U.S. dollars to leading European banks for a period of one month
in amounts approximately equal to the aggregate Class Balance of the
Certificates then outstanding. If no such quotations can be obtained and no
Reference Bank Rate is available, LIBOR will be LIBOR applicable to the
preceding Distribution Date.
The establishment of LIBOR by the Trustee on any LIBOR Rate Adjustment
Date and the Trustee's subsequent calculation of the Pass-Through Rates
applicable to the Certificates for the relevant Interest Accrual Period, in
the absence of manifest error, will be final and binding.
Promptly following each LIBOR Rate Adjustment Date the Trustee shall
supply the Master Servicer with the results of its determination of LIBOR on
such date.
SECTION 1.04 General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires:
(a) The terms defined in this Agreement include the plural as well
as the singular, and the use of any gender herein shall be deemed to
include the other gender;
(b) Accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with Generally Accepted
Accounting Principles ("GAAP");
(c) References herein to "Articles", "Sections", "Subsections",
"Paragraphs", and other subdivisions without reference to a document are
to designated Articles, Sections, Subsections, Paragraphs and other
subdivisions of this Agreement;
(d) References to a Subsection without further reference to a
Section is a reference to such subsection as contained in the same
Section in which the reference appears, and this rule shall also apply
to Paragraphs and other subdivisions;
(e) The words "herein", "hereof", "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any
particular provision;
(f) The term "include" or "including" shall be deemed to be
followed by the phrase "without limitation";
(g) In the computation of periods of time from a specified date to
a later specified date, the word "from" means "from and including" and
the words "to" and "until" each means "to but excluding";
(h) The headings in this Agreement are solely for convenience of
reference and shall be given no effect in the construction or
interpretation of this Agreement;
(i) References herein to actions to be taken shall include the
failure to take any action;
(j) Any action or delivery which is required pursuant to the terms
hereof which falls on a day which is not a Business Day will be due on
the immediately following Business Day.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.01 Conveyance of Mortgage Loans.
(a) The Depositor, concurrently with the execution and delivery
hereof, does hereby assign to the Trustee without recourse all the right,
title and interest of the Depositor, including any security interest therein
for the benefit of the Depositor, in, to and under the mortgage loans
identified on the Mortgage Loan Schedule (the "Mortgage Loans"), the Mortgage
Loan Purchase Agreement and all other assets included or to be included in
the Trust Fund for the benefit of the Certificateholders. 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 related property accomplished hereby is absolute
and, notwithstanding Section 13.07, is intended by the parties to constitute
a sale.
(b) In connection with the Depositor's assignment, the Depositor
shall deliver or cause to be delivered to the Trustee, the following
documents or instruments (or copies thereof as permitted by this Section) for
each Mortgage Loan so assigned:
(i) the original or, if accompanied by a "lost note" affidavit, a
copy of the Mortgage Note, endorsed by the Mortgage Loan
Seller or the prior holder of record in blank or to the order
of the Trustee;
(ii) the original Mortgage, and any intervening assignments (or
certified copies of such assignments) thereof, in each case
with evidence of recording indicated thereon, or certified
copies thereof if not returned from the applicable recording
office;
(iii) originals or certified copies of any related Assignment of
Leases and Rents and any related Security Agreement (if, in
either case, such item is a document separate from the
Mortgage), any intervening assignments of each such document
or instrument, and any related UCC Financing Statements;
(iv) an assignment of the Mortgage, executed by the Mortgage Loan
Seller or the prior holder of record in blank or to the order
of the Trustee, with the assignment to the Trustee in the
following form:
"LaSalle National Bank, as Trustee for J.P. Morgan Commercial
Mortgage Finance Corp., Commercial Mortgage Pass-Through
Certificates Series 1997-SPTL-C1", in recordable form;
(v) assignments of any related Assignment of Leases and Rents and
any related Security Agreement (if, in either case, such item
is a document separate from the Mortgage), executed by the
Mortgage Loan Seller or the prior holder of record in blank or
to the order of the Trustee, with the assignment to the
Trustee in the following form: "LaSalle National Bank, as
Trustee for J.P. Morgan Commercial Mortgage Finance Corp.,
Commercial Mortgage Pass-Through Certificates Series 1997-
SPTL-C1";
(vi) originals or certified copies of all assumption, modification
and substitution agreements in those instances where the terms
or provisions of the Mortgage or Mortgage Note have been
modified or the Mortgage or Mortgage Note has been assumed;
(vii) the originals or certificates of a lender's title insurance
policy issued on the date of the origination of such Mortgage
Loan or, with respect to each Mortgage Loan not covered by a
lender's title insurance policy, an attorney's opinion of
title given by an attorney licensed to practice law in the
jurisdiction where the Mortgaged Property is located;
(viii) either (i) the originals of all intervening assignments, if
any, including warehousing assignments, with evidence of
recording thereon, (ii) copies of such assignments certified
by a title company, if any, or escrow company to be true and
complete copies thereof where the originals have been
transmitted for recording until such time as the originals are
returned by the public recording office or (iii) copies of
such assignments certified by the public recording offices
where such assignments were recorded to be true and complete
copies thereof in those instances where the public recording
offices retain the original or where the original recorded
assignments are lost;
(ix) any escrow, guarantee and environmental liability agreement;
and
(x) any other Mortgage Loan Document.
(c) The Mortgage Loan Seller shall, as to each Mortgage Loan on
the Mortgage Loan Schedule, promptly (and in any event within 45 days of the
Delivery Date) cause (i) the assignment of the Mortgage and any Assignment of
Leases and Rents specified in clauses (iv) and (v) of Section 2.01(b) above
to be submitted for recording or filing, at its own expense, in the
appropriate public office for real property records. Any such assignment
delivered in blank shall be completed to the order of the Trustee, in the
following form: "LaSalle National Bank, as Trustee for J.P. Morgan
Commercial Mortgage Finance Corp., Commercial Mortgage Pass-Through
Certificates Series 1997-SPTL-C1" prior to recording. Each such assignment
shall reflect that it should be returned by the public recording office
following recording to LaSalle National Bank as the Trustee. If any such
assignment is lost or returned unrecorded or unfiled because of a defect
therein, the Mortgage Loan Seller shall promptly prepare or cause to be
prepared a substitute therefor or cure such defect, as the case may be, and
thereafter cause the same to be duly recorded or filed.
(d) The Mortgage Loan Seller shall complete (or cause such to be
completed) the endorsements on those Mortgage Notes delivered in blank to the
order of the Trustee.
SECTION 2.02 Acceptance by Trustee.
(a) The Trustee, by the execution and delivery of this Agreement,
acknowledges receipt, subject to the provisions of Section 2.01 and this
Section 2.02 of the documents specified in clauses (i), (ii), (iv) and (vii)
of Section 2.01(b), and declares that it holds and will hold such documents
and the other documents delivered to it constituting the Mortgage Loan Files,
and that it holds or will hold such other assets included in the Trust Fund,
in trust for the exclusive use and benefit of all present and future
Certificateholders.
(b) On or prior to 120 days following the Delivery Date, the
Trustee shall deliver to the Depositor, the Mortgage Loan Seller and the
Master Servicer, a Final Certification in a form reasonably acceptable to the
Depositor (the "Final Certification") to the effect that it has reviewed the
Mortgage Loan Documents delivered to it hereunder and has determined that all
documents required to be delivered pursuant to Section 2.01(b) have been
received by the Trustee except for those documents specified in the exception
report attached to the Final Certification. Any such exceptions shall be
treated as missing or defective for purposes of paragraph (c) below. In
performing the reviews called for herein, the Trustee may conclusively assume
the due execution, genuineness, enforceability and legal sufficiency of any
such document and the genuineness of any signature thereon. It is understood
that the scope of the review called for is limited solely to confirming,
after receipt of the documents listed in Section 2.01(b), that such
documents have been executed, received and recorded, if applicable, and
relate to the Mortgage Loans identified in the Mortgage Loan Schedule. The
Trustee shall have no responsibility for reviewing the Mortgage Loan
Documents except as expressly set forth in this Section 2.02(b). The
Trustee shall be under no duty or obligation to determine whether the
text of any assignment or endorsement is in proper or recordable form (except
to determine if the assignee or endorsee conforms to the requirements of
Section 2.01(b)), whether any document has been recorded in accordance with
the requirements of any applicable jurisdiction, or that any document is
other than what it purports to be on its face.
(c) If, in the process of reviewing the Mortgage Loan Files, the
Trustee finds any document or documents constituting a part of a Mortgage
Loan File not to have been properly executed, or to be missing or to be
defective on its face in any material respect, the Trustee shall promptly so
notify the Master Servicer, the Mortgage Loan Seller, Fitch Investors
Service, L.P. and the Depositor. If the Mortgage Loan Seller does not
correct or cure such omission or defect within 60 days from the date of such
notice the Mortgage Loan Seller shall, pursuant to the Mortgage Loan Purchase
Agreement, purchase such Mortgage Loan from the Trust Fund at its Purchase
Price within 90 days from the date of such notice. The Purchase Price for
any such Mortgage Loan shall be deposited or caused to be deposited by the
Master Servicer into the Collection Account and, upon receipt by the Trustee
of written notification of such deposit, signed by a Servicing Officer, the
Trustee shall release to the Mortgage Loan Seller the related Mortgage Loan
File and such Mortgage Loan and the Trustee shall execute and deliver such
instruments of transfer or assignment prepared by the Master Servicer, in
each case without recourse, as shall be necessary to vest in the Mortgage
Loan Seller or its designee, as the case may be, any Mortgage Loan released
pursuant hereto and thereafter such Mortgage Loan shall not be part of the
Trust Fund. It is understood and agreed that the obligation of the Mortgage
Loan Seller to so cure or purchase any Mortgage Loan as to which a material
defect in or omission of a constituent document exists shall constitute the
sole remedy respecting such defect or omission available to
Certificateholders or the Trustee on behalf of the Certificateholders.
SECTION 2.03 Representations and Warranties of the Depositor, the
Master Servicer, and the Special Servicer; Assignment of
Rights.
(a) The Depositor hereby represents and warrants to and covenants
with the Trustee, the Master Servicer, and the Special Servicer, as of the
Delivery Date, that:
(i) The Depositor is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware.
(ii) The execution and delivery of this Agreement by the Depositor,
and the performance and compliance with the terms of this
Agreement by the Depositor, will not violate the Depositor's
charter or bylaws or constitute a default (or an event which,
with notice or lapse of time, or both, would constitute a
default) under, or result in the breach of, any material
agreement or other instrument to which it is a party or which
is applicable to it or any of its assets.
(iii) The Depositor has the full power and authority to enter
into and consummate all transactions contemplated by this
Agreement, the execution, delivery and performance of
this Agreement by the Depositor has been duly authorized,
and the Depositor has duly executed and delivered this
Agreement.
(iv) This Agreement, assuming due authorization, execution and
delivery by the Trustee, the Master Servicer, and the Special
Servicer, constitutes a valid, legal and binding obligation of
the Depositor, enforceable against the Depositor in accordance
with the terms hereof, subject to (A) applicable bankruptcy,
insolvency, reorganization, moratorium and other laws
affecting the enforcement of creditors' rights generally, and
(B) general principles of equity, regardless of whether such
enforcement is considered in a proceeding in equity or at law.
(v) The Depositor is not in violation of, and its execution and
delivery of this Agreement and its performance and compliance
with the terms of this Agreement will not constitute a
violation of, any law, any order or decree of any court or
arbiter, or any order, regulation or demand of any federal,
state or local governmental or regulatory authority, or any of
the provisions of any indenture, mortgage, contract,
instrument, or other document to which such Depositor is a
party or by which it is bound, or result in the creation or
imposition of any lien, charge, or encumbrance upon any of its
property pursuant to the terms of any such indenture,
mortgage, contract, instrument, or other document which
violation, in the Depositor's good faith and reasonable
judgment, is likely to affect materially and adversely either
the ability of the Depositor to perform its obligations under
this Agreement or the financial condition of the Depositor.
(vi) The transfer of the Mortgage Loans from the Depositor to the
Trustee as contemplated herein requires no regulatory
approval, other than any such approvals as have been obtained,
and is not subject to any bulk transfer or similar law in
effect in any applicable jurisdiction.
(vii) No litigation is pending or, to the best of the
Depositor's knowledge, threatened against the Depositor
which, if determined adversely to the Depositor, would
prohibit the Depositor from entering into this Agreement
or, in the Depositor's good faith reasonable judgment, is
likely to materially and adversely affect either the
ability of the Depositor to perform its obligations under
this Agreement or the financial condition of the
Depositor.
(viii) At the time of the assignment of the Mortgage Loans from
the Depositor to the Trust Fund hereunder, the Depositor
had good title to and was the sole owner of, each
Mortgage Loan, free and clear of any pledge, lien,
encumbrance or security interest (other than the rights
to servicing and related compensation) and such
assignment validly transfers ownership of the Mortgage
Loans to the Trust Fund free and clear of any pledge,
lien, encumbrance or security interest.
(b) The Master Servicer and Special Servicer hereby represent,
warrant and covenant to the Trustee, the Depositor and the Fiscal Agent, as
of the Delivery Date, that:
(A) The Master Servicer and Special Servicer is a limited
partnership duly organized, validly existing and in good standing under
the laws of the State of Missouri.
(B) The execution and delivery of this Agreement by each
Servicer, and the performance and compliance with the terms of this
Agreement by each Servicer, will not (i) violate such Servicer's
certificate of limited partnership or limited partnership agreement or
(ii) 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, which default
or breach, in such Servicer's good faith and reasonable judgment, is
likely to affect materially and adversely either the ability of such
Servicer to perform its obligations under this Agreement or the
financial condition of such Servicer.
(C) Each Servicer has the full power and authority to enter into
and consummate all transactions of such Servicer contemplated by this
Agreement, has duly authorized the execution, delivery and performance
of this Agreement, and has duly executed and delivered this Agreement.
(D) This Agreement, assuming due authorization, execution and
delivery by the Trustee, the Fiscal Agent and the Depositor, constitutes
a valid, legal and binding obligation of such Servicer, enforceable
against such Servicer in accordance with the terms hereof, subject to
applicable bankruptcy, insolvency, reorganization, receivership,
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.
(E) Neither Servicer is 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, or any of the provisions of any indenture, mortgage,
contract, instrument, or other document to which such Servicer is a
party or by which it is bound, or result in the creation or imposition
of any lien, charge or encumbrance upon any of its property pursuant to
the terms of any such indenture, mortgage, contract, instrument or other
document which violation, lien, charge or encumbrance in such Servicer's
good faith and reasonable judgment, is likely to affect materially and
adversely either the ability of such Servicer to perform its obligations
under this Agreement or the financial condition of such Servicer.
(F) No litigation is pending or, to such Servicer's knowledge,
threatened against such Servicer which, if determined adversely to such
Servicer, would prohibit such Servicer from entering into this Agreement
or, in such Servicer's good faith and reasonable judgment, is likely to
materially and adversely affect either the ability of such Servicer to
perform its obligations under this Agreement or the financial condition
of such Servicer.
(c) It is understood and agreed that the representations and
warranties set forth in this Section 2.03 shall survive the execution and
delivery of this Agreement, and shall inure to the benefit of the Persons for
whose benefit they were made for so long as the Trust Fund remains in
existence. Upon discovery by the Depositor, the Master Servicer, the
Special Servicer or the Trustee of any breach of any of the foregoing
representations and warranties, the party discovering such breach shall
give prompt written notice to the other parties.
SECTION 2.04 Repurchase of Mortgage Loans for Breaches of Representa-
tion and Warranty.
(a) Within 90 days of the earlier of the discovery by the
Depositor of, or receipt by the Depositor of written notice from the Master
Servicer, the Special Servicer, the Trustee or any Certificateholder,
specifying in reasonable detail the existence of a breach of any
representation or warranty of the Depositor set forth in Section 2.03(a),
which materially and adversely affects the value of any Mortgage Loan or the
interest of any Certificateholder therein, the Depositor shall at its option
(A) in all material respects cure such breach or (B) purchase the affected
Mortgage Loan from the Trustee at the Purchase Price.
(b) Within 90 days of the earlier of, the discovery by the
Mortgage Loan Seller of, or receipt by the Mortgage Loan Seller of written
notice from the Depositor, the Master Servicer, the Special Servicer, the
Trustee or any Certificateholder, specifying in reasonable detail the
existence of a breach of any representation or warranty of the Mortgage Loan
Seller in the Mortgage Loan Purchase Agreement, which materially and
adversely affects the value of any Mortgage Loan or the interest of any
Certificateholder therein, the Mortgage Loan Seller shall at its option (A)
in all material respects cure such breach or (B) purchase the affected
Mortgage Loan from the Trustee at the Purchase Price.
(c) The purchase of any Mortgage Loan by the Depositor or the
Mortgage Loan Seller pursuant to Section 2.04(a) or (b), as applicable, shall
be effected by delivering the Purchase Price therefor to the Master Servicer
for deposit in the Collection Account. The Trustee, upon receipt of an
Officers' Certificate from the Master Servicer to the effect that such
deposit has been made, shall release or cause to be released to the
Depositor, the Mortgage Loan Seller or its designee, as applicable, the
related Mortgage Loan File and shall execute and deliver such instruments of
transfer or assignment (in recordable form if recording is appropriate), in
each case without recourse, as shall be necessary to vest in the Depositor,
the Mortgage Loan Seller or its designee, as applicable, any Mortgage Loan
released pursuant hereto. In connection with such repurchase, the Master
Servicer, and the Special Servicer, as applicable, shall release to the
Depositor or the Mortgage Loan Seller, as applicable, all documents and
records maintained by such Servicer and requested by the Depositor or
the Mortgage Loan Seller; provided, that such Servicer may retain copies
of such documents and records at its own expense. The Depositor or the
Mortgage Loan Seller, as applicable, shall be responsible for the payment
of all reasonable expenses of the Trustee and the Servicers incurred in
connection with such repurchase.
(d) It is understood and agreed that the provisions set forth in
Section 2.04(a) and (b) of this Agreement shall constitute the sole remedies
available to the Certificateholders, or the Trustee on behalf of the
Certificateholders, respecting any breach of the representations and
warranties contained in Section 2.03(a) of this Agreement or in the Mortgage
Loan Purchase Agreement.
SECTION 2.05 Execution of Certificates.
The Trustee acknowledges the assignment to it of the Mortgage Loans
and to the extent set forth herein, the Mortgage Loan Purchase Agreement,
and, concurrently with such assignment, has executed and caused the
Certificate Registrar to authenticate and deliver to or upon the order of the
Depositor, in exchange for the Mortgage Loans, Certificates in authorized
denominations evidencing beneficial ownership of the entire Trust Fund.
ARTICLE III
GENERAL PROVISIONS APPLICABLE TO SERVICERS
SECTION 3.01 Contract for Servicing.
(a) Each Servicer, by execution and delivery of this Agreement,
agrees to service the Mortgage Loans pursuant to this Agreement and in all
cases in accordance with Accepted Servicing Practices and Accepted Special
Servicing Practices, as applicable.
(b) Any funds received on or in connection with a Mortgage Loan by
a Servicer shall be received and held by such Servicer in accordance with
this Agreement and pursuant to Accepted Servicing Practices or Accepted
Special Servicing Practices, as applicable, for the benefit of the
Certificateholders and the related Mortgagor as their respective interests
may appear and as provided in this Agreement.
SECTION 3.02 Notices to Mortgagors.
The Master Servicer shall, within five (5) Business Days of the
Delivery Date for any Mortgage Loan, send by first class mail or by hand
delivery written notice to the related Mortgagor that the Master Servicer has
been engaged to service such Mortgage Loan, which notice shall direct such
Mortgagor to make further payments and to send all future notices with
respect to such Mortgage Loan directly to the Master Servicer.
Notwithstanding the foregoing, the Master Servicer shall not be required to
send such notice if the Mortgage Loans shall be subserviced by the Mortgage
Loan Seller pursuant to a Subservicing Agreement between the Master Servicer
and the Mortgage Loan Seller, and there is no change in where the Mortgagor
is required to send payments under the Mortgage Loan.
SECTION 3.03 Subservicing.
The Master Servicer and the Special Servicer may enter into
subservicing agreements with one or more subservicers (including subsidiaries
or affiliates of the Servicer) for the servicing and administration of the
Mortgage Loans. References in this Agreement to actions taken or to be taken
by the Master Servicer or the Special Servicer in servicing the Mortgage
Loans include actions taken or to be taken by a subservicer on behalf of such
Master Servicer.
Notwithstanding any subservicing agreement, any of the provisions
of this Agreement relating to agreements or arrangements between either
Servicer and a subservicer or reference to actions taken through such Persons
or otherwise, such Servicer shall remain obligated and liable to the Trustee
and Certificateholders for the servicing and administering of the Mortgage
Loans in accordance with the provisions of this Agreement without diminution
of such obligation or liability by virtue of such subservicing agreements or
arrangements, or by virtue of indemnification from a subservicer, and to the
same extent and under the same terms and conditions as if the such Servicer
alone were servicing and administering the Mortgage Loans. Each Servicer
shall be entitled to enter into any agreement with a subservicer for
indemnification of such Servicer and nothing contained in this Agreement
shall be deemed to limit or modify such indemnification.
Any subservicing agreement that may be entered into and any other
transactions or servicing arrangements relating to the Mortgage Loans
involving a subservicer shall be deemed to be between the subservicer and the
related Servicer, and none of the Trustee, the Fiscal Agent, the
Certificateholders nor the Depositor shall be deemed parties thereto and none
of such Persons shall have claims or rights (except as specified below), nor
obligations, duties or liabilities with respect to the subservicer; provided,
--------
that the Trustee and the Certificateholders may rely upon the representations
and warranties of the subservicer contained therein and each of the Trustee
and the Depositor shall be a third party beneficiary of the covenants and
other provisions setting forth obligations of the subservicer therein.
If the Trustee or any successor Servicer assumes the obligations of
the Master Servicer or the Special Servicer, as applicable, in accordance
with this Agreement, the Trustee or such successor Servicer may, at its
option, (i) terminate any subservicing agreement entered into by the Master
Servicer or Special Servicer pursuant to this Section 3.03 or (ii) succeed to
all of the rights and obligations of the Master Servicer or Special Servicer
under any subservicing agreement, and any such subservicing agreement shall
provide such right of termination or succession to the Trustee or such
successor Servicer. In such event, the Trustee or such successor Servicer
shall be deemed to have assumed all of the interest of the Master Servicer or
Special Servicer therein (but not any liabilities or obligations in respect
of acts or omissions of the Master Servicer or Special Servicer prior to such
deemed assumption) and to have replaced the Master Servicer or the Special
Servicer, as applicable, as a party to such subservicing agreement to the
same extent as if such subservicing agreement had been assigned to the
Trustee or such successor Servicer, except that the Master Servicer or the
Special Servicer shall not thereby be relieved of any liability or
obligations under such subservicing agreement that accrued prior to the
assumption of duties hereunder by the Trustee or such successor Servicer.
In the event that the Trustee or any successor Servicer assumes the
servicing obligations of the Master Servicer or the Special Servicer, as
applicable, upon request of the Trustee or such successor Servicer, the
Master Servicer or Special Servicer shall, at its own expense, promptly
deliver to the Trustee or such successor Servicer all documents and records
relating to any subservicing agreement and the Mortgage Loans then being
serviced thereunder, and the Servicer will otherwise use its best efforts to
effect the orderly and efficient transfer of any subservicing agreement to
the Trustee or such successor Servicer.
SECTION 3.04 Record Title to Mortgage Loans, Etc.
No Servicer shall hold record title to any Mortgage or any Mortgage
Note.
SECTION 3.05 Release of Documents and Instruments of
Satisfaction.
The Trustee may, subject to the terms hereof, upon receipt of a
Request for Release and Receipt of Documents provided by any Servicer
substantially in the form set forth on Exhibit H, release to such Servicer
the related Mortgage Loan File or the documents from a Mortgage Loan File set
forth in such request. Each Servicer acknowledges that during all times that
any Mortgage Loan File or any contents thereof are in the physical possession
of such Servicer, such Mortgage Loan File and the documents contained therein
shall be held by the Servicer.
Subject to any state law requirement or court order, each Servicer
hereby agrees to return to the Trustee each and every document previously
requested from the Mortgage Loan File when such Servicer's need therefor in
connection with such foreclosure or servicing no longer exists, unless the
related Mortgage Loan shall be liquidated or paid in full, in which case,
upon receipt of the Request for Release and Receipt of Documents from either
Servicer, the Trustee may release the related Servicer's prior request form,
together with all other documents still retained by the Trustee with respect
to such Mortgage Loan, to such Servicer.
Upon receipt of the payment in full of any Mortgage Loan, or upon
the receipt by the Master Servicer or Special Servicer of a notification that
payment in full will be escrowed in a manner customary for such purposes,
such Servicer shall promptly deliver to the Trustee a Request for Release and
Receipt of Documents in the form set forth on Exhibit H requesting delivery
to such Servicer of the Mortgage Loan File for such Mortgage Loan. In
connection therewith, such Servicer shall deliver to the Trustee a Request
for Release and Receipt of Documents indicating that all amounts received in
connection with such payment that are required to be deposited in the
Collection Account pursuant to Section 4.02 hereof have been or will be so
deposited.
The Master Servicer and the Special Servicer shall forward to the
Trustee original documents evidencing an assumption, modification,
consolidation or extension of any Mortgage Loan entered into by such Servicer
in accordance with this Agreement within ten (10) Business Days of the
execution thereof and the delivery of such instrument to such Servicer;
provided, however, that such Servicer may, in lieu thereof, provide the
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Trustee with a certified true copy of any such document submitted for
recordation within five (5) Business Days of its execution, in which event
such Servicer shall provide the Trustee with the original of any document
submitted for recordation or a copy of such document certified by the
appropriate public recording office to be a true and complete copy of the
recorded original within five (5) Business Days of receipt thereof by such
Servicer.
Upon any payment in full of a Mortgage Loan, the Master Servicer or
Special Servicer may execute an instrument of satisfaction regarding the
related Mortgage and any other related Mortgage Loan Documents, which
instruments of satisfaction shall be recorded by such Servicer if required by
applicable law and shall be delivered to the Person entitled thereto, it
being understood and agreed that all reasonable expenses incurred by such
Servicer in connection with such instruments of satisfaction shall be deemed
a Servicing Advance, which shall be reimbursed pursuant to the terms of this
Agreement. Such Servicer shall notify the Trustee of an instrument of
satisfaction described above as soon as practicable.
SECTION 3.06 Access to Certain Documentation Regarding the Mortgage
Loans and This Agreement.
Upon reasonable advance written notice, each Servicer shall give the
Trustee or its agents or representatives, during normal business hours at
such Servicer's offices, reasonable access to all reports, information and
documentation regarding any Mortgage Loan, this Agreement (including the
right to make copies or extracts therefrom) and access to officers of such
Servicer responsible for such obligations.
SECTION 3.07 Annual Statement As to Compliance.
Each Servicer shall deliver to the Depositor and the Trustee, on or
before April 30 of each year, beginning April 30, 1998, a statement, signed
by a Servicing Officer thereof, stating that (a) a review of the activities
of such Servicer during the preceding calendar year (or during the period
from the date of commencement of its duties hereunder until the end of such
preceding calendar year in the case of the first such certificate) and of
its performance under this Agreement has been made under such Servicing
Officer's supervision; and (b) to the best of such Servicing Officer's
knowledge, based on such review, such Servicer has fulfilled all of its
material obligations under this Agreement throughout such period, or if
there has been a default in the fulfillment of any such obligation,
specifying each such default known to such Servicing Officer and the nature
and status thereof.
SECTION 3.08 Annual Independent Public Accountants' Servicing Report.
On or before April 30 of each year, beginning April 30, 1998, each
Servicer, at its expense, shall cause a firm of independent public
accountants that is a member of the American Institute of Certified Public
Accountants to furnish a statement to the Depositor and the Trustee to the
effect that such firm has examined such documents and records as it has
deemed necessary and appropriate relating to the servicing of the Mortgage
Loans under this Agreement for the preceding calendar year (or during the
period from the date of commencement of such servicer's duties hereunder
until the end of such preceding calendar year in the case of the first such
certificate) and that, on the basis of such examination conducted
substantially in compliance with the Uniform Single Attestation Program for
Mortgage Bankers, such firm is of the opinion that such servicing during such
period has been conducted in compliance with this Agreement except for such
exceptions that, in the opinion of such firm, the Uniform Single Attestation
Program for Mortgage Bankers requires it to report, in which case such
exceptions shall be set forth in such statement.
SECTION 3.09 Merger or Consolidation of Any Servicer.
(a) Each Servicer shall keep in full force and effect its
existence, rights and franchises as an association or corporation under the
laws governing its charter or articles of incorporation and, in the case of
the initial Servicer, its good standing as a limited partnership under the
laws of the State of Missouri; except as permitted in this Section 3.09 and
shall obtain and preserve its qualification to do business as a foreign
corporation, association or limited partnership, as applicable, in each
jurisdiction in which such qualification is or shall be necessary to protect
the validity and enforceability of this Agreement, or any of the Mortgage
Loans and to perform its duties under this Agreement.
(b) Any Person into which a Servicer may be merged, converted, or
consolidated, or any Person resulting from any merger, conversion or
consolidation to which a Servicer shall be a party, or any Person succeeding
to the business of a Servicer, shall be the successor of such Servicer
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, however, that the successor or surviving Person
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shall be an entity whose business includes the servicing of mortgage loans,
shall service multifamily and/or commercial mortgage loans, as applicable,
in accordance with Accepted Servicing Practices or Accepted Special Servicing
Practices, as applicable, and shall satisfy the requirements of Section 13.12
hereof with respect to the qualifications of a successor to a Servicer.
SECTION 3.10 Limitation on Liability of the Servicers and Others.
Neither the Servicers or any of the directors, officers, employees or
agents thereof shall be under any liability for any action taken or for
refraining from the taking of any action in accordance with Accepted
Servicing Practices or Accepted Special Servicing Practices, as applicable,
and otherwise in good faith pursuant to this Agreement or for errors in
judgment (not constituting negligence or wilful misconduct); provided,
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however, that this provision shall not protect any Servicer or such Persons
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of such Servicer against any liability resulting from any breach of any
representation or warranty made herein, or from any liability specifically
required to be borne by such party without right of reimbursement pursuant to
the terms hereof; and provided, further, that this provision shall not
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protect any Servicer or such Persons of such Servicer against any liability
that would otherwise be imposed by reason of the willful misfeasance, bad
faith or negligence in the performance of duties or by reason of negligent
disregard of the obligations or duties hereunder. Each Servicer and any
director, officer, employee or agent thereof may rely in good faith on any
document of any kind prima facie properly executed and submitted by any
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appropriate Person respecting any matters arising hereunder. No Servicer
shall, as applicable, be under any obligation to appear in, prosecute or
defend any legal action that is not incidental to its duties to service the
Mortgage Loans in accordance with this Agreement.
SECTION 3.11 Resignation of Servicers.
Without in any way limiting the generality of this Section 3.11, neither
the Master Servicer nor the Special Servicer shall resign as such or delegate
its rights or duties hereunder or any portion thereof; provided that (i)
either Servicer may enter into a Subservicing Agreement subject to Section
3.03 and (ii) either Servicer may resign upon determination that its duties
hereunder are no longer permissible under applicable law. Any such
determination permitting the resignation of the Servicer shall be evidenced
by an Opinion of Counsel (obtained at the resigning Servicer's expense) to
such effect delivered to the Trustee and acceptable in form and substance
thereto. Unless applicable law requires the Servicer's resignation to become
effective immediately, no such resignation shall become effective until
the Trustee or other successor shall have assumed the responsibilities
and obligations of the resigning party in accordance with Section 9.02
and Section 13.12 hereof.
SECTION 3.12 Maintenance of Errors and Omissions and Fidelity
Coverage.
Each 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 issued by
a surety or insurer which is a Qualified Insurer covering such Servicer's
officers and employees in connection with its activities under this
Agreement.
The deductible on the fidelity bond or errors and omissions policy
shall not exceed the greater of $100,000 and five (5) percent of the face
amount of such bond or policy. In the event that any such bond or policy
ceases to be in effect, such Servicer shall immediately obtain a comparable
replacement bond or policy. Notwithstanding the foregoing, so long as the
long-term unsecured debt obligations of such Servicer or its corporate parent
have been rated "A" or better by two or more of the Rating Agencies (one of
which shall be Standard & Poor's Rating Services and, if not rated by Fitch
Investors Service, L.P., is acceptable thereto), such Servicer shall be
entitled to provide self-insurance or obtain from its parent adequate
insurance, as applicable, with respect to its obligation to maintain a
blanket fidelity bond or an errors and omissions insurance policy.
SECTION 3.13 Indemnity.
(a) Each Servicer shall indemnify and hold harmless the Trustee,
the Fiscal Agent and the Trust Fund against any and all costs, expenses,
losses, damages, claims and liabilities, including reasonable fees and
expenses of counsel and expenses of litigation, arising from claims or
actions that were caused by or resulted from a breach of any of such
Servicer's representations and warranties contained in this Agreement or
arising out of the Servicer's willful misfeasance, bad faith or negligence or
by reason of negligent disregard of obligations or duties of such Servicer
hereunder.
(b) Each Servicer and the directors, officers and agents thereof
shall be indemnified and held harmless by the Trust Fund from any and all
costs, expenses, losses, damages, claims and liabilities, including
reasonable fees and expenses of counsel and expenses of litigation, incurred
in connection with any legal action relating to any Mortgage Loans and this
Agreement, other than any costs, expense, loss, damage, claim or liability
incurred by reason of willful misfeasance, bad faith or negligence of such
Servicer in the performance of duties or by reason of negligent disregard of
obligations or duties of such Servicer hereunder.
(c) As soon as reasonably practicable after receipt by any
Servicer, the Trustee on behalf of the Trust Fund, or the Fiscal Agent, of
notice of any complaint or the commencement of any action or proceeding with
respect to which indemnification is being sought under clause (a) or (b)
above (each an "Indemnified Party"), such Indemnified Party shall notify each
Servicer, the Trustee on behalf of the Trust Fund, or the Fiscal Agent from
which indemnification is sought pursuant to clause (a) or clause (b) above
(each an "Indemnifying Party") in writing of such complaint or of the
commencement of such action or proceeding, but failure so to notify the
Indemnifying Party shall not relieve the Indemnifying Party from any
liability which the Indemnifying Party may have hereunder or otherwise,
except to the extent that such failure materially prejudices the rights of
the Indemnifying Party. If the Indemnifying Party so elects or is requested
by such Indemnified Party, the Indemnifying Party shall assume the defense of
such action or proceeding, including the employment of counsel reasonably
satisfactory to each Indemnified Party and the payment of the fees and
disbursements of such counsel. In the event, however, such Indemnified Party
reasonably determines in its judgment that having common counsel would
present such counsel with a conflict of interest or that having common
counsel would in any other way disadvantage such Indemnified Party or if the
Indemnifying Party fails to assume the defense of the action or proceeding in
a timely manner, then such Indemnified Party may employ separate counsel to
represent or defend it in any such action or proceeding and the Indemnifying
Party shall pay the fees and disbursements of such counsel; provided,
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however, that the Indemnifying Party shall not be required to pay the fees
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the fees and disbursements of more than one separate counsel for all related
Indemnified Parties in any jurisdiction in any single action or proceeding.
In any action or proceeding the defense of which the Indemnifying Party
assumes and in which an Indemnified Party is not entitled to separate counsel
pursuant to the immediately preceding sentence, such Indemnified Party shall
have the right to participate in such litigation and to retain its own
counsel at such Indemnified Party's expense.
SECTION 3.14 Information Systems.
Each Servicer shall maintain a data storage and retrieval system capable
of maintaining, updating and providing reports with respect to all relevant
information with respect to each Mortgage Loan that may be required to
satisfy the terms of this Agreement, including but not limited to all
information on the Mortgage Loan Schedule. Each Servicer shall update the
data on such system to reflect any information available thereto from time to
time.
SECTION 3.15 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
State Tax Laws. Each 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. For the purposes of the
REMIC I election in respect of the Trust Fund, the five hundred and forty
REMIC I Uncertificated Interests shall be designated as the "regular
interests" and the Class R-I Certificates shall be designated as the sole
class of "residual interest" in REMIC I. For the purposes of the REMIC II
election in respect of the Trust Fund, the REMIC II Uncertificated Interests
shall be designated as the "regular interests" and the Class R-II
Certificates shall be designated as the sole class of "residual interest" in
REMIC II. For the purposes of the REMIC III election in respect of the Trust
Fund, the Class A1, Class A2, Class B, Class C, Class D, Class E, Class F ,
Class G, Class H and Class NR Certificates and the Class X Components shall
be designated as the "regular interests" and the Class R-III Certificates
shall be designated as the sole class of "residual interest" in REMIC III.
To the extent the affairs of the Trust Fund are within their control, the
Master Servicer and the Trustee shall not 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 REMIC I Uncertificated Interests, the
REMIC II Uncertificated Interests and the Certificates.
(b) The Delivery Date is hereby designated as the "Startup Day" of
the REMIC within the meaning of Section 860G(a)(9) of the Code.
(c) The Holder of the Class R-I Certificate is hereby designated,
and by the acceptance of the Class R-I Certificate agrees to act, as Tax
Matters Person for REMIC I. The Holder of the Class R-II Certificate is
hereby designated, and by the acceptance of the Class R-II Certificate agrees
to act, as Tax Matters Person for REMIC II. The Holder of the R-III
Certificate is hereby designated, and by acceptance of the Class R-III
Certificate, agrees to act, as Tax Matters Person for REMIC III.
(d) The Tax Matters Person hereby irrevocably authorizes the
Trustee to be its attorney-in-fact for purposes of signing all Tax Returns.
(e) The Trustee shall prepare or cause to be prepared all of the
Tax Returns that it reasonably determines are required with respect to either
REMIC I, REMIC II or REMIC III created hereunder and shall sign and file
such Tax Returns in a timely manner. The expenses of preparing such
returns shall be borne by the Trustee without any right of reimbursement
therefor.
(f) The Trustee shall provide (i) to any transferor of a Class R-
I, Class R-II or Class R-III Certificate and to the Internal Revenue Service
such information as is necessary for the application of any tax relating to
the transfer of a Class R-I, Class R-II and Class R-III Certificate to any
Person who is not a Permitted Transferee, (ii) to the Certificateholders such
information or reports as are required by the Code, the REMIC Provisions or
State Tax Laws 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 telephone
number of the person who will serve as the representative of each of REMIC I,
REMIC II and REMIC III.
(g) The Trustee shall take such actions and shall cause each of
REMIC I, REMIC II and REMIC III 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 REMICs under the REMIC Provisions (and the Master Servicer shall
assist the Trustee, to the extent reasonably requested by the Trustee to do
so). None of the Master Servicer, the Special Servicer or the Trustee shall
knowingly or intentionally take any action, cause either of REMIC I, REMIC II
or REMIC III to take any action or fail to take (or fail to cause to be
taken) any action 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) endanger the status of either REMIC
I, REMIC II or REMIC III as a REMIC or (ii) result in the imposition of a tax
under the REMIC Provisions upon either 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 such party 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 such party determines that taking such action is in the best
interest of the Trust Fund and the Certificateholders, at the expense of the
Trust Fund, but in no event at the expense of such party) to the effect that
the contemplated action will not, with respect to either REMIC I, REMIC II or
REMIC III created hereunder, endanger such status or, unless such party
determines in its sole discretion to indemnify the Trust Fund against such
tax, result in the imposition of such a tax.
(h) In the event that any tax is imposed on "prohibited
transactions" of REMIC I, REMIC II or REMIC III created hereunder 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 any other tax is imposed by the Code or any applicable provisions of state
or local tax laws, such tax shall be charged (i) to a Servicer, if such tax
arises out of or results from a breach by such Servicer of any of its
obligations under this Agreement, (ii) 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 and (iii) otherwise, against amounts on deposit in the
Certificate Account and on the Distribution Date(s) following such
reimbursement the aggregate of such taxes shall be allocated in reduction of
the Interest Distribution Amount on each Class entitled thereto in the same
manner as if such taxes constituted a Prepayment Interest Shortfall.
(i) The Trustee and the Master Servicer shall, for federal income
tax purposes, maintain books and records with respect to 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.
(j) Following the Startup Day, neither the Master Service nor the
Trustee shall accept any contributions of assets to REMIC I, REMIC II and
REMIC III unless the Master Servicer and 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 REMIC I,
REMIC II and REMIC III will not cause REMIC I, REMIC II and REMIC III to fail
to qualify as REMICs at any time that any Certificates are outstanding or
subject REMIC I, REMIC II and REMIC III to any tax under the REMIC Provisions
or other applicable provisions of federal, state and local law or ordinances.
(k) Neither the Master Servicer, the Special Servicer nor the
Trustee shall enter into any arrangement by which REMIC I, REMIC II and REMIC
III will receive a fee or other compensation for services nor, to the extent
reasonably within their control, permit either such REMIC to receive an
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.
(l) Solely for the purposes of Section 1.860G-1(a)(4)(iii) of the
Treasury regulations, the "latest possible maturity date" by which the Class
Balance of each Class of Certificates representing a regular interest in
REMIC III and each Uncertificated Class representing a regular interest in
REMIC I or REMIC II would be reduced to zero is the Assumed Final
Distribution Date, which is the first Distribution Date following
the second anniversary of the date at which all of the Mortgage Loans have
zero balances, assuming no prepayments and that the Mortgage Loans which are
Balloon Loans fully amortize according to their amortization schedule and no
Balloon Payment is made.
(m) Within 30 days after the Delivery 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 REMIC I, REMIC II and REMIC III.
(n) None of the Trustee, the Master Servicer, or the Special
Servicer shall sell, dispose of, or significantly modify or amend (within the
meaning of United States Treasury Regulation 1.860G-(2)(b)), or dispose of
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 Mortgage Property acquired by deed in lieu
of foreclosure, (ii) the bankruptcy of REMIC I, REMIC II and REMIC III, (iii)
the termination of REMIC I, REMIC II and REMIC III pursuant to Article XI of
this Agreement or (iv) a purchase of Mortgage Loans pursuant to Article II of
this agreement) nor acquire any assets for REMIC I, REMIC II and REMIC III,
nor sell or dispose of any investments in the Certificate Account for gain,
nor accept any contributions to REMIC I, REMIC II and REMIC III after the
Delivery Date, unless it has received an Opinion of Counsel that such sale or
disposition will not affect adversely the status of REMIC I, REMIC II and
REMIC III as REMICs.
(o) The Depositor shall provide or cause to be provided to the
Trustee, within ten (10) days after the Delivery Date, and thereafter on an
ongoing basis, all information or data requested by the Trustee 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, original issue discount, market discount or
premium, Prepayment Assumption and projected cash flow (based upon the
Prepayment Assumption) of the Certificates. In addition, the Master
Servicer, the Special Servicer and the Depositor shall provide on a timely
basis to the Trustee or its designee such information with respect to the
Trust Fund as is in its possession and reasonably requested by the Trustee to
enable it to perform its obligations under this Article. The Trustee shall
be entitled to rely conclusively upon all such information so provided to it
without recalculation or other investigation.
(p) The Trustee shall pay out of its own funds, without any right
of reimbursement, any and all ordinary expenses of the Trust Fund incurred in
the performance of its duties under this Article but shall be reimbursed,
except as otherwise expressly provided for herein by the Trust Fund for any
of its extraordinary expenses, including any taxes or tax-related payments,
any expenses involved in any tax examination, audit or proceeding, and the
expense of any tax-related Opinion of Counsel or other professional advice
requested by the Trustee for the benefit or protection of the
Certificateholders.
ARTICLE IV
OBLIGATIONS OF THE MASTER SERVICER
SECTION 4.01 The Master Servicer.
(a) The Master Servicer shall service and administer each Mortgage
Loan (except as such obligations may be undertaken by the Special Servicer
pursuant to Article VI hereof) on behalf of and in the best interests of and
for the benefit of the Certificateholders in accordance with the terms of
this Agreement and Accepted Servicing Practices.
(b) Subject to Accepted Servicing Practices and the terms of this
Agreement and of each Mortgage Loan, the Master Servicer shall have full
power and authority to do or cause to be done any and all things in
connection with such servicing and administration that it may deem, in its
best judgment, necessary or desirable, including, without limitation, to
execute and deliver any and all instruments of satisfaction or cancellation,
or of partial or full release or discharge and all other comparable
instruments, with respect to any Mortgage Loan which is not a Specially
Serviced Mortgage Loan. Without limiting the generality of the foregoing,
the Master Servicer shall, and is hereby authorized and empowered to, with
respect to each Mortgage Loan, prepare, execute and deliver at the expense of
the Trust Fund, any and all financing statements, continuation statements and
other documents or instruments necessary to maintain the lien on the related
Mortgaged Property and related collateral. The Master Servicer shall service
and administer each Mortgage Loan in accordance with applicable state and
federal law and shall provide to each Mortgagor any information required to
be provided to it thereby. Subject to the foregoing, the Master Servicer
shall service and administer each Mortgage Loan in accordance with the
Mortgage Loan Documents, and shall enforce all provisions designated in the
Mortgage Loan Documents, including but not limited to the establishment and
administration of escrow accounts, reserve accounts, impound accounts and
operation and maintenance plans. The Master Servicer may from time to time
request in writing any powers of attorney and other documents necessary or
appropriate to enable the Master Servicer to carry out its servicing and
administrative duties hereunder. If it shall make such written request, the
Master Servicer shall prepare for signature by the Trustee, and the Trustee
shall sign any such powers of attorney or other documents necessary or
appropriate to carry out such duties hereunder; provided, however, that the
Trustee shall not be held liable for any misuse of any such power of attorney
by the Master Servicer.
(c) The Master Servicer assumes, with respect to each Mortgage
Loan (except as otherwise set forth in Article VI), full responsibility
for the timely payment (subject to Section 4.05(b) with respect to any
Nonrecoverable Advances) of all customary, reasonable and necessary "out of
pocket" costs and expenses (including reasonable attorneys' fees and
disbursements) incurred in connection with:
(i) any enforcement, administrative or judicial proceedings, or
any necessary legal work or advice specifically related to
servicing the Mortgage Loans, including but not limited to,
bankruptcies, condemnations, drug seizures, foreclosures by
subordinate lienholders, legal costs associated with preparing
powers of attorney pursuant to Section 4.01(b) above, and
other legal actions incidental to the servicing of the
Mortgage Loans (provided that such expenses are reasonable and
that the Master Servicer specifies the Mortgage Loan(s) to
which such expenses relate);
(ii) all ground rents, taxes, assessments, water rates, sewer rates
and other charges, as applicable, that are or may become a
lien upon the Mortgaged Property, and all fire, flood, hazard
and other insurance coverage (to the extent required in this
Agreement, including renewal payments); and
(iii) compliance with the servicing provisions applicable to the
Master Servicer set forth herein.
With respect to any costs described in clauses (i) and (ii) above
and to the extent the related Mortgage Loan Documents do not provide for
escrow payments or the Master Servicer determines that any such payments have
not been made by the related Mortgagor, the Master Servicer shall effect
timely payment of all such expenses before they become delinquent if the
Master Servicer shall have or should have had knowledge based on Accepted
Servicing Practices of such nonpayment by the Mortgagor before it becomes
delinquent, and, otherwise, the Master Servicer shall effect immediate
payment of all such expenses which it has knowledge or should have knowledge
based on Accepted Servicing Practices have become delinquent. The Master
Servicer shall make Servicing Advances from its own funds to effect such
payments to the extent not deemed a Nonrecoverable Advance and shall be
reimbursed therefor in accordance with Section 4.03(a) hereof; provided, that
with respect to the payment of taxes and assessments, the Master Servicer
shall make such advance within five Business Days after the Master Servicer
has received confirmation that such item has not been paid; provided further
that the Master Servicer shall use its best efforts to confirm whether such
items have been paid. With respect to any costs described in clause (iii)
above, the Master Servicer shall be entitled to reimbursement of such costs
as Servicing Advances only to the extent expressly provided in this
Agreement. If the Master Servicer determines with respect to any
Mortgage Loan that a Servicing Advance, if made, would constitute a
Nonrecoverable Advance or that it has made a Nonrecoverable Advance,
it shall deliver to the Trustee a Nonrecoverable Advance Certificate.
(d) Upon the occurrence of a Servicing Transfer Event or upon the
resignation or termination of the Master Servicer, the Master Servicer shall
effect the timely and efficient transfer of its servicing responsibilities to
the successor Servicer.
SECTION 4.02 Collection Account; Collection of Certain Mortgage
Loan Payments.
(a) Subject to Article VI, from the date hereof until the
principal and interest on the Mortgage Loans is paid in full, the Master
Servicer shall proceed diligently to collect all payments called for under
the terms and provisions of the Mortgage Loans, and shall follow such
collection procedures as are in accordance with Accepted Servicing Practices.
(b) On or before the Delivery Date and as necessary thereafter,
the Master Servicer shall establish, and agrees to maintain for the duration
of this Agreement, the Collection Account in the name of the Trustee for the
benefit of the Certificateholders. The Collection Account shall be an
Eligible Account. Funds in the Collection Account shall be held by the
Master Servicer for the benefit of the Certificateholders in each case and
shall not be commingled with any other moneys. The Master Servicer shall
deposit, within one Business Day following receipt, all collections with
respect to the Mortgage Loans into the Collection Account. The Master
Servicer shall, within five (5) Business Days of the establishment thereof,
notify the Trustee in writing of the location and account number of the
Collection Account established for the Mortgage Loans and shall give the
Trustee written notice of any change of such location or account number on or
prior to the date of such change. Funds in the Collection Account may be
invested by, at the risk of, and for the benefit of, the Master Servicer in
Permitted Investments which shall not be sold or disposed of prior to
maturity. All such Permitted Investments shall be registered in the name of
the Master Servicer (in its capacity as such and for the benefit of the
Certificateholders) or its nominee. All income therefrom shall be the
property of the Master Servicer. In addition, if the amounts in the
Collection Account are invested for the benefit of the Master Servicer, the
Master Servicer shall deposit on each Determination Date into such account
out of its own funds an amount representing any net losses realized on
Permitted Investments with respect to funds in such account for such
Remittance Period.
(c) The Master Servicer shall deposit the following amounts into
the Collection Account pursuant to clause (b) above:
(i) all payments on account of principal and Principal
Prepayments, on the related Mortgage Loans;
(ii) all payments on account of interest on the related
Mortgage Loans, including default interest net of any
portion thereof retained by the Master Servicer as its
Servicing Fee;
(iii) all Liquidation Proceeds, Excess Condemnation Proceeds
and Excess Insurance Proceeds with respect to the related
Mortgaged Properties;
(iv) out of the Master Servicer's own funds, an amount
representing net losses realized on Permitted Investments
with respect to funds in the Collection Account;
(v) any amounts representing Prepayment Premiums paid by the
related Mortgagors;
(vi) any amounts received from the Special Servicer pursuant
to Section 6.06(d);
(vii) any other amounts received from the Mortgagor with
respect to the related Mortgage Loans; and
(viii) any amounts received from the Special Servicer under
Section 6.07 hereof, other than REO Proceeds;
but excluding (1) REO Proceeds which will be remitted to the
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Special Servicer for deposit into the REO Account within one Business Day
after receipt and (2) amounts representing fees payable by Mortgagors with
respect to Mortgage Loans which may be retained by the Master Servicer or
remitted to the Special Servicer, as applicable, as additional servicing
compensation hereunder.
(d) Subject to Section 4.03(c), all funds deposited by the Master
Servicer in the Collection Account maintained for the benefit of the
Certificateholders shall be held for the benefit of the Certificateholders
until disbursed or withdrawn in accordance herewith. Except as expressly
permitted or required hereunder, the Master Servicer shall not sell, transfer
or assign to any Person any interest (including any security interest) in
amounts credited or to be credited to the Collection Account or
take any action towards that end, and shall maintain such amounts free of all
liens, claims and encumbrances of any nature.
SECTION 4.03 Permitted Withdrawals from the Collection Account.
(a) The Master Servicer may make withdrawals from the Collection
Account of amounts on deposit therein attributable to the related Mortgage
Loans for (without duplication) the following purposes in the following order
of priority:
(i) to recoup any amount deposited in the Collection Account
and not required to be deposited therein;
(ii) on each Remittance Date, from amounts representing
payments by a Mortgagor of interest (or advances thereof)
on the related Mortgage Loan or Liquidation Proceeds,
Excess Insurance Proceeds and Excess Condemnation
Proceeds with respect to a Mortgage Loan, to pay to
itself the Master Servicing Fee;
(iii) to reimburse the Fiscal Agent, the Trustee and itself, in
that order, for unreimbursed P&I Advances from
collections on the related Mortgage Loans, together with
interest at the Advance Rate pursuant to Section 4.05 and
Section 7.04, the right to withdraw amounts pursuant to
this subclause (iii) being limited to amounts on deposit
in the Collection Account in respect of Liquidation
Proceeds, Excess Insurance Proceeds and Excess
Condemnation Proceeds with respect to such Mortgaged
Property, and any other amounts received on the related
Mortgage Loan that represent late recoveries of payments
with respect to which such P&I Advances were made;
(iv) for unreimbursed Servicing Advances incurred in
connection with a Mortgage Loan or Mortgaged Property,
together with interest at the Advance Rate pursuant to
Section 4.05, the right to withdraw amounts pursuant to
this subclause (iv) being limited to amounts on deposit
in such Collection Account in respect of Liquidation
Proceeds, Excess Insurance Proceeds and Excess
Condemnation Proceeds with respect to such Mortgaged
Property, and any other amounts received on
the related Mortgage Loan that represent late recoveries
of payments with respect to which such Servicing Advances
were made;
(v) on each Remittance Date, to pay to the Special Servicer
the Special Servicing Fee, and from time to time, to pay
to the Special Servicer the Disposition Fee;
(vi) on each Remittance Date, to reimburse the Fiscal Agent,
the Trustee, and itself, in that order, for accrued and
unpaid interest at the Advance Rate on any reimbursed P&I
Advances pursuant to Sections 4.05 and 7.04 made with
respect to any Mortgage Loan from any amounts on deposit
in the Collection Account, to the extent not otherwise
offset by default interest collected on the related
Mortgage Loan;
(vii) on each Remittance Date, to reimburse the Fiscal Agent,
the Trustee and itself, in that order, from any amounts
on deposit in the Collection Account for (A) any
unreimbursed Nonrecoverable Advance for which a
Nonrecoverable Advance Certificate has been previously
delivered or (B) any unreimbursed Servicing Advance for
an expense the payment or reimbursement of which is not
an obligation of the related Mortgagor under the terms of
the related Mortgage Loan Documents, in each case,
together with interest at the Advance Rate pursuant to
Section 4.05 and Section 7.04;
(viii) to the extent not reimbursed or paid pursuant to any
other clause of this Section 4.03(a), to reimburse or pay
each Servicer, the Trustee, the Depositor and/or the
Fiscal Agent for unpaid items incurred by or on behalf of
such Person under this Agreement pursuant to which such
Person is entitled to reimbursement or payment from the
Trust Fund;
(ix) on each Remittance Date, to pay itself any reinvestment
income on amounts on deposit in such Collection Account
to which it is entitled pursuant to Section 4.02(b);
(x) on each Remittance Date, to make remittances to the
Trustee pursuant to Section 4.04 hereof; and
(xi) to clear and terminate such Collection Account upon
termination of this Agreement.
(b) The Master Servicer shall keep and maintain separate
accounting, on a Mortgage Loan-by-Mortgage Loan basis, for the purpose of
justifying any withdrawal from the Collection Account and determining any
shortfall or overpayment of any amounts due from or on behalf of any
Mortgagor or Mortgaged Property. The Master Servicer shall pay to the Fiscal
Agent, the Trustee or the Special Servicer from the Collection Account (to
the extent permitted by clause (a) above) amounts permitted to be paid to the
Fiscal Agent, the Trustee or the Special Servicer therefrom, promptly upon
receipt of a certificate of a Responsible Officer of the Fiscal Agent or the
Trustee or a Servicing Officer of the Special Servicer, as applicable,
describing the item and amount to which the Fiscal Agent, the Trustee or the
Special Servicer is entitled. The Servicer may rely conclusively on any such
certificate and shall have no duty to recalculate the amounts stated therein.
(c) The Fiscal Agent, the Trustee, the Special Servicer and the
Master Servicer shall in all cases have a right prior to the
Certificateholders to any funds on deposit in the Collection Account from
time to time for the reimbursement or payment of compensation, Advances with
interest thereon at the Advance Rate and their respective expenses hereunder
to the extent such items are to be reimbursed or paid from amounts on deposit
in the Collection Account pursuant to this Agreement.
(d) Notwithstanding any other provisions contained herein to the
contrary, the reimbursement of any P&I Advances, together with interest
thereon at the Advance Rate, shall be made in the following order: first, to
the Fiscal Agent, second, to the Trustee and, third, to the Master Servicer.
SECTION 4.04 Remittances to the Trustee.
On each Remittance Date, the Master Servicer shall (1) withdraw
from the Collection Account and remit to the Trustee, by wire transfer of
immediately available funds to the Collection Account, all amounts on deposit
in the Collection Account as of the close of business on the Determination
Date prior to such Remittance Date, minus:
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(i) any permitted charges against or withdrawals from such
Collection Account pursuant to clauses (i) through (ix) of
Section 4.03(a) hereof; and
(ii) any amounts on deposit in the Collection Account representing
a Monthly Payment due on a Due Date following the Remittance
Period for such Determination Date net of any reduction
in the aggregate amount of P&I Advances for such Determination
Date pursuant to Section 4.05(a) (which amounts shall be
remitted pursuant to this Agreement on the Remittance Date
immediately following the Remittance Period in which such
Monthly Payment was due), and (2) remit to the Trustee any
P&I Advances required to be made on or prior to such Remittance
Date pursuant to Section 4.05(a).
SECTION 4.05 Master Servicer Advances.
(a) To the extent that as of the Determination Date for any month,
the full amount of the Monthly Payment due in such month with respect to any
Mortgage Loan has not been received by the Master Servicer, the Master
Servicer shall, on the related Remittance Date, deposit into the Collection
Account, an advance (a "P&I Advance") in an amount equal to the excess of
such Monthly Payment over the amount received; provided, however, that
notwithstanding anything herein to the contrary, the Master Servicer shall
not be required to make a Nonrecoverable Advance and the Master Servicer
shall not be required to make a P&I Advance with respect to a Balloon
Payment. For purposes of the immediately preceding sentence, the Monthly
Payment due on the Maturity Date for a Balloon Mortgage Loan will be the
amount that would be due on such day based on the full amortization schedule
used to calculate the prior Monthly Payments assuming a later Maturity Date.
If the Master Servicer determines that a P&I Advance is required, it shall on
or prior to such Remittance Date deposit in the Collection Account out of its
own funds an amount equal to the P&I Advance; provided, however, that the
aggregate amount of such P&I Advances for any Remittance Date shall be
reduced by any amounts being held for future remittance to the Master
Servicer pursuant to Section 4.04(a)(1)(ii). Any funds being held in the
Collection Account for future distribution and so used shall be replaced by
the Master Servicer from its own funds by deposit in the Collection Account
on each future Remittance Date to the extent that funds in the Collection
Account on such Remittance Date shall be less than payments to the Master
Servicer required to be made on such date. If the Master Servicer determines
with respect to any Mortgage Loan that a P&I Advance, if made, would
constitute a Nonrecoverable Advance or that it has made a Nonrecoverable
Advance, it shall deliver to the Trustee a Nonrecoverable Advance
Certificate.
(b) To the extent required by the terms of this Agreement, the
Master Servicer shall make Servicing Advances from time to time; provided,
however, that notwithstanding anything herein to the contrary, the Master
Servicer shall not be required to make a Nonrecoverable Advance.
(c) The Master Servicer shall determine whether amounts are
available in the Collection Account or the escrow account to reimburse the
Fiscal Agent, the Trustee or the Master Servicer for unreimbursed Advances
made pursuant to this Agreement. The Master Servicer shall promptly (but in
any event no later than ten (10) Business Days following receipt) withdraw
all amounts necessary to make such reimbursement to the extent such
withdrawals are permitted under Section 4.03(a), and shall reimburse the
Fiscal Agent, the Trustee or itself.
(d) The Master Servicer shall be entitled to interest on any
Advance made with respect to a Mortgage Loan. Such interest shall accrue at
the Advance Rate from the date on which such Advance was made to but not
including any Business Day on which the Master Servicer is reimbursed for
such Advance pursuant to this Agreement.
(e) The Master Servicer shall not make any Advance hereunder prior
to the time such Advance is required hereunder.
SECTION 4.06 Maintenance of Insurance.
(a) The Master Servicer shall in accordance with Accepted
Servicing Practices cause the Mortgagor to maintain for each Mortgage Loan
(other than REO Mortgage Loans), and if the Mortgagor does not so maintain,
the Master Servicer shall cause to be maintained for each Mortgaged Property
all insurance required by the terms of the related Mortgage Loan Documents;
provided, however, that if the insurance in the amount required above is not
available at a commercially reasonable cost, or the Trustee, as mortgagee,
does not have an insurable interest, as determined by the Master Servicer in
accordance with Accepted Servicing Practices, the Master Servicer shall not
be required to maintain such policy. Subject to the preceding sentence,
hazard insurance shall be maintained in the amount set forth in the related
Mortgage Loan Documents but in any event in an amount at least equal to the
replacement cost of the improvements which are a part of such property. Such
insurance policies shall also provide coverage in amounts sufficient such
that the insurance carrier would not deem the Mortgagor to be a co-insurer
thereunder. All such policies shall provide for at least thirty days' prior
written notice to the Master Servicer of any cancellation, reduction in the
amount of, or material change in, the coverage provided thereunder. If at
any time the Mortgaged Property is in a federally designated special flood
hazard area, the Master Servicer shall cause the related Mortgagor to
maintain or will itself obtain flood insurance in respect thereof to the
extent available at a commercially reasonable cost. Such flood insurance
shall be in an amount equal to the lesser of (x) the unpaid principal balance
of the related Mortgage Loan and (y) the greater of (1) the maximum amount of
such insurance required by the terms of the related Mortgage Note or Mortgage
and (2) the maximum amount of such insurance that is available for the
related Mortgaged Property under the national flood insurance program
(assuming that the area in which such Mortgaged Property is located is
participating in such program). Any cost incurred in maintaining any
insurance required pursuant to this subsection (a) shall not, for the
purpose of calculating monthly distributions to the Certificateholders, be
added to the unpaid principal balance of the related Mortgage Loan,
notwithstanding that the terms of the Mortgage Loan so permit but such cost
shall be paid by the Master Servicer as a Servicing Advance and shall be
reimbursed as provided in this Agreement. The Master Servicer shall arrange
for the application of all such insurance proceeds (i) to the
restoration or repair of the related Mortgaged Property, (ii) to prepay in
whole or in part the outstanding principal amount of the related Mortgage
Note or (iii) to be released to the related Mortgagor, as the case may be, in
all cases in accordance with the express requirements of the applicable
Mortgage Loan Documents. To the extent the applicable Mortgage Loan
Documents require the delivery of appraisals, engineer's reports, architect's
disbursement certificates or other documents or instruments before any such
insurance proceeds are applied, the Master Servicer shall obtain and verify
the same and any costs so incurred shall be deemed to be a Servicing Advance
and shall be reimbursed as provided in this Agreement. If such insurance
proceeds are to be applied to restoration or repair of the related Mortgaged
Property or are to be released to the related Mortgagor, the Master Servicer
shall deliver to the Trustee prior to such application or release a
certificate of a Servicing Officer of the Master Servicer in reasonable
detail specifying the purposes to which such proceeds are to be applied and
the account or Person to which they are to be transferred.
(b) 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 policy is issued by a Qualified Insurer and
provides no less coverage in scope and amount for such Mortgaged Property or
REO Property than the insurance required to be maintained pursuant to Section
4.06(a), the Master Servicer or Special Servicer shall conclusively be deemed
to have satisfied its obligations to maintain insurance pursuant to Section
4.06(a). Such policy may contain a deductible clause, in which case the
Master Servicer or 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
4.06(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 Collection Account 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 Accepted
Servicing Practices or Accepted Special Servicing Practices, as applicable.
In the event that either Servicer shall cause any Mortgaged Property or REO
Property to be covered by such a master force placed insurance policy, the
incremental costs of such insurance applicable to such Mortgaged Property or
REO Property (i.e., other than any minimum or standby premium payable for
such policy whether or not any Mortgaged Property or REO Property is covered
thereby) shall be paid by the Master Servicer as a Servicing Advance.
SECTION 4.07 Enforcement of "Due-on-Sale" Clauses;
Assumption Agreements.
(a) To the extent any Mortgage Loan contains an enforceable "due-
on-sale" or "due-on-encumbrance" clause, the Master Servicer shall enforce
such clause unless the Master Servicer determines in accordance with Accepted
Servicing Practices that it would be in the best interest of the
Certificateholders to waive any such clause. If the Master Servicer is
unable to enforce any such "due-on-sale" clause or if no "due-on-sale" clause
is applicable or the Master Servicer determines that such clause should be
waived, the Master Servicer shall enter into an assumption agreement with the
Person to whom such property has been conveyed or is proposed to be conveyed,
pursuant to which such Person becomes liable under the Mortgage Note and, to
the extent permitted by applicable state Law and the related Mortgage, the
Mortgagor remains liable thereon. The Master Servicer is also authorized to
enter into a substitution of liability agreement with such Person, pursuant
to which the original Mortgagor is released from liability and such Person is
substituted as the Mortgagor and becomes liable under the Mortgage Note;
provided, however, that such substitute Mortgagor must satisfy the
requirements set forth in the related Mortgage Loan Documents or the
underwriting requirements customarily imposed by the Master Servicer's
Accepted Servicing Practices as a condition to approval of a borrower on a
new mortgage loan substantially similar to such Mortgage Loan.
(b) To the extent any Mortgage Loan contains a clause granting a
right of assumption to a qualified substitute Mortgagor upon the sale,
conveyance or transfer of the related Mortgaged Property, the Master Servicer
shall enter into an assumption agreement with such qualified substitute
Mortgagor, pursuant to which such substitute Mortgagor becomes liable under
the Mortgage Note. If any Person other than the Mortgagor has, pursuant to
the related Mortgage Loan Documents, undertaken to indemnify the mortgagee
and, in connection with an assumption of the type referred to in the
preceding sentence, the related Mortgage Loan Documents permit a substitution
of such third-party indemnitor by a qualified substitute indemnitor, the
Master
Servicer shall enter into an assumption of liability agreement with such
qualified substitute indemnitor, pursuant to which such substitute indemnitor
becomes liable under the relevant indemnification obligations. The Master
Servicer is also authorized to enter into a substitution of liability
agreement with such substitute Mortgagor, pursuant to which the original
Mortgagor is released from liability and such substitute Mortgagor is
substituted as the Mortgagor and becomes liable under the Mortgage Note;
provided, however, that such substitute Mortgagor must satisfy the
requirements set forth in the related Mortgage Loan Documents or the
underwriting requirements customarily imposed by the Master Servicer's
regular commercial mortgage loan origination standards or Accepted Servicing
Practices as a condition to approval of a borrower on a new mortgage loan
substantially similar to such Mortgage Loan.
(c) The Master Servicer shall retain as additional servicing
compensation any fee collected for entering into an assumption or
substitution of liability agreement.
(d) In connection with any assumption under this Section 4.07, no
material term of the Mortgage Note (including, but not limited to, the
Mortgage Interest Rate, the amount of the Monthly Payment, any interest rate
floor or cap applicable to the calculation of the Mortgage Interest Rate and
any other term affecting the amount or timing of payment on the Mortgage
Loan) may be changed. The Master Servicer shall forward to the Trustee the
original substitution or assumption agreement.
(e) Notwithstanding the foregoing or any other provision of this
Agreement, the Master Servicer shall not be deemed to be in default, breach
or any other violation of its obligations hereunder by reason of any
conveyance by a Mortgagor of a Mortgaged Property or any assumption of a
Mortgage Loan by operation of Law that the Master Servicer in good faith
determines it may be restricted by Law from preventing.
SECTION 4.08 Property Inspections.
The Master Servicer shall inspect or cause to be inspected each
Mortgaged Property and shall verify and deliver to the Trustee a copy of a
property inspection report consistent with Accepted Servicing Practices;
provided that (i) each Mortgaged Property securing a Mortgage Loan with an
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outstanding principal balance in excess of $1,000,000 shall be inspected and
such a property inspection report shall be delivered to the Trustee at least
once a year, (ii) each Mortgaged Property securing a Mortgage Loan with a
principal balance in excess of $100,000 and less than or equal to $1,000,000
shall be inspected and such a property inspection report shall be delivered
to the Trustee at least once every two years, and (iii) each Mortgaged
Property securing a Mortgage Loan with an outstanding principal
less than or equal to $100,000 shall be inspected as necessary or upon notice
of any adverse event occurring with the property, and such a property
inspection report shall be delivered to the Trustee. The Master Servicer
shall prepare a summary of such inspection reports and deliver such summary
to each Rating Agency.
SECTION 4.09 Reports of Master Servicer.
(a) The Master Servicer shall prepare, or cause to be prepared,
and deliver to the Trustee in an electronic format agreed to by the Trustee
and the Master Servicer and consistent with Accepted Servicing Practices, not
later than the fourth (4th) Business Day immediately preceding each
Distribution Date, a copy of a Remittance Report. Such report shall be in
respect of the related Remittance Period on a Mortgage Loan-by-Mortgage Loan
basis to the extent applicable.
(b) The Master Servicer shall prepare and deliver to the Trustee a
copy of the Collection Account reconciliation report in a form agreed to by
the Master Servicer and the Trustee on or prior to the fifteenth day of each
calendar month.
(c) (RESERVED)
(d) The Master Servicer shall prepare and distribute all
information statements relating to payments on the Mortgage Loans in
accordance with all applicable federal and state laws and regulations.
(e) The Master Servicer shall provide the Trustee with any
reasonable information needed by the Trustee which is consistent with
Accepted Servicing Practices with respect to the Mortgage Loans in order to
allow the Trustee to comply with its obligations under this Agreement and
shall provide the Special Servicer with any reasonable information needed by
the Special Servicer which is consistent with Accepted Special Servicing
Practices with respect to Specially Serviced Mortgage Loans and REO Mortgage
Loans in order to allow the Special Servicer to comply with its obligations
hereunder pursuant to Article VI.
(f) The Master Servicer shall proceed diligently to collect all
reports and other information required to be prepared and delivered by the
Mortgagor pursuant to the terms of the related Mortgage Loan Documents
(including, but not limited to, rent rolls) and shall forward copies of such
information to the Trustee periodically as such information from Mortgagor is
received or as otherwise directed by the Trustee.
SECTION 4.10 Confirmation of Balloon Payment.
The Master Servicer shall send a letter by first class mail to each
Mortgagor on a Balloon Mortgage Loan at least six (6) months and at least
three (3) months prior to the related Maturity Date reminding such Mortgagor
of such Maturity Date and requesting that not later than sixty (60) days
prior to such Maturity Date such Mortgagor confirm in writing that the
payment due on such Maturity Date will be made on such date and describe in
reasonable detail any arrangements made or to be made with regard to the
payment of such Balloon Payment.
SECTION 4.11 Master Servicer Compensation.
The Master Servicer shall be entitled to a per annum fee (the
"Master Servicing Fee"), with respect to each Mortgage Loan, that shall be
equal to one twelfth of the product of (a) the Master Servicing Fee Rate and
(b) the Stated Principal Balance of such Mortgage Loan as of the Due Date in
the preceding calendar month. The Master Servicing Fee is payable to the
extent permitted by Section 4.03 hereof. The Master Servicer shall also be
entitled to receive as additional servicing compensation (i) all investment
income earned on amounts on deposit in the Mortgagor escrow, impound or
reserve accounts (to the extent consistent with applicable law and the
related Mortgage Loan Documents) and the Collection Account, (ii) all amounts
collected with respect to the Mortgage Loans (that are not Specially Serviced
Mortgage Loans) in the nature of late payment charges, late fees, NSF check
charges (including with respect to Specially Serviced Mortgage Loans),
extension fees, modification fees, assumption fees, and similar fees and
charges, and (iii) any Prepayment Interest Excess (to the extent not offset
against any Prepayment Interest Shortfall in accordance with Section 4.12).
SECTION 4.12 Adjustment of Master Servicer's Compensation.
Notwithstanding anything set forth in this Article, the Master
Servicing Fee for the period ending on a Distribution Date shall be reduced
(but not below zero) by an amount equal to any excess of any Prepayment
Interest Shortfall over any Prepayment Interest Excess for such Distribution
Date. The Master Servicer shall be entitled to retain on any Distribution
Date any excess of any Prepayment Interest Excess for such Distribution Date
over any Prepayment Interest Shortfall for such Distribution Date.
SECTION 4.13 Implementation of Operations and Maintenance Plans;
ICII Representation and Warranty Agreement.
(a) To the extent an operations and maintenance plan is required
to be established and executed pursuant to the terms of the related Mortgage
Loan Documents, the Master Servicer shall use reasonable efforts to enforce
any such plans in accordance in with the terms of the Mortgage Loan Document.
(b) The Master Servicer shall cooperate with the Trustee in
connection with the enforcement of the ICII Representation and Warranty
Agreement.
ARTICLE V
(RESERVED)
ARTICLE VI
OBLIGATIONS OF THE SPECIAL SERVICER
SECTION 6.01 The Special Servicer.
(a) The Special Servicer, as independent contract servicer, shall
service and administer the Specially Serviced Mortgage Loans and REO Property
on behalf of and in the best interests of and for the benefit of the
Certificateholders in accordance with this Agreement and Accepted Special
Servicing Practices. In the event that a Mortgage Loan becomes a Specially
Serviced Mortgage Loan, subject to the provisions contained in this Article
VI, the Master Servicer shall continue to collect all Monthly Payments called
for under the terms and provisions of the Mortgage Loan in accordance with
Section 4.02, except as otherwise directed by the Special Servicer and agreed
to by the Master Servicer in writing.
SECTION 6.02 Transfer to Special Servicing.
(a) The Master Servicer shall notify the Special Servicer as
promptly as practicable by telephone and in an electronic format reasonably
acceptable to the Master Servicer after it becomes aware of the occurrence of
a Servicing Transfer Event.
(b) Unless the Master Servicer and the Special Servicer with
respect to a Mortgage Loan are the same Person, promptly after the occurrence
of a Servicing Transfer Event, the Master Servicer shall send a letter by
first class mail (with a copy to the Special Servicer) notifying the related
Mortgagor that the related Mortgage Loan has become a Specially Serviced
Mortgage Loan and instructing such Mortgagor to direct all future notices and
communications to the Special Servicer but to continue making Monthly
Payments to the Master Servicer unless otherwise directed by the Special
Servicer in writing and agreed by the Master Servicer.
(c) Not later than five (5) Business Days after the occurrence of
a Servicing Transfer Event, the Master Servicer shall use its best efforts to
provide the Special Servicer with copies of all information, documents and
records (including records stored electronically on computer tapes, magnetic
disks and the like) in its possession relating to each Mortgage Loan with
respect to which notice is required to be delivered pursuant to clause (a)
above. The Master Servicer and the Special Servicer shall take all other
actions necessary or appropriate to effect a transfer of servicing pursuant
to this Section 6.02 or Section 6.10, including but not limited to the
preparation, execution and delivery of any and all necessary or appropriate
documents and other instruments, and will cooperate fully with
each other in effecting such transfer as promptly as possible. Servicing of
a Mortgage Loan shall be automatically transferred to the Special Servicer on
the Servicing Transfer Date.
(d) Following the related Servicing Transfer Date, the Master
Servicer shall not have any further dealings or communications with the
related Mortgagor except as administrator of the Collection Account and the
escrow, impound or reserve accounts. The Master Servicer shall maintain up-
to-date information on each Mortgage Loan which becomes a Specially Serviced
Mortgage Loan in order to properly administer the Collection Account and the
escrow, impound or reserve accounts, to enable it to resume all servicing
obligations with respect to a Mortgage Loan which ceases to be a Specially
Serviced Mortgage Loan as promptly as possible pursuant to Section 6.10 and
to provide any reports required under Article IV. The Special Servicer shall
promptly provide to the Master Servicer all information available to the
Special Servicer and not available to the Master Servicer necessary to
maintain such up-to-date information.
(e) Promptly after the Servicing Transfer Date, the Special
Servicer shall send a letter by first class mail hereto notifying the related
Mortgagor that servicing has been transferred to the Special Servicer.
(f) (RESERVED)
(g) Following the occurrence of a Servicing Transfer Date with
respect to any Mortgage Loan, the Special Servicer shall service the related
Specially Serviced Mortgage Loan and REO Property in accordance with this
Agreement.
SECTION 6.03 Servicing of Specially Serviced Mortgage Loans.
(a) Following the occurrence of a Servicing Transfer Event, the
Special Servicer shall request from the Trustee the name of the current
Directing Certificateholder. The Trustee shall notify the Special Servicer
of the identity of the current Directing Certificateholder upon request.
Upon receipt of the name of such current Directing Certificateholder from the
Trustee, the Special Servicer shall notify the Directing Certificateholder of
the occurrence of such Servicing Transfer Event. Servicing Officers of the
Special Servicer shall, at the request of the Directing Certificateholder, be
reasonably available during regular business hours to discuss with such
Certificateholder objectives and strategies with respect to the Specially
Serviced Mortgage Loans and REO Properties.
(b) Subject to Section 6.03(c) below and Accepted Special
Servicing Practices, in servicing and administering any
Specially Serviced Mortgage Loan or REO Property, the Special Servicer shall
have full power and authority to do any and all things in connection with
such servicing and administration that it may deem in its best judgment
necessary or advisable including, without limitation, to execute and deliver
on behalf of the Trustee and the Certificateholders any and all instruments
of satisfaction or cancellation or of partial release or full release or
discharge and all other comparable instruments with respect to such Specially
Serviced Mortgage Loan or such REO Mortgage Loan or to agree to any
modification, waiver or amendment of any term and to defer, reduce or forgive
payment of interest and/or principal of any such Specially Serviced Mortgage
Loan. The Special Servicer may not extend the scheduled maturity date of any
Specially Serviced Mortgage Loan to a date later than three years prior to
the Assumed Final Distribution Date. The Special Servicer may from time to
time request in writing any powers of attorney and other documents necessary
or appropriate to enable the Special Servicer to carry out its servicing and
administrative duties hereunder. If it shall make such written request, the
Special Servicer shall prepare for signature by the Trustee, and the Trustee
shall sign any such powers of attorney or other documents necessary or
appropriate to carry out such duties hereunder; provided, however, that the
Trustee shall not be held liable for any misuse of any such power of attorney
by the Special Servicer. In addition to the duties and obligations set forth
in this Article VI, the Special Servicer shall assume the rights and
obligations of the Master Servicer set forth in (i) Section 4.07 of this
Agreement with respect to any Specially Serviced Mortgage Loan (but not any
liabilities incurred by the Master Servicer prior to the related Servicing
Transfer Date) and (ii) Section 4.06 with respect to REO Properties. Any
insurance required to be maintained by the Special Servicer with respect to
REO Properties pursuant to this Section and any such Section 4.06 shall be
maintained with Qualified Insurers.
(c) No later than sixty (60) days after a Servicing Transfer Date
for a Mortgage Loan, the Special Servicer shall deliver to the Trustee, the
Master Servicer, each Rating Agency and the Directing Certificateholder a
report (the "Asset Strategy Report"), with respect to such Mortgage Loan and
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the related Mortgaged Property. Such Asset Strategy Report shall set forth
the following information to the extent reasonably determinable:
(i) summary of the status of such Specially Serviced Mortgage
Loan and any negotiations with the related Mortgagor;
(ii) consideration of alternatives to the exercise of remedies
(such as forbearance relief, modification of the terms
and conditions of such Mortgage Loan, disposition of the
Specially Serviced Mortgage Loan or the
related Mortgaged Property and application of the
proceeds of such disposition to the outstanding principal
balance of such Mortgage Loan and interest thereon, or
abandonment of the related Mortgaged Property);
(iii) a discussion of the probable time frames and estimated
amount of any related Servicing Advances applicable to
each of the alternatives referred to above;
(iv) a discussion of the legal and environmental
considerations reasonably known to the Special Servicer,
consistent with the Accepted Special Servicing Practices,
that are applicable to the exercise of remedies as
aforesaid and to the enforcement of any related
guaranties or other collateral for the related Mortgage
Loan and a recommendation as to whether outside legal
counsel should be retained;
(v) estimated budgets for any operating or capital funds
expected to be required for the related Mortgaged
Property;
(vi) the most current rent roll available for and any strategy
for the leasing or releasing of the related Mortgaged
Property;
(vii) the Special Servicer's analysis and recommendations
(which will include a discussion of alternative courses
of action and a comparison of the probable benefits and
detriments of each alternative course of action) on how
such Specially Serviced Mortgage Loan might be returned
to performing status and returned to the Master Servicer
for regular servicing under Article IV of this Agreement
or otherwise realized upon; and
(viii) such other information as the Special Servicer deems
relevant in light of the Accepted Special Servicing
Practices.
If within ten (10) Business Days of receiving an Asset Strategy
Report, the Directing Certificateholder does not disapprove such Asset
Strategy Report in writing, the Special Servicer shall implement the
recommended action as outlined in such Asset Strategy Report; provided,
however, that notwithstanding anything herein to the contrary the Special
Servicer may not take and shall not be required to take any action that
is contrary to applicable Law or the terms of the applicable Mortgage Loan
Documents. If the Directing Certificateholder disapproves such Asset
Strategy Report, the Special Servicer will revise such Asset Strategy
Report and deliver to the Trustee, the Directing Certificateholder, the
Master Servicer and the Rating Agencies a new Asset Strategy Report as
soon as practicable. The Special Servicer shall revise such Asset Strategy
Report as described above in this Section 6.03(c) until the Directing
Certificateholder shall fail to disapprove such revised Asset Strategy
Report in writing within ten (10) Business Days of receiving such revised
Asset Strategy Report. The Special Servicer may, from time to time,
modify any Asset Strategy Report it has previously delivered and implement
such report, provided such report shall have been prepared, reviewed
and not rejected pursuant to the terms of this Section. Notwithstanding
the foregoing, the Special Servicer (i) may following the occurrence
of an extraordinary event with respect to the related Mortgaged Property,
take any action set forth in such Asset Strategy Report before the
expiration of a ten (10) Business Day period if the Special Servicer has
reasonably determined that failure to take such action would materially
and adversely affect the interest of the Certificateholders and it has made
a reasonable effort to contact the Directing Certificateholder and (ii)
in any case, shall determine whether such disapproval is not in the best
interest of all the Certificateholders pursuant to Accepted Special Servicing
Practices. Upon making such determination, the Special Servicer shall either
implement the Asset Strategy Report or notify the Trustee of such rejection
and deliver to the Trustee a proposed notice to Certificateholders which
shall include the Asset Strategy Report, and the Trustee shall send such
notice to all Certificateholders (or, to the extent known to the Trustee,
Certificate Owners). If the majority of such Certificateholders (including
Certificate Owners), as determined by Certificate Balance, fail within five
(5) days of the Trustee's sending such notice to reject such Asset Strategy
Report, the Special Servicer shall implement the same. If the Asset Strategy
Report is rejected by the Certificateholders, the Special Servicer shall
revise such Asset Strategy Report as described above in this Section 6.03(c).
The Trustee shall be entitled to be reimbursed by the Trust Fund for the
reasonable expenses of providing such notices.
(d) The Special Servicer shall have the authority to meet with the
Mortgagor for any Specially Serviced Mortgage Loan and take such actions
consistent with Accepted Special Servicing Practices and the related Asset
Strategy Report. The Special Servicer shall not take any action inconsistent
with the related Asset Strategy Report.
(e) Upon request of any Certificateholder (or any Certificate
Owner, if applicable, which shall have provided the Trustee with evidence
satisfactory to the Special Servicer and the Trustee of its interest in a
Certificate pursuant to Section 11.04) or any Rating Agency, the Trustee
shall mail, without charge, to the address specified in such request a copy
of the most current Asset Strategy Report for any Specially Serviced Mortgage
Loan or REO Property.
(f) The Special Servicer shall not acquire any personal property
on behalf of the Trust Fund pursuant to this Agreement unless either:
(i) such personal property is incident to real property
(within the meaning of Section 856(e)(1) of the Code) so
acquired by the Special Servicer; or
(ii) the Special Servicer shall have obtained an Opinion of
Counsel (at the expense of the Trust Fund) to the effect
that the holding of such personal property by the Trust
Fund will not cause the imposition of a tax on the Trust
Fund under the REMIC Provisions or cause the Trust Fund
to fail to qualify as a REMIC at any time that any
Certificate is outstanding.
SECTION 6.04 Management of REO Property.
(a) The Special Servicer, on behalf of the Trust Fund, shall use
best efforts to sell any REO Property within two years after the Trust Fund
acquires ownership of such REO Property for purposes of Section 860G(a)(8) of
the Code, unless the Special Servicer (i) obtains for the Trustee an Opinion
of Counsel (at the expense of the Trust Fund), addressed to the Trustee and
the Master Servicer, to the effect that the holding by the Trust Fund of such
REO Property subsequent to the second anniversary of such acquisition will
not result in the imposition of taxes on "prohibited transactions" of REMIC
I, REMIC II and REMIC III as defined in Section 860F of the Code or cause
REMIC I, REMIC II and REMIC III to fail to qualify as a REMIC at any time
that any Certificates are outstanding; or (ii) on behalf of the Trust Fund,
has applied for and received an extension of such two-year period pursuant to
Sections 856(e)(3) and 860G(a)(8)(A) of the Code, in which case the Special
Servicer shall sell such REO Property within the applicable extension period.
The Special Servicer shall manage, conserve, protect and operate each REO
Property for the Certificateholders solely for the purpose of its prompt
disposition and sale in a manner which 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 result in the receipt by REMIC I, REMIC II and
REMIC III 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 (except
for any such net income resulting from the operation or management of a trade
or business or such REO Property which was conducted immediately prior to
the Trust Fund's acquisition of such REO Property). Subject to the
foregoing, the Special Servicer shall solicit offers for any REO Property
in such manner as will be reasonably likely to realize a fair price for such
REO Property. The Special Servicer may retain an Independent contractor to
manage and operate such property; provided, however, that any such retention
will not relieve the Special Servicer of any of its obligations with
respect to the management and operation of such Mortgaged Property.
(b) The Special Servicer shall not:
(i) permit the Trust Fund to enter into, renew or extend any new
lease with respect to any REO Property, if the new lease by its terms
will give rise to any income that does not constitute Rents from Real
Property;
(ii) permit any amount to be received or accrued under any new
lease other than amounts that will constitute Rents from Real Property;
(iii) authorize or permit any construction on any REO Property,
other than the completion of a building or other improvement thereon,
and then only if more than ten percent of the construction of such
building or other improvement was completed before default on the
related Mortgage Loan became imminent, all within the meaning of Section
856(e)(4)(B) of the Code; or
(iv) Directly Operate, or allow any other Person to Directly
Operate, any REO Property on any date more than 90 days after its
Acquisition Date;
unless, in any such case, the Special Servicer has obtained an Opinion of
Counsel (at the expense of the Trust Fund) to the effect that such action
will not cause such REO Property to fail to qualify as "foreclosure property"
within the meaning of Section 860G(a)(8) of the Code at any time that it is
held by REMIC I, REMIC II and REMIC III, in which case the Special Servicer
may take such actions as are specified in such Opinion of Counsel.
(c) Any REO Property acquired by the Special Servicer hereunder
shall be acquired in the name of the Trustee for the benefit of the
Certificateholders.
SECTION 6.05 Sale of REO Property and Specially Serviced Mortgage
Loans.
Subject to terms of the related Asset Strategy Report, to the
extent the conditions, procedures or requirements set forth therein are more
restrictive or exacting than those set forth below, each Special Servicer
agrees as follows:
(a) The Special Servicer may purchase any Defaulted Mortgage Loan
or any REO Property (in each case at the Purchase Price therefor). The
Special Servicer may also offer to sell to any Person any Defaulted Mortgage
Loan or any REO Property, if and when the Special Servicer determines,
consistent with Accepted Special Servicing Practices that such a sale would
be in the best economic interests of the Trust Fund. The Special Servicer
shall give the Trustee and the Master Servicer not less than five Business
Days' prior written notice of the Purchase Price and its intention to (i)
purchase any Defaulted Mortgage Loan or REO Property at the Purchase Price
therefor or (ii) sell any Defaulted Mortgage Loan or REO Property, in which
case the Special Servicer shall accept the highest offer received from any
Person for any Defaulted Mortgage Loan or any REO Property in an amount at
least equal to the Purchase Price therefor.
In the absence of any such offer, the Special Servicer shall accept
the highest offer received from any Person that is determined by the Special
Servicer to be a fair price for such Defaulted Mortgage Loan or REO Property,
if the highest offeror is a Person other than an Interested Person, or if
such price is determined to be such a price by the Trustee, if the highest
offeror is an Interested Person. Notwithstanding anything to the contrary
herein, neither the Trustee, in its individual capacity, nor any of its
Affiliates may make an offer for or purchase any Defaulted Mortgage Loan or
any REO Property pursuant hereto.
The Special Servicer shall not be obligated by either of the
foregoing paragraphs or otherwise to accept the highest offer if the Special
Servicer determines, in accordance with Accepted Special Servicing Practices,
that rejection of such offer would be in the best interests of the
Certificateholders. In addition, the Special Servicer may accept a lower
offer if it determines, in accordance with Accepted Special Servicing
Practices, 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).
(b) In determining whether any offer received from an Interested
Person represents a fair price for any Defaulted Mortgage Loan or any REO
Property, the Trustee and the Special Servicer may conclusively rely on the
opinion of an Independent appraiser or other Independent expert in real
estate matters retained by the Trustee at the expense of the Trust Fund.
In determining whether any offer constitutes a fair price for any Defaulted
Mortgage Loan or any REO Property, the Special Servicer or the Trustee (or,
if applicable, such appraiser) shall take into account, and any appraiser
or other expert in real estate matters shall be instructed to take into
account, as applicable, among other factors, the period and amount of any
delinquency on the affected Defaulted Mortgage Loan, the physical condition
of the related Mortgaged Property or such REO Property, the state of the
local economy and the Trust Fund's obligation to comply with REMIC Provisions.
(c) Subject to Accepted Special Servicing Practices, 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, including the collection of all
amounts payable in connection therewith. Any sale of a Defaulted Mortgage
Loan or any REO Property shall be without recourse to, or representation or
warranty by, the Trustee, the Depositor, the Mortgage Loan Seller, any
Servicer, or the Trust Fund (except that any contract of sale and assignment
and conveyance documents may contain customary warranties of title, so long
as the only recourse for breach thereof is to the Trust Fund) and, if
consummated in accordance with the terms of this Agreement, none of the
Servicers, the Depositor, the Mortgage Loan Seller, nor the Trustee shall
have any liability to the Trust Fund or any Certificateholder with respect to
the purchase price therefor accepted by the Special Servicer or the Trustee.
(d) The proceeds of any sale after deduction of the expenses of
such sale incurred in connection therewith shall be promptly deposited into
the Collection Account.
SECTION 6.06 REO Account; Collection of REO Proceeds.
(a) The Special Servicer shall establish or cause to be
established, and hereby agrees to maintain or cause to be maintained for the
duration of this Agreement for each REO Mortgage Loan, an REO Account into
which all related REO Proceeds shall be deposited as and when received. Each
of the Special Servicer's REO Account shall be an Eligible Account.
(b) All funds deposited by the Special Servicer in any REO Account
maintained hereunder shall be held for the benefit of the Certificateholders
until disbursed or withdrawn in accordance herewith. Funds in such REO
Account shall not be commingled with any other moneys. The Special Servicer
shall, within five (5) Business Days of the establishment thereof, notify the
Master Servicer and the Trustee in writing of the location and the account
number of the REO Account established by the Special Servicer for the
Mortgage Loans and shall give the Trustee and the Master Servicer written
notice of any change of such location or account number on or prior to the
date of such change.
(c) Funds in an REO Account may be invested by, at the risk of,
and for the benefit of, the Special Servicer in Permitted Investments which
shall not be sold or disposed of prior to maturity. All such Permitted
Investments shall be registered in the name of the Special Servicer (in its
capacity as such and for the benefit of the Certificateholders) or its
nominee. All income therefrom shall be the property of the Special Servicer.
In addition, if the amounts in any REO Account are invested for the benefit
of the Special Servicer, the Special Servicer shall deposit on each
Determination Date into such REO Account out of its own funds an amount
representing any net losses realized on the Permitted Investments with
respect to funds in such REO Account for such Remittance Period.
(d) The Special Servicer shall deposit or cause to be deposited
any REO Proceeds into the applicable REO Account within one Business Day
after receipt. The Special Servicer shall withdraw therefrom funds necessary
for the proper operation, management, and maintenance of any REO Property,
including any Property Protection Expenses. To the extent such REO Proceeds
are insufficient for the purposes set forth in the preceding sentence, the
Master Servicer shall make a Servicing Advance for the amount of such
shortfall. The Special Servicer shall remit to the Master Servicer for
deposit into the Collection Account on a monthly basis prior to the related
Remittance Date the REO Proceeds collected with respect to the related REO
Property, net of withdrawals made by the Special Servicer pursuant to this
Section 6.06(d); provided, that for the purpose of determining the amount of
any such remittance, the Special Servicer may retain in such REO Account
reasonable reserves for Property Protection Expenses.
(e) Except as expressly permitted or required hereunder, the
Special Servicer shall not sell, transfer or assign to any Person any
interest (including any security interest) in amounts credited or to be
credited to any REO Account or take any action towards that end, and shall
maintain such amounts free of all liens, claims and encumbrances of any
nature.
SECTION 6.07 Remittances to Master Servicer.
Any collections received in respect of a Mortgage Loan, other than
REO Proceeds, shall be remitted to the Master Servicer within one Business
Day of receipt for deposit into the Collection Account established and
maintained by the Master Servicer for the duration of this Agreement pursuant
to Section 4.02 of this Agreement.
SECTION 6.08 Specially Serviced Mortgage Loan Status Reports and
Other Reports.
(a) The Special Servicer shall prepare, or cause to be prepared,
and deliver to the Master Servicer, the Trustee and the Rating Agencies, via
facsimile (with a hard copy sent on the same day by first-class mail and in
electronic format reasonably acceptable to the Master Servicer, the Rating
Agencies and the Trustee and consistent with Accepted Special Servicing
Practices) not later than the fourth (4th) Business Day immediately preceding
each Distribution Date, a copy of a Specially Serviced Mortgage Loan and REO
Property status report in a form agreed to by the Master Servicer and the
Trustee (the "Specially Serviced Mortgage Loan Status Report"), with respect
to each Specially Serviced Mortgage Loan and REO Mortgage Loan, respectively.
In addition, upon the occurrence of a Collateral Value Adjustment Event or
Liquidation Event from which a Collateral Value Adjustment, Realized Loss or
Collateral Value Adjustment Reduction Amount has resulted, the Special
Servicer shall prepare, or cause to be prepared, and deliver to the Master
Servicer, the Trustee and each Rating Agency, via facsimile (with a hard copy
sent on the same day by first-class mail or in electronic format reasonably
acceptable to the Master Servicer and consistent with Accepted Special
Servicing Practices) not later than the fourth (4th) Business Day immediately
preceding each Distribution Date, an Officers' Certificate setting forth (i)
the event which gave rise to such Collateral Value Adjustment or Realized
Loss and (ii) the amount of such Collateral Value Adjustment, Realized Loss
or Collateral Value Adjustment Reduction Amount.
(b) On or prior to the fifteenth day of each calendar month the
Special Servicer shall validate and deliver to the Master Servicer a copy of
the bank statement for the prior calendar month related to each REO Account
and an REO Account reconciliation report in the form mutually agreed to by
the Master Servicer and Trustee showing for the period from the day after the
second preceding Remittance Date through the immediately preceding Remittance
Date (or since the related Servicing Transfer Date, in the case of the first
of such reports), the aggregate of deposits into and withdrawals from such
funds or accounts in accordance with this Agreement.
(c) Upon prior request of a Rating Agency or written request of
the Master Servicer, the Trustee, or the Depositor, the Special Servicer
shall prepare such other reasonable reports as may be requested in writing
thereby. The Special Servicer shall be entitled to charge a reasonable fee
reflecting the internal and external costs to the Special Servicer of
preparing such other reports (except that no charges will be assessed for
costs of such reports requested by a Rating Agency) and such fee
shall be paid by the Master Servicer to the Special Servicer as a Servicing
Advance pursuant to this Agreement.
SECTION 6.09 Environmental Considerations.
(a) The Special Servicer shall not obtain title for the Trust Fund
to a Mortgaged Property as a result or in lieu of foreclosure or otherwise,
nor shall otherwise acquire possession of, or take other action with respect
to, any Mortgaged Property, if, as a result of any such action, the Trust
Fund, the Trustee, the Master Servicer, the Special Servicer or 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 the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended from time to
time, or any applicable comparable federal, state or local law, or a
"discharger" or "responsible party" thereunder, unless the Special Servicer
has also previously determined, in accordance with Accepted Special Servicing
Practices, based on a "Phase I", and, if applicable, a "Phase II"
environmental site assessment report prepared by a Person who regularly
conducts environmental audits as determined by such Special Servicer in a
manner consistent with Accepted Special Servicing Practices, that:
(i) such Mortgaged Property is in compliance with applicable
Environmental Laws or, if not, that taking such actions
as are necessary to bring the Mortgaged Property in
compliance therewith is reasonably likely to produce a
greater recovery on a net present value basis, after
taking into account any risks associated therewith, than
not taking such actions; and
(ii) there are no circumstances present on such Mortgaged
Property relating to the use, management, storage or
disposal of any Hazardous Materials for which
investigation, testing, monitoring, containment, clean-up
or remediation could be required under any Environmental
Law, or that, if any such Hazardous Materials are present
for which such action could be required, taking such
actions with respect to the affected Mortgaged Property
is reasonably likely to produce a greater recovery on a
net present value basis, after taking into account any
risks associated therewith, than not taking such actions;
and
if the Special Servicer has so determined based on satisfaction of the
criteria in clauses (i) and (ii) above that it would be in the best economic
interest of the Certificateholders to take any such actions, the Special
Servicer has notified the Trustee and the Master Servicer in writing of such
proposed action. The Special Servicer shall provide a copy of the report
described in the preceding sentence to the Trustee, the Master Servicer and
the Directing Certificateholder. If within ten (10) Business Days of
receiving such recommendation, the Directing Certificateholder does not
disapprove such recommendation in writing the Special Servicer shall
implement the recommended action. If the Directing Certificateholder
disapproves such recommendation, the Special Servicer shall revise such
recommendation and deliver to the Trustee, the Directing Certificateholder
and the Master Servicer a new recommendation as soon as practicable. The
Special Servicer shall revise such recommendation as described above in this
Section 6.09(a) until the Directing Certificateholder shall fail to
disapprove such revised recommendation in writing within ten (10) Business
Days of receiving such revised recommendation. Notwithstanding the
foregoing, the Special Servicer (i) may, following the occurrence of an
extraordinary event with respect to the related Mortgaged Property, take any
action it has recommended before the expiration of a ten (10) Business Day
period if the Special Servicer has reasonably determined that failure to take
such action would materially and adversely affect the interest of the
Certificateholders and it has made a reasonable effort to contact the
Directing Certificateholder and (ii) in any case, shall determine whether
such disapproval is not in the best interest of all the Certificateholders
pursuant to Accepted Special Servicing Practices. Upon making such
determination, the Special Servicer shall either implement its
recommendations or notify the Trustee of such rejection and deliver to the
Trustee a proposed notice to Certificateholders, which shall include the
Special Servicer's recommendation, and the Trustee shall send such notice to
all Certificateholders (or, to the extent known to the Trustee, Certificate
Owners). If the majority of such Certificateholders (including Certificate
Owners), as determined by Certificate Balance, fail within five (5) days of
the Trustee's sending such notice to reject such recommendation, the Special
Servicer shall implement the same. If such recommendation is rejected by the
Certificateholders, the Special Servicer shall not take any action so
recommended and shall prepare a new recommendation. The cost of preparation
of any environmental assessment and the cost of any compliance, containment,
clean-up or remediation shall be deemed to be a Property Protection Expense
paid by the Master Servicer as a Servicing Advance.
(b) If the Special Servicer determines, pursuant to subsection (a)
above, that taking such actions as are necessary to bring any such Mortgaged
Property into compliance with applicable Environmental Laws, or taking such
actions with respect to the containment, clean-up, removal or remediation
of Hazardous Materials affecting any such Mortgaged Property, is not
reasonably likely to produce a greater recovery on a net present value basis,
after taking into account any risks associated therewith, than not
taking such actions, the Special Servicer shall notify the Directing
Certificateholders, Trustee and the Master Servicer of such determination
and recommend such action as it deems in good faith to be in the best
economic interests of the Certificateholders. If within ten (10) Business
Days of receiving such recommendation, the Directing Certificateholder
does not disapprove such recommendation in writing the Special Servicer
shall implement the recommended action. If the Directing Certificateholder
disapproves such recommendation, the Special Servicer will revise such
recommendation and deliver to the Trustee, the Directing Certificateholder
and the Master Servicer a new recommendation as soon as practicable. The
Special Servicer shall revise such recommendation as described above in
this Section 6.09(b) until the Directing Certificateholder shall fail
to disapprove such revised recommendation in writing within ten (10)
Business Days of receiving such revised recommendation. Notwithstanding
the foregoing, the Special Servicer (i) may, following the occurrence of an
extraordinary event with respect to the related Mortgaged Property, take
any action it has recommended before the expiration of a ten (10) Business
Day period if the Special Servicer has reasonably determined that failure
to take such action would materially and adversely affect the interest of
the Certificateholders and it has made a reasonable effort to contact the
Directing Certificateholder and (ii) in any case, shall determine whether such
disapproval is not in the best interest of all the Certificateholders pursuant
to Accepted Special Servicing Practices. Upon making such determination, the
Special Servicer shall either implement its recommendations or notify the
Trustee of such rejection and deliver to the Trustee a proposed notice to
Certificateholders, which shall include the Special Servicer's recommendation,
and the Trustee shall send such notice to all Certificateholders (or, to the
extent known to the Trustee, Certificate Owners). If the majority of such
Certificateholders (including Certificate Owners), as determined by
Certificate Balance, fail within five (5) days of the Trustee's sending such
notice to reject such recommendation, the Special Servicer shall implement the
same. If such recommendation is rejected by the Certificateholders, the
Special Servicer shall not take any action so recommended.
(c) Notwithstanding the foregoing, the Special Servicer shall not
take any action pursuant to this Section 6.09 except in connection with the
implementation of an Asset Strategy Report pursuant to Section 6.03(c).
SECTION 6.10 Restoration of Specially Serviced Mortgage Loans.
(a) Upon determining with respect to a Specially Serviced Mortgage
Loan that (i) three consecutive Monthly Payments on a Specially Serviced
Mortgage Loan have been made in accordance with the terms of the related
Mortgage Note (taking into account any grace periods contained therein), (ii)
such Mortgage Loan is current as to payments of principal and interest and
(iii) no Servicing Transfer Event is continuing, the Special Servicer shall
immediately give written notice thereof to the Master Servicer and the
Trustee.
(b) Unless the Master Servicer and the Special Servicer with
respect to a Mortgage Loan are the same Person, not later than two (2)
Business Days after notice has been given pursuant to subsection (a) above,
the Special Servicer shall send a letter by first class mail, with a copy to
the Master Servicer, notifying the related Mortgagor that such Mortgage Loan
has ceased being a Specially Serviced Mortgage Loan and instructing such
Mortgagor to direct all future notices and communications to the Master
Servicer.
(c) In the event that a Specially Serviced Mortgage Loan ceases to
be such pursuant to this Section 6.10, not later than five (5) Business Days
after notice has been given in (a) above, the Special Servicer shall use its
best efforts to provide the Master Servicer with copies of all information,
documents and records (including records stored electronically on computer
tapes, magnetic disks and the like) in its possession relating to such
Mortgage Loan. Upon receipt of such notice and all information, documents
and records by the Master Servicer pursuant to this Section 6.10 hereof, such
Mortgage Loan shall cease to be a Specially Serviced Mortgage Loan, the
Special Servicer's obligation to service such Mortgage Loan shall terminate,
and all duties and obligations of the Master Servicer with respect to such
Mortgage Loan to the extent set forth herein previously undertaken by the
Special Servicer shall be resumed by the Master Servicer.
SECTION 6.11 Removal of Special Servicer.
The Special Servicer may be removed without cause at any time by
the Holders of a majority of the Voting Rights in the fewest number of
classes of Certificates representing the most subordinate interests in the
Trust Fund that equal at least a 5% interest therein (the "Controlling
Certificateholder"). Such determination shall be evidenced by written notice
to the Trustee and each Servicer from the Controlling Certificateholders.
The Special Servicer shall not be removed until a successor shall have been
appointed and shall be in the position to assume such obligations hereunder.
The Special Servicer shall cooperate in good faith with the successor
Special Servicer to minimize the number and severity of disruptions to the
servicing of the Specially Serviced Mortgage Loans as a result of such
removal. No successor Special Servicer shall be appointed until the Trustee
receives written confirmation from each of the Rating Agencies that such
appointment will not result in a withdrawal, downgrade or qualification
of the then current rating on the Certificates.
SECTION 6.12 Special Servicer Compensation.
Each Special Servicer shall be entitled to reasonable compensation
for services rendered by it hereunder on each Remittance Date from amounts in
the Trust Fund in an amount (the "Special Servicing Fee") equal to one-
twelfth of the product of (a) 0.45% per annum calculated on the basis of
twelve 30-day months and a 360-day year and (b) the Stated Principal Balance
of each Specially Serviced Mortgage Loan or REO Mortgage Loan as of the Due
Date in the preceding calendar month. The Special Servicer will also be
entitled to receive with respect to any Specially Serviced Mortgage Loan or
REO Property that is sold or transferred or otherwise liquidated, in addition
to the Special Servicing Fee, a disposition fee (the "Disposition Fee") equal
to 1.00% of the net proceeds of the sale or liquidation of any Specially
Serviced Mortgage Loan or REO Property. The Special Servicer will also be
entitled to retain as additional servicing compensation (i) all investment
income earned on amounts on deposit in any REO Account, and (ii) all amounts
collected with respect to the Specially Serviced Mortgage Loans in the nature
of late payment charges, late fees, assumption fees, modification fees,
extension fees or similar items (other than default interest).
SECTION 6.13 Collateral Value Adjustments.
(a) Within 30 days of a Required Appraisal Date for any Mortgage
Loan, the Special Servicer shall obtain an appraisal for the related
Mortgaged Property from an independent MAI appraiser at the expense of
the Trust Fund (except if an appraisal has been conducted within the 12
month period preceding such event).
(b) Until such time as the related Collateral Value Adjustment is
reduced to zero, within 30 days of each anniversary of a Required
Appraisal date for any Mortgage Loan, the Special Servicer shall order
an update of the prior appraisal for the related Mortgaged Property (the
cost of which will be a Servicing Advance of the Special servicer).
(c) The Special Servicer shall determine and report to the Trustee
and the Master Servicer any appraisal value obtained pursuant to clause
(a) or (b) above and will adjust the amount of the Collateral Value
Adjustment in accordance therewith.
ARTICLE VII
PAYMENTS TO CERTIFICATEHOLDERS
SECTION 7.01 Certificate Account; Remittances to the Trustee.
(a) The Trustee shall establish and maintain one or more accounts
(collectively, the "Certificate Account"), held in trust for the benefit of
the Certificateholders. The Certificate Account shall be an Eligible
Account. The Trustee shall deposit in the Certificate Account, when received
or as otherwise required hereunder, all amounts received from the Master
Servicer with respect to all Mortgage Loans pursuant to this Agreement. If
the Trustee 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.
(b) Notwithstanding any other provisions contained herein, the
Trustee shall be entitled to withdraw from the Certificate Account, prior to
any distribution to the Certificateholders on any Distributable Date, any
amount that is due and payable, or any amount, cost or expense that is
reimbursable to the Trustee, the Fiscal Agent or any of their respective
directors, officers, employees, agent or any person that "controls" the
Trustee or the Fiscal Agent, including, without limitation, the Trustee Fee
payable to the Trustee pursuant to Section 11.08(a).
SECTION 7.02 Distributions.
(a) On each Distribution Date, the Trustee shall apply amounts on
deposit in the Certificate Account, to the extent of the Available
Distribution Amount, in the following order of priority:
(i) On each Distribution Date, 100% of any Net Prepayment Premium
to the Class X Certificates;
(ii) The Adjusted Available Distribution Amount for each
Distribution Date will be applied in the following order of
priority:
(a) to distributions of the Interest Distribution Amounts for
such Distribution Date on the Class A1, Class A2, and Class X
Certificates, pro rata, based on their respective Interest
Accrual Amounts (in the case of the Class X Certificates,
after giving effect to reduction thereto resulting from a
Collateral Value Adjustment);
(b) to distributions of the Principal Distribution Amount for
such Distribution Date to Class A1 Certificates until the
Class Balance thereof is reduced to zero;
(c) to distributions of the Principal Distribution Amount (or
the portion thereof remaining after the distribution thereof
to the Class A1 Certificates in reduction of the Class Balance
thereof to zero) for such Distribution Date on the Class A2
Certificates, until the Class Balance thereof is reduced to
zero;
(d) to distributions of the Interest Distribution Amount for
such Distribution Date on the Class B Certificates;
(e) to distribution of the Principal Distribution Amount (or
the portion thereof remaining after the distribution thereof
to the Class A2 Certificates in reduction of the Class Balance
thereof to zero) for such Distribution Date to the Class B
Certificates, until the Class Balance thereof is reduced to
zero;
(f) to distributions of the Interest Distribution Amount for
such Distribution Date on the Class C Certificates;
(g) to distributions of the Principal Distribution Amount (or
the portion thereof remaining after the distribution thereof
to the Class B Certificates in reduction of the Class Balance
thereof to zero) for such Distribution Date to the Class C
Certificates until the Class Balance thereof is reduced to
zero;
(h) to the distributions of the Interest Distribution Amount
for such Distribution Date on the Class D Certificates;
(i) to distributions of the Principal Distribution Amount (or
the portion thereof remaining after the distribution thereof
to the Class C Certificates in reduction of the Class Balance
thereof to zero) for such Distribution Date on the Class D
Certificates, until the Class Balance thereof is reduced to
zero;
(j) to distributions of the Interest Distribution Amount for
such Distribution Date on the Class E Certificates;
(k) to distributions of the Principal Distribution Amount (or
the portion thereof remaining after the distribution thereof
to the Class D Certificates in reduction of the Class Balance
thereof to zero) for such Distribution Date on the Class E
Certificates, until the Class Balance thereof is reduced to
zero;
(l) to distributions of the Interest Distribution Amount for
such Distribution Date on the Class F Certificates;
(m) to distributions of the Principal Distribution Amount (or
the portion thereof remaining after the distribution thereof
to the Class E Certificates in reduction of the Class Balance
thereof to zero) for such Distribution Date on the Class F
Certificates, until the Class Balance thereof is reduced to
zero;
(n) to distributions of the Interest Distribution Amount for
such Distribution Date on the Class G Certificates;
(o) to distributions of the Principal Distribution Amount (or
the portion thereof remaining after the distribution thereof
to the Class F Certificates in reduction of the Class Balance
thereof to zero) for such Distribution Date on the Class G
Certificates, until the Class Balance thereof is reduced to
zero; and
(p) to distribution of the Principal Distribution Amount (or
the portion thereof remaining after the distribution thereof
to the Class G Certificates in reduction of the Class Balance
thereof to zero) for such Distribution Date on the Class H
Certificates, until the Class Balance thereof is reduced to
zero; and
(q) to distribution of the Principal Distribution Amount (or
the portion thereof remaining after the distribution thereof
to the Class H Certificates in reduction of the Class Balance
thereof to zero) for such Distribution Date on the Class NR
Certificates, until the Class Balance thereof is reduced to
zero.
(r) after reduction of the Class Balances of all the
Certificates to zero any remaining portion of the Available
Distribution Amount will be
distributed to the holders of the Class X Certificates up to
an aggregate amount equal to the sum of all prior Collateral
Value Adjustment Reduction Amounts allocated thereto.
Notwithstanding the foregoing, to the extent only the Class A1
and Class A2 Certificates are outstanding on any Distribution
Date, the Adjusted Available Distribution Amount remaining
after application pursuant to clause (a) above shall be
applied to distribution of the Principal Distribution Amount
for such Distribution Date to the Class A1 and Class A2
Certificates pro rata based on their respective Class
Balances.
(iii) sequentially to the Classes of Certificates in the order
set forth above for distribution of principal any amounts
recovered representing Realized Losses previously
allocated to such Class in reduction of its Class
Balance;
(iv) to distributions to the Class R-I Certificateholders, in an
amount equal to the balance, if any.
(b) All distributions made with respect to each Class on each
Distribution Date shall be computed by the Trustee based upon information
contained in the Remittance Report (upon which the Trustee shall be entitled
to conclusively rely) and allocated pro rata among the outstanding
Certificates in such Class based on their respective Percentage Interests.
All such distributions with respect to each Class (other than the final
distribution with respect thereto) will be made on each Distribution Date 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 (or, in the
case of the first Distribution Date, no later than the Delivery Date), or
otherwise by check mailed to the address of such Certificateholder appearing
in the Certificate Register. The final distribution on each Certificate will
be made in like manner, but only upon presentment and surrender of such
Certificate at the office of the Certificate Registrar or such other location
specified in the notice to Certificateholders of such final distribution.
(c) Except as otherwise provided in Section 12.01, whenever the
Trustee expects that the final distribution with respect to any Class of
Certificates will be made on the next Distribution Date, the Trustee shall,
promptly mail to each Holder on such date of such Class of Certificates and
each Rating Agency 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 office of the Certificate Registrar
therein specified, and
(ii) no interest shall accrue on such Certificates from and after
such Distribution Date.
Any funds not distributed to any Holder or Holders of Certificates of such
Class on such Distribution Date because of the failure of such Holder or
Holders to tender their Certificates shall, on such date, be set aside and
held in trust and credited to the account of the appropriate non-tendering
Holder or Holders. If any Certificates as to which notice has been given
pursuant to this Section 7.02(c) 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 non-tendering Certificateholders concerning
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 7.02(c).
SECTION 7.03 Statements to Certificateholders.
(a) On each Distribution Date, based on and to the extent of
information provided by the Master Servicer, the Trustee shall furnish to
each Certificateholder and each Certificate Owner which shall have certified
to the Trustee that it is a Certificate Owner pursuant to Section 11.04, to
the Depositor, the Master Servicer, and to each Rating Agency the following
reports setting forth certain information with respect to the Mortgage Loans
and the Certificates.
(1) A statement setting forth the following: (i) the amount of
distributions, if any, made on such Distribution Date to the holders of
each Class of Certificates applied to reduce the respective Class
Balances thereof, (ii) with respect to each Class of Certificates, the
amount of distributions allocable to interest accrued at the respective
Pass-Through Rates and the amount, if any, by which such distribution
was reduced by Prepayment Interest Shortfalls, Realized Losses of
interest, other interest shortfalls or accruals on outstanding
Collateral Value Adjustments, (iii) the number of outstanding
Mortgage Loans and the aggregate Stated Principal Balance of the
Mortgage Loans at the close of business on the last day of the
related Remittance Period; (iv) the number and aggregate Stated
Principal Balance of Mortgage Loans (a) delinquent one month, (b)
delinquent two months, (c) delinquent three or more months, or (d) as to
which foreclosure proceedings have commenced; (v) with respect to any
REO Property included in the Trust Fund, details pertaining to each
individual REO Property including the loan number of the related REO
Mortgage Loan, the unpaid principal balance of the related REO Mortgage
Loan (and all REO Mortgage Loans in the aggregate), the date that such
Mortgaged Property became an REO Property, the book value of such REO
Property (which will equal the unpaid principal balance of such Mortgage
Loan at the time of foreclosure) and any net income received on such REO
Property during the related Remittance Period; (vi) with respect to any
REO Property sold or otherwise disposed of during the related Remittance
Period, the amount of sale proceeds and other amounts, if any, received
in respect of such REO Property during the related Remittance Period;
(vii) as to any Mortgage Loan repurchased by the Depositor or otherwise
liquidated during the related Remittance Period, the loan number thereof
and the amount of the proceeds of such repurchase or other liquidation;
(viii) the aggregate Class Balance of each Class of Certificates before
and after giving effect to the distributions made on such Distribution
Date, separately identifying any reduction in the class Balance of each
such Class due to Realized Losses; (ix) the aggregate amount of
unscheduled principal collections made during the related Remittance
Period and the cumulative amount of such collections including such
Remittance Period, (x) the Pass-Through Rate applicable to each Class of
Certificates for such Distribution Date, (xi) the aggregate amount of
servicing compensation retained by or paid to each Servicer during the
related Remittance Period; (xii) the amount of Realized Losses,
shortfalls, and/or expenses, if any, incurred with respect to the
Mortgage Loans during the related Remittance Period; (xiii) the
aggregate amount of P&I Advances and other advances outstanding that
have been made by each of the Servicers, the Trustee or the Fiscal
Agent, (xiv) the amount of any Collateral Value Adjustments effected
during the related Remittance Period, and the total of Collateral Value
Adjustments as of such Distribution Date on a loan-by-loan basis, and
(xv) the amount of Prepayment Interest Excess and an accounting as to
the manner in which the same was allocated pursuant to this Agreement.
In the case of information pursuant to subclauses (i), (ii) and (xi)
above, the amounts shall be expressed in the aggregate for all
Certificates and in amounts allocable per $1,000 of Certificate
denomination.
(2) A report containing information regarding the Mortgage Loans
as of the end of the related Remittance Period, which report shall
contain substantially the categories of information regarding the
Mortgage Loans set forth in the Prospectus Supplement prepared in
connection with the initial offering of the Certificates in the tables
under the caption "Description of the Mortgage Pool -- Certain
Characteristics of the Mortgage Loans" (calculated where applicable on
the basis of the most recent relevant information provided by the
Mortgagors to the Servicers and by the Servicers to the Trustee) and
such information shall be presented in a tabular format substantially
similar to the format utilized in the Prospectus Supplement under such
caption.
(3) Other reports containing loan-by-loan information relating to
Mortgage Loans that (i) have not made the most recent monthly payment
then due, (ii) have been classified as Specially Serviced Mortgage Loans
or (iii) that have experienced a Realized Loss.
The Trustee currently makes such reports available to the
designated parties by mail or through an automated facsimile system that can
be accessed by dialing (312) 904-2200 from any touch-tone telephone.
In addition, the Trustee shall make available Mortgage Loan
information as presented in the CSSA100 format (or such other industry
standard that may be in effect from time to time) through electronic
transmission by no later than the Distribution Date in January 1998, to each
Certificateholder, the Depositor, the Servicers, each Rating Agency (and any
other parties reasonably designated by the Depositor or a Certificateholder),
an electronic file that includes the following information on a loan-by-loan
basis: loan number, location, Stated Principal Balance, Mortgage Interest
Rate, paid-through date, maturity date, scheduled interest due, scheduled
principal due, unscheduled principal collections, loan status and other
related information.
Upon request of any Certificateholder (or any Certificate Owner, if
applicable, which shall have provided the Trustee with evidence satisfactory
to the Trustee of its interest in a certificate pursuant to Section 11.04) or
any Rating Agency, the Trustee shall mail, without charge, to the address
specified in such request, a copy of the most current Asset Strategy Report
for any Specially Serviced Mortgage Loan or REO Property. In addition, upon
receipt of a written request of any Certificateholder (or any Certificate
Owner, if applicable, which shall have provided the Trustee with evidence
satisfactory to the Trustee of its interest in a certificate pursuant to
Section 11.04) for a copy of any report required to be prepared by the
Master Servicer herein, the Trustee shall forward such written request to
the Master Servicer. To the extent such report is available to the Master
Servicer, the Master Servicer shall deliver a copy thereof to the Trustee
for delivery to the requesting Certificateholder (or Certificate Owner)
at the address specified in such request. The request, reproduction and
delivery of such report, shall be at the expense of the requesting
Certificateholder (or Certificate Owner).
(b) The Trustee covenants to furnish or cause to be furnished,
promptly upon the written request of any Certificateholder (or a Certificate
Owner which shall have certified to the Trustee that it is a Certificate
Owner of any such Class pursuant to Section 11.04) of a Class E, Class F,
Class G, Class H or Class NR Certificate reasonably current Rule 144A
Information (as defined below) to such Certificateholder or to a prospective
transferee of such a Certificate (or interests in such Certificate)
designated by such Certificateholder, as the case may be, in connection with
the resale of such Certificate or such interests by such Certificateholder
pursuant to Rule 144A. "Rule 144A Information" shall mean the information
specified in Rule 144A(d)(4)(i) and (ii) under the 1933 Act. The Trustee
shall advise the Master Servicer of any request by a Certificateholder and
shall consult with the Master Servicer as to the information to be supplied.
Based upon such consultation and to the extent the Trustee is not in
possession of reasonably current Rule 144A Information on the date of any
such request, the Master Servicer shall, upon request from the Trustee,
promptly provide the Trustee with reasonably current Rule 144A Information to
the extent reasonably available. The Trustee and the Master Servicer may
place its disclaimer on any such Rule 144A Information to the extent it is
not the source of such information.
(c) Neither Servicer shall be responsible for the accuracy or
completeness of any information supplied to it by a Mortgagor or third party
for inclusion in any report or information furnished or provided by the
Master Servicer, the Special Servicer or the Trustee hereunder to the extent
such information has been collected and received in accordance with Accepted
Servicing Practices or Accepted Special Servicing Practices, as applicable.
In addition to the other reports and information made available and
distributed to the Depositor, the Trustee or the Certificateholders pursuant
to other provisions of this Agreement, each Servicer shall, in accordance
with such reasonable rules and procedures as it may adopt (except with
respect to the Trustee, which may include the requirement that an agreement
governing the availability, use and disclosure of such information, and which
may provide indemnification to such Servicer for any liability or damage that
may arise therefrom, be executed to the extent such Servicer deems such
action to be necessary or appropriate), also make available any information
relating to the Mortgage Loans, the Mortgaged Properties or the Mortgagors
for review by the Depositor, the Trustee, the Certificateholders, each Rating
Agency and any other Persons to whom such Servicer believes such disclosure
is appropriate, in each case except to the extent doing so is prohibited by
applicable law or by the Mortgage Loan Documents.
Copies of any and all of the foregoing items shall be available
from the Master Servicer, the Special Servicer or the Trustee, as applicable,
upon request (subject to the exception in the preceding sentence). The
Master Servicer, the Special Servicer and the Trustee shall be permitted to
require payment (other than from a Rating Agency) of a sum sufficient to
cover the reasonable costs and expenses incurred by it in providing copies of
or access to any information requested in accordance with the previous
sentence.
(d) The Trustee shall mail or otherwise provide to any Person
requesting a copy of the reports delivered to Certificateholders pursuant to
the first paragraph of clause (a) above, a copy of such reports. The Trustee
shall be entitled to charge such Person a nominal fee to cover the cost of
such mailing.
(e) The Trustee is hereby authorized to furnish, to
Certificateholders and/or to the public any other information (such other
information, collectively, "Additional Information") with respect to the
Mortgage Loans, any Mortgaged Property or the Trust Fund as may be provided
to it by the Depositor, the Master Servicer or Special Servicer or gathered
by it in any investigation or other manner from time to time, provided that
(A) any such Additional Information shall only be furnished with the consent
or at the request of the Depositor, (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
(including 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 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 and (D) the Trustee shall be
entitled to distribute or make available such 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). 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 require that any consent, direction or request given to it pursuant to this
clause (e) be made in writing.
Furthermore, the Trustee will supply to any Certificateholder so
requesting by telephone the Pass-Through Rates on any Class of Certificates
for the current and the immediately preceding Interest Accrual Periods.
SECTION 7.04 Distribution of Reports to the Trustee and the
Depositor; Advances.
On or prior to each Remittance Date, the Master Servicer shall
furnish a written statement (and an electronic data file reasonably
satisfactory to the Master Servicer and the Trustee) setting forth (i) the
amounts available for deposit into the Certificate Account and (ii) the
amounts of any P&I Advances required to be made by the Master Servicer in
connection with the related Distribution Date. The determination by the
Master Servicer of such amounts shall, in the absence of obvious error, be
presumptively deemed to be correct for all purposes hereunder and the Trustee
shall be protected in relying upon the same without any independent check or
verification. To the extent such statement indicates one or more
delinquencies in connection with which a related P&I Advance was not made by
the Master Servicer, the Trustee shall commence an evaluation of whether a
P&I Advance by the Trustee may be required and whether it would be a
Nonrecoverable Advance; provided, however, that notwithstanding such
examination, the Trustee shall have no responsibility for reviewing or
confirming any decision made with respect to a P&I Advance by a Servicer.
The Master Servicer shall promptly upon request provide to the Trustee such
information as the Master Servicer may have to enable the Trustee to make
such determination.
In the event that the Master Servicer determines as of the Business
Day preceding the Remittance Date that it will be unable to deposit in the
Certificate Account an amount equal to the P&I Advance required to be
made for the immediately succeeding Distribution Date, it shall give
written notice to the Trustee of its inability to advance (such written
notice may be given by telecopy), not later than 3:00 P.M., New York City
time, on such Business Day, specifying the portion of such amount that it
will be unable to deposit. Not later than 4:00 P.M., New York City time, on
such Remittance Date the Trustee or the Fiscal Agent shall, unless by
3:00 P.M., New York City time, on such day the Trustee shall have been
notified in writing (by telecopy) that the Master Servicer shall have
directly or indirectly deposited in the Certificate Account such portion
of the amount of such P&I Advance as to which the Master Servicer shall have
given notice pursuant to the preceding sentence deposit in the Certificate
Account on such Remittance Date an amount equal to such P&I Advance to the
extent it determines it is not a Nonrecoverable Advance (but not Servicing
Advances) for such Distribution Date; provided, however, that if the Trustee
or the Fiscal Agent is prohibited by law or regulation from obligating
itself to make such Advances, then the Trustee or the Fiscal Agent shall not
be obligated to make such Advances.
Notwithstanding anything herein to the contrary, neither the
Trustee nor the Fiscal Agent shall be required to make a Nonrecoverable
Advance, and shall not be required to make a P&I Advance with respect to a
Balloon Payment. The Trustee and the Fiscal Agent shall be entitled to
interest on any P&I Advance made with respect to a Mortgage Loan. Such
interest shall accrue at the Advance Rate from the date on which such Advance
was made to but not including any Business Day on which the Trustee or the
Fiscal Agent is reimbursed for such P&I Advance pursuant to this Agreement.
Notwithstanding any other provisions contained herein to the contrary, the
Fiscal Agent shall be reimbursed for any P&I Advance, together with interest
thereon at the Advance Rate, prior to the Trustee and the Servicers, and the
Trustee shall be reimbursed for any P&I Advances, together with interest
thereon at the Advance rate, prior to the Servicers.
The Trustee shall deposit all funds it receives pursuant to this
Section 7.04 into the Certificate Account.
SECTION 7.05 Allocations of Realized Losses and Collateral Value
Adjustments.
On or prior to the fourth Business Day immediately preceding the
applicable Distribution Date, the Master Servicer shall determine and
communicate to the Trustee the total amount of Realized Losses and Collateral
Value Adjustment, if any, that resulted during the related Remittance Period.
As soon as practicable following the occurrence of a Collateral Value
Adjustment Event with respect to any Mortgage Loan (taking into account the
time period necessary for the Master Servicer to obtain the Independent MAI
appraisal for such purpose), the Master Servicer shall make a Collateral
Value Adjustment determination with respect to such Mortgage Loan. The
amount of each Realized Loss or Collateral Value Adjustment shall be
evidenced by an Officers' Certificate. All Realized Losses and Collateral
Value Adjustments shall be allocated by the Trustee as follows in reduction
of the related Class Balance: first, to the Class NR Certificates until the
Class Balance thereof has been reduced to zero; second, to the Class F
Certificates until the Class Balance thereof has been reduced to zero; third,
to the Class E Certificates until the Class Balance thereof has been reduced
to zero; fourth, to the Class D Certificates until the Class Balance thereof
has been reduced to zero; fifth, to the Class C Certificates until the Class
Balance thereof has been reduced to zero; sixth, to the Class B Certificates
until the Class Balance thereof has been reduced to zero, and the remainder
of such Realized Losses and Collateral Value Adjustments to the Class A1 and
Class A2 Certificates, pro rata, until their respective Class Balances have
been reduced to zero. Amounts allocated to reduce the related Class Balance
shall also reduce such Class' Voting Rights in proportion to the other
Classes of Certificates.
ARTICLE VIII
THE CERTIFICATES
SECTION 8.01 The Certificates.
(a) The Certificates will be substantially in the respective forms
annexed hereto as Exhibits. The Class A1, Class A2, Class B, Class C, Class
D, Class X, Class E, Class F, Class G, Class H and Class NR Certificates will
be issuable only in minimum denominations (based on their respective Original
Class Balances or Notional Amounts) corresponding to initial Certificate
Balances or Notional Amounts as of the Delivery Date of not less than
$100,000, and integral multiples of $1 in excess thereof. Only one Class R-
I, one Class R-II and one Class R-III Certificate may be issued.
(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 under its seal imprinted thereon. Certificates bearing
the manual or facsimile signatures of individuals who were at any time the
proper officers of the Trustee shall bind the Trustee, 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, 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 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.
(c) The Class A1, Class A2, Class B, Class C, Class D and Class X
Certificates shall initially, and the Class E, Class F, Class G, Class H and
Class NR Certificates may, be issued as one or more Certificates registered
in the name of the Depository or its nominee and, except as provided below,
registration of such Certificates may not be transferred by the Trustee
except to another Depository that agrees to hold such Certificates for the
respective Certificate Owners with Ownership Interests therein. The
Certificate Owners shall hold their respective Ownership Interests in and to
each of the referenced herein Certificates (except for such remainders)
through the book-entry facilities of the Depository and, except as provided
below, shall not be entitled to Definitive Certificates in respect of such
Ownership Interests. All transfers by Certificate Owners of their respective
Ownership Interests in the Book-Entry Certificates shall be made in
accordance with the procedures established by the Depository Participant or
brokerage firm representing such Certificate Owner. Each Depository
Participant shall transfer the Ownership Interests only 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.
The Trustee, the Master Servicer and the Depositor may for all
purposes (including the making of payments due on the respective Classes of
Book-Entry Certificates (and, if necessary, the selection of the Directing
Certificateholder)) deal with the Depository as the authorized representative
of the Certificate Owners with respect to the respective Classes of Book-
Entry Certificates for the purposes of exercising the rights of
Certificateholders hereunder. The rights of Certificate Owners with respect
to the respective Classes of Book-Entry Certificates shall be limited to
those established by law and agreements between such Certificate Owners and
the Depository Participants and brokerage firms representing such Certificate
Owners. Multiple requests and directions from, and votes of, the Depository
as Holder of any Class of 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.
If (i)(A) the Depositor advises the Trustee in writing that the
Depository is no longer willing or able to properly discharge its
responsibilities as Depository and (B) the Depositor is unable to locate a
qualified successor or (ii) the Depositor at its option advises the Trustee
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 representing the same. In
addition, upon request, the Trustee will issue Definitive Certificates in
exchange for Ownership Interests in like Certificate Balances of the Book-
Entry Certificates for the Class E, Class F, Class G, Class H or Class NR
Certificates in connection with a transfer permitted pursuant to Section
8.02(b)(iv). Upon surrender to the Trustee of the Book-Entry Certificates by
the Depository, accompanied by registration instructions from the Depository
for registration of transfer, the Trustee shall issue the Definitive
Certificates. Neither the Depositor, the Master Servicer, the Special
Servicer nor the Trustee shall be liable for any actions taken by the
Depository or its nominee, including, without limitation, any delay in
delivery of such instructions and may conclusively rely on, and shall be
protected in relying on, such instructions. Upon the issuance of Definitive
Certificates all references herein to obligations imposed upon or to be
performed by the Depositor in connection with the issuance of the Definitive
Certificates pursuant to this Section 8.01 shall be deemed to be imposed upon
and performed by the Trustee, and the Trustee shall recognize the Holders of
the Definitive Certificates as Certificateholders hereunder.
SECTION 8.02 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) as Certificate Registrar for the purpose of registering Certificates and
transfers and exchanges of Certificates as herein provided. The Certificate
Registrar may appoint, by a written instrument delivered to the Trustee, 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.
Either 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) No transfer of any Class E, Class F, Class G, Class H, Class
NR, Class R-I, Class R-II and Class R-III Certificate shall be made unless
that transfer is made pursuant to an effective registration statement under
the Securities Act of 1933, as amended (the "1933 Act"), and effective
registration or qualification under applicable state securities laws, or is
made in a transaction which does not require such registration or
qualification. If such a transfer is to be made without registration or
qualification and is to be made in connection with the issuance or transfer
of a Definitive Certificate, then the Certificate Registrar shall require, in
order to assure compliance with such laws, receipt of: (i) if such transfer
is purportedly being made in reliance upon Rule 144A under the 1933 Act, a
certificate from the prospective transferee substantially in the form
attached as Exhibit D-1 hereto, (ii) if such transfer is purportedly being
made in reliance upon Regulation S under the 1933 Act, a certificate from the
prospective transferee substantially in the form attached as Exhibit D-2
hereto, (iii) if such transfer is purportedly being made in reliance upon
Rule 144 under the 1933 Act, a certificate from the prospective
transferee substantially in the form attached as Exhibit D-3 hereto, and (iv)
in all other cases, (A) except where the Depositor or the Mortgage Loan
Seller, or an Affiliate thereof, is the transferor or transferee, an Opinion
of Counsel satisfactory to the Certificate Registrar to the effect that such
transfer may be made without such registration or qualification (which
Opinion of Counsel shall not be an expense of the Trust Fund or of the
Depositor, the Master Servicer, the Special Servicer, the Trustee or the
Certificate Registrar in their respective capacities as such), (B) a
certificate from the Certificateholder desiring to effect such transfer
substantially in the form attached as Exhibit B hereto and (C) a certificate
from such Certificateholder's prospective transferee substantially in the
form attached as Exhibit D-4 hereto. None of the Depositor, the Trustee or
the Certificate Registrar is obligated to register or qualify the Class E,
Class F, Class G, Class H, Class NR, Class R-I, Class R-II and Class R-III
Certificates under the 1933 Act or any other securities law or to take any
action not otherwise required under this Agreement to permit the transfer of
any Class E, Class F, Class G, Class H, Class NR, Class R-I, Class R-II and
Class R-III Certificate without registration or qualification. Any Class E,
Class F, Class G, Class H, Class NR, Class R-I, Class R-II or Class R-III
Certificateholder desiring to effect such a transfer shall, and does hereby
agree to, indemnify the Trustee, the Certificate Registrar and the Depositor
against any liability that may result if the transfer is not so exempt or is
not made in accordance with such federal and state laws.
(c) None of the Certificates except for the Class A1, Class A2 or
Class X Certificates, or any interest therein shall be transferred 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 the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), or the Code (each, a "Plan") or (B) any Person
who is directly or indirectly purchasing any such Class 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 Certificate Registrar with a
certification of facts and an Opinion of Counsel which establish to the
satisfaction of the Certificate Registrar that such transfer will not result
in a violation of Section 406 of ERISA or Section 4975 of the Code or cause
either the Master Servicer or the Trustee to be deemed a fiduciary of such
Plan or result in the imposition of an excise tax under Section 4975 of the
Code. In the absence of its having received the certification and Opinion of
Counsel contemplated by the preceding sentence, the Certificate Registrar
shall require the prospective transferee of any Class E, Class F, Class G,
Class H, Class NR, Class R-I, Class R-II or Class R-III Certificate to
certify, and each prospective transferee of any Class B, Class C or Class D
Certificate shall be deemed to have represented by its acquisition of such
Certificate, that it is neither (A) a Plan nor (B) a Person who is directly
or indirectly purchasing any such Class Certificates on behalf of, as named
fiduciary of, as trustee of, or with assets of a Plan.
(d) No transfer of any Residual Certificate shall be made to a
Non-United States Person. Notwithstanding anything to the contrary contained
herein, prior to registration of any transfer, sale or other disposition of a
Residual Certificate, the Certificate Registrar shall have received (i) an
affidavit from the proposed transferee substantially in the form attached as
Exhibit E-1 hereto, to the effect that, among other things, (A) such
transferee is not a Disqualified Organization or an agent (including a
broker, nominee or middleman) of a Disqualified Organization, (B) such
transferee is not a Non-United States Person, (C) such transferee has no
present knowledge or expectation that it will become insolvent or subject to
a bankruptcy proceeding for so long as the Residual Certificate remains
outstanding, and (D) no purpose of such proposed transfer, sale or other
disposition of the Residual Certificate is or will be to impede the
assessment or collection of any tax, and (ii) a certificate from the
transferor substantially in the form attached as Exhibit E-2 hereto, to the
effect that, among other things, no purpose of such proposed transfer, sale
or other disposition of the Residual Certificate is or will be to impede the
assessment or collection of any tax. Notwithstanding the registration in the
Certificate Register of any transfer, sale or other disposition of a Residual
Certificate to a Disqualified Organization or an agent (including a broker,
nominee or middleman) of a Disqualified Organization or to a Non-United
States Person, 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, including, but not limited to,
the receipt of distributions in respect of such Residual Certificate. If any
purported transfer of a Residual Certificate shall be in violation of the
provisions of this Section 8.02(d), then the prior Holder of the Residual
Certificate purportedly transferred shall, upon discovery that the transfer
of such Residual Certificate was not in fact permitted by this Section
8.02(d), be restored to all rights as Holder thereof retroactive to the date
of the purported transfer. The Trustee shall be under no liability to any
Person for any registration of transfer of a Residual Certificate that is not
permitted by this Section 8.02(d) or for making payments due on such Residual
Certificate to the purported Holder thereof or taking any other action with
respect to such purported Holder under the provisions of this Agreement. The
prior Holder shall be entitled to recover from any purported Holder of a
Residual Certificate that was in fact not a permitted transferee under this
Section 8.02(d) at the time it became a Holder all payments
made on such Residual Certificate. The Holder of Residual Certificates, by
its acceptance thereof, shall be deemed for all purposes to have consented to
the provisions of this Section 8.02 and to any amendment of this Agreement
deemed necessary by counsel of the Depositor to ensure that the transfer of a
Residual Certificate to a Disqualified Organization or any other Person will
not cause the Trust Fund to cease to qualify as a REMIC or cause the
imposition of a tax upon the Trust Fund.
(e) Subject to the preceding subsections, upon surrender for
registration of transfer of any Certificate at the office of the Certificate
Registrar, 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 office of the Certificate Registrar. 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 Certificate Registrar) be duly endorsed
by, or be accompanied by a written instrument of transfer in the form
satisfactory to the Certificate Registrar duly executed by, the Holder
thereof or his attorney duly authorized in writing.
(h) No service charge shall be imposed for any transfer or
exchange of Certificates, but the 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 cancelled by the Certificate Registrar and a certificate of
such cancellation shall be delivered to the Trustee by the Certificate
Registrar. The Certificate Registrar shall hold such cancelled Certificates
in accordance with its standard procedures.
SECTION 8.03 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 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 Registrar) connected
therewith. Any replacement Certificate issued pursuant to this Section shall
constitute complete and indefeasible evidence of ownership in the Trust Fund,
as if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time.
SECTION 8.04 Persons Deemed Owners.
The Depositor, the Master Servicer, the Special Servicer, the Trustee,
the Certificate Registrar and any agent of any of them may treat the person
in whose name any Certificate is registered as the owner of such Certificate
for the purpose of receiving distributions pursuant to Section 7.02 and for
all other purposes whatsoever, and neither the Depositor, the Master
Servicer, the Special Servicer, the Trustee, the Certificate Registrar nor
any agent of any of them shall be affected by notice to the contrary.
ARTICLE IX
THE DEPOSITOR
SECTION 9.01 Liability of the Depositor.
The Depositor shall be liable in accordance herewith only to the extent
of the obligations specifically imposed upon and undertaken by the Depositor
herein.
SECTION 9.02 Merger, Consolidation or Conversion of the Depositor.
Subject to the following paragraph, the Depositor will keep in full
effect its existence, rights and franchises as a corporation under the laws
of the jurisdiction of its incorporation, and will obtain and preserve its
qualification to do business as a foreign corporation in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, the Certificates or any of the Mortgage
Loans and to perform its respective duties under this Agreement.
The Depositor may be merged or consolidated with or into any Person, or
transfer all or substantially all of its assets to any Person, in which case
any Person resulting from any merger or consolidation to which the Depositor,
shall be a party, or any Person succeeding to the business of the Depositor,
shall be the successor of the Depositor 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.
SECTION 9.03 Limitation on Liability of the Depositor and Others.
Neither the Depositor nor any of its directors, officers, employees or
agents 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 or any such Person against any breach of warranties or
representations made herein, or against any liability which would otherwise
be imposed by reason of misfeasance, bad faith or negligence in the
performance of duties. The Depositor and any director, officer, employee or
agent thereof may rely in good faith on any document of any kind which, prima
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facie, is properly executed and submitted by any Person respecting any
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matters arising hereunder. The Depositor shall not be under any obligation
to appear in, prosecute or defend any legal action unless such action is
related to its respective duties under this Agreement and in its opinion does
not involve it in any expense or liability.
ARTICLE X
DEFAULT
SECTION 10.01 Events of Default.
"Event of Default", wherever used herein, means with respect to any
Servicer any one of the following events:
(i) with respect to the Master Servicer, failure to remit when
due to the Trustee for deposit into the Certificate Account any amount
(other than a P&I Advance) required to be remitted under the terms of
this Agreement; with respect to the Special Servicer, failure to advance
or remit to the Master Servicer or the Master Servicer, as required
hereunder, any amount required to be advanced or remitted under the
terms of this Agreement within one Business Day of the date required
pursuant to the terms of this Agreement; or
(ii) any failure on the part of such Servicer duly to observe or
perform in any respect any other of the covenants or agreements on the
part of such Servicer contained in this Agreement which materially and
adversely affects the interests of the Certificateholders and 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 such Servicer by the Depositor or the Trustee, or to
such Servicer (with a copy to the Depositor, the Trustee, and the other
Servicer) by the Holders of Certificates entitled to at least 25% of the
Voting Rights of any Class affected thereby; or
(iii) any breach of the representations and warranties contained
in Section 2.03(b) which materially and adversely affects the interests
of the 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 such Servicer by the
Depositor or the Trustee or to such Servicer (with a copy to the
Depositor, the Trustee and the other Servicer) by the Holders of
Certificates entitled to at least 25% of the Voting Rights of any Class
affected thereby; or
(iv) 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 appointing 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 such Servicer and such decree
or order shall have remained in force undischarged or unstayed for
a period of 60 days; or
(v) such Servicer shall consent 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 Servicer or of, or relating to, all or
substantially all of the property of Servicer; or
(vi) such Servicer shall admit in writing its inability to pay
its debts generally as they become due, file a petition to take
advantage of, or commence a voluntary case under, any applicable
insolvency or reorganization statute, make assignment for the benefit of
its creditors, or voluntarily suspend payment of its obligations; or
(vii) any notice from each Rating Agency with respect to such
Servicer that if such Servicer were to remain in such capacity, a
qualification, withdrawal or downgrade of any rating on the Certificates
would result; or
(viii) any failure by the Master Servicer to make a P&I Advance
required pursuant to Sections 4.05 and 7.04 hereof;
then, and in each and every such case, so long as an Event of Default shall
not have been remedied, the Trustee may, and at the written direction of the
Holders of Certificates entitled to, at least 25% of all of the Voting
Rights, the Trustee shall, by notice in writing to such Servicer, with a copy
of such notice to the Depositor, subject to Section 13.12, terminate all of
the rights and obligations of such Servicer as such Servicer under this
Agreement and in and to the Mortgage Loans and the proceeds thereof. From
and after the receipt by such Servicer of such written notice, all authority
and power of the such Servicer under this Agreement, 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 such Servicer, 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. Each Servicer agrees promptly (and in any event no
later than ten Business Days subsequent to such notice) to provide the
Trustee or another successor Servicer designated by the Trustee with all
documents and records requested by it to enable it to assume such Servicer's
functions hereunder, and to cooperate with the Trustee in effecting the
termination of such Servicer's responsibilities and rights hereunder. Any
cost or expenses in connection with any actions to be taken by a
Servicer that is being terminated pursuant to this Section 10.01 shall be
borne by the Servicer that is being terminated and to the extent not paid by
the Servicer that is being terminated, such expense shall be borne by the
Trust Fund and shall not be an expense of any successor Servicer. Subject
to Section 11.01(c)(iv), for purposes of this Section 10.01, the Trustee
shall not be deemed to have knowledge of an Event of Default unless a
Responsible Officer of the Trustee has actual knowledge thereof, or unless
notice of any event which is in fact such an Event of Default is received
by the Trustee and such notice references the Certificates, the Trust
Fund or this Agreement.
SECTION 10.02 Trustee to Act; Appointment of Successor.
On and after the time a Servicer receives a notice of termination
pursuant to Section 10.01, the Trustee shall be the successor in all respects
to such Servicer 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 such
Servicer by the terms and provisions hereof provided, further, that any
failure to perform such duties or responsibilities caused by such Servicer's
failure to provide information or monies required by this Agreement shall not
be considered a default by the Trustee hereunder. The Trustee shall not be
liable for any of the representations and warranties of such Servicer or for
any losses incurred by such Servicer hereunder nor shall the Trustee be
required to purchase any Mortgage Loan hereunder. As compensation therefor,
the Trustee shall be entitled to the servicing fees and all funds relating to
the Mortgage Loans which such Servicer would have been entitled to if such
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 more than 25%
of all of the Voting Rights so request in writing to the Trustee, promptly
appoint, or petition a court of competent jurisdiction for the appointment
of, a loan servicing institution with (a) a net worth at the time of such
appointment of at least $15,000,000 and (b) whose appointment will not result
in a downgrade, withdrawal or qualification of the rating on any Class of
Certificates by any Rating Agency as evidenced in writing, to act as a
successor to such Servicer pursuant to Section 13.12 of this Agreement.
Pending appointment of a successor to such Servicer hereunder, the Trustee
shall act in such capacity as hereinabove provided. The Trustee and any such
successor may agree upon the servicing compensation to be paid, which in no
event may be greater than the compensation payable to the Master Servicer
under this Agreement.
SECTION 10.03 Notification to Certificateholders.
(a) Upon any such termination pursuant to Section 10.01 above, any
appointment of a successor to the Master Servicer pursuant to Section 10.02,
or any appointment of a successor Special Servicer pursuant to Section 13.12,
the Trustee shall give prompt written notice thereof to Certificateholders
and each Rating Agency at their respective addresses appearing in the
Certificate Register.
(b) Not later than the later of 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 not more than five (5) days after a
Responsible Officer becomes aware of the occurrence of such event, the
Trustee shall transmit by mail to the Depositor and all Certificateholders
notice of such occurrence, unless such default shall have been cured or
waived.
SECTION 10.04 Waiver of Events of Default.
The Holders representing at least 66-2/3% of the Voting Rights
exclusive of any Certificates owned by either the Servicer or an affiliate
thereof evidenced by all 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 clause (viii) of Section 10.01 may be
waived only by all of the Certificateholders. 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, except that no
Event of Default under Section 10.01(viii) shall be deemed so waived or cured
unless and until the Trustee and the Fiscal Agent have been reimbursed in
full for all P&I Advances, together with interest thereon at the Advance
Rate, which it may have made hereunder. The Trustee shall be entitled to
reimbursement from the Trust Fund for any expenses incurred by the Trustee or
successor Servicer in connection with assuming the duties of a Servicer
following the occurrence of an Event of Default if following the termination
of such Servicer pursuant to this Agreement, the Certificateholders elect to
waive such Event of Default and reinstate the terminated Servicer. 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 10.04, Certificates
registered in the name of the Depositor or any Affiliate of the Depositor
shall be entitled to Voting Rights with respect to the matters described
above.
SECTION 10.05 Additional Remedies of Trustee Upon Event of
Default.
During the continuance of any Event of Default, so long as such
Event of Default shall not have been remedied, the Trustee, in addition to
the rights specified in Sections 10.01 and 10.02, shall have the right, in
its own name and as trustee of an express trust, to take all actions now or
hereafter existing at law, in equity or by statute to enforce its rights and
remedies and to protect the interests, and enforce the rights and remedies,
of the Certificateholders (including the institution and prosecution of all
judicial, administrative and other proceedings and the filings of proofs of
claim and debt in connection therewith). Except as otherwise expressly
provided in this Agreement, no remedy provided for by this Agreement shall be
exclusive of any other remedy, and each and every remedy shall be cumulative
and in addition to any other remedy, and no delay or omission to exercise any
right or remedy shall impair any such right or remedy or shall be deemed to
be a waiver of any Event of Default.
ARTICLE XI
CONCERNING THE TRUSTEE
SECTION 11.01 Duties of Trustee.
(a) The Trustee, prior to the occurrence of an Event of Default
and after the curing or waiver of all Events of Default which may have
occurred, undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement. If an Event of Default occurs and
is continuing, the Trustee shall exercise such of the rights and powers
vested in it by this Agreement, and use the same degree of care and skill in
their exercise as a prudent man would exercise or use under the circumstances
in the conduct of his own affairs. Any permissive right of the Trustee
contained in this Agreement shall not be construed as a duty.
(b) The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments
furnished to the Trustee which are specifically required to be furnished
pursuant to any provision of this Agreement (other than the Mortgage Loan
Documents, the review of which is governed by the terms of Article II
hereof), shall examine them to determine whether they conform to the
requirements of this Agreement, if applicable. If any such instrument is
found not to conform to the requirements of this Agreement if applicable in a
material manner, the Trustee shall take such action as it deems appropriate
to have the instrument corrected. The Trustee shall not be responsible for
the accuracy or content of any resolution, certificate, statement, opinion,
report, document, order or other instrument furnished by the Depositor, the
Master Servicer or the Special Servicer, and accepted by the Trustee in good
faith, pursuant to this Agreement.
(c) No provision of this Agreement shall be construed to relieve
the Trustee from liability for its own negligent action, its own negligent
failure to act or its own misconduct; provided, however, that:
(i) Prior to the occurrence of an Event of Default, and after the
curing of all such Events of Default which may have occurred, the duties
and obligations of the Trustee shall be determined solely by the express
provisions of this Agreement, the Trustee shall not be liable except for
the performance of such duties and obligations as are specifically set
forth in this Agreement, no implied covenants or obligations shall be
read into this Agreement against the Trustee and, in the absence of bad
faith on the part of the Trustee, the Trustee may conclusively rely, as
to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions furnished
to the Trustee and conforming to the requirements of this Agreement;
(ii) The Trustee shall not be personally liable for an error of
judgment made in good faith by a Responsible Officer or Responsible
Officers of the Trustee, 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 remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Agreement.
(iv) For purposes of this Agreement, the Trustee shall not be
deemed to have notice of any default, Event of Default or any other
fact, event or circumstance the occurrence or existence of which may
impose duties upon the Trustee hereunder unless a Responsible Officer of
the Trustee has actual knowledge thereof; provided, however, that the
Trustee shall be deemed to have knowledge of the failure to deliver any
statement, report, certificate or other document when specifically
required herein.
(v) The Trustee and the Fiscal Agent shall not be under any
obligation to appear in, prosecute or defend any legal action that is
not incidental to their respective duties as Trustee and Fiscal Agent in
accordance with this Agreement, and if either does, then to the extent
provided in this Agreement, all legal expenses and costs of such action
shall be expenses and costs of the Trust Fund, and the Trustee and the
Fiscal Agent shall be entitled to be reimbursed therefor from the
Certificate Account.
(vi) Neither the Trustee nor the Fiscal Agent nor any of their
respective directors, officers, employees, agents or control persons
shall be responsible for any act or omission of any Custodian, paying
agent or Certificate Registrar that is not an Affiliate of the Trustee
and that is selected other than by the Trustee, performed or omitted in
compliance with any custodial or other agreement, or any act or omission
of the Master Servicer, the Special Servicer, the Depositor or any other
Person, including without limitation, in connection with actions taken
pursuant to this Agreement.
(vii) The execution by the Trustee of any forms or plans of
liquidation in connection with REMIC I, REMIC II or REMIC III shall not
constitute a representation by the Trustee as to the adequacy of such
form or plan of liquidation; provided, however, notwithstanding any
provision herein to the contrary, neither the Trustee nor any Servicer
may sell any Mortgage Loans pursuant to any plan of liquidation unless
such plan provides for a "qualified liquidation" within the meaning of
Section 860F(a)(4) of the Code.
(viii) Neither the Trustee nor the Fiscal Agent shall be charged with
knowledge of any act, failure to act or breach of any Person upon the
occurrence of which the Trustee may be required to act, unless a
Responsible Officer of the Trustee or the Fiscal Agent, as applicable,
obtains actual knowledge of such failure.
SECTION 11.02 Monitoring Certificateholders and Directing
Certificateholder.
(a) Each Monitoring Certificateholder is hereby deemed to have
agreed by virtue of its purchase of a Certificate to provide its name and
address to the Trustee and to notify the Trustee of the transfer of any
Certificate of a Monitoring Class the selection of a Directing
Certificateholder or the resignation or removal thereof. The Directing
Certificateholder is hereby deemed to have agreed by virtue of its purchase
of a Certificate to notify the Trustee when such Certificateholder is
appointed Directing Certificateholder and when it is removed or resigns.
Notwithstanding any other provisions contained herein, the Trustee shall be
required to give any notice, direction or information with respect to any
Monitoring Certificateholder or Directing Certificateholder only to the
extent the Trustee received the relevant information, as set forth in this
Section 11.02(a).
(b) Within thirty (30) days of the Delivery Date, the Trustee
shall notify the Monitoring Certificateholders that they may select a
Directing Certificateholder for purposes of Sections 6.03 and 6.11 of this
Agreement. Such notice shall set forth the process established by the
Trustee in order to select a Directing Certificateholder.
(c) A "Monitoring Class" as of any time of determination shall be
the following Class or Classes of Certificates:
(i) if the Class outstanding with the most subordinate interest
in the Trust Fund represents at least 2% by Class Balance of all the
Certificates, such Class only;
(ii) otherwise, each Class, in reverse order of seniority, but
only to the extent necessary to represent, in the aggregate, at least 2%
by Class Balance of all the Certificates.
(d) Once a Directing Certificateholder has been selected pursuant
to clause (b) above, each of the Servicer, the Depositor, the Trustee and
each other Certificateholder (or Certificate Owner, if applicable) shall be
entitled to rely on such selection unless a majority of the Monitoring
Certificateholders, by Certificate Balance, or such Directing
Certificateholder shall have notified the Trustee and each other Monitoring
Certificateholder, in writing, of the resignation of such Directing
Certificateholder or the selection of a new Directing Certificateholder.
Upon the resignation of a Directing Certificateholder, the Trustee shall
request the Monitoring Certificateholders to select a new Directing
Certificateholder.
(e) Within two (2) Business Days (or as soon thereafter as
practicable if Monitoring Certificates are held as Book-Entry Certificates)
of receiving a request from the Special Servicer pursuant to Section 6.03(a)
the Trustee shall deliver to the Special Servicer and the Master Servicer a
list of each Monitoring Certificateholder and the Directing Certificateholder
including names and addresses. In addition to the foregoing, within two (2)
Business Days of receiving notice of the selection of a new Directing
Certificateholder or the existence of a new Monitoring Certificateholder, the
Trustee shall notify the Special Servicer.
(f) If at any time a Book-Entry Certificate belongs to a
Monitoring Class, the Trustee shall notify the related Certificateholders
(through the Depository, unless the Trustee shall have been previously
provided with the name and address of the related Certificate Owner) of such
event and shall request that it be informed of any change in the identity of
the related Certificate Owner from time to time.
(g) Until it receives notice to the contrary each of the Servicers
and the Trustee shall be entitled to rely on the most recent notification
with respect to the identity of the Monitoring Certificateholders and the
Directing Certificateholder.
SECTION 11.03 Powers of Attorney.
The Trustee shall execute and deliver any powers of attorney
prepared and delivered to it by each Servicer pursuant to Sections 4.01(b)
and 6.03(b). Each Servicer hereby agrees to indemnify and hold harmless the
Trustee for all liabilities, costs and expenses incurred by the Trustee in
connection with the negligent or wilful misuse of any such power of attorney
by such Servicer.
SECTION 11.04 Certification by Certificate Owners.
To the extent that under the terms of this Agreement, it is
necessary to determine whether any Person is a Certificate Owner, the Trustee
shall make such determination based on a certificate of such Person which
shall specify, in reasonable detail satisfactory to the Trustee, the Class
and Certificate Balance of the Certificate owned, the value of such Person's
interest in such Certificate and any intermediaries through which such
Certificate is held. The Trustee shall make such determination at the
request of such Person or any Servicer. The Trustee shall be entitled to
rely conclusively on information it receives from such Person, the
Depository, Depository Participants, and indirect participating brokerage
firms for which a Depository Participant acts as agent, with respect to the
identity of a Certificate Owner.
SECTION 11.05 Certain Matters Affecting the Trustee.
(a) Except as otherwise provided in Section 11.01:
(i) The Trustee may request and rely upon and shall be protected
in acting or refraining from acting upon any resolution, Officers'
Certificate, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, consent, order,
appraisal, bond or other paper or document reasonably believed by it to
be genuine and to have been signed or presented by the proper party or
parties;
(ii) The Trustee may consult with counsel and the written advice
of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken or suffered
or omitted by it hereunder in good faith and in accordance therewith;
(iii) The Trustee shall be under no obligation to exercise any of
the trusts or powers vested in it by this Agreement or to make any
investigation of matters arising hereunder or to institute, conduct or
defend any litigation hereunder or in relation hereto at the request,
order or direction of any of the Certificateholders, pursuant to the
provisions of this Agreement, unless such Certificateholders shall have
offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which may be incurred therein or
thereby; the right of the Trustee to perform any discretionary act
enumerated in this Agreement shall not be construed as a duty; the
Trustee shall not be required to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its
duties hereunder, or in the exercise of any of its rights or powers, if
it shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not
reasonably assured to it; nothing contained herein shall, however,
relieve the Trustee of the obligation, upon the occurrence of an Event
of Default (which has not been cured or waived), 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) None of the Trustee or any of its directors, officers,
employees, agents or "control persons" within the meaning of the 1933
Act, 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;
(v) Prior to the occurrence of an Event of Default hereunder and
after the curing or waiver of all Events of Default which may have
occurred, the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond or other paper or document, unless requested in writing to do so by
Holders of Certificates entitled to at least 25% of the Voting Rights;
provided, however, that if the payment within a reasonable time to the
Trustee of the costs, expenses or liabilities likely to be incurred by
it in the making of such investigation is, in the opinion of the
Trustee, not reasonably assured to the Trustee by the security afforded
to it by the terms of this Agreement, the Trustee may require reasonable
indemnity against such expense or liability as a condition to taking any
such action. The reasonable expense of every such reasonable
examination shall be paid by the Master Servicer or, if paid by the
Trustee, shall be repaid by the Master Servicer upon demand;
(vi) The Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys, provided, however, that the Trustee shall
remain liable for the performance of all duties hereunder;
(vii) The Trustee shall not be required to obtain a deficiency
judgment against any Mortgagor;
(viii) For all purposes under this Agreement, the Trustee shall not
be deemed to have notice of any Event of Default hereunder or thereunder
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 Holders of the Certificates and this Agreement;
(ix) The Trustee shall not be responsible for any act or omission
of the Certificate Registrar (unless the Trustee or an Affiliate of the
Trustee is acting as Certificate Registrar), the Master Servicer, the
Special Servicer or the Depositor;
(x) Neither the Trustee nor the Fiscal Agent (in their
respective capacities as such) shall be liable for any loss on any
investment of funds pursuant to this Agreement; and
(xi) All rights of action under this Agreement or under any of
the Certificates, enforceable by the Trustee, may be enforced by it
without the possession of any of the Certificates, or the production
thereof at the trial or the proceeding relating thereto, and any such
suit, action or proceedings instituted by the Trustee shall be brought
in its name for the benefit of all the Holders of such Certificates,
subject to the provisions of this Agreement;
(xii) None of the provisions contained in this Agreement shall in
any event require the Trustee to perform, or be responsible for the
manner of performance of, any of the obligations of the Master Servicer
or the Special Servicer under this Agreement, except during such time,
if any, as the Trustee shall be the successor to, and be vested with the
rights, duties, powers and privileges of, the Master Servicer or the
Special Servicer in accordance with the terms of this Agreement, and
except for the making of P&I Advances. The Trustee shall have no duty
to conduct any affirmative investigation as to the occurrence of any
condition requiring the repurchase of any Mortgage Loan, or the transfer
and repurchase or eligibility of any Mortgage Loan for purposes of this
Agreement; and
(xiii) Unless otherwise specifically required by law, neither the
Trustee nor the Fiscal Agent shall be required to post any surety or
bond of any kind in connection with the execution or performance of its
duties hereunder.
SECTION 11.06 Trustee and Fiscal Agent Not Liable for Certificates
or Mortgage Loans.
The recitals contained herein and in the Certificates, other than
the certificate of authentication, shall be taken as the statements of the
Depositor, the Master Servicer or the Special Servicer, as the case may be,
and the Trustee and the Fiscal Agent assume no responsibility for their
correctness. The Trustee and the Fiscal Agent make no representations as to
the validity or sufficiency of this Agreement (other than as to the due
authorization, execution and delivery thereof by the Trustee) or of the
Certificates (other than as to the execution thereof by the Trustee) or of
any Mortgage Loans or related document. The Trustee and the Fiscal Agent
shall not be accountable for the use or application by the Depositor of any
of the Certificates issued to it or of the proceeds of such Certificates, or
for the use or application of any funds paid to the Depositor in respect of
the assignment of the Mortgage Loans to the Trust Fund, or any funds
deposited in or withdrawn from the Certificate Account or any other account
by or on behalf of the Depositor, the Master Servicer or the Special
Servicer. The Trustee and the Fiscal Agent shall not be responsible for the
accuracy or content of any resolution, certificate, statement, opinion,
report, document, order or other instrument furnished by the Depositor, the
Master Servicer or the Special Servicer, and accepted by the Trustee in good
faith, pursuant to this Agreement.
SECTION 11.07 Trustee and Fiscal Agent May Own Certificates.
The Trustee and Fiscal Agent in its 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 Fiscal Agent, as applicable.
SECTION 11.08 Fees and Expenses of Trustee; Indemnification of
Trustee.
(a) The Trustee shall be entitled to receive as reasonable
compensation out of the Certificate Account (which shall not be limited by
any provision of law in regard to the compensation of a trustee of an express
trust) 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
of the Trustee hereunder on each Distribution Date in an amount equal to
0.0175% per annum calculated on the basis of twelve 30-day months and a 360-
day year.
(b) The Trustee and Fiscal Agent and any director, officer,
employee or agent of the Trustee or the Fiscal Agent or any Person that
"controls" the Trustee or the Fiscal Agent within the meaning of the 1933 Act
shall be entitled to indemnification out of the Certificate Account for 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) incurred in connection with (i) enforcing its
rights and remedies and protecting the interests, and enforcing the rights
and remedies, of the Certificateholders during the continuance of an Event of
Default, (ii) defending or prosecuting any legal action in respect of this
Agreement or the Certificates, (iii) being the mortgagee of record with
respect to the Mortgage Loans and the owner of record with respect to any
Mortgaged Property acquired in respect thereof for the benefit of
Certificateholders, or (iv) acting or refraining from acting in good faith at
the direction of the Certificateholders entitled to not less than a
percentage of the Voting Rights specified herein; provided, however, that
such indemnification will not extend to any loss, liability or expense that
constitutes a specific liability of the Trustee pursuant to this Agreement,
or to any loss, liability or expense incurred by reason of willful
misfeasance, bad faith or negligence on the part of the Trustee in the
performance of its obligations and duties thereunder, or by reason of its
negligent disregard of such obligations or duties, or as may arise from a
breach of any representation, warranty or covenant of the Trustee made
therein; provided, however, that with respect to any third party claim:
(i) the Trustee and the Fiscal Agent, as applicable, shall have
given the Master Servicer, the Depositor, the Holders and, if in the
respect to a Specially Serviced Mortgage Loan, the Special Servicer,
written notice thereof promptly after the Trustee and the Fiscal Agent,
as applicable, shall have knowledge thereof except that any failure to
give such notice shall not in any way limit the right to indemnification
set forth in this Section 11.08;
(ii) while maintaining control over its own defense, the Trustee
and the Fiscal Agent, as applicable, shall cooperate and consult fully
with the Master Servicer, the Depositor and, if in respect of a
Specially Serviced Mortgage Loan, the Special Servicer in preparing such
defense; and
(iii) notwithstanding anything to the contrary in this Section
11.08, the Trust Fund shall not be liable for settlement of any such
claim by the Trustee and the Fiscal Agent, as applicable, entered into
without the prior consent of the Master Servicer, the Depositor and, if
in the respect to a Specially Serviced Mortgage Loan, the Special
Servicer, which consent shall not be unreasonably withheld.
Without in any way limiting the generality of the foregoing
indemnity, such indemnity shall specifically cover any loss, liability,
expense and costs of litigation and investigation, counsel fees, damages,
judgments and amounts paid in settlement incurred by the Trustee and the
Fiscal Agent, as applicable, pursuant to any federal, state or local
environmental statute.
(c) The provisions of this Section 11.08 shall survive the
termination of this Agreement or the resignation or removal of the Trustee
and the Fiscal Agent and the appointment of a successor.
SECTION 11.09 Eligibility Requirements for Trustee.
The Trustee hereunder shall at all times be an association or a
corporation organized and doing business under the laws of any state or the
United States of America or the District of Columbia, authorized under such
laws to exercise trust powers, having a combined capital and surplus of at
least $50,000,000 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 short-term or long-term
debt obligations of the Trustee shall at all times be rated in a rating
category by each Rating Agency at least equal to the rating one category
below the highest rating assigned by such Rating Agency to the then
outstanding Certificates, but in no event lower than an "investment grade"
rating by such Rating Agency or be otherwise acceptable to such Rating
Agency, so as not to cause a downgrade, qualification or withdrawal of the
then current ratings on the Certificates, as confirmed in writing by such
Rating Agency. In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, the Trustee shall resign
immediately in the manner and with the effect specified in Section 11.10.
The corporation or association serving as Trustee may have normal banking and
trust relationships with the Depositor and its Affiliates, the Master
Servicer and its Affiliates or the Special Servicer and its Affiliates.
SECTION 11.10 Resignation and Removal of the Trustee.
(a) The Trustee may at any time resign and be discharged from the
trusts hereby created by giving written notice thereof to the Depositor, the
Master Servicer, the Special Servicer and to all Certificateholders. Upon
receiving such notice of resignation, the Depositor shall promptly appoint a
successor trustee acceptable to the Master Servicer and meeting the
eligibility requirements set forth in Section 11.09 by written instrument, in
duplicate, which instrument shall be delivered to the resigning Trustee and
to the successor trustee. A copy of such instrument shall be delivered to
the Certificateholders, the Depositor and the Special Servicer by the Master
Servicer. If no successor trustee shall have been so appointed and have
accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee.
(b) If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 11.09 and shall fail to resign
after written request therefor by the Depositor or the Master Servicer, or if
at any time the Trustee shall become incapable of acting, or shall be
adjudged bankrupt or insolvent, or a receiver of the Trustee or of its
property shall be appointed, or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, then the Depositor may remove
the Trustee and appoint a successor trustee acceptable to the Master Servicer
by written instrument, in duplicate, which instrument shall be delivered to
the Trustee so removed and to the successor trustee. A copy of such
instrument shall be delivered to the Certificateholders, the Depositor and
the Special Servicer by the Master Servicer.
(c) The Holders of Certificates entitled to at least 51% of the
Voting Rights exclusive of any Certificates owned by the Trustee may at any
time remove the Trustee and appoint a successor trustee 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 remaining Certificateholders and the
Special Servicer by the successor Trustee.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section shall not
become effective until acceptance of appointment by the successor trustee as
provided in Section 11.11 and written confirmation from each Rating Agency
that the appointment of such successor Trustee shall not result in the
downgrade, qualification or withdrawal of any rating assigned thereby to any
Class Certificates. If the Trustee shall be removed as Trustee pursuant to
this Section 11.10, it 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
removal, whether in respect of P&I Advances or otherwise, and it shall
continue to be entitled to the benefits of Section 11.08 to the extent of
action taken prior to such termination, notwithstanding any such termination.
Any resignation or removal of LaSalle National Bank, acting in its capacity
as Trustee hereunder, shall also be deemed to be a resignation or removal of
ABN AMRO Bank N.V., acting in its capacity of Fiscal Agent hereunder, as the
initial Fiscal Agent.
SECTION 11.11 Successor Trustee.
(a) Any successor trustee appointed as provided in Section 11.10
shall execute, acknowledge and deliver to the parties hereto and to its
predecessor trustee an instrument accepting such appointment hereunder, and
thereupon the resignation or removal of the predecessor trustee shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if
originally named as trustee herein. The predecessor trustee shall deliver to
the successor trustee all Mortgage Loan Files and related documents and
statements held by it hereunder, and the Master Servicer and the predecessor
trustee shall execute and deliver such instruments and do such other things
as may reasonably be required to more fully and certainly vest and confirm in
the successor trustee all such rights, powers, duties and obligations, and to
enable the successor trustee to perform its obligations hereunder.
(b) No successor trustee shall accept appointment as provided in
this Section unless at the time of such acceptance such successor trustee
shall be eligible under the provisions of Section 11.09.
(c) Upon acceptance of appointment by a successor Trustee as
provided in this Section, the successor Trustee shall mail notice of the
succession of such Trustee hereunder to all Holders of Certificates at their
addresses as shown in the Certificate Register.
SECTION 11.12 Merger or Consolidation of Trustee.
Any entity into which the Trustee may be merged or converted or
with which it may be consolidated or any entity resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
entity succeeding to the corporate trust business of the Trustee, shall
be the successor of the Trustee hereunder, provided such entity shall be
eligible (including the receipt of Rating Agency confirmation) under the
provisions of Section 11.09 or 11.11, 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 11.13 Appointment of Co-Trustee or Separate Trustee.
(a) Notwithstanding any other provisions hereof, at any time, for
the purpose of meeting any legal requirements of any jurisdiction in which
any part of the Trust Fund or property securing the same may at the time be
located, the Master Servicer and the Trustee acting jointly shall have the
power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Trustee to act as co-trustee or co-trustees, jointly
with the Trustee, or separate trustee or separate trustees, of all or any
part of the Trust Fund, and to vest in such Person or Persons, in such
capacity, such title to the Trust Fund, or any part thereof, and, subject to
the other provisions of this Section 11.13, such powers, duties, obligations,
rights and trusts as the Master Servicer and the Trustee may consider
necessary or desirable. If the Master Servicer shall not have joined in such
appointment within 15 days after the receipt by it of a request to do so, or
in case an Event of Default 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 11.09 hereunder and no
notice to Holders of Certificates of the appointment of co-trustee(s) or
separate trustee(s) shall be required under Section 11.11 hereof.
(b) In the case of any appointment of a co-trustee or separate
trustee pursuant to this Section 11.13 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 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 XI. 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 11.13 shall not relieve the Trustee of its duties and
responsibilities hereunder.
SECTION 11.14 Appointment of Custodians.
The Trustee may appoint one or more Custodians to hold all or
a portion of the Mortgage Loan Files as agent for the Trustee. Subject to
the other provisions of this Article XI, the Trustee agrees to enforce the
terms and provisions of Sections 2.01 and 2.02 hereof against the Custodian
for the benefit of the Certificateholders. Each Custodian shall be a
depository institution subject to supervision by federal or state authority,
shall have combined capital and surplus of at least $10,000,000, shall be
qualified to do business in the jurisdiction in which it holds any Mortgage
Loan File and shall not be the Depositor or any Affiliate of the Depositor.
Each Custodian shall be subject to the same obligations and standard of care
as are imposed on the Trustee hereunder in connection with the retention of
Mortgage Loan Files. 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.
Each Custodian 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 issued by
a surety or insurer which satisfies the requirements set forth in (iii) of
the definition of Qualified Insurer in Section 1.01, covering such
Custodian's officers and employees in connection with its activities
under this Agreement.
SECTION 11.15 Representations and Warranties of the Trustee.
The Trustee hereby represents and warrants to the Master Servicer,
the Special Servicer and the Depositor, as of the Delivery Date, that:
(i) The Trustee is a banking corporation 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 charter or bylaws or
constitute a default (or an event which, with notice or lapse of time,
or both, would constitute a default) under, or result in the breach of,
any material agreement or other instrument to which it is a party or
which is applicable to it or any of its assets.
(iii) The 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 Master Servicer, the Special Servicer 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 (A) applicable bankruptcy, insolvency, reorganization,
moratorium and other laws affecting the enforcement of creditors' rights
generally, and (B) general principles of equity, regardless of whether
such enforcement is considered in a proceeding in equity or at law.
(v) The Trustee is not in violation of, and its execution and
delivery of this Agreement and its performance and compliance with the
terms of this Agreement will not constitute a violation of, any law, any
order or decree of any court or arbiter, or any order, regulation or
demand of any federal, state or local governmental or regulatory
authority, which violation, in the Trustee's good faith and reasonable
judgment, is likely to affect materially and adversely either the
ability of the Trustee to perform its obligations under this Agreement
or the financial condition of the Trustee.
(vi) 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 reasonable judgment, is likely to materially and adversely affect
either the ability of the Trustee to perform its obligations under this
Agreement or the financial condition of the Trustee.
SECTION 11.16 Fiscal Agent Appointed; Concerning the Fiscal
Agent.
(a) The Trustee hereby appoints ABN AMRO Bank N.V. as the initial
Fiscal Agent hereunder for the purposes of exercising and performing the
obligations and duties imposed upon the Fiscal Agent by this Section 11.16.
(b) To the extent that the Trustee is required, pursuant to the
terms of this Agreement, to make any P&I Advance, whether as successor Master
Servicer or otherwise and has failed to do so in accordance with the terms
hereof, the Fiscal Agent shall make such P&I Advance when and as required by
the terms of this Agreement on behalf the Trustee as if the Fiscal Agent were
the Trustee hereunder. To the extent that the Fiscal Agent makes a P&I
Advance pursuant to this Section 11.16, the obligations of the Trustee under
this Agreement in respect of such P&I Advance shall be satisfied.
Notwithstanding anything contained in this Agreement to the contrary, the
Fiscal Agent shall be entitled to all limitations on liability, rights of
reimbursement and indemnities that the Trustee is entitled to hereunder as if
it were the Trustee.
(c) All fees and expenses of the Fiscal Agent (other than interest
owed to the Fiscal Agent in respect of unreimbursed P&I Advances) incurred by
the Fiscal Agent in connection with the transactions contemplated by this
Agreement shall be borne by the Trustee, and neither the Trustee nor the
Fiscal agent shall be entitled to reimbursement therefor from any of the
Trust Fund, the Depositor, the Master Servicer or the Special Servicer.
SECTION 11.17 SEC Filings.
Based upon information furnished to it by the Master Servicer and
the Depositor, the Trustee will prepare and file with the Securities and
Exchange Commission on Forms 8-K and 10-K on behalf of the Trust Fund the
reports distributed to the Certificateholders pursuant to Section 7.03(a)(1),
(a)(2) and (a)(3). The Trustee shall have no responsibility to file any
items other than those specified in this Section 11.17. Prior to January 2,
1998 (and each anniversary thereafter until directed otherwise by the
Depositor) 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
expenses incurred by the Trustee in connection with this Section 11.17
(including reasonable attorneys' fees) shall be reimbursed to it by the
Depositor.
ARTICLE XII
TERMINATION
SECTION 12.01 Termination Upon Repurchase or Liquidation of All
Mortgage Loans.
The respective obligations and responsibilities under this
Agreement of the Depositor, the Master Servicer, the Special Servicer and the
Trustee (other than the obligations of the Trustee to provide for and make
payments to Certificateholders as hereafter set forth and to file tax returns
and any indemnification provision) shall terminate upon payment to the
Certificateholders and the deposit of all amounts held by or on behalf of the
Master Servicer and the Trustee and required hereunder to be so paid or
deposited on the Distribution Date following the earlier to occur of (i) the
purchase by the Master Servicer, any Holder of a Class R-I Certificate or the
holder of an aggregate Percentage Interest in excess of 50% of the Most
Subordinate Class of Certificates, in that order, and (to the extent all of
the remaining Mortgage Loans are being serviced by the Special Servicer) the
Special Servicer at a price equal to the greater of (a) the sum of (A) the
aggregate Purchase Price of all the Mortgage Loans (other than REO Property)
included in the Trust Fund, plus the appraised value of each REO Property, if
any, included in the Trust Fund, as determined by the Master Servicer and (B)
one month's accrued interest on the Stated Principal Balance of any REO
Mortgage Loan and (b) the aggregate Class Balance of all the Certificates
plus accrued and unpaid interest thereon and (ii) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund; 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.
Any Person which shall make an election to purchase all of the
Mortgage Loans remaining in the Trust Fund pursuant to clause (i) of the
preceding paragraph shall do so by giving written notice to the Trustee and
the Depositor no later than 60 days prior to the anticipated date of
purchase; provided, however, that no such election to purchase all of the
Mortgage Loans remaining in the Trust Fund pursuant to clause (i) above shall
be made unless the aggregate Stated Principal Balance of the Mortgage Loans
remaining in the Trust Fund at the time of such election is less than 10% of
the aggregate Cut-off Date Balance of the Mortgage Loans.
Notice of any termination shall be given promptly by any such
Person electing to terminate by letter to the Trustee, who will in turn
notify the Certificateholders mailed (a) in the event such notice is given
in connection with the purchase of the Mortgage Loans and each REO Property,
not earlier than the 60th day and not later than the 30th day of the month
next preceding the month of the proposed 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 upon presentation and
surrender of Certificates at the office of the Certificate Registrar therein
designated, (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 office of the Certificate Registrar. Unless it is acting as
Certificate Registrar, the Trustee shall give such notice to the
Certificate Registrar at the time such notice is given to Certificateholders.
In the event such notice is given in connection with the Master Servicer's
purchase of all of the Mortgage Loans remaining in the Trust Fund, the Master
Servicer shall deposit in the Certificate Account not later than the
Remittance Date related 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. Upon receipt of
an Officers' Certificate to the effect that such final deposit has been made,
the Trustee shall release to the Master Servicer the Mortgage Loan Files for
the remaining Mortgage Loans and shall execute all assignments, endorsements
and other instruments necessary to effectuate transfer of the Mortgage Loans.
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 (i) the amount otherwise distributable on such Distribution Date
in accordance with Section 7.02 in respect of the Certificates so presented
and surrendered, if not in connection with the Master Servicer's purchase of
all of the Mortgage Loans, or (ii) such Certificateholder's Percentage
Interest of that portion of the Available Distribution Amount for such
Distribution Date allocable to payments on the Class of Certificates so
presented and surrendered as described below, if in connection with the
Master Servicer's purchase of all of the Mortgage Loans. If the Trust Fund
is to terminate in connection with the Master Servicer's purchase of all of
the Mortgage Loans, the Available Distribution Amount for the final
Distribution Date shall be allocated in the order set forth in Section 7.02.
ARTICLE XIII
MISCELLANEOUS PROVISIONS
SECTION 13.01 Amendment.
(a) This Agreement may be amended from time to time by the
Depositor, the Master Servicer, the Special Servicer, the Trustee and the
Fiscal Agent, without the consent of any of the Certificateholders, (i) to
cure any ambiguity, (ii) to correct or supplement any provisions herein which
may be inconsistent with any other provisions herein, (iii) to make any other
provisions with respect to matters or questions arising hereunder which shall
not be inconsistent with the provisions hereof, (iv) to relax or eliminate
any requirement hereunder imposed by the REMIC Provisions if the REMIC
Provisions are amended or clarified such that any such requirement may be
relaxed or eliminated; or (v) if such amendment, as evidenced by an Opinion
of Counsel delivered to the Trustee, is reasonably necessary to comply with
any requirements imposed by the Code or any successor or amendatory statute
or any temporary or final regulation, revenue ruling, revenue procedure or
other written official announcement or interpretation relating to federal
income tax laws or any proposed such action which, if made effective, would
apply retroactively to the Trust Fund at least from the effective date of
such amendment, or would be necessary to avoid the occurrence of a prohibited
transaction or to reduce the incidence of any tax that would arise from any
actions taken with respect to the operation of the Trust Fund; provided that
such action (except any amendment described in clause (v) above) shall not,
as evidenced by an Opinion of Counsel delivered to the Trustee, adversely
affect in any material respect the interests of any Certificateholder;
provided further, however, that an Opinion of Counsel shall not be required
if each Rating Agency then rating the Certificates shall have confirmed in
writing that immediately following such amendment such Rating Agency will not
qualify, lower or withdraw its rating on the Certificates as a result of such
amendment.
(b) This Agreement may also be amended from time to time by the
Depositor, the Master Servicer, the Special Servicer, the Trustee and the
Fiscal Agent with the consent of the Holders of Certificates affected thereby
entitled to at least 51% of the Voting Rights for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions
of this Agreement or of modifying in any manner the rights of the Holders of
Certificates; provided, however, that no such amendment shall (i) reduce in
any manner the amount of, or delay the timing of, payments received on
Mortgage Loans which are required to be distributed on any Certificate
without the consent of the Holder of such Certificate, (ii) adversely affect
in any material respect the interests of the Holders of any Class of
Certificates in a manner other than as described in (i) without the consent
of the Holders of all Certificates of such Class, or (iii) reduce the
aforesaid percentages of Certificates the Holders of which are required to
consent to any such amendment without the consent of the Holders of all
Certificates then outstanding. Notwithstanding any other provision of this
Agreement, for purposes of the giving or withholding of consents pursuant to
this Section 13.01, Certificates registered in the name of the Depositor, the
Master Servicer, the Special Servicer or any Affiliate of the Depositor, the
Master Servicer or the Special Servicer shall be entitled to Voting Rights
with respect to matters described in clauses (i) and (ii) of this paragraph
affecting such Certificates.
(c) Notwithstanding any contrary provision of this Agreement,
neither the Trustee nor the Master Servicer shall consent to any amendment to
this Agreement unless the Trustee and the Master Servicer shall each have
obtained or been furnished with an Opinion of Counsel to the effect that such
amendment or the exercise of any power granted to the Master Servicer or the
Trustee in accordance with such amendment will not result in the imposition
of a tax on the Trust Fund pursuant to the REMIC Provisions or cause the
Trust Fund to fail to qualify as a REMIC at any time that any Certificates
are outstanding.
(d) Promptly after the execution of any such amendment, the
Trustee shall furnish a statement describing the amendment to each
Certificateholder and each Underwriter and a copy of such amendment to each
Rating Agency.
(e) It shall not be necessary for the consent of
Certificateholders under this Section 13.01 to approve the particular form of
any proposed amendment, but it shall be sufficient if such consent shall
approve the substance thereof. The manner of obtaining such consents and of
evidencing the authorization of the execution thereof by Certificateholders
shall be subject to such reasonable regulations as the Trustee may prescribe.
(f) 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 13.01(a) or (c) shall be borne by the Person seeking the related
amendment.
(h) Prior to the execution of any amendment to this Agreement, the
Depositor, the Master Servicer, the Special Servicer, the Trustee and the
Fiscal Agent shall be entitled to receive and rely upon an Opinion of
Counsel, at the expense of the party requesting such amendment, stating
that the execution of such amendment is authorized or permitted by this
Agreement.
SECTION 13.02 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, but only upon direction accompanied by an Opinion of Counsel
to the effect that such recordation materially and beneficially affects the
interests of the Certificateholders; provided, however, that the Trustee
shall have no obligation or responsibility to determine whether any such
recordation of this Agreement is required.
(b) For the purpose of facilitating the recordation of this
Agreement as herein provided and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
constitute but one and the same instrument.
SECTION 13.03 Limitation on Rights of Certificateholders.
(a) The death or incapacity of any Certificateholder shall not
operate to terminate this Agreement or the Trust Fund, nor entitle such
Certificateholder's legal representatives or heirs to claim an accounting or
to take any action or proceeding in any court for a partition or winding up
of the Trust Fund, nor otherwise affect the rights, obligations and
liabilities of the parties hereto or any of them.
(b) No Certificateholder shall have any right to vote (except as
expressly provided for herein) or in any manner otherwise control the
operation and management of the Trust Fund, or the obligations of the parties
hereto, nor shall anything herein set forth, or contained in the terms of the
Certificates, be construed so as to constitute the Certificateholders from
time to time as partners or members of an association; nor shall any
Certificateholder be under any liability to any third party by reason of any
action taken by the parties to this Agreement pursuant to any provision
hereof.
(c) No Certificateholder shall have any right by virtue of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement or any
Mortgage Loan, unless, with respect to any suit, action or proceeding upon or
under or with respect to this Agreement, such Holder previously shall have
given to the Trustee a written notice of an Event of Default, or of a default
by the Depositor in the performance of any of its obligations hereunder, and
of the continuance thereof, as hereinbefore provided, and unless also the
Holders of Certificates entitled to at least 25% of the Voting Rights shall
have made written request upon the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall have offered to
the Trustee such reasonable indemnity as it may require against the costs,
expenses and liabilities to be incurred therein or thereby, and the Trustee,
for 60 days after its receipt of such notice, request and offer of indemnity,
shall have neglected or refused to institute any such action, suit or
proceeding. It is understood and intended, and expressly covenanted by each
Certificateholder with every other Certificateholder and the Trustee, that
no one or more Holders of Certificates shall have any right in any manner
whatever by virtue of any provision of this Agreement to affect, disturb or
prejudice the rights of the Holders of any other of such Certificates, or
to obtain or seek to obtain priority over or preference to any other such
Holder, which priority or preference is not otherwise provided for herein,
or to enforce any right under this Agreement, except in the manner herein
provided and for the equal, ratable and common benefit of all
Certificateholders. For the protection and enforcement of the provisions
of this Section, each and every Certificateholder and the Trustee shall
be entitled to such relief as can be given either at law or in equity.
SECTION 13.04 Governing Law.
This Agreement and the Certificates shall be construed in
accordance with the internal laws of the State of New York and the
obligations, rights and remedies of the parties hereunder shall be determined
in accordance with such laws.
SECTION 13.05 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 (a) personally delivered, (b) mailed by registered
mail, postage prepaid, return receipt requested, and received by the
addressee, (c) sent by express courier delivery service and received by the
addressee, or (d) transmitted by telex, telecopy or telegraph and confirmed
by a writing delivered by means of (a), (b) or (c), to: (i) in the case of
the Depositor, J.P. Morgan Commercial Mortgage Finance Corp., 60 Wall Street,
New York, New York 10260, Attention: President, telecopy number: (212) 648-
5138; (ii) in the case of the Master Servicer and Special Servicer, Midland
Loan Services, L.P., 210 West 10th Street, 6th Floor, Kansas City, Missouri
64105, Attention: Alan L. Atterbury, telephone
number: (816) 435-5000, telecopy number: (816) 435-2326; (iii) in the case of
the Trustee, to the Corporate Trust Office, 135 South LaSalle Street, Suite
1740, Chicago, Illinois 60674, Attention: Asset-Backed Securities Trust
Services Group, telephone number: (800) 246-5761, telecopy number: (312) 904-
2084; (iv) in the case of the Mortgage Loan Seller, to Southern Pacific
Thrift and Loan Association, 12300 Wilshire Blvd., 2nd. Floor, Los Angeles,
California 90025, Attention: President, telecopy number: (310) 442-5160; and
(v) in the case of the Rating Agencies, (A) Standard & Poor's Ratings
Services, 26 Broadway, New York, New York 10004, Attention: Surveillance
Manager, telephone number: (212) 208-8000, telecopy number: (212) 412-0539,
(B) Fitch Investors Service, L.P., One State Street Plaza, New York, New York
10004, Attention: Commercial Mortgage-Backed Surveillance Group, telephone
number: (212) 908-0645, telecopy number: (212) 635-0295, and (C) Duff &
Phelps Credit Rating Co., 55 E. Monroe St. Chicago, Illinois 60603,
Attention: Structured Finance - Commercial Real Estate Monitoring, telephone
number: (312) 263-2610, telecopy number: (312) 263-2852; 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 sent to the address of such Holder
as shown in the Certificate Register.
SECTION 13.06 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 13.07 Grant of a Security Interest.
The Depositor intends that the conveyance of the Depositor's right,
title and interest in and to the Mortgage Loans pursuant to this Agreement
shall constitute a sale and not a pledge of security for a loan. If such
conveyance is deemed to be a pledge of security for a loan, however, the
Depositor intends that the rights and obligations of the parties to such loan
shall be established pursuant to the terms of this Agreement. The Depositor
also intends and agrees that, in such event, (i) the Depositor shall be
deemed to have granted to the Trustee (in such capacity) a first priority
security interest in the Depositor's entire right, title and interest in and
to the assets comprising the Trust Fund, including without limitation, the
Mortgage Loans, all principal and interest received or receivable with
respect to the Mortgage Loans (other than loan 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, the Collection Account, and REO Account
and all reinvestment earnings on such amounts, together with 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 cause to be filed, as a precautionary filing, a Form
UCC-1 in all appropriate locations in the State of New York promptly
following the initial issuance of the Certificates, and the Trustee shall
file continuation statements thereto at such office, 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 in
preparing and filing such continuation statements. This Section 13.07 shall
constitute notice to the Trustee pursuant to any of the requirements of the
New York Uniform Commercial Code.
SECTION 13.08 Successors and Assigns.
The provisions of this Agreement shall be binding upon and inure to
the benefit of and be enforceable by each Servicer, the Trustee and the
respective successors and assigns thereof and shall inure to the benefit of
the Certificateholders.
SECTION 13.09 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 13.10 Notices and Information to Rating Agencies.
(a) The Trustee shall use its best efforts promptly to provide
notice to the Rating Agencies with respect to each of the following of which
it has actual knowledge:
(i) any material change or amendment to this Agreement;
(ii) the occurrence of any Event of Default;
(iii) the resignation or termination of the Master Servicer or
the Special Servicer;
(iv) the repurchase of Mortgage Loans pursuant to Section 2.04(a);
(v) the final payment to any Class of Certificateholders; and
(vi) any change in the location of the Certificate Account.
(b) The Master Servicer shall use its best efforts promptly to
provide notice to the Rating Agencies with respect to any determination by
the Master Servicer that an Advance with respect to a Mortgage Loan
constitutes (or would, if made, constitute) a Nonrecoverable Advance under
this Agreement.
(c) The Master Servicer shall promptly furnish to the Rating
Agencies copies of the following:
(i) each of its annual statements as to compliance described in
Section 3.07,
(ii) each of its annual independent public accountants' servicing
reports described in Section 3.08,
(iii) the most current rent rolls and financial statements
available from time to time with respect to any Mortgaged
Property or any Mortgagor,
(iv) each report and statement pursuant to Sections 4.08 and 7.03,
(v) other information the Rating Agencies may reasonably request
consistent with the Master Servicer's servicing duties
hereunder, and
(vi) notice of the resignation or termination of the Trustee.
(d) All parties shall provide such information as each Rating
Agency may reasonably require, from time to time, through an electronic
medium and format reasonably acceptable to, and reasonably requested by, each
Rating Agency.
SECTION 13.11 Certificateholders' List.
Upon request of the Directing Certificateholder, the Trustee shall
provide a list of each Certificateholder and, to the extent known to the
Trustee and solely based on the certification of Certificate Owners, each
Certificate Owner.
SECTION 13.12 Successor to a Servicer.
(a) The termination of any Servicer's responsibilities and duties
pursuant to Section 3.11 or Section 10.01 hereof, the Trustee shall either
(i) succeed (as of the date of such succession) to and assume all of such
Servicer's responsibilities, rights, duties and obligations under this
Agreement, or (ii) appoint a successor that shall succeed (as of the date of
such succession) to all rights and assume all of the responsibilities and
duties of such Servicer under this Agreement. In the event that any
Servicer's duties and responsibilities under this Agreement are terminated
pursuant to the aforementioned Sections, such Servicer shall discharge such
duties and responsibilities during the period from the date it acquires
knowledge of such termination until the effective date thereof (if such dates
are not the same) with the same degree of diligence and prudence that it is
obligated to exercise under this Agreement, and shall take no action
whatsoever that might impair or prejudice the rights or financial condition
of its successor, any other Servicer. The termination of a Servicer's
responsibilities and duties under this Agreement pursuant to the
aforementioned Sections shall not become effective until a successor shall be
appointed pursuant to this Section 13.12 (or until the Trustee succeeds to
and assumes all of such Servicer's responsibilities under this Agreement) and
shall in no event relieve such Servicer of the covenants, representations and
warranties made herein and the remedies available under this Agreement. The
provisions of Section 3.10 hereof shall be applicable to each Servicer, to
the extent of claims against the Servicer arising out of the Servicer's
actions or failure to act prior to termination, notwithstanding any
termination of such Servicer's responsibilities and duties under this
Agreement or the termination of this Agreement. A successor Servicer shall
not, by reason of its appointment or assumption of the duties and
responsibilities of another Servicer, assume any of the liabilities of such
Servicer.
(b) Any successor appointed as provided herein shall execute,
acknowledge and deliver to the Trustee and each Servicer, an instrument
accepting such appointment, whereupon such successor shall become fully
vested with all the rights, powers, duties, responsibilities and obligations
of the Servicer it is succeeding, with like effect as if originally named as
a party to this Agreement. Any resignation or termination of a Servicer
pursuant to Section 3.11 or Section 10.01 hereof shall not affect any rights
or claims that any Servicer may have with respect to or against the Trust
Fund, the Depositor or another Servicer, in any case arising prior to any
such termination or resignation. The appointment of a successor Servicer
shall not be effective until the Trustee shall have received written
confirmation from each Rating Agency that such appointment will not result in
the withdrawal, qualification or downgrade of the rating on any Certificate.
(c) Upon its termination or resignation, the terminated or
resigning Servicer shall immediately deliver to the successor the funds in
any account maintained by such Servicer pursuant to this Agreement (net of
all unpaid Servicing Fees payable to it, and, in the case of the Master
Servicer, unreimbursed Advances advanced by it and interest on such Advances
at the Advance Rate), any Mortgage Loan Documents in such Servicer's
possession and related documents and statements held by it hereunder and
such Servicer shall account for all funds. Such Servicer shall execute and
deliver such instruments and do all such other things as may reasonably
be required to more fully and definitely vest and confirm in the successor
all such rights, powers, duties, responsibilities, obligations and
liabilities of such Servicer. The successor shall promptly make arrangements
to reimburse such Servicer for amounts such Servicer actually expended,
unreimbursed Advances with interest at the Advance Rate and amounts owed to
such Servicer in respect of unpaid Servicing Fees and additional servicing
compensation pursuant to this Agreement that would otherwise have been
recovered by such Servicer pursuant to this Agreement but for the appointment
of the successor servicer, net of any amounts owed by such Servicer
hereunder.
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.
J.P. MORGAN COMMERCIAL MORTGAGE
FINANCE CORP.,
Depositor
By: /s/ LEONARD VAN DRUNEN
------------------------------
Name: Leonard Van Drunen
Title: Vice President
MIDLAND LOAN SERVICES, L.P.,
Master Servicer and Special Servicer
By: Midland Data Systems, Inc.
its General Partner
By: /s/ CLARENCE A. KRANTZ
------------------------
Name: Clarence A. Krantz
Title: Executive Vice President
LASALLE NATIONAL BANK,
Trustee
By: /s/ RUSSELL M. GOLDENBERG
---------------------------
Name: Russell M. Goldenberg
Title: Senior Vice President
ABN AMRO BANK N.V.,
Fiscal Agent
By: /s/ IRENE PAZIK
---------------------------
Name: Irene Pazik
Title: Vice President
By: /s/ MARY C. CASEY
----------------------------
Name: Mary C. Casey
Title: Vice President
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the day of June, 1997 before me, a notary public in and for
----
said State, personally appeared _________________ known to me to be a Vice
President of J.P. Morgan Commercial Mortgage Finance Corp., the corporation
that executed the within instrument, and also known to me to be the person
who executed it on behalf of said 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.
______________________________
Notary Public
(Notarial Seal)
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the day of June, 1997, before me, a notary public in and
----
for said State, personally appeared ___________ known to me to be Assistant
Vice President of LaSalle National Bank, one of the corporations that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said 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.
_______________________________
Notary Public
(Notarial Seal)
STATE OF )
) ss.:
COUNTY OF )
On the 27th day of June, 1997, before me, a notary public in and
for said State, personally appeared _____________________________ known to me
to be _______________________ of ___________________, one of the corporations
that executed the within instrument, and also known to me to be the person
who executed it on behalf of said 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.
_______________________________
Notary Public
(Notarial Seal)
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE 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.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" ("REMIC") AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").
CLASS __ MORTGAGE PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund consisting
primarily of a pool of adjustable rate mortgage loans formed and sold by
J.P. MORGAN COMMERCIAL MORTGAGE FINANCE CORP.,
SERIES 1997-SPTL-C1
Original Class Balance
$___________
Date of Pooling and Servicing Initial Certificate
Agreement: June 1, 1997 Balance of this Class __
Certificate as of the
Delivery Date:
$____________
Cut-off Date: June 1, 1997
Delivery Date: June 27, 1997 Percentage Interest: 100%
First Distribution Date: Pass-Through Rate:
Adjustable
July 25, 1997
Master Servicer: Trustee:
Midland Loan LaSalle National Bank
Services, L.P.
No. 1
Cusip No.: _________________
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN J.P.
MORGAN COMMERCIAL MORTGAGE FINANCE CORP. OR ANY OF ITS AFFILIATES. NEITHER
THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY
AGENCY OR INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE BALANCE OF THIS CERTIFICATE MAY
BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING
CERTIFICATE 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 __ Certificate (obtained by
dividing the initial Certificate Balance of this Class __ Certificate as of
the Delivery Date by the initial Class Balance of the Class __ Certificates)
in that certain beneficial ownership interest evidenced by all the Class __
Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as of June 1, 1997 (the "Agreement"), among J.P. Morgan
Commercial Mortgage Finance Corp., as depositor (hereinafter called the
"Depositor", which term includes any successor entity under the Agreement),
Midland Loan Services, L.P. as master servicer and special servicer (in such
capacity, the "Master Servicer" or "Special Servicer" which term includes any
successor entity under the Agreement), ABN AMRO, as fiscal agent (in such
capacity the "Fiscal Agent," which term includes any successor entity under
the Agreement) and LaSalle National Bank, as trustee (in such capacity, the
"Trustee," which term includes any successor entity under the Agreement), a
summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used
herein have the 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 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (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 __ Certificates on the applicable Distribution Date
pursuant to the Agreement. All distributions made under the Agreement on a
Class __ Certificate will be made by the Trustee pursuant to the Agreement.
Any distribution to the Holder of this Certificate in reduction of
the Certificate Balance hereof is binding on such Holder and all future
Holders of this Certificate and any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of
such distribution is made upon this Certificate.
The Class __ 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 __ Certificates are exchangeable for new Class __ 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 office 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 Certificates of the
same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or
transferees.
No service charge will be imposed for any registration of transfer
or exchange of 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.
The Depositor, the Master Servicer, the Special Servicer, the
Trustee and the Certificate Registrar and any agent of the Depositor, the
Master Servicer, the Special Servicer, the Trustee or the Certificate
Registrar may treat the Person in whose name this Certificate is registered
as the owner hereof for all purposes, and neither the Depositor, the Master
Servicer, the Special Servicer, the Trustee, the Certificate Registrar nor
any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon distribution (or provision for distribution) to
the Certificateholders of all amounts held by or on behalf of the Master
Servicer or the Trustee and required to be distributed to them pursuant to
the Agreement following the earlier of (i) the purchase by the Master
Servicer, any holder of a Class R-I Certificate, the Holder of an aggregate
Percentage Interest in excess of 50% of the Most Subordinate Class of
Certificates, or under certain circumstances, the Special Servicer of all
Mortgage Loans remaining in the Trust Fund and (ii) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in the Trust Fund at a price determined as provided in the
Agreement from the Trust Fund of all Mortgage Loans and all other assets
of the Trust Fund; provided, however, that in no event shall the trust
created thereby 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 of the Court of St. James, living on the
date hereof. 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 Loans at the time of
purchase being less than 5% of the aggregate Cut-off Date Balance of the
Mortgage Loans.
The Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of
the Depositor, the Master Servicer, the Special Servicer, and the Trustee and
the rights of the Certificateholders under the Agreement at any time by the
Depositor, the Master Servicer, the Special Servicer, and the Trustee with
the consent of the Holders of Certificates entitled to at least 51% of the
Voting Rights. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, including any amendment necessary
to maintain the status of the Trust Fund 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, and the obligations, rights and remedies of
the Holder hereof shall be determined in accordance with such laws.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed under its official seal.
Dated: June 27, 1997
LaSalle National Bank
as Trustee
(SEAL) By:___________________________
---- Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class __ Certificates referred to in the
within-mentioned Agreement.
LaSalle National Bank
as Certificate Registrar
By:__________________________
_____ Authorized Signatory
EXHIBIT B
FORM OF TRANSFEROR CERTIFICATE
, 199_
-----------------
(CERTIFICATE REGISTRAR)
Re: J.P. Morgan Commercial Mortgage Finance Corp.,
Mortgage Pass-Through Certificates,
Series 199_-_, Class ( )
----------------------------------------------
Dear Sirs:
This letter is delivered to you in connection with the transfer by
---
(the "Transferor") to
- ----------------------
(the "Transferee") of a Certificate
- ---------------------------------------
evidencing a % Percentage Interest in the captioned Class of Certificates
---
(the "Certificate"), pursuant to Section 8.02 of the Pooling and Servicing
Agreement (the "Pooling and Servicing Agreement"), dated as of
------------
, 199_, among J.P. Morgan Commercial Mortgage Finance Corp., as
- ------
depositor, , as master servicer, special servicer and primary
-------------
servicer, as primary servicer, and ,
---------------- ----------------------
as trustee. All terms used herein and not otherwise defined shall have the
meanings set forth in the Pooling and Servicing Agreement. The Transferor
hereby certifies, represents and warrants to you, as Certificate Registrar,
that:
1. The Transferor is the lawful owner of the Certificate with the
full right to transfer the Certificate free from any and all claims and
encumbrances whatsoever.
2. Neither the Transferor nor anyone acting on its behalf has
offered, transferred, pledged, sold or otherwise disposed of the
Certificate, any interest in the Certificate or any other similar
security to, or solicited any offer to buy or accept a transfer, pledge
or other disposition of the Certificate, any interest in the Certificate
or any other similar security from, or otherwise approached or
negotiated with respect to the Certificate, any interest in the
Certificate or any other similar security with, any person by means of
any form of general solicitation or general advertising, including but
not limited to any advertisement, article, notice or other communication
published in any newspaper, magazine or similar news medium or broadcast
over
television or radio, or any seminar or meeting whose attendees have been
invited by any general solicitation or advertising, or in any manner
which would constitute a distribution under the Securities Act of 1933
(the "1933 Act") or which would render the disposition of the
Certificate a violation of Section 5 of the 1933 Act or require
registration pursuant thereto.
------------------------------
(Transferor)
By:
--------------------------
Name:
-----------------------
Title:
----------------------
EXHIBIT D-1
FORM OF INVESTMENT LETTER --
QUALIFIED INSTITUTIONAL BUYER
(Date)
(Trustee Name and Address)
J.P. Morgan Securities Inc.
as Initial Purchaser in connection with
the Private Placement Memorandum
referred to below
60 Wall Street
New York, New York 10260
Dear Sirs:
In connection with our proposed purchase of the Mortgage Pass-Through
Certificates, Series 199_-_, (Class E, Class F, Class G, Class NR, Class R-I,
Class R-II and Class R-III) (the "Certificates") of J.P. Morgan Commercial
Mortgage Finance Corp. (the "Depositor"), we confirm that:
1. We have received a copy of the Private Placement Memorandum
(the "Private Placement Memorandum") dated __________, relating to the
Certificates and such other information as we deem necessary in order to
make our investment decision. We understand that the Private Placement
Memorandum speaks only as of its date and that the information contained
therein may not be correct or complete as of any time subsequent to such
date.
2. We understand that the Certificates have not been, and will
not be registered under the Securities Act of 1933, as amended (the
"Act") and may not be sold except as permitted by the restrictions and
conditions set forth in the Pooling and Servicing Agreement dated as of
__________, 199_ relating to the Certificates and the undersigned agrees
to be bound by, and not to resell, pledge or otherwise transfer the
Certificates except in compliance with, such restrictions and conditions
and the Act. We understand that on any proposed resale of any
Certificates, we will be required to furnish to the Trustee such
certifications, legal opinions and other information as it may require
to confirm that the proposed sale is being made pursuant to an exemption
from, or in a transaction not subject to, the registration requirements
of the Act. We further understand that the Certificates will bear a
legend to the foregoing effect.
3. We are a "qualified institutional buyer" (within the meaning
of Rule 144A under the Act) (a "QIB") and we are acquiring the
Certificates for our own account or for the account of a QIB for
investment purposes and not with a view to, or for offer or sale in
connection with, any distribution in violation of the Act, and have such
knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the
Certificates, and we and any accounts for which we are acting are each
able to bear the economic risk of our or their investment. We
acknowledge that the sale of the Certificates to us is being made in
reliance on Rule 144A.
4. We are acquiring each of the Certificates purchased by us for
our own account or for a single account (which is a QIB and from which
no resale, pledge or other transfer may be made except to another QIB)
as to each of which we exercise sole investment discretion.
5. We are not an employee benefit plan (a "Plan") subject to
Section 406 of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), or Section 4975 of the Internal Revenue Code of 1986,
as amended (the "Code") or a person acting on behalf of such a Plan or
using the assets of such a Plan to acquire the Certificates.
You are entitled to rely upon this letter and are irrevocably authorized
to produce this letter or a copy hereof to any interested party in any
administrative or legal proceedings or official inquiry with respect to the
matters covered hereby.
Very truly yours,
By:
-----------------------------
Name:
Title:
Securities To Be Purchased:
$ principal amount of Certificates
EXHIBIT D-2
FORM OF INVESTMENT LETTER -
REGULATION S
(Date)
(Trustee Name and Address)
J.P. Morgan Securities Inc.
as Initial Purchaser in connection with
the Private Placement Memorandum
referred to below
60 Wall Street
New York, New York 10260
Dear Sirs:
In connection with our proposed purchase of the Mortgage Pass-Through
Certificates, Series 199_-_, (Class E, Class F, Class G, Class NR, Class R-I,
Class R-II and Class R-III) (the "Certificates") of J.P. Morgan Commercial
Mortgage Finance Corp. (the "Depositor"), we confirm that:
1. We have received a copy of the Private Placement Memorandum
(the "Private Placement Memorandum") dated __________, relating to the
Certificates and such other information as we deem necessary in order to
make our investment decision. We understand that the Private Placement
Memorandum speaks only as of its date and that the information contained
therein may not be correct or complete as of any time subsequent to such
date.
2. We understand that the Certificates have not been, and will
not be registered under the Securities Act of 1933, as amended (the
"Act") and may not be sold except as permitted by the restrictions and
conditions set forth in the Pooling and Servicing Agreement dated as of
__________, 199_ relating to the Certificates and the undersigned agrees
to be bound by, and not to resell, pledge or otherwise transfer the
Certificates except in compliance with, such restrictions and conditions
and the Act. We understand that on any proposed resale of any
Certificates, we will be required to furnish to the Trustee such
certifications, legal opinions and other information as it may require
to confirm that the proposed sale is being made pursuant to an exemption
from, or in a transaction not subject to, the registration requirements
of the Act. We further understand that the Certificates will bear a
legend to the foregoing effect.
3. We are a "qualified institutional buyer" (within the meaning
of Rule 144A under the Act) (a "QIB") and we are acquiring the
Certificates for our own account or for the account of a QIB for
investment purposes and not with a view to, or for offer or sale in
connection with, any distribution in violation of the Act, and have such
knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the
Certificates, and we and any accounts for which we are acting are each
able to bear the economic risk of our or their investment. We
acknowledge that the sale of the Certificates to us is being made in
reliance on Rule 144A.
4. We are aware that the purchase of such Certificates is being
made in reliance on the exemption from registration provided by
Regulation S and understand that the Certificates offered in reliance on
Regulation S will bear the appropriate legend set forth in the Pooling
and Servicing Agreement, and be represented by one or more Regulation S
Global Certificates. The Certificates so represented may not at any
time be held by or on behalf of U.S. Persons as defined in Regulation S
under the Securities Act. Neither we nor any beneficial owner of the
Certificates that we may hold is not, and will not be, a U.S. Person as
defined in Regulation S under the Securities Act. Before any interest
in a Regulation S Global Certificate may be offered, resold, pledged or
otherwise transferred to a person who takes delivery in the form of an
interest in a Physical Certificate, the transferee will be required to
provide the Trustee with a written certification as to compliance with
the transfer restrictions.
5. We are not an employee benefit plan (a "Plan") subject to
Section 406 of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), or Section 4975 of the Internal Revenue Code of 1986,
as amended (the "Code") or a person acting on behalf of such a Plan or
using the assets of such a Plan to acquire the Certificates.
You are entitled to rely upon this letter and are irrevocably authorized
to produce this letter or a copy hereof to any interested party in any
administrative or legal proceedings or official inquiry with respect to the
matters covered hereby.
Very truly yours,
By:
-----------------------------
Name:
Title:
Securities To Be Purchased:
$ principal amount of Certificates
EXHIBIT D-3
FORM OF INVESTMENT LETTER -
RULE 144
(Date)
(Trustee Name and Address)
J.P. Morgan Securities Inc.
as Initial Purchaser in connection with
the Private Placement Memorandum
referred to below
60 Wall Street
New York, New York 10260
Dear Sirs:
In connection with our proposed purchase of the Mortgage Pass-Through
Certificates, Series 199_-_, (Class E, Class F, Class G, Class NR, Class R-I,
Class R-II and Class R-III) (the "Certificates") of J.P. Morgan Commercial
Mortgage Finance Corp. (the "Depositor"), we confirm that:
1. We have received a copy of the Private Placement Memorandum
(the "Private Placement Memorandum") dated __________, relating to the
Certificates and such other information as we deem necessary in order to
make our investment decision. We understand that the Private Placement
Memorandum speaks only as of its date and that the information contained
therein may not be correct or complete as of any time subsequent to such
date.
2. We understand that the Certificates have not been, and will
not be registered under the Securities Act of 1933, as amended (the
"Act") and may not be sold except as permitted by the restrictions and
conditions set forth in the Pooling and Servicing Agreement dated as of
__________, 199_ relating to the Certificates and the undersigned agrees
to be bound by, and not to resell, pledge or otherwise transfer the
Certificates except in compliance with, such restrictions and conditions
and the Act. We understand that on any proposed resale of any
Certificates, we will be required to furnish to the Trustee such
certifications, legal opinions and other information as it may require
to confirm that the proposed sale is being made pursuant to an exemption
from, or in a transaction not subject to, the registration requirements
of the Act. We further understand that the Certificates will bear a
legend to the foregoing effect.
3. We are a "qualified institutional buyer" (within the meaning
of Rule 144A under the Act) (a "QIB") and we are acquiring the
Certificates for our own account or for the account of a QIB for
investment purposes and not with a view to, or for offer or sale in
connection with, any distribution in violation of the Act, and have such
knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the
Certificates, and we and any accounts for which we are acting are each
able to bear the economic risk of our or their investment. We
acknowledge that the sale of the Certificates to us is being made in
reliance on Rule 144A.
4. We are acquiring each of the Certificates purchased by us
pursuant to an exemption from registration provided by Rule 144 under
the Securities Act.
5. We are not an employee benefit plan (a "Plan") subject to
Section 406 of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), or Section 4975 of the Internal Revenue Code of 1986,
as amended (the "Code") or a person acting on behalf of such a Plan or
using the assets of such a Plan to acquire the Certificates.
You are entitled to rely upon this letter and are irrevocably authorized
to produce this letter or a copy hereof to any interested party in any
administrative or legal proceedings or official inquiry with respect to the
matters covered hereby.
Very truly yours,
By:
-----------------------------
Name:
Title:
Securities To Be Purchased:
$ principal amount of Certificates
EXHIBIT D-4
FORM OF INVESTMENT LETTER --
ACCREDITED INVESTOR
(Date)
(Trustee Name and Address)
J.P. Morgan Securities Inc.
as Initial Purchaser in connection with
the Private Placement Memorandum
referred to below
60 Wall Street
New York, New York 10260
Dear Sirs:
In connection with our proposed purchase of the Mortgage Pass-Through
Certificates, Series 199_-_, (Class E, Class F, Class G, Class NR, Class R-I,
Class R-II and Class R-III) (the "Certificates") of J.P. Morgan Commercial
Mortgage Finance Corp. (the "Depositor"), we confirm that:
1. We have received a copy of the Private Placement Memorandum
(the "Private Placement Memorandum") dated __________, relating to the
Certificates and such other information as we deem necessary in order to
make our investment decision. We understand that the Private Placement
Memorandum speaks only as of its date and that the information contained
therein may not be correct or complete as of any time subsequent to such
date.
2. We understand that the Certificates have not been, and will
not be registered under the Securities Act of 1933, as amended (the
"Act") and may not be sold except as permitted by the restrictions and
conditions set forth in the Pooling and Servicing Agreement dated as of
__________, 199_ relating to the Certificates and the undersigned agrees
to be bound by, and not to resell, pledge or otherwise transfer the
Certificates except in compliance with, such restrictions and conditions
and the Act. We understand that on any proposed resale of any
Certificates, we will be required to furnish to the Trustee such
certifications, legal opinions and other information as it may require
to confirm that the proposed sale is being made pursuant to an exemption
from, or in a transaction not subject to, the registration requirements
of the Act. We further understand that the Certificates will bear a
legend to the foregoing effect.
3. We are an "accredited investor" (as defined in Rule 501(a)(1),
(2), (3), or (7) under the Act) and we are acquiring the Certificates
for investment purposes and not with a view to, or for offer or sale in
connection with, any distribution in violation of the Act, and have such
knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the
Certificates, and we and any accounts for which we are acting are each
able to bear the economic risk of our or their investment.
4. We are acquiring each of the Certificates purchased by us for
our own account or for a single account (each of which is an "accredited
investor" and from which no resale, pledge or other transfer may be made
except to another "accredited investor") as to which we exercise sole
investment discretion.
5. We are not an employee benefit plan (a "Plan") subject to
Section 406 of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), or Section 4975 of the Internal Revenue Code of 1986,
as amended (the "Code") or a person acting on behalf of such a Plan or
using the assets of such a Plan to acquire the Certificates.
You are entitled to rely upon this letter and are irrevocably authorized
to produce this letter or a copy hereof to any interested party in any
administrative or legal proceedings or official inquiry with respect to the
matters covered hereby.
Very truly yours,
By:
------------------------------
Name:
Title:
Securities To Be Purchased:
$ principal amount of Certificates
EXHIBIT E-1
FORM OF TRANSFER AFFIDAVIT
STATE OF )
) ss.:
COUNTY OF )
(NAME OF OFFICER), being first duly sworn, deposes and says that:
1. He is the (Title of Officer) of (Name of Owner) (the record or
beneficial owner (the "Owner") of J.P. Morgan Commercial Mortgage Finance
Corp., Mortgage Pass-Through Certificate, Series 199_-_, Class ( ), No.
----
(the "Class ( ) Certificate")), a duly organized and
--------------------
existing under the laws of (the State of ) (the United States),
-------------
on behalf of which he makes this affidavit. Capitalized terms used but not
defined herein have the respective meanings assigned thereto in the Pooling
and Servicing Agreement pursuant to which the Class ( ) Certificate was
issued.
2. The Owner (i) is and will be a "Permitted Transferee" as of (date
of transfer) and (ii) is acquiring the Class ( ) Certificate for its own
account or for the account of another Owner from which it has received an
affidavit in substantially the same form as this affidavit. A "Permitted
Transferee" is any person other than a "disqualified organization" or a
possession of the United States. (For this purpose, a "disqualified
organization" means 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 Owner is aware (i) of the tax that would be imposed on
transfers of the Class ( ) Certificate to disqualified organizations under
the Internal Revenue Code of 1986, as amended, that applies to all transfers
of the Class ( ) Certificate after March 31, 1988; (ii) that such tax would
be on the transferor, or, if such transfer is through an agent (which
person includes a broker, nominee or middleman) for a non-Permitted
Transferee, on the agent; (iii) that the person otherwise liable for the tax
shall be relieved of liability for the tax if the transferee furnishes to
such person an affidavit that the transferee is a Permitted Transferee and,
at the time of transfer, such person does not have actual knowledge that the
affidavit is false.
4. The Owner is aware of the tax imposed on a "pass-through entity"
holding the Class ( ) Certificate 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 Owner is aware that it cannot transfer the Class
( ) Certificate unless the transferee, or the transferee's agent, delivers to
the Certificate Registrar, among other things, an affidavit in substantially
the same form as this affidavit.
6. The Owner consents to any additional restrictions or arrangements
that shall be deemed necessary upon advice of counsel to constitute a
reasonable arrangement to ensure that the Class ( ) Certificate will only be
owned, directly or indirectly, by an Owner that is a Permitted Transferee.
7. The Owner's taxpayer identification number is
.
- -------------------------
8. No purpose of the Owner relating to its purchase of a Class ( )
Certificate is or will be to impede the assessment or collection of any tax.
9. The Owner has no present knowledge or expectation that it will be
unable to pay any United States taxes owed by it so long as the Class ( )
Certificate remains outstanding.
10. The Owner has no present knowledge or expectation that it will
become insolvent or subject to a bankruptcy proceeding for so long as the
Class ( ) Certificate remains outstanding.
11. No purpose of the Owner relating to any sale of any Class ( )
Certificate will be to impede the assessment or collection of any tax.
12. The Owner is not a Non-United States Person.
IN WITNESS WHEREOF, the Owner has caused this instrument to be executed
on its behalf, pursuant to the authority of its Board of Directors, by its
(Title of Officer) and its Corporate Seal to be hereunto attached, attested
by its (Assistant) Secretary, this day of , 199_.
----
(NAME OF OWNER)
By:
-----------------------------
(Name of Officer)
(Title of Officer)
(Corporate Seal)
ATTEST:
- ----------------------
(Assistant) Secretary
Personally appeared before me the above-named (Name of Officer), known or
proved to me to be the same Person who executed the foregoing instrument and
to be the (Title of Officer) of the Owner, and acknowledged to me that he
executed the same as his free act and deed and the free act and deed of the
Owner.
Subscribed and Sworn before me this ____ day of 199_.
----------------------------------
NOTARY PUBLIC
COUNTY OF
------------------------
STATE OF
-------------------------
My Commission expires the
day of , 19__.
---- ---------------
EXHIBIT E-2
FORM OF TRANSFEROR CERTIFICATE
__________, 199__
(CERTIFICATE REGISTRAR)
Re: J.P. Morgan Commercial Mortgage Finance Corp.,
Mortgage Pass-Through Certificates, Series
199 - , Class ( )
----------------------------------------------
Dear Sirs::
In connection with our disposition of the above Certificates we
certify that (a) we understand that the Certificates have not been registered
under the Securities Act of 1933, as amended (the "Act"), and are being
disposed by us in a transaction that is exempt from the registration
requirements of the Act, (b) we have not offered or sold any Certificates to,
or solicited offers to buy any Certificates from, any person, or otherwise
approached or negotiated with any person with respect thereto, in a manner
that would be deemed, or taken any other action which would result in, a
violation of Section 5 of the Act and (c) to the extent we are disposing of a
Class ( ) Certificate, we have no knowledge the Transferee is not a
Permitted Transferee.
Very truly yours,
___________________________
(Transferor)
By:
--------------------------
Name:
Title:
EXHIBIT F
MORTGAGE LOAN SCHEDULE
Exhibit 99 to Report on Form 8-K filed on June 20, 1997 with respect to
the event occurring on June 18, 1997 under Registration Statement No. 333-04554
is incorporated herein by reference.
EXHIBIT G
FORM OF ACKNOWLEDGMENT
The undersigned hereby acknowledges that U.S. securities laws may impose
certain restrictions on the use of the information provided to it pursuant to
the Pooling and Servicing Agreement dated as of _____________, 199_ by and
among J.P. Morgan Commercial Mortgage Finance Corp., as depositor, Midland
Loan Services L.P., as master servicer and special servicer, LaSalle National
Bank, as trustee and ABN AMRO Bank N.V., as fiscal agent.
____________________________
By:_________________________
Name:
Title:
EXHIBIT H
FORM OF REQUEST FOR RELEASE AND
RECEIPT OF DOCUMENTS
To: (Trustee Name and Address)
Re: Commercial Mortgage Pass-Through Certificates, Series 1996-1
In connection with the administration of the Mortgage Loans held by
you as the Trustee, we request the release of the (Trustee's Mortgage
File/(specify documents)) for the Mortgage Loan described below, for the
reason indicated. The undersigned agrees to acknowledge receipt of such
Mortgage Loan File promptly upon receipt.
Mortgagor's Name, Address & Zip Code:
- -------------------------------------
Mortgage Loan Number
- --------------------
Reason for Requesting Documents (check one)
- -------------------------------
1. Mortgage Loan paid in full. (Servicer hereby certifies that
- -------
all amounts received in connection therewith have been credited or will be
escrowed as provided in the Servicing Agreement.)
2. Mortgage Loan Liquidated. (Servicer hereby certifies that all
- -------
proceeds of foreclosure, insurance or other liquidation have been finally
received and credited to or will be escrowed pursuant to the Servicing
Agreement.)
3. Mortgage Loan in Foreclosure.
- -------
4. Other (explain)
- -------
If item 1 or 2 above is checked, and if all or part of the
Trustee's Mortgage File was previously released to us, please release to us
our previous receipt on file with you, as well as any additional documents in
your possession relating to the above specified Mortgage Loan. If item 3 or 4
is checked, upon our return of all of the above documents to you as Trustee,
please acknowledge your receipt by signing in the space indicated below, and
returning this form.
(Servicer)
By:
--------------------------
Name:
------------------------
Title:
-----------------------
Date:
------------------------
Documents returned to Trustee:
By:
-------------------------------
Name:
---------------------------
Title:
-----------------------------
Date:
-----------------------------
BROWN & WOOD LLP
One World Trade Center
New York, New York 10048
Telephone: (212) 839-5300
Facsimile: (212) 839-5599
July 14, 1997
VIA ELECTRONIC FILING
- ---------------------
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: J.P. Morgan Commercial Mortgage Finance Corp.
Mortgage Pass-Through Certificates, Series 1997-SPTL-C1
-------------------------------------------------------
Ladies and Gentlemen:
On behalf of J.P. Morgan Commercial Mortgage Finance Corp. (the
"Company"), we attach herewith for filing, pursuant to the Securities and
Exchange Act of 1934, the Company's Current Report on Form 8-K, for the
Pooling and Servicing Agreement with attached exhibits in connection with the
above-referenced transaction.
Very truly yours,
/s/ Kirill A. Stein
-------------------
Kirill A. Stein
Attachment
