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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities and Exchange Act of 1934
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Date of Report: March 27, 1997
(Date of earliest event reported)
ASSET SECURITIZATION CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 33-49370-02 13-3672337
(State or Other (Commission File (I.R.S. Employer
Jurisdiction of Number) Identification Number
Incorporation)
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Two World Financial Center, Building B
New York, New York 10281
(Address of Principal Executive Office)
Registrant's telephone number, including area code: (212) 667-9300
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Item 5. Other Events
On March 27, 1997, Asset Securitization Corporation (the
"Company") caused the issuance, pursuant to a Pooling and
Servicing Agreement dated as of March 27, 1997 (the "Pooling and
Servicing Agreement"), by and among the Company, as Depositor,
Pacific Mutual Life Insurance Company, as Servicer, LaSalle
National Bank, as Trustee, and ABN AMRO Bank N.V., as Fiscal
Agent, of Asset Securitization Corporation, Commercial Mortgage
Pass-Through Certificates, Series 1997-MD VII (the
"Certificates"), issued in fifteen classes. The Class A-1A, Class
A-1B, Class PS-1, Class CS-1, Class A-2, Class A-3, Class A-4,
Class A-5 and Class A-6 Certificates (the "Offered Certificates")
were sold to Nomura Securities International, Inc. ("NSI")
pursuant to an Underwriting Agreement dated as of March 20, 1997,
between the Company and NSI, as underwriter. The Class B-1, Class
B-1H, Class V-1, Class V-2, Class R and Class LR Certificates
(the "Private Certificates") were sold to NSI pursuant to a
Purchase Agreement dated March 20, 1997, between the Company and
NSI, as purchaser. In the aggregate, the Certificates
represent the entire beneficial ownership interests in a trust
fund consisting of seven commercial mortgage loans (the "Mortgage
Loans"). The Offered Certificates had an aggregate principal
balance as of March 27, 1997 of $487,078,946 and the Private
Certificates had an aggregate principal balance as of March 27,
1997 or $12,488,205.79. Capitalized terms used herein and not
defined herein shall have the meanings ascribed to them in the
Pooling and Servicing Agreement.
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits
(c) Exhibit
Item 601(a)
Exhibit of Regulation
No. S-K Exhibit No. Description
- ------- --------------- -----------
1 1 Underwriting Agreement, dated as of
March 20, 1997
2 10 Pooling and Servicing Agreement, dated
as of March 27, 1997
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Pursuant to the requirements of the Securities Act of 1934,
the Registrant has duly caused this report to be signed on behalf
of the Registrant by the undersigned thereunto duly authorized.
ASSET SECURITIZATION CORPORATION
By: /s/ Marlyn A. Marincas
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Marlyn A. Marincas
Vice President
Date: March 27, 1997
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EXHIBIT INDEX
Item 601(a)
Exhibit of Regulation
No. S-K Exhibit No. Description
- ------- --------------- -----------
1 1 Underwriting Agreement, dated as of
March 20, 1997
2 10 Pooling and Servicing Agreement, dated
as of March 27, 1997
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ASSET SECURITIZATION CORPORATION
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1997-MD VII, CLASS A-1A, CLASS A-1B, CLASS PS-1, CLASS CS-1,
CLASS A-2, CLASS A-3, CLASS A-4, CLASS A-5 AND CLASS A-6
UNDERWRITING AGREEMENT
New York, New York
March 20, 1997
Nomura Securities International, Inc.
2 World Financial Center - Building B
New York, New York 10281-1198
Ladies and Gentlemen:
Asset Securitization Corporation, a Delaware
corporation (the "Company"), proposes to sell, pursuant to the
terms of this Underwriting Agreement (this "Agreement"), to
Nomura Securities International, Inc. (the "Underwriter"), Asset
Securitization Corporation, Commercial Mortgage Pass-Through
Certificates, Series 1997-MD VII, Class A-1A, Class A-1B, Class
PS-1, Class CS-1, Class A-2, Class A-3, Class A-4, Class A-5 and
Class A-6 Certificates, in the original Certificate Balances set
forth in Schedule I hereto (collectively, the "Offered
Certificates"). The Asset Securitization Corporation, Commercial
Mortgage Pass-Through Certificates, Series 1997-MD VII, will also
consist of the Class B-1, Class B-1H, Class V-1, Class V-2, Class
R and Class LR Certificates (the "Private Certificates" and
together with the Offered Certificates, the "Certificates"). The
Certificates will be issued pursuant to a Pooling and Servicing
Agreement (the "Pooling and Servicing Agreement") to be dated as
of March 27, 1997, by and among the Company, as depositor,
Pacific Mutual Life Insurance Company, as servicer (the
"Servicer"), LaSalle National Bank, as trustee (the "Trustee"),
and ABN AMRO Bank N.V., as fiscal agent (the "Fiscal Agent").
Each Certificate will evidence a fractional, undivided beneficial
ownership interest in a trust fund (the "Trust Fund") consisting
primarily of a mortgage pool (the "Mortgage Pool") consisting of
7 fixed-rate mortgage loans, with original terms to maturity of
not more than 30 years (the "Mortgage Loans"), secured by first
liens on 71 commercial properties. The Offered Certificates are
described more fully in Schedule I hereto and in a Prospectus
Supplement dated March 20, 1997 (the "Prospectus Supplement") and
Prospectus dated March 20, 1997 (the "Prospectus" and with the
Prospectus Supplement, the "Final Prospectus") furnished to the
Underwriter by the Company.
Elections will be made to treat designated portions of
the Trust Fund, exclusive of the Reserve Accounts, Lock Box
Accounts, Cash Collateral Accounts, the Certificate Distribution
Account, the Excess Interest, the Hudson Treasury Collateral
Account, the Excess Interest Distribution Account, the Default
Interest and the Default Interest Distribution Account (such
portions of the Trust Fund, the "Trust REMICs"), and the Trust
REMICs will qualify, as two separate "real estate mortgage
investment conduits" (each, a "REMIC" or, alternatively, the
"Upper-Tier REMIC" and the "Lower-Tier REMIC," respectively) for
federal income tax
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purposes. The Class R and Class LR Certificates will constitute
the sole classes of "residual interests" in the Upper-Tier REMIC
and the Lower-Tier REMIC, respectively. The Class V-1
Certificates will represent the right to receive Net Default
Interest and the Class V-2 Certificates will represent the right
to receive Excess Interest, which portions of the Trust Fund will
be treated as a grantor trust for federal income tax purposes.
The Mortgage Loans will be purchased by the Company
from Nomura Asset Capital Corporation, a Delaware corporation
("NACC"), pursuant to a Mortgage Loan Purchase and Sale Agreement
(the "Mortgage Loan Purchase and Sale Agreement"), to be dated as
of the Cut-off Date between the Company and NACC.
Capitalized terms used but not otherwise defined
herein shall have the respective meanings assigned to them in the
Pooling and Servicing Agreement.
1. Representations and Warranties. The Company represents
and warrants to, and agrees with, the Underwriter that:
(a) The Company has filed with the Securities and
Exchange Commission (the "Commission") a registration statement,
with exhibits thereto, on Form S-3 (File No. 33-99502) (the
"Registration Statement") for the registration of Commercial
Mortgage Pass-Through Certificates, issuable in series, including
the Offered Certificates, under the Securities Act of 1933, as
amended (the "1933 Act"), which Registration Statement has become
effective and copies of which have heretofore been delivered to
the Underwriter. The Company meets the requirements for use of
Form S-3 under the 1933 Act, and such Registration Statement
meets the requirements set forth in Rule 415(a)(1)(x) under the
1933 Act and complies in all other material respects with the
1933 Act and the rules and regulations thereunder. The Company
filed on March 17, 1997, with the Commission, with the
Underwriter's consent, a preliminary prospectus supplement and
prospectus dated March 14, 1997 (the "Preliminary Prospectus")
and will file by March 25, 1997 with the Commission, with the
Underwriter's consent, the Final Prospectus, in each case
pursuant to Rule 424(b)(5) under the 1933 Act and in each case
relating to the Offered Certificates and the plan of distribution
thereof, and has previously advised the Underwriter of all
further information (financial and other) with respect to the
Offered Certificates and the Mortgage Pool to be set forth
therein. The Company has filed with the Commission on Form 8-K on
each of February 25, 1997 and February 26, 1997 Collateral Term
Sheets (as defined below) provided to it by the Underwriter
pursuant to Section 4(b)(iv) hereof. Subject to the Underwriter's
compliance with its obligations pursuant to Section 4(b), the
Company shall file any other Marketing Materials (as defined
herein) provided to it by the Underwriter under Section 4(b)(iv)
hereof with the Commission on Form 8-K in accordance with the
provisions of such Section. The Company also will file with the
Commission within fifteen days of the issuance of the
Certificates a Current Report on Form 8-K setting forth specific
information concerning the Mortgage Pool and the Offered
Certificates to the extent that such information is not set forth
in the Final Prospectus.
(b) As of (i) the date hereof, (ii) the date on
which the Final Prospectus is first filed pursuant to Rule
424(b)(5) under the 1933 Act, (iii) the date on which, prior to
the Closing Date (as hereinafter defined), any amendment to the
Registration Statement becomes effective, (iv) the date on which
any amendment or supplement to the Final Prospectus is filed
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with the Commission and (v) the Closing Date, (x) the
Registration Statement, as amended as of any such time, and the
Final Prospectus, as amended or supplemented as of any such time,
complies and will comply in all material respects with the
applicable requirements of the 1933 Act and the rules and
regulations thereunder, (y) the Registration Statement, as
amended as of any such time, does not contain and will not
contain any untrue statement of a material fact and does not omit
and will not omit to state any material fact required to be
stated therein or necessary in order to make the statements
therein not misleading and (z) the Final Prospectus, as amended
or supplemented as of any such time, does not contain and will
not contain any untrue statement of a material fact and does not
omit and will not omit to state any material fact required to be
stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were
made, not misleading; provided, however, that the Company makes
no representations or warranties as to statements contained in or
omitted from the Registration Statement and any amendment thereto
or the Final Prospectus and any amendment or supplement thereto
made in reliance upon and in conformity with either any
information in any Marketing Materials required to be provided by
the Underwriter to the Company pursuant to Section 4(b) hereof or
any information furnished in writing to the Company by the
Underwriter specifically for use in the Registration Statement or
any amendment thereto and the Final Prospectus or any amendment
or supplement thereto.
(c) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws
of the State of Delaware and has full power and authority
(corporate and other) and all requisite approvals, orders,
licenses, certificates and permits of and from all governmental
or regulatory officials and bodies necessary to own its
properties and to conduct its business as described in the
Registration Statement and Final Prospectus and to enter into and
perform its obligations under this Agreement, the Pooling and
Servicing Agreement and the Mortgage Loan Purchase and Sale
Agreement; all such authorization, approvals, orders, licenses,
certificates and permits are in full force and effect and contain
no unduly burdensome provisions; and, except as otherwise set
forth or contemplated in the Registration Statement or the Final
Prospectus, there are no legal or governmental proceedings
pending or, to the best knowledge of the Company, threatened that
would result in a material modification, suspension or revocation
thereof.
(d) As of (i) the date hereof, (ii) the date on
which the Final Prospectus is first filed pursuant to Rule
424(b)(5) under the 1933 Act, (iii) the date on which, prior to
the Closing Date, any post-effective amendment to the
Registration Statement becomes effective, (iv) the date on which
any amendment or supplement to the Final Prospectus is filed with
the Commission and (v) the Closing Date, there has not and will
not have been (x) any request by the Commission for any further
amendment to the Registration Statement or any amendment or
supplement to the Final Prospectus or for any additional
information, (y) the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the
institution or threat of any proceeding for that purpose or (z)
any notification with respect to the suspension of the
qualification of the Offered Certificates for sale in any
jurisdiction or any initiation or threat of any proceeding for
such purpose.
(e) This Agreement has been duly authorized,
executed and delivered by the Company. Each of the Pooling
and Servicing Agreement and the Mortgage Loan Purchase
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and Sale Agreement, when executed and delivered as contemplated
hereby, will have been duly authorized, executed and delivered by
the Company. Each of the Pooling and Servicing Agreement and the
Mortgage Loan Purchase and Sale Agreement, when so executed and
delivered, will constitute the legal, valid, binding and
enforceable agreement of the Company, subject as to
enforceability, to bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights
generally and to general principles of equity regardless of
whether enforcement is sought in a proceeding in equity or at
law.
(f) As of the Closing Date, the Offered
Certificates, the Pooling and Servicing Agreement and the
Mortgage Loan Purchase and Sale Agreement will each conform in
all material respects to the respective descriptions thereof
contained in the Final Prospectus. As of the Closing Date, the
Offered Certificates will be duly and validly authorized and,
when duly and validly executed, countersigned and delivered in
accordance with the Pooling and Servicing Agreement and delivered
to the Underwriter against payment therefor as provided herein,
will be duly and validly issued and outstanding and entitled to
the benefits of the Pooling and Servicing Agreement.
(g) As of the Closing Date, each of the Mortgage
Loans will meet, in all material respects, the description
thereof in the Final Prospectus, and on the Closing Date, the
Company (pursuant to the Pooling and Servicing Agreement) will
assign to the Trustee for the benefit of the Certificateholders,
certain representations and warranties with respect to the
Mortgage Loans made by NACC to the Company in the Mortgage Loan
Purchase and Sale Agreement, and the representations and
warranties will be true and correct in all material respects.
(h) Immediately prior to the assignment of the
Mortgage Loans to the Trustee, the Company will have good title
to, and will be the sole owner of, each Mortgage Loan free and
clear of any pledge, mortgage, lien, security interest or other
encumbrance.
(i) The Company is not in violation of its
certificate of incorporation or by-laws or in default under any
agreement, indenture or instrument, the effect of which violation
or default would be material to the Company. Neither the issuance
and sale of the Offered Certificates, nor the execution and
delivery by the Company of this Agreement, the Pooling and
Servicing Agreement or the Mortgage Loan Purchase and Sale
Agreement, nor the consummation by the Company of any of the
transactions herein or therein contemplated, nor compliance by
the Company with the provisions hereof or thereof, does or will
conflict with or result in a breach of any term or provision of
the certificate of incorporation or by-laws of the Company or
conflict with, result in a breach, violation or acceleration of,
or constitute a default under, the terms of any indenture or
other agreement or instrument to which the Company is a party or
by which it is bound, or any statute, order or regulation
applicable to the Company of any court, regulatory body,
administrative agency or governmental body having jurisdiction
over the Company. The Company is not a party to, bound by or in
breach or violation of any indenture or other agreement or
instrument, or subject to or in violation of any statute, order
or regulation of any court, regulatory body, administrative
agency or governmental body having jurisdiction over it that
materially and adversely affects, or may in the future materially
and adversely affect, (i) the ability of the Company to perform
its obligations under this Agreement, the Pooling and Servicing
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Agreement or the Mortgage Loan Purchase and Sale Agreement or
(ii) the business, operations, financial conditions, properties
or assets of the Company.
(j) There are no actions or proceedings against,
or investigations of, the Company pending, or, to the knowledge
of the Company, threatened, before any court, arbitrator,
administrative agency or other tribunal (i) asserting the
invalidity of this Agreement, the Pooling and Servicing
Agreement, the Mortgage Loan Purchase and Sale Agreement or the
Offered Certificates, (ii) seeking to prevent the issuance of the
Offered Certificates or the consummation of any of the
transactions contemplated by this Agreement, the Pooling and
Servicing Agreement or the Mortgage Loan Purchase and Sale
Agreement, (iii) that might materially and adversely affect the
performance by the Company of its obligations under, or the
validity or enforceability of, this Agreement, the Pooling and
Servicing Agreement, the Mortgage Loan Purchase and Sale
Agreement or the Offered Certificates or (iv) seeking to affect
adversely the federal income tax attributes of the Offered
Certificates as described in the Final Prospectus.
(k) Any taxes, fees and other governmental
charges in connection with the execution and delivery of this
Agreement, the Pooling and Servicing Agreement and the Mortgage
Loan Purchase and Sale Agreement or the execution, delivery and
sale of the Offered Certificates have been or will be paid at or
prior to the Closing Date.
(l) Neither the Company nor the Trust Fund is,
and neither the issuance and sale of the Offered Certificates in
the manner contemplated by the Final Prospectus nor the
activities of the Trust Fund pursuant to the Pooling and
Servicing Agreement will cause the Company or the Trust Fund to
be, an "investment company" or under the control of an
"investment company" as such terms are defined in the Investment
Company Act of 1940, as amended.
(m) Upon execution and delivery to the Trustee of
the Pooling and Servicing Agreement, payment by the Underwriter
for the Offered Certificates, and delivery to the Underwriter of
the Offered Certificates, the Trust Fund will own the Mortgage
Loans and the Underwriter will acquire title to the Offered
Certificates, in each case free of liens except to the extent
permitted by the Pooling and Servicing Agreement.
2. Purchase and Sale. Subject to the terms and
conditions and in reliance upon the representations and
warranties set forth herein, the Company agrees to sell to the
Underwriter, and the Underwriter agrees to purchase from the
Company, on the Closing Date, the Offered Certificates at 101.5%
of the initial Certificate Balances set forth in Schedule I
hereto, plus accrued interest, if any, at the related
Pass-Through Rates from the Cut-off Date up to, but not
including, the Closing Date.
3. Delivery and Payment. Delivery of the Offered
Certificates shall be made in book-entry form (the "Book-Entry
Certificates") through the facilities of The Depository Trust
Company ("DTC") in the United States and Centrale de Livraison de
Valeurs Mobiliers S.A. ("CEDEL") and The Euroclear System
("Euroclear") in Europe, on or about March 27, 1997 (the
"Closing Date") and payment thereof will be made at the
offices of Cleary, Gottlieb, Steen & Hamilton, One Liberty Plaza,
New York, New York 10006, at 10:00 a.m. New York City time.
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Delivery of the Offered Certificates shall be made to the
Underwriter against payment by the Underwriter of the purchase
price therefor in immediately available funds wired to such bank
as may be designated by the Company, or such other manner of
payment as may be agreed upon by the Company and the Underwriter.
Each of the Book-Entry Certificates to be so delivered shall be
represented by certificates registered in the name of Cede & Co.,
as nominee of DTC. The interests of beneficial owners of the
Book-Entry Certificates will be represented by book entries on
the records of DTC and participating members thereof. Definitive
certificates representing the Book-Entry Certificates will be
available only under limited circumstances.
The Company agrees to have the Offered Certificates
available for inspection, checking and packaging by the
Underwriter in New York, New York, not later than 10:00 a.m.
on the business day prior to the Closing Date.
4. Offering by Underwriter.
(a) It is understood that the Underwriter
proposes to offer the Offered Certificates for sale to the public
as set forth in the Final Prospectus.
(b) It is understood that the Underwriter may
prepare and provide to prospective investors certain Marketing
Materials in connection with the Underwriter's offering of the
Offered Certificates, subject to the following conditions:
(i) The Underwriter shall comply
with all applicable laws and
regulations in connection
with the use of Marketing
Materials, including the No-
Action Letter of May 20, 1994
issued by the Commission to
Kidder, Peabody Acceptance
Corporation I, Kidder,
Peabody & Co. Incorporated and
Kidder Structured Asset Corpor-
ation, as made applicable to
other issuers and underwrit-
ers by the Commission in
response to the request of
the Public Securities Association
dated May 24, 1994 (collective-
ly, the "Kidder/PSA Letter")
and the No-Action Letter of
February 17, 1995 issued by
the Commission to Public Secur-
ities Association regarding
the distribution of ABS Term
Sheets (as defined below) in
response to its request dated
February 13, 1995 (the "PSA
Letter").
(ii) For purposes hereof, "Computational
Materials" has the meaning set forth in
the Kidder/PSA Letter and each of
"Collateral Term Sheets" and
"Structural Term Sheets" (together, the
"ABS Term Sheets") has the meaning set
forth in the PSA Letter (the ABS Term
Sheets and the Computational Materials,
collectively, the "Marketing
Materials").
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(iii) All Marketing Materials provided
to prospective investors shall bear the
legend previously agreed to by the
Company and the Underwriter.
The Company shall have the right to
require additional specific legends or
notations to appear on any Marketing
Materials, the right to require changes
regarding the use of terminology and
the right to determine the types of
information appearing therein.
(iv) The Underwriter shall provide to the
Company, for filing on Form 8-K, copies
(in such format as required by the
Company so as to permit filing thereof
by the Company) of all Marketing
Materials that are required to be filed
with the Commission pursuant to the
Kidder/PSA Letter and the PSA Letter.
The Underwriter shall provide copies of
all Collateral Term Sheets required to
be filed under the PSA Letter to the
Company no later than 12:00 p.m. New
York City time on the business day
immediately following the date on which
any Collateral Term Sheet was first
delivered to a prospective investor in
the Offered Certificates. The
Underwriter shall provide copies of all
Computational Materials and Structural
Term Sheets required to be filed under
the Kidder/PSA Letter and the PSA
Letter to the Company not later than
12:00 p.m. New York City time on the
date that the Prospectus Supplement is
dated; provided that if any Compu-
tational Materials or Structural Term
Sheets not previously filed with the
Commission are distributed to
prospective investors in connection
with the Underwriter's offering of the
Offered Certificates, subsequent to the
availability of the Final Prospectus
but prior to the sending or giving of
the Final Prospectus, the Underwriter
shall provide copies of such materials
to the Company no later than 12:00 p.m.
New York City time on the business day
immediately following the date on which
such materials were first delivered to
such investors. The Underwriter may, or
if requested by the Company shall,
provide copies of Computational
Materials and Structural Term Sheets in
a consolidated or aggregated form
including all information required to
be filed.
(v) (a) All information included in the
Computational Materials shall be
generated based on the same methodology
and assumptions that are used to
generate the information in the
Prospectus Supplement as set forth
therein (except with respect to Mortgage
Pool parameters or Offered Certificate
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structuring terms that were revised
prior to the printing of the
Prospectus); provided, that the
Computational Materials may include
information based on alternative
assumptions if so specified; and (b)
all information included in the ABS
Term Sheets shall be of the type which
would otherwise be included in the
Prospectus Supplement.
(vi) The Company shall file all Collateral
Terms Sheets with the Commission on
Form 8-K no later than the end of the
business day immediately following the
day on which the Company received such
materials from the Underwriter pursuant
to this Section 4(b), in accordance
with the requirements of the PSA
Letter. The Company shall file all
Structural Term Sheets and
Computational Materials received from
the Underwriter pursuant to this
Section 4(b) with the Commission on
Form 8-K concurrently or shortly before
the filing of the Final Prospectus with
the Commission under Rule 424(b)(5), in
accordance with the requirements of the
Kidder/PSA Letter and the PSA Letter;
provided that in the case of any
Structural Term Sheets and
Computational Materials distributed to
prospective investors subsequent to the
availability of the Final Prospectus,
as described in Section 4(b)(iv), the
Company shall file such Marketing
Materials no later than the end of the
business day immediately following the
day on which the Company received such
materials from the Underwriter. The
Company shall not be obligated to file
any Marketing Materials that have been
determined to contain any material
error or omission. In the event that
any Marketing Materials are not filed
by the Company pursuant to the
preceding sentence, or are filed with
the Commission as described herein and
are subsequently determined to contain
a material error or omission, the
Underwriter shall prepare a corrected
version of such Marketing Materials,
shall circulate such corrected
Marketing Materials to all recipients
of the prior versions thereof and shall
deliver copies of such corrected
Marketing Materials (marked "as
corrected") to the Company for filing
with the Commission in a subsequent
Form 8-K submission.
(vii) If the Underwriter does not provide
any Marketing Materials to the Company
pursuant to subsection (iv) above, the
Underwriter shall be deemed to have
represented, as of the Closing Date,
that it has not provided any actual or
prospective investors with any
information in written or electronic
form in connection with the offering of
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the Certificates that is required to be
filed with the Commission in accordance
with the Kidder/PSA Letter and the PSA
Letter.
(viii) In the event of any delay in the
delivery by the Underwriter to the
Company of Marketing Materials, if any,
required to be delivered in accordance
with subsection (iv) above, the Company
shall have the right to delay the
release of the Prospectus to investors
or to the Underwriter, to delay the
Closing Date and to take other
appropriate actions.
(ix) The Underwriter represents that it has
in place, and covenants that it shall
maintain, internal controls and
procedures sufficient to ensure full
compliance with all applicable legal
requirements (including the Kidder/PSA
Letter and the PSA Letter), and all
provisions of this Agreement, with
respect to the generation and use of
Marketing Materials in connection with
the offering of the Offered
Certificates.
(x) The Underwriter represents
that (i) as of the date of the
delivery of any Marketing
Materials provided to the
Company, (ii) as of the date
hereof, (iii) as of the date on
which, prior to the Closing
Date, any amendment or
supplement to the Final
Prospectus is filed with the
Commission, and (iv) as
of the Closing Date, the
Underwriter has complied
with all of its obligations
hereunder including this Sec-
tion 4 and, with respect to all
Marketing Materials provided
by the Underwriter to the
Company pursuant to this
Section 4(b), if any, such
Marketing Materials did not,
do not and will not contain any
untrue statement of a material
fact and, when read in
conjunction with the Final
Prospectus, do not omit and will
not omit to state any material
fact required to be stated
therein or necessary in order
to make the statements therein
not misleading; provided,
however, that the Underwriter
makes no such representation
to the extent that any such
untrue statement or alleged
untrue statement or omission or
alleged omission was made
therein in reliance upon and in
conformity with written infor-
mation furnished by the
Company to the Underwriter.
The Underwriter also
represents that the Marketing
Materials, if any, provided by
the Underwriter to the
Company constitute and will
constitute a complete set
of all Marketing Materials
required to be filed with
the Commission.
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(c) The Underwriter agrees that it will not offer
or sell the Class A-2, Class A-3, Class A-4, Class A-5 or Class A-6
Certificates in a manner that would cause the assets of the Trust
Fund to be regarded as plan assets and subject to the fiduciary
responsibility provisions of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") or the prohibited
transaction provisions of the Internal Revenue Code of 1986, as
amended (the "Code") or any federal, state or local law ("Similar
Law") which is, to a material extent, similar to the foregoing
provisions of ERISA or the Code, give rise to a fiduciary duty
under ERISA, Section 4975 of the Code or Similar Law on the part
of the Company, the Servicer or the Trustee or constitute a
prohibited transaction under ERISA or Section 4975 of the Code or
Similar Law.
5. Covenants of the Company. The Company covenants
and agrees with the Underwriter that:
(a) The Company has prepared the Prospectus
Supplement which sets forth the amount of Offered Certificates
covered thereby and the terms thereof not otherwise specified in
the Prospectus, the price at which such Offered Certificates are
to be purchased from the Company, the method by which the price
at which such Offered Certificates are to be sold will be
determined, the selling concessions and reallowances, if any, and
such other information as the Underwriter and the Company may
deem appropriate in connection with the offering of the Offered
Certificates. The Company will promptly advise the Underwriter or
counsel for the Underwriter (i) when the Final Prospectus shall
have been filed or transmitted to the Commission for filing
pursuant to Rule 424(b)(5), (ii) when any amendment to the
Registration Statement shall have become effective (unless such
amendment does not relate to the Offered Certificates) or any
further amendment to the Registration Statement (unless such
amendment does not relate to the Offered Certificates) or any
amendment or supplement to the Final Prospectus shall have been
filed with the Commission, (iii) of any proposal or request to
amend the Registration Statement (unless such amendment does not
relate to the Offered Certificates) or amend or supplement the
Final Prospectus or any request by the Commission for any
additional information (unless such request does not relate to
the Offered Certificates), (iv) when notice is received from the
Commission that any post-effective amendment to the Registration
Statement has become or will become effective (unless such
amendment does not relate to the Offered Certificates), (v) of
the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or any post-effective
amendment thereto or the institution or threatening of any
proceeding for that purpose (unless such stop order does not
relate to the Offered Certificates), (vi) of the receipt by the
Company of any notification with respect to the suspension of the
qualification of the Offered Certificates for sale in any
jurisdiction or the institution or threatening of any proceeding
for that purpose and (vii) of the occurrence of any event that
would cause the Registration Statement, as then in effect, to
contain an untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in
order to make the statements therein not misleading, or that
would cause the Final Prospectus, as then in effect, to contain
an untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances
under which they were made, not misleading. The Company will use
its best efforts to prevent the issuance of any such stop order
or suspension and, if issued, to obtain as soon as possible the
withdrawal thereof. The Company will not file any amendment to
the Registration Statement or any amendment or supplement to the
Final Prospectus unless the Company has furnished a copy
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<PAGE>
to the Underwriter for its review prior to filing (unless such
amendment or supplement does not relate to the Offered
Certificates) and will not file any such proposed amendment or
supplement to which the Underwriter reasonably objects. Subject
to the foregoing sentence, the Company will cause the Final
Prospectus to be transmitted to the Commission for filing
pursuant to Rule 424(b)(5) under the 1933 Act or will cause the
Final Prospectus to be filed with the Commission pursuant to said
Rule 424(b)(5).
(b) If, at any time when a prospectus relating to
the Offered Certificates is required to be delivered under the
1933 Act, any event occurs as a result of which the Final
Prospectus, as then amended or supplemented, would include any
untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which
they were made, not misleading, or if it shall be necessary to
amend or supplement the Final Prospectus to comply with the 1933
Act or the rules and regulations thereunder, the Company promptly
will prepare and file with the Commission, at the expense of the
Company, subject to paragraph (a) of this Section 5, an amendment
or supplement that will correct such statement or omission or an
amendment or supplement that will effect such compliance and, if
such amendment or supplement is required to be contained in a
post-effective amendment to the Registration Statement, the
Company will use its best efforts to cause such post-effective
amendment to the Registration Statement to be made effective as
soon as possible.
(c) The Company will furnish to the Underwriter
and to counsel for the Underwriter, without charge, signed copies
of the Registration Statement (including all exhibits thereto and
documents incorporated by reference therein) and each
post-effective amendment thereto which shall become effective on
or prior to the Closing Date and, so long as delivery of a
prospectus by the Underwriter or dealer may be required by the
1933 Act or the Securities Exchange Act of 1934, as amended (the
"1934 Act"), as many copies of the Final Prospectus and any
amendments and supplements thereto as may be reasonably
requested.
(d) The Company agrees that, so long as the
Offered Certificates shall be outstanding, it will deliver to the
Underwriter the annual statement as to compliance delivered to
the Trustee and the Company pursuant to Section 3.14 of the
Pooling and Servicing Agreement and the annual statement of a
firm of independent public accountants delivered to the Trustee
and the Company pursuant to Section 3.15 of the Pooling and
Servicing Agreement, as soon as such statements are furnished to
the Company.
(e) The Company will furnish such information, execute
such instruments and take such action, if any, as may be required to
qualify the Offered Certificates for sale under the laws of such
jurisdiction as the Underwriter may designate and will maintain
such qualifications in effect so long as required for the
distribution of the Offered Certificates; provided, however, that
the Company shall not be required to qualify to do business in
any jurisdiction where it is not now qualified or to take any
action that would subject it to general or unlimited service of
process in any jurisdiction where it is not now subject to such
service of process.
11
<PAGE>
(f) The Company will pay all costs and expenses in
connection with the transactions herein contemplated, including, but
not limited to, the fees and disbursements of its counsel; the costs
and expenses of printing (or otherwise reproducing) and delivering the
Pooling and Servicing Agreement and the Offered Certificates; the fees,
costs and expenses of the Trustee (to the extent permitted under
the Pooling and Servicing Agreement, and except to the extent
that another party is obligated to pay such amounts thereunder);
the fees and disbursements of accountants for the Company; the
costs and expenses in connection with the qualification or
exemption of the Offered Certificates under state securities or
"blue sky" laws (including filing fees and reasonable fees and
disbursements of counsel in connection therewith), the
preparation of any blue sky survey, any determination of the
eligibility of the Offered Certificates for investment by
institutional investors and the preparation of any legal
investment survey; the expenses of printing any such blue sky
survey and legal investment survey; the cost and expenses in
connection with the preparation, printing and filing of any
post-effective amendment to the Registration Statement (including
exhibits thereto), and any supplement or amendment to the Final
Prospectus, the preparation and printing of this Agreement and
the delivery to the Underwriter of such copies of the Final
Prospectus as it may reasonably request; and the fees of rating
agencies. Except as provided in Sections 7 and 9(b), the
Underwriter shall be responsible for paying all costs and
expenses incurred by it in connection with the purchase and sale
of the Offered Certificates, including the fees of its counsel.
(g) So long as any of the Offered Certificates
are outstanding, the Company will furnish to the Underwriter (i)
as soon as practicable after the end of each fiscal year all
documents required to be distributed to Certificateholders or
filed with the Commission pursuant to the 1934 Act, or any order
of the Commission thereunder and (ii) from time to time, any
other information concerning the Company filed with any
government or regulatory authority which is otherwise publicly
available, as the Underwriter reasonably requests.
(h) To the extent, if any, that the ratings
provided with respect to the Offered Certificates by the Rating
Agencies that initially rate the Offered Certificates are
conditional upon the furnishing of documents or the taking of any
other actions by the Company, the Company shall use its best
efforts to furnish such documents and take any such other
actions.
(i) The Company will enter into the Mortgage Loan
Purchase and Sale Agreement and the Pooling and Servicing
Agreement on or prior to the Closing Date.
6. Conditions to the Obligation of the Underwriter.
The obligation of the Underwriter hereunder to purchase the
Offered Certificates shall be subject to the accuracy of the
representations and warranties on the part of the Company
contained herein as of the date hereof and as of the date of the
effectiveness of any post-effective amendment to the Registration
Statement or any amendment or supplement to the Final Prospectus
filed prior to the Closing Date and as of the Closing Date, to
the accuracy of the statements of the Company made in any
certificates delivered pursuant to the provisions hereof, to the
performance by the Company in all material respects of its
obligations hereunder and to the following additional conditions:
(a) The Registration Statement shall remain
effective and no stop order suspending the effectiveness of the
Registration Statement, as amended from time to time, shall
12
<PAGE>
have been issued and not withdrawn and no proceedings for that
purpose shall have been instituted or threatened; and the Final
Prospectus shall have been filed or transmitted for filing with
the Commission in accordance with Rule 424(b)(5) under the 1933
Act.
(b) The Company shall have delivered to the
Underwriter a certificate of the Company, signed by the President
or a Vice President or an Assistant Vice President or an
attorney-in-fact of the Company and dated the Closing Date, to
the effect that the signer of such certificate has carefully
examined the Registration Statement, the Final Prospectus and
this Agreement and that: (i) the representations and warranties
of the Company in this Agreement are true and correct in all
material respects as of the Closing Date with the same effect as
if made on the Closing Date; (ii) the Company has complied with
all the agreements and satisfied all the conditions on its part
to be performed or satisfied at or prior to the Closing Date;
(iii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for
that purpose have been instituted or, to the Company's knowledge,
threatened; and (iv) nothing has come to the attention of the
signer that would lead the signer to believe that the Final
Prospectus contains any untrue statement of a material fact or
omits to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading,
except that no such representation or warranty shall be required
as to statements contained in or omitted from the Final
Prospectus in reliance upon and in conformity with information
furnished in writing to the Company by the Underwriter
specifically for use in the Final Prospectus and any amendment or
supplement thereto.
(c) The Underwriter shall have received from each
of (i) Barry Funt, Esq., in-house counsel to the Company, and
(ii) Cleary, Gottlieb, Steen & Hamilton, special counsel for the
Company, a favorable opinion, dated the Closing Date and
satisfactory in form and substance to counsel for the
Underwriter.
With respect to such opinions, each counsel: (1) may
express its reliance as to factual matters on the representations
and warranties made by, and on certificates or other documents
furnished by officers of, the parties to this Agreement, the
Pooling and Servicing Agreement and the Mortgage Loan Purchase
and Sale Agreement; (2) may assume the due authorization,
execution and delivery of the instruments and documents referred
to therein by the parties thereto other than the Company (except
that Cleary, Gottlieb, Steen & Hamilton may rely upon the opinion
of Barry Funt, Esq. as to due authorization and execution); (3)
may qualify such opinion only as to the federal laws of the
United States of America, the laws of the State of New York and
the General Corporation Law of the State of Delaware; and (4)
may, to the extent necessary, rely as to the laws of states other
than New York on the opinion of local counsel. Such counsel shall
also confirm that the Underwriter may rely, on and as of the
Closing Date, on any opinion or opinions of such counsel
submitted to the Rating Agencies rating the Offered Certificates
as if addressed to the Underwriter and dated the Closing Date.
(d) The Underwriter shall have received from
Cleary, Gottlieb, Steen & Hamilton, counsel for the Underwriter,
such opinion, dated the Closing Date, with respect to the
issuance and sale of the Offered Certificates, the Pooling and
Servicing Agreement, the Mortgage Loan Purchase and Sale
Agreement, this Agreement, the Registration Statement, the Final
13
<PAGE>
Prospectus and other related matters as the Underwriter may
reasonably require, and the Company shall have furnished to such
counsel such documents as they reasonably request for the purpose
of enabling them to pass upon such matters.
(e) The Underwriter shall have received from
Price Waterhouse, certified public accountants, a letter dated
the date hereof and satisfactory in form and substance to the
Underwriter and counsel for the Underwriter, to the effect that
such accountants have performed certain specified procedures as a
result of which they confirmed certain information of an
accounting, financial or statistical nature set forth in the
Final Prospectus.
(f) The Offered Certificates shall have been
rated not lower than the required ratings set forth in Schedule I
hereto by each of Duff & Phelps Credit Rating Co. ("DCR"),
Standard & Poor's Ratings Group ("S&P"), Fitch Investors Service,
L.P. ("Fitch") and Moody's Investors Service, Inc. ("Moody's"),
and as of the Closing Date, such ratings shall not have been
rescinded and there shall not have been any downgrading, or
public notification of a possible downgrading, or public
notification of a possible change without indication of
direction.
(g) The Underwriter shall have received from
counsel for the Trustee a favorable opinion, dated the Closing
Date, in form and substance satisfactory to the Underwriter and
counsel for the Underwriter, to the effect that the Pooling and
Servicing Agreement has been duly authorized, executed and
delivered by the Trustee and constitutes the legal, valid,
binding and enforceable agreement of the Trustee, subject as to
enforceability, to bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights in
general and by general principles of equity regardless of whether
enforcement is considered in a proceeding in equity or at law,
and as to such other matters as may be agreed upon by the
Underwriter and the Trustee.
(h) The Underwriter shall have received from
counsel for the Fiscal Agent a favorable opinion, dated the
Closing Date, in form and substance satisfactory to the
Underwriter and counsel for the Underwriter, to the effect that
the Pooling and Servicing Agreement has been duly authorized,
executed and delivered by the Fiscal Agent and constitutes the
legal, valid, binding and enforceable agreement of the Fiscal
Agent, subject as to enforceability, to bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting
creditors' rights in general and by general principles of equity
regardless of whether enforcement is considered in a proceeding
in equity or at law, and as to such other matters as may be
agreed upon by the Underwriter and the Fiscal Agent.
(i) The Underwriter shall have received from
counsel for the Servicer a favorable opinion, dated the Closing
Date, in form and substance satisfactory to the Underwriter and
counsel for the Underwriter, to the effect that the Pooling and
Servicing Agreement has been duly authorized, executed and
delivered by the Servicer and constitutes the legal, valid,
binding and enforceable agreement of the Servicer, subject as to
enforceability, to bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights in
general and by general principles of equity regardless of whether
enforcement is considered in a proceeding in equity or at law,
and as to such other matters as may be agreed upon by the
Underwriter and the Servicer. With respect to such opinion,
such counsel (a) may express its reliance as to factual
14
<PAGE>
matters on the representations and warranties made by, and on
certificates or other documents furnished by officers of, the
parties to this Agreement and the Pooling and Servicing
Agreement, (b) may assume the due authorization, execution and
delivery of the instruments and documents referred to therein by
the parties thereto other than the Servicer and (c) may qualify
such opinion only as to the laws of the State of New York, the
federal laws of the United States of America and the General
Corporation Law of the State of Delaware.
(j) As of the Closing Date, the Underwriter shall
have received any opinions of counsel the Company supplied to the
Rating Agencies in connection with the transactions contemplated
herein, addressed to the Underwriter and dated the Closing Date.
(k) All proceedings in connection with the
transactions contemplated by this Agreement and all documents
incident hereto shall be satisfactory in form and substance to
the Underwriter and counsel for the Underwriter, and the
Underwriter and such counsel shall have received such
information, certificates and documents as the Underwriter or
such counsel may have reasonably requested.
(l) The sale at or prior to the Closing Date of
the Private Certificates to Nomura Securities International, Inc.
(in such capacity, the "Purchaser") pursuant to the Purchase
Agreement, dated the date hereof between the Purchaser and the
Company, shall have occurred.
If any of the conditions specified in this Section 6
shall not have been fulfilled in all material respects when and
as provided in this Agreement, if the Company is in breach of any
covenants or agreements contained herein or if any of the
opinions and certificates referred to above or elsewhere in this
Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Underwriter and counsel
for the Underwriter, this Agreement and all obligations of the
Underwriter hereunder may be canceled at, or at any time prior
to, the Closing Date by the Underwriter. Notice of such
cancellation shall be given to the Company in writing, or by
telephone or telegraph confirmed in writing.
7. Reimbursement of Underwriter's Expenses. If the
sale of the Offered Certificates provided for herein is not
consummated because any condition to the obligation of the
Underwriter set forth in Section 6 is not satisfied or because of
any refusal, inability or failure on the part of the Company to
perform any agreement herein or comply with any provision hereof,
other than by reason of a default by the Underwriter, the Company
will reimburse the Underwriter, upon demand, for all
out-of-pocket expenses (including reasonable fees and
disbursements of counsel) that shall have been incurred by it in
connection with the proposed purchase and sale of the Offered
Certificates.
8. Indemnification and Contribution. The Company agrees
with the Underwriter that:
(a) The Company will indemnify and hold harmless the
Underwriter and each person who controls the Underwriter within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
against any and all losses, claims, damages or liabilities, joint or
15
<PAGE>
several to which they may become liable under the 1933 Act, the
1934 Act, or other federal or state law or regulation, at common
law or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or the
Final Prospectus or in any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and
agrees to reimburse such indemnified party for any legal or other
expenses reasonably incurred by it in connection with
investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company will not
be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any
such untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity
with written information furnished to the Company as herein
stated by the Underwriter specifically for use in connection with
the preparation thereof or any information in any Marketing
Materials required to be provided by the Underwriter to the
Company pursuant to Section 4(b) hereof. This indemnity will be
in addition to any liability that the Company may otherwise have.
(b) The Underwriter will indemnify and hold
harmless the Company, each of its directors, each of its officers
who signs the Registration Statement, and each person, if any,
who controls the Company within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act, to the same extent as the
foregoing indemnity from the Company to the Underwriter, but only
with reference to written information furnished to the Company as
herein stated by or on behalf of the Underwriter specifically for
use in connection with the preparation of the documents referred
to in the foregoing indemnity. This indemnity will be in addition
to any liability that the Underwriter may otherwise have. The
Company and the Underwriter each acknowledge that the statements
set forth in the sixth, seventh and eighth paragraphs of the
cover of the Final Prospectus, and under the heading "Method of
Distribution" in the Final Prospectus constitute the only
information furnished in writing by or on behalf of the
Underwriter for inclusion in the documents referred to in the
foregoing indemnity.
(c) Promptly after receipt by an indemnified
party under this Section 8 of notice of the commencement of any
action, such indemnified party will, if a claim in respect
thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the
indemnifying party will not relieve it from any liability that it
may have to any indemnified party otherwise than under this
Section 8. In case any such action is brought against any
indemnified party and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled (i)
to participate therein, and (ii) to the extent that it may elect
by written notice delivered to the indemnified party promptly
after receiving the aforesaid notice from such indemnified party,
to assume the defense thereof, with counsel satisfactory to such
indemnified party; provided, however, that if the defendants in
any such action include both the indemnified party and the
indemnifying party and the indemnified party or parties shall
have reasonably concluded that there may be legal defenses
available to it or them and/or other indemnified parties that are
different from or additional to those available to the
indemnifying party, the indemnified party or parties shall have
the right to select separate counsel to assert such legal
defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties; upon
16
<PAGE>
receipt of notice from the indemnifying party to such indemnified
party of its election to assume the defense of such action and
approval by the indemnified party of counsel, the indemnifying
party will not be liable for any legal or other expenses
subsequently incurred by such indemnified party in connection
with the defense thereof, unless (i) the indemnified party shall
have employed separate counsel in connection with the assertion
of legal defenses in accordance with the proviso to the next
preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more
than one separate counsel, approved by the Underwriter in the
case of paragraph (a) of this Section 8, representing the
indemnified parties under such paragraph (a) who are parties to
such action), (ii) the indemnifying party shall not have employed
counsel satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of
commencement of the action, or (iii) the indemnifying party has
authorized the employment of counsel for the indemnified party at
the expense of the indemnifying party; and except that, if clause
(i) or (iii) is applicable, such liability shall only be in
respect of the counsel referred to in such clause (i) or (iii).
(d) If the indemnification provided for in this
Section 8 shall for any reason be unavailable to an indemnified
party under this Section 8, then the Company and the Underwriter
shall contribute to the amount paid or payable by such
indemnified party as a result of the aggregate losses, claims,
damages and liabilities referred to in paragraph (a) or (b)
above, in such proportion as is appropriate to reflect (i) the
relative benefits received by the Company on the one hand and the
Underwriter on the other from the offering of the Offered
Certificates and (ii) the relative fault of the Company on the
one hand and the Underwriter on the other in connection with the
statement or omission that resulted in such losses, claims,
damages and liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company and
the Underwriter shall be deemed to be in the same proportion as
the total proceeds from the offering of the Offered Certificates
(before deducting expenses) received by the Company (as set forth
on the cover page of the Final Prospectus) bear to the total
underwriting discounts and commissions (before deducting
expenses) received by the Underwriter with respect to such
offering. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the
Company or the Underwriter and the parties' relative intent,
knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. The Company and the
Underwriter agree that it would not be just and equitable if
contributions pursuant to this paragraph (d) were to be
determined by pro rata allocation or by any other method of
allocation that does not take account of the equitable
considerations referred to herein. The amount paid or payable by
an indemnified party as a result of the losses, claims, damages
or liabilities referred to in the first sentence of this
paragraph (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in
connection with investigating or defending against any action or
claim which is the subject of this paragraph (d). Notwithstanding
the provisions of this paragraph (d), the Underwriter shall not
be required to contribute any amount in excess of the amount by
which the total price at which the Offered Certificates underwritten
and distributed by it were offered to the public exceeds the amount
of any damages that the Underwriter has otherwise been required to
pay or become liable to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of
17
<PAGE>
Section 11(f) of the 1933 Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 8 each person, if
any, who controls the Underwriter within the meaning of either
Section 15 of the 1933 Act or Section 20 of the 1934 Act shall
have the same rights to contribution as the Underwriter, and each
person, if any, who controls the Company within the meaning of
either Section 15 of the 1933 Act or Section 20 of the 1934 Act,
each officer of the Company who shall have signed the
Registration Statement and each director of the Company shall
have the same rights to contribution as the Company. Any party
entitled to contribution will promptly after receipt of notice of
commencement of any action, suit or proceeding against such party
in respect of which a claim for contribution may be made against
another party or parties under this paragraph (d), notify such
party or parties from whom contribution may be sought, but the
omission to so notify such party or parties shall not relieve the
party or parties from whom contribution may be sought from any
other obligation it or they may have hereunder or otherwise than
under this paragraph (d).
9. Termination. (a) This Agreement shall be subject to
termination in the absolute discretion of the Underwriter, by
notice given to the Company prior to delivery of and payment for
the Offered Certificates, if prior to such time (i) trading of
securities generally on the New York Stock Exchange or the
American Stock Exchange shall have been suspended or materially
limited, (ii) a general moratorium on commercial banking
activities in the State of New York shall have been declared by
either Federal or New York State authorities or (iii) there shall
have occurred any material outbreak or declaration of hostilities
or other calamity or crisis the effect of which on the financial
markets of the United States is such as to make it, in the
reasonable judgment of the Underwriter, impracticable to market
the Offered Certificates on the terms specified herein.
(b) If this Agreement is terminated in accordance
with Section 9(a), except if the event described in Section
9(a)(i) occurred directly or indirectly as a result of the action
of the Underwriter and such event is the basis upon which the
Underwriter seeks termination, the Company shall reimburse the
Underwriter for the reasonable fees and expenses of its counsel
and for such other out-of-pocket expenses as shall have been
incurred in connection with this Agreement and the proposed
purchase of the Offered Certificates, and upon demand, the
Company shall pay the full amount thereof to the Underwriter.
(c) This Agreement will survive delivery of and
payment for the Offered Certificates. The provisions of Sections
7, 8 and 12 shall survive the termination or cancellation of this
Agreement.
10. Notices. All communications hereunder will be in
writing and effective only on receipt, and, if sent to the
Underwriter, will be mailed, delivered or telegraphed and
confirmed to the Underwriter at 2 World Financial Center -
Building B, New York, New York 10281-1198, Attention: Manager -
Mortgage Finance Department; or, if sent to the Company, will be
mailed, delivered or telegraphed and confirmed to it at 2 World
Financial Center - Building B, New York, New York 10281-1198,
Attention: Manager - Mortgage Finance Department.
18
<PAGE>
11. Successors. This Agreement will inure to the benefit
of and be binding upon the parties hereto and their respective
successors and the officers and directors and controlling persons
referred to in Section 8, and their successors and assigns, and
no other person will have any right or obligation hereunder.
12. Applicable Law; Counterparts. This Agreement will
be governed by and construed in accordance with the laws of the
State of New York. This Agreement may be executed in any number
of counterparts, each of which shall for all purposes be deemed
to be an original and all of which shall together constitute but
one and the same instrument.
[Signatures Commence on Following Page]
19
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof,
whereupon this letter and your acceptance shall represent a
binding agreement between the Company and the Underwriter.
Very truly yours,
ASSET SECURITIZATION
CORPORATION
By: /s/ Marlyn A. Marincas
------------------------------
Name: Marlyn A. Marincas
Title: Vice President
20
<PAGE>
The foregoing Underwriting Agreement is hereby confirmed
and accepted as of the date first above written.
NOMURA SECURITIES INTERNATIONAL, INC.
By: /s/ Boyd Fellows
---------------------------
Name: Boyd Fellows
Title: Managing Director
21
<PAGE>
SCHEDULE I
Underwriting Agreement dated March 20, 1997
Title, Purchase Price and Description of Offered Certificates:
Asset Securitization Corporation, Commercial Mortgage
Pass-Through Certificates, Series 1997-MD VII, Class A-1A, Class
A-1B, Class PS-1, Class CS-1, Class A-2, Class A-3, Class A-4,
Class A-5 and Class A-6 Certificates.
Original Certificate Balance of the Offered Certificates:
$487,078,946 (Approximate).
Cut-off Date: March 27, 1997.
<PAGE>
Initial Pass-
Certificate Through S&P DCR Fitch Moody's
Desigation Balance1 Rate Rating Rating Rating Rating
- ---------- -------- ---- ------ ------ ------ ------
Class A-1A(4) 115,435,756 7.32000% AAA n/a AAA Aaa
Class A-1B(4) 214,279,224 7.41000% AAA n/a AAA Aaa
Class PS-1(4) 3 0.33126%(2) n/a n/a AAA Aaa
Class CS-1(4) 3 0.65561%(2) n/a n/a AAA Aaa
Class A-2 42,463,292 7.48561%(2) n/a n/a AA Aa
Class A-3 39,965,452 7.57561%(2) n/a A A A
Class A-4 37,467,611 7.77561%(2) n/a BBB n/a Baa
Class A-5 27,476,248 7.97561%(2) n/a BBB- BBB- n/a
Class A-6 9,991,363 7.97561%(2) n/a n/a BBB- n/a
- -------------------------
1 Approximate, subject to adjustment as described herein.
2 The Pass-Through Rates are the rates for the Distribution Date
occurring in April 1997. The Pass-Through Rate for such class for
each subsequent Distribution Date will be calculated as provided
in the Prospectus Supplement.
3 The Class PS-1 and Class CS-1 Certificates will not have
Certificate Balances and will not be entitled to receive
distributions of principal. Interest will accrue on such classes
of Certificates at the Pass-Through Rates thereof (subject to
certain circumstances described in the Prospectus Supplement) on
the Notional Balances thereof. The Notional Balance of the Class
CS-1 Certificates is initially $115,435,756, which is equal to
the initial Certificate Balance of the Class A-1A Certificates.
The Notional Balance of the Class PS-1 Certificates is initially
$499,568,151.79, which is equal to the aggregate principal
balance of the Mortgage Loans as of the Cut-off Date.
4 The Class A-1A, Class A-1B, Class PS-1 and Class CS-1
Certificates will also be entitled to receive a portion of any
Prepayment Premiums received.
Closing Time, Date and Location: 10:00 a.m. New York City time,
March 27, 1997, at the offices of Cleary, Gottlieb, Steen & Hamilton,
New York, New York.
Other Terms and Conditions: None.
S-2
<PAGE>
=================================================================
ASSET SECURITIZATION CORPORATION,
DEPOSITOR
PACIFIC MUTUAL LIFE INSURANCE COMPANY,
SERVICER
LASALLE NATIONAL BANK,
TRUSTEE
and
ABN AMRO BANK N.V.,
FISCAL AGENT
--------------------------------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of March 27, 1997
-------------------------------------------------------
Commercial Mortgage Pass-Through Certificates
Series 1997-MD VII
=================================================================
<PAGE>
PAGE
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms......................................3
SECTION 1.02. Certain Calculations..............................46
SECTION 1.03. Certain Constructions.............................47
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF
CERTIFICATES
SECTION 2.01. Conveyance of Mortgage Loans; Assignment of
Mortgage Loan Purchase and Sale Agreement.........48
SECTION 2.02. Acceptance by Custodian and the Trustee...........51
SECTION 2.03. Representations and Warranties of the Depositor...52
SECTION 2.04. Representations, Warranties and Covenants of
the Servicer and Special Servicer.................58
SECTION 2.05. Execution and Delivery of Certificates; Issuance
of Lower-Tier Regular Interests and Upper-Tier
Regular Interests.................................60
SECTION 2.06. Miscellaneous REMIC and Grantor Trust Provisions..61
ARTICLE III
ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS
SECTION 3.01. Servicer to Act as Servicer; Administration of
the Mortgage Loans................................62
SECTION 3.02. Liability of the Servicer.........................64
SECTION 3.03. Collection of Certain Mortgage Loan Payments......65
SECTION 3.04. Collection of Taxes, Assessments and Similar
Items; Escrow Accounts............................65
SECTION 3.05. Collection Account; Upper-Tier Distribution
Account; Lower-Tier Distribution Account; Default
Interest Distribution Account; and Excess
Interest Distribution Account.....................67
SECTION 3.06. Permitted Withdrawals from the Collection Account.69
SECTION 3.07. Investment of Funds in the Collection Account,
the REO Account, the Interest Reserve Account
and the Borrower Accounts.........................71
SECTION 3.08. Maintenance of Insurance Policies and Errors
and Omissions and Fidelity Coverage...............73
SECTION 3.09. Enforcement of Due-On-Sale Clauses; Assumption
Agreements; Defeasance Provisions.................77
SECTION 3.10. Realization Upon Defaulted Mortgage Loans.........79
SECTION 3.11. Trustee to Cooperate; Release of Mortgage Files...84
SECTION 3.12. Servicing Fees, Trustee Fees and Special
Servicing Compensation............................85
SECTION 3.13. Reports to the Trustee; Collection Account
Statements........................................87
SECTION 3.14. Annual Statement as to Compliance.................88
SECTION 3.15. Annual Independent Public Accountants' Servicing
Report............................................88
SECTION 3.16. Access to Certain Documentation...................89
SECTION 3.17. Title and Management of REO Properties and REO
Account Properties................................89
SECTION 3.18. Sale of Specially Serviced Mortgage Loans and
REO Properties....................................93
SECTION 3.19. Additional Obligations of the Servicer;
Inspections; Successor Manager....................95
SECTION 3.20. Authenticating Agent..............................96
SECTION 3.21. Appointment of Custodians.........................97
SECTION 3.22. Reports to the Securities and Exchange
Commission; Available Information.................98
SECTION 3.23. Lock-Box Accounts, Cash Collateral Accounts,
Escrow Accounts and Reserve Accounts.............102
SECTION 3.24. Property Advances................................102
SECTION 3.25. Appointment of Special Servicer..................103
SECTION 3.26. Transfer of Servicing Between Servicer and
Special Servicer; Record Keeping.................104
SECTION 3.27. Interest Reserve Account.........................106
SECTION 3.28. Hudson Treasury Collateral Account...............106
SECTION 3.29. Limitations on and Authorizations of the
Servicer and Special Servicer with Respect to
Specific Mortgage Loans..........................106
SECTION 3.30. Residual Trigger Date............................110
SECTION 3.31. Modifications....................................111
ARTICLE IV
DISTRIBUTIONS TO CERTIFICATEHOLDERS
SECTION 4.01. Distributions....................................113
SECTION 4.02. Statements to Certificateholders; Available
Information; Information Furnished to Financial
Market Publisher.................................123
SECTION 4.03. Compliance with Withholding Requirements.........126
SECTION 4.04. REMIC Compliance.................................126
SECTION 4.05. Imposition of Tax on the Trust Fund..............128
SECTION 4.06. Remittances; P&I Advances........................129
SECTION 4.07. Grantor Trust Reporting..........................132
ARTICLE V
THE CERTIFICATES
SECTION 5.01. The Certificates.................................133
SECTION 5.02. Registration, Transfer and Exchange of
Certificates.....................................137
SECTION 5.03. Mutilated, Destroyed, Lost or Stolen
Certificates.....................................149
SECTION 5.04. Appointment of Paying Agent......................149
SECTION 5.05. Access to Certificateholders' Names and
Addresses........................................150
SECTION 5.06. Actions of Certificateholders....................150
ARTICLE VI
THE DEPOSITOR, THE SERVICER AND THE SPECIAL SERVICER
SECTION 6.01. Liability of the Depositor, the Servicer and
the Special Servicer.............................151
SECTION 6.02. Merger or Consolidation of the Servicer..........151
SECTION 6.03. Limitation on Liability of the Depositor, the
Servicer and Others..............................151
SECTION 6.04. Limitation on Resignation of the Servicer or
Special Servicer; Termination of the Servicer
or Special Servicer..............................152
SECTION 6.05. Rights of the Depositor and the Trustee in
Respect of the Servicer and Special Servicer.....154
SECTION 6.06. Servicer or Special Servicer as Owner of a
Certificate......................................154
ARTICLE VII
DEFAULT
SECTION 7.01. Events of Default................................156
SECTION 7.02. Trustee to Act; Appointment of Successor.........160
SECTION 7.03. Notification to Certificateholders...............161
SECTION 7.04. Other Remedies of Trustee........................161
SECTION 7.05. Waiver of Past Events of Default; Termination....162
ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.01. Duties of Trustee................................163
SECTION 8.02. Certain Matters Affecting the Trustee............165
SECTION 8.03. Trustee Not Liable for Certificates or Mortgage
Loans............................................167
SECTION 8.04. Trustee May Own Certificates.....................168
SECTION 8.05. Payment of Trustee Fees and Expenses;
Indemnification..................................169
SECTION 8.06. Eligibility Requirements for Trustee.............170
SECTION 8.07. Resignation and Removal of the Trustee...........171
SECTION 8.08. Successor Trustee and Fiscal Agent...............173
SECTION 8.09. Merger or Consolidation of Trustee...............173
SECTION 8.10. Appointment of Co-Trustee or Separate Trustee....174
SECTION 8.11. Fiscal Agent Appointed; Concerning the Fiscal
Agent............................................175
ARTICLE IX
TERMINATION; OPTIONAL MORTGAGE LOAN PURCHASE
SECTION 9.01. Termination; Optional Mortgage Loan Purchase.....176
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.01. Counterparts....................................180
SECTION 10.02. Limitation on Rights of Certificateholders......180
SECTION 10.03. Governing Law...................................181
SECTION 10.04. Notices.........................................181
SECTION 10.05. Severability of Provisions......................183
SECTION 10.06. Notice to the Depositor and Each Rating Agency..183
SECTION 10.07. Amendment.......................................185
SECTION 10.08. Confirmation of Intent..........................187
SECTION 10.09. Streit Act......................................188
SECTION 10.10. No Intended Third-Party Beneficiaries...........188
<PAGE>
TABLE OF EXHIBITS
Exhibit A-1 Form of Class A-1A Certificate
Exhibit A-2 Form of Class A-1B Certificate
Exhibit A-3 Form of Class PS-1 Certificate
Exhibit A-4 Form of Class CS-1 Certificate
Exhibit A-5 Form of Class A-2 Certificate
Exhibit A-6 Form of Class A-3 Certificate
Exhibit A-7 Form of Class A-4 Certificate
Exhibit A-8 Form of Class A-5 Certificate
Exhibit A-9 Form of Class A-6 Certificate
Exhibit A-10 Form of Class B-1 Certificate
Exhibit A-11 Form of Class B-1H Certificate
Exhibit A-12 Form of Class V-1 Certificate
Exhibit A-13 Form of Class V-2 Certificate
Exhibit A-14 Form of Class R Certificate
Exhibit A-15 Form of Class LR Certificate
Exhibit B Mortgage Loan Schedule
Exhibit C-1 Form of Transferee Affidavit
Exhibit C-2 Form of Transferor Letter
Exhibit D-1 Form of Investment Representation Letter
Exhibit D-2 Form of ERISA Representation Letter
Exhibit E Form of Request for Release
Exhibit F Form of Custodial Agreement
Exhibit G Form of Regulation S Transfer Certificate
Exhibit H Securities Legend
Exhibit I Form of Mortgage Loan Purchase and Sale Agreement
Exhibit J Form of Collateral Summary
Exhibit K Form of Transfer Certificate for Rule 144A Global
Certificate to Regulation S Global Certificate during
Restricted Period
Exhibit L Form of Transfer Certificate for Rule 144A Global
Certificate to Regulation S Global Certificate after
Restricted Period
Exhibit M Form of Transfer Certificate of Regulation S Global
Certificate to Rule 144A Global Certificate during
Restricted Period
Exhibit N Form of Transfer Certificate for Regulation S Global
Certificate during Restricted Period
<PAGE>
Pooling and Servicing Agreement, dated as of March 27,
1997, among Asset Securitization Corporation, as Depositor,
Pacific Mutual Life Insurance Company, as Servicer, LaSalle
National Bank, as Trustee, and ABN AMRO Bank N.V., as Fiscal
Agent.
PRELIMINARY STATEMENT:
(Terms used but not defined in this Preliminary
Statement shall have the meanings
specified in Article I hereof)
The Depositor intends to sell pass-through
certificates to be issued hereunder in multiple classes which in
the aggregate will evidence the entire beneficial ownership
interest in the Trust Fund consisting primarily of the Mortgage
Loans. As provided herein, the Trustee will elect that the Trust
Fund, exclusive of the Lock-Box Accounts, Cash Collateral
Accounts, Reserve Accounts, Hudson Treasury Collateral Account,
the Default Interest, the Default Interest Distribution Account,
the Excess Interest and the Excess Interest Distribution Account
(such portion of the Trust Fund, the "Trust REMICs"), be treated
for federal income tax purposes as two separate real estate
mortgage investment conduits (each, a "REMIC" or, in the
alternative, the "Lower-Tier REMIC" and the "Upper-Tier REMIC,"
respectively). The Class A-1A, Class A-1B, Class PS-1, Class
CS-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6,
Class B-1 and Class B-1H Certificates constitute "regular
interests" in the Upper-Tier REMIC and the Class R Certificates
constitute the sole class of "residual interests" in the
Upper-Tier REMIC for purposes of the REMIC Provisions. The Class
LR Certificates constitute the sole class of "residual interests"
in the Lower-Tier REMIC for purposes of the REMIC Provisions.
There are also nine classes of uncertificated Lower-Tier Regular
Interests issued under this Agreement (the Class A-1A-L, Class
A-1B-L, Class A-2-L, Class A-3-L, Class A-4-L, Class A-5-L, Class
A-6-L, Class B-1-L and Class B-1H-L Interests), each of which
will constitute a regular interest in the Lower-Tier REMIC. All
such Lower-Tier Regular Interests will be held by the Trustee as
assets of the Upper-Tier REMIC. The parties intend that the
portions of the Trust Fund representing assets of the Grantor
Trust, including the Default Interest, the Default Interest
Distribution Account, the Excess Interest and the Excess Interest
Distribution Account will be treated as a grantor trust under
Subpart E of Part 1 of Subchapter J of the Code, that the Class
V-1 Certificates represent pro rata undivided beneficial
interests in the portion of the Trust Fund consisting of the
Default Interest and the Default Interest Distribution Account
and that the Class V-2 Certificates represent pro rata undivided
beneficial interests in the portion of the Trust Fund consisting
of the Excess Interest and the Excess Interest Distribution
Account.
The following table sets forth the designation and
aggregate initial Certificate Balance (or, with respect to the
Class CS-1 and Class PS-1 Certificates, Notional Balance) for
each Class of Certificates (other than the Class R, Class LR,
Class V-1 and Class V-2 Certificates).
Certificate Balance
Class or Notional Balance
----- -------------------
Class A-1A $ 115,435,756
Class A-1B $ 214,279,224
Class PS-1 (1) $ 499,568,151.79
<PAGE>
Class CS-1 (2) $ 115,435,756
Class A-2 $ 42,463,292
Class A-3 $ 39,965,452
Class A-4 $ 37,467,611
Class A-5 $ 27,476,248
Class A-6 $ 9,991,363
Class B-1 $ 12,488,205
Class B-1H $ 1,000.79
(1) The initial Notional Balance of the Class PS-1
Certificates is equal to the aggregate Stated Principal Balance
of the Mortgage Loans as of the Cut-off Date.
(2) The initial Notional Balance of the Class CS-1
Certificates is equal to the initial Certificate Balance of the
Class A-1A Certificates.
Class V-1, Class V-2, Class R and Class LR
Certificates do not have Certificate Balances or Notional
Balances. The Certificate Balance of any Class of Certificates
outstanding at any time represents the maximum amount which
holders thereof are entitled to receive as distributions
allocable to principal from the cash flow on the Mortgage Loans
and the other assets in the Trust Fund; provided, however, that
in the event that amounts previously allocated as Realized Losses
to a Class of Certificates in reduction of the Certificate
Balance thereof are recovered subsequent to the reduction of the
Certificate Balance of such Class to zero, such Class may receive
distributions in respect of such recoveries in accordance with
the priorities set forth in Section 4.01.
As of the Cut-off Date, the Mortgage Loans have an
aggregate Stated Principal Balance equal to $499,568,151.79.
In consideration of the mutual agreements herein
contained, the Depositor, the Servicer, the Trustee and the
Fiscal Agent agree as follows:
-2-
<PAGE>
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms
Whenever used in this Agreement, the following words
and phrases, unless the context otherwise requires, shall have
the meanings specified in this Article.
"Act": The Securities Act of 1933, as it may be amended
from time to time.
"Advance": Any P&I Advance or Property Advance.
"Advance Interest Amount": Interest at the Advance
Rate on the aggregate amount of P&I Advances and Property
Advances for which the Servicer, the Special Servicer, the
Trustee or the Fiscal Agent, as applicable, have not been
reimbursed and Servicing Fees or Special Servicing Compensation
for which the Servicer or the Special Servicer, as applicable,
has not been timely paid or reimbursed for the number of days
from the date on which such Advance was made or such Servicing
Fees or Special Servicing Compensation were due as provided in
Section 3.12(c) through the date of payment or reimbursement of
the related Advance or other such amount, less any amount of
interest previously paid on such Advance or Servicing Fees or
Special Servicing Compensation; provided, that, with respect to a
P&I Advance, in the event that the related Borrower makes payment
of the amount in respect of which such P&I Advance was made with
interest at the Default Rate, the Advance Interest Amount payable
to the Servicer, the Trustee or the Fiscal Agent shall be paid
(i) from the amount of Default Interest paid by the Borrower and
(ii) to the extent such amounts are insufficient therefor, from
amounts on deposit in the Collection Account.
"Advance Rate": A per annum rate equal to the sum of
(i) the Prime Rate (as most recently published in the "Money
Rates" section of The Wall Street Journal, New York edition, on
or before the related Record Date) plus (ii) 1%, compounded
monthly, as of each Servicer Remittance Date.
"Affiliate": With respect to any specified Person, any
other Person controlling or controlled by or under common control
with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means
the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise, and the terms "controlling"
and "controlled" have meanings correlative to the foregoing. The
Trustee may obtain and rely on an Officers' Certificate of the
Servicer, the Special Servicer or the Depositor to determine
whether any Person is an Affiliate of such party.
"Affiliated Person": Any Person (other than a Rating
Agency) involved in the organization or operation of the
Depositor or an affiliate, as defined in Rule 405 of the Act, of
such Person.
-3-
<PAGE>
"Agent Member": Members of, or participants in, the
Depository.
"Agreement": This Pooling and Servicing Agreement and
all amendments hereof and supplements hereto.
"Allocated Loan Amount": With respect to each
Mortgaged Property as of any date of determination, the portion
of the principal amount of the related Mortgage Loan then
allocated to such Mortgaged Property in the applicable Mortgage
or Loan Agreement.
"Annual Compliance Report": A report consisting of an
annual statement of compliance required by Section 3.14 hereof
and an annual report of an Independent accountant required
pursuant to Section 3.15 hereof.
"Anticipated Repayment Date": With respect to each
Mortgage Loan, the date set forth below opposite such Mortgage
Loan:
Fairfield Inn Pool Loan..........................January 11, 2007
101 Hudson Street Loan...........................January 11, 2007
M&H Retail Pool Loan.............................January 11, 2007
Innkeepers Pool Loan.............................March 11, 2009
Design Center of the Americas Loan...............January 11, 2007
G&L Medical Office II Pool Loan..................September 11, 2006
Insurance Company of the West Loan...............February 11, 2007
"Anticipated Termination Date": Any Distribution Date
on which it is anticipated that the Trust Fund will be terminated
pursuant to Section 9.01(c).
"Applicable Monthly Payment": As defined in Section
4.06.
"Applicable Procedures": As defined in Section
5.02(c)(ii)(A).
"Appraisal Reduction Amount": For any Distribution
Date and for any Mortgage Loan as to which an Appraisal Reduction
Event has occurred, an amount equal to the excess, if any, of (a)
the Stated Principal Balance of such Mortgage Loan as of the last
day of the related Collection Period over (b) the excess of (i)
90% of the sum of the appraised values of the Mortgaged
Properties as determined by Updated Appraisals obtained by the
Servicer of the related Mortgaged Properties securing such
Mortgage Loan over (ii) the sum of (A) to the extent not
previously advanced by the Servicer, the Trustee or the Fiscal
Agent, all unpaid interest on such Mortgage Loan at a per annum
rate equal to its Mortgage Rate, (B) all unreimbursed Advances,
with interest thereon at the Advance Rate in respect of such
Mortgage Loan and (C) all currently due and unpaid real estate
taxes, ground rents and assessments and insurance premiums and
all other amounts due and unpaid with respect to such Mortgage
Loan (which taxes, premiums and other amounts have not been the
subject of an Advance by the Servicer, the Trustee or the Fiscal
Agent, as applicable). If no Updated Appraisal has been obtained
within the 12 months prior to the first Distribution Date on or
after an Appraisal Reduction Event has
-4-
<PAGE>
occurred, the Servicer shall estimate the value of the
related Mortgaged Properties (the "Servicer's Appraisal
Estimate") and such estimate shall be used for purposes of
determining the Appraisal Reduction Amount for such Distribution
Date. Within 30 days after the Servicer receives notice or is
otherwise aware of the Appraisal Reduction Event, the Servicer
shall obtain an independent MAI appraisal, the costs of which
shall be paid as a Property Advance. On the first Distribution
Date occurring on or after the delivery of such independent MAI
appraisal, the Servicer shall adjust the Appraisal Reduction
Amount to take into account such appraisal (regardless of whether
the Updated Appraisal is higher or lower than the Servicer's
Appraisal Estimate). Each Appraisal Reduction Amount shall also
be adjusted with respect to the next Distribution Date to take
into account any subsequent Updated Appraisal and annual letter
updates, as of the date of each such subsequent Updated Appraisal
or letter update.
"Appraisal Reduction Event": With respect to any
Mortgage Loan, the earliest of (i) the third anniversary of the
date on which an extension of the Maturity Date of such Mortgage
Loan becomes effective as a result of a modification of such
Mortgage Loan by the Special Servicer pursuant to the terms
hereof, which extension does not change the amount of Monthly
Payments on the Mortgage Loan, (ii) 90 days after an uncured
Delinquency (without regard to the application of any grace
period) occurs in respect of such Mortgage Loan, (iii) 90 days
after the date on which a reduction in the amount of Monthly
Payments on the Mortgage Loan, or a change in any other material
economic term of the Mortgage Loan, becomes effective as a result
of a modification of such Mortgage Loan by the Special Servicer,
(iv) 60 days after a receiver in respect of the related Mortgaged
Property has been appointed, (v) immediately after a Borrower
declares bankruptcy and (vi) immediately after a Mortgage Loan
becomes an REO Mortgage Loan. The Special Servicer shall notify
the Servicer promptly upon the occurrence of any of the foregoing
events.
"Assignment of Leases, Rents and Profits": With
respect to any Mortgaged Property, any assignment of leases,
rents and profits or similar agreement executed by the Borrower,
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 Mortgage
without recourse, notice of transfer or equivalent instrument, in
recordable form, which is sufficient under the laws of the
jurisdiction in which the related Mortgaged Property is located
to reflect of record the sale of the Mortgage, which assignment,
notice of transfer or equivalent instrument may be in the form of
one or more blanket assignments covering Mortgages encumbering
Mortgaged Properties located in the same jurisdiction, if
permitted by law and acceptable for recording; provided, however,
that none of the Trustee, the Custodian and the Servicer shall be
responsible for determining whether any assignment is legally
sufficient or in recordable form.
-5-
<PAGE>
"Assumption Fees": Any fees collected by the Servicer
or Special Servicer in connection with an assumption or
modification of a Mortgage Loan or substitution of a Borrower
thereunder permitted to be executed under the provisions of this
Agreement.
"Authenticating Agent": Any authenticating agent appointed
by the Trustee pursuant to Section 3.20.
"Available Funds": For a Distribution Date, the sum of
(i) all Monthly Payments, Extended Monthly Payments or other
receipts on account of principal and interest (including
Unscheduled Payments and any Net REO Proceeds transferred from an
REO Account pursuant to Section 3.17(b)) on or in respect of the
Mortgage Loans received by the Servicer in the Collection Period
relating to such Distribution Date, (ii) all other amounts
received by the Servicer in such Collection Period and required
to be placed in the Collection Account by the Servicer pursuant
to Section 3.05 allocable to such Mortgage Loans, and including
all P&I Advances made by the Servicer, the Trustee or the Fiscal
Agent in respect of such Distribution Date, (iii) for the
Distribution Date occurring in each March, the related Withheld
Amounts remitted to the Lower-Tier Distribution Account pursuant
to Sections 3.27 and 4.06(b), (iv) any late payments of Monthly
Payments received after the end of the Collection Period relating
to such Distribution Date but prior to the related Servicer
Remittance Date and (v) any Servicer Prepayment Interest
Shortfalls remitted by the Servicer to the Lower-Tier
Distribution Account, but excluding the following:
(a) amounts permitted to be used to reimburse the
Servicer, the Special Servicer, the Trustee or
the Fiscal Agent, as applicable, for previously
unreimbursed Advances and interest thereon as
described in Section 3.06(ii) and (iii);
(b) those portions of each payment of interest which
represent the applicable Servicing Fee and an
amount representing any applicable Special
Servicing Compensation, including interest
thereon at the Advance Rate as provided in this
Agreement;
(c) all amounts in the nature of late fees (subject
to Section 3.12 hereof), loan modification fees,
extension fees, loan service transaction fees,
demand fees, beneficiary statement charges,
Assumption Fees and similar fees, which the
Servicer or the Special Servicer is entitled to
retain as additional servicing compensation;
(d) all amounts representing scheduled Monthly Payments
due after the related Due Date;
(e) that portion of Net Liquidation Proceeds or Net
Insurance Proceeds with respect to a Mortgage
Loan which represents any unpaid Servicing Fee,
Trustee Fee and Special Servicing Compensation
including interest
-6-
<PAGE>
thereon at the Advance Rate as
provided in this Agreement, to which the
Servicer, Trustee and the Special Servicer,
respectively, are entitled;
(f) all amounts representing expenses specifically
reimbursable or payable to the Servicer, the
Special Servicer, the Trustee or the Fiscal Agent
and other amounts permitted to be retained by the
Servicer or withdrawn by the
Servicer from the Collection Account to the
extent expressly set forth in this Agreement
(including, without limitation, as provided in
Section 3.06 and including any indemnities
provided for herein), including interest thereon
as provided in this Agreement;
(g) any interest or investment income on funds on
deposit in the Collection Account, the Upper-Tier
Distribution Account, the Lower-Tier Distribution
Account, the Default Interest Distribution Account,
the Excess Interest Distribution Account, the Interest
Reserve Account, any Cash Collateral Account, any
Lock-Box Account, any Reserve Account or any REO
Account or in Permitted Investments in which such
funds may be invested;
(h) with respect to each of the 101 Hudson Street Loan,
M&H Retail Pool Loan, Design Center of the Americas
Loan and Insurance Company of the West Loan and any
Distribution Date relating to each Interest Accrual
Period ending in each February or any January in a
year which is not a leap year, an amount equal to
one day of interest on the Stated Principal Balance
of each such Mortgage Loan as of the first day of the
related Interest Accrual Period at the related Mortgage
Rate to the extent such amounts are to be deposited
in the Interest Reserve Account and held for
future distribution pursuant to Section 3.27;
(i) all amounts received with respect to each
Mortgage Loan previously purchased or repurchased
pursuant to Sections 2.03(d), 2.03(e), 3.18 or
9.01 during the related Collection Period and
subsequent to the date as of which the amount
required to effect such purchase or repurchase
was determined;
(j) the amount reasonably determined by the Trustee
to be necessary to pay any applicable federal,
state or local taxes imposed on the Upper-Tier
REMIC or the Lower-Tier REMIC under the
circumstances and to the extent described in
Section 4.05;
(k) Prepayment Premiums;
(l) Default Interest; and
(m) Excess Interest.
-7-
<PAGE>
"Beneficial Owner": With respect to a Global Certificate,
the Person who is the beneficial owner of such Certificate as
reflected on the books of the Depository or on the books of a
Person maintaining an account with such Depository (directly as a
Depository Participant or indirectly through a Depository
Participant, in accordance with the rules of such Depository).
Each of the Trustee and the Servicer shall have the right to
require, as a condition to acknowledging the status of any Person
as a Beneficial Owner under this Agreement, that such Person
provide evidence at its expense of its status as a Beneficial
Owner hereunder.
"Borrower": With respect to any Mortgage Loan, any
obligor or obligors on any related Note or Notes.
"Borrower Account": As defined in Section 3.07(a).
"Business Day": Any day other than a Saturday, a
Sunday or a day on which banking institutions in the City of New
York, New York, the City of Chicago, Illinois, or the State of
California are authorized or obligated by law, executive order or
governmental decree to be closed.
"Cash Collateral Account": With respect to any
Mortgaged Property, any account or accounts created pursuant to
the related Mortgage, Loan Agreement, Cash Collateral Account
Agreement or other loan document into which the Lock-Box Account
monies are swept on a regular basis for the benefit of the
Trustee as successor to the Originator. Any Cash Collateral
Account shall be beneficially owned for federal income tax
purposes by the Person who is entitled to receive all
reinvestment income or gain thereon in accordance with the terms
and provisions of the related Mortgage Loan and Section 3.07,
which Person shall be taxed on all reinvestment income or gain
thereon. The Servicer shall be permitted to make withdrawals
therefrom for deposit into the Collection Account. To the extent
not inconsistent with the related Mortgage Loan, each such Cash
Collateral Account shall be an Eligible Account.
"Cash Collateral Account Agreement": With respect to
any Mortgage Loan, the cash collateral account agreement, if any,
between the Originator and the related Borrower, pursuant to
which the related Cash Collateral Account, if any, may have been
established.
"Cash Deposit": An amount equal to all cash payments
of principal and interest received by the Originator in respect
of the Mortgage Loans prior to or on the Closing Date that are
due after the Cut-off Date.
"CEDEL": Citibank, N.A., as depositary for Centrale
de Livraison de Valeurs Mobilieres, S.A., or its successor in
such capacity.
"Certificate": Any Class A-1A, Class A-1B, Class PS-1,
Class CS-1, Class A-2, Class A-3, Class A-4, Class A-5, Class
A-6, Class B-1, Class B-1H, Class V-1, Class V-2, Class R or
Class LR Certificate issued, authenticated and delivered
hereunder.
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"Certificate Balance": With respect to any Class of
Certificates (other than the Class PS-1, Class CS-1, Class V-1,
Class V-2, Class R and Class LR Certificates) (a) on or prior to
the first Distribution Date, an amount equal to the aggregate
initial Certificate Balance of such Class, as specified in the
Preliminary Statement hereto, and (b) as of any date of
determination after the first Distribution Date, the Certificate
Balance of such Class of Certificates on the Distribution Date
immediately prior to such date of determination, after
distributions of principal thereon and allocation of Realized
Losses thereto on such prior Distribution Date; provided that
for purposes of determining Voting Rights, the Certificate
Balance of each of the Class A-2, Class A-3 and Class A-4
Certificates shall be deemed to have been reduced by the amount
of any Appraisal Reduction Amounts notionally allocated thereto
pursuant to Section 4.01(m). With respect to any Class of
Lower-Tier Regular Interest, an amount equal to the Certificate
Balance of the Related Certificates.
"Certificate Custodian": Initially, LaSalle National
Bank; thereafter any other Certificate Custodian acceptable to
the Depository and selected by the Trustee.
"Certificate Register" and "Certificate Registrar":
The register maintained and the registrar appointed pursuant to
Section 5.02.
"Certificateholder": With respect to any Certificate,
the Person whose name is registered in the Certificate Register;
provided, however, that, except to the extent provided in the
next proviso, solely for the purpose of giving any consent or
taking any action pursuant to this Agreement, any Certificate
beneficially owned by the Depositor, the Servicer, the Special
Servicer, the Trustee, or any Person known to a Responsible
Officer of the Certificate Registrar to be an Affiliate of any
thereof shall be deemed not to be outstanding and the Voting
Rights to which it is entitled shall not be taken into account in
determining whether the requisite percentage of Voting Rights
necessary to effect any such consent or take any such action has
been obtained; provided, further, that (i) for purposes of
obtaining the consent of Certificateholders to an amendment of
this Pooling and Servicing Agreement, any Certificates
beneficially owned by the Servicer or the Special Servicer or an
Affiliate thereof shall be deemed to be outstanding, provided,
that, such amendment does not relate to compensation of the
Servicer or the Special Servicer or benefit the Servicer or the
Special Servicer (in its capacity as such) or any Affiliate
thereof (other than solely in its capacity as Certificateholder)
in any material respect, in which case such Certificate shall be
deemed not to be outstanding; and (ii) for purposes of obtaining
the consent of Certificateholders to any action proposed to be
taken by the Special Servicer with respect to a Specially
Serviced Mortgage Loan, any Certificates beneficially owned by
the Servicer or an Affiliate thereof shall be deemed to be
outstanding, provided that the Special Servicer is not the
Servicer. For purposes of obtaining the consent of
Certificateholders to any action with respect to a particular
Mortgage Loan proposed to be taken by the Servicer or Special
Servicer, any Certificates beneficially owned by the Affiliates
of the related Borrower, the related Manager, or Affiliates of
the related Manager shall not be deemed to be outstanding.
Notwithstanding the foregoing, solely for purposes of providing
or distributing any reports, statements or other information
required or permitted to be provided to a Certificateholder
hereunder, a Certificateholder shall include any Beneficial
Owner, or any
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Person identified by a Beneficial Owner as a prospective
transferee of a Certificate beneficially owned by such Beneficial
Owner but only if the Trustee or another party hereto furnishing
such report, statement or information has been provided with the
name of the Beneficial Owner of the related Certificate or the
Person identified as a prospective transferee thereof. For
purposes of the foregoing, the Depositor, the Servicer, the
Special Servicer, the Trustee, the Paying Agent, the Fiscal Agent
or other such Person may rely, without limitation, on a
participant listing from the Depository or statements furnished
by a Person that on their face appear to be statements from a
participant in the Depository to such Person indicating that such
Person beneficially owns Certificates.
"Class": With respect to the Certificates or Lower-Tier
Regular Interests, all of the Certificates or Lower-Tier Regular
Interests, as applicable, bearing the same alphabetical and
numerical class designation.
"Class A-1A Certificate": Any one of the Certificates
executed and authenticated by the Trustee or the Authenticating
Agent in substantially the form set forth in Exhibit A-1 hereto.
"Class A-1A Pass-Through Rate": A per annum rate equal
to 7.32%.
"Class A-1A-L Interest": A regular interest in the
Lower-Tier REMIC entitled to monthly distributions payable
thereto pursuant to Section 4.01.
"Class A-1A-L Pass-Through Rate": A per annum rate
equal to the Weighted Average Net Mortgage Pass-Through Rate.
"Class A-1B Certificate": Any one of the Certificates
executed and authenticated by the Trustee or the Authenticating
Agent in substantially the form set forth in Exhibit A-5 hereto.
"Class A-1B Pass-Through Rate": A per annum rate equal
to 7.41%.
"Class A-1B-L Interest": A regular interest in the
Lower-Tier REMIC entitled to monthly distributions payable
thereto pursuant to Section 4.01.
"Class A-1B-L Pass-Through Rate": A per annum rate
equal to the Weighted Average Net Mortgage Pass-Through Rate.
"Class A-2 Certificate": Any one of the Certificates
executed and authenticated by the Trustee or the Authenticating
Agent in substantially the form set forth in Exhibit A-5 hereto.
"Class A-2 Pass-Through Rate": A per annum rate equal
to the Weighted Average Net Mortgage Pass-Through Rate minus
0.49%.
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"Class A-2-L Interest": A regular interest in the
Lower-Tier REMIC entitled to monthly distributions payable
thereto pursuant to Section 4.01.
"Class A-2-L Pass-Through Rate": A per annum rate
equal to the Weighted Average Net Mortgage Pass-Through Rate.
"Class A-3 Certificate": Any one of the Certificates
executed and authenticated by the Trustee or the Authenticating
Agent in substantially the form set forth in Exhibit A-6 hereto.
"Class A-3 Pass-Through Rate": A per annum rate equal
to the Weighted Average Net Mortgage Pass-Through Rate minus
0.40%.
"Class A-3-L Interest": A regular interest in the Lower-Tier
REMIC entitled to the monthly distributions payable thereto
pursuant to Section 4.01.
"Class A-3-L Pass-Through Rate": A per annum rate
equal to the Weighted Average Net Mortgage Pass-Through Rate.
"Class A-4 Certificate": Any one of the Certificates
executed and authenticated by the Trustee or the Authenticating
Agent in substantially the form set forth in Exhibit A-7 hereto.
"Class A-4 Pass-Through Rate": A per annum rate equal
to the Weighted Average Net Mortgage Pass-Through Rate minus
0.20%.
"Class A-4-L Interest": A regular interest in the
Lower-Tier REMIC entitled to the monthly distributions payable
thereto pursuant to Section 4.01.
"Class A-4-L Pass-Through Rate": A per annum rate
equal to the Weighted Average Net Mortgage Pass-Through Rate.
"Class A-5 Certificate": Any one of the Certificates
executed and authenticated by the Trustee or the Authenticating
Agent in substantially the form set forth in Exhibit A-8 hereto.
"Class A-5 Pass-Through Rate": A per annum rate equal
to the Weighted Average Net Mortgage Pass-Through Rate.
"Class A-5-L Interest": A regular interest in the
Lower-Tier REMIC entitled to the monthly distributions payable
thereto pursuant to Section 4.01.
"Class A-5-L Pass-Through Rate": A per annum rate
equal to the Weighted Average Net Mortgage Pass-Through Rate.
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"Class A-6 Certificate": Any one of the Certificates
executed and authenticated by the Trustee or the Authenticating
Agent in substantially the form set forth in Exhibit A-9 hereto.
"Class A-6 Pass-Through Rate": A per annum rate equal
to the Weighted Average Net Mortgage Pass-Through Rate.
"Class A-6-L Interest": A regular interest in the
Lower-Tier REMIC entitled to the monthly distributions payable
thereto pursuant to Section 4.01.
"Class A-6-L Pass-Through Rate": A per annum rate equal
to the Weighted Average Net Mortgage Rate.
"Class B-1 Certificate": Any one of the Certificates
executed and authenticated by the Trustee or the Authenticating
Agent in substantially the form set forth in Exhibit A-10 hereto.
"Class B-1 Pass-Through Rate": A per annum rate equal
to the Weighted Average Net Mortgage Pass-Through Rate.
"Class B-1-L Interest": A regular interest in the Lower-
Tier REMIC entitled to the monthly distributions payable thereto
pursuant to Section 4.01.
"Class B-1-L Pass-Through Rate": A per annum rate
equal to the Weighted Average Net Mortgage Pass-Through Rate.
"Class B-1H Certificate": Any one of the Certificates
executed and authenticated by the Trustee or the Authenticating
Agent in substantially the form set forth in Exhibit A-11 hereto.
"Class B-1H Pass-Through Rate": A per annum rate equal
to the Weighted Average Net Mortgage Pass-Through Rate.
"Class B-1H-L Interest": A regular interest in the
Lower-Tier REMIC entitled to the monthly distributions payable
thereto pursuant to Section 4.01.
"Class B-1H-L Pass-Through Rate": A per annum rate
equal to the Weighted Average Net Mortgage Pass-Through Rate.
"Class CS-1 Certificate": Any one of the Certificates
executed and authenticated by the Trustee or the Authenticating
Agent in substantially the form set forth in Exhibit A-4 hereto.
"Class CS-1 Pass-Through Rate": A per annum rate equal
to the Weighted Average Net Mortgage Pass-Through Rate minus
7.32%.
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"Class Interest Distribution Amount": With respect to
any Distribution Date and any Class of Certificates other than
the Class PS-1 Certificates, an amount equal to the Interest
Accrual Amount for such Distribution Date; with respect to any
Distribution Date and the Class PS-1 Certificates, an amount
equal to the Interest Accrual Amount for such Distribution Date
minus the aggregate Reduction Interest Distribution Amounts in
respect of such Distribution Date.
"Class Interest Shortfall": On any Distribution Date
for any Class of Certificates, the amount of any shortfall in the
Class Interest Distribution Amount required to be distributed to
the Holders of such Class pursuant to Section 4.01(d) on such
Distribution Date.
"Class LR Certificate": Any Certificate executed and
authenticated by the Trustee or the Authenticating Agent in
substantially the form set forth in Exhibit A-15 hereto. The
Class LR Certificates have no Pass-Through Rate, Certificate
Balance or Notional Balance.
"Class PS-1 Certificate": Any one of the Certificates
executed and authenticated by the Trustee or the Authenticating
Agent in substantially the form set forth in Exhibit A-3 hereto.
"Class PS-1 Certificate Pass-Through Rate": A per annum
rate equal to the Weighted Average Net Mortgage Pass-Through Rate
minus the Weighted Average Pass-Through Rate.
"Class R Certificate": Any Certificate executed and
authenticated by the Trustee or the Authenticating Agent in
substantially the form set forth in Exhibit A-14 hereto. The
Class R Certificates have no Pass-Through Rate, Certificate
Balance or Notional Balance.
"Class V-1 Certificate": Any one of the Certificates
executed and authenticated by the Trustee or the Authenticating
Agent in substantially the form set forth in Exhibit A-12 hereto.
The Class V-1 Certificates have no Pass-Through Rate, Certificate
Balance or Notional Balance.
"Class V-2 Certificate": Any one of the Certificates
executed and authenticated by the Trustee or the Authenticating
Agent in substantially the form set forth in Exhibit A-13 hereto.
The Class V-2 Certificates have no Pass-Through Rate, Certificate
Balance or Notional Balance.
"Closing Date": March 27, 1997.
"Code": The Internal Revenue Code of 1986, as amended
from time to time, any successor statute thereto, and any
temporary or final regulations of the United States Department of
the Treasury promulgated pursuant thereto.
"Collection Account": The trust account or accounts
created and maintained by the Servicer pursuant to Section
3.05(a), which shall be entitled "Pacific Mutual Life Insurance
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Company in trust for LaSalle National Bank, as Trustee, in trust
for Holders of Asset Securitization Corporation, Commercial
Mortgage Pass-Through Certificates, Series 1997-MD VII,
Collection Account" and which must be an Eligible Account.
"Collection Period": With respect to a Distribution
Date and each Mortgage Loan, the period beginning on the day
after the Due Date in the month preceding the month in which such
Distribution Date occurs (or, in the case of the Distribution
Date occurring in April 1997, on the day after the Cut-off Date)
and ending on the Due Date in the month in which such
Distribution Date occurs.
"Commission": The Securities and Exchange Commission.
"Corporate Trust Office": The principal office of the
Trustee located at 135 South LaSalle Street, Suite 1740, Chicago,
Illinois 60603 or the principal trust office of any successor
trustee qualified and appointed pursuant to Section 8.08.
"Cross-over Date": The Distribution Date on which the
Certificate Balance of each Class of Certificates entitled to
distributions of principal other than the Class A-1A and Class
A1-B Certificates has been reduced to zero.
"Custodial Agreement": The Custodial Agreement, if any,
from time to time in effect between the Custodian named therein
and the Trustee, substantially in the form of Exhibit F
hereto, as the same may be amended or modified from time to time
in accordance with the terms thereof.
"Custodian": Any Custodian appointed pursuant to
Section 3.21 and, unless the Trustee is Custodian, named pursuant
to any Custodial Agreement. The Custodian may (but need not) be
the Trustee or the Servicer or any Affiliate of the Trustee or
the Servicer, but may not be the Depositor or any Affiliate
thereof.
"Cut-off Date": March 27, 1997.
"Default Interest": With respect to any Mortgage Loan,
interest accrued on such Mortgage Loan at the excess of the
Default Rate over the sum of the Mortgage Rate plus, if
applicable, the Excess Rate for such Mortgage Loan. The Default
Interest shall not be an asset of the Lower-Tier REMIC or the
Upper-Tier REMIC formed hereunder.
"Default Interest Distribution Account": The trust
account or accounts created and maintained as a separate trust
account or accounts by the Trustee pursuant to Section 3.05(e),
which shall be entitled "LaSalle National Bank, as Trustee, in
trust for Holders of Asset Securitization Corporation, Commercial
Mortgage Pass-Through Certificates, Series 1997-MD VII, Default
Interest Distribution Account" and which must be an Eligible
Account. The Default Interest Distribution Account shall not be
an asset of the Lower-Tier REMIC or the Upper-Tier REMIC formed
hereunder.
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"Default Rate": With respect to each Mortgage Loan,
the per annum rate at which interest accrues on such Mortgage
Loan following any event of default on such Mortgage Loan,
including a default in the payment of a Monthly Payment, as such
rate is set forth on the Mortgage Loan Schedule.
"Delinquency": Any failure of a Borrower to make a
scheduled payment on a Due Date.
"Delinquency Reduction Amount": In connection with a
Delinquency, an amount equal to the scheduled payment (or portion
thereof) due on the related Due Date (adjusted to the applicable
Net Mortgage Pass-Through Rate with respect to the interest
portion) and not received from a Borrower under any Mortgage
Loan.
"Denomination": As defined in Section 5.01.
"Depositor": Asset Securitization Corporation, a
Delaware corporation, and its successors and assigns.
"Depository": The Depository Trust Company or a
successor appointed by the Certificate Registrar (which
appointment shall be at the direction of the Depositor if the
Depositor is legally able to do so).
"Depository Participant": A Person for whom, from time to
time, the Depository effects book-entry transfers and pledges of
securities deposited with the Depository.
"Design Center of the Americas Loan": The Mortgage Loan
identified as No. 5 on the Mortgage Loan Schedule.
"Directing Class": As defined in Section 3.31.
"Directly Operate": With respect to any REO Property,
the furnishing or rendering of services to the tenants thereof
that are not customarily provided to tenants in connection with
the rental of space "for occupancy only" within the meaning of
Treasury Regulations Section 1.512(b)-1(c)(5), the management or
operation of such REO Property, the holding of such REO Property
primarily for sale to customers in the ordinary course of a trade
or business or any use of such REO Property in a trade or
business conducted by the Trust Fund, or the performance of any
construction work on the REO Property (other than the completion
of a building or improvement, where more than 10 percent of the
construction of such building or improvement was completed before
default became imminent), other than through an Independent
Contractor; provided, however, that the Special Servicer, on
behalf of the Trust Fund, shall not be considered to Directly
Operate an REO Property solely because the Special Servicer, on
behalf of the Trust Fund, 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 or takes other
actions consistent with Section 1.856-4(b)(5)(ii) of the
regulations of the United States Department of the Treasury.
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"Discount Rate": With respect to any Class of
Certificates, the rate determined by the Trustee, in its good
faith, to be the yield (interpolated and rounded to the nearest
one-thousandth of a percent, if necessary) in the secondary
market for United States Treasury securities with a maturity
closest to the then computed weighted average life (or in the
case of the Class PS-1 and Class CS-1 Certificates, the weighted
average life of the interest payments) of such Class, without
taking into account the related prepayment.
"Disqualified Non-U.S. Person": With respect to a
Class R or Class LR Certificate, any Non-U.S. Person or agent
thereof other than (i) a Non-U.S. Person that holds the Class R
or Class LR Certificate in connection with the conduct of a trade
or business within the United States and has furnished the
transferor and the Certificate Registrar with an effective IRS
Form 4224 or (ii) a Non-U.S. Person that has delivered to both
the transferor and the Certificate Registrar an opinion of a
nationally recognized tax counsel to the effect that the transfer
of the Class R or Class LR Certificate to it is in accordance
with the requirements of the Code and the regulations promulgated
thereunder and that such transfer of the Class R or Class LR
Certificate will not be disregarded for federal income tax
purposes.
"Disqualified Organization": Either (a) the United States,
a State or any political subdivision thereof, any possession of the
United States, or any agency or instrumentality of any of the
foregoing (other than an instrumentality that is a corporation if
all of its activities are subject to tax and a majority of its
board of directors is not selected by any such governmental
unit), (b) a foreign government, International Organization or
agency or instrumentality of either of the foregoing, (c) an
organization that is exempt from tax imposed by Chapter 1 of the
Code (including the tax imposed by Code Section 511 on unrelated
business taxable income) on any excess inclusions (as defined in
Code Section 860E(c)(1)) with respect to the Class R or Class LR
Certificates (except certain farmers' cooperatives described in
Code Section 521), (d) rural electric and telephone cooperatives
described in Code Section 1381(a)(2), or (e) any other Person so
designated by the Certificate Registrar based upon an Opinion of
Counsel to the effect that any Transfer to such Person may cause
the Upper-Tier REMIC or Lower-Tier REMIC to be subject to tax or
to fail to qualify as a REMIC at any time that the Certificates
are outstanding. The terms "United States," "State" and
"International Organization" shall have the meanings set forth in
Code Section 7701 or successor provisions.
"Distribution Date": The 13th day of each month, or if
such 13th day is not a Business Day, the Business Day immediately
following such 13th day, commencing in April 1997; provided,
however, that in any month, the Distribution Date will be no
earlier than the second Business Day following the 11th day of
such month and, provided further, that if the 11th day of any
month is not a Business Day the Distribution Date will be the
third Business Day following the 11th day of such month. The
Distribution Date occurring in April 1997 shall be April 15,
1997.
"DCR": Duff & Phelps Credit Rating Co., or its
successor in interest.
"Due Date": With respect to any Distribution Date
and/or any Mortgage Loan, as the case may be, the eleventh day
(or if such eleventh day is not a business day (as defined in the
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related Loan Documents), the next succeeding business day) of the
month in which such Distribution Date falls.
"Early Termination Notice Date": Any date as of which
the aggregate Stated Principal Balance of the Mortgage Loans is
less than 1.0% of the aggregate Stated Principal Balance of the
Mortgage Loans as of the Cut-off Date.
"Eligible Account": Either (i) (A) an account or accounts
maintained with a depository institution or trust company the
short term unsecured debt obligations or commercial paper of
which are rated at least "D-1" by DCR, "A-1" by S&P, "P-1" by
Moody's and "F-1" by Fitch in the case of accounts in which funds
are held for 30 days or less (or, in the case of accounts in
which funds are held for more than 30 days, the long term
unsecured debt obligations of which are rated at least "AA" by
Fitch and S&P, "Aa2" by Moody's and "A" by DCR) or (B) as to
which the Trustee has received written confirmation from each of
the Rating Agencies that holding funds in such account would not
cause any Rating Agency to requalify, withdraw or downgrade any
of its ratings on the Certificates or (ii) a segregated trust
account or accounts maintained with a federal or state chartered
depository institution or trust company acting in its fiduciary
capacity which, in the case of a state chartered depository
institution or trust company is subject to regulations
substantially similar to 12 C.F.R. ss. 9.10(b), having in either
case a combined capital and surplus of at least $50,000,000 and
subject to supervision or examination by federal or state
authority, or (iii) any other account that, as evidenced by a
written confirmation from each Rating Agency, would not, in and
of itself, cause a downgrade, qualification or withdrawal of the
then current ratings assigned to the Certificates, which may be
an account maintained with the Trustee or the Servicer. Eligible
Accounts may bear interest.
"Eligible Investor": Any of (i) a Qualified
Institutional Buyer that is purchasing for its own account or for
the account of a Qualified Institutional Buyer to whom notice is
given that the offer, sale or transfer is being made in reliance
on Rule 144A, (ii) an Institutional Accredited Investor or (iii)
a Regulation S Investor.
"Environmental Report": The environmental audit report
or reports with respect to each Mortgaged Property delivered to
the Originator in connection with the origination of the related
Mortgage Loan.
"ERISA": The Employee Retirement Income Security Act
of 1974, as it may be amended from time to time.
"Escrow Account": As defined in Section 3.04(b). Any
Escrow Account may be a sub-account of the related Cash Collateral
Account.
"Escrow Payment": Any payment made by any Borrower to
the Servicer pursuant to the related Mortgage, Cash Collateral
Agreement, Lock-Box Agreement or Loan Agreement for the account
of such Borrower for application toward the payment of taxes,
insurance premiums, assessments, ground rents and similar items
in respect of the related Mortgaged Property.
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"Euroclear": Morgan Guaranty Trust Company of New
York, Brussels Office, as operator of the Euroclear System, or
its successor in such capacity.
"Event of Default": A Servicer Event of Default or
Special Servicer Event of Default, as applicable.
"Excess Interest": With respect to each Mortgage Loan,
interest accrued on such Mortgage Loan attributable to the Excess
Rate. The Excess Interest shall not be an asset of the Lower-Tier
REMIC or the Upper-Tier REMIC formed hereunder.
"Excess Interest Distribution Account": The trust
account or accounts created and maintained as a separate trust
account or accounts by the Trustee pursuant to Section 3.05(f),
which shall be entitled "LaSalle National Bank, as Trustee, in
trust for Holders of Asset Securitization Corporation, Commercial
Mortgage Pass-Through Certificates, Series 1997-MD VII, Excess
Interest Distribution Account" and which must be an Eligible
Account. The Excess Interest Distribution Account shall not be an
asset of the Lower-Tier REMIC or the Upper-Tier REMIC formed
hereunder.
"Excess Rate": With respect to each Mortgage Loan, the
difference between (i) the applicable Revised Mortgage Rate and
(ii) the applicable Mortgage Rate, each as set forth in the
Mortgage Loan Schedule.
"Exchange Act": The Securities Exchange Act of 1934,
as amended.
"Exchange Act Report": A Monthly Distribution Statement,
Special Event Report, Summary Report or Annual Compliance Report
to be filed with the Commission, under cover of the related form
required by the Exchange Act.
"Extended Monthly Payment": With respect to any
extension of a Mortgage Loan as to which any principal balance
and accrued interest remains unpaid on its Maturity Date (such
unpaid amount, a "Balance"), an amount equal to (a) a deemed
principal portion of a revised monthly payment (which will be
calculated based on an amortization schedule which would fully
amortize the applicable Balance over a term of no more than 24
months (commencing on the Maturity Date of such Mortgage Loan)
and an interest rate no less than the Mortgage Rate with respect
to such Mortgage Loan), and (b) interest at the applicable
Default Rate; provided, however, that the Special Servicer may
agree that the Extended Monthly Payments may include interest at
a rate lower than the related Default Rate (but in no event lower
than the related Mortgage Rate).
"Fairfield Inn Pool Loan": The Mortgage Loan identified
as No. 1 on the Mortgage Loan Schedule.
"FDIC": The Federal Deposit Insurance Corporation, or
any successor thereto.
"FHA": The Federal Housing Administration, or any
successor thereto.
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"FHLMC": The Federal Home Loan Mortgage Corporation,
or any successor thereto.
"Final Recovery Determination": With respect to any
Specially Serviced Mortgage Loan or Mortgage Loan subject to
repurchase by the Depositor or the Originator pursuant to
Sections 2.03(d) or 2.03(e), the recovery of all Insurance
Proceeds, Liquidation Proceeds, the related Repurchase Price and
other payments or recoveries (including proceeds of the final
sale of any REO Property) which the Servicer (or in the case of a
Specially Serviced Mortgage Loan, the Special Servicer), in its
reasonable judgment as evidenced by a certificate of a Servicing
Officer delivered to the Trustee and the Custodian (and the
Servicer, if the certificate is from the Special Servicer),
expects to be finally recoverable. The Servicer shall maintain
records, prepared by a Servicing Officer, of each Final Recovery
Determination until the earlier of (i) its termination as
Servicer hereunder and the transfer of such records to a
successor servicer and (ii) five years following the termination
of the Trust Fund.
"Financial Market Publisher": Bloomberg Financial Service.
"Fiscal Agent": ABN AMRO Bank N.V., a Netherlands
banking corporation, in its capacity as fiscal agent of the
Trustee, or its successor in interest, or any successor fiscal
agent appointed as herein provided.
"Fitch": Fitch Investors Service, L.P., or its successor
in interest.
"Fixed Voting Rights Percentage": As defined in the
definition of "Voting Rights."
"FNMA": The Federal National Mortgage Association, or
any successor thereto.
"Form 8-K": A Current Report on Form 8-K under the
Exchange Act, or such successor form as the Commission may
specify from time to time.
"G&L Medical Office II Pool Loan": The Mortgage Loan
identified as No. 6 on the Mortgage Loan Schedule.
"Global Certificates": The Class A-1A, Class A-1B,
Class PS-1, Class CS-1, Class A-2, Class A-3, Class A-4, Class
A-5, Class A-6 and Class B-1 Certificates.
"Grantor Trust": A segregated asset pool within the
Trust Fund consisting of the Default Interest, Excess Interest
and amounts held from time to time in the Default Interest
Distribution Account and the Excess Interest Distribution
Account.
"Hazardous Materials": Any dangerous, toxic or
hazardous pollutants, chemicals, wastes, or substances,
including, without limitation, those so identified pursuant to
the Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. Section 9601 et seq., or any other
environmental laws now or hereafter existing, and specifically
including, without limitation, asbestos and asbestos-containing materials,
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polychlorinated biphenyls ("PCBs"), radon gas,
petroleum and petroleum products, urea formaldehyde and any
substances classified as being "in inventory", "usable work in
process" or similar classification which would, if classified as
unusable, be included in the foregoing definition.
"Holder": With respect to any Certificate, a
Certificateholder; with respect to any Lower-Tier Regular Interest,
the Trustee.
"Hudson Treasury Collateral Account": As defined in
Section 3.28.
"Indemnified Party": As defined in Section 8.05(c).
"Indemnifying Party": As defined in Section 8.05(c).
"Independent": When used with respect to any specified
Person, any such Person who (i) does not have any direct
financial interest, or any material indirect financial interest,
in any of the Depositor, the Trustee, the Servicer, the Special
Servicer, any Borrower or any Affiliate thereof, and (ii) is not
connected with any such Person as an officer, employee, promoter,
underwriter, trustee, partner, director or Person performing
similar functions.
"Independent Contractor": Either (i) any Person that
would be an "independent contractor" with respect to the Trust Fund
within the meaning of Section 856(d)(3) of the Code if the Trust
Fund were a real estate investment trust (except that the
ownership tests set forth in that section shall be considered to
be met by any Person that owns, directly or indirectly, 35% or
more of any Class or 35% or more of the aggregate value of all
Classes of Certificates), provided that the Trust Fund does not
receive or derive any income from such Person and the
relationship between such Person and the Trust Fund is at arm's
length, all within the meaning of Treasury Regulations Section
1.856-4(b)(5) (except neither the Servicer nor the Special
Servicer shall be considered to be an Independent Contractor
under the definition in this clause (i) unless an Opinion of
Counsel (at the expense of the party seeking to be deemed an
Independent) addressed to the Servicer and the Trustee has been
delivered to the Trustee to that effect) or (ii) any other Person
(including the Servicer and the Special Servicer) if the
Servicer, on behalf of itself and the Trustee, has received an
Opinion of Counsel (at the expense of the party seeking to be
deemed an Independent Contractor) to the effect that the taking
of any action in respect of any REO Property by such Person,
subject to any conditions therein specified, that is otherwise
herein contemplated to be taken by an Independent Contractor will
not cause such REO Property to cease to qualify as "foreclosure
property" within the meaning of Section 860G(a)(8) of the Code
(determined without regard to the exception applicable for
purposes of Section 860D(a) of the Code) or cause any income
realized in respect of such REO Property to fail to qualify as
Rents from Real Property (provided that such income would
otherwise so qualify).
"Individual Certificate": Any Certificate in definitive,
fully registered form without interest coupons.
"Innkeepers Pool Loan": The Mortgage Loan identified as
No. 4 on the Mortgage Loan Schedule.
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"Institutional Accredited Investor": An entity meeting
the requirements of Rule 501(a)(1), (2), (3) or (7) of Regulation
D promulgated under the Act, or an entity in which all the equity
owners meet such requirements.
"Insurance Company of the West Loan": The Mortgage Loan
identified as No. 7 on the Mortgage Loan Schedule.
"Insurance Proceeds": Proceeds of any fire and hazard
insurance policy, title policy or other insurance policy relating
to a Mortgage Loan (including any amounts paid by the Servicer
pursuant to Section 3.08).
"Interest Accrual Amount": With respect to any Distri-
bution Date and any Class of Certificates (other than the Class PS-1,
Class CS-1, Class V-1, Class V-2, Class R and Class LR
Certificates), an amount equal to interest for the related
Interest Accrual Period at the Pass-Through Rate for such Class
on the related Certificate Balance (provided, that for interest
accrual purposes any distributions in reduction of Certificate
Balance or reductions in Certificate Balance as a result of
allocations of Realized Losses on the Distribution Date occurring
in an Interest Accrual Period will be deemed to have been made on
the first day of such Interest Accrual Period). With respect to
any Distribution Date and the Class CS-1 Certificates, an amount
equal to interest for the related Interest Accrual Period at the
Pass-Through Rate for such Class for such Interest Accrual Period
on the Notional Balance of such Class (provided, that any
reductions in the Notional Balance of such Class as a result of
distributions in reduction of the Certificate Balance of the
Class A-1A Certificates or allocation of Realized Losses to the
Certificate Balance of the Class A-1A Certificates on the
Distribution Date occurring in an Interest Accrual Period, will
be deemed to have occurred on the first day of such Interest
Accrual Period). With respect to any Distribution Date and the
Class PS-1 Certificates, an amount equal to interest for the
related Interest Accrual Period at the Pass-Through Rate for such
Class for such Interest Accrual Period on the Notional Balance of
such Class.
"Interest Accrual Period": With respect to any
Distribution Date, the period which commences on the eleventh day
of the month preceding the month in which such Distribution Date
occurs and ends on the tenth day of the month in which such
Distribution Date occurs, provided that the first Interest
Accrual Period shall commence on and include the Cut-off Date and
end on and include April 10, 1997. Interest for each Interest
Accrual Period, other than the Interest Accrual Period with
respect to the Distribution Date occurring in April 1997, is
calculated based on a 360-day year consisting of twelve 30-day
months. The Interest Accrual Period with respect to the
Distribution Date occurring in April 1997 shall be assumed to
consist of 14 days.
"Interest Reserve Account": The trust account created
and maintained by the Servicer pursuant to Section 3.27, which
shall be entitled "LaSalle National Bank, as Trustee, in trust
for Holders of Asset Securitization Corporation, Commercial
Mortgage Pass-Through Certificates, Series 1997-MD VII, Interest
Reserve Account" and which shall be an Eligible
Account.
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"Interested Person": As of any date of determination,
the Depositor, the Servicer, the Special Servicer, the Trustee,
the Fiscal Agent, any Borrower, any manager of a Mortgaged
Property, any Independent Contractor engaged by the Special
Servicer pursuant to Section 3.17, or any Person known to a
Responsible Officer of the Trustee to be an Affiliate of any of
them.
"Investment Account": As defined in Section 3.07(a).
"Investment Representation Letter": As defined in
Section 5.02(c)(i)(A).
"IRS": The Internal Revenue Service.
"Liquidation Expenses": Expenses incurred by the
Servicer, the Special Servicer, the Trustee and the Fiscal Agent
in connection with the liquidation of any Mortgage Loan or
property acquired in respect thereof (including, without
limitation, legal fees and expenses, committee or referee fees,
and, if applicable, brokerage commissions, and conveyance taxes)
and any Property Protection Expenses incurred with respect to
such Mortgage Loan or such property including interest on the
related Property Advances at the Advance Rate not previously
reimbursed from collections or other proceeds therefrom.
"Liquidation Proceeds": The amount (other than Insurance
Proceeds) received in connection with (i) the taking of a
Mortgaged Property (or portion thereof) by exercise of the power
of eminent domain or condemnation, (ii) the liquidation of a
Specially Serviced Mortgage Loan through a trustee's sale,
foreclosure sale or otherwise or (iii) a sale of a Mortgage Loan
or an REO Property in accordance with Section 3.18 or Section
9.01.
"Loan Agreement": With respect to any Mortgage Loan,
the loan agreement, if any, between the Originator and the
Borrower, pursuant to which such Mortgage Loan was made.
"Loan Documents": With respect to any Mortgage Loan,
the documents executed or delivered in connection with the
origination of such Mortgage Loan or subsequently added to the
related Mortgage File.
"Loan Number": With respect to any Mortgage Loan, the
loan number by which such Mortgage Loan was identified on the
books and records of the Depositor or any sub-servicer for the
Depositor, as set forth in the Mortgage Loan Schedule.
"Lock-Box Account": With respect to any Mortgaged
Property, if applicable, any account created pursuant to any
documents relating to a Mortgage Loan to receive rental or other
income generated by the Mortgaged Property. Any Lock-Box Account
shall be beneficially owned for federal income tax purposes by
the Person who is entitled to receive the reinvestment income or
gain thereon in accordance with the terms and provisions of the
related Mortgage Loan and Section 3.07, which Person shall be
taxed on all reinvestment income or gain thereon. The Servicer
shall be permitted to make withdrawals therefrom for deposit into
the related Cash Collateral Accounts.
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"Lock-Box Agreement": With respect to any Mortgage
Loan, the lock-box agreement, if any, between the Originator and
the Borrower, pursuant to which the related Lock-Box Account, if
any, may have been established.
"Lock-out Period": With respect to any Mortgage Loan,
the period of time specified in the related Loan Documents during
which voluntary prepayments by the related Borrower are
prohibited.
"Lower-Tier Distribution Account": The trust account
or accounts created and maintained as a separate trust account or
accounts by the Trustee pursuant to Section 3.05(b), which shall
be entitled "LaSalle National Bank, as Trustee, in trust for
Holders of Asset Securitization Corporation, Commercial Mortgage
Pass-Through Certificates, Series 1997-MD VII, Lower-Tier
Distribution Account" and which must be an Eligible Account.
"Lower-Tier REMIC": A segregated asset pool within the
Trust Fund consisting of the Mortgage Loans (exclusive of Default
Interest and Excess Interest), collections thereon, any REO
Property acquired in respect thereof and all proceeds of such REO
Property and amounts held from time to time in the Collection
Account, the Interest Reserve Account and the Lower-Tier
Distribution Account.
"MAI": Member of the Appraisal Institute.
"M&H Retail Pool Loan": The Mortgage Loan identified as
No. 3 on the Mortgage Loan Schedule.
"Management Agreement": With respect to any Mortgage
Loan, the management agreement, if any, by and between the
Manager and the related Borrower, or any successor management
agreement between such parties.
"Manager": With respect to any Mortgage Loan, any property
manager for the related Mortgaged Properties.
"Maturity Date": With respect to each Mortgage Loan, the
Maturity Date as set forth on the Mortgage Loan Schedule.
"Monthly Distribution Statement": As defined in Section
4.02(a).
"Monthly Payment": With respect to any Mortgage Loan
(other than any REO Mortgage Loan) and any Due Date, the
scheduled monthly payment of principal and interest at the
Mortgage Pass-Through Rate, which is payable by the related
Borrower on such Due Date under the related Note or Notes. With
respect to an REO Mortgage Loan, the monthly payment that would
otherwise have been payable on the related Due Date had the
related Note not been discharged, determined as set forth in the
preceding sentence and on the assumption that all other amounts,
if any, due thereunder are paid when due.
"Moody's": Moody's Investors Service, Inc., or its
successor in interest.
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"Mortgage": The mortgage, deed of trust or other
instrument creating a first lien on or first priority ownership
interest in a Mortgaged Property securing a Note.
"Mortgage File": With respect to any Mortgage Loan,
the mortgage documents listed in Section 2.01(i) through (xv)
pertaining to such particular Mortgage Loan and any additional
documents required to be added to such Mortgage File pursuant to
the express provisions of this Agreement.
"Mortgage Loan": Each of the mortgage loans
transferred and assigned to the Trustee pursuant to Section 2.01
and from time to time held in the Trust Fund, the mortgage loans
originally so transferred, assigned and held being identified on
the Mortgage Loan Schedule as of the Cut-off Date. Such term
shall include any REO Mortgage Loan or defeased Mortgage Loan.
"Mortgage Loan Purchase and Sale Agreement": The
Mortgage Loan Purchase and Sale Agreement dated as of the Cut-off
Date, by and between the Depositor and the Originator, a copy of
which is attached hereto as Exhibit I.
"Mortgage Loan Schedule": The list of Mortgage Loans
included in the Trust Fund as of the Closing Date being attached
hereto as Exhibit B, which list shall set forth the following
information with respect to each Mortgage Loan:
(a) the Monthly Payment in effect as of the Cut-off Date;
(b) the Mortgage Rate (separately identifying the Default
Rate, the Excess Rate and the Revised Mortgage Rate);
(c) the Maturity Date;
(d) the Stated Principal Balance as of the Cut-off Date; and
(e) the name of the Manager for the related Mortgaged
Properties.
The Mortgage Loan Schedule shall also set forth the total of the
amounts described under clause (a) and (d) above for all of the
Mortgage Loans.
"Mortgage Pass-Through Rate": The Mortgage
Pass-Through Rate with respect to each Mortgage Loan (other than
the 101 Hudson Street Loan, M&H Retail Pool Loan, Design Center
of the Americas Loan and Insurance Company of the West Loan), for
any Interest Accrual Period (other than the Interest Accrual
Period relating to the Distribution Date occurring in April
1997), is a per annum rate equal to the Mortgage Rate thereof
multiplied by a fraction, the numerator of which is the actual
number of days in such Interest Accrual Period and the
denominator of which is 30. The "Mortgage Pass-Through Rate" with
respect to each Mortgage Loan and the Interest Accrual Period
relating to the Distribution Date occurring in April 1997
will be the per annum rate equal to Mortgage Rate thereof.
The Mortgage Pass-Through Rate with respect to each of the
101 Hudson Street Loan, M&H Retail Pool Loan, Design Center of
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the Americas Loan and Insurance Company of the West Loan
and any Interest Accrual Period commencing in any (a) January,
February, April, June, September and November and in any December
occurring in a year immediately preceding a year which is not a
leap year, is the per annum rate equal to the Mortgage Rate
thereof and (b) March (other than March 1997), May, July, August
and October and in any December occurring in a year preceding a
year which is a leap year, is the per annum rate equal to the
Mortgage Rate thereof multiplied by a fraction the numerator of
which is the actual number of days in such Interest Accrual
Period and the denominator of which is 30.
"Mortgage Rate": With respect to each Mortgage Loan,
the annual rate, not including any Excess Rate, at which interest
accrues on such Mortgage Loan (in the absence of a default), as
set forth on the Mortgage Loan Schedule. The Mortgage Rate for
purposes of calculating the Weighted Average Net Mortgage
Pass-Through Rate will be the Mortgage Rate of such Mortgage Loan
without taking into account any reduction in the interest rate by
a bankruptcy court pursuant to a plan of reorganization or
pursuant to any of its equitable powers or pursuant to Section
3.31.
"Mortgaged Property": The underlying property securing
a Mortgage Loan, including any REO Property, consisting of a fee
simple estate, and, with respect to certain Mortgage Loans, a
leasehold estate, or both a leasehold estate and a fee simple
estate, or a leasehold estate in a portion of the property and a
fee simple estate in the remainder, in a parcel of land improved
by a commercial property, together with any personal property,
fixtures, leases and other property or rights pertaining thereto.
"Net Default Interest": As defined in Section 3.05(e).
"Net Insurance Proceeds": Insurance Proceeds, to the
extent such proceeds are not to be applied to the restoration of
the related Mortgaged Property or released to the Borrower in
accordance with the express requirements of the Mortgage or Note
or other documents included in the Mortgage File or in accordance
with prudent and customary servicing practices.
"Net Liquidation Proceeds": The Liquidation Proceeds
received with respect to any Mortgage Loan net of the amount of
(i) Liquidation Expenses incurred with respect thereto and, (ii)
with respect to proceeds received in connection with the taking
of a Mortgaged Property (or portion thereof) by the power of
eminent domain in condemnation, amounts required to be applied to
the restoration or repair of the related Mortgaged Property.
"Net Mortgage Pass-Through Rate": With respect to any
Mortgage Loan and any Distribution Date, the per annum rate equal
to the Mortgage Pass-Through Rate for such Mortgage Loan minus
the Servicing Fee Rate.
"Net REO Proceeds": With respect to each REO Property,
REO Proceeds with respect to such REO Property net of any
insurance premiums, taxes, assessments, ground rents and other
costs and expenses permitted to be paid therefrom pursuant to
Section 3.17(b) of this Agreement.
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"New Lease": Any lease of REO Property entered into on
behalf of the Trust Fund, including any lease renewed or extended
on behalf of the Trust Fund if the Trust Fund has the right to
renegotiate the terms of such lease.
"Nonrecoverable Advance": Any portion of an Advance
proposed to be made or previously made which has not been previously
reimbursed to the Servicer, the Special Servicer, the Trustee or
the Fiscal Agent, as applicable, and which, in the good faith
business judgment of the Servicer, the Special Servicer, the
Trustee or the Fiscal Agent, as applicable, will not or, in the
case of a proposed Advance, would not be ultimately recoverable
from late payments, Insurance Proceeds, Liquidation Proceeds and
other collections on or in respect of the related Mortgage Loan.
The judgment or determination by the Servicer, the Special
Servicer, the Trustee or the Fiscal Agent that it has made a
Nonrecoverable Advance or that any proposed Advance, if made,
would constitute a Nonrecoverable Advance shall be evidenced in
the case of the Servicer or Special Servicer, by a certificate of
a Servicing Officer delivered to the Trustee, the Fiscal Agent,
the Depositor and, in the case of the Special Servicer, to the
Servicer, and in the case of the Trustee or the Fiscal Agent, by
a certificate of a Responsible Officer of the Trustee or Fiscal
Agent, as applicable, delivered to the Depositor (and the Trustee
if the certificate is from the Fiscal Agent), which in each case
sets forth such judgment or determination and the procedures and
considerations of the Servicer, Special Servicer, Trustee or
Fiscal Agent, as applicable, forming the basis of such
determination (including, but not limited to, information
selected by the Person making such judgment or determination in
its good faith discretion, such as related income and expense
statements, rent rolls, occupancy status, property inspections,
Servicer, Special Servicer, Trustee or Fiscal Agent inquiries,
third party engineering and environmental reports, and an
appraisal conducted by an MAI appraiser in accordance with MAI
standards or any Updated Appraisal thereof conducted within the
past 12 months; copies of such documents to be included with the
certificate of a Responsible Officer). Any determination of
non-recoverability made by the Servicer may be made without
regard to any value determination made by the Special Servicer
other than pursuant to an Updated Appraisal. Notwithstanding the
above, the Trustee and the Fiscal Agent shall be entitled to rely
upon any determination by the Servicer that any Advance
previously made is a Nonrecoverable Advance or that any proposed
Advance would, if made, constitute a Nonrecoverable Advance (and
with respect to a proposed P&I Advance, the Trustee and the
Fiscal Agent, as applicable, shall rely on the Servicer's
determination that the Advance would be a Nonrecoverable Advance
if the Trustee or Fiscal Agent, as applicable, determines that it
does not have sufficient time to make such a determination).
"Non-U.S. Person": A person that is not a citizen or
resident of the United States, a corporation, partnership, or
other entity created or organized in or under the laws of the
United States or any political subdivision thereof, an estate
whose income is subject to United States federal income tax
regardless of its source, or a trust if a court within the United
States is able to exercise primary supervision over the
administration of such trust, and one or more United States
fiduciaries have the authority to control all substantial
decisions of such trust.
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"Note": With respect to any Mortgage Loan as of any
date of determination, the note or other evidence of indebtedness
and/or agreements evidencing the indebtedness of a Borrower under
such Mortgage Loan, including any amendments or modifications, or
any renewal or substitution notes, as of such date.
"Notice of Termination": Any of the notices given to
the Trustee by the Servicer, the Depositor or any Holder of a
Class LR Certificate pursuant to Section 9.01(c).
"Notional Balance": With respect to each of the Class
PS-1 and Class CS-1 Certificates, (a) on or prior to the
Distribution Date occurring in April 1997, a notional principal
amount equal to the aggregate initial Notional Balance of such
Class, as specified in the Preliminary Statement hereto, and (b)
(i) in the case of the Class CS-1 Certificates, as of any date of
determination after the Distribution Date occurring in April
1997, the Notional Balance of such Class on the Distribution Date
immediately prior to such date of determination, after
distributions of principal on the Class A-1A Certificates and
allocations of Realized Losses on such Class on such prior
Distribution Date and (ii) in the case of the Class PS-1
Certificates, as of any Distribution Date after April 1997 a
notional principal amount equal to the aggregate Stated Principal
Balance of the Mortgage Loans as of the first day of the related
Interest Accrual Period. The Notional Balance of the Class CS-1
Certificates will at all times equal the Certificate Balance of
the Class A-1A Certificates.
"Officers' Certificate": A certificate signed by the
Chairman of the Board, the Vice Chairman of the Board, the
President or a Vice President (however denominated) and by the
Treasurer, the Secretary, one of the Assistant Treasurers or
Assistant Secretaries, any Trust Officer or other officer of the
Servicer or the Special Servicer, as the case may be, customarily
performing functions similar to those performed by any of the
above designated officers 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, or an authorized officer of the Depositor,
and delivered to the Depositor, the Trustee or the Servicer, as
the case may be.
"101 Hudson Street Loan": The Mortgage Loan identified
as No. 2 on the Mortgage Loan Schedule.
"Opinion of Counsel": A written opinion of counsel,
who may, without limitation, be counsel for the Depositor, the
Special Servicer or the Servicer, as the case may be, acceptable
to the Trustee, except that any opinion of counsel relating to
(a) qualification of the Upper-Tier REMIC or Lower-Tier REMIC as
a REMIC or the imposition of tax under the REMIC Provisions on
any income or property of either REMIC, (b) compliance with the
REMIC Provisions (including application of the definition of
"Independent Contractor"), (c) qualification of the Grantor Trust
as a grantor trust or (d) a resignation of the Servicer pursuant
to Section 6.04, must be an opinion of counsel who is Independent
of the Depositor, the Special Servicer and the Servicer.
"Originator": Nomura Asset Capital Corporation, a
Delaware corporation, and its successors in interest.
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"Ownership Interest": Any record or beneficial interest
in a Class R or Class LR Certificate.
"P&I Advance": As to any Mortgage Loan, any advance
made by the Servicer, the Trustee, or the Fiscal Agent pursuant
to Section 4.06. Each reference to the payment or reimbursement
of a P&I Advance shall be deemed to include, whether or not
specifically referred to but without duplication, payment or
reimbursement of interest thereon at the Advance Rate through the
date of payment or reimbursement.
"Pass-Through Rate": With respect to each Class of
Certificates (other than the Class V-1, Class V-2, Class R and
Class LR Certificates), the Pass-Through Rate as set forth below:
Class Pass-Through Rate
- ----- -----------------
Class A-1A Class A-1A Pass-Through Rate
Class A-1B Class A-1B Pass-Through Rate
Class PS-1 Class PS-1 Pass-Through Rate
Class CS-1 Class CS-1 Pass-Through Rate
Class A-2 Class A-2 Pass-Through Rate
Class A-3 Class A-3 Pass-Through Rate
Class A-4 Class A-4 Pass-Through Rate
Class A-5 Class A-5 Pass-Through Rate
Class A-6 Class A-6 Pass-Through Rate
Class B-1 Class B-1 Pass-Through Rate
Class B-1H Class B-1H Pass-Through Rate
"Paying Agent": The paying agent appointed pursuant
to Section 5.04.
"Percentage Interest": As to any Certificate, the
percentage interest evidenced thereby in distributions required
to be made with respect to the related Class. With respect to any
Certificate (except the Class V-1, Class V-2, Class R and Class
LR Certificates), the percentage interest is equal to the initial
denomination of such Certificate divided by the initial
Certificate Balance or Notional Balance, as applicable, of such
Class of Certificates. With respect to any Class V-1, Class V-2,
Class R or Class LR Certificate, the percentage interest is set
forth on the face thereof.
"Permitted Investments": Any one or more of the
following obligations or securities payable on demand or having a
scheduled maturity on or before the Business Day preceding the
date upon which such funds are required to be drawn, regardless
of whether issued by the Depositor, the Servicer, the Trustee or
any of their respective Affiliates and having at all times the
required ratings, if any, provided for in this definition, unless
each Rating Agency shall have confirmed in writing to the
Servicer that a lower rating would not, in and of itself, result
in a downgrade, qualification or withdrawal of the then current
ratings assigned to the Certificates:
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(i) obligations of, or obligations fully guaranteed as
to payment of principal and interest by, the United
States or any agency or instrumentality thereof
provided such obligations are backed by the full
faith and credit of the United States of America
including, without limitation, obligations of: the
U.S. Treasury (all direct or fully guaranteed
obligations), the Farmers Home Administration
(certificates of beneficial ownership), the General
Services Administration (participation certificates),
the U.S. Maritime Administration (guaranteed Title
XI financing), the Small Business Administration
(guaranteed participation certificates and guaranteed
pool certificates), the U.S. Department of Housing
and Urban Development (local authority bonds) and the
Washington Metropolitan Area Transit Authority
(guaranteed transit bonds); provided, however, that
the investments described in this clause must (A) have
a predetermined fixed dollar of principal due at
maturity that cannot vary or change, (B) if rated
by S&P, must not have an "r" highlighter affixed to
their rating, (C) if such investments have a variable
rate of interest, such interest rate must be tied to a
single interest rate index plus a fixed spread (if any)
and must move proportionately with that index, and (D)
such investments must not be subject to liquidation
prior to their maturity;
(ii) Federal Housing Administration debentures;
(iii) obligations of the following United States government
sponsored agencies: Federal Home Loan Mortgage Corp.
(debt obligations), the Farm Credit System (consolidated
systemwide bonds and notes), the Federal Home
Loan Banks (consolidated debt obligations), the
Federal National Mortgage Association (debt
obligations), the Student Loan Marketing
Association (debt obligations), the Financing
Corp. (debt obligations), and the Resolution
Funding Corp. (debt obligations); provided,
however, that the investments described in this
clause must (A) have a predetermined fixed dollar
of principal due at maturity that cannot vary or
change, (B) if rated by S&P, must not have an "r"
highlighter affixed to their rating, (C) if such
investments have a variable rate of interest,
such interest rate must be tied to a single
interest rate index plus a fixed spread (if any)
and must move proportionately with that index,
and (D) such investments must not be subject to
liquidation prior to their maturity;
(iv) federal funds, unsecured certificates of deposit,
time or similar deposits, bankers' acceptances and
repurchase agreements, with maturities of not more
than 365 days, of any bank, the short term
obligations of which are rated in the highest short
term rating category by each Rating Agency (or,
if not rated by Moody's, DCR or Fitch, otherwise
acceptable to Moody's, DCR or Fitch, as
applicable, as confirmed in writing that
such investment would not, in and of itself,
result in a downgrade, qualification or
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withdrawal of the then current ratings
assigned to the Certificates); provided,
however, that the investments described in this
clause must (A) have a predetermined fixed dollar
of principal due at maturity that cannot vary or
change, (B) if rated by S&P, must not have an "r"
highlighter affixed to their rating, (C) if such
investments have a variable rate of interest, such
interest rate must be tied to a single interest rate
index plus a fixed spread (if any) and must move
proportionately with that index, and (D) such
investments must not be subject to liquidation prior
to their maturity;
(v) fully Federal Deposit Insurance Corporation-insured
demand and time deposits in, or certificates of
deposit of, or bankers' acceptances issued by, any
bank or trust company, savings and loan association
or savings bank, the short term obligations of which
are rated in the highest short term rating category
by each Rating Agency (or, if not rated by Moody's, DCR
or Fitch, otherwise acceptable to Moody's, DCR or
Fitch, as applicable, as confirmed in writing that
such investment would not, in and of itself, result
in a downgrade, qualification or withdrawal of the
then current ratings assigned to the Certificates);
provided, however, that the investments described in
this clause must (A) have a predetermined fixed dollar
of principal due at maturity that cannot vary or change,
(B) if rated by S&P, must not have an "r" highlighter
affixed to their rating, (C) if such investments have a
variable rate of interest, such interest rate must be
tied to a single interest rate index plus a fixed spread
(if any) and must move proportionately with that index,
and (D) such investments must not be subject to
liquidation prior to their maturity;
(vi) debt obligations with maturities of not more than
365 days rated by each Rating Agency (or, if not
rated by Moody's, DCR or Fitch, otherwise
acceptable to Moody's, DCR or Fitch, as
applicable, as confirmed in writing that such
investment would not, in and of itself, result in
a downgrade, qualification or withdrawal of the
then current ratings assigned to the
Certificates) in its highest long-term unsecured
rating category; provided, however, that the
investments described in this clause must (A)
have a predetermined fixed dollar of principal
due at maturity that cannot vary or change, (B)
if rated by S&P, must not have an "r" highlighter
affixed to their rating, (C) if such investments
have a variable rate of interest, such interest
rate must be tied to a single interest rate index
plus a fixed spread (if any) and must move
proportionately with that index, and (D) such
investments must not be subject to liquidation
prior to their maturity;
(vii) commercial paper (including both non-interest-
bearing discount obligations and interest-
bearing obligations payable on demand or on a
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specified date not more than one year after the date
of issuance thereof) with maturities of not more
than 365 days and that is rated by each Rating
Agency (or, if not rated by Moody's, DCR or Fitch,
otherwise acceptable to Moody's, DCR or Fitch, as
applicable, as confirmed in writing that such
investment would not, in and of itself, result in
a downgrade, qualification or withdrawal of the then
current ratings assigned to the Certificates) in its
highest short-term unsecured debt rating; provided,
however, that the investments described in this
clause must (A) have a predetermined fixed dollar
of principal due at maturity that cannot vary or
change, (B) if rated by S&P, must not have an "r"
highlighter affixed to their rating, (C) if such
investments have a variable rate of interest, such
interest rate must be tied to a single interest rate
index plus a fixed spread (if any) and must move
proportionately with that index, and (D) such
investments must not be subject to liquidation prior
to their maturity;
(viii) the Federated Prime Obligation Money Market
Fund (the "Fund") so long as the Fund is rated
by each Rating Agency in its highest short-term
unsecured debt ratings category (or, if not
rated by Moody's, DCR or Fitch, otherwise
acceptable to Moody's, DCR or Fitch, as applicable,
as confirmed in writing that such investment
would not, in and of itself, result in a
downgrade, qualification or withdrawal of the
then current ratings assigned to the Certificates);
and
(ix) any other demand, money market or time deposit,
demand obligation or any other obligation,
security or investment, provided that each Rating
Agency has confirmed in writing to the Servicer,
Special Servicer or Trustee, as applicable, that
such investment would not, in and of itself,
result in a downgrade, qualification or withdrawal
of the then current ratings assigned to the
Certificates;
provided, however, that, in the judgment of the Servicer, such
instrument continues to qualify as a "cash flow investment"
pursuant to Code Section 860G(a)(6) earning a passive return in
the nature of interest and that no instrument or security shall
be a Permitted Investment if (i) such instrument or security
evidences a right to receive only interest payments or (ii) the
right to receive principal and interest payments derived from the
underlying investment provides a yield to maturity in excess of
120% of the yield to maturity at par of such underlying
investment.
"Permitted Transferee": With respect to a Class R or
Class LR Certificate, any Person other than (a) a Disqualified
Organization, (b) any other Person so designated by the
Certificate Registrar based upon an Opinion of Counsel (provided
at the expense of such Person or the Person requesting the
Transfer) to the effect that the Transfer of an Ownership Interest
in any Class R or Class LR Certificate to such Person may cause
the Upper-Tier REMIC or Lower-Tier REMIC to fail to qualify as a
REMIC at any time that the Certificates are outstanding, (c) a
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Person that is a Disqualified Non-U.S. Person and (d) a Plan or
any Person investing the assets of a Plan.
"Person": Any individual, corporation, limited
liability company, partnership, joint venture, association,
joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Plan": As defined in Section 5.02(k).
"Prepayment Assumption": The assumption that all of
the Mortgage Loans prepay on their respective Anticipated
Repayment Dates.
"Prepayment Interest Shortfall": With respect to any
Distribution Date and any Mortgage Loan, the amount of any
shortfall in collections of interest (adjusted to the applicable
Net Mortgage Pass-Through Rate) resulting from a Principal
Prepayment on such Mortgage Loan during the related Collection
Period and prior to the related Due Date, other than Servicer
Prepayment Interest Shortfalls to the extent offset by the
aggregate Servicing Fee with respect to such Distribution Date.
"Prepayment Premium": Payments received on a Mortgage
Loan as the result of a Principal Prepayment thereon, not
otherwise due thereon in respect of principal or interest, other
than an amount paid in connection with the release of the related
Mortgaged Property through defeasance, which are intended to
compensate the holder of the related Note for prepayment.
"Principal Distribution Amount": For any Distribution
Date will be equal to the sum of:
(i) the principal component of all scheduled Monthly
Payments which become due on the Mortgage Loans on or before the
related Due Date (if received, or advanced by the Servicer,
Trustee or Fiscal Agent, in respect of such Distribution Date);
(ii) the principal component of all Extended Monthly
Payments due on the Mortgage Loans on or before the related Due
Date (if received, or advanced by the Servicer, Trustee or Fiscal
Agent, in respect of such Distribution Date);
(iii) to the extent not included in the preceding clauses,
the principal component of the purchase price of each Mortgage
Loan that was, during the related Collection Period, repurchased
from the Trust Fund pursuant to Section 2.03 or purchased from
the Trust Fund pursuant to Section 9.01;
(iv) to the extent not included in the preceding clauses,
the portion of Unscheduled Payments allocable to principal of any
Mortgage Loan that was liquidated during the related Collection
Period;
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(v) to the extent not included in the preceding clauses,
any other principal payment on any Mortgage Loan received on or
after the Maturity Date thereof to the extent received during the
related Collection Period;
(vi) to the extent not included in the preceding clauses,
all other Principal Prepayments received in the related Collection
Period; and
(vii) to the extent not included in the preceding clauses,
any other full or partial recoveries in respect of principal,
including Net Insurance Proceeds, Net Liquidation Proceeds and
Net REO Proceeds (in the case of clauses (i) through (vii), net
of any related outstanding P&I Advances allocable to principal
and excluding any amounts representing recoveries of Subordinate
Class Advance Amounts).
The principal component of the amounts set forth above
shall be determined in accordance with Section 1.02 hereof.
"Principal Prepayment": Any payment of principal made
by a Borrower on a Mortgage Loan which is received in advance of
its scheduled Due Date and which is not accompanied by an amount
of interest representing the full amount of scheduled interest
due on any date or dates in any month or months subsequent to the
month of prepayment other than any amount paid in connection with
the release of the related Mortgaged Property through defeasance.
"Private Global Certificate": Each of the Regulation S
Global Certificate or Rule 144A Global Certificate with respect
to the Class B-1 Certificates so long as any such Class of
Certificates is registered in the name of a nominee of the
Depository.
"Property Advance": As to any Mortgage Loan, any
advance made by the Servicer, Special Servicer, the Trustee or
the Fiscal Agent in respect of Property Protection Expenses or
any expenses incurred to protect, preserve and enforce the
security for a Mortgage Loan or taxes and assessments or
insurance premiums, pursuant to Section 3.04 or Section 3.24, as
applicable. Each reference to the payment or reimbursement of a
Property Advance shall be deemed to include, whether or not
specifically referred to, payment or reimbursement of interest
thereon at the Advance Rate from and including the date of the
making of such Advance through and including the date of payment
or reimbursement.
"Property Protection Expenses": Any costs and expenses
incurred by the Servicer or the Special Servicer pursuant to
Sections 3.04, 3.08, 3.10(f), 3.10(g), 3.10(i) and 3.17(b) or
indicated herein as being a cost or expense of the Trust Fund or
the Lower-Tier REMIC or Upper-Tier REMIC to be advanced by the
Servicer or the Special Servicer, as applicable.
"Public Global Certificate": Each of the Class A-1A,
Class A-1B, Class PS-1, Class CS-1 Class A-2, Class A-3, Class
A-4, Class A-5 and Class A-6 Certificates so long as any such
Class of Certificates is registered in the name of a nominee of
the Depository.
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"Qualified Institutional Buyer": A qualified
institutional buyer within the meaning of Rule 144A.
"Qualified Insurer": As used in Section 3.08, (i) an
insurance company or security or bonding company qualified to
write the related insurance policy in the relevant jurisdiction
which shall have a claims paying ability of "AA" or better by S&P
and Fitch (and, if such company is not rated by Fitch, is rated
A-IX by Best's Key Rating Guide) and "Baa3" or better by Moody's
and "A" or better by DCR (or, if such company is not rated by
DCR, is rated at least in an equivalent category by at least two
nationally recognized statistical rating organizations), (ii) in
the case of public liability insurance policies required to be
maintained with respect to REO Properties in accordance with
Section 3.08(a), shall have a claims paying ability of "A" or
better by S&P and Fitch (and, if such company is not rated by
Fitch, is rated A-IX by Best's Key Rating Guide) and "Baa3" or
better by Moody's and "A" or better by DCR (or, if such company
is not rated by DCR, is rated at least in an equivalent category
by at least two nationally recognized statistical rating
organizations), and (iii) in the case of the fidelity bond and
the errors and omissions insurance required to be maintained
pursuant to Section 3.08(c), shall have a claims paying ability
rated by each Rating Agency (and if such company is not rated by
Fitch, is rated A-VIII by Best's Key Rating Guide) no lower than
two ratings categories (without regard to pluses or minuses)
lower than the highest rating of any outstanding Class of
Certificates from time to time, but in no event lower than "BBB"
by S&P, DCR and Fitch and "Baa3" by Moody's (or, if such company
is not rated by DCR, rated at least in an equivalent category by
at least two nationally recognized statistical rating
organizations), unless in any such case each of the Rating
Agencies has confirmed in writing that obtaining the related
insurance from an insurance company that is not rated by each of
the Rating Agencies (subject to the foregoing exceptions) or that
has a lower claims paying ability than such requirements shall
not result, in and of itself, a downgrade, qualification or
withdrawal of the then current ratings by such Rating Agency to
any Class of Certificates.
"Qualified Mortgage": A Mortgage Loan that is a
"qualified mortgage" within the meaning of Code Section
860G(a)(3) of the Code (but without regard to the rule in
Treasury Regulations 1.860G-2(f)(2) that treats a defective
obligation as a qualified mortgage, or any substantially similar
successor provision).
"Rated Final Distribution Date": The Distribution Date
occurring in January 2030.
"Rating Agency": Any of DCR, Moody's, Fitch or S&P.
References herein to the highest long-term unsecured debt rating
category of DCR, S&P and Fitch shall mean "AAA" and of Moody's
shall mean "Aaa" and in the case of any other rating agency shall
mean such highest rating category or better without regard to any
plus or minus or numerical qualification.
"Real Property": Land or improvements thereon such as
buildings or other inherently permanent structures thereon
(including items that are structural components of the buildings
or structures), in each such case as such terms are used in the
REMIC Provisions.
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"Realized Loss": With respect to any Distribution
Date, the amount, if any, by which the aggregate Certificate
Balance of the Certificates after giving effect to distributions
of principal on such Distribution Date exceeds the aggregate
Stated Principal Balance of the Mortgage Loans as of the first
day of the Interest Accrual Period commencing immediately prior
to such Distribution Date.
"Reassignment of Assignment of Leases, Rents and Profits":
As defined in Section 2.01(viii).
"Record Date": With respect to each Distribution Date,
the close of business on the tenth day of the month in which such
Distribution Date occurs or, if such day is not a Business Day,
the preceding Business Day; provided, however, that with respect
to the first Distribution Date, for all purposes other than
receipt of the distribution pursuant to Section 4.01 on such
Distribution Date, the Record Date shall be the Closing Date.
"Reduction Interest Distribution Amount": With respect
to the Class PS-1 Certificates, any Distribution Date and each of
clauses Sixth, Tenth and Fourteenth of Section 4.01(d), the
amount of interest accrued for the Interest Accrual Period at a
per annum rate equal to the applicable Reduction Interest
Pass-Through Rate for such Interest Accrual Period on the
aggregate amount of Appraisal Reduction Amounts and Delinquency
Reduction Amounts notionally allocated to the related Classes
referred to in subclause (B) of each such clause as of such
Distribution Date.
"Reduction Interest Pass-Through Rate": With respect
to any Distribution Date (i) when the Class A-4 Certificates are
the most subordinate Class outstanding, 0.20%, (ii) when the
Class A-3 Certificates are the most subordinate Class
outstanding, 0.40% and (iii) when the Class A-2 Certificates are
the most subordinate Class outstanding, 0.49%.
"Reduction Interest Shortfall": With respect to any
Distribution Date and each of clauses Sixth, Tenth and Fourteenth
of Section 4.01(d), any shortfall in the Reduction Interest
Distribution Amount required to be distributed to the Class PS-1
Certificates pursuant to such clause on such Distribution Date.
"Regular Certificates": The Class A-1A, Class A-1B,
Class PS-1, Class CS-1, Class A-2, Class A-3, Class A-4, Class
A-5, Class A-6, Class B-1 and Class B-1H Certificates.
"Regulation D": Regulation D under the Act.
"Regulation S": Regulation S under the Act.
"Regulation S Global Certificate": As defined in
Section 5.01.
"Regulation S Investor": With respect to a transferee
of a Regulation S Global Certificate, a transferee that acquires
such Certificate pursuant to Regulation S.
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"Regulation S Transfer Certificate": A certificate
substantially in the form of Exhibit G hereto.
"Related Certificate" and "Related Lower-Tier Regular
Interest": For any Class of Lower-Tier Regular Interest, the
related Certificates set forth below, and for any Class of
Certificates (other than the Class PS-1, Class CS-1, Class V-1,
Class V-2, Class R and Class LR Certificates), the related Class
of Lower-Tier Regular Interest set forth below:
Related Lower-Tier
Related Certificate Regular Interest
------------------- ----------------
Class A-1A Class A-1A-L
Class A-1B Class A-1B-L
Class A-2 Class A-2-L
Class A-3 Class A-3-L
Class A-4 Class A-4-L
Class A-5 Class A-5-L
Class A-6 Class A-6-L
Class B-1 Class B-1-L
Class B-1H Class B-1H-L
"REMIC": A "real estate mortgage investment conduit"
within the meaning of Section 860D of the Code.
"REMIC Provisions": Provisions of the federal income
tax law relating to real estate mortgage investment conduits,
which appear at Section 860A through 860G of Subchapter M of
Chapter 1 of the Code, and related provisions, and regulations
(including any applicable proposed regulations) and rulings
promulgated thereunder, as the foregoing may be in effect from
time to time.
"Rents from Real Property": With respect to any REO
Property, gross income of the character described in Section
856(d) of the Code, which income, subject to the terms and
conditions of that Section of the Code in its present form, does
not include:
(i) except as provided in Section 856(d)(4) or (6) of
the Code, any amount received or accrued,
directly or indirectly, with respect to such REO
Property, if the determination of such amount
depends in whole or in part on the income or
profits derived by any Person from such property
(unless such amount is a fixed percentage or percen-
tages of receipts or sales and otherwise constitutes
Rents from Real Property);
(ii) any amount received or accrued, directly or
indirectly, from any Person if the Trust Fund
owns directly or indirectly (including by
attribution) a ten percent or greater interest in
such Person determined in accordance with
Sections 856(d)(2)(B) and (d)(5) of the Code;
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(iii) any amount received or accrued, directly or
indirectly, with respect to such REO Property if
any Person Directly Operates such REO Property;
(iv) any amount charged for services that are not
customarily furnished in connection with the
rental of property to tenants in buildings of a
similar class in the same geographic market as
such REO Property within the meaning of Treasury
Regulations Section 1.856-4(b)(1) (whether or not
such charges are separately stated); and
(v) rent attributable to personal property unless
such personal property is leased under, or in
connection with, the lease of such REO Property
and, for any taxable year of the Trust Fund, such
rent is no greater than 15 percent of the total
rent received or accrued under, or in connection
with, the lease.
"REO Account": As defined in Section 3.17(b).
"REO Disposition Fee": With respect to any REO
Property which is sold or transferred or otherwise liquidated, an
amount equal to 1% of the amount equal to (a) the Liquidation
Proceeds of such REO Property minus (b) any broker's commission
and related brokerage referral fees.
"REO Mortgage Loan": Any Mortgage Loan as to which the
related Mortgaged Property has become an REO Property.
"REO Proceeds": With respect to any REO Property and
the related REO Mortgage Loan, all revenues received by the
Special Servicer with respect to such REO Property or REO
Mortgage Loan which do not constitute Liquidation Proceeds.
"REO Property": A Mortgaged Property title to which
has been acquired by the Servicer on behalf of the Trust Fund
through foreclosure, deed in lieu of foreclosure or otherwise.
"Repurchase Price": With respect to any Mortgage Loan
to be repurchased pursuant to Section 2.03(d), 2.03(e) or 9.01 or
any Specially Serviced Mortgage Loan or any REO Mortgage Loan to
be sold or repurchased pursuant to Section 3.18, an amount,
calculated by the Servicer, equal to:
(i) the unpaid principal balance of such Mortgage
Loan as of the Due Date as to which a payment was
last made by the Borrower (less any Advances
previously made on account of principal); plus
(ii) unpaid accrued interest from the Due Date as to
which interest was last paid by the Borrower
up to the Due Date in the month following
the month in which the purchase or repurchase
is to occur at a rate equal to the
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Mortgage Rate on the unpaid principal balance
of such Mortgage Loan (less any Advances previously
made on account of interest); plus
(iii) any unreimbursed Advances and unpaid Servicing
Fees, Trustee Fees and Special Servicing
Compensation allocable to such Mortgage Loan
together with interest thereon at the Advance
Rate; plus
(iv) in the event that the Mortgage Loan is required
to be repurchased pursuant to Sections 2.03(d) or
2.03(e), any expenses reasonably incurred or to
be incurred by the Servicer, the Special Servicer
or the Trustee in respect of the breach or defect
giving rise to the repurchase obligation,
including any expenses arising out of the
enforcement of the repurchase obligation.
"Request for Release": A request for a release signed by
a Servicing Officer, substantially in the form of Exhibit E hereto.
"Reserve Accounts": With respect to any Mortgage Loan,
reserve accounts, if any, established pursuant to the Mortgage or
the Loan Agreement and any Escrow Account. Any Reserve Account
may be a sub-account of the related Cash Collateral Account. Any
Reserve Account shall be beneficially owned for federal income
tax purposes by the Person who is entitled to receive the
reinvestment income or gain thereon in accordance with the terms
and provisions of the related Mortgage Loan and Section 3.07,
which Person shall be taxed on all reinvestment income or gain
thereon. The Servicer shall be permitted to make withdrawals
therefrom for deposit into the related Cash Collateral Account,
if applicable, or the Collection Account or for the purposes set
forth under the related Mortgage Loan. To the extent not
inconsistent with the related Mortgage Loan, each such Reserve
Account shall be an Eligible Account.
"Residual Transfer Opinion": An opinion of counsel to
the Depositor acceptable to the Trustee and the Certificate
Registrar to the effect that the continued ownership after the
Residual Trigger Date of an Ownership Interest by an
Institutional Accredited Investor shall not cause the Trust Fund
to be required to be registered as an investment company under
the Investment Company Act of 1940, as amended.
"Residual Trigger Date": The date on which more than
20% of the aggregate then outstanding principal balance of the
Mortgage Loans is secured by U.S. Government obligations pursuant
to the release of Mortgaged Properties through defeasance.
"Responsible Officer": Any officer of the Asset-Backed
Trust Services Department of the Trustee or the Fiscal Agent (and, in
the event that the Trustee is the Certificate Registrar or the
Paying Agent, of the Certificate Registrar or the Paying Agent,
as applicable) assigned to the 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, and, in the case of
any certification required to be signed by a Responsible Officer,
such an officer
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whose name and specimen signature appears on a list of
corporate trust officers furnished to the Servicer by the Trustee
and the Fiscal Agent, as such list may from time to time be
amended.
"Restricted Certificate": As defined in Section 5.02(k).
"Restricted Period": The 40-day period prescribed by
Regulation S commencing on the later of (a) the date upon which
the Certificates are first offered to persons other than the
Underwriter and any other distributor (as defined in Regulation
S) of the Certificates, and (b) the Closing Date.
"Revised Mortgage Rate": With respect to any Mortgage
Loan, the revised Mortgage Rate on each such Mortgage Loan (in
the absence of a default), as set forth on the Mortgage Loan
Schedule.
"Rule 144A": Rule 144A under the Act.
"Rule 144A Global Certificate": As defined in
Section 5.01.
"S&P": Standard & Poor's Ratings Services, or its
successor in interest.
"Scheduled Final Distribution Date": The Distribution
Date occurring in January 2027.
"Securities Legend": With respect to each Rule 144A
Global Certificate, Residual Certificate or any Individual
Certificate other than an Individual Certificate issued after the
Restricted Period in exchange for or transfer of a beneficial
interest in a Regulation S Global Certificate, the legend set
forth in, and substantially in the form of, Exhibit H hereto.
"Servicer": Pacific Mutual Life Insurance Company, a
California corporation, or its successor in interest, or any
successor Servicer appointed as herein provided.
"Servicer Event of Default": As defined in Section 7.01(a).
"Servicer Prepayment Interest Shortfall": With respect
to any Distribution Date and any Mortgage Loan, the amount of any
shortfall in collections of interest (adjusted to the applicable
Net Mortgage Pass-Through Rate) resulting from a voluntary
Principal Prepayment made by the Borrower on such Mortgage Loan
during the related Collection Period and prior to the related Due
Date, which Principal Prepayment, pursuant to the terms of the
related Mortgage Loan, was not permitted to be made on any date
other than a Due Date under such Mortgage Loan, but was
nonetheless accepted by the Servicer; provided, however, that the
aggregate amount of the Servicer Prepayment Interest Shortfall
with respect to any Interest Accrual Period shall not exceed the
aggregate amount of the Servicing Fee (less the aggregate Trustee
Fee) earned with respect to such Interest Accrual Period.
"Servicer Remittance Date": With respect to any
Distribution Date, the Business Day preceding such Distribution
Date.
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"Servicer Remittance Report": A report prepared by the
Servicer and/or the Special Servicer in such media as may be
agreed upon by the Servicer, the Special Servicer and the Trustee
containing such information regarding the Mortgage Loans as will
permit the Trustee to calculate the amounts to be distributed
pursuant to Section 4.01 and to furnish statements to
Certificateholders pursuant to Section 4.02 and containing such
additional information as the Servicer and the Trustee may from
time to time agree.
"Servicer's Appraisal Estimate": As defined in the
definition of Appraisal Reduction Amount.
"Servicing Fee": With respect to each Mortgage Loan
and for any Distribution Date, an amount per Interest Accrual
Period equal to the product of (i) one-twelfth of the Servicing
Fee Rate and (ii) the Stated Principal Balance of such Mortgage
Loan as of the first day of the Interest Accrual Period ending
immediately prior to such Distribution Date; provided that such
fee for the first Interest Accrual Period shall be appropriately
prorated to reflect the fact that the first Interest Accrual
Period is less than a full month.
"Servicing Fee Rate": A rate equal to 0.055% per annum.
"Servicing Officer": Any officer or employee of the
Servicer or the Special Servicer, as applicable, involved in, or
responsible for, the administration and servicing of the Mortgage
Loans or this Agreement and also, with respect to a particular
matter, any other officer to whom such matter is referred because
of such officer's or employee's knowledge of and familiarity with
the particular subject, and, in the case of any certification
required to be signed by a Servicing Officer, such an officer or
employee whose name and specimen signature appears on a list of
servicing officers furnished to the Trustee by the Servicer or
the Special Servicer, as applicable, as such list may from time
to time be amended.
"Servicing Standard": With respect to the Servicer or
Special Servicer shall mean the servicing of the Mortgage Loans
by the Servicer or Special Servicer solely in the best interests
of and for the benefit of all of the Certificateholders (as
determined by the Servicer or Special Servicer as the case may
be, in its reasonable judgment) and in accordance with applicable
law, the specific terms of the respective Mortgage Loans and this
Agreement and to the extent not inconsistent with the foregoing,
in the same manner in which, and with the same care, skill,
prudence and diligence with which, it (i) services and
administers similar mortgage loans for other third-party
portfolios or (ii) administers mortgage loans for its own
account, whichever standard is higher, but in any case without
regard to:
(i) any known relationship that the Servicer, the
Special Servicer, any sub-servicer or any
Affiliate of the Servicer, the Special Servicer
or any sub-servicer may have with any Borrower
or any other parties to this Agreement;
(ii) the ownership of any Certificate by the Servicer,
the Special Servicer or any Affiliate of the Servicer
or Special Servicer, as applicable;
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(iii) the Servicer's or Special Servicer's obligation
to make P&I Advances, Property Advances or to
incur servicing expenses with respect to the
Mortgage Loans;
(iv) the Servicer's, Special Servicer's or any
sub-servicer's right to receive compensation for
its services hereunder or with respect to any
particular transaction; or
(v) the ownership, or servicing or management for
others, by the Servicer, the Special Servicer or
any sub-servicer, of any other mortgage loans or
properties.
"Special Event Report": As defined in Section 3.22.
"Special Servicer": The Servicer, in such capacity, or
its successor in interest, or any successor Special Servicer
appointed as provided in Section 3.25. In the event that the
Servicer is terminated or resigns as the Servicer hereunder, the
Servicer shall be terminated as the Special Servicer hereunder.
"Special Servicer Event of Default": As defined in
Section 7.01(b).
"Special Servicing Compensation": With respect to any
Mortgage Loan, any of the Special Servicing Fee, the Special
Servicing Rehabilitation Fee, and the REO Disposition Fee which
shall be due to the Special Servicer.
"Special Servicing Fee": With respect to each
Specially Serviced Mortgage Loan and any Distribution Date, an
amount per Interest Accrual Period equal to the product of (i)
one-twelfth of the Special Servicing Fee Rate and (ii) the Stated
Principal Balance of such Specially Serviced Mortgage Loan as of
the first day of the Interest Accrual Period ending immediately
prior to such Distribution Date; provided that such fee for the
first Interest Accrual Period shall be appropriately prorated to
reflect the fact that the first Interest Accrual Period is less
than a full month.
"Special Servicing Fee Rate": A rate equal to 0.50%
per annum (except that if the Special Servicer is, or is an
Affiliate of, or has an economic arrangement for the purpose of
retaining the full Special Servicing Fee with, the Holder or
Holders of Certificates representing greater than 50% of the
Voting Rights of the most subordinate Class of Certificates then
outstanding, the Special Servicer shall provide written notice
thereof to the Servicer and the rate shall equal 0.25% per
annum).
"Special Servicing Rehabilitation Fee": As to any Mortgage
Loan that has been a Specially Serviced Mortgage Loan, on the
occasion that such Mortgage Loan has not been a Specially Serviced
Mortgage Loan for nine consecutive Collection Periods (or 12
consecutive Collection Periods in the case of any Mortgage Loan
which became a Specially Serviced Mortgage Loan as a result of
circumstances described in clauses (iii) through (vii) of the
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definition thereof), an amount equal to 0.25% of the highest
Stated Principal Balance of such Mortgage Loan while it was a
Specially Serviced Mortgage Loan; provided, however, that such
Special Servicing Rehabilitation Fee shall be due only once for
each Mortgage Loan during the term hereof.
"Specially Serviced Mortgage Loan": Subject to
Section 3.26, any Mortgage Loan with respect to which:
(i) the related Borrower has not made two consecutive
Monthly Payments (and has not cured at least one
such Delinquency by the next Due Date under the
related Mortgage Loan);
(ii) the Servicer, the Trustee or the Fiscal Agent,
individually or collectively, have made four
consecutive P&I Advances (regardless of whether
such P&I Advances have been reimbursed);
(iii) the related Borrower under which has expressed to
the Servicer an inability to pay or a hardship in
paying the Mortgage Loan in accordance with its
terms;
(iv) the Servicer has received notice that the
Borrower has become the subject of any
bankruptcy, insolvency or similar proceeding,
admitted in writing the inability to pay its
debts as they come due or made an assignment for
the benefit of creditors;
(v) the Servicer has received notice of a foreclosure
or threatened foreclosure of any lien on the
Mortgaged Property securing the Mortgage Loan;
(vi) a default of which (A) the Servicer has notice
(other than a failure by the Borrower to pay
principal or interest) and (B) which materially and
adversely affects the interests of the Certificate-
holders has occurred and remained unremedied for the
applicable grace period specified in the Mortgage Loan
(or, if no grace period is specified, 60 days);
provided, that a default requiring a Property Advance
shall be deemed to materially and adversely affect
the interests of the Certificateholders;
(vii) the Special Servicer proposes to commence foreclosure
or other workout arrangements; or
(viii) in the opinion of the Servicer (consistent with
the Servicing Standard) a default under a
Mortgage Loan is imminent and such Mortgage Loan
deserves the attention of the Special Servicer;
provided, however, that a Mortgage Loan will cease to be a
Specially Serviced Mortgage Loan:
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(a) with respect to the circumstances described in
clause (i) or (ii) above, when the Borrower
thereunder has brought the Mortgage Loan current
(or, with respect to the circumstances described
in clause (viii), pursuant to any work out
implemented by the Special Servicer) and
thereafter made three consecutive full and timely
Monthly Payments (including pursuant to any
workout of the Mortgage Loan);
(b) with respect to the circumstances described in
clause (iii), (iv), (v) and (vii) above, when
such circumstances cease to exist in the good
faith judgment of the Servicer; or
(c) with respect to the circumstances described in
clause (vi) above, when such default is cured;
provided, further, that at that time no circumstance identified
in clauses (i) through (viii) above exists that would cause the
Mortgage Loan to continue to be characterized as a Specially
Serviced Mortgage Loan.
"Spread Rate": The Spread Rate for each Class of
Certificates is as set forth below:
Class Spread Rate
----- -----------
Class PS-1................... 1.60%
Class CS-1................... 1.60%
Class A-1A................... 0.50%
Class A-1B................... 0.64%
"Startup Day": The day designated as such pursuant
to Section 2.06(a) hereof.
"Stated Principal Balance": With respect to any Mortgage
Loan, at any date of determination, an amount equal to (a) the
principal balance as of the Cut-off Date of such Mortgage Loan,
minus (b) the sum of (i) the principal portion of each Monthly
Payment or, if applicable, Extended Monthly Payment due on such
Mortgage Loan after the Cut-off Date and prior to such date of
determination, if received from the Borrower or advanced by the
Servicer, Trustee, Fiscal Agent, (ii) all voluntary and
involuntary principal prepayments and other unscheduled
collections of principal received with respect to such Mortgage
Loan, to the extent distributed to Certificateholders or applied
to other payments required under this Agreement before such date
of determination and (iii) any adjustment thereto as a result of
a reduction of principal by a bankruptcy court or as a result of
a modification reducing the principal amount due on such Mortgage
Loan. The Stated Principal Balance of a Mortgage Loan with
respect to which title to the related Mortgaged Property has been
acquired by the Trust Fund is equal to the principal balance
thereof outstanding on the date on which such title is
acquired less any Net REO Proceeds allocated to principal
on such Mortgage Loan. The Stated Principal Balance of a
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Specially Serviced Mortgage Loan with respect to which the
Special Servicer has made a Final Recovery Determination is
zero.
"Subordinate Class Advance Amount": As defined in
Section 4.06(d).
"Summary Report": A quarterly report or annual summary
of quarterly reports setting forth the information with respect
to the Borrowers and Mortgaged Properties, substantially in the
form of Exhibit J hereto.
"Tax Returns": The federal income tax return on IRS
Form 1066, U.S. Real Estate Mortgage Investment Conduit Income
Tax Return, including Schedule Q thereto, Quarterly Notice to
Residual Interest Holders of REMIC Taxable Income or Net Loss
Allocation, or any successor forms, to be filed on behalf of each
of the Upper-Tier REMIC or Lower-Tier 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 IRS or any other
governmental taxing authority under any applicable provisions of
federal, state or local tax laws.
"Terminated Party": As defined in Section 7.01(c).
"Terminating Party": As defined in Section 7.01(c).
"Termination Date": The Distribution Date on which
the Trust Fund is terminated pursuant to Section 9.01.
"Transfer": Any direct or indirect transfer or other
form of assignment of any Ownership Interest in a Class R or
Class LR Certificate.
"Transferee Affidavit": As defined in Section 5.02(l).
"Transferor Letter": As defined in Section 5.02(l).
"Trust Fund": The corpus of the trust created hereby
and to be administered hereunder, consisting of: (i) such
Mortgage Loans as from time to time are subject to this
Agreement, together with the Mortgage Files relating thereto;
(ii) all scheduled or unscheduled payments on or collections in
respect of the Mortgage Loans due after the Cut-off Date; (iii)
any REO Property; (iv) all revenues received in respect of any
REO Property; (v) the Servicer's and the Trustee's rights under
the insurance policies with respect to the Mortgage Loans
required to be maintained pursuant to this Agreement and any
proceeds thereof; (vi) any Assignments of Leases, Rents and
Profits and any security agreements; (vii) any indemnities or
guaranties given as additional security for any Mortgage Loans;
(viii) all assets deposited in the Lock-Box Accounts, Cash
Collateral Accounts, Escrow Accounts, the Hudson Treasury
Collateral Account and Reserve Accounts (to the extent such
assets in such accounts are not assets of the respective
Borrowers), the Collection Account, Lower-Tier Distribution
Account, the Upper-Tier Distribution Account, the Excess Interest
Distribution Account, the Interest Reserve Account and
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the Default Interest Distribution Account, including reinvestment
income thereon; (ix) any environmental indemnity agreements
relating to the Mortgaged Properties; (x) the rights and remedies
under the Mortgage Loan Purchase and Sale Agreement; and (xi) the
proceeds of any of the foregoing (other than any interest earned
on deposits in the Lock-Box Accounts, Cash Collateral Accounts,
Escrow Accounts, the Hudson Treasury Collateral Account and any
Reserve Accounts, to the extent such interest belongs to the
related Borrower).
"Trust REMICs": The Lower-Tier REMIC and the
Upper-Tier REMIC.
"Trustee": LaSalle National Bank, a nationally
chartered bank, in its capacity as trustee, or its successor in
interest, or any successor trustee appointed as herein provided.
"Trustee Fee": With respect to each Mortgage Loan and
for any Distribution Date, an amount per Interest Accrual Period
equal to the product of (i) one-twelfth of the Trustee Fee Rate
multiplied by (ii) the Stated Principal Balance of such Mortgage
Loan as of the first day of the Interest Accrual Period ending
immediately prior to such Distribution Date; provided that such
fee for the first Interest Accrual Period shall be appropriately
prorated to reflect the fact that the first Interest Accrual
Period is less than a full month.
"Trustee Fee Rate": A rate equal to 0.005% per annum.
"Underwriter": Nomura Securities International, Inc.
"Unscheduled Payments": With respect to a Mortgage
Loan and a Collection Period, all Net Liquidation Proceeds and
Net Insurance Proceeds payable under such Mortgage Loan, the
Repurchase Price of any Mortgage Loan that is repurchased or
purchased pursuant to Sections 2.03(d), 2.03(e), 3.18 or 9.01,
and any other payments under or with respect to such Mortgage
Loan not scheduled to be made, including Principal Prepayments
received by the Servicer, but excluding Prepayment Premiums,
during such Collection Period.
"Updated Appraisal": An appraisal of a Mortgaged
Property or REO Property, as the case may be, conducted
subsequent to any appraisal performed on or prior to the Cut-off
Date and in accordance with MAI standards, the costs of which
shall be paid as a Property Advance by the Servicer. Updated
Appraisals shall be conducted by an MAI appraiser selected by the
Servicer after consultation with the Special Servicer.
"Upper-Tier Distribution Account": The trust account
or accounts created and maintained as a separate trust account or
accounts by the Trustee pursuant to Section 3.05(c), which shall
be entitled "LaSalle National Bank, as Trustee, in trust for
Holders of Asset Securitization Corporation, Commercial Mortgage
Pass-Through Certificates, Series 1997-MD VII, Upper-Tier
Distribution Account" and which must be an Eligible Account.
"Upper-Tier REMIC": A segregated asset pool within the
Trust Fund consisting of the Lower-Tier Regular Interests and
amounts held from time to time in the Upper-Tier Distribution
Account.
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"Voting Rights": The portion of the voting rights of
all of the Certificates that is allocated to any Certificate or
Class of Certificates. At all times during the term of this
Agreement, the percentage of the Voting Rights assigned to each
Class shall be (a) 0%, in the case of the Class V-1, Class V-2,
Class R and Class LR Certificates, (b) 0.85%, in the case of the
Class PS-1 Certificates, and 0.25%, in the case of the Class CS-1
Certificates (the sum of such percentages for each such Class
outstanding is the "Fixed Voting Rights Percentage"); provided
that the Voting Rights of each of the Class PS-1 and Class CS-1
Certificates will be reduced to zero upon the reduction of the
Notional Balance of such Class to zero; provided further that the
Voting Rights of the Class PS-1 Certificates will be reduced to
zero on the Distribution Date that the Class A-5 Certificates is
the most senior Class outstanding, (c) in the case of any of the
Class A-1A, Class A-1B, Class A-2, Class A-3, Class A-4, Class
A-5 and Class A-6 Certificates, a percentage equal to the product
of (i) 100% minus the Fixed Voting Rights Percentage multiplied
by (ii) a fraction, the numerator of which is equal to the
aggregate Certificate Balance of any such Class and the
denominator of which is equal to the aggregate Certificate
Balances of all Classes of Certificates and (d) in the case of
any of the Class B-1 and Class B-1H Certificates, a percentage
equal to (i) 100% minus the Fixed Voting Rights Percentage
multiplied by (ii) a fraction, the numerator of which is equal to
the aggregate outstanding Certificate Balance of such Class and
the denominator of which is equal to the aggregate outstanding
Certificate Balances of all Classes of Certificates. The Voting
Rights of any Class of Certificates shall be allocated among
Holders of Certificates of such Class in proportion to their
respective Percentage Interests. The aggregate Voting Rights of
Holders of more than one Class of Certificates shall be equal to
the sum of the products of each such Holder's Voting Rights and
the percentage of Voting Rights allocated to the related Class of
Certificates. Any Certificateholder may transfer its Voting
Rights without transferring its ownership interest in the related
Certificates provided that such Certificateholder provides notice
of such transfer to the Trustee prior to the effectiveness of
such transfer.
"Weighted Average Net Mortgage Pass-Through Rate" With
respect to any Interest Accrual Period, the amount (expressed as
a percentage), the numerator of which is the sum of the products
of (i) the Net Mortgage Pass-Through Rate of each Mortgage Loan
and (ii) the Stated Principal Balance of such Mortgage Loan as of
the first day of such Interest Accrual Period and the denominator
of which is the sum of the Stated Principal Balances of all
Mortgage Loans as of such date.
"Weighted Average Pass-Through Rate": With respect to any
Interest Accrual Period, the amount (expressed as a percentage),
the numerator of which is the sum of (i) the sum of the products
of (A) the Pass-Through Rate with respect to each Class of
Certificates having a Pass-Through Rate (other than the Class
PS-1 and Class CS-1 Certificates) and (B) the Certificate Balance
of such Class as of the first day of such Interest Accrual Period
and (ii) the product of (A) the Pass-Through Rate on the Class
CS-1 Certificates and (B) the Notional Balance of such Class as
of such date and the denominator of which is the sum of the
Certificate Balances of each Class included in clause (i)(A)
above as of such date (provided in each case, any reductions
in Certificate Balance or Notional Balance, as applicable,
as a result of distributions or allocations of Realized
Losses to such Class or the related Class, respectively,
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occurring in an Interest Accrual Period will be deemed to
have been made on the first day of such Interest Accrual
Period).
"Withheld Amounts": As defined in Section 3.27.
SECTION 1.02. Certain Calculations
Unless otherwise specified herein, the following
provisions shall apply:
(a) All calculations of interest with respect to the
Mortgage Loans shall be made in accordance with the terms of the
related Note and Mortgage or, if such documents do not specify
the basis upon which interest accrues thereon, on the basis of
the actual number of days in each month and a 360-day year.
(b) The portion of any Insurance Proceeds and Net
Liquidation Proceeds in respect of a Mortgage Loan allocable to
principal shall equal the total amount of such proceeds minus (a)
any portion thereof payable to the Servicer, the Special
Servicer, the Trustee or the Fiscal Agent pursuant to the
provisions of this Agreement and (b) a portion thereof equal to
the interest component of the Monthly Payment or Extended Monthly
Payment, as the case may be, at the related Net Mortgage
Pass-Through Rate from the date as to which interest was last
paid by the Borrower up to but not including the Due Date in the
Collection Period in which such proceeds are received.
(c) For purposes of distribution of Prepayment Premiums
pursuant to Section 4.01(g)(iii) and (iv) on any Distribution
Date, the Class of Certificates as to which any prepayment shall
be deemed to be distributed shall be determined on the assumption
that the portion of the Principal Distribution Amount paid to the
Class A-1A and, if applicable, Class A-1B Certificates on such
Distribution Date in respect of principal shall consist first of
scheduled payments included in the definition of Principal
Distribution Amount and second of prepayments included in such
definition.
(d) Any Mortgage Loan payment is deemed to be received
on the date such payment is actually received by the Servicer or
the Trustee; provided, however, that for purposes of calculating
distributions on the Certificates, Principal Prepayments with
respect to any Mortgage Loan are deemed to be received on the
date they are applied in accordance with Section 3.01(b) to
reduce the outstanding principal balance of such Mortgage Loan on
which interest accrues.
(e) Any amounts received in respect of a Mortgage Loan
as to which a default has occurred shall be applied to Default
Interest and other amounts due on such Mortgage Loan prior to the
application to late fees.
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SECTION 1.03. Certain Constructions
For purposes of this Agreement, references to the most
or next most subordinate Class of Certificates outstanding at any
time shall mean the most or next most subordinate Class of
Certificates then outstanding as among the Class A-1A, Class
A-1B, Class PS-1, Class CS-1, Class A-2, Class A-3, Class A-4,
Class A-5, Class A-6, Class B-1 and Class B-1H Certificates. For
such purposes, the Class B-1 and Class B-1H Certificates together
shall be considered to be one Class and the Class A-1A, Class
A-1B, Class PS-1 (except in respect of any Reduction Interest
Distribution Amounts and Reduction Interest Shortfalls) and Class
CS-1 Certificates together shall be considered to be one Class.
For purposes of this Agreement, each Class of Certificates other
than the Class B-1H, Class V-1, Class V-2, Class LR and Class R
Certificates shall be deemed to be outstanding only to the extent
its respective Certificate Balance or Notional Balance has not
been reduced to zero. For purposes of this Agreement, the Class
V-1 and the Class V-2 Certificates shall be deemed to be
outstanding so long as there are any Certificates outstanding,
the Class B-1H Certificates shall be deemed to be outstanding so
long as there are any Certificates outstanding that provide for
payments of Prepayment Premiums in connection with voluntary or
involuntary prepayments and the Class R and Class LR Certificates
shall be deemed to be outstanding so long as the Trust Fund has
not been terminated pursuant to Section 9.01.
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ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.01. Conveyance of Mortgage Loans; Assignment of
Mortgage Loan Purchase and Sale Agreement.
The Depositor, concurrently with the execution and
delivery hereof, does hereby, sell, transfer, assign, set over
and otherwise convey to the Trustee without recourse (except to
the extent herein provided) all the right, title and interest of
the Depositor in and to the Mortgage Loans, including all rights
to payment in respect thereof, except as set forth below, and any
security interest thereunder (whether in real or personal
property and whether tangible or intangible) in favor of the
Depositor, and all Reserve Accounts, Lock-Box Accounts, Cash
Collateral Accounts and all other assets included or to be
included in the Trust Fund for the benefit of the
Certificateholders. Such transfer and assignment includes all
interest and principal due on or with respect to the Mortgage
Loans other than interest and principal due on or prior to the
Cut-off Date. In connection with such transfer and assignment,
the Depositor shall make a cash deposit to the Collection Account
in an amount equal to the Cash Deposit. The Depositor,
concurrently with execution and delivery hereof, does also hereby
transfer, assign, set over and otherwise convey to the Trustee
without recourse (except to the extent provided herein) all the
right, title and interest of the Depositor in, to and under the
Mortgage Loan Purchase and Sale Agreement. The Depositor shall
cause the Hudson Treasury Collateral Account, Reserve Accounts,
Cash Collateral Accounts and Lock-Box Accounts to be transferred
to and held in the name of the Servicer on behalf of the Trustee
as successor to the Originator.
In connection with such transfer and assignment, the
Depositor does hereby deliver to, and deposit with, the Custodian
(on behalf of the Trustee), with copies to the Servicer and
Special Servicer, the following documents or instruments with
respect to each Mortgage Loan so assigned (provided, however, the
documents specified in item (ix) shall be delivered only to the
Servicer):
(i) the original of the Note, endorsed without
recourse to the order of the Trustee in the
following form: "Pay to the order of LaSalle
National Bank, as Trustee, without recourse"
which Note and all endorsements thereon shall,
unless the Mortgage Loan was originated by the
Originator, show a complete chain of
endorsement from the Originator to the Trustee;
(ii) the original recorded Mortgage or counterpart
thereof showing the Originator as mortgagee or,
if any such original Mortgage has not been
returned from the applicable public recording
office, a copy thereof certified to be a true
and complete copy of the original thereof
submitted for recording;
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(iii) an executed Assignment of Mortgage in suitable
form for recordation in the jurisdiction in
which the Mortgaged Property is located to
"LaSalle National Bank, as Trustee for the
Commercial Mortgage Pass-Through Certificates,
Series 1997-MD VII, without recourse";
(iv) if the related security agreement is separate
from the Mortgage, the original executed
version or counterpart thereof of such security
agreement and the assignment thereof to the
Trustee;
(v) a copy of the UCC-1 financing statement,
together with an original executed UCC-2 or
UCC-3 financing statement, in a form suitable
for filing, disclosing the assignment to the
Trustee of the security interest in the
personal property (if any) constituting
security for repayment of the Mortgage Loan;
(vi) the original of the Loan Agreement or counterpart
thereof relating to such Mortgage Loan, if any;
(vii) the original lender's title insurance policy (or
the original pro forma title insurance policy),
together with any endorsements thereto;
(viii) if any related Assignment of Leases, Rents and
Profits is separate from the Mortgage, the original
executed version or counterpart thereof, together
with an executed reassignment of such instrument to
the Trustee (a "Reassignment of Assignment of Leases,
Rents and Profits") in suitable form for recordation
in the jurisdiction in which the Mortgaged Property
is located (which reassignment, however, may be
included in the Assignment of Mortgage and need
not be a separate instrument);
(ix) copies of the original Environmental Reports of
the Mortgaged Properties made in connection with
origination of the Mortgage Loan, if any;
(x) copies of the original Management Agreements, if
any, for the Mortgaged Properties;
(xi) a copy of the related ground lease, as amended,
for the Mortgaged Properties, if any;
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(xii) if the related assignment of contracts is
separate from the Mortgage, the original
executed version of such assignment of
contracts and the assignment thereof to the
Trustee;
(xiii) if any related Lock-Box Agreement or Cash Collateral
Agreement is separate from the Mortgage or Loan
Agreement, a copy thereof; with respect to the
Reserve Accounts, Cash Collateral Accounts and Lock-
Box Accounts, if any, a copy of the UCC-1 financing
statements, if any, submitted for filing with
respect to the Originator's security interest in
the Reserve Accounts, Cash Collateral Accounts and
Lock-Box Accounts and all funds contained therein
(and UCC-2 or UCC-3 financing statements assigning
such security interest to the Trustee on behalf of
the Certificateholders);
(xiv) any and all amendments, modifications and supplements
to, and waivers related to, any of the foregoing; and
(xv) any other written agreements related to the Mortgage
Loan.
On or promptly following the Closing Date, the Servicer
shall, to the extent possession thereof has been delivered to it
by the Trustee, at the expense of the Depositor, (1) record (a)
each Assignment of Mortgage referred to in Section 2.01(iii)
which has not yet been submitted for recording and (b) each
Reassignment of Assignment of Leases, Rents and Profits referred
to in Section 2.01(viii) (if not otherwise included in the
related Assignment of Mortgage) which has not yet been submitted
for recordation; and (2) file each UCC-2 or UCC-3 financing
statement referred to in Section 2.01(v) or (xiii) which has not
yet been submitted for filing. The Servicer shall upon delivery
promptly submit (and in no event later than five Business Days
following the receipt of the related documents in the case of
clause 1(a) above and 60 days following the Closing Date in the
case of clauses 1(b) and 2 above) for recording or filing, as the
case may be, in the appropriate public recording office, each
such document. In the event that any such document is lost or
returned unrecorded because of a defect therein, the Servicer, at
the expense of the Depositor, shall use its best efforts to
promptly prepare a substitute document for signature by the
Depositor, and thereafter the Servicer shall cause each such
document to be duly recorded. The Servicer shall, promptly upon
receipt of the original recorded copy (and in no event later than
five Business Days following such receipt) deliver such original
to the Custodian. Notwithstanding anything to the contrary
contained in this Section 2.01, in those instances where the
public recording office retains the original Mortgage, Assignment
of Mortgage or Reassignment of Assignment of Leases, Rents and
Profits, if applicable, after any has been recorded, the
obligations hereunder of the Depositor shall be deemed to have
been satisfied upon delivery to the Custodian of a copy of such
Mortgage, Assignment of Mortgage or Reassignment of Assignment of
Leases, Rents and Profits, if applicable, certified by the public
recording office to be a true and complete copy of the recorded
original thereof. If a pro forma title insurance policy has been
delivered to the Custodian in lieu of an original title insurance
policy, the Depositor will promptly deliver to the Custodian the
related original title insurance policy upon receipt thereof. The
Depositor shall promptly cause the UCC-1's referred to in Section
2.01(v), if not already filed, to be filed in the applicable
public recording office and upon filing will promptly deliver to
the Custodian the related UCC-1, with evidence of filing thereon.
The Depositor shall reimburse the Servicer for all out-of-pocket
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expenses incurred and filing fees paid by the Servicer in
connection with its obligations under this paragraph. Copies of
such recorded or filed documents shall be delivered to the
Servicer by the Depositor or the Trustee, as applicable.
All original documents relating to the Mortgage Loans
which are not delivered to the Custodian are and shall be held by
the Depositor, the Trustee or the Servicer, as the case may be,
in trust for the benefit of the Certificateholders. In the event
that any such original document is required pursuant to the terms
of this Section to be a part of a Mortgage File, such document
shall be delivered promptly to the Custodian.
SECTION 2.02. Acceptance by Custodian and the Trustee.
If the Depositor cannot deliver any original or certified
recorded document described in Section 2.01 on the Closing Date,
the Depositor shall use its best efforts, promptly upon receipt
thereof and in any case not later than 45 days from the Closing
Date, to deliver such original or certified recorded documents to
the Custodian (unless the Depositor is delayed in making such
delivery by reason of the fact that such documents shall not have
been returned by the appropriate recording office in which case
it shall notify the Custodian and the Trustee in writing of such
delay and shall deliver such documents to the Custodian promptly
upon the Depositor's receipt thereof). By its execution and
delivery of this Agreement, the Trustee acknowledges the
assignment to it of the Mortgage Loans in good faith without
notice of adverse claims and declares that the Custodian holds
and will hold such documents and all others delivered to it
constituting the Mortgage File (to the extent the documents
constituting the Mortgage File are actually delivered to the
Custodian) for any Mortgage Loan assigned to the Trustee
hereunder in trust, upon the conditions herein set forth, for the
use and benefit of all present and future Certificateholders. The
Trustee agrees to review each Mortgage File within 45 days after
the later of (a) the Trustee's receipt of such Mortgage File or
(b) execution and delivery of this Agreement, to ascertain that
all documents (other than documents referred to in clause (ix) of
Section 2.01 which shall be delivered to the Servicer) referred
to in Section 2.01 above (in the case of the documents referred
to in Section 2.01(iv), (v), (vi), (vii) (in the case of any
endorsement thereto) and (viii) and (x) through (xv), as
identified to it in writing by the Depositor) and any original
recorded documents referred to in the first sentence of this
Section included in the delivery of a Mortgage File have been
received, have been executed, appear to be what they purport to
be, purport to be recorded or filed (as applicable) and have not
been torn, mutilated or otherwise defaced, and that such
documents relate to the Mortgage Loans identified in the Mortgage
Loan Schedule. In so doing, the Trustee may rely on the purported
due execution and genuineness of any such document and on the
purported genuineness of any signature thereon. If at the
conclusion of such review any document or documents constituting
a part of a Mortgage File have not been executed or received,
have not been recorded or filed (if required), are unrelated to
the Mortgage Loans identified in the Mortgage Loan Schedule,
appear not to be what they purport to be or have been torn,
mutilated or otherwise defaced, the Trustee shall promptly so
notify the Depositor and the Originator by providing a written
report, setting forth for each affected Mortgage Loan,
with particularity, the nature of the defective or missing
document. The Depositor shall, or shall cause the
Originator to, deliver an executed, recorded or
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undamaged document, as applicable, within 90 days of receipt
of such notice or, if the failure to deliver such document in
such form has a material adverse effect on the security provided
by the related Mortgaged Property, the Depositor shall, or shall
cause the Originator to, repurchase the related Mortgage Loan in
the manner and within the time period provided in Section 2.03.
None of the Servicer, the Special Servicer and the Trustee shall
be responsible for any loss, cost, damage or expense to the Trust
Fund resulting from any failure to receive any document
constituting a portion of a Mortgage File noted on such a report
or for any failure by the Depositor to use its best efforts to
deliver any such document.
In reviewing any Mortgage File pursuant to the
preceding paragraph or Section 2.01, the Servicer shall have no
responsibility to cause the Trustee to, and the Trustee will have
no responsibility to, determine whether any document or opinion
is legal, valid, binding or enforceable, whether the text of any
assignment or endorsement is in proper or recordable form
(except, if applicable, to determine if the Trustee is the
assignee or endorsee), whether any document has been recorded in
accordance with the requirements of any applicable jurisdiction,
whether a blanket assignment is permitted in any applicable
jurisdiction, or whether any Person executing any document or
rendering any opinion is authorized to do so or whether any
signature thereon is genuine.
The Trustee shall hold that portion of the Trust Fund
delivered to the Trustee consisting of "instruments" (as such
term is defined in Section 9-105(i) of the Uniform Commercial
Code as in effect in Illinois on the date hereof) in Illinois
and, except as otherwise specifically provided in this Agreement,
shall not remove such instruments from Illinois, as applicable,
unless it receives an Opinion of Counsel (obtained and delivered
at the expense of the Person requesting the removal of such
instruments from Illinois) that in the event the transfer of the
Mortgage Loans to the Trustee is deemed not to be a sale, after
such removal, the Trustee will possess a first priority perfected
security interest in such instruments.
SECTION 2.03. Representations and Warranties of the
Depositor.
(a) The Depositor hereby represents and warrants 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 Depositor has taken all necessary action to
authorize the execution, delivery and
performance of this Agreement by it, and has
the power and authority to execute, deliver and
perform this Agreement and all the transactions
contemplated hereby, including, but not limited
to, the power and authority to sell, assign and
transfer the Mortgage Loans in accordance with
this Agreement;
(iii) This Agreement has been duly and validly
authorized, executed and delivered by the
Depositor and assuming the due
authorization, execution and delivery of this
Agreement by each other party hereto,
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this Agreement and all of the obligations
of the Depositor hereunder are the legal,
valid and binding obligations of the
Depositor, enforceable in accordance with
the terms of this Agreement, except as such
enforcement may be limited by bankruptcy,
insolvency, reorganization, liquidation,
receivership, moratorium or other laws relating
to or affecting creditors' rights generally, or
by general principles of equity (regardless of
whether such enforceability is considered in a
proceeding in equity or at law);
(iv) The execution and delivery of this
Agreement and the performance of its
obligations hereunder by the
Depositor will not conflict with any
provision of its certificate of
incorporation or bylaws, or any law or
regulation to which the Depositor is
subject, or conflict with, result in a
breach of or constitute a default
under (or an event which with notice or
lapse of time or both would constitute
a default under) any of the terms,
conditions or provisions of any agree-
ment or instrument to which the
Depositor is a party or by which it
is bound, or any order or decree
applicable to the Depositor, or result
in the creation or imposition of any
lien on any of the Depositor's
assets or property, which would
materially and adversely affect the
ability of the Depositor to carry out
the transactions contemplated by
this Agreement. The Depositor has
obtained any consent, approval, author-
ization or order of any court or
governmental agency or body required
for the execution, delivery and
performance by the Depositor of this
Agreement;
(v) The certificate of incorporation of the
Depositor provides that the Depositor is
permitted to engage in only the following
activities:
(A) to acquire, own, hold, sell,
transfer, assign, pledge, finance,
refinance and otherwise deal
with (I) loans secured by first or
second mortgages, deeds of trust
or similar liens on residential,
including single-family and multi-
family, commercial or mixed
commercial and residential proper-
ties, shares issued by private non-
profit housing corporations, or
manufactured housing contracts,
(II) any participation interest in,
security (in bond or pass-through
form) or funding agreement based
on, backed or collateralized by,
directly or indirectly, any of the
foregoing (the loans described in
clause (A)(I) and the participation
interests, securities and funding
agreements described in clause
(A)(II), collectively, "Mortgage
Loans"), (III) receivables and loan
obligations, whether secured or
unsecured, including, but not limited
to, retail automotive, truck or
manufactured housing installment
sale contracts or loans or
automotive, truck or manufactured housing
leases, consumer or commercial loans or
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leases, credit card accounts, accounts
receivable, corporate receivables, trade
receivables, trade bills, boat and
recreational vehicle loans, computer or
other equipment loans or leases, mobile home
loans and pads, construction equipment,
dealer and floor plan financing notes,
insurance policy loans, medical and health
care receivables, municipal and other
governmental leases, short-term notes
secured by a lien on a small business or all
or part of its assets, and loans to
lesser-developed countries, (IV) any
participation interest in, security (in bond
or pass-through form) or funding agreement
based on, backed or collateralized by,
directly or indirectly, any of the foregoing
(the receivables and loans described in
clause (A)(III) and the participation
interests, securities and funding agreements
described in clause (A)(IV), collectively,
"Receivables");
(B) to authorize and issue one or
more series (each, a "Pass-Through
Series") of pass-through securi-
ties ("Certificates") pursuant to
pooling and servicing agreements
(each, a "Pooling and Servicing
Agreement"), each of which Pass-
Through Series (I) represents an
ownership interest in Mortgage
Loans or Receivables, related
property and/or collections in
respect thereof and (II) may be
structured to contain one or more
classes of Certificates, each Class
having the characteristics specified
in the related Pooling and
Servicing Agreement, and to acquire,
own, hold, sell, transfer,
assign, pledge, finance or refinance
one or more Certificates or
classes of Certificates of any
Pass-Through Series;
(C) to establish one or more trusts
("Trusts") to issue, acquire, own,
and hold one or more series
(each, a "Bond Series") of debt
obligations ("Bonds"), each
issued pursuant to an indenture
("Indenture"), each of which bond
series (I) is collateralized by
Mortgage Loans, Receivables and
any supplemental collateral (the
"Supplemental Collateral";
Mortgage Loans, Receivables and
Supplemental Collateral, collect-
ively, the "Collateral") and/or
related property and/or collections
in respect thereof and (II) may
be structured to contain one or
more classes of Bonds, each class
having the characteristics specified
in the related Indenture, and to
acquire, own, hold, sell, transfer,
assign, pledge, finance or
refinance one or more Bonds or
classes of Bonds of any Bond
Series; provided, however, that
the Bonds of any Bond Series have
been rated in one of the two highest
rating categories by one or
more nationally recognized statist-
ical rating agencies and, provided
further, that the Bonds of any Bond
Series other than the initial Bond
Series issued by a Trust have been
rated in the same or a
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higher rating category by the nationally
recognized statistical rating agency or
agencies that rated the initial Bond Series
issued by such Trust;
(D) to issue, acquire, assume, own,
hold, sell, transfer, assign, pledge
and finance indebtedness that (I)
is subordinated to the Bonds; (II)
is nonrecourse to the Depositor
and the related Trust other than to
cash flow on the Collateral secur-
ing a Bond Series issued by the
related Trust in excess of amounts
necessary to pay holders of
Bonds ("Bondholders") of such
Bond Series; (III) does not
constitute a claim against the
Depositor to the extent that funds are
insufficient to pay such indebted-
ness; and (IV) does not result in a
lowering or withdrawal of the rating
or ratings then assigned to the
Bonds of any Bond Series issued
by the Trust issuing such
subordinated indebtedness, as
confirmed in writing by the nationally
recognized statistical rating agency
or agencies rating such Bond
Series;
(I) to establish one or more Trusts to engage in any one or more of
the activities described in (A) and (D) above, each of which Trusts
and any Trust formed to engage in one or more of the activities
described in (C) above may deliver to the Depositor Certificates
("Trust Certificates") representing the ownership interest in the
assets of such Trust, (II) to acquire, own, hold, sell, transfer,
assign, pledge, finance, and otherwise deal with any or all of the
Trust Certificates in any Trust that it establishes and (III) to act as
settlor or depositor of such Trusts and to invest in or sell Trust
Certificates; and
(F) to engage in any other acts and activities
and to exercise any powers permitted to
corporations under the laws of the State of
Delaware which are incidental to, or
connected with, the foregoing, and
necessary, suitable or convenient to
accomplish any of the foregoing;
Capitalized terms defined in this clause (v)
shall apply only to such clause.
(vi) There is no action, suit or proceeding pending
against the Depositor in any court or by or
before any other governmental agency or
instrumentality which would materially and
adversely affect the ability of the Depositor to
carry out its obligations under this Agreement;
and
(vii) The Trustee, if not the owner of the related
Mortgage Loan, will have a valid and perfected
security interest of first priority in each of
the Mortgage Loans and any proceeds thereof.
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(b) The Depositor hereby represents and warrants with
respect to each Mortgage Loan that:
(i) Immediately prior to the transfer and
assignment to the Trustee, the Note and the
Mortgage were not subject to an assignment or
pledge, and the Depositor had good title to,
and was the sole owner of, the Mortgage Loan
and had full right to transfer and sell the
Mortgage Loan to the Trustee free and clear of
any encumbrance, equity, lien, pledge, charge,
claim or security interest;
(ii) The Depositor is transferring such Mortgage
Loan free and clear of any and all liens,
pledges, charges or security interests of any
nature encumbering such Mortgage Loan;
(iii) The related Assignment of Mortgage constitutes
the legal, valid and binding assignment of such
Mortgage from the Depositor to the Trustee, and
any related Reassignment of Assignment of
Leases, Rents and Profits constitutes the
legal, valid and binding assignment from the
Depositor to the Trustee;
(iv) No claims have been made by the Depositor under
the lender's title insurance policy, and the
Depositor has not done, by act or omission,
anything which would impair the coverage of
such lender's title insurance policy;
(v) All of the representations and warranties of the
Originator contained in the Mortgage Loan Purchase
and Sale Agreement are true and correct as of the
Cut-off Date;
(vi) (1) Such Mortgage Loan is directly
secured by a Mortgage on Real
Property, and (2) either (i) substan-
tially all of the proceeds of such
Mortgage Loan were used to acquire
or improve or protect an interest
in Real Property that, at the origi-
nation date, was the only security for
the Mortgage Loan (in the case of a
Mortgage Loan that has not been
modified in a manner that constituted
a deemed exchange under Section
1001 of the Code at a time when the
Mortgage Loan was not in default
or default with respect thereto was
not reasonably foreseeable) or (ii)
the fair market value of such Real
Property was at least equal to 80% of
the principal amount of the Mortgage
Loan (a) at origination (or, if the
Mortgage Loan has been modified in
a manner that constituted a
deemed exchange under Section 1001
of the Code at a time when the
Mortgage Loan was not in default or
default with respect thereto was
not reasonably foreseeable, the date
of the last such modification) or (b)
at the Closing Date; provided that for
purposes of this clause (ii) the fair
market value of the real property
interest must first be reduced by
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(A) the amount of any lien on the real property
interest that is senior to the Mortgage Loan
and (B) a proportionate amount of any lien
that is in parity with the Mortgage Loan
(unless such other lien secures a Mortgage
Loan that is cross-collateralized with such
Mortgage Loan, in which event the
computation described in (a) and (b) of this
clause (ii) shall be made on an aggregate
basis); and
(vii) The information set forth with respect to
such Mortgage Loan on the Mortgage Loan
Schedule is true and correct in all material
respects as of the dates respecting which
such information is given, or if no date is
specified, as of the Cut-off Date.
(c) It is understood and agreed that the
representations and warranties set forth in this Section 2.03
shall survive delivery of the respective Mortgage Files to the
Trustee until the termination of this Agreement, and shall inure
to the benefit of the Certificateholders and the Servicer.
(d) Upon discovery by the Custodian, the Servicer, the
Special Servicer or the Trustee of a breach of the representation
and warranty set forth in Section 2.03(b)(vi) or that any
Mortgage Loan otherwise fails to constitute a Qualified Mortgage,
such Person shall give prompt notice thereof to the Depositor and
the Depositor shall correct such condition or repurchase or cause
the Originator to repurchase such Mortgage Loan at the Repurchase
Price within 90 days of discovery of such failure; it being
understood and agreed that none of such Persons has an obligation
to conduct any investigation with respect to such matters. It is
understood and agreed that the obligations of the Depositor set
forth in this Section 2.03(d) to cure or repurchase a Mortgage
Loan which fails to constitute a Qualified Mortgage shall be the
sole remedies available to the Trustee against the Depositor
respecting a breach of a representation or warranty set forth in
Section 2.03(b)(vi).
(e) Upon discovery by the Custodian, the Servicer, the
Special Servicer, or the Trustee of a breach of any
representation or warranty of the Originator in the Mortgage Loan
Purchase and Sale Agreement with respect to any Mortgage Loan, or
that any document required to be included in the Mortgage File
does not conform to the requirements of Section 2.01, such Person
shall give prompt notice thereof to the Originator and the
Originator shall, to the extent the Originator is obligated to
cure or repurchase the related Mortgage Loan under the terms of
the Mortgage Loan Purchase and Sale Agreement, either cure such
breach or repurchase said Mortgage Loan at the Repurchase Price
within 90 days of the receipt of notice of the breach as provided
in the Mortgage Loan Purchase and Sale Agreement; it being
understood and agreed that none of the Custodian, the Servicer,
the Special Servicer, and the Trustee has an obligation to
conduct any investigation with respect to such matters (except,
in the case of the Mortgage Files, to the extent provided in
Section 2.01); provided, however, that in the event that such
breach is capable of being cured but not within such 90 day
period and the Originator has commenced and is diligently
proceeding with the cure of such breach within such 90 day
period (other than a breach that is also a breach
of Section 2.03(b)(vi)), the Originator shall have an
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additional 90 days to complete such cure; provided,
further, that with respect to such additional 90 day period
theOriginator shall have delivered an officer's certificate to
the Trustee and the Servicer setting forth the reason such breach
is not capable of being cured within the initial 90 day period
and what actions the Originator is pursuing in connection with
the cure thereof and stating that the Originator anticipates that
such breach will be cured within the additional 90 day period;
and, provided, further, that in the event the Originator fails to
cure such breach within such additional 90-day period, the
repurchase price shall include any Advances (with interest
thereon at the Advance Rate) made in respect of the related
Mortgage Loan during such period.
(f) Upon receipt by the Servicer from the Depositor or
Originator of the Repurchase Price for the repurchased Mortgage
Loan, the Servicer shall deposit such amount in the Collection
Account, and the Trustee, pursuant to Section 3.11, shall, upon
receipt of a certificate of a Servicing Officer certifying as to
the receipt by the Servicer of the Repurchase Price and the
deposit of the Repurchase Price into the Collection Account
pursuant to this Section 2.03(f), release or cause to be released
to the Depositor or the Originator the related Mortgage File and
shall execute and deliver such instruments of transfer or
assignment, in each case without recourse, representation or
warranty, as shall be prepared by the Servicer to vest in the
Depositor or the Originator any Mortgage Loan released pursuant
hereto, and any rights of the Depositor in, to and under the
Mortgage Loan Purchase and Sale Agreement as it related to such
Mortgage Loan that were initially transferred to the Trust Fund
under Section 2.01, and the Trustee and the Servicer shall have
no further responsibility with regard to such Mortgage File.
(g) In the event that the Originator incurs any
expense in connection with curing a breach of a representation or
warranty pursuant to Section 2.03(e) which also constitutes a
default under the related Mortgage Loan, the Originator shall
have a right, subrogated to that of the Trustee, as successor to
the mortgagee, to recover the amount of such expenses from the
related Borrower. The Servicer shall use reasonable efforts in
recovering, or assisting the Originator in recovering, from the
related Borrower the amount of any such expenses.
(h) In the event that any litigation is commenced
which alleges facts which, in the judgment of the Depositor,
could constitute a breach of any of the Depositor's
representations and warranties relating to the Mortgage Loans,
the Depositor hereby reserves the right to conduct the defense of
such litigation at its expense.
SECTION 2.04. Representations, Warranties and
Covenants of the Servicer and Special
Servicer.
(a) The Servicer, as Servicer and if it is also the
Special Servicer, as the Special Servicer, hereby represents,
warrants and covenants that as of the Closing Date or as of such
date specifically provided herein:
(i) The Servicer is a corporation, duly organized,
validly existing and in good standing under the
laws of the State of California and has all
licenses necessary to carry on its business as now
being conducted or will be in compliance with the
laws of each state or foreign jurisdiction
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in which any Mortgaged Property is located to the
extent necessary to comply with its duties and
responsibilities hereunder with respect to each
Mortgage Loan in accordance with the terms of
this Agreement;
(ii) The Servicer has the full corporate
power, authority and legal right to
execute and deliver this Agreement
and to perform in accordance
herewith; the execution and delivery
of this Agreement by the Servicer
and its performance and compliance
with the terms of this Agreement
will not violate the Servicer's charter
or by-laws or constitute a default
(or an event which, with notice or
lapse of time, or both, would
constitute a default) under, or result
in the breach of, any material
contract, agreement or other instrument
to which the Servicer is a party
or which may be applicable to the
Servicer or any of its assets;
(iii) This Agreement has been duly and
validly authorized, executed and
delivered by the Servicer and,
assuming due authorization, execution
and delivery by the other parties
hereto, constitutes a legal, valid and
binding obligation of the Servicer,
enforceable against it in accordance
with the terms of this Agreement,
except as such enforcement may be
limited by bankruptcy, insolvency,
reorganization, liquidation,
receivership, moratorium or other
laws relating to or affecting creditors'
rights generally, or by general
principles of equity (regardless of whether
such enforceability is considered
in a proceeding in equity or at law),
and all requisite corporate action has
been taken by the Servicer to make
this Agreement and all agreements
contemplated hereby valid and
binding upon the Servicer in
accordance with their terms;
(iv) The Servicer is not in violation of,
and the execution and delivery of this
Agreement by the Servicer and its
performance and compliance with the
terms of this Agreement will not
constitute a violation with respect to,
any statute, order or decree of any
court binding on the Servicer or any
order or regulation of any federal,
state, municipal or governmental
agency having jurisdiction, or result
in the creation or imposition of any
lien, charge or encumbrance which,
in any such event, would have
consequences that would materially
and adversely affect the condition
(financial or otherwise) or operation
of the Servicer or its properties or
impair the ability of the Trust Fund
to realize on the Mortgage Loans;
(v) There is no action, suit, proceeding or
investigation pending or threatened against the
Servicer which, either in any one instance or
in the aggregate, would result in any material
adverse change in the business, operations,
financial condition, properties or assets of the
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Servicer, or in any material impairment of
the right, or would, if adversely determined,
materially impair the ability of the Servicer,
to carry on its business substantially as now
conducted, or in any material liability on the
part of the Servicer, or which would draw into
question the validity of this Agreement or the
Mortgage Loans or of any action taken or to be
taken in connection with the obligations of the
Servicer contemplated herein, or which would be
likely to impair materially the ability of the
Servicer to perform under the terms of this
Agreement; and
(vi) No consent, approval, authorization or order
of, or registration or filing with, or notice
to any court or governmental agency or body, is
required for the execution, delivery and
performance by the Servicer of or compliance by
the Servicer with this Agreement, or if
required, such approval has been obtained prior
to the Cut-off Date.
(b) It is understood and agreed that the
representations and warranties set forth in this Section shall
survive delivery of the respective Mortgage Files to the Trustee
or the Custodian on behalf of the Trustee until the termination
of this Agreement, and shall inure to the benefit of the Trustee,
the Depositor and the Servicer or Special Servicer, as the case
may be. Upon discovery by the Depositor, the Servicer, the
Special Servicer or a Responsible Officer of the Trustee (or upon
written notice thereof from any Certificateholder) of a breach of
any of the representations and warranties set forth in this
Section which materially and adversely affects the interests of
the Certificateholders, the Servicer, the Special Servicer or the
Trustee in any Mortgage Loan, the party discovering such breach
shall give prompt written notice to the other parties hereto.
SECTION 2.05. Execution and Delivery of Certificates;
Issuance of Lower-Tier Regular Interests
and Upper-Tier Regular Interests.
The Trustee acknowledges the assignment to it of the
Mortgage Loans and the delivery of the Mortgage Files to the
Custodian (to the extent the documents constituting the Mortgage
Files are actually delivered to the Custodian), subject to the
provisions of Section 2.01 and Section 2.02 and, concurrently
with such delivery, (i) acknowledges the issuance of and hereby
declares that it holds the uncertificated Lower-Tier Regular
Interests on behalf of the Upper-Tier REMIC and the beneficial
owners of the Regular Certificates and the Class R Certificates
and (ii) has caused to be executed and caused to be authenticated
and delivered to or upon the order of the Depositor, or as
directed by the terms of this Agreement, Class A-1A, Class A-1B,
Class PS-1, Class CS-1, Class A-2, Class A-3, Class A-4, Class
A-5, Class A-6, Class B-1, Class B-1H, Class V-1, Class V-2,
Class R and Class LR Certificates in authorized denominations, in
each case registered in the names set forth in such order or so
directed in this Agreement and duly authenticated by the
Authenticating Agent, which Certificates and Lower-Tier Regular
Interests evidence ownership of the entire Trust Fund.
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SECTION 2.06. Miscellaneous REMIC and Grantor
Trust Provisions.
(a) The Class A-1A-L, Class A-1B-L, Class A-2-L, Class
A-3-L, Class A-4-L, Class A-5-L, Class A-6-L, Class B-1-L and
Class B-1H-L Interests are hereby designated as "regular
interests" in the Lower-Tier REMIC within the meaning of Section
860G(a)(1) of the Code, and the Class LR Certificates are hereby
designated as the sole class of "residual interests" in the
Lower-Tier REMIC within the meaning of Section 860G(a)(2) of the
Code. The Class A-1-A, Class A-1B, Class PS-1, Class CS-1, Class
A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class B-1 and
Class B-1H Certificates are hereby designated as "regular
interests" in the Upper-Tier REMIC within the meaning of Section
860G(a)(1) of the Code and the Class R Certificates are hereby
designated as the sole class of "residual interests" in the
Upper-Tier REMIC within the meaning of Section 860G(a)(2) of the
Code. The Closing Date is hereby designated as the "Startup Day"
of the Lower-Tier REMIC and the Upper-Tier REMIC within the
meaning of Section 860G(a)(9) of the Code. The "latest possible
maturity date" of the Lower-Tier Regular Interests and the
Regular Certificates for purposes of Section 860G(a)(1) of the
Code is the Scheduled Final Distribution Date. The initial
Certificate Balance of each Class of the Lower-Tier Regular
Interests is equal to the Certificate Balance of the Related
Certificates. The rate of interest for each Class of Lower-Tier
Regular Interests is a per annum rate equal to the Weighted
Average Net Mortgage Pass-Through Rate.
(b) The Class V-1 Certificates represent pro rata
undivided beneficial interests in the Default Interest (subject
to the liability of the Trust Fund to pay interest on Advances at
the Advance Rate). The Class V-2 Certificates represent
beneficial pro rata undivided interests in the Excess Interest.
The Class V-1 and Class V-2 Certificates do not represent regular
or residual interests in either the Upper-Tier REMIC or the
Lower-Tier REMIC.
(c) None of the Depositor, the Trustee, the Servicer,
the Fiscal Agent or the Special Servicer shall enter into any
arrangement by which the Trust Fund will receive a fee or other
compensation for services other than as specifically contemplated
herein.
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ARTICLE III
ADMINISTRATION AND SERVICING
OF THE MORTGAGE LOANS
SECTION 3.01. Servicer to Act as Servicer; Administration
of the Mortgage Loans.
(a) The Servicer and the Special Servicer, each as an
independent contractor servicer, shall service and administer the
Mortgage Loans on behalf of the Trust Fund and the Trustee (as
trustee for Certificateholders) in accordance with the Servicing
Standard.
The Servicer's or Special Servicer's liability for
actions and omissions in its capacity as Servicer or Special
Servicer, as the case may be, hereunder is limited as provided
herein (including, without limitation, pursuant to Section 6.03
hereof). To the extent consistent with the foregoing and subject
to any express limitations set forth in this Agreement, the
Servicer and Special Servicer shall seek to maximize the timely
and complete recovery of principal and interest on the Notes;
provided, however, that nothing herein contained shall be
construed as an express or implied guarantee by the Servicer or
Special Servicer of the collectability of the Mortgage Loans.
Subject only to the Servicing Standard, the Servicer and Special
Servicer shall have full power and authority, acting alone or
through sub-servicers (subject to paragraph (c) of this Section
3.01 and to Section 3.02), to do or cause to be done any and all
things in connection with such servicing and administration which
it may deem consistent with the Servicing Standard and, in its
reasonable judgment, in the best interests of the
Certificateholders, including, without limitation, with respect
to each Mortgage Loan, to prepare, execute and deliver, on behalf
of the Certificateholders and the Trustee or any of them: (i) any
and all financing statements, continuation statements and other
documents or instruments necessary to maintain the lien on each
Mortgaged Property and related collateral; (ii) subject to
Sections 3.09, 3.10 and 3.31, any modifications, waivers,
consents or amendments to or with respect to any documents
contained in the related Mortgage File; and (iii) any and all
instruments of satisfaction or cancellation, or of partial or
full release or discharge, and all other comparable instruments,
with respect to the Mortgage Loans and the Mortgaged Properties.
Notwithstanding the foregoing, neither the Servicer nor the
Special Servicer shall modify, amend, waive or otherwise consent
to any change of the terms of any Mortgage Loan except under the
circumstances described in Sections 3.09, 3.10, 3.29 and 3.31 or
the definition of Extended Monthly Payment hereof. The Servicer
and Special Servicer shall service and administer the Mortgage
Loans in accordance with applicable law and shall provide to the
Borrowers any reports required to be provided to them thereby.
Subject to Section 3.11, the Trustee shall, upon the receipt of a
written request of a Servicing Officer, execute and deliver to
the Servicer and Special Servicer any powers of attorney and
other documents prepared by the Servicer and Special Servicer and
necessary or appropriate (as certified in such written request)
to enable the Servicer and Special Servicer to carry out their
servicing and administrative duties hereunder.
(b) Unless otherwise provided in the related Note,
the Servicer shall apply any partial Principal Prepayment
received on a Mortgage Loan on a date other than a Due Date to the
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principal balance of such Mortgage Loan as of the Due Date
immediately following the date of receipt of such partial
Principal Prepayment. Unless otherwise provided in the related
Note, the Servicer shall apply any amounts received on U.S.
Treasury obligations (which shall not be redeemed by the Servicer
prior to the maturity thereof) in respect of a Mortgage Loan
being defeased pursuant to its terms to the principal balance of
and interest on such Mortgage Loan as of the Due Date immediately
following the receipt of such amounts.
(c) Each of the Servicer and the Special Servicer may
enter into sub-servicing agreements with third parties with
respect to any of its respective obligations hereunder, provided
that (i) any such agreement shall be consistent with the
provisions of this Agreement and (ii) no sub-servicer retained by
the Servicer or the Special Servicer, as applicable, shall grant
any modification, waiver or amendment to any Mortgage Loan
without the approval of the Servicer or the Special Servicer, as
applicable, which approval shall be given or withheld in
accordance with the procedures set forth in Sections 3.09, 3.10
(or the definition of Extended Monthly Payment), 3.29 or 3.31,
and (iii) such agreement shall be consistent with the Servicing
Standard. Any such sub-servicing agreement may permit the
sub-servicer to delegate its duties to agents or subcontractors
so long as the related agreements or arrangements with such
agents or subcontractors are consistent with the provisions of
this Section 3.01(c).
Any sub-servicing agreement entered into by the
Servicer or the Special Servicer, as applicable, shall provide
that it may be assumed or terminated by the Trustee or the
Servicer, respectively, if the Trustee or the Servicer,
respectively, has assumed the duties of the Servicer or the
Special Servicer, respectively, or any successor Servicer or
Special Servicer, as applicable, without cost or obligation to
the assuming or terminating party or the Trust Fund, upon the
assumption by such party of the obligations of the Servicer or
the Special Servicer, as applicable, pursuant to Section 7.02.
Any sub-servicing agreement, and any other
transactions or services relating to the Mortgage Loans involving
a sub-servicer, shall be deemed to be between the Servicer or the
Special Servicer, as applicable, and such sub-servicer alone, and
the Trustee, the Trust Fund and the Certificateholders shall not
be deemed parties thereto and shall have no claims, rights,
obligations, duties or liabilities with respect to the
sub-servicer, except as set forth in Section 3.01(d) and no
provision herein may be construed so as to require the Trust Fund
to indemnify any such sub-servicer.
(d) If the Trustee or any successor Servicer assumes
the obligations of the Servicer, or if the Servicer or any
successor Special Servicer assumes the obligations of the Special
Servicer, in each case in accordance with Section 7.02, the
Trustee, the Servicer or such successor, as applicable, to the
extent necessary to permit the Trustee, the Servicer or such
successor, as applicable, to carry out the provisions of Section
7.02, shall, without act or deed on the part of the Trustee, the
Servicer or such successor, as applicable, succeed to all of the
rights and obligations of the Servicer or the Special Servicer,
as applicable, under any sub-servicing agreement entered into
by the Servicer or the Special Servicer, as applicable,
pursuant to Section 3.01(c), subject to the right of termi-
nation by the Trustee set forth in Section 3.01(c). In such
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event, the Trustee, the Servicer or the successor Servicer
or Special Servicer, as applicable, shall be deemed to have
assumed all of the Servicer's or the Special Servicer's interest,
as applicable, therein (but not any liabilities or obligations in
respect of acts or omissions of the Servicer or the Special
Servicer, as applicable, prior to such deemed assumption) and to
have replaced the Servicer or the Special Servicer, as
applicable, as a party to such sub-servicing agreement to the
same extent as if such sub-servicing agreement had been assigned
to the Trustee, the Servicer or such successor Servicer or
successor Special Servicer, as applicable, except that the
Servicer or Special Servicer, as applicable, shall not thereby be
relieved of any liability or obligations under such sub-servicing
agreement that accrued prior to the succession of the Trustee,
the Servicer or the successor Servicer or successor Special
Servicer, as applicable.
In the event that the Trustee, the Servicer or any
successor Servicer or Special Servicer, as applicable, assumes
the servicing obligations of the Servicer or the Special
Servicer, as applicable, upon request of the Trustee, the
Servicer or such successor Servicer or Special Servicer, as
applicable, the Servicer or Special Servicer shall at its own
expense (except in the event that the Servicer or the Special
Servicer is terminated pursuant to Section 6.04(c), in which
event, at the expense of the Certificateholders effecting such
termination) deliver to the Trustee, the Servicer or such
successor Servicer or Special Servicer, as applicable, all
documents and records relating to any sub-servicing agreement and
the Mortgage Loans then being serviced thereunder and an
accounting of amounts collected and held by it, if any, and will
otherwise use its best efforts to effect the orderly and
efficient transfer of any sub-servicing agreement to the Trustee,
the Servicer or the successor Servicer or Special Servicer, as
applicable.
SECTION 3.02. Liability of the Servicer.
Notwithstanding any sub-servicing agreement, any of
the provisions of this Agreement relating to agreements or
arrangements between the Servicer or Special Servicer and any
Person acting as sub-servicer (or its agents or subcontractors)
or any reference to actions taken through any Person acting as
sub-servicer or otherwise, the Servicer or Special Servicer, as
applicable, shall remain obligated and primarily 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 sub-servicing
agreements or arrangements or by virtue of indemnification from
the Depositor or any other Person acting as sub-servicer (or its
agents or subcontractors) to the same extent and under the same
terms and conditions as if the Servicer or Special Servicer, as
applicable, alone were servicing and administering the Mortgage
Loans. Each of the Servicer and the Special Servicer shall be
entitled to enter into an agreement with any sub-servicer
providing for indemnification of the Servicer or Special
Servicer, as applicable, by such sub-servicer, and nothing
contained in this Agreement shall be deemed to limit or modify
such indemnification, but no such agreement for indemnification
shall be deemed to limit or modify this Agreement.
SECTION 3.03. Collection of Certain Mortgage Loan Payments.
(a) The Servicer or the Special Servicer, as
applicable, shall use reasonable efforts to collect all payments
called for under the terms and provisions of the Mortgage Loans it
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is obligated to service hereunder, and shall follow the
Servicing Standard with respect to such collection procedures.
The Servicer shall use its reasonable efforts to collect income
statements and rent rolls from Borrowers as required by the Loan
Documents and the terms hereof. Consistent with the foregoing,
the Servicer or Special Servicer, as applicable, may in its
discretion waive any late payment charge in connection with any
delinquent Monthly Payment with respect to any Mortgage Loan. In
addition, the Servicer shall be entitled to take such actions
with respect to the collection of payments on the Mortgage Loans
as are permitted or required under Section 3.29 hereof.
(b) In the event that the Servicer receives, or
receives notice from the related Borrower that it will be
receiving, Excess Interest in any Collection Period, the Servicer
or Special Servicer, as applicable, will promptly notify the
Trustee.
SECTION 3.04. Collection of Taxes, Assessments and
Similar Items; Escrow Accounts.
(a) With respect to each Mortgage Loan (other than any
REO Mortgage Loan), the Servicer shall maintain accurate records
with respect to each related Mortgaged Property reflecting the
status of taxes, assessments, ground rents and other similar
items that are or may become a lien on the related Mortgaged
Property and the status of insurance premiums payable with
respect thereto. From time to time, the Servicer shall (i) obtain
all bills for the payment of such items (including renewal
premiums), and (ii) effect payment of all such bills with respect
to such Mortgaged Properties prior to the applicable penalty or
termination date, in each case employing for such purpose Escrow
Payments as allowed under the terms of the related Mortgage Loan.
If a Borrower fails to make any such payment on a timely basis or
collections from the Borrower are insufficient to pay any such
item before the applicable penalty or termination date, the
Servicer shall advance the amount of any shortfall as a Property
Advance unless the Servicer determines in its good faith business
judgment that such Advance would be a Nonrecoverable Advance. The
Servicer shall be entitled to reimbursement of Advances, with
interest thereon at the Advance Rate, that it makes pursuant to
the preceding sentence from amounts received on or in respect of
the related Mortgage Loan respecting which such Advance was made
or if such Advance has become a Nonrecoverable Advance, to the
extent permitted by Section 3.06 of this Agreement. No costs
incurred by the Servicer in effecting the payment of taxes and
assessments on the Mortgaged Properties shall, for the purpose of
calculating distributions to Certificateholders, be added to the
amount owing under the related Mortgage Loans, notwithstanding
that the terms of such Mortgage Loans so permit.
(b) The Servicer shall segregate and hold all funds
collected and received pursuant to any Mortgage Loan constituting
Escrow Payments separate and apart from any of its own funds and
general assets and shall establish and maintain one or more
segregated custodial accounts (each, an "Escrow Account") into
which all Escrow Payments shall be deposited within one Business
Day after receipt. The Servicer shall also deposit into each appli-
cable Escrow Account any amounts representing losses on Permitted
Investments pursuant to Section 3.07(b) and any Insurance Proceeds
or Liquidation Proceeds which are required to be applied to the
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restoration or repair of any Mortgaged Property pursuant
to the related Mortgage Loan. Escrow Accounts shall be Eligible
Accounts (except to the extent the related Mortgage Loan requires
it to be held in an account that is not an Eligible Account) and
shall be entitled, "Pacific Mutual Life Insurance Company, as
Servicer, in trust for LaSalle National Bank, as Trustee in trust
for Holders of Asset Securitization Corporation, Commercial
Mortgage Pass-Through Certificates, Series 1997-MD VII and
Various Borrowers". Withdrawals from an Escrow Account may be
made by the Servicer only:
(i) to effect timely payments of items constituting
Escrow Payments for the related Mortgage and in
accordance with the terms of the related
Mortgage Loan;
(ii) to transfer funds to the Collection Account to
reimburse the Servicer, the Special Servicer,
the Trustee or the Fiscal Agent, as applicable,
for any Advance (with interest thereon at the
Advance Rate) relating to Escrow Payments, but
only from amounts received with respect to the
related Mortgage Loan which represent late
collections of Escrow Payments thereunder;
(iii) for application to the restoration or repair of
the related Mortgaged Property in accordance
with the related Mortgage Loan and the
Servicing Standard;
(iv) to clear and terminate such Escrow Account upon
the termination of this Agreement;
(v) to pay from time to time to the related
Borrower any interest or investment income
earned on funds deposited in the Escrow Account
if such income is required to be paid to the
related Borrower under law or by the terms of
the Mortgage Loan, or otherwise to the
Servicer; and
(vi) to remove any funds deposited in an Escrow
Account that were not required to be deposited
therein.
SECTION 3.05. Collection Account; Upper-Tier
Distribution Account;
Lower-Tier Distribution Account;
Default Interest Distribution Account;
and Excess Interest Distribution
Account.
(a) The Servicer shall establish and maintain the
Collection Account in the Trustee's name, for the benefit of the
Certificateholders and the Trustee as the Holder of the
Lower-Tier Regular Interests. The Collection Account shall be
established and maintained as an Eligible Account. The Servicer
shall deposit or cause to be deposited in the Collection Account
within one Business Day following receipt the following payments
and collections received or made by it on or with respect to the
Mortgage Loans:
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(i) all payments on account of principal on the
Mortgage Loans, including the principal component
of Unscheduled Payments;
(ii) all payments on account of interest on the Mortgage
Loans and the interest portion of all Unscheduled
Payments and all Prepayment Premiums;
(iii) any amounts required to be deposited pursuant
to Section 3.07(b) in connection with net
losses realized on Permitted Investments with
respect to funds held in the Collection
Account;
(iv) all Net REO Proceeds withdrawn from an REO Account
pursuant to Section 3.17(b) and all Net Insurance
Proceeds and Net Liquidation Proceeds;
(v) any amounts received from Borrowers which
represent recoveries of Property Protection
Expenses, to the extent not permitted to be
retained by the Servicer as provided herein;
and
(vi) any other amounts required by the provisions of
this Agreement to be deposited into the
Collection Account by the Servicer or Special
Servicer, including, without limitation,
proceeds of any repurchase of a Mortgage Loan
pursuant to Sections 2.03(d) or (e) hereof.
The foregoing requirements for deposits in the
Collection Account shall be exclusive, it being understood and
agreed that, without limiting the generality of the foregoing,
payments in the nature of late payment charges (subject to
Section 3.12 hereof), Assumption Fees, loan modification fees,
loan service transaction fees, extension fees, demand fees,
beneficiary statement charges and similar fees need not be
deposited in the Collection Account by the Servicer and, to the
extent permitted by applicable law, the Servicer shall be
entitled to retain
any such charges and fees received with respect to the Mortgage
Loans. In the event that the Servicer deposits in the Collection
Account any amount not required to be deposited therein, it may
at any time withdraw such amount from the Collection Account, any
provision herein to the contrary notwithstanding.
(b) The Trustee shall establish and maintain the Lower-Tier
Distribution Account in the name of the Trustee, in trust for the
benefit of the Certificateholders and the Trustee as the Holder
of the Lower-Tier Regular Interests. The Lower-Tier Distribution
Account shall be established and maintained as an Eligible
Account.
(c) The Trustee shall establish and maintain the
Upper-Tier Distribution Account in the name of the Trustee, in
trust for the benefit of the Certificateholders. The Upper-Tier
Distribution Account shall be established and maintained as an
Eligible Account. With respect to each Distribution Date, the Trustee
shall withdraw from the Lower-Tier Distribution Account and deposit
in the Upper-Tier Distribution Account on or before such date the amount
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of Available Funds (including P&I Advances) and
Prepayment Premiums to be distributed in respect of the
Lower-Tier Regular Interests pursuant to Section 4.01 hereof on
such date.
(d) [Intentionally left blank].
(e) Prior to the Servicer Remittance Date relating to
any Collection Period in which Default Interest is received, the
Trustee shall establish and maintain the Default Interest
Distribution Account in the name of the Trustee in trust for the
benefit of the Holders of the Class V-1 Certificates. The Default
Interest Distribution Account shall be established and maintained
as an Eligible Account. On or before the Servicer Remittance Date
related to each Distribution Date, the Servicer shall remit to
the Trustee for deposit in the Default Interest Distribution
Account an amount equal to (i) the amount of the aggregate
Default Interest received during the preceding Collection Period,
minus (ii) any portions thereof withdrawn from the Collection
Account pursuant to clause (iii) of Section 3.06 or otherwise
applied to pay the Advance Interest Amount in respect of Advances
(such amount, if any, the "Net Default Interest" for such
Distribution Date).
(f) Prior to the Servicer Remittance Date relating to
the Collection Period, if any, in which Excess Interest is
received, the Trustee shall establish and maintain the Excess
Interest Distribution Account in the name of the Trustee in trust
for the benefit of the Holders of the Class V-2 Certificates. The
Excess Interest Distribution Account shall be established and
maintained as an Eligible Account. On or before the Servicer
Remittance Date related to the applicable Distribution Date, the
Servicer shall remit to the Trustee for deposit in the Excess
Interest Distribution Account an amount equal to the Excess
Interest received during the applicable Collection Period.
Following the distribution of Excess Interest to
Certificateholders on the first Distribution Date after which
there are no longer any Mortgage Loans outstanding which pursuant
to their terms could pay Excess Interest, the Trustee shall
terminate the Excess Interest Distribution Account.
(g) Funds in the Collection Account, the Upper-Tier
Distribution Account, the Lower-Tier Distribution Account, the
Default Interest Distribution Account and the Excess Interest
Distribution Account may be invested in Permitted Investments in
accordance with the provisions of Section 3.07. The Servicer
shall give written notice to the Trustee of the location and
account number of the Collection Account and shall notify the
Trustee in writing prior to any subsequent change thereof.
SECTION 3.06. Permitted Withdrawals from the
Collection Account.
The Servicer may make withdrawals from the Collection
Account only as described below (the order set forth below not
constituting an order of priority for such withdrawals):
(i) to remit to the Trustee for deposit
in the Lower-Tier Distribution
Account, the Default Interest Distri-
bution Account, the Interest Reserve
Account and the Excess Interest Distri-
bution Account, the amounts
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required to be deposited in the
Lower-Tier Distribution Account, the
Default Interest Distribution Account,
the Interest Reserve Account and
the Excess Interest Distribution
Account pursuant to Sections 4.06,
3.05(e), 3.27 and 3.05(f), respectively;
(ii) to pay or reimburse the Servicer, the
Special Servicer, the Trustee or the
Fiscal Agent for Advances (provided
that the Trustee and the Fiscal
Agent shall have priority with
respect to such payment or
reimbursement), the Servicer's
right to reimburse any such Person
pursuant to this clause (ii) being
limited to (x) any collections on or in
respect of the particular Mortgage
Loan or REO Property respecting
which such Advance was made, (y)
any Subordinate Class Advance
Amounts with respect to the related
Distribution Date as provided in
Section 4.06(d) or (z) any other
amounts in the Collection Account in
the event that such Advances have
been deemed to be Nonrecoverable
Advances or are not recovered from
such recoveries in respect of the
related Mortgage Loan or REO
Property after a Final Recovery
Determination;
(iii) (A) to pay to the Servicer, the
Trustee or the Fiscal Agent the Advance
Interest Amount relating to P&I
Advances (to the extent not reimbursed
from Default Interest), and (B)
to pay to the Servicer, the Special
Servicer, Trustee or Fiscal Agent
any Advance Interest Amounts not
relating to any P&I Advances (pro-
vided that in the case of both (A) and
(B), the Trustee and the Fiscal Agent
shall have priority with respect to
such payments);
(iv) to pay on or before each Servicer Remittance
Date to the Servicer and the Special Servicer,
as applicable, as compensation, the aggregate
unpaid Servicing Fee (less any Servicer
Prepayment Interest Shortfalls) and Special
Servicing Compensation (if any), respectively,
in respect of the immediately preceding
Interest Accrual Period, to be paid, in the
case of the Servicing Fee, from interest
received on the related Mortgage Loan, and to
pay from time to time to the Servicer in
accordance with Section 3.07(b) any interest or
investment income earned on funds deposited in
the Collection Account;
(v) to pay on or before each Distri-
bution Date to the Depositor, the
Originator or any other applicable
Person, as the case may be, with
respect to each Mortgage Loan or
REO Property that has previously
been purchased or repurchased by
it pursuant to Section 2.03(d),
Section 2.03(e), Section 3.18 or
Section 9.01, all amounts received
thereon during the related Collection
Period and subsequent to the date
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as of which the amount required to
effect such purchase or repurchase
was determined;
(vi) to the extent not reimbursed or paid
pursuant to any other clause of this
Section 3.06, to reimburse or pay
the Servicer, the Trustee, the Special
Servicer, the Depositor or the Fiscal
Agent, as applicable, for unpaid
Servicing Fees, Special Servicing
Compensation and other unpaid items
incurred by such Person pursuant
to the second sentence of Section
3.07(c), Section 3.08(a) and (b),
Section 3.10, Section 3.12(e), Section
3.17(a) and (b), Section 3.18(b),
Section 3.22, Section 6.03, Section
7.04, Section 8.05(d) or Section
10.07, or any other provision of this
Agreement pursuant to which such
Person is entitled to reimbursement
or payment from the Trust Fund,
in each case only to the extent
reimbursable under such Section, it
being acknowledged that this clause
(vi) shall not be deemed to modify
the substance of any such Section,
including the provisions of such
Section that set forth the extent to
which one of the foregoing Persons
is or is not entitled to payment or
reimbursement;
(vii) to transfer to the Trustee for deposit in one
or more separate, non-interest bearing accounts
any amount reasonably determined by the Trustee
to be necessary to pay any applicable federal,
state or local taxes imposed on the Upper-Tier
REMIC or the Lower-Tier REMIC under the
circumstances and to the extent described in
Section 4.05;
(viii) to withdraw any amount deposited into the
Collection Account that was not required to
be deposited therein; and
(ix) to clear and terminate the Collection Account
pursuant to Section 9.01.
The 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 pursuant to
subclauses (ii)-(vi) above.
The Servicer shall pay to the Trustee, the Fiscal
Agent or the Special Servicer from the Collection Account (to the
extent permitted by clauses (i)-(vi) above) amounts permitted to
be paid to the Trustee, the Fiscal Agent or the Special Servicer
therefrom, promptly upon receipt of a certificate of a
Responsible Officer of the Trustee or the Fiscal Agent or a
certificate of a Servicing Officer, as applicable, describing the
item and amount to which such Person is entitled. The Servicer
may rely conclusively on any such certificate and shall have no
duty to recalculate the amounts stated therein.
The Trustee, the Fiscal Agent, the Special
Servicer and the 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 reim-
bursement or payment of the Servicing Fees (including
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investment income), or Trustee Fees, Special Servicing
Compensation, Advances, Advance Interest Amounts and their
respective expenses hereunder to the extent such fees and
expenses are to be reimbursed or paid from amounts on deposit in
the Collection Account pursuant to this Agreement (and to have
such amounts paid directly to third party contractors for any
invoices approved by the Trustee, the Servicer or the Special
Servicer, as applicable).
SECTION 3.07. Investment of Funds in the Collection
Account, the REO Account, the Interest
Reserve Account, and the Borrower Accounts.
(a) The Servicer (or with respect to any REO Account,
the Special Servicer, or with respect to the Interest Reserve
Accounts, Nomura Securities International, Inc.) may direct any
depository institution maintaining the Collection Account, the
Interest Reserve Accounts and any Borrower Accounts (subject to
the second succeeding sentence) and any REO Account (each, for
purposes of this Section 3.07, an "Investment Account"), to
invest the funds in such Investment Account in one or more
Permitted Investments that bear interest or are sold at a
discount, and that mature, unless payable on demand, no later
than the Business Day preceding the date on which such funds are
required to be withdrawn from such Investment Account pursuant to
this Agreement. Any direction by the Servicer, the Special
Servicer or by Nomura Securities International, Inc., to invest
funds on deposit in an Investment Account shall be in writing and
shall certify that the requested investment is a Permitted
Investment which matures at or prior to the time required hereby
or is payable on demand. In the case of any Escrow Account,
Lock-Box Account, Cash Collateral Account or Reserve Account (the
"Borrower Accounts"), the Servicer shall act upon the written
request of the related Borrower or Manager to the extent the
Servicer is required to do so under the terms of the respective
Mortgage Loan or related documents, provided that in the absence
of appropriate written instructions from the related Borrower or
Manager meeting the requirements of this Section 3.07, the
Servicer shall have no obligation to, but will be entitled to,
direct the investment of funds in such accounts in Permitted
Investments. All such Permitted Investments shall be held to
maturity, unless payable on demand. Any investment of funds in an
Investment Account shall be made in the name of the Trustee (in
its capacity as such) or in the name of a nominee of the Trustee.
The Trustee shall have sole control (except with respect to
investment direction which shall be in the control of the
Servicer (or Nomura Securities International, Inc., with respect
to the Interest Reserve Account, or the Special Servicer, with
respect to any REO Accounts), as an independent contractor to the
Trust Fund) over each such investment and any certificate or
other instrument evidencing any such investment shall be
delivered directly to the Trustee or its agent (which shall
initially be the Servicer), together with any document of
transfer, if any, necessary to transfer title to such investment
to the Trustee or its nominee. The Trustee shall have no
responsibility or liability with respect to the investment
directions of the Servicer, the Special Servicer or Nomura
Securities International, Inc., any Borrower or Manager or any
losses resulting therefrom, whether from Permitted Investments or
otherwise. The Servicer shall have no responsibility or liability with
respect to the investment directions of Nomura Securities International,
Inc. or any losses resulting therefrom, whether from Permitted
Investments or otherwise. In the event amounts on deposit in an
Investment Account are at any time invested in a Permitted Investment
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payable on demand, the Servicer (or the Special Servicer or
Nomura Securities International, Inc., as applicable), shall:
(x) consistent with any notice required to be
given thereunder, demand that payment
thereon be made on the last day such
Permitted Investment may otherwise mature
hereunder in an amount equal to the lesser
of (1) all amounts then payable thereunder
and (2) the amount required to be withdrawn
on such date; and
(y) demand payment of all amounts due thereunder
promptly upon determination by the Servicer
(or the Special Servicer or Nomura
Securities International, Inc., as
applicable) that such Permitted Investment
would not constitute a Permitted Investment
in respect of funds thereafter on deposit in
the related Investment Account.
(b) All income and gain realized from investment of funds
deposited in any Investment Account shall be for the benefit of
the Servicer (except with respect to the investment of funds
deposited in (i) any Borrower Account, which shall be for the
benefit of the related Borrower to the extent required under the
Mortgage Loan or applicable law, (ii) any REO Account, which
shall be for the benefit of the Special Servicer or (iii) the
Interest Reserve Account, which shall be for the benefit of
Nomura Securities International, Inc., and, if held in the
Collection Account or REO Account shall be subject to withdrawal
by the Servicer or the Special Servicer, as applicable, in
accordance with Section 3.06 or Section 3.17(b), as applicable,
and if held in the Interest Reserve Account, shall be subject to
withdrawal by Nomura Securities International, Inc. pursuant to
written instructions. The Servicer (or with respect to any REO
Account, the Special Servicer or with respect to the Interest
Reserve Account, Nomura Securities International, Inc.), shall
deposit from its own funds into the Collection Account, any REO
Account or the Interest Reserve Account, as applicable, the
amount of any loss incurred in respect of any such Permitted
Investment immediately upon realization of such loss; provided,
however, that the Servicer, Special Servicer, or Nomura
Securities International, Inc. as applicable, may reduce the
amount of such payment to the extent it forgoes any investment
income in such Investment Account otherwise payable to it. The
Servicer shall also deposit from its own funds in any Borrower
Account the amount of any loss incurred in respect of Permitted
Investments, except to the extent that amounts are invested for
the benefit of the Borrower under the terms of the Mortgage Loan
or applicable law.
(c) Except as otherwise expressly provided in this
Agreement, if any default occurs in the making of a payment due
under any Permitted Investment, or if a default occurs in any
other performance required under any Permitted Investment, the
Trustee may, and upon the request of Holders of Certificates
representing greater than 50% of the Percentage Interests of any
Class shall, take such action as may be appropriate to enforce
such payment or performance, including the institution and
prosecution of appropriate proceedings. In the event the Trustee
takes any such action, the Trust Fund shall pay or reimburse the
Trustee for all reasonable out-of-pocket expenses, disbursements
and advances incurred or made by the Trustee in connection
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therewith. In the event that the Trustee does not take any such
action, the Servicer may take such action at its own cost and
expense.
SECTION 3.08. Maintenance of Insurance Policies and
Errors and Omissions and Fidelity Coverage.
(a) The Servicer on behalf of the Trustee, as mortgagee,
shall cause the related Borrower to maintain, to the extent
required by each Mortgage Loan (other than REO Mortgage Loans),
and if the Borrower does not so maintain, shall itself maintain
(subject to the provisions of this Agreement concerning
Nonrecoverable Advances) to the extent the Trustee as mortgagee
has an insurable interest and to the extent available at
commercially reasonable rates, (i) fire and hazard insurance with
extended coverage on the related Mortgaged Property in an amount
which is at least equal to the lesser of (A) one hundred percent
(100%) of the then "full replacement cost" of the improvements
and equipment, (excluding foundations, footings and excavation
costs), without deduction for physical depreciation, and (B) the
outstanding principal balance of the related Mortgage Loan or
such greater amount as is necessary to prevent any reduction in
such policy by reason of the application of co-insurance
provisions and to prevent the Trustee thereunder from being
deemed to be a co-insurer and provided such policy shall include
a "replacement cost" rider, (ii) insurance providing coverage
against 18 months (or such longer period or with such extended
period endorsement as provided in the related Mortgage or other
Loan Document) of rent interruptions and (iii) such other
insurance as is required in the related Mortgage Loan. The
Special Servicer shall maintain fire and hazard insurance with
extended coverage on each REO Property (subject to the provisions
of this Agreement concerning Nonrecoverable Advances) in an
amount which is at least equal to one hundred percent (100%) of
the then "full replacement cost" of the improvements and
equipment (excluding foundations, footings and excavation costs),
without deduction for physical depreciation. If the Special
Servicer does not maintain the insurance described in the
preceding sentence or the required flood insurance described
below, the Servicer shall, as soon as practicable after receipt
of notice of such failure, maintain such insurance, and if the
Servicer does not maintain such insurance, the insurance required
in the first sentence of this Section 3.08(a) or the required
flood insurance described below (if the related Borrower fails to
maintain such insurance), the Trustee shall, as soon as
practicable after receipt of notice of such failure, maintain
such insurance and if the Trustee does not maintain such
insurance, the Fiscal Agent shall do so, provided that, in each
such case, such obligation will be subject to the provisions of
this Agreement concerning Nonrecoverable Advances. The Special
Servicer shall maintain, with respect to each REO Property (i)
public liability insurance providing such coverage against such
risks as the Special Servicer determines, consistent with the
related Mortgage and the Servicing Standard, to be in the best
interests of the Trust Fund, (ii) insurance providing coverage
against 24 months of rent interruptions and (iii) such other
insurance as was required pursuant to the terms of the related
Mortgage Loan. All insurance for an REO Property shall be
from a Qualified Insurer. Any amounts collected by the
Servicer or the Special Servicer under any such policies
(other than amounts required to be applied to the restoration
or repair of the related Mortgaged Property or amounts to be
released to the Borrower in accordance with the terms of
the related Mortgage) shall be deposited into the Collection
Account pursuant to Section 3.05, subject to withdrawal
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pursuant to Section 3.06. Any cost incurred by the
Servicer or the Special Servicer in maintaining any such
insurance shall not, for the purpose of calculating distributions
to Certificateholders, be added to the unpaid principal balance
of the related Mortgage Loan, notwithstanding that the terms of
such Mortgage Loan so permit. It is understood and agreed that no
other additional insurance other than flood insurance or
earthquake insurance subject to the conditions set forth below is
to be required of any Borrower or to be maintained by the
Servicer other than pursuant to the terms of the related Mortgage
and pursuant to such applicable laws and regulations as shall at
any time be in force and as shall require such additional
insurance. If the Mortgaged Property (other than an REO Property)
is located in a federally designated special flood hazard area,
the Servicer will use its best efforts to cause the related
Borrower to maintain, to the extent required by each Mortgage
Loan, and if the related Borrower does not so maintain, will
itself obtain (subject to the provisions of this Agreement
concerning Nonrecoverable Advances) flood insurance in respect
thereof. Such flood insurance shall be in an amount equal to the
lesser of (i) the unpaid principal balance of the related
Mortgage Loan and (ii) the maximum amount of such insurance
required by the terms of the related Mortgage Loan and as is
available for the related property under the national flood
insurance program (assuming that the area in which such property
is located is participating in such program). If a Mortgaged
Property is related to a Mortgage Loan pursuant to which
earthquake insurance was in place at the time of origination, is
required to be maintained by the Mortgage Loan and continues to
be available at commercially reasonable rates, the Servicer shall
use its best efforts to cause the related Borrower to maintain,
to the extent required by such Mortgage Loan, and if the related
Borrower does not so maintain will itself obtain (subject to the
provisions of this Agreement concerning Nonrecoverable Advances)
earthquake insurance in respect thereof, in the amount required
by the Mortgage Loan or, if not specified, in-place at
origination. If an REO Property (i) is located in a federally
designated special flood hazard area or (ii) is related to a
Mortgage Loan pursuant to which earthquake insurance was in place
at the time of origination and continues to be available at
commercially reasonable rates, the Special Servicer will obtain
(subject to the provisions of this Agreement concerning
Nonrecoverable Advances) flood insurance and/or earthquake
insurance in respect thereof providing substantially the same
coverage as described in the preceding sentences
or, with respect to earthquake insurance, in the amount required
by the Mortgage Loan or, if not specified, in-place at
origination. If at any time during the term of this Agreement a
recovery under a flood or fire and hazard insurance policy in
respect of an REO Property is not available but would have been
available if such insurance were maintained thereon in accordance
with the standards applied to Mortgaged Properties described
herein, the Special Servicer shall either (i) immediately deposit
into the Collection Account from its own funds the amount that
would have been recovered or (ii) apply to the restoration and
repair of the property from its own funds the amount that would
have been recovered, if such application would be consistent with
the Servicing Standard; provided, however, that the Special
Servicer shall not be responsible for any shortfall in insurance
proceeds resulting from an insurer's refusal or inability to pay
a claim. In the case of any insurance otherwise required to be
maintained pursuant to this Section that is not being so
maintained because the Servicer or the Special Servicer, as
applicable, has determined that it is not available at
commercially reasonable rates, the Servicer or the Special
Servicer, as applicable, shall deliver an Officers'
Certificate to the Trustee and each Rating Agency which
details the steps that were taken in seeking such
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insurance and the factors which led to the determination
that such insurance was not so available. Costs to the Servicer
or Special Servicer of maintaining insurance policies pursuant to
this Section 3.08 shall be paid by the Servicer or Special
Servicer as a Property Advance and shall be reimbursable to the
Servicer or Special Servicer with interest at the Advance Rate,
which reimbursement may be effected under Section 3.06(ii) or
(vii).
The Servicer (or the Special Servicer, with respect to
the Specially Serviced Mortgage Loans) agrees to prepare and
present, on behalf of itself, the Trustee and the
Certificateholders, claims under each related insurance policy
maintained pursuant to this Section 3.08(a) in a timely fashion
in accordance with the terms of such policy and to take such
reasonable steps as are necessary to receive payment or to permit
recovery thereunder.
All insurance policies required hereunder shall name
the Trustee or the Servicer or the Special Servicer, on behalf of
the Trustee as the mortgagee, as loss payee.
(b) (I) If the Servicer or the Special Servicer, as
applicable, obtains and maintains a blanket insurance policy
insuring against fire and hazard losses on all of the Mortgaged
Properties (other than REO Properties) as to which the related
Borrower has not maintained insurance required by the related
Mortgage Loan or on all of the REO Properties, as the case may
be, it shall conclusively be deemed to have satisfied its
respective obligations concerning the maintenance of insurance
coverage set forth in Section 3.08(a). Any such blanket insurance
policy shall be maintained with a Qualified Insurer. A blanket
insurance policy may contain a deductible clause, in which case
the Servicer or the Special Servicer, as applicable, shall, in
the event that (i) there shall not have been maintained on the
related Mortgaged Property a policy otherwise complying with the
provisions of Section 3.08(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
the blanket policy because of such deductible clause to the
extent that any such deductible exceeds the deductible limitation
that pertained to the related Mortgage Loan, or, in the absence
of any such deductible limitation, the deductible limitation
which is consistent with the Servicing Standard. In connection
with its activities as Servicer or the Special Servicer
hereunder, as applicable, the Servicer or the Special Servicer,
respectively, agrees to prepare and present, on behalf of itself,
the Trustee and Certificateholders, claims under any such blanket
policy which it maintains in a timely fashion in accordance with
the terms of such policy and to take such reasonable steps as are
necessary to receive payment or permit recovery thereunder.
(II) If the Servicer or the Special Servicer, as
applicable, causes any Mortgaged Property or REO Property to be
covered by a master force placed insurance policy and such policy
shall be issued by a Qualified Insurer and provide no less
coverage in scope and amount for such Mortgaged Property or REO
Property than the insurance required to be maintained pursuant to
Section 3.08(a), then the Servicer or Special Servicer shall conclu-
sively be deemed to have satisfied its respective obligations to main-
tain insurance pursuant to Section 3.08(a). Such policy may contain
a deductible clause, in which case the Servicer or the Special
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Servicer, as applicable, shall, in the event that (i) there
shall not have been maintained on the related Mortgaged Property
or REO Property a policy otherwise complying with the provisions
of Section 3.08(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
the Servicing Standard.
(c) The Servicer and the Special Servicer shall each
maintain a fidelity bond in the form and amount that would meet
the servicing requirements of prudent institutional commercial
mortgage lenders and loan servicers with the Trustee named as
loss payee. The Servicer and the Special Servicer each shall be
deemed to have complied with this provision if one of its
respective Affiliates has such fidelity bond coverage and, by the
terms of such fidelity bond, the coverage afforded thereunder
extends to the Servicer and the Special Servicer, as applicable.
In addition, the Servicer and the Special Servicer shall each
keep in force during the term of this Agreement a policy or
policies of insurance covering loss occasioned by the errors and
omissions of its officers and employees in connection with its
obligations to service the Mortgage Loans hereunder in the form
and amount that would meet the servicing requirements of prudent
institutional commercial mortgage lenders and loan servicers,
with the Trustee named as loss payee. The Servicer shall cause
each and every sub-servicer for it to maintain, or cause to be
maintained by any agent or contractor servicing any Mortgage Loan
on behalf of such sub-servicer, a fidelity bond and an errors and
omissions insurance policy which satisfy the requirements for the
fidelity bond and the errors and omissions policy to be
maintained by the Servicer pursuant to this Section 3.08(c). All
fidelity bonds and policies of errors and omissions insurance
obtained under this Section 3.08(c) shall be issued by a
Qualified Insurer.
SECTION 3.09. Enforcement of Due-On-Sale Clauses; Assumption
Agreements; Defeasance Provisions.
(a) If any Mortgage Loan contains a provision in the
nature of a "due-on-sale" clause, which by its terms:
(i) provides that such Mortgage Loan shall (or may
at the mortgagee's option) become due and
payable upon the sale or other transfer of an
interest in the related Mortgaged Property, or
(ii) provides that such Mortgage Loan may not be
assumed without the consent of the related
mortgagee in connection with any such sale or
other transfer,
then, for so long as such Mortgage Loan is included in the Trust
Fund, the Servicer or Special Servicer, as applicable, on behalf
of the Trust Fund shall not be required to enforce such due-on-sale
clause and in connection therewith shall not be required to (x)
accelerate payments thereon or (y) withhold its consent to such
an assumption to the extent permitted under the terms of the
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related Mortgage Loan if (x) such provision is not
exercisable under applicable law or such exercise is reasonably
likely to result in meritorious legal action by the Borrower or
(y) the Servicer or Special Servicer, as applicable, determines,
in accordance with the Servicing Standard, that granting such
consent would be likely to result in a greater recovery, on a
present value basis (discounting at the related Mortgage Rate),
than would enforcement of such clause. If the Servicer or Special
Servicer, as applicable, determines that granting of such consent
would likely result in a greater recovery, the Servicer or
Special Servicer, as applicable, is authorized to take or enter
into an assumption agreement from or with the Person to whom the
related Mortgaged Property has been or is about to be conveyed,
and to release the original Borrower from liability upon the
Mortgage Loan and substitute the new Borrower as obligor thereon,
provided, that (a) the credit status of the prospective new
Borrower is in compliance with the Servicer's or Special
Servicer's regular commercial mortgage origination or servicing
standards and criteria (as evidenced in writing by the Servicer
or Special Servicer) and the terms of the related Mortgage and
(b) the Servicer or Special Servicer has received written
confirmation from each Rating Agency that such assumption or
substitution would not, in and of itself, cause a downgrade,
qualification or withdrawal of the then current ratings assigned
to the Certificates. In connection with each such assumption or
substitution entered into by the Special Servicer, the Special
Servicer shall give prior notice thereof to the Servicer. The
Servicer or Special Servicer, as applicable, shall notify the
Trustee that any such assumption or substitution agreement has
been completed by forwarding to the Trustee (with a copy to the
Servicer, if applicable,) the original copy of such agreement,
which copies shall be added to the related Mortgage File and
shall, for all purposes, be considered a part of such Mortgage
File to the same extent as all other documents and instruments
constituting a part thereof.
(b) Subject to Section 3.29(b), if any Mortgage Loan
contains a provision in the nature of a "due-on-encumbrance"
clause, which by its terms:
(i) provides that such Mortgage Loan shall (or may
at the mortgagee's option) become due and
payable upon the creation of any lien or other
encumbrance on the related Mortgaged Property,
or
(ii) requires the consent of the related mortgagee
to the creation of any such lien or other
encumbrance on the related Mortgaged Property,
then the Servicer or Special Servicer, as applicable, on behalf
of the Trust Fund, shall not be required to enforce such
due-on-encumbrance clause and in connection therewith will not be
required to (i) accelerate the payments on the related Mortgage
Loan or (ii) withhold its consent to such lien or encumbrance if
in either case the Servicer or Special Servicer, as applicable,
(x) determines, in accordance with the Servicing Standard, that
such consent would be in the best interests of the Trust Fund and
(y) receives prior written confirmation from each Rating Agency
that granting such consent would not, in and of itself, cause a
downgrade, qualification or withdrawal of any of the then current
ratings assigned to the Certificates.
(c) Nothing in this Section 3.09 shall constitute a
waiver of the Trustee's right, as the mortgagee of record, to
receive notice of any assumption of a Mortgage Loan, any
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sale or other transfer of the related Mortgaged Property or
the creation of any lien or other encumbrance with respect to
such Mortgaged Property.
(d) In connection with the taking of, or the failure
to take, any action pursuant to this Section 3.09, neither the
Servicer nor the Special Servicer shall agree to modify, waive or
amend, and no assumption or substitution agreement entered into
pursuant to Section 3.09(a) shall contain any terms that are
different from, any term of any Mortgage Loan or the related
Note, other than pursuant to Section 3.31.
(e) With respect to any Mortgage Loan which permits
release of Mortgaged Properties through defeasance:
(i) In the event such Mortgage Loan re-
quires that the Servicer on behalf of
the Trustee purchase the required
U.S. government obligations, the
Servicer shall, at the Borrower's
expense, purchase such obligations in
accordance with the terms of such
Mortgage Loan and hold the same on
behalf of the Trust Fund; provided,
that the Servicer shall not accept the
amounts paid by the related Bor-
rower to effect defeasance until
acceptable U.S. government obliga-
tions have been identified.
(ii) In the event that such Mortgage Loan permits
the assumption of the obligations of the
related Borrower by a successor mortgagor,
prior to permitting such assumption, the
Servicer shall (at the Borrower's expense)
obtain written confirmation from each Rating
Agency that such assumption would not, in and
of itself, cause a downgrade,
qualification or withdrawal of the then
current ratings assigned to the
Certificates.
(iii) The Servicer shall obtain an Opinion
of Counsel (which shall be an
expense of the related Borrower) to
the effect that the Trustee has a
first priority security interest
in the defeasance deposit and the U.S.
government obligations and the
assignment thereof is valid and
enforceable; such opinion, together
with any other certificates or
documents to be required in connection
with such defeasance shall be in
form and substance acceptable to each
Rating Agency.
(vi) The Servicer shall obtain a certificate at the
related Borrower's expense from an Independent
certified public accountant certifying that the
U.S. government obligations comply with the
requirements of the related Loan Agreement or
Mortgage.
(v) Prior to permitting release of
any Mortgaged Properties through
defeasance, the Servicer shall (at
the Borrower's expense) obtain
written confirmation from each Rating
Agency (after providing a copy
of the opinion received pursuant to
clause (vi) below, and such other
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information with respect to the effect
of defeasance on the status of the
Trust REMICs as may be available)
that such defeasance would not, in
and of itself, result in a downgrade,
qualification or withdrawal of the
then current ratings assigned to the
Certificates.
(vi) Prior to permitting release of
any Mortgaged Property through
defeasance, the Servicer shall ob-
tain an Opinion of Counsel (which shall
be an expense of the related Borrower)
to the effect that such release
will not cause either the Upper-
Tier REMIC or Lower-Tier REMIC to
fail to qualify as a REMIC at any
time that any Certificates are
outstanding or cause a tax to be
imposed on the Trust Fund under the
REMIC Provisions.
SECTION 3.10. Realization Upon Defaulted Mortgage Loans.
(a) Contemporaneously with the occurrence of an Appraisal
Reduction Event, the Servicer shall obtain an Updated Appraisal
of the related Mortgaged Property or REO Property, as the case
may be, the costs of which shall be a Property Advance; provided,
however, that the Servicer shall not be required to obtain an
Updated Appraisal of any Mortgaged Property with respect to which
there exists an appraisal which is less than twelve months old.
The Servicer shall obtain annual letter updates to the Updated
Appraisal or new Updated Appraisals, provided, that in the event
that the Servicer becomes aware pursuant to the financial and
property reports, if any, collected from the related Borrower
that net operating income with respect to any Mortgaged Property
(calculated as provided in the related Loan Documents) has
dropped by more than 10% in any year or the debt service coverage
ratio of any Mortgaged Property (calculated as provided in the
related Loan Documents) has fallen below 1.2, the Servicer shall
obtain a new Updated Appraisal.
Following a default in the payment of any principal
balance and accrued interest remaining unpaid on the maturity
date of a Mortgage Loan, either the Servicer shall continue to
make P&I Advances if permitted under Section 3.10(j) or the
Special Servicer shall foreclose or elect to grant up to two
consecutive one-year extensions of the Specially Serviced
Mortgage Loan; provided that the Special Servicer may only extend
such Mortgage Loan if (i) immediately prior to the default on the
maturity date (or the first anniversary thereof in the case of
the second extension), the related Borrower had made twelve
consecutive Monthly Payments (or Extended Monthly Payments (as
defined herein) in the case of the second extension) on or prior
to their Due Dates, (ii) the Special Servicer determines that (A)
extension of such Mortgage Loan is consistent with the Servicing
Standard and (B) extension of such Mortgage Loan is likely to
result in a recovery which on a net present value basis would be
greater than the recovery that would result from a foreclosure,
(iii) such extension requires that all cash flow on all related
Mortgage Properties in excess of amounts required to operate and
maintain such Mortgaged Properties be applied to payments of
principal and interest on such Mortgage Loan, (iv) the Special
Servicer terminates the related Manager unless the Special
Servicer determines that retaining such Manager is conducive to
maintaining the value of such Mortgaged Properties and
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(v) such extension requires the related Borrower to make
Extended Monthly Payments. The Special Servicer's determination
to extend shall be made in the Special Servicer's good faith
judgment, and may, but is not required to be, based on an Updated
Appraisal or a letter update thereof.
The Special Servicer will not agree to any extension
of a Mortgage Loan beyond the date which is two years prior to
the Rated Final Distribution Date. If the related Borrower fails
to make an Extended Monthly Payment during the initial extension
period, no further extensions will be granted. In no event will
the Special Servicer be permitted to modify or extend any
Mortgage Loan at a rate lower than the Mortgage Rate.
(b) In connection with any foreclosure, enforcement of
the Loan Documents or other acquisition, the Special Servicer
shall pay the costs and expenses in any such proceedings as an
Advance unless the Special Servicer determines, in its good faith
judgment, that such Advance would constitute a Nonrecoverable
Advance. The Special Servicer shall be entitled to reimbursement
of Advances (with interest at the Advance Rate) made pursuant to
the preceding sentence to the extent permitted by Section
3.06(ii) and Section 3.06(iii).
If the Special Servicer elects to proceed with a
non-judicial foreclosure in accordance with the laws of the state
where the Mortgaged Property is located, the Special Servicer
shall not be required to pursue a deficiency judgment against the
related Borrower or any other liable party if the laws of the
state do not permit such a deficiency judgment after a
non-judicial foreclosure or if the Special Servicer determines,
in its best judgment, that the likely recovery if a deficiency
judgment is obtained will not be sufficient to warrant the cost,
time, expense and/or exposure of pursuing the deficiency judgment
and such determination is evidenced by an Officers' Certificate
delivered to the Trustee.
In the event that title to any Mortgaged Property is
acquired in foreclosure or by deed in lieu of foreclosure, the
deed or certificate of sale shall be issued to the Trustee, or to
its nominee (which shall not include the Servicer) or a separate
trustee or co-trustee on behalf of the Trustee as holder of the
Lower-Tier Regular Interests and on behalf of the holders of the
Certificates. Notwithstanding any such acquisition of title and
cancellation of the related Mortgage Loan, such Mortgage Loan
shall (except for purposes of Section 9.01) be considered to be a
REO Mortgage Loan held in the Trust Fund until such time as the
related REO Property shall be sold by the Trust Fund and shall be
reduced only by collections net of expenses. Consistent with the
foregoing, for purposes of all calculations hereunder, so long as
such Mortgage Loan shall be considered to be an outstanding
Mortgage Loan:
(i) it shall be assumed that, notwithstanding that
the indebtedness evidenced by the related Note
shall have been discharged, such Note and, for
purposes of determining the Stated Principal
Balance thereof, the related amortization
schedule in effect at the time of any such
acquisition of title remain in effect; and
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(ii) Net REO Proceeds received in any
month shall be applied to amounts
that would have been payable under
the related Note in accordance with
the terms of such Note. In the
absence of such terms, Net REO
Proceeds shall be deemed to have
been received first in payment of the
accrued interest (not including Excess
Interest) that remained unpaid on
the date that the related REO Proper-
ty was acquired by the Trust Fund;
second in respect of the delinquent
principal installments that remained
unpaid on such date; and thereafter,
Net REO Proceeds received in any
month shall be applied to the payment
of installments of principal and
accrued interest on such Mortgage Loan
deemed to be due and payable
in accordance with the terms of such
Note and such amortization
schedule. If such Net REO Proceeds
exceed the Monthly Payment then
payable, the excess shall be treated
as a Principal Prepayment received
in respect of such Mortgage Loan.
(c) Notwithstanding any provision to the contrary, the
Special Servicer shall not acquire for the benefit of the Trust
Fund any personal property pursuant to this Section 3.10 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 for the benefit of the Trust
Fund; or
(ii) the Special Servicer shall have requested and
received an Opinion of Counsel (which opinion
shall be an expense of the Lower-Tier REMIC)
to the effect that the holding of such personal
property by the Lower-Tier REMIC will not cause
the imposition of a tax on the Lower-Tier REMIC
or Upper-Tier REMIC under the REMIC Provisions
or cause the Lower-Tier REMIC or Upper-Tier
REMIC to fail to qualify as a REMIC at any time
that any Certificate is outstanding.
(d) Notwithstanding any provision to the contrary in
this Agreement, the Special Servicer shall not, on behalf of the
Trust Fund, obtain title to any direct or indirect partnership
interest or other equity interest in any Borrower pledged
pursuant to any pledge agreement unless the Special Servicer
shall have requested and received an Opinion of Counsel (which
opinion shall be an expense of the Trust Fund) to the effect that
the holding of such partnership interest or other equity interest
by the Trust Fund will not cause the imposition of a tax on the
Lower-Tier REMIC or Upper-Tier REMIC under the REMIC Provisions
or cause the Lower-Tier REMIC or Upper-Tier REMIC to fail to
qualify as a REMIC at any time that any Certificate is
outstanding.
(e) Notwithstanding any provision to the contrary
contained in this Agreement, the Special Servicer shall not,
on behalf of the Trust Fund, obtain title to a Mortgaged
Property as a result of or in lieu of foreclosure or otherwise,
obtain title to any direct or indirect partnership interest
in any Borrower2pledged pursuant to a pledge agreement and
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thereby be the beneficial owner of a Mortgaged Property, and
shall not otherwise acquire possession of, or take any other
action with respect to, any Mortgaged Property if, as a result of
any such action, the Trustee, for the Trust Fund 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 comparable law,
unless the Special Servicer has previously determined in
accordance with the Servicing Standard, based on an updated
environmental assessment report prepared by an Independent Person
who regularly conducts environmental audits, that:
(A) such Mortgaged Property is in compliance with
applicable environmental laws or, if not, after
consultation with an environmental consultant, that it
would be in the best economic interest of the Trust Fund to
take such actions as are necessary to bring such Mortgaged
Property in compliance therewith, and
(B) there are no circumstances present at such
Mortgaged Property relating to the use, management or
disposal of any Hazardous Materials for which
investigation, testing, monitoring, containment, clean-up
or remediation could be required under any currently
effective federal, state or local law or regulation, or
that, if any such Hazardous Materials are present for which
such action could be required, after consultation with an
environmental consultant, it would be in the best economic
interest of the Trust Fund to take such actions with
respect to the affected Mortgaged Property.
In the event that the environmental assessment first
obtained by the Special Servicer with respect to a Mortgaged
Property indicates that such Mortgaged Property may not
be in compliance with applicable environmental laws or that
Hazardous Materials may be present but does not definitively
establish such fact, the Special Servicer shall cause such
further environmental tests to be conducted by an Independent
Person who regularly conducts such tests as the Special Servicer
shall deem prudent to protect the interests of
Certificateholders. Any such tests shall be deemed part of the
environmental assessment obtained by the Special Servicer for
purposes of this Section 3.10.
(f) The environmental assessment contemplated by
Section 3.10(e) shall be prepared within three months of the
determination that such assessment is required by any Independent
Person who regularly conducts environmental audits for purchasers
of commercial property where the Mortgaged Property is located,
as determined by the Special Servicer in a manner consistent with
the Servicing Standard. The Servicer shall advance the cost of
preparation of such environmental assessments unless the Servicer
determines, in its good faith judgment, that such Advance would
be a Nonrecoverable Advance. The Servicer shall be entitled to
reimbursement of Advances (with interest at the Advance Rate)
made pursuant to the preceding sentence in the manner set forth
in Section 3.06.
(g) If the Special Servicer determines pursuant
to Section 3.10(e)(A) that a Mortgaged Property is not
in compliance with applicable environmental laws but that
it is in the best economic interest of the Trust Fund to
take such actions as are necessary to bring such
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Mortgaged Property in compliance therewith, or if the
Special Servicer determines pursuant to Section 3.10(e)(B) that
the circumstances referred to therein relating to Hazardous
Materials are present but that it is in the best economic
interest of the Trust Fund to take such action with respect to
the containment, clean-up or remediation of Hazardous Materials
affecting such Mortgaged Property as is required by law or
regulation, the Special Servicer shall take such action as it
deems to be in the best economic interest of the Trust Fund, but
only if the Trustee has mailed notice to the Holders of the
Regular Certificates of such proposed action, which notice shall
be prepared by the Special Servicer and delivered to the Trustee,
and only if the Trustee does not receive, within 30 days of such
notification, instructions from the Holders of greater than 50%
of the aggregate Voting Rights of such Classes directing the
Special Servicer not to take such action. None of the Trustee,
the Servicer or the Special Servicer shall be obligated to take
any action or not take any action pursuant to this Section
3.10(g) at the direction of the Certificateholders unless the
Certificateholders agree to indemnify the Trustee, the Servicer
and the Special Servicer with respect to such action or inaction.
The Special Servicer shall advance the cost of any such
compliance, containment, clean-up or remediation unless the
Special Servicer determines, in its good faith judgment, that
such Advance would constitute a Nonrecoverable Advance.
(h) The Special Servicer shall report to the IRS and
to the related Borrower, in the manner required by applicable
law, the information required to be reported regarding any
Mortgaged Property which is abandoned or foreclosed. The Special
Servicer shall deliver a copy of any such report to the Trustee.
(i) The costs of any appraisal obtained pursuant to this
Section 3.10 shall be paid by the Servicer as an Advance and
shall be reimbursable from the Collection Account pursuant to
Section 3.06.
(j) Following a default in the payment of principal or
interest on a Mortgage Loan, the Special Servicer, after
consultation and agreement by the Servicer, may elect not to
foreclose or institute similar proceedings or to modify the loan
pursuant to Section 3.31 and instead the Servicer shall continue
to make P&I Advances with respect to such delinquencies so long
as the Special Servicer, in its reasonable judgment in accordance
with the Servicing Standard, after consultation and agreement by
the Servicer, concludes (a) that the election not to foreclose or
to modify would likely result in a greater recovery, on a present
value basis, than would foreclosure or modification and (b) such
P&I Advances will not be Nonrecoverable Advances.
SECTION 3.11. Trustee to Cooperate; Release of Mortgage
Files.
Upon the payment in full of any Mortgage Loan, or the
receipt by the Servicer of a notification that payment in full
has been escrowed in a manner customary for such purposes, the
Servicer shall immediately notify the Trustee or the Custodian by
a certification (which certification shall include a statement to
the effect that all amounts received or to be received in
connection with such payment which are required to be deposited
in the Collection Account pursuant to Section 3.05 have been
or will be so deposited) of a Servicing Officer and shall
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request delivery to it of the Mortgage File. No expenses
incurred in connection with any instrument of satisfaction or
deed of reconveyance shall be chargeable to the Trust Fund.
From time to time upon request of the Servicer or
Special Servicer and delivery to the Trustee and the Custodian of
a Request for Release, the Trustee shall promptly cause the
Custodian to release the Mortgage File (or any portion thereof)
designated in such Request for Release to the Servicer or Special
Servicer, as applicable. Upon return of the foregoing to the
Custodian, or in the event of a liquidation or conversion of the
Mortgage Loan into an REO Property, receipt by the Trustee of a
certificate of a Servicing Officer stating that such Mortgage
Loan was liquidated and that all amounts received or to be
received in connection with such liquidation which are required
to be deposited into the Collection Account or Lower-Tier
Distribution Account have been so deposited, or that such
Mortgage Loan has become an REO Property, the Custodian shall
deliver a copy of the Request for Release to the Servicer or
Special Servicer, as applicable.
Upon written certification of a Servicing Officer, the
Trustee shall execute and deliver to the Special Servicer any
court pleadings, requests for trustee's sale or other documents
prepared by the Special Servicer, its agents or attorneys,
necessary to the foreclosure or trustee's sale in respect of a
Mortgaged Property or to any legal action brought to obtain
judgment against any Borrower on the Note or Mortgage or to
obtain a deficiency judgment, or to enforce any other remedies or
rights provided by the Note or Mortgage or otherwise available at
law or in equity. Each such certification shall include a request
that such pleadings or documents be executed by the Trustee and a
statement as to the reason such documents or pleadings are
required, and that the execution and delivery thereof by the
Trustee will not invalidate or otherwise affect the lien of the
Mortgage, except for the termination of such a lien upon
completion of the foreclosure or trustee's sale.
SECTION 3.12. Servicing Fees, Trustee Fees and Special
Servicing Compensation.
(a) As compensation for its activities hereunder, the
Servicer shall be entitled, with respect to each Mortgage Loan
and each Interest Accrual Period, to the Servicing Fee, which
shall be payable from amounts on deposit in the Collection
Account as set forth in Section 3.06(iv). The Servicer's rights
to the Servicing Fee may not be transferred in whole or in part
except in connection with the transfer of all of the Servicer's
responsibilities and obligations under this Agreement. In
addition, the Servicer shall be entitled to receive, as
additional servicing compensation, to the extent permitted by
applicable law and the related Mortgage Loans, any late payment
charges, Assumption Fees, loan modification fees, extension fees,
loan service transaction fees, demand fees, beneficiary statement
charges, or similar items (but not including any Net Default
Interest or Prepayment Premiums), in each case to the extent
received and not required to be deposited or retained in the
Collection Account pursuant to Section 3.05; provided, however,
that the Servicer shall not be entitled to apply or retain any amounts
as additional compensation, including any late payment charges, with
respect to any Mortgage Loan with respect to which a default or
event of default thereunder has occurred and is continuing
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unless and until such default or event of default has
been cured and all delinquent amounts (including any Default
Interest) due with respect to such Mortgage Loan have been paid.
The Servicer shall also be entitled pursuant to, and to the
extent provided in, Sections 3.06(iv) and 3.07(b) to withdraw
from the Collection Account and to receive from any Borrower
Accounts (to the extent not payable to the related Borrower under
the Mortgage Loan or applicable law), the Lower-Tier Distribution
Account, Upper-Tier Distribution Account, Default Interest
Distribution Account, and Excess Interest Distribution Account
any interest or other income earned on deposits therein.
Notwithstanding the foregoing, the aggregate Servicing Fee due to
the Servicer with respect to any Distribution Date shall be
reduced by the aggregate amount of any Servicer Prepayment
Interest Shortfalls for the related Collection Period.
As compensation for its activities hereunder, on each
Distribution Date the Trustee shall be entitled with respect to
each Mortgage Loan to the Trustee Fee, which shall be payable by
the Servicer out of the aggregate Servicing Fee. The Trustee
shall pay the routine fees and expenses of the Certificate
Registrar, the Paying Agent, the Custodian and the Authenticating
Agent. The Trustee's rights to the Trustee Fee may not be
transferred in whole or in part except in connection with the
transfer of all of the Trustee's responsibilities and obligations
under this Agreement.
Except as otherwise provided herein, the Servicer shall
pay all expenses incurred by it in connection with its servicing
activities hereunder, including all fees of any sub-servicers
retained by it. Except as otherwise provided herein, the Trustee
shall pay all expenses incurred by it in connection with its
activities hereunder.
(b) As compensation for its activities hereunder, the
Special Servicer shall be entitled with respect to each Specially
Serviced Mortgage Loan to the Special Servicing Fee, which shall
be payable from amounts on deposit in the Collection Account as
set forth in Section 3.06(iv). The Special Servicer's rights to
the Special Servicing Fee may not be transferred in whole or in
part except in connection with the transfer of all of the Special
Servicer's responsibilities and obligations under this Agreement.
In addition, the Special Servicer shall be entitled to receive,
as additional servicing compensation, (i) to the extent permitted
by applicable law and the related Specially Serviced Mortgaged
Loans, any Assumption Fees and loan modification fees and (ii)
any interest or other income earned on deposits in the REO
Accounts.
Except as otherwise provided herein, the Special
Servicer shall pay all expenses incurred by it in connection with
its servicing activities hereunder.
(c) In addition to the Special Servicing Fees provided
for in this Agreement, and not in lieu thereof, the Special
Servicer shall be entitled to the following fees and
compensation:
(i) the Special Servicing Rehabilitation Fee; and
(ii) the REO Disposition Fee payable out
of the Liquidation Proceeds prior
to the deposit of the Net Liquida-
tion Proceeds in the Collection
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Account. However, no REO Disposi-
tion Fee will be payable in
connection with, or out of, Liquida-
tion Proceeds resulting from the
purchase of any Specially Serviced
Mortgage Loan or REO Property (i)
by the Originator pursuant to the
Mortgage Loan Purchase and Sale
Agreement, or (ii) by the Servi-
cer, the Depositor or the
Certificateholders pursuant to
Section 2.03 or Section 9.01.
Each of the Servicer and the Special Servicer shall be entitled
to receive interest at the Advance Rate in respect of any
Servicing Fees or Special Servicing Compensation that remain
unpaid on the Distribution Date immediately following the related
Interest Accrual Period.
(d) Notwithstanding the foregoing, in the event that
the Special Servicer is, or is an Affiliate of, or has an
economic arrangement for the purpose of retaining the full
Special Servicing Fee with, the Holder or Holders of Certificates
representing greater than 50% of the Voting Rights of the most
subordinate Class of Certificates then outstanding, the Special
Servicer shall provide written notice thereof to the Servicer.
(e) The Servicer, Special Servicer and Trustee shall
be entitled to reimbursement from the Trust Fund for the costs
and expenses incurred by them in the performance of their duties
under this Agreement which are "unanticipated expenses incurred
by the REMIC" within the meaning of Treasury Regulations Section
1.860G-1(b)(3)(iii). Such expenses shall include, by way of
example and not by way of limitation, environmental
assessments, Updated Appraisals and appraisals in connection with
foreclosure, the fees and expenses of any administrative or
judicial proceeding and expenses expressly identified as
reimbursable in Section 3.06(vi).
(f) No provision of this Agreement or of the
Certificates shall require the Servicer, the Special Servicer,
the Trustee or the Fiscal Agent to expend or risk their own funds
or otherwise incur any financial liability in the performance of
any of their duties hereunder or thereunder, or in the exercise
of any of their rights or powers, if, in the good faith business
judgment of the Servicer, Special Servicer, Trustee or Fiscal
Agent, as the case may be, repayment of such funds would not be
ultimately recoverable from late payments, Net Insurance
Proceeds, Net Liquidation Proceeds and other collections on or in
respect of the Mortgage Loans, or from adequate indemnity from
other assets comprising the Trust Fund against such risk or
liability.
If the Servicer, the Special Servicer or the Trustee
receives a request or inquiry from a Borrower, any
Certificateholder or any other Person the response to which
would, in the Servicer's or the Trustee's good faith business
judgment require the assistance of Independent legal counsel or
other consultant to the Servicer, the Special Servicer or the
Trustee, the cost of which would not be an expense of the Trust
Fund hereunder, then the Servicer, the Special Servicer or the
Trustee, as the case may be, shall not be required to take any
action in response to such request or inquiry unless the Borrower
or such Certificateholder or such other Person, as applicable,
makes arrangements for the payment of the Servicer's, the
Special Servicer's or Trustee's expenses associated with
such counsel (including, without limitation, posting an
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advance payment for such expenses) satisfactory to the
Servicer, the Special Servicer or the Trustee, as the case may
be, in its sole discretion. Unless such arrangements have been
made, the Servicer, the Special Servicer or the Trustee, as the
case may be, shall have no liability to any Person for the
failure to respond to such request or inquiry.
SECTION 3.13. Reports to the Trustee; Collection
Account Statements.
(a) The Servicer shall deliver to the Trustee, the
Special Servicer and the Fiscal Agent, no later than 2:00 p.m.
Central time on the Due Date prior to each Distribution Date a
preliminary report containing the information provided on the
Servicer Remittance Report and by no later than 2:00 p.m. Central
time on the Servicer Remittance Date prior to each Distribution
Date, the Servicer Remittance Report with respect to the related
Distribution Date (which shall include, without limitation, the
amount of Available Funds for such related Collection Period)
including a written statement of anticipated P&I Advances for the
related Distribution Date. The Servicer's responsibilities under
this Section 3.13(a) with respect to REO Mortgage Loans shall be
subject to the satisfaction of the Special Servicer's obligations
under Section 3.26.
(b) For so long as the Servicer makes deposits into and
withdrawals from the Collection Account, not later than fifteen
days after each Distribution Date, the Servicer shall forward to
the Trustee a statement prepared by the Servicer setting forth
the status of the Collection Account as of the close of business
on the last Business Day of the related Collection Period and
showing the aggregate amount of deposits into and withdrawals
from the Collection Account of each category of deposit specified
in Section 3.05 and each category of withdrawal specified in
Section 3.06 for the related Collection Period. The Trustee and
its agents and attorneys may at any time during normal business
hours, upon reasonable notice, inspect and copy the books,
records and accounts of the Servicer solely relating to the
Mortgage Loans and the performance of its duties hereunder.
(c) The Trustee shall be entitled to rely conclusively
on and shall not be responsible for the content or accuracy of
any information provided to it by the Servicer or the Special
Servicer pursuant to this Agreement.
SECTION 3.14. Annual Statement as to Compliance.
The Servicer and the Special Servicer (the "reporting
person") each shall deliver to the Trustee, the Depositor and to
the Rating Agencies on or before March 15 of each year, beginning
with March 15, 1998, an Officers' Certificate stating, as to each
signatory thereof, (i) that a review of the activities of the
reporting person during the preceding calendar year (or such
shorter period from the Closing Date to the end of the related
calendar year) and of its performance under this Agreement has
been made under such officer's supervision, (ii) that, to the
best of such officer's knowledge, based on such review, the
reporting person has fulfilled all of its obligations under this
Agreement throughout such year (or such shorter period), or, if
there has been a default in the fulfillment of any such obligation,
specifying each such default known to such officer, the nature and
status thereof and what action it proposes to take with respect
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thereto, (iii) that, to the best of such officer's knowledge,
each sub-servicer has fulfilled its obligations under
its sub-servicing agreement in all material respects, or, if
there has been a material default in the fulfillment of such
obligations, specifying each such default known to such officer
and the nature and status thereof, and (iv) whether it has
received any notice regarding qualification, or challenging the
status, of the Upper-Tier REMIC or Lower-Tier REMIC as a REMIC
from the IRS or any other governmental agency or body.
SECTION 3.15. Annual Independent Public Accountants'
Servicing Report.
On or before March 15 of each year, beginning with
March 15, 1998, the Servicer (the "reporting person") at its own ex-
pense shall cause a firm of nationally recognized Independent public
accountants (who may also render other services to the reporting
person) which is a member of the American Institute of Certified
Public Accountants to furnish a statement (an "Accountant's
Statement") to the Trustee, the Depositor and to the Rating
Agencies, to the effect that such firm has examined certain
documents and records relating to the servicing of mortgage loans
similar to the Mortgage Loans under agreements similar to this
Agreement and that, on the basis of such examination conducted
substantially in compliance with generally accepted auditing
standards and the Uniform Single Attestation Program for Mortgage
Bankers or the Audit Program for Mortgages serviced for FHLMC,
such servicing has been conducted in compliance with such similar
agreements except for such significant exceptions or errors in
records that, in the opinion of such firm, generally accepted
auditing standards and the Uniform Single Attestation Program for
Mortgage Bankers or the Audit Program for Mortgages serviced for
FHLMC require it to report, in which case such exceptions and
errors shall be so reported. The reporting person shall obtain
from the related accountants, or shall prepare, an electronic
version of each Accountant's Statement and provide such
electronic version to the Trustee for filing in accordance with
the procedures set forth in Section 3.22 hereof. With respect to
any electronic version of an Accountant's Statement prepared by
the reporting person, the reporting person shall receive written
confirmation from the related accountants that such electronic
version is a conformed copy of the original Accountant's
Statement.
SECTION 3.16. Access to Certain Documentation.
The Servicer and Special Servicer shall provide to any
Certificateholders that are federally insured financial
institutions, the Federal Reserve Board, the FDIC and the OTS and
the supervisory agents and examiners of such boards and such
corporations, and any other governmental or regulatory body to
the jurisdiction of which any Certificateholder is subject,
access to the documentation regarding the Mortgage Loans required
by applicable regulations of the Federal Reserve Board, FDIC, OTS
or any such governmental or regulatory body, such access being
afforded without charge but only upon reasonable request and
during normal business hours at the offices of the Servicer or
Special Servicer. Nothing in this Section 3.16 shall detract
from the obligation of the Servicer and Special Servicer to
observe any applicable law prohibiting disclosure of information
with respect to the Borrowers, and the failure of the
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Servicer and Special Servicer to provide access as provided
in this Section 3.16 as a result of such obligation shall not
constitute a breach of this Section 3.16.
SECTION 3.17. Title and Management of REO
Properties and REO Account Properties.
(a) In the event that title to any Mortgaged Property
is acquired for the benefit of Certificateholders in foreclosure,
by deed in lieu of foreclosure or upon abandonment or reclamation
from bankruptcy, the deed or certificate of sale shall be taken
in the name of the Trustee, or its nominee (which shall not
include the Servicer), or a separate trustee or co-trustee, on
behalf of the Trust Fund. The Special Servicer, on behalf of the
Trust Fund, shall dispose of 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 (i) the
Special Servicer on behalf of the Lower-Tier REMIC has applied
for 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 or (ii) the Special Servicer seeks
and subsequently receives an Opinion of Counsel (which opinion
shall be an expense of the Trust Fund), addressed to the Special
Servicer and Trustee, to the effect that the holding by the Trust
Fund of such REO Property for an additional specified period will
not cause such REO Property to fail to qualify as "foreclosure
property" within the meaning of Section 860G(a)(8) of the Code
(determined without regard to the exception applicable for
purposes of Section 860D(a) of the Code) at any time that any
Certificate is outstanding, in which event such two-year period
shall be extended by such additional specified period subject to
any conditions set forth in such Opinion of Counsel. The Special
Servicer, on behalf of the Trust Fund, shall dispose of any REO
Property held by the Trust Fund prior to the last day of such
period (taking into account extensions) by which such REO
Property is required to be disposed of pursuant to the provisions
of the immediately preceding sentence in a manner provided under
Section 3.18 hereof. 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 (determined without regard to the
exception applicable for purposes of Section 860D(a)).
(b) The Special Servicer shall have full power and
authority, subject only to the specific requirements and
prohibitions of this Agreement, to do any and all things in
connection with any REO Property as are consistent with the
manner in which the Special Servicer manages and operates similar
property owned or managed by the Special Servicer or any of its
Affiliates, all on such terms and for such period as the Special
Servicer deems to be in the best interests of Certificateholders,
and, in connection therewith, the Special Servicer shall agree to
the payment of management fees that are consistent with general
market standards. Consistent with the foregoing, the Special
Servicer shall cause or permit to be earned with respect to such REO
Property any "net income from foreclosure property," within the meaning
of Section 860G(c) of the Code, which is subject to tax under the
REMIC Provisions only if it has determined, and has so advised the
Trustee in writing, that the earning of such income on a net
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after-tax basis could reasonably be expected to result in a
greater recovery on behalf of Certificateholders than an
alternative method of operation or rental of such REO Property
that would not be subject to such a tax. The Special Servicer
shall segregate and hold all revenues received by it with respect
to any REO Property separate and apart from its own funds and
general assets and shall establish and maintain with respect to
any REO Property a segregated custodial account (each, an "REO
Account"), each of which shall be an Eligible Account and shall
be entitled "LaSalle National Bank, as Trustee, in trust for
Holders of Asset Securitization Corporation, Commercial Mortgage
Pass-Through Certificates, Series 1997-MD VII, REO Account." The
Special Servicer shall be entitled to withdraw for its account
any interest or investment income earned on funds deposited in an
REO Account to the extent provided in Section 3.07(b). The
Special Servicer shall deposit or cause to be deposited in the
REO Account within one Business Day after receipt all revenues
received by it with respect to any REO Property (other than
Liquidation Proceeds, which shall be remitted pursuant to Section
3.18(e) to the Collection Account), and shall withdraw therefrom
funds necessary for the proper operation, management and
maintenance of such REO Property and for other Property
Protection Expenses with respect to such REO Property, including:
(i) all insurance premiums due and payable in
respect of any REO Property;
(ii) all real estate taxes and assessments in respect
of any REO Property that may result in the
imposition of a lien thereon;
(iii) all costs and expenses reasonable and necessary
to protect, maintain, manage, operate, repair and
restore any REO Property; and
(vi) any taxes imposed on the Upper Tier REMIC or
Lower-Tier REMIC in respect of net income from
foreclosure property in accordance with Section
4.05.
To the extent that such REO Proceeds are insufficient
for the purposes set forth in clauses (i) through (iii) above and
the Special Servicer has provided written notice of such
shortfall to the Servicer at least five Business Days prior to
the date that such amounts are due, the Servicer shall advance
the amount of such shortfall unless the Servicer determines, in
its good faith judgment, that such Advance would be a
Nonrecoverable Advance. If the Servicer does not make any such
Advance in violation of the immediately preceding sentence, the
Trustee shall make such Advance; and if the Trustee fails to make
any such Advance, the Fiscal Agent shall make such Advance,
unless in either case, the Trustee or the Fiscal Agent determines
that such Advance would be a Nonrecoverable Advance. The Trustee
and the Fiscal Agent shall be entitled to rely, conclusively, on
any determination by the Servicer that an Advance, if made, would
be a Nonrecoverable Advance. The Trustee and the Fiscal Agent, in
determining whether or not a proposed Advance would be a
Nonrecoverable Advance, shall be subject to the standards
applicable to the Servicer hereunder. The Servicer, the
Trustee or the Fiscal Agent, as applicable, shall be
entitled to reimbursement of such Advances (with interest
at the Advance Rate) made pursuant to the preceding
sentence, to the extent set forth in Section 3.06. The
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Special Servicer shall withdraw from each REO Account and
remit to the Servicer for deposit into the Collection Account on
a monthly basis prior to the related Servicer Remittance Date the
Net REO Proceeds received or collected from each REO Property,
except that in determining the amount of such Net REO Proceeds,
the Special Servicer may retain in each REO Account reasonable
reserves for repairs, replacements and necessary capital
improvements and other related expenses.
Notwithstanding the foregoing, the Special Servicer
shall not:
(i) permit the Trust Fund to enter into, renew or
extend any New Lease, 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 repair or maintenance
thereof or 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 Person to
Directly Operate any REO Property on any date
more than 90 days after its date of acquisition
by the Trust Fund, unless such Person is an
Independent Contractor;
unless, in any such case, the Special Servicer has requested and
received an Opinion of Counsel addressed to the Special Servicer
and the Trustee (which opinion shall be an 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 (determined without
regard to the exception applicable for purposes of Section
860D(a) of the Code) at any time that it is held by the Trust
Fund, in which case the Special Servicer may take such actions as
are specified in such Opinion of Counsel.
The Special Servicer shall be required to contract
with an Independent Contractor (acceptable to each Rating Agency
as evidenced by written confirmation that contracting with such
Independent Contractor would not, in and of itself cause a
downgrade, qualification or withdrawal of the then current
ratings assigned to any Class of Certificates), the fees and
expenses of which shall be an expense of the Trust Fund and
payable out of REO Proceeds, for the operation and management of
any REO Property, within 90 days of the Trust Fund's acquisition
thereof (unless the Special Servicer shall have provided the Trustee
with an Opinion of Counsel that the operation and management of any
REO Property other than through an Independent Contractor shall not
cause such REO Property to fail to qualify as "foreclosure
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property" within the meaning of Code Section 860G(a)(8)) (which
opinion shall be an expense of the Trust Fund), provided that:
(i) the terms and conditions of any such contract
shall be reasonable and customary for the area
and type of property and shall not be inconsistent
herewith;
(ii) any such contract shall require, or
shall be administered to require, that
the Independent Contractor pay
all costs and expenses incurred in
connection with the operation and
management of such REO Property,
including those listed above, and
remit all related revenues (net of such
costs and expenses) to the Special
Servicer as soon as practicable, but in
no event later than thirty days fol-
lowing the receipt thereof by such
Independent Contractor;
(iii) none of the provisions of this Section 3.17(b)
relating to any such contract or to actions
taken through any such Independent Contractor
shall be deemed to relieve the Special Servicer
of any of its duties and obligations to the
Trust Fund or the Trustee on behalf of the
Certificateholders with respect to the
operation and management of any such REO
Property; and
(iv) the Special Servicer shall be obligated with
respect thereto to the same extent as if it
alone were performing all duties and
obligations in connection with the operation
and management of such REO Property.
The Special Servicer shall be entitled to enter into
any agreement with any Independent Contractor performing services
for it related to its duties and obligations hereunder for
indemnification of the Special Servicer by such Independent
Contractor, and nothing in this Agreement shall be deemed to
limit or modify such indemnification.
(c) [Intentionally left blank].
(d) When and as necessary, the Special Servicer shall
send to the Trustee a statement prepared by the Special Servicer
setting forth the amount of net income or net loss, as determined
for federal income tax purposes, resulting from the operation and
management of a trade or business on, the furnishing or rendering
of a non-customary service to the tenants of, or the receipt of
any other amount not constituting Rents from Real Property in
respect of, any REO Property in accordance with Sections 3.17(a)
and 3.17(b).
SECTION 3.18. Sale of Specially Serviced Mortgage
Loans and REO Properties.
(a) With respect to any Specially Serviced Mortgage
Loan or REO Property which the Special Servicer has determined
to sell in accordance with Section 3.10, the Special
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Servicer shall deliver to the Trustee an Officers'
Certificate to the effect that, pursuant to Section 3.10, the
Special Servicer has determined to sell such Specially Serviced
Mortgage Loan or REO Property in accordance with this Section
3.18. The Special Servicer may then offer to sell to any Person
any Specially Serviced Mortgage Loan or any REO Property or,
subject to the following sentence, purchase any such Specially
Serviced Mortgage Loan or REO Property (in each case at the
Repurchase Price therefor), but shall, in any event, so offer to
sell any REO Property no later than the time determined by the
Special Servicer to be sufficient to result in the sale of such
REO Property within the period specified in Section 3.17(a). The
Special Servicer shall deliver such Officers' Certificate and
give the Trustee not less than ten Business Days prior written
notice of its intention to sell any Specially Serviced Mortgage
Loan or REO Property, in which case the Special Servicer shall
accept the highest offer received from any Person for any
Specially Serviced Mortgage Loan or any REO Property in an amount
at least equal to the Repurchase Price therefor or, at its
option, if it has received no offer (of at least three offers) at
least equal to the Repurchase Price therefor, purchase the
Specially Serviced Mortgage Loan or REO Property at the
Repurchase Price.
In the absence of any such offer or purchase by the
Special Servicer, the Special Servicer shall accept the highest
offer received from any Person that is determined by the Special
Servicer to be a fair price, as determined in accordance with
Section 3.18(b), for such Specially Serviced Mortgage Loan or REO
Property, if the highest offeror is a Person other than an
Interested Person, or is determined to be a fair price by the
Trustee in accordance with Section 3.18(b), if the highest
offeror is an Interested Person; provided, that the Trustee shall
be entitled to engage, at the expense of the Trust Fund, an
Independent appraiser to determine whether the highest offer is a
fair price and, further provided, that if the highest offeror is
an Interested Person such offer shall not be accepted if it is
less than the Repurchase Price, unless the Rating Agencies have
confirmed, in writing, that such acceptance will not, in itself,
result in the qualification, downgrade or withdrawal of the then
current ratings assigned to the Certificates. Notwithstanding
anything to the contrary herein, neither the Trustee, in its
individual capacity, nor any of its Affiliates may make an offer
or purchase any Specially Serviced 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 the
Servicing Standard, 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 the Servicing Standard, 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),
provided that the offeror is not the Special Servicer or an
Affiliate of the Special Servicer. In the event that the Special
Servicer determines with respect to any REO Property that the
offers being made with respect thereto are not in the best
interests of the Certificateholders and that the end of the
two-year period referred to in Section 3.17(a) with respect to
such REO Property is approaching, the Special Servicer shall
seek an extension of such two-year period in the manner
described in Section 3.17(a); provided, however, that the
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Special Servicer shall use its best efforts, consistent with
the Servicing Standard, to sell each Specially Serviced Mortgage
Loan and any REO Property prior to the Rated Final Distribution
Date.
(b) In determining whether any offer received from an
Interested Person represents a fair price for any Specially
Serviced Mortgage Loan or any REO Property, the Trustee may
conclusively rely on the opinion of an Independent appraiser or
other 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 Specially Serviced Mortgage Loan
or any REO Property, the Special Servicer (if the highest offeror
is not an Interested Person) or the Trustee 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, any Updated Appraisal previously obtained, the
period and amount of any delinquency on the affected Specially
Serviced Mortgage Loan, the physical (including environmental)
condition of the related Mortgaged Property or such REO
Property, the state of the local economy and the Trust Fund's
obligation to dispose of any REO Property within the time period
specified in Section 3.17(a).
(c) Subject to the provisions of Section 3.17, 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 Specially Serviced Mortgage Loan or REO
Property, including the collection of all amounts payable in
connection therewith. Any sale of a Specially Serviced Mortgage
Loan or any REO Property shall be without recourse to, or
representation or warranty by, the Trustee, the Fiscal Agent, the
Depositor, the Servicer, the Special 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 such sale is consummated in accordance with the duties of the
Special Servicer, the Servicer, the Depositor, the Fiscal Agent
and the Trustee pursuant to the terms of this Agreement, no such
Person who so performed shall have any liability to the Trust
Fund or any Certificate holder with respect to the purchase price
therefor accepted by the Special Servicer, if the offeror is not
an Interested Person (or the Trustee, if an Interested Person is
an offeror).
(d) The Special Servicer shall file information
returns regarding the abandonment or foreclosure of Mortgaged
Properties with the IRS at the time and in the manner required by
the Code.
(e) The proceeds of any sale pursuant to this Section
3.18 after deduction of the expenses of such sale incurred in
connection therewith shall be promptly, and in any event within
one Business Day following receipt thereof, deposited in the
Collection Account in accordance with Section 3.05(a)(iv).
SECTION 3.19. Additional Obligations of the Servicer;
Inspections; Successor Manager.
(a) The Servicer (or, with respect to Specially
Serviced Mortgage Loans and REO Properties, the Special Servicer)
shall inspect or cause to be inspected (at its own expense)
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each Mortgaged Property at such times and in such manner as are
consistent with the Servicing Standard, but in any event shall
inspect each Mortgaged Property with an Allocated Loan Amount of
(A) $2,000,000 or more at least once every 12 months and (B) less
than $2,000,000 at least once every 24 months, in each case
commencing in January 1998 (or at such lesser frequency as each
Rating Agency shall have confirmed in writing to the Servicer
will not result in a downgrade, qualification or withdrawal of
the then current ratings assigned to any Class of the
Certificates) and (C) if the Mortgage Loan (i) becomes a
Specially Serviced Mortgage Loan, (ii) has a debt service
coverage ratio (calculated as provided in the related Loan
Documents) of less than 1.0 or (iii) is delinquent for 60 days,
each related Mortgaged Property shall be inspected by the Special
Servicer as soon as practicable and thereafter at least every 12
months for so long as such condition exists.
(b) With respect to each Mortgage Loan, the Servicer shall
enforce the Trustee's rights with respect to the Manager under
the related Mortgage and Management Agreement. In the event the
Servicer is entitled to terminate the Manager, the Servicer shall
promptly give notice to the Trustee (who shall copy the
Certificateholders), the Originator, the Depositor and each
Rating Agency. After receipt of such notice, the most subordinate
Class of Certificates then outstanding shall have the right to
recommend termination of the Manager, and if so, to recommend a
Successor Manager (meeting the requirements set forth below).
Certificateholders representing Voting Rights of greater than 50%
of such subordinate Class of Certificates will have ten Business
Days from the receipt of the Servicer's notice to respond to such
notice. Upon receipt of a recommendation to terminate the manager
and appoint a Successor Manager, the Servicer shall give notice
of such recommendation to the Trustee (who shall copy the
Certificateholders), and the Servicer shall effect such
recommendation unless: (i) within five Business Days of the
receipt of notice of such recommendation, Certificateholders
representing Voting Rights of greater than 50% of any Class of
Certificates then outstanding which was assigned a rating by any
Rating Agency on the Closing Date reject such proposed Successor
Manager in which case the Servicer shall procure a Successor
Manager as set forth in the following sentence; or (ii) the
Servicer determines that effecting such recommendation to
terminate is not consistent with the Servicing Standard, and
either (A) within 30 days of giving notice of such recommendation
to all holders of Certificates (other than those holders making
such recommendation) the notice of rejection described in clause
(i) above is given to the Servicer or (B) notwithstanding the
lack of such rejection, the Servicer elects not to effect such
recommendation. If the Servicer does not receive a required
response (or if the response received is inconsistent) or in the
event a Manager is otherwise terminated or resigns under the
related Mortgage or Management Agreement and the related Borrower
does not appoint a Successor Manager, the Servicer shall use its
best efforts to retain a Successor Manager (or the recommended
Successor Manager, if any) on terms substantially similar to the
Management Agreement or, failing that, on terms as favorable to
the Trust Fund as can reasonably be obtained by the Servicer. For
the purposes of this paragraph, a "Successor Manager" shall be
reasonably acceptable to the Servicer and a professional
management corporation or business entity which (i) manages, and
is experienced in managing, other comparable commercial
properties, (ii) will not result in a downgrade, qualification or
withdrawal of the then current ratings assigned to the
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Certificates by each Rating Agency, as confirmed in writing by
each Rating Agency, and (iii) otherwise satisfies any criteria
set forth in the Mortgage and related Loan Documents.
SECTION 3.20. Authenticating Agent.
The Trustee may appoint an Authenticating Agent to
execute and to authenticate Certificates. The Authenticating
Agent must be acceptable to the Depositor and the Servicer and
must be a corporation organized and doing business under the laws
of the United States of America or any state, having a principal
office and place of business in a state and city acceptable to
the Depositor and the Servicer, having a combined capital and
surplus of at least $15,000,000, authorized under such laws to do
a trust business and subject to supervision or examination by
federal or state authorities. The Trustee shall serve as the
initial Authenticating Agent and the Trustee hereby accepts such
appointment.
Any corporation into which the Authenticating Agent
may be merged or converted or with which it may be consolidated,
or any corporation resulting from any merger, conversion or
consolidation to which the Authenticating Agent shall be party,
or any corporation succeeding to the corporate agency business of
the Authenticating Agent, shall be the Authenticating Agent
without the execution or filing of any paper or any further act
on the part of the Trustee or the Authenticating Agent.
The Authenticating Agent may at any time resign by giving
at least 30 days' advance written notice of resignation to the
Trustee, the Depositor and the Servicer. The Trustee may at any
time terminate the agency of the Authenticating Agent by giving
written notice of termination to the Authenticating Agent, the
Depositor and the Servicer. Upon receiving a notice of
resignation or upon such a termination, or in case at any time
the Authenticating Agent shall cease to be eligible in accordance
with the provisions of this Section 3.20, the Trustee promptly
shall appoint a successor Authenticating Agent, which shall be
acceptable to the Servicer and the Depositor, and shall mail
notice of such appointment to all Certificateholders. Any
successor Authenticating Agent upon acceptance of its appointment
hereunder shall become vested with all the rights, powers, duties
and responsibilities of its predecessor hereunder, with like
effect as if originally named as Authenticating Agent herein. No
successor Authenticating Agent shall be appointed unless eligible
under the provisions of this Section 3.20.
The Authenticating Agent shall have no responsibility
or liability for any action taken by it as such at the direction
of the Trustee. Any compensation paid to the Authenticating Agent
shall be an unreimbursable expense of the Trustee.
SECTION 3.21. Appointment of Custodians.
The Trustee may appoint one or more Custodians to hold
all or a portion of the Mortgage Files as agent for the Trustee,
by entering into a Custodial Agreement. The Trustee agrees to
comply with the terms of each Custodial Agreement and to
enforce the terms and provisions thereof against the Custo-
dian for the benefit of the Certificateholders. Each Custo-
dian shall be a depository institution subject to super-
vision by federal or state authority, shall have a
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combined capital and surplus of at least $10,000,000, shall
have a long-term debt rating of at least "BBB" from Fitch and S&P
and Baa2 from Moody's, unless the Trustee shall have received
prior written confirmation from each Rating Agency that the
appointment of such Custodian would not cause such Rating Agency
to withdraw, qualify or downgrade any of its then-current ratings
on the Certificates, and shall be qualified to do business in the
jurisdiction in which it holds any Mortgage File. Each Custodial
Agreement may be amended only as provided in Section 10.07. Any
compensation paid to the Custodian shall be an unreimbursable
expense of the Trustee. The Trustee shall serve as the initial
Custodian. The Custodian shall maintain a fidelity bond in the
form and amount that are customary for securitizations similar to
the securitization evidenced by this Agreement, with the Trustee
named as loss payee. The Custodian shall be deemed to have
complied with this provision if one of its respective Affiliates
has such fidelity bond coverage and, by the terms of such
fidelity bond, the coverage afforded thereunder extends to the
Custodian. In addition, the Custodian shall keep in force during
the term of this Agreement a policy or policies of insurance
covering loss occasioned by the errors and omissions of its
officers and employees in connection with its obligations
hereunder in the form and amount that are customary for
securitizations similar to the securitization evidenced by this
Agreement, with the Trustee named as loss payee. All fidelity
bonds and policies of errors and omissions insurance obtained
under this Section 3.21 shall be issued by a Qualified Insurer.
SECTION 3.22. Reports to the Securities and Exchange
Commission; Available Information.
(a) The Servicer shall prepare and sign, on behalf of
the Depositor, any and all Exchange Act Reports; provided,
however, that (i) the Depositor shall prepare, sign and file with
the Commission the initial Form 8-K relating to the Trust Fund
and (ii) the Special Servicer shall prepare and sign on behalf of
the Depositor any Exchange Act Report which includes an Annual
Compliance Report relating to the Special Servicer. Each Exchange
Act Report consisting of a Monthly Distribution Statement,
Special Event Report or Summary Report shall be prepared as an
exhibit or exhibits to a Form 8-K. Each Exchange Act Report
consisting of an Annual Compliance Report shall be prepared as
exhibits to an Annual Report on Form 10-K and shall identify the
aggregate number of Holders of Certificates initially represented
by the Public Global Certificates (the "Public Certificates") and
Depository Participants holding positions in Public Certificates
as of December 31 (or the nearest Business Day if such date is
not a Business Day) of the related year based on information
provided by the Trustee. The Trustee shall provide the Servicer
and the Special Servicer with a list of Certificateholders and
Depository Participants holding Public Certificates as of
December 31 of the related year no later than two Business Days
prior to the date on which the Servicer or Special Servicer, as
applicable, is required to deliver the related Exchange Act
Report to the Trustee. For each Exchange Act Report, the Servicer
or the Special Servicer, as applicable, shall prepare (i) a
manually-signed paper version of such report and (ii) an
electronic version of such report, which version shall be
prepared as a Microsoft Word for Windows file (or in such other
format as the Trustee, the Depositor and the Servicer or the
Special Servicer may agree), provided, that, with respect to the
electronic version of each Exchange Act Report consisting of a Monthly
Distribution Statement, the Servicer need only deliver an electronic
version of the related Form 8-K and the Trustee shall attach an
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electronic version of the related Monthly Distribution
Statement thereto as an exhibit. Exchange Act Reports consisting
of (i) a Monthly Distribution Statement shall be delivered within
ten days after the related Distribution Date; (ii) a Special
Event Report shall be delivered within ten days after the
occurrence of event being reported or the date on which the
Servicer has knowledge of the occurrence of such event, whichever
is later; (iii) a Summary Report, together with or inclusive of a
list of all quarterly and annual financial statements and other
financial and property information of the Borrowers provided to
the Servicer pursuant to the Mortgage Loans (to the extent not
inconsistent with the rights of the related Borrower or Manager
under the related Loan Documents or applicable law), shall be
delivered within ten days after the last Business Day of the
related calendar quarter or year, as applicable; and (iv) an
Annual Compliance Report shall be delivered on or prior to March
15 of each calendar year. Electronic versions of each Exchange
Act Report shall be delivered to the Trustee on a computer
diskette (delivered by courier in packaging designed to shield
such diskette from damage in transmission) or by means of
electronic data transfer system mutually agreed upon by the
Trustee and the Servicer or Special Servicer. The Trustee shall
forward each Exchange Act Report to the Depositor in a manner and
in a format agreed upon by the Trustee and the Depositor, and the
Depositor shall file each Exchange Act Report with the
Commission. Manually-signed copies of each Exchange Act
Report shall be delivered to the Depositor to the attention of
William Kramer (or such other Persons as are designated in
writing by the Depositor), with a copy to the Trustee.
If information for any Exchange Act Report is
incomplete by the date on which such report is required to be
delivered to the Trustee hereunder, the Servicer or, with respect
to any Annual Compliance Report relating to the Special Servicer,
the Special Servicer shall prepare and execute a Form 12b-25
under the Exchange Act and shall deliver an electronic version of
such form to the Trustee for forwarding to the Depositor as
provided above. The Servicer or the Special Servicer, as
applicable, shall deliver the related report in electronic form
to the Trustee when such information is available and such
completed report shall be forwarded electronically by the Trustee
to the Depositor.
None of the Servicer, the Special Servicer and the
Trustee shall (i) file a Form ID with respect to the Depositor or
(ii) cause the Trust Fund to stop filing reports, statements and
information with the Commission pursuant to this Section unless
directed to do so by the Depositor or the continued reporting is
prohibited under the Exchange Act or any regulations thereunder.
Upon the written request of the Depositor, the Servicer shall
file a Form 15 relating to the Trust Fund with the Commission and
send a copy thereof to the Trustee and the Depositor.
The Trustee shall solicit any and all proxies of the
Certificateholders whenever such proxies are required to be
solicited pursuant to the Exchange Act.
(b) The Servicer shall promptly prepare a report
(each, a "Special Event Report") reporting (i) any notice from
a Borrower or insurance company, or any knowledge otherwise
obtained, regarding an upcoming voluntary or involuntary
prepayment (including that resulting from a casualty or
condemnation) or defeasance of all or part of the related
Mortgage Loan (provided that a request by a Borrower
or other Person for a quotation of the amount
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necessary to satisfy all obligations with respect to a
Mortgage Loan shall not, in and of itself, be deemed to be such
notice); (ii) any imminent or actual default on a Mortgage Loan
that results or which the Servicer, after consultation with the
Special Servicer, reasonably believes is likely to result in the
acceleration of the indebtedness due under such Mortgage Loan;
(iii) the results of any property inspection of which the
Servicer has knowledge and which has revealed any material damage
or deterioration or the presence of any environmental condition
with respect to any Mortgaged Property; (iv) any notice from a
Borrower, or any knowledge otherwise obtained, regarding any
litigation involving such Borrower or any related Mortgaged
Property which the Servicer reasonably believes is likely to have
an adverse effect on the Mortgaged Property or the ability of
such Borrower to pay the amounts due under the related Mortgage
Loan; (v) any notice received from a Borrower, Manager or tenant
of a Mortgaged Property, or any knowledge otherwise obtained,
regarding the material default of such tenant under the terms of
its lease or early termination by either the tenant or the
Borrower of such lease, the bankruptcy of such tenant or its
direct or indirect parent, or the loss of a license or permit
relating to the Mortgaged Property; (vi) any amendment,
modification or waiver of a material provision of a Mortgage Loan
of which the Servicer has knowledge; (vii) any event of which the
Servicer has actual knowledge (other than an event covered by
clause (i)) which would result in the release of any part of the
Mortgaged Property; provided, however, that in the event that the
Servicer after consulting with the Depositor and the Special
Servicer determines in its good faith judgment that any of the
preceding items will not materially affect the interests of the
Certificateholders, the Servicer shall omit such item from the
reporting obligation described above.
The Special Servicer shall report to the Servicer any
of the foregoing events promptly upon the Special Servicer having
knowledge of such event. In addition, in connection with their
servicing of the Mortgage Loans, the Servicer and the Special
Servicer shall provide to each other and to the Trustee written
notice of any other known event with respect to a Mortgage Loan
or REO Property that the Servicer or the Special Servicer,
respectively, determines would have a material adverse effect on
such Mortgage Loan or REO Property, which notice shall include an
explanation as to the reason for such material adverse effect.
The Servicer shall promptly prepare, sign and, except
to the extent the Servicer receives contrary directions from the
Depositor or the Trustee, file with the Commission, and shall
mail to the Trustee, who will copy each Certificateholder upon
request (provided that each Certificateholder may only make one
request per month and will be required to pay any expenses
incurred by the Trustee in connection with the provision of such
information), each Rating Agency, the Depositor and the
Originator, a Current Report on Form 8-K under the Exchange Act
or other equivalent report attaching all quarterly and annual
financial statements of the Borrower with respect to the
Fairfield Inn Pool Loan and the 101 Hudson Street Loan provided
to the Servicer pursuant to the such Mortgage Loans.
(c) The Servicer shall collect on a monthly basis all
information available pursuant to the Mortgage Loans. Promptly
following the end of each calendar quarter and the end of
each calendar year, the Servicer shall prepare a Summary
Report based on information provided to the Servicer by the
Borrowers without modification, interpretation or analysis
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(except that the Servicer will use its best efforts to
isolate management fees and funded reserves from Borrower
reported expenses, if necessary). To the extent not inconsistent
with the rights of the related Borrower and/or Manager under the
Loan Documents or applicable law, the Servicer shall deliver a
copy of each Summary Report to each Rating Agency and the
Trustee. None of the Servicer, the Special Servicer and the
Trustee shall be responsible for the completeness or accuracy of
such information provided by the Borrowers (except that the
Servicer will use its best efforts to correct patent errors).
(d) The Servicer shall, in accordance with such
reasonable rules and procedures as it may adopt (which may
include the requirement that an agreement that provides that such
information shall be used solely for purposes of evaluating the
investment characteristics of the Certificates be executed to the
extent the Servicer deems such action to be necessary or
appropriate), also make available any additional information
relating to the Mortgage Loans, the Mortgaged Properties or the
Borrowers, for review by the Depositor, the Rating Agencies and
any other Persons to whom the Servicer believes such disclosure
is appropriate, in each case except to the extent doing so is
prohibited by applicable law or by any related Loan Documents
related to a Mortgage Loan.
(e) The Trustee shall deliver a copy of each Summary Report
and Annual Compliance Statement to each Rating Agency and, upon
request, to each Certificateholder and Beneficial Owner (provided
that each Certificateholder and Beneficial Owner may only make
one request per month and will be required to pay any expenses
incurred by the Trustee in connection with the provision of such
information). The Trustee shall also deliver a copy of each
Special Event Report to each Rating Agency, Certificateholder
and, if known, Beneficial Owner within one Business Day of
receipt. The Trustee shall deliver the foregoing information and
reports regardless of whether the Trust Fund is still filing
Exchange Act Reports. The Trustee shall also make available at
its offices primarily responsible for administration of the Trust
Fund, during normal business hours, or send to the requesting
party at the expense of each such requesting party (other than
the Rating Agencies) for review by the Depositor, the Rating
Agencies, any Certificateholder, any Person identified to the
Trustee by a Certificateholder as a prospective transferee of a
Certificate and any other Persons to whom the Trustee believes
such disclosure is appropriate, the following items: (i) this
Agreement, (ii) all Monthly Distribution Statements, (iii) all
Annual Compliance Reports, (iv) all Summary Reports and (v) all
Special Event Reports.
The Servicer and the Special Servicer shall make
available at its offices during normal business hours, or send to
the requesting party at the expense of each such requesting party
(other than the Rating Agencies) for review by the Depositor, the
Trustee, the Rating Agencies, any Certificateholder, any Person
identified to the Servicer or the Special Servicer, as
applicable, by a Certificateholder as a prospective transferee of
a Certificate and any other Persons to whom the Servicer or the
Special Servicer, as applicable, believes such disclosure to be
appropriate the following items: (i) all financial statements,
occupancy information, rent rolls, average daily room rates
and similar information received by the Servicer or the
Special Servicer, as applicable, from each Borrower,
(ii) the inspection reports prepared by or on behalf of the
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Servicer or the Special Servicer, as applicable, in
connection with the property inspections pursuant to Section
3.19, (iii) any and all modifications, waivers and amendments of
the terms of a Mortgage Loan entered into by the Servicer or the
Special Servicer, as applicable and (iv) any and all officer's
certificates and other evidence delivered to the Trustee and the
Depositor to support the Servicer's determination that any
Advance was, or if made would be, a Nonrecoverable Advance.
Copies of any and all of the foregoing items shall be available
from the Servicer or the Special Servicer, as applicable, or the
Trustee, as applicable, upon request.
(f) Notwithstanding the obligations of the Servicer
set forth in the preceding provisions of this Section 3.22, the
Servicer may withhold any information not yet included in a Form
8-K filed with the Commission or otherwise made publicly
available with respect to which the Trustee or the Servicer has
determined that such withholding is appropriate.
(g) Notwithstanding any provisions in this Agreement to the
contrary, the Trustee shall not be required to review the content
of any Exchange Act Report for compliance with applicable
securities laws or regulations, completeness, accuracy or
otherwise, and the Trustee shall have no liability with respect
to any Exchange Act Report filed with the Commission or delivered
to Certificateholders. None of the Servicer, the Special Servicer
and the Trustee shall be responsible for the accuracy or
completeness of any information supplied by a Borrower or a third
party for inclusion in any Form 8-K, and each of the Servicer,
the Special Servicer and the Trustee shall be indemnified and
held harmless by the Trust Fund against any loss, liability or
expense incurred in connection with any legal action relating to
any statement or omission or alleged statement or omission
therein (unless the Servicer, the Special Servicer or the Trustee
was the original source of such statement). None of the Trustee,
the Special Servicer and the Servicer shall have any
responsibility or liability with respect to any Exchange Act
Report filed by the Depositor, and each of the Servicer, the
Special Servicer and the Trustee shall be indemnified and held
harmless by the Trust Fund against any loss, liability or expense
incurred in connection with any legal action relating to any
statement or omission or alleged statement or omission therein.
SECTION 3.23. Lock-Box Accounts, Cash Collateral
Accounts, Escrow Accounts and Reserve
Accounts.
The Servicer shall administer each Lock-Box Account,
Cash Collateral Account, Escrow Account and Reserve Account in
accordance with the related Mortgage or Loan Agreement, Cash
Collateral Account Agreement or Lock-Box Agreement, if any.
SECTION 3.24. Property Advances.
(a) The Servicer (or, to the extent provided in
Section 3.24(b), the Trustee or the Fiscal Agent or, to the
extent specifically provided for in this Agreement, the Special
Servicer) shall make any Property Advances as and to the
extent otherwise required pursuant to the terms hereof.
For purposes of distributions to Certificateholders and
compensation to the Servicer, Special Servicer or Trustee,
Property Advances shall not be considered to increase the
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principal balance of any Mortgage Loan, notwithstanding that the
terms of such Mortgage Loan so provide.
(b) The Servicer shall notify the Trustee and the
Fiscal Agent, and the Special Servicer shall notify the Servicer,
the Trustee and the Fiscal Agent, in writing promptly upon, and
in any event within one Business Day after, becoming aware that
it will be unable to make any Property Advance required to be
made pursuant to the terms hereof, and in connection therewith,
shall set forth in such notice the amount of such Property
Advance, the Person to whom it will be paid, and the
circumstances and purpose of such Property Advance, and shall set
forth therein information and instructions for the payment of
such Property Advance, and, on the date specified in such notice
for the payment of such Property Advance, or, if the date for
payment has passed or if no such date is specified, then within
five Business Days following such notice, the Trustee (or with
respect to a Property Advance required to be made by the Special
Servicer, the Servicer, and if the Servicer so fails, the
Trustee), subject to the provisions of Section 3.24(c), shall pay
the amount of such Property Advance in accordance with such
information and instructions. If the Trustee fails to make any
Property Advance required to be made under this Section 3.24, the
Fiscal Agent, subject to the provisions of Section 3.24(c), shall
make such Advance on the same day the Trustee was required to
make such Property Advance and, thereby, the Trustee shall not be
in default under this Agreement.
(c) None of the Servicer, the Trustee, the Fiscal Agent
or the Special Servicer shall be obligated to make a Property
Advance as to any Mortgage Loan or REO Property if the Servicer,
the Trustee, the Fiscal Agent or the Special Servicer, as
applicable, determines that such Advance will be a Nonrecoverable
Advance. The Trustee and the Fiscal Agent (or the Servicer with
respect to a Property Advance required to be made by the Special
Servicer) shall be entitled to rely, conclusively, on any
determination by the Servicer or Special Servicer, as applicable,
that a Property Advance, if made, would be a Nonrecoverable
Advance. The Trustee and the Fiscal Agent, in determining whether
or not a Property Advance previously made is, or a proposed
Property Advance, if made, would be, a Nonrecoverable Advance
shall be subject to the standards applicable to the Servicer
hereunder.
(d) The Servicer, the Special Servicer, the Trustee
and/or the Fiscal Agent, as applicable, shall be entitled to the
reimbursement of Property Advances made by any of them to the
extent permitted pursuant to Section 3.06(ii) of this Agreement,
together with any related Advance Interest Amount in respect of
such Property Advances, and the Servicer and Special Servicer
hereby covenant and agree to promptly seek and effect the
reimbursement of such Property Advances from the related
Borrowers to the extent permitted by applicable law and the
related Loan Documents.
SECTION 3.25. Appointment of Special Servicer.
(a) The Servicer is hereby appointed as the initial
Special Servicer to service each Specially Serviced Mortgage
Loan.
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(b) Certificateholders representing greater than 50%
of the Percentage Interests of the most subordinate Class of
Certificates outstanding at any time shall be entitled to remove
the Special Servicer with or without cause and to appoint a
successor Special Servicer entitled to the same servicing
compensation as its predecessor, provided that each Rating Agency
confirms to the Trustee in writing that such appointment, in and
of itself, would not have caused a downgrade, qualification or
withdrawal of the then current ratings assigned to any Class of
Certificates. If there is a Special Servicer Event of Default,
the Special Servicer shall be removed and replaced pursuant to
Sections 7.01(c) and 7.02. The Special Servicer may be removed by
Certificateholders as aforesaid with respect to only one or more
Mortgage Loans and remain the Special Servicer with respect to
the remainder of the Mortgage Loans; provided that a successor
Special Servicer is appointed, in respect of the Mortgage Loans
that the Special Servicer would no longer be servicing, as
provided in this Section 3.25.
(c) The appointment of any such successor Special
Servicer, shall not relieve the Servicer, the Trustee or the
Fiscal Agent of their respective obligations to make Advances as
set forth herein; provided, however, the Servicer shall not be
liable for any actions or any inaction of such successor Special
Servicer. Any termination fee payable to the terminated Special
Servicer (and it is acknowledged that there is no such fee
payable in the event of a termination of the Servicer as Special
Servicer or in the event of a termination for breach of this
Agreement)
shall be paid by the Certificateholders so terminating the
Special Servicer and shall not in any event be an expense of the
Trust Fund.
(d) No termination of the Special Servicer and
appointment of a successor Special Servicer shall be effective
until the successor Special Servicer has assumed all of its
responsibilities, duties and liabilities hereunder pursuant to a
writing satisfactory to the Trustee and each Rating Agency, as
evidenced in writing and the Trustee has received written
confirmation from each Rating Agency that such appointment would
not cause any Rating Agency to qualify, withdraw or downgrade any
of its then current ratings on any Certificates.
(e) In the event that a Mortgage Loan secured by one
or more hotels becomes a Specially Serviced Mortgage Loan, the
Special Servicer shall hire a consultant which is experienced in
the operation of such facilities at the expense of the Trust Fund
as a Property Advance to advise the Special Servicer with respect
thereto.
(f) Any successor Special Servicer shall be deemed to make
the representations and warranties provided for in Section
2.04(a) mutatis mutandis as of the date of its succession.
SECTION 3.26. Transfer of Servicing Between Servicer
and Special Servicer; Record Keeping.
(a) Upon determining that any Mortgage Loan has
become a Specially Serviced Mortgage Loan, the Servicer shall
immediately give notice thereof to the Special Servicer and
shall use its best efforts to provide the Special Servicer
with all information, documents (but excluding the original
documents constituting the Mortgage File) and records
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(including records stored electronically on computer tapes,
magnetic discs and the like) relating to the Mortgage Loan and
reasonably requested by the Special Servicer to enable it to
assume its duties hereunder with respect thereto without acting
through a sub-servicer. The Servicer shall use its best efforts
to comply with the preceding sentence within five Business Days
of the date such Mortgage Loan became a Specially Serviced
Mortgage Loan and in any event shall continue to act as Servicer
and administrator of such Mortgage Loan until the Special
Servicer has commenced the servicing of such Mortgage Loan, which
shall occur upon the receipt by the Special Servicer of the
information, documents and records referred to in the preceding
sentence. With respect to each Mortgage Loan that becomes a
Specially Serviced Mortgage Loan, the Servicer shall instruct the
related Borrower to continue to remit all payments in respect of
such Mortgage Loan to the Servicer. If Pacific Mutual Life
Insurance Company ceases to be the Servicer or the Special
Servicer, respectively, the remaining party of the two and the
successor Servicer or Special Servicer, as applicable, may agree
that, notwithstanding the preceding sentence, with respect to
each Mortgage Loan that became a Specially Serviced Mortgage
Loan, the Servicer shall instruct the related Borrower to remit
all payments in respect of such Mortgage Loan to the Special
Servicer, provided that the payee in respect of such payments
shall remain the Servicer. The Special Servicer shall remit to
the Servicer any such payments received by it pursuant to the
preceding sentence within one Business Day of receipt. The
Servicer shall forward any notices it would otherwise send to the
Borrower of a Specially Serviced Mortgage Loan to the Special
Servicer who shall send such notice to the related Borrower.
Upon determining that no event has occurred and is
continuing with respect to a Mortgage Loan that causes such
Mortgage Loan to be a Specially Serviced Mortgage Loan, the
Special Servicer shall immediately give notice thereof to the
Servicer and, upon giving such notice, such Mortgage Loan shall
cease to be a Specially Serviced Mortgage Loan in accordance with
the first proviso of the definition of Specially Serviced
Mortgage Loans, the Special Servicer's obligation to service such
Mortgage Loan shall terminate and the obligations of the Servicer
to service and administer such Mortgage Loan as a Mortgage Loan
that is not a Specially Serviced Mortgage Loan shall resume. In
addition, if the related Borrower has been instructed, pursuant
to the penultimate sentence of the preceding paragraph, to make
payments to the Special Servicer, upon such determination, the
Special Servicer shall instruct the related Borrower to remit all
payments in respect of such Specially Serviced Mortgage Loan
directly to the Servicer.
(b) In servicing any Specially Serviced Mortgage Loan,
the Special Servicer shall provide to the Trustee originals of
documents included within the definition of "Mortgage File" for
inclusion in the related Mortgage File (to the extent such
documents are in the possession of the Special Servicer) and
copies of any additional related Mortgage Loan information,
including correspondence with the related Borrower, and the
Special Servicer shall promptly provide copies of all of the
foregoing to the Servicer as well as copies of any analysis or
internal review prepared by or for the benefit of the Special
Servicer.
(c) Not later than the Business Day preceding each
date on which the Servicer is required to furnish a report under
Section 3.13(a) to the Trustee, the Special Servicer shall
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deliver to the Servicer, with a copy to the Trustee a written
statement describing, on a Mortgage Loan by Mortgage Loan basis,
(i) the amount of all payments on account of interest received on
each Specially Serviced Mortgage Loan, the amount of all payments
on account of principal, including Principal Prepayments, on each
Specially Serviced Mortgage Loan, the amount of Net Insurance
Proceeds and Net Liquidation Proceeds received with respect to
each Specially Serviced Mortgage Loan, and the amount of net
income or net loss, as determined from management of a trade or
business on, the furnishing or rendering of a non-customary
service to the tenants of, or the receipt of any rental income
that does not constitute Rents from Real Property with respect to
the REO Property relating to each applicable Specially Serviced
Mortgage Loan, in each case in accordance with Section 3.17 and
(ii) such additional information relating to the Specially
Serviced Mortgage Loans as the Servicer or Trustee reasonably
requests to enable it to perform its duties under this Agreement.
(d) Notwithstanding the provisions of the preceding
subsection (c), the Servicer shall maintain ongoing payment
records with respect to each of the Specially Serviced Mortgage
Loans and shall provide the Special Servicer with any information
reasonably required by the Special Servicer to perform its duties
under this Agreement. The Special Servicer shall provide the
Servicer with any information reasonably required by the Servicer
to perform its duties under this Agreement.
SECTION 3.27. Interest Reserve Account.
On each Servicer Remittance Date occurring in any
February and on any Servicer Remittance Date occurring in any
January which occurs in a year which is not a leap year, the
Servicer shall remit to the Trustee, in respect of each of the
101 Hudson Street Loan, M&H Retail Pool Loan, Design Center of
the Americas Loan and Insurance Company of the West Loan, for
deposit into the Interest Reserve Account, an amount equal to one
day's interest on the Stated Principal Balance of each such
Mortgage Loan as of the first day of the immediately preceding
Interest Accrual Period at the related Mortgage Pass-Through
Rate, to the extent a Monthly Payment or P&I Advance is made in
respect thereof (all amounts so deposited in any consecutive
January (if applicable) and February, "Withheld Amounts").
SECTION 3.28. Hudson Treasury Collateral Account.
Pursuant to Section 2.01, the Depositor shall transfer
to the Servicer on behalf of the Trust Fund on the Closing Date
its rights to an account (the "Hudson Treasury Collateral
Account") containing U.S. Treasury obligations, the distributions
in respect of which are to be used to make payments on behalf of
the Borrower in respect of the 101 Hudson Street Loan to the New
Jersey Urban Development Corporation (the "UDC"). The Hudson
Treasury Collateral Account shall constitute a part of the Trust
Fund but shall not constitute a part of the Trust REMICs or the
Grantor Trust. On February 1, 2005, February 20, 2005 and on the
twentieth day of each succeeding month to and including December
20, 2009 (each such date, a "UDC Debt Service Payment Date"), the
Servicer shall remit to the UDC the monthly installment of
interest and principal of $88,399.31 required to be paid under
the related promissory note (the "UDC Note"). On the business day
next succeeding the UDC Debt Service Payment Date in December
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of each of 2005, 2006, 2007, 2008 and 2009 or on the business day
after the payment of the UDC Note in full, if earlier, the
Servicer shall remit to the Borrower the balance, if any, of the
cash funds in the Hudson Treasury Collateral Account.
SECTION 3.29. Limitations on and Authorizations of the
Servicer and Special Servicer with Respect
to Specific Mortgage Loans.
(a) Notwithstanding anything contained elsewhere in
this Agreement to the contrary, the Servicer or Special Servicer,
as applicable, shall be subject to the following limitations or
authorizations, as applicable, with respect to the specific
Mortgage Loans identified below.
(i) To the extent not inconsistent with the Mortgage
Loans, the Servicer or Special Servicer, as applicable, shall if the
total amount of casualty or condemnation proceeds or awards exceeds 5%
of the current principal balance of a Mortgage Loan, require, to
the extent permitted by the Loan Documents, the Borrower to
obtain prior to the release of such funds (x) an independent
architect's certificate certifying (I) that the portion of the
restoration has been completed in accordance with plans and
specifications previously provided to the Servicer, or Special
Servicer, as applicable, (II) the estimated percentage of
restoration completed and the actual sum required to complete the
remaining restoration and (III) compliance of the restoration
with all legal requirements; (y) applicable lien waivers; and (z)
an endorsement to the title insurance policy insuring the
continued priority of the lien of the Mortgage.
(ii) With respect to the Fairfield Inn Pool Loan and
the 101 Hudson Street Loan, the Servicer shall seek to recover
from the Borrowers thereunder for amounts due in respect of the
Special Servicing Compensation and the establishment and
maintenance of the related Reserve Accounts, prior to assessing
the Trust Fund for such amounts.
(iii) With respect to each Mortgage Loan, to the
extent not inconsistent with the terms thereof, the Servicer
shall, in the absence of an event of default under such
Mortgage Loan, (and, in the case of the Insurance Company of the
West Loan, in the absence of a default under the related triple
net lease in effect on the Closing Date), remit to the Borrower
thereunder the excess, if any, of (A) any Liquidation Proceeds
received in connection with an event described under clause (1)
of the definition of Liquidation Proceeds over (B) the amount
required to restore the related Mortgaged Property.
(iv) With respect to each of the Design Center of the
Americas Loan and the G&L Medical Office II Pool Loan, the
Servicer shall not accept, and shall return to the related
Borrower, any amount received, during the period from the related
Anticipated Repayment Date to (A) in the case of the Design
Center of the Americas Loan, the third payment date under such
Mortgage Loan after such Anticipated Repayment Date and (B) in
the case of the G&L Medical Office II Pool Loan, the sixth
payment date under such Mortgage Loan after such Anticipated
Repayment Date, in respect of Excess Interest on such Mortgage
Loan.
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(v) With respect to the Fairfield Inn Pool Loan,
notwithstanding any other disclosure obligations contained in
this Agreement, the Servicer shall comply with the
confidentiality requirements set forth in Sections 13 and 14 of
the related Modification, Subordination and Non-Disturbance
Agreement and Sections 20.12 and 20.13 of the related Management
Agreement.
(vi) With respect to the Design Center of the
Americas Loan, the Servicer shall (A) require the related
Borrower at all times to carry hurricane (wind storm) coverage,
(B) prior to consenting to any amendment of the Borrower's
partnership agreement or the organizational documents of the
general partner of the Borrower, obtain confirmation in writing
from the Rating Agencies that such amendment will not result in a
withdrawal, downgrading or qualification of the then current
ratings of the Certificates and (C) notify the Rating Agencies if
it obtains knowledge that the parcel adjacent to the Mortgaged
Property owned by an affiliate of the Borrower is undergoing
development or construction.
(vii) With respect to the 101 Hudson Street
Loan, the Servicer shall not consent to any material
amendment of the leases in effect on the Closing Date
with Merrill Lynch, Pierce, Fenner & Smith Incorporated
or Lehman Brothers Holdings, Inc. unless it shall
have first obtained confirmation in writing from the Rating
Agencies that such amendment will not result in a withdrawal,
downgrading or qualification of the then current ratings of the
Certificates.
(viii) To the extent permitted by the terms of
any Mortgage Loan, the Servicer shall require that, prior to the
making of any proposed alteration in any related Mortgaged
Property of which the Servicer has knowledge, the cost of which
is expected to exceed 25% of the related Allocated Loan Amount,
the related Borrower shall post collateral with, or provide other
security to, the Servicer on behalf of the Trust Fund in the
amount of the estimated cost of such alteration.
(b) With respect to any Mortgage Loan which permits
the related Borrower, with the consent or grant of a waiver by
mortgagee, to incur additional indebtedness or to amend or modify
the related Borrower's organizational documents, then the
Servicer or the Special Servicer, as the case may be, may only
consent to either such action, or grant a waiver with respect
thereto, if the Servicer or the Special Servicer determines that
such consent or waiver is likely to result in a greater recovery
on a present value basis (discounted at the related Mortgage
Rate) than would not consenting to such action and the Servicer
or the Special Servicer first obtains written confirmation from
each Rating Agency that such consent or grant of a waiver would
not, in and of itself, result in a downgrade, qualification or
withdrawal of any of the then current ratings assigned to the
Certificates. Any such consent or waiver shall also satisfy the
criteria set forth in Section 3.09 (b), to the extent applicable.
(c) With respect to the Mortgage Loans that require
the related Borrower to pay Rating Agency monitoring or review
fees, the Servicer shall enforce the obligation of the related
Borrowers to pay Rating Agency monitoring or review fees and
shall remit such fees from the related Cash Collateral
Account for payment of such fees to the applicable Rating
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Agencies. The Servicer shall receive bills from the Rating
Agencies for monitoring, review and surveillance of the
Certificates and the Mortgage Loans on behalf of Nomura
Securities International, Inc. and shall promptly notify and send
such bills to Nomura Securities International, Inc., Attention:
Sheryl McAfee. Nomura Securities International, Inc. will notify
each Rating Agency to bill Nomura Securities International, Inc.
for such services and to send such bills to the Servicer. Nomura
Securities International, Inc. will pay such portion of the bill
not paid from funds provided by the applicable Borrowers (as
described in this section (c)) and the Servicer shall notify
Nomura Securities International, Inc. of the portion of the bill
that it has paid from funds collected from such Borrowers.
(d) Prior to taking any enforcement action with
respect to a Mortgage Loan secured by Mortgaged Properties
located in a "one-action" state, the Servicer or Special
Servicer, as applicable, shall consult with legal counsel, the
fees and expenses of which shall be an expense of the Trust Fund.
(e) With respect to all Mortgage Loans that provide that
the holder of the related Note may apply the monthly payment against
principal, interest and any other sums due in the order as the
holder shall determine, the Servicer shall apply such Monthly
Payment to interest (other than Excess Interest or Default
Interest) under the related Mortgage Loan prior to application to
principal or any other sums due.
(f) With respect to each Mortgage Loan, neither the
Servicer (nor the Special Servicer (including in its capacity as
a Certificateholder, if applicable), shall take any enforcement
action with respect to the payment of Excess Interest or
principal in excess of the principal component of the constant
Monthly Payment, other than requests for collection, until the
Maturity Date of the related Mortgage Loan.
(g) The Servicer shall not consent to a change of
franchise affiliation with respect to a Mortgaged Property unless
it obtains written confirmation from the Rating Agencies that
such consent would not, in and of itself, result in a downgrade,
qualification or withdrawal of the then current ratings assigned
to the Certificates.
(h) The obligations of the Servicer and Special
Servicer set forth in this Section 3.29 shall be subject to the
operative documents with respect to the related Mortgage Loan,
and the failure or inability of the related Borrower to comply
with the Servicer's or the Special Servicer's direction shall not
be deemed to be an Event of Default of the Servicer or the
Special Servicer hereunder.
(i) The Servicer shall be permitted, in its
discretion, to waive all or any accrued Excess Interest if, prior
to the related Maturity Date, the related Borrower has requested
the right to prepay the Mortgage Loan in full together with all
payments required by the Mortgage Loan in connection with such
prepayment except for all or a portion of accrued Excess
Interest, provided that the Servicer determines (taking into
account the value and revenues of the related Mortgaged
Property and the ability of the Borrower to pay the
Mortgage Loan (including such Excess Interest)) that (1) in
the absence of the waiver of such Excess Interest, there is a
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reasonable likelihood that the Mortgage Loan will not be
paid in full on the related Maturity Date and (2) the waiver of
the right to such accrued Excess Interest is reasonably likely to
produce a larger and not equivalent payment to Certificateholders
(other than holders of the Class V-2 Certificates) on a present
value basis than a refusal to waive the right to such Excess
Interest. The Servicer will have no liability to the Trust Fund,
the Certificateholders or any other person so long as such
determination is based on such criteria. In no event shall such
waiver of such Excess Interest be effective prior to the date of
actual prepayment in full (other than such waived Excess
Interest), and such waiver shall in no event be effective if such
prepayment is not made.
(j) [Intentionally left blank]
(k) Subject to Section 3.01 and Section 3.19(b), in
determining whether to extend the term of a Management Agreement
with a Manager that is an Affiliate of the related Borrower, the
Servicer shall take into account the preservation and maintenance
of the value of the related Mortgaged Property and any potential
increase in cash flow available to pay such Mortgage Loan which
would result from the replacement of the affiliated Manager with
a comparable third party property manager upon expiration of the
existing Management Agreement.
(l) With respect to the Mortgage Loans that (i)
require earthquake insurance, or (ii) (A) at the date of
origination were secured by Mortgaged Properties on which the
related Borrower maintained earthquake insurance and (B) have
provisions which enable the Servicer to continue to require the
related Borrower to maintain earthquake insurance, then,
consistent with Section 3.08, the Servicer shall require the
related Borrower to maintain such insurance in the amount, in the
case of clause (i), required by the Mortgage Loan and in the
amount, in the case of clause (ii), maintained at origination, in
each case, to the extent such amounts are available at
commercially reasonable rates.
(m) The Servicer shall send written notice to each
Borrower and the related Manager and clearing bank that, if
applicable, the Servicer and/or the Trustee has been appointed as
the "Designee" of the "Lender" (or equivalent terminology) under
any related Lock-Box Agreement.
(n) For any Specially Serviced Mortgage Loan and with
respect to which, under the terms of the related Loan Documents,
the mortgagee may, in its discretion, apply Insurance Proceeds,
condemnation awards or escrowed funds to the prepayment of such
loan prior to the expiration of the related Lock-out Period, the
Servicer or Special Servicer, as applicable, may only require
such a prepayment if the Servicer or Special Servicer, as
applicable, has determined in accordance with the Servicing
Standard that such prepayment is in the best interests of all
Certificateholders.
(o) If any Mortgage Loan provides that the "Lender"
with respect thereto is required to purchase U.S. government
obligations on behalf of the related Borrower in connection with
any defeasance of the related Note, the Servicer shall purchase
such obligations and effectuate such defeasance as provided
in Section 3.09(e). If the Mortgage Loan requires the
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lender or its designee to assume such defeased obligations,
the Originator shall establish a special purpose entity to assume
such obligations, the establishment of which will not, as
evidenced in a writing of the Rating Agencies delivered to the
Trustee, in and of itself, result in the downgrade, qualification
or withdrawals of the ratings then assigned to the Certificates.
SECTION 3.30. Residual Trigger Date.
The Servicer shall give prompt written notice to
Nomura Securities International, Inc. of each release of a
Mortgaged Property pursuant to defeasance with U.S. government
obligations pursuant to the terms of the related Mortgage Loan
and the percentage of the aggregate then outstanding principal
balance of the Mortgage Loans that is secured by U.S. government
obligations after giving effect to such release. Upon the
occurrence of the Residual Trigger Date, the Servicer shall give
prompt written notice thereof to the Trustee, the Depositor and
Nomura Securities International, Inc. Notice to Nomura Securities
International, Inc. shall be sent to:
Nomura Securities International, Inc.
Two World Financial Center
Building B, 21st Floor
New York, New York 10281
Attention: Sheryl McAfee and
Perry Gershon
SECTION 3.31. Modifications.
(a) During the term of a Mortgage Loan, the Special
Servicer, may, consistent with the Servicing Standard, agree to
modify a Mortgage Loan to reduce the amount of principal (but not
interest) payable monthly on such Mortgage Loan, provided that
(a) a material default in respect of payment on such Mortgage
Loan has occurred or, in the Special Servicer's reasonable and
good faith judgment, a default in respect of payment on such
Mortgage Loan is reasonably foreseeable, and such modification is
reasonably likely to produce a greater recovery to
Certificateholders, on a net present value basis, than would
liquidation; (b) the Special Servicer terminates the related
manager (unless the Special Servicer determines that retaining
such manager is conducive to maintaining the value of the related
Mortgaged Properties); and (c) the Special Servicer may only
agree to reductions of principal lasting a period of no more than
twelve consecutive months and, in the aggregate, to no more than
three reductions of twelve months or less each; provided,
however, Certificateholders representing greater than 66 2/3% of
all Voting Rights may direct the Special Servicer not to agree to
any such modification. The Special Servicer shall promptly
provide a copy of such proposed modification to the Servicer, the
Rating Agencies and the Trustee. The Trustee shall, within two
Business Days, notify, in writing, all of the Certificateholders
that have Voting Rights of such proposed modification. For
purposes of determining whether Certificateholders representing
66 2/3% of all Voting Rights have directed the Special Servicer
not to agree to such modification, each Certificateholder shall
have 15 days to respond to such notice, and any Certificateholder
that has not responded within such time period shall be deemed to
have consented to such modification.
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Additionally, the Special Servicer may, consistent with
the Servicing Standard, agree to any modification, waiver or
amendment of any term or forgive or defer interest on and
principal of, and/or add collateral for, any Mortgage Loan with
the consent of Certificateholders representing 100% of the
Percentage Interests of the most subordinate Class of
Certificates then outstanding (the "Directing Class"), subject,
however, to each of the following limitations, conditions and
restrictions: (a) a material default in respect of such Mortgage
Loan has occurred or, in the Special Servicer's reasonable and
good faith judgment, a default in respect of payment on such
Mortgage Loan is reasonably foreseeable, and such modification,
waiver, amendment or other action is reasonably likely to produce
a greater recovery to Certificateholders, on a net present value
basis, than would liquidation; (b) no reduction in the scheduled
monthly payment of interest on any Mortgage Loan as result of
such modification, waiver or amendment may result in a Class
Interest Shortfall to any Class other than the Directing Class,
determined as of the date of such modification, waiver or
amendment; (c) any reduction in the scheduled monthly payment of
principal and/or interest on any Mortgage Loan must require that
all cash flow on all related Mortgaged Properties in excess of
amounts required to operate and maintain such Mortgaged
Properties be applied to payments of principal and interest on
such Mortgage Loan; (d) the Special Servicer may only agree to
reductions of principal and/or interest lasting a period of no
more than twelve consecutive months and, in the aggregate, to no
more than three periods of twelve months or less each; (e) the
Special Servicer may not reduce any Prepayment Premium or
Lock-out Period; (f) the Special Servicer may not at any time
forgive principal of a Mortgage Loan to the extent that the
amount forgiven, together with all amounts of principal
previously forgiven pursuant to this paragraph would be in excess
of (i) the Certificate Balance of the Directing Class less the
sum of (ii) the aggregate amount of Delinquency Reduction Amounts
and Appraisal Reduction Amounts then outstanding and (iii) the
aggregate amount of Class Interest Shortfalls and Reduction
Interest Shortfalls then outstanding (other than with respect to
the Directing Class); and (g) the Special Servicer shall not
permit any Borrower to add any real property collateral unless
the Special Servicer has first determined in accordance with the
Servicing Standard, based upon an environmental assessment
prepared by an Independent Person who regularly conducts
environmental assessments, at the expense of the Borrower, that
such additional real property collateral is in compliance with
applicable environmental laws and regulations and that there are
no circumstances or conditions present with respect to such new
collateral relating to the use, management or disposal of any
Hazardous Materials for which investigation, testing, monitoring,
containment, clean-up or remediation would be required under any
then applicable environmental laws and/or regulations. If the
Certificateholders representing 100% of the Percentage Interests
of the second most subordinate Class of Certificates then
outstanding consent to such modification, waiver or amendment,
the Directing Class for purposes of the determinations made in
clauses (b) and (f) shall include the second most subordinate
Class of Certificates and the amount by which principal can be
reduced shall not be in excess of 80% of the aggregate principal
balance of both such Classes less the items specified in clause
(f)(ii) and (f)(iii). A modification pursuant to this paragraph
is not subject to the veto of Certificateholders set forth in the
preceding paragraph of this Section.
(b) Notwithstanding Section 3.31(a), the Servicer or
the Special Servicer, as applicable, shall be permitted to
modify, waive or amend any term of a Mortgage Loan that is not
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in default or as to which default is not reasonably foreseeable but
only if such modification, waiver or amendment (a) would not be
"significant" as such term is defined in Code Section 1001, or
Treasury Regulations Section 1.860G-2(b)(3), as evidenced by an
Opinion of Counsel, (b) would be in accordance with the Servicing
Standard and (c) would not adversely affect in any material
respect the interest of any Certificateholder not consenting
thereto. The consent thereto of the majority of Percentage
Interests of each Class of Certificates affected thereby or
written confirmation from each Rating Agency that such
modification, waiver or amendment will not result in a
qualification, withdrawal or downgrading of the then current
ratings assigned to the Certificates shall not be required but
shall be conclusive evidence that such modification, waiver or
amendment would not adversely affect in any material respect the
interest of any Certificateholder not consenting thereto.
(c) The Servicer or Special Servicer, as applicable,
shall provide copies of any modifications, waivers or amendments
pursuant to this Section 3.31 to each Rating Agency and to the
Depositor.
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ARTICLE IV
DISTRIBUTIONS TO CERTIFICATEHOLDERS
SECTION 4.01. Distributions.
(a) On each Distribution Date, to the extent of
Available Funds and Prepayment Premiums, amounts held in the
Lower-Tier Distribution Account shall be withdrawn and
distributed on the Lower-Tier REMIC Regular Interests as follows:
(i) The amounts and timing of principal and
interest payments on each Lower-Tier REMIC Regular
Interest will be identical to such amounts and timing
on the corresponding Related Certificates for such
Distribution Date, except that, solely for this
purpose, all calculations with respect to the Related
Certificates shall be made as though (i) the Class
A-1A, Class A-1B, Class A-2, Class A-3, Class A- 4,
Class A-5 and Class A-6 Certificate Pass-Through Rates
were equal to the Weighted Average Net Mortgage
Pass-Through Rate, (ii) the Class PS-1 and Class CS-1
Notional Balances were zero at all times, and (iii)
any Reduction Interest Shortfall allocated to, or any
restoration of amounts corresponding to such Reduction
Interest Shortfall distributed on, the Class PS-1
Certificates on such Distribution Date based on
notional reductions to the Certificate Balance of a
Related Certificate were allocated to or distributed
on, as the case may be, the Lower-Tier Regular
Interest that corresponds to such Related Certificate.
(ii) Any Prepayment Premium that is to be paid on
a Regular Certificate on such Distribution Date shall
be distributed pro rata to the Lower-Tier Regular
Interests in proportion to their Certificate Balances
outstanding as of such date.
(iii) Realized Losses shall be allocated to, and
shall reduce the Certificate Balances of, each Class
of Lower-Tier Regular Interests without distribution
on any Distribution Date, to the extent that the
Certificate Balance of such Class exceeds the
Certificate Balance of the corresponding Related
Certificates because of Realized Losses allocated to
such Related Certificates. Amounts recovered in
respect of any amounts previously written off as
Realized Losses will be distributed on the Related
Lower-Tier Regular Interests, to the extent that
amounts recovered in respect of any amounts previously
written off as Realized Losses are distributed on the
corresponding Related Certificates.
(b) [Intentionally left blank]
(c) [Intentionally left blank]
(d) On each Distribution Date, amounts distributed
on the Lower-Tier Regular Interests shall be deposited in the
Upper-Tier Distribution Account. On each Distribution Date,
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Holders of each Class of Certificates (other than the Class
R and Class LR Certificates) shall receive distributions from
amounts on deposit in the Upper-Tier Distribution Account in
respect of interest and principal, to the extent of Available
Funds, in the amounts and in the order of priority set forth
below:
(i) First, pro rata, in respect of interest, to the
Class A-1A, Class A-1B, Class PS-1 and Class
CS-1 Certificates, up to an amount equal to the
aggregate Class Interest Distribution Amounts
of such Classes;
(ii) Second, pro rata, to the Class A-1A, Class
A-1B, Class PS-1 and Class CS-1 Certificates,
in respect of interest, up to an amount equal
to the aggregate unpaid Class Interest
Shortfalls previously allocated to such
Classes;
(iii) Third, to the Class A-1A Certificates, in
reduction of the Certificate Balance thereof,
up to an amount equal to the Principal
Distribution Amount, until the Certificate
Balance thereof is reduced to zero;
(iv) Fourth, to the Class A-1B Certificates, in
reduction of the Certificate Balance thereof,
up to an amount equal to the Principal
Distribution Amount less the portion of the
Principal Distribution Amount distributed
pursuant to all prior clauses, until the
Certificate Balance thereof is reduced to zero;
(v) Fifth, to the Class A-2 Certificates, in respect
of interest, up to an amount equal to the aggregate
Class Interest Distribution Amount of such Class;
(vi) Sixth, pro rata, (A) to the Class
A-2 Certificates, in respect of interest,
up to an amount equal to the aggre-
gate unpaid Class Interest Shortfalls
previously allocated to such Class,
(B) to the Class PS-1 Certificates in
respect of the Reduction Interest
Distribution Amount attributable to
the notional reduction in the
Certificate Balance of the Class A-2
Certificates as described under
4.01(m), up to an amount equal to the
aggregate Reduction Interest Distri-
bution Amount so attributable and
(C) to the Class PS-1 Certificates,
up to an amount equal to the
aggregate unpaid Reduction Interest
Shortfalls previously allocated to
such Class;
(vii) Seventh, to the Class A-2 Certificates, in
reduction of the Certificate Balance thereof,
up to an amount equal to the Principal
Distribution Amount less the portion of the
Principal Distribution Amount distributed
pursuant to all prior clauses, until the
Certificate Balance thereof is reduced to zero;
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(viii) Eighth, to the Class A-2 Certificates, for the
unreimbursed amounts of Realized Losses, if
any, up to an amount equal to the Principal
Distribution Amount less the portion of
Principal Distribution Amount distributed
pursuant to all prior clauses, an amount equal
to the aggregate of such unreimbursed Realized
Losses previously allocated to such Class;
(ix) Ninth, to the Class A-3 Certificates, in respect
of interest, up to an amount equal to the aggregate
Class Interest Distribution Amount of such Class;
(x) Tenth, pro rata, (A) to the Class
A-3 Certificates, in respect of interest,
up to an amount equal to the ag-
gregate unpaid Class Interest Shortfalls
previously allocated to such Class,
(B) to the Class PS-1 Certificates in
respect of the Reduction Interest
Distribution Amount attributable to
the notional reduction in the
Certificate Balance of the Class A-3
Certificates as described under
4.01(m) up to an amount equal to the
aggregate Reduction Interest Distri-
bution Amount so attributable and
(C) to the Class PS-1 Certificates,
up to an amount equal to the
aggregate unpaid Reduction Interest
Shortfalls previously allocated to
such Class;
(xi) Eleventh, to the Class A-3 Certificates, in
reduction of the Certificate Balance thereof,
up to an amount equal to the Principal
Distribution Amount less the portion of the
Principal Distribution Amount distributed
pursuant to all prior clauses, until the
Certificate Balance thereof is reduced to zero;
(xii) Twelfth, to the Class A-3 Certificates, for the
unreimbursed amounts of Realized Losses, if
any, up to an amount equal to the Principal
Distribution Amount less the portion of the
Principal Distribution Amount distributed
pursuant to all prior clauses, an amount equal
to the aggregate of such unreimbursed Realized
Losses previously allocated to such Class;
(xiii) Thirteenth, to the Class A-4 Certificates, in
respect of interest, up to an amount equal to
the aggregate Class Interest Distribution Amount of
such Class;
(xiv) Fourteenth, pro rata, (A) to the Class A-4
Certificates, in respect of interest, up to an
amount equal to the aggregate unpaid Class
Interest Shortfalls previously allocated to
such Class, (B) to the Class PS-1 Certificates
in respect of the Reduction Interest
Distribution Amount attributable to the
notional reduction in the Certificate Balance
of the Class A-4 Certificates as described
under 4.01(m) up to an amount
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equal to the aggregate Reduction Interest
Distribution Amount so attributable and (C) to
the Class PS-1 Certificates, up to an amount
equal to the aggregate unpaid Reduction
Interest Shortfalls previously allocated to
such Class;
(xv) Fifteenth, to the Class A-4 Certificates, in
reduction of the Certificate Balance thereof,
up to an amount equal to the Principal
Distribution Amount less the portion of the
Principal Distribution Amount distributed
pursuant to all prior clauses, until the
Certificate Balance thereof is reduced to zero;
(xvi) Sixteenth, to the Class A-4 Certificates, for
the unreimbursed amounts of Realized Losses, if
any, up to an amount equal to the Principal
Distribution Amount less the portion of the
Principal Distribution Amount distributed
pursuant to all prior clauses, an amount equal
to the aggregate of such unreimbursed Realized
Losses previously allocated to such Class;
(xvii) Seventeenth, to the Class A-5 Certificates, in
respect of interest, up to an amount equal to the
aggregate Class Interest Distribution Amount of
such Class;
(xviii) Eighteenth, to the Class A-5 Certificates, in
respect of interest, up to an amount equal to
the aggregate unpaid Class Interest Shortfalls
previously allocated to such Class;
(xix) Nineteenth, to the Class A-5 Certificates, in
reduction of the Certificate Balance thereof,
up to an amount equal to the Principal
Distribution Amount less the portion of the
Principal Distribution Amount distributed
pursuant to all prior clauses, until the
Certificate Balance thereof is reduced to zero;
(xx) Twentieth, to the Class A-5 Certificates, for
the unreimbursed amounts of Realized Losses, if
any, up to an amount equal to the Principal
Distribution Amount less the portion of the
Principal Distribution Amount distributed
pursuant to all prior clauses, an amount equal
to the aggregate of such unreimbursed Realized
Losses previously allocated to such Class;
(xxi) Twenty-first, to the Class A-6 Certificates, in
respect of interest, up to an amount equal to the
aggregate Class Interest Distribution Amount of
such Class;
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(xxii) Twenty-second, to the Class A-6 Certificates,
in respect of interest, up to an amount equal
to the aggregate unpaid Class Interest
Shortfalls previously allocated to such Class;
(xxiii) Twenty-third, to the Class A-6 Certificates, in
reduction of the Certificate Balance thereof,
up to an amount equal to the Principal
Distribution Amount less the portion of the
Principal Distribution Amount distributed
pursuant to all prior clauses, until the
Certificate Balance thereof is reduced to zero;
(xxiv) Twenty-fourth, to the Class A-6 Certificates,
for the unreimbursed amounts of Realized
Losses, if any, up to an amount equal to the
Principal Distribution Amount less the portion
of the Principal Distribution Amount
distributed pursuant to all prior clauses, an
amount equal to the aggregate of such
unreimbursed Realized Losses previously
allocated to such Class;
(xxv) Twenty-fifth, pro rata, to the Class B-1 and
Class B-1H Certificates, in respect of
interest, up to an amount equal to the
aggregate Class Interest Distribution Amount of
such Classes;
(xxvi) Twenty-sixth, pro rata, to the Class B-1 and
Class B-1H Certificates, in respect of
interest, up to an amount equal to the
aggregate unpaid Class Interest Shortfalls
previously allocated to such Classes;
(xxvii) Twenty-seventh, pro rata, to the Class B-1 and
Class B-1H Certificates, in reduction of the
Certificate Balance thereof, up to an amount
equal to the Principal Distribution Amount less
the portion of the Principal Distribution
Amount distributed pursuant to all prior
clauses, until the Certificate Balance of each
such Class is reduced to zero; and
(xxviii) Twenty-eighth, pro rata, to the Class B-1 and
Class B-1H Certificates, for the unreimbursed
amounts of Realized Losses, if any, up to an
amount equal to the Principal Distribution
Amount less the portion of Principal
Distribution Amount distributed pursuant to all
prior clauses, an amount equal to the aggregate
of such unreimbursed Realized Losses previously
allocated to such Classes.
On each Distribution Date occurring on and after the
Cross-over Date, regardless of the allocation of principal payments
described in priorities Third and Fourth above, an amount equal to
the Principal Distribution Amount will be distributed, first, to
the Class A-1A and Class A-1B Certificates, pro rata, based on their
respective Certificate Balances, in reduction of their respective
Certificate Balances, until the Certificate Balance of each such
Class is reduced to zero, and, second, to the Class A-1A and
Class A-1B Certificates, for unreimbursed amounts of
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Realized Losses previously allocated to such Classes, pro
rata in accordance with the amount of such unreimbursed Realized
Losses so allocated.
All references to pro rata in the preceding clauses
with respect to interest and Class Interest Shortfalls shall mean
pro rata based on the amount distributable pursuant to such
clauses, with respect to distributions of principal other than in
reimbursement of Realized Losses
shall mean pro rata based on Certificate Balance, and with
respect to distributions in reimbursement of Realized Losses
shall mean pro rata based on the amount of unreimbursed Realized
Losses previously allocated to the applicable Classes.
(e) [Intentionally left blank]
(f) [Intentionally left blank]
(g) On each Distribution Date, following the
distributions pursuant to Section 4.01(d), Prepayment Premiums
will be distributed, separately from Available Funds for such
Distribution Date, in the following amounts and order of priority
to the extent remaining amounts of Prepayment Premium are
available therefor, with respect to the Certificates of each such
Class:
(i) First, to the Class CS-1 Certificates, an amount
equal to (A) the present value (discounted at a per annum rate
equal to the Discount Rate for the Class CS-1
Certificates plus the Spread Rate for the Class CS-1
Certificates) of the aggregate interest that would have been paid
in respect of the Class CS-1 Certificates from the Distribution
Date occurring in the following month until the Notional Balance
of the Class CS-1 Certificates would have been reduced to zero
had the related prepayment not occurred, minus (B) the present
value (discounted at a per annum rate equal to the Discount Rate
for the Class CS-1 Certificates plus the Spread Rate for the
Class CS-1 Certificates) of the aggregate interest that will be
paid in respect of the Class CS-1 Certificates from the
Distribution Date occurring in the following month until the
Notional Balance of the Class CS-1 Certificates is reduced to
zero following such prepayment (in each case, assuming all
scheduled payments are timely made and no further prepayments are
made except that all Mortgage Loans prepay on their respective
Anticipated Repayment Dates);
(ii) Second, to the Class PS-1 Certificates, an
amount equal to (A) the present value (discounted at a per annum
rate equal to the Discount Rate for the Class PS-1 Certificates
plus the Spread Rate for the Class PS-1 Certificates) of the
aggregate interest that would have been paid in respect of the
Class PS-1 Certificates from the Distribution Date occurring in
the following month until the Notional Balance of the Class PS-1
Certificates would have been reduced to zero had the related
prepayment not occurred, minus (B) the present value (discounted
at a per annum rate equal to the Discount Rate for the Class PS-1
Certificates plus the Spread Rate for the Class PS-1
Certificates) of the aggregate interest that will be paid in
respect of the Class PS-1 Certificates from the Distribution Date
occurring in the following month until the Notional Balance of
the Class PS-1 Certificates is reduced to zero following such
prepayment (in each case, assuming all scheduled payments are
timely made and no further
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prepayments are made except that all Mortgage Loans prepay on
their respective Anticipated Repayment Dates);
(iii) Third, to the Class A-1A Certificates, an amount
equal to (A) the present value (discounted at a per annum rate equal to
the Discount Rate for the Class A-1A Certificates plus the Spread
Rate for the Class A-1A Certificates) of the aggregate principal
and interest that would have been paid in respect of the Class
A-1A Certificates from the Distribution Date occurring in the
following month until the Certificate Balance of the Class A-1A
Certificates would have been reduced to zero had the related
prepayment not occurred, minus (B) the sum of (1) the amount of
such prepayment distributed in respect of the Class A-1A
Certificates and (2) the present value (discounted at a per annum
rate equal to the Discount Rate for the Class A-1A Certificates
plus the Spread Rate for the Class A-1A Certificates) of the
aggregate principal and interest that will be paid in respect of
the Class A-1A Certificates from the Distribution Date occurring
in the following month until the Certificate Balance of the Class
A-1A Certificates is reduced to zero following such prepayment
(in each case, assuming all scheduled payments are timely made
and no further prepayments are made except that all Mortgage
Loans prepay on their respective Anticipated Repayment Dates);
and
(iv) Fourth, to the Class A-1B Certificates, an
amount equal to (A) the present value (discounted at a per annum
rate equal to the Discount Rate for the Class A-1B Certificates
plus the Spread Rate for the Class A-1B Certificates) of the
aggregate principal and interest that would have been paid in
respect of the Class A-1B Certificates from the Distribution Date
occurring in the following month until the Certificate Balance of
the Class A-1B Certificates would have been reduced to zero had
the related prepayment not occurred, minus (B) the sum of (1) the
amount of such prepayment distributed in respect of the Class
A-1B Certificates and (2) the present value (discounted at a per
annum rate equal to the Discount Rate for the Class A-1B
Certificates plus the Spread Rate for the Class A-1B
Certificates) of the aggregate principal and interest that will
be paid in respect of the Class A-1B Certificates from the
Distribution Date occurring in the following month until the
Certificate Balance of the Class A-1B Certificates is reduced to
zero following such prepayment (in each case, assuming all
scheduled payments are timely made and no further prepayments are
made except that all Mortgage Loans prepay on their respective
Anticipated Repayment Dates).
In all clauses above, Prepayment Premiums will only be
distributed on a Distribution Date (x) if the respective
Certificate Balance or Notional Balance of the related Class is
greater than zero on the last Business Day of the Interest
Accrual Period ending immediately prior to such Distribution Date
and (y) if the amount computed pursuant to the related clause
above is greater than zero. Any Prepayment Premiums remaining
following the distributions described in the preceding clauses
(i) through (iv) shall be distributed to holders of the Class
B1-H Certificates regardless of whether the Certificate Balance
of such Class has been reduced to zero.
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Notwithstanding the foregoing, Prepayment Premiums
shall be distributed on any Distribution Date only to the extent
they are received in respect of the Mortgage Loans in the related
Collection Period.
(h) (i) On each Distribution Date, Net Default
Interest for such Distribution Date shall be distributed to the
Class V-1 Certificates.
(ii) On any applicable Distribution Date, Excess
Interest received during the preceding Collection Period shall be
distributed to the Class V-2 Certificates.
(i) The Certificate Balances of each Class of Regular
Certificates (other than the Class CS-1 and Class PS-1
Certificates) will be reduced without distribution on any
Distribution Date, as a write-off, to the extent of any Realized
Losses allocated to such Class with respect to such date. Any
such write-offs will be applied to the Classes of Regular
Certificates in the following order, in each case until the
Certificate Balance of such Class is reduced to zero: first, to
the Class B-1 and Class B-1H Certificates, pro rata, based on
their respective Certificate Balances; second to the Class A-6
Certificates; third, to the Class A-5 Certificates; fourth, to
the Class A-4 Certificates; fifth, to the Class A-3 Certificates;
sixth, to the Class A-2 Certificates; and seventh, pro rata, to
the Class A-1A and Class A-1B Certificates, based on their
respective Certificate Balances. Any amounts recovered in respect
of any amounts previously written off as Realized Losses will be
distributed to the Classes of Certificates described above in
reverse order of allocation of Realized Losses thereto.
Shortfalls in Available Funds resulting from
additional servicing compensation other than the Servicing Fee
(including interest on Advances not covered by Default Interest
and interest on unpaid servicing compensation and servicing
expenses to the extent expressly permitted by this Agreement),
extraordinary expenses of the Trust Fund (other than
indemnification expenses), a reduction of the interest rate of a
Mortgage Loan by a bankruptcy court pursuant to a plan of
reorganization or pursuant to any of its equitable powers or
pursuant to a modification in accordance with Section 3.31 or
other unanticipated or default-related expenses will be allocated
to, and reduce the respective Certificate Balances of, each Class
of Certificates in the same manner as Realized Losses. Prepayment
Interest Shortfalls will be allocated to each Class of
Certificates, pro rata, based upon the Class Interest
Distribution Amount (plus the aggregate Reduction Interest
Distribution Amount, in the case of the Class PS- 1 Certificates)
distributable to such Class of Certificates. Shortfalls in
Available Funds resulting from indemnification expenses pursuant
to Section 6.03(a) shall be allocated to each Class of
Certificates pro rata based upon the amount distributable to each
Class and shall be allocated, first, in respect of interest and,
second, in respect of principal.
(j) All amounts distributable, or reductions allocable
on account of Realized Losses, to a Class of Certificates
pursuant to this Section 4.01 on each Distribution Date shall be
allocated pro rata among the outstanding Certificates in each
such Class based on their respective Percentage Interests. Such
distributions shall be made on each Distribution Date other than
the Termination Date to each Certificateholder of record on the
related Record Date by check mailed by first class mail to the
address set forth therefor in the Certificate Register or,
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provided that such Certificateholder holds Certificates with an
aggregate initial Certificate Balance or initial Notional Balance
in excess of $5,000,000, and shall have provided the Paying Agent
with wire instructions in writing at least five Business Days
prior to the related Record Date, by wire transfer of immediately
available funds to the account of such Certificateholder at a
bank or other entity located in the United States and having
appropriate facilities therefor. The final distribution on each
Certificate shall be made in like manner, but only upon
presentment and surrender of such Certificate at the office of
the Trustee or its agent (which may be the Paying Agent or the
Certificate Registrar acting as such agent) maintained in the
Borough of Manhattan that is specified in the notice to
Certificateholders of such final distribution.
(k) Except as otherwise provided in Section 9.01 with
respect to an Anticipated Termination Date, the Trustee shall, no
later than the fifteenth day of the month in the month preceding
the month in which the final distribution with respect to any
Class of Certificates is expected to be made, mail to each Holder
of such Class of Certificates, on such date a notice to the
effect that:
(A) the Trustee reasonably expects based upon
information previously provided to it 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 Trustee
therein specified, and
(B) if such final distribution is made on such
Distribution Date, no interest shall accrue on
such Certificate, or on the Related Lower-Tier
Regular Interests from and after such
Distribution Date;
provided, however, that the Class V-1, Class V-2, Class R and
Class LR Certificates shall remain outstanding until there is no
other Class of Certificates or Lower-Tier Regular Interests
outstanding and the Class B-1H Certificates shall be deemed to be
outstanding so long as there are any Notes outstanding that
provide for payments of Prepayment Premiums in connection with
voluntary or involuntary prepayments.
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
for the benefit of the appropriate non-tendering Holder or
Holders. If any Certificates as to which notice has been given
pursuant to this Section 4.01(k) 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 to receive the final distribution
with respect thereto. If within one year after the second notice
not all of such Certificates shall have been surrendered for
cancellation, the Trustee may, directly or through an agent, take
appropriate steps to contact the remaining non-tendering
Certificateholders concerning surrender of their Certificates.
The costs and expenses of holding such funds in trust and of
contacting such Certificateholders shall be paid out of such
funds. If within two years after the second notice any such
Certificates shall not have been surrendered for cancellation, the
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Paying Agent shall pay to the Trustee all amounts
distributable to the Holders thereof, and the Trustee shall
thereafter hold such amounts for the benefit of such Holders
until the earlier of (i) its termination as Trustee hereunder and
the transfer of such amounts to a successor Trustee and (ii) the
termination of the Trust Fund and distribution of such amounts to
the Class R Certificateholders. No interest shall accrue or be
payable to any Certificateholder on any amount held in trust
hereunder or by the Trustee as a result of such
Certificateholder's failure to surrender its Certificate(s) for
final payment thereof in accordance with this Section 4.01(k).
Any such amounts transferred to the Trustee may be invested in
Permitted Investments and all income and gain realized from
investment of such funds shall be for the benefit of the Trustee.
In the event the Trustee is permitted or required to invest any
amounts in Permitted Investments under this
Agreement, whether in its capacity as Trustee or in the event of
its assumption of the duties of, or becoming the successor to,
the Servicer in accordance with the terms of this Agreement, it
shall invest such amounts in the following Permitted Investments
and priority, in each case only for so long as any such
investment shall continue to be a Permitted Investment: (1)
Associates Corp. of North America Demand Notes, (2) GECC Demand
Notes, (3) Dreyfus Treasury Prime Cash Management Plus and (4) if
none of (1)-(3) above are available, Permitted Investments under
clause (i) of the definition of Permitted Investments. The
Trustee shall indemnify the related Certificateholders against
any loss incurred in respect of any such Permitted Investment
immediately upon realization of such loss.
(l) Notwithstanding any provision in this Agreement to
the contrary, the aggregate amount distributable to each Class
pursuant to this Section 4.01 shall be reduced by the aggregate
amount paid to any Person pursuant to Section 6.03 or Section
8.05(b) and (d), such reduction to be allocated among such
Classes pro rata, based upon the respective amounts so
distributable without taking into account the provision of this
Section 4.01(l). Such reduction of amounts otherwise
distributable to a Class shall be allocated first, in respect of
interest and second, in respect of principal. For purposes of
determining Class Interest Shortfalls and Certificate Balances,
the amount of any such reduction so allocated to a Class shall be
deemed to have been distributed on such Class.
(m) On or after any Distribution Date on which the
Class A-4 Certificates are the most subordinate Class of
Certificates outstanding, the Certificate Balances of the Class
A-2, Class A-3 and Class A-4 Certificates will be notionally
reduced on any Distribution Date to the extent of any Delinquency
Reduction Amounts or Appraisal Reduction Amounts with respect to
such Distribution Date; provided that (i) if a Delinquency and an
Appraisal Reduction Event occur with respect to the same
Distribution Date and the same Mortgage Loan, the reduction will
equal the Appraisal Reduction Amount, (ii) following the
occurrence of an Appraisal Reduction Event with respect to any
Mortgage Loan, no further Delinquency Reduction Amounts will be
applied with respect to such Mortgage Loan and any Delinquency
Reduction Amounts previously applied will be reversed and (iii)
for any Distribution Date, the aggregate of the Appraisal
Reduction Amounts and Delinquency Reduction
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Amounts may not exceed the Certificate Balance (as adjusted
by any notional reductions) of the most subordinate Class of
Certificates outstanding among the Class A-2, Class A-3 and Class
A-4 Certificates. To the extent that the aggregate of the
Appraisal Reduction Amounts and Delinquency Reduction Amounts for
any Distribution Date do exceed such Certificate Balance, such
excess will be applied, subject to any reversal described below,
to notionally reduce the Certificate Balance of the next most
subordinate Class of Certificates on the next Distribution Date.
Any such reductions will be applied to the Class A-2, Class A-3
and Class A-4 Certificates in the following order of priority:
first, to the Class A-4 Certificates; second to the Class A-3
Certificates; and finally to the Class A-2 Certificates (provided
in each case that no Certificate Balance in respect of any such
Class may be notionally reduced below zero). Any notional
reduction of the Certificate Balance of the Class A-2, Class A-3
and Class A-4 Certificates as a result of any Delinquency or
Appraisal Reduction Event with respect to a Mortgage Loan will be
reversed to the extent there is a recovery of any or all of the
Delinquency Reduction Amounts or a Realized Loss. Additionally, a
reversal or additional reduction will occur to the extent that
the Servicer's estimate of the value of the related Mortgaged
Properties is less than or greater than the Appraisal Reduction
Amount as adjusted to take into account a subsequent Updated
Appraisal.
SECTION 4.02. Statements to Certificateholders; Available
Information; Information Furnished to Financial
Market Publisher.
(a) On each Distribution Date, the Trustee shall,
based on information provided by the Servicer or provided by the
Special Servicer to the Servicer (with respect to a Specially
Serviced Mortgage Loan or the servicing responsibilities of the
Special Servicer set forth herein) and subject to receipt
thereof, prepare and forward by mail to each Holder of a
Certificate, with copies to the Depositor, the Paying Agent, the
Servicer, the Special Servicer, the Rating Agencies and up to
three market reporting services designated by the Depositor, a
statement as to such distribution (a "Monthly Distribution
Statement") setting forth for each Class, as applicable:
(i) the Principal Distribution Amount and the amount
of Available Funds allocable to principal included
therein;
(ii) The Class Interest Distribution Amount
distributable on such Class and the amount of
Available Funds allocable thereto, together
with any Class Interest Shortfall allocable to
such Class;
(iii) The amount of any P&I Advances by the Servicer,
the Trustee or the Fiscal Agent included in the
amounts distributed to Certificateholders not
reimbursed since the previous Distribution
Date;
(iv) The Certificate Balance or Notional Balance, as
applicable, of each Class after giving effect
to the distribution of amounts in respect of
the Principal Distribution Amount on such
Distribution Date;
(v) Realized Losses (for such month and cumulative basis)
and their allocation to the Certificate Balance of
any Class of Certificates;
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(vi) The Stated Principal Balance of the Mortgage
Loans as of the first day of the Interest
Accrual Period commencing immediately prior to
such Distribution Date;
(vii) The number and aggregate principal balance of
Mortgage Loans (and the identity of each
related Borrower) (A) delinquent one month, (B)
delinquent two months, (C) delinquent three or
more months, (D) as to which foreclosure
proceedings have been commenced and (E) that
otherwise constitute Specially Serviced
Mortgage Loans, and, with
respect to each Specially Serviced Mortgage
Loan, the amount of Property Advances made
during the related Collection Period, the
amount of the P&I Advance made with respect to
such Distribution Date, the aggregate amount of
Property Advances theretofore made that remain
unreimbursed and the aggregate amount of P&I
Advances theretofore made that remain
unreimbursed;
(viii) With respect to any Mortgage Loan that became
an REO Property during the preceding calendar
month, the principal balance and appraised
value (based on an Updated Appraisal, if
required under Section 3.10(a)) of such
Mortgage Loan as of the date it became an REO
Mortgage Loan;
(ix) (A) For any REO Property sold during
the related Collection Period, the
date on which the Special Servicer
determined that a Final Recovery
Determination was made and the
amount of the proceeds of such sale
deposited into the Collection Ac-
count, (B) the aggregate amount of
other revenues collected by the
Special Servicer with respect to each
REO Property during the related
Collection Period and credited to the
Collection Account, in each case
identifying such REO Property by
name and (C) the appraised value
as determined by the most recent
Updated Appraisal (or annual letter
update thereof) of any REO
Property, if required under Section
3.10(a);
(x) The amount of the Servicing Fee, Trustee Fee
and Special Servicing Compensation paid with
respect to such Distribution Date, and the
amount of the additional servicing compensation
described in Section 3.12(a) that was received
during the related Collection Period;
(xi) (A) The amount of Prepayment Premiums, if any,
received during the related Collection Period,
(B) the amount of Default Interest received
during the related Collection Period and the
Net Default Interest for such Distribution Date
and (C) the amount of Excess Interest, if any,
received during the related Collection Period;
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(xii) the outstanding principal balance and Repurchase
Price of any Mortgage Loan purchased or repurchased
pursuant to Sections 2.03(d), 2.03(e), 3.18 or 9.01(c);
(xiii) the amount of Prepayment Interest Shortfalls and
Servicer Prepayment Interest Shortfalls with respect
to such Distribution Date; and
(xiv) the account balance contained in the respective
Reserve Accounts as of the related Due Date for
each Mortgage Loan.
In the case of information furnished pursuant to subclauses
(i), (ii), (iv) and (v) above, the amounts shall be expressed as
a dollar amount in the aggregate for all Certificates of each
applicable Class and for each Class of Certificates with a
denomination of $1,000 initial Certificate Balance or Notional
Balance.
Within a reasonable period of time after the end of
each calendar year, the Trustee shall furnish to each Person who
at any time during the calendar year was a Holder of a
Certificate (except for a Class R or Class LR Certificate) a
statement containing the information set forth in subclauses (i)
and (ii) above, aggregated for such calendar year or applicable
portion thereof during which such Person was a Certificateholder.
Such obligation of the Trustee shall be deemed to have been
satisfied to the extent that it provided substantially comparable
information pursuant to any requirements of the Code as from time
to time in force.
On each Distribution Date, the Trustee shall forward
to each Holder of a Class R or Class LR Certificate a copy of the
reports forwarded to the other Certificateholders on such
Distribution Date and a statement setting forth the amounts, if
any, actually distributed with respect to the Class R or Class LR
Certificates on such Distribution Date. Such obligation of the
Trustee shall be deemed to have been satisfied to the extent that
it provided substantially comparable information pursuant to any
requirements of the Code as from time to time in force.
Within a reasonable period of time after the end of
each calendar year, the Trustee shall furnish to each Person who
at any time during the calendar year was a Holder of a Class R or
Class LR Certificate a statement containing the information
provided pursuant to the previous paragraph aggregated for such
calendar year or applicable portion thereof during which such
Person was a Certificateholder. Such obligation of the Trustee
shall be deemed to have been satisfied to the extent that it
provided substantially comparable information pursuant to any
requirements of the Code as from time to time in force.
(b) On or within two Business Days following each
Distribution Date, the Trustee shall prepare and furnish to the
Financial Market Publisher and the Underwriter, using the format
and media mutually agreed upon by the Trustee, the Financial
Market Publisher and the Underwriter, the following information
regarding each Mortgage Loan and any other information reasonably
requested by the Underwriter and available to the Trustee:
(i) the Loan Number;
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(ii) each related Mortgage Rate; and
(iii) the principal balance as of such Distribution Date.
The Trustee shall only be obligated to deliver the statements,
reports and information contemplated by Section 4.02(a) and
4.02(b) to the extent it receives the necessary underlying
information from the Servicer or the Special Servicer and shall
not be liable for any failure to deliver any thereof on the
prescribed due dates, to the extent caused by failure to receive
timely such underlying information. Nothing herein shall obligate
the Trustee, the Servicer or the Special Servicer to violate any
applicable law prohibiting disclosure of information with respect
to
any Borrower and the failure of the Trustee, the Servicer or the
Special Servicer to disseminate information for such reason shall
not be a breach hereof.
SECTION 4.03. Compliance with Withholding Requirements.
Notwithstanding any other provision of this Agreement,
the Paying Agent shall comply with all federal withholding
requirements with respect to payments to Certificateholders of
interest or original issue discount that the Paying Agent
reasonably believes are applicable under the Code. The consent of
Certificateholders shall not be required for any such
withholding. The Paying Agent agrees that it will not withhold
with respect to payments of interest or original issue discount
in the case of a Certificateholder that is a non-U.S. Person that
has furnished or caused to be furnished (i) an effective Form W-8
or Form W-9 or an acceptable substitute form or a successor form
and who is not a "10-percent shareholder" within the meaning of
Code Section 871(h)(3)(B) or a "controlled foreign corporation"
described in Code Section 881(c)(3)(C) with respect to the Trust
Fund or the Depositor, or (ii) an effective Form 4224 or an
acceptable substitute form or a successor form. In the event the
Paying Agent or its agent withholds any amount from interest or
original issue discount payments or advances thereof to any
Certificateholder pursuant to federal withholding requirements,
the Paying Agent shall indicate the amount withheld to such
Certificateholder. Any amount so withheld shall be treated as
having been distributed to such Certificateholder for all
purposes of this Agreement.
SECTION 4.04. REMIC Compliance.
(a) The parties intend that each of the Upper-Tier
REMIC and the Lower-Tier REMIC shall constitute, and that the
affairs of each of the Upper-Tier REMIC and the Lower-Tier REMIC
shall be conducted so as to qualify it as, a "real estate
mortgage investment conduit" as defined in, and in accordance
with, the REMIC Provisions, and the provisions hereof shall be
interpreted consistently with this intention. In furtherance of
such intention, the Trustee shall, to the extent permitted by
applicable law, act as agent, and is hereby appointed to act as
agent, of each of the Upper-Tier REMIC and the Lower-Tier REMIC
and shall on behalf of each of the Upper-Tier REMIC and the
Lower-Tier REMIC: (i) prepare, sign and file, or cause to be
prepared and filed, all required Tax Returns for each of the
Upper-Tier REMIC and the Lower-Tier REMIC, using a calendar year
as the taxable year for each of the Upper-Tier REMIC and the
Lower-Tier REMIC when and as required by the REMIC Provisions and
other applicable federal, state or local income tax laws; (ii)
make an election, on behalf of each of the Upper-Tier REMIC
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and the Lower-Tier REMIC, to be treated as a REMIC on Form 1066 for
its first taxable year, in accordance with the REMIC Provisions;
(iii) prepare and forward, or cause to be prepared and forwarded,
to the Certificateholders and the Internal Revenue Service and
applicable state and local tax authorities all information
reports as and when required to be provided to them in accordance
with the REMIC Provisions of the Code and Section 4.07; (iv) if
the filing or distribution of any documents of an administrative
nature not addressed in clauses (i) through (iii) of this Section
4.05(a) is then required by the REMIC Provisions in order to
maintain the status of the Upper-Tier REMIC or the Lower-Tier
REMIC as a REMIC or is otherwise required by the
Code, prepare, sign and file or distribute, or cause to be
prepared and signed and filed or distributed, such documents with
or to such Persons when and as required by the REMIC Provisions
or the Code or comparable provisions of state and local law; (v)
within thirty days of the Closing Date, furnish or cause to be
furnished to the Internal Revenue Service, on Form 8811 or as
otherwise may be required by the Code, the name, title and
address of the Person that the holders of the Certificates may
contact for tax information relating thereto (and the Trustee
shall act as the representative of each of the Upper-Tier REMIC
and the Lower-Tier REMIC for this purpose), together with such
additional information as may be required by such Form, and shall
update such information at the time or times and in the manner
required by the Code (and the Depositor agrees within 10 Business
Days of the Closing Date to provide any information reasonably
requested by the Servicer or the Trustee and necessary to make
such filing); and (vi) maintain such records relating to each of
the Upper-Tier REMIC and the Lower-Tier REMIC as may be necessary
to prepare the foregoing returns, schedules, statements or
information, such records, for federal income tax purposes, to be
maintained on a calendar year and on an accrual basis. The Holder
of the largest Percentage Interest in the Class R or Class LR
Certificates shall be the tax matters person of the Upper-Tier
REMIC or the Lower-Tier REMIC, respectively, pursuant to Treasury
Regulations Section 1.860F-4(d). If more than one Holder should
hold an equal Percentage Interest in the Class R or Class LR
Certificates larger than that held by any other Holder, the first
such Holder to have acquired such Class R or Class LR
Certificates shall be such tax matters person. The Trustee shall
act as attorney-in-fact and agent for the tax matters person of
each of the Upper-Tier REMIC and Lower-Tier REMIC, and each
Holder of a Percentage Interest in the Class R or Class LR
Certificates, by acceptance hereof, is deemed to have consented
to the Trustee's appointment in such capacity and agrees to
execute any documents required to give effect thereto, and any
fees and expenses incurred by the Trustee in connection with any
audit or administrative or judicial proceeding shall be paid by
the Trust Fund. The Trustee shall not intentionally take any
action or intentionally omit to take any action if, in taking or
omitting to take such action, the Trustee knows that such action
or omission (as the case may be) would cause the termination of
the REMIC status of the Upper-Tier REMIC or the Lower-Tier REMIC
or the imposition of tax on the Upper-Tier REMIC or the
Lower-Tier REMIC (other than a tax on income expressly permitted
or contemplated to be received by the terms of this Agreement).
Notwithstanding any provision of this paragraph to the contrary,
the Trustee shall not be required to take any action that the
Trustee in good faith believes to be inconsistent with any other
provision of this Agreement, nor shall the Trustee be deemed in
violation of this paragraph if it takes any action expressly
required or authorized by any other provision of this Agreement,
and the Trustee shall have no responsibility or liability with
respect to any act or omission of the Depositor or the Servicer
which does not enable the Trustee to
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comply with any of clauses (i) through (vi) of the fifth
preceding sentence or which results in any action contemplated by
clauses (i) through (iii) of the next succeeding sentence. In
this regard the Trustee shall (i) exercise reasonable care not to
allow the occurrence of any "prohibited transactions" within the
meaning of Code Section 860F(a), unless the party seeking such
action shall have delivered to the Trustee an Opinion of Counsel
(at such party's expense) that such occurrence would not (A)
result in a taxable gain, (B) otherwise subject the Upper-Tier
REMIC or Lower-Tier REMIC to tax (other than a tax at the highest
marginal corporate tax rate on net income from foreclosure
property), or (C) cause either the Upper-Tier REMIC or Lower-Tier
REMIC to fail to qualify as a REMIC; and (ii) exercise reasonable
care not to allow the Trust Fund to receive income from the
performance of services or from assets not permitted under the
REMIC Provisions to be held by a REMIC (provided, however, that
the receipt of any income expressly permitted or contemplated by
the terms of this Agreement shall not be deemed to violate this
clause) and (iii) not permit the creation of any "interests,"
within the meaning of the REMIC Provisions, in the Upper-Tier
REMIC other than the Regular Certificates and the Class R
Certificates or in the Lower-Tier REMIC other than the Lower-Tier
Regular Interests and the Class LR Certificates. None of the
Servicer, the Special Servicer or the Depositor shall be
responsible or liable for any failure by the Trustee to comply
with the provisions of this Section 4.04. The Depositor, the
Servicer and the Special Servicer shall cooperate in a timely
manner with the Trustee in supplying any information within the
Depositor's, the Servicer's or the Special Servicer's control
(other than any confidential information) that is reasonably
necessary to enable the Trustee to perform its duties under this
Section 4.04.
(b) The following assumptions are to be used for
purposes of determining the anticipated payments of principal and
interest for calculating the original yield to maturity and
original issue discount with respect to the Regular Certificates:
(i) each Mortgage Loan will pay principal and interest in
accordance with its terms and scheduled payments will be timely
received on their Due Dates, provided that the Mortgage Loans in
the aggregate will prepay in accordance with the Prepayment
Assumption; (ii) none of the Servicer, the Depositor and the
Class LR Certificateholders will exercise the right described in
Section 9.01 of this Agreement to cause early termination of the
Trust Fund; and (iii) no Mortgage Loan is repurchased by the
Originator or the Depositor pursuant to Article II hereof.
SECTION 4.05. Imposition of Tax on the Trust Fund.
In the event that any tax, including interest,
penalties or assessments, additional amounts or additions to tax,
is imposed on the Upper-Tier REMIC or Lower-Tier REMIC, such tax
shall be charged against amounts otherwise distributable to the
Holders of the Certificates; provided, that any taxes imposed on
any net income from foreclosure property pursuant to Code Section
860G(d) or any similar tax imposed by a state or local
jurisdiction shall instead be treated as an expense of the
related REO Property in determining Net REO Proceeds with respect
to the REO Property (and until such taxes are paid, the Special
Servicer from time to time shall withdraw from the REO Account
and transfer to the Trustee amounts reasonably determined by the
Trustee to be necessary to pay such taxes, which the Trustee
shall maintain in a separate, non-interest-bearing account, and
the Trustee shall deposit in the Collection Account the excess
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determined by the Trustee from time to time of the amount in
such account over the amount necessary to pay such taxes) and
shall be paid therefrom; provided that any such tax imposed on
net income from foreclosure property that exceeds the amount in
any such reserve shall be retained from Available Funds as
provided in Section 3.06(viii) and the next sentence. Except as
provided in the preceding sentence, the Trustee is hereby
authorized to and shall retain or cause to be retained from the
Collection Account in determining the amount of Available Funds
sufficient funds to pay or provide for the payment of, and to
actually pay, such tax as is legally owed by the Upper-Tier REMIC
or Lower-Tier REMIC (but such authorization shall not prevent the
Trustee from contesting, at the expense of the Trust Fund, any
such tax in appropriate proceedings, and withholding payment of
such tax, if permitted by law, pending the outcome of such
proceedings). The Trustee is hereby authorized to and shall
segregate or cause to be segregated, into a separate non-interest
bearing account, (i) the net income from any "prohibited
transaction" under Code Section 860F(a) or (ii) the amount of any
contribution to the Upper-Tier REMIC or Lower-Tier REMIC after
the Startup Day that is subject to tax under Code Section 860G(d)
and use such income or amount, to the extent necessary, to pay
such tax (and return the balance thereof, if any, to the
Lower-Tier Distribution Account or the Upper-Tier Distribution
Account, as the case may be). To the extent that any such tax is
paid to the Internal Revenue Service, the Trustee shall retain an
equal amount from future amounts otherwise distributable to the
Holders of the Class R or the Class LR Certificates, as the case
may be, and shall distribute such retained amounts to the Holders
of Regular Certificates or to the Trustee in respect of the
Lower-Tier Regular Interests, as applicable, until they are fully
reimbursed and then to the Holders of the Class R Certificates or
the Class LR Certificates, as applicable. Neither the Servicer,
the Special Servicer nor the Trustee shall be responsible for any
taxes imposed on the Upper-Tier REMIC or Lower-Tier REMIC except
to the extent such tax is attributable to a breach of a
representation or warranty of the Servicer, the Special Servicer
or the Trustee or an act or omission of the Servicer, the Special
Servicer or the Trustee in contravention of this Agreement in
both cases, provided, further, that such breach, act or omission
could result in liability under Section 6.03, in the case of the
Servicer or Section 4.04 or 8.01, in the case of the Trustee.
Notwithstanding anything in this Agreement to the contrary, in
each such case, the Servicer or the Special Servicer shall not be
responsible for Trustee's breaches, acts or omissions, and the
Trustee shall not be responsible for the breaches, acts or
omissions of the Servicer or the Special Servicer.
SECTION 4.06. Remittances; P&I Advances.
(a) "Applicable Monthly Payment" shall mean, for any
Mortgage Loan with respect to any month, (A) if such Mortgage
Loan has been extended (other than pursuant to
Section 3.31) in accordance with the terms and conditions
otherwise set forth in this Agreement, the lesser of (1) the
Extended Monthly Payment and (2) the Monthly Payment on the
Mortgage Loan prior to such extensions, and (B) if such Mortgage
Loan is not described by the preceding clause (A) (including any
such Mortgage Loan as to which the related Mortgaged Property has
become an REO Property), the Monthly Payment; provided, however,
that for purposes of calculating the amount of any P&I Advance
required to be made by the Servicer, the Trustee or the Fiscal Agent,
notwithstanding the amount of such Applicable Monthly Payment, interest
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shall be calculated at the Net Mortgage Pass-Through Rate
plus the Trustee Fee Rate; and provided further that for purposes
of determining the amount of any P&I Advance, the Monthly Payment
shall be as reduced pursuant to any modification of a Mortgage
Loan pursuant to Section 3.31.
(b) On the Servicer Remittance Date immediately
preceding each Distribution Date, the Servicer shall:
(i) remit to the Trustee for deposit in the
Lower-Tier Distribution Account an amount equal
to the Prepayment Premiums received by the
Servicer in the Collection Period preceding
such Distribution Date;
(ii) remit to the Trustee for deposit in the
Lower-Tier Distribution Account an amount equal
to the Available Funds (other than the amounts
referred to in clauses (iii), (iv) and (v)
below);
(iii) make a P&I Advance, by deposit into the
Lower-Tier Distribution Account, in an amount
equal to the sum of the Applicable Monthly
Payments for each Mortgage Loan to the extent
such amounts were not received on such Mortgage
Loan as of the close of business on the
Servicer Remittance Date (and therefore are not
included in the remittance described in the
preceding clause (ii));
(iv) deposit from the portion of the aggregate
Servicing Fee retained in the Collection
Account pursuant to Section 3.06(iv) into the
Lower-Tier Distribution Account an amount equal
to the sum of any Servicer Prepayment Interest
Shortfalls with respect to such Distribution
Date; and
(v) if such Servicer Remittance Date occurs in
March, remit to the Trustee for deposit in the
Lower-Tier Distribution Account by withdrawal
from the Interest Reserve Account an amount
equal the amounts described in clause (iii) of
the definition of Available Funds.
(c) [RESERVED]
(d) Notwithstanding Section 4.06(b)(iii), the Servicer
shall (i) make only one full advance in respect of each Mortgage
Loan pursuant to such Section in respect of the most subordinate
Class of Certificates then outstanding and (ii) not make any P&I
Advance in respect of Reduction Interest Distribution Amounts and
Reduction Interest Shortfalls, and accordingly, the Servicer may
reduce the aggregate amount of P&I Advances to be deposited by
the Servicer on the related Servicer Remittance Date in respect
of such amounts the Servicer is not required to advance. For
purposes of clause (i) of the preceding sentence, the Servicer
shall reduce the amount of the P&I Advance it would otherwise be
required to make with respect to any Mortgage Loans that have had
more than one uncured Delinquency by the lesser of (a) the total
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amount that would be distributable to the most subordinate
outstanding Class in respect of all Mortgage Loans on such
Distribution Date if the Servicer were to make a full P&I Advance
and (b) the amount of the delinquent Monthly Payments on such
Mortgage Loans. In the event that there is more than one Mortgage
Loan that has had more than one uncured Delinquency as of any
Servicer Remittance Date and the amount determined pursuant to
clause (b) of the preceding sentence exceeds the amount
determined pursuant to clause (a) thereof, the P&I Advance that
the Servicer makes in respect of such delinquent Mortgage Loans
(i.e., the amount by which clause (b) exceeds clause (a)) will be
deemed to have been made in respect of such delinquent Monthly
Payment, pro rata in accordance with the amounts of delinquent
Monthly Payments. (The first P&I Advance made by the Servicer in
respect of a Mortgage Loan shall be deemed to be in respect of
the most subordinate Class for purposes of clause (i) of the
preceding sentence.) In addition, on any Servicer Remittance Date
on which the Servicer is not required to make a P&I
Advance for the benefit of the most subordinate Class as
described in the preceding sentence, the Servicer shall initially
make such P&I Advance and shall, immediately subsequent to the
making of the P&I Advance on such Servicer Remittance Date,
reimburse itself for such P&I Advance from amounts otherwise
distributable to such most subordinate Class on the related
Distribution Date (such amount of reimbursement, the "Subordinate
Class Advance Amount"). The Trustee shall provide to the Servicer
written statements one Business Day prior to the Servicer
Remittance Date listing (i) the aggregate Reduction Interest
Distribution Amounts and Reduction Interest Shortfalls for such
Distribution Date and (ii) the amounts otherwise distributable on
such date to the Holders of the most subordinate Class of
Certificates.
(e) The Servicer shall not be required or permitted to
make an advance for Excess Interest or Default Interest or in
respect of Reduction Interest Distribution Amounts and Reduction
Interest Shortfalls. The amount required to be advanced in
respect of Applicable Monthly Payments on Mortgage Loans that
have been subject to an Appraisal Reduction Event will equal the
product of (a) the amount required to be advanced by the Servicer
without giving effect to such Appraisal Reduction Amounts and (b)
a fraction, the numerator of which is the Stated Principal
Balance of the Mortgage Loan as of the first day of the Interest
Accrual Period commencing immediately prior to the related
Distribution Date less any Appraisal Reduction Amounts thereof
and the denominator of which is the Stated Principal Balance as
of such date.
(f) Any amount advanced by the Servicer pursuant to
Section 4.06(b)(iii) shall constitute a P&I Advance for all
purposes of this Agreement and the Servicer shall be entitled to
reimbursement (with interest at the Advance Rate) thereof to the
full extent as otherwise set forth in this Agreement.
(g) If as of 9:00 A.M., New York City time, on any
Distribution Date the Servicer shall not have made the P&I
Advance required to have been made on the related Servicer
Remittance Date pursuant to Section 4.06(b)(iii), the Trustee
shall immediately notify the Fiscal Agent by telephone promptly
confirmed in writing, and the Trustee shall no later than 11:00
a.m., New York City time, on such Business Day deposit into the
Lower-Tier Distribution Account in immediately available funds an
amount equal to the P&I Advances otherwise required to have been
made by the Servicer. If the Trustee fails to make any P&I Advance
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required to be made under this Section 4.06, the Fiscal
Agent shall make such P&I Advance not later than 1:00 p.m., New
York City time, on such Business Day and, thereby, the Trustee
shall not be in default under this Agreement.
(h) None of the Servicer, the Trustee or the Fiscal
Agent shall be obligated to make a P&I Advance as to any Monthly
Payment or Extended Monthly Payment on any date on which a P&I
Advance is otherwise required to be made by this Section 4.06 if
the Servicer, the Trustee or Fiscal Agent, as applicable,
determines that such advance will be a Nonrecoverable Advance.
The Servicer shall be required to provide notice to the Trustee
and the Fiscal Agent on or prior to the Servicer Remittance Date
of any such non-recoverability determination made on or prior to
such date. The Trustee and the Fiscal Agent shall be entitled to
rely, conclusively, on any determination by the Servicer that a
P&I Advance, if made, would be a Nonrecoverable Advance (and with
respect to a P&I Advance, the Trustee or the Fiscal Agent, as
applicable, shall rely on the Servicer's determination that the
Advance would be a Nonrecoverable Advance if the Trustee or
Fiscal Agent, as applicable, determines that it does not have
sufficient time to make such determination); provided, however,
that if the Servicer has failed to make a P&I Advance for reasons
other than a determination by the Servicer that such Advance
would be a Nonrecoverable Advance, the Trustee or Fiscal Agent,
as applicable, shall make such advance within the time periods
required by Section 4.06(g) unless the Trustee or the Fiscal
Agent, in good faith, makes a determination prior to the times
specified in Section 4.06(g) that such advance would be a
Nonrecoverable Advance. The Trustee and the Fiscal Agent, in
determining whether or not an Advance previously made is, or a
proposed Advance, if made, would be, a Nonrecoverable Advance
shall be subject to the standards applicable to the Servicer
hereunder.
(i) The Servicer, the Trustee or the Fiscal Agent, as
applicable, shall be entitled to the reimbursement of P&I
Advances it makes to the extent permitted pursuant to Section
3.06(ii) of this Agreement together with any related Advance
Interest Amount in respect of such P&I Advances to the extent
permitted pursuant to Section 3.06(iii) and the Servicer and
Special Servicer hereby covenant and agree to promptly seek and
effect the reimbursement of such Advances from the related
Borrowers to the extent permitted by applicable law and the
related Mortgage Loan.
SECTION 4.07. Grantor Trust Reporting.
The parties intend that the portions of the Trust Fund
consisting of (i) the Default Interest and the Default Interest
Distribution Account and (ii) the Excess Interest and the Excess
Interest Distribution Account shall constitute, and that the
affairs of the Trust Fund (exclusive of the Trust REMICs) shall
be conducted so as to qualify such portion as, a "grantor trust"
under the Code, and the provisions hereof shall be interpreted
consistently with this intention. In furtherance of such
intention, the Trustee shall furnish or cause to be furnished to
Certificateholders and shall file or cause to be filed with the
Internal Revenue Service together with Form 1041 or such other
form as may be applicable, (i) to the Holders of the Class V-1
Certificates, income with respect to their allocable share of
Default Interest and the amount of any interest on unreimbursed
Advances payable to the Servicer, the Trustee and the Fiscal Agent,
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as applicable, therefrom pursuant to Section 3.06(iii),
and (ii) to the Holders of the Class V-2 Certificates, income
with respect to their allocable share of Excess Interest at the
time or times and in the manner required by the Code.
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ARTICLE V
THE CERTIFICATES
SECTION 5.01. The Certificates.
The Certificates consist of the Class A-1A
Certificates, the Class A-1B Certificates, the Class PS-1
Certificates, the Class CS-1 Certificates, the Class A-2
Certificates, the Class A-3 Certificates, the Class A-4
Certificates, the Class A-5 Certificates, the Class A-6
Certificates, the Class B-1 Certificates, the Class B-1H
Certificates, the Class V-1 Certificates, the Class V-2
Certificates, the Class R Certificates and the Class LR
Certificates.
The Class A-1A, the Class A-1B, Class PS-1, Class
CS-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6,
Class B-1, Class B-1H, Class V-1, Class V-2, Class R and Class LR
Certificates will be substantially in the forms annexed hereto as
Exhibits A-1 through A-15, respectively. The Certificates of each
Class will be issuable in registered form only, in minimum
denominations of authorized initial Certificate Balance or
Notional Balance, as applicable, as described in the succeeding
table, and multiples of $1 in excess thereof (or such lesser
amount if the Certificate Balance or Notional Balance is not a
multiple of $1) except that, in the case of the Class PS-1
Certificates, one Individual Certificate with an initial Notional
Balance of $.79 may be issued. With respect to any Certificate or
any beneficial interest in a Certificate, the "Denomination"
thereof shall be (i) the amount (A) set forth on the face thereof
or (B) in the case of any Global Certificate, set forth on a
schedule attached thereto or, in the case of any beneficial
interest in a Global Certificate, the product of the Percentage
Interest represented by such beneficial interest and the amount
set forth on such schedule of the related Global Certificate,
(ii) expressed in terms of initial Certificate Balance or
Notional Balance, as applicable, and (iii) be in an authorized
denomination, as set forth below. With respect to the Class B-1
Certificates, on the Closing Date, the Trustee or the
Authenticating Agent shall execute and authenticate and the
Certificate Registrar shall deliver (i) a Rule 144A global Class
B-1 Certificate (the "Rule 144A Global Certificate") in
definitive, fully registered form without interest coupons, (ii)
a Regulation S global Class B-1 Certificate (the "Regulation S
Global Certificate") in definitive, fully registered form without
interest coupons or (iii) one or more, if any, Individual
Certificates, in each case substantially in the form of Exhibit
A-10 hereto. Each Certificate will share ratably in all rights of
the related Class. The Class B-1H Certificates shall be issuable
in a single Individual Certificate evidencing its aggregate
initial Certificate Balance. The Class V-1, Class V-2, Class R
and LR Certificates will each be issuable in one or more
Individual Certificates in minimum denominations of 5% Percentage
Interests and integral multiples of a 1% Percentage Interest in
excess thereof and together aggregating the entire 100%
Percentage Interest in each such Class.
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Aggregate
Denominations
of all Certificates
of Class (in Initial
Minimum Certificate Balance
Class Denomonation or Notional Balance)
----- ------------ --------------------
A-1A $ 50,000.00 $ 115,435,756
A-1B $ 50,000.00 $ 214,279,224
PS-1 $ 50,000.00* $ 499,568,151.79
CS-1 $ 50,000.00 $ 115,435,756
A-2 $ 50,000.00 $ 42,463,292
A-3 $ 50,000.00 $ 39,965,452
A-4 $ 50,000.00 $ 37,467,611
A-5 $ 50,000.00 $ 27,476,248
A-6 $ 50,000.00 $ 9,991,363
B-1 $ 50,000.00 $ 12,488,205
B-1H $ 1,000.79 $ 1,000.79
- ----------------
* One Individual Certificate with an initial Notional Balance
of $.79 may be issued.
The Global Certificates shall be issued as one or more
certificates registered in the name of a nominee designated by
the Depository, and Beneficial Owners shall hold interests in the
Global Certificates through the book-entry facilities of the
Depository in the minimum Denominations and aggregate
Denominations and Classes as set forth above.
The Global Certificates shall in all respects be
entitled to the same benefits under this Agreement as Individual
Certificates authenticated and delivered hereunder.
Except insofar as pertains to any Individual
Certificate, the Trust Fund, the Paying Agent and the Trustee may
for all purposes (including the making of payments due on the
Global Certificates and the giving of notice to Holders thereof)
deal with the Depository as the authorized representative of the
Beneficial Owners with respect to the Global Certificates for the
purposes of exercising the rights of Certificateholders
hereunder; provided, however, that, for purposes of providing
information pursuant to Section 3.22 or transmitting
communications pursuant to Section 5.05(a), to the extent that
the Depositor has provided the Trustee with the names of
Certificateholders (even if such Certificateholders hold their
Certificates through the Depository), the Trustee shall provide
such information to such Certificateholders directly. The rights
of Beneficial Owners with respect to Global Certificates shall be
limited to those established by law and agreements between such
Beneficial Owners and the Depository and Depository Participants.
Except in the limited circumstances described below, Beneficial
Owners of Public Global Certificates shall not be entitled to
physical certificates for the Public Global Certificates as to
which they are the Beneficial Owners. Requests and directions
from, and votes of, the Depository as Holder of the Global
Certificates shall not be deemed inconsistent if they are made
with respect to different Beneficial Owners. Subject to the restric-
tions on transfer set forth in Section 5.02 and Applicable Procedures,
a Beneficial Owner of a Private Global Certificate may request that
the Depositor, or an agent thereof, cause the Depository (or
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any Agent Member) to notify the Certificate Registrar and the Certi-
ficate Custodian in writing of a request for transfer or exchange of
such beneficial interest for an Individual Certificate or Certificates.
Upon receipt of such a request and payment by the related Beneficial
Owner of any attendant expenses, the Depositor shall cause the
issuance and delivery of such Individual Certificates. The
Certificate Registrar may establish a reasonable record date in
connection with solicitations of consents from or voting by
Certificateholders and give notice to the Depository of such
record date. Without the written consent of the Depositor and the
Certificate Registrar, no Global Certificate may be transferred
by the Depository except to a successor Depository that agrees to
hold the Global Certificates for the account of the Beneficial
Owners.
Any of the Certificates may be issued with appropriate
insertions, omissions, substitutions and variations, and may have
imprinted or otherwise reproduced thereon such legend or legends,
not inconsistent with the provisions of this Agreement, as may be
required to comply with any law or with rules or regulations
pursuant thereto, or with the rules of any securities market in
which the Certificates are admitted to trading, or to conform to
general usage.
The Global Certificates (i) shall be delivered by the
Certificate Registrar to the Depository or, pursuant to the
Depository's instructions on behalf of the Depository to, and
deposited with, the Certificate Custodian, and in either case
shall be registered in the name of Cede & Co. and (ii) shall bear
a legend substantially to the following effect:
"Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New
York corporation ("DTC"), to the Certificate Registrar
for registration of transfer, exchange or payment, and
any certificate issued is registered in the name of
Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as
the registered owner hereof, Cede & Co., has an
interest herein."
The Global Certificates may be deposited with such
other Depository as the Certificate Registrar may from time to
time designate, and shall bear such legend as may be appropriate.
If (i) the Depository advises the Trustee in writing
that the Depository is no longer willing, qualified or able
properly to discharge its responsibilities as Depository, and the
Trustee is unable to locate a qualified successor, (ii) the
Depositor or the Trustee, at its sole option, elects to terminate
the book-entry system through the Depository with respect to all
or any portion of any Class of Certificates or (iii) after the
occurrence of an Event of Default, Beneficial Owners owning not
less than a majority in Certificate Balance or Notional Balance,
as applicable, of the Global Certificate for any Class then
outstanding advise the Depository through Depository Participants
in writing that the continuation of a book-entry system through
the Depository is no longer in the best interest of the
Beneficial Owner or Owners of such Global Certificate, the
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Trustee shall notify the affected Beneficial Owners through
the Depository of the occurrence of such event and the
availability of Individual Certificates to such Beneficial Owner
or Owners requesting them. Upon surrender to the Trustee of
Global Certificates by the Depository, accompanied by
registration instructions from the Depository for registration of
transfer, the Trustee shall issue the Individual Certificates.
Neither the Trustee, the Fiscal Agent, the Certificate Registrar,
the Servicer, the Special Servicer nor the Depositor shall be
liable for any actions taken by the Depository or its nominee,
including, without limitation, any delay in delivery of such
instructions. Upon the issuance of Individual Certificates, the
Trustee, the Fiscal Agent, the Certificate Registrar, the
Servicer, the Special Servicer, and the Depositor shall recognize
the Holders of Individual Certificates as Certificateholders
hereunder.
If the Trustee, its agents or the Servicer or Special
Servicer has instituted or has been directed to institute any
judicial proceeding in a court to enforce the rights of the
Certificateholders under the Certificates, and the Trustee, the
Servicer or the Special Servicer has been advised by counsel that
in connection with such proceeding it is necessary or appropriate
for the Trustee, the Servicer or the Special Servicer to obtain
possession of the Certificates, the Trustee, the Servicer or the
Special Servicer may in its sole discretion determine that the
Certificates represented by the Global Certificates shall no
longer be represented by such Global Certificates. In such event,
the Trustee or the Authenticating Agent will execute and
authenticate and the Certificate Registrar will deliver, in
exchange for such Global Certificates, Individual Certificates
(and if the Trustee or the Certificate Custodian has in its
possession Individual Certificates previously executed, the
Authenticating Agent will authenticate and the Certificate
Registrar will deliver such Certificates) in a Denomination equal
to the aggregate Denomination of such Global Certificates.
If the Trust Fund ceases to be subject to Section 13
or 15(d) of the Exchange Act, the Trustee shall make available to
each Holder of a Class B-1, Class B-1H, Class V-1, Class V-2,
Class R or Class LR Certificate, upon request of such a Holder,
information substantially equivalent in scope to the information
currently filed by the Servicer with the Commission pursuant to
the Exchange Act, plus such additional information required to be
provided for securities qualifying for resales under Rule 144A
under the Act which information shall be provided on a timely
basis to the Trustee by the Servicer.
For so long as the Class B-1, Class B-1H, Class V-1,
Class V-2, Class R or Class LR Certificates remain outstanding,
neither the Depositor nor the Trustee nor the Certificate
Registrar shall take any action which would cause the Trust Fund
to fail to be subject to Section 15(d) of the Exchange Act.
Each Certificate may be printed or in typewritten or
similar form, and each Certificate shall, upon original issue, be
executed and authenticated by the Trustee or the Authenticating
Agent and delivered to the Depositor. All Certificates shall be
executed by manual or facsimile signature on behalf of the
Trustee or Authenticating Agent by an authorized officer or
signatory. Certificates bearing the signature of an individual
who was at any time the proper officer or signatory of the
Trustee or Authenticating Agent shall bind the Trustee or
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Authenticating Agent, notwithstanding that such individual
has ceased to hold such office or position prior to the delivery
of such Certificates or did not hold such office or position 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 in the form set forth in Exhibits A-1 through A-15
executed by the Authenticating Agent by manual signature, and
such certificate of authentication upon any Certificate shall be
conclusive evidence, and the only evidence, that such Certificate
has been duly authenticated and delivered hereunder. All
Certificates shall be dated the date of their authentication.
SECTION 5.02. Registration, Transfer and Exchange
of Certificates.
(a) The Trustee shall keep or cause to be kept at the
Corporate Trust Office books (the "Certificate Register") for the
registration, transfer and exchange of Certificates (the Trustee,
in such capacity, being the "Certificate Registrar"). The names
and addresses of all Certificateholders and the names and
addresses of the transferees of any Certificates shall be
registered in the Certificate Register; provided, however, in no
event shall the Certificate Registrar be required to maintain in
the Certificate Register the names of the individual participants
holding beneficial interests in the Trust Fund through the
Depository. The Person in whose name any Certificate is so
registered shall be deemed and treated as the sole owner and
Holder thereof for all purposes of this Agreement and the
Certificate Registrar, the Servicer, the Trustee, any Paying
Agent and any agent of any of them shall not be affected by any
notice or knowledge to the contrary. An Individual Certificate is
transferable or exchangeable only upon the surrender of such
Certificate to the Certificate Registrar at the Corporate Trust
Office together with an assignment and transfer (executed by the
Holder or his duly authorized attorney), subject to the
applicable requirements of this Section 5.02. Upon request of the
Trustee, the Certificate Registrar shall provide the Trustee with
the names, addresses and Percentage Interests of the Holders.
(b) Upon surrender for registration of transfer of any
Individual Certificate, subject to the applicable requirements of
this Section 5.02, the Trustee shall execute and the
Authenticating Agent shall duly authenticate in the name of the
designated transferee or transferees, one or more new
Certificates in Denominations of a like aggregate Denomination as
the Individual Certificate being surrendered. Such Certificates
shall be delivered by the Certificate Registrar in accordance
with Section 5.02(e). Each Certificate surrendered for
registration of transfer shall be canceled and subsequently
destroyed by the Certificate Registrar. Each new Certificate
issued pursuant to this Section 5.02 shall be registered in the
name of any Person as the transferring Holder may request,
subject to the applicable provisions of this Section 5.02.
(c) In addition to the applicable provisions of this
Section 5.02 and the rules of the Depository, the exchange,
transfer and registration of transfer of Individual Certificates
(other than the one Class PS-1 Certificate initially issued as an
Individual Certificate) or beneficial interests in the Private
Global Certificates shall be subject to the following
restrictions.
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(i) Transfers between Holders of Individual
Certificates. With respect to the transfer and regis-
tration of transfer of an Individual Certificate
representing an interest in the Class B-1, Class
B-1H, Class V-1, Class V-2, Class R or Class
LR Certificates to a transferee that takes delivery in
the form of an Individual Certificate:
(A) The Certificate Registrar shall register
the transfer of an Individual Certificate if the
requested transfer is being made by a transferee
who has provided the Certificate Registrar with
an Investment Representation Letter substantially
in the form of Exhibit D-1 hereto (an "Investment
Representation Letter"), to the effect that the
transfer is being made to a Qualified
Institutional Buyer in accordance with Rule 144A;
(B) The Certificate Registrar shall register
the transfer of an Individual Certificate
pursuant to Regulation S after the expiration of
the Restricted Period if (1) the transferor has
provided the Certificate Registrar with a
Regulation S Transfer Certificate substantially
in the form of Exhibit G hereto (a "Regulation S
Transfer Certificate"), and (2) the transferee
furnishes to the Certificate Registrar an
Investment Representation Letter; and
(C) The Certificate Registrar shall register
the transfer of an Individual Certificate if
prior to the transfer such transferee furnishes
to the Certificate Registrar (1) an Investment
Representation Letter to the effect that the
transfer is being made to an Institutional
Accredited Investor in accordance with an
applicable exemption under the Act, and (2) an
opinion of counsel acceptable to the Certificate
Registrar that such transfer is in compliance
with the Act;
and, in each case the Certificate Registrar shall
register the transfer of an Individual Certificate
only if prior to the transfer the transferee furnishes
to the Certificate Registrar a written undertaking by
the transferor to reimburse the Trust for any costs
incurred by it in connection with the proposed transfer.
In addition, the Certificate Registrar may, as a condition
of the registration of any such transfer, require the
transferor to furnish such other certificates, legal
opinions or other information (at the transferor's expense)
as the Certificate Registrar may reasonably require to
confirm that the proposed transfer is being made pursuant to
an exemption from, or in a transaction not subject to,
the registration requirements of the Act and other
applicable laws.
(ii) Transfers within the Private Global
Certificates. Notwithstanding any provision to the
contrary herein, so long as a Private Global
Certificate remains outstanding and is held by or on
behalf of the Depository, transfers within the Private
Global Certificates shall only be made in accordance
with this Section 5.02(c)(ii).
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(A) Rule 144A Global Certificate to Regulation
S Global Certificate During the Restricted Period.
If, during the Restricted Period, a
Beneficial Owner of an interest in a Rule 144A
Global Certificate wishes at any time to transfer
its beneficial interest in such Rule 144A Global
Certificate to a Person who wishes to take
delivery thereof in the form of a beneficial
interest in the related Regulation S Global
Certificate, such Beneficial Owner may, in
addition to complying with all applicable rules
and procedures of the Depository and CEDEL or
Euroclear applicable to transfers by their
respective participants (the "Applicable
Procedures"), transfer or cause the transfer of
such beneficial interest for an equivalent
beneficial interest in the Regulation S Global
Certificate only upon compliance with the
provisions of this Section 5.02(c)(ii)(A). Upon
receipt by the Certificate Registrar at its
Corporate Trust Office of (1) written
instructions given in accordance with the
Applicable Procedures from an Agent Member
directing the Certificate Registrar to credit or
cause to be credited to another specified Agent
Member's account a beneficial interest in the
Regulation S Global Certificate in an amount
equal to the Denomination of the beneficial
interest in the Rule 144A Global Certificate to
be transferred, (2) a written order given in
accordance with the Applicable Procedures
containing information regarding the account of
the Agent Member (and the Euroclear or CEDEL
account, as the case may be) to be credited with,
and the account of the Agent Member to be debited
for, such beneficial interest, (3) a certificate
in the form of Exhibit K hereto given by the
Beneficial Owner that is transferring such
interest and (4) a certificate in the form of
Exhibit N hereto given by the transferee, the
Certificate Registrar shall instruct the
Depository or the Certificate Custodian, as
applicable, to reduce the Denomination of the
Rule 144A Global Certificate by the Denomination
of the beneficial interest in the Rule 144A
Global Certificate to be so transferred and,
concurrently with such reduction, to increase the
Denomination of the Regulation S Global
Certificate by the Denomination of the beneficial
interest in the Rule 144A Global Certificate to
be so transferred, and to credit or cause to be
credited to the account of the Person specified
in such instructions (who shall be an Agent
Member acting for or on behalf of Euroclear or
CEDEL, or both, as the case may be) a beneficial
interest in the Regulation S Global Certificate
having a Denomination equal to the amount by
which the Denomination of the Rule 144A Global
Certificate was reduced upon such transfer.
(B) Rule 144A Global Certificate to
Regulation S Global Certificate After the
Restricted Period. If, after the Restricted
Period, a Beneficial Owner of an interest in a
Rule 144A Global Certificate wishes at any time
to transfer its beneficial interest in such Rule
144A Global Certificate to a Person who wishes
to take delivery thereof in the form of a
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beneficial interest in the Regulation S Global
Certificate, such holder may, in addition to complying
with all Applicable Procedures, transfer or cause the
transfer of such beneficial interest for an
equivalent beneficial interest in the Regulation
S Global Certificate only upon compliance with the
provisions of this Section 5.02(c)(ii)(B). Upon
receipt by the Certificate Registrar at its
Corporate Trust Office of (1) written
instructions given in accordance with the
Applicable Procedures from an Agent Member
directing the Certificate Registrar to credit or
cause to be credited to another specified Agent
Member's account a beneficial interest in the
Regulation S Global Certificate in an amount
equal to the Denomination of the beneficial
interest in the Rule 144A Global Certificate to
be transferred, (2) a written order given in
accordance with the Applicable Procedures
containing information regarding the account of
the Agent Member (and, in the case of a transfer
pursuant to and in accordance with Regulation S,
the Euroclear or CEDEL account, as the case may
be) to be credited with, and the account of the
Agent Member to be debited for, such beneficial
interest, and (3) a certificate in the form of
Exhibit L hereto given by the Beneficial Owner
that is transferring such interest, the
Certificate Registrar shall instruct the
Depository or the Certificate Custodian, as
applicable, to reduce the Denomination of the
Rule 144A Global Certificate by the aggregate
Denomination of the beneficial interest in the
Rule 144A Global Certificate to be so transferred
and, concurrently with such reduction, to
increase the Denomination of the Regulation S
Global Certificate by the aggregate Denomination
of the beneficial interest in the Rule 144A
Global Certificate to be so transferred, and to
credit or cause to be credited to the account of
the Person specified in such instructions (who
shall be an Agent Member acting for or on behalf
of Euroclear or CEDEL, or both, as the case may
be) a beneficial interest in the Regulation S
Global Certificate having a Denomination equal to
the amount by which the Denomination of the Rule
144A Global Certificate was reduced upon such
transfer.
(C) Regulation S Global Certificate to Rule
144A Global Certificate. If the Beneficial Owner
of an interest in a Regulation S Global
Certificate wishes at any time to transfer its
beneficial interest in such Regulation S Global
Certificate to a Person who wishes to take
delivery thereof in the form of a beneficial
interest in the Rule 144A Global Certificate,
such holder may, in addition to complying with
all Applicable Procedures, transfer or cause the
transfer of such beneficial interest for an
equivalent beneficial interest in the Rule 144A
Global Certificate only upon compliance with the
provisions of this Section 5.02(c)(ii)(C). Upon
receipt by the Certificate Registrar at its
Corporate Trust Office of (1) written
instructions given in accordance with the
Applicable Procedures from an Agent Member
directing the Certificate Registrar to credit or
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cause to be credited to another specified Agent
Member's account a beneficial interest in the
Rule 144A Global Certificate in an amount equal
to the Denomination of the beneficial interest in
the Regulation S Global Certificate to be
transferred, (2) a written order given in
accordance with the Applicable Procedures
containing information regarding the account of
the Agent Member to be credited with, and the
account of the Agent
Member (or, if such account is held for Euroclear
or CEDEL, the Euroclear or CEDEL account, as the
case may be) to be debited for, such beneficial
interest, and (3) with respect to a transfer of a
beneficial interest in the Regulation S Global
Certificate for a beneficial interest in the
related Rule 144A Global Certificate (i) during
the Restricted Period, a certificate in the form
of Exhibit M hereto given by the holder of such
beneficial interest, or (ii) after the Restricted
Period, an Investment Representation Letter from
the transferee to the effect that such transferee
is a Qualified Institutional Buyer, the
Certificate Registrar shall instruct the
Depository or the Certificate Custodian, as
applicable, to reduce the Denomination of the
Regulation S Global Certificate by the
Denomination of the beneficial interest in the
Regulation S Global Certificate to be
transferred, and, concurrently with such
reduction, to increase the Denomination of the
Rule 144A Global Certificate by the aggregate
Denomination of the beneficial interest in the
Regulation S Global Certificate to be so
transferred, and to credit or cause to be
credited to the account of the Person specified
in such instructions (who shall be an Agent
Member acting for or on behalf of Euroclear or
CEDEL, or both, as the case may be) a beneficial
interest in the Rule 144A Global Certificate
having a Denomination equal to the amount by
which the Denomination of the Regulation S Global
Certificate was reduced upon such transfer.
(D) Transfers Within Regulation S Global
Certificate During Restricted Period. If, during
the Restricted Period, the Beneficial Owner of an
interest in a Regulation S Global Certificate
wishes at any time to transfer its beneficial
interest in such certificate to a Person who
wishes to take delivery thereof in the form of
such Regulation S Global Certificate, such
Beneficial Owner may transfer or cause the
transfer of such beneficial interest for an
equivalent beneficial interest in such Regulation
S Global Certificate only upon compliance with
the provisions of this Section 5.02(c)(ii)(D) and
all Applicable Procedures. Upon receipt by the
Certificate Registrar at its Corporate Trust
Office of (1) written instructions given in
accordance with the Applicable Procedures from an
Agent Member directing the Certificate Registrar
to credit or cause to be credited to another
specified Agent Member's account a beneficial
interest in such Regulation S Global Certificate
in an amount equal to the Denomination of the
beneficial interest to be transferred, (2) a
written order given in accordance with
the Applicable Procedures containing
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information regarding the account of the Agent Member
to be credited with, and the account of the Agent
Member (or, if such account is held for Euroclear
or CEDEL, the Euroclear or CEDEL account, as the
case may be) to be debited for, such beneficial
interest and (3) a certificate in the form of
Exhibit N hereto given by the transferee, the
Certificate Registrar shall instruct the
Depository or the Certificate Custodian, as
applicable, to credit or cause to be credited to
the account of the Person specified in such
instructions (who shall be an Agent Member acting
for or on behalf of Euroclear or CEDEL, or both,
as the case may be) a beneficial interest in the
Regulation S Global Certificate having a
Denomination equal to the amount specified in
such instructions by which the account to be
debited was reduced upon such transfer.
(iii) Transfers from the Private Global
Certificates to Individual Certificates. Any and all
transfers from a Private Global Certificate to a
transferee wishing to take delivery in the form of an
Individual Certificate will require the transferee to
take delivery subject to the restrictions on the
transfer of such Individual Certificate described on
the face of such Certificate, and such transferee
agrees that it will transfer such Individual
Certificate only as provided therein and herein. No
such transfer shall be made and the Certificate
Registrar shall not register any such transfer unless
such transfer is made in accordance with this Section
5.02(c)(iii).
(A) Transfers of a beneficial interest in a
Private Global Certificate to an Institutional
Accredited Investor will require delivery in the
form of an Individual Certificate and the
Certificate Registrar shall register such
transfer only upon compliance with the provisions
of Section 5.02(c)(i)(C).
(B) Transfers of a beneficial interest in a
Private Global Certificate to a Qualified
Institutional Buyer or a Regulation S Investor
wishing to take delivery in the form of an
Individual Certificate will be registered by the
Certificate Registrar only upon compliance with
the provisions of Sections 5.02(c)(i)(A) and (B),
respectively.
(C) Notwithstanding the foregoing, no
transfer of a beneficial interest in a Regulation
S Global Certificate to an Individual Certificate
pursuant to subparagraph (B) above shall be made
prior to the expiration of the Restricted Period.
Upon acceptance for exchange or transfer of a
beneficial interest in a Private Global Certificate
for an Individual Certificate, as provided herein, the
Certificate Registrar shall endorse on the schedule
affixed to the related Private Global Certificate (or
on a continuation of such schedule affixed to such
Private Global Certificate and made a part thereof)
an appropriate notation evidencing the
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date of such exchange or transfer and a decrease in the
Denomination of such Private Global Certificate equal
to the Denomination of such Individual Certificate
issued in exchange therefor or upon transfer thereof.
Unless determined otherwise by the Certificate
Registrar in accordance with applicable law, an
Individual Certificate issued upon transfer of or
exchange for a beneficial interest in the Private
Global Certificate shall bear the Securities Legend.
(iv) Transfers of Individual Certificates to the Private
Global Certificates. If a Holder of an Individual Certificate
wishes at any time to transfer such Certificate to a
Person who wishes to take delivery thereof in the form
of a beneficial interest in the related Regulation S
Global Certificate or the related Rule 144A Global
Certificate, such transfer may be effected only in
accordance with the Applicable Procedures and this
Section 5.02(c)(iv). Upon receipt by the Certificate
Registrar at the Corporate Trust Office of (1) the
Individual Certificate to be transferred with an
assignment and transfer pursuant to Section 5.02(a),
(2) written instructions given in accordance with the
Applicable Procedures from an Agent Member directing
the Certificate Registrar to credit or cause to be
credited to another specified Agent Member's account a
beneficial interest in such Regulation S Global
Certificate or such Rule 144A Global Certificate, as
the case may be, in an amount equal to the
Denomination of the Individual Certificate to be so
transferred, (3) a written order given in accordance
with the Applicable Procedures containing information
regarding the account of the Agent Member (and, in the
case of any transfer pursuant to Regulation S, the
Euroclear or CEDEL account, as the case may be) to be
credited with such beneficial interest, and (4) (x) an
Investment Representation Letter from the transferee
and (if delivery is to be taken in the form of a
beneficial interest in the Regulation S Global
Certificate) a Regulation S Transfer Certificate from
the transferor or (y) an Investment Representation
Letter from the transferee to the effect that such
transferee is a Qualified Institutional Buyer (if
delivery is to be taken in the form of a beneficial
interest in the Rule 144A Global Certificate), the
Certificate Registrar shall cancel such Individual
Certificate, execute and deliver a new Individual
Certificate for the Denomination of the Individual
Certificate not so transferred, registered in the name
of the Holder, and the Certificate Registrar shall
instruct the Depository or the Certificate Custodian,
as applicable, to increase the Denomination of the
Regulation S Global Certificate or the Rule 144A
Global Certificate, as the case may be, by the
Denomination of the Individual Certificate to be so
transferred, and to credit or cause to be credited to
the account of the Person specified in such
instructions (who, in the case of any increase in the
Regulation S Global Certificate during the Restricted
Period, shall be an Agent Member acting for or on
behalf of Euroclear or CEDEL, or both, as the case may
be) a corresponding Denomination of the Rule 144A
Global Certificate or the Regulation S Global
Certificate, as the case may be.
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It is the intent of the foregoing that under no
circumstances may an Institutional Accredited Investor
that is not a Qualified Institutional Buyer take
delivery in the form of a beneficial interest in a
Private Global Certificate.
(v) All Transfers. An exchange of a beneficial
interest in a Private Global Certificate for an
Individual Certificate or Certificates, an exchange of
an Individual Certificate or Certificates for a
beneficial interest in the Private Global Certificate
and an exchange of an Individual Certificate or
Certificates for another Individual Certificate or
Certificates (in each case, whether or not such
exchange is
made in anticipation of subsequent transfer, and in
the case of the Private Global Certificates, so long
as the Private Global Certificates remain outstanding
and are held by or on behalf of the Depository), may
be made only in accordance with this Section 5.02 and
in accordance with the rules of the Depository and
Applicable Procedures.
(d) If Certificates are issued upon the transfer,
exchange or replacement of Certificates not bearing the
Securities Legend, the Certificates so issued shall not bear the
Securities Legend. If Certificates are issued upon the transfer,
exchange or replacement of Certificates bearing the Securities
Legend, or if a request is made to remove the Securities Legend
on a Certificate, the Certificates so issued shall bear the
Securities Legend, or the Securities Legend shall not be removed,
as the case may be, unless there is delivered to the Certificate
Registrar such satisfactory evidence, which may include an
opinion of counsel (at the expense of the party requesting the
removal of such legend) familiar with United States securities
laws, as may be reasonably required by the Certificate Registrar,
that neither the Securities Legend nor the restrictions on
transfers set forth therein are required to ensure that transfers
of any Certificate comply with the provisions of Rule 144A or
Rule 144 under the Act or that such Certificate is not a
"restricted security" within the meaning of Rule 144 under the
Act. Upon provision of such satisfactory evidence, the
Certificate Registrar shall execute and deliver a Certificate
that does not bear the Securities Legend.
(e) Subject to the restrictions on transfer and
exchange set forth in this Section 5.02, the Holder of any
Individual Certificate may transfer or exchange the same in whole
or in part (with a Denomination equal to any authorized
Denomination) by surrendering such Certificate at the Corporate
Trust Office or at the office of any transfer agent appointed as
provided under this Agreement, together with an instrument of
assignment or transfer (executed by the Holder or its duly
authorized attorney), in the case of transfer, and a written
request for exchange in the case of exchange. Following a proper
request for transfer or exchange, the Certificate Registrar
shall, within five Business Days of such request if made at such
Corporate Trust Office, or within ten Business Days if made at
the office of a transfer agent (other than the Certificate
Registrar), execute and deliver at the Corporate Trust Office or
at the office of such transfer agent, as the case may be, to the
transferee (in the case of transfer) or Holder (in the case of
exchange) or send by first class mail (at the risk of the
transferee in the case of transfer or Holder in the case of
exchange) to such address as the transferee or Holder, as
applicable, may request, an Individual Certificate or
Certificates, as the case may require, for a like aggregate
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Denomination and in such Denomination or Denominations as may be
requested. The presentation for transfer or exchange of any
Individual Certificate shall not be valid unless made at the
Corporate Trust Office or at the office of a transfer agent by
the registered Holder in person, or by a duly authorized
attorney-in-fact. The Certificate Registrar may decline to accept
any request for an exchange or registration of transfer of any
Certificate during the period of fifteen days preceding any
Distribution Date.
(f) An Individual Certificate (other than an
Individual Certificate issued in exchange for a beneficial
interest in a Public Global Certificate pursuant Section 5.01) or
a beneficial interest in a Private Global Certificate may only be
transferred to Eligible Investors, as
described herein. In the event that a Responsible Officer of the
Certificate Registrar becomes aware that such an Individual
Certificate or beneficial interest in a Private Global
Certificate is being held by or for the benefit of a Person who
is not an Eligible Investor, or that such holding is unlawful
under the laws of a relevant jurisdiction, then the Certificate
Registrar shall have the right to void such transfer, if
permitted under applicable law, or to require the investor to
sell such Individual Certificate or beneficial interest in a
Private Global Certificate to an Eligible Investor within
fourteen days after notice of such determination and each
Certificateholder by its acceptance of a Certificate authorizes
the Certificate Registrar to take such action.
(g) Subject to the provisions of this Section 5.02
regarding transfer and exchange, transfers of the Global
Certificates shall be limited to transfers of such Global
Certificates in whole, but not in part, to nominees of the
Depository or to a successor of the Depository or such
successor's nominee.
(h) No fee or service charge shall be imposed by the
Certificate Registrar for its services in respect of any
registration of transfer or exchange referred to in this Section
5.02 other than for transfers to Institutional Accredited
Investors, as provided herein. In connection with any transfer to
an Institutional Accredited Investor, the transferor shall
reimburse the Trust Fund for any costs (including the cost of the
Certificate Registrar's counsel's review of the documents and any
legal opinions, submitted by the transferor or transferee to the
Certificate Registrar as provided herein) incurred by the
Certificate Registrar in connection with such transfer. The
Certificate Registrar may require payment by each transferor of a
sum sufficient to cover any tax, expense or other governmental
charge payable in connection with any such transfer.
(i) The Certificate Registrar may as a condition of
the registration of any transfer of the Class B-1H, Class V-1,
Class V-2, Class R and Class LR Certificates require the
transferor to furnish other certifications, legal opinions or
other information (at the transferor's expense) as it may
reasonably require to confirm that the proposed transfer is being
made pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Act and other
applicable laws.
(j) Neither the Depositor, the Servicer, the Trustee nor
the Certificate Registrar is obligated to register or qualify the Class
B-1, Class B-1H, Class V-1, Class V-2, Class R or Class LR Certificates
under the Act or any other securities law or to take any action
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not otherwise required under this Agreement to permit the
transfer of such Certificates without registration or
qualification. Any such Certificateholder desiring to effect such
transfer shall, and does hereby agree to, indemnify the
Depositor, the Servicer, the Trustee and the Certificate
Registrar against any loss, liability or expense that may result
if the transfer is not so exempt or is not made in accordance
with such federal and state laws.
(k) No transfer of any Class A-2, Class A-3, Class
A-4, Class A-5, Class A-6, Class B-1, Class B-1H, Class V-1,
Class V-2, Class R or Class LR Certificate (each, a "Restricted
Certificate") shall be made to (i) an employee benefit plan or
other retirement arrangement, including an individual retirement
account or a Keogh plan, which is subject to the fiduciary
responsibility provisions of ERISA, or Section 4975 of the Code,
or any federal, state or local law ("Similar Law"), which is to a
material extent, similar to the foregoing provisions of ERISA or
the Code (collectively, a "Plan") or (ii) a collective investment
fund in which a Plan is invested, an insurance company that is
using the assets of any insurance company separate account or
general account in which the assets of any such Plan are invested
(or which are deemed pursuant to ERISA or any Similar Law to
include assets of Plans) to acquire any such Restricted
Certificate or any other Person acting on behalf of any Plan or
using the assets of any Plan to acquire any such Restricted
Certificate, other than an insurance company using the assets of
its general account under circumstances whereby such transfer to
such insurance company would not constitute or result in a
"prohibited transaction" within the meaning of Section 406 or 407
of ERISA, Section 4975 of the Code, or a materially similar
characterization under any Similar Law. Each prospective
transferee of a Restricted Certificate that takes the form of an
Individual Certificate shall either (1) deliver to the Depositor,
the Certificate Registrar and the Trustee, a transfer or
representation letter, substantially in the form of Exhibit D-2
hereto, stating that the prospective transferee is not a Person
referred to in (i) or (ii) above or (2) in the event the
transferee is such an entity specified in (i) or (ii) above,
except in the case of a Residual Certificate, which may not be
transferred unless the transferee represents it is not such an
entity, such entity shall provide to the Depositor, the Trustee
and the Certificate Registrar an opinion of counsel in form and
substance satisfactory to the Depositor, the Trustee and the
Certificate Registrar that the purchase or holding of the
Restricted Certificates by or on behalf of a Plan will not result
in the assets of the Trust Fund being deemed to be "plan assets"
and subject to the fiduciary responsibility provisions of ERISA
or the prohibited transaction provisions of ERISA and the Code or
Similar Law, will not constitute or result in a prohibited
transaction within the meaning of Section 406 or 407 of ERISA or
Section 4975 of the Code, or a materially similar
characterization under any Similar Law, and will not subject the
Servicer, the Special Servicer, the Depositor, the Trustee or the
Certificate Registrar to any obligation or liability (including
obligations or liabilities under ERISA, Section 4975 of the Code
or any Similar Law), which opinion of counsel shall not be an
expense of the Trustee, the Trust Fund, the Servicer, the
Certificate Registrar or the Depositor. Neither the Trustee, the
Servicer nor the Certificate Registrar shall register a Class R
or Class LR Certificate in any Person's name unless such Person
has provided the letter referred to in clause (1) of the
preceding sentence. The transferee of a beneficial interest in a
Global Certificate that is a Restricted Certificate shall be
deemed to represent that it is not a Plan or a Person acting on
behalf of any Plan or using the assets of any Plan to acquire such
interest other than an insurance company using the assets of its general
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account under circumstances whereby such transfer to
such insurance company would not constitute a "prohibited
transaction" within the meaning of Section 406 or 407 of ERISA,
Section 4975 of the Code, or a materially similar
characterization under any Similar Law. Any transfer of a
Restricted Certificate that would violate or result in a
prohibited transaction under ERISA or Section 4975 of the Code,
or a materially similar characterization under any Similar Law,
shall be deemed absolutely null and void ab initio.
(l) Each Person who has or acquires any Ownership
Interest shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following
provisions and the rights of each Person acquiring any Ownership
Interest are expressly subject to the following provisions:
(i) Each Person acquiring or holding any Ownership
Interest shall be a Permitted Transferee and
shall not acquire or hold such Ownership
Interest as agent (including a broker, nominee
or other middleman) on behalf of any Person
that is not a Permitted Transferee. Any such
Person shall promptly notify the Certificate
Registrar of any change or impending change in
its status (or the status of the beneficial
owner of such Ownership Interest) as a
Permitted Transferee. Any acquisition described
in the first sentence of this Section 5.02(l)
by a Person who is not a Permitted Transferee
or by a Person who is acting as an agent of a
Person who is not a Permitted Transferee shall
be void and of no effect, and the immediately
preceding owner who was a Permitted Transferee
shall be restored to registered and beneficial
ownership of the Ownership Interest as fully as
possible. Thirty (30) days after the Residual
Trigger Date, any Ownership Interest owned by
an Institutional Accredited Investor on such
date shall mandatorily be sold to Nomura
Securities International, Inc.; provided,
however, that such mandatory sale shall not
occur if such Institutional Accredited Investor
has previously provided to the Trustee and the
Certificate Registrar (i) a Residual Transfer
Opinion or (ii) evidence that such Ownership
Interest is held by a Permitted Transferee who
is a Qualified Institutional Buyer.
(ii) No Ownership Interest may be Trans-
ferred, and no such Transfer shall
be registered in the Certificate
Register, without the express written
consent of the Certificate Registrar,
and the Certificate Registrar shall
not recognize the Transfer, and such
proposed Transfer shall not be
effective, without such consent with
respect thereto. In connection with
any proposed Transfer of any Ownership
Interest, the Certificate
Registrar shall, as a condition to
such consent, (x) require delivery to it
in form and substance satisfactory to
it, and the proposed transferee
shall deliver to the Certificate Regis-
trar and to the proposed transferor
an affidavit in substantially the
form attached as Exhibit C-1 (a
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"Transferee Affidavit") of the pro-
posed transferee (A) that such
proposed transferee is a Permitted
Transferee and (B) stating that (i) the
proposed transferee historically has
paid its debts as they have come due
and intends to do so in the future,
(ii) the proposed transferee
understands that, as the holder of
an Ownership Interest, it may incur
liabilities in excess of cash flows
generated by the residual interest, (iii)
the proposed transferee intends to
pay taxes associated with holding the
Ownership Interest as they become
due, (iv) the proposed transferee
will not transfer the Ownership Inte-
rest to any Person that does not
provide a Transferee Affidavit or as
to which the proposed transferee
has actual knowledge that such Person
is not a Permitted Transferee or
is acting as an agent (including a
broker, nominee or other middleman)
for a Person that is not a Permitted
Transferee, and (v) the proposed
transferee expressly agrees to be
bound by and to abide by the
provisions of this Section 5.02(e) and (y)
other than in connection with the initial
issuance of the Class R and Class LR
Certificates, require a statement from the
proposed transferor substantially in the form
attached as Exhibit C-2 (the "Transferor
Letter"), that the proposed transferor has no
actual knowledge that the proposed transferee
is not a Permitted Transferee and has no actual
knowledge or reason to know that the proposed
transferee's statements in the preceding
clauses (x)(B)(i) or (iii) are false.
(iii) Notwithstanding the delivery of
a Transferee Affidavit by a proposed
transferee under clause (ii) above,
if a Responsible Officer of the
Certificate Registrar has actual
knowledge that the proposed transferee
is not a Permitted Transferee, no
Transfer to such proposed transferee
shall be effected and such proposed
Transfer shall not be registered on
the Certificate Register; provided,
however, that the Certificate
Registrar shall not be required to
conduct any independent investigation
to determine whether a proposed
transferee is a Permitted Transferee.
Upon notice to the Certificate Registrar that there
has occurred a Transfer to any Person that is a Disqualified
Organization or an agent thereof (including a broker, nominee, or
middleman) in contravention of the foregoing restrictions, and in
any event not later than 60 days after a request for information
from the transferor of such Ownership Interest, or such agent,
the Certificate Registrar and the Trustee agree to furnish to the
IRS and the transferor of such Ownership Interest or such agent
such information necessary to the application of Section 860E(e)
of the Code as may be required by the Code, including, but not limited
to, the present value of the total anticipated excess inclusions with
respect to such Class R or Class LR Certificate (or portion thereof)
for periods after such Transfer. At the election of the Certificate
Registrar and the Trustee, the Certificate Registrar and the Trustee
may charge a reasonable fee for computing and furnishing such
information to the transferor or to such agent referred to
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above; provided, however, that such Persons shall in no event
be excused from furnishing such information.
Within one (1) Business Day after notice from the
Servicer of the occurrence of the Residual Trigger Date, the
Trustee shall forward such notice to any Institutional Accredited
Investor who is the holder of an Ownership Interest on such date.
Thirty (30) days after the Residual Trigger Date, the Ownership
Interest held by an Institutional Accredited Investor shall be
mandatorily sold to Nomura Securities International, Inc.;
provided, however, the Trustee shall not effect such mandatory
sale of such Ownership Interest if such Institutional Accredited
Investor has delivered to the Trustee and Certificate Registrar
either (i) evidence that such Ownership Interest is held by a
Permitted Transferee who is a Qualified Institutional Buyer or
(ii) a Residual Transfer Opinion. The Trustee and the Certificate
Registrar shall take all steps necessary to effect and document
the mandatory sale of any Ownership Interest thirty (30) days
after the Residual Trigger Date pursuant to this Section 5.02(l).
For purposes of the REMIC Provisions, any mandatory sale of any
Ownership Interest pursuant to this Section 5.02(l) shall be
deemed to be a purchase and sale between Nomura Securities
International, Inc. and the Institutional Accredited Investor
that held the related Ownership Interest prior to such sale.
Upon request of an Institutional Accredited Investor
who is the holder of an Ownership Interest on the Residual
Trigger Date, the Depositor shall use its best reasonable efforts
to obtain a Residual Transfer Opinion, which opinion shall be at
the expense of the Person requesting such opinion.
SECTION 5.03. 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 Certificate
Registrar such security or indemnity as may be required by it to
save it, the Trustee and the Servicer harmless, then, in the
absence of actual knowledge by a Responsible Officer of the
Certificate Registrar that such Certificate has been acquired by
a bona fide purchaser, the Trustee or the Authenticating Agent
shall execute and authenticate and the Certificate Registrar
shall deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of the
same Class and of like tenor and Percentage Interest. Upon the
issuance of any new Certificate under this Section 5.03, 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 Certificate Registrar) connected therewith.
Any replacement Certificate issued pursuant to this Section 5.03
shall constitute complete and indefeasible evidence of ownership
of the corresponding interest in the Trust Fund, as if originally
issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
SECTION 5.04. Appointment of Paying Agent.
The Trustee may appoint a paying agent for the purpose
of making distributions to Certificateholders pursuant to Section
4.01. The Trustee shall cause such Paying Agent, if other
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than the Trustee or the Servicer, to execute and deliver to the
Servicer and the Trustee an instrument in which such Paying Agent
shall agree with the Servicer and the Trustee that such Paying
Agent will hold all sums held by it for the payment to
Certificateholders in trust for the benefit of the
Certificateholders entitled thereto until such sums have been
paid to the Certificateholders or disposed of as otherwise
provided herein. The initial Paying Agent shall be the Trustee.
Except for LaSalle National Bank, as the initial Paying Agent,
the Paying Agent shall at all times be an entity having a
long-term unsecured debt rating of at least "A" by Fitch, S&P and
DCR and "AA2" by Moody's, or shall be otherwise acceptable to
each Rating Agency.
SECTION 5.05. Access to Certificateholders' Names
and Addresses.
(a) If any Certificateholder (for purposes of this
Section 5.05, an "Applicant") applies in writing to the
Certificate Registrar, and such application states that the
Applicant desires to communicate with other Certificateholders,
the Certificate Registrar shall furnish or cause to be furnished
to such Applicant a list of the names and addresses of the
Certificateholders as of the most recent Record Date, at the
expense of the Applicant.
(b) Every Certificateholder, by receiving and holding
its Certificate, agrees with the Trustee that the Trustee and the
Certificate Registrar shall not be held accountable in any way by
reason of the disclosure of any information as to the names and
addresses of the Certificateholders hereunder, regardless of the
source from which such information was derived.
SECTION 5.06. Actions of Certificateholders.
(a) Any request, demand, authorization, direction,
notice, consent, waiver or other action provided by this
Agreement to be given or taken by Certificateholders may be
embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Certificateholders in
person or by agent duly appointed in writing; and except as
herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to
the Trustee and, when required, to the Depositor or the Servicer.
Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of
this Agreement and conclusive in favor of the Trustee, the
Depositor and the Servicer, if made in the manner provided in
this Section.
(b) The fact and date of the execution by any
Certificateholder of any such instrument or writing may be proved
in any reasonable manner which the Trustee deems sufficient.
(c) Any request, demand, authorization, direction,
notice, consent, waiver or other act by a Certificateholder shall
bind every Holder of every Certificate issued upon the
registration of transfer thereof or in exchange therefor or in
lieu thereof, in respect of anything done, or omitted to be done,
by the Trustee, the Depositor or the Servicer in reliance
thereon, whether or not notation of such action is made upon such
Certificate.
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(d) The Trustee or Certificate Registrar may require
such additional proof of any matter referred to in this Section
5.06 as it shall deem necessary.
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ARTICLE VI
THE DEPOSITOR, THE SERVICER AND THE SPECIAL SERVICER
SECTION 6.01. Liability of the Depositor, the Servicer
and the Special Servicer.
The Depositor, the Servicer and the Special Servicer
each shall be liable in accordance herewith only to the extent of
the obligations specifically imposed by this Agreement.
SECTION 6.02. Merger or Consolidation of the Servicer.
Subject to the following paragraph, the Servicer will
keep in full effect its existence, rights and good standing as a
corporation under the laws of the State of California and will
not jeopardize its ability to do business in each jurisdiction in
which the Mortgaged Properties are located or 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 Servicer may be merged or consolidated with or
into any Person, or transfer all or substantially all of its
assets to any Person, in which case any Person resulting from any
merger or consolidation to which it shall be a party, or any
Person succeeding to its business, shall be the successor of the
Servicer hereunder, and shall be deemed to have assumed all of
the liabilities of the Servicer hereunder, if each of the Rating
Agencies has confirmed in writing that such merger or
consolidation or transfer of assets and succession, in and of
itself, will not cause a downgrade, qualification or withdrawal
of the then current ratings assigned by such Rating Agency to any
Class of Certificates.
SECTION 6.03. Limitation on Liability of the Depositor,
the Servicer and Others.
Neither the Depositor, the Servicer, the Special Servicer
nor any of the directors, officers, employees or agents of the
Depositor or the Servicer or the Special Servicer shall be under
any liability to the Trust Fund or the Certificateholders for any
action taken, or for refraining from the taking of any action, in
good faith pursuant to this Agreement, or for errors in judgment;
provided, however, that this provision shall not protect the
Depositor or the Servicer or the Special Servicer or any such
Person against any breach of warranties or representations made
herein, or against any specific liability imposed on the Servicer
or the Special Servicer, or against any liability which would
otherwise be imposed by reason of willful misconduct, bad faith,
fraud or negligence in the performance of duties or by reason of
reckless disregard of obligations or duties hereunder. The
Depositor, the Servicer, the Special Servicer and any director,
officer, employee or agent of the Depositor, the Servicer or the
Special Servicer may rely in good faith on any document of any kind
which, prima facie, is properly executed and submitted by any appropriate
Person respecting any matters arising hereunder. The Depositor,
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the Servicer, the Special Servicer and any director,
officer, employee or agent of the Depositor or the Servicer or
the Special Servicer shall be indemnified and held harmless by
the Trust Fund against any loss, liability or expense incurred in
connection with any legal action relating to this Agreement or
the Certificates, other than any loss, liability or expense
(including legal fees and expenses) (i) incurred by reason of
willful misconduct, bad faith, fraud or negligence in the
performance of duties or by reason of reckless disregard of
obligations or duties hereunder, in each case by the Person being
indemnified; (ii) imposed by any taxing authority if such loss,
liability or expense is not specifically reimbursable pursuant to
the terms of this Agreement or (iii) with respect to any such
party, resulting from the breach by such party of any of its
representations or warranties contained herein. Neither the
Depositor nor the Servicer nor the Special Servicer shall be
under any obligation to appear in, prosecute or defend any legal
action unless such action is related to its respective duties
under this Agreement and in its opinion does not expose it to any
expense or liability; provided, however, that the Depositor or
the Servicer or the Special Servicer may in its discretion
undertake any action related to its obligations hereunder which
it may deem necessary or desirable with respect to this Agreement
and the rights and duties of the parties hereto and the interests
of the Certificateholders hereunder. In such event, the legal
expenses and costs of such action and any liability resulting
therefrom shall be expenses, costs and liabilities of the Trust
Fund, and the Depositor, the Servicer and the Special Servicer
shall be entitled to be reimbursed therefor from the Collection
Account as provided in Section 3.06 of this Agreement.
SECTION 6.04. Limitation on Resignation of the Servicer
or Special Servicer; Termination of the
Servicer or Special Servicer.
(a) The Servicer and the Special Servicer may assign
their respective rights and delegate their respective duties and
obligations under this Agreement in connection with the sale or
transfer of a substantial portion of their mortgage servicing or
asset management portfolio, provided that: (i) the purchaser or
transferee accepting such assignment and delegation (A) shall be
satisfactory to the Trustee and to the Depositor, (B) shall be an
established mortgage finance institution, bank or mortgage
servicing institution, organized and doing business under the
laws of any state of the United States or the District of
Columbia, authorized under such laws to perform the duties of a
servicer of mortgage loans or a Person resulting from a merger,
consolidation or succession that is permitted under Section 6.02,
and (C) shall execute and deliver to the Trustee an agreement, in
form and substance reasonably satisfactory to the Trustee, which
contains an assumption by such Person of the due and punctual
performance and observance of each covenant and condition to be
performed or observed by the Servicer or the Special Servicer, as
the case may be, under this Agreement from and after the date of
such agreement; (ii) as confirmed by a letter from each Rating
Agency delivered to the Trustee, each Rating Agency's rating or
ratings of the Regular Certificates in effect immediately prior
to such assignment, sale, transfer or delegation will not be
qualified, downgraded or withdrawn as a result of such assignment,
sale, transfer or delegation; (iii) the Servicer or the Special Servicer
shall not be released from its obligations under this Agreement that
arose prior to the effective date of such assignment and delegation
under this Section 6.04; and (iv) the rate at which the
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Servicing Fee or Special Servicing Compensation, as
applicable (or any component thereof) is calculated shall not
exceed the rate then in effect. Upon acceptance of such
assignment and delegation, the purchaser or transferee shall be
the successor Servicer or Special Servicer, as applicable,
hereunder.
(b) Except as provided in this Section 6.04, the
Servicer and the Special Servicer shall not resign from their
respective obligations and duties hereby imposed on them except
upon determination that such duties hereunder are no longer
permissible under applicable law. Any such determination
permitting the resignation of the Servicer or the Special
Servicer, as applicable, shall be evidenced by an Opinion of
Counsel (obtained at the resigning Servicer's or Special
Servicer's expense) to such effect delivered to the Trustee.
(c) Certificateholders representing in the aggregate
at least 50% of the Voting Rights of all Certificateholders may
remove the Servicer or the Special Servicer upon the occurrence
of a good faith dispute under this Agreement, upon written notice
to the Servicer, the Special Servicer, the Depositor and the
Trustee, provided that each Rating Agency has confirmed in
writing that such removal will not result in a downgrade,
qualification or withdrawal of the then current ratings by such
Rating Agency to any Class of Certificates. Without limiting the
generality of the succeeding paragraph, no such removal shall be
effective unless and until (i) the Servicer or the Special
Servicer has been paid any unpaid Servicing Fee or Special
Servicing Compensation, as applicable, unreimbursed Advances
(including Advance Interest Amounts thereon to which it is
entitled) and all other amounts to which the Servicer or the
Special Servicer is entitled hereunder to the extent such amounts
accrue prior to such effective date and (ii) with respect to a
resignation by the Servicer, the successor Servicer has deposited
into the Investment Accounts from which amounts were withdrawn to
reimburse the terminated Servicer, an amount equal to the amounts
so withdrawn, to the extent such amounts would not have been
permitted to be withdrawn except pursuant to this paragraph, in
which case the successor Servicer shall, immediately upon
deposit, have the same right of reimbursement or payment as the
terminated Servicer had immediately prior to its termination
without regard to the operation of this paragraph.
No resignation or removal of the Servicer or the
Special Servicer as contemplated by the preceding paragraphs
shall become effective until the Trustee or a successor Servicer
or Special Servicer shall have assumed the Servicer's or the
Special Servicer's responsibilities, duties, liabilities and
obligations hereunder. If no successor Servicer or Special
Servicer can be obtained to perform such obligations for the same
compensation to which the terminated Servicer or Special Servicer
would have been entitled, additional amounts payable to such
successor Servicer or Special Servicer shall be treated as
Realized Losses.
SECTION 6.05. Rights of the Depositor and the Trustee
in Respect of the Servicer and Special
Servicer.
The Servicer and the Special Servicer shall afford
the Depositor, the Trustee and the Rating Agencies, upon
reasonable notice, during normal business hours access to
all records maintained by it in respect of its rights and
obligations hereunder and access to its officers
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responsible for such obligations. Upon request, the Servicer
and the Special Servicer shall furnish to the Depositor, the
Servicer, the Special Servicer and the Trustee its most recent
financial statements and such other information in its possession
regarding its business, affairs, property and condition,
financial or otherwise as the party requesting such information,
in its reasonable judgment, determines to be relevant to the
performance of the obligations hereunder of the Servicer and the
Special Servicer. The Depositor may, but is not obligated to,
enforce the obligations of the Servicer or the Special Servicer
hereunder which are in default and may, but is not obligated to,
perform, or cause a designee to perform, any defaulted obligation
of such Person hereunder or exercise its rights hereunder,
provided that the Servicer and the Special Servicer shall not be
relieved of any of its obligations hereunder by virtue of such
performance by the Depositor or its designee. In the event the
Depositor or its designee undertakes any such action it will be
reimbursed by the Trust Fund from the Collection Account as
provided in Section 3.06 and Section 6.03(a) hereof to the extent
not recoverable from the Servicer or Special Servicer, as
applicable. Neither the Depositor nor the Trustee and neither the
Servicer, with respect to the Special Servicer, nor the Special
Servicer, with respect to the Servicer, shall have any
responsibility or liability for any action or failure to act by
the Servicer or the Special Servicer and neither such Person is
obligated to monitor or supervise the performance of the Servicer
or the Special Servicer under this Agreement or otherwise.
Neither the Servicer nor the Special Servicer shall be under any
obligation to disclose confidential or proprietary information
pursuant to this Section.
SECTION 6.06. Servicer or Special Servicer as Owner
of a Certificate.
The Servicer or an Affiliate of the Servicer or the Special
Servicer or an Affiliate of the Special Servicer may become the
Holder (or with respect to a Global Certificate, Beneficial
Owner) of any Certificate with the same rights it would have if
it were not the Servicer or the Special Servicer or an Affiliate
thereof, except as otherwise expressly provided herein. If, at
any time during which the Servicer or the Special Servicer or an
Affiliate of the Servicer or the Special Servicer is the Holder
or Beneficial Owner of any Certificate, the Servicer or the
Special Servicer proposes to take action (including for this
purpose, omitting to take action) that (i) is not expressly
prohibited by the terms hereof and would not, in the Servicer's
or the Special Servicer's good faith judgment, violate the
Servicing Standard, and (ii) if taken, might nonetheless, in the
Servicer's or the Special Servicer's good faith judgment, be
considered by other Persons to violate the Servicing Standard,
the Servicer or the Special Servicer may seek the approval of the
Certificateholders to such action by delivering to the Trustee a
written notice that (i) states that it is delivered pursuant to
this Section 6.06, (ii) identifies the Percentage Interest in
each Class of Certificates beneficially owned by the Servicer or
the Special Servicer or an Affiliate of the Servicer or the
Special Servicer, and (iii) describes in reasonable detail the
action that the Servicer or the Special Servicer proposes to
take. The Trustee, upon receipt of such notice, shall forward it
to the Certificateholders (other than the Servicer and its
Affiliates or the Special Servicer and its Affiliates, as
appropriate) together with such instructions for response as the
Trustee shall reasonably determine. If at any time
Certificateholders holding greater than 50% of the Voting Rights
of all Certificateholders (calculated without regard to the
Certificates beneficially owned by the Servicer or its
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Affiliates or the Special Servicer or its Affiliates) shall
have consented in writing to the proposal described in the
written notice, and if the Servicer or the Special Servicer shall
act as proposed in the written notice, such action shall be
deemed to comply with the Servicing Standard. The Trustee shall
be entitled to reimbursement from the Servicer or the Special
Servicer, as applicable, of the reasonable expenses of the
Trustee incurred pursuant to this paragraph. It is not the intent
of the foregoing provision that the Servicer or the Special
Servicer be permitted to invoke the procedure set forth herein
with respect to routine servicing matters arising hereunder,
except in the case of unusual circumstances.
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ARTICLE VII
DEFAULT
SECTION 7.01. Events of Default.
(a) "Servicer Event of Default", wherever used herein,
means any one of the following events:
(i) any failure by the Servicer to
remit to the Collection Account or any
failure by the Servicer to remit
to the Trustee for deposit into the
Lower-Tier Distribution Account,
Upper-Tier Distribution Account,
Excess Interest Distribution Account,
Interest Reserve Account or
Default Interest Distribution
Account, any amount required to be so
remitted by the Servicer (including
a P&I Advance) pursuant to, and at
the time specified by the terms of
this Agreement; or
(ii) any failure on the part of the Ser-
vicer duly to observe or perform in any
material respect any other of the
covenants or agreements, or the breach
of any representations or warran-
ties on the part of the Servicer
contained in this Agreement, which
continues unremedied for a period
of 30 days after the date on which
written notice of such failure or
breach, requiring the same to be
remedied, shall have been given to the
Servicer by the Depositor or the
Trustee, or to the Servicer, the
Depositor and the Trustee by the
Holders of Certificates evidencing
Percentage Interests of at least
25% of any Class affected thereby;
provided that the failure of the
Servicer to perform any covenant or
agreement contained herein (other
than as provided in clause (i) above)
as a result of an inconsistency be-
tween this Agreement and any Loan
Document shall not be a Servicer
Event of Default hereunder to the
extent that the Servicer gives notice
of any such inconsistency to the
Rating Agencies; or
(iii) confirmation in writing by any Rating Agency
that failure to remove the Servicer will, in
and of itself, cause a downgrade, qualification
or withdrawal of the then current ratings
assigned to any Class of Certificates; 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 for the appointment
of a conservator or receiver or liquidator in
any insolvency, readjustment of debt, marshaling
of assets and liabilities or similar proceedings,
or for the winding-up or liquidation of
its affairs, shall have been entered against
the Servicer and such decree or order
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shall have remained in force undischarged or unstayed
for a period of 60 days; (v) the Servicer shall
consent to the appointment of a conservator or
receiver or liquidator in any insolvency,
readjustment of debt, marshaling of assets and
liabilities or similar proceedings of or
relating to the Servicer, or of or relating to
all or substantially all of its property; or
(v) the Servicer shall admit in writing its
inability to pay its debts generally as they
become due, file a petition to take advantage
of any applicable insolvency or reorganization
statute, make an assignment for the benefit of
its creditors, or voluntarily suspend payment
of its obligations; or
(vi) the Servicer shall fail to make
any Property Advance required to be
made by the Servicer hereunder
(whether or not the Trustee or the
Fiscal Agent makes such Advance),
which failure continues unremedied
for a period of fifteen (15) days
after the date on which such Property
Advance was first due (or for any
shorter period as may be required, if
applicable, to avoid any lapse in
insurance coverage required under any
Mortgage or this Agreement with respect
to any Mortgaged Property or
to avoid any foreclosure or similar
action with respect to any Mortgaged
Property by reason of a failure to pay
real estate taxes and assessments);
provided, however, that in the event
the Trustee makes a required
Property Advance pursuant to Section 3.08(a)
due to the Servicer's failure to make a
required Advance, such Event of Default shall
occur immediately upon such Advance; or
(vii) the Servicer shall no longer be an "approved"
servicer by each of the Rating Agencies for
mortgage pools similar to the Trust Funds;
then, and in each and every such case, so long as a Servicer
Event of Default shall not have been remedied, the Trustee may,
and at the written direction of the Holders of at least 25% of
the aggregate Voting Rights of all Certificates shall, terminate
the Servicer.
In the event that the Servicer is also the Special
Servicer and the Servicer is terminated as provided in this
Section 7.01, the Servicer shall also be terminated as Special
Servicer.
(b) "Special Servicer Event of Default", wherever used
herein, means any one of the following events:
(i) any failure by the Special Servicer to remit to
the Collection Account any amount required to
be so deposited by the Special Servicer
pursuant to and in accordance with the terms of
this Agreement; or
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(ii) any failure on the part of the Special Servicer
duly to observe or perform in any material
respect any other of the covenants or
agreements, or the breach of any
representations or warranties on the part of
the Special Servicer contained in this
Agreement, which continues unremedied for a
period of 30 days after the date on which
written notice of such failure or breach,
requiring the same to be remedied, shall have
been given to the Special Servicer by the
Servicer, the Depositor or the Trustee, or to
the Special Servicer, the Servicer, the
Depositor and the Trustee by the Holders of
Certificates evidencing Percentage Interests of
at least 25% of any Class affected thereby; or
(iii) confirmation in writing by any Rating Agency
that failure to remove the Special Servicer
would, in and of itself, cause a downgrade,
qualification or withdrawal of the then current
ratings assigned to any Class of Certificates;
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 for the
appointment of a conservator or
receiver or liquidator in any insolvency,
readjustment of debt, marshaling of
assets and liabilities or similar
proceedings, or for the winding-up
or liquidation of its affairs, shall have
been entered against the Special Servi-
cer and such decree or order shall
have remained in force undischarged
or unstayed for a period of 60
days; or
(v) the Special Servicer shall consent to the
appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of
debt, marshaling of assets and liabilities or
similar proceedings of or relating to the
Special Servicer, or of or relating to all or
substantially all of its property;
(vi) the Special Servicer shall admit in writing its
inability to pay its debts generally as they
become due, file a petition to take advantage
of any applicable insolvency or reorganization
statute, make an assignment for the benefit of
its creditors, or voluntarily suspend payment
of its obligations; or
(vii) the Special Servicer shall no longer be an
"approved" special servicer by each of the Rating
Agencies for mortgage pools similar to the Trust
Fund;
then, and in each and every such case, so long as a Special
Servicer Event of Default shall not have been remedied, the
Trustee may, and at the written direction of the Holders of at
least 25% of the aggregate Voting Rights of all Certificates
shall, terminate the Special Servicer.
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(c) In the event that the Servicer or the Special
Servicer is terminated pursuant to this Section 7.01, the Trustee
(the "Terminating Party") shall, by notice in writing to the
Servicer or the Special Servicer, as the case may be (the
"Terminated Party"), terminate all of its rights and
obligations under this Agreement and in and to the Mortgage
Loans and the proceeds thereof, other than any rights the
Servicer or Special Servicer may have hereunder as a
Certificateholder and any rights or obligations that accrued
prior to the date of such termination (including the right
to receive all amounts accrued or owing to it under this
Agreement, plus interest at the Advance Rate on such amounts
until received to the extent such amounts bear interest as
provided in this Agreement, with respect to periods prior to
the date of such termination and the right to the benefits
of Section 6.03 notwithstanding any such termination). On or
after the receipt by the Terminated Party of such written
notice, all of its authority and power under this Agreement,
whether with respect to the Certificates (except that the
Terminated Party shall retain its rights as a
Certificateholder in the event and to the extent that it is
a Certificateholder) or the Mortgage Loans or otherwise,
shall pass to and be vested in the Terminating Party
pursuant to and under this Section and, without limitation,
the Terminating Party is hereby authorized and empowered to
execute and deliver, on behalf of and at the expense of the
Terminated Party, as attorney-in-fact or otherwise, any and
all documents and other instruments, and to do or accomplish
all other acts or things necessary or appropriate to effect
the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the
Mortgage Loans and related documents, or otherwise. The
Servicer and the Special Servicer each agrees that, in the
event it is terminated pursuant to this Section 7.01, to
promptly (and in any event no later than ten Business Days
subsequent to such notice) provide, at its own expense, the
Terminating Party with all documents and records requested
by the Terminating Party to enable the Terminating Party to
assume its functions hereunder, and to cooperate with the
Terminating Party and the successor to its responsibilities
hereunder in effecting the termination of its
responsibilities and rights hereunder, including, without
limitation, the transfer to the successor Servicer or
successor Special Servicer or the Terminating Party, as
applicable, for administration by it of all cash amounts
which shall at the time be or should have been credited by
the Servicer or the Special Servicer to the Collection
Account, any REO Account, Lock-Box Account or Cash
Collateral Account or shall thereafter be received with
respect to the Mortgage Loans, and shall promptly provide
the Terminating Party or such successor Servicer or Special
Servicer (which may include the Trustee), as applicable, all
documents and records reasonably requested by it, such
documents and records to be provided in such form as the
Terminating Party or such successor Servicer or Special
Servicer shall reasonably request (including electromagnetic
form), to enable it to assume the Servicer's or Special
Servicer's function hereunder. All reasonable costs and
expenses of the Terminating Party or the successor Servicer
or successor Special Servicer incurred in connection with
transferring the Mortgage Files to the successor Servicer or
Special Servicer and amending this Agreement to reflect such
succession as successor Servicer or successor Special
Servicer pursuant to this Section 7.01 shall be paid by the
predecessor Servicer or the Special Servicer, as applicable,
upon presentation of reasonable documentation of such costs
and expenses. If the predecessor Servicer or Special
Servicer (as the case may be) has not reimbursed the
Terminating Party or the successor Servicer or Special
Servicer for such expenses within 90 days after the
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presentation of reasonable documentation, such expense shall be
reimbursed by the Trust Fund; provided that the Terminated Party
shall not thereby be relieved of its liability for such expenses.
SECTION 7.02. Trustee to Act; Appointment of Successor.
On and after the time the Servicer or the Special
Servicer receives a notice of termination pursuant to Section
7.01, the Terminating Party shall be its successor in all
respects in its capacity as Servicer or Special Servicer under
this Agreement and the transactions set forth or provided for
herein and, except as provided herein, shall be subject to all
the responsibilities, duties, limitations on liability and
liabilities relating thereto and arising thereafter placed on the
Servicer or Special Servicer by the terms and provisions hereof;
provided, however, that (i) the Terminating Party shall have no
responsibilities, duties, liabilities or obligations with respect
to any act or omission of the Servicer or Special Servicer and
(ii) any failure to perform, or delay in performing, such duties
or responsibilities caused by the Terminated Party's failure to
provide, or delay in providing, records, tapes, disks,
information or monies shall not be considered a default by such
successor hereunder. The Trustee, as successor Servicer or
successor Special Servicer, shall be indemnified to the full
extent provided the Servicer or Special Servicer, as applicable,
under this Agreement prior to the Servicer's or the Special
Servicer's termination. The appointment of a successor Servicer
or successor Special Servicer shall not affect any liability of
the predecessor Servicer or Special Servicer which may have
arisen prior to its termination as Servicer or Special Servicer.
The Terminating Party shall not be liable for any of the
representations and warranties of the Servicer or Special
Servicer herein or in any related document or agreement, for any
acts or omissions of the predecessor Servicer or predecessor
Special Servicer or for any losses incurred in respect of any
Permitted Investment by the Servicer pursuant to Section 3.07
hereunder nor shall the Trustee be required to purchase any
Mortgage Loan hereunder. As compensation therefor, the
Terminating Party as successor Servicer or successor Special
Servicer shall be entitled to the Servicing Fee or Special
Servicing Compensation, as applicable, and all funds relating to
the Mortgage Loans that accrue after the date of the Terminating
Party's succession to which the Servicer or Special Servicer
would have been entitled if the Servicer or Special Servicer, as
applicable, had continued to act hereunder. In the event any
Advances made by the Servicer and the Trustee or the Fiscal Agent
shall at any time be outstanding, or any amounts of interest
thereon shall be accrued and unpaid, all amounts available to
repay Advances and interest hereunder shall be applied entirely
to the Advances made by the Trustee or the Fiscal Agent (and the
accrued and unpaid interest thereon), until such Advances and
interest shall have been repaid in full. 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 25% of the aggregate Voting
Rights so request in writing to the Trustee, or if neither the
Trustee nor the Fiscal Agent is rated by each Rating Agency in
one of its two highest long-term debt rating categories or the
Trustee is not approved by S&P as a servicer or special servicer
or if the Rating Agencies do not provide written confirmation
that the succession of the Trustee, as Servicer or Special
Servicer, as applicable, will not cause a downgrade,
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qualification or withdrawal of the then current ratings assigned
to the Certificates, promptly appoint, or petition a court of
competent jurisdiction to appoint, any established mortgage loan
servicing institution the appointment of which will not result in
a downgrade, qualification or withdrawal of the then current
rating or ratings assigned to any Class of Certificates as
evidenced in writing by each Rating Agency, as the successor to
the Servicer or Special Servicer, as applicable, hereunder in the
assumption of all or any part of the responsibilities, duties or
liabilities of the Servicer or Special Servicer hereunder. No
appointment of a successor to the Servicer or Special Servicer
hereunder shall be effective until the assumption by such
successor of all the Servicer's or Special Servicer's
responsibilities, duties and liabilities hereunder. Pending
appointment of a successor to the Servicer (or the Special
Servicer if the Special Servicer is also the Servicer) hereunder,
unless the Trustee shall be prohibited by law from so acting, the
Trustee shall act in such capacity as herein above provided.
Pending the appointment of a successor to the Special Servicer,
unless the Servicer is also the Special Servicer, the Servicer
shall act in such capacity. In connection with such appointment
and assumption described herein, the Trustee may make such
arrangements for the compensation of such successor out of
payments on Mortgage Loans as it and such successor shall agree;
provided, however, that no such compensation shall be in excess
of that permitted the Terminated Party hereunder, provided,
further, that if no successor to the Terminated Party can be
obtained to perform the obligations of such Terminated Party
hereunder, additional amounts shall be paid to such successor and
such amounts in excess of that permitted the Terminated Party
shall be treated as Realized Losses. The Depositor, the Trustee,
the Servicer or Special Servicer and such successor shall take
such action, consistent with this Agreement, as shall be
necessary to effectuate any such succession.
SECTION 7.03. Notification to Certificateholders.
(a) Upon any termination pursuant to Section 7.01
above or appointment of a successor to the Servicer or the
Special Servicer, the Trustee shall give prompt written notice
thereof to Certificateholders at their respective addresses
appearing in the Certificate Register and to each Rating Agency.
(b) Within 30 days after the occurrence of any Event
of Default of which a Responsible Officer of the Trustee has
actual knowledge, the Trustee shall transmit by mail to all
Holders of Certificates and to each Rating Agency notice of such
Event of Default, unless such Event of Default shall have been
cured or waived.
SECTION 7.04. Other Remedies of Trustee.
During the continuance of any Servicer Event of
Default or a Special Servicer Event of Default when the Servicer
is also serving as Special Servicer, so long as such Servicer
Event of Default or Special Servicer Event of Default, if
applicable, shall not have been remedied, the Trustee, in
addition to the rights specified in Section 7.01, shall have the
right, in its own name 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
filing of proofs of claim and debt in connection therewith).
In such event, the legal fees, expenses and costs of such
action and any liability resulting therefrom shall be
expenses, costs and liabilities of the Trust Fund, and the
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Trustee shall be entitled to be reimbursed therefor from the
Collection Account as provided in Section 3.06. 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 Servicer Event of Default
or Special Servicer Event of Default, if applicable.
SECTION 7.05. Waiver of Past Events of Default; Termination.
The Holders of Certificates evidencing not less than
66-2/3% of the aggregate Voting Rights of the Certificates may,
on behalf of all Holders of Certificates, waive any default by
the Servicer or Special Servicer in the performance of its
obligations hereunder and its consequences, except a default in
making any required deposits (including P&I Advances) to or
payments from the Collection Account or the Lower-Tier
Distribution Account or in remitting payments as received, in
each case in accordance with this Agreement. Upon any such waiver
of a past default, such default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been
remedied for every purpose of this Agreement. No such waiver
shall extend to any subsequent or other default or impair any
right consequent thereon.
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ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.01. Duties of Trustee.
(a) The Trustee, prior to the occurrence of an Event
of Default of which a Responsible Officer of the Trustee has
actual knowledge 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 and no permissive right of the Trustee shall be
construed as a duty. During the continuance of an Event of
Default of which a Responsible Officer of the Trustee has actual
knowledge, the Trustee, subject to the provisions of Sections
7.02 and 7.05, 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 person would exercise
or use under the circumstances in the conduct of such person's
own affairs.
(b) The Trustee, upon receipt of any 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, shall examine them to determine whether they conform
on their face to the requirements of this Agreement; provided,
however, that, the Trustee shall not be responsible for the
accuracy or content of any such resolution, certificate,
statement, opinion, report, document, order or other instrument
provided to it hereunder. If any such instrument is found not to
conform on its face to the requirements of this Agreement in a
material manner, the Trustee shall take action as it deems
appropriate to have the instrument corrected, and if the
instrument is not corrected to the Trustee's reasonable
satisfaction, the Trustee will provide notice thereof to the
Certificateholders.
(c) Neither the Trustee nor any of its officers,
directors, employees, agents or "control" persons within the
meaning of the Act shall have any liability arising out of or in
connection with this Agreement, provided, that, subject to
Section 8.02, no provision of this Agreement shall be construed
to relieve the Trustee, or any such person, from liability for
its own negligent action, its own negligent failure to act or its
own willful misconduct or its own bad faith; and provided,
further, that:
(i) Prior to the occurrence of an Event
of Default of which a Responsible
Officer of the Trustee has actual
knowledge, and after the curing or
waiver 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 resolutions, certificates,
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statements, reports, opinions, documents, orders
or other instruments furnished to the Trustee that
conform on their face to the requirements of this
Agreement without responsibility for investigating
the contents thereof;
(ii) The Trustee shall not be personally liable for
an error of judgment made in good faith by a
Responsible Officer or Responsible Officers,
unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts;
(iii) The Trustee shall not be personally
liable with respect to any action
taken, suffered or omitted to be
taken by it in good faith in accordance
with the direction of Holders of Certi-
ficates entitled to greater than 50%
of the Percentage Interests (or such
other percentage as is specified
herein) of each affected Class, or
of the aggregate Voting Rights of the
Certificates, 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) Neither the Trustee nor any of
its 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 Servicer, Special Servicer, the
Depositor or any other third Person,
including, without limitation, in
connection with actions taken
pursuant to this Agreement;
(v) The Trustee shall not be under any
obligation to appear in, prosecute or
defend any legal action which is not
incidental to its respective duties as
Trustee in accordance with this Agree-
ment (and, if it does, all legal
expenses and costs of such action shall
be expenses and costs of the
Trust Fund), and the Trustee shall be
entitled to be reimbursed therefor
from the Collection Account, unless
such legal action arises out of the
negligence or bad faith of the Trustee
or any breach of an obligation,
representation, warranty or covenant
of the Trustee contained herein;
and
(vi) The Trustee shall not 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 obtains actual knowledge
of such failure. The Trustee shall be deemed to
have actual knowledge of the Servicer's or the
Special Servicer's failure to provide scheduled
reports, certificates and statements when
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and as required to be delivered to the Trustee
pursuant to this Agreement.
None of the provisions contained in this Agreement
shall require either the Trustee, in its capacity as Trustee, or
the Fiscal Agent, to expend or risk its own funds, or otherwise
incur financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if
in the opinion of the Trustee or the Fiscal Agent, respectively,
the repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it, and 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 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 Servicer
or the Special Servicer in accordance with the terms of this
Agreement. Neither the Trustee nor the Fiscal Agent shall be
required to post any surety or bond of any kind in connection
with its performance of its obligations under this Agreement and
neither the Trustee nor the Fiscal Agent shall be liable for any
loss on any investment of funds pursuant to this Agreement (other
than any funds invested with it in its commercial capacity).
SECTION 8.02. Certain Matters Affecting the Trustee.
(a) Except as otherwise provided in Section 8.01:
(i) The Trustee may request and/or 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 and the Trustee shall have
no responsibility to ascertain or
confirm the genuineness of any such
party or parties;
(ii) The Trustee may consult with counsel and 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 with
such Opinion of Counsel;
(iii) (A) The Trustee shall be under no
obligation to institute, conduct or
defend any litigation hereunder or
in relation hereto at the request, order
or direction of any of the Certificate-
-holders, pursuant to the provisions
of this Agreement, unless such Certifi-
cateholders shall have offered to
the Trustee reasonable security or
indemnity against the costs, expenses
and liabilities which may be incurred
therein or thereby; (B) the right of
the Trustee to perform any discretion-
ary act enumerated in this
Agreement shall not be construed as a
duty, and the Trustee shall not be answerable
for other than its negligence or willful
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misconduct in the performance of any such
act; and (C) provided, that subject to the
foregoing clause (A), nothing contained herein
shall relieve the Trustee of the obligations,
upon the occurrence of an Event of Default
(which has not been cured or waived) of which a
Responsible Officer of the Trustee has actual
knowledge, 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 person would exercise or
use under the circumstances in the conduct of
such person's own affairs;
(iv) Neither the Trustee nor any of its directors,
officers, employees, Affiliates, agents or
"control" persons within the meaning of the Act
shall be personally liable for any action
taken, suffered or omitted by it in good faith
and reasonably believed by the Trustee to be
authorized or within the discretion or rights
or powers conferred upon it by this Agreement;
(v) 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% (or such other percentage as is
specified herein) of the Percentage
Interests of any affected Class;
provided, however, that if the
payment within a reasonable time to the
Trustee of the costs, expenses or lia-
bilities 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
investigation shall be paid by the
Servicer or the Special Servicer if
an Event of Default shall have
occurred and be continuing relating
to the Servicer, or the Special
Servicer, respectively, and otherwise
by the Certificateholders
requesting the investigation; and
(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 but shall not be relieved
of its obligations hereunder.
(b) Following the Start-up Day, the Trustee shall not, except
as expressly required by any provision of this Agreement, accept
any contribution of assets to the Trust Fund unless the Trustee shall
have received an Opinion of Counsel (the costs of obtaining such
opinion to be borne by the Person requesting such contribution) to
the effect that the inclusion of such assets in the Trust Fund will
not cause either the Upper-Tier REMIC or the Lower-Tier REMIC
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to fail to qualify as a REMIC at any time that any Certificates
are outstanding or subject either the Upper-Tier REMIC or the
Lower-Tier REMIC to any tax under the REMIC Provisions or other
applicable provisions of federal, state and local law or
ordinances.
(c) 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 other proceeding
relating thereto, and any such suit, action or proceeding
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.
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 by the Depositor
pursuant to this Agreement or the eligibility of any Mortgage
Loan for purposes of this Agreement.
SECTION 8.03. Trustee Not Liable for Certificates or Mortgage
Loans.
The recitals contained herein and in the Certificates shall not
be taken as the statements of the Trustee, the Fiscal Agent, the
Servicer, or the Special Servicer, and the Trustee, the Fiscal
Agent, the Servicer and Special Servicer assume no responsibility
for their correctness. The Trustee, the Fiscal Agent, the
Servicer and Special Servicer make no representations or
warranties as to the validity or sufficiency of this Agreement,
of the Certificates or any prospectus used to offer the
Certificates for sale or the validity, enforceability or
sufficiency of any Mortgage Loan or related document. Neither the
Trustee nor the Fiscal Agent shall at any time have any
responsibility or liability for or with respect to the legality,
validity and enforceability of any Mortgage, any Mortgage Loan,
or the perfection and priority of any Mortgage or the maintenance
of any such perfection and priority, or for or with respect to
the sufficiency of the Trust Fund or its ability to generate the
payments to be distributed to Certificateholders under this
Agreement. Without limiting the foregoing, neither the Trustee
nor the Fiscal Agent shall be liable or responsible for: the
existence, condition and ownership of any Mortgaged Property; the
existence of any hazard or other insurance thereon (other than if
the Trustee shall assume the duties of the Servicer or the
Special Servicer pursuant to Section 7.02) or the enforceability
thereof; the existence of any Mortgage Loan or the contents of
the related Mortgage File on any computer or other record thereof
(other than if the Trustee shall assume the duties of the
Servicer or the Special Servicer pursuant to Section 7.02); the
validity of the assignment of any Mortgage Loan to the Trust Fund
or of any intervening assignment; the completeness of any
Mortgage File (except for its review thereof pursuant to Section
2.02); the performance or enforcement of any Mortgage Loan (other
than if the Trustee shall assume the duties of the Servicer or
the Special Servicer pursuant to Section 7.02); the compliance
by the Depositor, the Servicer or the Special Servicer with
any warranty or representation made under this Agreement
or in any related document or the accuracy of any such
warranty or representation prior to the Trustee's receipt of
notice or other discovery of any non-compliance therewith or
any breach thereof; any investment of monies by or at the
direction of the Servicer or any loss resulting therefrom
(other than if the Trustee shall assume the duties of the Servicer
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or the Special Servicer pursuant to Section 7.02), it being
understood that the Trustee shall remain responsible for any
Trust Fund property that it may hold in its individual capacity;
the acts or omissions of any of the Depositor, the Servicer or
the Special Servicer (other than if the Trustee shall assume the
duties of the Servicer or Special Servicer pursuant to Section
7.02) or any subservicer or any Borrower; any action of the
Servicer or Special Servicer (other than if the Trustee shall
assume the duties of the Servicer or the Special Servicer
pursuant to Section 7.02) or any subservicer taken in the name of
the Trustee, except to the extent such action is taken at the
express written direction of the Trustee; the failure of the
Servicer or the Special Servicer or any subservicer to act or
perform any duties required of it on behalf of the Trust Fund or
the Trustee hereunder; or any action by or omission of the
Trustee taken at the instruction of the Servicer or the Special
Servicer (other than if the Trustee shall assume the duties of
the Servicer or the Special Servicer pursuant to Section 7.02)
unless the taking of such action is not permitted by the express
terms of this Agreement; provided, however, that the foregoing
shall not relieve the Trustee of its obligation to perform its
duties as specifically set forth in this Agreement. Neither the
Trustee nor the Fiscal Agent shall be accountable for the use or
application by the Depositor, the Servicer or the Special
Servicer of any of the Certificates or of the proceeds of such
Certificates, or for the use or application of any funds paid to
the Depositor, the Servicer or the Special Servicer in respect of
the assignment of the Mortgage Loans or deposited in or withdrawn
from the Collection Account, Lower-Tier Distribution Account,
Upper-Tier Distribution Account, Default Interest Distribution
Account, Excess Interest Distribution Account, Lock Box Account,
Cash Collateral Account, Hudson Treasury Collateral Account,
Reserve Accounts, Interest Reserve Account or any other account
maintained by or on behalf of the Servicer or the Special
Servicer, other than any funds held by the Trustee or Fiscal
Agent, as applicable. Neither the Trustee nor the Fiscal Agent
shall have responsibility for filing any financing or
continuation statement in any public office at any time or to
otherwise perfect or maintain the perfection of any security
interest or lien granted to it hereunder (unless the Trustee
shall have become the successor Servicer) or to record this
Agreement. In making any calculation hereunder which includes as
a component thereof the payment or distribution of interest for a
stated period at a stated rate "to the extent permitted by
applicable law," the Trustee shall assume that such payment is so
permitted unless a Responsible Officer of the Trustee has actual
knowledge, or receives an Opinion of Counsel (at the expense of
the Person asserting the impermissibility) to the effect that
such payment is not permitted by applicable law.
SECTION 8.04. Trustee May Own Certificates.
The Trustee, the Fiscal Agent and any agent of the
Trustee and Fiscal Agent in its individual capacity or any other
capacity may become the owner or pledgee of Certificates, and may
deal with the Depositor and the Servicer in banking transactions,
with the same rights it would have if it were not Trustee, Fiscal
Agent or such agent.
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SECTION 8.05. Payment of Trustee Fees and Expenses;
Indemnification.
(a) The Trustee or any successor Trustee shall be
entitled, on each Distribution Date, to the Trustee Fee (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 the Trustee in the execution of the trusts hereby
created and in the exercise and performance of any of the powers
and duties hereunder of the Trustee, which Trustee Fee shall be
paid to the Trustee prior to the distribution on such
Distribution Date of amounts to the Certificateholders. In the
event that the Trustee assumes the servicing responsibilities of
the Servicer or the Special Servicer hereunder pursuant to or
otherwise arising from the resignation or removal of the Servicer
or the Special Servicer, the Trustee shall be entitled to the
compensation to which the Servicer or the Special Servicer, as
the case may be, would have been entitled.
(b) The Trustee and the Fiscal Agent shall each be
paid or reimbursed by the Trust Fund upon its request for all
reasonable expenses, disbursements and advances incurred or made
by the Trustee or the Fiscal Agent pursuant to and in accordance
with any of the provisions of this Agreement (including the
reasonable compensation and the expenses and disbursements of its
counsel and of all persons not regularly in its employ) to the
extent such payments are "unanticipated expenses incurred by the
REMIC" within the meaning of Treasury Regulations Section
1.860G-1(b)(iii) except any such expense, disbursement or advance
as may arise from its negligence or bad faith; provided, however,
that, subject to the last paragraph of Section 8.01, neither the
Trustee nor the Fiscal Agent shall refuse to perform any of its
duties hereunder solely as a result of the failure to be paid the
Trustee Fee and the Trustee's expenses or any sums due to the
Fiscal Agent.
The Servicer and the Special Servicer covenant and
agree to pay or reimburse the Trustee for the reasonable
expenses, disbursements and advances incurred or made by the
Trustee in connection with any transfer of the servicing
responsibilities of the Servicer or the Special Servicer,
respectively, hereunder, pursuant to or otherwise arising from
the resignation or removal of the Servicer or the Special
Servicer, in accordance with any of the provisions of this
Agreement (and including the reasonable fees and expenses and
disbursements of its counsel and all other persons not regularly
in its employ), except any such expense, disbursement or advance
as may arise from the negligence or bad faith of the Trustee;
provided, that in the event that the Servicer or the Special
Servicer is terminated pursuant to Section 6.04(c), expenses
incurred in connection with such transfer shall be paid by the
Certificateholders effecting such termination.
(c) Each of the Paying Agent, the Certificate Registrar, the
Custodian, the Depositor, the Servicer and the Special Servicer
(each, an "Indemnifying Party") shall indemnify the Trustee and
the Fiscal Agent and their respective Affiliates and each of the
directors, officers, employees and agents of the Trustee, the Fiscal
Agent and their respective Affiliates (each, an "Indemnified Party"),
and hold each of them harmless against any and all claims, losses,
damages, penalties, fines, forfeitures, reasonable and necessary
legal fees and related costs, judgments, and any other costs,
fees and expenses that the Indemnified Party may sustain in
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connection with this Agreement (including, without limitation,
reasonable fees and disbursements of counsel incurred by the
Indemnified Party in any action or proceeding between the
Indemnifying Party and the Indemnified Party or between the
Indemnified Party and any third party or otherwise) related to
each such Indemnifying Party's respective willful misconduct, bad
faith, fraud and/or negligence in the performance of each of its
respective duties hereunder or by reason of reckless disregard of
its respective obligations and duties hereunder (including in the
case of the Servicer, any agent of the Servicer or subservicer).
(d) The Trust Fund shall indemnify each Indemnified
Party from, and hold it harmless against, any and all losses,
liabilities, damages, claims or unanticipated expenses
(including, without limitation, reasonable fees and disbursements
of counsel incurred by the Indemnified Party in any action or
proceeding between the Indemnifying Party and the Indemnified
Party or between the Indemnified Party and any third party or
otherwise) arising in respect of this Agreement or the
Certificates, in each case to the extent and only to the extent,
such payments are expressly reimbursable under this Agreement or
are "unanticipated expenses incurred by the REMIC" within the
meaning of Treasury Regulations Section 1.860G-1(b)(3)(iii),
other than (i) those resulting from the negligence, fraud, bad
faith or willful misconduct of the Indemnified Party and (ii)
those as to which such Indemnified Party is entitled to
indemnification pursuant to Section 8.05(c). The term
"unanticipated expenses incurred by a REMIC" shall include any
fees, expenses and disbursement of any separate trustee or
co-trustee appointed hereunder, only to the extent such fees,
expenses and disbursements were not reasonably anticipated as of
the Closing Date and the losses, liabilities, damages, claims or
expenses (including reasonable attorneys' fees) incurred or
advanced by an Indemnified Party in connection with any
litigation arising out of this Agreement, including, without
limitation, under Section 2.03, Section 3.10, the third paragraph
of Section 3.11, Section 4.05 and Section 7.01. The right of
reimbursement of the Indemnified Parties under this Section
8.05(d) shall be senior to the rights of all Certificateholders.
(e) Notwithstanding anything herein to the contrary,
this Section 8.05 shall survive the termination or maturity of
this Agreement or the resignation or removal of the Trustee or
the Fiscal Agent, as the case may be, as regards rights accrued
prior to such resignation or removal and (with respect to any
acts or omissions during their respective tenures) the
resignation, removal or termination of the Servicer, the Special
Servicer, the Paying Agent, the Certificate Registrar or the
Custodian.
(f) This Section 8.05 shall be expressly construed to
include, but not be limited to, such indemnities, compensation,
expenses, disbursements, advances, losses, liabilities, damages
and the like, as may pertain or relate to any environmental law
or environmental matter.
SECTION 8.06. Eligibility Requirements for Trustee.
The Trustee hereunder shall at all times be a corporation or
association organized and doing business under the laws of any state or
the United States of America, authorized under such laws to exercise
corporate trust powers and to accept the trust conferred under this
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Agreement, having a combined capital and surplus of at least
$50,000,000 and a rating on its unsecured long-term debt of at
least "BBB" by Fitch, DCR and S&P and "Baa2" by Moody's (or at
any time when there is no Fiscal Agent appointed and acting
hereunder or any such Fiscal Agent so appointed has a rating on
its long-term unsecured debt that is lower than "AA" by Fitch and
S&P, "Aa2" by Moody's the rating on the unsecured long term debt
of the Trustee must be at least "AA" by Fitch and S&P, and "Aa2"
by Moody's, or meet different standards provided that each Rating
Agency shall have confirmed in writing that such different
standards would not, in and of itself, result in a downgrade,
qualification or withdrawal of the then current ratings assigned
to the Certificates) and subject to supervision or examination by
federal or state authority and shall not be an Affiliate of the
Servicer (except during any period when the Trustee has assumed
the duties of the Servicer pursuant to Section 7.02); provided
that, notwithstanding that the long-term unsecured debt of
LaSalle National Bank and ABN AMRO Bank N.V. are not rated by
Fitch and DCR, LaSalle National Bank shall not fail to qualify as
Trustee solely by virtue of the lack of such ratings until such
time as either Fitch or DCR shall notify the Trustee, the
Servicer and the Special Servicer in writing that LaSalle
National Bank is no longer exempt from the foregoing rating
requirements imposed by this sentence. If a corporation or
association publishes reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for purposes of this
Section the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. In the
event that the place of business from which the Trustee
administers the Trust Fund is a state or local jurisdiction that
imposes a tax on the Trust Fund or the net income of a REMIC
(other than a tax corresponding to a tax imposed under the REMIC
Provisions) the Trustee shall elect either to (i) resign
immediately in the manner and with the effect specified in
Section 8.07, (ii) pay such tax from its own funds and continue
as Trustee or (iii) administer the Trust Fund from a state and
local jurisdiction that does not impose such a tax. In case at
any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section, the Trustee shall resign
immediately in the manner and with the effect specified in
Section 8.07.
SECTION 8.07. Resignation and Removal of the Trustee.
The Trustee may at any time resign and be discharged
from the trusts hereby created by giving written notice thereof
to the Depositor, the Servicer and each Rating Agency. Upon such
notice of resignation, the Fiscal Agent shall also be deemed to
have been removed and, accordingly, the Servicer shall promptly
appoint a successor Trustee, the appointment of which would not,
as evidenced in writing, in and of itself, result in a downgrade,
qualification or withdrawal of the then current ratings assigned
to the Certificates, and a successor Fiscal Agent (if necessary
to satisfy the requirements contained in Section 8.06), the
appointment of which, if the successor Trustee is not rated by each
Rating Agency in one of its two highest long-term debt rating categories,
would not, as evidenced in writing, in and of itself, result in a
downgrade, qualification or withdrawal of the then current ratings
assigned to the Certificates, by written instrument, in triplicate,
which instrument shall be delivered to the resigning Trustee, with a
copy to the Fiscal Agent deemed removed, and the successor Trustee
and successor Fiscal Agent. If no successor Trustee and successor
Fiscal Agent shall have been so appointed and have accepted
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appointment within 30 days after the giving of such notice of
resignation, the resigning Trustee and the Fiscal Agent may
petition any court of competent jurisdiction for the appointment
of a successor Trustee and successor Fiscal Agent.
If at any time the Trustee shall cease to be eligible
in accordance with the provisions of Section 8.06 and shall fail
to resign after written request therefor by the Depositor or
Servicer, or if at any time the Trustee shall become incapable of
acting, or shall be adjudged bankrupt or insolvent, or a receiver
of the Trustee or of its property shall be appointed, or any
public officer shall take charge or control of the Trustee or of
its property or affairs for the purpose of rehabilitation,
conservation or liquidation, or upon a confirmation in writing by
any Rating Agency that not terminating the Trustee, or the Fiscal
Agent, as applicable, would, in and of itself, cause the
then-current rating assigned to any Class of Certificates to be
qualified, withdrawn or downgraded, then the Depositor or the
Servicer may remove the Trustee and the Fiscal Agent and the
Servicer shall promptly appoint a successor Trustee and successor
Fiscal Agent by written instrument, which shall be delivered to
the Trustee and the Fiscal Agent so removed and to the successor
Trustee and the successor Fiscal Agent.
The Holders of Certificates entitled to at least 50%
of the Voting Rights of all of the Certificates may at any time
remove the Trustee and the Fiscal Agent (and any removal of the
Trustee shall be deemed to be a removal also of the Fiscal Agent)
and appoint a successor Trustee and, if necessary, successor
Fiscal Agent by written instrument or instruments, in seven
originals, signed by such Holders or their attorneys-in-fact duly
authorized, one complete set of which instruments shall be
delivered to the Depositor, one complete set to the Servicer, one
complete set to the Trustee so removed, one complete set to the
Fiscal Agent deemed removed, one complete set to the successor
Trustee so appointed and one complete set to any successor Fiscal
Agent so appointed.
In the event of removal of the Trustee, the Fiscal
Agent shall be deemed to have been removed.
In the event that the Trustee or Fiscal Agent is
terminated or removed pursuant to this Section 8.07, all of its
rights and obligations under this Agreement and in and to the
Mortgage Loans shall be terminated, other than any rights or
obligations that accrued prior to the date of such termination or
removal (including the right to receive all fees, expenses and
other amounts accrued or owing to it under this Agreement, plus
interest at the Advance Rate on all such amounts until received
to the extent such amounts bear interest as provided in this
Agreement, with respect to periods prior to the date of such
termination or removal).
Any resignation or removal of the Trustee and Fiscal
Agent and appointment of a successor Trustee and, if such trustee
is not rated by each Rating Agency in one of its two highest
long-term debt rating categories, a successor Fiscal Agent
pursuant to any of the provisions of this Section 8.07 shall not
become effective until acceptance of appointment by the successor
Trustee and, if necessary, successor Fiscal Agent as provided in
Section 8.08.
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SECTION 8.08. Successor Trustee and Fiscal Agent.
(a) Any successor Trustee and any successor Fiscal
Agent appointed as provided in Section 8.07 shall execute,
acknowledge and deliver to the Depositor, the Servicer and to the
predecessor Trustee and predecessor Fiscal Agent, as the case may
be, instruments accepting their appointment hereunder, and
thereupon the resignation or removal of the predecessor Trustee
and predecessor Fiscal Agent shall become effective and such
successor Trustee and successor Fiscal Agent, without any further
act, deed or conveyance, shall become fully vested with all the
rights, powers, duties and obligations of its predecessor
hereunder, with the like effect as if originally named as Trustee
or Fiscal Agent herein, provided that the appointment of such
successor Trustee and successor Fiscal Agent shall not, as
evidenced in writing by each Rating Agency, result in a
downgrade, qualification or withdrawal of the then current
ratings assigned to the Certificates. The predecessor Trustee
shall deliver to the successor Trustee all Mortgage Files and
related documents and statements held by it hereunder, and the
Depositor and the predecessor Trustee shall execute and deliver
such instruments and do such other things as may reasonably be
required for more fully and certainly vesting and confirming in
the successor Trustee all such rights, powers, duties and
obligations. No successor Trustee shall accept appointment as
provided in this Section 8.08 unless at the time of such
acceptance such successor Trustee shall be eligible under the
provisions of Section 8.06.
Upon acceptance of appointment by a successor Trustee
as provided in this Section 8.08, the Depositor shall mail notice
of the succession of such Trustee hereunder to all Holders of
Certificates at their addresses as shown in the Certificate
Register. If the Depositor fails to mail such notice within 10
days after acceptance of appointment by the successor Trustee,
the successor Trustee shall cause such notice to be mailed at the
expense of the Depositor.
(b) Any successor Trustee or Fiscal Agent appointed
pursuant to this Agreement shall satisfy the eligibility
requirements set forth in Section 8.06 hereof.
SECTION 8.09. Merger or Consolidation of Trustee.
Any corporation into which the Trustee may be merged
or converted or with which it may be consolidated or any
corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the
corporate trust business of the Trustee, shall be the successor
of the Trustee hereunder, provided that such corporation shall be
eligible under the provisions of Section 8.06, without the
execution or filing of any paper or any further act on the part
of any of the parties hereto, anything herein to the contrary
notwithstanding.
SECTION 8.10. Appointment of Co-Trustee or Separate Trustee.
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 Depositor and
the Trustee acting jointly shall have the power and shall
execute and deliver all instruments to appoint one or more
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Persons approved by the Trustee to act (at the expense of the
Trustee) as co-trustee or co-trustees, jointly with the Trustee,
or separate trustee or separate trustees, of all or any part of
the Trust Fund, and to vest in such Person or Persons, in such
capacity, such title to the Trust Fund, or any part thereof, and,
subject to the other provisions of this Section 8.10, such
powers, duties, obligations, rights and trusts as the Depositor
and the Trustee may consider necessary or desirable. If the
Depositor shall not be in existence or shall not have joined in
such appointment within 15 days after the receipt by it of a
request so to do, or in case an Event of Default shall have
occurred and be continuing, the Trustee alone shall have the
power to make such appointment. Except as required by applicable
law, the appointment of a co-trustee or separate trustee shall
not relieve the Trustee of its responsibilities, obligations and
liabilities hereunder. No co-trustee or separate trustee
hereunder shall be required to meet the terms of eligibility as a
successor Trustee under Section 8.06 hereunder and no notice to
Holders of Certificates of the appointment of co-trustee(s) or
separate trustee(s) shall be required under Section 8.08 hereof.
In the case of any appointment of a co-trustee or
separate trustee pursuant to this Section 8.10, all rights,
powers, duties and obligations conferred or imposed upon the
Trustee shall be conferred or imposed upon and exercised or
performed by the Trustee and such separate trustee or co-trustee
jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the
Trustee joining in such act), 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 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 solely at the direction of the Trustee.
No trustee under this Agreement shall be personally
liable by reason of any act or omission of any other trustee
under this Agreement. The Depositor and the Trustee acting
jointly may at any time accept the resignation of or remove any
separate trustee or co-trustee, or if the separate trustee or
co-trustee is an employee of the Trustee, the Trustee acting
alone may accept the resignation of or remove any separate
trustee or co-trustee.
Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then separate
trustees and co-trustees, as effectively as if given to each of
them. Every instrument appointing any separate trustee or
co-trustee shall refer to this Agreement and the conditions of
this Article VIII. Every such instrument shall be filed with the
Trustee. 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. In no event shall any such separate
trustee or co-trustee be entitled to any provision relating to
the conduct of, affecting the liability of, or affording
protection to, such separate trustee or co-trustee that imposes a
standard of conduct less stringent than that imposed on the
Trustee hereunder, affording greater protection
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than that afforded to the Trustee hereunder or providing a
greater limit on liability than that provided to the Trustee
hereunder.
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.
SECTION 8.11. 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 Sections 3.08, 3.24 and 4.06.
(b) The Fiscal Agent undertakes to perform such duties
and only such duties as are specifically set forth in Sections
3.08, 3.24 and 4.06.
(c) No provision of this Agreement shall be construed
to relieve the Fiscal Agent from liability for its own negligent
failure to act or its own willful misfeasance or for a breach of
a representation or warranty contained herein; provided, however,
that (i) the duties and obligations of the Fiscal Agent shall be
determined solely by the express provisions of Sections 3.08,
3.24 and 4.06, the Fiscal Agent shall not be liable except for
the performance of such duties and obligations, no implied
covenants or obligations shall be read into this Agreement
against the Fiscal Agent and, in the absence of bad faith on the
part of the Fiscal Agent, the Fiscal Agent may conclusively rely,
as to the truth and correctness of the statements or conclusions
expressed therein, upon any resolutions, certificates,
statements, opinions, reports, documents, orders or other
instruments furnished to the Fiscal Agent by the Depositor, the
Servicer, the Special Servicer or the Trustee and which on their
face do not contradict the requirements of this Agreement, and
(ii) the provisions of clause (ii) of Section 8.01(c) shall apply
to the Fiscal Agent.
(d) Except as otherwise provided in Section 8.11(c),
the Fiscal Agent also shall have the benefit of provisions of
clauses (i), (ii), (iii) (other than the proviso thereto), (iv),
(v) (other than the proviso thereto) and (vi) of Section 8.02(a).
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ARTICLE IX
TERMINATION; OPTIONAL MORTGAGE LOAN PURCHASE
SECTION 9.01. Termination; Optional Mortgage Loan Purchase.
(a) The respective obligations and responsibilities of
the Servicer, the Special Servicer, the Depositor, the Trustee
and the Fiscal Agent created hereby with respect to the
Certificates (other than the obligation to make certain payments
and to send certain notices to Certificateholders as hereinafter
set forth) shall terminate immediately following the occurrence
of the last action required to be taken by the Trustee pursuant
to this Article IX on the Termination Date; provided, however,
that in no event shall the trust created hereby continue beyond
the expiration of twenty-one years from the death of the last
survivor of the descendants of Joseph P. Kennedy, the late
ambassador of the United States to the United Kingdom, living on
the date hereof.
(b) The Trust Fund, the Upper-Tier REMIC and the
Lower-Tier REMIC shall be terminated and the assets of the Trust
Fund shall be sold or otherwise disposed of in connection
therewith, only pursuant to a "plan of complete liquidation"
within the meaning of Code Section 860F(a)(4)(A) providing for
the actions contemplated by the provisions hereof pursuant to
which the applicable Notice of Termination is given and requiring
that the Trust Fund, the Upper-Tier REMIC and the Lower-Tier
REMIC shall terminate on a Distribution Date occurring not more
than 90 days following the date of adoption of the plan of
complete liquidation. For purposes of this Section 9.01(b), the
Notice of Termination given pursuant to Section 9.01(c) shall
constitute the adoption of the plan of complete liquidation as of
the date such notice is given, which date shall be specified by
the Servicer in the final federal income tax returns of the
Upper-Tier REMIC and the Lower-Tier REMIC.
(c) Any holder of a Class LR Certificate representing
greater than a 50% Percentage Interest in such Class may effect
an early termination of the Trust Fund, upon not less than 30
days' prior notice given to the Trustee and Servicer any time on
or after the Early Termination Notice Date specifying the
Anticipated Termination Date, by purchasing on such date all, but
not less than all, of the Mortgage Loans then included in the
Trust Fund, and all property acquired in respect of any Mortgage
Loan, at a purchase price, payable in cash, equal to not less
than the greater of:
(i) the sum of
(A) 100% of the unpaid principal balance of each
Mortgage Loan included in the Trust Fund as
of the last day of the month preceding such
Distribution Date;
(B) the fair market value of all other property
included in the Trust Fund as of the
last day of the month preceding such
Distribution Date, as determined by an
Independent appraiser acceptable to the
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Servicer as of the date not more than 30
days prior to the last day of the month
preceding such Distribution Date;
(C) all unpaid interest accrued on such
principal balance of each such Mortgage Loan
(including for this purpose any Mortgage
Loan as to which title to the related
Mortgaged Property has been acquired) at the
Mortgage Rate (plus the Excess Rate, to the
extent applicable) to the last day of the
Interest Accrual Period preceding such
Distribution Date;
(D) the aggregate amount of unreimbursed
Advances and unpaid Servicing Fees, Special
Servicing Compensation, Trustee Fees and
Trust Fund expenses, in each case with
interest thereon at the Advance Rate to the
extent permitted hereby; and
(ii) the aggregate fair market value of the
Mortgage Loans, and all other property
acquired in respect of any Mortgage Loan in
the Trust Fund, on the last day of the month
preceding such Distribution Date, as
determined by an Independent appraiser
acceptable to the Servicer as of a date not
more than 30 days prior to the last day of
the month preceding such Distribution Date,
together with one month's interest thereon
at the related Mortgage Rates.
The Servicer or the Depositor may also effect such
termination as provided above if it first notifies each Holder of
a Class LR Certificate through the Trustee of its intention to do
so in writing at least 30 days prior to the Early Termination
Notice Date and no Class LR Holder terminates the Trust Fund as
described above within such 30-day period. All costs and expenses
incurred by any and all parties to this Agreement or by the Trust
Fund in connection with the purchase of the Mortgage Loans and
other assets of the Trust Fund pursuant to this Section 9.01(c)
shall be borne by the party exercising its purchase rights
hereunder. The Trustee shall be entitled to rely conclusively on
any determination made by an Independent appraiser pursuant to
this subsection (c).
Any Mortgage Loan purchased under the circumstances
described above must be purchased subject to a continuing right
of the then holders of the Class V-1 and V-2 Certificates to
receive from the purchaser(s), from time to time, payments
corresponding to Default Interest and Excess Interest,
respectively, with respect to such Mortgage Loan.
(d) If the Trust Fund has not been previously terminated
pursuant to subsection (c) of this Section 9.01, the Trustee
shall determine as soon as practicable the Distribution Date on
which the Trustee reasonably anticipates, based on information
with respect to the Mortgage Loans previously provided to it,
that the final distribution will be made (i) to the Holders of
outstanding Regular Certificates, and to the Trustee in respect
of the Lower-Tier Regular Interests, notwithstanding that
such distribution may be insufficient to distribute in full
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an amount equal to the remaining Certificate Balance of each
such Certificate or Lower-Tier Regular Interest, together with
amounts required to be distributed on such Distribution Date
pursuant to Section 4.01 or (ii) if no such Regular Certificates
are then outstanding, to the Holders of the Class LR Certificates
of any amount remaining in the Collection Account or the
Lower-Tier Distribution Account and to the Holders of the Class R
Certificates of any amount remaining in the Upper-Tier
Distribution Account, in either case, following the later to
occur of (A) the receipt or collection of the last payment due on
any Mortgage Loan included in the Trust Fund or (B) the
liquidation or disposition pursuant to Section 3.18 of the last
asset held by the Trust Fund and (iii) to the holders of the
Class V-1 and V-2 Certificates, of any amount remaining in the
Default Interest Distribution Account and the Excess Interest
Distribution Account, respectively.
(e) Notice of any termination of the Trust Fund
pursuant to this Section 9.01 shall be mailed by the Trustee to
affected Certificateholders with a copy to the Servicer and each
Rating Agency at their addresses shown in the Certificate
Registrar as soon as practicable after the Trustee shall have
received, given or been deemed to have received a Notice of
Termination but in any event not more than thirty days, and not
less than ten days, prior to the Anticipated Termination Date.
The notice mailed by the Trustee to affected Certificateholders
shall:
(i) specify the Anticipated Termination Date on
which the final distribution is anticipated
to be made to Holders of Certificates of the Classes
specified therein;
(ii) specify the amount of any such final distribution,
if known; and
(iii) state that the final distribution to
Certificateholders will be made only upon
presentation and surrender of Certificates at
the office of the Paying Agent therein
specified.
If the Trust Fund is not terminated on any Anticipated
Termination Date for any reason, the Trustee shall promptly mail
notice thereof to each affected Certificateholder.
(f) Any funds not distributed on the Termination Date
because of the failure of any Certificateholders to tender their
Certificates shall be set aside and held in trust for the account
of the appropriate non-tendering Certificateholders, whereupon
the Trust Fund shall terminate. If any Certificates as to which
notice of the Termination Date has been given pursuant to this
Section 9.01 shall not have been surrendered for cancellation
within six months after the time specified in such notice, the
Trustee shall mail a second notice to the remaining
Certificateholders, at their last addresses shown in the
Certificate Register, to surrender their Certificates for
cancellation in order to receive, from such funds held, the final
distribution with respect thereto. If within one year after the
second notice any Certificate shall not have been surrendered for
cancellation, the Trustee may, directly or through an agent, take
appropriate steps to contact the remaining Certificateholders
concerning surrender of their Certificates. The costs and
expenses of maintaining such funds and of contacting
Certificateholders shall be paid out of the assets which remain held.
If within two years after the second notice any Certificates shall
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not have been surrendered for cancellation, the Paying Agent shall
pay to the Class R Certificateholders all amounts distributable
to the Holders thereof. No interest shall accrue or be payable to
any Certificateholder on any amount held as a result of such
Certificateholder's failure to surrender its Certificate(s) for
final payment thereof in accordance with this Section 9.01.
(g) The Holder or Holders of a 100% Percentage
Interest in the Class LR Certificates may purchase any Mortgage
Loan on the last day of the first Collection Period following its
Anticipated Repayment Date, if any, at a price equal to the sum
of the following:
(i) 100% of the outstanding principal balance of
such Mortgage Loan on the date of purchase;
(ii) all unpaid interest accrued on such principal
balance of such Mortgage Loan at the Mortgage
Rate thereof, to the last day of the Interest
Accrual Period preceding the Distribution Date
on which the payment will be distributed to
Certificateholders;
(iii) the aggregate amount of unreimbursed Advances
with respect to such Mortgage Loan, unpaid
Special Servicing Compensation, Servicing Fees,
Trustee Fees and Trust Fund expenses, in each
case with interest thereon at the Advance Rate
to the extent permitted hereby; and
(iv) the amount of any Liquidation Expenses incurred
by the Trust Fund in connection with such purchase;
provided, that such Holder or Holders purchase such Mortgage Loan
subject to the retained interest of the then holders of the Class
V-1 and V-2 Certificates; and provided, further, that, such
Holder(s), at its or their expense, has or have provided the
Trustee with an Opinion of Counsel to the effect that such
purchase would not (x) result in a gain which would be subject to
the tax on net income derived from "prohibited transactions"
imposed by Code Section 860F(a)(1) or otherwise result in the
imposition of any other tax on the Lower-Tier REMIC or the
Upper-Tier REMIC under the REMIC Provisions or (y) cause either
the Upper-Tier REMIC or the Lower-Tier REMIC to fail to qualify
as a REMIC; such opinion relying upon appraisals of the fair
market value (for the purposes of Section 860F(c)(1) of the Code)
of such Mortgage Loan by at least three Independent appraisers.
The proceeds of any such purchase shall be deposited
in the Collection Account and disbursed as provided herein.
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ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.01. Counterparts.
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 10.02. Limitation on Rights of Certificateholders.
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.
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 person by
reason of any action taken by the parties to this Agreement
pursuant to any provision hereof.
No Certificateholder shall have any right 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
such Holder previously shall have given to the Trustee a written
notice of default and of the continuance thereof, as hereinbefore
provided, and unless also the Holders of Certificates
representing Percentage Interests of at least 25% of each
affected Class of Certificates 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 of any Class
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, or to enforce any right under this Agreement, except
in the manner herein provided and for the equal, ratable and
common benefit of all Holders of Certificates of such Class. 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.
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SECTION 10.03. Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH
THE 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 10.04. Notices.
All demands, notices and communications hereunder
shall be in writing, shall be deemed to have been given upon
receipt (except that notices to Holders of Class V-1, Class V-2,
Class B-1H, Class R and Class LR Certificates or Holders of any
Class of Certificates no longer held through a Depository and
instead held in registered, definitive form shall be deemed to
have been given upon being sent by first class mail, postage
prepaid) as follows:
If to the Trustee, to:
LaSalle National Bank
135 South LaSalle Street
Suite 1740
Chicago, Illinois 60603
Attention: Asset-Backed Securities
Trust Services, Nomura 1997-MD VII
With copies to:
Mayer, Brown & Platt
2000 Pennsylvania Avenue
Suite 6500
Washington, D.C. 20006
Attention: Stuart P. Pergament
If to the Fiscal Agent, to:
ABN AMRO Bank, N.V.
c/o LaSalle National Bank
135 South LaSalle Street
Chicago, IL 60603
Attention: Asset-Backed Securities
Trust Services, Nomura 1997-MD VII
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If to the Depositor, to:
Asset Securitization Corporation
2 World Financial Center
Building B, 21st Floor
New York, New York 10281-1198
Attention: Perry Gershon and
Sheryl McAfee
With copies to:
Cleary, Gottlieb, Steen & Hamilton
One Liberty Plaza
New York, New York 10006
Attention: Andrea G. Podolsky
If to the Servicer or the Special Servicer, to:
Pacific Mutual Life Insurance Company
700 Newport Drive
Newport Beach, CA 92660
Attention: Michelle A. Curran
If to the Originator, to:
Nomura Asset Capital Corporation
2 World Financial Center
Building B, 21st Floor
New York, NY 10281-1198
Attention: Perry Gershon and
Sheryl McAfee
If to any Certificateholder, to:
the address set forth in the
Certificate Register,
or, in the case of the parties to this Agreement, to such other
address as such party shall specify by written notice to the
other parties hereto.
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SECTION 10.05. 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, to the extent permitted by
applicable law, 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 10.06. Notice to the Depositor and Each Rating Agency.
(a) The Trustee shall use its best efforts to promptly
provide notice to the Depositor and each Rating Agency with
respect to each of the following of which a Responsible Officer
of the Trustee has actual knowledge:
(i) any material change or amendment to this Agreement;
(ii) the occurrence of any Event of Default that has
not been cured;
(iii) the merger, consolidation, resignation or termination
of the Servicer, Special Servicer, the Trustee or
Fiscal Agent;
(iv) the repurchase of Mortgage Loans pursuant to Section
2.03(d) or 2.03(e);
(v) the final payment to any Class of Certificateholders;
(vi) any change in the location of the Collection Account,
the Lower-Tier Distribution Account or the Upper-Tier
Distribution Account;
(vii) any event that would result in the voluntary or
involuntary termination of any insurance of the
accounts of the Servicer;
(viii) each report to Certificateholders described in
Section 4.02 and Section 3.22;
(ix) any change in the lien priority of a Mortgage Loan;
(x) any new lease of an anchor or a termination of an
anchor lease at a retail Mortgaged Property; and
(xi) any material damage to a Mortgaged Property.
(b) The Servicer shall promptly furnish to each Rating Agency
copies of the following:
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(i) each of its annual statements as to compliance
described in Section 3.14;
(ii) each of its annual independent public accountants'
servicing reports described in Section 3.15; and
(iii) a copy of each rent roll and each operating and
other financial statement and occupancy
reports, to the extent such information is
required to be delivered under a Mortgage Loan,
in each case to the extent collected pursuant
to Section 3.03.
(c) The Servicer shall furnish each Rating Agency with such
information with respect to the Trust Fund, any Mortgaged
Property, a Borrower and a non-performing or Specially Serviced
Mortgage Loan as such Rating Agency shall reasonably request and
which the Servicer can reasonably obtain. The Rating Agencies
shall not be charged any fee or expense in connection therewith.
(d) Notices to each Rating Agency shall be addressed
as follows:
Fitch Investors Service, L.P.
One State Street Plaza
New York, New York 10004
Attention: Commercial Mortgage Surveillance
Duff & Phelps Credit Rating Co.
55 E. Monroe Street, 35th Floor
Chicago, Illinois 60603
Attention: Structured Finance Commercial Real Estate Monitoring
Moody's Investor Services, Inc.
99 Church Street
New York, New York 10007
Attention: Managing Director
Commercial Mortgage-Backed Securities
Standard & Poor's Ratings Services
25 Broadway
New York, New York 10004
Attention: Commercial Mortgage Surveillance
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or in each case to such other address as any Rating Agency shall
specify by written notice to the parties hereto.
SECTION 10.07. Amendment.
This Agreement or any Custodial Agreement may be
amended from time to time by the Depositor, the 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 or
therein that may be defective or inconsistent with any other
provisions herein or therein, (iii) to amend or supplement any
provisions herein or therein that shall not adversely affect in
any material respect the interests of any Certificateholder not
consenting thereto, as evidenced in writing by an Opinion of
Counsel, at the expense of the party requesting such amendment,
or as evidenced by confirmation in writing from each Rating
Agency that such amendment or supplement will not result in a
qualification, withdrawal or downgrading of the then-current
ratings assigned to the Certificates, (iv) to amend or supplement
any provisions therein to the extent necessary or desirable to
maintain the ratings assigned to each of the Classes of
Certificates by each Rating Agency or (v) to make any other
provisions with respect to matters or questions arising under
this Agreement, which shall not be inconsistent with the
provisions of this Agreement and will not result in a downgrade,
qualification or withdrawal of the then current rating or ratings
then assigned to any outstanding Class of Certificates, as
confirmed by each Rating Agency in writing.
Further, the Depositor, the Servicer, the Special
Servicer, the Trustee and the Fiscal Agent, at any time and from
time to time, without the consent of the Certificateholders, may
amend this Agreement to modify, eliminate or add to any of its
provisions to such extent as shall be necessary to maintain the
qualification of the Trust REMIC as two separate REMICs or of the
Grantor Trust as a grantor trust, or to prevent the imposition of
any additional material state or local taxes, at all times that
any Certificates are outstanding; provided, however, that such
action, as evidenced by an Opinion of Counsel (obtained at the
expense of the Trust Fund), is necessary or helpful to maintain
such qualification or to prevent the imposition of any such
taxes, and would not adversely affect in any material respect the
interest of any Certificateholder.
This Agreement or any Custodial Agreement may also be
amended from time to time by the Depositor, the Servicer, the
Special Servicer, the Trustee and the Fiscal Agent with the
consent of the Holders of Certificates representing not less than
66-2/3% of the Percentage Interests of each Class of Certificates
affected by the amendment 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 Certificateholders; 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 all the
holders of all Certificates
representing all Percentage Interests of the Class
or Classes affected thereby;
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(ii) change the percentages of Voting Rights of
Holders of Certificates which are required to
consent to any action or inaction under this
Agreement, without the consent of the Holders
of all Certificates representing all of the
Percentage Interest of the Class or Classes
affected hereby;
(iii) alter the Servicing Standard or the obligations
of the Servicer, the Special Servicer, the
Trustee or the Fiscal Agent to make a P&I
Advance or Property Advance without the consent
of the Holders of all Certificates representing
all of the Percentage Interests of the Class or
Classes affected thereby; or
(iv) amend any section hereof which relates to the
amendment of this Agreement without the consent
of all the holders of all Certificates
representing all Percentage Interests of the
Class or Classes affected thereby.
In the event that neither the Depositor nor any
successor thereto, if any, is in existence, any amendment under
this Section 10.07 shall be effective with the consent of the
Trustee, the Fiscal Agent, and the Servicer, in writing, and to
the extent required by this Section, the Certificateholders.
Promptly after the execution of any amendment, the Servicer shall
forward to the Trustee and the Trustee shall furnish written
notification of the substance of such amendment to each
Certificateholder and each Rating Agency.
It shall not be necessary for the consent of
Certificateholders under this Section 10.07 to approve the
particular form of any proposed amendment, but it shall be
sufficient if such consent shall approve the substance thereof.
The method 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; provided, however, that such method shall always
be by affirmation and in writing.
Notwithstanding any contrary provision of this
Agreement, no amendment shall be made to this Agreement or any
Custodial Agreement unless, if requested by the Servicer and/or
the Trustee, the Servicer and the Trustee shall have received an
Opinion of Counsel, at the expense of the party requesting such
amendment (or, if such amendment is required by any Rating Agency
to maintain the rating issued by it or requested by the Trustee
for any purpose described in clause (i) or (ii) of the first
sentence of this Section, then at the expense of the Trust Fund),
to the effect that such amendment will not cause either the
Upper-Tier REMIC or Lower-Tier REMIC to fail to qualify as a
REMIC at any time that any Certificates are outstanding, will not
cause a tax to be imposed on the Trust Fund under the REMIC
Provisions (other than a tax at the highest marginal corporate
tax rate on net income from foreclosure property) or will not
cause the Grantor Trust to fail to qualify as a grantor trust.
Prior to the execution of any amendment to this Agreement or
any Custodial Agreement, the Trustee, the Fiscal Agent,
the Special Servicer and the Servicer may request and
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shall be entitled to rely conclusively upon an Opinion of
Counsel, at the expense of the party requesting such amendment
(or, if such amendment is required by any Rating Agency to
maintain the rating issued by it or requested by the Trustee for
any purpose described in clause (i), (ii), (iii) or (v) (which do
not modify or otherwise relate solely to the obligations, duties
or rights of the Trustee) of the first sentence of this Section,
then at the expense of the Trust Fund) stating that the execution
of such amendment is authorized or permitted by this Agreement.
The Trustee and the Fiscal Agent may, but shall not be obligated
to, enter into any such amendment which affects the Trustee's or
the Fiscal Agent's own rights, duties or immunities under this
Agreement.
SECTION 10.08. Confirmation of Intent.
It is the express intent of the parties hereto that
the conveyance of the Trust Fund (including the Mortgage Loans)
by the Depositor to the Trustee on behalf of Certificateholders
as contemplated by this Agreement and the sale by the Depositor
of the Certificates be, and be treated for all purposes as, a
sale by the Depositor of the undivided portion of the beneficial
interest in the Trust Fund represented by the Certificates. It
is, further, not the intention of the parties that such
conveyance be deemed a pledge of the Trust Fund by the Depositor
to the Trustee to secure a debt or other obligation of the
Depositor. However, in the event that, notwithstanding the intent
of the parties, the Trust Fund is held to continue to be property
of the Depositor then (a) this Agreement shall also be deemed to
be a security agreement under applicable law; (b) the transfer of
the Trust Fund provided for herein shall be deemed to be a grant
by the Depositor to the Trustee on behalf of Certificateholders
of a first priority security interest in all of the Depositor's
right, title and interest in and to the Trust Fund and all
amounts payable to the holders of the Mortgage Loans in
accordance with the terms thereof and all proceeds of the
conversion, voluntary or involuntary, of the foregoing into cash,
instruments, securities or other property, including, without
limitation, all amounts from time to time held or invested in the
Collection Account, Lower-Tier Distribution Account, Upper-Tier
Distribution Account, Default Interest Distribution Account and
Excess Interest Distribution Account, whether in the form of
cash, instruments, securities or other property; (c) the
possession by the Trustee (or the Custodian on its behalf) of
Notes and such other items of property as constitute instruments,
money, negotiable documents or chattel paper shall be deemed to
be "possession by the secured party" for purposes of perfecting
the security interest pursuant to Section 9-305 of the Delaware
and Illinois Uniform Commercial Code; and (d) notifications to
Persons holding such property, and acknowledgments, receipts or
confirmations from Persons holding such property, shall be deemed
notifications to, or acknowledgments, receipts or confirmations
from, financial intermediaries, bailees or agents (as applicable)
of the Trustee for the purpose of perfecting such security
interest under applicable law. Any assignment of the interest of
the Trustee pursuant to any provision hereof shall also be deemed
to be an assignment of any security interest created hereby. The
Depositor shall, and upon the request of the Servicer, the
Trustee shall, to the extent consistent with this Agreement (and
at the expense of the Trust Fund), take such actions as may
be necessary to ensure that, if this Agreement were deemed
to create a security interest in the Mortgage Loans, such
security interest would be deemed to be a perfected
security interest of first priority under applicable law
and will be maintained as such throughout the term of this
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Agreement. It is the intent of
the parties that such a security interest would be effective
whether any of the Certificates are sold, pledged or assigned.
SECTION 10.09. Streit Act.
Any provisions required to be contained in this
Agreement by Section 126 and/or Section 130-k or Article 4-A of
the New York Real Property Law are hereby incorporated herein,
and such provisions shall be in addition to those conferred or
imposed by this Agreement; provided, however, that to the extent
that such Section 126 and/or Section 130-k shall not have any
effect, and if said Section 126 and/or Section 130-k should at
any time be repealed or cease to apply to this Agreement or be
construed by judicial decision to be inapplicable, said Section
126 and/or Section 130-k shall cease to have any further effect
upon the provisions of this Agreement. In case of a conflict
between the provisions of this Agreement and any mandatory
provisions of Article 4-A of the New York Real Property Law, such
mandatory provisions of said Article 4-A shall prevail, provided
that if said Article 4-A shall not apply to this Agreement,
should at any time be repealed, or cease to apply to this
Agreement or be construed by judicial decision to be
inapplicable, such mandatory provisions of such Article 4-A shall
cease to have any further effect upon the provisions of this
Agreement.
SECTION 10.10. No Intended Third-Party Beneficiaries.
No Person other than a party to this Agreement and any
Certificateholder shall have any rights with respect to the
enforcement of any of the rights or obligations hereunder.
Without limiting the foregoing, the parties to this Agreement
specifically state that no Borrower, property manager or other
party to a Mortgage Loan is an intended third-party beneficiary
of this Agreement.
-191-
<PAGE>
IN WITNESS WHEREOF, the Depositor, the Servicer, the
Trustee and the Fiscal Agent have caused their names to be signed
hereto by their respective officers thereunto duly authorized all
as of the day and year first above written.
Signed and acknowledged ASSET SECURITIZATION
in the presence of: CORPORATION,
as Depositor
/s/ Russell M. Goldenberg
- ---------------------------------
Print Name: Russell M. Goldenberg
By: /s/ Marlyn A. Marincas
/s/ Kenneth J. Yellen ---------------------------------
- --------------------------------- Name: Marlyn A. Marincas
Print Name: Kenneth J. Yellen Title: Vice President
Signed and acknowledged PACIFIC MUTUAL LIFE INSURANCE
in the presence of COMPANY,
as Servicer
/s/ P. Sneed By: /s/ M.A. Curran
- --------------------------------- --------------------------------
Print Name: P. Sneed Name: M.A. Curran
Title: Vice President
/s/ C. DeFrenza By: /s/ C.S. Dillion
- --------------------------------- --------------------------------
Print Name: C. DeFrenza Name: C.S. Dillion
Title: Assistant Secretary
Signed and acknowledged LASALLE NATIONAL BANK
in the presence of as Trustee, Custodian,
Certificate Registrar
/s/ Russell M. Goldenberg and Paying Agent
- ---------------------------------
Print Name: Russell M. Goldenberg By: /s/ Mary L. Collier
--------------------------------
/s/ Kenneth J. Yellen Name: Mary L. Collier
- --------------------------------- Title: Asst. Vice President
Print Name: Kenneth J. Yellen
-192-
<PAGE>
ABN AMRO BANK N.V., ABN AMRO BANK N.V.,
as Fiscal Agent of the Trustee as Fiscal Agent of the Trustee
By: /s/ Mary C. Casey By: /s/ Robert C. Smolka
- --------------------------------- --------------------------------
Name: Mary C. Casey Name: Robert C. Smolka
Title: Vice President Title: Group Vice President
Acknowledged by Nomura Securities
International, Inc., solely with respect
to Section 3.07, Section 3.29(c) and
Section 5.02(l)
By: /s/ Boyd Fellows
--------------------------------
Name: Boyd Fellows
Title: Managing Director
Acknowledged by Nomura Asset
Capital Corporation, Solely
with respect to Section
2.03(e) and Section 3.29(o),
NOMURA ASSET CAPITAL
CORPORATION
By: /s/ Sheryl McAfee
--------------------------------
Name: Sheryl McAfee
Title: Managing Director
-193-
<PAGE>
STATE OF NEW YORK )
)ss:
COUNTY OF NEW YORK )
On this 27th day of March, 1997, before me, the
undersigned, a Notary Public in and for the State of New York,
duly commissioned and sworn, personally appeared Marlyn A.
Marincas, to me known who, by me duly sworn, did depose and
acknowledge before me and say that he resides at Two World
Financial Center, New York, New York; that she is the Vice
President of ASSET SECURITIZATION CORPORATION, a Delaware
corporation, the corporation described in and that executed the
foregoing instrument; and that he signed his name thereto under
authority of the board of directors of said corporation and on
behalf of such corporation.
WITNESS my hand and seal hereto affixed the day and
year first above written.
/s/ Michael F. Rinzler
-----------------------------------
NOTARY PUBLIC in and for the
State of New York.
My Commission expires: January 21, 1999
(stamp)
(seal)
This instrument prepared by:
/s/ Joanna Smith
- -------------------------------
Name: Joanna Smith
Address: One Liberty Plaza
New York, NY 10006
<PAGE>
STATE OF CALIFORNIA )
)ss:
COUNTY OF ORANGE )
On this 27th day of March, 1997, before me, the
undersigned, a Notary Public in and for the State of California,
duly commissioned and sworn, personally appeared C.S. Dillion, to me
known who, by me duly sworn, did depose and acknowledge before me
and say that he/she resides at 700 Newport Center Dr., NB, CA; is
the Assistant Secretary of Pacific Mutual Life Insurance Company,
the corporation described in and that executed the foregoing
instrument; and that he/she signed his/her name thereto under
authority of the board of directors of said corporation and on
behalf of such corporation.
WITNESS my hand and seal hereto affixed the day and
year first above written.
/s/ Patti A. Sneed
-----------------------------------
NOTARY PUBLIC in and for the
State of California.
My Commission expires: October 30, 2000
(stamp)
(seal)
This instrument prepared by:
/s/ Joanna Smith
- ---------------------------------
Name: Joanna Smith
Address: One Liberty Plaza
New York, NY 10006
<PAGE>
STATE OF CALIFORNIA )
)ss:
COUNTY OF ORANGE )
On this 27th day of March, 1997, before me, the
undersigned, a Notary Public in and for the State of California,
duly commissioned and sworn, personally appeared M.A. Curran, to me
known who, by me duly sworn, did depose and acknowledge before me
and say that he/she resides at 700 Newport Center Dr., NB, CA; is
the Vice President of Pacific Mutual Life Insurance Company,
the corporation described in and that executed the foregoing
instrument; and that he/she signed his/her name thereto under
authority of the board of directors of said corporation and on
behalf of such corporation.
WITNESS my hand and seal hereto affixed the day and
year first above written.
/s/ Patti A. Sneed
-----------------------------------
NOTARY PUBLIC in and for the
State of California.
My Commission expires: October 30, 2000
(stamp)
(seal)
This instrument prepared by:
/s/ Joanna Smith
- ---------------------------------
Name: Joanna Smith
Address: One Liberty Plaza
New York, NY 10006
<PAGE>
STATE OF NEW YORK )
)ss:
COUNTY OF NEW YORK )
On this 27th day of March, 1997, before me, the
undersigned, a Notary Public in and for the State of New York,
duly commissioned and sworn, personally appeared Mary Collier, to
me known who, by me duly sworn, did depose and acknowledge before
me and say that she resides at 135 South LaSalle, Chicago, Illinois;
that she is an Assistant Vice President of LASALLE NATIONAL BANK, a
nationally chartered bank, the corporation described in and that
executed the foregoing instrument; and that she signed her name
thereto under authority of the board of directors of said
corporation and on behalf of such corporation.
WITNESS my hand and seal hereto affixed the day and
year first above written.
/s/ Michael F. Rinzler
-----------------------------------
NOTARY PUBLIC in and for the
State of New York.
My Commission expires: January 21, 1999
(stamp)
(seal)
This instrument prepared by:
/s/ Joanna Smith
- -------------------------------
Name: Joanna Smith
Address: One Liberty Plaza
New York, NY 10006
<PAGE>
STATE OF ILLINOIS )
)ss:
COUNTY OF COOK )
On the 25th day of March, 1997, before me, Sandra Alvarez,
a Notary Public in and for said State, personally appeared Mary
C. Casey, Vice President, and Robert C. Smolka, Group Vice
President, personally known to me or proved to me on the basis of
satisfactory evidence to be the persons whose names are
subscribed to the within instrument and acknowledged to me that
they executed the same in their authorized capacity, and that by
their signatures on the instrument the corporation upon behalf of
which the persons acted executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed
my official seal the day and year in this certificate first above
written.
/s/ Sandra Alvarez
-------------------------------------
NOTARY PUBLIC
My Commission expires August 20, 2000
(stamp)
(seal)
This instrument prepared by:
/s/ Joanna Smith
- -------------------------------
Name: Joanna Smith
Address: One Liberty Plaza
New York, NY 10006
<PAGE>
EXHIBIT A-1
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO THE CERTIFICATE REGISTRAR FOR
REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC),
ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION
OF THE DEPOSITOR, THE ORIGINATOR, THE SERVICER, THE TRUSTEE, THE
FISCAL AGENT OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THE
CERTIFICATES NOR THE UNDERLYING MORTGAGE LOANS ARE INSURED OR
GUARANTEED BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
PRINCIPAL PAYMENTS ON THIS CERTIFICATE ARE PAYABLE IN
INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING
CERTIFICATE BALANCE OF THIS CERTIFICATE AT ANY TIME MAY BE LESS
THAN THE INITIAL CERTIFICATE BALANCE SET FORTH BELOW.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS A PRO RATA UNDIVIDED BENEFICIAL INTEREST IN A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G(a)(1) AND
860D OF THE INTERNAL REVENUE CODE OF 1986, AND CERTAIN OTHER
ASSETS.
<PAGE>
ASSET SECURITIZATION CORPORATION
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1997-MD VII, CLASS A-1A
Pass-Through Rate: 7.32000%
First Distribution Date: Cut-off Date: March 27, 1997
April 15, 1997
Aggregate Initial Scheduled Final
Certificate Balance of the Distribution Date:
Class A-1A Certificates: January 13, 2027
$115,435,756
CUSIP: 045424 EG 9 ISIN: US045424 EG92
Common Code: 7522207 Initial Certificate
Balance of this Certificate:
$115,435,756
No.: A-1A-
This certifies that CEDE & CO. is the registered owner
of a beneficial ownership interest in a Trust Fund, including the
distributions to be made with respect to the Class A-1A
Certificates. The Trust Fund, described more fully below,
consists primarily of a pool of Mortgage Loans secured by first
liens on commercial properties and held in trust by the Trustee
and serviced by the Servicer. The Trust Fund was created, and the
Mortgage Loans are to be serviced, pursuant to the Pooling and
Servicing Agreement (as defined below). The Holder of this
Certificate, by virtue of the acceptance hereof, assents to the
terms, provisions and conditions of the Pooling and Servicing
Agreement and is bound thereby. Also issued under the Pooling and
Servicing Agreement are the Class A-1B, Class PS-1, Class CS-1,
Class A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class B-1,
Class B-1H, Class V-1, Class V-2, Class R and Class LR
Certificates (together with the A-1A Certificates, the
"Certificates"; the Holders of Certificates issued under the
Pooling and Servicing Agreement are collectively referred to
herein as "Certificateholders").
This Certificate is issued pursuant to, and in
accordance with, the terms of a Pooling and Servicing Agreement
dated as of March 27, 1997 (the "Pooling and Servicing
Agreement"), by and among Asset Securitization Corporation, as
Depositor, Pacific Mutual Life Insurance Company, as Servicer,
LaSalle National Bank, as Trustee, and ABN AMRO Bank N.V., as
Fiscal Agent. To the extent not defined herein, capitalized terms
used herein shall have the meanings assigned thereto in the
Pooling and Servicing Agreement.
This Certificate represents a pro rata undivided
beneficial interest in a "regular interest" in a "real estate
mortgage investment conduit," as those terms are defined,
respectively, in Sections 860G(a)(1) and 860D of the Internal
Revenue Code of l986, as amended, and certain other assets.
1
<PAGE>
The Trustee makes no representation or warranty as to
any of the statements contained herein or the validity or
sufficiency of the Certificates or the Mortgage Loans and has
executed this Certificate in its limited capacity as Trustee
under the Pooling and Servicing Agreement.
Pursuant to the terms of the Pooling and Servicing
Agreement, the Trustee, or the Paying Agent on behalf of the
Trustee, will distribute (other than the final distribution on
any Certificate), on the thirteenth day of each month, or if such
day is not a Business Day, the Business Day immediately following
such day, commencing in April, 1997 (each such date, a
"Distribution Date"); provided, however, that in any month the
Distribution Date will be no earlier than the second Business Day
following the eleventh day of such month and, provided further,
that if the eleventh day of any month is not a Business Day, the
Distribution Date shall be the third Business Day following the
eleventh day of such month, to the Person in whose name this
Certificate is registered as of the related Record Date, an
amount equal to such Person's pro rata share (based on the
Percentage Interest represented by this Certificate) of that
portion of the aggregate amount of principal and interest then
distributable, if any, allocable to the Class A-1A Certificates
for such Distribution Date, all as more fully described in the
Pooling and Servicing Agreement. Holders of this Certificate may
be entitled to Prepayment Premiums, as provided in the Pooling
and Servicing Agreement.
Interest accrued on this Certificate during an
Interest Accrual Period, plus the aggregate unpaid Class Interest
Shortfall with respect to this Certificate, if any, will be
payable on the related Distribution Date to the extent provided
in the Pooling and Servicing Agreement. The "Interest Accrual
Period" with respect to any Distribution Date commences on the
eleventh day of the month preceding the month in which such
Distribution Date occurs and ends on the tenth day of the month
in which such Distribution Date occurs, provided that the first
Interest Accrual Period shall commence on the Cut-off Date and
end on April 10, 1997. Interest for each Interest Accrual Period,
other than the Interest Accrual Period with respect to the
Distribution Date occurring in April 1997, is calculated based on
a 360-day year consisting of twelve 30-day months. The Interest
Accrual Period with respect to the Distribution Date occurring in
April 1997 shall consist of 14 days.
All distributions (other than the final distribution
on any Certificate) will be made by the Paying Agent to the
persons in whose names the Certificates are registered at the
close of business on each Record Date, which will be the tenth
day of the month in which the related Distribution Date occurs
or, if such day is not a Business Day, the preceding Business
Day; provided, however, that with respect to the Distribution
Date occurring in April 1997, the Record Date will be the Closing
Date, except as specified in the Pooling and Servicing Agreement.
Such distributions shall be made on each Distribution Date other
than the Termination Date to each Certificateholder of record on
the related Record Date by check mailed by first class mail to
the address set forth therefor in the Certificate Register or,
provided that such Certificateholder holds Certificates with an
aggregate initial Certificate Balance in excess of $5,000,000,
2
<PAGE>
and shall have provided the Paying Agent with wire instructions
in writing at least five Business Days prior to the related
Record Date, by wire transfer of immediately available funds to
the account of such Certificateholder at a bank or other entity
located in the United States and having appropriate facilities
therefor. The final distribution on each Certificate shall be
made in like manner, but only upon presentment and surrender of
such Certificate at the office of the Trustee or its agent (which
may be the Paying Agent or the Certificate Registrar acting as
such agent) maintained in the Borough of Manhattan that is
specified in the notice to Certificateholders of such final
distribution.
Any funds not distributed on the Termination Date
because of the failure of any Certificateholders to tender their
Certificates shall be set aside and held in trust for the account
of the appropriate non-tendering Certificateholders, whereupon
the Trust Fund shall terminate. If any Certificates as to which
notice of the Termination Date has been given pursuant to Section
9.01 of the Pooling and Servicing Agreement 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 Certificateholders, at their last addresses
shown in the Certificate Register, to surrender their
Certificates for cancellation in order to receive, from such
funds held, the final distribution with respect thereto. If
within one year after the second notice any Certificate shall not
have been surrendered for cancellation, the Trustee may, directly
or through an agent, take appropriate steps to contact the
remaining Certificateholders concerning surrender of their
Certificates. The costs and expenses of maintaining such funds
and of contacting Certificateholders shall be paid out of the
assets which remain held. If within two years after the second
notice any Certificates shall not have been surrendered for
cancellation, the Paying Agent shall pay to the Class R
Certificateholders all amounts distributable to the Holders
thereof.. No interest shall accrue or be payable to any
Certificateholder on any amount held as a result of such
Certificateholder's failure to surrender its Certificate(s) for
final payment thereof in accordance with Section 9.01 of the
Pooling and Servicing Agreement. Such funds held by the Trustee
may be invested under certain circumstances, and subject to
certain conditions as specified in the Pooling and Servicing
Agreement.
This Certificate is limited in right of payment to,
among other things, certain collections and recoveries in respect
of the Mortgage Loans, as more specifically set forth herein and
in the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement,
the Trust Fund includes (i) such Mortgage Loans as from time to
time are subject to the Pooling and Servicing Agreement, together
with the Mortgage Files relating thereto; (ii) all scheduled or
unscheduled payments on or collections in respect of the Mortgage
Loans due after Cut-off Date; (iii) any REO Property; (iv) all
revenues received in respect of any REO Property; (v) the
Servicer's and the Trustee's rights under the insurance policies
with respect to the Mortgage Loans required to be maintained
pursuant to the Pooling and Servicing Agreement and any proceeds
thereof; (vi) any Assignments of Leases, Rents and Profits and
any security agreements; (vii) any indemnities or guaranties
given as additional security for any Mortgage Loans; (viii) all
assets deposited in the Lock-Box Accounts, Cash Collateral
Accounts, Escrow Accounts, Reserve Accounts and the Hudson
Treasury Collateral Account (to the extent such assets in such
3
<PAGE>
accounts are not assets of the respective Borrowers), the
Collection Account, the Lower-Tier Distribution Account, the
Upper-Tier Distribution Account, the Excess Interest Distribution
Account, the Interest Reserve Account and the Default Interest
Distribution Account, including reinvestment income thereon; (ix)
any environmental indemnity agreements relating to the Mortgaged
Properties; (x) the rights and remedies under the Mortgage Loan
Purchase and Sale Agreement; and (xi) the proceeds of any of the
foregoing (other than any interest earned on deposits in the
Lock-Box Accounts, Cash Collateral Accounts, Escrow Accounts, the
Hudson Treasury Collateral Account and any Reserve Accounts, to
the extent such interest belongs to the related Borrower). As
provided in the Pooling and Servicing Agreement, withdrawals may
be made from certain of the above accounts for purposes other
than distributions to Certificateholders.
This Certificate does not purport to summarize the
Pooling and Servicing Agreement, and reference is made to the
Pooling and Servicing Agreement for the interests, rights,
benefits, obligations and duties evidenced hereby, and the
limitations thereon, and the rights, duties and immunities of the
Trustee.
As provided in the Pooling and Servicing Agreement and
subject to certain limitations set forth therein, this
Certificate is transferable or exchangeable only upon surrender
of this Certificate to the Certificate Registrar at the Corporate
Trust Office together with an assignment and transfer (executed
by the Holder or his duly authorized attorney), subject to the
applicable requirements in Article V of the Pooling and Servicing
Agreement. Upon surrender for registration of transfer of this
Certificate, subject to the applicable requirements of Article V
of the Pooling and Servicing Agreement, the Trustee shall execute
and the Authenticating Agent shall duly authenticate in the name
of the designated transferee or transferees, one or more new
Certificates in authorized denominations of a like aggregate
Certificate Balance. Such Certificates shall be delivered by the
Certificate Registrar in accordance with Section 5.02(e) of the
Pooling and Servicing Agreement.
Prior to due presentation of this Certificate for
registration of transfer, the Depositor, the Servicer, the
Trustee, the Fiscal Agent, the Certificate Registrar, any Paying
Agent and any agent of any of them may treat the Person in whose
name this Certificate is registered as the owner hereof for all
purposes, and none of the Depositor, the Servicer, the Trustee,
the Fiscal Agent, the Certificate Registrar, any Paying Agent or
any agent of any of them shall be affected by any notice or
knowledge to the contrary.
No fee or service charge shall be imposed by the
Certificate Registrar for its services in respect of any
registration of transfer or exchange referred to in Section 5.02
of the Pooling and Servicing Agreement. The Certificate Registrar
may require payment by each transferor of a sum sufficient to
cover any tax, expense or other governmental charge payable in
connection with any such transfer.
The Pooling and Servicing Agreement or any Custodial
Agreement may be amended from time to time by the Depositor, the
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 in
4
<PAGE>
the Pooling and Servicing Agreement or therein that may be
defective or inconsistent with any other provisions in such
agreement, (iii) to amend or supplement any provisions in either
of such agreements to the extent necessary or desirable to
maintain the rating or ratings assigned to each of the Classes of
Certificates by each Rating Agency, (iv) to amend or supplement
any provisions in either of such agreements that shall not
adversely affect in any material respect the interests of any
Certificateholder not consenting thereto, as evidenced in writing
by an Opinion of Counsel, at the expense of the party requesting
such amendment, or as evidenced by confirmation in writing from
each Rating Agency that such amendment or supplement will not
result in a qualification, withdrawal or downgrading of the
then-current ratings assigned to the Certificates, or (v) to make
any other provisions with respect to matters or questions arising
under the Pooling and Servicing Agreement, which shall not be
inconsistent with the provisions of the Pooling and Servicing
Agreement and will not result in a downgrade, qualification or
withdrawal of the then current rating or ratings then assigned to
any outstanding Class of Certificates, as confirmed by each
Rating Agency in writing.
Further, the Depositor, the Servicer, the Special
Servicer, the Trustee and the Fiscal Agent, at any time and from
time to time, without the consent of the Certificateholders, may
amend the Pooling and Servicing Agreement to modify, eliminate or
add to any of its provisions to such extent as shall be necessary
to maintain the qualification of the Trust REMIC as two separate
REMICs or of the Grantor Trust as a grantor trust, or to prevent
the imposition of any additional material state or local taxes,
at all times that any Certificates are outstanding; provided,
however, that such action, as evidenced by an Opinion of Counsel
(obtained at the expense of the Trust Fund), is necessary or
helpful to maintain such qualification or to prevent the
imposition of any such taxes, and would not adversely affect in
any material respect the interest of any Certificateholder.
The Pooling and Servicing Agreement or any Custodial
Agreement may also be amended from time to time by the Depositor,
the Servicer, the Special Servicer, the Trustee and the Fiscal
Agent with the consent of the Holders of Certificates evidencing
not less than 662/3% of the Percentage Interests of each Class of
Certificates affected by the amendment for the purpose of adding
any provisions to or changing in any manner or eliminating any of
the provisions of the Pooling and Servicing Agreement or of
modifying in any manner the rights of the Certificateholders;
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 all the
holders of all Certificates representing all
Percentage Interests of the Class or Classes
affected thereby;
(ii) change the percentages of Voting Rights of
Holders of Certificates which are required to
consent to any action or inaction under the
Pooling and Servicing Agreement, without the
consent of all the holders of all Certificates
representing all Percentage Interests of the
Class or Classes affected thereby;
5
<PAGE>
(iii) alter the Servicing Standard or the
obligations of the Servicer, the Special
Servicer, the Trustee or the Fiscal Agent to make
a P&I Advance or Property Advance without the
consent of the Holders of all Certificates
representing all of the Percentage Interests of
the Class or Classes affected thereby; or
(iv) amend any section of the Pooling and
Servicing Agreement which relates to the
amendment thereof, without the consent of all the
holders of all Certificates representing all
Percentage Interests of the Class or Classes
affected thereby.
Any Holder of Class LR Certificates representing
greater than a 50% Percentage Interest in such Class may effect
an early termination of the Trust Fund, upon not less than 30
days' prior notice given to the Trustee and Servicer any time on
or after the Early Termination Notice Date (defined as any date
as of which the aggregate Stated Principal Balance of the
Mortgage Loans is less than 1.0% of the aggregate Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date)
specifying the Anticipated Termination Date, by purchasing on
such date all, but not less than all, of the Mortgage Loans then
included in the Trust Fund, and all property acquired in respect
of any Mortgage Loan, at a purchase price, payable in cash, equal
to not less than the greater of:
(i) the sum of
(A) 100% of the unpaid principal balance of each
Mortgage Loan included in the Trust Fund as
of the last day of the month preceding such
Distribution Date;
(B) the fair market value of all other property
included in the Trust Fund as of the last
day of the month preceding such Distribution
Date, as determined by an Independent
appraiser acceptable to the Servicer as of
the date not more than 30 days prior to the
last day of the month preceding such
Distribution Date;
(C) all unpaid interest accrued on such
principal balance of each such Mortgage Loan
(including for this purpose any Mortgage
Loan as to which title to the related
Mortgaged Property has been acquired) at the
Mortgage Rate (plus the Excess Rate, to the
extent applicable) to the last day of the
Interest Accrual Period preceding such
Distribution Date;
(D) the aggregate amount of unreimbursed
Advances and unpaid Servicing Fees, Special
Servicing Compensation, Trustee Fees and
Trust Fund expenses, in each case with
interest thereon at the Advance Rate to the
extent permitted under the Pooling and
Servicing Agreement; and
6
<PAGE>
(ii) the aggregate fair market value of the
Mortgage Loans, and all other property acquired
in respect of any Mortgage Loan in the Trust
Fund, on the last day of the month preceding such
Distribution Date, as determined by an
Independent appraiser acceptable to the Servicer
as of a date not more than 30 days prior to the
last day of the month preceding such Distribution
Date, together with one month's interest thereon
at the related Mortgage Rates.
The Servicer or the Depositor may also effect such
termination as provided above if it first notifies each Holder of
a Class LR Certificate through the Trustee of its intention to do
so in writing at least 30 days prior to the Early Termination
Notice Date and no Class LR Holder terminates the Trust Fund as
described above within such 30 day period. All costs and expenses
incurred by any and all parties to the Pooling and Servicing
Agreement or by the Trust Fund in connection with the purchase of
the Mortgage Loans and other assets of the Trust Fund pursuant to
Section 9.01(c) of the Pooling and Servicing Agreement shall be
borne by the party exercising its purchase rights thereunder. The
Trustee shall be entitled to rely conclusively on any
determination made by an Independent appraiser pursuant to
Section 9.01(c) of the Pooling and Servicing Agreement.
The respective obligations and responsibilities of the
Servicer, the Special Servicer, the Depositor, the Trustee and
the Fiscal Agent created by the Pooling and Servicing Agreement
with respect to the Certificates (other than the obligation to
make certain payments and to send certain notices to
Certificateholders as set forth in the Pooling and Servicing
Agreement) shall terminate immediately following the occurrence
of the last action required to be taken by the Trustee pursuant
to Article IX of the Pooling and Servicing Agreement on the
Termination Date; provided, however, that in no event shall the
trust created thereby continue beyond the expiration of
twenty-one years from the death of the last survivor of the
descendants of Joseph P. Kennedy, the late ambassador of the
United States to the United Kingdom, living on the Closing Date.
Unless the Certificate of Authentication on this
Certificate has been executed by the Trustee or on its behalf by
the Authenticating Agent, by manual signature, this Certificate
shall not be entitled to any benefit under the Pooling and
Servicing Agreement or be valid for any purpose.
7
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Class A-1A
Certificate to be duly executed.
Dated: March 27, 1997
LASALLE NATIONAL BANK, not in its
individual capacity but solely as Trustee
By:______________________________________
Authorized Officer
Certificate of Authentication
_____________________________
This is one of the Class A-1A Certificates referred to
in the Pooling and Servicing Agreement.
Dated: March 27, 1997
LASALLE NATIONAL BANK, not in its individual
capacity but solely as Authenticating Agent
By:_______________________________________
Authorized Officer
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ASSIGNMENT
FOR VALUE RECEIVED, the undersigned ("Assignor(s)") hereby sell(s),
assign(s) and transfer(s) unto__________________________________________
________________________________________________________________________
(please print or typewrite name(s) and address(es), including
postal zip code(s) of assignee(s)) ("Assignee(s)") the entire
Percentage Interest represented by the within Class A-1A
Certificate and hereby authorize(s) the registration of transfer
of such interest to Assignee(s) on the Certificate Register of
the Trust Fund.
I (we) further direct the Certificate Registrar to
issue a new Class A-1A Certificate of the entire Percentage
Interest represented by the within Class A-1A Certificates to the
above-named Assignee(s) and to deliver such Class A-1A
Certificate to the following address:
________________________________________________________________________
________________________________________________________________________
Date:_______________ _________________________________________
Signature by or on behalf of
Assignor(s)
_________________________________________
Taxpayer Identification Number
9
<PAGE>
DISTRIBUTION INSTRUCTIONS
The Assignee(s) should include the following for
purposes of distribution:_______________________________________________
________________________________________________________________________
Address of the Assignee(s) for the purpose of receiving notices
and distributions:
Distributions, if being made by wire transfer in immediately
available funds to _____________________________________________________
for the account of _____________________________________________________
account number _________________________________________________________.
This information is provided by______________________________
_______________________________________ the Assignee(s) named
above, or ________________________________________________ as its
(their) agent.
By:______________________________________
______________________________________
[Please print or type name(s)]
______________________________________
Title:
______________________________________
Taxpayer Identification Number
10
<PAGE>
EXHIBIT A-2
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO THE CERTIFICATE REGISTRAR FOR
REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC),
ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION
OF THE DEPOSITOR, THE ORIGINATOR, THE SERVICER, THE TRUSTEE, THE
FISCAL AGENT OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THE
CERTIFICATES NOR THE UNDERLYING MORTGAGE LOANS ARE INSURED OR
GUARANTEED BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
PRINCIPAL PAYMENTS ON THIS CERTIFICATE ARE PAYABLE IN
INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING
CERTIFICATE BALANCE OF THIS CERTIFICATE AT ANY TIME MAY BE LESS
THAN THE INITIAL CERTIFICATE BALANCE SET FORTH BELOW.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS A PRO RATA UNDIVIDED BENEFICIAL INTEREST IN A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G(a)(1) AND
860D OF THE INTERNAL REVENUE CODE OF 1986, AND CERTAIN OTHER
ASSETS.
<PAGE>
ASSET SECURITIZATION CORPORATION
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1997-MD VII, CLASS A-1B
Pass-Through Rate: 7.41000%
First Distribution Date: Cut-off Date: March 27, 1997
April 15, 1997
Aggregate Initial Scheduled Final
Certificate Balance of the Distribution Date:
Class A-1B Certificates: January 13, 2027
$214,279,224
CUSIP: 045424 EH 7 ISIN: US045424 EH75
Common Code: 7522215 Initial Certificate
Balance of this Certificate:
$214,279,224
No.: A-1B-
This certifies that CEDE & CO. is the registered owner
of a beneficial ownership interest in a Trust Fund, including the
distributions to be made with respect to the Class A-1B
Certificates. The Trust Fund, described more fully below,
consists primarily of a pool of Mortgage Loans secured by first
liens on commercial properties and held in trust by the Trustee
and serviced by the Servicer. The Trust Fund was created, and the
Mortgage Loans are to be serviced, pursuant to the Pooling and
Servicing Agreement (as defined below). The Holder of this
Certificate, by virtue of the acceptance hereof, assents to the
terms, provisions and conditions of the Pooling and Servicing
Agreement and is bound thereby. Also issued under the Pooling and
Servicing Agreement are the Class A-1A, Class PS-1, Class CS-1,
Class A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class B-1,
Class B-1H, Class V-1, Class V-2, Class R and Class LR
Certificates (together with the A-1B Certificates, the
"Certificates"; the Holders of Certificates issued under the
Pooling and Servicing Agreement are collectively referred to
herein as "Certificateholders").
This Certificate is issued pursuant to, and in
accordance with, the terms of a Pooling and Servicing Agreement
dated as of March 27, 1997 (the "Pooling and Servicing
Agreement"), by and among Asset Securitization Corporation, as
Depositor, Pacific Mutual Life Insurance Company, as Servicer,
LaSalle National Bank, as Trustee, and ABN AMRO Bank N.V., as
Fiscal Agent. To the extent not defined herein, capitalized terms
used herein shall have the meanings assigned thereto in the
Pooling and Servicing Agreement.
This Certificate represents a pro rata undivided
beneficial interest in a "regular interest" in a "real estate
mortgage investment conduit," as those terms are defined, respectively,
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in Sections 860G(a)(1) and 860D of the Internal Revenue Code of
l986, as amended, and certain other assets.
The Trustee makes no representation or warranty as to
any of the statements contained herein or the validity or
sufficiency of the Certificates or the Mortgage Loans and has
executed this Certificate in its limited capacity as Trustee
under the Pooling and Servicing Agreement.
Pursuant to the terms of the Pooling and Servicing
Agreement, the Trustee, or the Paying Agent on behalf of the
Trustee, will distribute (other than the final distribution on
any Certificate), on the thirteenth day of each month, or if such
day is not a Business Day, the Business Day immediately following
such day, commencing in April, 1997 (each such date, a
"Distribution Date"); provided, however, that in any month the
Distribution Date will be no earlier than the second Business Day
following the eleventh day of such month and, provided further,
that if the eleventh day of any month is not a Business Day, the
Distribution Date shall be the third Business Day following the
eleventh day of such month, to the Person in whose name this
Certificate is registered as of the related Record Date, an
amount equal to such Person's pro rata share (based on the
Percentage Interest represented by this Certificate) of that
portion of the aggregate amount of principal and interest then
distributable, if any, allocable to the Class A-1B Certificates
for such Distribution Date, all as more fully described in the
Pooling and Servicing Agreement. Holders of this Certificate may
be entitled to Prepayment Premiums, as provided in the Pooling
and Servicing Agreement.
Interest accrued on this Certificate during an
Interest Accrual Period, plus the aggregate unpaid Class Interest
Shortfall with respect to this Certificate, if any, will be
payable on the related Distribution Date to the extent provided
in the Pooling and Servicing Agreement. The "Interest Accrual
Period" with respect to any Distribution Date commences on the
eleventh day of the month preceding the month in which such
Distribution Date occurs and ends on the tenth day of the month
in which such Distribution Date occurs, provided that the first
Interest Accrual Period shall commence on the Cut-off Date and
end on April 10, 1997. Interest for each Interest Accrual Period,
other than the Interest Accrual Period with respect to the
Distribution Date occurring in April 1997, is calculated based on
a 360-day year consisting of twelve 30-day months. The Interest
Accrual Period with respect to the Distribution Date occurring in
April 1997 shall consist of 14 days.
All distributions (other than the final distribution
on any Certificate) will be made by the Paying Agent to the
persons in whose names the Certificates are registered at the
close of business on each Record Date, which will be the tenth
day of the month in which the related Distribution Date occurs
or, if such day is not a Business Day, the preceding Business
Day; provided, however, that with respect to the Distribution
Date occurring in April 1997, the Record Date will be the Closing
Date, except as specified in the Pooling and Servicing Agreement.
Such distributions shall be made on each Distribution Date other
than the Termination Date to each Certificateholder of record on
the related Record Date by check mailed by first class mail to
the address set forth therefor in the Certificate Register or,
provided that such Certificateholder holds Certificates with an
aggregate initial Certificate Balance in excess of $5,000,000,
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and shall have provided the Paying Agent with wire instructions in
writing at least five Business Days prior to the related Record Date,
by wire transfer of immediately available funds to the account of
such Certificateholder at a bank or other entity located in the
United States and having appropriate facilities therefor. The
final distribution on each Certificate shall be made in like
manner, but only upon presentment and surrender of such
Certificate at the office of the Trustee or its agent (which may
be the Paying Agent or the Certificate Registrar acting as such
agent) maintained in the Borough of Manhattan that is specified
in the notice to Certificateholders of such final distribution.
Any funds not distributed on the Termination Date
because of the failure of any Certificateholders to tender their
Certificates shall be set aside and held in trust for the account
of the appropriate non-tendering Certificateholders, whereupon
the Trust Fund shall terminate. If any Certificates as to which
notice of the Termination Date has been given pursuant to Section
9.01 of the Pooling and Servicing Agreement 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 Certificateholders, at their last addresses
shown in the Certificate Register, to surrender their
Certificates for cancellation in order to receive, from such
funds held, the final distribution with respect thereto. If
within one year after the second notice any Certificate shall not
have been surrendered for cancellation, the Trustee may, directly
or through an agent, take appropriate steps to contact the
remaining Certificateholders concerning surrender of their
Certificates. The costs and expenses of maintaining such funds
and of contacting Certificateholders shall be paid out of the
assets which remain held. If within two years after the second
notice any Certificates shall not have been surrendered for
cancellation, the Paying Agent shall pay to the Class R
Certificateholders all amounts distributable to the Holders
thereof.. No interest shall accrue or be payable to any
Certificateholder on any amount held as a result of such
Certificateholder's failure to surrender its Certificate(s) for
final payment thereof in accordance with Section 9.01 of the
Pooling and Servicing Agreement. Such funds held by the Trustee
may be invested under certain circumstances, and subject to
certain conditions as specified in the Pooling and Servicing
Agreement.
This Certificate is limited in right of payment to,
among other things, certain collections and recoveries in respect
of the Mortgage Loans, as more specifically set forth herein and
in the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement,
the Trust Fund includes (i) such Mortgage Loans as from time to
time are subject to the Pooling and Servicing Agreement, together
with the Mortgage Files relating thereto; (ii) all scheduled or
unscheduled payments on or collections in respect of the Mortgage
Loans due after Cut-off Date; (iii) any REO Property; (iv) all
revenues received in respect of any REO Property; (v) the
Servicer's and the Trustee's rights under the insurance policies
with respect to the Mortgage Loans required to be maintained
pursuant to the Pooling and Servicing Agreement and any proceeds
thereof; (vi) any Assignments of Leases, Rents and Profits and
any security agreements; (vii) any indemnities or guaranties
given as additional security for any Mortgage Loans; (viii) all
assets deposited in the Lock-Box Accounts, Cash Collateral
Accounts, Escrow Accounts, Reserve Accounts and the Hudson
Treasury Collateral Account (to the extent such assets in such
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accounts are not assets of the respective Borrowers), the
Collection Account, the Lower-Tier Distribution Account, the
Upper-Tier Distribution Account, the Excess Interest Distribution
Account, the Interest Reserve Account and the Default Interest
Distribution Account, including reinvestment income thereon; (ix)
any environmental indemnity agreements relating to the Mortgaged
Properties; (x) the rights and remedies under the Mortgage Loan
Purchase and Sale Agreement; and (xi) the proceeds of any of the
foregoing (other than any interest earned on deposits in the
Lock-Box Accounts, Cash Collateral Accounts, Escrow Accounts, the
Hudson Treasury Collateral Account and any Reserve Accounts, to
the extent such interest belongs to the related Borrower). As
provided in the Pooling and Servicing Agreement, withdrawals may
be made from certain of the above accounts for purposes other
than distributions to Certificateholders.
This Certificate does not purport to summarize the
Pooling and Servicing Agreement, and reference is made to the
Pooling and Servicing Agreement for the interests, rights,
benefits, obligations and duties evidenced hereby, and the
limitations thereon, and the rights, duties and immunities of the
Trustee.
As provided in the Pooling and Servicing Agreement and
subject to certain limitations set forth therein, this
Certificate is transferable or exchangeable only upon surrender
of this Certificate to the Certificate Registrar at the Corporate
Trust Office together with an assignment and transfer (executed
by the Holder or his duly authorized attorney), subject to the
applicable requirements in Article V of the Pooling and Servicing
Agreement. Upon surrender for registration of transfer of this
Certificate, subject to the applicable requirements of Article V
of the Pooling and Servicing Agreement, the Trustee shall execute
and the Authenticating Agent shall duly authenticate in the name
of the designated transferee or transferees, one or more new
Certificates in authorized denominations of a like aggregate
Certificate Balance. Such Certificates shall be delivered by the
Certificate Registrar in accordance with Section 5.02(e) of the
Pooling and Servicing Agreement.
Prior to due presentation of this Certificate for
registration of transfer, the Depositor, the Servicer, the
Trustee, the Fiscal Agent, the Certificate Registrar, any Paying
Agent and any agent of any of them may treat the Person in whose
name this Certificate is registered as the owner hereof for all
purposes, and none of the Depositor, the Servicer, the Trustee,
the Fiscal Agent, the Certificate Registrar, any Paying Agent or
any agent of any of them shall be affected by any notice or
knowledge to the contrary.
No fee or service charge shall be imposed by the
Certificate Registrar for its services in respect of any
registration of transfer or exchange referred to in Section 5.02
of the Pooling and Servicing Agreement. The Certificate Registrar
may require payment by each transferor of a sum sufficient to
cover any tax, expense or other governmental charge payable in
connection with any such transfer.
The Pooling and Servicing Agreement or any Custodial
Agreement may be amended from time to time by the Depositor, the
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 in
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the Pooling and Servicing Agreement or therein that may be
defective or inconsistent with any other provisions in such
agreement, (iii) to amend or supplement any provisions in either
of such agreements to the extent necessary or desirable to
maintain the rating or ratings assigned to each of the Classes of
Certificates by each Rating Agency, (iv) to amend or supplement
any provisions in either of such agreements that shall not
adversely affect in any material respect the interests of any
Certificateholder not consenting thereto, as evidenced in writing
by an Opinion of Counsel, at the expense of the party requesting
such amendment, or as evidenced by confirmation in writing from
each Rating Agency that such amendment or supplement will not
result in a qualification, withdrawal or downgrading of the
then-current ratings assigned to the Certificates, or (v) to make
any other provisions with respect to matters or questions arising
under the Pooling and Servicing Agreement, which shall not be
inconsistent with the provisions of the Pooling and Servicing
Agreement and will not result in a downgrade, qualification or
withdrawal of the then current rating or ratings then assigned to
any outstanding Class of Certificates, as confirmed by each
Rating Agency in writing.
Further, the Depositor, the Servicer, the Special
Servicer, the Trustee and the Fiscal Agent, at any time and from
time to time, without the consent of the Certificateholders, may
amend the Pooling and Servicing Agreement to modify, eliminate or
add to any of its provisions to such extent as shall be necessary
to maintain the qualification of the Trust REMIC as two separate
REMICs or of the Grantor Trust as a grantor trust, or to prevent
the imposition of any additional material state or local taxes,
at all times that any Certificates are outstanding; provided,
however, that such action, as evidenced by an Opinion of Counsel
(obtained at the expense of the Trust Fund), is necessary or
helpful to maintain such qualification or to prevent the
imposition of any such taxes, and would not adversely affect in
any material respect the interest of any Certificateholder.
The Pooling and Servicing Agreement or any Custodial
Agreement may also be amended from time to time by the Depositor,
the Servicer, the Special Servicer, the Trustee and the Fiscal
Agent with the consent of the Holders of Certificates evidencing
not less than 662/3% of the Percentage Interests of each Class of
Certificates affected by the amendment for the purpose of adding
any provisions to or changing in any manner or eliminating any of
the provisions of the Pooling and Servicing Agreement or of
modifying in any manner the rights of the Certificateholders;
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 all the
holders of all Certificates representing all
Percentage Interests of the Class or Classes
affected thereby;
(ii) change the percentages of Voting Rights of
Holders of Certificates which are required to
consent to any action or inaction under the
Pooling and Servicing Agreement, without the
consent of all the holders of all Certificates
representing all Percentage Interests of the
Class or Classes affected thereby;
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(iii) alter the Servicing Standard or the
obligations of the Servicer, the Special
Servicer, the Trustee or the Fiscal Agent to make
a P&I Advance or Property Advance without the
consent of the Holders of all Certificates
representing all of the Percentage Interests of
the Class or Classes affected thereby; or
(iv) amend any section of the Pooling and
Servicing Agreement which relates to the
amendment thereof, without the consent of all the
holders of all Certificates representing all
Percentage Interests of the Class or Classes
affected thereby.
Any Holder of Class LR Certificates representing
greater than a 50% Percentage Interest in such Class may effect
an early termination of the Trust Fund, upon not less than 30
days' prior notice given to the Trustee and Servicer any time on
or after the Early Termination Notice Date (defined as any date
as of which the aggregate Stated Principal Balance of the
Mortgage Loans is less than 1.0% of the aggregate Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date)
specifying the Anticipated Termination Date, by purchasing on
such date all, but not less than all, of the Mortgage Loans then
included in the Trust Fund, and all property acquired in respect
of any Mortgage Loan, at a purchase price, payable in cash, equal
to not less than the greater of:
(i) the sum of
(A) 100% of the unpaid principal balance of each
Mortgage Loan included in the Trust Fund as
of the last day of the month preceding such
Distribution Date;
(B) the fair market value of all other property
included in the Trust Fund as of the last
day of the month preceding such Distribution
Date, as determined by an Independent
appraiser acceptable to the Servicer as of
the date not more than 30 days prior to the
last day of the month preceding such
Distribution Date;
(C) all unpaid interest accrued on such
principal balance of each such Mortgage Loan
(including for this purpose any Mortgage
Loan as to which title to the related
Mortgaged Property has been acquired) at the
Mortgage Rate (plus the Excess Rate, to the
extent applicable) to the last day of the
Interest Accrual Period preceding such
Distribution Date;
(D) the aggregate amount of unreimbursed
Advances and unpaid Servicing Fees, Special
Servicing Compensation, Trustee Fees and
Trust Fund expenses, in each case with
interest thereon at the Advance Rate to the
extent permitted under the Pooling and
Servicing Agreement; and
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(ii) the aggregate fair market value of the
Mortgage Loans, and all other property acquired
in respect of any Mortgage Loan in the Trust
Fund, on the last day of the month preceding such
Distribution Date, as determined by an
Independent appraiser acceptable to the Servicer
as of a date not more than 30 days prior to the
last day of the month preceding such Distribution
Date, together with one month's interest thereon
at the related Mortgage Rates.
The Servicer or the Depositor may also effect such
termination as provided above if it first notifies each Holder of
a Class LR Certificate through the Trustee of its intention to do
so in writing at least 30 days prior to the Early Termination
Notice Date and no Class LR Holder terminates the Trust Fund as
described above within such 30 day period. All costs and expenses
incurred by any and all parties to the Pooling and Servicing
Agreement or by the Trust Fund in connection with the purchase of
the Mortgage Loans and other assets of the Trust Fund pursuant to
Section 9.01(c) of the Pooling and Servicing Agreement shall be
borne by the party exercising its purchase rights thereunder. The
Trustee shall be entitled to rely conclusively on any
determination made by an Independent appraiser pursuant to
Section 9.01(c) of the Pooling and Servicing Agreement.
The respective obligations and responsibilities of the
Servicer, the Special Servicer, the Depositor, the Trustee and
the Fiscal Agent created by the Pooling and Servicing Agreement
with respect to the Certificates (other than the obligation to
make certain payments and to send certain notices to
Certificateholders as set forth in the Pooling and Servicing
Agreement) shall terminate immediately following the occurrence
of the last action required to be taken by the Trustee pursuant
to Article IX of the Pooling and Servicing Agreement on the
Termination Date; provided, however, that in no event shall the
trust created thereby continue beyond the expiration of
twenty-one years from the death of the last survivor of the
descendants of Joseph P. Kennedy, the late ambassador of the
United States to the United Kingdom, living on the Closing Date.
Unless the Certificate of Authentication on this
Certificate has been executed by the Trustee or on its behalf by
the Authenticating Agent, by manual signature, this Certificate
shall not be entitled to any benefit under the Pooling and
Servicing Agreement or be valid for any purpose.
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IN WITNESS WHEREOF, the Trustee has caused this Class A-1B
Certificate to be duly executed.
Dated: March 27, 1997
LASALLE NATIONAL BANK, not in its
individual capacity but solely as Trustee
By:______________________________________
Authorized Officer
Certificate of Authentication
_____________________________
This is one of the Class A-1B Certificates referred to
in the Pooling and Servicing Agreement.
Dated: March 27, 1997
LASALLE NATIONAL BANK, not in its individual
capacity but solely as Authenticating Agent
By:___________________________________
Authorized Officer
8
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ASSIGNMENT
FOR VALUE RECEIVED, the undersigned ("Assignor(s)") hereby sell(s),
assign(s) and transfer(s) unto_________________________________________
_______________________________________________________________________
(please print or typewrite name(s) and address(es), including
postal zip code(s) of assignee(s)) ("Assignee(s)") the entire
Percentage Interest represented by the within Class A-1B
Certificate and hereby authorize(s) the registration of transfer
of such interest to Assignee(s) on the Certificate Register of
the Trust Fund.
I (we) further direct the Certificate Registrar to
issue a new Class A-1B Certificate of the entire Percentage
Interest represented by the within Class A-1B Certificates to the
above-named Assignee(s) and to deliver such Class A-1B
Certificate to the following address:
_______________________________________________________________________
_______________________________________________________________________
Date:_________________ ________________________________________
Signature by or on behalf of
Assignor(s)
________________________________________
Taxpayer Identification Number
9
<PAGE>
DISTRIBUTION INSTRUCTIONS
The Assignee(s) should include the following for
purposes of distribution:
Address of the Assignee(s) for the purpose of receiving notices
and distributions:___________________________________________________
_____________________________________________________________________
Distributions, if being made by wire transfer in immediately
available funds to___________________________________________________
for the account of __________________________________________________
account number __________________________.
This information is provided by __________________________
_______________________________________ the Assignee(s) named
above, or ________________________________________________ as its
(their) agent.
By:___________________________________
___________________________________
[Please print or type name(s)]
___________________________________
Title:
___________________________________
Taxpayer Identification Number
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<PAGE>
EXHIBIT A-3
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO THE CERTIFICATE REGISTRAR FOR
REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC),
ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION
OF THE DEPOSITOR, THE ORIGINATOR, THE SERVICER, THE TRUSTEE, THE
FISCAL AGENT OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THE
CERTIFICATES NOR THE UNDERLYING MORTGAGE LOANS ARE INSURED OR
GUARANTEED BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
PRINCIPAL WILL NOT BE DISTRIBUTABLE IN RESPECT OF THIS
CERTIFICATE THE NOTIONAL BALANCE OF THE CLASS PS-1 CERTIFICATES
IS EQUAL TO THE AGGREGATE STATED PRINCIPAL BALANCE OF THE
MORTGAGE LOANS AS SET FORTH IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO BELOW. ACCORDINGLY, THE OUTSTANDING
NOTIONAL BALANCE OF THIS CERTIFICATE AT ANY TIME MAY BE LESS THAN
THE INITIAL NOTIONAL BALANCE SET FORTH BELOW.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS A PRO RATA UNDIVIDED BENEFICIAL INTEREST IN A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G(a)(1) AND
860D OF THE INTERNAL REVENUE CODE OF 1986, AND CERTAIN OTHER
ASSETS.
THIS CERTIFICATE IS ISSUED ON MARCH 27, 1997, AT AN ISSUE PRICE
OF 2.5541% OF THE INITIAL CLASS PS-1 NOTIONAL BALANCE AND A
STATED REDEMPTION PRICE AT MATURITY EQUAL TO ALL INTEREST
DISTRIBUTIONS HEREON, AND IS ISSUED WITH ORIGINAL ISSUE DISCOUNT
("OID") FOR FEDERAL INCOME TAX PURPOSES. ASSUMING (A) THAT THIS
CERTIFICATE PAYS IN ACCORDANCE WITH PROJECTED CASH FLOWS
REFLECTING THE PREPAYMENT ASSUMPTION OF SCENARIO 1 (AS DESCRIBED
IN THE PROSPECTUS SUPPLEMENT DATED MARCH 20, 1997 WITH RESPECT TO
THE OFFERING OF THE CLASS A-1A, CLASS A-1B, CLASS PS-1, CLASS
CS-1, CLASS A-2, CLASS A-3, CLASS A-4, CLASS A-5, AND CLASS A-6
<PAGE>
CERTIFICATES) USED TO PRICE THIS CERTIFICATE, AND (B) THAT THE
PASS- THROUGH RATE HEREON CHANGES IN ACCORDANCE WITH SUCH
PREPAYMENT ASSUMPTION: (I) THIS CERTIFICATE HAS BEEN ISSUED WITH
NO MORE THAN $11.40 OF OID PER $1000 OF INITIAL NOTIONAL BALANCE;
(II) THE ANNUAL YIELD TO MATURITY OF THIS CERTIFICATE, COMPOUNDED
MONTHLY, IS APPROXIMATELY 8.20%; AND (III) THE AMOUNT OF OID
ALLOCABLE TO THE INITIAL SHORT INTEREST ACCRUAL PERIOD (MARCH 27,
1997 TO APRIL 13, 1997), CALCULATED USING THE EXACT METHOD, IS NO
MORE THAN $.09 PER $1000 OF INITIAL NOTIONAL BALANCE. NO
REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL PREPAY AT A
RATE BASED ON THE PREPAYMENT ASSUMPTION OR AT ANY OTHER RATE.
<PAGE>
ASSET SECURITIZATION CORPORATION
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1997-MD VII, CLASS PS-1
Pass-Through Rate: 0.33126%*
First Distribution Date: Cut-off Date: March 27, 1997
April 15, 1997
Aggregate Initial Scheduled Final
Notional Balance of the Distribution Date:
Class PS-1 Certificates: January 13, 2027
$499,568,151
CUSIP: 045424 EJ 3 ISIN: US045424 EJ32
Common Code: 7522282 Initial Notional
Balance of this Certificate:
$499,568,151
No.: PS-1-
This certifies that CEDE & CO. is the registered owner
of a beneficial ownership interest in a Trust Fund, including the
distributions to be made with respect to the Class PS-1
Certificates. The Trust Fund, described more fully below,
consists primarily of a pool of Mortgage Loans secured by first
liens on commercial properties and held in trust by the Trustee
and serviced by the Servicer. The Trust Fund was created, and the
Mortgage Loans are to be serviced, pursuant to the Pooling and
Servicing Agreement (as defined below). The Holder of this
Certificate, by virtue of the acceptance hereof, assents to the
terms, provisions and conditions of the Pooling and Servicing
Agreement and is bound thereby. Also issued under the Pooling and
Servicing Agreement are the Class A-1A, Class A-1B, Class CS-1,
Class A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class B-1,
Class B-1H, Class V-1, Class V-2, Class R and Class LR
Certificates (together with the PS-1 Certificates, the
"Certificates"; the Holders of Certificates issued under the
Pooling and Servicing Agreement are collectively referred to
herein as "Certificateholders").
This Certificate is issued pursuant to, and in
accordance with, the terms of a Pooling and Servicing Agreement
dated as of March 27, 1997 (the "Pooling and Servicing
Agreement"), by and among Asset Securitization Corporation, as
Depositor, Pacific Mutual Life Insurance Company, as Servicer,
LaSalle National Bank, as Trustee, and ABN AMRO Bank
__________________
* The Pass-Through Rate is for the Distribution Date
occurring in April 1997. The Pass- Through Rate for all
subsequent Distribution Dates shall be calculated as
provided in the Pooling and Servicing Agreement.
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N.V., as Fiscal Agent. To the extent not defined herein,
capitalized terms used herein shall have the meanings assigned
thereto in the Pooling and Servicing Agreement.
This Certificate represents a pro rata undivided
beneficial interest in a "regular interest" in a "real estate
mortgage investment conduit," as those terms are defined,
respectively, in Sections 860G(a)(1) and 860D of the Internal
Revenue Code of l986, as amended, and certain other assets.
The Trustee makes no representation or warranty as to
any of the statements contained herein or the validity or
sufficiency of the Certificates or the Mortgage Loans and has
executed this Certificate in its limited capacity as Trustee
under the Pooling and Servicing Agreement.
Pursuant to the terms of the Pooling and Servicing
Agreement, the Trustee, or the Paying Agent on behalf of the
Trustee, will distribute (other than the final distribution on
any Certificate), on the thirteenth day of each month, or if such
day is not a Business Day, the Business Day immediately following
such day, commencing in April, 1997 (each such date, a
"Distribution Date"); provided, however, that in any month the
Distribution Date will be no earlier than the second Business Day
following the eleventh day of such month and, provided further,
that if the eleventh day of any month is not a Business Day, the
Distribution Date shall be the third Business Day following the
eleventh day of such month, to the Person in whose name this
Certificate is registered as of the related Record Date, an
amount equal to such Person's pro rata share (based on the
Percentage Interest represented by this Certificate) of that
portion of the aggregate amount of interest then distributable,
if any, allocable to the Class PS-1 Certificates for such
Distribution Date, all as more fully described in the Pooling and
Servicing Agreement. Holders of this Certificate may be entitled
to Prepayment Premiums, as provided in the Pooling and Servicing
Agreement.
Interest accrued on this Certificate during an
Interest Accrual Period, plus the aggregate unpaid Class Interest
Shortfall with respect to this Certificate, if any, will be
payable on the related Distribution Date to the extent provided
in the Pooling and Servicing Agreement. The "Interest Accrual
Period" with respect to any Distribution Date commences on the
eleventh day of the month preceding the month in which such
Distribution Date occurs and ends on the tenth day of the month
in which such Distribution Date occurs, provided that the first
Interest Accrual Period shall commence on the Cut-off Date and
end on April 10, 1997. Interest for each Interest Accrual Period,
other than the Interest Accrual Period with respect to the
Distribution Date occurring in April 1997, is calculated based on
a 360-day year consisting of twelve 30-day months. The Interest
Accrual Period with respect to the Distribution Date occurring in
April 1997 shall consist of 14 days.
All distributions (other than the final distribution
on any Certificate) will be made by the Paying Agent to the
persons in whose names the Certificates are registered at the
close of business on each Record Date, which will be the tenth
day of the month in which the related Distribution Date occurs
or, if such day is not a Business Day, the preceding Business
Day; provided, however, that with respect to the Distribution
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Date occurring in April 1997, the Record Date will be the Closing
Date, except as specified in the Pooling and Servicing Agreement.
Such distributions shall be made on each Distribution Date other
than the Termination Date to each Certificateholder of record on
the related Record Date by check mailed by first class mail to
the address set forth therefor in the Certificate Register or,
provided that such Certificateholder holds Certificates with an
aggregate initial Notional Balance in excess of $5,000,000, and
shall have provided the Paying Agent with wire instructions in
writing at least five Business Days prior to the related Record
Date, by wire transfer of immediately available funds to the
account of such Certificateholder at a bank or other entity
located in the United States and having appropriate facilities
therefor. The final distribution on each Certificate shall be
made in like manner, but only upon presentment and surrender of
such Certificate at the office of the Trustee or its agent (which
may be the Paying Agent or the Certificate Registrar acting as
such agent) maintained in the Borough of Manhattan that is
specified in the notice to Certificateholders of such final
distribution.
Any funds not distributed on the Termination Date
because of the failure of any Certificateholders to tender their
Certificates shall be set aside and held in trust for the account
of the appropriate non-tendering Certificateholders, whereupon
the Trust Fund shall terminate. If any Certificates as to which
notice of the Termination Date has been given pursuant to Section
9.01 of the Pooling and Servicing Agreement 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 Certificateholders, at their last addresses
shown in the Certificate Register, to surrender their
Certificates for cancellation in order to receive, from such
funds held, the final distribution with respect thereto. If
within one year after the second notice any Certificate shall not
have been surrendered for cancellation, the Trustee may, directly
or through an agent, take appropriate steps to contact the
remaining Certificateholders concerning surrender of their
Certificates. The costs and expenses of maintaining such funds
and of contacting Certificateholders shall be paid out of the
assets which remain held. If within two years after the second
notice any Certificates shall not have been surrendered for
cancellation, the Paying Agent shall pay to the Class R
Certificateholders all amounts distributable to the Holders
thereof.. No interest shall accrue or be payable to any
Certificateholder on any amount held as a result of such
Certificateholder's failure to surrender its Certificate(s) for
final payment thereof in accordance with Section 9.01 of the
Pooling and Servicing Agreement. Such funds held by the Trustee
may be invested under certain circumstances, and subject to
certain conditions as specified in the Pooling and Servicing
Agreement.
This Certificate is limited in right of payment to,
among other things, certain collections and recoveries in respect
of the Mortgage Loans, as more specifically set forth herein and
in the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement,
the Trust Fund includes (i) such Mortgage Loans as from time to
time are subject to the Pooling and Servicing Agreement, together
with the Mortgage Files relating thereto; (ii) all scheduled or
unscheduled payments on or collections in respect of the Mortgage
Loans due after Cut-off Date; (iii) any REO Property; (iv) all
revenues received in respect of any REO Property; (v) the
Servicer's and the Trustee's rights under the insurance policies
with respect to the Mortgage Loans required to be maintained
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pursuant to the Pooling and Servicing Agreement and any proceeds
thereof; (vi) any Assignments of Leases, Rents and Profits and
any security agreements; (vii) any indemnities or guaranties
given as additional security for any Mortgage Loans; (viii) all
assets deposited in the Lock-Box Accounts, Cash Collateral
Accounts, Escrow Accounts, Reserve Accounts and the Hudson
Treasury Collateral Account (to the extent such assets in such
accounts are not assets of the respective Borrowers), the
Collection Account, the Lower-Tier Distribution Account, the
Upper-Tier Distribution Account, the Excess Interest Distribution
Account, the Interest Reserve Account and the Default Interest
Distribution Account, including reinvestment income thereon; (ix)
any environmental indemnity agreements relating to the Mortgaged
Properties; (x) the rights and remedies under the Mortgage Loan
Purchase and Sale Agreement; and (xi) the proceeds of any of the
foregoing (other than any interest earned on deposits in the
Lock-Box Accounts, Cash Collateral Accounts, Escrow Accounts, the
Hudson Treasury Collateral Account and any Reserve Accounts, to
the extent such interest belongs to the related Borrower). As
provided in the Pooling and Servicing Agreement, withdrawals may
be made from certain of the above accounts for purposes other
than distributions to Certificateholders.
This Certificate does not purport to summarize the
Pooling and Servicing Agreement, and reference is made to the
Pooling and Servicing Agreement for the interests, rights,
benefits, obligations and duties evidenced hereby, and the
limitations thereon, and the rights, duties and immunities of the
Trustee.
As provided in the Pooling and Servicing Agreement and
subject to certain limitations set forth therein, this
Certificate is transferable or exchangeable only upon surrender
of this Certificate to the Certificate Registrar at the Corporate
Trust Office together with an assignment and transfer (executed
by the Holder or his duly authorized attorney), subject to the
applicable requirements in Article V of the Pooling and Servicing
Agreement. Upon surrender for registration of transfer of this
Certificate, subject to the applicable requirements of Article V
of the Pooling and Servicing Agreement, the Trustee shall execute
and the Authenticating Agent shall duly authenticate in the name
of the designated transferee or transferees, one or more new
Certificates in authorized denominations of a like aggregate
Notional Balance. Such Certificates shall be delivered by the
Certificate Registrar in accordance with Section 5.02(e) of the
Pooling and Servicing Agreement.
Prior to due presentation of this Certificate for
registration of transfer, the Depositor, the Servicer, the
Trustee, the Fiscal Agent, the Certificate Registrar, any Paying
Agent and any agent of any of them may treat the Person in whose
name this Certificate is registered as the owner hereof for all
purposes, and none of the Depositor, the Servicer, the Trustee,
the Fiscal Agent, the Certificate Registrar, any Paying Agent or
any agent of any of them shall be affected by any notice or
knowledge to the contrary.
No fee or service charge shall be imposed by the
Certificate Registrar for its services in respect of any
registration of transfer or exchange referred to in Section 5.02
of the Pooling and Servicing Agreement. The Certificate Registrar
may require payment by each transferor of a sum sufficient to
cover any tax, expense or other governmental charge payable in
connection with any such transfer.
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The Pooling and Servicing Agreement or any Custodial
Agreement may be amended from time to time by the Depositor, the
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 in
the Pooling and Servicing Agreement or therein that may be
defective or inconsistent with any other provisions in such
agreement, (iii) to amend or supplement any provisions in either
of such agreements to the extent necessary or desirable to
maintain the rating or ratings assigned to each of the Classes of
Certificates by each Rating Agency, (iv) to amend or supplement
any provisions in either of such agreements that shall not
adversely affect in any material respect the interests of any
Certificateholder not consenting thereto, as evidenced in writing
by an Opinion of Counsel, at the expense of the party requesting
such amendment, or as evidenced by confirmation in writing from
each Rating Agency that such amendment or supplement will not
result in a qualification, withdrawal or downgrading of the
then-current ratings assigned to the Certificates, or (v) to make
any other provisions with respect to matters or questions arising
under the Pooling and Servicing Agreement, which shall not be
inconsistent with the provisions of the Pooling and Servicing
Agreement and will not result in a downgrade, qualification or
withdrawal of the then current rating or ratings then assigned to
any outstanding Class of Certificates, as confirmed by each
Rating Agency in writing.
Further, the Depositor, the Servicer, the Special
Servicer, the Trustee and the Fiscal Agent, at any time and from
time to time, without the consent of the Certificateholders, may
amend the Pooling and Servicing Agreement to modify, eliminate or
add to any of its provisions to such extent as shall be necessary
to maintain the qualification of the Trust REMIC as two separate
REMICs or of the Grantor Trust as a grantor trust, or to prevent
the imposition of any additional material state or local taxes,
at all times that any Certificates are outstanding; provided,
however, that such action, as evidenced by an Opinion of Counsel
(obtained at the expense of the Trust Fund), is necessary or
helpful to maintain such qualification or to prevent the
imposition of any such taxes, and would not adversely affect in
any material respect the interest of any Certificateholder.
The Pooling and Servicing Agreement or any Custodial
Agreement may also be amended from time to time by the Depositor,
the Servicer, the Special Servicer, the Trustee and the Fiscal
Agent with the consent of the Holders of Certificates evidencing
not less than 662/3% of the Percentage Interests of each Class of
Certificates affected by the amendment for the purpose of adding
any provisions to or changing in any manner or eliminating any of
the provisions of the Pooling and Servicing Agreement or of
modifying in any manner the rights of the Certificateholders;
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 all the
holders of all Certificates representing all
Percentage Interests of the Class or Classes
affected thereby;
(ii) change the percentages of Voting Rights of Holders
of Certificates which are required to consent to
any action or inaction under the Pooling and
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Servicing Agreement, without the consent of all
the holders of all Certificates representing all
Percentage Interests of the Class or Classes
affected thereby;
(iii) alter the Servicing Standard or the
obligations of the Servicer, the Special
Servicer, the Trustee or the Fiscal Agent to make
a P&I Advance or Property Advance without the
consent of the Holders of all Certificates
representing all of the Percentage Interests of
the Class or Classes affected thereby; or
(iv) amend any section of the Pooling and
Servicing Agreement which relates to the
amendment thereof, without the consent of all the
holders of all Certificates representing all
Percentage Interests of the Class or Classes
affected thereby.
Any Holder of Class LR Certificates representing
greater than a 50% Percentage Interest in such Class may effect
an early termination of the Trust Fund, upon not less than 30
days' prior notice given to the Trustee and Servicer any time on
or after the Early Termination Notice Date (defined as any date
as of which the aggregate Stated Principal Balance of the
Mortgage Loans is less than 1.0% of the aggregate Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date)
specifying the Anticipated Termination Date, by purchasing on
such date all, but not less than all, of the Mortgage Loans then
included in the Trust Fund, and all property acquired in respect
of any Mortgage Loan, at a purchase price, payable in cash, equal
to not less than the greater of:
(i) the sum of
(A) 100% of the unpaid principal balance of each
Mortgage Loan included in the Trust Fund as
of the last day of the month preceding such
Distribution Date;
(B) the fair market value of all other property
included in the Trust Fund as of the last
day of the month preceding such Distribution
Date, as determined by an Independent
appraiser acceptable to the Servicer as of
the date not more than 30 days prior to the
last day of the month preceding such
Distribution Date;
(C) all unpaid interest accrued on such
principal balance of each such Mortgage Loan
(including for this purpose any Mortgage
Loan as to which title to the related
Mortgaged Property has been acquired) at the
Mortgage Rate (plus the Excess Rate, to the
extent applicable) to the last day of the
Interest Accrual Period preceding such
Distribution Date;
(D) the aggregate amount of unreimbursed
Advances and unpaid Servicing Fees, Special
Servicing Compensation, Trustee Fees and
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Trust Fund expenses, in each case with
interest thereon at the Advance Rate to the
extent permitted under the Pooling and
Servicing Agreement; and
(ii) the aggregate fair market value of the
Mortgage Loans, and all other property acquired
in respect of any Mortgage Loan in the Trust
Fund, on the last day of the month preceding such
Distribution Date, as determined by an
Independent appraiser acceptable to the Servicer
as of a date not more than 30 days prior to the
last day of the month preceding such Distribution
Date, together with one month's interest thereon
at the related Mortgage Rates.
The Servicer or the Depositor may also effect such
termination as provided above if it first notifies each Holder of
a Class LR Certificate through the Trustee of its intention to do
so in writing at least 30 days prior to the Early Termination
Notice Date and no Class LR Holder terminates the Trust Fund as
described above within such 30 day period. All costs and expenses
incurred by any and all parties to the Pooling and Servicing
Agreement or by the Trust Fund in connection with the purchase of
the Mortgage Loans and other assets of the Trust Fund pursuant to
Section 9.01(c) of the Pooling and Servicing Agreement shall be
borne by the party exercising its purchase rights thereunder. The
Trustee shall be entitled to rely conclusively on any
determination made by an Independent appraiser pursuant to
Section 9.01(c) of the Pooling and Servicing Agreement.
The respective obligations and responsibilities of the
Servicer, the Special Servicer, the Depositor, the Trustee and
the Fiscal Agent created by the Pooling and Servicing Agreement
with respect to the Certificates (other than the obligation to
make certain payments and to send certain notices to
Certificateholders as set forth in the Pooling and Servicing
Agreement) shall terminate immediately following the occurrence
of the last action required to be taken by the Trustee pursuant
to Article IX of the Pooling and Servicing Agreement on the
Termination Date; provided, however, that in no event shall the
trust created thereby continue beyond the expiration of
twenty-one years from the death of the last survivor of the
descendants of Joseph P. Kennedy, the late ambassador of the
United States to the United Kingdom, living on the Closing Date.
Unless the Certificate of Authentication on this
Certificate has been executed by the Trustee or on its behalf by
the Authenticating Agent, by manual signature, this Certificate
shall not be entitled to any benefit under the Pooling and
Servicing Agreement or be valid for any purpose.
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IN WITNESS WHEREOF, the Trustee has caused this Class PS-1
Certificate to be duly executed.
Dated: March 27, 1997
LASALLE NATIONAL BANK, not in its
individual capacity but solely as Trustee
By:______________________________________
Authorized Officer
Certificate of Authentication
_____________________________
This is one of the Class PS-1 Certificates referred to
in the Pooling and Servicing Agreement.
Dated: March 27, 1997
LASALLE NATIONAL BANK, not in its individual
capacity but solely as Authenticating Agent
By:_____________________________________
Authorized Officer
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ASSIGNMENT
FOR VALUE RECEIVED, the undersigned ("Assignor(s)") hereby sell(s),
assign(s) and transfer(s) unto ________________________________________
______________________________________________________________________
(please print or typewrite name(s) and address(es), including
postal zip code(s) of assignee(s)) ("Assignee(s)") the entire
Percentage Interest represented by the within Class PS-1
Certificate and hereby authorize(s) the registration of transfer
of such interest to Assignee(s) on the Certificate Register of
the Trust Fund.
I (we) further direct the Certificate Registrar to
issue a new Class PS-1 Certificate of the entire Percentage
Interest represented by the within Class PS-1 Certificates to the
above-named Assignee(s) and to deliver such Class PS-1
Certificate to the following address:
______________________________________________________________________
______________________________________________________________________
Date:____________________ _______________________________________
Signature by or on behalf of
Assignor(s)
_______________________________________
Taxpayer Identification Number
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DISTRIBUTION INSTRUCTIONS
The Assignee(s) should include the following for
purposes of distribution:
Address of the Assignee(s) for the purpose of receiving notices
and distributions:____________________________________________________
______________________________________________________________________
Distributions, if being made by wire transfer in immediately
available funds to ___________________________________________________
for the account of ___________________________________________________
account number ____________________________.
This information is provided by____________________________
_______________________________________ the Assignee(s) named
above, or ________________________________________________ as its
(their) agent.
By:____________________________________
____________________________________
[Please print or type name(s)]
____________________________________
Title:
____________________________________
Taxpayer Identification Number
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EXHIBIT A-4
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO THE CERTIFICATE REGISTRAR FOR
REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC),
ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION
OF THE DEPOSITOR, THE ORIGINATOR, THE SERVICER, THE TRUSTEE, THE
FISCAL AGENT OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THE
CERTIFICATES NOR THE UNDERLYING MORTGAGE LOANS ARE INSURED OR
GUARANTEED BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
PRINCIPAL WILL NOT BE DISTRIBUTABLE IN RESPECT OF THIS
CERTIFICATE THE NOTIONAL BALANCE OF THE CLASS CS-1 CERTIFICATES
IS EQUAL TO THE CERTIFICATE BALANCE OF THE CLASS A-1A
CERTIFICATES AS SET FORTH IN THE POOLING AND SERVICING AGREEMENT
REFERRED TO BELOW. ACCORDINGLY, THE OUTSTANDING NOTIONAL BALANCE
OF THIS CERTIFICATE AT ANY TIME MAY BE LESS THAN THE INITIAL
NOTIONAL BALANCE SET FORTH BELOW.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS A PRO RATA UNDIVIDED BENEFICIAL INTEREST IN A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G(a)(1) AND
860D OF THE INTERNAL REVENUE CODE OF 1986, AND CERTAIN OTHER
ASSETS.
THIS CERTIFICATE IS ISSUED ON MARCH 27, 1997, AT AN ISSUE PRICE
OF 3.2205% OF THE INITIAL CLASS PS-1 NOTIONAL BALANCE AND A
STATED REDEMPTION PRICE AT MATURITY EQUAL TO ALL INTEREST
DISTRIBUTIONS HEREON, AND IS ISSUED WITH ORIGINAL ISSUE DISCOUNT
("OID") FOR FEDERAL INCOME TAX PURPOSES. ASSUMING (A) THAT THIS
CERTIFICATE PAYS IN ACCORDANCE WITH PROJECTED CASH FLOWS
REFLECTING THE PREPAYMENT ASSUMPTION OF SCENARIO 1 (AS DESCRIBED
IN THE PROSPECTUS SUPPLEMENT DATED MARCH 20, 1997 WITH RESPECT TO
THE OFFERING OF THE CLASS A-1A, CLASS A-1B, CLASS PS-1, CLASS
CS-1, CLASS A-2, CLASS A-3, CLASS A-4, CLASS A-5, AND CLASS A-6
<PAGE>
CERTIFICATES) USED TO PRICE THIS CERTIFICATE, AND (B) THAT THE
PASS- THROUGH RATE HEREON CHANGES IN ACCORDANCE WITH SUCH
PREPAYMENT ASSUMPTION: (I) THIS CERTIFICATE HAS BEEN ISSUED WITH
NO MORE THAN $9.54 OF OID PER $1000 OF INITIAL NOTIONAL BALANCE;
(II) THE ANNUAL YIELD TO MATURITY OF THIS CERTIFICATE, COMPOUNDED
MONTHLY, IS APPROXIMATELY 8.26%; AND (III) THE AMOUNT OF OID
ALLOCABLE TO THE INITIAL SHORT INTEREST ACCRUAL PERIOD (MARCH 27,
1997 TO APRIL 13, 1997), CALCULATED USING THE EXACT METHOD, IS NO
MORE THAN $.12 PER $1000 OF INITIAL NOTIONAL BALANCE. NO
REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL PREPAY AT A
RATE BASED ON THE PREPAYMENT ASSUMPTION OR AT ANY OTHER RATE.
<PAGE>
ASSET SECURITIZATION CORPORATION
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1997-MD VII, CLASS CS-1
Initial Pass-Through Rate: 0.65561%*
First Distribution Date: Cut-off Date: March 27, 1997
April 15, 1997
Aggregate Initial Scheduled Final
Notional Balance of the Distribution Date:
Class CS-1 Certificates: January 13, 2027
$115,435,756
CUSIP: 045424 EK 0 ISIN: US045424 EK05
Common Code: 7522355 Initial Notional
Balance of this Certificate:
$115,435,756
No.: CS-1-
This certifies that CEDE & CO. is the registered owner
of a beneficial ownership interest in a Trust Fund, including the
distributions to be made with respect to the Class CS-1
Certificates. The Trust Fund, described more fully below,
consists primarily of a pool of Mortgage Loans secured by first
liens on commercial properties and held in trust by the Trustee
and serviced by the Servicer. The Trust Fund was created, and the
Mortgage Loans are to be serviced, pursuant to the Pooling and
Servicing Agreement (as defined below). The Holder of this
Certificate, by virtue of the acceptance hereof, assents to the
terms, provisions and conditions of the Pooling and Servicing
Agreement and is bound thereby. Also issued under the Pooling and
Servicing Agreement are the Class A-1A, Class A-1B, Class PS-1,
Class A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class B-1,
Class B-1H, Class V-1, Class V-2, Class R and Class LR
Certificates (together with the CS-1 Certificates, the
"Certificates"; the Holders of Certificates issued under the
Pooling and Servicing Agreement are collectively referred to
herein as "Certificateholders").
This Certificate is issued pursuant to, and in
accordance with, the terms of a Pooling and Servicing Agreement
dated as of March 27, 1997 (the "Pooling and Servicing
Agreement"), by and among Asset Securitization Corporation, as
Depositor, Pacific Mutual Life Insurance Company, as Servicer,
LaSalle National Bank, as Trustee, and ABN AMRO Bank
_______________
* The Pass-Through Rate is for the Distribution Date
occurring in April 1997. The Pass- Through Rate for all
subsequent Distribution Dates shall be calculated as
provided in the Pooling and Servicing Agreement.
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N.V., as Fiscal Agent. To the extent not defined herein,
capitalized terms used herein shall have the meanings assigned
thereto in the Pooling and Servicing Agreement.
This Certificate represents a pro rata undivided
beneficial interest in a "regular interest" in a "real estate
mortgage investment conduit," as those terms are defined,
respectively, in Sections 860G(a)(1) and 860D of the Internal
Revenue Code of l986, as amended, and certain other assets.
The Trustee makes no representation or warranty as to
any of the statements contained herein or the validity or
sufficiency of the Certificates or the Mortgage Loans and has
executed this Certificate in its limited capacity as Trustee
under the Pooling and Servicing Agreement.
Pursuant to the terms of the Pooling and Servicing
Agreement, the Trustee, or the Paying Agent on behalf of the
Trustee, will distribute (other than the final distribution on
any Certificate), on the thirteenth day of each month, or if such
day is not a Business Day, the Business Day immediately following
such day, commencing in April, 1997 (each such date, a
"Distribution Date"); provided, however, that in any month the
Distribution Date will be no earlier than the second Business Day
following the eleventh day of such month and, provided further,
that if the eleventh day of any month is not a Business Day, the
Distribution Date shall be the third Business Day following the
eleventh day of such month, to the Person in whose name this
Certificate is registered as of the related Record Date, an
amount equal to such Person's pro rata share (based on the
Percentage Interest represented by this Certificate) of that
portion of the aggregate amount of interest then distributable,
if any, allocable to the Class CS-1 Certificates for such
Distribution Date, all as more fully described in the Pooling and
Servicing Agreement. Holders of this Certificate may be entitled
to Prepayment Premiums, as provided in the Pooling and Servicing
Agreement.
Interest accrued on this Certificate during an
Interest Accrual Period, plus the aggregate unpaid Class Interest
Shortfall with respect to this Certificate, if any, will be
payable on the related Distribution Date to the extent provided
in the Pooling and Servicing Agreement. The "Interest Accrual
Period" with respect to any Distribution Date commences on the
eleventh day of the month preceding the month in which such
Distribution Date occurs and ends on the tenth day of the month
in which such Distribution Date occurs, provided that the first
Interest Accrual Period shall commence on the Cut-off Date and
end on April 10, 1997. Interest for each Interest Accrual Period,
other than the Interest Accrual Period with respect to the
Distribution Date occurring in April 1997, is calculated based on
a 360-day year consisting of twelve 30-day months. The Interest
Accrual Period with respect to the Distribution Date occurring in
April 1997 shall consist of 14 days.
All distributions (other than the final distribution
on any Certificate) will be made by the Paying Agent to the
persons in whose names the Certificates are registered at the
close of business on each Record Date, which will be the tenth
day of the month in which the related Distribution Date occurs
or, if such day is not a Business Day, the preceding Business
Day; provided, however, that with respect to the Distribution
2
<PAGE>
Date occurring in April 1997, the Record Date will be the Closing
Date, except as specified in the Pooling and Servicing Agreement.
Such distributions shall be made on each Distribution Date other
than the Termination Date to each Certificateholder of record on
the related Record Date by check mailed by first class mail to
the address set forth therefor in the Certificate Register or,
provided that such Certificateholder holds Certificates with an
aggregate initial Notional Balance in excess of $5,000,000, and
shall have provided the Paying Agent with wire instructions in
writing at least five Business Days prior to the related Record
Date, by wire transfer of immediately available funds to the
account of such Certificateholder at a bank or other entity
located in the United States and having appropriate facilities
therefor. The final distribution on each Certificate shall be
made in like manner, but only upon presentment and surrender of
such Certificate at the office of the Trustee or its agent (which
may be the Paying Agent or the Certificate Registrar acting as
such agent) maintained in the Borough of Manhattan that is
specified in the notice to Certificateholders of such final
distribution.
Any funds not distributed on the Termination Date
because of the failure of any Certificateholders to tender their
Certificates shall be set aside and held in trust for the account
of the appropriate non-tendering Certificateholders, whereupon
the Trust Fund shall terminate. If any Certificates as to which
notice of the Termination Date has been given pursuant to Section
9.01 of the Pooling and Servicing Agreement 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 Certificateholders, at their last addresses
shown in the Certificate Register, to surrender their
Certificates for cancellation in order to receive, from such
funds held, the final distribution with respect thereto. If
within one year after the second notice any Certificate shall not
have been surrendered for cancellation, the Trustee may, directly
or through an agent, take appropriate steps to contact the
remaining Certificateholders concerning surrender of their
Certificates. The costs and expenses of maintaining such funds
and of contacting Certificateholders shall be paid out of the
assets which remain held. If within two years after the second
notice any Certificates shall not have been surrendered for
cancellation, the Paying Agent shall pay to the Class R
Certificateholders all amounts distributable to the Holders
thereof.. No interest shall accrue or be payable to any
Certificateholder on any amount held as a result of such
Certificateholder's failure to surrender its Certificate(s) for
final payment thereof in accordance with Section 9.01 of the
Pooling and Servicing Agreement. Such funds held by the Trustee
may be invested under certain circumstances, and subject to
certain conditions as specified in the Pooling and Servicing
Agreement.
This Certificate is limited in right of payment to,
among other things, certain collections and recoveries in respect
of the Mortgage Loans, as more specifically set forth herein and
in the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement,
the Trust Fund includes (i) such Mortgage Loans as from time to
time are subject to the Pooling and Servicing Agreement, together
with the Mortgage Files relating thereto; (ii) all scheduled or
unscheduled payments on or collections in respect of the Mortgage
Loans due after Cut-off Date; (iii) any REO Property; (iv) all
revenues received in respect of any REO Property; (v) the
Servicer's and the Trustee's rights under the insurance policies
with respect to the Mortgage Loans required to be maintained
3
<PAGE>
pursuant to the Pooling and Servicing Agreement and any proceeds
thereof; (vi) any Assignments of Leases, Rents and Profits and
any security agreements; (vii) any indemnities or guaranties
given as additional security for any Mortgage Loans; (viii) all
assets deposited in the Lock-Box Accounts, Cash Collateral
Accounts, Escrow Accounts, Reserve Accounts and the Hudson
Treasury Collateral Account (to the extent such assets in such
accounts are not assets of the respective Borrowers), the
Collection Account, the Lower-Tier Distribution Account, the
Upper-Tier Distribution Account, the Excess Interest Distribution
Account, the Interest Reserve Account and the Default Interest
Distribution Account, including reinvestment income thereon; (ix)
any environmental indemnity agreements relating to the Mortgaged
Properties; (x) the rights and remedies under the Mortgage Loan
Purchase and Sale Agreement; and (xi) the proceeds of any of the
foregoing (other than any interest earned on deposits in the
Lock-Box Accounts, Cash Collateral Accounts, Escrow Accounts, the
Hudson Treasury Collateral Account and any Reserve Accounts, to
the extent such interest belongs to the related Borrower). As
provided in the Pooling and Servicing Agreement, withdrawals may
be made from certain of the above accounts for purposes other
than distributions to Certificateholders.
This Certificate does not purport to summarize the
Pooling and Servicing Agreement, and reference is made to the
Pooling and Servicing Agreement for the interests, rights,
benefits, obligations and duties evidenced hereby, and the
limitations thereon, and the rights, duties and immunities of the
Trustee.
As provided in the Pooling and Servicing Agreement and
subject to certain limitations set forth therein, this
Certificate is transferable or exchangeable only upon surrender
of this Certificate to the Certificate Registrar at the Corporate
Trust Office together with an assignment and transfer (executed
by the Holder or his duly authorized attorney), subject to the
applicable requirements in Article V of the Pooling and Servicing
Agreement. Upon surrender for registration of transfer of this
Certificate, subject to the applicable requirements of Article V
of the Pooling and Servicing Agreement, the Trustee shall execute
and the Authenticating Agent shall duly authenticate in the name
of the designated transferee or transferees, one or more new
Certificates in authorized denominations of a like aggregate
Notional Balance. Such Certificates shall be delivered by the
Certificate Registrar in accordance with Section 5.02(e) of the
Pooling and Servicing Agreement.
Prior to due presentation of this Certificate for
registration of transfer, the Depositor, the Servicer, the
Trustee, the Fiscal Agent, the Certificate Registrar, any Paying
Agent and any agent of any of them may treat the Person in whose
name this Certificate is registered as the owner hereof for all
purposes, and none of the Depositor, the Servicer, the Trustee,
the Fiscal Agent, the Certificate Registrar, any Paying Agent or
any agent of any of them shall be affected by any notice or
knowledge to the contrary.
No fee or service charge shall be imposed by the
Certificate Registrar for its services in respect of any
registration of transfer or exchange referred to in Section 5.02
of the Pooling and Servicing Agreement. The Certificate Registrar
may require payment by each transferor of a sum sufficient to
cover any tax, expense or other governmental charge payable in
connection with any such transfer.
4
<PAGE>
The Pooling and Servicing Agreement or any Custodial
Agreement may be amended from time to time by the Depositor, the
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 in
the Pooling and Servicing Agreement or therein that may be
defective or inconsistent with any other provisions in such
agreement, (iii) to amend or supplement any provisions in either
of such agreements to the extent necessary or desirable to
maintain the rating or ratings assigned to each of the Classes of
Certificates by each Rating Agency, (iv) to amend or supplement
any provisions in either of such agreements that shall not
adversely affect in any material respect the interests of any
Certificateholder not consenting thereto, as evidenced in writing
by an Opinion of Counsel, at the expense of the party requesting
such amendment, or as evidenced by confirmation in writing from
each Rating Agency that such amendment or supplement will not
result in a qualification, withdrawal or downgrading of the
then-current ratings assigned to the Certificates, or (v) to make
any other provisions with respect to matters or questions arising
under the Pooling and Servicing Agreement, which shall not be
inconsistent with the provisions of the Pooling and Servicing
Agreement and will not result in a downgrade, qualification or
withdrawal of the then current rating or ratings then assigned to
any outstanding Class of Certificates, as confirmed by each
Rating Agency in writing.
Further, the Depositor, the Servicer, the Special
Servicer, the Trustee and the Fiscal Agent, at any time and from
time to time, without the consent of the Certificateholders, may
amend the Pooling and Servicing Agreement to modify, eliminate or
add to any of its provisions to such extent as shall be necessary
to maintain the qualification of the Trust REMIC as two separate
REMICs or of the Grantor Trust as a grantor trust, or to prevent
the imposition of any additional material state or local taxes,
at all times that any Certificates are outstanding; provided,
however, that such action, as evidenced by an Opinion of Counsel
(obtained at the expense of the Trust Fund), is necessary or
helpful to maintain such qualification or to prevent the
imposition of any such taxes, and would not adversely affect in
any material respect the interest of any Certificateholder.
The Pooling and Servicing Agreement or any Custodial
Agreement may also be amended from time to time by the Depositor,
the Servicer, the Special Servicer, the Trustee and the Fiscal
Agent with the consent of the Holders of Certificates evidencing
not less than 662/3% of the Percentage Interests of each Class of
Certificates affected by the amendment for the purpose of adding
any provisions to or changing in any manner or eliminating any of
the provisions of the Pooling and Servicing Agreement or of
modifying in any manner the rights of the Certificateholders;
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 all the
holders of all Certificates representing all
Percentage Interests of the Class or Classes
affected thereby;
(ii) change the percentages of Voting Rights of
Holders of Certificates which are required to
consent to any action or inaction under the Pooling and
5
<PAGE>
Servicing Agreement, without the consent of all
the holders of all Certificates representing all
Percentage Interests of the Class or Classes
affected thereby;
(iii) alter the Servicing Standard or the
obligations of the Servicer, the Special
Servicer, the Trustee or the Fiscal Agent to make
a P&I Advance or Property Advance without the
consent of the Holders of all Certificates
representing all of the Percentage Interests of
the Class or Classes affected thereby; or
(iv) amend any section of the Pooling and
Servicing Agreement which relates to the
amendment thereof, without the consent of all the
holders of all Certificates representing all
Percentage Interests of the Class or Classes
affected thereby.
Any Holder of Class LR Certificates representing
greater than a 50% Percentage Interest in such Class may effect
an early termination of the Trust Fund, upon not less than 30
days' prior notice given to the Trustee and Servicer any time on
or after the Early Termination Notice Date (defined as any date
as of which the aggregate Stated Principal Balance of the
Mortgage Loans is less than 1.0% of the aggregate Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date)
specifying the Anticipated Termination Date, by purchasing on
such date all, but not less than all, of the Mortgage Loans then
included in the Trust Fund, and all property acquired in respect
of any Mortgage Loan, at a purchase price, payable in cash, equal
to not less than the greater of:
(i) the sum of
(A) 100% of the unpaid principal balance of each
Mortgage Loan included in the Trust Fund as
of the last day of the month preceding such
Distribution Date;
(B) the fair market value of all other property
included in the Trust Fund as of the last
day of the month preceding such Distribution
Date, as determined by an Independent
appraiser acceptable to the Servicer as of
the date not more than 30 days prior to the
last day of the month preceding such
Distribution Date;
(C) all unpaid interest accrued on such
principal balance of each such Mortgage Loan
(including for this purpose any Mortgage
Loan as to which title to the related
Mortgaged Property has been acquired) at the
Mortgage Rate (plus the Excess Rate, to the
extent applicable) to the last day of the
Interest Accrual Period preceding such
Distribution Date;
(D) the aggregate amount of unreimbursed
Advances and unpaid Servicing Fees, Special
Servicing Compensation, Trustee Fees and
6
<PAGE>
Trust Fund expenses, in each case with
interest thereon at the Advance Rate to the
extent permitted under the Pooling and
Servicing Agreement; and
(ii) the aggregate fair market value of the
Mortgage Loans, and all other property acquired
in respect of any Mortgage Loan in the Trust
Fund, on the last day of the month preceding such
Distribution Date, as determined by an
Independent appraiser acceptable to the Servicer
as of a date not more than 30 days prior to the
last day of the month preceding such Distribution
Date, together with one month's interest thereon
at the related Mortgage Rates.
The Servicer or the Depositor may also effect such
termination as provided above if it first notifies each Holder of
a Class LR Certificate through the Trustee of its intention to do
so in writing at least 30 days prior to the Early Termination
Notice Date and no Class LR Holder terminates the Trust Fund as
described above within such 30 day period. All costs and expenses
incurred by any and all parties to the Pooling and Servicing
Agreement or by the Trust Fund in connection with the purchase of
the Mortgage Loans and other assets of the Trust Fund pursuant to
Section 9.01(c) of the Pooling and Servicing Agreement shall be
borne by the party exercising its purchase rights thereunder. The
Trustee shall be entitled to rely conclusively on any
determination made by an Independent appraiser pursuant to
Section 9.01(c) of the Pooling and Servicing Agreement.
The respective obligations and responsibilities of the
Servicer, the Special Servicer, the Depositor, the Trustee and
the Fiscal Agent created by the Pooling and Servicing Agreement
with respect to the Certificates (other than the obligation to
make certain payments and to send certain notices to
Certificateholders as set forth in the Pooling and Servicing
Agreement) shall terminate immediately following the occurrence
of the last action required to be taken by the Trustee pursuant
to Article IX of the Pooling and Servicing Agreement on the
Termination Date; provided, however, that in no event shall the
trust created thereby continue beyond the expiration of
twenty-one years from the death of the last survivor of the
descendants of Joseph P. Kennedy, the late ambassador of the
United States to the United Kingdom, living on the Closing Date.
Unless the Certificate of Authentication on this
Certificate has been executed by the Trustee or on its behalf by
the Authenticating Agent, by manual signature, this Certificate
shall not be entitled to any benefit under the Pooling and
Servicing Agreement or be valid for any purpose.
7
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Class CS-1
Certificate to be duly executed.
Dated: March 27, 1997
LASALLE NATIONAL BANK, not in its
individual capacity but solely as Trustee
By:______________________________________
Authorized Officer
Certificate of Authentication
This is one of the Class CS-1 Certificates referred to
in the Pooling and Servicing Agreement.
Dated: March 27, 1997
LASALLE NATIONAL BANK, not in its individual
capacity but solely as Authenticating Agent
By:_______________________________________
Authorized Officer
8
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned ("Assignor(s)") hereby sell(s),
assign(s) and transfer(s) unto_________________________________________
_______________________________________________________________________
(please print or typewrite name(s) and address(es), including
postal zip code(s) of assignee(s)) ("Assignee(s)") the entire
Percentage Interest represented by the within Class CS-1
Certificate and hereby authorize(s) the registration of transfer
of such interest to Assignee(s) on the Certificate Register of
the Trust Fund.
I (we) further direct the Certificate Registrar to
issue a new Class CS-1 Certificate of the entire Percentage
Interest represented by the within Class CS-1 Certificates to the
above-named Assignee(s) and to deliver such Class CS-1
Certificate to the following address:
_______________________________________________________________________
_______________________________________________________________________
Date: __________________ ________________________________________
Signature by or on behalf of
Assignor(s)
________________________________________
Taxpayer Identification Number
9
<PAGE>
DISTRIBUTION INSTRUCTIONS
The Assignee(s) should include the following for
purposes of distribution:
Address of the Assignee(s) for the purpose of receiving notices
and distributions:________________________________________________________
__________________________________________________________________________
Distributions, if being made by wire transfer in immediately
available funds to _______________________________________________________
for the account of _______________________________________________________
account number ________________________________.
This information is provided by _______________________________
_______________________________________ the Assignee(s) named
above, or ________________________________________________ as its
(their) agent.
By:_____________________________________
_____________________________________
[Please print or type name(s)]
_____________________________________
Title:
_____________________________________
Taxpayer Identification Number
10
<PAGE>
EXHIBIT A-5
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO THE CERTIFICATE REGISTRAR FOR
REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC),
ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION
OF THE DEPOSITOR, THE ORIGINATOR, THE SERVICER, THE TRUSTEE, THE
FISCAL AGENT OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THE
CERTIFICATES NOR THE UNDERLYING MORTGAGE LOANS ARE INSURED OR
GUARANTEED BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
PRINCIPAL PAYMENTS ON THIS CERTIFICATE ARE PAYABLE IN
INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING
CERTIFICATE BALANCE OF THIS CERTIFICATE AT ANY TIME MAY BE LESS
THAN THE INITIAL CERTIFICATE BALANCE SET FORTH BELOW.
THIS CLASS A-2 CERTIFICATE IS SUBORDINATE TO THE CLASS A-1A,
CLASS A- 1B, CLASS PS-1 AND CLASS CS-1 CERTIFICATES AS AND TO THE
EXTENT SET FORTH IN THE POOLING AND SERVICING AGREEMENT REFERRED
TO HEREIN.
THIS CERTIFICATE OR ANY INTEREST HEREIN MAY NOT BE PURCHASED BY A
TRANSFEREE THAT IS (A) AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT, INCLUDING AN INDIVIDUAL RETIREMENT
ACCOUNT OR A KEOGH PLAN, WHICH IS SUBJECT TO THE FIDUCIARY
RESPONSIBILITY PROVISIONS OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), SECTION 4975 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR ANY
FEDERAL, STATE OR LOCAL LAW (A "SIMILAR LAW") WHICH IS TO A
MATERIAL EXTENT, SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR
THE CODE (EACH, A "PLAN"), OR (B) A COLLECTIVE INVESTMENT FUND IN
WHICH SUCH PLANS ARE INVESTED, AN INSURANCE COMPANY USING ASSETS
OF SEPARATE ACCOUNTS OR GENERAL ACCOUNTS WHICH INCLUDE ASSETS OF
PLANS (OR WHICH ARE DEEMED PURSUANT TO ERISA OR ANY SIMILAR LAW
TO INCLUDE ASSETS OF PLANS) OR ANY OTHER PERSON ACTING ON BEHALF
OF ANY SUCH PLAN OR USING THE ASSETS OF ANY SUCH PLAN,
<PAGE>
OTHER THAN AN INSURANCE COMPANY USING THE ASSETS OF ITS GENERAL
ACCOUNT UNDER CIRCUMSTANCES WHEREBY SUCH PURCHASE AND THE
SUBSEQUENT HOLDING OF SUCH CERTIFICATE BY SUCH INSURANCE COMPANY
WOULD NOT CONSTITUTE OR RESULT IN A PROHIBITED TRANSACTION WITHIN
THE MEANING OF SECTION 406 OR 407 OF ERISA, SECTION 4975 OF THE
CODE, OR A MATERIALLY SIMILAR CHARACTERIZATION UNDER ANY SIMILAR
LAW. TRANSFEREES OF THIS CERTIFICATE TAKING DELIVERY IN
CERTIFICATED FORM SHALL BE REQUIRED EITHER (i) TO DELIVER A
LETTER SUBSTANTIALLY IN THE FORM OF EXHIBIT D-2 OF THE POOLING
AND SERVICING AGREEMENT STATING THAT THE TRANSFEREE IS NOT AN
ENTITY REFERRED TO IN (A) OR (B) ABOVE TO THE DEPOSITOR, THE
CERTIFICATE REGISTRAR AND THE TRUSTEE, OR (ii) IN THE EVENT THE
TRANSFEREE IS SUCH AN ENTITY SPECIFIED IN (A) OR (B) ABOVE, SUCH
ENTITY SHALL PROVIDE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE
SATISFACTORY TO THE DEPOSITOR, THE TRUSTEE AND THE CERTIFICATE
REGISTRAR THAT THE PURCHASE OR HOLDING OF THE CERTIFICATES BY OR
ON BEHALF OF A PLAN WILL NOT RESULT IN THE ASSETS OF THE TRUST
BEING DEEMED TO BE "PLAN ASSETS" AND SUBJECT TO THE FIDUCIARY
RESPONSIBILITY PROVISIONS OF ERISA OR THE PROHIBITED TRANSACTION
PROVISIONS OF ERISA AND THE CODE OR SIMILAR LAW, WILL NOT
CONSTITUTE OR RESULT IN A PROHIBITED TRANSACTION WITHIN THE
MEANING OF SECTION 406 OR 407 OF ERISA OR SECTION 4975 OF THE
CODE OR A MATERIALLY SIMILAR CHARACTERIZATION UNDER ANY SIMILAR
LAW, AND WILL NOT SUBJECT THE SERVICER, THE SPECIAL SERVICER, THE
DEPOSITOR, THE TRUSTEE OR THE CERTIFICATE REGISTRAR TO ANY
OBLIGATION OR LIABILITY. THE TRANSFEREE OF A BENEFICIAL INTEREST
IN A "GLOBAL CERTIFICATE" THAT IS A "RESTRICTED CERTIFICATE"
(EACH AS DEFINED IN THE POOLING AND SERVICING AGREEMENT) SHALL BE
DEEMED TO REPRESENT THAT IT IS NOT A PLAN OR A PERSON ACTING ON
BEHALF OF ANY PLAN OR USING THE ASSETS OF ANY PLAN TO ACQUIRE
SUCH INTEREST, OTHER THAN AN INSURANCE COMPANY USING THE ASSETS
OF ITS GENERAL ACCOUNT UNDER CIRCUMSTANCES WHEREBY SUCH PURCHASE
AND THE SUBSEQUENT HOLDING OF SUCH CERTIFICATE BY SUCH INSURANCE
COMPANY WOULD NOT CONSTITUTE OR RESULT IN A PROHIBITED
TRANSACTION WITHIN THE MEANING OF SECTION 406 OR 407 OF ERISA,
SECTION 4975 OF THE CODE, OR A MATERIALLY SIMILAR
CHARACTERIZATION UNDER ANY SIMILAR LAW.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS A PRO RATA UNDIVIDED BENEFICIAL INTEREST IN A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G(a)(1) AND
860D OF THE INTERNAL REVENUE CODE OF 1986, AND CERTAIN OTHER
ASSETS.
<PAGE>
ASSET SECURITIZATION CORPORATION
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1997-MD VII, CLASS A-2
Pass-Through Rate: 7.48561%*
First Distribution Date: Cut-off Date: March 27, 1997
April 15, 1997
Aggregate Initial Scheduled Final
Certificate Balance of the Distribution Date:
Class A-2 Certificates: January 13, 2027
$42,463,292
CUSIP: 045424 EL 8 ISIN: US045424 EL87
Common Code: 7522479 Initial Certificate
Balance of this Certificate:
$42,463,292
No.: A-2-
This certifies that CEDE & CO. is the registered owner
of a beneficial ownership interest in a Trust Fund, including the
distributions to be made with respect to the Class A-2
Certificates. The Trust Fund, described more fully below,
consists primarily of a pool of Mortgage Loans secured by first
liens on commercial properties and held in trust by the Trustee
and serviced by the Servicer. The Trust Fund was created, and the
Mortgage Loans are to be serviced, pursuant to the Pooling and
Servicing Agreement (as defined below). The Holder of this
Certificate, by virtue of the acceptance hereof, assents to the
terms, provisions and conditions of the Pooling and Servicing
Agreement and is bound thereby. Also issued under the Pooling and
Servicing Agreement are the Class A-1A, Class A-1B, Class PS-1,
Class CS-1, Class A-3, Class A-4, Class A-5, Class A-6, Class
B-1, Class B-1H, Class V-1, Class V-2, Class R and Class LR
Certificates (together with the A-2 Certificates, the
"Certificates"; the Holders of Certificates issued under the
Pooling and Servicing Agreement are collectively referred to
herein as "Certificateholders").
This Certificate is issued pursuant to, and in
accordance with, the terms of a Pooling and Servicing Agreement
dated as of March 27, 1997 (the "Pooling and Servicing
Agreement"), by and among Asset Securitization Corporation, as
Depositor, Pacific Mutual Life Insurance Company, as Servicer,
LaSalle National Bank, as Trustee, and ABN AMRO Bank
____________________
* The Pass-Through Rate is for the Distribution Date
occurring in April 1997. The Pass- Through Rate for all
subsequent Distribution Dates shall be calculated as
provided in the Pooling and Servicing Agreement.
1
<PAGE>
N.V., as Fiscal Agent. To the extent not defined herein,
capitalized terms used herein shall have the meanings assigned
thereto in the Pooling and Servicing Agreement.
This Certificate represents a pro rata undivided
beneficial interest in a "regular interest" in a "real estate
mortgage investment conduit," as those terms are defined,
respectively, in Sections 860G(a)(1) and 860D of the Internal
Revenue Code of l986, as amended, and certain other assets.
The Trustee makes no representation or warranty as to
any of the statements contained herein or the validity or
sufficiency of the Certificates or the Mortgage Loans and has
executed this Certificate in its limited capacity as Trustee
under the Pooling and Servicing Agreement.
Pursuant to the terms of the Pooling and Servicing
Agreement, the Trustee, or the Paying Agent on behalf of the
Trustee, will distribute (other than the final distribution on
any Certificate), on the thirteenth day of each month, or if such
day is not a Business Day, the Business Day immediately following
such day, commencing in April, 1997 (each such date, a
"Distribution Date"); provided, however, that in any month the
Distribution Date will be no earlier than the second Business Day
following the eleventh day of such month and, provided further,
that if the eleventh day of any month is not a Business Day, the
Distribution Date shall be the third Business Day following the
eleventh day of such month, to the Person in whose name this
Certificate is registered as of the related Record Date, an
amount equal to such Person's pro rata share (based on the
Percentage Interest represented by this Certificate) of that
portion of the aggregate amount of principal and interest then
distributable, if any, allocable to the Class A-2 Certificates
for such Distribution Date, all as more fully described in the
Pooling and Servicing Agreement.
Interest accrued on this Certificate during an
Interest Accrual Period, plus the aggregate unpaid Class Interest
Shortfall with respect to this Certificate, if any, will be
payable on the related Distribution Date to the extent provided
in the Pooling and Servicing Agreement. The "Interest Accrual
Period" with respect to any Distribution Date commences on the
eleventh day of the month preceding the month in which such
Distribution Date occurs and ends on the tenth day of the month
in which such Distribution Date occurs, provided that the first
Interest Accrual Period shall commence on the Cut-off Date and
end on April 10, 1997. Interest for each Interest Accrual Period,
other than the Interest Accrual Period with respect to the
Distribution Date occurring in April 1997, is calculated based on
a 360-day year consisting of twelve 30-day months. The Interest
Accrual Period with respect to the Distribution Date occurring in
April 1997 shall consist of 14 days.
All distributions (other than the final distribution on any
Certificate) will be made by the Paying Agent to the persons in
whose names the Certificates are registered at the close of
business on each Record Date, which will be the tenth day of the
month in which the related Distribution Date occurs or, if such
day is not a Business Day, the preceding Business Day; provided,
however, that with respect to the Distribution Date occurring in
April 1997, the Record Date will be the Closing Date, except as
specified in the Pooling and Servicing Agreement. Such
2
<PAGE>
distributions shall be made on each Distribution Date other than
the Termination Date to each Certificateholder of record on the
related Record Date by check mailed by first class mail to the
address set forth therefor in the Certificate Register or,
provided that such Certificateholder holds Certificates with an
aggregate initial Certificate Balance in excess of $5,000,000,
and shall have provided the Paying Agent with wire instructions
in writing at least five Business Days prior to the related
Record Date, by wire transfer of immediately available funds to
the account of such Certificateholder at a bank or other entity
located in the United States and having appropriate facilities
therefor. The final distribution on each Certificate shall be
made in like manner, but only upon presentment and surrender of
such Certificate at the office of the Trustee or its agent (which
may be the Paying Agent or the Certificate Registrar acting as
such agent) maintained in the Borough of Manhattan that is
specified in the notice to Certificateholders of such final
distribution.
Any funds not distributed on the Termination Date
because of the failure of any Certificateholders to tender their
Certificates shall be set aside and held in trust for the account
of the appropriate non-tendering Certificateholders, whereupon
the Trust Fund shall terminate. If any Certificates as to which
notice of the Termination Date has been given pursuant to Section
9.01 of the Pooling and Servicing Agreement 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 Certificateholders, at their last addresses
shown in the Certificate Register, to surrender their
Certificates for cancellation in order to receive, from such
funds held, the final distribution with respect thereto. If
within one year after the second notice any Certificate shall not
have been surrendered for cancellation, the Trustee may, directly
or through an agent, take appropriate steps to contact the
remaining Certificateholders concerning surrender of their
Certificates. The costs and expenses of maintaining such funds
and of contacting Certificateholders shall be paid out of the
assets which remain held. If within two years after the second
notice any Certificates shall not have been surrendered for
cancellation, the Paying Agent shall pay to the Class R
Certificateholders all amounts distributable to the Holders
thereof.. No interest shall accrue or be payable to any
Certificateholder on any amount held as a result of such
Certificateholder's failure to surrender its Certificate(s) for
final payment thereof in accordance with Section 9.01 of the
Pooling and Servicing Agreement. Such funds held by the Trustee
may be invested under certain circumstances, and subject to
certain conditions as specified in the Pooling and Servicing
Agreement.
This Certificate is limited in right of payment to,
among other things, certain collections and recoveries in respect
of the Mortgage Loans, as more specifically set forth herein and
in the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement,
the Trust Fund includes (i) such Mortgage Loans as from time to
time are subject to the Pooling and Servicing Agreement, together
with the Mortgage Files relating thereto; (ii) all scheduled or
unscheduled payments on or collections in respect of the Mortgage
Loans due after Cut-off Date; (iii) any REO Property; (iv) all
revenues received in respect of any REO Property; (v) the
Servicer's and the Trustee's rights under the insurance policies
with respect to the Mortgage Loans required to be maintained
pursuant to the Pooling and Servicing Agreement and any proceeds
3
<PAGE>
thereof; (vi) any Assignments of Leases, Rents and Profits and any
security agreements; (vii) any indemnities or guaranties given as
additional security for any Mortgage Loans; (viii) all assets
deposited in the Lock-Box Accounts, Cash Collateral Accounts,
Escrow Accounts, Reserve Accounts and the Hudson Treasury
Collateral Account (to the extent such assets in such accounts
are not assets of the respective Borrowers), the Collection
Account, the Lower-Tier Distribution Account, the Upper-Tier
Distribution Account, the Excess Interest Distribution Account,
the Interest Reserve Account and the Default Interest
Distribution Account, including reinvestment income thereon; (ix)
any environmental indemnity agreements relating to the Mortgaged
Properties; (x) the rights and remedies under the Mortgage Loan
Purchase and Sale Agreement; and (xi) the proceeds of any of the
foregoing (other than any interest earned on deposits in the
Lock-Box Accounts, Cash Collateral Accounts, Escrow Accounts, the
Hudson Treasury Collateral Account and any Reserve Accounts, to
the extent such interest belongs to the related Borrower). As
provided in the Pooling and Servicing Agreement, withdrawals may
be made from certain of the above accounts for purposes other
than distributions to Certificateholders.
This Certificate does not purport to summarize the
Pooling and Servicing Agreement, and reference is made to the
Pooling and Servicing Agreement for the interests, rights,
benefits, obligations and duties evidenced hereby, and the
limitations thereon, and the rights, duties and immunities of the
Trustee.
As provided in the Pooling and Servicing Agreement and
subject to certain limitations set forth therein, this
Certificate is transferable or exchangeable only upon surrender
of this Certificate to the Certificate Registrar at the Corporate
Trust Office together with an assignment and transfer (executed
by the Holder or his duly authorized attorney), subject to the
applicable requirements in Article V of the Pooling and Servicing
Agreement. Upon surrender for registration of transfer of this
Certificate, subject to the applicable requirements of Article V
of the Pooling and Servicing Agreement, the Trustee shall execute
and the Authenticating Agent shall duly authenticate in the name
of the designated transferee or transferees, one or more new
Certificates in authorized denominations of a like aggregate
Certificate Balance. Such Certificates shall be delivered by the
Certificate Registrar in accordance with Section 5.02(e) of the
Pooling and Servicing Agreement.
Prior to due presentation of this Certificate for
registration of transfer, the Depositor, the Servicer, the
Trustee, the Fiscal Agent, the Certificate Registrar, any Paying
Agent and any agent of any of them may treat the Person in whose
name this Certificate is registered as the owner hereof for all
purposes, and none of the Depositor, the Servicer, the Trustee,
the Fiscal Agent, the Certificate Registrar, any Paying Agent or
any agent of any of them shall be affected by any notice or
knowledge to the contrary.
No fee or service charge shall be imposed by the
Certificate Registrar for its services in respect of any
registration of transfer or exchange referred to in Section 5.02
of the Pooling and Servicing Agreement. The Certificate Registrar
may require payment by each transferor of a sum sufficient to
cover any tax, expense or other governmental charge payable in
connection with any such transfer.
4
<PAGE>
The Pooling and Servicing Agreement or any Custodial
Agreement may be amended from time to time by the Depositor, the
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 in
the Pooling and Servicing Agreement or therein that may be
defective or inconsistent with any other provisions in such
agreement, (iii) to amend or supplement any provisions in either
of such agreements to the extent necessary or desirable to
maintain the rating or ratings assigned to each of the Classes of
Certificates by each Rating Agency, (iv) to amend or supplement
any provisions in either of such agreements that shall not
adversely affect in any material respect the interests of any
Certificateholder not consenting thereto, as evidenced in writing
by an Opinion of Counsel, at the expense of the party requesting
such amendment, or as evidenced by confirmation in writing from
each Rating Agency that such amendment or supplement will not
result in a qualification, withdrawal or downgrading of the
then-current ratings assigned to the Certificates, or (v) to make
any other provisions with respect to matters or questions arising
under the Pooling and Servicing Agreement, which shall not be
inconsistent with the provisions of the Pooling and Servicing
Agreement and will not result in a downgrade, qualification or
withdrawal of the then current rating or ratings then assigned to
any outstanding Class of Certificates, as confirmed by each
Rating Agency in writing.
Further, the Depositor, the Servicer, the Special
Servicer, the Trustee and the Fiscal Agent, at any time and from
time to time, without the consent of the Certificateholders, may
amend the Pooling and Servicing Agreement to modify, eliminate or
add to any of its provisions to such extent as shall be necessary
to maintain the qualification of the Trust REMIC as two separate
REMICs or of the Grantor Trust as a grantor trust, or to prevent
the imposition of any additional material state or local taxes,
at all times that any Certificates are outstanding; provided,
however, that such action, as evidenced by an Opinion of Counsel
(obtained at the expense of the Trust Fund), is necessary or
helpful to maintain such qualification or to prevent the
imposition of any such taxes, and would not adversely affect in
any material respect the interest of any Certificateholder.
The Pooling and Servicing Agreement or any Custodial
Agreement may also be amended from time to time by the Depositor,
the Servicer, the Special Servicer, the Trustee and the Fiscal
Agent with the consent of the Holders of Certificates evidencing
not less than 662/3% of the Percentage Interests of each Class of
Certificates affected by the amendment for the purpose of adding
any provisions to or changing in any manner or eliminating any of
the provisions of the Pooling and Servicing Agreement or of
modifying in any manner the rights of the Certificateholders;
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 all the
holders of all Certificates representing all
Percentage Interests of the Class or Classes
affected thereby;
(ii) change the percentages of Voting Rights of
Holders of Certificates which are required to
consent to any action or inaction under the Pooling and
5
<PAGE>
Servicing Agreement, without the consent of all
the holders of all Certificates representing all
Percentage Interests of the Class or Classes
affected thereby;
(iii) alter the Servicing Standard or the
obligations of the Servicer, the Special
Servicer, the Trustee or the Fiscal Agent to make
a P&I Advance or Property Advance without the
consent of the Holders of all Certificates
representing all of the Percentage Interests of
the Class or Classes affected thereby; or
(iv) amend any section of the Pooling and
Servicing Agreement which relates to the
amendment thereof, without the consent of all the
holders of all Certificates representing all
Percentage Interests of the Class or Classes
affected thereby.
Any Holder of Class LR Certificates representing
greater than a 50% Percentage Interest in such Class may effect
an early termination of the Trust Fund, upon not less than 30
days' prior notice given to the Trustee and Servicer any time on
or after the Early Termination Notice Date (defined as any date
as of which the aggregate Stated Principal Balance of the
Mortgage Loans is less than 1.0% of the aggregate Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date)
specifying the Anticipated Termination Date, by purchasing on
such date all, but not less than all, of the Mortgage Loans then
included in the Trust Fund, and all property acquired in respect
of any Mortgage Loan, at a purchase price, payable in cash, equal
to not less than the greater of:
(i) the sum of
(A) 100% of the unpaid principal balance of each
Mortgage Loan included in the Trust Fund as
of the last day of the month preceding such
Distribution Date;
(B) the fair market value of all other property
included in the Trust Fund as of the last
day of the month preceding such Distribution
Date, as determined by an Independent
appraiser acceptable to the Servicer as of
the date not more than 30 days prior to the
last day of the month preceding such
Distribution Date;
(C) all unpaid interest accrued on such
principal balance of each such Mortgage Loan
(including for this purpose any Mortgage
Loan as to which title to the related
Mortgaged Property has been acquired) at the
Mortgage Rate (plus the Excess Rate, to the
extent applicable) to the last day of the
Interest Accrual Period preceding such
Distribution Date;
(D) the aggregate amount of unreimbursed
Advances and unpaid Servicing Fees, Special
Servicing Compensation, Trustee Fees and
6
<PAGE>
Trust Fund expenses, in each case with
interest thereon at the Advance Rate to the
extent permitted under the Pooling and
Servicing Agreement; and
(ii) the aggregate fair market value of the
Mortgage Loans, and all other property acquired
in respect of any Mortgage Loan in the Trust
Fund, on the last day of the month preceding such
Distribution Date, as determined by an
Independent appraiser acceptable to the Servicer
as of a date not more than 30 days prior to the
last day of the month preceding such Distribution
Date, together with one month's interest thereon
at the related Mortgage Rates.
The Servicer or the Depositor may also effect such
termination as provided above if it first notifies each Holder of
a Class LR Certificate through the Trustee of its intention to do
so in writing at least 30 days prior to the Early Termination
Notice Date and no Class LR Holder terminates the Trust Fund as
described above within such 30 day period. All costs and expenses
incurred by any and all parties to the Pooling and Servicing
Agreement or by the Trust Fund in connection with the purchase of
the Mortgage Loans and other assets of the Trust Fund pursuant to
Section 9.01(c) of the Pooling and Servicing Agreement shall be
borne by the party exercising its purchase rights thereunder. The
Trustee shall be entitled to rely conclusively on any
determination made by an Independent appraiser pursuant to
Section 9.01(c) of the Pooling and Servicing Agreement.
The respective obligations and responsibilities of the
Servicer, the Special Servicer, the Depositor, the Trustee and
the Fiscal Agent created by the Pooling and Servicing Agreement
with respect to the Certificates (other than the obligation to
make certain payments and to send certain notices to
Certificateholders as set forth in the Pooling and Servicing
Agreement) shall terminate immediately following the occurrence
of the last action required to be taken by the Trustee pursuant
to Article IX of the Pooling and Servicing Agreement on the
Termination Date; provided, however, that in no event shall the
trust created thereby continue beyond the expiration of
twenty-one years from the death of the last survivor of the
descendants of Joseph P. Kennedy, the late ambassador of the
United States to the United Kingdom, living on the Closing Date.
Unless the Certificate of Authentication on this
Certificate has been executed by the Trustee or on its behalf by
the Authenticating Agent, by manual signature, this Certificate
shall not be entitled to any benefit under the Pooling and
Servicing Agreement or be valid for any purpose.
7
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Class A-2
Certificate to be duly executed.
Dated: March 27, 1997
LASALLE NATIONAL BANK, not in its
individual capacity but solely as Trustee
By:______________________________________
Authorized Officer
Certificate of Authentication
_____________________________
This is one of the Class A-2 Certificates referred to
in the Pooling and Servicing Agreement.
Dated: March 27, 1997
LASALLE NATIONAL BANK, not in its individual
capacity but solely as Authenticating Agent
By:________________________________________
Authorized Officer
8
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned ("Assignor(s)") hereby sell(s),
assign(s) and transfer(s) unto___________________________________________
_________________________________________________________________________
(please print or typewrite name(s) and address(es), including
postal zip code(s) of assignee(s)) ("Assignee(s)") the entire
Percentage Interest represented by the within Class A-2
Certificate and hereby authorize(s) the registration of transfer
of such interest to Assignee(s) on the Certificate Register of
the Trust Fund.
I (we) further direct the Certificate Registrar to
issue a new Class A-2 Certificate of the entire Percentage
Interest represented by the within Class A-2 Certificates to the
above-named Assignee(s) and to deliver such Class A-2 Certificate
to the following address:
_________________________________________________________________________
_________________________________________________________________________
Date:___________________ __________________________________________
Signature by or on behalf of
Assignor(s)
__________________________________________
Taxpayer Identification Number
10
<PAGE>
DISTRIBUTION INSTRUCTIONS
The Assignee(s) should include the following for
purposes of distribution:
Address of the Assignee(s) for the purpose of receiving notices
and distributions:_______________________________________________________
_________________________________________________________________________
Distributions, if being made by wire transfer in immediately
available funds to_______________________________________________________
for the account of_______________________________________________________
account number_____________________________.
This information is provided by_______________________________
_______________________________________ the Assignee(s) named
above, or ________________________________________________ as its
(their) agent.
By:___________________________________
___________________________________
[Please print or type name(s)]
___________________________________
Title:
___________________________________
Taxpayer Identification Number
13
<PAGE>
EXHIBIT A-6
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO THE CERTIFICATE REGISTRAR FOR
REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC),
ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST
IN THE DEPOSITOR, THE ORIGINATOR, THE SERVICER, THE TRUSTEE, THE
FISCAL AGENT OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THE
CERTIFICATES NOR THE UNDERLYING MORTGAGE LOANS ARE INSURED OR
GUARANTEED BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
PRINCIPAL PAYMENTS ON THIS CERTIFICATE ARE PAYABLE IN
INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING
CERTIFICATE BALANCE OF THIS CERTIFICATE AT ANY TIME MAY BE LESS
THAN THE INITIAL CERTIFICATE BALANCE SET FORTH BELOW.
THIS CLASS A-3 CERTIFICATE IS SUBORDINATE TO THE CLASS A-1A,
CLASS A- 1B, CLASS PS-1, CLASS CS-1 AND CLASS A-2 CERTIFICATES AS
AND TO THE EXTENT SET FORTH IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE SHOULD NOT BE PURCHASED BY A TRANSFEREE THAT IS
(A) AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT,
INCLUDING AN INDIVIDUAL RETIREMENT ACCOUNT OR A KEOGH PLAN, WHICH
IS SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SECTION 4975 OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR ANY ESSENTIALLY
SIMILAR FEDERAL, STATE OR LOCAL LAW (A "SIMILAR LAW") (EACH, A
"PLAN"), OR (B) A COLLECTIVE INVESTMENT FUND IN WHICH SUCH PLANS
ARE INVESTED, AN INSURANCE COMPANY USING ASSETS OF SEPARATE
ACCOUNTS OR GENERAL ACCOUNTS WHICH INCLUDE ASSETS OF PLANS (OR
WHICH ARE DEEMED PURSUANT TO ERISA OR ANY SIMILAR LAW TO INCLUDE
ASSETS OF PLANS) OR OTHER PERSON ACTING ON BEHALF OF ANY SUCH
PLAN OR USING THE ASSETS OF ANY SUCH PLAN, OTHER THAN AN
INSURANCE COMPANY USING THE ASSETS OF ITS GENERAL ACCOUNT UNDER
CIRCUMSTANCES WHEREBY SUCH PURCHASE AND THE SUBSEQUENT
<PAGE>
HOLDING OF SUCH CERTIFICATE BY SUCH INSURANCE COMPANY WOULD NOT
CONSTITUTE OR RESULT IN A PROHIBITED TRANSACTION WITHIN THE
MEANING OF SECTION 406 OR 407 OF ERISA, SECTION 4975 OF THE CODE,
OR A MATERIALLY SIMILAR CHARACTERIZATION UNDER ANY SIMILAR LAW.
TRANSFEREES OF THIS CERTIFICATE TAKING DELIVERY IN CERTIFICATED
FORM SHALL BE REQUIRED EITHER (i) TO DELIVER A LETTER IN THE FORM
OF EXHIBIT D-2 OF THE POOLING AND SERVICING AGREEMENT TO SUCH
EFFECT, OR (ii) IN THE EVENT THE TRANSFEREE IS SUCH AN ENTITY
SPECIFIED IN (A) OR (B) ABOVE, EXCEPT IN THE CASE OF A RESIDUAL
CERTIFICATE, WHICH MAY NOT BE TRANSFERRED UNLESS THE TRANSFEREE
REPRESENTS IT IS NOT SUCH AN ENTITY, SUCH ENTITY SHALL PROVIDE AN
OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE
CERTIFICATE REGISTRAR THAT THE PURCHASE OR HOLDING OF THE
CERTIFICATES BY OR ON BEHALF OF A PLAN WILL NOT RESULT IN THE
ASSETS OF THE TRUST BEING DEEMED TO BE "PLAN ASSETS" AND SUBJECT
TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF ERISA OR THE
PROHIBITED TRANSACTION PROVISIONS OF ERISA AND THE CODE OR
SIMILAR LAW, WILL NOT CONSTITUTE OR RESULT IN A PROHIBITED
TRANSACTION WITHIN THE MEANING OF SECTION 406 OR 407 OF ERISA OR
SECTION 4975 OF THE CODE, AND WILL NOT SUBJECT THE SERVICER, THE
DEPOSITOR, THE TRUSTEE OR THE CERTIFICATE REGISTRAR TO ANY
OBLIGATION OR LIABILITY. THE TRANSFEREE OF A BENEFICIAL INTEREST
IN A "GLOBAL CERTIFICATE" THAT IS A "RESTRICTED CERTIFICATE"
(EACH AS DEFINED IN THE POOLING AND SERVICING AGREEMENT) SHALL BE
DEEMED TO REPRESENT THAT IT IS NOT A PLAN OR A PERSON ACTING ON
BEHALF OF ANY PLAN OR USING THE ASSETS OF ANY PLAN TO ACQUIRE
SUCH INTEREST, OTHER THAN AN INSURANCE COMPANY USING THE ASSETS
OF ITS GENERAL ACCOUNT UNDER CIRCUMSTANCES WHEREBY SUCH PURCHASE
AND THE SUBSEQUENT HOLDING OF SUCH CERTIFICATE BY SUCH INSURANCE
COMPANY WOULD NOT CONSTITUTE OR RESULT IN A PROHIBITED
TRANSACTION WITHIN THE MEANING OF SECTION 406 OR 407 OF ERISA,
SECTION 4975 OF THE CODE, OR A MATERIALLY SIMILAR
CHARACTERIZATION UNDER ANY SIMILAR LAW.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS A PRO RATA UNDIVIDED BENEFICIAL INTEREST IN A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G(a)(1) AND
860D OF THE INTERNAL REVENUE CODE OF 1986, AND CERTAIN OTHER
ASSETS.
<PAGE>
ASSET SECURITIZATION CORPORATION
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1997-MD VII, CLASS A-3
Pass-Through Rate: 7.57561%*
First Distribution Date: Cut-off Date: March 27, 1997
April 15, 1997
Aggregate Initial Scheduled Final
Certificate Balance of the Distribution Date:
Class A-3 Certificates: January 13, 2027
$39,965,452
CUSIP: 045424 EM 6 ISIN: US045424 EM60
Common Code: 7522541 Initial Certificate
Balance of this Certificate:
$39,965,452
No.: A-3-
This certifies that CEDE & CO. is the registered owner
of a beneficial ownership interest in a Trust Fund, including the
distributions to be made with respect to the Class A-3
Certificates. The Trust Fund, described more fully below,
consists primarily of a pool of Mortgage Loans secured by first
liens on commercial properties and held in trust by the Trustee
and serviced by the Servicer. The Trust Fund was created, and the
Mortgage Loans are to be serviced, pursuant to the Pooling and
Servicing Agreement (as defined below). The Holder of this
Certificate, by virtue of the acceptance hereof, assents to the
terms, provisions and conditions of the Pooling and Servicing
Agreement and is bound thereby. Also issued under the Pooling and
Servicing Agreement are the Class A-1A, Class A-1B, Class PS-1,
Class CS-1, Class A-2, Class A-4, Class A-5, Class A-6, Class
B-1, Class B-1H, Class V-1, Class V-2, Class R and Class LR
Certificates (together with the A-3 Certificates, the
"Certificates"; the Holders of Certificates issued under the
Pooling and Servicing Agreement are collectively referred to
herein as "Certificateholders").
This Certificate is issued pursuant to, and in
accordance with, the terms of a Pooling and Servicing Agreement
dated as of March 27, 1997 (the "Pooling and Servicing
Agreement"), by and among Asset Securitization Corporation, as
Depositor, Pacific Mutual Life Insurance Company, as Servicer,
LaSalle National Bank, as Trustee, and ABN AMRO Bank
- --------
The Pass-Through Rate is for the Distribution Date
occurring in April 1997. The Pass- Through Rate for all
subsequent Distribution Dates shall be calculated as
provided in the Pooling and Servicing Agreement.
1
<PAGE>
N.V., as Fiscal Agent. To the extent not defined herein,
capitalized terms used herein shall have the meanings assigned
thereto in the Pooling and Servicing Agreement.
This Certificate represents a pro rata undivided
beneficial interest in a "regular interest" in a "real estate
mortgage investment conduit," as those terms are defined,
respectively, in Sections 860G(a)(1) and 860D of the Internal
Revenue Code of l986, as amended, and certain other assets.
The Trustee makes no representation or warranty as to
any of the statements contained herein or the validity or
sufficiency of the Certificates or the Mortgage Loans and has
executed this Certificate in its limited capacity as Trustee
under the Pooling and Servicing Agreement.
Pursuant to the terms of the Pooling and Servicing
Agreement, the Trustee, or the Paying Agent on behalf of the
Trustee, will distribute (other than the final distribution on
any Certificate), on the thirteenth day of each month, or if such
day is not a Business Day, the Business Day immediately following
such day, commencing in April, 1997 (each such date, a
"Distribution Date"); provided, however, that in any month the
Distribution Date will be no earlier than the second Business Day
following the eleventh day of such month and, provided further,
that if the eleventh day of any month is not a Business Day, the
Distribution Date shall be the third Business Day following the
eleventh day of such month, to the Person in whose name this
Certificate is registered as of the related Record Date, an
amount equal to such Person's pro rata share (based on the
Percentage Interest represented by this Certificate) of that
portion of the aggregate amount of principal and interest then
distributable, if any, allocable to the Class A-3 Certificates
for such Distribution Date, all as more fully described in the
Pooling and Servicing Agreement.
Interest accrued on this Certificate during an
Interest Accrual Period, plus the aggregate unpaid Class Interest
Shortfall with respect to this Certificate, if any, will be
payable on the related Distribution Date to the extent provided
in the Pooling and Servicing Agreement. The "Interest Accrual
Period" with respect to any Distribution Date commences on the
eleventh day of the month preceding the month in which such
Distribution Date occurs and ends on the tenth day of the month
in which such Distribution Date occurs, provided that the first
Interest Accrual Period shall commence on the Cut-off Date and
end on April 10, 1997. Interest for each Interest Accrual Period,
other than the Interest Accrual Period with respect to the
Distribution Date occurring in April 1997, is calculated based on
a 360-day year consisting of twelve 30-day months. The Interest
Accrual Period with respect to the Distribution Date occurring in
April 1997 shall consist of 14 days.
All distributions (other than the final distribution on
any Certificate) will be made by the Paying Agent to the persons in
whose names the Certificates are registered at the close of
business on each Record Date, which will be the tenth day of the
month in which the related Distribution Date occurs or, if such
day is not a Business Day, the preceding Business Day; provided,
however, that with respect to the Distribution Date occurring in
April 1997, the Record Date will be the Closing Date, except as
specified in the Pooling and Servicing Agreement. Such
2
<PAGE>
distributions shall be made on each Distribution Date other than
the Termination Date to each Certificateholder of record on the
related Record Date by check mailed by first class mail to the
address set forth therefor in the Certificate Register or,
provided that such Certificateholder holds Certificates with an
aggregate initial Certificate Balance in excess of $5,000,000,
and shall have provided the Paying Agent with wire instructions
in writing at least five Business Days prior to the related
Record Date, by wire transfer of immediately available funds to
the account of such Certificateholder at a bank or other entity
located in the United States and having appropriate facilities
therefor. The final distribution on each Certificate shall be
made in like manner, but only upon presentment and surrender of
such Certificate at the office of the Trustee or its agent (which
may be the Paying Agent or the Certificate Registrar acting as
such agent) maintained in the Borough of Manhattan that is
specified in the notice to Certificateholders of such final
distribution.
Any funds not distributed on the Termination Date
because of the failure of any Certificateholders to tender their
Certificates shall be set aside and held in trust for the account
of the appropriate non-tendering Certificateholders, whereupon
the Trust Fund shall terminate. If any Certificates as to which
notice of the Termination Date has been given pursuant to Section
9.01 of the Pooling and Servicing Agreement 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 Certificateholders, at their last addresses
shown in the Certificate Register, to surrender their
Certificates for cancellation in order to receive, from such
funds held, the final distribution with respect thereto. If
within one year after the second notice any Certificate shall not
have been surrendered for cancellation, the Trustee may, directly
or through an agent, take appropriate steps to contact the
remaining Certificateholders concerning surrender of their
Certificates. The costs and expenses of maintaining such funds
and of contacting Certificateholders shall be paid out of the
assets which remain held. If within two years after the second
notice any Certificates shall not have been surrendered for
cancellation, the Paying Agent shall pay to the Class R
Certificateholders all amounts distributable to the Holders
thereof.. No interest shall accrue or be payable to any
Certificateholder on any amount held as a result of such
Certificateholder's failure to surrender its Certificate(s) for
final payment thereof in accordance with Section 9.01 of the
Pooling and Servicing Agreement. Such funds held by the Trustee
may be invested under certain circumstances, and subject to
certain conditions as specified in the Pooling and Servicing
Agreement.
This Certificate is limited in right of payment to,
among other things, certain collections and recoveries in respect
of the Mortgage Loans, as more specifically set forth herein and
in the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement,
the Trust Fund includes (i) such Mortgage Loans as from time to
time are subject to the Pooling and Servicing Agreement, together
with the Mortgage Files relating thereto; (ii) all scheduled or
unscheduled payments on or collections in respect of the Mortgage
Loans due after Cut-off Date; (iii) any REO Property; (iv) all
revenues received in respect of any REO Property; (v) the
Servicer's and the Trustee's rights under the insurance policies
with respect to the Mortgage Loans required to be maintained
pursuant to the Pooling and Servicing Agreement and any proceeds
thereof; (vi) any
3
<PAGE>
Assignments of Leases, Rents and Profits and any security
agreements; (vii) any indemnities or guaranties given as
additional security for any Mortgage Loans; (viii) all assets
deposited in the Lock-Box Accounts, Cash Collateral Accounts,
Escrow Accounts, Reserve Accounts and the Hudson Treasury
Collateral Account (to the extent such assets in such accounts
are not assets of the respective Borrowers), the Collection
Account, the Lower-Tier Distribution Account, the Upper-Tier
Distribution Account, the Excess Interest Distribution Account,
the Interest Reserve Account and the Default Interest
Distribution Account, including reinvestment income thereon; (ix)
any environmental indemnity agreements relating to the Mortgaged
Properties; (x) the rights and remedies under the Mortgage Loan
Purchase and Sale Agreement; and (xi) the proceeds of any of the
foregoing (other than any interest earned on deposits in the
Lock-Box Accounts, Cash Collateral Accounts, Escrow Accounts, the
Hudson Treasury Collateral Account and any Reserve Accounts, to
the extent such interest belongs to the related Borrower). As
provided in the Pooling and Servicing Agreement, withdrawals may
be made from certain of the above accounts for purposes other
than distributions to Certificateholders.
This Certificate does not purport to summarize the
Pooling and Servicing Agreement, and reference is made to the
Pooling and Servicing Agreement for the interests, rights,
benefits, obligations and duties evidenced hereby, and the
limitations thereon, and the rights, duties and immunities of the
Trustee.
As provided in the Pooling and Servicing Agreement and
subject to certain limitations set forth therein, this
Certificate is transferable or exchangeable only upon surrender
of this Certificate to the Certificate Registrar at the Corporate
Trust Office together with an assignment and transfer (executed
by the Holder or his duly authorized attorney), subject to the
applicable requirements in Article V of the Pooling and Servicing
Agreement. Upon surrender for registration of transfer of this
Certificate, subject to the applicable requirements of Article V
of the Pooling and Servicing Agreement, the Trustee shall execute
and the Authenticating Agent shall duly authenticate in the name
of the designated transferee or transferees, one or more new
Certificates in authorized denominations of a like aggregate
Certificate Balance. Such Certificates shall be delivered by the
Certificate Registrar in accordance with Section 5.02(e) of the
Pooling and Servicing Agreement.
Prior to due presentation of this Certificate for
registration of transfer, the Depositor, the Servicer, the
Trustee, the Fiscal Agent, the Certificate Registrar, any Paying
Agent and any agent of any of them may treat the Person in whose
name this Certificate is registered as the owner hereof for all
purposes, and none of the Depositor, the Servicer, the Trustee,
the Fiscal Agent, the Certificate Registrar, any Paying Agent or
any agent of any of them shall be affected by any notice or
knowledge to the contrary.
No fee or service charge shall be imposed by the
Certificate Registrar for its services in respect of any
registration of transfer or exchange referred to in Section 5.02
of the Pooling and Servicing Agreement. The Certificate Registrar
may require payment by each transferor of a sum sufficient to
cover any tax, expense or other governmental charge payable in
connection with any such transfer.
4
<PAGE>
The Pooling and Servicing Agreement or any Custodial Agreement may be
amended from time to time by the Depositor, the 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 in the
Pooling and Servicing Agreement or therein that may be defective
or inconsistent with any other provisions in such agreement,
(iii) to amend or supplement any provisions in either of such
agreements to the extent necessary or desirable to maintain the
rating or ratings assigned to each of the Classes of Certificates
by each Rating Agency, (iv) to amend or supplement any provisions
in either of such agreements that shall not adversely affect in
any material respect the interests of any Certificateholder not
consenting thereto, as evidenced in writing by an Opinion of
Counsel, at the expense of the party requesting such amendment,
or as evidenced by confirmation in writing from each Rating
Agency that such amendment or supplement will not result in a
qualification, withdrawal or downgrading of the then-current
ratings assigned to the Certificates, or (v) to make any other
provisions with respect to matters or questions arising under the
Pooling and Servicing Agreement, which shall not be inconsistent
with the provisions of the Pooling and Servicing Agreement and
will not result in a downgrade, qualification or withdrawal of
the then current rating or ratings then assigned to any
outstanding Class of Certificates, as confirmed by each Rating
Agency in writing.
Further, the Depositor, the Servicer, the Special
Servicer, the Trustee and the Fiscal Agent, at any time and from
time to time, without the consent of the Certificateholders, may
amend the Pooling and Servicing Agreement to modify, eliminate or
add to any of its provisions to such extent as shall be necessary
to maintain the qualification of the Trust REMIC as two separate
REMICs or of the Grantor Trust as a grantor trust, or to prevent
the imposition of any additional material state or local taxes,
at all times that any Certificates are outstanding; provided,
however, that such action, as evidenced by an Opinion of Counsel
(obtained at the expense of the Trust Fund), is necessary or
helpful to maintain such qualification or to prevent the
imposition of any such taxes, and would not adversely affect in
any material respect the interest of any Certificateholder.
The Pooling and Servicing Agreement or any Custodial
Agreement may also be amended from time to time by the Depositor,
the Servicer, the Special Servicer, the Trustee and the Fiscal
Agent with the consent of the Holders of Certificates evidencing
not less than 662/3% of the Percentage Interests of each Class of
Certificates affected by the amendment for the purpose of adding
any provisions to or changing in any manner or eliminating any of
the provisions of the Pooling and Servicing Agreement or of
modifying in any manner the rights of the Certificateholders;
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 all the
holders of all Certificates representing all
Percentage Interests of the Class or Classes
affected thereby;
(ii) change the percentages of Voting Rights of
Holders of Certificates which are required to
consent to any action or inaction under the
Pooling and
5
<PAGE>
Servicing Agreement, without the consent of all
the holders of all Certificates representing all
Percentage Interests of the Class or Classes
affected thereby;
(iii) alter the Servicing Standard or the
obligations of the Servicer, the Special
Servicer, the Trustee or the Fiscal Agent to make
a P&I Advance or Property Advance without the
consent of the Holders of all Certificates
representing all of the Percentage Interests of
the Class or Classes affected thereby; or
(iv) amend any section of the Pooling and
Servicing Agreement which relates to the
amendment thereof, without the consent of all the
holders of all Certificates representing all
Percentage Interests of the Class or Classes
affected thereby.
Any Holder of Class LR Certificates representing
greater than a 50% Percentage Interest in such Class may effect
an early termination of the Trust Fund, upon not less than 30
days' prior notice given to the Trustee and Servicer any time on
or after the Early Termination Notice Date (defined as any date
as of which the aggregate Stated Principal Balance of the
Mortgage Loans is less than 1.0% of the aggregate Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date)
specifying the Anticipated Termination Date, by purchasing on
such date all, but not less than all, of the Mortgage Loans then
included in the Trust Fund, and all property acquired in respect
of any Mortgage Loan, at a purchase price, payable in cash, equal
to not less than the greater of:
(i) the sum of
(A) 100% of the unpaid principal balance of each
Mortgage Loan included in the Trust Fund as
of the last day of the month preceding such
Distribution Date;
(B) the fair market value of all other property
included in the Trust Fund as of the last
day of the month preceding such Distribution
Date, as determined by an Independent
appraiser acceptable to the Servicer as of
the date not more than 30 days prior to the
last day of the month preceding such
Distribution Date;
(C) all unpaid interest accrued on such
principal balance of each such Mortgage Loan
(including for this purpose any Mortgage
Loan as to which title to the related
Mortgaged Property has been acquired) at the
Mortgage Rate (plus the Excess Rate, to the
extent applicable) to the last day of the
Interest Accrual Period preceding such
Distribution Date;
(D) the aggregate amount of unreimbursed
Advances and unpaid Servicing Fees, Special
Servicing Compensation, Trustee Fees and
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<PAGE>
Trust Fund expenses, in each case with
interest thereon at the Advance Rate to the
extent permitted under the Pooling and
Servicing Agreement; and
(ii) the aggregate fair market value of the
Mortgage Loans, and all other property acquired
in respect of any Mortgage Loan in the Trust
Fund, on the last day of the month preceding such
Distribution Date, as determined by an
Independent appraiser acceptable to the Servicer
as of a date not more than 30 days prior to the
last day of the month preceding such Distribution
Date, together with one month's interest thereon
at the related Mortgage Rates.
The Servicer or the Depositor may also effect such
termination as provided above if it first notifies each Holder of
a Class LR Certificate through the Trustee of its intention to do
so in writing at least 30 days prior to the Early Termination
Notice Date and no Class LR Holder terminates the Trust Fund as
described above within such 30 day period. All costs and expenses
incurred by any and all parties to the Pooling and Servicing
Agreement or by the Trust Fund in connection with the purchase of
the Mortgage Loans and other assets of the Trust Fund pursuant to
Section 9.01(c) of the Pooling and Servicing Agreement shall be
borne by the party exercising its purchase rights thereunder. The
Trustee shall be entitled to rely conclusively on any
determination made by an Independent appraiser pursuant to
Section 9.01(c) of the Pooling and Servicing Agreement.
The respective obligations and responsibilities of the
Servicer, the Special Servicer, the Depositor, the Trustee and
the Fiscal Agent created by the Pooling and Servicing Agreement
with respect to the Certificates (other than the obligation to
make certain payments and to send certain notices to
Certificateholders as set forth in the Pooling and Servicing
Agreement) shall terminate immediately following the occurrence
of the last action required to be taken by the Trustee pursuant
to Article IX of the Pooling and Servicing Agreement on the
Termination Date; provided, however, that in no event shall the
trust created thereby continue beyond the expiration of
twenty-one years from the death of the last survivor of the
descendants of Joseph P. Kennedy, the late ambassador of the
United States to the United Kingdom, living on the Closing Date.
Unless the Certificate of Authentication on this
Certificate has been executed by the Trustee or on its behalf by
the Authenticating Agent, by manual signature, this Certificate
shall not be entitled to any benefit under the Pooling and
Servicing Agreement or be valid for any purpose.
7
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Class A-3
Certificate to be duly executed.
Dated: March 27, 1997
LASALLE NATIONAL BANK, not in its
individual capacity but solely as Trustee
By:______________________________________
Authorized Officer
Certificate of Authentication
This is one of the Class A-3 Certificates referred to
in the Pooling and Servicing Agreement.
Dated: March 27, 1997
LASALLE NATIONAL BANK, not in its
individual capacity but solely as
Authenticating Agent
By:______________________________________
Authorized Officer
8
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned ("Assignor(s)") hereby
sell(s), assign(s) and transfer(s) unto_____________________________
____________________________________________________________________
(please print or typewrite name(s) and address(es), including
postal zip code(s) of assignee(s)) ("Assignee(s)") the entire
Percentage Interest represented by the within Class A-3
Certificate and hereby authorize(s) the registration of transfer
of such interest to Assignee(s) on the Certificate Register of
the Trust Fund.
I (we) further direct the Certificate Registrar to
issue a new Class A-3 Certificate of the entire Percentage
Interest represented by the within Class A-3 Certificates to the
above-named Assignee(s) and to deliver such Class A-3 Certificate
to the following address:
____________________________________________________________________
____________________________________________________________________
Date:________________ ___________________________________
Signature by or on behalf of
Assignor(s)
___________________________________
Taxpayer Identification Number
9
<PAGE>
DISTRIBUTION INSTRUCTIONS
The Assignee(s) should include the following for
purposes of distribution:
Address of the Assignee(s) for the purpose of receiving notices
and distributions:____________________________________________________
______________________________________________________________________
Distributions, if being made by wire transfer in immediately
available funds to ___________________________________________________
for the account of ___________________________________________________
account number ____________________________.
This information is provided by____________________________
_______________________________________ the Assignee(s) named
above, or ________________________________________________ as its
(their) agent.
By:____________________________________
____________________________________
[Please print or type name(s)]
____________________________________
Title:
____________________________________
Taxpayer Identification Number
1
<PAGE>
EXHIBIT A-7
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO THE CERTIFICATE REGISTRAR FOR
REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC),
ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION
OF THE DEPOSITOR, THE ORIGINATOR, THE SERVICER, THE TRUSTEE, THE
FISCAL AGENT OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THE
CERTIFICATES NOR THE UNDERLYING MORTGAGE LOANS ARE INSURED OR
GUARANTEED BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
PRINCIPAL PAYMENTS ON THIS CERTIFICATE ARE PAYABLE IN
INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING
CERTIFICATE BALANCE OF THIS CERTIFICATE AT ANY TIME MAY BE LESS
THAN THE INITIAL CERTIFICATE BALANCE SET FORTH BELOW.
THIS CLASS A-4 CERTIFICATE IS SUBORDINATE TO THE CLASS A-1A,
CLASS A- 1B, CLASS PS-1, CLASS CS-1, CLASS A-2 AND CLASS A-3
CERTIFICATES AS AND TO THE EXTENT SET FORTH IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE SHOULD NOT BE PURCHASED BY A TRANSFEREE THAT IS
(A) AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT,
INCLUDING AN INDIVIDUAL RETIREMENT ACCOUNT OR A KEOGH PLAN, WHICH
IS SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SECTION 4975 OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR ANY ESSENTIALLY
SIMILAR FEDERAL, STATE OR LOCAL LAW (A "SIMILAR LAW") (EACH, A
"PLAN"), OR (B) A COLLECTIVE INVESTMENT FUND IN WHICH SUCH PLANS
ARE INVESTED, AN INSURANCE COMPANY USING ASSETS OF SEPARATE
ACCOUNTS OR GENERAL ACCOUNTS WHICH INCLUDE ASSETS OF PLANS (OR
WHICH ARE DEEMED PURSUANT TO ERISA OR ANY SIMILAR LAW TO INCLUDE
ASSETS OF PLANS) OR OTHER PERSON ACTING ON BEHALF OF ANY SUCH
PLAN OR USING THE ASSETS OF ANY SUCH PLAN, OTHER THAN AN
INSURANCE COMPANY USING THE ASSETS OF ITS GENERAL ACCOUNT UNDER
CIRCUMSTANCES WHEREBY SUCH PURCHASE AND THE SUBSEQUENT
<PAGE>
HOLDING OF SUCH CERTIFICATE BY SUCH INSURANCE COMPANY WOULD NOT
CONSTITUTE OR RESULT IN A PROHIBITED TRANSACTION WITHIN THE
MEANING OF SECTION 406 OR 407 OF ERISA, SECTION 4975 OF THE CODE,
OR A MATERIALLY SIMILAR CHARACTERIZATION UNDER ANY SIMILAR LAW.
TRANSFEREES OF THIS CERTIFICATE TAKING DELIVERY IN CERTIFICATED
FORM SHALL BE REQUIRED EITHER (i) TO DELIVER A LETTER IN THE FORM
OF EXHIBIT D-2 OF THE POOLING AND SERVICING AGREEMENT TO SUCH
EFFECT, OR (ii) IN THE EVENT THE TRANSFEREE IS SUCH AN ENTITY
SPECIFIED IN (A) OR (B) ABOVE, EXCEPT IN THE CASE OF A RESIDUAL
CERTIFICATE, WHICH MAY NOT BE TRANSFERRED UNLESS THE TRANSFEREE
REPRESENTS IT IS NOT SUCH AN ENTITY, SUCH ENTITY SHALL PROVIDE AN
OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE
CERTIFICATE REGISTRAR THAT THE PURCHASE OR HOLDING OF THE
CERTIFICATES BY OR ON BEHALF OF A PLAN WILL NOT RESULT IN THE
ASSETS OF THE TRUST BEING DEEMED TO BE "PLAN ASSETS" AND SUBJECT
TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF ERISA OR THE
PROHIBITED TRANSACTION PROVISIONS OF ERISA AND THE CODE OR
SIMILAR LAW, WILL NOT CONSTITUTE OR RESULT IN A PROHIBITED
TRANSACTION WITHIN THE MEANING OF SECTION 406 OR 407 OF ERISA OR
SECTION 4975 OF THE CODE, AND WILL NOT SUBJECT THE SERVICER, THE
DEPOSITOR, THE TRUSTEE OR THE CERTIFICATE REGISTRAR TO ANY
OBLIGATION OR LIABILITY. THE TRANSFEREE OF A BENEFICIAL INTEREST
IN A "GLOBAL CERTIFICATE" THAT IS A "RESTRICTED CERTIFICATE"
(EACH AS DEFINED IN THE POOLING AND SERVICING AGREEMENT) SHALL BE
DEEMED TO REPRESENT THAT IT IS NOT A PLAN OR A PERSON ACTING ON
BEHALF OF ANY PLAN OR USING THE ASSETS OF ANY PLAN TO ACQUIRE
SUCH INTEREST, OTHER THAN AN INSURANCE COMPANY USING THE ASSETS
OF ITS GENERAL ACCOUNT UNDER CIRCUMSTANCES WHEREBY SUCH PURCHASE
AND THE SUBSEQUENT HOLDING OF SUCH CERTIFICATE BY SUCH INSURANCE
COMPANY WOULD NOT CONSTITUTE OR RESULT IN A PROHIBITED
TRANSACTION WITHIN THE MEANING OF SECTION 406 OR 407 OF ERISA,
SECTION 4975 OF THE CODE, OR A MATERIALLY SIMILAR
CHARACTERIZATION UNDER ANY SIMILAR LAW.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS A PRO RATA UNDIVIDED BENEFICIAL INTEREST IN A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G(a)(1) AND
860D OF THE INTERNAL REVENUE CODE OF 1986, AND CERTAIN OTHER
ASSETS.
<PAGE>
ASSET SECURITIZATION CORPORATION
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1997-MD VII, CLASS A-4
Pass-Through Rate: 7.77561%*
First Distribution Date: Cut-off Date: March 27, 1997
April 15, 1997
Aggregate Initial Scheduled Final
Certificate Balance of the Distribution Date:
Class A-4 Certificates: January 13, 2027
$37,467,611
CUSIP: 045424 EN 4 ISIN: US045424 EM60
Common Code:7522606 Initial Certificate
Balance of this Certificate:
$37,467,611
No.: A-4-
This certifies that CEDE & CO. is the registered owner
of a beneficial ownership interest in a Trust Fund, including the
distributions to be made with respect to the Class A-4
Certificates. The Trust Fund, described more fully below,
consists primarily of a pool of Mortgage Loans secured by first
liens on commercial properties and held in trust by the Trustee
and serviced by the Servicer. The Trust Fund was created, and the
Mortgage Loans are to be serviced, pursuant to the Pooling and
Servicing Agreement (as defined below). The Holder of this
Certificate, by virtue of the acceptance hereof, assents to the
terms, provisions and conditions of the Pooling and Servicing
Agreement and is bound thereby. Also issued under the Pooling and
Servicing Agreement are the Class A-1A, Class A-1B, Class PS-1,
Class CS-1, Class A-2, Class A-3, Class A-5, Class A-6, Class
B-1, Class B-1H, Class V-1, Class V-2, Class R and Class LR
Certificates (together with the A-4 Certificates, the
"Certificates"; the Holders of Certificates issued under the
Pooling and Servicing Agreement are collectively referred to
herein as "Certificateholders").
This Certificate is issued pursuant to, and in
accordance with, the terms of a Pooling and Servicing Agreement
dated as of March 27, 1997 (the "Pooling and Servicing
Agreement"), by and among Asset Securitization Corporation, as
Depositor, Pacific Mutual Life Insurance Company, as Servicer,
LaSalle National Bank, as Trustee, and ABN AMRO Bank
- --------
The Pass-Through Rate is for the Distribution Date
occurring in April 1997. The Pass- Through Rate for all
subsequent Distribution Dates shall be calculated as
provided in the Pooling and Servicing Agreement.
1
<PAGE>
N.V., as Fiscal Agent. To the extent not defined herein,
capitalized terms used herein shall have the meanings assigned
thereto in the Pooling and Servicing Agreement.
This Certificate represents a pro rata undivided
beneficial interest in a "regular interest" in a "real estate
mortgage investment conduit," as those terms are defined,
respectively, in Sections 860G(a)(1) and 860D of the Internal
Revenue Code of l986, as amended, and certain other assets.
The Trustee makes no representation or warranty as to
any of the statements contained herein or the validity or
sufficiency of the Certificates or the Mortgage Loans and has
executed this Certificate in its limited capacity as Trustee
under the Pooling and Servicing Agreement.
Pursuant to the terms of the Pooling and Servicing
Agreement, the Trustee, or the Paying Agent on behalf of the
Trustee, will distribute (other than the final distribution on
any Certificate), on the thirteenth day of each month, or if such
day is not a Business Day, the Business Day immediately following
such day, commencing in April, 1997 (each such date, a
"Distribution Date"); provided, however, that in any month the
Distribution Date will be no earlier than the second Business Day
following the eleventh day of such month and, provided further,
that if the eleventh day of any month is not a Business Day, the
Distribution Date shall be the third Business Day following the
eleventh day of such month, to the Person in whose name this
Certificate is registered as of the related Record Date, an
amount equal to such Person's pro rata share (based on the
Percentage Interest represented by this Certificate) of that
portion of the aggregate amount of principal and interest then
distributable, if any, allocable to the Class A-4 Certificates
for such Distribution Date, all as more fully described in the
Pooling and Servicing Agreement.
Interest accrued on this Certificate during an
Interest Accrual Period, plus the aggregate unpaid Class Interest
Shortfall with respect to this Certificate, if any, will be
payable on the related Distribution Date to the extent provided
in the Pooling and Servicing Agreement. The "Interest Accrual
Period" with respect to any Distribution Date commences on the
eleventh day of the month preceding the month in which such
Distribution Date occurs and ends on the tenth day of the month
in which such Distribution Date occurs, provided that the first
Interest Accrual Period shall commence on the Cut-off Date and
end on April 10, 1997. Interest for each Interest Accrual Period,
other than the Interest Accrual Period with respect to the
Distribution Date occurring in April 1997, is calculated based on
a 360-day year consisting of twelve 30-day months. The Interest
Accrual Period with respect to the Distribution Date occurring in
April 1997 shall consist of 14 days.
All distributions (other than the final distribution on
any Certificate) will be made by the Paying Agent to the persons in
whose names the Certificates are registered at the close of
business on each Record Date, which will be the tenth day of the
month in which the related Distribution Date occurs or, if such
day is not a Business Day, the preceding Business Day; provided,
however, that with respect to the Distribution Date occurring in
April 1997, the Record Date will be the Closing Date, except as
specified in the Pooling and Servicing Agreement. Such
2
<PAGE>
distributions shall be made on each Distribution Date other than
the Termination Date to each Certificateholder of record on the
related Record Date by check mailed by first class mail to the
address set forth therefor in the Certificate Register or,
provided that such Certificateholder holds Certificates with an
aggregate initial Certificate Balance in excess of $5,000,000,
and shall have provided the Paying Agent with wire instructions
in writing at least five Business Days prior to the related
Record Date, by wire transfer of immediately available funds to
the account of such Certificateholder at a bank or other entity
located in the United States and having appropriate facilities
therefor. The final distribution on each Certificate shall be
made in like manner, but only upon presentment and surrender of
such Certificate at the office of the Trustee or its agent (which
may be the Paying Agent or the Certificate Registrar acting as
such agent) maintained in the Borough of Manhattan that is
specified in the notice to Certificateholders of such final
distribution.
Any funds not distributed on the Termination Date
because of the failure of any Certificateholders to tender their
Certificates shall be set aside and held in trust for the account
of the appropriate non-tendering Certificateholders, whereupon
the Trust Fund shall terminate. If any Certificates as to which
notice of the Termination Date has been given pursuant to Section
9.01 of the Pooling and Servicing Agreement 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 Certificateholders, at their last addresses
shown in the Certificate Register, to surrender their
Certificates for cancellation in order to receive, from such
funds held, the final distribution with respect thereto. If
within one year after the second notice any Certificate shall not
have been surrendered for cancellation, the Trustee may, directly
or through an agent, take appropriate steps to contact the
remaining Certificateholders concerning surrender of their
Certificates. The costs and expenses of maintaining such funds
and of contacting Certificateholders shall be paid out of the
assets which remain held. If within two years after the second
notice any Certificates shall not have been surrendered for
cancellation, the Paying Agent shall pay to the Class R
Certificateholders all amounts distributable to the Holders
thereof.. No interest shall accrue or be payable to any
Certificateholder on any amount held as a result of such
Certificateholder's failure to surrender its Certificate(s) for
final payment thereof in accordance with Section 9.01 of the
Pooling and Servicing Agreement. Such funds held by the Trustee
may be invested under certain circumstances, and subject to
certain conditions as specified in the Pooling and Servicing
Agreement.
This Certificate is limited in right of payment to,
among other things, certain collections and recoveries in respect
of the Mortgage Loans, as more specifically set forth herein and
in the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement,
the Trust Fund includes (i) such Mortgage Loans as from time to
time are subject to the Pooling and Servicing Agreement, together
with the Mortgage Files relating thereto; (ii) all scheduled or
unscheduled payments on or collections in respect of the Mortgage
Loans due after Cut-off Date; (iii) any REO Property; (iv) all
revenues received in respect of any REO Property; (v) the
Servicer's and the Trustee's rights under the insurance policies
with respect to the Mortgage Loans required to be maintained
pursuant to the Pooling and Servicing Agreement and any proceeds
thereof; (vi) any
3
<PAGE>
Assignments of Leases, Rents and Profits and any security
agreements; (vii) any indemnities or guaranties given as
additional security for any Mortgage Loans; (viii) all assets
deposited in the Lock-Box Accounts, Cash Collateral Accounts,
Escrow Accounts, Reserve Accounts and the Hudson Treasury
Collateral Account (to the extent such assets in such accounts
are not assets of the respective Borrowers), the Collection
Account, the Lower-Tier Distribution Account, the Upper-Tier
Distribution Account, the Excess Interest Distribution Account,
the Interest Reserve Account and the Default Interest
Distribution Account, including reinvestment income thereon; (ix)
any environmental indemnity agreements relating to the Mortgaged
Properties; (x) the rights and remedies under the Mortgage Loan
Purchase and Sale Agreement; and (xi) the proceeds of any of the
foregoing (other than any interest earned on deposits in the
Lock-Box Accounts, Cash Collateral Accounts, Escrow Accounts, the
Hudson Treasury Collateral Account and any Reserve Accounts, to
the extent such interest belongs to the related Borrower). As
provided in the Pooling and Servicing Agreement, withdrawals may
be made from certain of the above accounts for purposes other
than distributions to Certificateholders.
This Certificate does not purport to summarize the
Pooling and Servicing Agreement, and reference is made to the
Pooling and Servicing Agreement for the interests, rights,
benefits, obligations and duties evidenced hereby, and the
limitations thereon, and the rights, duties and immunities of the
Trustee.
As provided in the Pooling and Servicing Agreement and
subject to certain limitations set forth therein, this
Certificate is transferable or exchangeable only upon surrender
of this Certificate to the Certificate Registrar at the Corporate
Trust Office together with an assignment and transfer (executed
by the Holder or his duly authorized attorney), subject to the
applicable requirements in Article V of the Pooling and Servicing
Agreement. Upon surrender for registration of transfer of this
Certificate, subject to the applicable requirements of Article V
of the Pooling and Servicing Agreement, the Trustee shall execute
and the Authenticating Agent shall duly authenticate in the name
of the designated transferee or transferees, one or more new
Certificates in authorized denominations of a like aggregate
Certificate Balance. Such Certificates shall be delivered by the
Certificate Registrar in accordance with Section 5.02(e) of the
Pooling and Servicing Agreement.
Prior to due presentation of this Certificate for
registration of transfer, the Depositor, the Servicer, the
Trustee, the Fiscal Agent, the Certificate Registrar, any Paying
Agent and any agent of any of them may treat the Person in whose
name this Certificate is registered as the owner hereof for all
purposes, and none of the Depositor, the Servicer, the Trustee,
the Fiscal Agent, the Certificate Registrar, any Paying Agent or
any agent of any of them shall be affected by any notice or
knowledge to the contrary.
No fee or service charge shall be imposed by the
Certificate Registrar for its services in respect of any
registration of transfer or exchange referred to in Section 5.02
of the Pooling and Servicing Agreement. The Certificate Registrar
may require payment by each transferor of a sum sufficient to
cover any tax, expense or other governmental charge payable in
connection with any such transfer.
4
<PAGE>
The Pooling and Servicing Agreement or any Custodial Agreement may be
amended from time to time by the Depositor, the 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 in the
Pooling and Servicing Agreement or therein that may be defective
or inconsistent with any other provisions in such agreement,
(iii) to amend or supplement any provisions in either of such
agreements to the extent necessary or desirable to maintain the
rating or ratings assigned to each of the Classes of Certificates
by each Rating Agency, (iv) to amend or supplement any provisions
in either of such agreements that shall not adversely affect in
any material respect the interests of any Certificateholder not
consenting thereto, as evidenced in writing by an Opinion of
Counsel, at the expense of the party requesting such amendment,
or as evidenced by confirmation in writing from each Rating
Agency that such amendment or supplement will not result in a
qualification, withdrawal or downgrading of the then-current
ratings assigned to the Certificates, or (v) to make any other
provisions with respect to matters or questions arising under the
Pooling and Servicing Agreement, which shall not be inconsistent
with the provisions of the Pooling and Servicing Agreement and
will not result in a downgrade, qualification or withdrawal of
the then current rating or ratings then assigned to any
outstanding Class of Certificates, as confirmed by each Rating
Agency in writing.
Further, the Depositor, the Servicer, the Special
Servicer, the Trustee and the Fiscal Agent, at any time and from
time to time, without the consent of the Certificateholders, may
amend the Pooling and Servicing Agreement to modify, eliminate or
add to any of its provisions to such extent as shall be necessary
to maintain the qualification of the Trust REMIC as two separate
REMICs or of the Grantor Trust as a grantor trust, or to prevent
the imposition of any additional material state or local taxes,
at all times that any Certificates are outstanding; provided,
however, that such action, as evidenced by an Opinion of Counsel
(obtained at the expense of the Trust Fund), is necessary or
helpful to maintain such qualification or to prevent the
imposition of any such taxes, and would not adversely affect in
any material respect the interest of any Certificateholder.
The Pooling and Servicing Agreement or any Custodial
Agreement may also be amended from time to time by the Depositor,
the Servicer, the Special Servicer, the Trustee and the Fiscal
Agent with the consent of the Holders of Certificates evidencing
not less than 662/3% of the Percentage Interests of each Class of
Certificates affected by the amendment for the purpose of adding
any provisions to or changing in any manner or eliminating any of
the provisions of the Pooling and Servicing Agreement or of
modifying in any manner the rights of the Certificateholders;
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 all the
holders of all Certificates representing all
Percentage Interests of the Class or Classes
affected thereby;
(ii) change the percentages of Voting Rights of
Holders of Certificates which are required to
consent to any action or inaction under the
Pooling and
5
<PAGE>
Servicing Agreement, without the consent of all
the holders of all Certificates representing all
Percentage Interests of the Class or Classes
affected thereby;
(iii) alter the Servicing Standard or the
obligations of the Servicer, the Special
Servicer, the Trustee or the Fiscal Agent to make
a P&I Advance or Property Advance without the
consent of the Holders of all Certificates
representing all of the Percentage Interests of
the Class or Classes affected thereby; or
(iv) amend any section of the Pooling and
Servicing Agreement which relates to the
amendment thereof, without the consent of all the
holders of all Certificates representing all
Percentage Interests of the Class or Classes
affected thereby.
Any Holder of Class LR Certificates representing
greater than a 50% Percentage Interest in such Class may effect
an early termination of the Trust Fund, upon not less than 30
days' prior notice given to the Trustee and Servicer any time on
or after the Early Termination Notice Date (defined as any date
as of which the aggregate Stated Principal Balance of the
Mortgage Loans is less than 1.0% of the aggregate Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date)
specifying the Anticipated Termination Date, by purchasing on
such date all, but not less than all, of the Mortgage Loans then
included in the Trust Fund, and all property acquired in respect
of any Mortgage Loan, at a purchase price, payable in cash, equal
to not less than the greater of:
(i) the sum of
(A) 100% of the unpaid principal balance of each
Mortgage Loan included in the Trust Fund as
of the last day of the month preceding such
Distribution Date;
(B) the fair market value of all other property
included in the Trust Fund as of the last
day of the month preceding such Distribution
Date, as determined by an Independent
appraiser acceptable to the Servicer as of
the date not more than 30 days prior to the
last day of the month preceding such
Distribution Date;
(C) all unpaid interest accrued on such
principal balance of each such Mortgage Loan
(including for this purpose any Mortgage
Loan as to which title to the related
Mortgaged Property has been acquired) at the
Mortgage Rate (plus the Excess Rate, to the
extent applicable) to the last day of the
Interest Accrual Period preceding such
Distribution Date;
(D) the aggregate amount of unreimbursed
Advances and unpaid Servicing Fees, Special
Servicing Compensation, Trustee Fees and
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<PAGE>
Trust Fund expenses, in each case with
interest thereon at the Advance Rate to the
extent permitted under the Pooling and
Servicing Agreement; and
(ii) the aggregate fair market value of the
Mortgage Loans, and all other property acquired
in respect of any Mortgage Loan in the Trust
Fund, on the last day of the month preceding such
Distribution Date, as determined by an
Independent appraiser acceptable to the Servicer
as of a date not more than 30 days prior to the
last day of the month preceding such Distribution
Date, together with one month's interest thereon
at the related Mortgage Rates.
The Servicer or the Depositor may also effect such
termination as provided above if it first notifies each Holder of
a Class LR Certificate through the Trustee of its intention to do
so in writing at least 30 days prior to the Early Termination
Notice Date and no Class LR Holder terminates the Trust Fund as
described above within such 30 day period. All costs and expenses
incurred by any and all parties to the Pooling and Servicing
Agreement or by the Trust Fund in connection with the purchase of
the Mortgage Loans and other assets of the Trust Fund pursuant to
Section 9.01(c) of the Pooling and Servicing Agreement shall be
borne by the party exercising its purchase rights thereunder. The
Trustee shall be entitled to rely conclusively on any
determination made by an Independent appraiser pursuant to
Section 9.01(c) of the Pooling and Servicing Agreement.
The respective obligations and responsibilities of the
Servicer, the Special Servicer, the Depositor, the Trustee and
the Fiscal Agent created by the Pooling and Servicing Agreement
with respect to the Certificates (other than the obligation to
make certain payments and to send certain notices to
Certificateholders as set forth in the Pooling and Servicing
Agreement) shall terminate immediately following the occurrence
of the last action required to be taken by the Trustee pursuant
to Article IX of the Pooling and Servicing Agreement on the
Termination Date; provided, however, that in no event shall the
trust created thereby continue beyond the expiration of
twenty-one years from the death of the last survivor of the
descendants of Joseph P. Kennedy, the late ambassador of the
United States to the United Kingdom, living on the Closing Date.
Unless the Certificate of Authentication on this
Certificate has been executed by the Trustee or on its behalf by
the Authenticating Agent, by manual signature, this Certificate
shall not be entitled to any benefit under the Pooling and
Servicing Agreement or be valid for any purpose.
7
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Class A-4
Certificate to be duly executed.
Dated: March 27, 1997
LASALLE NATIONAL BANK, not in its
individual capacity but solely as Trustee
By:______________________________________
Authorized Officer
Certificate of Authentication
This is one of the Class A-4 Certificates referred to
in the Pooling and Servicing Agreement.
Dated: March 27, 1997
LASALLE NATIONAL BANK, not in its
individual capacity but solely as
Authenticating Agent
By:______________________________________
Authorized Officer
8
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned ("Assignor(s)") hereby
sell(s), assign(s) and transfer(s) unto_____________________________
____________________________________________________________________
(please print or typewrite name(s) and address(es), including
postal zip code(s) of assignee(s)) ("Assignee(s)") the entire
Percentage Interest represented by the within Class A-4
Certificate and hereby authorize(s) the registration of transfer
of such interest to Assignee(s) on the Certificate Register of
the Trust Fund.
I (we) further direct the Certificate Registrar to
issue a new Class A-4 Certificate of the entire Percentage
Interest represented by the within Class A-4 Certificates to the
above-named Assignee(s) and to deliver such Class A-4 Certificate
to the following address:
____________________________________________________________________
____________________________________________________________________
Date:________________ ___________________________________
Signature by or on behalf of
Assignor(s)
___________________________________
Taxpayer Identification Number
9
<PAGE>
DISTRIBUTION INSTRUCTIONS
The Assignee(s) should include the following for
purposes of distribution:
Address of the Assignee(s) for the purpose of receiving notices
and distributions:____________________________________________________
______________________________________________________________________
Distributions, if being made by wire transfer in immediately
available funds to ___________________________________________________
for the account of ___________________________________________________
account number ____________________________.
This information is provided by____________________________
_______________________________________ the Assignee(s) named
above, or ________________________________________________ as its
(their) agent.
By:____________________________________
____________________________________
[Please print or type name(s)]
____________________________________
Title:
____________________________________
Taxpayer Identification Number
10
<PAGE>
EXHIBIT A-8
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO THE CERTIFICATE REGISTRAR FOR
REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC),
ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION
OF THE DEPOSITOR, THE ORIGINATOR, THE SERVICER, THE TRUSTEE, THE
FISCAL AGENT OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THE
CERTIFICATES NOR THE UNDERLYING MORTGAGE LOANS ARE INSURED OR
GUARANTEED BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
PRINCIPAL PAYMENTS ON THIS CERTIFICATE ARE PAYABLE IN
INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING
CERTIFICATE BALANCE OF THIS CERTIFICATE AT ANY TIME MAY BE LESS
THAN THE INITIAL CERTIFICATE BALANCE SET FORTH BELOW.
THIS CLASS A-5 CERTIFICATE IS SUBORDINATE TO THE CLASS A-1A,
CLASS A- 1B, CLASS PS-1, CLASS CS-1, CLASS A-2, CLASS A-3 AND
CLASS A-4 CERTIFICATES AS AND TO THE EXTENT SET FORTH IN THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE SHOULD NOT BE PURCHASED BY A TRANSFEREE THAT IS
(A) AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT,
INCLUDING AN INDIVIDUAL RETIREMENT ACCOUNT OR A KEOGH PLAN, WHICH
IS SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SECTION 4975 OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR ANY ESSENTIALLY
SIMILAR FEDERAL, STATE OR LOCAL LAW (A "SIMILAR LAW") (EACH, A
"PLAN"), OR (B) A COLLECTIVE INVESTMENT FUND IN WHICH SUCH PLANS
ARE INVESTED, AN INSURANCE COMPANY USING ASSETS OF SEPARATE
ACCOUNTS OR GENERAL ACCOUNTS WHICH INCLUDE ASSETS OF PLANS (OR
WHICH ARE DEEMED PURSUANT TO ERISA OR ANY SIMILAR LAW TO INCLUDE
ASSETS OF PLANS) OR OTHER PERSON ACTING ON BEHALF OF ANY SUCH
PLAN OR USING THE ASSETS OF ANY SUCH PLAN, OTHER THAN AN
INSURANCE COMPANY USING THE ASSETS OF ITS GENERAL ACCOUNT UNDER
CIRCUMSTANCES WHEREBY SUCH PURCHASE AND THE SUBSEQUENT
<PAGE>
HOLDING OF SUCH CERTIFICATE BY SUCH INSURANCE COMPANY WOULD NOT
CONSTITUTE OR RESULT IN A PROHIBITED TRANSACTION WITHIN THE
MEANING OF SECTION 406 OR 407 OF ERISA, SECTION 4975 OF THE CODE,
OR A MATERIALLY SIMILAR CHARACTERIZATION UNDER ANY SIMILAR LAW.
TRANSFEREES OF THIS CERTIFICATE TAKING DELIVERY IN CERTIFICATED
FORM SHALL BE REQUIRED EITHER (i) TO DELIVER A LETTER IN THE FORM
OF EXHIBIT D-2 OF THE POOLING AND SERVICING AGREEMENT TO SUCH
EFFECT, OR (ii) IN THE EVENT THE TRANSFEREE IS SUCH AN ENTITY
SPECIFIED IN (A) OR (B) ABOVE, EXCEPT IN THE CASE OF A RESIDUAL
CERTIFICATE, WHICH MAY NOT BE TRANSFERRED UNLESS THE TRANSFEREE
REPRESENTS IT IS NOT SUCH AN ENTITY, SUCH ENTITY SHALL PROVIDE AN
OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE
CERTIFICATE REGISTRAR THAT THE PURCHASE OR HOLDING OF THE
CERTIFICATES BY OR ON BEHALF OF A PLAN WILL NOT RESULT IN THE
ASSETS OF THE TRUST BEING DEEMED TO BE "PLAN ASSETS" AND SUBJECT
TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF ERISA OR THE
PROHIBITED TRANSACTION PROVISIONS OF ERISA AND THE CODE OR
SIMILAR LAW, WILL NOT CONSTITUTE OR RESULT IN A PROHIBITED
TRANSACTION WITHIN THE MEANING OF SECTION 406 OR 407 OF ERISA OR
SECTION 4975 OF THE CODE, AND WILL NOT SUBJECT THE SERVICER, THE
DEPOSITOR, THE TRUSTEE OR THE CERTIFICATE REGISTRAR TO ANY
OBLIGATION OR LIABILITY. THE TRANSFEREE OF A BENEFICIAL INTEREST
IN A "GLOBAL CERTIFICATE" THAT IS A "RESTRICTED CERTIFICATE"
(EACH AS DEFINED IN THE POOLING AND SERVICING AGREEMENT) SHALL BE
DEEMED TO REPRESENT THAT IT IS NOT A PLAN OR A PERSON ACTING ON
BEHALF OF ANY PLAN OR USING THE ASSETS OF ANY PLAN TO ACQUIRE
SUCH INTEREST, OTHER THAN AN INSURANCE COMPANY USING THE ASSETS
OF ITS GENERAL ACCOUNT UNDER CIRCUMSTANCES WHEREBY SUCH PURCHASE
AND THE SUBSEQUENT HOLDING OF SUCH CERTIFICATE BY SUCH INSURANCE
COMPANY WOULD NOT CONSTITUTE OR RESULT IN A PROHIBITED
TRANSACTION WITHIN THE MEANING OF SECTION 406 OR 407 OF ERISA,
SECTION 4975 OF THE CODE, OR A MATERIALLY SIMILAR
CHARACTERIZATION UNDER ANY SIMILAR LAW.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS A PRO RATA UNDIVIDED BENEFICIAL INTEREST IN A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G(a)(1) AND
860D OF THE INTERNAL REVENUE CODE OF 1986, AND CERTAIN OTHER
ASSETS.
<PAGE>
ASSET SECURITIZATION CORPORATION
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1997-MD VII, CLASS A-5
Pass-Through Rate: 7.97561%*
First Distribution Date: Cut-off Date: March 27, 1997
April 15, 1997
Aggregate Initial Scheduled Final
Certificate Balance of the Distribution Date:
Class A-5 Certificates: January 13, 2027
$27,476,248
CUSIP: 045424 EP 9 ISIN: US045424 EP91
Common Code: 7522665 Initial Certificate
Balance of this Certificate:
$27,476,248
No.: A-5-
This certifies that CEDE & CO. is the registered owner
of a beneficial ownership interest in a Trust Fund, including the
distributions to be made with respect to the Class A-5
Certificates. The Trust Fund, described more fully below,
consists primarily of a pool of Mortgage Loans secured by first
liens on commercial properties and held in trust by the Trustee
and serviced by the Servicer. The Trust Fund was created, and the
Mortgage Loans are to be serviced, pursuant to the Pooling and
Servicing Agreement (as defined below). The Holder of this
Certificate, by virtue of the acceptance hereof, assents to the
terms, provisions and conditions of the Pooling and Servicing
Agreement and is bound thereby. Also issued under the Pooling and
Servicing Agreement are the Class A-1A, Class A-1B, Class PS-1,
Class CS-1, Class A-2, Class A-3, Class A-4, Class A-6, Class
B-1, Class B-1H, Class V-1, Class V-2, Class R and Class LR
Certificates (together with the A-5 Certificates, the
"Certificates"; the Holders of Certificates issued under the
Pooling and Servicing Agreement are collectively referred to
herein as "Certificateholders").
This Certificate is issued pursuant to, and in
accordance with, the terms of a Pooling and Servicing Agreement
dated as of March 27, 1997 (the "Pooling and Servicing
Agreement"), by and among Asset Securitization Corporation, as
Depositor, Pacific Mutual Life Insurance Company, as Servicer,
LaSalle National Bank, as Trustee, and ABN AMRO Bank
- --------
The Pass-Through Rate is for the Distribution Date
occurring in April 1997. The Pass- Through Rate for all
subsequent Distribution Dates shall be calculated as
provided in the Pooling and Servicing Agreement.
1
<PAGE>
N.V., as Fiscal Agent. To the extent not defined herein,
capitalized terms used herein shall have the meanings assigned
thereto in the Pooling and Servicing Agreement.
This Certificate represents a pro rata undivided
beneficial interest in a "regular interest" in a "real estate
mortgage investment conduit," as those terms are defined,
respectively, in Sections 860G(a)(1) and 860D of the Internal
Revenue Code of l986, as amended, and certain other assets.
The Trustee makes no representation or warranty as to
any of the statements contained herein or the validity or
sufficiency of the Certificates or the Mortgage Loans and has
executed this Certificate in its limited capacity as Trustee
under the Pooling and Servicing Agreement.
Pursuant to the terms of the Pooling and Servicing
Agreement, the Trustee, or the Paying Agent on behalf of the
Trustee, will distribute (other than the final distribution on
any Certificate), on the thirteenth day of each month, or if such
day is not a Business Day, the Business Day immediately following
such day, commencing in April, 1997 (each such date, a
"Distribution Date"); provided, however, that in any month the
Distribution Date will be no earlier than the second Business Day
following the eleventh day of such month and, provided further,
that if the eleventh day of any month is not a Business Day, the
Distribution Date shall be the third Business Day following the
eleventh day of such month, to the Person in whose name this
Certificate is registered as of the related Record Date, an
amount equal to such Person's pro rata share (based on the
Percentage Interest represented by this Certificate) of that
portion of the aggregate amount of principal and interest then
distributable, if any, allocable to the Class A-5 Certificates
for such Distribution Date, all as more fully described in the
Pooling and Servicing Agreement.
During each Interest Accrual Period (as defined
below), interest on the Class A-5 Certificates will be calculated
based on a 360-day year consisting of twelve 30-day months on the
outstanding Certificate Balance hereof.
Interest accrued on this Certificate during an
Interest Accrual Period, plus the aggregate unpaid Class Interest
Shortfall with respect to this Certificate, if any, will be
payable on the related Distribution Date to the extent provided
in the Pooling and Servicing Agreement. The "Interest Accrual
Period" with respect to any Distribution Date commences on the
eleventh day of the month preceding the month in which such
Distribution Date occurs and ends on the tenth day of the month
in which such Distribution Date occurs, provided that the first
Interest Accrual Period shall commence on the Cut-off Date and
end on April 10, 1997. Interest for each Interest Accrual Period,
other than the Interest Accrual Period with respect to the
Distribution Date occurring in April 1997, is calculated based on
a 360-day year consisting of twelve 30-day months. The Interest
Accrual Period with respect to the Distribution Date occurring in
April 1997 shall consist of the actual number of 14 days.
All distributions (other than the final distribution
on any Certificate) will be made by the Paying Agent to the
persons in whose names the Certificates are registered at the
close of business on each Record Date, which will be the tenth
day of the month in which the related
2
<PAGE>
Distribution Date occurs or, if such day is not a Business Day,
the preceding Business Day; provided, however, that with respect
to the Distribution Date occurring in April 1997, the Record Date
will be the Closing Date, except as specified in the Pooling and
Servicing Agreement. Such distributions shall be made on each
Distribution Date other than the Termination Date to each
Certificateholder of record on the related Record Date by check
mailed by first class mail to the address set forth therefor in
the Certificate Register or, provided that such Certificateholder
holds Certificates with an aggregate initial Certificate Balance
in excess of $5,000,000, and shall have provided the Paying Agent
with wire instructions in writing at least five Business Days
prior to the related Record Date, by wire transfer of immediately
available funds to the account of such Certificateholder at a
bank or other entity located in the United States and having
appropriate facilities therefor. The final distribution on each
Certificate shall be made in like manner, but only upon
presentment and surrender of such Certificate at the office of
the Trustee or its agent (which may be the Paying Agent or the
Certificate Registrar acting as such agent) maintained in the
Borough of Manhattan that is specified in the notice to
Certificateholders of such final distribution.
Any funds not distributed on the Termination Date
because of the failure of any Certificateholders to tender their
Certificates shall be set aside and held in trust for the account
of the appropriate non-tendering Certificateholders, whereupon
the Trust Fund shall terminate. If any Certificates as to which
notice of the Termination Date has been given pursuant to Section
9.01 of the Pooling and Servicing Agreement 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 Certificateholders, at their last addresses
shown in the Certificate Register, to surrender their
Certificates for cancellation in order to receive, from such
funds held, the final distribution with respect thereto. If
within one year after the second notice any Certificate shall not
have been surrendered for cancellation, the Trustee may, directly
or through an agent, take appropriate steps to contact the
remaining Certificateholders concerning surrender of their
Certificates. The costs and expenses of maintaining such funds
and of contacting Certificateholders shall be paid out of the
assets which remain held. If within two years after the second
notice any Certificates shall not have been surrendered for
cancellation, the Paying Agent shall pay to the Class R
Certificateholders all amounts distributable to the Holders
thereof.. No interest shall accrue or be payable to any
Certificateholder on any amount held as a result of such
Certificateholder's failure to surrender its Certificate(s) for
final payment thereof in accordance with Section 9.01 of the
Pooling and Servicing Agreement. Such funds held by the Trustee
may be invested under certain circumstances, and subject to
certain conditions as specified in the Pooling and Servicing
Agreement.
This Certificate is limited in right of payment to,
among other things, certain collections and recoveries in respect
of the Mortgage Loans, as more specifically set forth herein and
in the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement,
the Trust Fund includes (i) such Mortgage Loans as from time to
time are subject to the Pooling and Servicing Agreement, together
with the Mortgage Files relating thereto; (ii) all scheduled or
unscheduled payments on or collections in respect of the Mortgage
Loans due after Cut-off Date; (iii) any REO Property;
3
<PAGE>
(iv) all revenues received in respect of any REO Property; (v)
the Servicer's and the Trustee's rights under the insurance
policies with respect to the Mortgage Loans required to be
maintained pursuant to the Pooling and Servicing Agreement and
any proceeds thereof; (vi) any Assignments of Leases, Rents and
Profits and any security agreements; (vii) any indemnities or
guaranties given as additional security for any Mortgage Loans;
(viii) all assets deposited in the Lock-Box Accounts, Cash
Collateral Accounts, Escrow Accounts, Reserve Accounts and the
Hudson Treasury Collateral Account (to the extent such assets in
such accounts are not assets of the respective Borrowers), the
Collection Account, the Lower-Tier Distribution Account, the
Upper-Tier Distribution Account, the Excess Interest Distribution
Account, the Interest Reserve Account and the Default Interest
Distribution Account, including reinvestment income thereon; (ix)
any environmental indemnity agreements relating to the Mortgaged
Properties; (x) the rights and remedies under the Mortgage Loan
Purchase and Sale Agreement; and (xi) the proceeds of any of the
foregoing (other than any interest earned on deposits in the
Lock-Box Accounts, Cash Collateral Accounts, Escrow Accounts, the
Hudson Treasury Collateral Account and any Reserve Accounts, to
the extent such interest belongs to the related Borrower). As
provided in the Pooling and Servicing Agreement, withdrawals may
be made from certain of the above accounts for purposes other
than distributions to Certificateholders.
This Certificate does not purport to summarize the
Pooling and Servicing Agreement, and reference is made to the
Pooling and Servicing Agreement for the interests, rights,
benefits, obligations and duties evidenced hereby, and the
limitations thereon, and the rights, duties and immunities of the
Trustee.
As provided in the Pooling and Servicing Agreement and
subject to certain limitations set forth therein, this
Certificate is transferable or exchangeable only upon surrender
of this Certificate to the Certificate Registrar at the Corporate
Trust Office together with an assignment and transfer (executed
by the Holder or his duly authorized attorney), subject to the
applicable requirements in Article V of the Pooling and Servicing
Agreement. Upon surrender for registration of transfer of this
Certificate, subject to the applicable requirements of Article V
of the Pooling and Servicing Agreement, the Trustee shall execute
and the Authenticating Agent shall duly authenticate in the name
of the designated transferee or transferees, one or more new
Certificates in authorized denominations of a like aggregate
Certificate Balance. Such Certificates shall be delivered by the
Certificate Registrar in accordance with Section 5.02(e) of the
Pooling and Servicing Agreement.
Prior to due presentation of this Certificate for
registration of transfer, the Depositor, the Servicer, the
Trustee, the Fiscal Agent, the Certificate Registrar, any Paying
Agent and any agent of any of them may treat the Person in whose
name this Certificate is registered as the owner hereof for all
purposes, and none of the Depositor, the Servicer, the Trustee,
the Fiscal Agent, the Certificate Registrar, any Paying Agent or
any agent of any of them shall be affected by any notice or
knowledge to the contrary.
No fee or service charge shall be imposed by the
Certificate Registrar for its services in respect of any
registration of transfer or exchange referred to in Section 5.02
of the Pooling and Servicing Agreement. The Certificate Registrar
may require payment by each
4
<PAGE>
transferor of a sum sufficient to cover any tax, expense or other
governmental charge payable in connection with any such transfer.
The Pooling and Servicing Agreement or any Custodial
Agreement may be amended from time to time by the Depositor, the
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 in
the Pooling and Servicing Agreement or therein that may be
defective or inconsistent with any other provisions in such
agreement, (iii) to amend or supplement any provisions in either
of such agreements to the extent necessary or desirable to
maintain the rating or ratings assigned to each of the Classes of
Certificates by each Rating Agency, (iv) to amend or supplement
any provisions in either of such agreements that shall not
adversely affect in any material respect the interests of any
Certificateholder not consenting thereto, as evidenced in writing
by an Opinion of Counsel, at the expense of the party requesting
such amendment, or as evidenced by confirmation in writing from
each Rating Agency that such amendment or supplement will not
result in a qualification, withdrawal or downgrading of the
then-current ratings assigned to the Certificates, or (v) to make
any other provisions with respect to matters or questions arising
under the Pooling and Servicing Agreement, which shall not be
inconsistent with the provisions of the Pooling and Servicing
Agreement and will not result in a downgrade, qualification or
withdrawal of the then current rating or ratings then assigned to
any outstanding Class of Certificates, as confirmed by each
Rating Agency in writing.
Further, the Depositor, the Servicer, the Special
Servicer, the Trustee and the Fiscal Agent, at any time and from
time to time, without the consent of the Certificateholders, may
amend the Pooling and Servicing Agreement to modify, eliminate or
add to any of its provisions to such extent as shall be necessary
to maintain the qualification of the Trust REMIC as two separate
REMICs or of the Grantor Trust as a grantor trust, or to prevent
the imposition of any additional material state or local taxes,
at all times that any Certificates are outstanding; provided,
however, that such action, as evidenced by an Opinion of Counsel
(obtained at the expense of the Trust Fund), is necessary or
helpful to maintain such qualification or to prevent the
imposition of any such taxes, and would not adversely affect in
any material respect the interest of any Certificateholder.
The Pooling and Servicing Agreement or any Custodial
Agreement may also be amended from time to time by the Depositor,
the Servicer, the Special Servicer, the Trustee and the Fiscal
Agent with the consent of the Holders of Certificates evidencing
not less than 662/3% of the Percentage Interests of each Class of
Certificates affected by the amendment for the purpose of adding
any provisions to or changing in any manner or eliminating any of
the provisions of the Pooling and Servicing Agreement or of
modifying in any manner the rights of the Certificateholders;
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 all the
holders of all Certificates representing all
Percentage Interests of the Class or Classes
affected thereby;
5
<PAGE>
(ii) change the percentages of Voting Rights
of Holders of Certificates which are required to
consent to any action or inaction under the
Pooling and Servicing Agreement, without the
consent of all the holders of all Certificates
representing all Percentage Interests of the
Class or Classes affected thereby;
(iii) alter the Servicing Standard or the
obligations of the Servicer, the Special
Servicer, the Trustee or the Fiscal Agent to make
a P&I Advance or Property Advance without the
consent of the Holders of all Certificates
representing all of the Percentage Interests of
the Class or Classes affected thereby; or
(iv) amend any section of the Pooling and
Servicing Agreement which relates to the
amendment thereof, without the consent of all the
holders of all Certificates representing all
Percentage Interests of the Class or Classes
affected thereby.
Any Holder of Class LR Certificates representing
greater than a 50% Percentage Interest in such Class may effect
an early termination of the Trust Fund, upon not less than 30
days' prior notice given to the Trustee and Servicer any time on
or after the Early Termination Notice Date (defined as any date
as of which the aggregate Stated Principal Balance of the
Mortgage Loans is less than 1.0% of the aggregate Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date)
specifying the Anticipated Termination Date, by purchasing on
such date all, but not less than all, of the Mortgage Loans then
included in the Trust Fund, and all property acquired in respect
of any Mortgage Loan, at a purchase price, payable in cash, equal
to not less than the greater of:
(i) the sum of
(A) 100% of the unpaid principal balance of each
Mortgage Loan included in the Trust Fund as
of the last day of the month preceding such
Distribution Date;
(B) the fair market value of all other property
included in the Trust Fund as of the last
day of the month preceding such Distribution
Date, as determined by an Independent
appraiser acceptable to the Servicer as of
the date not more than 30 days prior to the
last day of the month preceding such
Distribution Date;
(C) all unpaid interest accrued on such
principal balance of each such Mortgage Loan
(including for this purpose any Mortgage
Loan as to which title to the related
Mortgaged Property has been acquired) at the
Mortgage Rate (plus the Excess Rate, to the
extent applicable) to the last day of the
Interest Accrual Period preceding such
Distribution Date;
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<PAGE>
(D) the aggregate amount of unreimbursed
Advances and unpaid Servicing Fees, Special
Servicing Compensation, Trustee Fees and
Trust Fund expenses, in each case with
interest thereon at the Advance Rate to the
extent permitted under the Pooling and
Servicing Agreement; and
(ii) the aggregate fair market value of the
Mortgage Loans, and all other property acquired
in respect of any Mortgage Loan in the Trust
Fund, on the last day of the month preceding such
Distribution Date, as determined by an
Independent appraiser acceptable to the Servicer
as of a date not more than 30 days prior to the
last day of the month preceding such Distribution
Date, together with one month's interest thereon
at the related Mortgage Rates.
The Servicer or the Depositor may also effect such
termination as provided above if it first notifies each Holder of
a Class LR Certificate through the Trustee of its intention to do
so in writing at least 30 days prior to the Early Termination
Notice Date and no Class LR Holder terminates the Trust Fund as
described above within such 30 day period. All costs and expenses
incurred by any and all parties to the Pooling and Servicing
Agreement or by the Trust Fund in connection with the purchase of
the Mortgage Loans and other assets of the Trust Fund pursuant to
Section 9.01(c) of the Pooling and Servicing Agreement shall be
borne by the party exercising its purchase rights thereunder. The
Trustee shall be entitled to rely conclusively on any
determination made by an Independent appraiser pursuant to
Section 9.01(c) of the Pooling and Servicing Agreement.
The respective obligations and responsibilities of the
Servicer, the Special Servicer, the Depositor, the Trustee and
the Fiscal Agent created by the Pooling and Servicing Agreement
with respect to the Certificates (other than the obligation to
make certain payments and to send certain notices to
Certificateholders as set forth in the Pooling and Servicing
Agreement) shall terminate immediately following the occurrence
of the last action required to be taken by the Trustee pursuant
to Article IX of the Pooling and Servicing Agreement on the
Termination Date; provided, however, that in no event shall the
trust created thereby continue beyond the expiration of
twenty-one years from the death of the last survivor of the
descendants of Joseph P. Kennedy, the late ambassador of the
United States to the United Kingdom, living on the Closing Date.
Unless the Certificate of Authentication on this
Certificate has been executed by the Trustee or on its behalf by
the Authenticating Agent, by manual signature, this Certificate
shall not be entitled to any benefit under the Pooling and
Servicing Agreement or be valid for any purpose.
7
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Class A-5
Certificate to be duly executed.
Dated: March 27, 1997
LASALLE NATIONAL BANK, not in its
individual capacity but solely as Trustee
By:______________________________________
Authorized Officer
Certificate of Authentication
This is one of the Class A-5 Certificates referred to
in the Pooling and Servicing Agreement.
Dated: March 27, 1997
LASALLE NATIONAL BANK, not in its
individual capacity but solely as
Authenticating Agent
By:______________________________________
Authorized Officer
8
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned ("Assignor(s)") hereby
sell(s), assign(s) and transfer(s) unto_____________________________
____________________________________________________________________
(please print or typewrite name(s) and address(es), including
postal zip code(s) of assignee(s)) ("Assignee(s)") the entire
Percentage Interest represented by the within Class A-5
Certificate and hereby authorize(s) the registration of transfer
of such interest to Assignee(s) on the Certificate Register of
the Trust Fund.
I (we) further direct the Certificate Registrar to
issue a new Class A-5 Certificate of the entire Percentage
Interest represented by the within Class A-5 Certificates to the
above-named Assignee(s) and to deliver such Class A-5 Certificate
to the following address:
____________________________________________________________________
____________________________________________________________________
Date:________________ ___________________________________
Signature by or on behalf of
Assignor(s)
___________________________________
Taxpayer Identification Number
9
<PAGE>
DISTRIBUTION INSTRUCTIONS
The Assignee(s) should include the following for
purposes of distribution:
Address of the Assignee(s) for the purpose of receiving notices
and distributions:____________________________________________________
______________________________________________________________________
Distributions, if being made by wire transfer in immediately
available funds to ___________________________________________________
for the account of ___________________________________________________
account number ____________________________.
This information is provided by____________________________
_______________________________________ the Assignee(s) named
above, or ________________________________________________ as its
(their) agent.
By:____________________________________
____________________________________
[Please print or type name(s)]
____________________________________
Title:
____________________________________
Taxpayer Identification Number
10
<PAGE>
EXHIBIT A-9
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO THE CERTIFICATE REGISTRAR FOR
REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC),
ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION
OF THE DEPOSITOR, THE ORIGINATOR, THE SERVICER, THE TRUSTEE, THE
FISCAL AGENT OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THE
CERTIFICATES NOR THE UNDERLYING MORTGAGE LOANS ARE INSURED OR
GUARANTEED BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
PRINCIPAL PAYMENTS ON THIS CERTIFICATE ARE PAYABLE IN
INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING
CERTIFICATE BALANCE OF THIS CERTIFICATE AT ANY TIME MAY BE LESS
THAN THE INITIAL CERTIFICATE BALANCE SET FORTH BELOW.
THIS CLASS A-6 CERTIFICATE IS SUBORDINATE TO THE CLASS A-1A,
CLASS A- 1B, CLASS PS-1, CLASS CS-1, CLASS A-2, CLASS A-3, CLASS
A-4 AND CLASS A-5 CERTIFICATES AS AND TO THE EXTENT SET FORTH IN
THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE SHOULD NOT BE PURCHASED BY A TRANSFEREE THAT IS
(A) AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT,
INCLUDING AN INDIVIDUAL RETIREMENT ACCOUNT OR A KEOGH PLAN, WHICH
IS SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SECTION 4975 OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR ANY ESSENTIALLY
SIMILAR FEDERAL, STATE OR LOCAL LAW (A "SIMILAR LAW") (EACH, A
"PLAN"), OR (B) A COLLECTIVE INVESTMENT FUND IN WHICH SUCH PLANS
ARE INVESTED, AN INSURANCE COMPANY USING ASSETS OF SEPARATE
ACCOUNTS OR GENERAL ACCOUNTS WHICH INCLUDE ASSETS OF PLANS (OR
WHICH ARE DEEMED PURSUANT TO ERISA OR ANY SIMILAR LAW TO INCLUDE
ASSETS OF PLANS) OR OTHER PERSON ACTING ON BEHALF OF ANY SUCH
PLAN OR USING THE ASSETS OF ANY SUCH PLAN, OTHER THAN AN
INSURANCE COMPANY USING THE ASSETS OF ITS GENERAL ACCOUNT UNDER
CIRCUMSTANCES WHEREBY SUCH PURCHASE AND THE SUBSEQUENT
<PAGE>
HOLDING OF SUCH CERTIFICATE BY SUCH INSURANCE COMPANY WOULD NOT
CONSTITUTE OR RESULT IN A PROHIBITED TRANSACTION WITHIN THE
MEANING OF SECTION 406 OR 407 OF ERISA, SECTION 4975 OF THE CODE,
OR A MATERIALLY SIMILAR CHARACTERIZATION UNDER ANY SIMILAR LAW.
TRANSFEREES OF THIS CERTIFICATE TAKING DELIVERY IN CERTIFICATED
FORM SHALL BE REQUIRED EITHER (i) TO DELIVER A LETTER IN THE FORM
OF EXHIBIT D-2 OF THE POOLING AND SERVICING AGREEMENT TO SUCH
EFFECT, OR (ii) IN THE EVENT THE TRANSFEREE IS SUCH AN ENTITY
SPECIFIED IN (A) OR (B) ABOVE, EXCEPT IN THE CASE OF A RESIDUAL
CERTIFICATE, WHICH MAY NOT BE TRANSFERRED UNLESS THE TRANSFEREE
REPRESENTS IT IS NOT SUCH AN ENTITY, SUCH ENTITY SHALL PROVIDE AN
OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE
CERTIFICATE REGISTRAR THAT THE PURCHASE OR HOLDING OF THE
CERTIFICATES BY OR ON BEHALF OF A PLAN WILL NOT RESULT IN THE
ASSETS OF THE TRUST BEING DEEMED TO BE "PLAN ASSETS" AND SUBJECT
TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF ERISA OR THE
PROHIBITED TRANSACTION PROVISIONS OF ERISA AND THE CODE OR
SIMILAR LAW, WILL NOT CONSTITUTE OR RESULT IN A PROHIBITED
TRANSACTION WITHIN THE MEANING OF SECTION 406 OR 407 OF ERISA OR
SECTION 4975 OF THE CODE, AND WILL NOT SUBJECT THE SERVICER, THE
DEPOSITOR, THE TRUSTEE OR THE CERTIFICATE REGISTRAR TO ANY
OBLIGATION OR LIABILITY. THE TRANSFEREE OF A BENEFICIAL INTEREST
IN A "GLOBAL CERTIFICATE" THAT IS A "RESTRICTED CERTIFICATE"
(EACH AS DEFINED IN THE POOLING AND SERVICING AGREEMENT) SHALL BE
DEEMED TO REPRESENT THAT IT IS NOT A PLAN OR A PERSON ACTING ON
BEHALF OF ANY PLAN OR USING THE ASSETS OF ANY PLAN TO ACQUIRE
SUCH INTEREST, OTHER THAN AN INSURANCE COMPANY USING THE ASSETS
OF ITS GENERAL ACCOUNT UNDER CIRCUMSTANCES WHEREBY SUCH PURCHASE
AND THE SUBSEQUENT HOLDING OF SUCH CERTIFICATE BY SUCH INSURANCE
COMPANY WOULD NOT CONSTITUTE OR RESULT IN A PROHIBITED
TRANSACTION WITHIN THE MEANING OF SECTION 406 OR 407 OF ERISA,
SECTION 4975 OF THE CODE, OR A MATERIALLY SIMILAR
CHARACTERIZATION UNDER ANY SIMILAR LAW.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS A PRO RATA UNDIVIDED BENEFICIAL INTEREST IN A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G(a)(1) AND
860D OF THE INTERNAL REVENUE CODE OF 1986, AND CERTAIN OTHER
ASSETS.
THIS CERTIFICATE IS ISSUED ON MARCH 27, 1997, AND BASED ON ITS
ISSUE PRICE OF 99.4062% OF ITS INITIAL PRINCIPAL BALANCE AND A
STATED REDEMPTION PRICE AT MATURITY EQUAL TO ITS INITIAL
PRINCIPAL BALANCE, IS ISSUED WITH A DE MINIMIS AMOUNT OF ORIGINAL
ISSUE
<PAGE>
DISCOUNT ("OID") FOR FEDERAL INCOME TAX PURPOSES. ASSUMING (A)
THAT THIS CERTIFICATE PAYS IN ACCORDANCE WITH PROJECTED CASH
FLOWS REFLECTING THE PREPAYMENT ASSUMPTION OF SCENARIO 1 (AS
DESCRIBED IN THE PROSPECTUS SUPPLEMENT DATED MARCH 20, 1997 WITH
RESPECT TO THE OFFERING OF THE CLASS A-1A, CLASS A-1B, CLASS
PS-1, CLASS CS-1, CLASS A-2, CLASS A-3, CLASS A-4, CLASS A-5 AND
CLASS A-6 CERTIFICATES) USED TO PRICE THIS CERTIFICATE, AND (B)
THAT THE PASS- THROUGH RATE HEREON CHANGES IN ACCORDANCE WITH
SUCH PREPAYMENT ASSUMPTION: (I) THIS CERTIFICATE HAS BEEN ISSUED
WITH NO MORE THAN $5.94 OF OID PER $1000 OF INITIAL PRINCIPAL
BALANCE; (II) THE ANNUAL YIELD TO MATURITY OF THIS CERTIFICATE,
COMPOUNDED MONTHLY, IS APPROXIMATELY 8.31%; AND (III) THE AMOUNT
OF OID ALLOCABLE TO THE INITIAL SHORT INTEREST ACCRUAL PERIOD
(MARCH 27, 1997 TO APRIL 13, 1997), CALCULATED USING THE EXACT
METHOD, IS NO MORE THAN $.50 PER $1000 OF INITIAL PRINCIPAL
BALANCE. NO REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL
PREPAY AT A RATE BASED ON THE PREPAYMENT ASSUMPTION OR AT ANY
OTHER RATE.
<PAGE>
ASSET SECURITIZATION CORPORATION
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1997-MD VII, CLASS A-6
Pass-Through Rate: 7.97561%*
First Distribution Date: Cut-off Date: March 27, 1997
April 15, 1997
Aggregate Initial Scheduled Final
Certificate Balance of the Distribution Date:
Class A-6 Certificates: January 13, 2027
$9,991,363
CUSIP: 045424 EQ7 ISIN: US045424 EQ74
Common Code: 7522746 Initial Certificate
Balance of this Certificate:
$9,991,363
No.: A-6-
This certifies that CEDE & CO. is the registered owner
of a beneficial ownership interest in a Trust Fund, including the
distributions to be made with respect to the Class A-6
Certificates. The Trust Fund, described more fully below,
consists primarily of a pool of Mortgage Loans secured by first
liens on commercial properties and held in trust by the Trustee
and serviced by the Servicer. The Trust Fund was created, and the
Mortgage Loans are to be serviced, pursuant to the Pooling and
Servicing Agreement (as defined below). The Holder of this
Certificate, by virtue of the acceptance hereof, assents to the
terms, provisions and conditions of the Pooling and Servicing
Agreement and is bound thereby. Also issued under the Pooling and
Servicing Agreement are the Class A-1A, Class A-1B, Class PS-1,
Class CS-1, Class A-2, Class A-3, Class A-4, Class A-5, Class
B-1, Class B-1H, Class V-1, Class V-2, Class R and Class LR
Certificates (together with the A-6 Certificates, the
"Certificates"; the Holders of Certificates issued under the
Pooling and Servicing Agreement are collectively referred to
herein as "Certificateholders").
This Certificate is issued pursuant to, and in
accordance with, the terms of a Pooling and Servicing Agreement
dated as of March 27, 1997 (the "Pooling and Servicing
Agreement"), by and among Asset Securitization Corporation, as
Depositor, Pacific Mutual Life Insurance Company, as Servicer,
LaSalle National Bank, as Trustee, and ABN AMRO Bank
- --------
The Pass-Through Rate is for the Distribution Date
occurring in April 1997. The Pass- Through Rate for all
subsequent Distribution Dates shall be calculated as
provided in the Pooling and Servicing Agreement.
1
<PAGE>
N.V., as Fiscal Agent. To the extent not defined herein,
capitalized terms used herein shall have the meanings assigned
thereto in the Pooling and Servicing Agreement.
This Certificate represents a pro rata undivided
beneficial interest in a "regular interest" in a "real estate
mortgage investment conduit," as those terms are defined,
respectively, in Sections 860G(a)(1) and 860D of the Internal
Revenue Code of l986, as amended, and certain other assets.
The Trustee makes no representation or warranty as to
any of the statements contained herein or the validity or
sufficiency of the Certificates or the Mortgage Loans and has
executed this Certificate in its limited capacity as Trustee
under the Pooling and Servicing Agreement.
Pursuant to the terms of the Pooling and Servicing
Agreement, the Trustee, or the Paying Agent on behalf of the
Trustee, will distribute (other than the final distribution on
any Certificate), on the thirteenth day of each month, or if such
day is not a Business Day, the Business Day immediately following
such day, commencing in April, 1997 (each such date, a
"Distribution Date"); provided, however, that in any month the
Distribution Date will be no earlier than the second Business Day
following the eleventh day of such month and, provided further,
that if the eleventh day of any month is not a Business Day, the
Distribution Date shall be the third Business Day following the
eleventh day of such month, to the Person in whose name this
Certificate is registered as of the related Record Date, an
amount equal to such Person's pro rata share (based on the
Percentage Interest represented by this Certificate) of that
portion of the aggregate amount of principal and interest then
distributable, if any, allocable to the Class A-6 Certificates
for such Distribution Date, all as more fully described in the
Pooling and Servicing Agreement.
Interest accrued on this Certificate during an
Interest Accrual Period, plus the aggregate unpaid Class Interest
Shortfall with respect to this Certificate, if any, will be
payable on the related Distribution Date to the extent provided
in the Pooling and Servicing Agreement. The "Interest Accrual
Period" with respect to any Distribution Date commences on the
eleventh day of the month preceding the month in which such
Distribution Date occurs and ends on the tenth day of the month
in which such Distribution Date occurs, provided that the first
Interest Accrual Period shall commence on the Cut-off Date and
end on April 10, 1997. Interest for each Interest Accrual Period,
other than the Interest Accrual Period with respect to the
Distribution Date occurring in April 1997, is calculated based on
a 360-day year consisting of twelve 30-day months. The Interest
Accrual Period with respect to the Distribution Date occurring in
April 1997 shall consist of 14 days.
All distributions (other than the final distribution on
any Certificate) will be made by the Paying Agent to the persons in
whose names the Certificates are registered at the close of
business on each Record Date, which will be the tenth day of the
month in which the related Distribution Date occurs or, if such
day is not a Business Day, the preceding Business Day; provided,
however, that with respect to the Distribution Date occurring in
April 1997, the Record Date will be the Closing Date, except as
specified in the Pooling and Servicing Agreement. Such
2
<PAGE>
distributions shall be made on each Distribution Date other than
the Termination Date to each Certificateholder of record on the
related Record Date by check mailed by first class mail to the
address set forth therefor in the Certificate Register or,
provided that such Certificateholder holds Certificates with an
aggregate initial Certificate Balance in excess of $5,000,000,
and shall have provided the Paying Agent with wire instructions
in writing at least five Business Days prior to the related
Record Date, by wire transfer of immediately available funds to
the account of such Certificateholder at a bank or other entity
located in the United States and having appropriate facilities
therefor. The final distribution on each Certificate shall be
made in like manner, but only upon presentment and surrender of
such Certificate at the office of the Trustee or its agent (which
may be the Paying Agent or the Certificate Registrar acting as
such agent) maintained in the Borough of Manhattan that is
specified in the notice to Certificateholders of such final
distribution.
Any funds not distributed on the Termination Date
because of the failure of any Certificateholders to tender their
Certificates shall be set aside and held in trust for the account
of the appropriate non-tendering Certificateholders, whereupon
the Trust Fund shall terminate. If any Certificates as to which
notice of the Termination Date has been given pursuant to Section
9.01 of the Pooling and Servicing Agreement 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 Certificateholders, at their last addresses
shown in the Certificate Register, to surrender their
Certificates for cancellation in order to receive, from such
funds held, the final distribution with respect thereto. If
within one year after the second notice any Certificate shall not
have been surrendered for cancellation, the Trustee may, directly
or through an agent, take appropriate steps to contact the
remaining Certificateholders concerning surrender of their
Certificates. The costs and expenses of maintaining such funds
and of contacting Certificateholders shall be paid out of the
assets which remain held. If within two years after the second
notice any Certificates shall not have been surrendered for
cancellation, the Paying Agent shall pay to the Class R
Certificateholders all amounts distributable to the Holders
thereof.. No interest shall accrue or be payable to any
Certificateholder on any amount held as a result of such
Certificateholder's failure to surrender its Certificate(s) for
final payment thereof in accordance with Section 9.01 of the
Pooling and Servicing Agreement. Such funds held by the Trustee
may be invested under certain circumstances, and subject to
certain conditions as specified in the Pooling and Servicing
Agreement.
This Certificate is limited in right of payment to,
among other things, certain collections and recoveries in respect
of the Mortgage Loans, as more specifically set forth herein and
in the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement,
the Trust Fund includes (i) such Mortgage Loans as from time to
time are subject to the Pooling and Servicing Agreement, together
with the Mortgage Files relating thereto; (ii) all scheduled or
unscheduled payments on or collections in respect of the Mortgage
Loans due after Cut-off Date; (iii) any REO Property; (iv) all
revenues received in respect of any REO Property; (v) the
Servicer's and the Trustee's rights under the insurance policies
with respect to the Mortgage Loans required to be maintained
pursuant to the Pooling and Servicing Agreement and any proceeds
thereof; (vi) any
3
<PAGE>
Assignments of Leases, Rents and Profits and any security
agreements; (vii) any indemnities or guaranties given as
additional security for any Mortgage Loans; (viii) all assets
deposited in the Lock-Box Accounts, Cash Collateral Accounts,
Escrow Accounts, Reserve Accounts and the Hudson Treasury
Collateral Account (to the extent such assets in such accounts
are not assets of the respective Borrowers), the Collection
Account, the Lower-Tier Distribution Account, the Upper-Tier
Distribution Account, the Excess Interest Distribution Account,
the Interest Reserve Account and the Default Interest
Distribution Account, including reinvestment income thereon; (ix)
any environmental indemnity agreements relating to the Mortgaged
Properties; (x) the rights and remedies under the Mortgage Loan
Purchase and Sale Agreement; and (xi) the proceeds of any of the
foregoing (other than any interest earned on deposits in the
Lock-Box Accounts, Cash Collateral Accounts, Escrow Accounts, the
Hudson Treasury Collateral Account and any Reserve Accounts, to
the extent such interest belongs to the related Borrower). As
provided in the Pooling and Servicing Agreement, withdrawals may
be made from certain of the above accounts for purposes other
than distributions to Certificateholders.
This Certificate does not purport to summarize the
Pooling and Servicing Agreement, and reference is made to the
Pooling and Servicing Agreement for the interests, rights,
benefits, obligations and duties evidenced hereby, and the
limitations thereon, and the rights, duties and immunities of the
Trustee.
As provided in the Pooling and Servicing Agreement and
subject to certain limitations set forth therein, this
Certificate is transferable or exchangeable only upon surrender
of this Certificate to the Certificate Registrar at the Corporate
Trust Office together with an assignment and transfer (executed
by the Holder or his duly authorized attorney), subject to the
applicable requirements in Article V of the Pooling and Servicing
Agreement. Upon surrender for registration of transfer of this
Certificate, subject to the applicable requirements of Article V
of the Pooling and Servicing Agreement, the Trustee shall execute
and the Authenticating Agent shall duly authenticate in the name
of the designated transferee or transferees, one or more new
Certificates in authorized denominations of a like aggregate
Certificate Balance. Such Certificates shall be delivered by the
Certificate Registrar in accordance with Section 5.02(e) of the
Pooling and Servicing Agreement.
Prior to due presentation of this Certificate for
registration of transfer, the Depositor, the Servicer, the
Trustee, the Fiscal Agent, the Certificate Registrar, any Paying
Agent and any agent of any of them may treat the Person in whose
name this Certificate is registered as the owner hereof for all
purposes, and none of the Depositor, the Servicer, the Trustee,
the Fiscal Agent, the Certificate Registrar, any Paying Agent or
any agent of any of them shall be affected by any notice or
knowledge to the contrary.
No fee or service charge shall be imposed by the
Certificate Registrar for its services in respect of any
registration of transfer or exchange referred to in Section 5.02
of the Pooling and Servicing Agreement. The Certificate Registrar
may require payment by each transferor of a sum sufficient to
cover any tax, expense or other governmental charge payable in
connection with any such transfer.
4
<PAGE>
The Pooling and Servicing Agreement or any Custodial Agreement may be
amended from time to time by the Depositor, the 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 in the
Pooling and Servicing Agreement or therein that may be defective
or inconsistent with any other provisions in such agreement,
(iii) to amend or supplement any provisions in either of such
agreements to the extent necessary or desirable to maintain the
rating or ratings assigned to each of the Classes of Certificates
by each Rating Agency, (iv) to amend or supplement any provisions
in either of such agreements that shall not adversely affect in
any material respect the interests of any Certificateholder not
consenting thereto, as evidenced in writing by an Opinion of
Counsel, at the expense of the party requesting such amendment,
or as evidenced by confirmation in writing from each Rating
Agency that such amendment or supplement will not result in a
qualification, withdrawal or downgrading of the then-current
ratings assigned to the Certificates, or (v) to make any other
provisions with respect to matters or questions arising under the
Pooling and Servicing Agreement, which shall not be inconsistent
with the provisions of the Pooling and Servicing Agreement and
will not result in a downgrade, qualification or withdrawal of
the then current rating or ratings then assigned to any
outstanding Class of Certificates, as confirmed by each Rating
Agency in writing.
Further, the Depositor, the Servicer, the Special
Servicer, the Trustee and the Fiscal Agent, at any time and from
time to time, without the consent of the Certificateholders, may
amend the Pooling and Servicing Agreement to modify, eliminate or
add to any of its provisions to such extent as shall be necessary
to maintain the qualification of the Trust REMIC as two separate
REMICs or of the Grantor Trust as a grantor trust, or to prevent
the imposition of any additional material state or local taxes,
at all times that any Certificates are outstanding; provided,
however, that such action, as evidenced by an Opinion of Counsel
(obtained at the expense of the Trust Fund), is necessary or
helpful to maintain such qualification or to prevent the
imposition of any such taxes, and would not adversely affect in
any material respect the interest of any Certificateholder.
The Pooling and Servicing Agreement or any Custodial
Agreement may also be amended from time to time by the Depositor,
the Servicer, the Special Servicer, the Trustee and the Fiscal
Agent with the consent of the Holders of Certificates evidencing
not less than 662/3% of the Percentage Interests of each Class of
Certificates affected by the amendment for the purpose of adding
any provisions to or changing in any manner or eliminating any of
the provisions of the Pooling and Servicing Agreement or of
modifying in any manner the rights of the Certificateholders;
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 all the
holders of all Certificates representing all
Percentage Interests of the Class or Classes
affected thereby;
(ii) change the percentages of Voting Rights of
Holders of Certificates which are required to
consent to any action or inaction under the
Pooling and
5
<PAGE>
Servicing Agreement, without the consent of all
the holders of all Certificates representing all
Percentage Interests of the Class or Classes
affected thereby;
(iii) alter the Servicing Standard or the
obligations of the Servicer, the Special
Servicer, the Trustee or the Fiscal Agent to make
a P&I Advance or Property Advance without the
consent of the Holders of all Certificates
representing all of the Percentage Interests of
the Class or Classes affected thereby; or
(iv) amend any section of the Pooling and
Servicing Agreement which relates to the
amendment thereof, without the consent of all the
holders of all Certificates representing all
Percentage Interests of the Class or Classes
affected thereby.
Any Holder of Class LR Certificates representing
greater than a 50% Percentage Interest in such Class may effect
an early termination of the Trust Fund, upon not less than 30
days' prior notice given to the Trustee and Servicer any time on
or after the Early Termination Notice Date (defined as any date
as of which the aggregate Stated Principal Balance of the
Mortgage Loans is less than 1.0% of the aggregate Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date)
specifying the Anticipated Termination Date, by purchasing on
such date all, but not less than all, of the Mortgage Loans then
included in the Trust Fund, and all property acquired in respect
of any Mortgage Loan, at a purchase price, payable in cash, equal
to not less than the greater of:
(i) the sum of
(A) 100% of the unpaid principal balance of each
Mortgage Loan included in the Trust Fund as
of the last day of the month preceding such
Distribution Date;
(B) the fair market value of all other property
included in the Trust Fund as of the last
day of the month preceding such Distribution
Date, as determined by an Independent
appraiser acceptable to the Servicer as of
the date not more than 30 days prior to the
last day of the month preceding such
Distribution Date;
(C) all unpaid interest accrued on such
principal balance of each such Mortgage Loan
(including for this purpose any Mortgage
Loan as to which title to the related
Mortgaged Property has been acquired) at the
Mortgage Rate (plus the Excess Rate, to the
extent applicable) to the last day of the
Interest Accrual Period preceding such
Distribution Date;
(D) the aggregate amount of unreimbursed
Advances and unpaid Servicing Fees, Special
Servicing Compensation, Trustee Fees and
6
<PAGE>
Trust Fund expenses, in each case with
interest thereon at the Advance Rate to the
extent permitted under the Pooling and
Servicing Agreement; and
(ii) the aggregate fair market value of the
Mortgage Loans, and all other property acquired
in respect of any Mortgage Loan in the Trust
Fund, on the last day of the month preceding such
Distribution Date, as determined by an
Independent appraiser acceptable to the Servicer
as of a date not more than 30 days prior to the
last day of the month preceding such Distribution
Date, together with one month's interest thereon
at the related Mortgage Rates.
The Servicer or the Depositor may also effect such
termination as provided above if it first notifies each Holder of
a Class LR Certificate through the Trustee of its intention to do
so in writing at least 30 days prior to the Early Termination
Notice Date and no Class LR Holder terminates the Trust Fund as
described above within such 30 day period. All costs and expenses
incurred by any and all parties to the Pooling and Servicing
Agreement or by the Trust Fund in connection with the purchase of
the Mortgage Loans and other assets of the Trust Fund pursuant to
Section 9.01(c) of the Pooling and Servicing Agreement shall be
borne by the party exercising its purchase rights thereunder. The
Trustee shall be entitled to rely conclusively on any
determination made by an Independent appraiser pursuant to
Section 9.01(c) of the Pooling and Servicing Agreement.
The respective obligations and responsibilities of the
Servicer, the Special Servicer, the Depositor, the Trustee and
the Fiscal Agent created by the Pooling and Servicing Agreement
with respect to the Certificates (other than the obligation to
make certain payments and to send certain notices to
Certificateholders as set forth in the Pooling and Servicing
Agreement) shall terminate immediately following the occurrence
of the last action required to be taken by the Trustee pursuant
to Article IX of the Pooling and Servicing Agreement on the
Termination Date; provided, however, that in no event shall the
trust created thereby continue beyond the expiration of
twenty-one years from the death of the last survivor of the
descendants of Joseph P. Kennedy, the late ambassador of the
United States to the United Kingdom, living on the Closing Date.
Unless the Certificate of Authentication on this
Certificate has been executed by the Trustee or on its behalf by
the Authenticating Agent, by manual signature, this Certificate
shall not be entitled to any benefit under the Pooling and
Servicing Agreement or be valid for any purpose.
7
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Class A-6
Certificate to be duly executed.
Dated: March 27, 1997
LASALLE NATIONAL BANK, not in its
individual capacity but solely as Trustee
By:______________________________________
Authorized Officer
Certificate of Authentication
This is one of the Class A-6 Certificates referred to
in the Pooling and Servicing Agreement.
Dated: March 27, 1997
LASALLE NATIONAL BANK, not in its
individual capacity but solely as
Authenticating Agent
By:______________________________________
Authorized Officer
8
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned ("Assignor(s)") hereby
sell(s), assign(s) and transfer(s) unto_____________________________
____________________________________________________________________
(please print or typewrite name(s) and address(es), including
postal zip code(s) of assignee(s)) ("Assignee(s)") the entire
Percentage Interest represented by the within Class A-6
Certificate and hereby authorize(s) the registration of transfer
of such interest to Assignee(s) on the Certificate Register of
the Trust Fund.
I (we) further direct the Certificate Registrar to
issue a new Class A-6 Certificate of the entire Percentage
Interest represented by the within Class A-6 Certificates to the
above-named Assignee(s) and to deliver such Class A-6 Certificate
to the following address:
____________________________________________________________________
____________________________________________________________________
Date:________________ ___________________________________
Signature by or on behalf of
Assignor(s)
___________________________________
Taxpayer Identification Number
9
<PAGE>
DISTRIBUTION INSTRUCTIONS
The Assignee(s) should include the following for
purposes of distribution:
Address of the Assignee(s) for the purpose of receiving notices
and distributions:____________________________________________________
______________________________________________________________________
Distributions, if being made by wire transfer in immediately
available funds to ___________________________________________________
for the account of ___________________________________________________
account number ____________________________.
This information is provided by____________________________
_______________________________________ the Assignee(s) named
above, or ________________________________________________ as its
(their) agent.
By:____________________________________
____________________________________
[Please print or type name(s)]
____________________________________
Title:
____________________________________
Taxpayer Identification Number
10
<PAGE>
EXHIBIT A-10/A
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO THE CERTIFICATE REGISTRAR FOR
REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC),
ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION
OF THE DEPOSITOR, THE ORIGINATOR, THE SERVICER, THE TRUSTEE, THE
FISCAL AGENT OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THE
CERTIFICATES NOR THE UNDERLYING MORTGAGE LOANS ARE INSURED OR
GUARANTEED BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
PRINCIPAL PAYMENTS ON THIS CERTIFICATE ARE PAYABLE IN
INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING
CERTIFICATE BALANCE OF THIS CERTIFICATE AT ANY TIME MAY BE LESS
THAN THE INITIAL CERTIFICATE BALANCE SET FORTH BELOW.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR
ANY STATE OR FOREIGN SECURITIES LAW. THE HOLDER HEREOF, BY
PURCHASING THIS CERTIFICATE, AGREES THAT THIS CERTIFICATE MAY BE
REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN
COMPLIANCE WITH THE 1933 ACT AND OTHER APPLICABLE LAWS AND ONLY
(A)(1) PURSUANT TO RULE 144A UNDER THE 1933 ACT TO AN
INSTITUTIONAL INVESTOR THAT THE HOLDER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER, WITHIN THE MEANING OF RULE 144A (A
"QIB") PURCHASING FOR ITS OWN ACCOUNT OR A PERSON PURCHASING FOR
THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED, IN EACH CASE,
THAT THE REOFFER, RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE
IN RELIANCE ON RULE 144A, (2) TO AN "INSTITUTIONAL ACCREDITED
INVESTOR" AS SUCH TERM IS DEFINED IN RULE 501(a)(1), (2), (3) OR
(7) OF REGULATION D UNDER THE 1933 ACT, (3) IN AN OFFSHORE
TRANSACTION IN ACCORDANCE WITH RULE 903 OR 904 OF REGULATION S
UNDER THE 1933 ACT OR (4) PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE 1933 ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE) AND (B) IN ACCORDANCE WITH ANY OTHER
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES.
<PAGE>
THIS CERTIFICATE SHOULD NOT BE PURCHASED BY A TRANSFEREE THAT IS
(A) AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT,
INCLUDING AN INDIVIDUAL RETIREMENT ACCOUNT OR A KEOGH PLAN, WHICH
IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED ("ERISA"), SECTION 4975 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED (THE "CODE"), OR ANY ESSENTIALLY SIMILAR
FEDERAL, STATE OR LOCAL LAW (A "SIMILAR LAW") (EACH, A "PLAN"),
OR (B) A COLLECTIVE INVESTMENT FUND IN WHICH SUCH PLANS ARE
INVESTED, AN INSURANCE COMPANY USING ASSETS OF SEPARATE ACCOUNTS
OR GENERAL ACCOUNTS WHICH INCLUDE ASSETS OF PLANS (OR WHICH ARE
DEEMED PURSUANT TO ERISA OR ANY SIMILAR LAW TO INCLUDE ASSETS OF
PLANS) OR OTHER PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR USING
THE ASSETS OF ANY SUCH PLAN, OTHER THAN AN INSURANCE COMPANY
USING THE ASSETS OF ITS GENERAL ACCOUNT UNDER CIRCUMSTANCES
WHEREBY SUCH PURCHASE AND THE SUBSEQUENT HOLDING OF SUCH
CERTIFICATE BY SUCH INSURANCE COMPANY WOULD NOT CONSTITUTE OR
RESULT IN A PROHIBITED TRANSACTION WITHIN THE MEANING OF SECTION
406 OR 407 OF ERISA, SECTION 4975 OF THE CODE, OR A MATERIALLY
SIMILAR CHARACTERIZATION UNDER ANY SIMILAR LAW. TRANSFEREES OF
THIS CERTIFICATE TAKING DELIVERY IN CERTIFICATED FORM SHALL BE
REQUIRED EITHER (i) TO DELIVER A LETTER IN THE FORM OF EXHIBIT
D-2 OF THE POOLING AND SERVICING AGREEMENT TO SUCH EFFECT, OR
(ii) IN THE EVENT THE TRANSFEREE IS SUCH AN ENTITY SPECIFIED IN
(A) OR (B) ABOVE, EXCEPT IN THE CASE OF A RESIDUAL CERTIFICATE,
WHICH MAY NOT BE TRANSFERRED UNLESS THE TRANSFEREE REPRESENTS IT
IS NOT SUCH AN ENTITY, SUCH ENTITY SHALL PROVIDE AN OPINION OF
COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE CERTIFICATE
REGISTRAR THAT THE PURCHASE OR HOLDING OF THE CERTIFICATES BY OR
ON BEHALF OF A PLAN WILL NOT RESULT IN THE ASSETS OF THE TRUST
BEING DEEMED TO BE "PLAN ASSETS" AND SUBJECT TO THE FIDUCIARY
RESPONSIBILITY PROVISIONS OF ERISA OR THE PROHIBITED TRANSACTION
PROVISIONS OF ERISA AND THE CODE OR SIMILAR LAW, WILL NOT
CONSTITUTE OR RESULT IN A PROHIBITED TRANSACTION WITHIN THE
MEANING OF SECTION 406 OR 407 OF ERISA OR SECTION 4975 OF THE
CODE, AND WILL NOT SUBJECT THE SERVICER, THE DEPOSITOR, THE
TRUSTEE OR THE CERTIFICATE REGISTRAR TO ANY OBLIGATION OR
LIABILITY.
TRANSFERS AND EXCHANGES OF PORTIONS OF THIS CERTIFICATE ARE
SUBJECT TO RESTRICTIONS AS PROVIDED IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO BELOW.
THIS CLASS B-1 CERTIFICATE IS SUBORDINATE TO THE CLASS A-1A,
CLASS A- 1B, CLASS PS-1, CLASS CS-1, CLASS A-2, CLASS A-3, CLASS
A-4, CLASS A-5 AND
<PAGE>
CLASS A-6 CERTIFICATES AS AND TO THE EXTENT SET FORTH IN THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS A PRO RATA UNDIVIDED BENEFICIAL INTEREST IN A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G(a)(1) AND
860D OF THE INTERNAL REVENUE CODE OF 1986, AND CERTAIN OTHER
ASSETS.
THIS CERTIFICATE IS ISSUED ON MARCH 27, 1997, AND BASED ON ITS
ISSUE PRICE OF 93.6875% OF ITS INITIAL PRINCIPAL BALANCE AND A
STATED REDEMPTION PRICE AT MATURITY EQUAL TO ITS INITIAL
PRINCIPAL BALANCE, IS ISSUED WITH A DE MINIMIS AMOUNT OF ORIGINAL
ISSUE DISCOUNT ("OID") FOR FEDERAL INCOME TAX PURPOSES. ASSUMING
(A) THAT THIS CERTIFICATE PAYS IN ACCORDANCE WITH PROJECTED CASH
FLOWS REFLECTING THE PREPAYMENT ASSUMPTION OF SCENARIO 1 (AS
DESCRIBED IN THE PROSPECTUS SUPPLEMENT DATED MARCH 20, 1997 WITH
RESPECT TO THE OFFERING OF THE CLASS A-1A, CLASS A-1B, CLASS
PS-1, CLASS CS-1, CLASS A-2, CLASS A-3, CLASS A-4, CLASS A-5 AND
CLASS A-6 CERTIFICATES) USED TO PRICE THIS CERTIFICATE, AND (B)
THAT THE PASS- THROUGH RATE HEREON CHANGES IN ACCORDANCE WITH
SUCH PREPAYMENT ASSUMPTION: (I) THIS CERTIFICATE HAS BEEN ISSUED
WITH NO MORE THAN $63.12 OF OID PER $1000 OF INITIAL PRINCIPAL
BALANCE; (II) THE ANNUAL YIELD TO MATURITY OF THIS CERTIFICATE,
COMPOUNDED MONTHLY, IS APPROXIMATELY 9.12%; AND (III) THE AMOUNT
OF OID ALLOCABLE TO THE INITIAL SHORT INTEREST ACCRUAL PERIOD
(MARCH 27, 1997 TO APRIL 13, 1997), CALCULATED USING THE EXACT
METHOD, IS NO MORE THAN $.62 PER $1000 OF INITIAL PRINCIPAL
BALANCE. NO REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL
PREPAY AT A RATE BASED ON THE PREPAYMENT ASSUMPTION OR AT ANY
OTHER RATE.
<PAGE>
ASSET SECURITIZATION CORPORATION
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1997-MD VII, CLASS B-1
REGULATION S GLOBAL CERTIFICATE
Pass-Through Rate: 7.97561%*
First Distribution Date: Cut-off Date: March 27, 1997
April 15, 1997
Aggregate Initial Scheduled Final
Certificate Balance of the Distribution Date:
Class B-1 Certificates: January 13, 2027
$12,488,205
CINS: USU04509 BK71 ISIN: U04509 BK7
Common Code: Initial Certificate
Balance of this Certificate:
$0
No.: B-1-
This certifies that CEDE & CO. is the registered owner
of a beneficial ownership interest in a Trust Fund, including the
distributions to be made with respect to the Class B-1
Certificates. The Trust Fund, described more fully below,
consists primarily of a pool of Mortgage Loans secured by first
liens on commercial properties and held in trust by the Trustee
and serviced by the Servicer. The Trust Fund was created, and the
Mortgage Loans are to be serviced, pursuant to the Pooling and
Servicing Agreement (as defined below). The Holder of this
Certificate, by virtue of the acceptance hereof, assents to the
terms, provisions and conditions of the Pooling and Servicing
Agreement and is bound thereby. Also issued under the Pooling and
Servicing Agreement are the Class A-1A, Class A-1B, Class PS-1,
Class CS-1, Class A-2, Class A-3, Class A-4, Class A-5, Class
A-6, Class B-1H, Class V-1, Class V-2, Class R and Class LR
Certificates (together with the B-1 Certificates, the
"Certificates"; the Holders of Certificates issued under the
Pooling and Servicing Agreement are collectively referred to
herein as "Certificateholders").
- --------
* The Pass-Through Rate is for the Distribution Date
occurring in April 1997. The Pass- Through Rate for all
subsequent Distribution Dates shall be calculated as
provided in the Pooling and Servicing Agreement.
1
<PAGE>
This Certificate is issued pursuant to, and in accordance with,
the terms of a Pooling and Servicing Agreement dated as of March
27, 1997 (the "Pooling and Servicing Agreement"), by and among
Asset Securitization Corporation, as Depositor, Pacific Mutual
Life Insurance Company, as Servicer, LaSalle National Bank, as
Trustee, and ABN AMRO Bank N.V., as Fiscal Agent. To the extent
not defined herein, capitalized terms used herein shall have the
meanings assigned thereto in the Pooling and Servicing Agreement.
This Certificate represents a pro rata undivided
beneficial interest in a "regular interest" in a "real estate
mortgage investment conduit," as those terms are defined,
respectively, in Sections 860G(a)(1) and 860D of the Internal
Revenue Code of l986, as amended, and certain other assets.
The Trustee makes no representation or warranty as to
any of the statements contained herein or the validity or
sufficiency of the Certificates or the Mortgage Loans and has
executed this Certificate in its limited capacity as Trustee
under the Pooling and Servicing Agreement.
Pursuant to the terms of the Pooling and Servicing
Agreement, the Trustee, or the Paying Agent on behalf of the
Trustee, will distribute (other than the final distribution on
any Certificate), on the thirteenth day of each month, or if such
day is not a Business Day, the Business Day immediately following
such day, commencing in April, 1997 (each such date, a
"Distribution Date"); provided, however, that in any month the
Distribution Date will be no earlier than the second Business Day
following the eleventh day of such month and, provided further,
that if the eleventh day of any month is not a Business Day, the
Distribution Date shall be the third Business Day following the
eleventh day of such month, to the Person in whose name this
Certificate is registered as of the related Record Date, an
amount equal to such Person's pro rata share (based on the
Percentage Interest represented by this Certificate) of that
portion of the aggregate amount of principal and interest then
distributable, if any, allocable to the Class B-1 Certificates
for such Distribution Date, all as more fully described in the
Pooling and Servicing Agreement.
Interest accrued on this Certificate during an
Interest Accrual Period, plus the aggregate unpaid Class Interest
Shortfall with respect to this Certificate, if any, will be
payable on the related Distribution Date to the extent provided
in the Pooling and Servicing Agreement. The "Interest Accrual
Period" with respect to any Distribution Date commences on the
eleventh day of the month preceding the month in which such
Distribution Date occurs and ends on the tenth day of the month
in which such Distribution Date occurs, provided that the first
Interest Accrual Period shall commence on the Cut-off Date and
end on April 10, 1997. Interest for each Interest Accrual Period,
other than the Interest Accrual Period with respect to the
Distribution Date occurring in April 1997, is calculated based on
a 360-day year consisting of twelve 30-day months. The Interest
Accrual Period with respect to the Distribution Date occurring in
April 1997 shall consist of 14 days.
All distributions (other than the final distribution
on any Certificate) will be made by the Paying Agent to the
persons in whose names the Certificates are registered at the
close of
2
<PAGE>
business on each Record Date, which will be the tenth day of the
month in which the related Distribution Date occurs or, if such
day is not a Business Day, the preceding Business Day; provided,
however, that with respect to the Distribution Date occurring in
April 1997, the Record Date will be the Closing Date, except as
specified in the Pooling and Servicing Agreement. Such
distributions shall be made on each Distribution Date other than
the Termination Date to each Certificateholder of record on the
related Record Date by check mailed by first class mail to the
address set forth therefor in the Certificate Register or,
provided that such Certificateholder holds Certificates with an
aggregate initial Certificate Balance in excess of $5,000,000,
and shall have provided the Paying Agent with wire instructions
in writing at least five Business Days prior to the related
Record Date, by wire transfer of immediately available funds to
the account of such Certificateholder at a bank or other entity
located in the United States and having appropriate facilities
therefor. The final distribution on each Certificate shall be
made in like manner, but only upon presentment and surrender of
such Certificate at the office of the Trustee or its agent (which
may be the Paying Agent or the Certificate Registrar acting as
such agent) maintained in the Borough of Manhattan that is
specified in the notice to Certificateholders of such final
distribution.
Any funds not distributed on the Termination Date
because of the failure of any Certificateholders to tender their
Certificates shall be set aside and held in trust for the account
of the appropriate non-tendering Certificateholders, whereupon
the Trust Fund shall terminate. If any Certificates as to which
notice of the Termination Date has been given pursuant to Section
9.01 of the Pooling and Servicing Agreement 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 Certificateholders, at their last addresses
shown in the Certificate Register, to surrender their
Certificates for cancellation in order to receive, from such
funds held, the final distribution with respect thereto. If
within one year after the second notice any Certificate shall not
have been surrendered for cancellation, the Trustee may, directly
or through an agent, take appropriate steps to contact the
remaining Certificateholders concerning surrender of their
Certificates. The costs and expenses of maintaining such funds
and of contacting Certificateholders shall be paid out of the
assets which remain held. If within two years after the second
notice any Certificates shall not have been surrendered for
cancellation, the Paying Agent shall pay to the Class R
Certificateholders all amounts distributable to the Holders
thereof.. No interest shall accrue or be payable to any
Certificateholder on any amount held as a result of such
Certificateholder's failure to surrender its Certificate(s) for
final payment thereof in accordance with Section 9.01 of the
Pooling and Servicing Agreement. Such funds held by the Trustee
may be invested under certain circumstances, and subject to
certain conditions as specified in the Pooling and Servicing
Agreement.
This Certificate is limited in right of payment to,
among other things, certain collections and recoveries in respect
of the Mortgage Loans, as more specifically set forth herein and
in the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement,
the Trust Fund includes (i) such Mortgage Loans as from time to
time are subject to the Pooling and Servicing Agreement, together
with the Mortgage Files relating thereto; (ii) all scheduled or
unscheduled payments on
3
<PAGE>
or collections in respect of the Mortgage Loans due after Cut-off
Date; (iii) any REO Property; (iv) all revenues received in
respect of any REO Property; (v) the Servicer's and the Trustee's
rights under the insurance policies with respect to the Mortgage
Loans required to be maintained pursuant to the Pooling and
Servicing Agreement and any proceeds thereof; (vi) any
Assignments of Leases, Rents and Profits and any security
agreements; (vii) any indemnities or guaranties given as
additional security for any Mortgage Loans; (viii) all assets
deposited in the Lock-Box Accounts, Cash Collateral Accounts,
Escrow Accounts, Reserve Accounts and the Hudson Treasury
Collateral Account (to the extent such assets in such accounts
are not assets of the respective Borrowers), the Collection
Account, the Lower-Tier Distribution Account, the Upper-Tier
Distribution Account, the Excess Interest Distribution Account,
the Interest Reserve Account and the Default Interest
Distribution Account, including reinvestment income thereon; (ix)
any environmental indemnity agreements relating to the Mortgaged
Properties; (x) the rights and remedies under the Mortgage Loan
Purchase and Sale Agreement; and (xi) the proceeds of any of the
foregoing (other than any interest earned on deposits in the
Lock-Box Accounts, Cash Collateral Accounts, Escrow Accounts, the
Hudson Treasury Collateral Account and any Reserve Accounts, to
the extent such interest belongs to the related Borrower). As
provided in the Pooling and Servicing Agreement, withdrawals may
be made from certain of the above accounts for purposes other
than distributions to Certificateholders.
This Certificate does not purport to summarize the
Pooling and Servicing Agreement, and reference is made to the
Pooling and Servicing Agreement for the interests, rights,
benefits, obligations and duties evidenced hereby, and the
limitations thereon, and the rights, duties and immunities of the
Trustee.
As provided in the Pooling and Servicing Agreement and
subject to certain limitations set forth therein, this
Certificate is transferable or exchangeable only upon surrender
of this Certificate to the Certificate Registrar at the Corporate
Trust Office together with an assignment and transfer (executed
by the Holder or his duly authorized attorney), subject to the
applicable requirements in Article V of the Pooling and Servicing
Agreement. Upon surrender for registration of transfer of this
Certificate, subject to the applicable requirements of Article V
of the Pooling and Servicing Agreement, the Trustee shall execute
and the Authenticating Agent shall duly authenticate in the name
of the designated transferee or transferees, one or more new
Certificates in authorized denominations of a like aggregate
Certificate Balance. Such Certificates shall be delivered by the
Certificate Registrar in accordance with Section 5.02(e) of the
Pooling and Servicing Agreement.
Prior to due presentation of this Certificate for
registration of transfer, the Depositor, the Servicer, the
Trustee, the Fiscal Agent, the Certificate Registrar, any Paying
Agent and any agent of any of them may treat the Person in whose
name this Certificate is registered as the owner hereof for all
purposes, and none of the Depositor, the Servicer, the Trustee,
the Fiscal Agent, the Certificate Registrar, any Paying Agent or
any agent of any of them shall be affected by any notice or
knowledge to the contrary.
No fee or service charge shall be imposed by the
Certificate Registrar for its services in respect of any
registration of transfer or exchange referred to in Section 5.02
of the
4
<PAGE>
Pooling and Servicing Agreement other than for transfers to
Institutional Accredited Investors as provided in Section 5.02(h)
of that Agreement. The Certificate Registrar may require payment
by each transferor of a sum sufficient to cover any tax, expense
or other governmental charge payable in connection with any such
transfer.
The Pooling and Servicing Agreement or any Custodial
Agreement may be amended from time to time by the Depositor, the
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 in
the Pooling and Servicing Agreement or therein that may be
defective or inconsistent with any other provisions in such
agreement, (iii) to amend or supplement any provisions in either
of such agreements to the extent necessary or desirable to
maintain the rating or ratings assigned to each of the Classes of
Certificates by each Rating Agency, (iv) to amend or supplement
any provisions in either of such agreements that shall not
adversely affect in any material respect the interests of any
Certificateholder not consenting thereto, as evidenced in writing
by an Opinion of Counsel, at the expense of the party requesting
such amendment, or as evidenced by confirmation in writing from
each Rating Agency that such amendment or supplement will not
result in a qualification, withdrawal or downgrading of the
then-current ratings assigned to the Certificates, or (v) to make
any other provisions with respect to matters or questions arising
under the Pooling and Servicing Agreement, which shall not be
inconsistent with the provisions of the Pooling and Servicing
Agreement and will not result in a downgrade, qualification or
withdrawal of the then current rating or ratings then assigned to
any outstanding Class of Certificates, as confirmed by each
Rating Agency in writing.
Further, the Depositor, the Servicer, the Special
Servicer, the Trustee and the Fiscal Agent, at any time and from
time to time, without the consent of the Certificateholders, may
amend the Pooling and Servicing Agreement to modify, eliminate or
add to any of its provisions to such extent as shall be necessary
to maintain the qualification of the Trust REMIC as two separate
REMICs or of the Grantor Trust as a grantor trust, or to prevent
the imposition of any additional material state or local taxes,
at all times that any Certificates are outstanding; provided,
however, that such action, as evidenced by an Opinion of Counsel
(obtained at the expense of the Trust Fund), is necessary or
helpful to maintain such qualification or to prevent the
imposition of any such taxes, and would not adversely affect in
any material respect the interest of any Certificateholder.
The Pooling and Servicing Agreement or any Custodial
Agreement may also be amended from time to time by the Depositor,
the Servicer, the Special Servicer, the Trustee and the Fiscal
Agent with the consent of the Holders of Certificates evidencing
not less than 662/3% of the Percentage Interests of each Class of
Certificates affected by the amendment for the purpose of adding
any provisions to or changing in any manner or eliminating any of
the provisions of the Pooling and Servicing Agreement or of
modifying in any manner the rights of the Certificateholders;
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 all the
holders of all Certificates
5
<PAGE>
representing all Percentage Interests of the Class or
Classes affected thereby;
(ii) change the percentages of Voting Rights of
Holders of Certificates which are required to
consent to any action or inaction under the
Pooling and Servicing Agreement, without the
consent of all the holders of all Certificates
representing all Percentage Interests of the
Class or Classes affected thereby;
(iii) alter the Servicing Standard or the
obligations of the Servicer, the Special
Servicer, the Trustee or the Fiscal Agent to make
a P&I Advance or Property Advance without the
consent of the Holders of all Certificates
representing all of the Percentage Interests of
the Class or Classes affected thereby; or
(iv) amend any section of the Pooling and
Servicing Agreement which relates to the
amendment thereof, without the consent of all the
holders of all Certificates representing all
Percentage Interests of the Class or Classes
affected thereby.
Any Holder of Class LR Certificates representing
greater than a 50% Percentage Interest in such Class may effect
an early termination of the Trust Fund, upon not less than 30
days' prior notice given to the Trustee and Servicer any time on
or after the Early Termination Notice Date (defined as any date
as of which the aggregate Stated Principal Balance of the
Mortgage Loans is less than 1.0% of the aggregate Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date)
specifying the Anticipated Termination Date, by purchasing on
such date all, but not less than all, of the Mortgage Loans then
included in the Trust Fund, and all property acquired in respect
of any Mortgage Loan, at a purchase price, payable in cash, equal
to not less than the greater of:
(i) the sum of
(A) 100% of the unpaid principal balance of each
Mortgage Loan included in the Trust Fund as
of the last day of the month preceding such
Distribution Date;
(B) the fair market value of all other property
included in the Trust Fund as of the last
day of the month preceding such Distribution
Date, as determined by an Independent
appraiser acceptable to the Servicer as of
the date not more than 30 days prior to the
last day of the month preceding such
Distribution Date;
(C) all unpaid interest accrued on such
principal balance of each such Mortgage Loan
(including for this purpose any Mortgage
Loan as to which title to the related
Mortgaged Property has been acquired) at the
Mortgage Rate (plus the Excess Rate, to the
extent
6
<PAGE>
applicable) to the last day of the Interest
Accrual Period preceding such Distribution Date;
(D) the aggregate amount of unreimbursed
Advances and unpaid Servicing Fees, Special
Servicing Compensation, Trustee Fees and
Trust Fund expenses, in each case with
interest thereon at the Advance Rate to the
extent permitted under the Pooling and
Servicing Agreement; and
(ii) the aggregate fair market value of the
Mortgage Loans, and all other property acquired
in respect of any Mortgage Loan in the Trust
Fund, on the last day of the month preceding such
Distribution Date, as determined by an
Independent appraiser acceptable to the Servicer
as of a date not more than 30 days prior to the
last day of the month preceding such Distribution
Date, together with one month's interest thereon
at the related Mortgage Rates.
The Servicer or the Depositor may also effect such
termination as provided above if it first notifies each Holder of
a Class LR Certificate through the Trustee of its intention to do
so in writing at least 30 days prior to the Early Termination
Notice Date and no Class LR Holder terminates the Trust Fund as
described above within such 30 day period. All costs and expenses
incurred by any and all parties to the Pooling and Servicing
Agreement or by the Trust Fund in connection with the purchase of
the Mortgage Loans and other assets of the Trust Fund pursuant to
Section 9.01(c) of the Pooling and Servicing Agreement shall be
borne by the party exercising its purchase rights thereunder. The
Trustee shall be entitled to rely conclusively on any
determination made by an Independent appraiser pursuant to
Section 9.01(c) of the Pooling and Servicing Agreement.
The respective obligations and responsibilities of the
Servicer, the Special Servicer, the Depositor, the Trustee and
the Fiscal Agent created by the Pooling and Servicing Agreement
with respect to the Certificates (other than the obligation to
make certain payments and to send certain notices to
Certificateholders as set forth in the Pooling and Servicing
Agreement) shall terminate immediately following the occurrence
of the last action required to be taken by the Trustee pursuant
to Article IX of the Pooling and Servicing Agreement on the
Termination Date; provided, however, that in no event shall the
trust created thereby continue beyond the expiration of
twenty-one years from the death of the last survivor of the
descendants of Joseph P. Kennedy, the late ambassador of the
United States to the United Kingdom, living on the Closing Date.
Unless the Certificate of Authentication on this
Certificate has been executed by the Trustee or on its behalf by
the Authenticating Agent, by manual signature, this Certificate
shall not be entitled to any benefit under the Pooling and
Servicing Agreement or be valid for any purpose.
7
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Class B-1
Certificate to be duly executed.
Dated: March 27, 1997
LASALLE NATIONAL BANK, not in its
individual capacity but solely as Trustee
By:______________________________________
Authorized Officer
Certificate of Authentication
This is one of the Class B-1 Certificates referred to
in the Pooling and Servicing Agreement.
Dated: March 27, 1997
LASALLE NATIONAL BANK, not in its
individual capacity but solely as
Authenticating Agent
By:______________________________________
Authorized Officer
8
<PAGE>
Schedule A
Certificate
Balance of
Individual
Certificates
or Regulation
S Global
Certificate
exchanged or
transferred
for, or issued
in exchange
for or upon
transfer of,
an interest Remaining
in this Rule Principal Amount
144A Global of this Rule 144A Notation
Date Certificate Global Certificate Made by
- ---- ----------- ------------------ -------
________ _______________________ ___________________ ________
________ _______________________ ___________________ ________
________ _______________________ ___________________ ________
________ _______________________ ___________________ ________
________ _______________________ ___________________ ________
________ _______________________ ___________________ ________
________ _______________________ ___________________ ________
________ _______________________ ___________________ ________
________ _______________________ ___________________ ________
________ _______________________ ___________________ ________
________ _______________________ ___________________ ________
________ _______________________ ___________________ ________
________ _______________________ ___________________ ________
9
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned ("Assignor(s)") hereby
sell(s), assign(s) and transfer(s) unto_____________________________
____________________________________________________________________
(please print or typewrite name(s) and address(es), including
postal zip code(s) of assignee(s)) ("Assignee(s)") the entire
Percentage Interest represented by the within Class B-1
Certificate and hereby authorize(s) the registration of transfer
of such interest to Assignee(s) on the Certificate Register of
the Trust Fund.
I (we) further direct the Certificate Registrar to
issue a new Class B-1 Certificate of the entire Percentage
Interest represented by the within Class B-1 Certificates to the
above-named Assignee(s) and to deliver such Class B-1 Certificate
to the following address:
____________________________________________________________________
____________________________________________________________________
Date:________________ ___________________________________
Signature by or on behalf of
Assignor(s)
___________________________________
Taxpayer Identification Number
10
<PAGE>
DISTRIBUTION INSTRUCTIONS
The Assignee(s) should include the following for
purposes of distribution:
Address of the Assignee(s) for the purpose of receiving notices
and distributions:____________________________________________________
______________________________________________________________________
Distributions, if being made by wire transfer in immediately
available funds to ___________________________________________________
for the account of ___________________________________________________
account number ____________________________.
This information is provided by____________________________
_______________________________________ the Assignee(s) named
above, or ________________________________________________ as its
(their) agent.
By:____________________________________
____________________________________
[Please print or type name(s)]
____________________________________
Title:
____________________________________
Taxpayer Identification Number
11
<PAGE>
EXHIBIT A-10/B
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO THE CERTIFICATE REGISTRAR FOR
REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC),
ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION
OF THE DEPOSITOR, THE ORIGINATOR, THE SERVICER, THE TRUSTEE, THE
FISCAL AGENT OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THE
CERTIFICATES NOR THE UNDERLYING MORTGAGE LOANS ARE INSURED OR
GUARANTEED BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
PRINCIPAL PAYMENTS ON THIS CERTIFICATE ARE PAYABLE IN
INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING
CERTIFICATE BALANCE OF THIS CERTIFICATE AT ANY TIME MAY BE LESS
THAN THE INITIAL CERTIFICATE BALANCE SET FORTH BELOW.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR
ANY STATE OR FOREIGN SECURITIES LAW. THE HOLDER HEREOF, BY
PURCHASING THIS CERTIFICATE, AGREES THAT THIS CERTIFICATE MAY BE
REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN
COMPLIANCE WITH THE 1933 ACT AND OTHER APPLICABLE LAWS AND ONLY
(A)(1) PURSUANT TO RULE 144A UNDER THE 1933 ACT TO AN
INSTITUTIONAL INVESTOR THAT THE HOLDER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER, WITHIN THE MEANING OF RULE 144A (A
"QIB") PURCHASING FOR ITS OWN ACCOUNT OR A PERSON PURCHASING FOR
THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED, IN EACH CASE,
THAT THE REOFFER, RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE
IN RELIANCE ON RULE 144A, (2) TO AN "INSTITUTIONAL ACCREDITED
INVESTOR" AS SUCH TERM IS DEFINED IN RULE 501(a)(1), (2), (3) OR
(7) OF REGULATION D UNDER THE 1933 ACT, (3) IN AN OFFSHORE
TRANSACTION IN ACCORDANCE WITH RULE 903 OR 904 OF REGULATION S
UNDER THE 1933 ACT OR (4) PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE 1933 ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE) AND (B) IN ACCORDANCE WITH ANY OTHER
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES.
<PAGE>
THIS CLASS B-1 CERTIFICATE IS SUBORDINATE TO THE CLASS A-1A,
CLASS A- 1B, CLASS PS-1, CLASS CS-1, CLASS A-2, CLASS A-3, CLASS
A-4, CLASS A-5 AND CLASS A-6 CERTIFICATES AS AND TO THE EXTENT
SET FORTH IN THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.
THIS CERTIFICATE SHOULD NOT BE PURCHASED BY A TRANSFEREE THAT IS
(A) AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT,
INCLUDING AN INDIVIDUAL RETIREMENT ACCOUNT OR A KEOGH PLAN, WHICH
IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED ("ERISA"), SECTION 4975 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED (THE "CODE"), OR ANY ESSENTIALLY SIMILAR
FEDERAL, STATE OR LOCAL LAW (A "SIMILAR LAW") (EACH, A "PLAN"),
OR (B) A COLLECTIVE INVESTMENT FUND IN WHICH SUCH PLANS ARE
INVESTED, AN INSURANCE COMPANY USING ASSETS OF SEPARATE ACCOUNTS
OR GENERAL ACCOUNTS WHICH INCLUDE ASSETS OF PLANS (OR WHICH ARE
DEEMED PURSUANT TO ERISA OR ANY SIMILAR LAW TO INCLUDE ASSETS OF
PLANS) OR OTHER PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR USING
THE ASSETS OF ANY SUCH PLAN, OTHER THAN AN INSURANCE COMPANY
USING THE ASSETS OF ITS GENERAL ACCOUNT UNDER CIRCUMSTANCES
WHEREBY SUCH PURCHASE AND THE SUBSEQUENT HOLDING OF SUCH
CERTIFICATE BY SUCH INSURANCE COMPANY WOULD NOT CONSTITUTE OR
RESULT IN A PROHIBITED TRANSACTION WITHIN THE MEANING OF SECTION
406 OR 407 OF ERISA, SECTION 4975 OF THE CODE, OR A MATERIALLY
SIMILAR CHARACTERIZATION UNDER ANY SIMILAR LAW. TRANSFEREES OF
THIS CERTIFICATE TAKING DELIVERY IN CERTIFICATED FORM SHALL BE
REQUIRED EITHER (i) TO DELIVER A LETTER IN THE FORM OF EXHIBIT
D-2 OF THE POOLING AND SERVICING AGREEMENT TO SUCH EFFECT, OR
(ii) IN THE EVENT THE TRANSFEREE IS SUCH AN ENTITY SPECIFIED IN
(A) OR (B) ABOVE, EXCEPT IN THE CASE OF A RESIDUAL CERTIFICATE,
WHICH MAY NOT BE TRANSFERRED UNLESS THE TRANSFEREE REPRESENTS IT
IS NOT SUCH AN ENTITY, SUCH ENTITY SHALL PROVIDE AN OPINION OF
COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE CERTIFICATE
REGISTRAR THAT THE PURCHASE OR HOLDING OF THE CERTIFICATES BY OR
ON BEHALF OF A PLAN WILL NOT RESULT IN THE ASSETS OF THE TRUST
BEING DEEMED TO BE "PLAN ASSETS" AND SUBJECT TO THE FIDUCIARY
RESPONSIBILITY PROVISIONS OF ERISA OR THE PROHIBITED TRANSACTION
PROVISIONS OF ERISA AND THE CODE OR SIMILAR LAW, WILL NOT
CONSTITUTE OR RESULT IN A PROHIBITED TRANSACTION WITHIN THE
MEANING OF SECTION 406 OR 407 OF ERISA OR SECTION 4975 OF THE
CODE, AND WILL NOT SUBJECT THE SERVICER, THE DEPOSITOR, THE
TRUSTEE OR THE CERTIFICATE REGISTRAR TO ANY OBLIGATION OR
LIABILITY.
<PAGE>
TRANSFERS AND EXCHANGES OF PORTIONS OF THIS CERTIFICATE ARE
SUBJECT TO RESTRICTIONS AS PROVIDED IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO BELOW.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS A PRO RATA UNDIVIDED BENEFICIAL INTEREST IN A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G(a)(1) AND
860D OF THE INTERNAL REVENUE CODE OF 1986, AND CERTAIN OTHER
ASSETS.
THIS CERTIFICATE IS ISSUED ON MARCH 27, 1997, AND BASED ON ITS
ISSUE PRICE OF 93.6875% OF ITS INITIAL PRINCIPAL BALANCE AND A
STATED REDEMPTION PRICE AT MATURITY EQUAL TO ITS INITIAL
PRINCIPAL BALANCE, IS ISSUED WITH A DE MINIMIS AMOUNT OF ORIGINAL
ISSUE DISCOUNT ("OID") FOR FEDERAL INCOME TAX PURPOSES. ASSUMING
(A) THAT THIS CERTIFICATE PAYS IN ACCORDANCE WITH PROJECTED CASH
FLOWS REFLECTING THE PREPAYMENT ASSUMPTION OF SCENARIO 1 (AS
DESCRIBED IN THE PROSPECTUS SUPPLEMENT DATED MARCH 20, 1997 WITH
RESPECT TO THE OFFERING OF THE CLASS A-1A, CLASS A-1B, CLASS
PS-1, CLASS CS-1, CLASS A-2, CLASS A-3, CLASS A-4, CLASS A-5 AND
CLASS A-6 CERTIFICATES) USED TO PRICE THIS CERTIFICATE, AND (B)
THAT THE PASS- THROUGH RATE HEREON CHANGES IN ACCORDANCE WITH
SUCH PREPAYMENT ASSUMPTION: (I) THIS CERTIFICATE HAS BEEN ISSUED
WITH NO MORE THAN $63.12 OF OID PER $1000 OF INITIAL PRINCIPAL
BALANCE; (II) THE ANNUAL YIELD TO MATURITY OF THIS CERTIFICATE,
COMPOUNDED MONTHLY, IS APPROXIMATELY 9.12%; AND (III) THE AMOUNT
OF OID ALLOCABLE TO THE INITIAL SHORT INTEREST ACCRUAL PERIOD
(MARCH 27, 1997 TO APRIL 13, 1997), CALCULATED USING THE EXACT
METHOD, IS NO MORE THAN $.62 PER $1000 OF INITIAL PRINCIPAL
BALANCE. NO REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL
PREPAY AT A RATE BASED ON THE PREPAYMENT ASSUMPTION OR AT ANY
OTHER RATE.
<PAGE>
ASSET SECURITIZATION CORPORATION
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1997-MD VII, CLASS B-1
RULE 144A GLOBAL CERTIFICATE
Pass-Through Rate: 7.97561%*
First Distribution Date: Cut-off Date: March 27, 1997
April 15, 1997
Aggregate Initial Scheduled Final
Certificate Balance of the Distribution Date:
Class B-1 Certificates: January 13, 2027
$12,488,205
CUSIP: 045424 FB 9 ISIN: US045424 FB96
Initial Certificate
Balance of this Certificate:
$12,488,205
No.: B-1-
This certifies that CEDE & CO. is the registered owner
of a beneficial ownership interest in a Trust Fund, including the
distributions to be made with respect to the Class B-1
Certificates. The Trust Fund, described more fully below,
consists primarily of a pool of Mortgage Loans secured by first
liens on commercial properties and held in trust by the Trustee
and serviced by the Servicer. The Trust Fund was created, and the
Mortgage Loans are to be serviced, pursuant to the Pooling and
Servicing Agreement (as defined below). The Holder of this
Certificate, by virtue of the acceptance hereof, assents to the
terms, provisions and conditions of the Pooling and Servicing
Agreement and is bound thereby. Also issued under the Pooling and
Servicing Agreement are the Class A-1A, Class A-1B, Class PS-1,
Class CS-1, Class A-2, Class A-3, Class A-4, Class A-5, Class
A-6, Class B-1H, Class V-1, Class V-2, Class R and Class LR
Certificates (together with the B-1 Certificates, the
"Certificates"; the Holders of Certificates issued under the
Pooling and Servicing Agreement are collectively referred to
herein as "Certificateholders").
This Certificate is issued pursuant to, and in
accordance with, the terms of a Pooling and Servicing Agreement
dated as of March 27, 1997 (the "Pooling and Servicing
Agreement"), by and among Asset Securitization Corporation, as
Depositor, Pacific Mutual Life
- --------
* The Pass-Through Rate is for the Distribution Date
occurring in April 1997. The Pass- Through Rate for all
subsequent Distribution Dates shall be calculated as
provided in the Pooling and Servicing Agreement.
1
<PAGE>
Insurance Company, as Servicer, LaSalle National Bank, as
Trustee, and ABN AMRO Bank N.V., as Fiscal Agent. To the extent
not defined herein, capitalized terms used herein shall have the
meanings assigned thereto in the Pooling and Servicing Agreement.
This Certificate represents a pro rata undivided
beneficial interest in a "regular interest" in a "real estate
mortgage investment conduit," as those terms are defined,
respectively, in Sections 860G(a)(1) and 860D of the Internal
Revenue Code of l986, as amended, and certain other assets.
The Trustee makes no representation or warranty as to
any of the statements contained herein or the validity or
sufficiency of the Certificates or the Mortgage Loans and has
executed this Certificate in its limited capacity as Trustee
under the Pooling and Servicing Agreement.
Pursuant to the terms of the Pooling and Servicing
Agreement, the Trustee, or the Paying Agent on behalf of the
Trustee, will distribute (other than the final distribution on
any Certificate), on the thirteenth day of each month, or if such
day is not a Business Day, the Business Day immediately following
such day, commencing in April, 1997 (each such date, a
"Distribution Date"); provided, however, that in any month the
Distribution Date will be no earlier than the second Business Day
following the eleventh day of such month and, provided further,
that if the eleventh day of any month is not a Business Day, the
Distribution Date shall be the third Business Day following the
eleventh day of such month, to the Person in whose name this
Certificate is registered as of the related Record Date, an
amount equal to such Person's pro rata share (based on the
Percentage Interest represented by this Certificate) of that
portion of the aggregate amount of principal and interest then
distributable, if any, allocable to the Class B-1 Certificates
for such Distribution Date, all as more fully described in the
Pooling and Servicing Agreement.
Interest accrued on this Certificate during an
Interest Accrual Period, plus the aggregate unpaid Class Interest
Shortfall with respect to this Certificate, if any, will be
payable on the related Distribution Date to the extent provided
in the Pooling and Servicing Agreement. The "Interest Accrual
Period" with respect to any Distribution Date commences on the
eleventh day of the month preceding the month in which such
Distribution Date occurs and ends on the tenth day of the month
in which such Distribution Date occurs, provided that the first
Interest Accrual Period shall commence on the Cut-off Date and
end on April 10, 1997. Interest for each Interest Accrual Period,
other than the Interest Accrual Period with respect to the
Distribution Date occurring in April 1997, is calculated based on
a 360-day year consisting of twelve 30-day months. The Interest
Accrual Period with respect to the Distribution Date occurring in
April 1997 shall consist of 14 days.
All distributions (other than the final distribution
on any Certificate) will be made by the Paying Agent to the
persons in whose names the Certificates are registered at the
close of business on each Record Date, which will be the tenth
day of the month in which the related Distribution Date occurs
or, if such day is not a Business Day, the preceding Business
Day; provided, however, that with respect to the Distribution
Date occurring in April 1997, the Record
2
<PAGE>
Date will be the Closing Date, except as specified in the Pooling
and Servicing Agreement. Such distributions shall be made on each
Distribution Date other than the Termination Date to each
Certificateholder of record on the related Record Date by check
mailed by first class mail to the address set forth therefor in
the Certificate Register or, provided that such Certificateholder
holds Certificates with an aggregate initial Certificate Balance
in excess of $5,000,000, and shall have provided the Paying Agent
with wire instructions in writing at least five Business Days
prior to the related Record Date, by wire transfer of immediately
available funds to the account of such Certificateholder at a
bank or other entity located in the United States and having
appropriate facilities therefor. The final distribution on each
Certificate shall be made in like manner, but only upon
presentment and surrender of such Certificate at the office of
the Trustee or its agent (which may be the Paying Agent or the
Certificate Registrar acting as such agent) maintained in the
Borough of Manhattan that is specified in the notice to
Certificateholders of such final distribution.
Any funds not distributed on the Termination Date
because of the failure of any Certificateholders to tender their
Certificates shall be set aside and held in trust for the account
of the appropriate non-tendering Certificateholders, whereupon
the Trust Fund shall terminate. If any Certificates as to which
notice of the Termination Date has been given pursuant to Section
9.01 of the Pooling and Servicing Agreement 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 Certificateholders, at their last addresses
shown in the Certificate Register, to surrender their
Certificates for cancellation in order to receive, from such
funds held, the final distribution with respect thereto. If
within one year after the second notice any Certificate shall not
have been surrendered for cancellation, the Trustee may, directly
or through an agent, take appropriate steps to contact the
remaining Certificateholders concerning surrender of their
Certificates. The costs and expenses of maintaining such funds
and of contacting Certificateholders shall be paid out of the
assets which remain held. If within two years after the second
notice any Certificates shall not have been surrendered for
cancellation, the Paying Agent shall pay to the Class R
Certificateholders all amounts distributable to the Holders
thereof.. No interest shall accrue or be payable to any
Certificateholder on any amount held as a result of such
Certificateholder's failure to surrender its Certificate(s) for
final payment thereof in accordance with Section 9.01 of the
Pooling and Servicing Agreement. Such funds held by the Trustee
may be invested under certain circumstances, and subject to
certain conditions as specified in the Pooling and Servicing
Agreement.
This Certificate is limited in right of payment to,
among other things, certain collections and recoveries in respect
of the Mortgage Loans, as more specifically set forth herein and
in the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement,
the Trust Fund includes (i) such Mortgage Loans as from time to
time are subject to the Pooling and Servicing Agreement, together
with the Mortgage Files relating thereto; (ii) all scheduled or
unscheduled payments on or collections in respect of the Mortgage
Loans due after Cut-off Date; (iii) any REO Property; (iv) all
revenues received in respect of any REO Property; (v) the
Servicer's and the Trustee's rights under the insurance policies
with respect to the Mortgage Loans required to be maintained
3
<PAGE>
pursuant to the Pooling and Servicing Agreement and any proceeds
thereof; (vi) any Assignments of Leases, Rents and Profits and
any security agreements; (vii) any indemnities or guaranties
given as additional security for any Mortgage Loans; (viii) all
assets deposited in the Lock-Box Accounts, Cash Collateral
Accounts, Escrow Accounts, Reserve Accounts and the Hudson
Treasury Collateral Account (to the extent such assets in such
accounts are not assets of the respective Borrowers), the
Collection Account, the Lower-Tier Distribution Account, the
Upper-Tier Distribution Account, the Excess Interest Distribution
Account, the Interest Reserve Account and the Default Interest
Distribution Account, including reinvestment income thereon; (ix)
any environmental indemnity agreements relating to the Mortgaged
Properties; (x) the rights and remedies under the Mortgage Loan
Purchase and Sale Agreement; and (xi) the proceeds of any of the
foregoing (other than any interest earned on deposits in the
Lock-Box Accounts, Cash Collateral Accounts, Escrow Accounts, the
Hudson Treasury Collateral Account and any Reserve Accounts, to
the extent such interest belongs to the related Borrower). As
provided in the Pooling and Servicing Agreement, withdrawals may
be made from certain of the above accounts for purposes other
than distributions to Certificateholders.
This Certificate does not purport to summarize the
Pooling and Servicing Agreement, and reference is made to the
Pooling and Servicing Agreement for the interests, rights,
benefits, obligations and duties evidenced hereby, and the
limitations thereon, and the rights, duties and immunities of the
Trustee.
As provided in the Pooling and Servicing Agreement and
subject to certain limitations set forth therein, this
Certificate is transferable or exchangeable only upon surrender
of this Certificate to the Certificate Registrar at the Corporate
Trust Office together with an assignment and transfer (executed
by the Holder or his duly authorized attorney), subject to the
applicable requirements in Article V of the Pooling and Servicing
Agreement. Upon surrender for registration of transfer of this
Certificate, subject to the applicable requirements of Article V
of the Pooling and Servicing Agreement, the Trustee shall execute
and the Authenticating Agent shall duly authenticate in the name
of the designated transferee or transferees, one or more new
Certificates in authorized denominations of a like aggregate
Certificate Balance. Such Certificates shall be delivered by the
Certificate Registrar in accordance with Section 5.02(e) of the
Pooling and Servicing Agreement.
Prior to due presentation of this Certificate for
registration of transfer, the Depositor, the Servicer, the
Trustee, the Fiscal Agent, the Certificate Registrar, any Paying
Agent and any agent of any of them may treat the Person in whose
name this Certificate is registered as the owner hereof for all
purposes, and none of the Depositor, the Servicer, the Trustee,
the Fiscal Agent, the Certificate Registrar, any Paying Agent or
any agent of any of them shall be affected by any notice or
knowledge to the contrary.
No fee or service charge shall be imposed by the
Certificate Registrar for its services in respect of any
registration of transfer or exchange referred to in Section 5.02
of the Pooling and Servicing Agreement other than for transfers
to Institutional Accredited Investors as provided in Section
5.02(h) of that Agreement. The Certificate Registrar may require
4
<PAGE>
payment by each transferor of a sum sufficient to cover any tax,
expense or other governmental charge payable in connection with
any such transfer.
The Pooling and Servicing Agreement or any Custodial
Agreement may be amended from time to time by the Depositor, the
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 in
the Pooling and Servicing Agreement or therein that may be
defective or inconsistent with any other provisions in such
agreement, (iii) to amend or supplement any provisions in either
of such agreements to the extent necessary or desirable to
maintain the rating or ratings assigned to each of the Classes of
Certificates by each Rating Agency, (iv) to amend or supplement
any provisions in either of such agreements that shall not
adversely affect in any material respect the interests of any
Certificateholder not consenting thereto, as evidenced in writing
by an Opinion of Counsel, at the expense of the party requesting
such amendment, or as evidenced by confirmation in writing from
each Rating Agency that such amendment or supplement will not
result in a qualification, withdrawal or downgrading of the
then-current ratings assigned to the Certificates, or (v) to make
any other provisions with respect to matters or questions arising
under the Pooling and Servicing Agreement, which shall not be
inconsistent with the provisions of the Pooling and Servicing
Agreement and will not result in a downgrade, qualification or
withdrawal of the then current rating or ratings then assigned to
any outstanding Class of Certificates, as confirmed by each
Rating Agency in writing.
Further, the Depositor, the Servicer, the Special
Servicer, the Trustee and the Fiscal Agent, at any time and from
time to time, without the consent of the Certificateholders, may
amend the Pooling and Servicing Agreement to modify, eliminate or
add to any of its provisions to such extent as shall be necessary
to maintain the qualification of the Trust REMIC as two separate
REMICs or of the Grantor Trust as a grantor trust, or to prevent
the imposition of any additional material state or local taxes,
at all times that any Certificates are outstanding; provided,
however, that such action, as evidenced by an Opinion of Counsel
(obtained at the expense of the Trust Fund), is necessary or
helpful to maintain such qualification or to prevent the
imposition of any such taxes, and would not adversely affect in
any material respect the interest of any Certificateholder.
The Pooling and Servicing Agreement or any Custodial
Agreement may also be amended from time to time by the Depositor,
the Servicer, the Special Servicer, the Trustee and the Fiscal
Agent with the consent of the Holders of Certificates evidencing
not less than 662/3% of the Percentage Interests of each Class of
Certificates affected by the amendment for the purpose of adding
any provisions to or changing in any manner or eliminating any of
the provisions of the Pooling and Servicing Agreement or of
modifying in any manner the rights of the Certificateholders;
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 all the
holders of all Certificates representing all
Percentage Interests of the Class or Classes
affected thereby;
5
<PAGE>
(ii) change the percentages of Voting Rights
of Holders of Certificates which are required to
consent to any action or inaction under the
Pooling and Servicing Agreement, without the
consent of all the holders of all Certificates
representing all Percentage Interests of the
Class or Classes affected thereby;
(iii) alter the Servicing Standard or the
obligations of the Servicer, the Special
Servicer, the Trustee or the Fiscal Agent to make
a P&I Advance or Property Advance without the
consent of the Holders of all Certificates
representing all of the Percentage Interests of
the Class or Classes affected thereby; or
(iv) amend any section of the Pooling and
Servicing Agreement which relates to the
amendment thereof, without the consent of all the
holders of all Certificates representing all
Percentage Interests of the Class or Classes
affected thereby.
Any Holder of Class LR Certificates representing
greater than a 50% Percentage Interest in such Class may effect
an early termination of the Trust Fund, upon not less than 30
days' prior notice given to the Trustee and Servicer any time on
or after the Early Termination Notice Date (defined as any date
as of which the aggregate Stated Principal Balance of the
Mortgage Loans is less than 1.0% of the aggregate Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date)
specifying the Anticipated Termination Date, by purchasing on
such date all, but not less than all, of the Mortgage Loans then
included in the Trust Fund, and all property acquired in respect
of any Mortgage Loan, at a purchase price, payable in cash, equal
to not less than the greater of:
(i) the sum of
(A) 100% of the unpaid principal balance of each
Mortgage Loan included in the Trust Fund as
of the last day of the month preceding such
Distribution Date;
(B) the fair market value of all other property
included in the Trust Fund as of the last
day of the month preceding such Distribution
Date, as determined by an Independent
appraiser acceptable to the Servicer as of
the date not more than 30 days prior to the
last day of the month preceding such
Distribution Date;
(C) all unpaid interest accrued on such
principal balance of each such Mortgage Loan
(including for this purpose any Mortgage
Loan as to which title to the related
Mortgaged Property has been acquired) at the
Mortgage Rate (plus the Excess Rate, to the
extent applicable) to the last day of the
Interest Accrual Period preceding such
Distribution Date;
6
<PAGE>
(D) the aggregate amount of unreimbursed
Advances and unpaid Servicing Fees, Special
Servicing Compensation, Trustee Fees and
Trust Fund expenses, in each case with
interest thereon at the Advance Rate to the
extent permitted under the Pooling and
Servicing Agreement; and
(ii) the aggregate fair market value of the
Mortgage Loans, and all other property acquired
in respect of any Mortgage Loan in the Trust
Fund, on the last day of the month preceding such
Distribution Date, as determined by an
Independent appraiser acceptable to the Servicer
as of a date not more than 30 days prior to the
last day of the month preceding such Distribution
Date, together with one month's interest thereon
at the related Mortgage Rates.
The Servicer or the Depositor may also effect such
termination as provided above if it first notifies each Holder of
a Class LR Certificate through the Trustee of its intention to do
so in writing at least 30 days prior to the Early Termination
Notice Date and no Class LR Holder terminates the Trust Fund as
described above within such 30 day period. All costs and expenses
incurred by any and all parties to the Pooling and Servicing
Agreement or by the Trust Fund in connection with the purchase of
the Mortgage Loans and other assets of the Trust Fund pursuant to
Section 9.01(c) of the Pooling and Servicing Agreement shall be
borne by the party exercising its purchase rights thereunder. The
Trustee shall be entitled to rely conclusively on any
determination made by an Independent appraiser pursuant to
Section 9.01(c) of the Pooling and Servicing Agreement.
The respective obligations and responsibilities of the
Servicer, the Special Servicer, the Depositor, the Trustee and
the Fiscal Agent created by the Pooling and Servicing Agreement
with respect to the Certificates (other than the obligation to
make certain payments and to send certain notices to
Certificateholders as set forth in the Pooling and Servicing
Agreement) shall terminate immediately following the occurrence
of the last action required to be taken by the Trustee pursuant
to Article IX of the Pooling and Servicing Agreement on the
Termination Date; provided, however, that in no event shall the
trust created thereby continue beyond the expiration of
twenty-one years from the death of the last survivor of the
descendants of Joseph P. Kennedy, the late ambassador of the
United States to the United Kingdom, living on the Closing Date.
Unless the Certificate of Authentication on this
Certificate has been executed by the Trustee or on its behalf by
the Authenticating Agent, by manual signature, this Certificate
shall not be entitled to any benefit under the Pooling and
Servicing Agreement or be valid for any purpose.
7
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Class B-1
Certificate to be duly executed.
Dated: March 27, 1997
LASALLE NATIONAL BANK, not in its
individual capacity but solely as Trustee
By:______________________________________
Authorized Officer
Certificate of Authentication
This is one of the Class B-1 Certificates referred to
in the Pooling and Servicing Agreement.
Dated: March 27, 1997
LASALLE NATIONAL BANK, not in its
individual capacity but solely as
Authenticating Agent
By:______________________________________
Authorized Officer
8
<PAGE>
Schedule A
Certificate
Balance of
Individual
Certificates
or Rule
144A Global
Certificate
exchanged or
transferred
for, or issued
in exchange
for or upon
transfer of,
an interest Remaining
in this Regula- Principal Amount
tion S Global of this Regulaion S Notation
Date Certificate Global Certificate Made by
- ---- ----------- ------------------ -------
________ _______________________ ___________________ ________
________ _______________________ ___________________ ________
________ _______________________ ___________________ ________
________ _______________________ ___________________ ________
________ _______________________ ___________________ ________
________ _______________________ ___________________ ________
________ _______________________ ___________________ ________
________ _______________________ ___________________ ________
________ _______________________ ___________________ ________
________ _______________________ ___________________ ________
________ _______________________ ___________________ ________
________ _______________________ ___________________ ________
________ _______________________ ___________________ ________
9
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned ("Assignor(s)") hereby
sell(s), assign(s) and transfer(s) unto_____________________________
____________________________________________________________________
(please print or typewrite name(s) and address(es), including
postal zip code(s) of assignee(s)) ("Assignee(s)") the entire
Percentage Interest represented by the within Class B-1
Certificate and hereby authorize(s) the registration of transfer
of such interest to Assignee(s) on the Certificate Register of
the Trust Fund.
I (we) further direct the Certificate Registrar to
issue a new Class B-1 Certificate of the entire Percentage
Interest represented by the within Class B-1 Certificates to the
above-named Assignee(s) and to deliver such Class B-1 Certificate
to the following address:
____________________________________________________________________
____________________________________________________________________
Date:________________ ___________________________________
Signature by or on behalf of
Assignor(s)
___________________________________
Taxpayer Identification Number
10
<PAGE>
DISTRIBUTION INSTRUCTIONS
The Assignee(s) should include the following for
purposes of distribution:
Address of the Assignee(s) for the purpose of receiving notices
and distributions:____________________________________________________
______________________________________________________________________
Distributions, if being made by wire transfer in immediately
available funds to ___________________________________________________
for the account of ___________________________________________________
account number ____________________________.
This information is provided by____________________________
_______________________________________ the Assignee(s) named
above, or ________________________________________________ as its
(their) agent.
By:____________________________________
____________________________________
[Please print or type name(s)]
____________________________________
Title:
____________________________________
Taxpayer Identification Number
11
<PAGE>
EXHIBIT A-11
THIS CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION
OF THE DEPOSITOR, THE ORIGINATOR, THE SERVICER, THE TRUSTEE, THE
FISCAL AGENT OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THE
CERTIFICATES NOR THE UNDERLYING MORTGAGE LOANS ARE INSURED OR
GUARANTEED BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
PRINCIPAL PAYMENTS ON THIS CERTIFICATE ARE PAYABLE IN
INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING
CERTIFICATE BALANCE OF THIS CERTIFICATE AT ANY TIME MAY BE LESS
THAN THE INITIAL CERTIFICATE BALANCE SET FORTH BELOW.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR
ANY STATE OR FOREIGN SECURITIES LAW. THE HOLDER HEREOF, BY
PURCHASING THIS CERTIFICATE, AGREES THAT THIS CERTIFICATE MAY BE
REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN
COMPLIANCE WITH THE 1933 ACT AND OTHER APPLICABLE LAWS AND ONLY
(A)(1) PURSUANT TO RULE 144A UNDER THE 1933 ACT TO AN
INSTITUTIONAL INVESTOR THAT THE HOLDER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER, WITHIN THE MEANING OF RULE 144A (A
"QIB") PURCHASING FOR ITS OWN ACCOUNT OR A PERSON PURCHASING FOR
THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED, IN EACH CASE,
THAT THE REOFFER, RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE
IN RELIANCE ON RULE 144A, (2) TO AN "INSTITUTIONAL ACCREDITED
INVESTOR" AS SUCH TERM IS DEFINED IN RULE 501(a)(1), (2), (3) OR
(7) OF REGULATION D UNDER THE 1933 ACT, (3) IN AN OFFSHORE
TRANSACTION IN ACCORDANCE WITH RULE 903 OR 904 OF REGULATION S
UNDER THE 1933 ACT OR (4) PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE 1933 ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE) AND (B) IN ACCORDANCE WITH ANY OTHER
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES.
THIS CLASS B-1H CERTIFICATE IS SUBORDINATE TO THE CLASS A-1A,
CLASS A-1B, CLASS PS-1, CLASS CS-1, CLASS A-2, CLASS A-3, CLASS
A-4, CLASS A-5 AND CLASS A-6 CERTIFICATES AS AND TO THE EXTENT
SET FORTH IN THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.
THIS CERTIFICATE SHOULD NOT BE PURCHASED BY A TRANSFEREE THAT IS
(A) AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT,
INCLUDING AN INDIVIDUAL RETIREMENT ACCOUNT OR A KEOGH PLAN, WHICH
IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED ("ERISA"), SECTION 4975 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED (THE "CODE"), OR ANY ESSENTIALLY
<PAGE>
SIMILAR FEDERAL, STATE OR LOCAL LAW (A "SIMILAR LAW") (EACH, A
"PLAN"), OR (B) A COLLECTIVE INVESTMENT FUND IN WHICH SUCH PLANS
ARE INVESTED, AN INSURANCE COMPANY USING ASSETS OF SEPARATE
ACCOUNTS OR GENERAL ACCOUNTS WHICH INCLUDE ASSETS OF PLANS (OR
WHICH ARE DEEMED PURSUANT TO ERISA OR ANY SIMILAR LAW TO INCLUDE
ASSETS OF PLANS) OR OTHER PERSON ACTING ON BEHALF OF ANY SUCH
PLAN OR USING THE ASSETS OF ANY SUCH PLAN, OTHER THAN AN
INSURANCE COMPANY USING THE ASSETS OF ITS GENERAL ACCOUNT UNDER
CIRCUMSTANCES WHEREBY SUCH PURCHASE AND THE SUBSEQUENT HOLDING OF
SUCH CERTIFICATE BY SUCH INSURANCE COMPANY WOULD NOT CONSTITUTE
OR RESULT IN A PROHIBITED TRANSACTION WITHIN THE MEANING OF
SECTION 406 OR 407 OF ERISA, SECTION 4975 OF THE CODE, OR A
MATERIALLY SIMILAR CHARACTERIZATION UNDER ANY SIMILAR LAW.
TRANSFEREES OF THIS CERTIFICATE TAKING DELIVERY IN CERTIFICATED
FORM SHALL BE REQUIRED EITHER (i) TO DELIVER A LETTER IN THE FORM
OF EXHIBIT D-2 OF THE POOLING AND SERVICING AGREEMENT TO SUCH
EFFECT, OR (ii) IN THE EVENT THE TRANSFEREE IS SUCH AN ENTITY
SPECIFIED IN (A) OR (B) ABOVE, EXCEPT IN THE CASE OF A RESIDUAL
CERTIFICATE, WHICH MAY NOT BE TRANSFERRED UNLESS THE TRANSFEREE
REPRESENTS IT IS NOT SUCH AN ENTITY, SUCH ENTITY SHALL PROVIDE AN
OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE
CERTIFICATE REGISTRAR THAT THE PURCHASE OR HOLDING OF THE
CERTIFICATES BY OR ON BEHALF OF A PLAN WILL NOT RESULT IN THE
ASSETS OF THE TRUST BEING DEEMED TO BE "PLAN ASSETS" AND SUBJECT
TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF ERISA OR THE
PROHIBITED TRANSACTION PROVISIONS OF ERISA AND THE CODE OR
SIMILAR LAW, WILL NOT CONSTITUTE OR RESULT IN A PROHIBITED
TRANSACTION WITHIN THE MEANING OF SECTION 406 OR 407 OF ERISA OR
SECTION 4975 OF THE CODE, AND WILL NOT SUBJECT THE SERVICER, THE
DEPOSITOR, THE TRUSTEE OR THE CERTIFICATE REGISTRAR TO ANY
OBLIGATION OR LIABILITY.
TRANSFERS AND EXCHANGES OF PORTIONS OF THIS CERTIFICATE ARE
SUBJECT TO RESTRICTIONS AS PROVIDED IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO BELOW.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
REPRESENTS A PRO RATA UNDIVIDED BENEFICIAL INTEREST IN A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G(a)(1) AND
860D OF THE INTERNAL REVENUE CODE OF 1986, AND CERTAIN OTHER
ASSETS.
THIS CERTIFICATE IS ISSUED ON MARCH 27, 1997, AND BASED ON ITS ISSUE
PRICE OF 93.6875% OF ITS INITIAL PRINCIPAL BALANCE AND A STATED
<PAGE>
REDEMPTION PRICE AT MATURITY EQUAL TO ITS INITIAL PRINCIPAL
BALANCE, IS ISSUED WITH A DE MINIMIS AMOUNT OF ORIGINAL ISSUE
DISCOUNT ("OID") FOR FEDERAL INCOME TAX PURPOSES. ASSUMING (A)
THAT THIS CERTIFICATE PAYS IN ACCORDANCE WITH PROJECTED CASH
FLOWS REFLECTING THE PREPAYMENT ASSUMPTION OF SCENARIO 1 (AS
DESCRIBED IN THE PROSPECTUS SUPPLEMENT DATED MARCH 20, 1997 WITH
RESPECT TO THE OFFERING OF THE CLASS A-1A, CLASS A-1B, CLASS
PS-1, CLASS CS-1, CLASS A-2, CLASS A-3, CLASS A-4, CLASS A-5 AND
CLASS A-6 CERTIFICATES) USED TO PRICE THIS CERTIFICATE, AND (B)
THAT THE PASS- THROUGH RATE HEREON CHANGES IN ACCORDANCE WITH
SUCH PREPAYMENT ASSUMPTION: (I) THIS CERTIFICATE HAS BEEN ISSUED
WITH NO MORE THAN $63.12 OF OID PER $1000 OF INITIAL PRINCIPAL
BALANCE; (II) THE ANNUAL YIELD TO MATURITY OF THIS CERTIFICATE,
COMPOUNDED MONTHLY, IS APPROXIMATELY 9.12%; AND (III) THE AMOUNT
OF OID ALLOCABLE TO THE INITIAL SHORT INTEREST ACCRUAL PERIOD
(MARCH 27, 1997 TO APRIL 13, 1997), CALCULATED USING THE EXACT
METHOD, IS NO MORE THAN $.62 PER $1000 OF INITIAL PRINCIPAL
BALANCE. NO REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL
PREPAY AT A RATE BASED ON THE PREPAYMENT ASSUMPTION OR AT ANY
OTHER RATE.
<PAGE>
ASSET SECURITIZATION CORPORATION
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1997-MD VII, CLASS B-1H
Pass-Through Rate: 7.97561%*
First Distribution Date: Cut-off Date: March 27, 1997
April 15, 1997
Aggregate Initial Scheduled Final
Certificate Balance of the Distribution Date:
Class B-1H Certificates: January 13, 2027
$1,000.79
CUSIP:
Initial Certificate
Balance of this Certificate:
$1,000.79
No.: B-1H-
This certifies that NOMURA SECURITIES INTERNATIONAL, INC.
is the registered owner of a beneficial ownership interest in a
Trust Fund, including the distributions to be made with respect
to the Class B-1H Certificates. The Trust Fund, described more
fully below, consists primarily of a pool of Mortgage Loans
secured by first liens on commercial properties and held in trust
by the Trustee and serviced by the Servicer. The Trust Fund was
created, and the Mortgage Loans are to be serviced, pursuant to
the Pooling and Servicing Agreement (as defined below). The
Holder of this Certificate, by virtue of the acceptance hereof,
assents to the terms, provisions and conditions of the Pooling
and Servicing Agreement and is bound thereby. Also issued under
the Pooling and Servicing Agreement are the Class A-1A, Class
A-1B, Class PS-1, Class CS-1, Class A-2, Class A-3, Class A-4,
Class A-5, Class A-6, Class B-1, Class V-1, Class V-2, Class R
and Class LR Certificates (together with the B-1H Certificates,
the "Certificates"; the Holders of Certificates issued under the
Pooling and Servicing Agreement are collectively referred to
herein as "Certificateholders").
This Certificate is issued pursuant to, and in
accordance with, the terms of a Pooling and Servicing Agreement
dated as of March 27, 1997 (the "Pooling and Servicing
Agreement"), by and among Asset Securitization Corporation, as
Depositor, Pacific Mutual Life
- --------
* The Pass-Through Rate is for the Distribution Date
occurring in April 1997. The Pass- Through Rate for all
subsequent Distribution Dates shall be calculated as
provided in the Pooling and Servicing Agreement.
<PAGE>
Insurance Company, as Servicer, LaSalle National Bank, as
Trustee, and ABN AMRO Bank N.V., as Fiscal Agent. To the extent
not defined herein, capitalized terms used herein shall have the
meanings assigned thereto in the Pooling and Servicing Agreement.
This Certificate represents a pro rata undivided
beneficial interest in a "regular interest" in a "real estate
mortgage investment conduit," as those terms are defined,
respectively, in Sections 860G(a)(1) and 860D of the Internal
Revenue Code of l986, as amended, and certain other assets.
The Trustee makes no representation or warranty as to
any of the statements contained herein or the validity or
sufficiency of the Certificates or the Mortgage Loans and has
executed this Certificate in its limited capacity as Trustee
under the Pooling and Servicing Agreement.
Pursuant to the terms of the Pooling and Servicing
Agreement, the Trustee, or the Paying Agent on behalf of the
Trustee, will distribute (other than the final distribution on
any Certificate), on the thirteenth day of each month, or if such
day is not a Business Day, the Business Day immediately following
such day, commencing in April, 1997 (each such date, a
"Distribution Date"); provided, however, that in any month the
Distribution Date will be no earlier than the second Business Day
following the eleventh day of such month and, provided further,
that if the eleventh day of any month is not a Business Day, the
Distribution Date shall be the third Business Day following the
eleventh day of such month, to the Person in whose name this
Certificate is registered as of the related Record Date, an
amount equal to such Person's pro rata share (based on the
Percentage Interest represented by this Certificate) of that
portion of the aggregate amount of principal and interest then
distributable, if any, allocable to the Class B-1H Certificates
for such Distribution Date, all as more fully described in the
Pooling and Servicing Agreement.
Interest accrued on this Certificate during an
Interest Accrual Period, plus the aggregate unpaid Class Interest
Shortfall with respect to this Certificate, if any, will be
payable on the related Distribution Date to the extent provided
in the Pooling and Servicing Agreement. The "Interest Accrual
Period" with respect to any Distribution Date commences on the
eleventh day of the month preceding the month in which such
Distribution Date occurs and ends on the tenth day of the month
in which such Distribution Date occurs, provided that the first
Interest Accrual Period shall commence on the Cut-off Date and
end on April 10, 1997. Interest for each Interest Accrual Period,
other than the Interest Accrual Period with respect to the
Distribution Date occurring in April 1997, is calculated based on
a 360-day year consisting of twelve 30-day months. The Interest
Accrual Period with respect to the Distribution Date occurring in
April 1997 shall consist of 14 days.
All distributions (other than the final distribution
on any Certificate) will be made by the Paying Agent to the
persons in whose names the Certificates are registered at the
close of business on each Record Date, which will be the tenth
day of the month in which the related Distribution Date occurs
or, if such day is not a Business Day, the preceding Business
Day; provided, however, that with respect to the Distribution
Date occurring in April 1997, the Record
2
<PAGE>
Date will be the Closing Date, except as specified in the Pooling
and Servicing Agreement. Such distributions shall be made on each
Distribution Date other than the Termination Date to each
Certificateholder of record on the related Record Date by check
mailed by first class mail to the address set forth therefor in
the Certificate Register or, provided that such Certificateholder
holds Certificates with an aggregate initial Certificate Balance
in excess of $5,000,000, and shall have provided the Paying Agent
with wire instructions in writing at least five Business Days
prior to the related Record Date, by wire transfer of immediately
available funds to the account of such Certificateholder at a
bank or other entity located in the United States and having
appropriate facilities therefor. The final distribution on each
Certificate shall be made in like manner, but only upon
presentment and surrender of such Certificate at the office of
the Trustee or its agent (which may be the Paying Agent or the
Certificate Registrar acting as such agent) maintained in the
Borough of Manhattan that is specified in the notice to
Certificateholders of such final distribution.
Any funds not distributed on the Termination Date
because of the failure of any Certificateholders to tender their
Certificates shall be set aside and held in trust for the account
of the appropriate non-tendering Certificateholders, whereupon
the Trust Fund shall terminate. If any Certificates as to which
notice of the Termination Date has been given pursuant to Section
9.01 of the Pooling and Servicing Agreement 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 Certificateholders, at their last addresses
shown in the Certificate Register, to surrender their
Certificates for cancellation in order to receive, from such
funds held, the final distribution with respect thereto. If
within one year after the second notice any Certificate shall not
have been surrendered for cancellation, the Trustee may, directly
or through an agent, take appropriate steps to contact the
remaining Certificateholders concerning surrender of their
Certificates. The costs and expenses of maintaining such funds
and of contacting Certificateholders shall be paid out of the
assets which remain held. If within two years after the second
notice any Certificates shall not have been surrendered for
cancellation, the Paying Agent shall pay to the Class R
Certificateholders all amounts distributable to the Holders
thereof.. No interest shall accrue or be payable to any
Certificateholder on any amount held as a result of such
Certificateholder's failure to surrender its Certificate(s) for
final payment thereof in accordance with Section 9.01 of the
Pooling and Servicing Agreement. Such funds held by the Trustee
may be invested under certain circumstances, and subject to
certain conditions as specified in the Pooling and Servicing
Agreement.
This Certificate is limited in right of payment to,
among other things, certain collections and recoveries in respect
of the Mortgage Loans, as more specifically set forth herein and
in the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement,
the Trust Fund includes (i) such Mortgage Loans as from time to
time are subject to the Pooling and Servicing Agreement, together
with the Mortgage Files relating thereto; (ii) all scheduled or
unscheduled payments on or collections in respect of the Mortgage
Loans due after Cut-off Date; (iii) any REO Property; (iv) all
revenues received in respect of any REO Property; (v) the
Servicer's and the Trustee's rights under the insurance policies
with respect to the Mortgage Loans required to be maintained
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pursuant to the Pooling and Servicing Agreement and any proceeds
thereof; (vi) any Assignments of Leases, Rents and Profits and
any security agreements; (vii) any indemnities or guaranties
given as additional security for any Mortgage Loans; (viii) all
assets deposited in the Lock-Box Accounts, Cash Collateral
Accounts, Escrow Accounts, Reserve Accounts and the Hudson
Treasury Collateral Account (to the extent such assets in such
accounts are not assets of the respective Borrowers), the
Collection Account, the Lower-Tier Distribution Account, the
Upper-Tier Distribution Account, the Excess Interest Distribution
Account, the Interest Reserve Account and the Default Interest
Distribution Account, including reinvestment income thereon; (ix)
any environmental indemnity agreements relating to the Mortgaged
Properties; (x) the rights and remedies under the Mortgage Loan
Purchase and Sale Agreement; and (xi) the proceeds of any of the
foregoing (other than any interest earned on deposits in the
Lock-Box Accounts, Cash Collateral Accounts, Escrow Accounts, the
Hudson Treasury Collateral Account and any Reserve Accounts, to
the extent such interest belongs to the related Borrower). As
provided in the Pooling and Servicing Agreement, withdrawals may
be made from certain of the above accounts for purposes other
than distributions to Certificateholders.
This Certificate does not purport to summarize the
Pooling and Servicing Agreement, and reference is made to the
Pooling and Servicing Agreement for the interests, rights,
benefits, obligations and duties evidenced hereby, and the
limitations thereon, and the rights, duties and immunities of the
Trustee.
As provided in the Pooling and Servicing Agreement and
subject to certain limitations set forth therein, this
Certificate is transferable or exchangeable only upon surrender
of this Certificate to the Certificate Registrar at the Corporate
Trust Office together with an assignment and transfer (executed
by the Holder or his duly authorized attorney), subject to the
applicable requirements in Article V of the Pooling and Servicing
Agreement. Upon surrender for registration of transfer of this
Certificate, subject to the applicable requirements of Article V
of the Pooling and Servicing Agreement, the Trustee shall execute
and the Authenticating Agent shall duly authenticate in the name
of the designated transferee or transferees, one or more new
Certificates in authorized denominations of a like aggregate
Certificate Balance. Such Certificates shall be delivered by the
Certificate Registrar in accordance with Section 5.02(e) of the
Pooling and Servicing Agreement.
Prior to due presentation of this Certificate for
registration of transfer, the Depositor, the Servicer, the
Trustee, the Fiscal Agent, the Certificate Registrar, any Paying
Agent and any agent of any of them may treat the Person in whose
name this Certificate is registered as the owner hereof for all
purposes, and none of the Depositor, the Servicer, the Trustee,
the Fiscal Agent, the Certificate Registrar, any Paying Agent or
any agent of any of them shall be affected by any notice or
knowledge to the contrary.
No fee or service charge shall be imposed by the
Certificate Registrar for its services in respect of any
registration of transfer or exchange referred to in Section 5.02
of the Pooling and Servicing Agreement other than for transfers
to Institutional Accredited Investors as provided in Section
5.02(h) of that Agreement. The Certificate Registrar may require
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payment by each transferor of a sum sufficient to cover any tax,
expense or other governmental charge payable in connection with
any such transfer.
The Pooling and Servicing Agreement or any Custodial
Agreement may be amended from time to time by the Depositor, the
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 in
the Pooling and Servicing Agreement or therein that may be
defective or inconsistent with any other provisions in such
agreement, (iii) to amend or supplement any provisions in either
of such agreements to the extent necessary or desirable to
maintain the rating or ratings assigned to each of the Classes of
Certificates by each Rating Agency, (iv) to amend or supplement
any provisions in either of such agreements that shall not
adversely affect in any material respect the interests of any
Certificateholder not consenting thereto, as evidenced in writing
by an Opinion of Counsel, at the expense of the party requesting
such amendment, or as evidenced by confirmation in writing from
each Rating Agency that such amendment or supplement will not
result in a qualification, withdrawal or downgrading of the
then-current ratings assigned to the Certificates, or (v) to make
any other provisions with respect to matters or questions arising
under the Pooling and Servicing Agreement, which shall not be
inconsistent with the provisions of the Pooling and Servicing
Agreement and will not result in a downgrade, qualification or
withdrawal of the then current rating or ratings then assigned to
any outstanding Class of Certificates, as confirmed by each
Rating Agency in writing.
Further, the Depositor, the Servicer, the Special
Servicer, the Trustee and the Fiscal Agent, at any time and from
time to time, without the consent of the Certificateholders, may
amend the Pooling and Servicing Agreement to modify, eliminate or
add to any of its provisions to such extent as shall be necessary
to maintain the qualification of the Trust REMIC as two separate
REMICs or of the Grantor Trust as a grantor trust, or to prevent
the imposition of any additional material state or local taxes,
at all times that any Certificates are outstanding; provided,
however, that such action, as evidenced by an Opinion of Counsel
(obtained at the expense of the Trust Fund), is necessary or
helpful to maintain such qualification or to prevent the
imposition of any such taxes, and would not adversely affect in
any material respect the interest of any Certificateholder.
The Pooling and Servicing Agreement or any Custodial
Agreement may also be amended from time to time by the Depositor,
the Servicer, the Special Servicer, the Trustee and the Fiscal
Agent with the consent of the Holders of Certificates evidencing
not less than 662/3% of the Percentage Interests of each Class of
Certificates affected by the amendment for the purpose of adding
any provisions to or changing in any manner or eliminating any of
the provisions of the Pooling and Servicing Agreement or of
modifying in any manner the rights of the Certificateholders;
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 all the
holders of all Certificates representing all
Percentage Interests of the Class or Classes
affected thereby;
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(ii) change the percentages of Voting Rights
of Holders of Certificates which are required to
consent to any action or inaction under the
Pooling and Servicing Agreement, without the
consent of all the holders of all Certificates
representing all Percentage Interests of the
Class or Classes affected thereby;
(iii) alter the Servicing Standard or the
obligations of the Servicer, the Special
Servicer, the Trustee or the Fiscal Agent to make
a P&I Advance or Property Advance without the
consent of the Holders of all Certificates
representing all of the Percentage Interests of
the Class or Classes affected thereby; or
(iv) amend any section of the Pooling and
Servicing Agreement which relates to the
amendment thereof, without the consent of all the
holders of all Certificates representing all
Percentage Interests of the Class or Classes
affected thereby.
Any Holder of Class LR Certificates representing
greater than a 50% Percentage Interest in such Class may effect
an early termination of the Trust Fund, upon not less than 30
days' prior notice given to the Trustee and Servicer any time on
or after the Early Termination Notice Date (defined as any date
as of which the aggregate Stated Principal Balance of the
Mortgage Loans is less than 1.0% of the aggregate Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date)
specifying the Anticipated Termination Date, by purchasing on
such date all, but not less than all, of the Mortgage Loans then
included in the Trust Fund, and all property acquired in respect
of any Mortgage Loan, at a purchase price, payable in cash, equal
to not less than the greater of:
(i) the sum of
(A) 100% of the unpaid principal balance of each
Mortgage Loan included in the Trust Fund as
of the last day of the month preceding such
Distribution Date;
(B) the fair market value of all other property
included in the Trust Fund as of the last
day of the month preceding such Distribution
Date, as determined by an Independent
appraiser acceptable to the Servicer as of
the date not more than 30 days prior to the
last day of the month preceding such
Distribution Date;
(C) all unpaid interest accrued on such
principal balance of each such Mortgage Loan
(including for this purpose any Mortgage
Loan as to which title to the related
Mortgaged Property has been acquired) at the
Mortgage Rate (plus the Excess Rate, to the
extent applicable) to the last day of the
Interest Accrual Period preceding such
Distribution Date;
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(D) the aggregate amount of unreimbursed
Advances and unpaid Servicing Fees, Special
Servicing Compensation, Trustee Fees and
Trust Fund expenses, in each case with
interest thereon at the Advance Rate to the
extent permitted under the Pooling and
Servicing Agreement; and
(ii) the aggregate fair market value of the
Mortgage Loans, and all other property acquired
in respect of any Mortgage Loan in the Trust
Fund, on the last day of the month preceding such
Distribution Date, as determined by an
Independent appraiser acceptable to the Servicer
as of a date not more than 30 days prior to the
last day of the month preceding such Distribution
Date, together with one month's interest thereon
at the related Mortgage Rates.
The Servicer or the Depositor may also effect such
termination as provided above if it first notifies each Holder of
a Class LR Certificate through the Trustee of its intention to do
so in writing at least 30 days prior to the Early Termination
Notice Date and no Class LR Holder terminates the Trust Fund as
described above within such 30 day period. All costs and expenses
incurred by any and all parties to the Pooling and Servicing
Agreement or by the Trust Fund in connection with the purchase of
the Mortgage Loans and other assets of the Trust Fund pursuant to
Section 9.01(c) of the Pooling and Servicing Agreement shall be
borne by the party exercising its purchase rights thereunder. The
Trustee shall be entitled to rely conclusively on any
determination made by an Independent appraiser pursuant to
Section 9.01(c) of the Pooling and Servicing Agreement.
The respective obligations and responsibilities of the
Servicer, the Special Servicer, the Depositor, the Trustee and
the Fiscal Agent created by the Pooling and Servicing Agreement
with respect to the Certificates (other than the obligation to
make certain payments and to send certain notices to
Certificateholders as set forth in the Pooling and Servicing
Agreement) shall terminate immediately following the occurrence
of the last action required to be taken by the Trustee pursuant
to Article IX of the Pooling and Servicing Agreement on the
Termination Date; provided, however, that in no event shall the
trust created thereby continue beyond the expiration of
twenty-one years from the death of the last survivor of the
descendants of Joseph P. Kennedy, the late ambassador of the
United States to the United Kingdom, living on the Closing Date.
Unless the Certificate of Authentication on this
Certificate has been executed by the Trustee or on its behalf by
the Authenticating Agent, by manual signature, this Certificate
shall not be entitled to any benefit under the Pooling and
Servicing Agreement or be valid for any purpose.
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IN WITNESS WHEREOF, the Trustee has caused this Class B-1H
Certificate to be duly executed.
Dated: March 27, 1997
LASALLE NATIONAL BANK, not in its
individual capacity but solely as Trustee
By:______________________________________
Authorized Officer
Certificate of Authentication
This is one of the Class B-1H Certificates referred to
in the Pooling and Servicing Agreement.
Dated: March 27, 1997
LASALLE NATIONAL BANK, not in its
individual capacity but solely as
Authenticating Agent
By:______________________________________
Authorized Officer
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<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned ("Assignor(s)") hereby
sell(s), assign(s) and transfer(s) unto_____________________________
____________________________________________________________________
(please print or typewrite name(s) and address(es), including
postal zip code(s) of assignee(s)) ("Assignee(s)") the entire
Percentage Interest represented by the within Class B-1H
Certificate and hereby authorize(s) the registration of transfer
of such interest to Assignee(s) on the Certificate Register of
the Trust Fund.
I (we) further direct the Certificate Registrar to
issue a new Class B-1H Certificate of the entire Percentage
Interest represented by the within Class B-1H Certificates to the
above-named Assignee(s) and to deliver such Class B-1H
Certificate to the following address:
____________________________________________________________________
____________________________________________________________________
Date:________________ ___________________________________
Signature by or on behalf of
Assignor(s)
___________________________________
Taxpayer Identification Number
9
<PAGE>
DISTRIBUTION INSTRUCTIONS
The Assignee(s) should include the following for
purposes of distribution:
Address of the Assignee(s) for the purpose of receiving notices
and distributions:____________________________________________________
______________________________________________________________________
Distributions, if being made by wire transfer in immediately
available funds to ___________________________________________________
for the account of ___________________________________________________
account number ____________________________.
This information is provided by____________________________
_______________________________________ the Assignee(s) named
above, or ________________________________________________ as its
(their) agent.
By:____________________________________
____________________________________
[Please print or type name(s)]
____________________________________
Title:
____________________________________
Taxpayer Identification Number
10
<PAGE>
EXHIBIT A-12
THIS CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION
OF THE DEPOSITOR, THE ORIGINATOR, THE SERVICER, THE TRUSTEE, THE
FISCAL AGENT OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THE
CERTIFICATES NOR THE UNDERLYING MORTGAGE LOANS ARE INSURED OR
GUARANTEED BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR
ANY STATE OR FOREIGN SECURITIES LAW. THE HOLDER HEREOF, BY
PURCHASING THIS CERTIFICATE, AGREES THAT THIS CERTIFICATE MAY BE
REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN
COMPLIANCE WITH THE 1933 ACT AND OTHER APPLICABLE LAWS AND ONLY
(A)(1) PURSUANT TO RULE 144A UNDER THE 1933 ACT TO AN
INSTITUTIONAL INVESTOR THAT THE HOLDER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER, WITHIN THE MEANING OF RULE 144A (A
"QIB") PURCHASING FOR ITS OWN ACCOUNT OR A PERSON PURCHASING FOR
THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED, IN EACH CASE,
THAT THE REOFFER, RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE
IN RELIANCE ON RULE 144A, (2) TO AN "INSTITUTIONAL ACCREDITED
INVESTOR" AS SUCH TERM IS DEFINED IN RULE 501(a)(1), (2), (3) OR
(7) OF REGULATION D UNDER THE 1933 ACT, (3) IN AN OFFSHORE
TRANSACTION IN ACCORDANCE WITH RULE 903 OR 904 OF REGULATION S
UNDER THE 1933 ACT OR (4) PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE 1933 ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE) AND (B) IN ACCORDANCE WITH ANY OTHER
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES.
THIS CERTIFICATE SHOULD NOT BE PURCHASED BY A TRANSFEREE THAT IS
(A) AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT,
INCLUDING AN INDIVIDUAL RETIREMENT ACCOUNT OR A KEOGH PLAN, WHICH
IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED ("ERISA"), SECTION 4975 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED (THE "CODE"), OR ANY ESSENTIALLY SIMILAR
FEDERAL, STATE OR LOCAL LAW (A "SIMILAR LAW") (EACH, A "PLAN"),
OR (B) A COLLECTIVE INVESTMENT FUND IN WHICH SUCH PLANS ARE
INVESTED, AN INSURANCE COMPANY USING ASSETS OF SEPARATE ACCOUNTS
OR GENERAL ACCOUNTS WHICH INCLUDE ASSETS OF PLANS (OR WHICH ARE
DEEMED PURSUANT TO ERISA OR ANY SIMILAR LAW TO INCLUDE ASSETS OF
PLANS) OR OTHER PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR USING
THE ASSETS OF ANY SUCH PLAN, OTHER THAN AN INSURANCE COMPANY
USING THE ASSETS OF ITS GENERAL ACCOUNT UNDER CIRCUMSTANCES
WHEREBY SUCH PURCHASE AND THE SUBSEQUENT HOLDING OF SUCH
CERTIFICATE BY SUCH INSURANCE COMPANY WOULD
<PAGE>
NOT CONSTITUTE OR RESULT IN A PROHIBITED TRANSACTION WITHIN THE
MEANING OF SECTION 406 OR 407 OF ERISA, SECTION 4975 OF THE CODE,
OR A MATERIALLY SIMILAR CHARACTERIZATION UNDER ANY SIMILAR LAW.
TRANSFEREES OF THIS CERTIFICATE TAKING DELIVERY IN CERTIFICATED
FORM SHALL BE REQUIRED EITHER (i) TO DELIVER A LETTER IN THE FORM
OF EXHIBIT D-2 OF THE POOLING AND SERVICING AGREEMENT TO SUCH
EFFECT, OR (ii) IN THE EVENT THE TRANSFEREE IS SUCH AN ENTITY
SPECIFIED IN (A) OR (B) ABOVE, EXCEPT IN THE CASE OF A RESIDUAL
CERTIFICATE, WHICH MAY NOT BE TRANSFERRED UNLESS THE TRANSFEREE
REPRESENTS IT IS NOT SUCH AN ENTITY, SUCH ENTITY SHALL PROVIDE AN
OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE
CERTIFICATE REGISTRAR THAT THE PURCHASE OR HOLDING OF THE
CERTIFICATES BY OR ON BEHALF OF A PLAN WILL NOT RESULT IN THE
ASSETS OF THE TRUST BEING DEEMED TO BE "PLAN ASSETS" AND SUBJECT
TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF ERISA OR THE
PROHIBITED TRANSACTION PROVISIONS OF ERISA AND THE CODE OR
SIMILAR LAW, WILL NOT CONSTITUTE OR RESULT IN A PROHIBITED
TRANSACTION WITHIN THE MEANING OF SECTION 406 OR 407 OF ERISA OR
SECTION 4975 OF THE CODE, AND WILL NOT SUBJECT THE SERVICER, THE
DEPOSITOR, THE TRUSTEE OR THE CERTIFICATE REGISTRAR TO ANY
OBLIGATION OR LIABILITY.
TRANSFERS AND EXCHANGES OF PORTIONS OF THIS CERTIFICATE ARE
SUBJECT TO RESTRICTIONS AS PROVIDED IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO BELOW.
<PAGE>
ASSET SECURITIZATION CORPORATION
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1997-MD VII, CLASS V-1
CUSIP: Percentage Interest: 100%
No.: V-1-
This certifies that NOMURA SECURITIES INTERNATIONAL, INC. is the
registered owner of a beneficial ownership interest in a Trust
Fund, including the distributions to be made with respect to the
Class V-1 Certificates. The Trust Fund, described more fully
below, consists primarily of a pool of Mortgage Loans secured by
first liens on commercial properties and held in trust by the
Trustee and serviced by the Servicer. The Trust Fund was created,
and the Mortgage Loans are to be serviced, pursuant to the
Pooling and Servicing Agreement (as defined below). The Holder of
this Certificate, by virtue of the acceptance hereof, assents to
the terms, provisions and conditions of the Pooling and Servicing
Agreement and is bound thereby. Also issued under the Pooling and
Servicing Agreement are the Class A-1A, Class A-1B, Class PS-1,
Class CS-1, Class A-2, Class A-3, Class A-4, Class A-5, Class
A-6, Class B-1, Class B- 1H, Class V-2, Class R and Class LR
Certificates (together with the V-1 Certificates, the
"Certificates"; the Holders of Certificates issued under the
Pooling and Servicing Agreement are collectively referred to
herein as "Certificateholders").
This Certificate is issued pursuant to, and in
accordance with, the terms of a Pooling and Servicing Agreement
dated as of March 27, 1997 (the "Pooling and Servicing
Agreement"), by and among Asset Securitization Corporation, as
Depositor, Pacific Mutual Life Insurance Company, as Servicer,
LaSalle National Bank, as Trustee, and ABN AMRO Bank N.V., as
Fiscal Agent. To the extent not defined herein, capitalized terms
used herein shall have the meanings assigned thereto in the
Pooling and Servicing Agreement.
The Trustee makes no representation or warranty as to
any of the statements contained herein or the validity or
sufficiency of the Certificates or the Mortgage Loans and has
executed this Certificate in its limited capacity as Trustee
under the Pooling and Servicing Agreement.
Pursuant to the terms of the Pooling and Servicing
Agreement, the Trustee, or the Paying Agent on behalf of the
Trustee, will distribute (other than the final distribution on
any Certificate), on the thirteenth day of each month, or if such
day is not a Business Day, the Business Day immediately following
such day, commencing in April, 1997 (each such date, a
"Distribution Date"); provided, however, that in any month the
Distribution Date will be no earlier than the second Business Day
following the eleventh day of such month and, provided further,
that if the eleventh day of any month is not a Business Day, the
Distribution Date shall be the third Business Day following the
eleventh day of such month, to the Person in whose name this
Certificate is registered as of the related Record Date, an
amount equal to such Person's pro rata share (based on the
Percentage Interest represented by this Certificate) of that
1
<PAGE>
portion of the aggregate amount of Net Default Interest then
distributable, if any, allocable to the Class V-1 Certificates
for such Distribution Date, all as more fully described in the
Pooling and Servicing Agreement.
All distributions (other than the final distribution
on any Certificate) will be made by the Paying Agent to the
persons in whose names the Certificates are registered at the
close of business on each Record Date, which will be the tenth
day of the month in which the related Distribution Date occurs
or, if such day is not a Business Day, the preceding Business
Day; provided, however, that with respect to the Distribution
Date occurring in April 1997, the Record Date will be the Closing
Date, except as specified in the Pooling and Servicing Agreement.
Such distributions shall be made on each Distribution Date other
than the Termination Date to each Certificateholder of record on
the related Record Date by check mailed by first class mail to
the address set forth therefor in the Certificate Register or,
provided that such Certificateholder holds Certificates with an
aggregate initial Certificate Balance in excess of $5,000,000,
and shall have provided the Paying Agent with wire instructions
in writing at least five Business Days prior to the related
Record Date, by wire transfer of immediately available funds to
the account of such Certificateholder at a bank or other entity
located in the United States and having appropriate facilities
therefor. The final distribution on each Certificate shall be
made in like manner, but only upon presentment and surrender of
such Certificate at the office of the Trustee or its agent (which
may be the Paying Agent or the Certificate Registrar acting as
such agent) maintained in the Borough of Manhattan that is
specified in the notice to Certificateholders of such final
distribution.
Any funds not distributed on the Termination Date
because of the failure of any Certificateholders to tender their
Certificates shall be set aside and held in trust for the account
of the appropriate non-tendering Certificateholders, whereupon
the Trust Fund shall terminate. If any Certificates as to which
notice of the Termination Date has been given pursuant to Section
9.01 of the Pooling and Servicing Agreement 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 Certificateholders, at their last addresses
shown in the Certificate Register, to surrender their
Certificates for cancellation in order to receive, from such
funds held, the final distribution with respect thereto. If
within one year after the second notice any Certificate shall not
have been surrendered for cancellation, the Trustee may, directly
or through an agent, take appropriate steps to contact the
remaining Certificateholders concerning surrender of their
Certificates. The costs and expenses of maintaining such funds
and of contacting Certificateholders shall be paid out of the
assets which remain held. If within two years after the second
notice any Certificates shall not have been surrendered for
cancellation, the Paying Agent shall pay to the Class R
Certificateholders all amounts distributable to the Holders
thereof.. No interest shall accrue or be payable to any
Certificateholder on any amount held as a result of such
Certificateholder's failure to surrender its Certificate(s) for
final payment thereof in accordance with Section 9.01 of the
Pooling and Servicing Agreement. Such funds held by the Trustee
may be invested under certain circumstances, and subject to
certain conditions as specified in the Pooling and Servicing
Agreement.
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<PAGE>
This Certificate is limited in right of payment to, among other
things, certain collections and recoveries in respect of the
Mortgage Loans, as more specifically set forth herein and in the
Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement,
the Trust Fund includes (i) such Mortgage Loans as from time to
time are subject to the Pooling and Servicing Agreement, together
with the Mortgage Files relating thereto; (ii) all scheduled or
unscheduled payments on or collections in respect of the Mortgage
Loans due after Cut-off Date; (iii) any REO Property; (iv) all
revenues received in respect of any REO Property; (v) the
Servicer's and the Trustee's rights under the insurance policies
with respect to the Mortgage Loans required to be maintained
pursuant to the Pooling and Servicing Agreement and any proceeds
thereof; (vi) any Assignments of Leases, Rents and Profits and
any security agreements; (vii) any indemnities or guaranties
given as additional security for any Mortgage Loans; (viii) all
assets deposited in the Lock-Box Accounts, Cash Collateral
Accounts, Escrow Accounts, Reserve Accounts and the Hudson
Treasury Collateral Account (to the extent such assets in such
accounts are not assets of the respective Borrowers), the
Collection Account, the Lower-Tier Distribution Account, the
Upper-Tier Distribution Account, the Excess Interest Distribution
Account, the Interest Reserve Account and the Default Interest
Distribution Account, including reinvestment income thereon; (ix)
any environmental indemnity agreements relating to the Mortgaged
Properties; (x) the rights and remedies under the Mortgage Loan
Purchase and Sale Agreement; and (xi) the proceeds of any of the
foregoing (other than any interest earned on deposits in the
Lock-Box Accounts, Cash Collateral Accounts, Escrow Accounts, the
Hudson Treasury Collateral Account and any Reserve Accounts, to
the extent such interest belongs to the related Borrower). As
provided in the Pooling and Servicing Agreement, withdrawals may
be made from certain of the above accounts for purposes other
than distributions to Certificateholders.
This Certificate does not purport to summarize the
Pooling and Servicing Agreement, and reference is made to the
Pooling and Servicing Agreement for the interests, rights,
benefits, obligations and duties evidenced hereby, and the
limitations thereon, and the rights, duties and immunities of the
Trustee.
As provided in the Pooling and Servicing Agreement and
subject to certain limitations set forth therein, this
Certificate is transferable or exchangeable only upon surrender
of this Certificate to the Certificate Registrar at the Corporate
Trust Office together with an assignment and transfer (executed
by the Holder or his duly authorized attorney), subject to the
applicable requirements in Article V of the Pooling and Servicing
Agreement. Upon surrender for registration of transfer of this
Certificate, subject to the applicable requirements of Article V
of the Pooling and Servicing Agreement, the Trustee shall execute
and the Authenticating Agent shall duly authenticate in the name
of the designated transferee or transferees, one or more new
Certificates in authorized denominations of a like aggregate
Certificate Balance. Such Certificates shall be delivered by the
Certificate Registrar in accordance with Section 5.02(e) of the
Pooling and Servicing Agreement.
Prior to due presentation of this Certificate for
registration of transfer, the Depositor, the Servicer, the
Trustee, the Fiscal Agent, the Certificate Registrar, any Paying
Agent
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and any agent of any of them may treat the Person in whose name
this Certificate is registered as the owner hereof for all
purposes, and none of the Depositor, the Servicer, the Trustee,
the Fiscal Agent, the Certificate Registrar, any Paying Agent or
any agent of any of them shall be affected by any notice or
knowledge to the contrary.
No fee or service charge shall be imposed by the
Certificate Registrar for its services in respect of any
registration of transfer or exchange referred to in Section 5.02
of the Pooling and Servicing Agreement other than for transfers
to Institutional Accredited Investors as provided in Section
5.02(h) of that Agreement. The Certificate Registrar may require
payment by each transferor of a sum sufficient to cover any tax,
expense or other governmental charge payable in connection with
any such transfer.
The Pooling and Servicing Agreement or any Custodial
Agreement may be amended from time to time by the Depositor, the
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 in
the Pooling and Servicing Agreement or therein that may be
defective or inconsistent with any other provisions in such
agreement, (iii) to amend or supplement any provisions in either
of such agreements to the extent necessary or desirable to
maintain the rating or ratings assigned to each of the Classes of
Certificates by each Rating Agency, (iv) to amend or supplement
any provisions in either of such agreements that shall not
adversely affect in any material respect the interests of any
Certificateholder not consenting thereto, as evidenced in writing
by an Opinion of Counsel, at the expense of the party requesting
such amendment, or as evidenced by confirmation in writing from
each Rating Agency that such amendment or supplement will not
result in a qualification, withdrawal or downgrading of the
then-current ratings assigned to the Certificates, or (v) to make
any other provisions with respect to matters or questions arising
under the Pooling and Servicing Agreement, which shall not be
inconsistent with the provisions of the Pooling and Servicing
Agreement and will not result in a downgrade, qualification or
withdrawal of the then current rating or ratings then assigned to
any outstanding Class of Certificates, as confirmed by each
Rating Agency in writing.
Further, the Depositor, the Servicer, the Special
Servicer, the Trustee and the Fiscal Agent, at any time and from
time to time, without the consent of the Certificateholders, may
amend the Pooling and Servicing Agreement to modify, eliminate or
add to any of its provisions to such extent as shall be necessary
to maintain the qualification of the Trust REMIC as two separate
REMICs or of the Grantor Trust as a grantor trust, or to prevent
the imposition of any additional material state or local taxes,
at all times that any Certificates are outstanding; provided,
however, that such action, as evidenced by an Opinion of Counsel
(obtained at the expense of the Trust Fund), is necessary or
helpful to maintain such qualification or to prevent the
imposition of any such taxes, and would not adversely affect in
any material respect the interest of any Certificateholder.
The Pooling and Servicing Agreement or any Custodial
Agreement may also be amended from time to time by the Depositor,
the Servicer, the Special Servicer, the Trustee and the Fiscal
Agent with the consent of the Holders of Certificates evidencing
not less than 662/3% of the Percentage Interests of each Class of
Certificates affected by the amendment for the
4
<PAGE>
purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of the Pooling and Servicing
Agreement or of modifying in any manner the rights of the
Certificateholders; 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 all the
holders of all Certificates representing all
Percentage Interests of the Class or Classes
affected thereby;
(ii) change the percentages of Voting Rights of
Holders of Certificates which are required to
consent to any action or inaction under the
Pooling and Servicing Agreement, without the
consent of all the holders of all Certificates
representing all Percentage Interests of the
Class or Classes affected thereby;
(iii) alter the Servicing Standard or the
obligations of the Servicer, the Special
Servicer, the Trustee or the Fiscal Agent to make
a P&I Advance or Property Advance without the
consent of the Holders of all Certificates
representing all of the Percentage Interests of
the Class or Classes affected thereby; or
(iv) amend any section of the Pooling and
Servicing Agreement which relates to the
amendment thereof, without the consent of all the
holders of all Certificates representing all
Percentage Interests of the Class or Classes
affected thereby.
Any Holder of Class LR Certificates representing
greater than a 50% Percentage Interest in such Class may effect
an early termination of the Trust Fund, upon not less than 30
days' prior notice given to the Trustee and Servicer any time on
or after the Early Termination Notice Date (defined as any date
as of which the aggregate Stated Principal Balance of the
Mortgage Loans is less than 1.0% of the aggregate Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date)
specifying the Anticipated Termination Date, by purchasing on
such date all, but not less than all, of the Mortgage Loans then
included in the Trust Fund, and all property acquired in respect
of any Mortgage Loan, at a purchase price, payable in cash, equal
to not less than the greater of:
(i) the sum of
(A) 100% of the unpaid principal balance of each
Mortgage Loan included in the Trust Fund as
of the last day of the month preceding such
Distribution Date;
(B) the fair market value of all other property
included in the Trust Fund as of the last
day of the month preceding such Distribution
Date, as determined by an Independent
appraiser acceptable to the
5
<PAGE>
Servicer as of the date not more than 30
days prior to the last day of the month
preceding such Distribution Date;
(C) all unpaid interest accrued on such
principal balance of each such Mortgage Loan
(including for this purpose any Mortgage
Loan as to which title to the related
Mortgaged Property has been acquired) at the
Mortgage Rate (plus the Excess Rate, to the
extent applicable) to the last day of the
Interest Accrual Period preceding such
Distribution Date;
(D) the aggregate amount of unreimbursed
Advances and unpaid Servicing Fees, Special
Servicing Compensation, Trustee Fees and
Trust Fund expenses, in each case with
interest thereon at the Advance Rate to the
extent permitted under the Pooling and
Servicing Agreement; and
(ii) the aggregate fair market value of the
Mortgage Loans, and all other property acquired
in respect of any Mortgage Loan in the Trust
Fund, on the last day of the month preceding such
Distribution Date, as determined by an
Independent appraiser acceptable to the Servicer
as of a date not more than 30 days prior to the
last day of the month preceding such Distribution
Date, together with one month's interest thereon
at the related Mortgage Rates.
The Servicer or the Depositor may also effect such
termination as provided above if it first notifies each Holder of
a Class LR Certificate through the Trustee of its intention to do
so in writing at least 30 days prior to the Early Termination
Notice Date and no Class LR Holder terminates the Trust Fund as
described above within such 30 day period. All costs and expenses
incurred by any and all parties to the Pooling and Servicing
Agreement or by the Trust Fund in connection with the purchase of
the Mortgage Loans and other assets of the Trust Fund pursuant to
Section 9.01(c) of the Pooling and Servicing Agreement shall be
borne by the party exercising its purchase rights thereunder. The
Trustee shall be entitled to rely conclusively on any
determination made by an Independent appraiser pursuant to
Section 9.01(c) of the Pooling and Servicing Agreement.
The respective obligations and responsibilities of the
Servicer, the Special Servicer, the Depositor, the Trustee and
the Fiscal Agent created by the Pooling and Servicing Agreement
with respect to the Certificates (other than the obligation to
make certain payments and to send certain notices to
Certificateholders as set forth in the Pooling and Servicing
Agreement) shall terminate immediately following the occurrence
of the last action required to be taken by the Trustee pursuant
to Article IX of the Pooling and Servicing Agreement on the
Termination Date; provided, however, that in no event shall the
trust created thereby continue beyond the expiration of
twenty-one years from the death of the last survivor of the
descendants of Joseph P. Kennedy, the late ambassador of the
United States to the United Kingdom, living on the Closing Date.
6
<PAGE>
Unless the Certificate of Authentication on this Certificate has
been executed by the Trustee or on its behalf by the
Authenticating Agent, by manual signature, this Certificate shall
not be entitled to any benefit under the Pooling and Servicing
Agreement or be valid for any purpose.
7
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Class V-1
Certificate to be duly executed.
Dated: March 27, 1997
LASALLE NATIONAL BANK, not in its
individual capacity but solely as Trustee
By:______________________________________
Authorized Officer
Certificate of Authentication
This is one of the Class V-1 Certificates referred to
in the Pooling and Servicing Agreement.
Dated: March 27, 1997
LASALLE NATIONAL BANK, not in its
individual capacity but solely as
Authenticating Agent
By:______________________________________
Authorized Officer
8
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned ("Assignor(s)") hereby
sell(s), assign(s) and transfer(s) unto_____________________________
____________________________________________________________________
(please print or typewrite name(s) and address(es), including
postal zip code(s) of assignee(s)) ("Assignee(s)") the entire
Percentage Interest represented by the within Class V-1
Certificate and hereby authorize(s) the registration of transfer
of such interest to Assignee(s) on the Certificate Register of
the Trust Fund.
I (we) further direct the Certificate Registrar to
issue a new Class V-1 Certificate of the entire Percentage
Interest represented by the within Class V-1 Certificates to the
above-named Assignee(s) and to deliver such Class V-1 Certificate
to the following address:
____________________________________________________________________
____________________________________________________________________
Date:________________ ___________________________________
Signature by or on behalf of
Assignor(s)
___________________________________
Taxpayer Identification Number
9
<PAGE>
DISTRIBUTION INSTRUCTIONS
The Assignee(s) should include the following for
purposes of distribution:
Address of the Assignee(s) for the purpose of receiving notices
and distributions:____________________________________________________
______________________________________________________________________
Distributions, if being made by wire transfer in immediately
available funds to ___________________________________________________
for the account of ___________________________________________________
account number ____________________________.
This information is provided by____________________________
_______________________________________ the Assignee(s) named
above, or ________________________________________________ as its
(their) agent.
By:____________________________________
____________________________________
[Please print or type name(s)]
____________________________________
Title:
____________________________________
Taxpayer Identification Number
11
<PAGE>
EXHIBIT A-13
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST
IN THE DEPOSITOR, THE ORIGINATOR, THE SERVICER, THE TRUSTEE, THE
FISCAL AGENT OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THE
CERTIFICATES NOR THE UNDERLYING MORTGAGE LOANS ARE INSURED OR
GUARANTEED BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR
ANY STATE OR FOREIGN SECURITIES LAW. THE HOLDER HEREOF, BY
PURCHASING THIS CERTIFICATE, AGREES THAT THIS CERTIFICATE MAY BE
REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN
COMPLIANCE WITH THE 1933 ACT AND OTHER APPLICABLE LAWS AND ONLY
(A)(1) PURSUANT TO RULE 144A UNDER THE 1933 ACT TO AN
INSTITUTIONAL INVESTOR THAT THE HOLDER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER, WITHIN THE MEANING OF RULE 144A
("QIB") PURCHASING FOR ITS OWN ACCOUNT OR A PERSON PURCHASING FOR
THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED, IN EACH CASE,
THAT THE REOFFER, RESALE, PLEDGE, OR OTHER TRANSFER IS BEING MADE
IN RELIANCE ON RULE 144A, (2) IN CERTIFICATED FORM TO AN
"INSTITUTIONAL ACCREDITED INVESTOR" AS SUCH TERM IS DEFINED IN
RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE 1933
ACT, OR (3) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE
903 OR 904 OF REGULATION S UNDER THE 1933 ACT AND (B) IN
ACCORDANCE WITH ANY OTHER APPLICABLE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES.
THIS CERTIFICATE SHOULD NOT BE PURCHASED BY A TRANSFEREE THAT IS
(A) AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT,
INCLUDING AN INDIVIDUAL RETIREMENT ACCOUNT OR A KEOGH PLAN, WHICH
IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED ("ERISA"), SECTION 4975 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED (THE "CODE"), OR ANY ESSENTIALLY SIMILAR
FEDERAL, STATE OR LOCAL LAW (A "SIMILAR LAW") (EACH, A "PLAN"),
OR (B) A COLLECTIVE INVESTMENT FUND IN WHICH SUCH PLANS ARE
INVESTED, AN INSURANCE COMPANY USING ASSETS OF SEPARATE ACCOUNTS
OR GENERAL ACCOUNTS WHICH INCLUDE ASSETS OF PLANS (OR WHICH ARE
DEEMED PURSUANT TO ERISA OR ANY SIMILAR LAW TO INCLUDE ASSETS OF
PLANS) OR OTHER PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR USING
THE ASSETS OF ANY SUCH PLAN, OTHER THAN AN INSURANCE COMPANY
USING THE ASSETS OF ITS GENERAL ACCOUNT UNDER CIRCUMSTANCES
WHEREBY SUCH PURCHASE AND THE SUBSEQUENT HOLDING OF SUCH
CERTIFICATE BY SUCH INSURANCE COMPANY WOULD NOT CONSTITUTE OR
RESULT IN A PROHIBITED TRANSACTION WITHIN THE
<PAGE>
MEANING OF SECTION 406 OR 407 OF ERISA, SECTION 4975 OF THE CODE,
OR A MATERIALLY SIMILAR CHARACTERIZATION UNDER ANY SIMILAR LAW.
TRANSFEREES OF THIS CERTIFICATE TAKING DELIVERY IN CERTIFICATED
FORM SHALL BE REQUIRED EITHER (i) TO DELIVER A LETTER IN THE FORM
OF EXHIBIT D-2 OF THE POOLING AND SERVICING AGREEMENT TO SUCH
EFFECT, OR (ii) IN THE EVENT THE TRANSFEREE IS SUCH AN ENTITY
SPECIFIED IN (A) OR (B) ABOVE, EXCEPT IN THE CASE OF A RESIDUAL
CERTIFICATE, WHICH MAY NOT BE TRANSFERRED UNLESS THE TRANSFEREE
REPRESENTS IT IS NOT SUCH AN ENTITY, SUCH ENTITY SHALL PROVIDE AN
OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE
CERTIFICATE REGISTRAR THAT THE PURCHASE OR HOLDING OF THE
CERTIFICATES BY OR ON BEHALF OF A PLAN WILL NOT RESULT IN THE
ASSETS OF THE TRUST BEING DEEMED TO BE "PLAN ASSETS" AND SUBJECT
TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF ERISA OR THE
PROHIBITED TRANSACTION PROVISIONS OF ERISA AND THE CODE OR
SIMILAR LAW, WILL NOT CONSTITUTE OR RESULT IN A PROHIBITED
TRANSACTION WITHIN THE MEANING OF SECTION 406 OR 407 OF ERISA OR
SECTION 4975 OF THE CODE, AND WILL NOT SUBJECT THE SERVICER, THE
DEPOSITOR, THE TRUSTEE OR THE CERTIFICATE REGISTRAR TO ANY
OBLIGATION OR LIABILITY.
ANY HOLDER DESIRING TO EFFECT A TRANSFER OF THIS CERTIFICATE
SHALL, AND DOES HEREBY AGREE TO, INDEMNIFY THE CERTIFICATE
REGISTRAR, THE TRUSTEE, THE FISCAL AGENT, THE SERVICER AND THE
DEPOSITOR AGAINST ANY LIABILITY THAT MAY RESULT IF THE TRANSFER
IS NOT EXEMPT FROM THE 1933 ACT OR IS NOT MADE IN ACCORDANCE WITH
FEDERAL AND STATE LAWS.
<PAGE>
ASSET SECURITIZATION CORPORATION
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1997-MD VII, CLASS V-2
Percentage Interest: 100%
CUSIP:
No.: V-2-
This certifies that NOMURA SECURITIES INTERNATIONAL, INC. is the
registered owner of a beneficial ownership interest in a Trust
Fund, including the distributions to be made with respect to the
Class V-2 Certificates. The Trust Fund, described more fully
below, consists primarily of a pool of Mortgage Loans secured by
first liens on commercial properties and held in trust by the
Trustee and serviced by the Servicer. The Trust Fund was created,
and the Mortgage Loans are to be serviced, pursuant to the
Pooling and Servicing Agreement (as defined below). The Holder of
this Certificate, by virtue of the acceptance hereof, assents to
the terms, provisions and conditions of the Pooling and Servicing
Agreement and is bound thereby. Also issued under the Pooling and
Servicing Agreement are the Class A-1A, Class A-1B, Class PS-1,
Class CS-1, Class A-2, Class A-3, Class A-4, Class A-5, Class
A-6, Class B-1, Class B- 1H, Class V-1, Class R and Class LR
Certificates (together with the V-2 Certificates, the
"Certificates"; the Holders of Certificates issued under the
Pooling and Servicing Agreement are collectively referred to
herein as "Certificateholders").
This Certificate is issued pursuant to, and in
accordance with, the terms of a Pooling and Servicing Agreement
dated as of March 27, 1997 (the "Pooling and Servicing
Agreement"), by and among Asset Securitization Corporation, as
Depositor, Pacific Mutual Life Insurance Company, as Servicer,
LaSalle National Bank, as Trustee, and ABN AMRO Bank N.V., as
Fiscal Agent. To the extent not defined herein, capitalized terms
used herein shall have the meanings assigned thereto in the
Pooling and Servicing Agreement.
The Trustee makes no representation or warranty as to
any of the statements contained herein or the validity or
sufficiency of the Certificates or the Mortgage Loans and has
executed this Certificate in its limited capacity as Trustee
under the Pooling and Servicing Agreement.
Pursuant to the terms of the Pooling and Servicing
Agreement, the Trustee, or the Paying Agent on behalf of the
Trustee, will distribute (other than the final distribution on
any Certificate), on the thirteenth day of each month, or if such
day is not a Business Day, the Business Day immediately following
such day, commencing in April, 1997 (each such date, a
"Distribution Date"); provided, however, that in any month the
Distribution Date will be no earlier than the second Business Day
following the eleventh day of such month and, provided further,
that if the eleventh day of any month is not a Business Day, the
Distribution Date shall be the third Business Day following the
eleventh day of such month, to the Person in whose name this
Certificate is registered as of the related Record Date, an
amount equal to such Person's pro rata share (based on the
Percentage Interest represented by this Certificate) of that
<PAGE>
portion of the aggregate amount of Excess Interest then
distributable, if any, allocable to the Class V-2 Certificates
for such Distribution Date, all as more fully described in the
Pooling and Servicing Agreement.
All distributions (other than the final distribution
on any Certificate) will be made by the Paying Agent to the
persons in whose names the Certificates are registered at the
close of business on each Record Date, which will be the tenth
day of the month in which the related Distribution Date occurs
or, if such day is not a Business Day, the preceding Business
Day; provided, however, that with respect to the Distribution
Date occurring in April 1997, the Record Date will be the Closing
Date, except as specified in the Pooling and Servicing Agreement.
Such distributions shall be made on each Distribution Date other
than the Termination Date to each Certificateholder of record on
the related Record Date by check mailed by first class mail to
the address set forth therefor in the Certificate Register or,
provided that such Certificateholder holds Certificates with an
aggregate initial Certificate Balance in excess of $5,000,000,
and shall have provided the Paying Agent with wire instructions
in writing at least five Business Days prior to the related
Record Date, by wire transfer of immediately available funds to
the account of such Certificateholder at a bank or other entity
located in the United States and having appropriate facilities
therefor. The final distribution on each Certificate shall be
made in like manner, but only upon presentment and surrender of
such Certificate at the office of the Trustee or its agent (which
may be the Paying Agent or the Certificate Registrar acting as
such agent) maintained in the Borough of Manhattan that is
specified in the notice to Certificateholders of such final
distribution.
Any funds not distributed on the Termination Date
because of the failure of any Certificateholders to tender their
Certificates shall be set aside and held in trust for the account
of the appropriate non-tendering Certificateholders, whereupon
the Trust Fund shall terminate. If any Certificates as to which
notice of the Termination Date has been given pursuant to Section
9.01 of the Pooling and Servicing Agreement 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 Certificateholders, at their last addresses
shown in the Certificate Register, to surrender their
Certificates for cancellation in order to receive, from such
funds held, the final distribution with respect thereto. If
within one year after the second notice any Certificate shall not
have been surrendered for cancellation, the Trustee may, directly
or through an agent, take appropriate steps to contact the
remaining Certificateholders concerning surrender of their
Certificates. The costs and expenses of maintaining such funds
and of contacting Certificateholders shall be paid out of the
assets which remain held. If within two years after the second
notice any Certificates shall not have been surrendered for
cancellation, the Paying Agent shall pay to the Class R
Certificateholders all amounts distributable to the Holders
thereof.. No interest shall accrue or be payable to any
Certificateholder on any amount held as a result of such
Certificateholder's failure to surrender its Certificate(s) for
final payment thereof in accordance with Section 9.01 of the
Pooling and Servicing Agreement. Such funds held by the Trustee
may be invested under certain circumstances, and subject to
certain conditions as specified in the Pooling and Servicing
Agreement.
2
<PAGE>
This Certificate is limited in right of payment to, among other
things, certain collections and recoveries in respect of the
Mortgage Loans, as more specifically set forth herein and in the
Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement,
the Trust Fund includes (i) such Mortgage Loans as from time to
time are subject to the Pooling and Servicing Agreement, together
with the Mortgage Files relating thereto; (ii) all scheduled or
unscheduled payments on or collections in respect of the Mortgage
Loans due after Cut-off Date; (iii) any REO Property; (iv) all
revenues received in respect of any REO Property; (v) the
Servicer's and the Trustee's rights under the insurance policies
with respect to the Mortgage Loans required to be maintained
pursuant to the Pooling and Servicing Agreement and any proceeds
thereof; (vi) any Assignments of Leases, Rents and Profits and
any security agreements; (vii) any indemnities or guaranties
given as additional security for any Mortgage Loans; (viii) all
assets deposited in the Lock-Box Accounts, Cash Collateral
Accounts, Escrow Accounts, Reserve Accounts and the Hudson
Treasury Collateral Account (to the extent such assets in such
accounts are not assets of the respective Borrowers), the
Collection Account, the Lower-Tier Distribution Account, the
Upper-Tier Distribution Account, the Excess Interest Distribution
Account, the Interest Reserve Account and the Default Interest
Distribution Account, including reinvestment income thereon; (ix)
any environmental indemnity agreements relating to the Mortgaged
Properties; (x) the rights and remedies under the Mortgage Loan
Purchase and Sale Agreement; and (xi) the proceeds of any of the
foregoing (other than any interest earned on deposits in the
Lock-Box Accounts, Cash Collateral Accounts, Escrow Accounts, the
Hudson Treasury Collateral Account and any Reserve Accounts, to
the extent such interest belongs to the related Borrower). As
provided in the Pooling and Servicing Agreement, withdrawals may
be made from certain of the above accounts for purposes other
than distributions to Certificateholders.
This Certificate does not purport to summarize the
Pooling and Servicing Agreement, and reference is made to the
Pooling and Servicing Agreement for the interests, rights,
benefits, obligations and duties evidenced hereby, and the
limitations thereon, and the rights, duties and immunities of the
Trustee.
As provided in the Pooling and Servicing Agreement and
subject to certain limitations set forth therein, this
Certificate is transferable or exchangeable only upon surrender
of this Certificate to the Certificate Registrar at the Corporate
Trust Office together with an assignment and transfer (executed
by the Holder or his duly authorized attorney), subject to the
applicable requirements in Article V of the Pooling and Servicing
Agreement. Upon surrender for registration of transfer of this
Certificate, subject to the applicable requirements of Article V
of the Pooling and Servicing Agreement, the Trustee shall execute
and the Authenticating Agent shall duly authenticate in the name
of the designated transferee or transferees, one or more new
Certificates in authorized denominations of a like aggregate
Certificate Balance. Such Certificates shall be delivered by the
Certificate Registrar in accordance with Section 5.02(e) of the
Pooling and Servicing Agreement.
Prior to due presentation of this Certificate for
registration of transfer, the Depositor, the Servicer, the
Trustee, the Fiscal Agent, the Certificate Registrar, any Paying
Agent
3
<PAGE>
and any agent of any of them may treat the Person in whose name
this Certificate is registered as the owner hereof for all
purposes, and none of the Depositor, the Servicer, the Trustee,
the Fiscal Agent, the Certificate Registrar, any Paying Agent or
any agent of any of them shall be affected by any notice or
knowledge to the contrary.
No fee or service charge shall be imposed by the
Certificate Registrar for its services in respect of any
registration of transfer or exchange referred to in Section 5.02
of the Pooling and Servicing Agreement other than for transfers
to Institutional Accredited Investors as provided in Section
5.02(h) of that Agreement. The Certificate Registrar may require
payment by each transferor of a sum sufficient to cover any tax,
expense or other governmental charge payable in connection with
any such transfer.
The Pooling and Servicing Agreement or any Custodial
Agreement may be amended from time to time by the Depositor, the
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 in
the Pooling and Servicing Agreement or therein that may be
defective or inconsistent with any other provisions in such
agreement, (iii) to amend or supplement any provisions in either
of such agreements to the extent necessary or desirable to
maintain the rating or ratings assigned to each of the Classes of
Certificates by each Rating Agency, (iv) to amend or supplement
any provisions in either of such agreements that shall not
adversely affect in any material respect the interests of any
Certificateholder not consenting thereto, as evidenced in writing
by an Opinion of Counsel, at the expense of the party requesting
such amendment, or as evidenced by confirmation in writing from
each Rating Agency that such amendment or supplement will not
result in a qualification, withdrawal or downgrading of the
then-current ratings assigned to the Certificates, or (v) to make
any other provisions with respect to matters or questions arising
under the Pooling and Servicing Agreement, which shall not be
inconsistent with the provisions of the Pooling and Servicing
Agreement and will not result in a downgrade, qualification or
withdrawal of the then current rating or ratings then assigned to
any outstanding Class of Certificates, as confirmed by each
Rating Agency in writing.
Further, the Depositor, the Servicer, the Special
Servicer, the Trustee and the Fiscal Agent, at any time and from
time to time, without the consent of the Certificateholders, may
amend the Pooling and Servicing Agreement to modify, eliminate or
add to any of its provisions to such extent as shall be necessary
to maintain the qualification of the Trust REMIC as two separate
REMICs or of the Grantor Trust as a grantor trust, or to prevent
the imposition of any additional material state or local taxes,
at all times that any Certificates are outstanding; provided,
however, that such action, as evidenced by an Opinion of Counsel
(obtained at the expense of the Trust Fund), is necessary or
helpful to maintain such qualification or to prevent the
imposition of any such taxes, and would not adversely affect in
any material respect the interest of any Certificateholder.
The Pooling and Servicing Agreement or any Custodial
Agreement may also be amended from time to time by the Depositor,
the Servicer, the Special Servicer, the Trustee and the Fiscal
Agent with the consent of the Holders of Certificates evidencing
not less than 662/3% of the Percentage Interests of each Class of
Certificates affected by the amendment for the
4
<PAGE>
purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of the Pooling and Servicing
Agreement or of modifying in any manner the rights of the
Certificateholders; 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 all the
holders of all Certificates representing all
Percentage Interests of the Class or Classes
affected thereby;
(ii) change the percentages of Voting Rights of
Holders of Certificates which are required to
consent to any action or inaction under the
Pooling and Servicing Agreement, without the
consent of all the holders of all Certificates
representing all Percentage Interests of the
Class or Classes affected thereby;
(iii) alter the Servicing Standard or the
obligations of the Servicer, the Special
Servicer, the Trustee or the Fiscal Agent to make
a P&I Advance or Property Advance without the
consent of the Holders of all Certificates
representing all of the Percentage Interests of
the Class or Classes affected thereby; or
(iv) amend any section of the Pooling and
Servicing Agreement which relates to the
amendment thereof, without the consent of all the
holders of all Certificates representing all
Percentage Interests of the Class or Classes
affected thereby.
Any Holder of Class LR Certificates representing
greater than a 50% Percentage Interest in such Class may effect
an early termination of the Trust Fund, upon not less than 30
days' prior notice given to the Trustee and Servicer any time on
or after the Early Termination Notice Date (defined as any date
as of which the aggregate Stated Principal Balance of the
Mortgage Loans is less than 1.0% of the aggregate Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date)
specifying the Anticipated Termination Date, by purchasing on
such date all, but not less than all, of the Mortgage Loans then
included in the Trust Fund, and all property acquired in respect
of any Mortgage Loan, at a purchase price, payable in cash, equal
to not less than the greater of:
(i) the sum of
(A) 100% of the unpaid principal balance of each
Mortgage Loan included in the Trust Fund as
of the last day of the month preceding such
Distribution Date;
(B) the fair market value of all other property
included in the Trust Fund as of the last
day of the month preceding such Distribution
Date, as determined by an Independent
appraiser acceptable to the
5
<PAGE>
Servicer as of the date not more than 30
days prior to the last day of the month
preceding such Distribution Date;
(C) all unpaid interest accrued on such
principal balance of each such Mortgage Loan
(including for this purpose any Mortgage
Loan as to which title to the related
Mortgaged Property has been acquired) at the
Mortgage Rate (plus the Excess Rate, to the
extent applicable) to the last day of the
Interest Accrual Period preceding such
Distribution Date;
(D) the aggregate amount of unreimbursed
Advances and unpaid Servicing Fees, Special
Servicing Compensation, Trustee Fees and
Trust Fund expenses, in each case with
interest thereon at the Advance Rate to the
extent permitted under the Pooling and
Servicing Agreement; and
(ii) the aggregate fair market value of the
Mortgage Loans, and all other property acquired
in respect of any Mortgage Loan in the Trust
Fund, on the last day of the month preceding such
Distribution Date, as determined by an
Independent appraiser acceptable to the Servicer
as of a date not more than 30 days prior to the
last day of the month preceding such Distribution
Date, together with one month's interest thereon
at the related Mortgage Rates.
The Servicer or the Depositor may also effect such
termination as provided above if it first notifies each Holder of
a Class LR Certificate through the Trustee of its intention to do
so in writing at least 30 days prior to the Early Termination
Notice Date and no Class LR Holder terminates the Trust Fund as
described above within such 30 day period. All costs and expenses
incurred by any and all parties to the Pooling and Servicing
Agreement or by the Trust Fund in connection with the purchase of
the Mortgage Loans and other assets of the Trust Fund pursuant to
Section 9.01(c) of the Pooling and Servicing Agreement shall be
borne by the party exercising its purchase rights thereunder. The
Trustee shall be entitled to rely conclusively on any
determination made by an Independent appraiser pursuant to
Section 9.01(c) of the Pooling and Servicing Agreement.
The respective obligations and responsibilities of the
Servicer, the Special Servicer, the Depositor, the Trustee and
the Fiscal Agent created by the Pooling and Servicing Agreement
with respect to the Certificates (other than the obligation to
make certain payments and to send certain notices to
Certificateholders as set forth in the Pooling and Servicing
Agreement) shall terminate immediately following the occurrence
of the last action required to be taken by the Trustee pursuant
to Article IX of the Pooling and Servicing Agreement on the
Termination Date; provided, however, that in no event shall the
trust created thereby continue beyond the expiration of
twenty-one years from the death of the last survivor of the
descendants of Joseph P. Kennedy, the late ambassador of the
United States to the United Kingdom, living on the Closing Date.
6
<PAGE>
Unless the Certificate of Authentication on this Certificate has
been executed by the Trustee or on its behalf by the
Authenticating Agent, by manual signature, this Certificate shall
not be entitled to any benefit under the Pooling and Servicing
Agreement or be valid for any purpose.
7
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Class V-2
Certificate to be duly executed.
Dated: March 27, 1997
LASALLE NATIONAL BANK, not in its
individual capacity but solely as Trustee
By:______________________________________
Authorized Officer
Certificate of Authentication
This is one of the Class V-2 Certificates referred to
in the Pooling and Servicing Agreement.
Dated: March 27, 1997
LASALLE NATIONAL BANK, not in its
individual capacity but solely as
Authenticating Agent
By:______________________________________
Authorized Officer
8
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned ("Assignor(s)") hereby
sell(s), assign(s) and transfer(s) unto_____________________________
____________________________________________________________________
(please print or typewrite name(s) and address(es), including
postal zip code(s) of assignee(s)) ("Assignee(s)") the entire
Percentage Interest represented by the within Class V-2
Certificate and hereby authorize(s) the registration of transfer
of such interest to Assignee(s) on the Certificate Register of
the Trust Fund.
I (we) further direct the Certificate Registrar to
issue a new Class V-2 Certificate of the entire Percentage
Interest represented by the within Class V-2 Certificates to the
above-named Assignee(s) and to deliver such Class V-2 Certificate
to the following address:
____________________________________________________________________
____________________________________________________________________
Date:________________ ___________________________________
Signature by or on behalf of
Assignor(s)
___________________________________
Taxpayer Identification Number
9
<PAGE>
DISTRIBUTION INSTRUCTIONS
The Assignee(s) should include the following for
purposes of distribution:
Address of the Assignee(s) for the purpose of receiving notices
and distributions:____________________________________________________
______________________________________________________________________
Distributions, if being made by wire transfer in immediately
available funds to ___________________________________________________
for the account of ___________________________________________________
account number ____________________________.
This information is provided by____________________________
_______________________________________ the Assignee(s) named
above, or ________________________________________________ as its
(their) agent.
By:____________________________________
____________________________________
[Please print or type name(s)]
____________________________________
Title:
____________________________________
Taxpayer Identification Number
10
<PAGE>
EXHIBIT A-14
THIS CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION
OF THE DEPOSITOR, THE ORIGINATOR, THE SERVICER, THE TRUSTEE, THE
FISCAL AGENT OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THE
CERTIFICATES NOR THE UNDERLYING MORTGAGE LOANS ARE INSURED OR
GUARANTEED BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT" AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G(a)(2) AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED (THE "CODE"). A TRANSFEREE OF THIS CERTIFICATE, BY
ACCEPTANCE HEREOF, IS DEEMED TO HAVE ACCEPTED THIS CERTIFICATE
SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFERABILITY, AS SET FORTH
IN SECTION 5.02(l) OF THE POOLING AND SERVICING AGREEMENT, AND
SHALL BE REQUIRED TO FURNISH AN AFFIDAVIT TO THE TRANSFEROR AND
THE TRUSTEE TO THE EFFECT THAT, AMONG OTHER THINGS, (A) IT IS NOT
A DISQUALIFIED ORGANIZATION, AS SUCH TERM IS DEFINED IN CODE
SECTION 860(E)(e)(5), OR AN AGENT (INCLUDING A BROKER, NOMINEE OR
OTHER MIDDLEMAN) FOR SUCH DISQUALIFIED ORGANIZATION, (B) IT HAS
HISTORICALLY PAID ITS DEBTS AS THEY HAVE COME DUE AND INTENDS TO
CONTINUE TO PAY ITS DEBTS AS THEY COME DUE IN THE FUTURE, AND (C)
IT INTENDS TO PAY ANY TAXES ASSOCIATED WITH HOLDING THIS
CERTIFICATE AS THEY BECOME DUE. ANY PURPORTED TRANSFER TO A
DISQUALIFIED ORGANIZATION OR OTHERWISE IN VIOLATION OF THESE
RESTRICTIONS SHALL BE ABSOLUTELY NULL AND VOID AND SHALL VEST NO
RIGHTS IN ANY PURPORTED TRANSFEREE. IF THIS CERTIFICATE
REPRESENTS A "NON-ECONOMIC RESIDUAL INTEREST", AS DEFINED IN
TREASURY REGULATIONS SECTION 1.860E-1(c), TRANSFERS OF THIS
CERTIFICATE MAY BE DISREGARDED FOR FEDERAL INCOME TAX PURPOSES.
IN ORDER TO SATISFY A REGULATORY SAFE HARBOR UNDER WHICH SUCH
TRANSFERS WILL NOT BE DISREGARDED, THE TRANSFEROR MAY BE
REQUIRED, AMONG OTHER THINGS, TO SATISFY ITSELF AS TO THE
FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE.
THE HOLDER OF THIS CERTIFICATE, BY ACCEPTANCE HEREOF, IS DEEMED
TO HAVE AGREED TO CONSENT TO ACT AS "TAX MATTERS PERSON" OF THE
UPPER-TIER REMIC AND TO THE APPOINTMENT OF THE TRUSTEE AS
ATTORNEY-IN-FACT AND AGENT FOR THE TAX MATTERS PERSON OR AS
OTHERWISE PROVIDED IN THE POOLING AND SERVICING AGREEMENT TO
PERFORM THE FUNCTIONS OF A "TAX MATTERS PARTNER" FOR PURPOSES OF
SUBCHAPTER C OF CHAPTER 63 OF SUBTITLE F OF THE CODE.
<PAGE>
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR
ANY STATE OR FOREIGN SECURITIES LAW. THE HOLDER HEREOF, BY
PURCHASING THIS CERTIFICATE, AGREES THAT THIS CERTIFICATE MAY BE
REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN
COMPLIANCE WITH THE 1933 ACT AND OTHER APPLICABLE LAWS AND ONLY
(A)(1) PURSUANT TO RULE 144A UNDER THE 1933 ACT TO AN
INSTITUTIONAL INVESTOR THAT THE HOLDER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER, WITHIN THE MEANING OF RULE 144A
("QIB") PURCHASING FOR ITS OWN ACCOUNT OR A PERSON PURCHASING FOR
THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED, IN EACH CASE,
THAT THE REOFFER, RESALE, PLEDGE, OR OTHER TRANSFER IS BEING MADE
IN RELIANCE ON RULE 144A OR (2) PRIOR TO THE RESIDUAL TRIGGER
DATE, TO AN "INSTITUTIONAL ACCREDITED INVESTOR" AS SUCH TERM IS
DEFINED IN RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER
THE 1933 ACT AND (B) IN ACCORDANCE WITH ANY OTHER APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES.
THIS CERTIFICATE OR ANY INTEREST HEREIN MAY NOT BE PURCHASED BY A
TRANSFEREE THAT IS (A) AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT, INCLUDING AN INDIVIDUAL RETIREMENT
ACCOUNT OR A KEOGH PLAN, WHICH IS SUBJECT TO THE FIDUCIARY
RESPONSIBILITY PROVISIONS OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), SECTION 4975 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR ANY
FEDERAL, STATE OR LOCAL LAW (A "SIMILAR LAW"), WHICH IS TO A
MATERIAL EXTENT, SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR
THE CODE (EACH, A "PLAN"), OR (B) A COLLECTIVE INVESTMENT FUND IN
WHICH SUCH PLANS ARE INVESTED, AN INSURANCE COMPANY USING ASSETS
OF SEPARATE ACCOUNTS OR GENERAL ACCOUNTS WHICH INCLUDE ASSETS OF
PLANS (OR WHICH ARE DEEMED PURSUANT TO ERISA OR ANY SIMILAR LAW
TO INCLUDE ASSETS OF PLANS) OR ANY OTHER PERSON ACTING ON BEHALF
OF ANY SUCH PLAN OR USING THE ASSETS OF ANY SUCH PLAN, OTHER THAN
AN INSURANCE COMPANY USING THE ASSETS OF ITS GENERAL ACCOUNT
UNDER CIRCUMSTANCES WHEREBY SUCH PURCHASE AND THE SUBSEQUENT
HOLDING OF SUCH CERTIFICATE BY SUCH INSURANCE COMPANY WOULD NOT
CONSTITUTE OR RESULT IN A PROHIBITED TRANSACTION WITHIN THE
MEANING OF SECTION 406 OR 407 OF ERISA, SECTION 4975 OF THE CODE,
OR A MATERIALLY SIMILAR CHARACTERIZATION UNDER ANY SIMILAR LAW.
TRANSFEREES OF THIS CERTIFICATE SHALL BE REQUIRED TO DELIVER A
LETTER SUBSTANTIALLY IN THE FORM OF EXHIBIT D-2 OF THE POOLING
AND SERVICING AGREEMENT.
<PAGE>
ANY HOLDER DESIRING TO EFFECT A TRANSFER OF THIS CERTIFICATE
SHALL, AND DOES HEREBY AGREE TO, INDEMNIFY THE CERTIFICATE
REGISTRAR, THE TRUSTEE, THE FISCAL AGENT, THE SERVICER AND THE
DEPOSITOR AGAINST ANY LIABILITY THAT MAY RESULT IF THE TRANSFER
IS NOT EXEMPT FROM THE 1933 ACT OR IS NOT MADE IN ACCORDANCE WITH
FEDERAL AND STATE LAWS.
<PAGE>
ASSET SECURITIZATION CORPORATION
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1997-MD VII, CLASS R
Percentage Interest: 100%
CUSIP: 045424 FC7 ISIN: US045424 FC79
No.: R-
This certifies that NOMURA SECURITIES INTERNATIONAL, INC. is the
registered owner of a beneficial ownership interest in a Trust
Fund, including the distributions to be made with respect to the
Class R Certificates. The Trust Fund, described more fully below,
consists primarily of a pool of Mortgage Loans secured by first
liens on commercial properties and held in trust by the Trustee
and serviced by the Servicer. The Trust Fund was created, and the
Mortgage Loans are to be serviced, pursuant to the Pooling and
Servicing Agreement (as defined below). The Holder of this
Certificate, by virtue of the acceptance hereof, assents to the
terms, provisions and conditions of the Pooling and Servicing
Agreement and is bound thereby. Also issued under the Pooling and
Servicing Agreement are the Class A-1A, Class A-1B, Class PS-1,
Class CS-1, Class A-2, Class A-3, Class A-4, Class A-5, Class
A-6, Class B-1, Class B- 1H, Class V-1, Class V-2 and Class LR
Certificates (together with the R Certificates, the
"Certificates"; the Holders of Certificates issued under the
Pooling and Servicing Agreement are collectively referred to
herein as "Certificateholders").
This Certificate is issued pursuant to, and in
accordance with, the terms of a Pooling and Servicing Agreement
dated as of March 27, 1997 (the "Pooling and Servicing
Agreement"), by and among Asset Securitization Corporation, as
Depositor, Pacific Mutual Life Insurance Company, as Servicer,
LaSalle National Bank, as Trustee, and ABN AMRO Bank N.V., as
Fiscal Agent. To the extent not defined herein, capitalized terms
used herein shall have the meanings assigned thereto in the
Pooling and Servicing Agreement.
This Certificate represents a "residual interest" in a
"real estate mortgage investment conduit," as those terms are
defined, respectively, in Sections 860G(a)(2) and 860D of the
Internal Revenue Code of l986, as amended, and certain other
assets.
The Trustee makes no representation or warranty as to
any of the statements contained herein or the validity or
sufficiency of the Certificates or the Mortgage Loans and has
executed this Certificate in its limited capacity as Trustee
under the Pooling and Servicing Agreement.
Pursuant to the terms of the Pooling and Servicing
Agreement, the Trustee, or the Paying Agent on behalf of the
Trustee, will distribute (other than the final distribution on
any Certificate), on the thirteenth day of each month, or if such
day is not a Business Day, the Business Day immediately following
such day, commencing in April, 1997 (each such date, a
"Distribution Date"); provided, however, that in any month the
Distribution Date will be no earlier than the second Business Day
following the eleventh day of such month and, provided
<PAGE>
further, that if the eleventh day of any month is not a Business
Day, the Distribution Date shall be the third Business Day
following the eleventh day of such month, to the Person in whose
name this Certificate is registered as of the related Record
Date, an amount equal to such Person's pro rata share (based on
the Percentage Interest represented by this Certificate) of that
portion of the aggregate amount of principal and interest then
distributable, if any, allocable to the Class R Certificates for
such Distribution Date, all as more fully described in the
Pooling and Servicing Agreement.
All distributions (other than the final distribution
on any Certificate) will be made by the Paying Agent to the
persons in whose names the Certificates are registered at the
close of business on each Record Date, which will be the tenth
day of the month in which the related Distribution Date occurs
or, if such day is not a Business Day, the preceding Business
Day; provided, however, that with respect to the Distribution
Date occurring in April 1997, the Record Date will be the Closing
Date, except as specified in the Pooling and Servicing Agreement.
Such distributions shall be made on each Distribution Date other
than the Termination Date to each Certificateholder of record on
the related Record Date by check mailed by first class mail to
the address set forth therefor in the Certificate Register or,
provided that such Certificateholder holds Certificates with an
aggregate initial Certificate Balance in excess of $5,000,000,
and shall have provided the Paying Agent with wire instructions
in writing at least five Business Days prior to the related
Record Date, by wire transfer of immediately available funds to
the account of such Certificateholder at a bank or other entity
located in the United States and having appropriate facilities
therefor. The final distribution on each Certificate shall be
made in like manner, but only upon presentment and surrender of
such Certificate at the office of the Trustee or its agent (which
may be the Paying Agent or the Certificate Registrar acting as
such agent) maintained in the Borough of Manhattan that is
specified in the notice to Certificateholders of such final
distribution.
Any funds not distributed on the Termination Date
because of the failure of any Certificateholders to tender their
Certificates shall be set aside and held in trust for the account
of the appropriate non-tendering Certificateholders, whereupon
the Trust Fund shall terminate. If any Certificates as to which
notice of the Termination Date has been given pursuant to Section
9.01 of the Pooling and Servicing Agreement 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 Certificateholders, at their last addresses
shown in the Certificate Register, to surrender their
Certificates for cancellation in order to receive, from such
funds held, the final distribution with respect thereto. If
within one year after the second notice any Certificate shall not
have been surrendered for cancellation, the Trustee may, directly
or through an agent, take appropriate steps to contact the
remaining Certificateholders concerning surrender of their
Certificates. The costs and expenses of maintaining such funds
and of contacting Certificateholders shall be paid out of the
assets which remain held. If within two years after the second
notice any Certificates shall not have been surrendered for
cancellation, the Paying Agent shall pay to the Class R
Certificateholders all amounts distributable to the Holders
thereof.. No interest shall accrue or be payable to any
Certificateholder on any amount held as a result of such
Certificateholder's failure to surrender its Certificate(s) for
final payment thereof in accordance with Section 9.01 of the
Pooling and Servicing Agreement. Such funds held by the Trustee
may
2
<PAGE>
be invested under certain circumstances, and subject to certain
conditions as specified in the Pooling and Servicing Agreement.
This Certificate is limited in right of payment to,
among other things, certain collections and recoveries in respect
of the Mortgage Loans, as more specifically set forth herein and
in the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement,
the Trust Fund includes (i) such Mortgage Loans as from time to
time are subject to the Pooling and Servicing Agreement, together
with the Mortgage Files relating thereto; (ii) all scheduled or
unscheduled payments on or collections in respect of the Mortgage
Loans due after Cut-off Date; (iii) any REO Property; (iv) all
revenues received in respect of any REO Property; (v) the
Servicer's and the Trustee's rights under the insurance policies
with respect to the Mortgage Loans required to be maintained
pursuant to the Pooling and Servicing Agreement and any proceeds
thereof; (vi) any Assignments of Leases, Rents and Profits and
any security agreements; (vii) any indemnities or guaranties
given as additional security for any Mortgage Loans; (viii) all
assets deposited in the Lock-Box Accounts, Cash Collateral
Accounts, Escrow Accounts, Reserve Accounts and the Hudson
Treasury Collateral Account (to the extent such assets in such
accounts are not assets of the respective Borrowers), the
Collection Account, the Lower-Tier Distribution Account, the
Upper-Tier Distribution Account, the Excess Interest Distribution
Account, the Interest Reserve Account and the Default Interest
Distribution Account, including reinvestment income thereon; (ix)
any environmental indemnity agreements relating to the Mortgaged
Properties; (x) the rights and remedies under the Mortgage Loan
Purchase and Sale Agreement; and (xi) the proceeds of any of the
foregoing (other than any interest earned on deposits in the
Lock-Box Accounts, Cash Collateral Accounts, Escrow Accounts, the
Hudson Treasury Collateral Account and any Reserve Accounts, to
the extent such interest belongs to the related Borrower). As
provided in the Pooling and Servicing Agreement, withdrawals may
be made from certain of the above accounts for purposes other
than distributions to Certificateholders.
This Certificate does not purport to summarize the
Pooling and Servicing Agreement, and reference is made to the
Pooling and Servicing Agreement for the interests, rights,
benefits, obligations and duties evidenced hereby, and the
limitations thereon, and the rights, duties and immunities of the
Trustee.
As provided in the Pooling and Servicing Agreement and
subject to certain limitations set forth therein, this
Certificate is transferable or exchangeable only upon surrender
of this Certificate to the Certificate Registrar at the Corporate
Trust Office together with an assignment and transfer (executed
by the Holder or his duly authorized attorney), subject to the
applicable requirements in Article V of the Pooling and Servicing
Agreement. Upon surrender for registration of transfer of this
Certificate, subject to the applicable requirements of Article V
of the Pooling and Servicing Agreement, the Trustee shall execute
and the Authenticating Agent shall duly authenticate in the name
of the designated transferee or transferees, one or more new
Certificates in authorized denominations of a like aggregate
Certificate Balance. Such Certificates shall be delivered by the
Certificate Registrar in accordance with Section 5.02(e) of the
Pooling and Servicing Agreement.
3
<PAGE>
Prior to due presentation of this Certificate for registration of
transfer, the Depositor, the Servicer, the Trustee, the Fiscal
Agent, the Certificate Registrar, any Paying Agent and any agent
of any of them may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes,
and none of the Depositor, the Servicer, the Trustee, the Fiscal
Agent, the Certificate Registrar, any Paying Agent or any agent
of any of them shall be affected by any notice or knowledge to
the contrary.
No fee or service charge shall be imposed by the
Certificate Registrar for its services in respect of any
registration of transfer or exchange referred to in Section 5.02
of the Pooling and Servicing Agreement other than for transfers
to Institutional Accredited Investors as provided in Section
5.02(h) of that Agreement. The Certificate Registrar may require
payment by each transferor of a sum sufficient to cover any tax,
expense or other governmental charge payable in connection with
any such transfer.
The Pooling and Servicing Agreement or any Custodial
Agreement may be amended from time to time by the Depositor, the
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 in
the Pooling and Servicing Agreement or therein that may be
defective or inconsistent with any other provisions in such
agreement, (iii) to amend or supplement any provisions in either
of such agreements to the extent necessary or desirable to
maintain the rating or ratings assigned to each of the Classes of
Certificates by each Rating Agency, (iv) to amend or supplement
any provisions in either of such agreements that shall not
adversely affect in any material respect the interests of any
Certificateholder not consenting thereto, as evidenced in writing
by an Opinion of Counsel, at the expense of the party requesting
such amendment, or as evidenced by confirmation in writing from
each Rating Agency that such amendment or supplement will not
result in a qualification, withdrawal or downgrading of the
then-current ratings assigned to the Certificates, or (v) to make
any other provisions with respect to matters or questions arising
under the Pooling and Servicing Agreement, which shall not be
inconsistent with the provisions of the Pooling and Servicing
Agreement and will not result in a downgrade, qualification or
withdrawal of the then current rating or ratings then assigned to
any outstanding Class of Certificates, as confirmed by each
Rating Agency in writing.
Further, the Depositor, the Servicer, the Special
Servicer, the Trustee and the Fiscal Agent, at any time and from
time to time, without the consent of the Certificateholders, may
amend the Pooling and Servicing Agreement to modify, eliminate or
add to any of its provisions to such extent as shall be necessary
to maintain the qualification of the Trust REMIC as two separate
REMICs or of the Grantor Trust as a grantor trust, or to prevent
the imposition of any additional material state or local taxes,
at all times that any Certificates are outstanding; provided,
however, that such action, as evidenced by an Opinion of Counsel
(obtained at the expense of the Trust Fund), is necessary or
helpful to maintain such qualification or to prevent the
imposition of any such taxes, and would not adversely affect in
any material respect the interest of any Certificateholder.
The Pooling and Servicing Agreement or any Custodial
Agreement may also be amended from time to time by the Depositor,
the Servicer, the Special Servicer, the Trustee and
4
<PAGE>
the Fiscal Agent with the consent of the Holders of Certificates
evidencing not less than 662/3% of the Percentage Interests of
each Class of Certificates affected by the amendment for the
purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of the Pooling and Servicing
Agreement or of modifying in any manner the rights of the
Certificateholders; 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 all the
holders of all Certificates representing all
Percentage Interests of the Class or Classes
affected thereby;
(ii) change the percentages of Voting Rights of
Holders of Certificates which are required to
consent to any action or inaction under the
Pooling and Servicing Agreement, without the
consent of all the holders of all Certificates
representing all Percentage Interests of the
Class or Classes affected thereby;
(iii) alter the Servicing Standard or the
obligations of the Servicer, the Special
Servicer, the Trustee or the Fiscal Agent to make
a P&I Advance or Property Advance without the
consent of the Holders of all Certificates
representing all of the Percentage Interests of
the Class or Classes affected thereby; or
(iv) amend any section of the Pooling and
Servicing Agreement which relates to the
amendment thereof, without the consent of all the
holders of all Certificates representing all
Percentage Interests of the Class or Classes
affected thereby.
Any Holder of Class LR Certificates representing
greater than a 50% Percentage Interest in such Class may effect
an early termination of the Trust Fund, upon not less than 30
days' prior notice given to the Trustee and Servicer any time on
or after the Early Termination Notice Date (defined as any date
as of which the aggregate Stated Principal Balance of the
Mortgage Loans is less than 1.0% of the aggregate Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date)
specifying the Anticipated Termination Date, by purchasing on
such date all, but not less than all, of the Mortgage Loans then
included in the Trust Fund, and all property acquired in respect
of any Mortgage Loan, at a purchase price, payable in cash, equal
to not less than the greater of:
(i) the sum of
(A) 100% of the unpaid principal balance of each
Mortgage Loan included in the Trust Fund as
of the last day of the month preceding such
Distribution Date;
5
<PAGE>
(B) the fair market value of all other
property included in the Trust Fund as of
the last day of the month preceding such
Distribution Date, as determined by an
Independent appraiser acceptable to the
Servicer as of the date not more than 30
days prior to the last day of the month
preceding such Distribution Date;
(C) all unpaid interest accrued on such
principal balance of each such Mortgage Loan
(including for this purpose any Mortgage
Loan as to which title to the related
Mortgaged Property has been acquired) at the
Mortgage Rate (plus the Excess Rate, to the
extent applicable) to the last day of the
Interest Accrual Period preceding such
Distribution Date;
(D) the aggregate amount of unreimbursed
Advances and unpaid Servicing Fees, Special
Servicing Compensation, Trustee Fees and
Trust Fund expenses, in each case with
interest thereon at the Advance Rate to the
extent permitted under the Pooling and
Servicing Agreement; and
(ii) the aggregate fair market value of the
Mortgage Loans, and all other property acquired
in respect of any Mortgage Loan in the Trust
Fund, on the last day of the month preceding such
Distribution Date, as determined by an
Independent appraiser acceptable to the Servicer
as of a date not more than 30 days prior to the
last day of the month preceding such Distribution
Date, together with one month's interest thereon
at the related Mortgage Rates.
The Servicer or the Depositor may also effect such
termination as provided above if it first notifies each Holder of
a Class LR Certificate through the Trustee of its intention to do
so in writing at least 30 days prior to the Early Termination
Notice Date and no Class LR Holder terminates the Trust Fund as
described above within such 30 day period. All costs and expenses
incurred by any and all parties to the Pooling and Servicing
Agreement or by the Trust Fund in connection with the purchase of
the Mortgage Loans and other assets of the Trust Fund pursuant to
Section 9.01(c) of the Pooling and Servicing Agreement shall be
borne by the party exercising its purchase rights thereunder. The
Trustee shall be entitled to rely conclusively on any
determination made by an Independent appraiser pursuant to
Section 9.01(c) of the Pooling and Servicing Agreement.
The respective obligations and responsibilities of the
Servicer, the Special Servicer, the Depositor, the Trustee and
the Fiscal Agent created by the Pooling and Servicing Agreement
with respect to the Certificates (other than the obligation to
make certain payments and to send certain notices to
Certificateholders as set forth in the Pooling and Servicing
Agreement) shall terminate immediately following the occurrence
of the last action required to be taken by the Trustee pursuant
to Article IX of the Pooling and Servicing Agreement on the
Termination Date; provided, however, that in no event shall the
trust created thereby continue
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<PAGE>
beyond the expiration of twenty-one years from the death of the
last survivor of the descendants of Joseph P. Kennedy, the late
ambassador of the United States to the United Kingdom, living on
the Closing Date.
Unless the Certificate of Authentication on this
Certificate has been executed by the Trustee or on its behalf by
the Authenticating Agent, by manual signature, this Certificate
shall not be entitled to any benefit under the Pooling and
Servicing Agreement or be valid for any purpose.
7
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Class R
Certificate to be duly executed.
Dated: March 27, 1997
LASALLE NATIONAL BANK, not in its
individual capacity but solely as Trustee
By:______________________________________
Authorized Officer
Certificate of Authentication
This is one of the Class R Certificates referred to in
the Pooling and Servicing Agreement.
Dated: March 27, 1997
LASALLE NATIONAL BANK, not in its
individual capacity but solely as
Authenticating Agent
By:______________________________________
Authorized Officer
8
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned ("Assignor(s)") hereby
sell(s), assign(s) and transfer(s) unto_____________________________
____________________________________________________________________
(please print or typewrite name(s) and address(es), including
postal zip code(s) of assignee(s)) ("Assignee(s)") the entire
Percentage Interest represented by the within Class R Certificate
and hereby authorize(s) the registration of transfer of such
interest to Assignee(s) on the Certificate Register of the Trust
Fund.
I (we) further direct the Certificate Registrar to
issue a new Class R Certificate of the entire Percentage Interest
represented by the within Class R Certificates to the above-named
Assignee(s) and to deliver such Class R Certificate to the
following address:
____________________________________________________________________
____________________________________________________________________
Date:________________ ___________________________________
Signature by or on behalf of
Assignor(s)
___________________________________
Taxpayer Identification Number
9
<PAGE>
DISTRIBUTION INSTRUCTIONS
The Assignee(s) should include the following for
purposes of distribution:
Address of the Assignee(s) for the purpose of receiving notices
and distributions:____________________________________________________
______________________________________________________________________
Distributions, if being made by wire transfer in immediately
available funds to ___________________________________________________
for the account of ___________________________________________________
account number ____________________________.
This information is provided by____________________________
_______________________________________ the Assignee(s) named
above, or ________________________________________________ as its
(their) agent.
By:____________________________________
____________________________________
[Please print or type name(s)]
____________________________________
Title:
____________________________________
Taxpayer Identification Number
10
<PAGE>
EXHIBIT A-15
THIS CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION
OF THE DEPOSITOR, THE ORIGINATOR, THE SERVICER, THE TRUSTEE, THE
FISCAL AGENT OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THE
CERTIFICATES NOR THE UNDERLYING MORTGAGE LOANS ARE INSURED OR
GUARANTEED BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT" AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G(a)(2) AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED (THE "CODE"). A TRANSFEREE OF THIS CERTIFICATE, BY
ACCEPTANCE HEREOF, IS DEEMED TO HAVE ACCEPTED THIS CERTIFICATE
SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFERABILITY, AS SET FORTH
IN SECTION 5.02(l) OF THE POOLING AND SERVICING AGREEMENT, AND
SHALL BE REQUIRED TO FURNISH AN AFFIDAVIT TO THE TRANSFEROR AND
THE TRUSTEE TO THE EFFECT THAT, AMONG OTHER THINGS, (A) IT IS NOT
A DISQUALIFIED ORGANIZATION, AS SUCH TERM IS DEFINED IN CODE
SECTION 860(E)(e)(5), OR AN AGENT (INCLUDING A BROKER, NOMINEE OR
OTHER MIDDLEMAN) FOR SUCH DISQUALIFIED ORGANIZATION, (B) IT HAS
HISTORICALLY PAID ITS DEBTS AS THEY HAVE COME DUE AND INTENDS TO
CONTINUE TO PAY ITS DEBTS AS THEY COME DUE IN THE FUTURE, AND (C)
IT INTENDS TO PAY ANY TAXES ASSOCIATED WITH HOLDING THIS
CERTIFICATE AS THEY BECOME DUE. ANY PURPORTED TRANSFER TO A
DISQUALIFIED ORGANIZATION OR OTHERWISE IN VIOLATION OF THESE
RESTRICTIONS SHALL BE ABSOLUTELY NULL AND VOID AND SHALL VEST NO
RIGHTS IN ANY PURPORTED TRANSFEREE. IF THIS CERTIFICATE
REPRESENTS A "NON-ECONOMIC RESIDUAL INTEREST", AS DEFINED IN
TREASURY REGULATIONS SECTION 1.860E-1(c), TRANSFERS OF THIS
CERTIFICATE MAY BE DISREGARDED FOR FEDERAL INCOME TAX PURPOSES.
IN ORDER TO SATISFY A REGULATORY SAFE HARBOR UNDER WHICH SUCH
TRANSFERS WILL NOT BE DISREGARDED, THE TRANSFEROR MAY BE
REQUIRED, AMONG OTHER THINGS, TO SATISFY ITSELF AS TO THE
FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE.
THE HOLDER OF THIS CERTIFICATE, BY ACCEPTANCE HEREOF, IS DEEMED
TO HAVE AGREED TO CONSENT TO ACT AS "TAX MATTERS PERSON" OF THE
LOWER-TIER REMIC AND TO THE APPOINTMENT OF THE TRUSTEE AS
ATTORNEY-IN-FACT AND AGENT FOR THE TAX MATTERS PERSON OR AS
OTHERWISE PROVIDED IN THE POOLING AND SERVICING AGREEMENT TO
PERFORM THE FUNCTIONS OF A "TAX MATTERS PARTNER" FOR PURPOSES OF
SUBCHAPTER C OF CHAPTER 63 OF SUBTITLE F OF THE CODE.
<PAGE>
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR
ANY STATE OR FOREIGN SECURITIES LAW. THE HOLDER HEREOF, BY
PURCHASING THIS CERTIFICATE, AGREES THAT THIS CERTIFICATE MAY BE
REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN
COMPLIANCE WITH THE 1933 ACT AND OTHER APPLICABLE LAWS AND ONLY
(A)(1) PURSUANT TO RULE 144A UNDER THE 1933 ACT TO AN
INSTITUTIONAL INVESTOR THAT THE HOLDER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER, WITHIN THE MEANING OF RULE 144A
("QIB") PURCHASING FOR ITS OWN ACCOUNT OR A PERSON PURCHASING FOR
THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED, IN EACH CASE,
THAT THE REOFFER, RESALE, PLEDGE, OR OTHER TRANSFER IS BEING MADE
IN RELIANCE ON RULE 144A OR (2) PRIOR TO THE RESIDUAL TRIGGER
DATE, TO AN "INSTITUTIONAL ACCREDITED INVESTOR" AS SUCH TERM IS
DEFINED IN RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER
THE 1933 ACT AND (B) IN ACCORDANCE WITH ANY OTHER APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES.
THIS CERTIFICATE OR ANY INTEREST HEREIN MAY NOT BE PURCHASED BY A
TRANSFEREE THAT IS (A) AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT, INCLUDING AN INDIVIDUAL RETIREMENT
ACCOUNT OR A KEOGH PLAN, WHICH IS SUBJECT TO THE FIDUCIARY
RESPONSIBILITY PROVISIONS OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), SECTION 4975 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR ANY
FEDERAL, STATE OR LOCAL LAW (A "SIMILAR LAW"), WHICH IS TO A
MATERIAL EXTENT, SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR
THE CODE (EACH, A "PLAN"), OR (B) A COLLECTIVE INVESTMENT FUND IN
WHICH SUCH PLANS ARE INVESTED, AN INSURANCE COMPANY USING ASSETS
OF SEPARATE ACCOUNTS OR GENERAL ACCOUNTS WHICH INCLUDE ASSETS OF
PLANS (OR WHICH ARE DEEMED PURSUANT TO ERISA OR ANY SIMILAR LAW
TO INCLUDE ASSETS OF PLANS) OR ANY OTHER PERSON ACTING ON BEHALF
OF ANY SUCH PLAN OR USING THE ASSETS OF ANY SUCH PLAN, OTHER THAN
AN INSURANCE COMPANY USING THE ASSETS OF ITS GENERAL ACCOUNT
UNDER CIRCUMSTANCES WHEREBY SUCH PURCHASE AND THE SUBSEQUENT
HOLDING OF SUCH CERTIFICATE BY SUCH INSURANCE COMPANY WOULD NOT
CONSTITUTE OR RESULT IN A PROHIBITED TRANSACTION WITHIN THE
MEANING OF SECTION 406 OR 407 OF ERISA, SECTION 4975 OF THE CODE,
OR A MATERIALLY SIMILAR CHARACTERIZATION UNDER ANY SIMILAR LAW.
TRANSFEREES OF THIS CERTIFICATE SHALL BE REQUIRED TO DELIVER A
LETTER SUBSTANTIALLY IN THE FORM OF EXHIBIT D-2 OF THE POOLING
AND SERVICING AGREEMENT.
<PAGE>
ANY HOLDER DESIRING TO EFFECT A TRANSFER OF THIS CERTIFICATE
SHALL, AND DOES HEREBY AGREE TO, INDEMNIFY THE CERTIFICATE
REGISTRAR, THE TRUSTEE, THE FISCAL AGENT, THE SERVICER AND THE
DEPOSITOR AGAINST ANY LIABILITY THAT MAY RESULT IF THE TRANSFER
IS NOT EXEMPT FROM THE 1933 ACT OR IS NOT MADE IN ACCORDANCE WITH
FEDERAL AND STATE LAWS.
<PAGE>
ASSET SECURITIZATION CORPORATION
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1997-MD VII, CLASS LR
Percentage Interest: 100%
CUSIP: ISIN:
No.: LR-
This certifies that CEDE & CO. is the registered owner
of a beneficial ownership interest in a Trust Fund, including the
distributions to be made with respect to the Class LR
Certificates. The Trust Fund, described more fully below,
consists primarily of a pool of Mortgage Loans secured by first
liens on commercial properties and held in trust by the Trustee
and serviced by the Servicer. The Trust Fund was created, and the
Mortgage Loans are to be serviced, pursuant to the Pooling and
Servicing Agreement (as defined below). The Holder of this
Certificate, by virtue of the acceptance hereof, assents to the
terms, provisions and conditions of the Pooling and Servicing
Agreement and is bound thereby. Also issued under the Pooling and
Servicing Agreement are the Class A-1A, Class A-1B, Class PS-1,
Class CS-1, Class A-2, Class A-3, Class A-4, Class A-5, Class
A-6, Class B-1, Class B-1H, Class V-1, Class V-2 and Class R
Certificates (together with the LR Certificates, the
"Certificates"; the Holders of Certificates issued under the
Pooling and Servicing Agreement are collectively referred to
herein as "Certificateholders").
This Certificate is issued pursuant to, and in
accordance with, the terms of a Pooling and Servicing Agreement
dated as of March 27, 1997 (the "Pooling and Servicing
Agreement"), by and among Asset Securitization Corporation, as
Depositor, Pacific Mutual Life Insurance Company, as Servicer,
LaSalle National Bank, as Trustee, and ABN AMRO Bank N.V., as
Fiscal Agent. To the extent not defined herein, capitalized terms
used herein shall have the meanings assigned thereto in the
Pooling and Servicing Agreement.
This Certificate represents a "residual interest" in a
"real estate mortgage investment conduit," as those terms are
defined, respectively, in Sections 860G(a)(2) and 860D of the
Internal Revenue Code of l986, as amended, and certain other
assets.
The Trustee makes no representation or warranty as to
any of the statements contained herein or the validity or
sufficiency of the Certificates or the Mortgage Loans and has
executed this Certificate in its limited capacity as Trustee
under the Pooling and Servicing Agreement.
Pursuant to the terms of the Pooling and Servicing
Agreement, the Trustee, or the Paying Agent on behalf of the
Trustee, will distribute (other than the final distribution on
any Certificate), on the thirteenth day of each month, or if such
day is not a Business Day, the Business Day immediately following
such day, commencing in April, 1997 (each such date, a
"Distribution Date"); provided, however, that in any month the
Distribution Date will be no earlier than the second Business Day
following the eleventh day of such month and, provided
1
<PAGE>
further, that if the eleventh day of any month is not a Business
Day, the Distribution Date shall be the third Business Day
following the eleventh day of such month, to the Person in whose
name this Certificate is registered as of the related Record
Date, an amount equal to such Person's pro rata share (based on
the Percentage Interest represented by this Certificate) of that
portion of the aggregate amount of principal and interest then
distributable, if any, allocable to the Class LR Certificates for
such Distribution Date, all as more fully described in the
Pooling and Servicing Agreement.
All distributions (other than the final distribution
on any Certificate) will be made by the Paying Agent to the
persons in whose names the Certificates are registered at the
close of business on each Record Date, which will be the tenth
day of the month in which the related Distribution Date occurs
or, if such day is not a Business Day, the preceding Business
Day; provided, however, that with respect to the Distribution
Date occurring in April 1997, the Record Date will be the Closing
Date, except as specified in the Pooling and Servicing Agreement.
Such distributions shall be made on each Distribution Date other
than the Termination Date to each Certificateholder of record on
the related Record Date by check mailed by first class mail to
the address set forth therefor in the Certificate Register or,
provided that such Certificateholder holds Certificates with an
aggregate initial Certificate Balance in excess of $5,000,000,
and shall have provided the Paying Agent with wire instructions
in writing at least five Business Days prior to the related
Record Date, by wire transfer of immediately available funds to
the account of such Certificateholder at a bank or other entity
located in the United States and having appropriate facilities
therefor. The final distribution on each Certificate shall be
made in like manner, but only upon presentment and surrender of
such Certificate at the office of the Trustee or its agent (which
may be the Paying Agent or the Certificate Registrar acting as
such agent) maintained in the Borough of Manhattan that is
specified in the notice to Certificateholders of such final
distribution.
Any funds not distributed on the Termination Date
because of the failure of any Certificateholders to tender their
Certificates shall be set aside and held in trust for the account
of the appropriate non-tendering Certificateholders, whereupon
the Trust Fund shall terminate. If any Certificates as to which
notice of the Termination Date has been given pursuant to Section
9.01 of the Pooling and Servicing Agreement 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 Certificateholders, at their last addresses
shown in the Certificate Register, to surrender their
Certificates for cancellation in order to receive, from such
funds held, the final distribution with respect thereto. If
within one year after the second notice any Certificate shall not
have been surrendered for cancellation, the Trustee may, directly
or through an agent, take appropriate steps to contact the
remaining Certificateholders concerning surrender of their
Certificates. The costs and expenses of maintaining such funds
and of contacting Certificateholders shall be paid out of the
assets which remain held. If within two years after the second
notice any Certificates shall not have been surrendered for
cancellation, the Paying Agent shall pay to the Class R
Certificateholders all amounts distributable to the Holders
thereof.. No interest shall accrue or be payable to any
Certificateholder on any amount held as a result of such
Certificateholder's failure to surrender its Certificate(s) for
final payment thereof in accordance with Section 9.01 of the
Pooling and Servicing Agreement. Such funds held by the Trustee
may
2
<PAGE>
be invested under certain circumstances, and subject to certain
conditions as specified in the Pooling and Servicing Agreement.
This Certificate is limited in right of payment to,
among other things, certain collections and recoveries in respect
of the Mortgage Loans, as more specifically set forth herein and
in the Pooling and Servicing Agreement.
As provided in the Pooling and Servicing Agreement,
the Trust Fund includes (i) such Mortgage Loans as from time to
time are subject to the Pooling and Servicing Agreement, together
with the Mortgage Files relating thereto; (ii) all scheduled or
unscheduled payments on or collections in respect of the Mortgage
Loans due after Cut-off Date; (iii) any REO Property; (iv) all
revenues received in respect of any REO Property; (v) the
Servicer's and the Trustee's rights under the insurance policies
with respect to the Mortgage Loans required to be maintained
pursuant to the Pooling and Servicing Agreement and any proceeds
thereof; (vi) any Assignments of Leases, Rents and Profits and
any security agreements; (vii) any indemnities or guaranties
given as additional security for any Mortgage Loans; (viii) all
assets deposited in the Lock-Box Accounts, Cash Collateral
Accounts, Escrow Accounts, Reserve Accounts and the Hudson
Treasury Collateral Account (to the extent such assets in such
accounts are not assets of the respective Borrowers), the
Collection Account, the Lower-Tier Distribution Account, the
Upper-Tier Distribution Account, the Excess Interest Distribution
Account, the Interest Reserve Account and the Default Interest
Distribution Account, including reinvestment income thereon; (ix)
any environmental indemnity agreements relating to the Mortgaged
Properties; (x) the rights and remedies under the Mortgage Loan
Purchase and Sale Agreement; and (xi) the proceeds of any of the
foregoing (other than any interest earned on deposits in the
Lock-Box Accounts, Cash Collateral Accounts, Escrow Accounts, the
Hudson Treasury Collateral Account and any Reserve Accounts, to
the extent such interest belongs to the related Borrower). As
provided in the Pooling and Servicing Agreement, withdrawals may
be made from certain of the above accounts for purposes other
than distributions to Certificateholders.
This Certificate does not purport to summarize the
Pooling and Servicing Agreement, and reference is made to the
Pooling and Servicing Agreement for the interests, rights,
benefits, obligations and duties evidenced hereby, and the
limitations thereon, and the rights, duties and immunities of the
Trustee.
As provided in the Pooling and Servicing Agreement and
subject to certain limitations set forth therein, this
Certificate is transferable or exchangeable only upon surrender
of this Certificate to the Certificate Registrar at the Corporate
Trust Office together with an assignment and transfer (executed
by the Holder or his duly authorized attorney), subject to the
applicable requirements in Article V of the Pooling and Servicing
Agreement. Upon surrender for registration of transfer of this
Certificate, subject to the applicable requirements of Article V
of the Pooling and Servicing Agreement, the Trustee shall execute
and the Authenticating Agent shall duly authenticate in the name
of the designated transferee or transferees, one or more new
Certificates in authorized denominations of a like aggregate
Certificate Balance. Such Certificates shall be delivered by the
Certificate Registrar in accordance with Section 5.02(e) of the
Pooling and Servicing Agreement.
3
<PAGE>
Prior to due presentation of this Certificate for registration of
transfer, the Depositor, the Servicer, the Trustee, the Fiscal
Agent, the Certificate Registrar, any Paying Agent and any agent
of any of them may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes,
and none of the Depositor, the Servicer, the Trustee, the Fiscal
Agent, the Certificate Registrar, any Paying Agent or any agent
of any of them shall be affected by any notice or knowledge to
the contrary.
No fee or service charge shall be imposed by the
Certificate Registrar for its services in respect of any
registration of transfer or exchange referred to in Section 5.02
of the Pooling and Servicing Agreement other than for transfers
to Institutional Accredited Investors as provided in Section
5.02(h) of that Agreement. The Certificate Registrar may require
payment by each transferor of a sum sufficient to cover any tax,
expense or other governmental charge payable in connection with
any such transfer.
The Pooling and Servicing Agreement or any Custodial
Agreement may be amended from time to time by the Depositor, the
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 in
the Pooling and Servicing Agreement or therein that may be
defective or inconsistent with any other provisions in such
agreement, (iii) to amend or supplement any provisions in either
of such agreements to the extent necessary or desirable to
maintain the rating or ratings assigned to each of the Classes of
Certificates by each Rating Agency, (iv) to amend or supplement
any provisions in either of such agreements that shall not
adversely affect in any material respect the interests of any
Certificateholder not consenting thereto, as evidenced in writing
by an Opinion of Counsel, at the expense of the party requesting
such amendment, or as evidenced by confirmation in writing from
each Rating Agency that such amendment or supplement will not
result in a qualification, withdrawal or downgrading of the
then-current ratings assigned to the Certificates, or (v) to make
any other provisions with respect to matters or questions arising
under the Pooling and Servicing Agreement, which shall not be
inconsistent with the provisions of the Pooling and Servicing
Agreement and will not result in a downgrade, qualification or
withdrawal of the then current rating or ratings then assigned to
any outstanding Class of Certificates, as confirmed by each
Rating Agency in writing.
Further, the Depositor, the Servicer, the Special
Servicer, the Trustee and the Fiscal Agent, at any time and from
time to time, without the consent of the Certificateholders, may
amend the Pooling and Servicing Agreement to modify, eliminate or
add to any of its provisions to such extent as shall be necessary
to maintain the qualification of the Trust REMIC as two separate
REMICs or of the Grantor Trust as a grantor trust, or to prevent
the imposition of any additional material state or local taxes,
at all times that any Certificates are outstanding; provided,
however, that such action, as evidenced by an Opinion of Counsel
(obtained at the expense of the Trust Fund), is necessary or
helpful to maintain such qualification or to prevent the
imposition of any such taxes, and would not adversely affect in
any material respect the interest of any Certificateholder.
The Pooling and Servicing Agreement or any Custodial
Agreement may also be amended from time to time by the Depositor,
the Servicer, the Special Servicer, the Trustee and
4
<PAGE>
the Fiscal Agent with the consent of the Holders of Certificates
evidencing not less than 662/3% of the Percentage Interests of
each Class of Certificates affected by the amendment for the
purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of the Pooling and Servicing
Agreement or of modifying in any manner the rights of the
Certificateholders; 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 all the
holders of all Certificates representing all
Percentage Interests of the Class or Classes
affected thereby;
(ii) change the percentages of Voting Rights of
Holders of Certificates which are required to
consent to any action or inaction under the
Pooling and Servicing Agreement, without the
consent of all the holders of all Certificates
representing all Percentage Interests of the
Class or Classes affected thereby;
(iii) alter the Servicing Standard or the
obligations of the Servicer, the Special
Servicer, the Trustee or the Fiscal Agent to make
a P&I Advance or Property Advance without the
consent of the Holders of all Certificates
representing all of the Percentage Interests of
the Class or Classes affected thereby; or
(iv) amend any section of the Pooling and
Servicing Agreement which relates to the
amendment thereof, without the consent of all the
holders of all Certificates representing all
Percentage Interests of the Class or Classes
affected thereby.
Any Holder of Class LR Certificates representing
greater than a 50% Percentage Interest in such Class may effect
an early termination of the Trust Fund, upon not less than 30
days' prior notice given to the Trustee and Servicer any time on
or after the Early Termination Notice Date (defined as any date
as of which the aggregate Stated Principal Balance of the
Mortgage Loans is less than 1.0% of the aggregate Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date)
specifying the Anticipated Termination Date, by purchasing on
such date all, but not less than all, of the Mortgage Loans then
included in the Trust Fund, and all property acquired in respect
of any Mortgage Loan, at a purchase price, payable in cash, equal
to not less than the greater of:
(i) the sum of
(A) 100% of the unpaid principal balance of each
Mortgage Loan included in the Trust Fund as
of the last day of the month preceding such
Distribution Date;
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<PAGE>
(B) the fair market value of all other
property included in the Trust Fund as of
the last day of the month preceding such
Distribution Date, as determined by an
Independent appraiser acceptable to the
Servicer as of the date not more than 30
days prior to the last day of the month
preceding such Distribution Date;
(C) all unpaid interest accrued on such
principal balance of each such Mortgage Loan
(including for this purpose any Mortgage
Loan as to which title to the related
Mortgaged Property has been acquired) at the
Mortgage Rate (plus the Excess Rate, to the
extent applicable) to the last day of the
Interest Accrual Period preceding such
Distribution Date;
(D) the aggregate amount of unreimbursed
Advances and unpaid Servicing Fees, Special
Servicing Compensation, Trustee Fees and
Trust Fund expenses, in each case with
interest thereon at the Advance Rate to the
extent permitted under the Pooling and
Servicing Agreement; and
(ii) the aggregate fair market value of the
Mortgage Loans, and all other property acquired
in respect of any Mortgage Loan in the Trust
Fund, on the last day of the month preceding such
Distribution Date, as determined by an
Independent appraiser acceptable to the Servicer
as of a date not more than 30 days prior to the
last day of the month preceding such Distribution
Date, together with one month's interest thereon
at the related Mortgage Rates.
The Servicer or the Depositor may also effect such
termination as provided above if it first notifies each Holder of
a Class LR Certificate through the Trustee of its intention to do
so in writing at least 30 days prior to the Early Termination
Notice Date and no Class LR Holder terminates the Trust Fund as
described above within such 30 day period. All costs and expenses
incurred by any and all parties to the Pooling and Servicing
Agreement or by the Trust Fund in connection with the purchase of
the Mortgage Loans and other assets of the Trust Fund pursuant to
Section 9.01(c) of the Pooling and Servicing Agreement shall be
borne by the party exercising its purchase rights thereunder. The
Trustee shall be entitled to rely conclusively on any
determination made by an Independent appraiser pursuant to
Section 9.01(c) of the Pooling and Servicing Agreement.
The respective obligations and responsibilities of the
Servicer, the Special Servicer, the Depositor, the Trustee and
the Fiscal Agent created by the Pooling and Servicing Agreement
with respect to the Certificates (other than the obligation to
make certain payments and to send certain notices to
Certificateholders as set forth in the Pooling and Servicing
Agreement) shall terminate immediately following the occurrence
of the last action required to be taken by the Trustee pursuant
to Article IX of the Pooling and Servicing Agreement on the
Termination Date; provided, however, that in no event shall the
trust created thereby continue
6
<PAGE>
beyond the expiration of twenty-one years from the death of the
last survivor of the descendants of Joseph P. Kennedy, the late
ambassador of the United States to the United Kingdom, living on
the Closing Date.
Unless the Certificate of Authentication on this
Certificate has been executed by the Trustee or on its behalf by
the Authenticating Agent, by manual signature, this Certificate
shall not be entitled to any benefit under the Pooling and
Servicing Agreement or be valid for any purpose.
7
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Class LR
Certificate to be duly executed.
Dated: March 27, 1997
LASALLE NATIONAL BANK, not in its
individual capacity but solely as Trustee
By:______________________________________
Authorized Officer
Certificate of Authentication
This is one of the Class LR Certificates referred to
in the Pooling and Servicing Agreement.
Dated: March 27, 1997
LASALLE NATIONAL BANK, not in its
individual capacity but solely as
Authenticating Agent
By:______________________________________
Authorized Officer
8
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned ("Assignor(s)") hereby
sell(s), assign(s) and transfer(s) unto_____________________________
____________________________________________________________________
(please print or typewrite name(s) and address(es), including
postal zip code(s) of assignee(s)) ("Assignee(s)") the entire
Percentage Interest represented by the within Class LR
Certificate and hereby authorize(s) the registration of transfer
of such interest to Assignee(s) on the Certificate Register of
the Trust Fund.
I (we) further direct the Certificate Registrar to
issue a new Class LR Certificate of the entire Percentage
Interest represented by the within Class LR Certificates to the
above-named Assignee(s) and to deliver such Class LR Certificate
to the following address:
____________________________________________________________________
____________________________________________________________________
Date:________________ ___________________________________
Signature by or on behalf of
Assignor(s)
___________________________________
Taxpayer Identification Number
9
<PAGE>
DISTRIBUTION INSTRUCTIONS
The Assignee(s) should include the following for
purposes of distribution:
Address of the Assignee(s) for the purpose of receiving notices
and distributions:____________________________________________________
______________________________________________________________________
Distributions, if being made by wire transfer in immediately
available funds to ___________________________________________________
for the account of ___________________________________________________
account number ____________________________.
This information is provided by____________________________
_______________________________________ the Assignee(s) named
above, or ________________________________________________ as its
(their) agent.
By:____________________________________
____________________________________
[Please print or type name(s)]
____________________________________
Title:
____________________________________
Taxpayer Identification Number
10
<PAGE>
EXHIBIT B
Revised
Monthly Mortgage Default Step up Mortgage
Loan Name Payment Rate Rate Rate Rate
--------- ------- ---- ---- ---- ----
1. Fairfield Inn Pool
Loan 1,424,928.44 8.400% 2.0% 2.0% Note 1
2. Hudson Loan 1,122,147.00 7.916% 5.0% N/A N/A
3. M&H Retail Pool
Loan 408,341.00 7.500% 5.0% 2.0% Note 2
4. Innkeepers Pool Loan 355,235.77 8.150% 5.0% 2.0% Note 3
5. DCOTA Loan 294,816.36 7.470% 5.0% 2.0% Note 4
6. G&L Medical Office
Pool Loan 281,640.81 8.492% 5.0% 2.0% Note 5
7. ICW Loan 203,727.47 7.506% 5.0% 2.0% Note 6
8.031%
Cut-Off Date
Maturity Principal Manager of the
Loan Name Date Balance Related Properties
--------- ---- ------- ------------------
1. Fairfield Inn Pool
Loan 1/11/17 164,825,657 Fairfield FMC Corporation
2. Hudson Loan 1/11/22 134,505,878 LCOR Asset Management Limited
Partnership
3. M&H Retail Pool
Loan 1/11/27 58,300,969 M&H Property Management, Inc.
4. Innkeepers Pool Loan 3/11/19 42,000,000 JF Hotels/Residence Inn by
Marriott, Inc.
5. DCOTA Loan 1/11/22 39,899,849 Danto Investment Company,
Inc.
6. G&L Medical Office
Pool Loan 9/11/21 34,801,294 G&L II LP
7. ICW Loan 2/11/17 25,234,505 ICW
499,568,152
- -------------------
Note 1: The greater of i) Mortgage Rate plus 2.0% or ii)
the yield, as of January 11, 2007, calculated by
linear interpolation of the yields on U.S. Treasury
Constant Maturities with terms (one longer and one
shorter) most nearly approximating those of
non-callable U.S. Treasury Obligations having
maturities as close as possible to January 11, 2017,
plus 2.0%
Note 2: The greater of i) the Mortgage Rate plus 2.0% or
ii) the yield, as of January 11, 2007, calculated by
linear interpolation of the yields on U.S. Treasury
Constant Maturities with terms (one longer and one
shorter) most nearly approximating that of U.S.
Treasury maturities as close as possible to January
11, 2027, plus 2.0%
Note 3: The greater of i) the Mortgage Rate plus 2.0% or
ii) the yield, as of the week prior to March 11, 2009,
calculated by the linear interpolation of the bond
equivalent yields of U.S. Treasury Constant Maturities
having maturity dates (one longer and one shorter)
most nearly approximating the remaining term of the
Innkeepers Loans, plus 2.0%.
Note 4: The greater of i) Mortgage Rate plus 2.0% or ii)
the yield, as of January 11, 2007, calculated by
linear interpolation of the yields on U.S. Treasury
Constant Maturities, with terms (one longer and one
shorter) most nearly approximating those of the
non-callable U.S. Treasury Obligations having
maturities as close as possible to January 11, 2022,
plus 2.0%
Note 5: The greater of i) Mortgage Rate plus 2.0% or ii)
the yield, calculated by linear interpolation of the
yields of the U.S. Treasury Constant Maturities with
terms (one longer and one shorter) most nearly
approximating that of non-callable U.S. Treasury
Obligations having maturities as close as possible to
September 11, 2021, plus 2.0%
Note 6: The greater of i) Mortgage Rate plus 2.0% or ii)
the yield, as of February 11, 2007, calculated by
linear interpolation of the yields of the U.S.
Treasury Constant Maturities with terms (one longer
and one shorter) most nearly approximating that of
non-callable U.S. Treasury obligations having
maturities as close as possible to February 11, 2017,
plus 2.0%
<PAGE>
EXHIBIT C-1
AFFIDAVIT PURSUANT TO
SECTION 860E(e)(4) OF THE
INTERNAL REVENUE CODE OF
1986, AS AMENDED
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
__________________, being first duly sworn, deposes and says:
1. That he/she is a ________________ of ___________
________________________ (the "Purchaser"), a ___________ duly
organized and existing under the laws of the State of ________,
on behalf of which he makes this affidavit.
2. That the Purchaser's Taxpayer Identification Number
is ___________.
3. That the Purchaser of the Asset Securitization
Corporation, Commercial Mortgage Pass-Through Certificates,
Series 1997 - MD VII, Class [R] [LR] (the "Class [R] [LR]
Certificate") is a Permitted Transferee (as defined in Article I
of the Pooling and Servicing Agreement dated as of March 27,
1997, by and among Asset Securitization Corporation, as
depositor, Pacific Mutual Life Insurance Company, as servicer and
special servicer, LaSalle National Bank, as trustee, and ABN AMRO
Bank N.V., as fiscal agent (the "Pooling and Servicing
Agreement")), or is acquiring the Class [R] [LR] Certificate for
the account of, or as agent (including as a broker, nominee, or
other middleman) for, a Permitted Transferee and has received
from such person or entity an affidavit substantially in the form
of this affidavit.
4. That the Purchaser historically has paid its debts
as they have come due and intends to pay its debts as they come
due in the future and the Purchaser intends to pay taxes
associated with holding the Class [R] [LR] Certificate as they
become due.
5. That the Purchaser understands that it may incur
tax liabilities with respect to the Class [R] [LR] Certificate in
excess of any cash flow generated by the Class [R] [LR]
Certificate.
6. That the Purchaser will not transfer the Class [R]
[LR] Certificate to any person or entity from which the Purchaser
has not received an affidavit substantially in the form of this
affidavit or as to which the Purchaser has actual knowledge that
the requirements set forth in paragraph 3, paragraph 4 or
paragraph 7 hereof are not satisfied or that the Purchaser has
reason to know does not satisfy the requirements set forth in
paragraph 4 hereof.
7. That the Purchaser is not a Disqualified Non-U.S.
Person and is not purchasing the Class [R] [LR] Certificate for the
account of, or as an agent (including as a broker, nominee or
other middleman) for, a Disqualified Non-U.S. Person.
<PAGE>
8. That the Purchaser agrees to such amendments of the
Pooling and Servicing Agreement as may be required to further
effectuate the restrictions on transfer of the Class [R] [LR)
Certificate to such a "disqualified organization," an agent
thereof, or a person that does not satisfy the requirements of
paragraph 4 and paragraph 7 hereof.
9. That, if a "tax matters person" is required to be
designated with respect to the [Upper Tier REMIC] [Lower Tier
REMIC], the Purchaser agrees to act as "tax matters person" and
to perform the functions of "tax matters person" of the [Upper
Tier REMIC][Lower Tier REMIC] pursuant to Section 4.04 of the
Pooling and Servicing Agreement, and agrees to the irrevocable
designation of the Trustee as the Purchaser's agent in performing
the function of "tax matters person."
10. The Purchaser agrees to be bound by and to abide
by the provisions of Section 5.02 of the Pooling and Servicing
Agreement concerning registration of the transfer and exchange of
the Class [R] [LR] Certificate. The Purchaser understands that
such provisions provide, among other things, that thirty (30)
days after the Residual Trigger Date, any Ownership Interest
owned by an Institutional Accredited Investor on such date shall
mandatorily be sold to Nomura Securities International, Inc.
unless such Institutional Accredited Investor has previously
provided the Trustee and the Certificate Registrar a Residual
Transfer Opinion.
Capitalized terms used but not defined herein have the
respective meanings ascribed to such terms in the Pooling and
Servicing Agreement.
IN WITNESS WHEREOF, the Purchaser has caused this
instrument to be executed on its behalf by its _______________
this _th day of _____, 199_.
[Purchaser]
By:__________________
Title
Name:
Personally appeared before me the above-named
______________, known or proved to me to be the same person
who executed the foregoing instrument and to be the
<PAGE>
____________ of the Purchaser, and acknowledged to me that he/she
executed the same as his/her free act and deed and the free act
and deed of the Purchaser.
Subscribed and sworn before me this __th day of
_________________, 199_.
________________________
NOTARY PUBLIC
COUNTY OF
STATE OF
My commission expires the __th day of _______________, 199_.
<PAGE>
EXHIBIT C-2
FORM OF TRANSFEROR LETTER
[Date]
[CERTIFICATE REGISTRAR]
Re: Asset Securitization Corporation, Commercial
Mortgage Pass-Through Certificates, Series 1997 - MD VII
Ladies and Gentlemen:
[Transferor] has reviewed the attached affidavit of
[Transferee], and has no actual knowledge that such affidavit is
not true and has no reason to know that the information contained
in paragraph 4 thereof is not true.
Very truly yours,
[Transferor]
______________________
<PAGE>
EXHIBIT D-1
FORM OF INVESTMENT REPRESENTATION LETTER
LaSalle National Bank, as Trustee
and Certificate Registrar
135 South LaSalle Street, 17th Floor
Chicago, Illinois 60603
Attention: Corporate Trust Administration
Asset Securitization Corporation
Two World Financial Center
Building B, 21st Floor
New York, New York 10281
Attention: Perry Gershon
Sheryl McAfee
Re: Transfer of Asset Securitization Corporation, Commercial Mortgage
Pass-Through Certificates, Series 1997 - MD VII, Class[ ]
Ladies and Gentlemen:
This letter is delivered pursuant to Section 5.02 of
the Pooling and Servicing Agreement dated as of March 27, 1997
(the "Pooling and Servicing Agreement"), by and among Asset
Securitization Corporation, as depositor, Pacific Mutual Life
Insurance Company., as servicer and special servicer, LaSalle
National Bank, as trustee (the "Trustee"), and ABN AMRO Bank
N.V., as fiscal agent (the "Fiscal Agent"), on behalf of the
holders of Asset Securitization Corporation, Commercial Mortgage
Pass-Through Certificates, Series 1997 - MD VII (the
"Certificates") in connection with the transfer by
________________ (the "Seller") to the undersigned (the
"Purchaser") of $_______________ aggregate Certificate Balance of
Class _ Certificates, in certificated fully registered form, or,
if applicable, a beneficial interest of such aggregate
Certificate Balance in a Private Global Certificate (either such
interest, the "Transferred Interest"). Terms used but not defined
herein shall have the meanings ascribed thereto in the Pooling
and Servicing Agreement.
In connection with such transfer, the undersigned
hereby represents and warrants to you as follows:
[[For Institutional Accredited Investors only.] 1. We
are an "institutional accredited investor" (an entity meeting the
requirements of Rule 501(a)(1), (2), (3) or (7) of Regulation D
under the Securities Act (as defined below)) 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 Transferred Interest, and we and any accounts for which
we are acting are each able to bear the economic risk of
our or its investment. We are acquiring the Transferred
<PAGE>
Interest purchased by us for our own account or for one or more
accounts (each of which is an "institutional accredited
investor") as to each of which we exercise sole investment
discretion. The Purchaser hereby undertakes to reimburse the
Trust for any costs incurred by it in connection with this
transfer.]
[[For Qualified Institutional Buyers only.] 1. The
Purchaser is a "qualified institutional buyer" within the meaning
of Rule 144A (as defined below) promulgated under the Securities
Act (as defined below). The Purchaser is aware that the transfer
is being made in reliance on Rule 144A, and the Purchaser has had
the opportunity to obtain the information required to be provided
pursuant to paragraph (d)(4)(i) of Rule 144A.]
2. The Purchaser's intention is to acquire the
Transferred Interest (a) for investment for the Purchaser's own
account or (b) for resale to (i) "qualified institutional buyers"
in transactions under Rule 144A ("Rule 144A") promulgated under
the Securities Act of 1933 (the "Securities Act") or (ii) to
"institutional accredited investors" meeting the requirements of
Rule 501(a)(1), (2), (3) or (7) of Regulation D promulgated under
the Securities Act, or (iii) pursuant to any other exemption from
the registration requirements of the Securities Act, subject in
the case of this clause (ii) to (a) the receipt by the
Certificate Registrar of a letter substantially in the form
hereof, (b) the receipt by the Certificate Registrar of an
opinion of counsel acceptable to the Certificate Registrar that
such reoffer, resale, pledge or transfer is in compliance with
the Securities Act, (c) the receipt by the Certificate Registrar
of such other evidence acceptable to the Certificate Registrar
that such reoffer, resale, pledge or transfer is in compliance
with the Securities Act and other applicable laws, and (d) a
written undertaking to reimburse the Trust for any costs incurred
by it in connection with the proposed transfer. It understands
that the Transferred Interest has not been registered under the
Securities Act, by reason of a specified exemption from the
registration provisions of the Securities Act which may depend
upon, among other things, the bona fide nature of the Purchaser's
investment intent (or intent to resell to only certain investors
in certain exempted transactions) as expressed herein.
3. The Purchaser acknowledges that the Transferred
Interest has not been registered or qualified under the
Securities Act or the securities laws of any State or any other
jurisdiction, and that the Transferred Interest cannot be resold
unless it is registered or qualified thereunder or unless an
exemption from such registration or qualification is available.
4. The Purchaser hereby undertakes to be bound by the
terms and conditions of the Pooling and Servicing Agreement in
its capacity as an owner of the Transferred Interest in all
respects as if it were a signatory thereto. This undertaking is
made for the benefit of the Trust, the Certificate Registrar and
all Certificateholders present and future.
5. The Purchaser will not sell or otherwise transfer
any portion of the Transferred Interest, except in compliance
with Section 5.02 of the Pooling and Servicing Agreement.
D-1-2
<PAGE>
6. Check one of the following: *
_______ The Purchaser is a "U.S. Person" and it has attached
hereto an Internal Revenue Service ("IRS") Form W-9
(or successor form).
_______ The Purchaser is not a "U.S. Person" and under applicable
law in effect on the date hereof, no Taxes will be required
to be withheld by the Certificate Registrar (or its
agent) with respect to Distributions to be made on the
Transferred Interest. The Purchaser has attached
hereto either (i) a duly executed IRS Form W-8 (or
successor form), which identifies such Purchaser as
the beneficial owner of the Transferred Interest and
states that such Purchaser is not a U.S. Person or
(ii) two duly executed copies of IRS Form 4224 (or
successor form), which identify such Purchaser as the
beneficial owner of the Transferred Interest and state
that interest and original issue discount on the
Transferred Interest is, or is expected to be,
effectively connected with a U.S. trade or business.
The Purchaser agrees to provide to the Certificate
Registrar updated IRS Forms W-8 or IRS Forms 4224, as
the case may be, any applicable successor IRS forms,
or such other certifications as the Certificate
Registrar may reasonably request, on or before the
date that any such IRS form or certification expires
or becomes obsolete, or promptly after the occurrence
of any event requiring a change in the most recent IRS
form of certification furnished by it to the
Certificate Registrar.
For this purpose, "U.S. Person" means a citizen or resident of
the United States for U.S. federal income tax purposes, a
corporation, partnership or other entity created or organized in
or under the laws of the United States or any of its political
subdivisions, or an estate or trust the income of which is
subject to U.S. federal income taxation regardless of its source.
Please make all payments due on the Transferred Interests: **
______ (a) by wire transfer to the following account at a
bank or entity in New York, New York, having
appropriate facilities therefore:
Account number __________ Institution ___________
______ (b) by mailing a check or draft to the following address:
____________________________________
_______________
* Each Purchaser must include one of the two alternative
certifications.
** Only to be filled out by Purchasers of Individual
Certificates. Please select (a) or (b). For holders of
Individual Certificates, wire transfers are only available
if such holder's Individual Certificates have an aggregate
principal face amount of at least U.S.
$5,000,000.
D-1-3
<PAGE>
__________________________________
__________________________________
Very truly yours,
[The Purchaser]
By
Name::_________________________________
Title:
Dated: ______ __, ____
D-1-4
<PAGE>
EXHIBIT D-2
FORM OF ERISA REPRESENTATION LETTER
______ __, ____
LaSalle National Bank, as Trustee
and Certificate Registrar
135 South LaSalle Street, 17th Floor
Chicago, Illinois 60603
Attention: Corporate Trust Administration
Asset Securitization Corporation
Two World Financial Center
Building B, 21st Floor
New York, New York 10281
Attention: Perry Gershon
Sheryl McAfee
Re: Asset Securitization Corporation, Commercial Mortgage Pass-Through
Certificates, Series 1997 - MD VII, Class [A-2, A-3, A-4, A-5, A-6,
B-1, B-1H, V-1, V-2, R, LR]
Ladies and Gentlemen:
__________________________ (the "Purchaser") intends
to purchase from ____________________ (the "Seller") $________
initial Certificate Balance or _____% Percentage Interest of
Asset Securitization Corporation, Commercial Mortgage
Pass-Through Certificates, Series 1997 - MD VII, Class [A-2, A-3,
A-4, A-5, A-6, B-1, B-1H, V-1, V-2, R, LR], CUSIP No. [ ]-_______
(the "Certificates"), issued pursuant to the Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement") dated
as of March 27, 1997, by and among Asset Securitization
Corporation, as depositor (the "Depositor"), Pacific Mutual Life
Insurance Company, as servicer and special servicer, LaSalle
National Bank, as trustee (the "Trustee"), and ABN AMRO Bank
N.V., as fiscal agent (the "Fiscal Agent"). All capitalized terms
used herein and not otherwise defined shall have the meaning set
forth in the Pooling and Servicing Agreement. The Purchaser
hereby certifies, represents and warrants to, and covenants with,
the Depositor, the Certificate Registrar and the Trustee that:
1. The Purchaser is not (a) an employee benefit plan
or other retirement arrangement, including an individual
retirement account or a Keogh plan, which is subject to the
Employee Retirement Income Security Act of 1974, as amended
("ERISA"), Section 4975 of the Code, or any Federal, State or
local law (a "Similar Law"), which is to a material extent,
similar to the foregoing provisions of ERISA or the Code (each, a
"Plan"), nor (b) a collective investment fund in which such Plans
are invested, an insurance company using assets of separate
D-2-1
<PAGE>
accounts or general accounts which include assets of Plans (or
which are deemed pursuant to ERISA or any Similar Law to include
assets of Plans) or other Person acting on behalf of any such
Plan or using the assets of any such Plan, other than an
insurance company using assets of its general account under
circumstances whereby such purchase and the subsequent holding of
such Certificate by such insurance company would not constitute
or result in a prohibited transaction within the meaning of
Section 406 or 407 or ERISA, Section 4975 of the Code, or a
materially similar characterization under any Similar Law.
2. The Purchaser understands that if the Purchaser is
a Person referred to in 1(a) or 1(b) above, except in the case of
the Class R or Class LR Certificate, which may not be transferred
unless the transferee represents it is not such a Person, such
Purchaser is required to provide to the Depositor, the Trustee
and the Certificate Registrar an Opinion of Counsel in form and
substance satisfactory to of the Depositor, the Trustee and the
Certificate Registrar that the purchase or holding of the
Certificates will not result in the assets of the Trust Fund
being deemed to be "plan assets" and subject to the fiduciary
responsibility provisions of ERISA or the prohibited transaction
provisions of ERISA and the Code or Similar Law, will not
constitute or result in a prohibited transaction within the
meaning of Section 406 or Section 407 of ERISA or Section 4975 of
the Code or a materially similar characterization under any
Similar Law, and will not subject the Servicer, the Special
Servicer, the Depositor, the Trustee or the Certificate Registrar
to any obligation or liability (including obligations or
liabilities under ERISA, or Section 4975 of the Code or Similar
Law), which Opinion of Counsel shall not be at the expense of the
Trust Fund, the Servicer, the Depositor, the Trustee or the
Certificate Registrar.
IN WITNESS WHEREOF, the Purchaser hereby executes the
ERISA Representation Letter on ______________ __, ____.
Very truly yours,
________________________________
By:______________________________
Name: _____________________
Title: ____________________
D-2-2
<PAGE>
EXHIBIT E
FORM OF REQUEST FOR RELEASE
(for Trustee/Custodian)
Loan Information
Name of Mortgagor: __________________
Servicer
Loan No.: __________________
Custodian/Trustee
Name: __________________
Address: __________________
__________________
Custodian/Trustee
Mortgage File No.: __________________
Depositor
Name: __________________
Address: __________________
__________________
Certificates: Asset Securitization
Corporation, Commercial
Mortgage Pass-Through
Certificates, Series
1997 - MD VII
The undersigned Servicer hereby acknowledges that it
has received from LaSalle National Bank, as Trustee for the
Holders of Asset Securitization Corporation, Commercial Mortgage
Pass-Through Certificates, Series 1997 - MD VII, the documents
referred to below (the "Documents"). All capitalized terms of not
otherwise defined in this Request for Release shall have the meanings
given them in the Pooling and Servicing Agreement (the "Pooling and
E-1
<PAGE>
Servicing Agreement") dated as of March 27, 1997, by and among
the Trustee, ABN AMRO Bank N.V., as fiscal agent, Asset
Securitization Corporation, as depositor and Pacific Mutual Life
Insurance Company, as servicer and special servicer.
( ) Promissory Note dated _________, 199__, in the original
principal sum of $_____, made by _______, payable to, or
endorsed to the order of, the Trustee.
( ) Mortgage recorded on ____________ as instrument no. ________
in the County Recorder's Office of the County of _________,
State of ___________ in book/reel/docket ___________ of
official records at page/image ________.
( ) Deed of Trust recorded on __________ as instrument no. ________
in the County Recorder's Office of the County of ___________,
State of _______ in book/reel/docket ____________ of official
records at page/image.
( ) Assignment of Mortgage or Deed of Trust to the Trustee,
recorded on _____________ as instrument no. _______ in the
County Recorder's Office of the County of _________,
State of _______ in book/reel/docket __________ of official
records at page/image _____________.
( ) Other documents, including any amendments, assignments or
other assumptions of the Note or Mortgage.
( ) ___________________________
( ) ___________________________
( ) ___________________________
( ) ___________________________
The undersigned Servicer hereby acknowledges and
agrees as follows:
(1) The Servicer shall hold and retain possession of
the Documents in trust for the benefit of the
Trustee, solely for the purposes provided in the
Agreement.
(2) The Servicer shall not cause or permit the
Documents to become subject to, or encumbered by,
any claim, liens, security interest, charges,
writs of attachment or other impositions nor
shall the Servicer assert or seek to assert any
claims or rights of set-off to or against the
Documents or any proceeds thereof.
(3) The Servicer shall return the Documents to the
Custodian when the need therefor no longer
exists, unless the Mortgage Loan relating to the
Documents has been liquidated and the proceeds
thereof have been
E-2
<PAGE>
remitted to the Collection Account and except as
expressly provided in the Agreement.
(4) The Documents and any proceeds thereof, including
any proceeds of proceeds, coming into the
possession or control of the Servicer shall at
all times be earmarked for the account of the
Trustee, and the Servicer shall keep the
Documents and any proceeds separate and distinct
from all other property in the Servicer's
possession, custody or control.
PACIFIC MUTUAL LIFE INSURANCE
COMPANY
By:__________________________
Title:_________________________
Date: _________, 19__
E-3
<PAGE>
EXHIBIT F
FORM OF CUSTODIAL AGREEMENT
THIS CUSTODIAL AGREEMENT, dated as of [ ] by and among
[NAME OF CUSTODIAN], as Custodian (the "Custodian"), Pacific
Mutual Life Insurance Company, as Servicer and special servicer
(the "Servicer"), and LaSalle National Bank, as Trustee (the
"Trustee").
W I T N E S S E T H:
WHEREAS, the Servicer and the Trustee are parties to a
Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement"), dated as of March 27, 1997, among Asset
Securitization Corporation, as Depositor, the Servicer, the
Trustee and ABN AMRO Bank N.V., as Fiscal Agent, relating to
Asset Securitization Corporation, Commercial Mortgage
Pass-Through Certificates, Series 1997 - MD VII (capitalized
terms used but not defined herein having the meaning assigned
thereto in the Pooling and Servicing Agreement);
WHEREAS, the parties hereto desire the Custodian to
take possession of the documents specified in Section 2.01 of the
Pooling and Servicing Agreement, as custodian for the Trustee, in
accordance with the terms hereof;
NOW, THEREFORE, in consideration of the mutual
undertakings herein expressed, the parties hereto hereby agree as
follows:
1. The Trustee hereby certifies that it has caused to
be delivered and released to the Custodian and the Custodian
hereby acknowledges receipt of the documents specified in Section
2.01 of the Pooling and Servicing Agreement pertaining to each of
the Mortgage Loans identified in the Mortgage Loan Schedule
attached to the Pooling and Servicing Agreement as Exhibit B.
From time to time, the Servicer shall forward to the Custodian
additional original documents evidencing an assumption or
modification of a Mortgage Loan approved by the Servicer. All
Mortgage Loan documents held by the Custodian as to each Mortgage
Loan are referred to herein as the "Custodian's Mortgage File."
The Custodian hereby agrees to review each of the Custodian's
Mortgage Files and perform such other obligations of the
Custodian as such obligations are set forth in the Pooling and
Servicing Agreement (including Section 2.02 thereof).
2. With respect to each Note, each Mortgage, each
Assignment of Mortgage and each other document constituting each
Custodian's Mortgage File which is delivered to the Custodian or
which at any time comes into the possession of the Custodian, the
Custodian is exclusively the custodian for and the bailee of the
Trustee or the Servicer. The Custodian shall hold all documents
constituting each Custodian's Mortgage File received by it for
the exclusive use and benefit of the Trustee, and shall make
disposition thereof only in accordance with the instructions
furnished by the Servicer. The Custodian shall segregate and
maintain continuous
F-1
<PAGE>
custody of all documents constituting the Custodian's Mortgage
File received in secure and fire resistant facilities located in
the State of ___________ in accordance with customary standards
for such custody. In the event the Custodian discovers any defect
with respect to any Custodian's Mortgage File, the Custodian
shall give written specification of such defect to the Servicer
and the Trustee.
3. From time to time and as appropriate for the
foreclosure or servicing of any of the Mortgage Loans, the
Custodian is hereby directed, upon written request and receipt
from the Servicer (a copy of which shall be forwarded to the
Trustee), to release to the Servicer the related Custodian's
Mortgage File or the documents set forth in such receipt to the
Servicer. All documents so released to the Servicer shall be held
by it in trust for the benefit of the Trustee. The Servicer shall
return to the Custodian the Custodian's Mortgage File or such
documents when the Servicer's need therefor in connection with
such foreclosure or servicing no longer exists, unless the
Mortgage Loan shall be liquidated, in which case, upon receipt of
a certification to this effect from the Servicer to the
Custodian, the Servicer's receipt shall be released by the
Custodian to the Servicer.
4. Upon the purchase of any Mortgage Loan pursuant to
the terms of the Pooling and Servicing Agreement or the payment
in full of any Mortgage Loan, and upon receipt by the Custodian
of the Servicer's request for release, receipt and certification
(which certification shall include a statement to the effect that
all amounts received in connection with such payment or
repurchase have been credited to the Collection Account or
Distribution Account as provided in the Pooling and Servicing
Agreement), the Custodian shall promptly release the related
Custodian's Mortgage File to the Servicer.
5. It is understood that the Custodian will charge
such fees for its services under this Agreement as are set forth
in a separate agreement between the Custodian and the Servicer,
the payment of which, together with the Custodian's expenses in
connection therewith, shall be solely the obligation of the
Servicer.
6. The Trustee may upon 30 days' written notice (with
copy to the Servicer) remove and discharge the Custodian or any
successor Custodian thereafter appointed from the performance of
its duties under this Custodial Agreement. Simultaneously, the
Trustee shall appoint a successor Custodian to act on its behalf
by written instrument, one original counterpart of which
instrument shall be delivered to each Rating Agency, one copy to
the Servicer and one copy to the successor Custodian. In the
event of any such removal, the Custodian shall promptly transfer
to the successor Custodian, as directed, all Custodian's Mortgage
Files being administered under this Custodial Agreement.
Notwithstanding the foregoing, so long as Pacific Mutual Life
Insurance Company is Servicer, the Trustee shall not have a right
to remove the Custodian.
7. Upon reasonable prior written notice to the
Custodian, the Trustee and its agents, accountants, attorneys and
auditors will be permitted during normal business hours to
examine the Custodian's Mortgage Files, documents, records and
other papers in the possession of or under the control of the
Custodian relating to any or all of the Mortgage Loans.
F-2
<PAGE>
8. If the Custodian is furnished with written notice from
the Trustee or the Servicer that the Pooling and Servicing
Agreement has been terminated as to any or all of the Mortgage
Loans, it shall upon written request of the Trustee or the
Servicer release to such persons as the Trustee or the Servicer
shall designate the Custodian's Mortgage Files relating to such
Mortgage Loans as the Trustee or the Servicer shall request and
shall complete the Assignments of Mortgage and endorse the Notes
only as, and if, the Trustee or the Servicer shall request. The
person making such written request shall send notice of such
request to all other parties to the Pooling and Servicing
Agreement.
9. The Custodian shall, at its own expense, maintain
at all times during the existence of this Custodial Agreement and
keep in full force and effect (a) fidelity insurance, (b) theft
of documents insurance, (c) forgery insurance and (d) errors and
omissions insurance. All such insurance shall be in amounts, with
standard coverage and subject to deductibles, as are customary
for insurance typically maintained by banks which act as
custodian in similar transactions provided, however, that so long
as the Custodian is rated at least "AA" no such insurance shall
be required.
10. This Custodial 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 and be one and the same instrument.
11. Within 10 days of each anniversary of the date of
this Custodial Agreement, or upon the request of the Trustee or the
Servicer at any other time, the Custodian shall provide to the
Trustee and the Servicer a list of all the Mortgage Loans for
which the Custodian holds a Custodian's Mortgage File pursuant to
this Custodial Agreement. Such list may be in the form of a copy
of the Mortgage Loan Schedule with manual deletions to
specifically denote any Mortgage Loans paid off, liquidated or
repurchased since the date of this Custodial Agreement.
12. THIS CUSTODIAL AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE 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.
13. By execution of this Custodial Agreement, the
Custodian warrants that it currently does not hold and during the
existence of this Custodial Agreement shall not hold any adverse
interest, by way of security or otherwise, in any Mortgage Loan,
and hereby waives and releases any such interest which it may
have in any Mortgage Loan as of the date hereof.
14. The Custodian may terminate its obligations under
this Custodial Agreement upon at least 60 days' notice to the
Trustee and the Servicer, provided that so long as Pacific Mutual
Life Insurance Company is the Servicer, Pacific Mutual Life
Insurance Company will not resign from its duties hereunder. In
the event of such termination, the Trustee shall appoint a
successor Custodian. Upon such appointment, the Custodian shall
promptly transfer to the successor Custodian, as directed, all
Custodian's Mortgage Files being administered under this
Custodial Agreement.
F-3
<PAGE>
15. This Custodial Agreement shall terminate upon the
final payment or other liquidation (or advance with respect thereto)
of the last Mortgage Loan or the disposition of all property
acquired upon foreclosure or deed in lieu of foreclosure of any
Mortgage Loan, and the final remittance of all funds due the
Certificateholders under the Pooling and Servicing Agreement. In
such event, all documents remaining in the Custodian's Mortgage
Files shall be forwarded to the Trustee.
16. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given
when received by the addressee. Any such demand, notice or
communication hereunder shall be deemed to have been received on
the date delivered to or received at the premises of the
addressee (as evidenced, in the case of registered or certified
mail, by the date noted on the return receipt).
17. The Servicer shall indemnify, defend, and hold
harmless the Custodian for any actions taken by the Custodian at
its written request.
F-4
<PAGE>
IN WITNESS WHEREOF, the Custodian, the Servicer and the Trustee have
caused their names to be signed hereto by their respective
officers thereunto duly authorized, all as of the date first
written above.
[NAME OF CUSTODIAN],
as Custodian
By:____________________________
Name:__________________________
Title:___________________________
PACIFIC MUTUAL LIFE INSURANCE
COMPANY,
as Servicer
By:____________________________
Name:__________________________
Title:___________________________
LASALLE NATIONAL BANK,
as Trustee
By:____________________________
Name:__________________________
Title:___________________________
F-5
<PAGE>
EXHIBIT G
FORM OF REGULATION S TRANSFER CERTIFICATE
[Certificate Registrar]
Attention: Corporate Trust Administration
Re: Transfer of Asset Securitization Corporation, Commercial
Mortgage Pass-Through Certificates, Series 1997 - MD VII, Class [ ]
Ladies and Gentlemen:
This certificate is delivered pursuant to Section 5.02
of the Pooling and Servicing Agreement dated as of March 27, 1997
(the "Pooling and Servicing Agreement") by and among Asset
Securitization Corporation, as depositor, Pacific Mutual Life
Insurance Company, as servicer and special servicer, LaSalle
National Bank, as trustee (the "Trustee"), and ABN AMRO Bank
N.V., as fiscal agent, on behalf of the holders of the Asset
Securitization Corporation, Commercial Mortgage Pass-Through
Certificates, 1997 - MD VII, Class [ ] (the "Certificates") in
connection with the transfer by the undersigned (the
"Transferor") to ____________ (the "Transferee") of
$__________________ Certificate Balance of Certificates, in fully
registered form (each, an "Individual Certificate"), or a
beneficial interest of such aggregate Certificate Balance in the
Regulation S Global Certificate (the "Global Certificate")
maintained by The Depository Trust Company or its successor as
Depositary under the Pooling and Servicing Agreement (such
transferred interest, in either form, being the "Transferred
Interest").
In connection with such transfer, the Transferor does
hereby certify that such transfer has been effected in accordance
with the transfer restrictions set forth in the Pooling and
Servicing Agreement and the Certificates and (i) with respect to
transfers made in accordance with Regulation S ("Regulation S")
promulgated under the Securities Act of 1933, as amended (the
"Securities Act"), the Transferor does hereby certify that:
(1) the offer of the Transferred Interest was not
made to a person in the United States;
[(2) at the time the buy order was originated, the
Transferee was outside the United States or the Transferor
and any person acting on its behalf reasonably believed
that the Transferee was outside the United States;] *
[(2) the transaction was executed in, on or through
the facilities of a designated offshore securities market
and neither the undersigned nor any person acting on its
behalf knows that the transaction was pre-arranged with a
buyer in the United States;] *
- --------
* Insert one of these two provisions, which come from
the definition of "off-shore transaction" in
Regulation S.
G-1
<PAGE>
(3) no directed selling efforts have been made in
contravention of the requirements of Rule 903(b) or 904(b)
of Regulation S, as applicable; and
(4) the transaction is not part of a plan or scheme to
evade the registration requirements of the Securities Act.
or (ii) with respect to transfers made in reliance on Rule 144
under the Securities Act, the Transferor does hereby certify that
the Certificates that are being transferred are not "restricted
securities" as defined in Rule 144 under the Securities Act.
This certificate and the statements contained herein
are made for your benefit and the benefit of the Depositor, the
Trustee and the Servicer.
__________________________________
Transferor
By:_______________________________
Name:
Title:
Dated: _________ __, 199_
G-2
<PAGE>
EXHIBIT H
SECURITIES LEGEND
Subject to the Pooling and Servicing Agreement, the
Private Certificates will bear a legend (the "Securities Legend")
to the following effect, unless the Certificate Registrar
determines otherwise in accordance with applicable law:
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "1933 ACT"), OR ANY STATE OR FOREIGN
SECURITIES LAW. THE HOLDER HEREOF, BY PURCHASING THIS
CERTIFICATE, AGREES THAT THIS CERTIFICATE MAY BE
REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED
ONLY IN COMPLIANCE WITH THE 1933 ACT AND OTHER
APPLICABLE LAWS AND ONLY (A)(1) PURSUANT TO RULE 144A
UNDER THE 1933 ACT TO AN INSTITUTIONAL INVESTOR THAT
THE HOLDER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER, WITHIN THE MEANING OF RULE 144A
(A "QIB") PURCHASING FOR ITS OWN ACCOUNT OR A PERSON
PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER
HAS INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE,
PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (2) TO AN "INSTITUTIONAL ACCREDITED
INVESTOR" AS SUCH TERM IS DEFINED IN RULE 501(a)(1),
(2), (3) OR (7) OF REGULATION D UNDER THE 1933 ACT,
(3) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE
903 OR 904 OF REGULATION S UNDER THE 1933 ACT OR (4)
PURSUANT TO AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE 1933 ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE) AND (B) IN ACCORDANCE WITH
ANY OTHER APPLICABLE SECURITIES LAWS OF ANY STATE OF
THE UNITED STATES.
Notwithstanding anything to the contrary, the Class R
and LR Certificates will not bear clauses A(3) and A(4) and the
following language shall be inserted at the beginning of clause
A(2) of the Securities Legend borne by such Certificates "PRIOR
TO THE RESIDUAL TRIGGER DATE".
H-1
<PAGE>
EXHIBIT I
MORTGAGE LOAN PURCHASE AND SALE AGREEMENT
This Mortgage Loan Purchase and Sale Agreement (this
"Agreement") dated as of March 27, 1997 (the "Cut-off Date") is
between Asset Securitization Corporation, a Delaware corporation
(the "Company"), and Nomura Asset Capital Corporation, a Delaware
corporation (the "Seller"). The Seller agrees to sell, and the
Company agrees to purchase, the mortgage loans (the "Mortgage
Loans") described in, and set forth in, the Mortgage Loan
Schedule attached as Exhibit B to the Pooling and Servicing
Agreement dated as of March 27, 1997 (the "Pooling and Servicing
Agreement"), among the Company, Pacific Mutual Life Insurance
Company, as servicer (the "Servicer"), LaSalle National Bank, as
trustee (the "Trustee"), and ABN AMRO Bank N.V., as fiscal agent,
relating to the issuance of the Asset Securitization Corporation,
Commercial Mortgage Pass-Through Certificates, Series 1997-MD VII
(the "Certificates"). The Company intends to deposit the Mortgage
Loans into a trust fund, the entire beneficial ownership of which
will be evidenced by the Certificates. Terms used without
definition herein shall have the respective meanings assigned to
them in the Pooling and Servicing Agreement or, if not defined
therein, in the Underwriting Agreement, dated March 20, 1997 (the
"Underwriting Agreement"), by and between the Company and Nomura
Securities International, Inc. (in such capacity, the
"Underwriter") or in the Purchase Agreement, dated March 20, 1997
(the "Purchase Agreement"), by and between the Company and Nomura
Securities International, Inc. (in such capacity, the "Placement
Agent").
1. Purchase Price; Purchase and Sale. The purchase
price (the "Purchase Price") for the Mortgage Loans shall be an
amount agreed upon by the parties in a separate writing, which
amount shall be payable by the Company to the Seller on the
Closing Date in immediately available funds. The closing for the
purchase and sale of the Mortgage Loans shall take place at the
offices of Cleary, Gottlieb, Steen & Hamilton, New York, New
York, at 10:00 a.m. New York time, on the Closing Date.
As of the Closing Date, the Seller hereby sells,
transfers, assigns, sets over and otherwise conveys to the
Company, without recourse but subject to the terms of this
Agreement and the limited representations and warranties and
repurchase obligation set forth herein, all the right, title and
interest of the Seller in and to the Mortgage Loans (except for
the obligation of the Seller to indemnify any Borrower, Manager
or any other person for liabilities incurred in connection with
the creation and issuance of the Certificates), including all
interest and principal due on or with respect to the Mortgage
Loans other than interest and principal due on or before the
Cut-off Date, together with all of the Seller's right, title and
interest in and to the Hudson Treasury Collateral Account and the
proceeds of any related title, hazard, primary mortgage or other
insurance policies. In connection with such transfer and
assignment, the Seller hereby agrees to transfer to, or at the
direction of, the Company, an amount equal to the Cash Deposit.
The Company hereby directs the Seller, and the Seller hereby
agrees, to deliver to the Trustee or the Custodian (on behalf of
the Trustee), as the case may be, with respect to each Mortgage
Loan, the Mortgage File and all other documents, instruments and
agreements required to be delivered by the Company pursuant to
the Pooling and Servicing Agreement and such other documents,
instruments and agreements as the Company or the Trustee shall
reasonably request.
<PAGE>
2. Representations and Warranties. (a) The Seller hereby
represents and warrants to the Company as of the Closing Date
that:
(i) The Seller is a corporation duly organized,
validly existing and in good standing under the
laws of the State of Delaware, with full power
and authority to carry on its business as
presently conducted by it;
(ii) The Seller has taken all necessary action to
authorize the execution, delivery and
performance of this Agreement by it, and has the
power and authority to execute, deliver and
perform this Agreement and all the transactions
contemplated hereby, including, but not limited
to, the power and authority to sell, assign and
transfer the Mortgage Loans in accordance with
this Agreement;
(iii) Assuming the due authorization, execution and
delivery of this Agreement by the Company, this
Agreement and all of the obligations of the
Seller hereunder, are the legal, valid and
binding obligations of the Seller, enforceable
in accordance with the terms of this Agreement,
except as such enforcement may be limited by
bankruptcy, insolvency, reorganization,
liquidation, receivership, moratorium or other
laws relating to or affecting creditors' rights
generally, or by general principles of equity
(regardless of whether such enforceability is
considered in a proceeding in equity or at law);
(iv) The execution and delivery of this
Agreement and the performance of its
obligations hereunder by the Seller
does not conflict with any provision
of any law or regulation to which the
Seller is subject, or conflict with,
result in a breach of or constitute
a default under any of the terms,
conditions or provisions of any
agreement or instrument to which the
Seller is a party or by which it is
bound, or any order or decree applicable
to the Seller, or result in the creation
or imposition of any lien on any of
the Seller's assets or property,
which would materially and adversely
affect the ability of the Seller to
carry out the transactions contemplated
by this Agreement. The Seller has
obtained any consent, approval,
authorization or order of any court
or governmental agency or body
required for the execution, delivery
and performance by the Seller of this
Agreement;
(v) There is no action, suit or proceeding pending
against the Seller in any court or by or before
any other governmental agency or instrumentality
(a) which would materially and adversely affect
the ability of the Seller to carry out its
obligations under this Agreement or have a
material adverse effect on the financial
condition of the Seller or the ability of the
Seller to perform its obligations under this
Agreement or (b) seeking to prevent the Seller
from entering into this Agreement; and
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<PAGE>
(vi) The Originator is approved by the Secretary
of Housing and Urban Development pursuant to
Sections 203 and 211 of the National Housing
Act.
(b) The Seller hereby represents and warrants with
respect to each Mortgage Loan, except as disclosed in Exhibit A
attached hereto, that as of the date specified below or, if no
such date is specified, as of the Closing Date:
(i) Immediately prior to the sale, transfer and
assignment to the Company, each related Note and
Mortgage was not subject to an assignment (other
than to the Seller) or pledge, and the Seller
had good title to, and was the sole owner of,
such Mortgage Loan;
(ii) The Seller has full right and authority to sell,
assign and transfer such Mortgage Loan;
(iii) The Seller is transferring such Mortgage Loan
pursuant to this Agreement free and clear of any
and all liens, pledges, charges or security
interests of any nature encumbering such
Mortgage Loan;
(iv) Each related Note, Mortgage, Assign-
ment of Leases, Rents and Profits
(if any) and other agreement executed
in connection with such Mortgage
Loan are legal, valid and binding
obligations of the related Borrower,
enforceable in accordance with their
terms, except as such enforcement
may be limited by bankruptcy, insol-
vency, reorganization, moratorium or
other laws affecting the enforcement
of creditors rights generally, or by
general principles of equity (regard-
less of whether such enforceability is
considered in a proceeding in equity
or at law);
(v) Each related Assignment of Leases,
Rents and Profits, if any, creates a
valid, first priority assignment of, or
a valid first priority security interest
in, certain rights under the related
leases, subject only to a license granted
to the related Borrower to exercise
certain rights and to perform certain
obligations of the lessor under such
leases, including the right to operate
the related Mortgaged Property; no
person other than the related
Borrower owns any interest in any pay-
ments due under such leases that is
superior to or of equal priority with
the mortgagee's interest therein;
(vi) Each related assignment of Mortgage
from the Seller to the Company
constitutes the legal, valid, binding
and enforceable assignment of such
Mortgage from the Seller to the
Company and any related Reassignment
of Assignment of Leases, Rents and
Profits, if any, or assignment of any
other agreement executed in connec-
tion with such Mortgage Loan, from
the Seller to the Company, consti-
tutes the legal, valid, binding and
enforceable assignment from the Seller
to the Company, except as such
enforcement may be limited by bank-
ruptcy, insolvency, reorganization,
3
<PAGE>
liquidation, receivership, moratorium or other
laws relating to or affecting creditors' rights
generally, or by general principles of equity
(regardless of whether such enforceability is
considered in a proceeding in equity or at law);
(vii) Since origination, and except as set forth in
the related Mortgage File, such Mortgage Loan
has not been waived, modified, altered,
satisfied, canceled, subordinated or rescinded,
and each related Mortgaged Property has not been
released from the lien of the related Mortgage
in any manner that materially interferes with
the security intended to be provided by such
Mortgage;
(viii) Each related Mortgage is a valid and
enforceable first lien on the related Mortgaged
Property (subject to the matters described in
clause (xi) below), and, as of the date of the
origination of such Mortgage Loan, such
Mortgaged Property is free and clear of any
mechanics' and materialmen's liens which are
prior to or equal with the lien of the related
Mortgage, except those which are insured against
by a lender's title insurance policy (as
described below in clause (xi));
(ix) The Seller has not taken any action that would
cause the representations and warranties made by
each related Borrower in the Mortgage Loan not
to be true;
(x) The Seller has no knowledge that the
representations and warranties made by each
related Borrower in such Mortgage Loan are not
true in any material respect;
(xi) The lien of each related Mortgage
is insured by an ALTA lender's title
insurance policy (or a binding commit-
ment therefor), or its equivalent as
adopted in the applicable jurisdiction,
insuring the Originator, its
successors and assigns, or the holder
of the related Note as to a valid and
first priority lien on the related
Mortgaged Property and the first priority
lien of the Mortgage in at least the
original principal amount of such
Mortgage Loan or Allocated Loan
Amount of the related Mortgaged
Property (as set forth on the Mortgage
Loan Schedule) after all advances
of principal, subject only to (A) the
lien of current real property taxes,
ground rents, water charges, sewer rents
and assessments not yet due and
payable, (B) covenants, conditions
and restrictions, rights of way,
easements and other matters of public
record, none of which, individually
or in the aggregate, materially interferes
with the current use or operation
of the Mortgaged Property, or the
security intended to be provided by
such Mortgage, or with the related
Borrower's ability to pay its
obligations when they become due,
or the value of the Mortgaged
Property and (C) the exceptions (general
and specific) set forth in such
lender's title insurance policy, none
of which, individually or in the
4
<PAGE>
aggregate, materially interferes with the
security intended to be provided by such
Mortgage, or with the related Borrower's ability
to pay its obligations when they become due, or
the value, use or operation of the Mortgaged
Property; the Seller or its successors or
assigns is the sole named insured of such
policy, and such policy is in full force and
effect upon the consummation of the transactions
contemplated by this Agreement; no claims have
been made under such policy, and the Seller has
not done anything, by act or omission, and the
Seller has no knowledge of any matter, that
would impair or diminish the coverage of such
policy; to the extent required by applicable
law, the insurer issuing such policy is
qualified to do business in the jurisdiction in
which the related Mortgaged Properties are
located;
(xii) The proceeds of such Mortgage Loan have been
fully disbursed, and there is no requirement for
future advances thereunder, and the Seller
covenants that it will not make any future
advances under the Mortgage Loan to the related
Borrower;
(xiii) Based on inspection reports contained in the
related Mortgage File, except to the extent
amounts at least sufficient to cure such damage
have been reserved, each related Mortgaged
Property is free of any material damage that
would affect materially and adversely the value
of such Mortgaged Property as security for the
Mortgage Loan; the Mortgaged Property is in good
repair, and there is no proceeding pending for
the total or partial condemnation of such
Mortgaged Property;
(xiv) Each of the related Borrowers is in possession
of all material licenses, permits and other
authorizations necessary and required by all
applicable laws for the conduct of its business
that if not obtained would have a material
adverse effect on the conduct of its business or
its ability to repay the related Mortgage Loan,
and all such licenses, permits and
authorizations are valid and in full force and
effect, and if a related Mortgaged Property is
improved by a hotel, the most recent inspection
or review by the franchiser, if any, did not
cite such Mortgaged Property for material
violations of the related franchise agreement
which have not been cured;
(xv) The Seller has inspected or caused to be
inspected each related Mortgaged Property within
the past twelve months preceding the Cut-off
Date;
(xvi) Such Mortgage Loan does not have a shared
appreciation feature, other contingent interest
feature or negative amortization;
(xvii) Such Mortgage Loan is a whole loan
and no other party holds a
participation interest in the Mort-
gage Loan. Neither the Originator nor
5
<PAGE>
any of its affiliates has or is entitled
to any preferred or any other direct
equity interest in a Borrower;
(xviii) The Mortgage Rate (exclusive of any default
interest, late charges, or prepayment premiums)
of such Mortgage Loan complied as of the date of
origination with, or is exempt from, applicable
state or federal laws, regulations and other
requirements pertaining to usury; any and all
other requirements of any federal, state or
local laws applicable to such Mortgage Loan have
been complied with as of the date of origination
of such Mortgage Loan;
(xix) No fraudulent acts were committed by the
Seller during the origination
process of any such Mortgage Loan;
(xx) All taxes and governmental assessments that
prior to the Closing Date became due and owing
in respect of each related Mortgaged Property
have been paid, are being appealed, or an escrow
of funds in an amount sufficient to cover such
payments has been established;
(xxi) All escrow deposits and payments required
pursuant to the Mortgage Loans are in the
possession, or under the control, of the Seller
or its agent, and there are no deficiencies in
connection therewith;
(xxii) To the extent required under applicable law, as
of the Cut-off Date, the Seller was authorized
to transact and do business in the jurisdiction
in which each related Mortgaged Property is
located at all times when it held the Mortgage
Loan;
(xxiii) Except as disclosed in the Prospectus
Supplement dated March 20, 1997 relating to the
Certificates (the "Prospectus Supplement"), each
related Mortgaged Property is insured by a fire
and extended perils insurance policy, issued by
an insurer, or reinsured by a reinsurer, meeting
the requirements of the related Loan Documents,
in an amount not less than the replacement cost
and the amount necessary to avoid the operation
of any co-insurance provisions with respect to
the Mortgaged Property; each related Mortgaged
Property is also covered by business
interruption insurance for a minimum of twelve
months and comprehensive general liability
insurance in amounts generally required by
institutional lenders for similar properties;
all premiums on such insurance policies required
to be paid as of the Closing Date have been
paid; such insurance policies require prior
notice to the insured of termination or
cancellation, and no such notice has been
received; each related Mortgage or Loan
Agreement obligates the related Borrower to
maintain all such insurance and, at such
Borrower's failure to do so, authorizes the
mortgagee to maintain such insurance at the
Borrower's cost and expense and to seek
reimbursement therefor from such Borrower;
6
<PAGE>
(xxiv) Except for payments due but not yet one
month delinquent, there is no default, breach,
violation or event of acceleration existing
under the related Mortgage or the related Note
and, to the Seller's knowledge, no event (other
than payments due but not yet delinquent) that,
with the passage of time or with notice and the
expiration of any grace or cure period, would
and does constitute a default, breach, violation
or event of acceleration;
(xxv) Such Mortgage Loan has not been more than one
month delinquent since origination and as of the
Cut-off Date was not one month or more
delinquent;
(xxvi) Each related Mortgage contains customary and
enforceable provisions (subject to matters
described in clause (iv) above) such as to
render the rights and remedies of the holder
thereof adequate for the realization against the
Mortgaged Property of the benefits of the
security, including realization by judicial or,
if applicable, non-judicial foreclosure, and
there is no exemption available to the related
Borrower which would interfere with such right
to foreclose;
(xxvii) In each related Mortgage or Loan Agreement,
the related Borrower represents and warrants
that, except as set forth in certain
environmental reports or other documents
previously provided to the Rating Agencies and
to the best of its knowledge, it has not used,
caused or permitted to exist and will not use,
cause or permit to exist on the related
Mortgaged Property any Hazardous Materials in
any manner which violates federal, state or
local laws, ordinances, regulations, orders,
directives or policies governing the use,
storage, treatment, transportation, manufacture,
refinement, handling, production or disposal of
Hazardous Materials; the related Borrower agrees
to indemnify, defend and hold the mortgagee and
its successors and assigns harmless from and
against any and all losses, liabilities,
damages, injuries, penalties, fines, expenses,
and claims of any kind whatsoever (including
attorneys' fees and costs) paid, incurred or
suffered by, or asserted against, any such party
resulting from a breach of certain
representations, warranties or covenants given
by the Borrower in such Mortgage or Loan
Agreement, subject to certain exceptions with
respect to the culpability of the indemnified
parties; a Phase I environmental report was
conducted by a reputable environmental
consultant in connection with such Mortgage
Loan, which report, except as disclosed in the
Prospectus Supplement, did not indicate any
material non-compliance or material existence of
Hazardous Materials; to the best of the Seller's
knowledge, each related Mortgaged Property,
except as disclosed in the Prospectus
Supplement, is in material compliance with all
applicable federal, state and local laws
pertaining to environmental hazards, and to
the best of Seller's knowledge, except
as disclosed in the Prospectus Supplement,
no notice of violation of such
7
<PAGE>
laws has been issued by any governmental agency
or authority; the Seller has not taken any
action which would cause the related Mortgaged
Property not to be in compliance with all
federal, state and local laws pertaining to
environmental hazards;
(xxviii) Each related Mortgage or Loan Agreement
contains provisions for the acceleration of the
payment of the unpaid principal balance of such
Mortgage Loan if, without complying with the
requirements of the Mortgage or Loan Agreement
or obtaining the prior written consent of the
mortgagee, the related Mortgaged Property, or
any interest therein, is directly or indirectly
transferred or sold, or encumbered in connection
with subordinate financing;
(xxix) To Seller's knowledge, and in reliance upon an
opinion of counsel to the extent received, (A)
when the related UCC financing statements are
filed and indexed in the appropriate state and
local offices for such filing and indexing, such
filings shall be sufficient to perfect a lien on
the Mortgaged Property described therein to the
extent a security interest can be perfected
under the UCC and (B) no re-filing of such
financing statements will be necessary for the
perfection of the lien intended to be created or
the enforcement of such Mortgage Loan against
the related Borrower, other than filing UCC
continuation statements with the appropriate
state and local offices as required under the
law of the applicable state to continue the
perfection of the liens perfected by UCC
financing statements;
(xxx) (A) Such Mortgage Loan is directly secured by
one or more Mortgages on commercial property,
and (B) the fair market value of such real
property, as evidenced by an MAI appraisal
conducted within 12 months of the origination of
the Mortgage Loan, was at least equal to 80% of
the principal amount of the Mortgage Loan (1) at
origination (or if the Mortgage Loan has been
modified in a manner that constituted a deemed
exchange under Section 1001 of the Code at a
time when the Mortgage Loan was not in default
or default with respect thereto was not
reasonably foreseeable, the date of the last
such modification) or (2) at the Closing Date;
provided that the fair market value of the real
property interest must first be reduced by (x)
the amount of any lien on the real property
interest that is senior to the Mortgage Loan
(unless such senior lien also secures a Mortgage
Loan, in which event the computation described
in clauses (1) and (2) shall be made on an
aggregated basis) and (y) a proportionate amount
of any lien that is in parity with the Mortgage
Loan (unless such other lien secures a Mortgage
Loan that is cross-collateralized with such
Mortgage Loan, in which event the computation
described in clauses (1) and (2) shall be made
on an aggregate basis);
8
<PAGE>
(xxxi) With respect to each Mortgaged Property
where the estate of the related Borrower therein
is a leasehold estate and the fee interest of
the ground lessor is not subject and subordinate
to the related Mortgage, that:
(A) the related lease or a memorandum
thereof has been or will be
duly recorded; such lease or
an estoppel letter or lender
protective agreement between the
Seller and the lessor under such
lease permits the interest of
the lessee thereunder to be
encumbered by the related Mort-
gage; and, to the best of Seller's
knowledge, there has been no
material amendment or
modification of such lease since
its recordation, with the
exception of written amendments
or modifications which are part
of the related Mortgage File;
(B) except as may be indicated in the related
title insurance policy referred to in
clause (xi) above, to the best of Seller's
knowledge, the lessee's interest in the
related lease and the leasehold estate
created thereby is not subject to any liens
or encumbrances superior to, or of equal
priority with, the related Mortgage;
(C) the Seller and, subsequent to any
assignment of the related Mortgage, the
Seller's successors and assigns, have the
right to succeed to the Borrower's interest
in the related lease upon
notice to, but without the consent of, the
lessor thereunder (or, if any such consent
is required, it has been obtained prior to
the Closing Date), provided, in the event
that Seller, or its successors and assigns,
shall have succeeded to the interest of the
Borrower, as lessee under the lease, by
foreclosure of the related Mortgage or
acceptance of an assignment in lieu thereof
or other remedies available to the
mortgagee, the consent of such lessor may
be required for any subsequent assignment;
(D) as of the date the related Mort-
gage Loan was made, the related
lease was in full force and effect
and, to such lessor's knowledge,
no default had occurred under
such lease, nor, to such lessor's
knowledge, was there any then
existing condition which, but for
the passage of time or the giving
of notice, would have resulted in
a default under the terms of such
lease, and as of the Closing
Date, Seller has received no writ-
ten notice of a default or event of
default on the part of a Borrower
from the lessor of such
Borrower's lease;
(E) the related lease or an estoppel letter or
lender protective agreement requires the
lessor thereunder to give notice of any
default by the lessee to the mortgagee,
provided that the mortgagee has provided
the lessor with notice of its lien in
9
<PAGE>
accordance with the provisions of such
lease, estoppel letter or lender protective
agreement; the mortgagee has provided the
lessor with such notice;
(F) the related lease, estoppel letter or
lender protective agreement provides a
mortgagee with a reasonable opportunity
(including, where necessary, sufficient
time to gain possession of the interest of
the lessee under such lease) to cure any
default under such lease, which is curable
after the receipt of notice of any such
default before the lessor thereunder may
terminate such lease;
(G) the related lease has a term which extends
not less than ten years beyond the maturity
date of the related Mortgage Note;
(H) under the terms of the related
lease, estoppel letter, lender
protection agreement and the
related Mortgage, taken together,
any insurance proceeds other
than in respect of a total or
substantially total loss or taking,
will be applied either (1) to the
repair or restoration of all or
part of the related Mortgaged
Property, with the lessor, mort-
gagee or a depository appointed
pursuant to the terms of such lease
having the right to hold and
disburse such proceeds as the repair
or restoration progresses, or
(2) to the payment of the outstand-
ing principal balance of the
applicable Mortgage Loan together
with any accrued interest
thereon;
(I) the related lease does not impose
restrictions on subletting of all or
portions of the Mortgaged Property by the
lessee which would be viewed, as of the
date of origination of such Mortgage Loan,
as commercially unreasonable by the Seller;
and
(J) the related lease or an estoppel letter
provides that, in the event that a lessee
in bankruptcy rejects any or all of its
leases, the leasehold mortgagee will have
the right to succeed to the ground lessee's
position under the lease, provided that
written notice has been sent to the lessor
and all defaults with respect to the lease
are cured.
(xxxii) The Mortgage Loan Schedule is complete and accurate
in all respects;
(xxxiii) No advance of funds has been made, directly
or indirectly, by the Seller to any borrower and
no funds have been received from any person
other than the borrower for or on account of
payments due on a Note or Mortgage;
10
<PAGE>
(xxxiv) No Mortgage Loan is secured by collateral that is
not included in the Trust Fund;
(xxxv) Each Mortgage Loan that is cross-collateralized
is cross-collateralized only with Notes included
in the Trust Fund;
(xxxvi) Each Mortgaged Property that is located in a
federally designated flood hazard area is
covered by an insurance policy covering flood
losses;
(xxxvii) The improvements located on or forming part
of each Mortgaged Property securing a Mortgage
Loan comply with applicable zoning laws and
ordinances, or constitute a legal non-conforming
use or structure or, if any such improvement
does not so comply, such non-compliance does not
materially and adversely affect the value of the
related Mortgaged Property; to Seller's
knowledge each of the individual Mortgaged
Properties is comprised of one or more parcels
which constitute one or more separate tax lots
which do not include any property not a part of
such individual Mortgaged Property; and
(xxxviii) In the case of each Mortgage Loan secured in
whole or in part both by a ground lease and the
related fee interest, (a) such fee interest is
subject, and subordinated of record, to the
related Mortgage, and the related Mortgage does
not by its terms provide that it will be
subordinate to the lien of any other mortgage or
other lien upon such fee interest and (b) upon
the occurrence of a default under the terms of
the related Mortgage by the mortgagor, the
mortgagee has the right to foreclose upon or
otherwise exercise its rights with respect to
such fee interest.
3. Notice of Breach; Cure and Repurchase. (a) Pursuant
to the Pooling and Servicing Agreement, the Seller and the
Company shall be given notice of (i) any breach of any
representation or warranty contained in Section 2(b)(i), (ii),
(iii), (iv), (v), (vi), (vii), (viii), (ix), (xi), (xii), (xv),
(xvi), (xvii), (xviii), (xix), (xx), (xxii), (xxiv), (xxix) or
(xxx) and (ii) any breach of any representation or warranty
contained in Section 2(b)(x), (xiii), (xiv), (xxi), (xxiii),
(xxv), (xxvi), (xxvii), (xxviii), (xxxi), (xxxii), (xxxiii),
(xxxiv), (xxxv), (xxxvi), (xxxvii) and (xxxviii) that materially
and adversely affects the value of such Mortgage Loan or the
interests of the holders of the Certificates therein.
If Seller receives notice that any document required
to be delivered by the Seller with respect to a Mortgage Loan
pursuant to the second paragraph of Section 1 is missing or
defective (either such event, a "Defect"), the Seller shall cure
the Defect within 90 days of receipt of such notice or, if the
same cannot be cured within such period and the defect has a
material adverse effect on the security provided by the related
Mortgaged Property, the Seller shall repurchase the related
Mortgage Loan at the price and in the manner provided in clause
(b) below.
11
<PAGE>
(b) Within 90 days of the receipt of the notice (or with
respect to the representation and warranty contained in Section
2(b)(xxx), discovery) of a breach provided for in clause (a) the
Seller shall either (i) repurchase the related Mortgage Loan at the
Repurchase Price or (ii) promptly cure such breach in all
material respects; provided, however, that in the event that such
breach (other than a breach of Section 2(b)(xxx)) is capable of
being cured, but not within such 90 day period, and the Seller
has commenced and is diligently proceeding with the cure of such
breach within such 90 day period, the Seller shall have an
additional 90 days to complete such cure; provided, further, that
with respect to such additional 90 day period the Seller shall
have delivered an officer's certificate to the Trustee and the
Servicer setting forth the reason such breach is not capable of
being cured within the initial 90 day period and what actions the
Seller is pursuing in connection with the cure thereof and
stating that the Seller anticipates that such breach will be
cured within the additional 90 day period; and provided, further,
that in the event that the Seller fails to complete the cure of
such breach within such additional 90 day period, the Repurchase
Price shall also include interest at the Advance Rate on any
Advance made by the Servicer during such period in respect of the
Mortgage Loan to which such breach related. Upon any such
repurchase of a Mortgage Loan by the Seller, the Company shall
execute and deliver such instruments of transfer or assignment
presented to it by the Seller, in each case without recourse, as
shall be necessary to vest in the Seller the legal and beneficial
ownership of such Mortgage Loan (including any property acquired
in respect thereof or proceeds of any insurance policy with
respect thereto) and shall deliver the related Mortgage File to
Seller or its designee after receipt of the related repurchase
price.
(c) The Seller hereby acknowledges the assignment by
the Company to the Trustee, as trustee under the Pooling and
Servicing Agreement, for the benefit of the Holders of the
Certificates, of the representations and warranties contained
herein and of the obligation of the Seller to repurchase a
Mortgage Loan pursuant to this Section. The Trustee or its
designee may enforce such obligation as provided in Section 9
hereof.
4. Opinions of Counsel. The Seller hereby covenants to
the Company to, simultaneously with the execution hereof, deliver or
cause to be delivered to the Company opinions of counsel as to
various corporate matters in form satisfactory to the Company.
5. Underwriting. The Seller hereby agrees to furnish
any and all information, documents, certificates, letters or
opinions with respect to the Mortgage Loans, reasonably requested
by the Company in order to perform any of its obligations or
satisfy any of the conditions on its part to be performed or
satisfied pursuant to the Underwriting Agreement or the Purchase
Agreement, at or prior to the Closing Date.
6. Successor Borrowers. The Company hereby agrees that
in the event that the Seller is obligated to establish an entity
to succeed to the obligations of a Borrower upon the defeasance
with respect to the related Mortgage Loan, the Company shall, or
shall cause the Servicer under the Pooling and Servicing
Agreement to, establish such a successor entity, in each case in
accordance with the provisions of the related Loan Documents.
7. Costs. The Company shall pay all expenses inci-
dental to the performance of its obligations under the
Underwriting Agreement and the Purchase Agreement, including
12
<PAGE>
without limitation (a) any recording fees or fees for title
policy endorsements and continuations, (b) the expenses of
preparing, printing and reproducing the Prospectus Supplement,
the Private Placement Memorandum, the Underwriting Agreement, the
Purchase Agreement, the Pooling and Servicing Agreement and the
Certificates and (c) the cost of delivering the Certificates to
the office of the Underwriter or the purchaser of the
Certificates, as applicable, insured to the satisfaction of the
Underwriter or such purchaser, as applicable.
8. Notices. All communications hereunder shall be in
writing and effective only upon receipt and, if sent to the
Company, will be mailed, delivered or telecopied and confirmed to
it at 2 World Financial Center - Building B, New York, New York
10281-1198 attention of Manager - Mortgage Finance Department or,
if sent to the Seller, will be mailed, delivered or telecopied
and confirmed to it at 2 World Financial Center - Building B, New
York, New York 10281-1198 attention of Manager - Mortgage Finance
Department.
9. Trustee Beneficiary. The representations,
warranties and agreements made by the Seller in this Agreement
are made for the benefit of, and may be enforced by or on behalf
of, the Trustee and the Holders of Certificates to the same
extent that the Company has rights against the Seller under this
Agreement in respect of representations, warranties and
agreements made by the Seller herein and such representations and
warranties shall survive delivery of the respective Mortgage
Files to the Trustee until the termination of the Pooling and
Servicing Agreement.
10. Miscellaneous. This Agreement will be governed by
and construed in accordance with the laws of the State of New
York. Neither this Agreement nor any term hereof may be changed,
waived, discharged or terminated except by a writing signed by
the party against whom enforcement of such change, waiver,
discharge or termination is sought. This Agreement may not be
changed in any manner which would have a material adverse effect
on the Holders of Certificates without the prior written consent
of the Trustee. The Trustee shall be protected in consenting to
any such change to the same extent provided in Section 10.07 of
the Pooling and Servicing Agreement. This Agreement may be
executed in any number of counterparts, each of which shall for
all purposes be deemed to be an original and all of which shall
together constitute but one and the same instrument. This
Agreement will inure to the benefit of and be binding upon the
parties hereto and their respective successors and assigns, and
no other person will have any right or obligation hereunder,
other than as provided in Section 9 hereof.
11. Third Party Beneficiary. Nomura Securities
International, Inc. is an intended third party beneficiary of the
representations and warranties of the Seller set forth in Section
2 hereof.
13
<PAGE>
IN WITNESS WHEREOF, the Company and the Seller have caused this
Agreement to be duly executed by their respective officers as of
the day and year first above written.
ASSET SECURITIZATION CORPORATION
By:_______________________________
Name: Marlyn A. Marincas
Title: Vice President
NOMURA ASSET CAPITAL CORPORATION
By: _______________________________
Name:
Title:
14
<PAGE>
EXHIBIT A
Exceptions to Representations and Warranties
Clause of
Section 2(b): Exception:
- ------------- ----------------------------------------------
None.
<PAGE>
EXHIBIT J
MD VII Collateral Report Summary Information
Adjusted DSCR
Most Recent Four Quarters
Annual 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Aggregate
------ ------- ------- ------- ------- ---------
G&L
Design Center
of the Americas
Insurance Company
of the West
101 Hudson
M&H
Fairfield Inns
Total:
Occupancy/RevPar
Most Recent Four Quarters
Annual 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Aggregate
------ ------- ------- ------- ------- ---------
G&L
Design Center
of the Americas
Insurance Company
of the West
101 Hudson
M&H
Fairfield Inns
Total:
Page 1
<PAGE>
MD VII Quarterly Collateral Summary
Cash
Flow
Total Available
Expenses for
Total Before Debt Mgt Funded
Property Revenues Mgt Fees Service Fees Reserves
-------- -------- -------- ------- ---- --------
G&L:
----
Friendly Hills
Healthcare Building
Shearman Oaks
Medical Plaza
Regents Medical Center
North Bedford
Total:
Design Center of
the Americas
Insurance Company
of the West
101 Hudson
M&H:
----
Westgate Mall
The Promenade
County Hills Town Center
Lincoln Park Center
Mission Square
Plaza La Quinta
Total:
Fairfield Inns:
---------------
Fairfield - Birmingham
Fairfield - Montgomery
Fairfield - Buena Park
Fairfield - Placentia
Fairfield - Miami-West
Fairfield - Gainesville
Fairfield - Orlando-Int'l
Fairfield - Orlando-South
Fairfield -
Atlanta-Airport
Fairfield -
Atlanta-Gwinnett
Fairfield -
Atlanta-Northlake
Fairfield -
Atlanta-Northwest
Fairfield -
Atlanta-Peachtree
Fairfield -
Atlanta-Southlake
Debt Derived
Property Service DSCR Occupancy ADR
-------- ------- ---- --------- ---
G&L:
----
Friendly Hills
Healthcare Building
Shearman Oaks
Medical Plaza
Regents Medical Center
North Bedford
Total:
Design Center of
the Americas
Insurance Company
of the West
101 Hudson
M&H:
----
Westgate Mall
The Promenade
County Hills Town Center
Lincoln Park Center
Mission Square
Plaza La Quinta
Total:
Fairfield Inns:
---------------
Fairfield - Birmingham
Fairfield - Montgomery
Fairfield - Buena Park
Fairfield - Placentia
Fairfield - Miami-West
Fairfield - Gainesville
Fairfield - Orlando-Int'l
Fairfield - Orlando-South
Fairfield -
Atlanta-Airport
Fairfield -
Atlanta-Gwinnett
Fairfield -
Atlanta-Northlake
Fairfield -
Atlanta-Northwest
Fairfield -
Atlanta-Peachtree
Fairfield -
Atlanta-Southlake
Page 1
<PAGE>
MD VII Quarterly Collateral Summary
Cash
Flow
Total Available
Expenses for
Total Before Debt Mgt Funded
Property Revenues Mgt Fees Service Fees Reserves
-------- -------- -------- ------- ---- --------
Fairfield - Savannah
Fairfield - Bloomington
Fairfield - Chicago
Fairfield - Peoria
Fairfield - Rockford
Fairfield -
Indianapolis-Castle
Fairfield -
Indianapolis-Coll.
Fairfield - Des Moines
Fairfield - KC -
Overland Park
Fairfield - KC-West
Fairfield - Auburn Hills
Fairfield -
Detroit-Airport
Fairfield -
Detroit-Madison
Fairfield - Detroit-Warren
Fairfield - Detroit-West
Fairfield - Kalamazoo
Fairfield - St. Louis
Fairfield -
Charlotte-Airport
Fairfield -
Charlotte-North
Fairfield - Durham
Fairfield - Fayetteville
Fairfield - Raleigh
Fairfield - Greensboro
Fairfield - Wilmington
Fairfield - Cleveland
Fairfield - Columbus
Fairfield - Dayton
Fairfield - Toledo-Airport
Fairfield - Florence
Fairfield - Greenville
Fairfield - Hilton Head
Fairfield - Johnson City
Fairfield - Hampton
Fairfield - Virginia Beach
Debt Derived Adjusted
Property Service DSCR DSCR Occupancy ADR
-------- ------- ---- ---- --------- ---
Fairfield - Savannah
Fairfield - Bloomington
Fairfield - Chicago
Fairfield - Peoria
Fairfield - Rockford
Fairfield -
Indianapolis-Castle
Fairfield -
Indianapolis-Coll.
Fairfield - Des Moines
Fairfield - KC -
Overland Park
Fairfield - KC-West
Fairfield - Auburn Hills
Fairfield -
Detroit-Airport
Fairfield -
Detroit-Madison
Fairfield - Detroit-Warren
Fairfield - Detroit-West
Fairfield - Kalamazoo
Fairfield - St. Louis
Fairfield -
Charlotte-Airport
Fairfield -
Charlotte-North
Fairfield - Durham
Fairfield - Fayetteville
Fairfield - Raleigh
Fairfield - Greensboro
Fairfield - Wilmington
Fairfield - Cleveland
Fairfield - Columbus
Fairfield - Dayton
Fairfield - Toledo-Airport
Fairfield - Florence
Fairfield - Greenville
Fairfield - Hilton Head
Fairfield - Johnson City
Fairfield - Hampton
Fairfield - Virginia Beach
Page 2
<PAGE>
MD VII Quarterly Collateral Summary
Cash
Flow
Total Available
Expenses for
Total Before Debt Mgt Funded
Property Revenues Mgt Fees Service Fees Reserves
-------- -------- -------- ------- ---- --------
Fairfield - Madison
Fairfield - Milwaukee
Hampton Inn - Naples
Residence Inn -
Sunnyvale
Residence Inn -
Binghampton
Hampton Inn - Islandia
Residence Inn -
Cherry Hill
Residence Inn - Denver
Residence Inn - Wichita
Hampton Inn -
Tallahassee
Total:
Debt Derived Adjusted
Property Service DSCR DSCR Occupancy ADR
-------- ------- ---- ---- --------- ---
Fairfield - Madison
Fairfield - Milwaukee
Hampton Inn - Naples
Residence Inn -
Sunnyvale
Residence Inn -
Binghampton
Hampton Inn - Islandia
Residence Inn -
Cherry Hill
Residence Inn - Denver
Residence Inn - Wichita
Hampton Inn -
Tallahassee
Total:
Page 3
<PAGE>
EXHIBIT K
FORM OF TRANSFER CERTIFICATE
FOR EXCHANGE OR TRANSFER FROM RULE 144A
GLOBAL CERTIFICATE TO REGULATION S
GLOBAL CERTIFICATE DURING THE RESTRICTED PERIOD
(Exchanges or transfers pursuant to
Section 5.02(c)(ii)(A) of the Pooling and Servicing Agreement)
[Certificate Registrar]
Attention: Corporate Trust Administration
Re: Transfer of Asset Securitization Corporation, Commercial Mortgage
Pass-Through Certificates, Series 1997 - MD VII Class B-1
Reference is hereby made to the Pooling and Servicing
Agreement dated as of March 27, 1997 (the "Pooling and Servicing
Agreement"), by and among Asset Securitization Corporation, as
depositor (the "Depositor"), Pacific Mutual Life Insurance
Company, as servicer (the "Servicer") and special servicer,
LaSalle National Bank, as trustee (the "Trustee"), and ABN AMRO
Bank N.V., as fiscal agent (the "Fiscal Agent"). Capitalized
terms used but not defined herein shall have the meanings given
to them in the Pooling and Servicing Agreement.
This letter relates to US $[ ] aggregate Certificate
Balance of Certificates (the "Certificates") which are held in
the form of the Rule 144A Global Certificate (CUSIP No. ) with
the Depository in the name of [insert name of transferor] (the
"Transferor"). The Transferor has requested a transfer of such
beneficial interest for an interest in the Regulation S Global
Certificate (CUSIP No. ) to be held with [Euroclear] [CEDEL]*
(Common Code ) through the Depositary.
In connection with such request and in respect of such
Certificates, the Transferor does hereby certify that such
transfer has been effected in accordance with the transfer
restrictions set forth in the Pooling and Servicing Agreement and
pursuant to and in accordance with Regulation S under the
Securities Act of 1933, as amended (the "Securities Act"), and
accordingly the Transferor does hereby certify that:
(1) the offer of the Certificates was not made to a
person in the United States,
- --------
* Select appropriate depository.
K-1
<PAGE>
[(2) at the time the buy order was originated, the
transferee was outside the United States or the Transferor and
any persons acting on its behalf reasonably believed that the
transferee was outside the United States,]**
[(2) the transaction was executed in, on or through
the facilities of a designated offshore securities market and
neither the Transferor nor any person acting on its behalf knows
that the transaction was prearranged with a buyer in the United
States,] **
(3) no directed selling efforts have been made in
contravention of the requirements of Rule 903(b) or 904(b) of
Regulation S, as applicable, and
(4) the transaction is not part of a plan or scheme to
evade the registration requirements of the Securities Act.
This certificate and the statements contained herein
are made for your benefit and the benefit of the Depositor, the
Trustee, the Servicer and the Fiscal Agent.
[Insert Name of Transferor]
By:_______________________________
Name:
Title:
Dated: _____________, ____
- --------
** Insert one of these two provisions, which come from the
definition of "off-shore transaction" in Regulation S.
K-2
<PAGE>
EXHIBIT L
FORM OF TRANSFER CERTIFICATE
FOR EXCHANGE OR TRANSFER FROM RULE 144A
GLOBAL CERTIFICATE TO REGULATION S GLOBAL
CERTIFICATE AFTER THE RESTRICTED PERIOD
(Exchange or transfers pursuant to
Section 5.02(c)(ii)(B) of the Pooling and Servicing Agreement)
[Certificate Registrar]
Attention: Corporate Trust Administration
Re: Transfer of Asset Securitization Corporation, Commercial
Mortgage Pass-Through Certificates, Series 1997 - MD VII, Class B-1
Reference is hereby made to the Pooling and Servicing
Agreement dated as of March 27, 1997 (the "Pooling and Servicing
Agreement"), by and among Asset Securitization Corporation, as
depositor (the "Depositor"), Pacific Mutual Life Insurance
Company, as servicer (the "Servicer") and special servicer,
LaSalle National Bank, as trustee (the "Trustee"), and ABN AMRO
Bank N.V., as fiscal agent (the "Fiscal Agent"). Capitalized
terms used but not defined herein shall have the meanings given
to them in the Pooling and Servicing Agreement.
This letter relates to US $[ ] aggregate Certificate
Balance of Certificates (the "Certificates") which are held in
the form of the Rule 144A Global Certificate (CUSIP No. ) with
the Depository in the name of [insert name of transferor] (the
"Transferor"). The Transferor has requested a transfer of such
beneficial interest in the Certificates for an interest in the
Regulation S Global Certificate (Common Code No. ).
In connection with such request, and in respect of
such Certificates, the Transferor does hereby certify that such
transfer has been effected in accordance with the transfer
restrictions set forth in the Pooling and Servicing Agreement
and, (i) with respect to transfers made in reliance on Regulation
S under the Securities Act of 1933, as amended (the "Securities
Act"), the Transferor does hereby certify that:
(1) the offer of the Certificates was not made to
a person in the United States,
L-1
<PAGE>
[(2) at the time the buy order was originated, the
transferee was outside the United States or the Transferor and
any person acting on its behalf reasonably believed that the
transferee was outside the United States,]*
[(2) the transaction was executed in, on or through
the facilities of a designated offshore securities market and
neither the Transferor nor any person acting on its behalf knows
that the transaction was prearranged with a buyer in the United
States,] *
(3) no directed selling efforts have been made in
contravention of the requirements of Rule 903(b) or 904(b) of
Regulation S, as applicable, and
(4) the transaction is not part of a plan or scheme
to evade the registration requirements of the Securities Act;
or (ii) with respect to transfers made in reliance on Rule 144
under the Securities Act, the Transferor does hereby certify that
the Certificates that are being transferred are not "restricted
securities" as defined in Rule 144 under the Securities Act.
This certificate and the statements contained herein
are made for your benefit and the benefit of the Depositor, the
Trustee, the Fiscal Agent and the Servicer.
[Insert Name of Transferor]
By:_______________________________
Name:
Title:
Dated: ___________, ____
- --------
* Insert one of these two provisions, which come from the
definition of "offshore transaction" in Regulation S.
L-2
<PAGE>
EXHIBIT M
FORM OF TRANSFER CERTIFICATE
FOR EXCHANGE OR TRANSFER FROM REGULATION S GLOBAL
CERTIFICATE TO RULE 144A GLOBAL CERTIFICATE
(Exchange or transfers pursuant to
Section 5.02(c)(ii)(C) of the Pooling and Servicing Agreement)
[Certificate Registrar]
Attention: Corporate Trust Administration
Re: Transfer of Asset Securitization Corporation, Commercial
Mortgage Pass-Through Certificates, Series 1997 - MD VII, Class B-1
Reference is hereby made to the Pooling and Servicing
Agreement dated as of March 27, 1997 (the "Pooling and Servicing
Agreement"), by and among Asset Securitization Corporation, as
depositor (the "Depositor"), Pacific Mutual Life Insurance
Company, as servicer (the "Servicer") and special servicer,
LaSalle National Bank, as trustee (the "Trustee"), and ABN AMRO
Bank N.V., as fiscal agent. Capitalized terms used but not
defined herein shall have the meanings given to them in the
Pooling and Servicing Agreement.
This letter relates to US $[ ] aggregate Certificate
Balance of Certificates (the "Certificates") which are held in
the form of the Regulation S Global Certificate (CUSIP No.
_______) with [Euroclear] [CEDEL]* (Common Code __________)
through the Depository in the name of [insert name of transferor]
(the "Transferor"). The Transferor has requested a transfer of
such beneficial interest in the Certificates for an interest in
the Regulation 144A Global Certificate (CUSIP No.____________).
In connection with such request, and in respect of
such Certificates, the Transferor does hereby certify that such
Certificates are being transferred in accordance with (i) the
transfer restrictions set forth in the Pooling and Servicing
Agreement and (ii) Rule 144A under the Securities Act to a
transferee that the Transferor reasonably believes is purchasing
the Certificates for its own account with respect to which the
transferee exercises sole investment discretion and the
transferee and any such account is a "qualified institutional
buyer" within the meaning of Rule
- --------
* Select appropriate depository.
M-1
<PAGE>
144A, in each case in a transaction meeting the requirements of
Rule 144A and in accordance with any applicable securities laws
of any state of the United States or any jurisdiction.
This certificate and the statements contained herein
are made for your benefit and the benefit of the Depositor, the
Trustee, the Servicer, and Underwriter and placement agent of the
offering of the Certificates.
[Insert Name of Transferor]
By:_________________________
Name:
Title:
Dated: ________ ___, 19__
M-2
<PAGE>
EXHIBIT N
FORM OF TRANSFER CERTIFICATE FOR REGULATION S GLOBAL CERTIFICATE
DURING RESTRICTED PERIOD
[Certificate Registrar]
Attention: Corporate Trust Administration
Re: Transfer of Asset Securitization Corporation, Commercial
Mortgage Pass-Through Certificates, Series 1997 - MD VII, Class B-1
Ladies and Gentlemen:
This certificate is delivered pursuant to Section 5.02
of the Pooling and Servicing Agreement dated as of March 27, 1997
by and among Asset Securitization Corporation, as depositor,
Pacific Mutual Life Insurance Company, as servicer and special
servicer, LaSalle National Bank, as trustee (the "Trustee"), and
ABN AMRO Bank N.V., as fiscal agent, on behalf of the holders of
the Asset Securitization Corporation, Commercial Mortgage
Pass-Through Certificates, 1997 - MD VII in connection with the
transfer by __________ of a beneficial interest of
$__________________ Certificate Balance in a Private Global
Certificate during the Restricted Period to the undersigned (the
"Transferee"). The Transferee desires to beneficially own such
transferred interest in the form of the Regulation S Global
Certificate. Capitalized terms used but not defined herein shall
have the meanings given to them in the Pooling and Servicing
Agreement.
In connection with such transfer, the Transferee does
hereby certify that it is a non-"U.S. Person" (as defined under
Regulation S under the Securities Act of 1933, as amended). This
certificate and the statements contained herein are made for your
benefit and the benefit of the Depositor, the Trustee and the
Servicer.
__________________________________
Transferee
By:_______________________________
Name:
Title:
Dated: _________ __, 199_
N-1
<PAGE>
