SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K
(Mark One)
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended: December 31, 1997
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OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _____________ to ______________
Commission file number: 333-4554
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J.P. Morgan Commercial Mortgage Finance Corp.
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(Exact name of Registrant as specified in its charter)
Delaware 13-3789046
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(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
60 Wall Street
New York, New York 10260
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 483-2323
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Securities registered pursuant to Section 12(b) of the Act: None
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Securities registered pursuant to Section 12(g) of the Act: None
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Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
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Indicate by check mark if disclosure of delinquent filers pursuant to item
405 of Regulation S-K is not contained herein, and will be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. ( )
State the aggregate market value of the voting stock held by non-affiliates
of the Registrant: Not applicable
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Indicate the number of shares of common stock of the Registrant outstanding
as of December 31, 1997: Not applicable
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DOCUMENTS INCORPORATED BY REFERENCE
* * *
This Annual Report on Form 10-K (the "Report") is filed with respect to
the trust fund (the "Trust Fund") formed pursuant to the pooling and
servicing agreement dated as of June, 1, 1997 (the "Pooling and Servicing
Agreement") by and among J.P. Morgan Commercial Mortgage Finance Corp. (the
"Company"), Midland Loan Services, L.P., as master servicer and special
servicer (in such capacity, the "Master Servicer" or the "Special Servicer"),
LaSalle National Bank, as Trustee (the "Trustee") and ABN AMRO Bank, N.V., as
fiscal agent, for the issuance of J.P. Morgan Commercial Mortgage Finance
Corp., Mortgage Pass-Through Certificates, Series 1997-SPTL-C1 (the
"Certificates").
PART I
ITEM 1. BUSINESS
Not applicable.
ITEM 2. PROPERTIES
Not applicable.
ITEM 3. LEGAL PROCEEDINGS
The Company is not aware of any pending legal proceedings relating
to the Trust Fund to which any of the Trust Fund, the Trustee, the
Master Servicer or the Company was a party or of which any of their
respective properties was the subject during the fiscal year covered
by this Report, nor is the Company aware of any such proceedings
contemplated by governmental authorities.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted to a vote of Certificateholders, and no
Certificateholder consent was solicited during the fiscal year
covered by this Report.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
(a) There is no established public trading market for the
Certificates.
(b) As of December 31, 1997, there were eighteen (18) holders of
record of the Certificates.
(c) Not applicable. (Information as to distributions to
Certificateholders is provided in the Registrant's monthly
filings on Form 8-K.)
ITEM 6. SELECTED FINANCIAL DATA
Not applicable.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Not applicable.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Not applicable.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Not applicable.
ITEM 11. EXECUTIVE COMPENSATION
Not applicable.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
(a) Not applicable.
(b) Not applicable.
(c) Not applicable.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
(a) Not applicable.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) (1) Pursuant to the Pooling and Servicing Agreement, the Master
Servicer is required (i) to deliver an annual statement as
to compliance with the provisions of the Pooling and
Servicing Agreement and certain other matters (the "Annual
Statement of the Master Servicer") and (ii) to cause a firm
of independent public accountants to deliver an annual
report as to compliance with the servicing provisions of the
Pooling and Servicing Agreement (the "Annual Report of the
Firm of Accountants"). Both the Annual Statement of the
Master Servicer and the Annual Report of the Firm of
Accountants are attached as Exhibits 99.1 and 99.2,
respectively, to this Report.
(2) Not applicable.
(3) The required exhibits are as follows:
Exhibit 3(i): Copy of Company's Certificate of
Incorporation (Incorporated by reference as an Exhibit to
Registration Statement on Form S-3 (File No. 333-4554)).
Exhibit 3(ii): Copy of Company's By-laws (Incorporated by
reference as an Exhibit to Registration Statement on Form S-
3 (File No. 333-4554)).
Exhibit 4: Pooling and Servicing Agreement (Filed as part
of the Registrant's Current Report on Form 8-K filed on July
15, 1997).
Exhibit 99.1: Annual Statement of the Master Servicer.
Exhibit 99.2: Annual Report of the Firm of Accountants.
(b) Current Reports on Form 8-K filed during the last quarter of the
period covered by this Report:
Date of Current Report Item Reported
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October 25, 1997 Monthly report sent to
Certificateholders with the
October 1997 distribution
November 25, 1997 Monthly report sent to
Certificateholders with the
November 1997 distribution
December 25, 1997 Monthly report sent to
Certificateholders with the
December 1997 distribution
(c) See subparagraph (a)(3) above.
(d) Not applicable.
SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO
SECTION 15(d) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES
PURSUANT TO SECTION 12 OF THE ACT.
No such annual report, proxy statement, form of proxy or other
soliciting material has been sent to Certificateholders.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.,
as Registrant and on behalf of the Trust Fund.
By: /s/ Larry Blume
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Name: Larry Blume
Title: Vice President
Date: April 14, 1998
EXHIBIT INDEX
Sequential
Exhibit Document Page Number
- ------- -------- -----------
3(i) Company's Certificate of Incorporation (Incorporated
by reference as an Exhibit to Registration Statement
on Form S-3 (File No. 33-4554)) . . . . . . . . . . . . . . . *
3(ii) Company's By-laws (Incorporated by reference as
an Exhibit to Registration Statement on Form S-3
(File No. 33-4554)) . . . . . . . . . . . . . . . . . . . . . *
4 Pooling and Servicing Agreement (Filed as part of the
Company's Current Report on Form 8-K filed on
July 15, 1997) . . . . . . . . . . . . . . . . . . . . . . . . *
99.1 Annual Statement of the Master Servicer . . . . . . . . . . 10
99.2 Annual Report of the Firm of Accountants . . . . . . . . . . 12
_________________________
* Incorporated herein by reference.
Exhibit 99.1
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(Midland Loan Services, Inc. Letterhead)
April 15, 1998
ABS Trust Services Group - SPTL 97-C1
LaSalle National Bank
135 South LaSalle Street, Suite 1740
Chicago, Illinois 60603
Southern Pacific Thrift and Loan Commercial Mortgage Pass-Through
Certificates
Series 1997-C1
OFFICER'S CERTIFICATE
Pursuant to the requirements of that certain Pooling and Servicing Agreement
governing the referenced Trust (the "PSA"), it is hereby certified that the
(i) undersigned has completed a review of the Servicer's performance of its
obligations under the PSA for the current calendar year; (ii) to the best of
the undersigned's knowledge on the basis of that review the Servicer has
fulfilled all of its obligations under the PSA throughout such period; (iii)
to the best of the undersigned's knowledge, except as noted by the attached
memorandum, the sub-servicer has fulfilled its obligations under its sub-
servicing agreement in all material respects; and (iv) no notice has been
received from any governmental agency or body which would indicate a
challenge or question as to the status of the Trust's qualification as a
REMIC under the Code.
/s/ Charles J. Sipple April 15, 1998
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Charles J. Sipple Date
Senior Vice President
/s/ Lawrence D. Ashley April 15, 1998
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Lawrence D. Ashley Date
Vice President
cc: Structured Finance: Commercial Real Estate Monitoring
Duff & Phelps Credit Rating Co.
55 East Monroe Street, 35th Floor
Chicago, Illinois 60603
P.O. Box 419127 Kansas City, MO 64141-6127 Phone 816/435-5000
(Midland Loan Services, Inc. Letterhead)
MEMORANDUM
To: Charles J. Sipple
From: Larry Smith
Date: April 15, 1998
Subject:Annual review of servicing activities - SPTL '97-C1
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We have reviewed the performance of Southern Pacific Bank ("SPB") as
sub-servicer during the calendar year ended December 31, 1997. Exceptions to
compliance with the servicing standard as required by the sub-servicing
agreement for the referenced transaction were noted, as follows:
- - Differences that existed between SPB's accounting records and bank
account statements for custodial bank accounts were not adequately
reconciled.
- - The minimum hazard insurance coverage specified by the PSA was not
enforced for some loans. SPB has represented that their procedures
have been changed and that they are now in compliance with
requirements.
- - As of January 10, 1998, SPB loan records and related reports to the
trustee were different with respect to the principal balances of 41
loans. While the cumulative total of these differences is not material,
Midland Loan Services believes that the SPB should investigate the cause
for the differences and resolve them in a timely manner. SPB has
represented that they are in the process of resolving these differences.
- - During a portion of the year ended December 31, 1997, SPB's execution of
some ARM loan adjustments were not accordance with the related mortgage
notes. SPB has represented that the differences have been corrected and
that all ARM adjustments are now made in accordance with the mortgage
documents.
- - SPB has not caused the mortgagee clause to be changed on some borrower
hazard insurance policies to reflect the name of the Trust.
- - SPB's documentation was not adequate regarding the collection effort for
several delinquent loans. SPB has represented that their procedures
have been changed and that they are now in compliance.
- - SPB did not report or remit prepayment penalties associated with loans
that were paid off during a portion of 1997. SPB has subsequently
reported these prepayment penalties and has represented that they will
remit the related funds to the Trustee with the next remittance.
Exhibit 99.2
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(Ernst & Young LLP Letterhead)
Independent Auditors' Report on Management's
Assertion on Compliance With Minimum
Servicing Standards Set Forth in the Uniform
Single Attestation Program for Mortgage Bankers
The Board of Directors and Stockholders
of Midland Data Systems, Inc.
The Partners of Midland Loan Services, L.P.
We have examined management's assertion that Midland Data Systems, Inc. and
Midland Loan Services, L.P. (the Companies) complied with the minimum
servicing standards set forth in the Mortgage Bankers Association of
America's (MBA) Uniform Single Attestation Program for Mortgage Bankers,
except for commercial loan and multifamily loan servicing, minimum servicing
standards V.4. and VI.1., which the MBA has interpreted as inapplicable to
such servicing during the year ended December 31, 1997, included in the
accompanying report titled Report of Management. management is responsible
for the Companies' compliance with those requirements. Our responsibility is
to express an opinion on management's assertion about the Companies'
compliance based on our examination.
Our examination was made in accordance with standards established by the
American Institute of Certified Public Accountants and, accordingly, included
examining, on a test basis, evidence about the Companies' compliance with
those requirements and performing such other procedures as we considered
necessary in the circumstances. We believe that our examination provides a
reasonable basis for our opinion. Our examination does not provide a legal
determination on the Companies' compliance with specified requirements.
In our opinion, management's assertion that the Companies complied with the
aforementioned requirements during the year ended December 31, 1997 is fairly
stated, in all material respects.
/s/ Ernst & Young LLP
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Ernst & Young LLP
January 28, 1998
Ernst & Young LLP is a member of Ernst & Young International, Ltd.
(MIDLAND LOAN SERVICES, L.P. Letterhead)
Report of Management
We, as members of management of Midland Data Systems, Inc. and Midland Loan
Services, L.P. (the Companies), are responsible for complying with the
minimum servicing standards as set forth in the Mortgage Bankers Association
of America's (MBA) Uniform Single Attestation Program for Mortgage Bankers
(USAP) except, for commercial loan and multifamily loan servicing, minimum
servicing standards V.4. and VI.1., which the MBA has interpreted as
inapplicable to such servicing. We are also responsible for establishing and
maintaining effective internal control over compliance with these standards.
We have performed an evaluation of the Companies' compliance with the minimum
servicing standards as set forth in the USAP as of December 31, 1997 and for
the year then ended. Based on this evaluation, we assert that during the
year ended December 31, 1997 the Companies complied with the minimum
servicing standards set forth in the USAP.
As of and for this same period, the Companies had in effect a fidelity bond
and errors and omissions policy in the amount of not less than $13 million.
January 28, 1998
/s/ C.J. Sipple
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C.J. Sipple
Senior Vice President
/s/ Paula Mickelson
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Paula Mickelson
Vice President
210 W. 10th Street Kansas City, MO 64105 Phone: 816/435-5000 FAX: 816/435-23271
